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In the case of Paul John Ferri v. Nancy Powell-Ferri et al., the plaintiff sought damages for vexatious litigation against his former wife, P, following a divorce action involving a disputed trust. While the divorce was ongoing, the trust's trustees initiated a declaratory judgment action against P and the plaintiff regarding their management of trust assets. P's legal representatives filed a cross complaint alleging that the plaintiff violated his duty to preserve marital assets. The trial court granted summary judgment in favor of the plaintiff on this cross complaint. In the vexatious litigation case, the plaintiff claimed the defendants lacked probable cause for pursuing the cross complaint. However, the court granted summary judgment for P's legal representatives, and after a bench trial against P, the trial court ruled in her favor. The appeal confirmed that P had probable cause for her cross complaint, as she had a reasonable, good faith belief regarding the plaintiff's actions, particularly relating to the transfer of marital assets. The procedural history notes that the case was brought in the Hartford Superior Court and later transferred to the Complex Litigation Docket, where the plaintiff's motion for summary judgment was denied.
The trial court's judgment in favor of defendant Nancy Powell-Ferri was affirmed on appeal by Paul John Ferri, who alleged vexatious litigation. Ferri contended that the trial court erred in determining that Powell-Ferri had probable cause to file a cross complaint against him in a previous lawsuit concerning a trust valued between $60 million and $70 million. This case is the third in a series related to the trust's assets. In the initial action, Powell-Ferri sought a divorce, during which the trustees of a 1983 trust filed a declaratory judgment action against both parties regarding the formation of a new trust in 2011. The Parrino defendants represented Powell-Ferri in both the divorce and the declaratory judgment action. They filed a cross complaint against Ferri, claiming he violated his duty to preserve marital assets by allowing the trustees to remove assets from the marital estate. The trial court granted summary judgment for Ferri, stating Powell-Ferri failed to state a cause of action, a decision later affirmed by the Supreme Court. Ferri then initiated the current vexatious litigation suit against Powell-Ferri and the Parrino defendants, asserting they lacked probable cause for the cross complaint. The trial court granted summary judgment in favor of the Parrino defendants, a decision also affirmed by this court. Ultimately, after a trial on Ferri's claims against Powell-Ferri, the court found that she had probable cause to pursue her cross complaint, based on two key facts: Ferri was aware of the decantation before the cross complaint was filed, and he did not attempt to return the assets to the original trust.
Ferri was aware of the trustees’ actions to establish a new trust intended to deprive Powell-Ferri of her equitable claims to trust assets but did not take steps to reclaim those assets for the 1983 Trust. Ferri admitted to learning about the new trust in 2011 and acknowledged he made no attempts to retrieve the trust assets. Consequently, it was determined that the plaintiff failed to demonstrate that Powell-Ferri provided misleading information to her attorney. The validity of the cross complaint hinged on whether a party in a dissolution must act to prevent asset removal that could benefit them. The Appellate Court found that Powell-Ferri’s attorneys had probable cause to pursue the claim, despite it not constituting a valid cause of action under Connecticut law, as it is unreasonable to expect laypersons to possess the same legal knowledge as attorneys. The court recognized a moral issue when a spouse fails to act on substantial trust assets potentially included in the marital estate, affirming that litigation wasn’t frivolous. Therefore, Powell-Ferri had a reasonable belief in the facts and validity of her claim, establishing probable cause.
In Connecticut, vexatious litigation claims exist both at common law and by statute, requiring proof of lack of probable cause, malice, and a favorable termination for the plaintiff in common law claims, while the statutory claim does not necessitate proving malice. The defendant lacks probable cause if they do not have a reasonable, good faith belief in the facts and validity of the claim. The burden lies with the plaintiff to prove the defendant's lack of probable cause, and the determination of probable cause is a legal question decided by the court, subject to plenary review.
Ferri's appeal contests the court's finding that Powell-Ferri had probable cause to file her cross complaint against him in a declaratory judgment action. He argues that there was insufficient evidence of her reasonable, good faith belief in the facts of her complaint, claiming that her evasive responses during discovery hindered his attempts to ascertain the factual basis for her accusations. Ferri maintains that Powell-Ferri did not provide any information justifying her claim or conduct an independent investigation to establish a good faith belief necessary to pursue the cross complaint.
However, the court clarified that Ferri bore the burden of proving Powell-Ferri lacked probable cause. It emphasized that she was not required to demonstrate her good faith belief, and it concluded that Powell-Ferri indeed possessed such a belief, supported by undisputed facts. Specifically, she alleged that Ferri failed to comply with automatic dissolution orders by transferring substantial trust assets after the dissolution action commenced, which underpinned her belief that he violated these orders.
The court affirmed the judgment, noting that Ferri's claims of error regarding the trial court's conclusion of probable cause, Powell-Ferri’s investigative duties, and other related matters were unsubstantiated. Additionally, the court referenced a related case involving the trustees of the trust, which further supported Powell-Ferri's belief that she had an interest in the transferred assets. Consequently, Ferri's claims were deemed unavailing, and the judgment was upheld. The other defendants in the case, Parrino and his law firm, were not part of this appeal following the earlier summary judgment in their favor.
