Opinion
No. CV 095011887
April 30, 2010
MEMORANDUM OF DECISION RE MOTION TO DISMISS NO. 101
On April 27, 2009, the plaintiff commenced this action by service of process on one of the defendants, James Clanton. Thereafter, on April 30, 2009, the marshal served, in hand, Alefor Ragazza aka Alefor Ragaza (Ragaza), the agent for service of process for the defendant Maxcom Realty, LLC.
James Clanton has appeared in the present case as a self-represented party and has not joined in the present motion. Approved Mortgage Company, LLC, First Cleveland Mortgage Corporation and Paradise Financial Services, LLC, were defaulted on January 27, 2010, for failing to appear in the present case. The present motion to dismiss was brought by Maxcom Realty, LLC. Thus, for purposes of this memorandum, Maxcom Realty, LLC is referred to as "the defendant." When all defendants are referred to collectively, they are referred to as "the defendants."
The filings on record with the secretary of state's office spell Ragazza in two ways. The signature on the Articles of Dissolution appears to contain only one "Z" — Ragaza. See business inquiry records from the secretary of state's website attached to the defendant's motion and the opposition thereto refer to Alefor G. Ragazza, residing at 8 Wood Road, Branford, as the agent for Maxcom Realty, LLC, while referring to Aleflor G. Ragaza, residing at 8 Wood Road, Branford, as a manager of Maxcom Realty, LLC. Additionally, articles of dissolution attached as an exhibit to the defendant's motion are signed by Aleflor Ragaza.
In the twenty-five-count complaint, which was filed on May 27, 2009, the plaintiff alleges, inter alia, that the defendants defrauded, made fraudulent misrepresentations to, breached contracts with and breached their fiduciary duties owed to the plaintiff in relation to a real estate transaction. On July 2, 2009, the defendant filed this motion to dismiss the action on the ground that the court does not have jurisdiction over the defendant because it was dissolved at the time that process was served. The defendant submitted a memorandum of law in support of the motion. On August 19, 2009, the plaintiff filed a memorandum of law in opposition. The motion was heard at short calendar on March 15, 2010.
DISCUSSION
"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.) Caruso v. Bridgeport, 285 Conn. 618, 627, 941 A.2d 266 (2008); R.C. Equity Group, LLC v. Zoning Commission, 285 Conn. 240, 248, 939 A.2d 1122 (2008). "The grounds which may be asserted in [a motion to dismiss] are: (1) lack of jurisdiction over the subject matter; (2) lack of jurisdiction over the person; (3) improper venue; (4) insufficiency of process; and (5) insufficiency of service of process." Zizka v. Water Pollution Control Authority, 195 Conn. 682, 687, 490 A.2d 509 (1985), citing Practice Book § 142 (now § 10-31). "[A]n action commenced by . . . improper service must be dismissed." (Internal quotation marks omitted.) Jimenez v. DeRosa, 109 Conn.App. 332, 338, 951 A.2d 632 (2008). "Facts showing the service of process in time, form, and manner sufficient to satisfy the requirements of mandatory statutes in that regard are essential to jurisdiction over the person." (Internal quotation marks omitted.) Bridgeport v. Debek, 210 Conn. 175, 179-80, 554 A.2d 728 (1989).
"When a trial court decides a jurisdictional question raised by a pretrial motion to dismiss on the basis of the complaint alone, 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." (Internal quotation marks omitted.) Conboy v. State, 292 Conn. 642, 651, 974 A.2d 669 (2009). "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 . . . If, however, the defendant submits either no proof to rebut the plaintiff's jurisdictional allegations . . . or only evidence that fails to call those allegations into question . . . the plaintiff need not supply counteraffidavits or other evidence to support the complaint, but may rest on the jurisdictional allegations therein." (Citations omitted.) Id., 652. "When a motion to dismiss for lack of personal jurisdiction raises a factual question which is not determinable from the face of the record, the burden of proof is on the plaintiff to present evidence which will establish jurisdiction." (Internal quotation marks omitted.) Kenny v. Banks, 289 Conn. 529, 533, 958 A.2d 750 (2008).
The defendant argues that at the time the marshal served Ragaza, the defendant was dissolved and was no longer a business entity. In particular, the defendant argues that the court is unable to maintain jurisdiction over the defendant because the defendant "ceased to be a legal entity as of February 27, 2009." Thus, the plaintiff "could not have effectuated service on the agent of service as [Ragaza] was no longer the agent once the entity was dissolved." Moreover, the defendant represented at oral argument that the members of the defendant approved dissolution of the defendant prior to the commencement of the present suit. Attached to its motion to dismiss, the defendant provides a copy of articles of dissolution executed by Ragaza on April 29, 2009, along with an electronic business record inquiry from the secretary of state's website indicating a "dissolution" was filed on May 1, 2009.
The plaintiff argues that the court may maintain jurisdiction over the defendant. In support of his position, the plaintiff proffers two alternative arguments. Initially, the plaintiff argues that the defendant was not dissolved on the date that process was served, but rather was dissolved on May 1, 2009. In support of this contention, the plaintiff attaches a copy of an electronic business record inquiry from the secretary of state's website identical to that provided by the defendant. Alternatively, the plaintiff argues that even if the defendant were dissolved, the court has personal jurisdiction over the defendant because Connecticut law permits a dissolved limited liability company (LLC) to sue and be sued.
It is undisputed that an existing LLC has the capacity to sue or be sued. Nevertheless, even if the defendant were effectively dissolved prior to the commencement of the present case, it is still subject to the court's jurisdiction. General Statutes § 34-214 "authorizes claims against a dissolved limited liability company or its members under certain circumstances." Benchmark Investments, LLC v. Elms at Mystic, LLC, Superior Court, judicial district of New London, Docket No. CV 555579 (January 11, 2002, Hurley, J.T.R.). In particular, such claims must not be barred under §§ 34-212 or 34-213.
General Statutes § 34-186 provides: "Suits by and against limited liability company. Suits may be brought by or against a limited liability company in its own name."
Section 34-214 provides: "Recovery for claims not barred. Any claim not barred pursuant to sections 34-212 and 34-213 may be enforced by a claimant, legal representative or assignee against: (1) The dissolved limited liability company to the extent of its undistributed assets, or (2) if the assets of a dissolved limited liability company have been distributed in liquidation, against one or more members of the dissolved limited liability company to the extent of their pro rata shares of the claim or the assets of the limited liability company distributed to them in liquidation, whichever is less, but no member's total liability for all claims under this section shall exceed the total amount of assets distributed to that member."
Section 34-212 provides: "Known claims against dissolved limited liability company. (a) A dissolved limited liability company may dispose of the known claims against it by filing articles of dissolution pursuant to section 34-211 and following the procedures described in this section.
(b) The dissolved limited liability company shall notify its known claimants in writing of the dissolution at any time after the effective date of dissolution. The written notice shall: (1) Describe the information that must be included in a claim; (2) provide a mailing address where a claim may be sent; (3) state the deadline, which may not be fewer than one hundred twenty days from the later of (A) the effective date of the written notice or (B) the filing of articles of dissolution pursuant to section 34-211, by which the dissolved limited liability company must receive the claim; and (4) state that the claim will be barred if not received by the deadline.
(c) A claim against the dissolved limited liability company is barred if (1) a claimant who was given written notice under subsection (b) of this section does not deliver the claim to the dissolved limited liability company by the deadline or (2) a claimant whose claim was rejected by the dissolved limited liability company does not commence a proceeding to enforce the claim within ninety days from the effective date of the rejection notice.
(d) For purposes of this section, `claim" does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution."
Section 34-213 provides: Unknown claims against dissolved limited liability company. (a) A dissolved limited liability company may publish a notice of dissolution pursuant to this section which requests that persons with claims against the limited liability company present them in accordance with the notice.
(b) The notice shall: (1) Be published once in a newspaper of general circulation in the county where the dissolved limited liability company's principal office is or was located, (2) describe the information that must be included in a claim and provide a mailing address where the claim may be sent, and (3) state that a claim against the limited liability company will be barred unless a proceeding to enforce the claim is commenced within three years after the publication of the notice.
(c) If the dissolved limited liability company publishes a newspaper notice in accordance with subsection (b) of this section and files articles of dissolution pursuant to section 34-211, the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the dissolved limited liability company within three years after the later of the publication date of the newspaper notice or the filing of the articles of dissolution: (1) A claimant who did not receive written notice under section 34-212; (2) a claimant whose claim was timely sent to the dissolved limited liability company but not acted upon; (3) a claimant whose claim is contingent or based on an event occurring after the effective date of dissolution.
Sections 34-212 and 34-213 require that a dissolved LLC provide actual and constructive notice, respectively, to the LLC's known and unknown creditors so as to trigger a limitation period within which an aggrieved party may bring a claim against the LLC. There is no indication in the record that the defendant provided the requisite notice necessary to trigger application of § 34-212 or § 34-213. Thus, the plaintiff is not precluded from bringing suit against the defendant, even though it is dissolved, nor is the court precluded from exercising jurisdiction over the defendant.
Even if § 34-212 or § 34-213 were to apply to the present case, the court could still exercise jurisdiction over the defendant. Sections 34-212 and 34-213 create limitations periods in which to bring particular claims against a dissolved LLC. Based upon the May 1, 2009 filing date of the articles of dissolution, the plaintiff's commencement of the present action against the defendant on April 30, 2009 was timely within the meaning of either section.
The defendant further argues that jurisdiction over the defendant is improper as Ragaza ceased to be the agent of the defendant at the time the defendant was dissolved, thus rendering service upon Ragaza ineffective. Curiously, the defendant itself argues that Ragaza acted on its behalf in filing articles of dissolution on April 29, 2009, well after February 27, 2009, the date the defendant contends was the effective date of dissolution. It is incongruous for the defendant to argue that Ragazza may bind the company by executing articles of dissolution in winding up the affairs of the defendant yet simultaneously claim that his agency was extinguished upon the alleged date of dissolution. Moreover, the defendant has not offered any evidence to support its argument that Ragazza had resigned as statutory agent for service.
Furthermore, § 34-208(b) permits those winding up the affairs of a dissolved LLC to prosecute and defend suits. See JM Avalon Investments, LLC v. Nischan, Superior Court, judicial district of Fairfield, Docket No. CV 96 0330010 (March 7, 1997, Skolnick, J.) ( 19 Conn. L. Rptr. 280) (remaining member of dissolved LLC permitted to bring suit on behalf of LLC); Elecor, LLC v. King, Superior Court, judicial district of New Haven, Docket No. CV 06 5006235 (December 5, 2007, Bellis, J.) (dissolved LLC permitted to bring suit on its own behalf).
Nor does the defendant point to any authority establishing that the agency of a registered agent for service of an LLC is automatically extinguished upon dissolution of the LLC. To the contrary, the weight of authority indicates that such agency is not extinguished in similar contexts. Although chapter 613 of title 34 is silent as to the effect of dissolution of an LLC on the status of the LLC's registered agent, courts of this jurisdiction have previously applied other legal principles governing the affairs of corporations to LLCs. See, e.g., Litchfield Asset Management Corp. v. Howell, 70 Conn.App. 133, 147, 799 A.2d 298, cert. denied, 261 Conn. 911, 806 A.2d 49 (2002) (principles of corporate veil piercing applied to a limited liability company); Gelinas v. Fuss, Superior Court, judicial district of Windham at Putnam, Docket No. CV 03 0070629 (March 19, 2004, Foley, J.) (principles of corporate officer liability applied to limited liability company principal). General Statutes § 33-884(b) provides that dissolution of a corporation does not extinguish the agency of the registered agent for service. In light of the courts' previous applications of corporate legal principles to LLCs, the dissolution of an LLC does not extinguish the agency of the registered agent for service.
Section 34-105 provides in relevant part: "Any process, notice or demand in connection with any action or proceeding required or permitted by law to be served upon a limited liability company . . . may be served upon the limited liability company's statutory agent for service . . ." As § 34-214 provides for the commencement of an action to enforce a claim against a dissolved LLC and § 34-105 provides for service upon the registered agent of an LLC in connection with any proceeding permitted by law, service upon Ragaza, under the present facts, was proper and effective.
For the foregoing reasons, the defendant's motion to dismiss is denied.