Opinion
AANCV165011834S
02-06-2018
Paul SITAR et al. v. SYFERLOCK TECHNOLOGY CORP.
UNPUBLISHED OPINION
OPINION
STEVENS, J.
STATEMENT OF THE CASE
The plaintiffs in this action are Paul Sitar and Joseph Stage. The defendant is Syferlock Technology Corp. The plaintiffs claim that the defendant failed to compensate them for work they performed while employed by the defendant. Pending before the court is the defendant’s motion to dismiss all the claims of the complaint asserted by Stage for lack of subject matter jurisdiction. These claims are asserted in counts three, four, and five. The defendant contends that dismissal is warranted because the claims asserted in counts three and four are not ripe and the claim asserted in count five is moot.
Hereafter, the court refers to Sitar and Stage, collectively, as the plaintiffs, and individually by name where appropriate.
Counts one and two of the complaint are brought by Sitar, respectively alleging breach of contract and a violation of General Statutes § 31-72. These counts are not at issue in the motion before the court.
The defendant’s motion to dismiss was filed on September 11, 2017. In support of the motion, the defendant filed a memorandum of law, a copy of an employment agreement, a copy of an advisory agreement, and a copy of a stock agreement. On October 4, 2017, Stage filed an objection to the defendant’s motion to dismiss. Oral argument was heard at short calendar on October 10, 2017. For the following reasons, the motion to dismiss is denied.
DISCUSSION
A
The operative complaint was filed on June 20, 2017. In counts three and four, the complaint alleges that Stage and the defendant entered into an employment agreement in September 2007. Under the terms of this agreement, Stage would be employed as the defendant’s senior vice president of corporate development and would be " paid a salary [of] $150,000 per year payable at the rate of $12,500 a month." Complaint, Count Three, ¶ 6. More specifically, there is no dispute about the existence of this employment agreement or that under its terms the $12,500 monthly salary was paid as follows: $6,250 was paid each month and $6,250 was accrued. The accrued salary would be paid " upon reaching adequate sales/cash flow or adequate financing (subject to financing terms)." Motion to Dismiss, Ex. A, p. 2.
The third and fourth counts further allege that when the employment contract was executed, the defendant separately agreed to pay Stage $43,750, consisting of unpaid salary that Stage had earned at a company named Grid Data Security. As described in the complaint, Grid Data Security was the defendant’s predecessor company. Based on Stage’s unpaid, accrued salary from his work for the defendant and on his unpaid salary earned from Grid Data, the third count alleges that the defendant owes Stage $157,994 and sixty cents. In court four, Stage alleges that the defendant’s failure to pay this salary violates General Statutes § 31-72.
General Statutes § 31-72 provides in relevant part: " When any employer fails to pay an employee wages in accordance with the provisions of sections 31-71a to 31-71i, inclusive, or fails to compensate an employee in accordance with section 31-76k ... such employee ... shall recover, in a civil action, (1) twice the full amount of such wages, with costs and such reasonable attorneys fees as may be allowed by the court, or (2) if the employer establishes that the employer had a good faith belief that the underpayment of wages was in compliance with law, the full amount of such wages or compensation, with costs and such reasonable attorneys fees as may be allowed by the court ..."
Count five alleges that in April 2011, Stage and the defendant entered into an independent sales advisor agreement (advisory agreement). Under the advisory agreement, Stage would serve as an independent sales advisor for the defendant and would be compensated under the terms of an incentive stock option agreement (stock agreement). In May 2012, the defendant sent Stage a letter terminating the advisory agreement. Stage claims that the defendant failed to pay the compensation he is owed under this agreement.
The court also notes that the court (Hiller, J.T.R.) held a hearing on the plaintiffs’ application for a prejudgment attachment. Under General Statutes § 52-278d(a), a prejudgment may be allowed when " the plaintiff has shown probable cause that ... a judgment will be rendered ... in the plaintiff’s favor ..." On May 19, 2017, the court issued a memorandum of decision granting the application as to Sitar and denying the application as to Stage. As to Stage’s claim in count three that he was owed compensation under the employment agreement, the court denied Stage’s prejudgment attachment claim on the ground that he failed to present credible evidence sufficient to show that " the defendant had or now has such sales/cash flow or adequate financing as required in the agreement" to make any of the accrued, salary payments. Memorandum of Decision Re: Motion for Prejudgment Remedy, p. 8. As to Stage’s claim based on the alleged unpaid salary earned from Grid Data, Judge Hiller stated that the evidence presented by Stage was insufficient to show that the defendant had agreed to make this payment.
The court also denied Stage’s prejudgment remedy application regarding the claim made in count five that the defendant breached the advisory agreement by failing to transfer shares to him as provided under the stock agreement. Judge Hiller stated that Stage failed to present credible evidence that he had attempted to exercise the stock option in accordance with the requirements of the stock agreement.
B
" [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.) Santorso v. Bristol Hospital, 308 Conn. 338, 350, 63 A.3d 940 (2013). " When a ... court decides a jurisdictional question raised by a pretrial motion to dismiss, 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.) Mangiafico v. Farmington, 173 Conn.App. 178, 187-88, 163 A.3d 631 (2017). " Where, however ... the motion [to dismiss] 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.) Bagg v. Thompson, 114 Conn.App. 30, 38, 968 A.2d 468 (2009).
" 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). " Subject matter jurisdiction does not rest on the viability of the claims that a court is asked to adjudicate." Olympus Healthcare Group, Inc. v. Muller, 88 Conn.App. 296, 300, 870 A.2d 1091 (2005). Rather, " [s]ubject matter jurisdiction involves the authority of a court to adjudicate the type of controversy presented to it. It exists if the court has the power to hear and determine cases of the general class to which the particular proceeding belongs." New England Retail Properties, Inc. v. Maturo, 102 Conn.App. 476, 481, 925 A.2d 1151, cert. denied, 284 Conn. 912, 931 A.2d 932 (2007). " It is well established that, in determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged." (Internal quotation marks omitted.) Financial Consulting, LLC v. Commissioner of Insurance, 315 Conn. 196, 226, 105 A.3d 210 (2015).
A case that does not present a justiciable controversy must be dismissed for lack of subject matter jurisdiction. " [J]usticiability comprises several related doctrines, namely, standing, ripeness, mootness and the political question doctrine, that implicate a court’s subject matter jurisdiction and its competency to adjudicate a particular matter." (Footnote omitted.) Office of the Governor v. Select Committee of Inquiry, 271 Conn. 540, 569, 858 A.2d 709 (2004). " Justiciability requires (1) that there be an actual controversy between or among the parties to the dispute ... (2) that the interests of the parties be adverse ... (3) that the matter in controversy be capable of being adjudicated by judicial power ... and (4) that the determination of the controversy will result in practical relief to the complainant." (Internal quotation marks omitted.) Id., 568-69.
Consequently, the court lacks jurisdiction over a case that is either unripe or moot. " [T]he rationale behind the ripeness requirement is to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements ..." (Internal quotation marks omitted.) Chapman Lumber, Inc. v. Tager, 288 Conn. 69, 86, 952 A.2d 1 (2008). In determining whether a case is ripe, the court must be satisfied that the case does not present a claim that is purely hypothetical, is contingent on some event that has not or may never occur, or is without any consequence in guiding the conduct of the parties. Id.
As to mootness, a claim is moot when the case involves " [a] question which has lost significance because of a change in the condition of affairs between the parties, whether before or after the commencement of the action." Ballentine’s Law Dictionary (3d Ed. 1969). " [I]t is not the province of [the] courts to decide moot questions, disconnected from the granting of actual relief or from the determination of which not practical relief can follow ... When ... events have occurred that preclude [the] court from granting any practical relief through its disposition of the merits, a case has become moot." (Internal quotation marks omitted.) Dutkiewicz v. Dutkiewicz, 289 Conn. 362, 366, 957 A.2d 821 (2008).
In regard to both ripeness and mootness, the exercise of the court’s power cannot proceed absent an actual, bona fide dispute, or a substantial uncertainty of legal relations which requires adjudication. See Esposito v. Specyalski, 268 Conn. 336, 350, 844 A.2d 211 (2004).
C
As previously stated, in counts three and four of the complaint, Stage claims that he is owed compensation from the defendant based on unpaid, accrued salary from his work for the defendant and on his unpaid salary earned from Grid Data that the defendant agreed to pay. The present controversy between the parties is whether the plaintiff is or is not owed these funds. This claim does not present a purely hypothetical dispute or an abstract, theoretical question. There is nothing " unripe" about this claim- at trial the plaintiff will either meet his burden of proving this claim or he will not. Certainly, the plaintiff will be required to prove all the factual conditions and legal elements of his claims, but if he meets his burden of proof, he obviously will be entitled to judgment in his favor. For example, the plaintiff is not suing on a contract that does not yet exist because the parties have merely agreed to engage in good faith discussions to make a contract. A suit on such a contract would be premature and unripe. Stage is suing on a contract that does exist and he will prevail if he proves that the defendant has breached its terms and caused him damages. In arguing that Stage’s claims are not ripe, the defendant is confusing a claim that does not exist because it is purely hypothetical and conditional, with a claim that does exist but must be proven.
For similar reasons, the defendant’s argument that the claims of count five are moot must fail. There is no dispute that the stock agreement provides specific procedures for Stage to exercise his right to the stock options. The defendant claims that since Stage did not present sufficient evidence at the prejudgment attachment hearing that he utilized these procedures within the time limits set out in the stock agreement, he cannot initiate these procedures now because the time limits have passed. On the basis of this reasoning, the defendant contends that Stage’s claim regarding the stock agreement is moot. The defendant’s argument misses the point because the issue is not whether the procedures may be utilized now, but whether Stage can prove that he utilized the procedures appropriately under the terms of the stock agreement. Stated differently, contrary to the defendant’s reasoning, merely because the plaintiff failed to establish probable cause to support this claim at the prejudgment attachment hearing does not mean that as a matter of law he cannot meet his burden of proof at trial.
In support of its motion to dismiss, the defendant relies on the court’s denial of Stage’s application for a prejudgment remedy. This reliance is misplaced. First, the court’s ruling denying Stage’s application does not mean that the case is either unripe or moot, but only that at this particular stage of the proceedings, Stage has failed to provide sufficient evidence to establish probable cause to support a prejudgment remedy.
Second, the ruling on the application for a prejudgment remedy does not have the preclusive or estoppel effect as the defendant contends. As previously stated, General Statutes § 52-278d(a) permits the court to grant a prejudgment remedy if " the plaintiff has shown probable cause that ... a judgment will be rendered ... in the plaintiff’s favor ..." A prejudgment remedy application initiates a proceeding that precedes the commencement of a civil action. Bernhard-Thomas Building Systems, LLC v. Dunican, 286 Conn. 548, 558, 944 A.2d 329 (2008). " Prejudgment remedy proceedings are circumscribed by statute ... and are not involved with the adjudication of the merits of the action brought by the plaintiff or with the progress or result of that adjudication." (Citation omitted; footnote omitted; internal quotation marks omitted.) Gateway, Kelso & Co. v. West Hartford No. 1, LLC, 126 Conn.App. 578, 585-86, 15 A.3d 635, cert. denied, 300 Conn. 929, 16 A.3d 703 (2011). The prejudgment remedy proceedings only concern whether a plaintiff is entitled to obtain security for any judgment that he may ultimately recover from a defendant. The applicant has the burden of proving that there is probable cause to sustain the validity of the claim, but the hearing on the prejudgment remedy application is not contemplated to be a full-blown trial, and such a hearing may be abbreviated or incomplete in presenting all of the relevant evidence. Thus, the evidence at a prejudgment attachment hearing may not be as developed and may not even be the same as the evidence presented at trial after the parties have completed the discovery process. " In fact, the evidence at trial will usually be much more expansive and may include exhibits or testimony not yet available at the time of the hearing on the application of the prejudgment remedy." Bosco v. Arrowhead by the Lake, Inc., 53 Conn.App. 873, 875, 732 A.2d 205 (1999).
In summary, contrary to the defendant’s position, Stage’s failure to show his entitlement to a prejudgment remedy does not automatically mean that he will be unable to meet his burden of proof at trial. Similarly, his failure to show his entitlement to a prejudgment remedy does not operate to preclude him from having the opportunity to meet this burden of proof at trial on the grounds of ripeness or mootness. In short, the obvious fallacy of the defendant’s position is that it seeks disposition of the substantive merits of Stage’s complaint through a motion to dismiss by relying on a prejudgment attachment ruling when the adjudication of the merits of the complaint must be accomplished through trial proceedings.
CONCLUSION
Therefore, for these reasons, the defendant’s motion to dismiss is denied and Stage’s objection to the motion is sustained.