Opinion
No. CV 05-4013285
May 11, 2006
MEMORANDUM OF DECISION ON MOTION TO DISMISS (#101)
At issue is whether this court should grant the defendant's motion to dismiss based on the prior pending action doctrine because this case and the prior pending action involve the same parties, seek to achieve the same goals and share the same factual background.
This case comes before the court on the defendant's motion to dismiss the second of two suits commended by the plaintiff, Rena Sobol Ackerman, based upon the prior pending action doctrine. Both of the plaintiff's cases arise from a dispute about the operation and governance of the Sobol Family Partnership, LLP (partnership) between two siblings who were both general partners in the partnership. In her first suit ( Ackerman I), the plaintiff initiated a four-count complaint on May 28, 2003, against the defendant, Ephraim Sobol, the partnership and Sobol Property Management, LLC (Sobol Property Management), a company owned and or controlled by the defendant. After multiple, unsuccessful attempts to amend and revise her complaint in Ackerman I, which are detailed herein, the plaintiff initiated the present action ( Ackerman II) by serving a two-count complaint on the defendant on June 7, 2005.
Ackerman v. Sobol Family Partnership, Docket No. CV 03 0826123, is still pending in the judicial district of Hartford.
The plaintiff alleged the following facts in the original complaint in Ackerman I that are relevant to the present case. The plaintiff and the defendant were among seven general partners in a partnership. From its inception in 1990, Sam Sobol, the parties' father, served as the managing partner. On or around October 4, 2001, Sam Sobol and his wife, Ruth Sobol, entered into a property management contract with Sobol Property Management. Under this contract, Sobol Property Management would manage the real property of the partnership in exchange for a percentage of the income derived from the partnership's real property. Thereafter, Sam Sobol resigned as managing partner and designated the defendant as managing partner. The partnership agreement does not provide compensation for the managing general partner. Nevertheless, by operation of the property management agreement, the defendant paid Sobol Property Management $1,375,000 in fees from October of 2001 through the end of 2003. Thus, according to the plaintiff, the two-step transaction of entering into the property management contract with Sobol Property Management and of designating the defendant as managing partner violated the partnership agreement's prohibition against compensating the managing general partner. In the first version of the complaint, the plaintiff set forth four theories of liability: breach of fiduciary duty; violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq.; reverse piercing the corporate veil from the defendant to Sobol Property Management; and the statutory right of access to the books and records of the partnership (General Statutes §§ 34-337 and 34-339).
The defendant and his codefendants in Ackerman I, respectively, moved to strike portions of the complaint on August 25 and 28, 2003. In response, the plaintiff filed a request for leave to amend the complaint and a proposed amended complaint on November 18, 2003 that omitted the count seeking enforcement of the statutory right of access to the books and records of the partnership. Again, on December 18 and 22, 2003, respectively, the defendant and his codefendants moved to strike the CUTPA and reverse piercing the corporate veil counts of the amended complaint. This Court granted the motion to strike the CUTPA and reverse piercing the corporate veil counts in its memorandum of decision issued on May 12, 2004.
The codefendants, the family partnership and Sobol Property Management, LLC are not parties to the present case.
The defendant and the codefendants also moved to strike the plaintiff's prayer for relief for punitive damages.
Specifically, on the reverse piercing the corporate veil count, this court found that the plaintiff failed to set forth facts that would establish that the defendant used his control over Sobol Property Management to commit a fraud or a wrong, as required to pierce, or reverse pierce, the corporate veil under an instrumentality test. Additionally, the motion to strike the CUTPA claim was granted because the plaintiff failed to allege facts that the dispute between the parties went beyond the governance of the partnership or that the defendant was directly competing with the partnership. This court also granted the motion to strike the punitive damages but only as to the CUTPA claim.
Instead of filing a substitute complaint within fifteen days of the granting of the motion to strike as permitted by Practice Book § 10-44, the plaintiff filed an amended complaint on June 1, 2004, without filing a request for leave to amend. In the third version of the complaint, the plaintiff sought recovery on two theories: breach of fiduciary duty and reverse piercing the corporate veil. In the reverse piercing the corporate veil count, the plaintiff added allegations that Sam Sobol was incompetent prior to and during the execution of the property management contract and that the defendant exercised undue influence over Sam Sobol in the execution of the contract and in Sam Sobol's subsequent appointment of the defendant as managing partner. On June 28 and 29, 2004, respectively, the defendants and codefendants filed requests to revise that sought to have the reverse piercing the corporate veil count removed. This court ruled on the defendants' requests to revise on December 14, 2004.
On February 10, 2005, the plaintiff filed a request for leave to amend the complaint. In the proposed fourth version of the complaint, the plaintiff sought recovery on three theories: breach of fiduciary duty, breach of contract and reverse piercing the corporate veil. The defendant and the codefendants filed objections to the request for leave to amend on February 24 and 25, 2005. On April 4, 2005, this court sustained the objections after oral arguments were heard.
The plaintiff submitted a fifth version of the complaint, titled "Second Amended and Revised Complaint," on April 15, 2005. Unaccompanied by a request for leave to amend, it consisted of two counts: breach of fiduciary duty and breach of contract. Along with that complaint, the plaintiff also filed a motion for clarification and a notice of intent to appeal. The defendant and codefendants objected to the motion for clarification and this court sustained the objections on May 23, 2005.
The plaintiff filed another "amended complaint" on November 9, 2005. In that complaint, only one count, breach of fiduciary duty, is alleged. On November 28, 2005, the defendant filed an answer to that complaint.
On June 7, 2005, the plaintiff initiated the present action (Ackerman II) against the defendant. In her complaint, the plaintiff seeks recovery under two theories: breach of contract and breach of the implied covenant of good faith and fair dealing. As the plaintiff alleged in her third version of the complaint in Ackerman I, the plaintiff again alleges that Sam Sobol was incompetent prior to and during the execution of the property management contract and that the defendant exerted undue influence over Sam Sobol to execute that contract and to designate the defendant as the managing partner of the partnership. On August 4, 2005, the defendant filed a motion to dismiss Ackerman II based on the prior pending action doctrine, which was accompanied by a memorandum of law in support of his motion. The plaintiff filed a memorandum of law in opposition to the motion to dismiss on December 9, 2005. This court heard oral arguments on the motion to dismiss on January 30, 2006.
"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.) Kozlowski v. Commissioner of Transportation, 274 Conn. 497, 501, CT Page 8660 876 A.2d 1148(2005). "[I]n ruling on a motion to dismiss, the trial 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.) Fort Trumbull Conservancy, LLC v. New London, 265 Conn. 423, 432-33, 829 A.2d 801 (2003). "[T]he prior pending action rule does not truly implicate the subject matter jurisdiction of the court." Halpern v. Board of Education, 196 Conn. 647, 652 n. 4, 495 A.2d 264 (1985). Nevertheless, "the motion to dismiss [is] the proper device by which to request that the trial court dismiss the second action." Id.
The issue in the present case, Ackerman II, is whether the court should grant the defendant's motion to dismiss based upon the prior pending action doctrine. The defendant argues that the prior pending action doctrine bars Ackerman II because Ackerman I and II involve the same parties and seek to achieve the same goals. In response, the plaintiff argues that the motion to dismiss should not be granted because she alleges facts different than those alleged in Ackerman I.
"Under the prior pending action doctrine, [t]he pendency of a prior suit of the same character, between the same parties, brought to obtain the same end or object, is, at common law, good cause for abatement. It is so, because there cannot be any reason or necessity for bringing the second, and, therefore, it must be oppressive and vexatious. This is a rule of justice and equity, generally applicable, and always, where the two suits are virtually alike, and in the same jurisdiction." (Internal quotation marks omitted.) Larobina v. McDonald, 274 Conn. 394, 409, 876 A.2d 522 (2005). "The rule forbidding the second action is not, however, one of unbending rigor, nor of universal application, nor a principle of absolute law." (Internal quotation marks omitted.) Modzelewski v. William Raveis Real Estate, Inc., 65 Conn.App. 708, 714, 783 A.2d 1074, cert. denied, 258 Conn. 948, 788 A.2d 96 (2001). "A court applying the prior pending action doctrine must examine the pleadings to ascertain whether the actions are virtually alike and whether they are brought to adjudicate the same underlying rights." (Internal quotation marks omitted.) Schoonmaker v. Lawrence Brunoli, Inc., 265 Conn. 210, 230 n. 22, 828 A.2d 64 (2003). If "the present case and the prior pending action both (1) arise from the same factual background, (2) include the same parties and (3) seek the same goals or objectives," the motion to dismiss based on the prior pending action doctrine may properly be granted. See Modzelewski v. William Raveis Real Estate, Inc., supra, 714; see also Anastasio v. Saint Raphael Healthcare System, Inc., Superior Court, judicial district of New Haven, Docket No. CV 04 0489151 (July 6, 2005, Lopez, J.); Duprey v. Izzo, Superior Court, judicial district of Tolland, Docket No. CV 02 0078548 (September 17, 2002, Scholl, J.).
In the present case, the plaintiff and the defendant are parties to both Ackerman I and II and both cases were brought in the judicial district of Hartford. In both, the plaintiff seeks overlapping damages in that the prayers for relief seek to accomplish the same ends and objectives. See Halpern v. Board of Education, supra, 196 Conn. 653 (analyzing prayers for relief to ascertain ends or objects of two actions). Specifically, in Ackerman I, the plaintiff seeks, inter alia, compensatory and punitive damages for the alleged two-step transaction occurring on or around October 4, 2001. In her multiple attempts to revise and amend her complaint in that case, she reiterates this.
In Ackerman II she seeks the same relief. Therefore, both actions include the same parties and seek the same goals or objectives.
Additionally, both cases arise from the same factual background. In Sandvig v. A. Debreuil Sons, Inc., 53 Conn.App. 466, 470, 730 A.2d 646, cert. denied, 250 Conn. 920, 738 A.2d 659 (1999), the Appellate Court found that dismissal of a contract action was appropriate where the allegations were virtually identical to those in a prior pending negligence action. The plaintiff sought relief based on the same facts in both actions. Id.
In the present case, the plaintiff has done the same. The only differences are the theories of liability that the plaintiff sets forth. In Ackerman I, the only remaining count is breach of fiduciary duty while in Ackerman II the counts are breach of contract and breach of the covenant of good faith and fair dealing, but both cases contain virtually identical allegations based upon the alleged two-step transaction occurring on or around October 4, 2001. In this circumstance, dismissal is appropriate because the different theories of liability are "merely different ways to characterize how the defendant's actions resulted in liability to the plaintiff." See Beaudoin v. Town Oil Co., 207 Conn. 575, 587, 542 A.2d 1124 (1988) (examining pleadings and determining that any damages owed would be result of same event).
Nevertheless, the plaintiff argues that, because she added the allegations that Sam Sobol was incompetent and that the defendant exercised undue influence over Sam Sobol, Ackerman I and II are not virtually alike. Connecticut courts have never held that both cases' pleadings should be identical for the prior pending action doctrine to apply. Rather, what is required is that the two cases arise from the same factual background. See, e.g., Modzelewski v. William Raveis Real Estate, Inc., supra, 714. The plaintiff's additional allegations do not change the fact that any damages owed by the defendant stem from the same factual background — the two-step transaction allegedly occurring on or around October 4, 2001.
Furthermore, dismissal is appropriate if "the `same underlying rights' . . . which the plaintiff asserted in the second action would be adjudicated and necessarily determined in the prior pending action." See Halpern v. Board of Education, supra, 196 Conn. 655. Because the alleged breach of the partnership agreement by the defendant is the subject of both cases, this issue would be adjudicated in both actions. "Parties cannot be permitted to waste the time of courts by the repetition in new pleadings of claims which have been set up on the record and overruled at an earlier stage of the proceedings." (Internal quotation marks omitted.) Sheff v. O'Neill, 42 Conn.Sup. 172, 179, 609 A.2d 1072 (1992) ( 6 Conn. L. Rptr. 141). "[A]llowing an action that raises claims that are substantially identical to claims raised in a prior action . . . undermine[s] an orderly and efficient judicial process and . . . potentially lead[s] to inconsistent verdicts." Larobina v. McDonald, supra, 274 Conn. 409. The plaintiff's claims are substantially identical to claims raised in Ackerman I and have already been subject to a motion to strike and a motion to revise. She cannot now revive these claims by bringing another suit; doing so subverts the goal of maintaining orderly, efficient and consistent judicial processes that underlie the prior pending action doctrine.
Accordingly, because the plaintiff's allegations in the two cases involve the same parties, seek to achieve the same goals and arise from the same factual background, this court grants the defendant's motion to dismiss based on the prior pending action doctrine. CT Page 8663