State v. Goggin

• Decision Date: 16 August 1988
• Docket Number: No. 13379,13379
• Citation: 546 A.2d 250,208 Conn. 606
• Court: Connecticut Supreme Court
• Parties: , Medicare & Medicaid Guide P 37,446 STATE of Connecticut v. David GOGGIN, Conservator (ESTATE OF Patrick GOGGIN), et al.

Page 250

546 A.2d 250

208 Conn. 606, Medicare & Medicaid Guide P 37,446

STATE of Connecticut v. David GOGGIN, Conservator (ESTATE OF Patrick GOGGIN), et al.

No. 13379.

Supreme Court of Connecticut.

Argued June 8, 1988.

Decided Aug. 16, 1988.

Lorrie D. Lewis, Asst. Atty. Gen., with whom, on the brief, was Joseph I. Lieberman, Atty. Gen., for appellant (state).

Daniel A. Silver, for appellees (defendant June Aleksiewicz et al.).

Before ARTHUR H. HEALEY, SHEA, CALLAHAN, COVELLO and HULL, JJ.

ARTHUR H. HEALEY, Associate Justice.

This action was instituted by the state of Connecticut acting through the commissioner of the department of income maintenance (DIM) under General Statutes §§ 17-83l ¹ and 17-83m ² against several defendants ³ seeking recovery for state assistance furnished under its Medicaid program to Patrick Goggin (Goggin), an incapable person. After the pleadings were closed, two defendants, June Aleksiewicz and Janet Braiewa (defendants) filed a motion for summary judgment which was granted. The state has appealed from that judgment. We find error.

The relevant background circumstances are the following. On February 7, 1984, and prior thereto, Goggin, who was in poor health and at an advanced age, was a patient in a convalescent home. At that time, he owned a life estate in certain premises in West Hartford. This house needed extensive repairs in order to make it rentable and, as the owner of the life estate, he would be responsible for making any repairs. Goggin's condition was such that he "would probably never" return to live in that house. The defendants Aleksiewicz and Braiewa and Anne Page were the remaindermen of these premises.

On February 7, 1984, a hearing was held in the West Hartford Probate Court on the application of the conservators David T. Goggin and Edythe M. Goggin for an order terminating Patrick Goggin's life estate in the West Hartford premises. After taking evidence, the Probate Court found that it was in Goggin's best interest to terminate his life estate and entered an order conveying that interest to the three remaindermen. The probate judge, in an affidavit filed with the defendants' motion for summary judgment, stated that "the consideration to be paid to Mr. Goggin for the release of the life interest was all of the outstanding bills owed by [him] for maintenance of the dwelling."

On May 14, 1984, Goggin's life interest in the real estate was conveyed to the three remaindermen for the sum of $433.32. On June 15, 1984, the remaindermen, by warranty deed, conveyed the fee to the West Hartford premises to Albert J. Larose and Thomas J. Larose. By an application dated December 11, 1984, Goggin applied for public assistance from the state under its Medicaid program. That application was granted effective December 2, 1984.

In March, 1986, the state instituted an action in two counts against the several defendants to recover money expended to that time for Goggin's care. Both counts were against the three remaindermen who were the transferees of Goggin's life interest. The first count was based on General Statutes § 17- 83l, maintaining that there had been a fraudulent conveyance against the state. It alleged, inter alia, that Goggin was in poor health, had limited assets and income and that his life interest was conveyed for the sum of $433.32. It also alleged that this conveyance "was made either without consideration or for less than fair market value and for the purpose of qualifying for assistance to a transferee having knowledge that such transfer [left] the transferor without sufficient means to support himself...." It went on to allege that to date the state had expended "at least $10,000" for Goggin's care and that assistance was ongoing.

The second count was based on General Statutes § 17-83m that provides for the state's right of subrogation to the right of an applicant or recipient of assistance concerning a transfer of property. It incorporated the allegations of the first count and asserted the state's right "to pursue rescission, revocation, avoidance or otherwise setting aside the transfer" of the life interest by virtue of its furnishing public assistance to Goggin. The state claimed money damages in addition to other relief.

By way of special defense, the defendants Aleksiewicz and Braiewa invoked the February 7, 1984 Probate Court decree obtained by the conservators terminating the life estate and approving the conveyance to the three remaindermen. In that pleading, these two defendants allege that "as a result of [the probate] court order, [they] received title to [the] property free and clear of any interest that the State alleges to have."

Thereafter, the defendants Aleksiewicz and Braiewa filed their motion for summary judgment maintaining that there was no genuine issue as to any material fact. To that motion they attached an affidavit ⁴ of the West Hartford probate judge that set out the circumstances surrounding the probate order terminating and conveying the life estate. The state filed its objection to the motion to which it attached certain documents. ⁵ See Practice Book §§ 379 through 381. Among these was a counteraffidavit executed by the chief of resources of the DIM. It averred, inter alia, that the conservators had conveyed Goggin's life use in the property involved to the three remaindermen "for the sum of $451.23" and that, according to "the Department of Income Maintenance Policy Manual Volume I, Chapter III regulations 314-314.1 the value of Mr. Goggin's life estate was assessed at $8,263.35." It also maintained that "to date [July 30, 1987,] the state had expended at least $18,000 ... for his care and treatment," that the assistance was ongoing and that the action in this case was one "for reimbursement by the State ... pursuant to Sections 17-83l and 17-83m for the disposition of property for less than fair market value."

The trial court acknowledged that the action was brought to recover for the "alleged fraudulent conveyance of a life estate" with the first count alleging the conveyance "for no value for the purpose of obtaining public assistance" and that the second count was based on subrogation under § 17-83m. It noted that there was "no dispute" over the Probate Court order of February 7, 1984, that the applications for state assistance were made and approved in December, 1984, and that there was no indication that any appeal had ever been taken from the action of the Probate Court.

On appeal, the state claims that the trial court erred in: (1) concluding that the order of the Probate Court, which was not appealed, precluded the state from seeking recovery, under §§ 17-83l and 17-83m, of state assistance it provided Goggin; and (2) granting summary judgment where there was a genuine issue of material fact concerning the fair market value of the life interest transferred in this fraudulent conveyance action.

I

We first address the state's claim that the trial court erred in concluding that the unappealed Probate Court order of February 7, 1984, precluded the state from pursuing this action under §§ 17-83l and 17-83m. The trial court did err in this conclusion.

The general rule is that judgment of an issue or claim is no bar as against one who is not a party or privy to a party to that judgment. See Hansberry v. Lee, 311 U.S. 32, 40, 61 S.Ct. 115, 117, 85 L.Ed. 22 (1940); Lake Garda Improvement Assn. v. Battistoni, 155 Conn. 287, 294-95, 231 A.2d 276 (1967); Sigal v. Hartford National Bank & Trust Co., 119 Conn. 570, 573, 177 A. 742 (1935); New Haven Sand Blast Co. v. Dreisbach, 102 Conn. 169, 179-80, 128 A. 320 (1925); Bethlehem v. Watertown, 47 Conn. 237 (1879); see also 1 Restatement (Second), Judgments § 34; ⁶ 46 Am.Jr.2d, Judgments §§ 518, 519. The basic principle of § 34 of the Restatement, i.e., "that, generally speaking, only persons who are parties are concluded by an action, is of constitutional dimension." 2 Restatement (Second), Judgments § 34, comment (a), citing, inter alia, Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 329, 91 S.Ct. 1434, 1443, 28 L.Ed.2d 788 (1971), on remand, 334 F.Supp. 47 (N.D.Ill.1971), aff'd, 465 F.2d 380 (7th Cir.1972), cert. denied, 409 U.S. 1061, 93 S.Ct. 559, 34 L.Ed.2d 513 (1972); see Harmon v. San Diego County, 477 F.Supp. 1084, 1091 (S.D.Cal.1979). This rule is well established as a matter of common law. See Commissioner v. Bosch, 387 U.S. 456, 87 S.Ct. 1776, 18 L.Ed.2d 886 (1967), on remand, 382 F.2d 295 (2d Cir.1967); Magavern v. United States, 550 F.2d 797 (2d Cir.1977) (government not bound by action to which it was not a party); 1 Restatement (Second), Judgments § 34, comment a.

Our decision in Cook v. Morris, 66 Conn. 137, 33 A. 594 (1895), is instructive on the issues in this case. In Cook, the plaintiff conservator brought an action against the defendant town of Morris to recover for support furnished to his ward alleging that the ward was a pauper. The plaintiff, to establish his ward's indigence, offered in evidence a certified copy of his account as conservator in which it appeared that the ward's estate had been expended. The account had been accepted and approved by the Probate Court and no appeal had been taken from that decree. The defendant town claimed that the acceptance and allowance of the account had been procured for "an improper and fraudulent purpose" and was "all part of a fraudulent scheme [by the plaintiff conservator]" to prevent his ward from obtaining the benefit of assets in fact belonging to her. In answer to this claim, the plaintiff contended that the probate decree was conclusive. In upholding the trial court's judgment in favor of the town, we pointed out that "[a] judgment can never be invoked to sustain fraud ..." and that "[a] probate record may always be impeached for fraud." Id., at 140, 33 A. 594.

In Cook, we also held that the entire matter of the ward's alleged ownership of...