Opinion
No. CV10 601 45 60 S
April 1, 2011
MEMORANDUM OF DECISION ON DEFENDANT'S MOTION TO DISMISS
FACTUAL BACKGROUND
On November 22, 2010, the plaintiff, ProBuild East, LLC, commenced this foreclosure action by service of process on several defendants including Maple Oak Reserve, LLC (Maple Oak). The complaint alleges the following facts.
The plaintiff alleges the other defendants: Maple Oak Reserve Unit Owners Association, Inc.; Yara Hussey; Bryan Hussey; Judith Toth; Stephen Toth; Vincent Musto; Marilyn Ondrasik; Marianne Putney; Linda Evanko; Richard Evanko; Patrick McHale; Marie McHale; Alan Coriaty; Nancy Coriaty; Marilyn Barker; Lawrence Yurdin; Barbara Yurdin; Beverly Benedetto; Trustee of the Beverly Benedetto Revocable Trust; Robert Macauda; Natalie Siazarkas; Michael Siazarkas; Louise Ford Broadhurst; Nancy Langman; Anthony Delano; Patricia Delano; Jeffrey Lustman; Diane Saslow; Gilbert Sidoti; Nancy Sidoti; James Murray; Georgie Murray; Brian Casey; Susan Casey; Johanna Pankow; Mary Serpe; Paul McNamara; Rocco Morcone, Trustee; Susan Morcone, Trustee; and Gene Blakeman Builders, LLC have an interest in the property by virtue of the ownership of the common elements, which is subsequent in right to the plaintiff's lien and are affected by this action.
On February 9, 2010, Maple Oak owned and possessed certain land and improvements (the property) in Stratford, Connecticut. On that date, Salce Contracting Associates, Inc. (Salce) entered into a contract with the plaintiff, in which Salce was to renovate and/or construct the building on the property owned by Maple Oak. Salce purchased $82,346.78 of materials and supplies from the plaintiff. Between February 9, 2010 and September 30, 2010, the plaintiff provided labor and materials. On October 29, 2010, the plaintiff filed a certificate of mechanic's lien with the town clerk of Stratford, claiming a lien on the property for $82,346.78. On October 30, 2010, a true and attested copy of the mechanic's lien was served upon the defendants. The amount owed to the plaintiff for the materials has not been paid. The plaintiff seeks a foreclosure of the lien, possession of the property, appointment of receiver of rents and such other relief as the court may deem just and equitable.
On December 30, 2010, Maple Oak and another defendant, Maple Oak Unit Owners Association, Inc., filed an answer, special defenses and a counterclaim. On January 4, 2011, Maple Oak filed a motion to dismiss pursuant to Practice Book § 10-31 on the ground that the court lacks subject matter jurisdiction because the plaintiff lacks standing to sue. Maple Oak attached to its motion to dismiss an affidavit and exhibits regarding searches of the Connecticut secretary of state and the Delaware secretary of state's business databases regarding the plaintiff's registration filings. Additionally, Maple Oak filed a memorandum of law in support of its motion to dismiss.
On January 18, 2011, the plaintiff filed a motion to substitute party plaintiff pursuant to Practice Book §§ 9-19 and 9-20 as well as General Statutes §§ 52-123 and 52-109. The motion stated that since the commencement of the action, the plaintiff has determined that the correct name of the plaintiff should be "ProBuild Company LLC" as opposed to the name currently reflected in the summons and complaint by virtue of the plaintiff's merger with ProBuild Company LLC. The plaintiff attached to the motion to substitute party plaintiff an exhibit of a Delaware certificate of the plaintiff's merger with ProBuild Company LLC. Additionally, the plaintiff filed a memorandum of law in support of its motion to substitute party plaintiff. The plaintiff also filed an objection to Maple Oak's motion to dismiss and supporting memorandum of law.
On January 24, 2011, Maple Oak filed a memorandum of law in support of its motion to dismiss and in opposition to the plaintiff's motion to substitute party plaintiff. On the same day, the court, Hartmere, J., heard oral argument regarding Maple Oak's motion to dismiss.
On January 25, 2011, the plaintiff filed a motion for permission to file a supplemental memorandum of law in support of its motion to substitute party plaintiff and its objection to Maple Oak's motion to dismiss. The plaintiff attached to the motion its supplemental memorandum of law. On February 14, 2011, the court, Tyma, J., granted the plaintiff's motion to file a supplemental memorandum of law.
On March 11, 2011, the plaintiff filed a motion for permission to file an additional supplemental memorandum of law in support of its motion to substitute party plaintiff and its objection to Maple Oak's motion to dismiss. On March, 30, 2011, the court, Hartmere, J., granted the plaintiff's motion for permission to file its additional supplemental memorandum of law.
The parties do not dispute that on March 1, 2010, the plaintiff merged into Probuild Company LLC, a Delaware limited liability company, and ceased to exist as a separate entity.
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." (Internal quotation marks omitted.) Bacon Construction Co. v. Dept. of Public Works, 294 Conn. 695, 706, 987 A.2d 348 (2010). "Pursuant to the rules of practice, a motion to dismiss is the appropriate motion for raising a lack of subject matter jurisdiction." St. George v. Gordon, 264 Conn. 538, 545, 825 A.2d 90 (2003).
"[T]he question of subject matter jurisdiction, because it addresses the basic competency of the court, can be raised by any of the parties, or by the court sua sponte, at any time . . . Moreover, [t]he parties cannot confer subject matter jurisdiction on the court, either by waiver or by consent." (Internal quotation marks omitted.) New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 511, 518, 970 A.2d 583 (2009). "Once the question of subject matter jurisdiction has been raised, cognizance of it must be taken and the matter passed upon before [the court] can move one further step in the cause; as any movement is necessarily the exercise of jurisdiction." (Internal quotation marks omitted.) Schaghticoke Tribal Nation v. Harrison, 264 Conn. 829, 839 n. 6, 826 A.2d 1102 (2003).
"Trial courts addressing motions to dismiss for lack of subject matter jurisdiction pursuant to § 10-31(a)(1) may encounter different situations, depending on the status of the record in the case . . . [L]ack of subject matter jurisdiction may be found in any one of three instances: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts. . . . Different rules and procedures will apply, depending on the state of the record at the time the motion is filed . . .
"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 . . .
"In contrast, if the complaint is supplemented by undisputed facts established by affidavits submitted in support of the motion to dismiss . . . other types of undisputed evidence . . . and/or public records of which judicial notice may be taken . . . the trial court, in determining the jurisdictional issue, may consider these supplementary undisputed facts and need not conclusively presume the validity of the allegations of the complaint. "(Citations omitted; emphasis in original; internal quotation marks omitted.) Conboy v. State, 292 Conn. 642, 650-52, 974 A.2d 669 (2009). "[A]ffidavits are insufficient to determine the facts unless . . . they disclose that no genuine issue as to a material fact exists." (Internal quotation marks omitted.) Id., 651 n. 14.
Maple Oak argues the court lacks subject matter jurisdiction because the plaintiff lacks standing to sue. Specifically, it argues the plaintiff ceased to exist prior to commencement of the action, therefore, it was not a legal entity and has no standing to maintain the complaint.
The plaintiff argues that the court should use its discretion under § 52-109 to substitute Probuild Company LLC as the proper plaintiff and deny Maple Oak's motion to dismiss, because the substituted plaintiff would have standing. Section 52-109 provides: "Substituted plaintiff. When any action has been commenced in the name of the wrong person as plaintiff, the court may, if satisfied that it was so commenced through mistake, and that it is necessary for the determination of the real matter in dispute so to do, allow any other person to be substituted or added as plaintiff." The plaintiff argues that this case is similar to other cases in which the court exercised its discretion to substitute parties in the interest of justice, including Wickes Mfg. Co. v. Currier Electric Co., 25 Conn.App. 751, 596 A.2d 1331 (1991).
The face of the motion to substitute party plaintiff says that the plaintiff proceeds pursuant to General Statutes § 52-123 in addition to General Statutes § 52-109. In its memoranda, the plaintiff only argues that the court should substitute under § 52-109.
Maple Oak counters that according to America's Wholesale Lender v. Silberstein, 87 Conn.App. 485, 866 A.2d 695 (2005), an action must be commenced in the name of a legally recognized entity for § 52-109 to apply. Second, Maple Oak argues that even if § 52-109 allows a substitution where an action is brought in the name of an entity that is not legally recognizable, the plaintiff also bears the burden of proving that the wrong person was named as a result of an honest conviction, entertained in good faith and not resulting from the plaintiff's own negligence. Maple Oak argues the plaintiff has not sustained its burden to show that the error in naming the wrong person did not result from its own failure to exercise reasonable diligence to know the truth.
"The issue of standing implicates subject matter jurisdiction and is therefore a basis for granting a motion to dismiss. Practice Book § 10-31(a). [I]t is the burden of the party who seeks the exercise of jurisdiction in his favor . . . clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute . . . It is well established that, in determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged . . .
"Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he [or she] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy . . . When standing is put in issue, the question is whether the person whose standing is challenged is a proper party to request an adjudication of the issue . . . Standing requires no more than a colorable claim of injury; a [party] ordinarily establishes . . . standing by allegations of injury [that he or she has suffered or is likely to suffer]. Similarly, standing exists to attempt to vindicate arguably protected interests." (Citations omitted; internal quotation marks omitted.) Wilcox v. Webster Ins., Inc., 294 Conn. 206, 213-14, 982 A.2d 1053 (2009).
In Wickes Mfg. Co. v. Currier Electric Co., supra, 25 Conn.App. 753, Eagle Signal Corporation (Eagle), instituted an action seeking reimbursement for equipment it furnished to one of the defendants, a general contractor. More than six years after Eagle commenced the action, Wickes Manufacturing Company (Wickes) moved that it be substituted as party plaintiff. Id., 755. The trial court found that before Eagle had commenced the action it was purchased by a company, which subsequently became Wickes. Id. The trial court granted the motion finding that the action commenced in the name of Eagle was a mistake and that the substitution of Wickes was necessary for the determination of the case. Id. The defendants appealed on the ground that the trial court improperly granted the plaintiff's motion that substituted Wickes as the party plaintiff. Id., 760.
On appeal, the Appellate Court concluded: "[T]he trial court was well within its sound discretion to grant the plaintiff's motion and we find no abuse of that discretion." Id., 760-61. It explained: "The trial court found that Eagle was the original party to the contract with the contractor, but that at the time the action was commenced it no longer existed. Wickes was Eagle's successor-in-interest and the proper party to the lawsuit. The trial court held that commencing the action in the name of Eagle was a mistake and allowed Wickes to be substituted as necessary for a determination of the matters in dispute. This substitution for reason of mistake is clearly authorized by § 52-109 and a review of the record supports the trial court's conclusion." Wickes Mfg. Co. v. Currier Electric Co., supra, 760.
Wickes Mfg. Co. is similar to the facts of the present case in that before the plaintiff filed its action it had become another company. Although Wickes Mfg. Co. is similar, it did not directly address the issues regarding standing and subject matter jurisdiction before the court in the present case. The Appellate Court did address these issues in America's Wholesale Lender v. Silberstein, supra, 87 Conn.App. 485.
In America's Wholesale Lender v. Silberstein, supra, 487, the defendants executed and delivered to the original plaintiff, America's Wholesale Lender (America's), a note and a mortgage on their property. America's was the trade name of Countrywide Home Loans, Inc. (Countrywide). Id. America's brought a foreclosure action against the defendants. Id.
The defendants filed a motion to dismiss on the ground that the court lacked subject matter jurisdiction because America's did not have legal capacity to sue. Id. America's filed a motion to substitute Mortgage Electronic Registration Systems, Inc. (Mortgage Systems), as the plaintiff to reflect an assignment of the note and mortgage that Countrywide made to Mortgage Systems. Id.
The trial court denied the motion to dismiss and granted the motion to substitute. Id. It concluded that Countrywide had commenced an action in the name of the wrong person and, therefore, substituted Mortgage Systems pursuant to § 52-109. Id. Ultimately, the trial court rendered summary judgment in favor of Mortgage Systems. Id. The defendants appealed claiming that the trial court improperly denied their motion to dismiss. Id., 488.
On appeal, the Appellate Court reversed the judgment of the trial court. Id., 436. It concluded "that because a trade name is not an entity with legal capacity to sue, the corporation has no standing to litigate the merits of the case." Id.
In reaching this conclusion, the Appellate Court explained: "[W]e look to the language of § 52-109, which provides in relevant part that the court may allow the substitution of a party plaintiff `[w]hen any action has been commenced in the name of the wrong person . . .' Such a person, while perhaps not aggrieved in the manner necessary to have standing, possesses the legal capacity to sue. No such person commenced the action in this case, as a trade name is not a recognized legal entity or person.
"Mortgage Systems, the holder of the mortgage and the note at the time the action was commenced, claims, however, that any jurisdictional defect was cured when it was substituted as the plaintiff. An assignee, however, may not commence an action solely in a trade name either, regardless of the entity to which the trade name applies, because a trade name is not an entity with the legal capacity to sue. Nor could Countrywide cure the jurisdictional defect by substituting a party with the legal capacity to sue on behalf of the trade name. The named plaintiff in the original complaint never existed. As a result, there was no legally recognized entity for which there could be a substitute . . . Furthermore, because America's had no standing to bring an action, no action in this case ever was commenced, as it was void ab initio. In the absence of standing on the part of the plaintiff, the court has no jurisdiction." (Citations omitted; emphasis in original.) America's Wholesale Lender v. Silberstein, supra, 488-89.
In the present case, the parties do not dispute that when the action commenced on November 22, 2010, the plaintiff did not exist. Months before, on March 1, 2010, the plaintiff merged into ProBuild Company LLC and ceased to exist as a separate entity. Similar to the trade name in America's Wholesale Lender, the plaintiff at the time of the commencement of the action was not a recognized legal entity or person possessing the capacity to sue. Therefore, there is no legally recognized entity for which there could be a substitute under § 52-109. Because the plaintiff did not have standing to bring an action to sue at the time of the commencement of the suit, the court lacks subject matter jurisdiction.
For the foregoing reasons, the court will grant Maple Oak's motion to dismiss. The plaintiff's motion to substitute party plaintiff is moot.