Opinion
HHBCV156030914S
04-26-2016
John Calderoni v. John Gissas et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE MOTION TO DISMISS
Robert E. Young, J.
FACTS AND PROCEDURAL HISTORY
This is an action seeking recovery of lost investment by the plaintiff, John Calderoni against John Gissas, a Connecticut financial advisor as well as three individuals and a limited liability company, all located in Texas. The Texas defendants, Rich DePaolo, Joseph Barkate, Tim Wright and American Safe Retirements (ASR), have moved to dismiss all counts directed against them on the ground that this court lacks personal jurisdiction over them because they are not within reach of the applicable longarm statute, General Statutes § 52-59b.
Collectively, these defendants will be referred to as the " Texas defendants."
The operative complaint is the March 14, 2016 " revised" complaint. The relevant counts of the revised complaint are the first count, second count, and third count, which are all alleged against defendants DePaolo, Barkate, and Wright, as well as the sixth count, seventh count, and eight count, which are alleged against ASR. The fourth count and the fifth count are both directed against Gissas and are not the subject of the motion to dismiss.
During oral argument on February 22, 2016, this court instructed the plaintiff to file a complaint that (1) specifies the specific breaches of contract, including a reference to the relevant language in the contract, (2) includes dates when the relevant events occurred, and (3) specifies as to which individual defendants each claim is directed.
The first count and the sixth count are negligence claims, are virtually identical, and allege the following relevant facts. The plaintiff is a retired individual who sought to invest his earnings in a prudent manner in order to ensure a secure future for his family. The Texas defendants, acting through their agent, John Gissas, promoted themselves as being sophisticated businessmen with significant experience in investments. Over time, the plaintiff began to trust the Texas defendants and to consider them as personal and financial advisors. Based upon the defendants' advice, on April 13, 2011, the plaintiff entered into an investment in Worldwide Diamond Ventures, LP (WDV), which was initiated by the Texas defendants and their sales agent.
The Texas defendants did not ensure that the plaintiff's interests were protected, and they were negligent in at least one of the following ways: (1) they misrepresented facts surrounding the investment; (2) they failed to warn of risks associated with the investment; (3) they failed to adequately research the investment and its risks before recommending it to the plaintiff; (4) they relied on false or negligent advice; (5) they failed to take full account of the plaintiff's financial position; (6) they failed to disclose their receipt of a commission; (7) they failed to disclose conflicting financial interest; (8) they failed to monitor the plaintiff's security interests in the inventory and assets of WDV; and (9) they prioritized their own interests over the plaintiff's once they discovered all of the risks.
The second count and the seventh count are intentional misrepresentation claims, and are virtually identical. The claims largely mirror the allegations in the negligence claims, but further allege that the Texas defendants " intentionally misled" the plaintiff.
The third count and the eight count are breach of contract claims, and are also virtually identical. The breach of contract claims allege that, after WDV defaulted on its note, the Texas defendants breached their contract obligations with the plaintiff to act as the agent for the plaintiff for the sole purpose of enforcing the lien and security interest in the inventory of WDV in the event of default by WDV under the note.
The Texas defendants filed a motion to dismiss all claims against them. In support, the Texas defendants attached multiple exhibits, including affidavits from Barkate, DePaolo, and Wright, a copy of the " WDV/ASR Loan Matrix, " a copy of a letter from Barkate to " agents" of ASR, a letter from WDV to the plaintiff, and a copy of the " Account Application."
The plaintiff filed an objection to the motion to dismiss. Although the plaintiff did not provide supporting documents, the plaintiff did request an evidentiary hearing. The Texas defendants filed a reply to the objection. On February 22, 2016, the court heard oral argument, and conducted an evidentiary hearing at which Gissas was the sole witness. Thereafter, the plaintiff and the Texas defendants filed supplemental briefs. Further relevant facts will be set forth in the analysis below.
LEGAL STANDARD
" [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." (Internal quotation marks omitted.) Santorso v. Bristol Hospital, 308 Conn. 338, 350, 63 A.3d 940 (2013). " [J]urisdiction over the person, jurisdiction over the [subject matter], and jurisdiction to render the particular judgment are three separate elements of the jurisdiction of a court." (Internal quotation marks omitted.) Morgan v. Hartford Hospital, 301 Conn. 388, 401, 21 A.3d 451 (2011). " Because a lack of personal jurisdiction may be waived by the defendant, the rules of practice require the defendant to challenge that jurisdiction by a motion to dismiss." (Footnote omitted; internal quotation marks omitted.) Golodner v. Women's Center of Southeastern Connecticut, Inc., 281 Conn. 819, 825, 917 A.2d 959 (2007).
" When a . . . court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light . . . In this regard, 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 . . . The motion to dismiss . . . admits all facts which are well pleaded, invokes the existing record and must be decided upon that alone . . . Where, however, as here, the motion is accompanied by supporting affidavits containing undisputed facts, the court may look to their content for determination of the jurisdictional issue[s] . . ." (Internal quotation marks omitted.) Matthews v. SBA, Inc., 149 Conn.App. 513, 528, 89 A.3d 938, cert. denied, 312 Conn. 917, 94 A.3d 642 (2014). " If affidavits and/or other evidence submitted in support of a defendant's motion to dismiss conclusively establish that jurisdiction is lacking, and the plaintiff fails to undermine this conclusion with counteraffidavits . . . or other evidence, the trial court may dismiss the action without further proceedings." (Internal quotation marks omitted.) Id.
" [O]nce a defendant that is a foreign corporation or who is a nonresident individual challenges personal jurisdiction, the plaintiff bears the burden of presenting evidence sufficient to establish jurisdiction . . . When a defendant files a motion to dismiss challenging the court's jurisdiction, a two-part inquiry is required. The trial court must first decide whether the applicable state long-arm statute authorizes the assertion of jurisdiction over the [defendant]. If the statutory requirements [are] met, its second obligation [is] then to decide whether the exercise of jurisdiction over the [defendant] would violate constitutional principles of due process . . . Only if we find the [longarm] statute to be applicable do we reach the question whether it would offend due process to assert jurisdiction." (Citations omitted; footnote omitted; internal quotation marks omitted.) Id., 543.
ANALYSIS
The Texas defendants move to dismiss all counts directed against them on the ground that this court lacks personal jurisdiction over them. More specifically, the Texas defendants argue that they are not within reach of the applicable longarm statute, General Statutes § 52-59b. The Texas defendants further contend, in the alternative, that requiring them to defend this suit in Connecticut would violate the due process clause of the United States constitution.
The plaintiff counters that (1) the Texas defendants have waived their right to contest Connecticut's personal jurisdiction, and that (2) the Texas defendants have conducted business within the state of Connecticut, establishing certain minimum contacts, and are, therefore, subject to its jurisdiction. As to waiver, the plaintiff argues that the Texas defendants have waived personal jurisdiction by failing to file their motion to dismiss within 30 days of the filing of their appearance. Furthermore, as to the substance of the defendants' personal jurisdiction argument, the plaintiff argues that the evidentiary hearing established that the Texas defendants maintained an agent in the state of Connecticut, namely Gissas, and gave him the necessary business support and materials to actively pursue business in the state. The plaintiff further contends that Gissas made at least fifteen sales of the investment product in the state of Connecticut, and, after each sale, ASR obligated itself to act as the agent for the purchaser for the sole purpose of enforcing the lien and security interest in the inventory of WDV in the event of default under the note.
I
The Texas Defendants Have Not Waived Right to Challenge Personal Jurisdiction
Practice Book § 10-30(b) states: " Any defendant, wishing to contest the court's jurisdiction, shall do so by filing a motion to dismiss within thirty days of the filing of an appearance." The plaintiff argues that the Texas defendants have waived their right to challenge personal jurisdiction because the Texas defendants failed to file their motion to dismiss within thirty days of the filing of the appearance, as required by § 10-30(b).
In the present case, on November 6, 2015, the Texas defendants filed their appearance. Thirty days after the filing of the appearance is December 6, 2015, which is a Sunday. The Texas defendants filed their motion to dismiss on December 7, 2015, which was on Monday, the following business day. The Practice Book states that when the last day for filing a motion falls on a day the office is not open, such as a Sunday, then the last day for filing shall be the next business day on which the office is open. See Practice Book § 7-17 (" [i]f the last day for filing any matter in the clerk's office falls on a day on which such office is not open as thus provided . . . then the last day for filing shall be the next business day upon which such office is open").
Therefore, because the thirty-day deadline for filing the motion to dismiss falls on December 6, 2015, which is a Sunday, and the Texas defendants properly filed on the next business day, December 7, 2015, the motion to dismiss was filed in a timely manner.
II
Parties' Evidence
The following relevant facts, as established by the affidavits and other evidence submitted by the Texas defendants, are undisputed. ASR is a limited liability company (LLC), with its principal place of business in Southlake, Tarrant County, Texas. (Defendants' Exhibit 1, Affidavit of Barkate, ¶ 3), ASR does not have an office or other physical location in Connecticut, nor does ASR own any property in Connecticut. (Defendants' Exhibit 1, ¶ 3.) ASR does not regularly do business in Connecticut. (Defendants' Exhibit 1, ¶ 3.)
Even though the plaintiff has argued that ASR is not an LLC, the only evidence the plaintiff has presented on the issue is Gissas' testimony during the evidentiary hearing, where he stated that he was " unaware" if ASR was ever an LLC. (Transcript, p. 35.) As such, based on the admissible evidence, ASR's status as an LLC is an undisputed fact.
ASR organizes informational seminars through which investment professionals can learn about investment products that the professionals may choose to offer to their clients, who are the investors. (Defendants' Exhibit 1, ¶ 4.) ASR does not interact with the investors, but only provides information to the investment professionals. (Defendants' Exhibit 1, ¶ 4.) Furthermore, investment professionals obtain information about a potential investment free of charge from ASR. (Defendants' Exhibit 1, ¶ 6.) ASR's profits are earned through commissions paid by the producers if a network member's clients decide to purchase its investment product. (Defendants' Exhibit 1, ¶ 6.)
ASR refers to the investment professionals as " agents." (Defendants' Exhibit 1, ¶ 5.) Nevertheless, ASR has no control over these agents. (Defendants' Exhibit 1, ¶ 5.) In particular, ASR does not instruct the agents as to how to advise clients or perform any other aspects of their work. (Defendants' Exhibit 1, ¶ 5.)
In late 2010, ASR learned about a " Diamond Note Program" (diamond program) being offered by Worldwide Diamond Ventures, LP (" WDV"), a Texas-based partnership. Under this diamond program, an investor would lend money to WDV in exchange for a promissory note secured by all of WDV's assets. (Defendants' Exhibit 1, ¶ 7; Plaintiff's Exhibit 6, " Non-Recourse Secured Promissory Note.") WDV would use all loan proceeds to purchase diamonds, which would serve as security for the notes. (Defendants' Exhibit 1, ¶ 7.) These transactions would be directly between WDV and the investor. (Defendants' Exhibit 1, ¶ 7.) WDV offered a commission to investment professionals whose clients invested in the diamond program, which was paid directly by WDV to the investment advisor. (Defendants' Exhibit 1, ¶ 7.)
After ASR performed due diligence on this investment product based on information it obtained from WDV, ASR decided to refer the diamond program to its network of investment professionals. (Defendants' Exhibit 1, ¶ 8.) In exchange for presenting the investment opportunity to its network, ASR would receive a commission from WDV based on investments. (Defendants' Exhibit 1, ¶ 8.) Much like with the other investment products, ASR did not advise investors about the product, but merely provided information about the product to the investment professionals. (Defendants' Exhibit 1, ¶ 9.)
In February 2011, ASR hosted a seminar in Texas, where the attendees learned about a number of investment products, including the diamond program. (Defendants' Exhibit 1, ¶ 12.). The " agents" were not required to recommend the diamond program to their clients, and the investment professionals would use their own professional judgment in determining whether they would offer the diamond program to their clients. (Defendants' Exhibit 1, ¶ 13.) More specifically, no one from ASR ever spoke or communicated directly with the plaintiff about the diamond program or WDV. (Defendants' Exhibit 1, ¶ 18).
In addition to the seminar in Texas, on February 22, 2011, a duplicative presentation was offered to " agents" of ASR through a " webinar" (internet-based seminar). (Defendants' Exhibit 1, ¶ 16.) ASR's records do not show whether Gissas viewed the webinar. (Defendants' Exhibit 1, ¶ 16.)
WDV began to experience liquidity problems in late 2011, and ASR sent a letter to investment professionals to inform them that WDV had used proceeds of the loans to purchase products other than diamonds, and that the client's investment may not be fully secured by cash or diamond assets. (Defendants' Exhibit 1, ¶ ¶ 20-22; see also Defendants' Exhibit D.) WDV filed for bankruptcy in October 2013. (Defendants' Exhibit 1, ¶ 23.)
In their respective affidavits, Barkate, DePaolo, and Wright each also testified as to their personal connections with Connecticut and their personal involvement with the diamond program. All three members of ASR are residents of Texas, without any property in Connecticut, and without any personal connections to Connecticut. (Defendants' Exhibit 1, ¶ 24; Defendants' Exhibit 2, Affidavit of DePaolo, ¶ 3; Defendants' Exhibit 3, Affidavit of Wright, ¶ 3.) Furthermore, the three members do not regularly travel to Connecticut. (Defendants' Exhibit 1, ¶ 24; Defendants' Exhibit 2, Affidavit of DePaolo, ¶ 7; Defendants' Exhibit 3, Affidavit of Wright, ¶ 8.)
In addition, although the three members were involved in reviewing the diamond program, hosting the seminar in Texas, and communicating with " agents" about the diamond program, all these actions were performed in their official capacity as officers of ASR. (Defendants' Exhibit 1, ¶ 25; Defendants' Exhibit 2, ¶ 4; Defendants' Exhibit 3, ¶ 4.) The three members did not serve as investment advisors to the plaintiff, did not enter into a contract with the plaintiff in their personal capacity, and did not personally solicit the plaintiff to invest. (Defendants' Exhibit 1, ¶ 26; Defendants' Exhibit 2, ¶ 6; Defendants' Exhibit 3, ¶ 6.)
In response to the Texas defendants' motion to dismiss, the plaintiff did not submit any affidavits or other evidence, but instead requested, and this court granted, an evidentiary hearing. On February 22, 2016, the court held the evidentiary hearing, at which Gissas testified as witness for the plaintiff, and both parties submitted exhibits. The testimony by Gissas touched upon the Texas defendants' connections to Connecticut, as well as on the alleged agency relationship between Gissas and ASR. Most of the testimony and other evidence presented during the evidentiary hearing was consistent with the complaint and the defendants' affidavits, but Gissas also established new facts and testified to a number of facts that are inconsistent with the prior evidence. The most important parts of Gissas' testimony centered on his agency relationship with ASR and the disputed fact that the individual defendants had meetings with Gissas in Connecticut. More specifically, Gissas' testimony and the parties' exhibits established the following relevant facts.
Even though parties typically submit documents and affidavits as evidence, they may also make an offer of proof to have a witness testify at an evidentiary hearing. See, e.g., Kenny v. Banks, 289 Conn. 529, 534 n.6, 958 A.2d 750 (2008); Capasso Restoration, Inc. v. New Haven, 88 Conn.App. 754, 870 A.2d 1184 (2005). In the present case, the plaintiff requested an evidentiary hearing in his objection to the motion to dismiss, which was filed on January 6, 2016. In addition, during oral argument on February 22, 2016, the plaintiff stated in part that the testimony of Gissas will show that Gissas has served as an agent of ASR, that he sold various products for ASR in the state, and that he did so at ASR's request under the licensing agreement.
Gissas is a financial advisor and insurance agent. (Transcript, p. 35.) Gissas signed a general agency agreement with ASR around 2007 or 2008, a date prior to the creation of the diamond program. (Tr., p. 82.) Gissas had business dealings with ASR, and, specifically, has sold products for ASR from at least four different companies. (Tr., pp. 35-36.) Typically, ASR would send e-mails to Gissas to inform him that they were going to have a presentation on a particular investment opportunity or product. (Tr., p. 38). Although ASR would usually not independently research the products, ASR did vet the diamond program. (Tr., pp. 39-40.) In fact, ASR had vetted WDV for six months, and had even invested in the product. (Tr., p. 40.) In addition, ASR would typically provide the necessary documents and forms for investments. (Tr., p. 42.) For example, ASR provided, via their website, the " Account Application" form, and this signed form was sent by Gissas to ASR. (Tr., p. 42.)
Gissas was asked whether he entered into an agency agreement concerning the diamond program. (Tr., pp. 60-61.) Gissas answered that he entered into an agreement with WDV. (Tr., p. 61.) Gissas was then asked whether he entered into a similar agreement with ASR. (Tr., p. 61.) Gissas replied that he was " not sure, " and that he would have to " go back and look at [his] notes." (Tr., p. 61.)
Gissas independently vetted the diamond program. (Tr., p. 40.)
During the evidentiary hearing, the " Account Application" was entered as an exhibit. (Plaintiff's Exhibit 5.) The Account Application names the plaintiff as a lender for a note payable to WDV. The application also states, in relevant part, that ASR " will act as the agent for the undersigned for the sole purpose of enforcing the lien and security interest in the inventory of [WDV] in the event of a default by WDV under the Note." Gissas testified that he signed as a dual agent of both WDV and ASR. (Tr., p. 84.) Gissas also specifically stated that he was working as an agent of ASR in enforcing the lien and security interest. (Tr., pp. 85-86.) The application was signed at the bottom by the plaintiff and by Gissas, as an agent. Gissas was identified by both his full name and an agent number. However that agent number was a number assigned by WDV, not ASR. (Tr., pp. 86-87.)
According to Gissas, ASR represented that each note had sufficient assets securing it. (Tr., pp. 54-55.) In particular, WDV was already in possession of a pink diamond, worth about $1.5 million. (Tr., pp. 55, 79.) Gissas also testified that the security for the note was not necessarily otherwise specific to any particular diamond, but was the process of obtaining diamonds. (Tr., p. 55.) Importantly, the diamonds were going to be located in Texas, and were held by a professional jeweler. (Tr., p. 79.)
At the time of his interaction with the plaintiff, Gissas repeatedly testified that he served as an agent of ASR, or possibly as an agent of both ASR and WDV. (Tr., pp. 36, 46, 84.) Specifically, Gissas stated that he was an agent of ASR even before he attended the seminar in Texas regarding the diamond program. (Tr., p. 51.) Gissas did not, however, have an exclusive agency agreement with ASR, requiring him to only offer his client investment products that he learned about through ASR. (Tr., pp. 83-84.) As such, Gissas could offer his client any investment, regardless of whether ASR was involved. (Tr., pp. 83-84.)
At one point in the testimony, Gissas suggested that ASR was his agent. (Tr., p. 36.)
ASR did not tell Gissas that he would be offering the diamond program to his clients on ASR's behalf. (Tr., p. 80.) ASR did not have control over who Gissas offered the diamond program to, and ASR never requested that the investment be offered to any specific client. (Tr., pp. 80-82, 84.) Although ASR wanted Gissas to offer the investment to all his clients, Gissas would ultimately use his professional judgment to decide which clients to offer the investment to. (Tr., p. 81.) The undisputed evidence shows that a minimum of thirteen Connecticut clients represented by Gissas, including the plaintiff, invested in the diamond program. (Tr., pp. 71-72; Plaintiff's Exhibit 7, " WDV/ASR Loan Matrix.")
In addition, Gissas received a commission on the Worldwide Diamond note directly from WDV, and not ASR. (Tr., p. 61.) Nevertheless, as a general matter, ASR had an incentive program, where ASR would sponsor a vacation trip for the agent if a certain amount of sale volume was reached. (Tr., p. 63.) Furthermore, other than software and PowerPoint presentations, ASR did not provide Gissas with any office, supplies or equipment, such as a computer. (Tr., pp. 82-83.) When Gissas traveled to Texas for the seminar, ASR paid for the hotel, but Gissas paid for the flight. (Tr., pp. 63-64.)
In addition to Gissas' testimony regarding his agency relationship with ASR and the promissory note, Gissas testified that members of ASR, and not WDV, gave the presentation in Texas regarding the diamond program opportunity. (Tr., pp. 50-51, 77-78.) More importantly, Gissas testified that ASR members came to Connecticut multiple times to talk with him about various investments, and that the member or members talked with him about the diamond program on at least one occasion. (Tr., pp. 74-76.) When Gissas was asked who talked to him, Gissas testified that " [t]ypically it would be either Tim Wright or Rich DePaolo, or both. They have made several trips to Connecticut over--since the time I've known them." (Tr., pp. 75-76.)
This contradicts the statements made by Barkate in his affidavit, where he stated that representatives of WDV and its general partner gave the presentation on the diamond program. (Defendants' Exhibit 1, ¶ 12.)
This testimony directly contradicts the statements made by Barkate, DePaolo, and Wright in their affidavits. Specifically, the affidavits stated that no one in ASR ever traveled to Connecticut in connection with the diamond program or WDV. (Defendants' Exhibit 1, ¶ ¶ 24, 27; Defendants' Exhibit 2, ¶ ¶ 3, 7; Defendants' Exhibit 3, ¶ ¶ 3, 7.)
III
Longarm Jurisdiction Pursuant to General Statutes § 52-59b(a)
" [O]ur general long arm jurisdiction provision, [General Statutes] § 52-59b . . . applies to foreign LLCs." Matthews v. SBA, Inc., supra, 149 Conn.App. 546. General Statutes § 52-59b(a) provides, in part: " [A] court may exercise personal jurisdiction over any nonresident individual, foreign partnership or foreign voluntary association, or over the executor or administrator of such nonresident individual, foreign partnership or foreign voluntary association, who in person or through an agent: (1) transacts any business within the state; (2) commits a tortious act within the state . . . (3) commits a tortious act outside the state causing injury to person or property within the state . . . (4) owns, uses or possesses any real property situated within the state; or (5) uses a computer . . . or a computer network . . . located within the state." (Emphasis added.)
In the present case, there is no dispute that the only relevant issues are (1) whether ASR transacted business in Connecticut through Gissas because Gissas was ASR's agent; and (2) whether the Texas defendants otherwise transacted any business within the meaning of General Statutes § 52-59b(a)(1).
A.
General Statutes § 52-59b(a). " Through an Agent"
The basic principles for determining the existence of an agency relationship are well-established in Connecticut. " Under § 1 of 1 Restatement (Second) of Agency (1958), [a]gency is defined as the fiduciary relationship which results from manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act . . . Thus, the three elements required to show the existence of an agency relationship include: (1) a manifestation by the principal that the agent will act for him; (2) acceptance by the agent of the undertaking; and (3) an understanding between the parties that the principal will be in control of the undertaking . . . The existence of an agency relationship is a question of fact . . . Some of the factors listed by the Second Restatement of Agency in assessing whether such a relationship exists include: [1] whether the alleged principal has the right to direct and control the work of the agent; [2] whether the agent is engaged in a distinct occupation; [3] whether the principal or the agent supplies the instrumentalities, tools, and the place of work; and [4] the method of paying the agent . . . In addition, [a]n essential ingredient of agency is that the agent is doing something at the behest and for the benefit of the principal . . . Finally, the labels used by the parties in referring to their relationship are not determinative; rather, a court must look to the operative terms of their agreement or understanding." (Internal quotation marks omitted.) Wesley v. Schaller Subaru, Inc., 277 Conn. 526, 543-44, 893 A.2d 389 (2006).
In the present case, the evidence shows that ASR has repeatedly and consistently referred the financial advisors such as Gissas as " agents" of ASR. Furthermore, Gissas repeatedly testified during the evidentiary hearing that he is an agent of ASR. Nevertheless, these conclusory statements do not show that there was, in fact, an agency relationship between Gissas and ASR. The court cannot simply rely on the labels used by the parties in referring to their relationship, and must instead look to whether the elements of an agency relationship have been established. It is the plaintiff's burden to establish personal jurisdiction once it is challenged.
Here, Gissas testified that ASR did not inform him that he will be acting on ASR's behalf. In addition, the only reference to a written agreement between ASR and Gissas that directly established an agency relationship was Gissas' testimony that he signed a general agency agreement with ASR around 2007 or 2008, which was before the diamond program existed. However, the failure to provide a copy of the actual agency agreement despite ample opportunity to do so, especially in view of the fact that the dismissal of the case is against the interest of Gissas, creates an inference that it does not exist. In addition, even if this portion of Gissas' testimony is admissible and credible, Gissas did not clarify whether the agreement was still in force at the times relevant to the present action.
The only other written document that the plaintiff argued serves as evidence of an agency relationship between ASR and Gissas was the account application. On its face, however, the application only states that ASR will act as the agent for the undersigned for the sole purpose of enforcing the lien and security interest in the inventory of WDV in the event of a default by WDV under the Note. The application does not state that Gissas is an agent of ASR or that he will serve as an agent of ASR for the purposes of said agreement. In addition, although the application was signed at the bottom by Gissas in his capacity as an agent, the agent number that appears next to his name on the account application refers to the number assigned by WDV, and not ASR. As such, the terms of the agreement do not show or suggest that Gissas was acting as an agent of ASR, and Gissas' conclusive statements to the contrary cannot establish such a legal relationship.
Furthermore, both parties offered evidence as to whether ASR had the right to direct and control Gissas' work. The undisputed evidence presented in the defendants' affidavits and during the evidentiary hearing shows that ASR did not have control over who Gissas offered the diamond program to, and that ASR never asked that the investment be offered to a specific client. Although ASR would recommend certain products, and would occasionally even vet the products, Gissas would ultimately use his discretion and professional judgment to decide which clients to offer the investment to.
Moreover, the undisputed evidence shows that ASR did not provide Gissas with the instrumentalities, tools, and a place to work. In particular, no office, work equipment, or supplies were provided by ASR.
In addition, the method of payment is relevant to whether Gissas was acting as an agent of ASR. Here, except for a general incentive program, the undisputed evidence shows that Gissas was not paid by ASR, but was instead paid by WDV.
Based on the foregoing analysis of the relevant factors, Gissas was not an agent of ASR at the time that he served as an investment advisor for the plaintiff. As such, in considering whether there is personal jurisdiction under the applicable longarm statute, this court can only consider the acts of the Texas defendants, and not of their alleged agent, Gissas.
B.
General Statutes § 52-59b(a)(1): " Transacts Any Business"
" Our Supreme Court has explained that § 52-59b(a)(1) authorizes jurisdiction over nonresidents who transact any business within the state provided that the cause of action arises out of such transaction . .. [A]lthough the term '[t]ransacts any business' is not defined by statute, [our Supreme Court has] construed the term to embrace a single purposeful business transaction." (Citation omitted; emphasis added; internal quotation marks omitted.) Doyle Group v. Alaskans for Cuddy, 146 Conn.App. 341, 347, 77 A.3d 880 (2013).
" In determining whether the [plaintiff's] cause of action arose from the defendants' transaction of business within this state we do not resort to a rigid formula. Rather, we balance considerations of public policy, common sense, and the chronology and geography of the relevant factors." (Internal quotation marks omitted.) Ryan v. Cerullo, 282 Conn. 109, 122, 918 A.2d 867 (2007). " Moreover, a nonresident individual who has not entered this state physically nevertheless may be subject to jurisdiction in this state under § 52-59b(a)(1) if that individual has invoked the benefits and protection of Connecticut's laws by virtue of his or her purposeful Connecticut related activity . . ." (Internal quotation marks omitted.) Id., 120.
" [T]he negotiation of contracts, standing alone, does not constitute transacting business in Connecticut . . . Similarly, the transmission of communications between an out-of-state defendant and a plaintiff within the jurisdiction does not, by itself, constitute the transaction of business in a forum state." (Citations omitted; internal quotation marks omitted.) LucidRisk LLC v. Ogden, 615 F.Supp.2d 1, 5 (D.Conn. 2009). See, e.g., Rosenblit v. Danaher, 206 Conn. 125, 138-41, 537 A.2d 145 (1988) (Massachusetts attorney named as defendant in action alleging that he negligently had represented plaintiffs in connection with Massachusetts development project was not subject to jurisdiction in this state under § 52-59b, even though Massachusetts attorney had at least one business meeting with plaintiff in Connecticut); Walshon v. Ballon Stoll Bader & Nadler, P.C., 121 Conn.App. 366, 373-74, 996 A.2d 1195 (2010) (no jurisdiction over nonresident law firm that sent letter to the plaintiff concerning an arbitration in New York because there is nothing to indicate that the defendant anticipated litigating or arbitrating in Connecticut, even though the defendant knew the plaintiff, its client, resided in Connecticut); Solano v. Calegari, 108 Conn.App. 731, 738-39, 949 A.2d 1257 (no jurisdiction under § 52-59b(a)(1) where conversation about loan and request for loan took place in Connecticut, but the loan funds were withdrawn from a financial institution outside of Connecticut), cert. denied, 289 Conn. 943, 959 A.2d 1010 (2008); Green v. Simmons, 100 Conn.App. 600, 607-08, 919 A.2d 482 (2007) (mailing of two unanswered letters of representation to a commercial establishment in Connecticut did not constitute transacting business in state).
On the other hand, the formation of a contract within the state, along with other evidence of business transactions within Connecticut by the defendant, such as repeated and regular visits and communication, may confer jurisdiction under § 52-59b(a)(1). See, e.g., Hart, Nininger & Campbell Associates, Inc. v. Rogers, 16 Conn.App. 619, 625, 548 A.2d 758 (1988) (jurisdiction proper when nonresident defendants came to Connecticut to negotiate and sign individual employment contracts, came to Connecticut to attend quarterly business meetings pertaining to their employment, kept in telephone contact regularly with plaintiff's Connecticut office, filed weekly activity report sheets which documented business transacted on behalf of Connecticut corporation, sent all business account expenses to Connecticut office for payment, had payroll checks drawn on Connecticut bank and mailed to defendants from Connecticut, and used plaintiff's motor vehicles, licensed in Connecticut, for business purposes).
Jurisdiction may also be found even where there is a single purposeful business transaction, especially where the relevant business transaction involves land or property in Connecticut, such as where there is an agreement regarding real property that is located in Connecticut. See, e.g., Zartolas v. Nisenfeld, 184 Conn. 471, 475, 440 A.2d 179 (1981) (grantees' cause of action against nonresident grantors for breach of warranties within warranty deed and other relief arose from grantors' transaction of business within this state where, though deed was executed in Iowa, the land described in deed was in Connecticut); see also Gaudio v. Gaudio, 23 Conn.App. 287, 299-300, 580 A.2d 1212 (jurisdiction proper when defendant purchased directly from a Connecticut resident all of the stock in a close corporation whose sole asset was commercial real estate in Connecticut, traveled to Connecticut to view the property, entered into an oral agreement to purchase the stock while in Connecticut, and retained two Connecticut residents as officers), cert. denied, 217 Conn. 803, 584 A.2d 471 (1990).
In the present case, the undisputed evidence shows that the Texas defendants are all Texas residents who do not regularly conduct business in Connecticut. It is also undisputed that ASR received a commission directly from WDV, and did not receive any income directly from Gissas, the plaintiff, or any other client of Gissas. Furthermore, the undisputed evidence shows that most of the events concerning the plaintiff's claim occurred in Texas. Gissas traveled to Texas in order to attend a presentation about a product that WDV, a Texas-based partnership, was offering. The product in question was an investment opportunity for the plaintiff, where he would enter into a promissory note agreement directly with WDV, and not ASR. The promissory note was secured by diamonds that were stored in Texas. Moreover, the undisputed evidence shows that, with the possible exception of one meeting that the Texas defendants had with Gissas regarding the diamond program, the Texas defendants never traveled to Connecticut to discuss or otherwise conduct business concerning the diamond program. The Texas defendants also never directly communicated with the plaintiff, although they did send e-mails to Gissas when Gissas was in Connecticut.
As such, the only significant connection that ASR has to Connecticut in regard to the plaintiff's claim is the disputed fact that at least one of the Texas defendants came to Connecticut to discuss the diamond program with Gissas. Even if Gissas' testimony is credited on this disputed point, this is not a sufficient connection to Connecticut to confer personal jurisdiction. As discussed in the preceding paragraphs, the general rule is that isolated instances of communication, including personal meetings, between an out-of-state defendant and a plaintiff within Connecticut does not, by itself, constitute the transaction of business in Connecticut.
The present case is comparable to Rosenblit v. Danaher, supra, 206 Conn. 125, where the Massachusetts defendant was not subject to Connecticut's jurisdiction because the plaintiff's claim involved events that largely occurred in Massachusetts, arose out of the business conduct in Massachusetts, and involved a number of potential witnesses from Massachusetts. Likewise, in the present case, the plaintiff's claims against the Texas defendants involved events that largely occurred in Texas, the relevant business conduct is largely limited to Texas, and the case would involve a number of witnesses from Texas. Significantly, both cases involve at least one in-person meeting in Connecticut on a matter relevant to the plaintiff's claims.
Here, the meeting was not directly with the plaintiff, but with Gissas, who was working as the plaintiff's financial advisor.
The present case is also distinguishable from Zartolas v. Nisenfeld, supra, 184 Conn. 471, and Gaudio v. Gaudio, 23 Conn.App. 287, 580 A.2d 1212, because here it is undisputed that the Texas defendants did not own land or other property in Connecticut, and that the relevant business transactions did not involve any land or property in Connecticut. In fact, the diamonds that were used as security for the note were held in Texas. Moreover, unlike Hart, Nininger & Campbell Associates, Inc. v. Rogers, supra, 16 Conn.App. 619, there is no evidence here that there was a formation of a contract with the Texas defendants within this state and, although there may have been a meeting between Gissas and the Texas defendants about the diamond program in Connecticut, there is no evidence of repeated and regular visits and communication in Connecticut regarding the diamond program.
In Zartolas, the court held, in part: " By owning land in Connecticut the defendants invoked the benefits and protection of Connecticut's laws of real property, including as an incident of ownership the right to sell the property. If the defendants breached their warranties, the breach occurred because of acts committed here. The warranties in the deed clearly anticipate litigation in Connecticut, which is the only forum that can determine title to Connecticut land." Zartolas v. Nisenfeld, supra, 184 Conn. 475-76.
Thus, for the forgoing reasons, ASR did not transact business in Connecticut within the meaning of § 52-59b(a)(1), and this court does not have personal jurisdiction over ASR. In addition, the undisputed evidence shows that the individual Texas defendants only conducted business relevant to the present action in their capacity as officers of ASR. As such, because the court lacks personal jurisdiction over ASR, it follows that the court also lacks jurisdiction over DePaolo, Barkate, and Wright. See Under Par Associates, LLC v. Wash Depot A., Inc., 47 Conn.Supp. 319, 324, 793 A.2d 300 (2001) (" Where a corporation has not 'transacted business' in Connecticut and an officer of that corporation has not transacted any business other than through the corporation, the court has no more jurisdiction over the individual than it does over the corporation. If the court lacks jurisdiction over the corporation, in these circumstances, it naturally follows that it also lacks jurisdiction over the officer").
Because there is no personal jurisdiction under § 52-59b as to any of the Texas defendants, this court does not address the Texas defendants' alternative argument that Connecticut courts have held that contacts with the state made in the defendant's capacity as an officer cannot create personal jurisdiction over them individually. Likewise, because the applicable state longarm statute does not authorize the assertion of jurisdiction over the Texas defendants, this court does not reach the question of whether it would offend due process to assert jurisdiction.
ORDER
Based on the foregoing, the defendants' motion to dismiss the first count, second count, third count, sixth count, seventh count, and eight count (105.00) is granted.
At an evidentiary hearing, " the . . . judge is the sole arbiter of the credibility of the witnesses and the weight to be given specific testimony . . . It is within the province of the trial court, as the finder of fact, to weigh the evidence presented and determine the credibility and effect to be given the evidence." (Citation omitted; internal quotation marks omitted.) Cadle Co. v. D'Addario, 268 Conn. 441, 462, 844 A.2d 836 (2004). Furthermore, as the trier of fact, the court " can . . . decide what--all, none, or some--of a witness' testimony to accept or reject." (Internal quotation marks omitted.) Wilson v. Hryniewicz, 51 Conn.App. 627, 633, 724 A.2d 531, cert. denied, 248 Conn. 904, 731 A.2d 310 (1999).