Opinion
FSTCV156024576S
04-19-2016
T& O Properties, LLC et al. v. John L. Kavanagh
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (No. 109)
Hon. Charles T. Lee, J.
This dispute arises out of a residential lease agreement between the plaintiff, T& O Properties, LLC, and the defendant, John Kavanagh. Based on the defendant's breach of this agreement, a Virginia court awarded two judgments to the plaintiff. The plaintiff has not recovered on either judgment. Prior to this action, the plaintiff successfully sought to have the second Virginia judgment docketed in Connecticut. Because the first Virginia judgment is a default judgment, the plaintiff could not request that it too be docketed; instead, the plaintiff is now requesting that the court enforce the Virginia default judgment. Before the court is the plaintiff's motion for summary judgment, which the court grants in part and denies in part, as more fully explained below.
On February 17, 2015, the plaintiff filed a two-count complaint against the defendant. In count one, the plaintiff asks the court to enforce the Virginia default judgment. In count two, the plaintiff asserts a claim for breach of the lease seeking continuing late fees and attorneys fees. In the ad damnum clause, the plaintiff seeks relief under General Statutes § 50a-33, monetary damages, attorneys fees, interest, and costs. On May 20, 2015, the self-represented defendant filed an answer, five special defenses, and two counterclaims. The defendant's counterclaims plead the federal and state Truth in Lending Acts, the federal Fair Debt Collection Practices Act, and Connecticut's Creditors' Collection Practices Act. On August 31, 2015, the plaintiff responded by denying the defendant's special defenses and counterclaims.
The plaintiff subsequently abandoned its effort to recover additional post-judgment late fees under the lease Reply memorandum at *9.
The next day, the plaintiff filed a motion for summary judgment, a memorandum in support, and an affidavit from Tom Lovell, a member of T& O Properties, LLC accompanied by:
(1) the lease agreement that underlies this dispute; (2) the warrant in debt from the Virginia default judgment; (3) the affidavit for service of process on the Secretary of the Commonwealth from the Virginia default judgment; (4) the warrant in debt from the second Virginia judgment; (5) the return of service from the second Virginia judgment; and (6) the defendant's grounds of defense form from the second Virginia judgment. On September 18, 2015, the defendant retained his uncle, an attorney at a law firm, as pro bono counsel. The court heard oral argument on November 30, 2015.
On February 3, 2016, the defendant filed an amended answer, special defenses, including a sixth special defense, and counterclaims. On the same date, the defendant submitted an objection to the plaintiff's motion for summary judgment. In support of his objection, the defendant filed a memorandum and his affidavit with a number of exhibits. On February 16, 2016, the plaintiff replied to the defendant's objection with a memorandum and a second affidavit from Tom Lovell with various exhibits, including an affidavit from the plaintiff's Virginia attorney.
BACKGROUND
The undisputed facts are as follows. In January 2011, the plaintiff (lessor), a company that rents out real estate to tenants, and the defendant (lessee), a twenty year old college student, entered into a residential lease agreement. Under the agreement, the defendant was to rent a room in a house that the plaintiff owned near the defendant's college in Virginia. The lease was to run from June 1, 2011 through May 31, 2012. The lessee was to pay a total rent of $5280 for the year, payable in installments of $440 due on the first day of each month, plus a security deposit equal to one month's rent. In the event of a missed payment, the lessee would incur a late penalty of $5 per day plus an additional $30 if lessor did not receive by the sixth of any month. Once the lessee made payment, the lessor would apply the funds to the earliest balance due. In the event of the lessee's material breach of the lease agreement or the lessor's not receiving rent by the fifth of any month (sic), the lessor had the right to sue the lessee for rent. Should the lessor have to sue for rent, the lessee would be responsible for paying all rent installments and charges past due. In addition, the rent installments for the remainder of the term of the lease would immediately become due and payable. The lessee would also be liable for all court costs and reasonable attorneys fees incurred by the lessor for collection of unpaid rent or other charges. Finally, the lease agreement was to be construed under the laws of the Commonwealth of Virginia.
The defendant signed the lease, but did not make payment in June or July. On August 10, 2011, the defendant paid the plaintiff $1,320. The defendant did not make payment in September. On October 19, 2011, the defendant paid the plaintiff $880. The defendant did not make payment in November or December. On January 1, 2012, the defendant paid the plaintiff $880. The defendant did not make payment in February. On March 5, 2012, the defendant paid the plaintiff $1,320. According to the defendant, on April 12, 2012, the defendant paid the plaintiff $440. As per the lease agreement, each time the plaintiff received payment, it applied the funds to the earliest balance due. Therefore, when the defendant made his first payment in August of 2011 ($1,320), the plaintiff applied it to the security deposit ($440), the June rent due ($440), and late fees attached to the June rent ($380). The plaintiff applied the remainder ($60) to reduce the July rent owed.
By February of 2012, this pattern of missed payment, penalty, late payment, and retroactive application of funds resulted in the defendant's allegedly owing the plaintiff over $5,000 dollars. Accordingly, the plaintiff brought suit in Virginia to collect the funds. Following Virginia civil procedure regarding serving a nonresident defendant, the plaintiff served process on the Secretary of the Commonwealth. The defendant did not appear in that action and the court entered a default judgment against him for $5,000 with interest at 6% from March 26, 2012 until paid, plus $73 in costs (the " Virginia default judgment").
Subsequently, in April of 2012, the plaintiff filed a second lawsuit in Virginia against the defendant for additional money owed. The plaintiff served the defendant by posting service on the front door of the leased premises. The defendant submitted a grounds of defense form and requested that the plaintiff's attorney reschedule a hearing. The Virginia court considered this an appearance and entered judgment against the defendant in the amount of $7,145.53 with interest at 6% from June 11, 2012 until paid, $135.38 in costs, and $1,000 in attorneys fees (the " second Virginia judgment").
Having not collected on either judgment, in February of 2015, the plaintiff successfully sought to have the second Virginia judgment docketed in Connecticut. In the present case, the plaintiff seeks to have the court enforce the Virginia default judgment. The plaintiff also seeks attorneys fees incurred in enforcing both judgments.
STANDARD OF REVIEW
" Practice Book § 17-49 provides that summary judgment 'shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.' . . . The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all material facts, which, under applicable principles of substantive law, entitle him to judgment as a matter of law. Because the burden of proof is on the movant, the trial court must view the evidence in the light most favorable to the nonmoving party . . . The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact." (Citations omitted; internal quotation marks omitted.) Maltas v. Maltas, 298 Conn. 354, 365-66 (2010). " The rules governing summary judgment are equally applicable to counterclaims." U.S. Bank National Assn. v. Sorrentino, 158 Conn.App. 84, 93, cert. denied, 319 Conn. 951 (2015). A defendant may overcome a motion for summary judgment by asserting a single valid defense. Union Trust Co. v. Jackson, 42 Conn.App. 413, 417, 679 A.2d 421 (1996).
I. COUNT ONE: ENFORCEMENT OF THE VIRGINIA DEFAULT JUDGMENT
A. Contentions of the Parties
The parties do not dispute the underlying facts. In its complaint, the plaintiff requests that the court enforce the Virginia default judgment pursuant to General Statutes § 50a-33. As to the validity of the Virginia default judgment, the plaintiff asserts that the defendant was properly served in accordance with Virginia law, thereby establishing the jurisdiction over the defendant of the court issuing the judgment. In his answer, the defendant, who was self-represented at the time, asserts five special defenses, including that the Virginia default judgment should be vacated because he had no notice or opportunity to defend himself.
In its motion for summary judgment, the plaintiff claims that it is entitled to judgment as a matter of law and again argues that the Virginia court properly exercised personal jurisdiction over the defendant and afforded him adequate due process. Although the plaintiff requested relief pursuant to General Statutes § 50a-33 in its complaint, the plaintiff does not specify what legal theory it relies upon in its motion for summary judgment. However, in its memorandum of law in support, plaintiff asks the court to docket and enforce the Virginia default judgment in Connecticut pursuant to the full faith and credit clause of the United States Constitution. Relying in part on Business Alliance Capital Corp. v. Fuselier, 88 Conn.App. 731 (2005), the plaintiff contends that " Connecticut case law traditionally honors foreign judgments obtained in default pursuant to Connecticut General Statutes § 52-607 when those judgments are valid in the foreign jurisdiction." The plaintiff argues that the judgment of another state is presumed valid and the burden of proving a lack of jurisdiction rests on the defendant. In the present case, because the defendant was properly served according to Virginia Code § 8.01-329, plaintiff claims that the Virginia court had personal jurisdiction over the defendant and the defendant cannot meet his burden of proving otherwise. The plaintiff reasserts these arguments in its response to the defendant's lack of notice special defense.
In his objection to the plaintiff's motion, the defendant argues that the Virginia default judgment was obtained by fraud and violates the public policy and statutes of Connecticut and Virginia. In his affidavit, the defendant describes this fraud as the plaintiff's use of his Connecticut address in the Virginia default judgment, thereby depriving the defendant of notice of any proceedings and violating his due process rights.
In its reply to the defendant's objection, plaintiff acknowledges that a foreign judgment can be collaterally attacked by proving the judgment void due to lack of jurisdiction over the parties. According to the plaintiff, however, the Virginia court had jurisdiction over the defendant. The defendant's contention that he did not have notice of the proceedings is not only false, but it falls short of claiming that the Virginia court lacked personal jurisdiction. He was properly served according to Virginia law as a nonresident in accordance with Virginia Code § 8.01-329. The defendant's allegation that the plaintiff's use of his Connecticut address was fraud is " absurd" and, in any event, it is unclear how the use of the Connecticut address to effectuate service is fraud or would otherwise prevent proper service.
B. Discussion
In Maltas v. Maltas, supra, 298 Conn. 363, our Supreme Court held, " [I]n an action to enforce a foreign judgment, a challenge to the foreign court's jurisdiction is properly raised as a special defense." The court further explained, " Although the burden of setting aside [a foreign default] judgment rests upon the party against whom it is sought to be enforced . . . where the personal jurisdiction issue is resolved on summary judgment, it is the moving party's burden to establish that there is no genuine issue of material fact, and an entitlement to prevail as a matter of law . . . In resolving this question, we treat the proffered materials in the light most favorable to the nonmoving party." (Citations omitted.) Id. 370-71.
" Because the plaintiff sought summary disposition of this matter, thereby depriving the defendant of the right to a trial, the plaintiff bore the heavy burden of showing that there were no real issues to be tried and that judgment in his favor unquestionably was warranted as a matter of law. Because the plaintiff failed to make that showing, the trial court improperly rendered summary judgment in his favor." Id.
General Statutes § 50a-33, which is part of the Uniform Foreign Money-Judgments Recognition Act, provides in relevant part: " Except as provided in section 50a-34, a foreign judgment meeting the requirements of section 50a-32 is conclusive between the parties to the extent that it grants or denies recovery of a sum of money. The foreign judgment is enforceable in the same manner as the judgment of a sister state which is entitled to full faith and credit." Under General Statutes § 50a-34, " [a] foreign judgment is not conclusive if . . . the foreign court did not have personal jurisdiction over the judgment debtor . . ."
General Statutes § 52-607 is part of the Uniform Enforcement of Foreign Judgments Act and allows for courts to enforce foreign default judgments by way of the full faith and credit clause of the United States Constitution. " As a general principle, the full faith and credit clause of the United States constitution permits a creditor who has obtained a judgment in one state to enforce that judgment in this state. This principle is inapplicable, however, if the foreign judgment is a default judgment rendered by a court that did not have personal jurisdiction over the judgment debtor." Business Alliance Capital Corp. v. Fuselier, supra, 88 Conn.App. 732-33. " To determine whether a foreign court lacked jurisdiction, we look to the law of the foreign state." Id., 737.
Under Virginia law, adequate service of process is necessary for a state to obtain jurisdiction over an out of state party. See Harrel v. Preston, 15 Va.App. 202, 206, 421 S.E.2d 676 (1992) (" Because service of process was invalid, the court did not acquire personal jurisdiction over [the defendant]"). " [W]here a defendant has received personal service of process, irregularity will not defeat the court's jurisdiction, but if a statute provides for constructive service, the terms of the statute authorizing it must be strictly followed or the service will be invalid and any default judgment based upon it will be void." (Internal quotation marks omitted.) O'Connell v. Bean, 263 Va. 176, 179, 556 S.E.2d 741 (2002).
Virginia Code § 8.01-329 provides for service of process on a nonresident defendant via service on the Secretary of the Commonwealth of Virginia. " When service is to be made on the Secretary, the party or his agent or attorney seeking service shall file an affidavit with the court, stating either (i) that the person to be served is a nonresident or (ii) that, after exercising due diligence, the party seeking service has been unable to locate the person to be served. In either case, such affidavit shall set forth the last known address of the person to be served." Virginia Code § 8.01-329(B). " The express language of Code § 8.01-329 clearly requires that the affidavit, essential for valid constructive service upon the Secretary, shall set forth the last known address of the person to be served." O'Connell v. Bean, supra, 263 Va. 179. It is not enough for the affidavit to " merely [state] that [the defendant] is a nonresident but . . . not set forth [his] last known address. The recitation of [the defendant's] purported address shown in the caption of the document is not a sufficient statement under oath of [the defendant's] last known address." Id. " [T]he omission of [the defendant's] last known address in the affidavit . . . [is] a material failure to comply with the terms of Code § 8.01-329 . . ." Id. Failure to comply with the constructive service statute prevents the court from properly exercising personal jurisdiction over a defendant and any default orders and judgments entered against such a defendant are void. Id.
C. Analysis
In obtaining the Virginia default judgment, it is undisputed that the plaintiff served the nonresident defendant via the Secretary of the Commonwealth of Virginia. Both parties submitted identical copies of the relevant affidavit for service of process as evidence in the present case. The defendant did not appear in the action and the Virginia court entered a default judgment against him. These are the material facts relevant to this issue. Therefore, resolution of this issue depends on whether the plaintiff has shown that it is entitled to judgment as a matter of law.
In support of his lack of notice argument, the defendant relies on law that discusses the right of a defendant to collaterally attack a foreign judgment based on lack of jurisdiction. The court construes the essentially self-represented defendant's argument liberally; Markley v. Dept. of Public Utility Control, 301 Conn. 56, 74 (2011); and, in light of this standard and the law on which the defendant relies, interprets the defendant's contentions regarding lack of notice as claims of inadequate service of process. Therefore, the court considers the defendant's third and sixth special defenses as the defendant's assertion that the Virginia court lacked personal jurisdiction over him in the Virginia default judgment.
According to O'Connell v. Bean, supra, 263 Va. 176, courts must strictly construe Virginia Code § 8.01-329. In the present case, as in O'Connell v. Bean, the affidavit for service shows that the plaintiff merely stated that the defendant was a nonresident and supplied the defendant's Connecticut address in the caption of the document. The plaintiff did not set forth the defendant's last known address in the place provided for such information. The omission of the defendant's last known address is a material failure. Therefore, at the time that the Virginia court issued the default judgment, it did not have personal jurisdiction over the defendant. Accordingly, the obligation to afford full faith and credit to a final judgment of the Virginia court is not applicable here.
The defendant, in opposing the motion for summary judgment, was only obligated to come forward with evidence if the plaintiff first made out a prima facie case that the Virginia court properly had exercised personal jurisdiction. Based on the material omission in the affidavit supplied by the plaintiff, the court concludes that the burden never shifted to the defendant. The plaintiff has failed to show that it is entitled to judgment as a matter of law. For the foregoing reasons, the plaintiff's motion for summary judgment on count one is denied.
II. COUNT TWO: BREACH OF CONTRACT
The material facts relevant to count two are not in dispute. Under the lease agreement, which is governed by Virginia law, in exchange for use of the premises, the lessee was obligated to pay the lessor $440 as a security deposit and $440 on the first day of each month for the duration of the lease term. For several months, the defendant did not do so and therefore breached the agreement. The lease specified that, in the event the lessor did not receive payment by the fifth of the month, the lessor would have the right to recover late payment fees, court costs, and reasonable attorneys fees. The lessor attempted to recover these charges by filing suit in Virginia and obtaining judgments for monetary damages. The judgments remain unsatisfied. The lessor has requested that the Connecticut courts enforce the Virginia judgments and, in doing so, has incurred additional court costs and attorneys fees. As these facts show, the plaintiff has established that it is entitled to judgment as a matter of law on its breach of contract claim.
As is discussed in the preceding section, however, the court has determined that the Virginia default judgment is void. Therefore, the plaintiff's recovery is limited to attorneys fees and costs stemming from the second Virginia judgment. The plaintiff must apportion its claim for attorneys fees accordingly. In addition, because the charges from the Virginia default judgment have been extinguished, the court need not consider whether the second Virginia judgment fraudulently contains duplicative charges as asserted by the defendant. The court also will not address the defendant's arguments regarding the legality of certain contract terms because the defendant did not raise these as defenses in the second Virginia action, the Virginia court recognized the contract and its terms as valid and entered judgment accordingly, and a Connecticut court enforced the judgment. Furthermore, the validity of the second Virginia judgment is not at issue in this case.
III. COUNTERCLAIMS
A. Contentions of the Parties
The defendant asserts two counterclaims: (1) that the plaintiff failed to comply with the federal and state Truth in Lending Acts, and (2) that the plaintiff failed to comply with the federal Fair Debt Collections Act and Connecticut's Creditors' Collection Practices Act. The plaintiff argues that it is entitled to judgment as a matter of law on both counterclaims because it is not a creditor as defined in the statutes underlying the defendant's counterclaims. The plaintiff also claims that the defendant's failure to provide any persuasive evidence or advance any legal argument in support of his counterclaims means that he has acquiesced in their dismissal.
A. Discussion
The federal Truth in Lending Act protects consumers in their dealings with creditors. 15 U.S.C. § 1602(g) provides, " The term 'creditor' refers only to a person who both (1) regularly extends, whether in connection with loans, sales of property or services, or otherwise, consumer credit which is payable by agreement in more than four installments or for which the payment of a finance charge is or may be required, and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness or, if there is no such evidence of indebtedness, by agreement." The Connecticut Truth-in-Lending Act, codified at General Statutes § § 36a-675 to 36a-686, serves a similar purpose and utilizes the same definition of " creditor" as the federal Act. General Statutes § 36a-676(a)(2).
As its name implies, the Fair Debt Collections Practices Act, codified at 15 U.S.C. § 1692 et seq., regulates debt collection practices and governs the behavior of debt collectors. 15 U.S.C. § 1692a(6) provides, " The term 'debt collector' means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another . . . [T]he term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts." Similarly, Connecticut's Creditors' Collection Practices Act, General Statutes § § 36a-645 to 36a-647, protects against certain debt collection behavior. Section 36a-645 defines a " creditor" as " (A) any person to whom a debt is owed by a consumer debtor and such debt results from a transaction occurring in the ordinary course of such person's business, or (B) any person to whom such debt is assigned."
B. Analysis
As the movant, the plaintiff bears the burden of showing that it is entitled to judgment as a matter of law. According to the undisputed evidence, the plaintiff is in the business of leasing real estate to tenants and does not extend credit as part of its business. The defendant has not opposed the plaintiff's argument that it is not a creditor as defined in 15 U.S.C. § 1602. Therefore, no genuine issues of material fact are in dispute, and plaintiff is entitled to judgment as to the first counterclaim.
The plaintiff has not addressed the defendant's second counterclaim, which arises under 15 U.S.C. § 1692 and General Statutes § 36a-645 and refers to debt collectors. Instead, the plaintiff erroneously argues that General Statutes § 36a-645 relies on the definition of a creditor as described in 15 U.S.C. § 1602. In reality, General Statutes § 36a-645 is a distinct statutory section with its own definition of the term. The plaintiff also has not addressed 15 U.S.C. § 1692. Therefore, because the plaintiff has not established that it is entitled to judgment as a matter of law under the Fair Debt Collections Practices Act or Connecticut's Creditors' Collection Practices Act, the plaintiff's motion is denied as to the defendant's second counterclaim.
CONCLUSION
By reason of the foregoing, the plaintiff's motion for summary judgment is granted in part and denied in part. Specifically, the plaintiff's motion for summary judgment on count one seeking to enforce the Virginia default judgment is denied. The plaintiff's motion for summary judgment on count two seeking attorneys fees is granted with respect to efforts to collect the debt contained in the second judgment only. The plaintiff's motion for summary judgment dismissing counterclaim one (federal and state Truth in Lending Acts) is granted. The plaintiff's motion for summary judgment on counterclaim two (federal Fair Debt Collection Practices Act and state Creditors' Collection Practices Act) is denied.