Opinion
No. CV 03 0407184
May 26, 2004
MEMORANDUM OF DECISION RE DEFENDANT'S MOTION TO DISMISS PREJUDGMENT REMEDY
The plaintiff, Joanna Pacheco, has commenced this action in four counts alleging breach of contract, breach of fiduciary duly, fraud and unjust enrichment. Her claims arise from a real estate transaction she allegedly entered into with the defendant, Edwin Sost.
To secure a judgment in this case, the plaintiff applied for an order of this court for the prejudgment attachment of real property of the defendant sufficient to secure the sum of $175,000.00 as well as garnishment of debts owed to the defendant.
The defendant has filed a motion (#122) to dismiss the said application for prejudgment remedy for the reason that the plaintiff has previously filed a notice of lis pendens on the land records concerning the real property which is the subject of the plaintiff's complaint. The plaintiff argues that the court lacks subject matter jurisdiction to entertain the application for prejudgment remedy "since the application is rendered moot by virtue of the Plaintiff's filing of a Lis Pendens on the property which may be affected by this litigation."
The defendant conceded that there is no precedent case for such relief, but argues that our courts have held that by its definition and purpose, a lis pendens has been found to be adequate security for payment of the plaintiff's claim and for that reason an application for prejudgment remedy brought after the filing of a lis pendens on the same property is moot. (Emphasis added.)
"Mootness is a question of justiciability that must be determined as a threshold matter because it implicates [a] court's subject matter jurisdiction . . . Because courts are established to resolve actual controversies, before a claimed controversy is entitled to a resolution on the merits it must be justiciable. Justiciability requires [inter-alia] . . . that there be an actual controversy between or among the parties to the dispute . . . and that the determination of the controversy will result in practical relief to the complainant . . .
"The mootness doctrine is . . . founded on the same policy interests as the doctrine of standing, namely, to assure the vigorous presentation of arguments concerning the matter at issue . . . [T]he standing doctrine is designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticiable interests and that judicial decisions which may affect the rights of others are forged in hot controversy, with each view fairly and vigorously represented . . . Indeed, we note that courts are called upon to determine existing controversies, and thus may not be used as a vehicle to obtain advisory judicial opinions on points of law." (Citations omitted; internal quotation marks omitted.) Wallingford v. Dept. of Public Health, 262 Conn. 758, 766-67, 817 A.2d 644 (2003).
Purpose of Lis Pendens
"[A] notice of lis pendens ensures that the plaintiffs' claim cannot be defeated by a prejudgment transfer of the property. Because of the uniqueness of real estate, this function is particularly important where the complaint seeks specific performance relative to the affected property. Even where the plaintiff seeks only recovery of funds allegedly invested in the burdened real estate, or where the plaintiff asserts a partial ownership interest therein, the lis pendens procedure provides security for payment of the claim pending final resolution of the case." Williams v. Bartlett, 189 Conn. 471, 479-80, 457 A.2d 290, appeal dismissed, 464 U.S. 801 (1983). "In certain types of actions, such as a quiet title action brought by a person claiming by adverse possession, a lis pendens rises to the level of an independent encumbrance in favor of that person, who otherwise has no record interest in the subject property." (Citation omitted; internal quotation marks omitted.) Ghent v. Meadowhaven Condominium, Inc., 77 Conn. App. 276, 284, 822 A.2d 355 (2003). "The doctrine underlying lis pendens is that a person who deals with property while it is in litigation does so at his peril . . . thereby preventing the effective disposition of the property." (Citations omitted.) Kukanskis v. Griffith, CT Page 8709 180 Conn. 501, 507, 430 A.2d 21 (1980). "A notice of lis pendens is appropriate in any case where the outcome of the case will in some way, either directly or indirectly, affect the title to or an interest in real property . . . As [General Statutes] § 52-325(a) provides, the purpose of [notice of lis pendens] is to bind any subsequent purchaser or encumbrancer as if he were made a party to the action described in the lis pendens." (Internal quotation marks omitted.) Donenfeld v. Friedman, 79 Conn. App. 64, 67, 829 A.2d 107 (2003). "The purpose of the lis pendens . . . is . . . to give constructive notice to persons seeking to purchase or encumber property after the recording of a lien or the commencement of a foreclosure suit." First Constitution Bank v. Harbor Village Ltd. Partnership, 37 Conn. App. 698, 703, 657 A.2d 1110, cert. denied, 235 Conn. 902, 665 A.2d 1110 (1995).
Purpose of a PJR
"The purpose of the prejudgment remedy statute is to secure the defendants' assets, forestalling the dissipation thereof, while awaiting a final judgment . . . The purpose of the statute is to allow a plaintiff who can show probable cause that he will eventually succeed on the merits to encumber property of the defendant to protect himself from obtaining a judgment which cannot be satisfied." (Citations omitted; internal quotation marks omitted.) Gagne v. Vaccaro, 80 Conn. App. 436, 452-53, 835 A.2d 491 (2003), cert. denied, 268 Conn. 920 (2004). "[A]n attachment . . . can . . . be issued only after a due process judicial hearing on notice and pursuant to an order of the court." E.J. Hansen Elevator, Inc. v. Stoll, 167 Conn. 623, 628, 356 A.2d 893 (1975).
Regardless of whether the court were to find persuasive the defendant's argument that a notice of lis pendens will adequately secure the plaintiff's interest in the subject real property, an attachment is appropriate where there is probable cause to believe that the equity in that property will be inadequate to compensate the plaintiff. In People's Bank v. Bilmor Building Corp., 28 Conn. App. 809, 817-18, 614 A.2d 456 (1992), "the plaintiff sought and obtained a judgment of foreclosure. As the amount due on the underlying debt exceeded the value of the property upon strict foreclosure, the plaintiff was entitled, within thirty days of the foreclosure, to seek a deficiency judgment in accordance with § 49-14. Even though the plaintiff was entitled to obtain a deficiency judgment in the foreclosure suit, it would be able to recover the amount of the deficiency judgment only if the defendants had other assets left to satisfy that judgment. The plaintiff, by its prejudgment attachment, attempted to secure a position superior to that of other attaching creditors."
In this case, the plaintiff seeks damages beyond the value of the equity in the subject real property. Her application, therefore, is not rendered moot by the filing of the notice of lis pendens because the attachment would provide additional security for the payment of the plaintiff's claim beyond the value of that property.
Further, neither the filing of a notice of lis pendens nor the prejudgment attachment of the defendant's assets is an exclusive remedy. In Bilmor, the Appellate Court reasoned as follows: "The first sentence of General Statutes § 52-279 authorizes the granting of attachments `upon all complaints containing a money demand against the estate of the defendant, both real and personal.' The statute then details specific instances when such attachments are not permitted. None of the enumerated exceptions proscribes the use of attachments in foreclosure actions. It is a well established maxim of statutory construction that when a statute enumerates exceptions to a stated general proposition, anything not excepted is conclusively included . . .
"There is also no exception for foreclosure actions in the general prejudgment remedy statute. General Statutes §§ 52-278a through 52-278h. General Statutes § 52-278b provides for prejudgment remedies in `any action at law or equity.' Thus, neither the attachment statute nor the prejudgment remedy statute specifically prohibits the granting of a prejudgment attachment in a foreclosure action.
"Similarly, there is nothing in those statutes that specifically prohibits the granting of a prejudgment attachment to secure the payment of a deficiency judgment. If the legislature intended to prevent the use of prejudgment attachments to secure the payment of deficiency judgments in foreclosure cases, then presumably it would have done so. It has not." (Citation omitted.) People's Bank v. Bilmor Building Corp., supra, 28 Conn. App. 818. Neither the attachment statute, General Statutes § 52-279, nor the prejudgment remedy statute, §§ 52-278a through 52-278h, prohibit a prejudgment attachment of the defendant's property after a notice of lis pendens has been filed. There is also no language in the notice of lis pendens statute, General Statutes § 52-325, which would preclude a plaintiff from seeking a prejudgment remedy after the filing of a notice of lis pendens.
Based on the allegations in the complaint, an award of damages in excess of the value of the subject real estate is possible. The prejudgment remedy sought by the plaintiff therefore, would provide her with practical relief. In Bilmor, the Appellate Court was "unpersuaded by the defendants' bedrock assertion that the possibility or probability of a deficiency judgment cannot form the basis for a prejudgment remedy because it cannot be known until the completion of the foreclosure action whether there will be such a judgment and, if there is, its amount. While it is true that a deficiency judgment is `contingent' in that it cannot automatically be granted by a court without credible evidence as to an appropriate amount . . . other prejudgment remedies that are based on various causes of action that can lead to judgments are no less contingent." (Citation omitted.) People's Bank v. Bilmor Building Corp., supra, 28 Conn. App. 819. Similarly, a judgment in favor of the plaintiff that would award her any damages in excess of the equity in the property would necessarily exceed the value of that equity. Consequently, the defendant's assertion that a notice of lis pendens adequately secures the plaintiff's claim is unpersuasive. The plaintiff simply attempted to avail herself of a commonly used procedural device in order to improve her chances to receive full compensation for her claim.
Further, "[a] plaintiff is not required to exhaust the collateral securing a debt before it attempts to reach other assets of a defendant by way of attachment, but the collateral must be taken into account in establishing the amount of the attachment necessary as a supplement . . . Thus, a plaintiff may be entitled to a prejudgment remedy because it has demonstrated the requisite probable cause, but it may still be denied the remedy if its interest is already adequately secured." (Citation omitted.) Blakeslee Arpaia Chapman, Inc. v. EI Constructors, Inc., 32 Conn. App. 118, 131, 628 A.2d 601 (1993).
Accordingly, the plaintiff here was not required to await the disposition of the real property referenced in the notice of lis pendens before attempting to attach the defendant's other assets by way of attachment. The defendant's arguments should be directed to the merits of the application rather than at this court's subject matter jurisdiction to hear the application.
For the foregoing reasons, the defendant's motion to dismiss the plaintiff's application for prejudgment remedy is hereby denied.
By the Court,
Joseph W. Doherty, Judge