Opinion
No. CVH-7514
June 4, 2007
MEMORANDUM OF DECISION RE APPLICATION FOR PREJUDGMENT REMEDY
I STATEMENT OF THE CASE
This is a case regarding a commercial lease agreement. The plaintiffs allege breach of lease. The plaintiff has applied for a prejudgment remedy in the amount of $ 24,000. The defendants have requested a hearing to contest the application and have asserted the following: a defense, counterclaim, set-off, or exemption exists; the amount sought in the application for prejudgment remedy is unreasonably high; the plaintiff be required to post a bond to secure the defendants against any damages that may result from the prejudgment remedy; and the defendants be allowed to substitute a bond for the prejudgment remedy.
II FINDINGS OF FACT
The plaintiffs are the owner of the subject commercial building located at 285 Main Street, Newington, Connecticut. The plaintiffs have owned the building for thirteen years. A pizza restaurant has always occupied the premises.
On or about November 1, 2002, the plaintiffs entered into a written lease agreement with Soni, LLC, operated by the Rajparas. The lease term commenced on November 1, 2002, and expired on October 31, 2007. The Rajparas each individually executed a lease guaranty. Soni, LLC took possession of the property pursuant to the lease.
On or about November 17, 2003, the plaintiffs and Soni, LLC, executed a consent to assign lease, by which the lease obligations were assigned to Cyr. The Rajparas remained as personal guarantors through the end of the lease term.
On or about November 20, 2003, Soni, LLC and Cyr executed an assignment whereby Soni, LLC assigned its rights and obligations under the lease to Cyr. Cyr also executed a personal guarantee.
The plaintiffs received payments through October 2006. No payments have been made to the plaintiffs by any of the defendants starting in November 2006. Cyr returned the keys to the plaintiffs and surrendered possession of the property on or about January 13, 2007.
After the plaintiffs regained possession, they inspected the property and claim that Cyr caused damage to the property, including removing signs, cooler controls, and pizza ovens. Numerous items were left at the property which the plaintiffs had to remove. The plaintiffs incurred costs of removing the abandoned items, cleaning and repair.
The plaintiffs claim damages for unpaid rent and other charges pursuant to the lease. They calculated the monthly rent/charges to be $ 1,804.17, through the end of the lease. They have made efforts to re-let the property. The property has been marketed through regular ads in the Hartford Courant. The plaintiffs have incurred the costs of these advertisements. Approximately ten individuals have expressed interest in the property, but these discussions have not led to a lease agreement. Several of the prospective tenants have not met the plaintiff's financial and other requirements. The plaintiffs have neither retained a broker to market the property nor placed a for-rent sign on the property.
In contesting the application, Cyr has raised several issues. The business has been operated by Franco Allocca. There have been problems with the condition of the property, including water seepage.
The Rajparas contend that the default provision of the lease does not provide for the damages being claimed by the plaintiffs. In addition, the plaintiffs' November 16, 2006 demand letter was not effective based on the language of the collateral assignment of lease. The rent was paid through October 2006. The letter demanded payment through the expiration of the lease.
III DISCUSSION A
CT Page 8821
Prejudgment Remedy
"`Prejudgment remedy' means any remedy or combination of remedies that enables a person by way of attachment, foreign attachment, garnishment or replevin to deprive the defendant in a civil action of, or affect the use, possession or enjoyment by such defendant of, his property prior to final judgment but shall not include a temporary restraining order." General Statutes § 52-278a (d).Prejudgment remedies are statutory devices designed to bring the defendant's assets into custody as security for the satisfaction of the judgment the plaintiff may recover. They are limited by definition to attachments, foreign attachments, garnishments, replevin, or a combination thereof. Feldmann v. Sebastian, 261 Conn. 721, 728, 805 A.2d 713 (2002).
(1) Statutory Requirements
An application for prejudgment remedy must comply with all the statutory requirements. General Statutes § 52-278c provides in relevant part: "(a) Except as provided in sections 52-278e and 52-278f, any person desiring to secure a prejudgment remedy shall attach his proposed unsigned writ, summons and complaint to the following documents: (1) An application, directed to the Superior Court to which the action is made returnable, for the prejudgment remedy requested; (2) An affidavit sworn to by the plaintiff or any competent affiant setting forth a statement of facts sufficient to show that there is probable cause that a judgment in the amount of the prejudgment remedy sought, or in an amount greater than the amount of the prejudgment remedy sought, taking into account any known defenses, counterclaims or set-offs, will be rendered in the matter in favor of the plaintiff; (3) A form of order that a hearing be held before the court or a judge thereof to determine whether or not the prejudgment remedy requested should be granted and that notice of such hearing complying with subsection (e) of this section be given to the defendant; (4) A form of summons directed to a proper officer commanding him to serve upon the defendant at least four days prior to the date of the hearing, pursuant to the law pertaining to the manner of service of civil process, the application, a true and attested copy of the writ, summons and complaint, such affidavit and the order and notice of hearing; . . . If the plaintiff fails to attach an affidavit, the application must be denied. Lauf v. James, 33 Conn.App. 223, 229, 635 A.2d 300 (1993).
CT Page 8822
(2) Defendants' Claim and Request for Hearing
"A defendant may request a hearing to contest the application for a prejudgment remedy, assert any exemption or make a request concerning the posting or substitution of a bond . . . whether the claim is an assertion of a defense, counterclaim, set-off or exemption, an assertion that any judgment that may be rendered is adequately secured by insurance, an assertion that the amount sought in the application for the prejudgment remedy is unreasonably high, a request that the plaintiff be required to post a bond to secure the defendant against any damages that may result from the prejudgment remedy or a request that the defendant be allowed to substitute a bond for the prejudgment remedy." General Statutes § 52-278c(g).(3) Hearing
"The purpose of a prejudgment remedy probable cause hearing is to satisfy the constitutional due process right of parties whose property rights are to be affected, to be heard at a meaningful time and in a meaningful manner." (Internal quotation marks omitted.) Plasil v. Tableman, 223 Conn. 68, 76, 612 A.2d 763 (1992).
Pursuant to General Statutes § 52-278d(a), the prejudgment remedy hearing is limited to a determination of: "(1) whether or not there is probable cause that a judgment in the amount of the prejudgment remedy sought, or in an amount greater than the amount of the prejudgment remedy sought, taking into account any defenses, counterclaims or set-offs, will be rendered in the matter in favor of the plaintiff, (2) whether payment of any judgment that may be rendered against the defendant is adequately secured by insurance, (3) whether the property sought to be subjected to the prejudgment remedy is exempt from execution, and (4) if the court finds that the application for the prejudgment remedy should be granted, whether the plaintiff should be required to post a bond to secure the defendant against damages that may result from the prejudgment remedy or whether the defendant should be allowed to substitute a bond for the prejudgment remedy."
(4) Probable Cause
"The role of the court in considering an award of a prejudgment remedy is well established. Pursuant to our prejudgment remedy statutes . . . the trial court's function is to determine whether there is probable cause to believe that a judgment will be rendered in favor of the plaintiff in a trial on the merits . . . The hearing in probable cause for the issuance of a prejudgment remedy is not contemplated to be a full scale trial on the merits of the plaintiff's claim. The plaintiff does not have to establish that he will prevail, only that there is probable cause to sustain the validity of the claim . . . The court's role in such a hearing is to determine probable success by weighing probabilities . . ."
"The legal idea of probable cause is a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence and judgment, under the circumstances, in entertaining it . . . Probable cause is a flexible common sense standard. It does not demand that a belief be correct or more likely true than false." (Citations omitted; internal quotation marks omitted.) J.K. Scanlan Co. v. Construction Group, Inc., 80 Conn.App. 345, 349-50, 835 A.2d 79 (2003).
"If the court, upon consideration of the facts before it and taking into account any defenses, counterclaims or set-offs, claims of exemption and claims of adequate insurance, finds that the plaintiff has shown probable cause that such a judgment will be rendered in the matter in the plaintiff's favor in the amount of the prejudgment remedy sought and finds that a prejudgment remedy securing the judgment should be granted, the prejudgment remedy applied for shall be granted as requested or as modified by the court." General Statutes § 52-278d(a).
(5) Purpose
"[P]rejudgment remedy proceedings pursuant to the provisions of [§ 52-278d] are not involved with the adjudication of the merits of the action brought by [a] plaintiff or with the progress or result of that adjudication. They are only concerned with whether and to what extent [that] plaintiff is entitled to have property of the defendant held in the custody of the law pending adjudication of the merits of that action." Hartford Accident Indemnity Co. v. Ace American Reinsurance Co., 279 Conn. 220, 230, 901 A.2d 1164 (2006).
"The purpose of the prejudgment remedy of attachment is security for the satisfaction of the plaintiffs judgment, should he obtain one . . . It is primarily designed to forestall any dissipation of assets by the defendant and to bring [those assets] into the custody of the law to be held as security for the satisfaction of such judgment as the plaintiff may recover . . . The adjudication made by the court on [an] application for a prejudgment remedy is not part of the proceedings ultimately to decide the validity and merits of the plaintiff's cause of action. It is independent of and collateral thereto . . ." (Citation omitted; emphasis omitted; internal quotation marks omitted.) Morris v. Cee Dee, LLC, 90 Conn.App. 403, 412, 877 A.2d 899 (2005).
"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. At the same time the statute seeks to protect the defendant from unreasonable encumbrances. It is as necessary to protect a plaintiff who has won at the trial level, when the final disposition of the case awaits appellate proceedings, as it is to protect that same plaintiff before trial . . . [A] prejudgment remedy is [also] available to a plaintiff who has won at the trial level and whose case is on appeal . . ." (Internal quotation marks omitted.) Gagne v. Vaccaro, 80 Conn.App. 436, 452-53, 835 A.2d 491 (2003).
(6) Motion to Disclose
A motion to disclose may be granted as to any appearing defendant after the court has found probable cause. General Statutes § 52-278n; Practice Book § 13-13.
Sec. 52-278n Motion to disclose property. Order for disclosure. Substitution of surety.
(a) The court may, on motion of a party, order an appearing defendant to disclose property in which he has an interest or debts owing to him sufficient to satisfy a prejudgment remedy. The existence, location and extent of the defendant's interest in such property or debts shall be subject to disclosure. The form and terms of disclosure shall be determined by the court.
(b) A motion to disclose pursuant to this section may be made by attaching it to the application for a prejudgment remedy or may be made at any time after the filing of the application.
(c) The court may order disclosure at any time prior to final judgment after it has determined that the party filing the motion for disclosure has, pursuant to section 52-278d, 52-278e or 52-278i, probable cause sufficient for the granting of a prejudgment remedy.
(d) A defendant, in lieu of disclosing assets pursuant to subsection (a) of this section, may move the court for substitution either of a bond with surety substantially in compliance with sections 52-307 and 52-308, or of other sufficient security.
(e) Rules of court shall be enacted to carry out the foregoing provisions and may provide for reasonable sanctions to enforce orders issued pursuant to this section.
(7) Homestead Exemption
At the hearing, Cyr asserted that the court should not issue a prejudgment attachment on her residence based on the homestead exemption provided for under General Statutes § 52-352b. In support of this position, the defendant has cited Shawmut Bank, N.A. v. Valley Farms, 222 Conn. 361, 610 A.2d 652 (1992).
In Bolduc v. Riches, 47 Conn.Sup. 590, 821 A.2d 848 (2003), the trial court addressed this issue. "Notwithstanding the dicta in Shawmut Bank, N.A., the Superior Courts appear to have allowed attachments against property which would be covered by the homestead exemption. The argument in favor of this result is based on a question of priorities in the event of multiple claims against property. Certainly it is possible that many attachments against property protected by the homestead exemption may eventually be paid when properties are sold or for one reason or another the homestead exemption is lost. If attachments are not allowed against homestead property, there is no way to perfect the priority of an earlier creditor against a later creditor . . .
"While acknowledging that this court is bound by precedent established by the Supreme Court, it appears that the Supreme Court holding in Shawmut Bank, N.A. is pure dicta which had not been subject to any degree of analysis. Under these circumstances, the court does not find that dicta binding upon it." Bolduc v. Riches, supra, 47 Conn.Sup. 593-94. Based on this reading of Shawmut Bank, N.A., the court granted the prejudgment remedy against the subject real estate. Id. at 594. In Munro v. Magnanimo, Superior Court, judicial district of Fairfield, at Bridgeport, Docket No. CV065001069S (April 5, 2006, Gilardi, J.), the court adopted the holding in Bolduc.
Cyr has failed to demonstrate that the homestead exemption precludes a prejudgment attachment of the subject residence. In addition, the evidence was insufficient as to the value of the residence and the lack of equity.
B Analysis
Based on the evidence presented, the court makes the following findings regarding the application for prejudgment remedy.
The plaintiff has complied with all the statutory requirements. General Statutes § 52-278d. Sufficient evidence has been presented for the court to find that a judgment in the amount of the prejudgment remedy sought, taking into account any defenses, counterclaims or set-offs, will be rendered in the matter in favor of the plaintiff. The payment of any judgment that may be rendered against the defendants is not adequately secured by insurance. The property sought to be subjected to the prejudgment remedy is not exempt from execution. The plaintiff should not be required to post a bond to secure the defendant against damages that may result from the prejudgment remedy. The defendants have failed to demonstrate that they should be allowed to substitute a bond for the prejudgment remedy.
IV CONCLUSION AND ORDER
After hearing held pursuant to § 52-278d, at which the plaintiff appeared and was fully heard, and at which the defendants appeared and were fully heard, the court finds that there is probable cause to sustain the validity of the plaintiff's claim and that the plaintiff's application for prejudgment remedy is granted in the amount of $ 24,000. The court orders that the plaintiff may now attach and/or garnish to the value of $ 24,000 in assets of the defendant, including:
(a) To attach the interest of the Defendants Jagruti and Kishor Rajpara in the real property commonly known as 18 Mozart Street, West Hartford, Connecticut.
(b) To attach the interest of the Defendant Virginia Cyr in the real estate known as 8 Lyons Street, New Britain, Connecticut.
(c) To attach any and all real or personal property of the defendants, and to garnish any and all debts owed to said defendant or any of defendant's property concealed in the hands of another, as may be disclosed pursuant to plaintiff's motion for prejudgment disclosure of property and assets.
Pursuant to § 52-278n, the motion for disclosure of assets having been heard, the court orders the defendant to disclose within thirty days of the entry of this order any and all property, real or personal, in which it has an interest and any and all debts owing to said defendant sufficient to satisfy the prejudgment remedy.
BY THE COURT: