Rendahl v. Peluso
| Decision Date | 28 April 2017 |
| Docket Number | AC 38181 |
| Citation | 173 Conn.App. 66,162 A.3d 1 |
| Court | Connecticut Court of Appeals |
| Parties | Joy M. RENDAHL, Administratrix (Estate of Frances M. Rendahl) v. Frank N. PELUSO, et al. |
Philip Russell, with whom, on the brief, was Catherine Keenan, for the appellants (plaintiffs).
Robert C. E. Laney, with whom was Shivani J. Desai, for the appellees (defendants).
Sheldon, Alvord and Gruendel, Js.
The plaintiff, Joy M. Rendahl, individually and as administratrix of the estate of her deceased mother, Frances M. Rendahl, brought this action against the defendants, Frank N. Peluso and his law firm, the Law Offices of Frank N. Peluso, P.C. (collectively, the defendant), to recover damages, inter alia, for breach of fiduciary duty, legal malpractice, and wilful, wanton, and reckless misconduct based upon the defendant's alleged mishandling of his responsibilities as the executor of and the attorney for the estate. Following an eight day trial and two days of deliberations, the jury returned a verdict in favor of the defendant on all counts. Thereafter, the plaintiff filed two motions to set aside the verdict, alleging, in the first motion, that the court erred in declining to accept an earlier verdict by the same jury, assertedly awarding her punitive damages on her claim of breach of fiduciary duty, and requiring the jury, under supplemental instructions, to continue its deliberations and make further factual findings before returning its final verdict; and, in the second motion, that the court erred in refusing to admit certain relevant, material evidence at trial. On June 30, 2015, the trial court, Povodator, J. , denied both motions. This appeal followed.
On appeal, the plaintiff reasserts the claims presented in her motions to set aside the verdict, and seeks reversal of the court's judgment based upon the denial of those motions. We affirm the judgment of the trial court.
The following facts and procedural history are relevant to the plaintiff's claims on appeal. The plaintiff first met the defendant in 1961, when she was eleven years old. At that time, the defendant's father was helping to construct the plaintiff's family home in Greenwich, where the plaintiff still resides. In 1975, the plaintiff's father hired the defendant to draft wills for himself and his wife, the plaintiff's mother, Frances M. Rendahl. The defendant was also asked to create and administer two income trusts for members of the plaintiff's family, specifically, one for the benefit of her mother, for the remainder of her mother's life; the other for the benefit of the plaintiff, until she reached the age of thirty-five. The plaintiff testified that the defendant performed his role as trustee "reasonably well" until her mother's death in 2006.
When the plaintiff's mother died on October 29, 2006, she left behind an estate comprised of cash, stocks, personal property, and real property with a total estimated value of approximately $3,083,982.1 The plaintiff, an only child, was the sole beneficiary named in her mother's will. The defendant, who had helped to draft the will, was named in the will as one of two coexecutors of the decedent's estate. Accordingly, when she died, he promptly filed an application for administration of the estate in the Probate Court, for the district of Greenwich. The Probate Court, Hopper, J. , approved that application on November 3, 2006. Shortly thereafter, on November 6, 2006, the defendant was appointed as the sole executor of the estate.2 Under the terms of a November 1, 2006 engagement letter, the defendant informed the plaintiff that, in exchange for his services as executor, he would charge an executor's fee equal to 2.5 percent of the estate's gross value.3 Thereafter, under the express terms of the will, the defendant, as executor, hired the codefendant, his own law firm, as the attorney for the estate.4 On that same day, the defendant executed a second engagement letter between himself, as executor, and his law firm, as attorney, to perform legal services on behalf of the estate for an additional fee equal to 2.5 percent of the estate's gross value.
The following month, December, 2006, the defendant met with the plaintiff to discuss the administration of the estate. At that meeting, the plaintiff gave the defendant several documents that would be necessary for his work as executor, including stock certificates, health care bills, utility bills, and insurance policies. Thereafter, the defendant began to marshal the assets of the estate, which included: $14,925 in personal funds; a stock portfolio valued at approximately $331,625; real property in Connecticut with an appraised value of approximately $2.3 million; real property in Florida5 with an appraised value of approximately $400,000; two joint bank accounts with a combined value of $25,332; and miscellaneous property with a reported value of $6551. The defendant ultimately reported on the estate's federal estate tax return that the estate had a gross value of approximately $3.083 million at the time of the decedent's death.
Between December, 2006, and July, 2007, the defendant liquidated a substantial portion of the estate's stock portfolio, producing an additional $278,434.83 in cash assets for the estate. The defendant used those assets to pay off $273,445 in estate debts and expenses, including funeral expenses, accountant fees, probate fees, property taxes, unpaid medical bills, utilities charges and mortgage payments, and repairs to the roof of the Florida property.
As early as January, 2007, the plaintiff's relationship with the defendant began to sour. Specifically, the plaintiff became dissatisfied with the defendant's handling of certain estate assets and his unresponsiveness to her questions and concerns. As a result of these concerns, the plaintiff met with the defendant to discuss the administration of the estate. Also at this meeting, the plaintiff informed the defendant that she had a personal claim against the estate in the amount of $536,914, for funds she had loaned to her mother during her mother's lifetime, and asked him how she should go about perfecting that claim. The defendant responded by informing her that, although she was the sole beneficiary of the estate, he was not her personal attorney, and thus she should hire her own attorney to obtain such advice. Acting on that suggestion, the plaintiff hired attorney Daniel Johnson to perfect her claim against the estate. By April, 2007, the plaintiff and Johnson had provided the defendant with sufficient documentation substantiating her claim that the defendant listed it as a debt of the estate on the estate's federal estate tax return.
Several months later, on July 25, 2007, the defendant filed the estate's inventory with the Probate Court. In that filing, the defendant reported that the estate's Connecticut assets had a combined gross value of $2.65 million, of which $2.3 million was the appraised value of the decedent's Greenwich property. After accounting for a $749,834 mortgage on that property,6 however, the defendant reduced the property's net value by that amount to $1.55 million, and reported on the inventory that the combined net value of the estate's Connecticut assets was approximately $1.9 million.
The following day, July 26, 2007, the defendant filed the estate's federal and state tax returns on Form 706 and Form CT–706, respectively. These forms, as submitted by the defendant, reported a tentative taxable estate of $1,475,451.7 Because the reported value of the estate's Connecticut assets was less than $2 million, the estate was determined not to be subject to Connecticut's then existing cliff rate8 of 7.2 percent tax on its total net assets. The following week, on July 30, 2007, the defendant received an "Opinion of No Connecticut Estate Tax Due," which was certified and signed by the Probate Court. As for the estate's federal estate tax return, the defendant reported on Form 706 that the estate had utilized a "maximum unified credit" of $780,800 to offset a potential liability of $545,244 in federal estate taxes, resulting in a net federal estate tax of zero dollars. On November 14, 2007, the defendant received an "Estate Tax Closing Document" from the Internal Revenue Service, confirming that the estate owed zero dollars in federal estate taxes.
Notwithstanding these favorable results, the plaintiff grew increasingly dissatisfied with the defendant's administration of the estate. Specifically, she had concerns about: (1) the defendant's invasion of her and her mother's joint bank account, which she claimed to be a nonprobate asset; (2) the commingling of her mother's income trust assets with the assets of the estate; and (3) the defendant's claim to a combined total of $151,687 in executor's and attorney's fees, which she believed to be excessive. Thus, in the spring of 2007, the plaintiff hired a second attorney, Sharon Schweitzer, to dispute the amount of the defendant's claimed fees and to seek his removal as executor of the estate. Ultimately, however, Schweitzer advised the plaintiff that it was too early either to contest the defendant's fees or to seek his removal as executor, and thus that she should wait until a later time before raising those claims.
The estate remained open for an additional eighteen months following the Internal Revenue Service's November, 14, 2007 estate tax closing letter. During that time, the defendant prepared the final account of the estate, which he filed with the Probate Court on March 20, 2009. Thereafter, on August 17, 2009, the Probate Court issued a certificate of devise with respect to the Greenwich property.
On June 1, 2009, the plaintiff submitted a letter to the Probate Court objecting to the fees charged by the defendant as the executor of and the attorney for the estate. Thereafter, the plaintiff resumed her efforts to dispute the defendant's fees and to remove him as executor of...
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