Opinion
LLICV156012961S
01-25-2017
TAKD, LLC et al. v. Andrew Biele et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE MOTION TO DISMISS
John D. Moore, J.
I
BACKGROUND
The defendant Joseph Bittner (Bittner) has moved to dismiss (#149) the complaint of the plaintiff's, TAKD, LLC, Dolores Ferretti, and David Ferretti, on the ground that the court lacks subject matter jurisdiction. Relying upon a " Partnership Agreement" (Agreement) executed between the parties on September 23, 2014, Bittner argues that the Agreement's arbitration provision and its provision " guaranteeing all parties the 'rights and remedies afforded by the laws of Georgia'" operate to strip this court of subject matter jurisdiction. The plaintiffs objected to this motion (#155). For the reasons stated below, the court disagrees and denies this motion.
The plaintiffs filed additional arguments and evidence on the day after the hearing in objection #163. Bittner moved to strike this additional evidence in #164 and filed a memorandum in support of this motion as #165. The court finds that the plaintiffs' additional arguments are no more than a rehash of arguments made prior to and during.
II
STANDARD OF REVIEW
" The grounds which may be asserted in [a motion to dismiss]" include " lack of jurisdiction over the subject matter . . ." Zizka v. Water Pollution Control Authority, 195 Conn. 682, 687, 490 A.2d 509 (1985), citing Practice Book § 143, which is now § 10-30(a). " [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). " A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) MacDermid, Inc. v. Leonetti, 310 Conn. 616, 626, 79 A.3d 60 (2013). " A court deciding a motion to dismiss must determine not the merits of the claim or even its legal sufficiency, but rather, whether the claim is one that the court has jurisdiction to hear and decide." (Internal quotation marks omitted.) Hinde v. Specialized Education of Connecticut, Inc., 147 Conn.App. 730, 740-41, 84 A.3d 895 (2014).
Once the question of subject matter jurisdiction has been raised, it " must be answered before the court may decide the case." (Internal quotation marks omitted.) Kelly v. Albertsen, 114 Conn.App. 600, 605, 970 A.2d 787 (2009). In fact, once raised, the court must consider and decide the issue of subject matter jurisdiction before proceeding any further. Schaghticoke Tribal Nation v. Harrison, 264 Conn. 829, 839 n.6, 826 A.2d 1102 (2003); Figueroa v. C& S Ball Bearing, 237 Conn. 1, 4, 675 A.2d 845 (1996).
" [T]he plaintiff bears the burden of proving subject matter jurisdiction, whenever and however raised." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. New London, 265 Conn. 423, 430 n.12, 829 A.2d 801 (2003). " [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." (Internal quotation marks omitted.) Financial Consulting, LLC v. Commissioner of Insurance, 315 Conn. 196, 226, 105 A.3d 210 (2015). " 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." (Internal quotation marks omitted.) Conboy v. State, 292 Conn. 642, 651, 974 A.2d 669 (2009). " The motion to dismiss . . . admits all facts which are well pleaded . . ." (Internal quotation marks omitted.) Ferreira v. Pringle, 255 Conn. 330, 346, 766 A.2d 400 (2001).
" Trial courts addressing motions to dismiss for lack of subject matter jurisdiction pursuant to § 10-30(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 . . .
" [I]f the complaint is supplemented by undisputed facts established by . . . undisputed evidence . . . 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 . . .
[W]here a jurisdictional determination is dependent on the resolution of a critical factual dispute, it cannot be decided on a motion to dismiss in the absence of an evidentiary hearing to establish jurisdictional facts . . . An evidentiary hearing is necessary because a court cannot make a critical factual [jurisdictional] finding based on memoranda and documents submitted by the parties." (Citations omitted; emphasis omitted; footnotes omitted; internal quotation marks omitted.) Conboy v. State, supra, 292 Conn. 650-54. After holding an evidentiary hearing, the court may resolve the disputed jurisdictional facts and rely upon its factual findings in deciding the motion to dismiss for lack of subject matter jurisdiction. Id., 651 (" [l]ack of subject matter jurisdiction may be found [based on] . . . the complaint supplemented by undisputed facts plus the court's resolution of disputed facts" [internal quotation marks omitted]).
The court conducted an evidentiary hearing on this motion to dismiss on December 14, 2016. After taking evidence at this hearing, the court was able to make findings regarding the disputed jurisdictional facts. These are set out below in the " Findings of Fact" section, and the court has relied upon these findings of controverted facts in deciding this motion. After considering the evidence adduced during that hearing, the court concludes that the Agreement does not operate to strip the court of subject matter jurisdiction.
III
FINDINGS OF FACT
The Agreement is an agreement between Bittner, on one hand, and, on the other, " the principal owners of TAKD, LLC" (TAKD), a plaintiff in this case, and " Novus Communication, LLC" (Novus). These principal owners are referred to in the Agreement as the " Principals." Therefore, the parties to the Agreement are not Bittner, TAKD and Novus, but, rather, Bittner and the principal owners of TAKD and Novus.
There was controverted testimony during the hearing as to who held an ownership interest in TAKD, Dolores Ferretti alone or Dolores and David Ferretti together. The court resolves this disputed fact by finding that Dolores Ferretti alone had an ownership interest in TAKD. The court finds that the only owner of Novus was Andrew Biele, another defendant in this case. Therefore, the Agreement was between Bittner, Dolores Ferretti and Biele. The Agreement was executed by all signatories on September 23, 2014.
The Agreement provided as follows. Bittner was termed a " Vesting Partner" in the Agreement. The signature line for Bittner, however, called him a " Vested Partner" as well as " Vice President of Sales." Bittner would vest into an equity position of one-third of the profit of TAKD and Novus if he delivered $28,000 of commissionable monthly recurring charge for two consecutive months. If Bittner were to violate any terms and conditions of the Agreement, the principal owners, Dolores Ferretti and Biele, could recover not only damages for loss of business and legal costs, but also damages arising from " any other rights and remedies afforded by the laws of Georgia." Finally, " in the event of a dispute on this partnership agreement all remedies will be handled by arbitration in the state of Georgia."
Bittner testified at the hearing that the Agreement was the only agreement between himself and Dolores Ferretti, David Ferretti and/or Biele. David Ferretti testified that there were other agreements. The court finds the number of agreements between the parties in the case to be in dispute.
The court notes that a close review of the allegations against Bittner in the operative complaint reveals that none of them involve the Agreement. Bittner is named in counts nine through fourteen, inclusive. The well-pleaded allegations of these counts aver as follows. Count nine alleges a breach of a later agreement, the Marvel Partnership Agreement, an oral agreement entered into on or about October 2014. Count ten alleges that Bittner breached certain fiduciary duties that arose under the Marvel Partnership Agreement. Count ten also alleges a breach of fiduciary duties by claiming that Bittner and Biele wrongfully induced David Ferretti to terminate a different agreement, alternatively entitled the " TAKD Marketing Contract with AT& T" and the " AT& T Marketing Contract, " that arose in or around January 2014, prior to the Agreement. Count eleven alleges that Bittner committed fraud in or around October 2014, claiming that Bittner and Biele made false representations to David Ferretti concerning his status in the Marvel Partnership and another partnership, the Verizon Partnership. Count twelve alleges that Bittner and Biele conspired to terminate David Ferretti's interests in the Verizon Partnership and the Marvel Partnership and to induce David Ferretti to terminate the TAKD Marketing Contract with AT& T. Count thirteen alleges that all of the aforementioned allegations leveled against Bittner constituted a violation of the Connecticut Unfair Trade Practices Act (CUTPA). Count fourteen, directed only against Bittner, alleged intentional interference with David Ferretti's business relationships with Biele, and under the AT& T and the Verizon Partnerships. None of the plaintiffs' allegations against Bittner involve the Agreement.
The partnership arising from this contract is referred to in the Substituted Complaint as the AT& T Partnership.
IV
DISCUSSION
As mentioned above, the gravamen of Bittner's argument is that the Agreement's two references to Georgia law as governing (1) additional available remedies to the plaintiffs and to Biele, and (2) arbitration of breaches of the Agreement, deprive the court of subject matter jurisdiction. The court disagrees, for the reasons set forth herein.
First, the Agreement cannot provide the basis for stripping the court of subject matter jurisdiction because the Agreement has no relevance to the allegations directed against Bittner in the operative complaint. As referenced above, the plaintiffs' allegations against Bittner pertain to (1) breaches of other agreements, (2) breaches of duty arising from other agreements, (3) fraud concerning damage to David Ferretti arising from other contracts in which David Ferretti is or was a partner or from which he received consideration, (4) CUTPA violations concerning other agreements or other financial arrangements, and (5) intentional interference with Ferretti's other business relationships. The plaintiffs' allegations against Bittner, therefore, do not arise from or relate to the Agreement. The express language of the two provisions on which Bittner relies, the choice of law provision for additional remedies and the arbitration provision reinforce this conclusion. Specifically, the reference to the application of Georgia law arises only in the context of remedies available to Ferretti or Biele if Bittner were to violate " any of the above Terms and Conditions [of the Agreement]." Similarly, the arbitration provision applies only to " a dispute on this partnership agreement." Each provision is limited to disputes or violations of the terms of the Agreement, and neither provision applies to the terms of other agreements, or to other allegedly tortious activities of Bittner. Moreover, nothing in the Agreement either expressly or by necessary implication indicates that the Agreement applies to all other business transactions or relationships between the parties. For all of these reasons, neither the Agreement, nor any of its terms or conditions, deprive this court of subject matter jurisdiction.
Second, even if the Agreement were relevant to the allegations against Bittner, the partial choice of law provision and the arbitration provision do not deprive the court of subject matter jurisdiction. The choice of Georgia law provision, as mentioned above, is not comprehensive. Rather, it is limited to allowing the principal owners access to Georgia remedies if Bittner were to have breached the Agreement. In any event, Connecticut courts regularly construe and apply the law of other jurisdictions. People's United Bank v. Kudej, 134 Conn.App. 432, 438, 39 A.3d 1139 (2012). Therefore, a choice of law provision cannot strip a Connecticut court of subject matter jurisdiction. See Picketts v. International Playtex, Inc., 215 Conn. 490, 512, 576 A.2d 518 (1990) (" [T]he mere fact that the court is called upon to determine and apply foreign law does not present a legal problem of the sort which would justify the dismissal of a case otherwise properly before [it] . . . Connecticut courts are quite capable of applying foreign law when required to do so . . ." [Citation omitted; internal quotation marks omitted.])
Similarly, an agreement to arbitrate does not deprive the court of subject matter jurisdiction. As our Appellate Court wrote in Catrini v. Erickson, 113 Conn.App. 195, 197, 966 A.2d 275, 276-77 (2009), " The fact that General Statutes § 52-409 allows a court to enter a stay in a matter involving an arbitration agreement belies the defendants' claim . . . that an agreement to arbitrate ousts the court of its subject matter jurisdiction. If the existence of an arbitration agreement in a contract implicated the court's jurisdiction to hear an action, then a court would, accordingly, not have jurisdiction to stay such a matter because, in the absence of jurisdiction, the court may only dismiss a matter. In short, because the power to order a stay implies that the court has jurisdiction over a matter, the legislature could not have empowered the court to enter a stay in such a matter unless the court has jurisdiction over it."
General Statutes § 52-409 provides: " If any action for legal or equitable relief or other proceeding is brought by any party to a written agreement to arbitrate, the court in which the action or proceeding is pending, upon being satisfied that any issue involved in the action or proceeding is referable to arbitration under the agreement, shall, on motion of any party to the arbitration agreement, stay the action or proceeding until an arbitration has been had in compliance with the agreement, provided the person making application for the stay shall be ready and willing to proceed with the arbitration."
V
CONCLUSION
For all the reasons set forth above, the court denies Bittner's motion to dismiss.
SO ORDERED.