Ferri v. Powell-Ferri

200 Conn.App. 63

239 A.3d 1216

Paul John FERRI

v.Nancy POWELL-FERRI et al.

AC 42068

Appellate Court of Connecticut.

Argued January 13, 2020

Officially released September 15, 2020

Jeffrey J. Mirman, Hartford, for the appellant (plaintiff).

Robert W. Cassot, Hartford, for the appellees (defendant Thomas Parrino et al.).

Prescott, Devlin and D'Addabbo, Js.

D'ADDABBO, J.

In this vexatious litigation action, the plaintiff, Paul John Ferri, appeals following the rendering of summary judgment in favor of the defendants Thomas Parrino and the law firm of Nusbaum & Parrino,

P.C. (Parrino defendants).¹ On appeal, the primary issue is whether the trial court properly concluded that the Parrino defendants had probable cause to initiate and pursue their cross complaint filed against Ferri in a prior lawsuit. We affirm the judgment of the trial court.

The present action is the third in a series of interrelated matters involving a dispute over the assets of a trust account. In the first action, the defendant Nancy Powell-Ferri sought the dissolution of her marriage to Ferri. In that action, a major marital asset in dispute was a trust created in 1983 and valued at between $60 million and $70 million. Powell-Ferri was represented in this action by the Parrino defendants.

While the dissolution action was pending, the trustees of the 1983 trust brought a declaratory judgment action against Powell-Ferri and Ferri, seeking approval of the trustees’ actions in forming another trust in 2011, into which they decanted all of the assets of the 1983 trust. The Parrino defendants also represented Powell-Ferri in the declaratory judgment action. As part of the trustees’ action, the Parrino defendants filed a cross complaint against Ferri, on behalf of Powell-Ferri, alleging that Ferri had violated his duty to preserve the marital assets by allowing the trustees to remove assets from the marital estate. The trial court, Munro , J. , rendered

summary judgment in favor of Ferri on the cross complaint, concluding that Powell-Ferri failed to state a cause of action. Our Supreme Court affirmed this decision on appeal and declined to recognize the new cause of action. See Ferri v. Powell -Ferri , 317 Conn. 223, 235, 116 A.3d 297 (2015).

The cross complaint against Ferri in the declaratory judgment action, brought by the Parrino defendants on behalf of Powell-Ferri, forms the basis for the present vexatious litigation action brought by Ferri against Powell-Ferri and the Parrino defendants. In this action, Ferri alleged that the Parrino defendants lacked probable cause to institute and pursue the cross complaint. The trial court, Moll , J. , rendered summary judgment in favor of the Parrino defendants. Ferri then filed the present appeal, claiming that the trial court erred by (1) determining that the Parrino defendants had probable cause to bring a cross complaint, (2) concluding that the Parrino defendants had complied with their obligations under rule 3.1 of the Rules of Professional Conduct, (3) denying Ferri's motion for summary judgment as to the Parrino defendants,² and (4) determining that the Parrino defendants had not acted with malice in pursuing their cross complaint. Additional facts will be set forth as necessary.

We begin by setting forth the applicable standard of review. "The standard of review of a trial court's decision granting summary judgment is well established.

Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." King v. Volvo Excavators AB , 333 Conn. 283, 290–91, 215 A.3d 149 (2019). "In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party. ... The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law ... and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact." (Internal quotation marks omitted.) NetScout Systems, Inc. v. Gartner, Inc. , 334 Conn. 396, 408–409, 223 A.3d 37 (2020). "Our review of the trial court's decision to grant the defendant's motion for summary judgment is plenary. ... On appeal, we must determine whether the legal conclusions reached by the trial court are legally and logically correct and whether they find support in the facts set out in the memorandum of decision of the trial court." (Internal quotation marks omitted.) King v. Volvo Excavators AB , supra, at 291, 215 A.3d 149.

"A vexatious suit is a type of malicious prosecution action, differing principally in that it is based upon a prior civil action, whereas a malicious prosecution suit ordinarily implies a prior criminal complaint. To establish either cause of action, it is necessary to prove want of probable cause, malice and a termination of suit in the plaintiff's favor. ... Probable cause is the knowledge of facts sufficient to justify a reasonable person in the belief that there are reasonable grounds for prosecuting an action. ... Malice may be inferred from lack of probable cause. ... The want of probable cause,

however, cannot be inferred from the fact that malice was proven. ... A statutory action for vexatious litigation under General Statutes § 52-568³ ... differs from a common-law action only in that a finding of malice is not an essential element, but will serve as a basis for higher damages. In either type of action, however, [t]he existence of probable cause is an absolute protection against an action for malicious prosecution, and what facts, and whether particular facts, constitute probable cause is always a question of law. ... Accordingly, our review is plenary." (Footnote added; internal quotation marks omitted.) Tatoian v. Tyler , 194 Conn. App. 1, 57–58, 220 A.3d 802 (2019), cert. denied, 334 Conn. 919, 222 A.3d 513 (2020).

With this procedural background and these legal principles in mind, we now set forth the following detailed facts, as stated in Ferri v. Powell-Ferri , supra, 317 Conn. at 223, 116 A.3d 297, the trustees’ declaratory judgment action, that are relevant to our resolution of this appeal. "Powell-Ferri filed an action for dissolution of her marriage to Ferri on October 26, 2010.... Ferri is the sole beneficiary of a trust created by his father, Paul John Ferri, Sr., in 1983 (1983 trust)....⁴

"The 1983 trust provides that, after Ferri attained the age of thirty-five, he would have the right to withdraw principal from the trust in increasing percentages depending on his age. In March, 2011, while the ... dissolution action was pending, the [trustees] created

a second trust whose sole beneficiary was Ferri (2011 trust). The [trustees] then distributed a substantial portion of the assets in the 1983 trust to the 2011 trust.⁵

"Unlike the terms of the 1983 trust, the terms of the 2011 trust do not allow Ferri to withdraw principal. Instead, under the terms of the 2011 trust, the [trustees] have all of the control and decision-making power as to whether Ferri will receive any of the trust income or assets.

"The trial court [in the trustees’ declaratory judgment action] found that Ferri did not have a role in creating the 2011 trust or decanting any of the assets from the 1983 trust. The trial court further found that it was undisputed that Ferri took no action to recover the trust assets when Michael Ferri informed him of the creation of the 2011 trust and the decanting of the assets. The trial court characterized the reasoning behind this inaction as follows: ‘[Ferri] does not want to sue his family ... and he believes the [trustees] are acting in his best interest.’

"After the [trustees] created the 2011 trust and transferred the assets from the 1983 trust to it, they instituted [a] declaratory judgment action seeking a ruling from

the court that they had validly exercised their authority in transferring the assets and that Powell-Ferri had no interest in the 2011 trust assets. Powell-Ferri filed a counterclaim asserting claims of common-law and statutory fraud, civil conspiracy, and seeking a declaratory judgment. After the trial court struck counts alleging fraud and conspiracy, Powell-Ferri filed a second amended counterclaim, later revised, asserting claims of breach of fiduciary duty, breach of loyalty, tortious interference with an expectancy, and seeking a declaratory judgment, as well as [a] cross complaint ....

"Ferri filed a motion for summary judgment, claiming that the cross complaint failed to state a cause of action, and that even if it did set out a cause of action, there was no genuine issue of material fact to support Powell-Ferri's claims. Powell-Ferri opposed the motion on procedural grounds, namely that summary judgment is not the proper means to test the legal sufficiency of a complaint, and on the merits.

"The trial court granted the motion for summary judgment, concluding that Powell-Ferri failed to state a cause of action. The trial court reasoned that, while marital partners have a fiduciary responsibility of full and open disclosure to each other, that responsibility does not extend to require spouses to recover assets belonging to the marital estate. The trial court observed that while spouses may not dissipate assets, ‘at a minimum dissipation in the marital dissolution context requires financial misconduct involving marital assets, such as intentional waste or a selfish financial impropriety, coupled with a purpose unrelated to the marriage.’ Gershman v. Gershman , 286 Conn. 341, 350–51, 943 A.2d 1091 (2008). The trial court concluded that there was no allegation that Ferri ‘engaged in intentional waste or selfish impropriety.’ The court further reasoned...