Opinion
X10CV166037132S
06-20-2018
Ted Richard ZUPA et al. v. Vickie ZUPA et al.
John A. Farnsworth, Withers Bergman LLP, and Robert J. Burns, Holland & Knight, for Plaintiffs. Charles W. Pieterse and Wyatt R. Jansen, Whitman Breed Abbott & Morgan LLC, for Defendant Ilse Gerdes. William H. Prout, Wiggin and Dana LLP, for Defendant Vickie Zupa.
UNPUBLISHED OPINION
John A. Farnsworth, Withers Bergman LLP, and Robert J. Burns, Holland & Knight, for Plaintiffs.
Charles W. Pieterse and Wyatt R. Jansen, Whitman Breed Abbott & Morgan LLC, for Defendant Ilse Gerdes.
William H. Prout, Wiggin and Dana LLP, for Defendant Vickie Zupa.
OPINION
LINDA K. LAGER, JUDGE
On September 12, 2014, a wealthy man named Victor Zupa died. The parties to this case are Victor Zupa’s adult biological children, the plaintiffs and the defendant Vickie Zupa, and Victor’s second wife, the defendant Ilse Gerdes. Boiled down to its essence, the plaintiffs allege that the defendants engaged in conduct which caused Victor Zupa to put a substantial amount of his considerable assets into payable-on-death accounts to their detriment. As a result, the plaintiffs allege they "stand to inherit millions of dollars less than they otherwise would have inherited." (Entry # 100.30, Complaint, ¶¶ 45, 53.) They seek to redress this situation in a five-count complaint that alleges tort claims in the first and second counts and seeks equitable relief in the third, fourth and fifth counts.
The defendants move to strike the first count alleging tortious interference with inheritance and the second count alleging tortious interference with contract on multiple grounds. First, they assert that tortious interference with inheritance is not a cognizable cause of action, both generally and under the particular circumstances of this case. Alternatively, they maintain that the plaintiffs have failed to sufficiently allege the requisite element of independently tortious conduct common to both counts. Finally, they assert that both counts fail as a matter of governing law because the plaintiffs had no legitimate expectancy with which the defendants could interfere or infringe. Familiarity with the well-established law governing motions to strike is presumed. See Plainville v. Almost Home Animal Rescue and Shelter, Inc., 182 Conn.App. 55, 63 (2018) and case cited therein.
I.
The complaint alleges the following pertinent facts: Victor Zupa (Victor) was married to Florence Zupa (Florence) from 1966 to 1999 and had three children with her- the plaintiffs Ted Richard Zupa, who resided in Pearl River, New York, Michael Neal Zupa, a resident of Upper Nyack, New York, and Victoria Lynn Zupa, a resident of Wyckoff, New Jersey. The defendant Vickie Zupa (Vickie) is also Victor’s biological daughter whom he had with the defendant Ilse Gerdes (Ilse).
Victor and Florence were divorced in the Supreme Court of the State of New York for the County of Rockland on March 15, 1999. The divorce judgment incorporated a stipulation dated February 11, 1999 (stipulation) "in which Victor agreed to have in effect a testamentary instrument wherein and whereby Ted, Michael and Victoria are named as legatees, distributees, heirs and beneficiaries of no less than a total of one-half of Victor’s estate." (¶ 10.) Victor complied with the provisions of the divorce judgment and its incorporated stipulation by first providing an attorney’s affirmation dated August 9, 1999 that he "had signed a Last Will and Testament that provides for at least 50% of Victor’s probate estate to be distributed to Ted, Michael and Victoria" (¶ 13) and signing a will on January 6, 2000 "which bequeathed 1/6th of Victor’s residuary estate to each of Ted, Michael and Victoria," along with all his tangible personal property, and bequeathed "1/4th of the residuary estate to each of Vickie and Ilse." (¶¶ 14, 15.)
Victor died on September 12, 2014 in New Canaan, Connecticut, where he had lived with Ilse and Vickie at the latter’s property. At the time of his death, Victor had been married to Ilse for approximately eight years. The plaintiffs allege, on information and belief, that the marriage resulted from "coercion by Ilse and/or Vickie." (¶ 29.) Victor was 101 when he died and was in poor health. "While at Vickie’s property in New Canaan, Victor relied on Vickie and Ilse heavily for many aspects of his daily care." (¶ 30.) Independently of his relationship with his second wife Ilse and his daughter Vickie, "Victor had lived his entire life in New York and had no connection with Connecticut." (¶ 31.)
Immediately before his death in September 2014, Victor’s substantial assets were his interests in two real estate companies that owned residential apartment buildings in New York City, accounts at JP Morgan Chase and more than $200,000.00 in cash in a safe deposit box at the same institution. As of the date of death, the residential real estate interests were valued at approximately $14,000,000.00 and the JP Morgan accounts at approximately $15,645,076.00. The accounts were established in New York as payable-on-death accounts (POD accounts) with Ilse as the beneficiary. "At the time some or all of the POD accounts were established ... Victor was living with Ilse and ... Vickie at Vickie’s property in New Canaan, Connecticut." (¶ 25.) During Victor’s lifetime, there were transfers of more than $4,250,000.00 from the POD accounts to Ilse and Vickie. The complaint does not allege when the POD accounts were opened or when the transfers occurred but does allege that their creation demonstrates "the influence Ilse and Vickie had over Victor" (¶ 35), and implies that he would not have opened the accounts except for that influence.
II.
To date, Connecticut’s appellate courts have not recognized a cause of action for tortious interference with the expectation of an inheritance. Each side cites Superior Court cases that conclude, with varying degrees of analysis, against or in favor of recognition. Likewise, each side cites academic articles criticizing or supporting recognition of the tort as well as appellate decisions from other jurisdictions in a similar vein.
Recognition of a new cause of action in tort requires a rigorous analysis. While Connecticut does not apply a "hard and fast test ... to recognize new tort causes of action, whether derived from a statutory provision or rooted in common law," Ferri v. Powell-Ferri, 317 Conn. 223, 229, 116 A.3d 297 (2015), Supreme Court decisions rely on a number of factors including: "a growing judicial receptivity to the recognition" of the claim, Sheets v. Teddy’s Frosted Food, Inc., 179 Conn. 471, 480, 427 A.2d 385 (1980) (recognizing tort of wrongful discharge); genuine public policy mandates, Id., 477; the risk "of affecting conduct in ways that are undesirable as a matter of public policy," Medillo v. Board of Education, 246 Conn. 456, 483, 717 A.2d 1177 (1998) (declining to recognize tort of loss of parental consortium), overruled by Campos v. Coleman, 319 Conn. 36, 123 A.3d 854 (2015) (recognizing tort with limitations); whether the new tort complements existing administrative and statutory schemes, Byrne v. Avery Center for Obstetrics & Gynecology, P.C., 327 Conn. 540, 573-75, 175 A.3d 1 (2018) (Robinson, J. concurring) (recognizing tort action for medical provider’s unauthorized disclosure of confidential information); the necessity to compensate innocent parties and deter future wrongful conduct, Rizzuto v. Davidson Ladders, Inc., 280 Conn. 225, 235-36, 905 A.2d 1165 (2006) (recognizing tort of intentional spoliation of evidence); and "whether existing remedies are sufficient to compensate those who seek recognition of a new cause of action," Ferri v. Powell-Ferri, supra, 317 Conn. 229 (declining to recognize cause of action against party to a dissolution for not taking affirmative steps to recover marital assets from a third party).
At this stage of this case, the court does not have to engage in the requisite analysis. The court assumes, without deciding, that Connecticut’s appellate courts could recognize a cause of action for tortious interference with inheritance under the particular circumstances of this case. Here, the alleged inheritance expectancy arises from a stipulation incorporated in a divorce judgment. Connecticut has "long recognized a cause of action for tortious interference with contract rights or [a business expectancy]." Blake v. Levy, 191 Conn. 257, 260, 464 A.2d 52 (1983), citing, among other decisions, a case from 1807, Bulkley v. Storer, 2 Day 531, and in the second count the plaintiffs plead tortious interference with contract. It is not too great a conceptual leap to conclude that the first count pleads an alternative theory of tort liability based on a non-contractual expectancy. See 4 Restatement (Second), Torts, § 774B, Intentional Interference with Inheritance or Gift, Comment (a) (1979): "This section represents an extension to a type of noncontractual relation of the principle found in the liability for intentional interference with prospective contracts stated in § 766B." Second, the claim for tortious interference does not implicate any probate court proceedings. See Hall v. Hall, 91 Conn. 514, 523-24, 100 A. 441 (1917) (A complaint attempting "to state a cause of action for damages for depriving the plaintiff of his inheritance ... is insufficient because it attempts to retry in a collateral proceeding the question of the validity of the will in the face of the outstanding decree of probate ... and because it attempts to go to the jury on the question of damages for the deprivation of the inheritance by a short cut, without first asking [for equitable relief from the probate decree]"). Nonetheless, the court concludes that count one as well as count two are insufficiently pled for the reasons discussed below.
In support of their claim of tortious interference with contract in the second count, the plaintiffs plead that they are third-party beneficiaries of the stipulation (¶ 48).
III.
Cases that recognize tortious interference with inheritance describe four elements: (1) the existence of an expected inheritance; (2) the defendant’s knowledge of the expectancy; (3) tortious conduct by the defendant and (4) actual damages to the plaintiff resulting from the defendant’s tortious conduct. See e.g., Hart v. Hart, Superior Court, Judicial District of Windham, docket no. 146007918 (May 11, 2015) (2015 WL 3555366 *3) . The third element requires more than the fact of interference; it requires interference "by means that are independently tortious in character" such as "fraud, duress, defamation or tortious abuse of fiduciary duty." 4 Restatement (Second), Torts, § 774B, Comment (c) (1979).
The elements of tortious interference with contract are: "(1) the existence of a contractual or beneficial relationship; (2) the defendant’s knowledge of that relationship; (3) the defendant’s intent to interfere with the relationship; (4) that the interference was tortious; and (5) a loss suffered by the plaintiff that was caused by the defendant’s tortious conduct." Rioux v. Barry. 283 Conn. 338, 351, 927 A.2d 304 (2007). The fourth element also requires independently tortious conduct beyond mere interference. Kakadelis v. DeFabritis, 191 Conn. 276, 280, 464 A.2d 57 (1983). "In an action for intentional interference with business relations ... the better reasoned approach requires the plaintiff to plead ... at least some improper motive or improper means." Blake v. Levy, supra, 191 Conn. 262. Actionable conduct includes fraud, misrepresentation, intimidation or molestation, id., or allegations of "malice on the part of the defendant, not in the sense of ill will, but intentional interference without justification. 4 Restatement (Second), Torts, § 766, comment(s) (1979). In other word, the [plaintiff] bears the burden of alleging and proving lack of justification on the part of the actor." (Internal quotation marks omitted.) Daley v. Aetna Life & Casualty Co., 249 Conn. 766, 806, 734 A.2d 112 (1999).
Interference torts require that defendants engage in tortious conduct directed to a non-party resulting in harm to the plaintiff. Thus, a requisite element of the first and second counts is that Victor was subjected to the defendants’ independently tortious conduct. In paragraphs 43 (first count) and 52 (second count), the complaint alleges that "Ilse and Vickie’s actions were tortious in that they were the product of undue influence over Victor." Citing Hart v. Hart, supra, 2015 WL 3555366 *9-*12, the defendants argue that pleading undue influence, which is not a tort but an action challenging testamentary capacity, cannot satisfy the requirement of independently tortious conduct and maintain the complaint lacks sufficient factual allegations of fraud or duress that would suffice. The plaintiffs agree that undue influence is a doctrine used to contest a will which focuses on the testator’s intent at the time the will was executed and does not require proof of conduct that would support tort liability. However, pointing specifically to paragraphs 25 through 42, they maintain the complaint sufficiently alleges "improper inducement via fraud and/or duress."
As a generic concept, fraud "consists of obtaining an undue advantage by means of some act or omission that is unconscientious or a violation of good faith." 37 C.J.S. 173, Fraud, § 1 (2008). The tort of fraud "consists [of] deception practiced in order to induce another to part with property or surrender some legal right, and which accomplishes the end designed ... The elements of a fraud action are: (1) a false representation was made as a statement of fact; (2) the statement was untrue and known to be so by its maker; (3) the statement was made with the intent of inducing reliance thereon; and (4) the other party relied on the statement to his detriment." (Citation omitted, quotation marks omitted.) Giulietti v. Giulietti, 65 Conn.App. 813, 836-37, 784 A.2d 905 (2001). The underlying tortious conduct for fraudulent inducement is an intentional misrepresentation of a material fact made to induce a person to act to his or her own detriment.
Duress, on the other hand, does not require deceit but does require coercion or pressure resulting in the deprivation of the free agency of the subject of the duress. Mills v. Swords Lumber Co., 63 Conn. 103, 105, 26 A. 689 (1893). "The test in determining whether there was duress, is not so much the means by which the party was compelled ... as it is the state of mind induced by the means employed, the fear which made it impossible to exercise his own free will ... The question in each case is, Was the alleged injured person, by being put in fear by the other party to the transaction for the purpose of obtaining an advantage over him, deprived of the free exercise of his own will power, and was such advantage thereby obtained?" (Citations omitted; internal quotation marks omitted). McCarthy v. Taniska, 84 Conn. 377, 381-82, 80 A. 84 (1911). The underlying tortious conduct is coercion or threats that induces fear in the subject preventing the exercise of free choice as to the particular transaction at hand.
The court must examine the facts alleged in the first and second counts and those necessarily implied from the allegations, in the light most favorable to the plaintiffs, to determine if they sufficiently plead that the defendants engaged in independently tortious conduct directed at Victor. As to the plaintiffs’ claim that the defendants fraudulently induced Victor to open the POD accounts and to transfer funds from those accounts to them, there are no direct allegations that Vickie and Ilse made any intentional factual misrepresentation to Victor. The requisite deceitful conduct cannot be implied from the facts alleged nor can the allegations support the conclusion that the defendants acted in bad faith or unconscientiously. With respect to the claim of duress, while the complaint does allege that the defendants coerced Victor to marry Ilse it does not follow that he was likewise threatened or coerced into creating the POD accounts. Although the plaintiffs allege that Ilse and Vickie had the opportunity to exercise undue influence over Victor, who was of advanced age and in poor health, because he lived with them, relied on them for daily care and was physically isolated from other members of his family, the mere opportunity to unduly influence Victor does not support an inference that he created the POD accounts under duress. Cf. Bassford v. Bassford, 180 Conn.App. 331, 355 (2018). (Even in undue influence cases, "mere opportunity to exert undue influence alone is not sufficient"; proof of the operative effect of the undue influence is required). The conclusory allegation that the defendants exercised "sufficient control over Victor so as to destroy his free agency and constrain him to create POD accounts," (¶ 37) is not a substitute for factual allegations that the defendants threatened, coerced or pressured Victor with the intent to prevent him from exercising his free choice with regard to the creation of the POD accounts and that the effect of the defendants’ conduct induced sufficient fear to deprive Victor of his free agency. Those factual allegations are entirely absent from the complaint.
IV.
Finally, the defendants maintain that the first and second counts fail as a matter of law because there are no allegations that the plaintiffs had any legitimate expectancy with which the defendants could interfere or infringe other than Victor’s agreement with Florence that he maintain a will that gave plaintiffs half of his probate estate. Specifically, the defendants assert that the complaint fails to plead that the stipulation incorporated into the divorce judgment prohibited the establishment of the POD accounts or limited Victor from making inter vivos transfers of any kind or promised the plaintiffs that they would receive a specific amount or indeed anything at the time of his death.
Both sides agree that the plaintiffs’ expectancy, as a matter of inheritance or contract, arises from the stipulation incorporated into the divorce judgment. The complaint alleges that by way of the stipulation Victor "agreed to have in effect a testamentary instrument wherein and whereby Ted, Michael and Victoria are named as legatees, distributees, heirs and beneficiaries of no less than a total of one-half of Victor’s estate." (¶ 10.) The plaintiffs concede that the complaint does not allege that the stipulation expressly or impliedly prohibited Victor from transferring assets during the course of his lifetime or required Victor to maintain a minimum net worth or promised that the plaintiffs were to receive a specific sum upon his death. They maintain, however, that the allegations of the complaint support an inference that the stipulation entitled them to one-half of the entirety of Victor’s assets at death including funds that were not part of his testamentary estate at that time.
The plaintiffs’ interpretation of the stipulation is not supported by New York law, which both sides agree governs here. New York has a long-standing public policy that gives testators "unfettered authority" to dispose of property during their lifetimes. See e.g., Matter of Fabbri, 2 N.Y.2d 236, 239, 140 N.E.2d 269 (1957); Rubin v Irving Trust Co., 305 N.Y. 288, 300, 113 N.E.2d 424 (1953); In re Estate of Lubins, 172 Misc.2d 517, 656 N.Y.S.2d 851 (Surrogate’s Court 1997), aff’d 250 A.D.2d 850, 673 N.Y.S.2d 204 (2d Dept. 1998). While individuals are free to explicitly agree to restrict that authority, New York courts are reluctant to imply such an agreement. Blackmon v. Estate of Battcock, 78 N.Y.2d 735, 740, 587 N.E.2d 280 (1991). Even in cases involving joint wills, New York courts hold that the survivor may make inter vivos transfers when the mutual agreement refers to an estate rather than to a specific bequest or devise. Here, there are no allegations that the stipulation explicitly prohibited Victor from creating the POD accounts or otherwise transferring or using his assets during his lifetime. Nor are there allegations that Victor and Florence agreed "that inter vivos trusts would be deemed part of [Victor’s] estate" and be subject to the terms of the stipulation. Matter of Wenzel, 85 A.D.3d 563, 925 N.Y.S.2d 474 (1st Dept. 2011).
A joint will specifying an agreement to bequeath or devise specific property precludes an inconsistent inter vivos gift, Schwartz v. Horn, 31 N.Y.2d 275, 280, 290 N.E.2d 816 (1972), while one specifying an agreement that an entire estate be left to certain beneficiaries does not necessarily prevent the survivor from making lifetime gifts. Id. ; Matter of Murray, 84 A.D.3d 106, 108, 921 N.Y.S.2d 161 (2d Dept. 2011) (the decedent’s ability to dispose of her assets during her lifetime was unfettered by that part of ... the joint will that bequeathed to the survivor of each of them the ‘entire estate’ of the one to die first").[2]
In 1999, when Victor and Florence agreed to the stipulation incorporated in their divorce judgment, New York law clearly required that any contract to make "a testamentary provision of any kind" had to be in writing. McKinney’s EPTL § 13-2.1. To create a legally recognized expectancy, the stipulation had to contain explicit language regarding Victor’s agreement to dispose of his property in a certain manner after his death. If the intent of the stipulation was to restrain Victor from putting assets into a non-testamentary instrument such as a Totten Trust, then that promise had to "be in writing, for the same reason that a promise to refrain from altering an existing will must be reduced to a writing." Blackmon v. Estate of Battcock, supra, 78 N.Y.2d 740 (citing to EPTL § 13-2.1[a][1] ). The absence of an allegation of such a written agreement is fatal to the plaintiffs’ claim that the stipulation created an expectancy that they would receive half of Victor’s assets at the time of death, which would include the funds in the POD accounts.
[Matter Not Available]
As alleged here, the beneficial interest or expectancy arising from the stipulation was that Victor would create and maintain a will bequeathing at least half of his estate to the plaintiffs (¶¶ 10, 11, 12). The term "estate" means "probate estate" under New York law. McKinney’s EPTL § 1-2.6, Practice Commentaries. The complaint alleges Victor fulfilled this promise by executing wills consistent with the stipulation (¶ 13, 14). The stipulation prevented Victor from revoking his will but did not limit his authority over his assets during his lifetime because he "remained the absolute owner of his own with all the rights of an owner." Rastetter v. Hoenninger, 214 N.Y. 66, 74, 108 N.E. 210 (1915). Under New York law, agreements such as the stipulation impliedly authorize inter vivos transfers made in good faith and without an intent to defraud. Dickinson v. Seaman, 193 N.Y. 18, 24-25, 85 N.E. 818 (1908) (agreement in a prenuptial agreement). The plaintiffs have not alleged fraud, see III., supra, p. 9, and when the value of the POD accounts is compared to the total alleged value of Victor’s assets at the time of his death the amount is not "so large, that independent of intent and motive, fraud under the contract would be imputed, or arise constructively by operation of law." Id., 25.
Section 1-2.6 provides, in relevant part: "Depending upon the context, ‘estate’ may mean ... (b) The aggregate of property which a person owns." The Commentaries clarify the meaning of § 1-2.6(b) as follows: "When [estate] is used in that context, it refers to the ‘probate’ estate, or property of the sort that passes under a decedent’s will or intestacy, as opposed to property that passes by a right of survivorship (such as jointly owned property) or under a contract (such as life insurance or annuities), or by the terms of a lifetime trust." McKinney’s EPTL § 1-2.6.
V.
For the foregoing reasons, the defendants’ motions to strike the first and second counts are granted. 1
However, upon the death of the depositor, there are substantial differences between the rights of the designated beneficiary under the Totten trust account and a beneficiary under the will. Upon the death of the depositor, the account passes by operation of law directly to the designated beneficiary pursuant to the contract between decedent and the depository and irrespective of any provision in decedent’s will unless the trust is revoked in the will by making the required specific references to the account, the beneficiary and the financial institution. Inasmuch as the Totten trust account is not a testamentary asset, the proceeds from the account may not be used to pay either the administration expenses of the estate or decedent’s debts unless the testamentary assets are insufficient to pay these obligations. (Citations omitted.)" In re Estate of Mirsky, 154 Misc.2d 278, 280-81, 586 N.Y.S.2d 205 (Surrogate’s Court 1992).