Are Fiduciaries Getting the Boot?

The traditional rule has always been that claims belonging to the Estate of a deceased person must be brought by the fiduciary of the Estate. ¹ If the fiduciary is not doing his or her job, the beneficiaries can petition the Probate Court to replace the fiduciary. ² Two exceptions to this rule, however, have been developing for years now: (1) the direct injury exception, and (2) the bad fiduciary exception. The Appellate Court in Geremia blessed these exceptions, thereby conferring standing to beneficiaries in many cases to enter the fight. ³

Geremia, of course, did not change the general requirements of standing. ⁴ Standing is "the legal right to set the judicial machinery in motion." ⁵ While the plaintiff must have a real interest in initiating the lawsuit, our Courts recognize that "standing is not a technical rule intended to keep aggrieved parties out of court." ⁶ In other words, standing "requires no more than a colorable claim of injury." ⁷

The first question an attorney must ask post-Geremia is whether the cause of action, as plead, alleges a direct injury to the plaintiff or whether it alleges an injury to the Estate.⁸ Importantly, if the Complaint alleges that the defendant tortiously interfered with the plaintiff’s expectation of inheritance, there is a "colorable claim of direct injury" and, thus, the plaintiff has standing to bring the action.⁹ In other words, when a Complaint alleges that the defendant depleted the Estate and, therefore, interfered with the plaintiff’s right of inheritance, the beneficiary has standing to pursue an action. ¹⁰ On the other hand, if the Complaint merely alleges that the defendant stole from or defrauded the deceased, the Complaint does not allege a direct injury to the beneficiary, and the beneficiary will not have standing unless another exception applies. ^{11, 12}

It is noteworthy that the Geremia Court did not address whether tortious interference with the expectation of inheritance is a recognized cause of action in Connecticut.¹³ With that said, the majority of our Superior Courts recognize such an action, ¹⁴ with the likely elements being "1) the existence of an expected inheritance; 2) the defendant’s knowledge of the expectancy; 3) tortious conduct by the defendant, such as fraud or undue influence; and 4) actual damages to the plaintiff resulting from the defendant’s tortious conduct." ¹⁵

While recognizing claims for tortious interference with the expectation of inheritance do convey new powers and rights to beneficiaries, it does not convey an unlimited power. We must remember that tortious interference with inheritance does not provide the plaintiff with an opportunity to collaterally attack a Will beyond the statutory appeal period.¹⁶ Once a Will is admitted by the Probate Court, and the appeal period expires, ¹⁷ a claim for tortious interference with the expectation of inheritance cannot be used to set aside a Will. ¹⁸ (The only exception to this rule is if the Complaint alleges fraud.¹⁹)

The finding that the Complaint does not allege a direct injury to the beneficiary-plaintiff, however, does not in itself deprive the beneficiary of standing. The Geremia Court blessed another exception from the traditional rule: the bad fiduciary exception. It is not uncommon for a testator to trust his or her nominated fiduciary during the testator’s lifetime. Unfortunately, given that elder abuse is the crime of the century, that trust is often abused.²⁰ The Court, of course, recognized that one cannot let the fox guard the chicken-coop and a fiduciary will not pursue an action against herself. ^{21, 22}

Where the [fiduciary] has been guilty of fraud or collusion with the party to be sued, or . . . where the interests of the personal representative are antagonistic to those of the heirs or distributes, the heirs or distributes may maintain actions relating to the personalty of the estate in their own names. Similarly, when the legal representative has failed or refused to act, the heir may maintain an action to recover assets for the benefit of the estate. ²³

Recognizing that this exception has been adopted by many of our sister states²⁴ and emphasizing that Connecticut General Statute § 45a-234(18) contemplated this exception,²⁵ the Geremia Court blessed prior Superior Court decisions that have conferred standing on the beneficiaries in cases of bad fiduciaries.²⁶ This exception has already been adopted to Trusts; conferring standing to Trust beneficiaries recover assets from bad Trustees.²⁷

Keep in mind, that this exception only gives another opportunity to the beneficiaries to protect their interest. It does not deprive the beneficiaries to petition the Probate Court to remove the fiduciary.²⁸ Nevertheless, this is a critical exception given that the removal of a fiduciary is an extraordinary remedy and the beneficiaries will often have no control over who the Probate Court may appoint.²⁹

All in all, the Geremia decision started a new chapter in estate related litigation, allowing heirs and beneficiaries to directly protect their interests, as opposed to watching from the sidelines. Of Course, the fiduciaries still maintain their duty to protect the Estate and recover potential Estate assets from wrongdoers.

¹ Geremia v. Geremia, 159 Conn. App. 751, 782, 125 A.3d 549 (2015).

² See Conn. Gen. Stat. § 45a-242(a) (2019).

³ Geremia, 159 Conn. App. at 779-88.

⁴ See id. at 779.

⁵ Id.

⁶ Id. (internal citation omitted).

⁷ Id. (internal citation omitted).

⁸ Id. at 780.

⁹ Id. at 871 (also recognizing that claims for slander and intentional infliction of emotional distress allege direct injury).

¹⁰ See id.

¹¹ See id. at 781-88.

¹² This distinction between tortious interference with the expectation of inheritance and statutory theft can be an important one. It is well-settled that the plaintiff will receive treble damages if she is successful at proving statutory theft. Conn. Gen. Stat. § 52-564 (2019). On the other hand, Courts are yet to address the question: if the underlying tort for tortious interference with the expectation of inheritance is statutory theft, can the plaintiff receive treble damages?

¹³ See Geremia, 159 Conn. App. at 780-81.

¹⁴ See e.g., Markowitz v. Villa, CV-16-6060963-S, 2017 Conn. Super. LEXIS 2882 (J.D. New Haven, J. Wilson, Jan. 26, 2017); Wild v. Cocivera, HHD-CV-14-6050575-S, 2016 Conn. Super. LEXIS 1788 (J.D. Hartford, J. Noble, June 16, 2016); Roscoe v. Elim Park Baptist Home, Inc., NNH-CV-14-6049541-S, 2015 Conn. Super. LEXIS 3124 (J.D. New Haven, J. Frechette, Dec. 22, 2015); Reilley v. Albanese, AAN-CV-15-6018220-S, 2015 Conn. Super. LEXIS 3141 (J.D. Ansonia-Milford, J. Stevens, Dec. 14, 2015); Hart v. Hart, WWM-CV-14-6007918-S, 2015 Conn. Super. LEXIS 1094 (J.D. Windham, J. Calmar, May 11, 2015); Kite v. Pascale, 3:07-cv-0512 (AWT), 2015 U.S. Dist. LEXIS 42086 (D. Conn., J. Thompson, March 31, 2015); Vechiola v. Fasanella, CV-10-5029378-S, 2013 Conn. Super. LEXIS 374 (J.D. Fairfield, J. Radcliffe, Feb. 7, 2013); Caro v. Weintraub, 3:09-CV-1353 (PCD), 2010 U.S. Dist. LEXIS 116492 (D. Conn, J. Dorsey, Nov. 2, 2010); Dapasquale v. Hennessey, CV-10-6007472-S, 2010 Conn. Super. LEXIS 2202 (J.D. Hartford, J. Peck, Aug. 27, 2010); Van Eck v. West Haven Funeral Home, CV-09-5031256-S, 2010 Conn. Super. LEXIS 2002 (J.D. New Haven, J. Zoarski, Aug. 4, 2010); Bochian v. Bank of Am., N.A., CV-06-4019877, 2006 Conn. Super. LEXIS 3663 (J.D. Hartford, J. Rittenband, Dec. 8, 2006); but see Eder v. Eder, NNH-CV-13-6036446, 2014 Conn. Super. LEXIS 1416 (J.D. New Haven, J. Nazzaro, June 10, 2014).

¹⁵ Depasquale v. Hennessey, CV106007472S, 2010 Conn. Super LEXIS 2202, *9 (J.D. of Hartford, J. Peck, Aug. 27, 2010).

¹⁶ See Conn. Gen. Stat. § 45a-24 (2019).

¹⁷ The appeal period is thirty days. Conn. Gen. Stat. § 45a-186(a) (2019); but see Conn. Gen. Stat. § 45a-187 (2019) (extending the appeal period to twelve months if the party did not receive notice.)

¹⁸ See Conn. Gen. Stat. § 45a-24 (2019). Will challenges are commonly done for undue influence and/or lack of capacity. See e.g., Lee v. Horrigan, 140 Conn. 232, 233, 98 A2.d 909 (1953).

¹⁹ Brennan v. King, CV-02-0172137-S, 2003 Conn. Super. LEXIS 21 (J.D. of Waterbury, J. Dubay, Jan. 8, 2003) (citing Conn. Gen. Stat. § 45a-24).

²⁰ Kristen Lewis, Elder Financial Abuse: The Crime of the 21^st Century, ACTEC FOUND., (August 2018), https://actecfoundation.org/podcasts/elder-financial-abuse (last visited May 24, 2019) (noting that elder abuse is responsible for over thirty-six billion dollars in losses to elderly victims each year).

²¹ See Hart v. Hart, CV-14-6007918, 2014 Conn. Super. LEXIS 2110 (J.D. of Windham, J. Boland, Aug. 28, 2014).

²² Even though fiduciaries have the mandatory duty to collect all debts due to the estate. See Geremia, 159 Conn. App. at 783.

²³ Id. at 784.

²⁴ Id. at 784-85 (citing Kiley v. Lubelsky, 315 F. Supp. 1025, 1028 (D. S.C. 1970); Schaefer v. Schaefer, 89 Wis. 2d 323, 329, 278 N.W.2d 276 (App. 1979); and Trotter v. Mut’l Reverse Fund Life Assn., 9 S.D. 596, 600, 70 N.W. 843 (1897).

²⁵ Id. at 785 (citing Conn. Gen. Stat. 45a-234(18), which provides that the fiduciary’s decision to compromise a claim “shall be conclusive between the fiduciary and the beneficiaries of the estate or trust in the absence of fraud, bad faith or gross negligence of the fiduciary”).

²⁶ Id. at 781-86 (citing Dickman v. Generis, 48 Conn. Supp. 380, 383-85, 845 A.2d 488 (2004); Hart v. Hart, CV-14-6007918, 2014 Conn. Super. LEXIS 2110 (J.D. of Windham, J. Boland, Aug. 28, 2014); and Wright v. Wright, CV-05-4000024, 2005 Conn. Super. LEXIS 1458 (J.D. of New Haven, J. Levin, May 27, 2005)).

²⁷ Christian v. Christian, AAN-CV-14-5011008-S, 2016 Conn. Super. LEXIS 296, *9-15 (J.D. of Ansonia-Milford, J. Stevens, Feb. 5, 2016).

²⁸ See Conn. Gen. Stat. § 45a-242(a) (2019). Keep in mind, however, that the removal of fiduciary is an “extraordinary remedy designed to protect against harm cause by the continuing depletion or mismanagement of an estate. In the absence of continuing harm to the interests of the estate and its beneficiaries, removal is not justified merely as a punishment for the fiduciary’s past misconduct.” Cadle Co. v. D’Addario, 268 Conn. 441, 457, 844 A.2d 836 (2004) (internal citation omitted.)

²⁹ See id.