Opinion
HHDCV185050642
09-05-2018
Michael KRACZKOWSKY, et al. v. William A. ROBERTO, et al.
UNPUBLISHED OPINION
OPINION
Matthew D. Gordon, J.
The plaintiffs have filed an application for a prejudgment remedy attachment premised on the defendants’ alleged breach of a promissory note dated January 26, 2011 in the amount of $172,500 made payable to Budzick & Meyerjack, PC, Trustee for the Kraczkowsky Family Trust. The note has a maturity date of January 31, 2012.
The defendants assert that the plaintiffs’ prejudgment remedy application should be denied because the plaintiffs failed to initiate suit on the note until February 1, 2018 (6 years and one day after the note’s maturity date). The defendants claim that the plaintiffs’ breach of contract action is therefore barred by the 6-year statute of limitations set forth in General Statute Section 42a-3-118(a), which provides, in pertinent part, that "an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the note or, if a due date is accelerated, within six years after the accelerated due date."
This case presents several interesting issues including whether the defendants’ periodic payments on the note constitute a reaffirmation of the debt sufficient to toll the 6-year statute of limitations; whether the plaintiffs’ filing of an application for prejudgment remedy attachment on January 30, 2018 (1 day shy of the 6-year anniversary of the note’s maturity date) constitutes the initiation of a civil action within the 6-year statute of limitations; whether the plaintiffs’ placement of the signed writ, summons and complaint into the hands of a marshal on January 30, 2018 extended the 6-year statute of limitations; and whether the plaintiffs’ addition of Budzick & Meyerjack, PC as an additional party plaintiff on May 22, 2018 (6 years and several months following the note’s maturity date) relates back to the date the plaintiffs first initiated their civil action.
Having carefully analyzed the pleadings and legal briefs of the parties, and having carefully analyzed the marshal’s return of service and other exhibits proffered by the plaintiffs (including the promissory note), and having entertained oral argument at which counsel for the parties set forth their respective positions in detail, the court finds that the plaintiffs have sustained their burden of proving that probable cause exists that the plaintiffs will ultimately prevail on their breach of contract action despite the defendants’ statute of limitations defense. The court therefore grants the plaintiffs’ application for prejudgment remedy attachment.
Because the court is granting the prejudgment remedy application based solely on the plaintiffs’ breach of contract cause of action, the court need not address the other issues raised by the parties regarding the other legal theories pleaded by the plaintiffs and challenged by the defendants. The court’s ruling is also restricted solely to the issue of probable cause in connection with the plaintiffs’ application for prejudgment remedy and does not otherwise address the merits of the plaintiffs’ claims, or the defendants’ special defenses, which are issues for another day.
The plaintiffs have pleaded several causes of action that have relatively short statutes of limitation, including legal malpractice and breach of fiduciary duty. Given that many of the acts alleged by the plaintiffs in support of these causes of action occurred more than six years prior to the initiation of the plaintiffs’ lawsuit, the plaintiffs may encounter difficulty overcoming the defendants’ statute of limitations defenses. Whether the plaintiffs ultimately prevail, however, is not the issue before the court today. Instead, the only issue is whether the plaintiffs have satisfied their burden of proving, after taking into consideration the special defense asserted by the defendants, probable cause that they will prevail on their breach of contract action.
The plaintiffs presented testimony at the prejudgment remedy hearing that the defendants defaulted on the promissory note almost immediately when they failed to make the first payment due under the note on March 1, 2011. If March 1, 2011 is ultimately determined to be the operative date for purposes of calculating the 6-year statute of limitations, the plaintiffs’ action may be defeated because the plaintiffs did not initiate their action until more than 6 years later when they effectuated service of process on the defendants on February 1, 2012. "Section 52-278d(a) explicitly requires that a trial court’s determination of probable cause in granting a prejudgment remedy include the court’s ‘taking into account any defenses, counterclaims or [setoffs] ...’ (Emphasis omitted.) TES Franchising LLC v. Feldman, 286 Conn. 132, 141, 943 A.2d 406 (2008). Therefore, it is well settled that, in determining whether to grant a prejudgment remedy, the trial court must evaluate both parties’ evidence as well as any defenses, counterclaims and setoffs ... Such consideration is significant because a valid defense has the ability to defeat a finding of probable cause." (Internal citations and quotations omitted.) ASPIC, LLC v. Poitier, 179 Conn.App. 631, 640-41, 181 A.3d 593, 598 (2018).
The plaintiffs assert, however, that the defendants made subsequent payments under the note that constitute a waiver of the statute of limitations. "The Statute of Limitations creates a defense to an action. It does not erase the debt. Hence, the defense can be lost by an unequivocal acknowledgment of the debt, such as a new promise, an unqualified recognition of the debt, or a payment on account ... Whether partial payment constitutes unequivocal acknowledgment of the whole debt from which an unconditional promise to pay can be implied thereby tolling the statute of limitations is a question for the trier of fact ..." (Emphasis in original.) Gianetti v. United Healthcare, 99 Conn.App. 136, 144, 912 A.2d 1093, 1098 (2007). "A general acknowledgment of an indebtedness may be sufficient to remove the bar of the statute. The governing principle is this: The determination of whether a sufficient acknowledgment has been made depends upon proof that the defendant has by an express or implied recognition of the debt voluntarily renounced the protection of the statute ... But an implication of a promise to pay cannot arise if it appears that although the debt was directly acknowledged, this acknowledgment was accompanied by expressions which showed that the defendant did not intend to pay it, and did not intend to deprive himself of the right to rely on the Statute of Limitations." Id.
The court finds, based on the testimony and evidence provided, that although factual findings by the trier of fact are necessary to determine definitively whether the plaintiffs will ultimately withstand the defendants’ statute of limitations defense, the plaintiffs have nevertheless sustained their burden of proving that probable cause exists to support the conclusion that the plaintiffs will prevail on their theory that the defendants’ periodic payments evidenced the defendants’ intention to continue honoring their obligations under the note thereby vitiating the defense.
The plaintiffs’ assertion that the filing of their prejudgment remedy application on January 30, 2018 constituted the initiation of a civil action within 6 years of the January 31, 2012 maturity date of the note may also ultimately fall victim to the defendants’ statute of limitations defense because the filing of a prejudgment remedy application does not necessarily constitute the initiation of a civil action. "We conclude that an application for a prejudgment remedy does not commence a civil action for purposes of a subsequent claim for vexatious litigation. First, there is no service of the requisite signed writ of summons. Additionally, the language of the prejudgment remedy statutes, § 52-278a et seq., in several instances previously set forth herein, makes it clear that proceedings for prejudgment remedy applications and civil actions are separate and distinct, with a prejudgment remedy application generally preceding the filing of the civil action. Finally, in addition to the differences regarding the process for initiating these two legal proceedings, the purpose of filing a civil action is fundamentally different from the purpose of obtaining a prejudgment remedy. A prejudgment remedy application is brought as a prelude to the filing of a civil action, and is meant to determine whether security should be provided for any judgment ultimately recovered by the plaintiff if he or she is successful on the merits of the civil action. A civil action, in contrast, resolves the merits of the parties’ claims, and can be filed irrespective of whether the plaintiff was successful in his or her prior pursuit of a prejudgment remedy." Bernhard-Thomas Bldg. Sys., LLC v. Dunican, 286 Conn. 548, 560-61, 944 A.2d 329, 338 (2008).
The plaintiffs claim that although they did not effectuate service on the defendants until February 1, 2018 (6 years and 1 day after the note’s maturity date), they placed the signed writ, summons, and complaint into the hands of a marshal on January 30, 2018 (1 day shy of the 6-year limitation period) and that delivery of the signed complaint to the marshal insulates them from the defendants’ statute of limitations defense pursuant to General Statutes Section 52-593a because that statute provides that a cause of action will not be lost on statute of limitations grounds if "the process to be served is personally delivered to a state marshal ... within [the limitation period] and the process is served, as provided by law, within thirty days of the delivery." Based on the facts presented, and the testimony and evidence submitted by the parties, the court finds that probable cause exists to believe that the plaintiffs will ultimately defeat the defendants’ statute of limitations defense to the extent the defense is premised on the February 1, 2018 service of process date.
The plaintiffs may also ultimately fail to establish that the addition of Budzick & Meyerjack, PC, which is the only payee under the note, as an additional party plaintiff on or about May 22, 2018 relates back to the initial filing of the plaintiffs’ civil action. Nevertheless, the court finds, based on the testimony and evidence presented, that probable cause exists to support the plaintiffs’ theory that the action does relate back because the defendants were apprised of the claims being asserted against them. "As long as [the] defendant is fully apprised of a claim arising from specified conduct and has prepared to defend the action, his ability to protect himself will not be prejudicially affected if a new plaintiffs is added, and he should not be permitted to invoke a limitations defense ... Thus, an amendment substituting a new plaintiffs [will] relate back if the added plaintiffs is the real party in interest." (Citation omitted) (internal quotation marks omitted.) Austin-Casares v. Safeco Ins. Co. of Am., 310 Conn. 640, 660, 81 A.3d 200, 213 (2013).
Having carefully analyzed the plaintiffs’ complaint, and having carefully taken into account the special defense asserted by the defendant, the court concludes that the plaintiffs have sustained their burden of proving that probable cause exists that the plaintiffs will ultimately prevail on their breach of contract claim notwithstanding the defendants’ special defense based on the applicable 6-year statute of limitations. "As our Supreme Court has stated, ‘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.’ (Emphasis in original; internal quotation marks omitted.) Three S. Development Co. v. Santore, 193 Conn. 174, 175, 474 A.2d 795 (1984). The burden of proof the plaintiff faces at trial necessarily will affect how the trial court views whether there is a bona fide reason to believe the plaintiff could prevail. Where the plaintiff’s burden at trial is proof by clear and convincing evidence, the task for the trial court in ruling on a prejudgment remedy is to determine whether, in the exercise of ordinary caution, prudence and judgment, it believes, based on the evidence presented, that the plaintiff can meet that burden at trial. Put another way, although the plaintiff does not have to prove its case by clear and convincing evidence at the prejudgment remedy hearing, it, nonetheless, must present sufficient evidence to lead the court to conclude that it could do so at trial. See Landmark Investment Group, LLC v. Chung Family Realty Partnership, LLC, supra, 137 Conn.App. at 370, 48 A.3d 705 (‘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’ [internal quotation marks omitted] )." (Footnote omitted.) ASPIC, LLC v. Poitier, 179 Conn.App. 631, 643-44, 181 A.3d 593, 600 (2018).
For all of the reason previously articulated, the court finds that the plaintiffs have presented credible evidence that they will prevail on their breach of contract claim notwithstanding the defendants’ statute of limitations defense and that probable cause therefore exists to support the issuance of a prejudgment remedy attachment. The plaintiffs’ application for prejudgment remedy attachment is therefore granted in the amount of $267,354.50.