Opinion
FSTCV116009029S
09-05-2017
Willis Cavanagh v. Joseph Richichi, Co-Trustee et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
Donna Nelson Heller, J.
The plaintiff Willis Cavanagh, also known as Willis Cavanaugh (Mr. Cavanagh), commenced this action, returnable April 26, 2011, for the partition by sale of the real property located at 120 Water Street in Norwalk, Connecticut (the Water Street property), in which he holds an undivided one-third interest. The original defendants were the other co-owners of the Water Street property: Joseph Richichi (Mr. Richichi) and Leslie Miklovich (Ms. Miklovich), in their capacity as the co-trustees of the Hillard E. Bloom Revocable Trust (the Hillard Bloom Trust); Robert Bloom (Mr. Bloom) and John Gardella (Mr. Gardella), in their capacity as the co-trustees of the Norman R. Bloom Revocable Trust (the Norman Bloom Trust); and New NRB #3 Corporation (New NRB).
On June 23, 2013, Mr. Richichi and Ms. Miklovich, as co-trustees of the Hillard Bloom Trust, filed an answer to the complaint (#106.00). In their answer, they agree with Mr. Cavanagh that a partition by sale, with an equitable distribution of the proceeds, would better serve the interests of the co-owners than a partition in kind.
Mr. Bloom, as co-trustee of the Norman Bloom Trust, and New NRB filed an answer, counterclaim, and cross claim on July 8, 2013 (#107.00). In their counterclaim, they contend that a physical division of the Water Street property is not appropriate and a partition by sale would not be in the best interests of the owners. They allege that Mr. Cavanagh's interest in the Water Street property is minimal, and, therefore, they are entitled to an order requiring Mr. Cavanagh to convey his interest to them in exchange for fair compensation. They also assert the right to set off against any fair compensation due to Mr. Cavanagh the amounts that they have spent for the upkeep, maintenance, and improvement of the Water Street property. Mr. Bloom, as co-trustee of the Norman Bloom Trust, and New NRB assert the same claims against Mr. Richichi and Ms. Miklovich, as co-trustees of the Hillard Bloom Trust, in their cross claim.
Mr. Cavanagh filed an answer with special defenses to the counterclaim on May 16, 2014 (#108.00). Mr. Bloom, as co-trustee of the Norman Bloom Trust, and New NRB filed a request to revise the special defenses on June 27, 2014 (#110.00).
Patrick D. McCabe (Mr. McCabe) succeeded Mr. Richichi as a co-trustee of the Hillard Bloom Trust following Mr. Richichi's death. On August 26, 2015, Mr. Cavanagh moved to substitute Mr. McCabe, as a successor co-trustee of the Hillard Bloom Trust, and to cite in Mr. Gardella, as co-trustee of the Norman Bloom Trust--who, although named as a defendant in the original summons and complaint, had not been effectively served with process--as defendants in this action (#121.00; #122.00). The court (Mintz, J.) granted both motions on September 29, 2015 (#121.01; #122.01).
Mr. Cavanagh submitted an amended complaint reflecting the interests of Mr. McCabe, as successor co-trustee of the Hillard Bloom Trust, and Mr. Gardella, as co-trustee of the Norman Bloom Trust, on August 26, 2015 (#123.00). On October 15, 2015, he filed the amended complaint, returnable November 3, 2015, as served (#125.00). The amended complaint is identical to the original complaint except as to the named parties.
Mr. Cavanagh filed revised special defenses to the counterclaim of Mr. Bloom and New NRB on August 16, 2016 (#137.00). The revised special defenses are enumerated First Special Defense to Eighth Special Defense and respond to the set-off claim asserted by Mr. Bloom, as co-trustee of the Norman Bloom Trust, and New NRB.
On August 17, 2016, Mr. Gardella, as co-trustee of the Norman Bloom Trust, and New NRB filed an answer, counterclaim, and cross claim (#138.00) that mirrors the allegations in the answer, counterclaim, and cross claim filed by Mr. Bloom, as co-trustee of the Norman Bloom Trust, and New NRB on July 8, 2013. Also on August 17, 2016, Mr. Bloom and Mr. Gardella, as the co-trustees of the Norman Bloom Trust co-trustees (the Norman Bloom Trust co-trustees), and New NRB replied to Mr. Cavanagh's revised special defenses (#139.00), and Mr. Cavanagh filed an answer to the counterclaim of Mr. Gardella, as co-trustee of the Norman Bloom Trust, and New NRB (#141.00).
Mr. McCabe and Ms. Miklovich, as the co-trustees of the Hillard Bloom Trust (the Hillard Bloom Trust co-trustees) filed an answer with special defenses to the cross claim of Mr. Bloom, as co-trustee of the Norman Bloom Trust, and New NRB on August 17, 2016 (#140.00), which they withdrew and replaced with an answer and special defenses to both the cross claim of Mr. Bloom, as co-trustee of the Norman Bloom Trust, and New NRB and the cross claim of Mr. Gardella, as co-trustee of the Norman Bloom Trust, and New NRB on August 19, 2016 (#143.00). On August 25, 2016, the Norman Bloom Trust co-trustees and New NRB replied to the special defenses asserted by the Hillard Bloom Trust co-trustees (#144.00).
This action was tried to the court on August 17, 2016, September 1, 2016 and January 10, 2017. All parties were represented by counsel. The court heard testimony from the following witnesses: Mr. Bloom; Michael McGuire (Mr. McGuire) of the Austin McGuire Company, a real estate appraiser retained as an expert by Mr. Cavanagh; Ronald McInerney (Mr. McInerney) of Domus Appraisals, a real estate appraiser retained as an expert by the Norman Bloom Trust co-trustees and New NRB; and Gary Wetmore (Mr. Wetmore) of G& C Marine Services, Inc. The court reviewed the exhibits that were admitted into evidence and took judicial notice of the contents of the court file.
The court set a briefing schedule at the close of the evidence. The Norman Bloom Trust co-trustees and New NRB filed a post-trial memorandum on March 3, 2017 (#147.00). Mr. Cavanagh filed a post-trial memorandum on March 23, 2017 (#148.00). The Hillard Bloom Trust co-trustees filed a post-trial memorandum on March 24, 2017 (#149.00). The Norman Bloom Trust co-trustees and New NRB submitted a post-trial reply memorandum on April 10, 2017 (#151.00).
I
The Water Street property is a .70-acre waterfront property in the South Norwalk section of Norwalk. The property has approximately 70 feet of frontage on Water Street and 150 feet of frontage on Norwalk Harbor. It is a narrow, mostly level, rectangularly shaped lot. The land portion of the Water Street property comprises about 75 percent of the parcel; the remaining 25 percent extends into Norwalk Harbor. The Water Street property is improved with a small two-story building, a bulkhead, a boat lift, a sixty-foot dock, and a sixty-foot pier that extends into the harbor. It has seven boat slips and storage space for twenty to twenty-five boats. The Water Street property is located in the Norwalk Marine Commercial zone.
Mr. Cavanagh owns an undivided one-third interest in the Water Street property. The Norman Bloom Trust co-trustees own an undivided one-sixth interest in the Water Street property. New NRB, an oyster and shellfishing company operated by Mr. Bloom under the trade name " Bloom Brothers, " owns an undivided one-third interest in the Water Street property. Mr. Bloom's wife is the president of New NRB, and Mr. Bloom is the vice president of the company. The Norman Bloom Trust owns 100 percent of the stock of New NRB. Mr. Bloom is a beneficiary of the Norman Bloom Trust. The Hillard Bloom Trust co-trustees own an undivided one-sixth interest in the Water Street property.
The Norman Bloom Trust is styled the " Norman R. Bloom Revocable Trust for the benefit of Robert W. Bloom, et al." No beneficiaries of the Norman Bloom Trust other than Mr. Bloom were identified during the trial.
Mr. Bloom's father, Norman Bloom (Norman Bloom) and Ms. Miklovich's father, Hillard Bloom (Hillard Bloom) were twin brothers. They were in the commercial shellfishing business together. They also had other jointly-owned commercial ventures and real estate holdings.
Norman Bloom and Hillard Bloom acquired the Water Street property in late 1962 with an individual named Wallace Bell (Mr. Bell). In a 2002 quiet title action, the court (Lewis, J.T.R.) found that Mr. Cavanagh held a one-third ownership interest in the Water Street property by virtue of a resulting trust that was created in 1963, when Mr. Cavanagh contributed half of the down payment for the purchase of the Water Street property, and a 1993 deed from the three record owners of the property that was delivered and recorded ten years later. Cavanaugh v. Richichi, Co-Executor et al., Superior Court, judicial district of Stamford/Norwalk, Docket No. FST-CV-02-0189366-S, (2005), aff'd, 100 Conn.App. 466, 918 A.2d 290 (2007) (the 2002 quiet title action). The court has taken judicial notice of the trial court's findings in the 2002 quiet title action.
Judge Lewis summarized the facts underlying the finding of a resulting trust as follows: " The starting point for the analysis of the plaintiff's claims is December 24, 1962, when Helen Soderstrom, Beatrice Berg and Grace Wolfe executed a warranty deed to 120 Water Street, Norwalk, to Hillard E. Bloom, his brother Norman R. Bloom and Wallace H. Bell, Jr. This deed was recorded in the Norwalk land records in volume 591, page 536. The plaintiff's name did not appear as a grantee because the grantors did not know the plaintiff and were apparently reluctant to include him in the deed of conveyance. The plaintiff did, however, pay the grantors $5,000, which was one-half of the $10,000 deposit or down payment. The grantees took out a mortgage for approximately $45,000, which was paid by a partnership called Bell's Boatyard, which ran an oyster business from 120 Water Street, and of which the plaintiff was a one-third partner." Cavanaugh v. Richichi, Co-Executor, supra, Superior Court, Docket No. FST-CV-02-0189366-S .
Mr. Bell operated a boatyard on the Water Street property under the name " Bell's Boatyard" until the late 1970s. Mr. Cavanagh was a one-third partner in the boatyard. Norman Bloom and Hillard Bloom were not involved in the day-to-day operation of the boatyard. Their company, Tallmadge Brothers, Inc. (Tallmadge Brothers) eventually acquired Mr. Bell's one-third interest in the Water Street property.
This interest passed to New NRB in the divisive reorganization of Tallmadge Brothers, described below.
While Bell's Boatyard was in operation on the Water Street property, a marine railway, with tracks extending from the land portion of the property onto the seabed, was used to haul boats out of the water. The marine railway failed in the late 1970s, and Bell's Boatyard shut down. The Water Street property was rented to Bud Dean, a woodworker, and then to Maurice Marine, a company that hauled and maintained small pleasure boats. Maurice Marine used a 1940s vintage crane that was located on the property to lift boats from the water. At some point, Maurice Marine ceased doing business on the Water Street property.
After Norman Bloom and Hillard Bloom passed away, their respective families divided the businesses and properties that the brothers had owned jointly. Tallmadge Brothers went through a divisive reorganization in or about 2001-2002, and the assets were split equally between the two families. Mr. Bloom and his brothers subsequently divided their one-half share of the properties among themselves.
The Hillard Bloom Trust co-trustees refer to this entity as Talmadge, Inc. in their post-trial memorandum.
A divisive reorganization is a type of organizational restructuring under § 368(a)(1)(D) of the Internal Revenue Code, 26 U.S.C. § 368(a)(1)(D).
Mr. Bloom testified that, as part of the divisive reorganization of Tallmadge Brothers, each party was supposed to have a location from which to operate his business without interference from the other participants in the divisive reorganization. The Water Street property was designated as the location from which Mr. Bloom could operate his oyster and shellfishing business without their interference. In or about 2003, when Mr. Bloom and his brothers divided their share of the assets, he selected the Water Street property, taking title to the Tallmadge Brothers' one-third interest in the name of New NRB. New NRB is a spin-off from Tallmadge Brothers.
The Hillard Bloom Trust co-trustees were required to withdraw an objection that they had filed to New NRB's permit applications with the Connecticut Department of Environmental Protection because they were not allowed to interfere with Mr. Bloom's right to operate his business on the Water Street property.
Mr. Bloom has been involved in commercial shellfishing since the early 1970s, when he was twelve or thirteen years old. He started with Tallmadge Brothers in the late 1980s or early 1990s.
By 2000, it was not possible to operate any marine-related business from the Water Street property without dredging the seabed and removing all of the garbage, derelict boats, and debris left from the Bell's Boatyard and Maurice Marine operations that had accumulated over the years. The existing bulkhead had deteriorated. A portion of the marine railway tracks and the old crane were still there. Foundation pilings remained in the water from a building that had been removed in the 1990s. Mr. Bloom testified that everyone in the Bloom family was aware of the work that needed to be done on the Water Street property.
In approximately 2000-2001, before he formally obtained an interest in the Water Street property, Mr. Bloom, through his marine construction company, Tallmadge Sea and Land Construction (Tallmadge Sea and Land), a limited liability company, began to clean up and restore the property with the help of his son and another man that he worked with. He testified that the property was " a mess" before they started clearing it. He was concerned at that time that the Norwalk Harbor Management Commission might take enforcement action against the Water Street property. They filled up many thirty-yard dumpsters with garbage and debris. They sent the derelict boats and the old crane to a scrap yard. They cleaned up the pilings on the land side of the property, where the marine railway had been, and extracted the foundation pilings that remained in the water with a crane or a vibratory hammer.
Tallmadge Sea and Land was formed in 1995 or 1996, when Tallmadge Brothers started taking on outside work. Mr. Bloom explained that he did the work on the Water Street property through Tallmadge Sea and Land for liability and insurance purposes because Tallmadge Sea and Land was insured to perform that type of work. He and his wife are currently the members of the Tallmadge Sea and Land.
Mr. Bloom began the process of obtaining the permits to improve the Water Street property in 2002-2003. New NRB secured the necessary permits and approvals from the Army Corps of Engineers, the Connecticut Department of Environmental Protection (now the Department of Energy and Environmental Protection), the Norwalk Harbor Management Commission, the Norwalk Coastal Area Management Commission, and the Norwalk Shellfish Commission. Once the permits were obtained, he started working on the improvements to the Water Street property.
In February 2005, Tallmadge Sea and Land removed the remains of the old bulkhead and the marine railway tracks from the Water Street property. Using a crane that worked off land and a vibratory hammer to drive the sheets into the ground, they replaced the old bulkhead with a new sheet steel bulkhead. They also replaced two telephone poles, repaired the water line, and installed underground power lines and frost-free hydrants. After the new bulkhead was anchored, they installed a cap and fender system, a travel lift for hauling boats, and a pier. The pier is made of concrete, on wooden foundation pilings. It is sixty feet long and six feet wide. It extends into the water with an aluminum ramp and a wooden floating dock. The wooden floating dock was installed in October 2006.
The seabed portion of the Water Street property was dredged in 2009 so that the property could be used for commercial boats. Approximately 3, 000 cubic yards of sediment were removed at that time. The dredging occurred over a period of time because Mr. Bloom, his son, and his co-worker did the work themselves. Prior to the dredging, New NRB's commercial fishing boats could not have been tied up to the pier or the dock. Due to the sediment that had built up over the years, even a personal pleasure boat would sit on the seabed at low tide.
Mr. Bloom prepared invoices from Tallmadge Sea and Land to New NRB to keep track of the improvements that he was making to the Water Street property and to support a claim for the value of those improvements in a partition action. Those invoices, totaling $893,900, have not been paid. Mr. Bloom covered the cost of the materials personally or through New NRB. All of the work to clean up the Water Street property and to install and construct the improvements on the property was necessary for the property to be useable by any marine dependent business, including New NRB's oyster and shellfishing business.
The invoices include a profit margin of around 10 percent, according to Mr. Bloom.
Mr. Bloom said that all of the other co-owners of the Water Street property were aware of the work that he was doing on the property and the permit application process, although he did not specifically notify them. Mr. Bloom did not send a bill or other documents to any or the co-owners, and he did not receive any contribution from them toward the costs that he incurred.
Mr. Bloom acknowledged that he did not consider Mr. Cavanagh to be a co-owner of the Water Street property until Mr. Cavanagh successfully prosecuted the 2002 quiet title action. He said that he and Mr. Cavanagh had little or no contact after the judgment in that case was affirmed.
Mr. Bloom has paid the real estate taxes on the Water Street property since 2001. From July 2003 to date, Mr. Bloom has paid a total of $143,748.74 in real estate taxes on the property. The taxes are current. New NRB pays for the insurance on the Water Street property. The co-owners have not contributed to the taxes, the insurance, or the cost of maintaining the Water Street property.
New NRB docks one to four fishing boats at the Water Street property. It operates its shellfishing business from that location. Coastal Oyster Farms, a business owned by two of Mr. Bloom's cousins, also docks a fishing boat at the Water Street property. Mr. Bloom has never denied anyone, including Mr. Cavanagh and the Hillard Bloom Trust co-trustees, the use of the Water Street property. New NRB has not paid anything to the co-owners for its use and occupancy of the property with the exception of one payment in the late 2000s, described as " a couple thousand dollars."
Mr. Bloom testified that if the Water Street property were sold and he no longer had an ownership interest in the property, it would be very difficult for him to find another location at which to dock his shellfishing boats. He said that there are not many areas in Norwalk where commercial boats can be tied up. He had looked for waterfront property in Norwalk and could not find anything.
Mr. Bloom testified that Mr. Cavanagh and the co-trustees of the Hillard Bloom Trust, Mr. McCabe (or his predecessor Mr. Richichi) and Ms. Miklovich, have never sought access to the Water Street property, and he has never denied them access. The court credits Mr. Bloom's testimony.
Mr. Bloom testified that he hauled a boat belonging to Mr. Cavanagh's son Keith Cavanagh out of the water at the Water Street property.
II
Pursuant to General Statutes § 52-495, " [c]ourts having jurisdiction of actions for equitable relief may, upon the complaint of any person interested, order partition of any real property held in joint tenancy, tenancy in common, coparcenary or by tenants in tail." General Statutes § 52-495. " The right to partition has long been regarded as an absolute right, and the difficulty involved in partitioning property and the inconvenience to other tenants are not grounds for denying the remedy. No person can be compelled to remain the owner with another of real estate, not even if he become[s] such by his own act; every owner is entitled to the fullest enjoyment of his property, and that can come only through an ownership free from dictation by others as to the manner in which it may be exercised. Therefore the law afford[s] to every owner with another relief by way of partition . . ." (Internal quotation marks omitted.) Fernandes v. Rodriguez, 255 Conn. 47, 55, 761 A.2d 1283 (2000).
" Historically, partition in kind has been the remedy of choice where owners of property do not want to be bound to each other through that ownership. Nonetheless, there [exist] circumstances in which physical partition is not feasible; therefore, [i]n Connecticut, an act extending the power of our courts to order a sale in partition proceedings was enacted in 1844." (Internal quotation marks omitted.) Giulietti v. Giulietti, 65 Conn.App. 813, 852-53, 784 A.2d 905, certs. denied, 258 Conn. 946, 947, 788 A.2d 95, 96, 97 (2001). Under General Statutes § 52-500(a), " [a]ny court of equitable jurisdiction may, upon the complaint of any person interested, order the sale of any property, real or personal, owned by two or more persons, when, in the opinion of the court, a sale will better promote the interests of the owners. If the court determines that one or more of the persons owning such real or personal property have only a minimal interest in such property and a sale would not promote the interests of the owners, the court may order such equitable distribution of such property, with payment of just compensation to the owners of such minimal interest, as will better promote the interests of the owners." General Statutes § 52-500(a).
The last sentence of subsection (a) of General Statutes § 52-500 was added following the decision of our Supreme Court in Fernandes v. Rodriguez, supra, 255 Conn. 47. At the time Fernandes was decided, § 52-500(a) provided that " [a]ny court of equitable jurisdiction may, upon the complaint of any person interested, order the sale of any property, real or personal, owned by two or more persons, when, in the opinion of the court, a sale will better promote the interest of the owners." General Statutes § 52-500(a) (Rev. to 1999). In Fernandes, the trial court had ordered the plaintiff to pay money to the defendant in exchange for a quitclaim deed to the subject property. The defendant appealed to the Appellate Court, which affirmed the trial court's ruling. Fernandes v. Rodriguez, 54 Conn.App. 444, 735 A.2d 871 (1999), rev'd, 255 Conn. 47, 55, 761 A.2d 1283 (2000).
Our Supreme Court granted the defendant's petition for certification for appeal from the Appellate Court, limited to the following issue: " In this partition action, did the Appellate Court properly conclude that the trial court had the equitable power to order the named defendant to convey his interest in the property to the plaintiff and the plaintiff to pay the named defendant money damage?" Fernandes v. Rodriguez, 251 Conn. 907, 739 A.2d 264 (1999). The court reversed the judgment and concluded that " in a partition action, one joint tenant or tenant in common cannot dispossess another except by partition in kind or partition by sale." (Emphasis in original.) Fernandes v. Rodriguez, supra, 255 Conn. at 54-55. As the court explained, " [o]n the basis of the history of the right to partition, and in light of the legislative treatment of that right, we have held repeatedly that in resolving partition actions, the only two modes of relief within the power of the court are partition by division of real estate and partition by sale. [A] court is limited to rendering a judgment of either partition in kind or by sale of the real property . . . thus terminating the ownership relationship between the parties . . . Accordingly, remedies that fall outside the realm of partition in kind or partition by sale are not legally permissible . . . and a court is precluded from substituting its own ideas of what might be a wise provision in place of a clear expression of legislative will." (Citations omitted; emphasis in original; internal quotation marks omitted.) Id. at 57-58.
Our legislature amended General Statutes § 52-500(a) in response to Fernandes . Public Acts 2004, No. 04-93, § 1. " As amended, § 52-500(a) permits the court to order an equitable distribution of the property if it determines that one or more of the persons owning the property have only a minimal interest in the property and a sale would not promote the interest of the owners." (Emphasis in original.) Fusco v. Austin, 141 Conn.App. 825, 833, 64 A.3d 794 (2013). Our legislature did not further define or specify the " interest" that would qualify as " minimal" under the statute.
In OTN Osceola, LLC v. Roth-Natale, Superior Court, judicial district of Stamford/Norwalk, Docket No. FST-CV-06-5001565-S (Sept. 4, 2007, Adams, J.) (44 Conn. L. Rptr. 212, ), the court concluded that the phrase " minimal interest" was ambiguous and looked to the legislative history of the 2004 amendment to General Statutes § 52-500(a) for guidance. The court found that the " legislative history provides three pieces of relevant information. First as noted the Public Acts 04-93 was designed to broaden the court's equitable power in partition actions. Second, there was concern that ordering a sale of property by auction often caused expenses not in proportion to the value of the property . . . Third, while certain percentages of ownership were seen by some legislators to fall clearly within the concept of minimal interest (e.g., less than 10 percent) or without (e.g., 35 or 50 percent) and interest could include more than just percentage of ownership, there remained a substantial area where the court, considering relevant factors, could exercise its judgment in determining whether an interest was minimal so as to justify exercising the option of ordering an owner to quitclaim his or her interest to another owner in return for just compensation." Id.
The court in OTN Osceola summarized the legislative history as follows: " The amendment was initially submitted by the judicial branch, and a representative of the judicial branch, testifying before the General Assembly's Judiciary Committee, proposed that the phrase 'minimal interest' be left to judicial interpretation on a case by case basis and emphasized that 'interest' should include more than monetary or legal interest and would, for example, include the fact that some owners were living and had lived on the property for a certain amount of time. Judiciary Committee Hearing Minutes, February 27, 2004, 00117575. In a colloquy with Representative McMahon, the judiciary representative seemed to indicate that if a property was left to five children and one wanted to be bought out, the amendment could apply but not if one child wanted to buy out the other four. Id., at 00117879. On the floor of the Connecticut Senate Senator McDonald, co-chair of the Judiciary Committee, described the amendment as providing the opportunity for a court to 'consider all of the merits and equitable considerations' in a partition action. Senate minutes, April 14, 2004, 001131. In the House of Representatives, Representative Stone said a 'minimal interest' is not defined and would be determined by the court 'under the totality of all the circumstances' but in '[his] opinion' a '50 percent interest would not be a minimal interest.' House of Representative Minutes, April 22, 2004, 002026. Representative Farr stated that minimal interest was meant to mean what it means in 'common English, a relatively small interest.' Id. Representative Farr continued that such an interest in his view included a five or eight percent interest but not a 50% or 35% interest. Id., at 00202627." (Footnote omitted.) OTN Osceola, LLC v. Roth-Natale, supra, Superior Court, Docket No. FST-CV-06-5001565-S .
This court has also reviewed the legislative history of Public Acts 2004, No. 04-93, § 1 and finds the discussion in OTN Osceola to be instructive. With the OTN Osceola criteria in mind, the court turns to the claims of the co-owners of the Water Street property.
III
As a preliminary matter, the court must first determine whether a commonality of interest exists between or among any of the parties to this partition action. The Norman Bloom Trust co-trustees and New NRB assert that the court should treat them as a single party that effectively owns an undivided one-half interest in the Water Street property. The Hillard Bloom Trust co-trustees contend that this partition action should properly be seen as a dispute among four parties, two of whom--Mr. Cavanagh and New NRB--each own an undivided one-third interest in the Water Street property, and two--the Norman Bloom Trust co-trustees and the Hillard Bloom Trust co-trustees--who each own an undivided one-sixth interest in the property. Alternatively, they argue that if the court finds a commonality of interest between the Norman Bloom Trust co-trustees and New NRB, then the court should also consider Mr. Cavanagh and the Hillard Bloom Trust co-trustees to be one party. Mr. Cavanagh supports the contention of the Hillard Bloom Trust co-trustees that he and they together own an undivided one-half interest in the Water Street property.
The court finds that the Norman Bloom Trust co-trustees and New NRB should be considered as a single party in this partition action. The Norman Bloom Trust owns 100 percent of the shares of New NRB. Mr. Bloom is a trustee and a beneficiary of the Norman Bloom Trust. His wife is the president of New NRB, and he is the vice president. He has operated New NRB's oyster and shellfishing business on the Water Street property since he dredged the seabed portion of the property in 2009. He spent nearly a decade cleaning and restoring the Water Street property so that it could again be used for a commercial marine business. New NRB and the co-trustees of the Norman Bloom Trust, the sole shareholder of New NRB, have a shared interest in having New NRB's oyster and shellfishing business remain on the Water Street property. See OTN Osceola, LLC v. Roth-Natale, supra, Superior Court, Docket No. FST-CV-06-5001565-S (" Because of their family ties and history, and their shared interest in remaining on the property, the two defendants may be considered as one party in this analysis . . . It is appropriate to consider as an interest in the property the decades that one or both of the defendants or their family members have owned and/or lived on the property. In this connection it is also appropriate to consider the stated desires of the defendants to return to or retain their status as residents on the property").
The same commonality of interest does not exist, however, between Mr. Cavanagh and the Hillard Bloom Trust co-trustees. While they are united in opposing the Norman Bloom Trust co-trustees and New NRB, that alone is not sufficient to show a commonality of interest between them. Mr. Cavanagh, Mr. McCabe, and Ms. Miklovich did not testify at the trial, and they offered no evidence in support of their position that they should be considered as one party in this partition action.
Accordingly, the court finds that this dispute is between the owners of an undivided one-half interest--the Norman Bloom Trust co-trustees and New NRB--on one side, and the owners of an undivided one-third interest--Mr. Cavanagh--and an undivided one-sixth interest--the Hillard Bloom Trust co-trustees--on the other.
IV
None of the parties seek a partition in kind of the Water Street property. Based on the testimony and the exhibits introduced at trial, including the site map, the court finds that the physical attributes of the property make partition in kind impracticable or inequitable. Mr. Cavanagh and the Hillard Bloom Trust co-trustees ask the court to order a partition by sale of the Water Street property pursuant to General Statutes § 52-500(a). The Norman Bloom Trust co-trustees and New NRB, the owners of an undivided one-half interest in the Water Street property, seek an order of this court directing Mr. Cavanagh, the owner of an undivided one-third interest in the Water Street property, and The Hillard Bloom Trust co-trustees, the owners of an undivided one-sixth interest in the Water Street property, to quitclaim their interests to them for just compensation, as provided by the final sentence of General Statutes § 52-500(a).
Alternatively, the Norman Bloom Trust co-trustees and New NRB ask the court to order a private sale of the Water Street property.
In Bombero v. Mihaley, Superior Court, judicial district of Fairfield, Docket No. FBT-CV-14-6045327-S (Oct. 28, 2015, Jennings, J.T.R.) (61 Conn. L. Rptr. 249, ), the court considered whether an equitable distribution of jointly held property pursuant to the final sentence of General Statutes § 52-500(a) would contravene the presumption that a partition in kind is in the best interests of the owners. The court concluded that such a disposition " would not run afoul of the long-standing preference for a partition in kind . . . [T]he presumption against a court-ordered sale is based on avoidance of the sale of one's property without his consent, which necessarily happens when the entire ownership interest of the parcel is sold to a third party at a court-ordered sale. But the equitable distribution now requested by plaintiffs would not result in the sale of their interests without their consent. Their interests would not be sold at all. They--the plaintiffs--would be purchasing only the interests of the defendants--the parties who wanted a sale in the first place. Accordingly there is no presumption against the equitable distribution now requested by plaintiffs, provided that the statutory conditions are satisfied." Id. This court finds the analysis of the trial court in Bombero to be persuasive.
The court turns next to the first of the two findings it is required to make before ordering equitable distribution of the Water Street property: whether " one or more of the persons owning such real or personal property have only a minimal interest in such property . . ." General Statutes § 52-500(a). As discussed above, our legislature did not define the phrase " minimal interest" when it amended § 52-500(a). There is no appellate authority on the issue. The legislative history indicates that the court should consider all of the facts and circumstances--not only the percentage of ownership--in determining whether the interests of Mr. Cavanagh and the Hillard Bloom Trust co-trustees--are minimal so as to warrant equitable distribution of the Water Street property. See OTN Osceola, LLC v. Roth-Natale, supra, Superior Court, Docket No. FST-CV-06-5001565-S .
Mr. Cavanagh owns an undivided one-third--or 33.33 percent--interest in the Water Street property. While this interest approaches the range of 35 to 50 percent that, as one legislator opined, would not be considered minimal; House of Representative Minutes, April 22, 2004, 002026-27; Mr. Cavanagh's percentage interest is but one of the relevant factors for the court to consider. Other relevant factors include: Mr. Cavanagh's successful prosecution of the 2002 quiet title action; his failure to contribute to the cost of cleaning up the Water Street property and constructing and installing the improvements; his failure to pay any portion of the real estate taxes or the insurance premiums for the property; his failure to contribute to the cost of maintaining the Water Street property; and the fact that he has never sought access to the property. While Mr. Cavanaugh has acted to assert his ownership interest in the Water Street property--by prosecuting the 2002 quiet title action and this partition action--he has done nothing to enhance, protect or preserve the property itself. Although he is the plaintiff in this action, he did not testify or offer any evidence to show that he has been anything other than a passive owner of the Water Street property. See Bombero v. Mihaley, supra, Superior Court, Docket No. FBT-CV-14-6045327-S (finding defendants to be passive owners where they did not manage property or pay their share of property taxes). Upon consideration of all of these facts and circumstances, the court finds that Mr. Cavanagh has a minimal interest in the Water Street property.
The Hillard Bloom Trust co-trustees own an undivided one-sixth--or 16.67 percent--interest in the Water Street property. Their interest is substantially less than the 25 percent interest that the court found to be minimal in OTN Osceola . In addition, there was no evidence that Mr. McCabe or Ms. Miklovich, individually or in their capacity as co-trustees of the Hillard Bloom Trust, have had anything to do with the Water Street property. Like Mr. Cavanagh, they did not testify at trial or offer any evidence to show that they are not merely passive owners. They have not contributed to the cost of cleaning up the Water Street property; the expenses that were incurred to construct and install the improvements on the property; the real estate taxes; the insurance premiums for the property; and the cost of maintaining the Water Street property. They have not sought access to the property, and they are precluded from interfering with New NRB's use of the property by virtue of the divisive reorganization. In view of the foregoing, the court finds that the Hillard Bloom Trust co-trustees also have a minimal interest in the Water Street property.
V
Under General Statutes § 52-500(a), if the court determines that one or more of the co-owners has only a minimal interest in the property, it must also find that " a sale would not promote the interests of the owners" before ordering " equitable distribution of such property, with payment of just compensation to the owners of such minimal interest, as will better promote the interests of the owners." General Statutes § 52-500(a). Beginning with the Norman Bloom Trust co-trustees and New NRB, the court finds that a sale of the Water Street property would not promote their interests. They want to retain their ownership position in the Water Street property so that New NRB can continue to operate its oyster and shellfishing business on the property. The equitable distribution that they seek will accomplish that goal, while a partition sale will not.
The interests of Mr. Cavanagh and The Hillard Bloom Trust co-trustees are purely economic. Their objective in this partition action is to receive the fair market value of their respective ownership interests in the Water Street property. That objective will be served by the equitable distribution of their interests in the Water Street property, with payment to them of just compensation.
Accordingly, the court finds that the equitable distribution of the minimal interests of Mr. Cavanagh and the Hillard Bloom Trust co-trustees to the Norman Bloom Trust co-trustees and New NRB in return for just compensation will better promote the interests of the owners of the Water Street property than would a partition by sale.
VI
The court next considers the issue of the just compensation to be paid to Mr. Cavanagh and the Hillard Bloom Trust co-trustees for their respective undivided interests in the Water Street property. As the court observed in OTN Osceola, " Just Compensation is usually associated with condemnation or eminent domain cases, and the phrase actually appears in the Connecticut Constitution at Article First, Section 11. In that context it means a fair equivalent in money for property taken. Ordinarily, but not necessarily, this is the market value of the Property taken. The court sees no reason to stray from that interpretation." (Internal quotation marks omitted.) OTN Osceola, LLC v. Roth-Natale, supra, Superior Court, Docket No. FST-CV-06-5001565- S; see Bombero v. Mihaley, supra, Superior Court, Docket No. MT-CV-14-6045327-S (" This court will also base just compensation for the defendants' 6.25 percent interest in the Property on the Property's fair market value, which will very likely place them at or ahead of what they would have received if the court had granted their request to have the Property auctioned off to the highest bidder"). Guided by the decisions of Judge Adams in OTN Osceola and Judge Jennings in Bombero, this court will determine the just compensation for the interests of Mr. Cavanagh and the Hillard Bloom Trust co-trustees based on the fair market value of the Water Street property.
Two real estate appraisers testified as expert witnesses regarding the fair market value of the Water Street property. According to Mr. McGuire, the expert engaged by Mr. Cavanagh, the fair market value of the Water Street property as of March 3, 2016 was $2,500,000. Using the cost approach to valuation, Mr. McGuire attributed a value of $1,400,000 to the land and a depreciated value of $1,098,287 to the improvements on the site, the sum of which he rounded up to $2,500,000.
Mr. McGuire explained that the cost approach includes the sales comparison approach because the sales comparison approach is used to determine the value of the land.
Mr. McInerney, the expert who testified on behalf of the Norman Bloom Trust co-trustees and New NRB, used the sales comparison approach to value the Water Street property. He determined that the fair market value of the Water Street property was $1,325,000 as of November 17, 2015. In his opinion, the site improvements contributed only minimal additional value. He noted that the assessed value of the Water Street property in 2015 was $537,070, which translated into a fair market value of $767,240, inclusive of all improvements, according to the tax assessor of the City of Norwalk.
The main difference between the two appraisals is the value placed on the site improvements, particularly the pilings installed by Tallmadge Sea and Land. In Mr. McGuire's opinion, the total replacement cost (new) of the fifty-eight pilings on the Water Street property was $1,160,000, or $20,000 per piling. He based this number on information available in the Marshall Valuation Service, which he described as the normal industry standard, and on his personal experience as fleet captain of the Stamford Yacht Club, which had to replace its dock and marina facility after Hurricane Sandy. Mr. McGuire said that the yacht club had to rebuild its entire pier structure, including the pilings, and he worked very closely with Race Engineering, a marine engineering company, on the project. He contacted Race Engineering to obtain information regarding the cost of pilings when he prepared his appraisal of the Water Street property. He did not obtain information from the City of Norwalk regarding the value of the improvements as reported by Mr. Bloom or New NRB on any of the permit applications. Mr. McGuire was not aware of the actual cost of the improvements. He acknowledged that the actual cost could affect value.
In Mr. McInerney's opinion, the value that Mr. McGuire attributed to the fifty-eight pilings was excessively high. He testified that he would estimate the cost of installing all of the pilings to be somewhere in the range of $50,000 to $75,000, although he did not specifically value the pilings in connection with his appraisal.
Mr. Bloom has been in the business of marine construction since he started working for Tallmadge Brothers almost thirty years ago. He testified that Tallmadge Sea and Land did not charge New NRB $20,000 per piling for the pilings that it installed on the Water Street property. He said that it was hard to estimate the cost per piling, because more work was involved than just driving the pilings. He pays about $500 to purchase a piling. He estimated that a piling, as installed, would cost from $1,000 to $2,000, depending on the size of the job. According to Mr. Bloom, the more pilings that he drives for a marina, the lower the cost will be per piling.
Mr. Bloom said, " If [I] get paid twenty thousand dollars a piling, that's going to be my primary business. I'll forget oysters and clamming. Stuff's not done that way." August 17, 2016 transcript, 198: 16-19.
Mr. Bloom explained, " Well, if I got to go over to a marina and drive two pilings, they're going to pay two thousand dollars a piling. If I go to the same marina and drive 20 pilings, that price is coming down." August 17, 2016 transcript, 190: 11-14.
Mr. Wetmore testified as a rebuttal expert on behalf of the Norman Bloom Trust trustees and New NRB. He has spent eighteen to twenty years in the marine construction business. He testified that the average going rate for the purchase and installation of pilings is $1,000 to $1,500 per piling. Due to the economies of scale, the cost per piling for installing fifty-eight pilings would be less than the cost per piling for installing one or two pilings. Based on his experience, if he installed fifty-eight pilings the cost would be $1,200 per piling. Mr. Wetmore was not aware of any company in Fairfield County that would charge $20,000 for a piling. His company, G& C Marine Services, has never been paid $20,000 per piling on any job.
The court credits the testimony of Mr. McInerney, Mr. Bloom, and Mr. Wetmore. The court finds Mr. McGuire's appraisal to be significantly flawed because he attributed an unreasonably high replacement cost to the pilings installed on the Water Street property, thus distorting his conclusion regarding the fair market value of the property.
The court credits the methodology that Mr. McInerney used to determine the value of the Water Street property and the conclusion that he reached as to the fair market value of the Water Street property in November 2015. Almost two years have passed, however, since Mr. McInerney completed his appraisal of the Water Street property. The court is not inclined to determine the amount of just compensation to be paid to Mr. Cavanagh, for his undivided one-third interest in the Water Street property, and to the Hillard Bloom Trust co-trustees for their undivided one-sixth interest in the property, based on a stale appraisal.
Therefore, the court opens the record and directs the Norman Bloom Trust co-trustees and New NRB to provide a current appraisal of the Water Street property, prepared by Mr. McInerney, for the consideration of the court and all parties within sixty days of the date of this memorandum of decision. The parties will be heard thereafter with respect to the just compensation to be paid to Mr. Cavanagh and to the Hillard Bloom Trust co-trustees for their interests in the Water Street property. The court will also consider the claim of the Norman Bloom Trust co-trustees and New NRB that they have the right to set off against any fair compensation due to Mr. Cavanagh and the Hillard Bloom Trust co-trustees the amounts that they have spent for the upkeep, maintenance, and improvement of the Water Street property, and the claims of Mr. Cavanagh and the Hillard Bloom Trust co-trustees that the Norman Bloom Trust co-trustees and New NRB should compensate them for their use and occupancy of the Water Street property, at that time.
VII
For the reasons set forth above, judgment shall enter as follows.
1. With respect to the amended complaint of the plaintiff Willis Cavanagh (#125.00), in favor of the defendants Robert Bloom and John Gardella, in their capacity as co-trustees of the Norman R. Bloom Revocable Trust, and New NRB #3 Corporation, and against the plaintiff Willis Cavanagh and the defendants Patrick McCabe and Leslie Miklovich, in their capacity as co-trustees of the Hillard E. Bloom Revocable Trust;
2. With respect to the counterclaim of the defendants Robert Bloom, in his capacity as co-trustee of the Norman R. Bloom Revocable Trust, and New NRB #3 Corporation (#107.00), in favor of the defendants Robert Bloom, in his capacity as co-trustee of the Norman R. Bloom Revocable Trust, and New NRB #3 Corporation, and against the plaintiff Willis Cavanagh;
3. With respect to the counterclaim of the defendants John Gardella, in his capacity as co-trustee of the Norman R. Bloom Revocable Trust, and New NRB #3 Corporation (#138.00), in favor of the defendants John Gardella, in his capacity as co-trustee of the Norman R. Bloom Revocable Trust, and New NRB #3 Corporation, and against the plaintiff Willis Cavanagh;
4. With respect to the cross claim of the defendants Robert Bloom, in his capacity as co-trustee of the Norman R. Bloom Revocable Trust, and New NRB #3 Corporation (#107.00), in favor of the defendants Robert Bloom, in his capacity as co-trustee of the Norman R. Bloom Revocable Trust, and New NRB #3 Corporation, and against the defendants Patrick McCabe and Leslie Miklovich, in their capacity as co-trustees of the Hillard E. Bloom Revocable Trust;
5. With respect to the cross claim of the defendants John Gardella, in his capacity as co-trustee of the Norman R. Bloom Revocable Trust, and New NRB #3 Corporation (#138.00), in favor of the defendants John Gardella, in his capacity as co-trustee of the Norman R. Bloom Revocable Trust, and New NRB #3 Corporation, and against the defendants Patrick McCabe and Leslie Miklovich, in their capacity as co-trustees of the Hillard E. Bloom Revocable Trust; and
6. It is further ORDERED that the record is hereby opened, and the defendants Robert Bloom and John Gardella, in their capacity as the co-trustees of the Norman R. Bloom Revocable Trust, and New NRB #3 Corporation shall provide a current appraisal of the Water Street property, prepared by Ronald McInerney of Domus Appraisals, for the consideration of the court and all parties, within sixty days of the date of this memorandum of decision. The parties will be heard thereafter with respect to the just compensation to be paid by the defendants Robert Bloom and John Gardella, in their capacity as the co-trustees of the Norman R. Bloom Revocable Trust, and New NRB #3 Corporation to the plaintiff Willis Cavanagh and to the defendants Patrick McCabe and Leslie Miklovich, in their capacity as the co-trustees of the Hillard E. Bloom Revocable Trust, for their interests in the Water Street property. The court will also consider the claim of the defendants Robert Bloom and John Gardella, in their capacity as the co-trustees of the Norman R. Bloom Revocable Trust, and New NRB #3 Corporation for reimbursement of the amounts that they have spent for the upkeep, maintenance, and improvement of the Water Street property, and those of the plaintiff Willis Cavanagh and the defendants Patrick McCabe and Leslie Miklovich, in their capacity as the co-trustees of the Hillard E. Bloom Revocable Trust, for the defendant New NRB #3 Corporation's use and occupancy of the Water Street property, at that time.