Opinion
No. X06 CV 06 5007333 S
July 10, 2009
MEMORANDUM OF DECISION ON THIRD-PARTY DEFENDANT MERRITT B. GAVIN'S MOTION TO DISMISS (#175)
STATEMENT OF THE CASE
This action was instituted by the plaintiff The Sergy Company, LLC against the defendant Magnetek, Inc., seeking costs and damages associated with the remediation of contaminated property. According to the second amended complaint, the plaintiff is the owner of certain property located on Seaview Avenue in Bridgeport, Connecticut. This property was leased to Universal Manufacturing Corporation. In 1986, Universal merged with Magnetek and Magnetek assumed Universal's obligations under the lease. In 1999, the plaintiff, as the lessor, and Magnetek, as the lessee, modified the lease and extended the lease terms to December 2004. In 2001, Magnetek filed a Transfer Act Form III certification. In or about December 2004, at the end of the lease term, Magnetek vacated the premises.
The plaintiff acquired this property in 1999 through a quitclaim deed executed by the trustees of the Sergy Trust, Merritt Gavin and Alan Sergy.
According to the parties' submissions, Magnetek allegedly acquired its interests in Universal from Fruit of the Loom, Inc.
The record is unclear about the circumstances or reasons for the Form III certification filed by Magnetek in 2001, but in any event, Magnetek admits in its answer to the complaint that it made this certification. Such certifications are governed by the Transfer Act, General Statutes §§ 22a-134 though 22a-134e. The Transfer Act concerns the transfer of property that has been exposed to "hazardous wastes." See General Statutes § 22a-134(4). "When ownership transfers are made concerning property exposed to hazardous wastes, the Transfer Act requires that the transferors give the transferees certain certification forms regarding the existence of hazardous wastes and the remediation of such wastes that may exist. General Statutes § 22a-134a. These forms are also required to be filed with the Commissioner of Environmental Protection. Id. According to the second amended complaint, ¶ 20, Magnetek made the following certification in its 2001 Form III filing: "to the extent necessary to minimize or mitigate a threat to human health and the environment, I agree to investigate the Parcel in accordance with prevailing standards and guidelines and to remediate the Parcel in accordance with the remediation standards. I agree to contain, remove or abate pollution, potential sources of pollution and substances in soil or sediment which pose an unacceptable risk to human health or the environment."
The gravamen of the plaintiff's second amended complaint is that Universal caused the property to become contaminated with "PCBs and volatile organic compounds" and that Universal failed to abate or remediate the contamination. The second amended complaint is in three counts. In the first count, the plaintiff claims that Universal's contamination of the property breached the terms of the lease. The plaintiff seeks to hold Magnetek liable for Universal's breach. The plaintiff demands damages against Magnetek, as well as specific performance to abate the contamination and to remediate the property. The second count of the complaint alleges that Magnetek violated General Statutes § 22a-16, and claims that the plaintiff is entitled "to declaratory and equitable relief against the unreasonable pollution caused by Magnetek." The third count alleges violation of "section 2 of Public Act 85-568." In the third count, the plaintiff seeks "[a] declaration that Magnetek is liable for costs of remediation pursuant to P.A. 85-568" and civil penalties.
General Statutes § 22a-16 provides the following:
The Attorney General, any political subdivision of the state, any instrumentality or agency of the state or of a political subdivision thereof, any person, partnership, corporation, association, organization or other legal entity may maintain an action in the superior court for the judicial district wherein the defendant is located, resides or conducts business, except that where the state is the defendant, such action shall be brought in the judicial district of Hartford, for declaratory and equitable relief against the state, any political subdivision thereof, any instrumentality or agency of the state or of a political subdivision thereof, any person, partnership, corporation, association, organization or other legal entity, acting alone, or in combination with others, for the protection of the public trust in the air, water and other natural resources of the state from unreasonable pollution, impairment or destruction provided no such action shall be maintained against the state for pollution of real property acquired by the state under subsection (e) of section 22a-133m, where the spill or discharge which caused the pollution occurred prior to the acquisition of the property by the state.
Public Act § 85-568 is now codified at General Statutes §§ 22a-134 through 22a-134e, and as previously indicated, is known as the Transfer Act.
In June 2008, Magnetek moved pursuant to General Statutes §§ 52-102, 52-103 and 52-107 to cite in as party defendants (a) Fruit of the Loom, Inc., and (b) Merritt B. Gavin and Alan M. Sergy, individually and as trustees of a trust created by Archie Sergy. This motion was granted, and Magnetek served a complaint for "declaratory judgment" against Fruit of the Loom and Gavin (it being reported in the return of service that Alan M. Sergy is deceased.) As to Merritt B. Gavin and Alan M. Sergy, Magnetek alleges that as trustees of the Sergy Trust, they were prior owners of the property in question and they transferred their interests in the property to the plaintiff in 1999. Magnetek further alleges that although this 1999 transfer "was subject to the Connecticut Transfer Act" and therefore required a Form III certification filing, Gavin and Sergy did not make this filing. Relying on General Statutes § 22-134b, Magnetek claims that the trustees "as transferors are and were strictly liable to [the plaintiff] as transferee for all costs of remediation and all direct and indirect damages." Complaint of Magnetek, Inc. For Declaratory Judgment, ¶ 9. In its prayer for relief, Magnetek seeks the following declaratory findings relevant to Gavin:
According to Magnetek's complaint, Fruit of the Loom is the successor to Farley/Northwest Industries, Inc. This complaint alleges that Parley/Northwest filed a Form III certification in 1986 and entered into a consent decree with the Connecticut Department of Environmental Protection in 1988 regarding the remediation of contamination on the property.
The court notes that Magnetek also moved to add the Connecticut Department of Environmental Protection as a defendant in this action. That motion was denied.
That pursuant to General Statutes § 22a-134b, Meritt B. Gavin and Alan M. Sergy are strictly liable to [the plaintiff], without regard to fault, for all remediation costs and direct and indirect damages, including investigation and, if necessary, remediation of conditions at the Property for which [the plaintiff] seeks to hold Magnetek responsible; and
That by reason of their precedence in time to Magnetek's 2001 Form III filing, the 1999 Transfer [by the trustees] should be fully and completely discharged before Magnetek is called upon to conduct any further investigation and, if necessary, remediation of conditions at the Property.
Pending before the court is defendant Meritt B. Gavin's motion to dismiss the complaint for declaratory judgment filed against him by Magnetek. Gavin argues that Magnetek lacks standing to maintain this action for declaratory relief against him, and as a consequence, this court lacks subject matter jurisdiction. For the following reasons, this motion to dismiss is granted.
DISCUSSION I
"A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction . . ." (Citations omitted; internal quotation marks omitted.) Filippi v. Sullivan, 273 Conn. 1, 8, 866 A.2d 599 (2005). "The issue of standing implicates subject matter jurisdiction and is therefore a basis for granting a motion to dismiss." St. George v. Gordon, 264 Conn. 538, 544, 825 A.2d 90 (2003). "If a party is found to lack standing, the court is without subject matter jurisdiction to determine the cause . . . (Citation omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 485, 815 A.2d 1188 (2003). "Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless [one] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy . . ." (Citation omitted; internal quotation marks omitted.) Ardito v. Olinger, 65 Conn.App. 295, 299, 782 A.2d 698, cert. denied, 258 Conn. 942, 786 A.2d 429 (2001). "[T]he plaintiff bears the burden of proving subject matter jurisdiction, whenever and however raised . . ." (Citation omitted.) Fink v. Golenbock, 238 Conn. 183, 199 n. 13, 680 A.2d 1243 (1996). "The rules of practice define the scope of declaratory judgment actions as follows: The judicial authority will, in cases not herein excepted, render declaratory judgments as to the existence or nonexistence (1) of any right, power, privilege or immunity; or (2) of any fact upon which the existence or nonexistence of such right, power, privilege or immunity does or may depend, whether such right, power, privilege or immunity now exists or will arise in the future. Practice Book § 17-54." (Citations omitted; internal quotation marks omitted.) ACMAT Corp. v. Greater N.Y., 88 Conn.App. 471, 476, 869 A.2d 1254 (2005).
II CT Page 12934
The substantive claim asserted by Magnetek against Gavin is stated in paragraph nine of its complaint and concerns Gavin's transfer of his interest in the property to the plaintiff allegedly without a Transfer Act filing: "Because no Transfer Act filing was made in connection with the 1999 transfer, Meritt B. Gavin and Alan M. Sergy as Transferors are and were strictly liable to [the plaintiff] as Transferee for all costs of remediation and all direct and indirect damages. [General Statutes] § 22a-134b." Section 22a-134b is a statutory remedy authorizing the recovery of damages in favor of a transferee when its transferor fails to comply with the provisions of the Transfer Act. The language of § 22a-134b is as follows:
Failure of the transferor to comply with any of the provisions of sections 22a-134 to 22a-134e, inclusive, entitles the transferee to recover damages from the transferor, and renders the transferor of the establishment strictly liable, without regard to fault, for all remediation costs and for all direct and indirect damages.
There is no dispute between the parties that the plain and unambiguous language of § 22a-134b only authorizes a cause of action in favor of a transferee against its transferor for the latter's failure to comply with the Transfer Act. See East Greyrock, LLC v. OBC Assoc., Inc., Superior Court, judicial district of Stamford-Norwalk at Stamford, Complex Litigation Docket, Docket No. X08 CV 044002173 (Feb. 7, 2006; Adams, J.). Consequently, Gavin's standing argument is straightforward: assuming arguendo that he failed to comply with the Transfer Act, this is a failure that the plaintiff, his transferee, may complain about under § 22a-134b, but not Magnetek. As a matter of law, Magnetek has no standing under § 22a-134b, either in an individual or representational capacity, to assert claims or to seek damages on behalf of the plaintiff.
Magnetek's response to Gavin's argument is very creative, but nonetheless meritless. According to Magnetek, Gavin's argument is misplaced because Magnetek is not asserting a claim under § 22a-134b. Magnetek contends that because Gavin is strictly liable to the plaintiff under the Transfer Act for the exact damages that the plaintiff is seeking to impose on Magnetek, Magnetek has standing to seek a declaration that its "obligations should be fully and completely discharged" before Magnetek is called upon to investigate or remediate the contamination on the property. Complaint of Magnetek, Inc. For Declaratory Judgment, Prayer for Relief, ¶ e. Magnetek's position is best expressed by quoting the following text from its memorandum in opposition to the motion to dismiss (#180):
Mr. Gavin seeks to dismiss the declaratory judgment complaint against him on the theory that Magnetek lacks standing to make a claim against him under General Statutes § 22a-134b. The problem with this theory is that Magnetek has asserted no such claim. Magnetek has standing to assert the claim it has actually made, which is that Mr. Gavin is liable to Sergy for the same relief Sergy seeks from Magnetek. Resolution of that question sufficiently affects Magnetek's rights vis-a-vis Sergy to give Magnetek standing based on principles of classical aggrievement.
Memorandum of Defendant Magnetek, Inc. in Opposition to Motion to Dismiss Filed by Meritt B. Gavin, p. 4.
It would obviously be easier for Magnetek to claim the direct benefit of § 22a-134b, but it has not attempted to do so. Magnetek has proceeded instead by seeking a declaration of Sergy's rights as against Mr. Gavin — not because those rights entitle Magnetek to recover anything from Mr. Gavin, but because they affect what Sergy can recover from Magnetek.
Id., p. 11.
Magnetek seeks here not to assert an affirmative liability claim against another party [Gavin], but to obtain a declaration of rights so that Magnetek itself is not unfairly saddled with a liability that properly rests with that party. Magnetek does not seek any affirmative recovery from Mr. Gavin or the others Magnetek has cited into this case. Rather, Magnetek seeks a declaration of their obligations relative to the Property and to Sergy so that those obligations are not unjustly transferred to Magnetek.
Id., pp. 13-14.
Thus, to the extent that multiple parties may be held liable for property contamination under the Transfer Act, the thrust of Magnetek's argument is that any one of them may seek a declaration or finding for the prioritization or apportionment of their respective liability under the Act. As cogently emphasized by Gavin, however, the Transfer Act does not contemplate or provide for any such prioritization or apportionment. Indeed, Magnetek's position is exactly at odds with the statutory scheme of the Transfer Act as reflected by § 22a-134b. As previously explained, § 22a-134b is the Act's only provision providing a basis for a private remedy or cause of action emanating from a transferor's violation of the Act. Section 22a-134b imposes strict liability upon transferors who fail to comply with the provisions of the Transfer Act, but this liability only runs in favor of their immediate or direct transferees.
The Transfer Act is strict, both legally and literally, in its imposition of liability without fault. This strict liability created by the Act encourages compliance, discourages noncompliance, and maximizes the number of people potentially liable for the remediation of hazardous waste contamination. The stringent consequences of the strict liability created by the Act, however, are narrowed by the provision limiting a transferor's liability to its immediate transferee. If the legislature intended to impose some form of priority, indemnification or apportionment among transferors who violate the Transfer Act, it could have done so, but it did not. Consequently, to provide the declaratory remedy as contemplated by Magnetek not only would add a remedy for a violation of the Act that is nonexistent in the language of the statute, but would also provide a form of relief that is directly contrary to the remedy expressly created by the statute.
For these same reasons, the court rejects Magnetek's contention that the Transfer Act fails "to address the situation where one Transfer Act filing has not reached closure at the time of a subsequent filing." Defendant's Reply to Supplemental Memoranda of Law, p. 15. The Transfer Act expressly addresses such a scenario by making the transferor strictly liable to its transferee, and not by authorizing some division or prioritization of responsibility as argued by Magnetek. The goals of the Transfer Act would be frustrated and the Act's imposition of strict liability would not truly be "strict" if the Act authorized the liable party to simply pass off to some other transferor the statutory responsibility that it owes specifically and solely to its transferee. In short, by admitting that it is not asserting a claim under § 22a-134b, Magnetek, in effect, is also conceding that it lacks standing to seek the relief it requests. In other words, as Magnetek has not brought its action under § 22a-134b, it obviously cannot claim to have standing under that statute. As just explained, Magnetek's claim for declaratory relief involving a determination of priority or apportionment cannot be premised on § 22a-134b. Furthermore, such a remedy certainly cannot be based on common law. It is too well settled for dispute that under the common law, with certain exceptions not applicable here, there is no right of contribution or indemnity among joint wrongdoers. See Sims v. Honda Motor Co., 225 Conn. 401, 417, 623 A.2d 995 (1993) ("the common law of this state entirely prohibited contribution among joint tortfeasors."); Gomeau v. Forrest, 175 Conn. 523, 524, 409 A.2d 1006 (1979) ("The common law of this state, unlike that of a number of other jurisdictions, does not permit contribution between joint tortfeasors."); Caviote v. Shea, 116 Conn. 569, 575, 165 A.2d 788 (1933) ("[e]ach defendant is responsible for the entire damage if his wrongful act was a substantial factor in producing it, and there would be no contribution between them.") Magnetek's expressed concern is about being held responsible for contamination for which prior transferors also may have responsibility under the Transfer Act, but contrary to Magnetek's position, it has no legally cognizable interest sufficient to give it standing to have such liabilities prioritized or apportioned under the provisions of the Transfer Act.
Although the court's jurisdiction to entertain actions seeking declaratory relief is broad and liberally construed, such authority is not so broad so as to allow adjudication of a complaint where the complainant lacks standing to assert any legally cognizable claim. "Notwithstanding this liberal heritage [of declaratory judgment proceedings], our Supreme Court has repeatedly stated that a declaratory judgment action is not a procedural panacea for use on all occasions but is a special statutory proceeding to be used only in accordance with the statute and rules adopted to implement the statute." (Citation omitted; internal quotation marks omitted.) ACMAT Corp. v. Greater N.Y., 88 Conn.App. 471, 476, 869 A.2d 1254, cert. denied, 274 Conn. 903, 876 A.2d 11 (2005).
Magnetek's remaining arguments require little discussion. Magnetek opines that it has an interest sufficient to support standing to prosecute its complaint against Gavin because it could seek declaratory relief under General Statutes § 22a-16 (see n. 4) or initiate a claim for reimbursement against Gavin under General Statutes § 22a-452. The obvious problem with this contention is that Magnetek has not referred to these statutes in its complaint, nor has it relied on them as a basis for its request for declaratory relief. See Practice Book § 10-3(a) ("[w]hen any claim made in a complaint . . . is grounded on a statute, the statute shall be specifically identified by its number.") As previously discussed, Magnetek seeks a declaratory adjudication of the parties' rights or obligations emanating from the provisions of the Transfer Act, not General Statutes § 22a-16 or § 22a-452.
General Statutes § 22a-452(a) provides the following:
Any person, firm, corporation or municipality which contains or removes or otherwise mitigates the effects of oil or petroleum or chemical liquids or solid, liquid or gaseous products or hazardous wastes resulting from any discharge, spillage, uncontrolled loss, seepage or filtration of such substance or material or waste shall be entitled to reimbursement from any person, firm or corporation for the reasonable costs expended for such containment, removal, or mitigation, if such oil or petroleum or chemical liquids or solid, liquid or gaseous products or hazardous wastes pollution or contamination or other emergency resulted from the negligence or other actions of such person, firm or corporation. When such pollution or contamination or emergency results from the joint negligence or other actions of two or more persons, firms or corporations, each shall be liable to the others for a pro rata share of the costs of containing, and removing or otherwise mitigating the effects of the same and for all damage caused thereby.
Magnetek also emphasizes that its motion to add Gavin to this case was premised on General Statutes § 52-102 which provides, in part, that a party may be added to a civil action "if that person is necessary for a complete determination or settlement of any question involved therein." This statute, however, is a procedural provision which does not establish standing or create a cause of action that does not otherwise exist. Moreover, as just discussed, Gavin's participation is not necessary for a complete determination of this action, notwithstanding the court's granting of the motion to add him as a party. This ruling was made without benefit of a full joinder of the issues as accomplished by Gavin's motion to dismiss.
Magnetek next refers to the plaintiff's complaint to support its argument. Magnetek notes that in count three of the complaint, the plaintiff asserts a claim against Magnetek under the Transfer Act even though the plaintiff does not claim that the property was transferred to the plaintiff from Magnetek. As noted earlier, the pleadings indicate that Meritt B. Gavin and Alan M. Sergy as trustees transferred the property to the plaintiff. However, the indication that the plaintiff's Transfer Act claim against Magnetek may be legally insufficient because Magnetek is not the plaintiff's transferor does not give Magnetek standing to assert against a third party a claim that is not authorized by the Act.
Finally, Magnetek suggests that the plaintiff's failure to pursue its Transfer Act claim against Gavin reflects the plaintiff's failure to mitigate damages. The court expresses no opinion on the substance of Magnetek's mitigation allegation. The point here is that a defendant's allegation that a plaintiff has failed to mitigate damages is a matter that may be asserted as a special defense to the plaintiff's claim. See generally Practice Book § 10-50; cf. Vanliner Insurance Co. v. Fay, CT Page 12939 98 Conn.App. 125, 907 A.2d 1220 (2006) (addressing a special defense alleging a plaintiff's failure to mitigate damages.) The right to assert a special defense against the plaintiff does not give Magnetek standing to assert a direct claim for declaratory relief against a third party.
CONCLUSION
Therefore, the "Third-Party Defendant Meritt B. Gavin's Motion to Dismiss" (#175) is hereby granted.
Fruit of the Loom, Inc. also has moved to dismiss the declaratory judgment complaint filed against it by Magnetek. In its motion to dismiss, Fruit of the Loom contends that assuming arguendo that it transferred stock ownership of Universal to Magnetek so that it is a transferor within the meaning of the Transfer Act (see General Statutes § 22a-134(1)), Magnetek's complaint seeking declaratory relief must be dismissed because the Act only authorizes the recovery of damages against a transferor who violates its provisions. The court rejects Fruit of the Loom's argument and denies its motion to dismiss. The court's ruling on Fruit of the Loom's motion to dismiss is articulated in a separate memorandum of decision.