Opinion
No. CV 02-0813517
April 4, 2003
MEMORANDUM OF DECISION ON MOTION TO DISMISS
On January 11, 2002, the plaintiff, Hartford Fire Insurance Company, a Connecticut corporation, commenced this action by filing a three-count complaint against the defendant, United Restoration, LLC, a Florida limited liability company with its principal place of business in Florida. The plaintiff alleges that, effective February 3, 2000, it entered into the Claims Service and Security Deductible Program agreement (agreement) with the defendant. Pursuant to the agreement, the plaintiff is seeking reimbursement from the defendant for claims services it allegedly provided on behalf of the defendant. In addition, the plaintiff alleges that it is entitled to additional premiums pursuant to the Workers' Compensation Deductible Policy (policy).
The February 2, 2000 agreement was later replaced with a subsequent agreement on August 31, 2000, which is the operative agreement between the parties.
On May 17, 2002, the defendant moved to dismiss this action on the ground that the court lacks personal jurisdiction. In support of its motion, the defendant submitted a memorandum of law, caselaw, the affidavit of Alan Cochran (the defendant's administrative/human resources director), a copy of the agreement (Ex. A) and a copy of the policy (Ex. B).
On July 17, 2002, the plaintiff filed a memorandum of law in opposition to the defendant's motion arguing that the defendant is subject to Connecticut's long-arm statute, pursuant to General Statutes § 33-929 (f), and that the defendant has availed itself to the privileges and protections of Connecticut's laws, thereby establishing minimum contacts with the state of Connecticut. The plaintiff submits the following in support of its memorandum in opposition: the affidavit of Daniel Schribert (a collections specialist employed by the plaintiff); a check issued by the defendant to the plaintiff in the amount of $35,605.41 (Ex. 1) and a duplicate check (Ex. C); two letters from the defendant to the American Arbitration Association, dated September 6, 2001 and September 24, 2001, respectively (Exs. 2 and 3); a copy of the agreement and policy (Exs. A and B); two letters from the defendant regarding the notice of the workers' compensation claim, dated March 22, 2001 and April 26, 2001, respectively (Exs. D and E); a letter from the defendant to the plaintiff, dated June 21, 2001 (Ex. F); a letter from the plaintiff to the defendant dated June 6, 2001 (Ex. G); a letter from the defendant to the plaintiff, dated December 15, 2001 (Ex. H); a copy of the defendant's filing for recognition as a limited liability company (Ex. I); a letter from the defendant's representative registering a complaint against the plaintiff addressed to the Connecticut department of insurance, dated October 23, 2001 (Ex. J); two letters from the defendant's representative concerning its complaint filed with the Connecticut department of insurance, dated December 18, 2001 and January 17, 2002, respectively (Exs. K and L) and supporting caselaw. On July 19, 2002, the defendant filed a reply memorandum in further support of its motion to dismiss.
Section 33-929 (f) provides: "Every foreign corporation shall be subject to suit in this state, by a resident of this state or by a person having a usual place of business in this state, whether or not such foreign corporation is transacting or has transacted business in this state and whether or not it is engaged exclusively in interstate or foreign commerce, on any cause of action arising as follows: (1) Out of any contract made in this state or to be performed in this state; (2) out of any business solicited in this state by mail or otherwise if the corporation has repeatedly so solicited business, whether the orders or offers relating thereto were accepted within or without the state; (3) out of the production, manufacture or distribution of goods by such corporation with the reasonable expectation that such goods are to be used or consumed in this state and are so used or consumed, regardless of how or where the goods were produced, manufactured, marketed or sold or whether or not through the medium of independent contractors or dealers; or (4) out of tortious conduct in this state, whether arising out of repeated activity or single acts, and whether arising out of misfeasance or nonfeasance."
On September 4, 2002, the trial court, Wagner, J.T.R., denied the defendant's motion to dismiss on the ground that it was not timely filed and, therefore, the defendant had waived its right to contest personal jurisdiction. On September 10, 2002, the defendant filed a motion for reargument claiming that the plaintiff had agreed to extend the time to file a motion to dismiss for lack of personal jurisdiction in order to facilitate settlement negotiations between the parties. On September 11, 2002, the plaintiff filed a memorandum consenting to reargument. On November 18, 2002, Judge Wagner granted the defendant's motion for reargument. This court, Booth, J., heard oral argument concerning the merits of defendant's original motion to dismiss on December 23, 2002.
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." (Emphasis in original; internal quotation marks omitted.) Gurliacci v. Mayer, 218 Conn. 531, 544, 590 A.2d 914 (1991). "The grounds which may be asserted in this motion 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." Practice Book 10-31. "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 and need not conclusively presume the validity of the allegations of the complaint." (Internal quotation marks omitted.) Ferreira v. Pringle, 255 Conn. 330, 346-47, 766 A.2d 400 (2001). "If a challenge to the court's personal jurisdiction is raised by a defendant, either by a foreign corporation or by a nonresident individual, the plaintiff must bear the burden of proving the court's jurisdiction." Knipple v. Viking Communications, Ltd., 236 Conn. 602, 607, 674 A.2d 426 (1996).
The defendant moves to dismiss this action on the ground that the court cannot exercise personal jurisdiction over it. Specifically, the defendant argues that the plaintiff cannot satisfy its burden of proving that any of Connecticut's long-arm statutes apply nor can the defendant establish sufficient minimum contacts with the state of Connecticut to satisfy due process. It is the defendant's contention that because neither General Statutes § 52-59b nor § 33-929 (f) references limited liability companies (LLC), the statutes are not applicable to the defendant. Further the defendant claims that the plaintiff cannot establish a factual basis for personal jurisdiction under either statute even if they are applicable. Finally, the defendant argues that even if it is subject to one of Connecticut's long-arm statutes, the plaintiff cannot demonstrate that the defendant has established sufficient minimum contacts with Connecticut in order to satisfy Constitutional due process.
Section 52-59b provides: "(a) As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nonresident individual, foreign partnership or over the executor or administrator of such nonresident individual or foreign partnership, who in person or through an agent: (1) Transacts any business within the state; (2) commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; (3) commits a tortious act outside the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if such person or agent (A) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (B) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce; (4) owns, uses or possesses any real property situated within the state; or (5) uses a computer, as defined in subdivision (1) of subsection (a) of section 53-451, or a computer network, as defined in subdivision (3) of subsection (a) of said section, located within the state."
The plaintiff argues that the defendant is a corporation and subject to personal jurisdiction pursuant to either § 33-929 (f) or § 33-1219. The plaintiff argues in the alternative that § 52-59b also confers personal jurisdiction over the defendant because it transacted business in this state. The plaintiff contends that exercising personal jurisdiction over the defendant does not violate due process because performance of the agreement occurred in Connecticut. The plaintiff concludes that the defendant engaged in numerous contacts with the plaintiff in this state, establishing that the defendant has sufficient minimum contacts with the state of Connecticut.
"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." (Internal quotation marks omitted.) Knipple v. Viking Communications, Ltd., supra, 236 Conn. 606.
I. Connecticut's Long-Arm Statutes
The defendant claims that neither of Connecticut's corporate long-arm statutes references LLCs. The defendant contends that § 52-59b (a), which pertains to nonresident individuals and foreign partnerships, is the applicable long-arm statute and cites New England National, LLC v. Kabro of East Lyme, LLC, Superior Court, judicial district of Norwich-New London at New London, Docket No. 550014 (February 16, 2000, Martin, J.), in support of this contention. While Kabro supports the application of § 52-59b (a) to an LLC, it does not hold that § 33-929 (f) or § 33-1214 are necessarily inapplicable.
The defendant argues that it has never transacted business in Connecticut within the meaning of § 52-59b (a). The defendant claims that it does not have any agents, stores or employees located in Connecticut and cites to Cochran's affidavit in support of this argument.
The defendant also argues that the plaintiff cannot establish personal jurisdiction pursuant to § 33-929 (f) even if applicable. The defendant contends that the plaintiff has not pleaded that the defendant solicited business, manufactured goods or engaged in tortious conduct in Connecticut. The defendant further argues that the plaintiff cannot prove that the agreement was made or performed in Connecticut, pursuant to § 33-929 (f) (1), because both the agreement and policy were negotiated in Florida and, therefore, made in Florida. The defendant cites Cochran's affidavit and Liberty Aircraft v. Atlanta Jet, Inc., Superior Court, judicial district of New Haven, Docket No. CV 99 0428927 (October 10, 2000, Munro, J.) ( 28 Conn.L.Rptr. 398), in support.
The plaintiff argues that the defendant's status is that of a corporation and cites to both the agreement and policy in support of this argument. (Plaintiff's Ex. A. pp. 1 and 13, and Ex. B.) The plaintiff further argues that because the defendant is a corporation, it is subject to § 33-929 (f). The plaintiff contends that "limited liability company" is synonymous with "limited liabilities corporation" and that Connecticut courts have examined LLCs pursuant to § 33-929 (f). The plaintiff cites to Dreamcatcher Software Development, LLC v. Pop Warner Little Scholars, Inc., United State District Court, District of Connecticut, Docket No. Civil No. 3:01CV808 (AVC) (D. Conn. March 28, 2002), and Northern Tankers (Cyprus) Ltd. v. Backstrom, 901 F. Sup. 72, 77 (D. Conn. 1995), in support of its claim that § 33-929 (f) applies to LLCs. The plaintiff contends that both the agreement and policy contemplated that the plaintiff's performance would take place in Connecticut.
The plaintiff argues that administration of multistate policies, similar to the subject policy, require that performance be done at its headquarters, which in this case is Hartford, CT. The plaintiff concludes that the documentary evidence attached to its memorandum (Plaintiff's Exs. A, B, C, D, E, F, G, H, J and K) supports its contention that performance of both the agreement and policy occurred in Connecticut. The plaintiff argues in the alternative that the defendant is subject to personal jurisdiction pursuant to § 52-59b (a). The plaintiff contends that the defendant has transacted business in Connecticut by entering into an agreement with a Connecticut corporation and, therefore, the defendant has subjected itself to the laws of Connecticut. The plaintiff cites to the choice of law provision located in the agreement that states the agreement and policy will be governed under the laws of Connecticut. (Plaintiff's Ex. A, p. 11, ¶ F.) The plaintiff contends that the choice of law provision is evidence that is foreseeable that the defendant could be subject to the jurisdiction of the Connecticut courts. The court finds that the defendant is subject to jurisdiction under § 52-59b (c) because it transacted business in Connecticut.
The court will examine § 33-929 (b)'s application to this LLC. In the agreement, the defendant is described as "United Restoration, LLC, A Florida Corporation." (Defendant's Ex. A.) In addition, in a letter from Cochran, dated December 15, 2001, he indicates that the defendant, United Restoration, LLC, is also known as United Air Comfort, Inc. (Plaintiff's Ex. H.) Furthermore, Cochran, in several letters to the plaintiff, used stationary that identifies the defendant as United Air Comfort, Inc. (Plaintiff's Exs. D, E, F.) Finally, in the letter addressed to Connecticut department of insurance, the defendant's representative identifies the defendant as United Air Comfort, Inc. (Plaintiff's Ex. J.)
"Every foreign corporation shall be subject to suit in this state, by a resident of this state or by a person having a usual place of business in this state, whether or not such foreign corporation is transacting or has transacted business in this state and whether or not it is engaged exclusively in interstate or foreign commerce, on any cause of action arising as follows: (1) Out of any contract made in this state or to be performed in this state . . ." General Statutes § 33-929 (f) (1). "In order to satisfy this provision of General Statutes § 33-929 (f) (1), the agreement serving as the basis for jurisdiction must contemplate or encompass some performance in Connecticut. However, that performance does not need to be by the defendant. The phrase `to be performed in this state' does not require performance in this state by the party over whom jurisdiction is sought . . . It has been held that jurisdiction is appropriate where the contract in question contemplated and required performance in this state by the plaintiff." (Citation omitted.) Miller v. American Bank Note Holographics Inc., Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 01 0181989 (September 11, 2001, Lewis, JTR.).
In Miller, the court, Lewis, J.T.R., ordered a Standard Tallow evidentiary hearing. After the hearing, the court denied the defendant's motion to dismiss. See Miller v. American Bank Note Holographics, Inc., Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 01 0181989 (August 28, 2002, Lewis, J.T.R.).
There is no dispute that an agreement exists between the parties. The plaintiff provided claims services to the defendant and in return the defendant mailed its premium payments to the plaintiff's office located in Hartford, CT. (Plaintiff's Exs. 1 and C.) Furthermore, the defendant sent two separate letters to the plaintiff's headquarters, located in Hartford, CT, providing the plaintiff with a "Notice of Dispute," in accordance with the terms of the policy. (Plaintiff's Exs. D and E.) Finally, the defendant's representative filed a complaint on behalf of the defendant with the Connecticut department of insurance (department) regarding the plaintiff's payment of allegedly inadequately investigated workers' compensation claims. In its letter, the defendant's representative stated that, pursuant to the terms of the agreement, the defendant had requested access to the plaintiff's claims files. (Plaintiff's Ex. J.) The plaintiff allegedly did not comply with the defendant's request; therefore, the defendant sought the assistance from the department and "request[ed] an official inquiry into this matter by your office to facilitate access to these clients' files." (Plaintiff's Ex. J.) In a follow-up letter to the department, the defendant's representative stated that the plaintiff was involved in this "claims handling activity from the [s]tate of Connecticut in a manner that is inconsistent with reasonable and professional levels of work." (Plaintiff's Ex. L.)
In its complaint to the department, the defendant's representative alleged that handling of these claims occurred within Connecticut and, furthermore, the defendant sought help from the department in order to compel performance from the plaintiff as required by the terms of the parties' agreement. (Plaintiff's Exs. J, K and L.) The court finds that the plaintiff has engaged in performance of the agreement within the state of Connecticut. Therefore, the defendant is subject to our jurisdiction pursuant to § 33-929 (f) (1) because performance of the agreement occurred in Connecticut.
II Due Process Analysis
The defendant further argues that even if the plaintiff can establish that it is subject to one of Connecticut's long-arm statutes it cannot demonstrate that the defendant maintained sufficient contacts with Connecticut for which it could expect to be haled into its courts. The plaintiff argues that the existence of a choice of law provision, while not a choice of forum, located in both the agreement and the policy is evidence that the defendant could reasonably anticipate that it might be subject to the jurisdiction of Connecticut's courts. Furthermore, the plaintiff argues that the defendant tried to avail itself of protection under Connecticut law by filing a complaint with the department. It is foreseeable that the defendant would be subject to the jurisdiction of the Connecticut courts and requiring the defendant to defend itself would not violate the constitutional standards of due process.
"The federal due process clause permits state courts to exercise in personam jurisdiction over a nonresident corporate defendant that has certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." (Internal quotation marks omitted.) Thomason v. Chemical Bank, 234 Conn. 281, 287, 661 A.2d 595 (1995), citing International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). "The United States Supreme Court has held that the test to be applied in considering the reach of personal jurisdiction is whether (1) the nonresident party has created a substantial connection to the forum state by action purposefully directed toward the forum state or otherwise invoking the benefits and protections of the laws of the state, and (2) the exercise of jurisdiction based on those minimum contacts would not offend traditional notions of fair play and substantial justice." Panganiban v. Panganiban, 54 Conn. App. 634, 639, 736 A.2d 190, cert. denied, 251 Conn. 920, 742 A.2d 359 (1999), citing Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 111-12, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987). "The twin touchstones of due process analysis under the minimum contacts doctrine are foreseeability and fairness. [T]he foreseeability that is critical to due process analysis . . . is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." (Internal quotation marks omitted.) United States Trust Co. v. Bohart, 197 Conn. 34, 41, 495 A.2d 1034 (1985). "The specific facts of each case necessarily determine the outcome of a minimum contacts analysis." Id., 42. "[I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." (Internal quotation marks omitted.) Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958).
The defendant entered into an agreement with the plaintiff whose name specifically indicates that it is affiliated with Hartford, CT. Furthermore, the defendant, through its representative, sought protection from a Connecticut department when it filed its complaint requesting that the department mandate the plaintiff's performance under the terms of the agreement. (Plaintiff's Ex. J.) The defendant's representative again contacted the department after its initial complaint was rejected and requested that the department "intercede in our behalf in order to properly conclude this conflict. In the absence of same, we will have no alternative but to litigate the matter in the local courts." (Plaintiff's Ex. K.) In its final letter to the department, the defendant's representative stated the plaintiff's actions under the agreement violate Connecticut law and, therefore would fall within the jurisdiction of the department. (Plaintiff's Ex. L.) Through its contacts with the department, the defendant tried to avail itself to the department's protection. Through these affirmative acts the defendant has attempted to invoke both the benefits and protections of Connecticut law.
Furthermore, pursuant to the agreement, there is a choice of law provision which states: "This Agreement shall be governed and construed in accordance with the laws of the State of Connecticut." (Defendant's Ex. A., p. 11, ¶ F.) See Travelers Ins. Co. v. Par Industries, Inc., Superior Court, judicial district of New Haven at New Haven, Docket No. CV 96 0394427 (February 5, 1998, Hartmere, J.) ( 21 Conn.L.Rptr. 393, 396) ("a choice of law provision in a contract is `a factor which the United States Supreme Court . . . held to be relevant when weighing a defendant's contacts with a forum.' "). Therefore, the court finds that the defendant has engaged in sufficient contacts with the state of Connecticut to have reasonably anticipated being subject to the jurisdiction of the Connecticut courts.
The defendant has created a substantial connection to the state of Connecticut by attempting to invoke benefits and protections afforded under Connecticut law. The exercise of jurisdiction by this court based on these minimum contacts does not offend the traditional notions of fair play and substantial justice. The defendant's conduct and connection with the state of Connecticut are such that it could reasonably anticipate being sued in a Connecticut court. For the above-stated reasons, the defendant's motion to dismiss is denied.
BY THE COURT
Kevin E. Boothe, J.