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In Re Estate of Daniel Maggio

November 30, 2012

IN RE ESTATE OF DANIEL MAGGIO


On Appeal from Superior Court, Orleans Unit, Civil Division Robert R. Bent, J.

The opinion of the court was delivered by: Robinson, J.

In re Estate of Maggio (2011-433)

2012 VT 99

Supreme Court

PRESENT: Reiber, C.J., Dooley, Skoglund, Burgess and Robinson, JJ.

¶ 1. Rosann Maggio, widow and primary beneficiary of the estate of Daniel Maggio, appeals a decision of the superior court holding that Daniel Maggio did not own an interest in real property in Holland, Vermont at the time of his death. Ms. Maggio argues that the trial court erroneously admitted statements from her interrogatory answers in violation of the best evidence rule, the dead man's statutes, and the requirement in V.R.E. 602 that testimony be based on personal knowledge; that the court's conclusions that the property in question was partnership property and that Daniel Maggio ceded his interest in the partnership to his partner, Paul Silas, prior to Mr. Maggio's death were unsupported by the evidence; and that the trial court erred in declining to apply the statute of frauds to the transfer of Mr. Maggio's interest in the partnership. We affirm.

¶ 2. Appellee, Paul Silas, and decedent, Daniel Maggio, operated a business partnership in Connecticut. In 1989, they acquired eight lots in Holland, Vermont from Jipac, N.V. Initially, Mr. Silas made a down payment and executed a promissory note, and Jipac conveyed the property to Mr. Silas. A year later, Mr. Silas reconveyed the lots to himself and Mr. Maggio as tenants in common. The partnership ended in 1991. Mr.Maggio died in 1994.

¶ 3. In 1992, after discovering that the conveyance of the divided lots violated Act 250, Mr. Silas ceased making payments on the promissory note. Jipac sued Mr. Silas for payments due on the note, and Mr. Silas counterclaimed, seeking rescission. Because the court stayed the proceedings to await environmental court review of the district coordinator's opinion that an Act 250 permit was required for the conveyance, the proceedings took several years. In 2000, Mr. Silas prevailed, and the superior court ordered a rescission of the 1989 sale of the Jipac property to Mr. Silas and entered judgment for a total of over $80,000 to Mr. Silas and two guarantors who had contributed to the cost of the property. We affirmed. Jipac, N.V. v. Silas, 174 Vt. 57, 800 A.2d 1092 (2002). Neither Mr. Maggio nor his estate was a party to that suit, was awarded judgment on the counterclaim, or was even mentioned in the judgment order granting rescission.

¶ 4. Mr. Silas then foreclosed on a judgment lien against Jipac and attempted to sell the properties by foreclosure sale. Mr. Silas was unable to do so because the record deed to the properties still listed Mr. Maggio as a tenant in common.

¶ 5. Mr. Silas brought a probate action to clear title to the property under 14 V.S.A. § 1801, and Ms. Maggio opposed his petition. During the initial probate proceeding, the parties agreed to allow the sale of the property and to have their respective interests converted to cash. The litigation then proceeded as an ancillary intestate proceeding to determine whether or not decedent owned an interest in the property at the time of his death in 1994. In October 2007, the probate court entered judgment in favor of decedent's estate, concluding that the property was not owned by the partnership and that, pursuant to the deed from Silas to Silas and Mr. Maggio as tenants in common, decedent owned a one-half interest in the property at the time of his death.

¶ 6. Mr. Silas appealed the probate court's judgment to the superior court. The superior court held a bench trial in June 2011. Neither Ms. Maggio nor Mr. Silas attended the trial; the only witness was a guarantor on the original promissory note who sought to protect his interest in the proceeds of the sale of the property as determined in the Jipac v. Silas litigation. The only evidence before the trial court on the issues central to this case were several documents relating to the property and the partnership (including the Maggio-to-Maggio-and-Silas deed, the promissory note, and partnership tax returns) and interrogatory answers signed under oath by appellant, Ms. Maggio. The trial court reversed the probate court judgment, concluding that, notwithstanding the characterization of title on the deed, the property was an asset of the partnership; when the partnership dissolved, Mr. Maggio relinquished his interest in the partnership, including his interest in the property. Accordingly, the trial court held that the estate of Maggio had no interest in the property at the time of Mr. Maggio's death.

¶ 7. In support of its conclusion that the property was partnership property, the court pointed to Ms. Maggio's interrogatory answer that partnership funds were used to purchase the property. In addition, the court noted, based on the partnership tax returns, that some of the property's carrying costs (i.e., taxes) were paid for with partnership funds. Citing Connecticut law that provided that "[p]roperty is presumed to be partnership property if purchased with partnership assets," even if the instrument transferring title to the property does not name or reference the partnership, Conn. Gen. Stat. § 34-316(c), the court concluded that, therefore, the property was partnership property.*fn1

¶ 8. With respect to the question of whether, when the partnership dissolved in 1991, Mr. Maggio ceded his interest in the Holland property to Mr. Silas, the court noted that there was no documentary evidence of the partnership dissolution. However, Ms. Maggio testified in her interrogatory answers that when the partnership ended, "[decedent] received $15,000, and [Mr. Silas] received everything else." The court concluded that "everything else" would have included the property at issue that had been purchased with partnership funds. The court noted that the fact that Mr. Maggio's interest in the property was not mentioned or discussed during the Jipac v. Silas litigation further supported its conclusion that the partners intended that Mr. Silas alone would retain the partnership's interest in the real property following the partnership dissolution.

¶ 9. The court considered whether the statute of frauds required a writing to relinquish Mr. Maggio's interest in the partnership property back to the remaining partner. Applying Connecticut law, the trial court stated that "a partner's interest in real property is, in fact, a form of personal property," and thus no writing was required to cede Mr. Maggio's interest in the property to Mr. Silas in the context of the partnership dissolution. Accordingly, the court concluded that Mr. Maggio did not own any interest in the Vermont property at the time of his death, and the owner of the funds derived from the property's sale was Mr. Silas, subject to any lawful claims against it as partnership property.

¶ 10. On appeal, Ms. Maggio contends the court erred in: (1) admitting her answers to interrogatories in violation of the best evidence rule and the "dead man's" statutes, and without an adequate foundation showing that she had personal knowledge about her husband's business affairs; (2) finding that the property was a partnership asset; (3) finding that Mr. Maggio relinquished his interest in the property to Mr. Silas in the partnership dissolution; (4) holding that the statute of frauds did not apply to the transfer of Mr. Maggio's interest in the property to Mr. Silas; and (5) relying on Connecticut law in its decision without first notifying the parties.

I.

¶ 11. First, we consider Ms. Maggio's argument that the trial court erred in admitting her interrogatory answers in violation of the best evidence rule, V.R.E. 1002, 1004, and Vermont's "dead man's" statutes, 12 V.S.A. §§ 1602-1603, and without an adequate foundation because of a lack of personal knowledge. V.R.E. 602. Ms. Maggio objected to the introduction of her interrogatory answers in a motion in limine, which the trial court denied. We review the trial court's exercise of discretion for abuse of discretion, Billings v. Billings, 2011 VT 116, ¶ 12, 190 ...


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