Tatoian v. Tyler, AC 40736

194 Conn.App. 1

220 A.3d 802

Richard TATOIAN, Trustee

v.Bruce D. TYLER, et al.

AC 40736

Appellate Court of Connecticut.

Argued December 3, 2018

Officially released October 29, 2019

Bruce D. Tyler, Somers, self-represented, and Jay M. Tyler, self-represented, the appellants-cross appellees (defendants).

Bruce S. Beck, Manchester, for the appellee-cross-appellant (plaintiff).

Sheldon, Keller and Moll, Js.^*

KELLER, J.

The plaintiff, Richard Tatoian, in his capacity as trustee of the Ruth B. Tyler Irrevocable Trust, brought the underlying vexatious litigation action against the defendants, Bruce D. Tyler (Bruce Tyler) and Jay M. Tyler (Jay Tyler). The defendants are among the beneficiaries of the trust. In 2010, Jay Tyler commenced an action (prior action) against, among others, the plaintiff and Bruce Tyler. Jay Tyler named the plaintiff as a defendant in all seven counts of his complaint, but counts three through seven of the complaint were brought against the plaintiff exclusively. Essentially, with respect to the plaintiff, Jay Tyler alleged in his complaint that, in a variety of ways, the plaintiff had performed deficiently as trustee and sought money damages and equitable relief. In 2011, Bruce Tyler brought a cross complaint in the prior action. All four counts of the cross complaint, which was brought against the plaintiff exclusively, are nearly identical to the claims raised in counts four through seven of the complaint. Bruce Tyler sought, inter alia, money damages. After the plaintiff prevailed in the prior action, he commenced the present action, sounding in common-law and statutory vexatious litigation, for, inter alia, attorney's fees and costs he incurred, on behalf of the trust, in defending himself in the prior action. Following a court trial in the present action, the trial court found that the defendants lacked probable cause to bring one of the claims against the plaintiff in the prior action. Accordingly, the court rendered judgment in part in the plaintiff's favor and awarded him a portion of the attorney's fees and costs he incurred in defending the prior action.

The defendants appeal from the judgment of the trial court and raise the following claims: (1) the court lacked subject matter jurisdiction over the plaintiff's causes of action because he lacked standing at the time of the commencement of the present action; (2) the court improperly failed to consider whether the settlor of the trust, Ruth B. Tyler (Ruth Tyler), was subjected to undue influence in connection with the creation of the trust; (3) the court misinterpreted relevant law in its analysis of whether, in the prior action, the defendants had probable cause to claim that the plaintiff had violated General Statutes § 45a-541c by failing to diversify trust assets; and (4) the court misinterpreted relevant law in its analysis of whether the plaintiff could prevail in the present action merely by demonstrating that the defendants lacked probable cause to bring one of the claims that they brought against him in the prior action.

The plaintiff cross appeals from the judgment of the trial court. He claims that, although the court properly concluded that one of the claims raised against him by the defendants in the prior action was not supported by probable cause, the court erroneously failed to conclude that the defendants lacked probable cause to bring the remaining claims and had acted with malice in bringing the claims.¹

We disagree with the claims raised in the defendants' appeal but agree, in part, with the claim raised in the plaintiff's cross appeal. Accordingly, we affirm in part and reverse in part the judgment of the trial court.

IFACTS AND PROCEDURAL HISTORY

In its initial memorandum of decision, the court found the following facts, many of which are not in dispute: "The defendants, [Jay Tyler] and [Bruce Tyler], are the sons of the late [Ruth Tyler]. The defendants ... have three brothers; Thomas J. Tyler [ (Thomas Tyler) ], Russell J. Tyler [ (Russell Tyler) ], and John E. Tyler, Jr. [ (John Tyler, Jr.) ].

"Bruce Tyler and Thomas Tyler are attorneys licensed to practice in this state.

"In 1984, [Bruce Tyler] represented his mother, Ruth Tyler, in executing a will that stated that the Tyler child with the lowest net worth would receive enough money from her estate to equalize that child's net worth with that of the sibling with the second lowest net worth. [Bruce Tyler] gave Ruth Tyler the original of the 1984 will and he kept a copy for his records. [Bruce Tyler] did not tell his siblings about the 1984 will or provide them with a copy because he understood that as her attorney he had an obligation not to disclose such information without her consent.

"Under the 1984 will, [Jay Tyler], the youngest of Ruth Tyler's five sons, would have received the entirety of Ruth Tyler's estate. [Jay Tyler] first learned about the 1984 will from [Bruce Tyler] after Ruth Tyler died in 2010.

"In 1988, Ruth Tyler and her husband, John Tyler, the defendants' father, executed new wills in which they divided their assets equally among their five sons. This 1988 will was also prepared by [Bruce Tyler], who was present when the will was executed and took the oaths. [Bruce Tyler] did not tell Jay Tyler that their parents had changed the will to leave their estate to their five children equally. At trial, [Bruce Tyler] claimed that he did not recall preparing the 1988 will for his parents.

"In 1990, Ruth and John Tyler took out a loan on the family home in order to loan Jay Tyler $50,000. [Bruce Tyler] assisted his parents in obtaining the bank loan. Under his agreement with his parents, [Jay Tyler] was required to pay back the loan in full with interest and to make monthly payments to his parents.

"In 1991, [Bruce Tyler] borrowed $25,000 from his parents to use for college tuition. He, too, was required to pay back this loan with interest. [Bruce Tyler] repaid his parents at least $10,000 on this loan.

"John Tyler, Ruth Tyler's husband, died in 1997.

"In 1999, Ruth Tyler executed a new will with the assistance of her son, Thomas Tyler. Under this will, Ruth's five sons would share equally in her estate; however, any outstanding loan amounts owed to her would be deducted from that child's share of the estate and redistributed to the others. At that time, she [granted] her son [John Tyler, Jr.] her power of attorney.

"[Bruce Tyler] could not recall if his mother told him about the 1999 will. [Jay Tyler] was not aware of the 1999 will until after his mother died.

"On August 3, 2004, the plaintiff received a call from Thomas Tyler notifying him that his mother, Ruth Tyler, would be calling him to discuss estate planning. The next day, Ruth Tyler called the plaintiff, and they met on August 10, 2004. The plaintiff is an attorney who has practiced in Enfield for forty years in the area of trusts, wills, and estates. He had known Ruth Tyler for fifty years, as their families were neighbors.

"At their meeting on August 10, 2004, Ruth Tyler explained that she had prepared a will in 1999, which she wished to maintain. She also told the plaintiff that she wanted to create a trust to preserve her assets in the event she went into a nursing home. They also discussed the execution of a living will and revised power of attorney, again designating her son, [John Tyler, Jr.]. The plaintiff met with [John Tyler, Jr.], who held Ruth Tyler's power of attorney, and he gave the plaintiff a copy of the 1999 will.

"The plaintiff prepared the trust based on Ruth Tyler's instructions and explained its contents to her in detail. In order to accomplish Ruth Tyler's purpose to preserve her assets and avoid probate, the trust was irrevocable. The plaintiff was made the trustee of the trust. Ruth Tyler agreed to the trust provisions.

"The trust adopted the provisions of the 1999 will, and provided that Ruth Tyler's five sons would share equally in her estate, ‘subject to the direction that any sums due and owing to the [g]rantor [Ruth Tyler] by her sons [Bruce Tyler and Jay Tyler], shall be deducted from any share which they are to receive’ under the trust.

"According to the trust, the trustee had ‘full power and authority to manage and control the trust estate,’ which included the right to invest and reinvest the trust assets. ‘The trustees may make and change such investments from time to time according to their discretion; and they may continue to hold any stocks, securities or other property received by them hereunder, without any duty of diversification.’ During his time as trustee, the plaintiff had discussions with an investment advisor but decided not to make any trades or any changes to the investments of the trust assets.

"Under the section [of the trust entitled ‘(t)rustee (a)ccountings’], the trust provides: ‘The [t]rustee shall render an account at least once each twelve months to each adult beneficiary .... The account shall show the receipts, disbursements and distributions of principal and income since the last accounting, and the assets on hand. If no objection shall be made to any account so rendered within ninety (90) days after a copy thereof has been deposited in the mail addressed to any person entitled thereto, as hereinabove provided, such beneficiary shall be conclusively presumed to have approved or assented to all actions reflected in the account so rendered.’ Prior to Ruth Tyler's death, the plaintiff only sent accountings to Ruth Tyler and [John Tyler, Jr.].

"The trust identifies Ruth Tyler as grantor and refers to her as grantor throughout the trust. Although the trust includes some limited definitions, it does not define the term ‘beneficiary.’

"The trust contains an incontestability of trust clause, which provides that ‘if any beneficiary’ under the trust shall contest the validity of the trust, they shall not be entitled to any benefit under the trust.

"The trust also provides a provision entitled ‘Exculpation of Individual Trustees’ that provides: ‘No...