Southport Congregational Church—united Church of Christ v. Hadley

• Decision Date: 19 August 2014
• Docket Number: Nos. 35289,36395.,s. 35289
• Citation: 98 A.3d 99,152 Conn.App. 282
• Court: Connecticut Court of Appeals
• Parties: SOUTHPORT CONGREGATIONAL CHURCH—UNITED CHURCH OF CHRIST v. Betty Ann HADLEY, Coexecutor (Estate of Albert L. Hadley), et al.

152 Conn.App. 282

98 A.3d 99

SOUTHPORT CONGREGATIONAL CHURCH—UNITED CHURCH OF CHRIST

v.Betty Ann HADLEY, Coexecutor (Estate of Albert L. Hadley), et al.

Nos. 35289, 36395.

Appellate Court of Connecticut.

Argued Feb. 20, 2014.

Argued May 28, 2014.

Decided Aug. 19, 2014.

John A. Farnsworth, New Haven, for the appellant in both appeals (plaintiff).

Daniel J. Krisch, with whom was Jeffrey F. Gostyla, Hartford, for the appellee in both appeals (defendant Cheekwood Botanical Garden and Museum of Art).

Grant P. Haskell, Westport, for the appellees in both appeals (named defendant et al.).

James Hogan Love, Fairfield, filed a brief for the appellee in AC 35289 (named defendant).

LAVINE, SHELDON and BISHOP, Js.

SHELDON, J.

In these appeals involving a disputed application of the doctrine of equitable conversion, the central question is whether certain real property automatically passed to the specific devisee of the property under a will upon the death of the decedent when, prior to the decedent's death, he had entered into a contract to sell the property to a third party. The decedent, Albert L. Hadley, in his last will and testament, specifically devised a residential real property that he owned in Southport to the plaintiff, Southport Congregational Church–United Church of Christ (church). Prior to his death, however, he entered into a contract to sell the property to a third party, Evelyn P. Winn. The decedent died before the closing on the property could take place and before a mortgage contingency clause contained in the sales contract either expired or was waived or fulfilled. The church claims that the Superior Court erred in applying the doctrine of equitable conversion in this case and, on that basis, authorizing the defendant coexecutors of the decedent's estate, Betty Ann Hadley and Lee Snow, to complete the sale of the property to Winn following the decedent's death, pursuant to General Statutes § 45a–325.¹ The church argues, as it did below, that because it is the specific devisee of the property under the decedent's will and the decedent's estate is solvent, the property cannot be sold without its written consent, pursuant to General Statutes § 45a–428 (b).² To resolve the church's claim on appeal, we must determine whether, at the time of the decedent's death, he retained an ownership interest in the subject property or, under the doctrine of equitable conversion, he retained only an equitable claim to the proceeds from the expected sale of the property, while Winn held title to the property itself. If, at the time of his death, the decedent no longer had an ownership interest in the property, it could not have passed automatically to the church upon his death, and thus the Probate Court, and the Superior Court thereafter, properly ruled that the coexecutors of the estate had the authority to sell the property, pursuant to § 45a–325, without the church's approval. The church has appealed from the judgment of the Superior Court, asserting that because the contract contained a contingency that had neither expired nor been waived or fulfilled by the time of the decedent's death, the contract was not subject to specific performance at that time, and, thus, not subject to the doctrine of equitable conversion. We agree with the church that the court improperly applied the doctrine of equitable conversion to this case, and, thus, that the property passed to the church by operation of law upon the decedent's death. The Superior Court's judgments authorizing the sale of the property to Winn without the consent of the church must therefore be reversed.³

The following factual and procedural history is relevant to the resolution of the claims raised in these appeals. The decedent owned a residential property at 504 Pequot Avenue in Southport. In his last will and testament dated September 22, 2010, he specifically devised that property to the church. On March 21, 2012, however, the decedent entered into a contract to sell that property to Winn. That transaction did not close prior to the decedent's death on March 30, 2012.

The decedent's will was admitted to probate in the Surrogate's Court for the County of New York, New York, on or about May 10, 2012. On June 15, 2012, the coexecutors of the decedent's estate filed an application with the Probate Court for the district of Fairfield for ancillary jurisdiction based upon the location of the subject property and for authorization to sell the property, pursuant to § 45a–325, in accordance with the contract executed by the decedent prior to his death. Around that same time, Cheekwood Botanical Garden and Museum of Art (Cheekwood) filed a claim that a certain letter from the decedent dated March 6, 2012, was a valid and enforceable codicil to the decedent's will, under which Cheekwood was to receive the proceeds from the sale of the property. On July 24, 2012, the Probate Court granted the application for ancillary administration, appointed Hadley and Snow as coexecutors of the decedent's estate, and granted the application for authorization to sell the property to Winn for the contract price of $466,000, which funds were to be held in an interest-bearing account until further order of that court.

On August 10, 2012, the church filed an appeal from the Probate Court's July 24, 2012 decree with the Superior Court, wherein it alleged that because it was the specific devisee of the subject property under the decedent's will, and the decedent's estate was solvent, the coexecutors could not sell the property without its consent pursuant to § 45a–428 (b). The church had not consented to the sale.

Five days later, on August 15, 2012, the Probate Court amended its July 24, 2012 decree to require the coexecutors, under § 45a–428, to obtain the consent of the church before selling the property.⁴

On September 24, 2012, with the church's probate appeal from the July 24, 2012 decree still pending, the coexecutors filed an answer, special defense and counterclaim in response to the church's complaint therein. In their counterclaim, the coexecutors sought authorization, as they had initially in the Probate Court, to sell the subject property pursuant to § 45a–325. ⁵ Thereafter, on October 5, 2012, the coexecutors filed a separate application with the Superior Court seeking the same relief as they were seeking in their counterclaim, to wit: authorization to sell the property to Winn pursuant to § 45a–325. The church withdrew its appeal later that day.

On December 4, 2012, Cheekwood, which had been permitted to intervene in the probate appeal as a party defendant on November 5, 2012, filed a memorandum of law in support of the coexecutors' application for authorization to sell the property, in which it argued, under the doctrine of equitable conversion, that because the decedent had executed the contract for sale of the property prior to his death, his interest in the real property had terminated at that time and had vested instead in the purchaser, Winn, leaving him with only an interest in the expected proceeds from the ultimate sale of the property. Thus, Cheekwood argued, because the estate had no interest in the subject real property at the time of the decedent's death, § 45a–428 did not apply.

In response, the church filed an objection to the coexecutors' application, in which it argued that: the application should be denied pursuant to General Statutes § 45a–24⁶ because it constituted an impermissible collateral attack on the Probate Court's August 15, 2012 decree; the Superior Court did not have jurisdiction to adjudicate the application because it was beyond the scope of the probate appeal, which had since been withdrawn; and the doctrine of equitable conversion did not apply in the circumstances of this case because the sales contract contained both an unsatisfied mortgage contingency clause and a waiver by the decedent of his right to specific performance of the contract, either of which assertedly precluded the termination of his interest in the real property.

On December 7, 2012, following a hearing on the application for authorization to sell the subject property at which the parties submitted documentary evidence and presented oral argument in support of their respective positions, the court rejected the church's jurisdictional challenges,⁷ then granted the coexecutors' application for authorization to sell the property to Winn. The court reasoned, under the doctrine of equitable conversion, that because the decedent had executed what it found to be a valid sales contract prior to his death, he no longer had an interest in the property at the time of his death, but only an equitable interest in the funds that would ultimately be realized from the sale of the property. The court thus concluded that § 45a–428 did not apply to this case, that the decedent's contract to sell the property to Winn was binding upon the executors of his estate, that the estate was solvent, that the property should be sold pursuant to § 45a–325, and that the proceeds realized from that sale should be held in an interest-bearing account until such time as the Probate Court determined the appropriate disposition of those funds. Following the issuance of those orders, when counsel for the plaintiff asked the court if it was “making any ruling on the counterclaim itself,” the court responded: “No, because that's not before me. The only item before me is the applicationto sell real property. The counterclaim is found to be an appeal as part of the appeal of the order of the [Probate] Court of the district of Fairfield.”

The church thereafter filed a motion to reargue, in which it renewed its § 45a–24 argument and elucidated its challenge to the court's jurisdiction. The church argued that a counterclaim is not a proper filing in a probate appeal and, additionally, because the counterclaim filed by the coexecutors in this case sought a declaratory judgment under General Statutes §...