Opinion
No. CV-06-5000535-S
February 27, 2007
MEMORANDUM OF DECISION
BACKGROUND
On April 24, 2006, the plaintiff's predecessor in title, NewMil Bank, filed a complaint against Encompass Insurance Company of America (Encompass) and Maurice and Marie Jajer ("the Jajers"), formerly of New Milford Connecticut seeking the proceeds of a fire insurance policy issued by Encompass to the Jajers. By note and mortgage dated March 19, 1987, and recorded in Volume 366 at page 550 of the New Milford Land records, the Jajers mortgaged certain real property located at 99 Merryall Road, New Milford, Connecticut, to the plaintiff's predecessor in interest, the principal amount of this note being $270,000.00. Pursuant to this mortgage, the Jajers were required to name the plaintiff as a loss payee on any fire insurance policy issued to them. The Jajers failed to do this. Sometime in 1992, the Jajers defaulted on the note and a foreclosure action was commenced by the plaintiff. In October 1995, the Jajers filed for bankruptcy and obtained a discharge of their debts in the United States Bankruptcy Court for the District of Connecticut, including the debt which was the subject of the plaintiff's foreclosure action. The practical result of this discharge is that the plaintiff is unable to pursue the Jajers for any deficiency judgment remaining after the foreclosure. On or about June 2005, while the foreclosure was still pending and the property was still in the Jajers' name, a fire destroyed the property in its entirety. On or about August 30, 2005, a judgment of strict foreclosure was entered in the Litchfield Superior Court. Pursuant to this judgment, title passed to the plaintiff on October 1, 2005. At the time of the judgment, the court found the debt due and owing the plaintiff to be $559,509.42. The fire insurance policy issued by Encompass on this property was in effect for the period from April 5, 2005 to April 5, 2006. Encompass has made no payments to anyone on this policy. On November 6, 2006, the plaintiff filed a two-count second revised complaint, wherein count one is a claim against Encompass. In its prayer for relief as to Encompass, the plaintiff claims an equitable lien on all proceeds paid or payable from Encompass to the Jajers as a result of the June 2005, fire.
Subsequent to the filing of this complaint NewMil Bank merged with Webster Bank, on November 20, 2006 Webster Bank NA was substituted for NewMil Bank as the Plaintiff.
On November 13, 2006, Encompass filed a motion to dismiss the first count of the second revised complaint, on the ground that there exists a lack of subject matter jurisdiction as the causes of action being pursued are premature, unripe and not presently justiciable as the plaintiff has not established a right to the insurance proceeds claimed due the Jajers. On November 27, 2006, the Jajers filed an objection to the plaintiff's motion to dismiss. On December 5, 2006, the plaintiff filed an objection and accompanying memorandum of law. The court heard oral argument on January 2, 2006.
ARGUMENT
Simply stated, Encompass's argument is that the plaintiff's claim is not justiciable for the following reasons: (1) the plaintiff lacks standing to bring the claim because there is no privity of contract between Encompass and the plaintiff; and, 2) the claim against Encompass is premature and unripe until the court first adjudicates the rights as between the plaintiff and the Jajers because Connecticut courts may not recognize an equitable lien in this instance.
The plaintiff counters that this is a claim for an equitable lien rather than breach of contract, and, as such, there is no requirement of privity. Furthermore, the plaintiff argues that Encompass is using a motion to dismiss to attack the sufficiency of the complaint, specifically, whether a justiciable cause of action that is recognized by the court exists, which can only be done through a motion to strike.
DISCUSSION
"Jurisdiction of the subject matter is the power [of the court] to hear and determine cases of the general class to which the proceedings belong . . . [O]nce the question of lack of jurisdiction is raised, [it] must be disposed of no matter in what form it is presented . . . and the court must fully resolve it before proceeding with the case." (Internal quotation marks omitted.) Esposito v. Specyaliski, 268 Conn. 336, 348, 844 A.2d 211 (2004), "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." (Internal quotation marks omitted.) Filippi v. Sullivan, 273 Conn. 1, 8, CT Page 3458 866 A.2d 599 (2005). "When a . . . court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of a complaint in their most favorable light . . . [A] court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal Quotation marks omitted.) Id. "It is well established that, in determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged." (Internal quotations marks omitted.) Loricco Towers Condominium Ass'n v. Pantini, 90 Conn.App. 43, 48, 876 A.2d 1211 (2005).
The first question presented to the court in this motion to dismiss is whether or not the plaintiff has standing to pursue its claims, absent contractual privity. In American States Ins. Co. v. Allstate Insurance Company, 94 Conn.App. 79, 83-84, 891 A.2d 75 (2006), a similar case involving insurance subrogation rights the court wrote, "[a] party must have standing to assert a claim in order for the court to have subject matter jurisdiction over the claim . . . Standing is the legal right to set the judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he has, in an individual or representative capacity, some real interest in the cause of action, or a legal equitable right, title or interest in the subject matter of the controversy." (Internal quotation marks omitted.) Furthermore, "[t]he right of [equitable] subrogation is not a matter of contract; it . . . takes place as a matter of equity, with or without an agreement to that effect . . . The object of [equitable] subrogation is the prevention of injustice. It is designed to promote and to accomplish justice, and is the mode which equity adopts to compel the ultimate payment of a debt by one who, in justice, equity, and good conscience, should pay it." (Citations omitted; internal quotation marks omitted.) Id., 84.
The plaintiff in this case claims an equitable right to proceeds of the insurance policy due to the requirements of its mortgage with the co-defendants, the Jajers. The plaintiff's claim is not a matter of contract, but rather, a claim of an equitable right. As such, there is not a requirement of privity between the plaintiff and Encompass. The court finds that, as a court of equity, it has subject matter jurisdiction to determine if the plaintiff has an equitable lien on the proceeds of the insurance policy issued by Encompass, even absent contractual privity.
To the extent that Encompass argues that this case should be dismissed because Connecticut courts may not recognize an equitable lien in this particular instance, Encompass is challenging the sufficiency of the claim, not the subject matter jurisdiction of the court. Such an argument is properly done through a motion to strike, rather than a motion to dismiss.
The motion to dismiss is denied.