Opinion
No. CV-10-6002308
March 10, 2011
MEMORANDUM OF DECISION RE DEFENDANT'S MOTION TO DISSOLVE EX PARTE PREJUDGMENT REMEDY
Facts and Procedural History
This action was initially brought in a two-count complaint filed on December 21, 2009, by the plaintiff, Mohegan Tribal Gaming Authority ("MTGA") against the defendant, Jerome Powers, claiming that Powers issued bad checks and demanding restitution. On April 13, 2010, the plaintiff sought a prejudgment remedy against the defendant based on a "Casino Credit Application," a 2009 "Addendum" to this application, and an affidavit of debt claiming that the defendant owed the principal amount of $1,230,197.34. The defendant filed his answer and special defenses on August 5, 2010.
On October 21, 2010, the plaintiff filed a proposed amended complaint. Over the defendant's objection, on December 20, 2010, the court, Cosgrove, J., permitted the amendments proposed by the plaintiff. Therefore, the operative complaint contains seven substantive causes of action, all made under Mohegan Tribal Law. On December 23, 2010, the plaintiff obtained an ex parte prejudgment remedy from the court, Devine, J., based upon its claim that the defendant was dissipating assets.
On December 29, 2010, the defendant filed a motion seeking a hearing to dissolve or modify the ex parte prejudgment remedy. On January 5, 2011, the defendant filed a supplement to this motion. A hearing was held on January 6, 2011. The parties complied with the court's order to provide the court with post-hearing briefs, which were filed on January 20, 2011. In his January 20, 2011 post-hearing brief, the defendant makes five arguments in support of his motion to modify or dissolve the prejudgment remedy granted by this court. The court will address each argument in turn.
CT Page 6930
Discussion Whether Plaintiff's Requested Relief Violates Public Policy
First, the defendant argues that the plaintiff's requested relief as to repayment of credit extended on wagers violates public policy embodied in § 52-553, which states that wagers and wagering contracts are void. The court disagrees.In Sokaitis v. Bakaysa, 293 Conn. 17, 19, 975 A.2d 51 (2009), the defendant argued that the parties' agreement to share their lottery winnings was unenforceable under § 52-553. Given that the laws of the state of Connecticut permitted many forms of wagering, the court determined that the legislature intended to exempt from the operation of § 52-553 those contracts supported by consideration in the form of money won or bet in the course of legal gambling. See id., 26. When reading §§ 53-278a and 53-278b, the statutes defining and criminalizing gambling, together with § 52-553, the court determined that these statutes were intended both to criminalize gambling not otherwise authorized by law and to deter illicit gambling by rendering all contracts facilitating such activities void and unenforceable. See id., 27. The court concluded that the parties' agreement, even if it was a wagering contract, was not governed by § 52-553 and therefore, the parties' contract was not unenforceable under § 52-553. See id., 31.
Specifically, the Supreme Court noted: "[T]he legislature has entered into tribal-state compacts with the Mashantucket Pequot Tribal Nation and the Mohegan Tribe of Indians of Connecticut to administer the operation of casinos on tribal lands at which many forms of gambling occur . . . It is beyond peradventure that the laws of the state of Connecticut permit many forms of wagering. Thus, it cannot be that § 52-553 truly prohibits or makes unenforceable `[a]ll wagers,' as such a reading of the statute is irreconcilable with this state's various forms of legalized wagering. Thus, at least with respect to the act of wagering, § 52-553 can only be read sensibly to include the implicit caveat `except as otherwise provided by law.'" (Citation omitted.) Id., 24-25; see also Mashantucket Pequot Gaming Enterprise v. Kennedy, Superior Court, judicial district of New London at Norwich, Docket No. 116860 (March 14, 2000, Hurley, J.) ( 26 Conn. L. Rptr. 674, 678) ("the provisions of the Tribal-State compact are controlling as to matters relating to gaming on Mashantucket Pequot lands, and this court may not apply General Statutes § 52-553 to the extent that it conflicts with the compact"); Mashantucket Pequot Gaming Enterprise v. DiMasi, Superior Court, judicial district of New London at Norwich, Docket No. CV 99 0117677 (September 23, 1999, Koletsky, J.) ( 25 Conn. L. Rptr. 474) ("[t]he Compact provides . . . [a] state sanctioned exception for an extension of credit for gaming purposes at the Foxwood Resort Casino. Under the unique circumstances of this case, the court finds that enforcement of the defendant's underlying debt does not violate the state's public policy against gambling [pursuant to § 52-553]"). In light of these decisions, the court rejects the defendant's argument.
The Plaintiff's Ability to Collect The Defendant's Debt Under the Compact
Next, the defendant argues that the plaintiff's negotiated gaming compact with the state does not authorize civil collection of claims to recoup credit extended for gaming. In Mashantucket Pequot Gaming Enterprise v. Kennedy, supra, 26 Conn. L. Rptr. 674, the court denied the defendant's motion for summary judgment in an action brought by Mashantucket Pequot Gaming Enterprise seeking money damages incurred when the defendant's decedent utilized a line of credit to borrow $60,000 from the plaintiff. In moving for summary judgment, the defendant claimed that any lending agreement between the plaintiff and the decedent was void under General Statutes § 52-553, an issue previously addressed in this decision. See id.
In rejecting the defendant's argument, the court examined the creation of the Tribal-State compact. Specifically, the court stated: "In the notice adopting the compact, the Secretary [of Interior] rejected the State of Connecticut's argument that extensions of credit were not intended under the compact . . . [given that] the explicit provisions in appendix A covering the extension of credit indicate the State and Tribe's understanding that credit would be extended." Id., 677. Consequently, the court concluded that it could not refuse to enforce the provisions of the compact on the ground that it conflicted with General Statutes § 52-553. See id., 678.
The compact between the Mashantucket Pequot Tribe and the State, discussed by the Kennedy court is nearly identical to the compact between the Mohegan Tribe and the State. As such, the court rejects the defendant's argument that the plaintiff's negotiated gaming compact with the state does not authorize civil collection of claims to recoup credit extended for gaming.
Subject Matter Jurisdiction
Further, the defendant contends that the court does not have subject matter jurisdiction over the plaintiff's claims. In Kizis v. Morse Diesel International, Inc., 260 Conn. 46, 52-54, 794 A.2d 498 (2002), the Supreme Court held that the tribe was a sovereign entity with the authority to create and enforce its own laws. Specifically, The Indian Gaming Regulatory Act, 25 U.S.C.S. § 2701 et seq. (1994), provided the state with a mechanism to negotiate with the tribe and to establish the manner in which to redress torts occurring in connection with casino operations on the tribe's land. See id., 55-57. As a result of the negotiations, the tribe maintained jurisdiction over tort actions. See id., 58. The Mohegan Torts Code, together with the gaming compact and the Mohegan constitution, provided a forum and mechanism to redress the victim's injuries resulting from a fall at the Mohegan Sun Casino. Accordingly, the Mohegan Gaming Disputes Court was the exclusive forum for the adjudication and settlement of tort claims against the tribe and its employees because it was the forum in which the sovereign had consented to being sued. See id.
Subsequently, in Ellis v. Allied Snow Plowing, Removal Sanding Services Corp., 81 Conn.App. 110, 114, 838 A.2d 237, cert. denied, 268 Conn. 910, 845 A.2d 410 (2004), the Appellate Court stated: "We are not persuaded that Kizis stands for the proposition that a properly authorized tribal court with broad tribal authority unfailingly ousts the Superior Court of jurisdiction to hear any case that is in any way related to tribal activities." In Ellis, the plaintiff was injured when the defendant contractor allegedly failed to clear snow and ice from a tribally-owned parking lot caused her to fall while attempting to board a bus. See id., 112. The contractor maintained that because its responsibilities for snow removal arose out of its contract with the tribe, it was entitled to sovereign immunity as an agent or representative of the tribe. See id. The court disagreed and concluded that "the tribal court does not have exclusive jurisdiction to adjudicate this `run of the mill' slip and fall accident. Although the plaintiff might have pursued her claim in the tribal court, she was not obligated to do so." Id., 115.
Therefore, the Mohegan Gaming Disputes Court has concurrent, but not exclusive, jurisdiction over the subject matter of this complaint, which is brought by the MTGA and not against it. See also Mashantucket Pequot Gaming Enterprise v. Kennedy, supra, 26 Conn. L. Rptr. 674. As such, the court rejects the defendant's argument.
Estoppel
Next, the defendant argues that the plaintiff should be estopped from claiming a prejudgment remedy since Mohegan Tribal Law has no provision for the same. The court also rejects this argument. Mohegan Code of Laws, Chapter 3, Judicial, Article II, Gaming Disputes Court, Division 3, Section 3-52 states: "Sources of Tribal Law. (a) The substantive law of the Mohegan Tribe for application by the Gaming Disputes Court shall be: (1) The law as set forth in any Mohegan Tribal ordinances or regulations. (2) The General Statutes of Connecticut, as may be amended from time to time, are hereby adopted as and declared to be the positive law of The Mohegan Tribe for application by the Gaming Disputes Court, except as such statutes are in conflict with Mohegan Tribal Law. (3) The common law of the State of Connecticut interpreting the positive law adopted in Subsection (2) above, which body of law is hereby adopted as and declared to be the common law of The Mohegan Tribe for application by the Gaming Disputes Court, except as such common law is in conflict with Mohegan Tribal Law." Therefore, the plaintiff may avail itself of the statutory scheme of § 52-578a et seq.
Sufficiency of Prejudgment Remedy Application and Affidavit
Finally, the defendant contends that the plaintiff's prejudgment remedy application, supporting affidavit, and testimony elicited are fatally flawed in that the affidavit and testimony in support thereof is predicated upon hearsay and are not "competent" within the meaning of § 52-278e(a); and that the testimony and affidavit fail to meet the requisite threshold of conduct constituting a basis for prejudgment remedy relief.
Recently, in State v. Sunrise Herbal Remedies, Inc., 296 Conn. 556, 2 A.3d 843 (2010), the Supreme Court discussed General Statutes § 52-278e(a), which governs the procedure for obtaining an ex parte application for a prejudgment remedy. In that case, the State of Connecticut filed an action for violation of § 42-110b(a) in connection with the defendants' sale of herbal products. See id., 561. The trial court granted its ex parte application for a prejudgment remedy pursuant to § 52-278e(a). See id., 562. Thereafter, the trial court concluded that the State's affidavits in support of the application were invalid because the affiant was not a competent affiant. See id. 564.
Section 52-278e(a) provides: "The court or a judge of the court may allow the prejudgment remedy to be issued by an attorney without hearing as provided in sections 52-278c and 52-278d upon the filing of an affidavit sworn to by the plaintiff or any competent affiant setting forth a statement of facts sufficient to show that there is probable cause that a judgment in the amount of the prejudgment remedy sought, or in an amount greater than the amount of the prejudgment remedy sought, taking into account any known defenses, counterclaims or set-offs, will be rendered in the matter in favor of the plaintiff and that there is reasonable likelihood that the defendant (1) has hidden or will hide himself so that process cannot be served on him or (2) is about to remove himself or his property from this state or (3) is about to fraudulently dispose of or has fraudulently disposed of any of his property with intent to hinder, delay or defraud his creditors or (4) has fraudulently hidden or withheld money, property or effects which should be liable to the satisfaction of his debts."
In reversing the trial court's decision, the Supreme Court explained: "A defendant against whom an ex parte prejudgment remedy has been issued may move to dissolve or modify the attachment by following the procedures set forth in § 52-278e(d) . . . Upon such a motion, the trial court shall proceed to hold a hearing . . . If the court determines at such hearing requested by the defendant that there is probable cause that judgment will be rendered in the matter in favor of the plaintiff and, if the plaintiff has relied on a ground set forth in subsection (a) of this section, that there is probable cause to believe such ground exists, the prejudgment remedy granted shall remain in effect. If the court determines there is no probable cause to believe that a judgment will be rendered in the matter in favor of the plaintiff or, if a ground set forth in subsection (a) of this section was relied on to believe such ground exists, the prejudgment remedy shall be dissolved . . . General Statutes § 52-278e(e)." (Citation omitted; internal quotation marks omitted.) Id., 569.
General Statutes § 52-278e(d) provides: "A defendant may move to dissolve or modify a prejudgment remedy allowed pursuant to this section by any proper motion or by return to the Superior Court of a signed claim form that indicates, by the checking of a box on the claim form, whether the claim is an assertion of a defense, counterclaim, set-off or exemption, an assertion that any judgment that may be rendered is adequately secured by insurance, an assertion that the amount of the prejudgment remedy is unreasonably high, a request that the plaintiff be required to post a bond to secure the defendant against any damages that may result from the prejudgment remedy, or a request that the defendant be allowed to substitute a bond for the prejudgment remedy."
The court continued: "Our case law has addressed two deficiencies that may occur under this scheme: the filing of an application for ex parte attachment with an affidavit that is insufficient, in and of itself, to establish probable cause; and the filing of an application without any supporting affidavit. When an affidavit is merely insufficient to establish probable cause, a plaintiff may introduce additional evidence to buttress the initial affidavit at the probable cause hearing held pursuant to § 52-278e(e) . . . When a plaintiff provides no affidavit with an application for a prejudgment remedy, however, the plaintiff is not entitled to provide support for the initial application at a probable cause hearing." (Citations omitted; internal quotation marks omitted.) Id., 570.
The Supreme Court found that the trial court's conclusion was premised on an incorrect interpretation of the term "competent affiant." See id., 571. The court stated: "`Competent affiant' is a legal term of art, and, because there is no legislative indication to the contrary, the term is presumed to carry its legal meaning in the context of the statute . . . An affidavit is defined as [a] voluntary declaration of facts written down and sworn to by a declarant before an officer authorized to administer oaths and an affiant is [o]ne who makes an affidavit . . . Generally, affidavits must be made on the affiant's personal knowledge of the facts alleged in the petition. The affidavit must in some way show that the affiant is personally familiar with the facts so that he could personally testify as a witness . . .[C]ompetence denotes a threshold level of basic capacity and ability." (Citations omitted; internal quotation marks omitted.) Id., 571-72.
"In determining the competence of a witness, it is well established that [a] person who has no personal knowledge concerning facts about which he or she is asked to testify is not competent to testify about these facts . . . A distinction should be drawn [however] between a witness who has no personal knowledge and one who has only hearsay knowledge. A person who has no personal knowledge about the subject matter of his or her testimony, i.e., the person is guessing or speculating, is an incompetent witness as to that matter. A witness who is testifying to information that is not admissible in evidence, such as inadmissible hearsay or privileged evidence, is a competent witness as to that matter because he or she has some personal information, but the evidence is inadmissible because the evidence is incompetent . . . These sources indicate that the touchstone of competence is personal knowledge. Personal knowledge is variously described as knowledge acquired firsthand or from observation." (Citations omitted; internal quotation marks omitted.) Id., 572-73.
"[T]he rule that a witness must testify from personal knowledge requires that a witness testifying about a fact which can be perceived by the senses must have had an opportunity to observe, and must have actually observed that fact . . . Determining whether an affiant has personal knowledge requires close examination of the averments set forth in the affidavit, and the character of such averments will depend significantly upon the nature of the underlying action." (Citation omitted; internal quotation marks omitted.) Id., 573. The court concluded that although the affiant, an Assistant Attorney General, lacked personal knowledge to aver to the truth of the allegations underlying the complaints, he nonetheless was competent to represent the nature and extent of those complaints. See id., 575. The affiant derived personal knowledge of the existence, nature, and content of the State's prejudgment application by personally reviewing the complaints and the State's investigative file. See id. Therefore, because he was a competent affiant, the trial court erred in finding that it lacked jurisdiction. See id., 576.
In the present case, the court disagrees with the defendant's argument that the plaintiff's prejudgment remedy application, supporting affidavit, and testimony elicited are fatally flawed. The plaintiff's counsel, Attorney Noble, is a "competent affiant" within the meaning of § 52-278e(a). In his December 23, 2010 affidavit, he attests as to the dissipation of the defendant's funds during the pendency of this action. Specifically, Attorney Noble attests that on December 23, 2010, he learned that the defendant had invested substantial sums in Plum TV, Inc. Attached to this affidavit is an article from the Miami Herald dated November 14, 2010, which discusses Powers' "substantial" investment in Plum TV and that he was named co-chairman of Plum TV's Board of Directors. At the January 6, 2011 hearing, Attorney Noble testified that he came across the article while doing an Internet search on the defendant. At this hearing, the defendant had an opportunity to cross-examine Noble. During cross-examination, Noble further testified that he took steps to authenticate the representations found in the article by checking Plum TV's website, which reported that the defendant was indeed named co-chairperson of the Board of Directors. That representation was further verified with Business.com. The article was admitted as a full exhibit, but "not for [its] truth."
Similar to the affiant in State v. Sunrise Herbal Remedies, Inc., Attorney Noble lacked personal knowledge to aver to the truth of the allegations underlying the article. This court finds, however, he nonetheless was competent to represent the nature and extent of the article given that he derived personal knowledge of the existence, nature, and content of the plaintiff's prejudgment application by personally reviewing the article and taking steps to verify the representations contained therein.
Next, the defendant argues that the prejudgment application was defective because it does not specifically identify the property sought to be attached or contain the name and address of any third person holding property pursuant to § 52-278e(c)(1). The court agrees with the plaintiff that its application is sufficient. The plaintiff seeks to attach the defendant's assets generally and at this time, lacks reliable information as to the nature and location of those assets. Section 52-578n permits an applicant for prejudgment attachment to move for an order requiring the defendant to disclose property in which he has an interest sufficient to satisfy potential liability at any time after the filing of an application for attachment.
Section 52-278e(c) states: "The notice and claim form required by subsection (b) of this section shall contain (1) the name and address of any third person holding property of the defendant who is subject to garnishee process preventing the dissipation of such property, and (2) a statement of the procedure set out in subsection (d) of this section for requesting a hearing to move to dissolve or modify the prejudgment remedy."
Section 52-278n(a)-(c) states: "The court may, on motion of a party, order an appearing defendant to disclose property in which he has an interest or debts owing to him sufficient to satisfy a prejudgment remedy. The existence, location and extent of the defendant's interest in such property or debts shall be subject to disclosure. The form and terms of disclosure shall be determined by the court . . . A motion to disclose pursuant to this section may be made by attaching it to the application for a prejudgment remedy or may be made at any time after the filing of the application . . . The court may order disclosure at any time prior to final judgment after it has determined that the party filing the motion for disclosure has, pursuant to section 52-278d, 52-278e or 52-278i, probable cause sufficient for the granting of a prejudgment remedy."
Finally, the Appellate Court has stated: "The law governing prejudgment remedies is codified in General Statutes §§ 52-278a through 52-278n. An ex parte prejudgment remedy . . . is available under the conditions set forth in General Statutes § 52-278e(a). When an ex parte prejudgment remedy is granted, a defendant may move to dissolve or modify the remedy pursuant to General Statutes § 52-278e(c). Upon the filing of a motion to dissolve, the court is directed to hear and determine such motion expeditiously. At such hearing, the plaintiff has the burden of demonstrating that there is probable cause to sustain the validity of [his] claim." (Internal quotation marks omitted.) Goodwin v. Pratt, 10 Conn.App. 618, 620, 524 A.2d 1168 (1987).
The Goodwin court went on to clarify the concept of probable cause as it is used in the prejudgment remedy statutes. "The legal idea of probable cause is a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence and judgment, under the circumstances, in entertaining it . . . Probable cause is a flexible common sense standard. It does not demand that a belief be correct or more likely true than false . . . The hearing in probable cause for the issuance of a prejudgment remedy is not contemplated to be a full scale trial on the merits of the plaintiff's claim. The plaintiff does not have to establish that he will prevail, only that there is probable cause to sustain the validity of the claim . . . The court's role in such a hearing is to determine probable success by weighing probabilities." (Citations omitted; internal quotation marks omitted.) Id., 620-21.
At the January 6, 2011 hearing, the court was presented with evidence of a credit application and addendum signed by the defendant, a personal check paid to the plaintiff by the defendant, and "counter checks" drawn on the defendant's account and made payable to the plaintiff that were returned because the accounts were closed. As previously discussed, the court also heard the testimony of Attorney Noble regarding the article about the defendant that he found in the Miami Herald, along with his testimony as to efforts made to verify the article's representations. In sum, the court is satisfied that there was probable cause for the court to grant the plaintiff's prejudgment remedy and that the prejudgment remedy application, supporting affidavit, and testimony comport with the statutory scheme.
Conclusion
For all of the foregoing reasons, the defendant's motion to dissolve or modify the ex parte prejudgment attachment is hereby denied.