New Haven Independent

A hearing before Probate Judge Jack Keyes (pictured) Monday wrapped up a 20-month-long probe into how lawyers handle estates, how insiders get deals on property, and whether a community foundation was shortchanged by a group of deal-makers including former city official Sal Brancati.

The case surrounds the last wishes of Margaret Amrich of 18 Cottage St. The widow died on Feb. 7, 2005. Having no inheritors, she left her worldly possessions to the Community Foundation For Greater New Haven, marked for a “fund for crippled children.”

A controversial handling of the widow’s home, first reported by the Independent in February 2007, drew the scrutiny of the state attorney general and disciplinary action by the Statewide Grievance Committee in Hartford Superior Court.

Settlement Struck

After months of discussions over missing funds, the Foundation has reached a settlement with the estate’s appointed executor, Gabriel Cusanelli.

Without seeking prior approval from the Probate Court, Cusanelli sold the property to his own business partners, Brancati and Mark Perez, for only $250,000. Less than a year later, his partners turned around and resold the house for $368,000 — a profit of $118,000.

The sale price raised the eyebrows of a neighbor and the city tax assessor, but in the end was deemed valid due to an appraisal done at that time. The man who did the appraisal and sold the home told the Independent he tipped off insiders on the deal, and sold the home to Brancati and Perez because they promised quick cash. Click here for that story.)

At the time Cusanelli promised Brancati and Perez the home, they were joined in business with him in an LLC. The LLC was later dissolved.

Cusanelli has been reprimanded by the Statewide Grievance Committee, a review panel investigating attorney misconduct. Mark Dubois, the state’s chief disciplinary counsel, ruled he erred in failing to disclose his business ties to the Probate Court before approving the sale.

After being disciplined by his peers, Cusanelli remained in discussions with the parties over thousands of dollars in interest he allegedly owed the estate. The interest was accrued over the course of an unusual delay: Brancati and Perez agreed to buy the home in August of 2005, but never got around to paying for the home until April 12, 2006.

Brancati and Perez have paid the price for that delay: They agreed to pay back $15,000 of profits they made selling the home. When controversy arose, Cusanelli resigned as executor of the estate and gave up his executor’s fees in the amount of $6,500.

Disagreement lingered over how much the estate was damaged by the delay of the sale. Had the home been paid for on time, that money would have been disbursed to the Community Foundation, or kept in an interest-accruing account. Cusanelli estimated the estate would’ve made a 3.76 percent interest on the money. He cut a check for $6,188 for lost interest over that amount.

The foundation, as well as Attorney General Dick Blumenthal, whose office is assigned to protect charities, objected to Cusanelli’s estimate. Threatening to take the matter to court, they fought for a higher estimate.

In August, the parties reached a deal in which Cusanelli agreed to pay another $12,500 “for damages to the estate.” The amount represents a revised estimate of the lost interest over the eight-month delay, according to Irving Schloss, attorney for the foundation.

With the settlement signed, Schloss entered a final accounting that became the subject of a hearing before Probate Judge Keyes Monday morning.

At the brief, under-five-minute hearing Monday, all parties said they had no objection to the final tally. By Schloss’s count, the foundation ended up getting an extra $42,000 over the amount it would have been given before the parties in the case were held accountable. The total includes roughly $25,000 in payments from Cusanelli; $15,000 from Brancati and Perez; and $2,000 in interest.

Under the final accounting, the foundation will receive a total of $314,870 towards a “crippled children’s fund.”

Lesson: Have Someone “Watch Your Back”

“At the end of the day,” said Schloss, “there will be $42,000 more going to charity than would have” according to the March 2007 final accounting, which drew objections from Blumenthal’s office.

“I think everyone is glad to have this: A, over with and B, to have the funds put to work for their intended purpose,” Schloss said after the hearing. He he expects the funds to be disbursed to the foundation after an appeal period is over, in the next month. Then the widow’s wishes, to create a fund for “crippled children,” would be finally carried out.

Amrich also left a small donation, $500, towards her place of worship, St. Joseph’s Roman Catholic Church. Parish member Bill Donohue kept an eye on the process to make sure the funds got through to the church.

He noted that in the end, about $42,000 of the $118,000 profit on flipping the home was returned. “It’s certainly more than it was,” he said.

Reached by phone, Blumenthal said he expects Monday’s hearing will bring closure to the case.

“Various parties have made payments to reimburse or compensate the Amrich estate, and we believe that the hearing should probably be the last step,” he said.

“One of the key questions is whether the house could’ve been sold for a higher amount,” he noted. He said because the sale price of the house was in line with an appraisal, “there was no legal basis to proceed” on that front.

“It was a sad ending to a difficult life for Margaret,” said Donohue, who lived down the street from the widow. He said the case showed the need for scrutiny over how wills are carried out.

“You really need to have someone to watch your back, when your back is no longer your back because you’re not there,” Donohue said.