Opinion
No. CV05 400 94 23 S
June 15, 2006
MEMORANDUM OF DECISION RE MOTION TO DISMISS #102
On June 15, 2005, the plaintiff, University of Bridgeport, filed a three-count complaint against the defendants, Maxus Leasing Group, Inc. (Maxus) and Kip Curran. Count one alleges that Maxus breached a contract with the plaintiff in which Maxus proposed that it would secure ten million dollars in financing for the plaintiff (proposal). Count two alleges that the defendants' actions amount to a breach of their implied contractual obligations to the plaintiff. Count three alleges that as a result of the defendants' failure to return the plaintiff's deposit, the defendants have been unjustly enriched. All three counts allege that Curran was acting as an agent and on behalf of Maxus.
On August 11, 2005, Curran filed a motion to dismiss, as to him, all three counts for lack of personal jurisdiction. Pursuant to Practice Book § 10-31, the motion to dismiss was accompanied by a memorandum of law and an affidavit of Curran. On October 14, 2005, the plaintiff filed a memorandum in opposition. On December 30, 2005, Curran filed a memorandum in reply.
"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 . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction . . . 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 . . . [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.) McIntosh v. Sullivan, 274 Conn. 262, 267, 875 A.2d 459 (2005). "Where, however . . . the motion 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.) Ferreira v. Pringle, 255 Conn. 330, 346-47, 766 A.2d 400 (2001). "If a challenge to the court's personal jurisdiction is raised by a defendant, either by a foreign corporation or by a nonresident individual, the plaintiff must bear the burden of proving the court's jurisdiction." Knipple v. Viking Communications, Ltd., 236 Conn. 602, 607, 674 A.2d 426 (1996).
Curran argues that his activities do not constitute the transaction of business under General Statutes § 52-59b. He argues that the plaintiff has not alleged that he committed any tortious act within the state and that absent such an allegation, the general rule is that the court does not have personal jurisdiction over nonresident officers of nonresident corporations where the officer's contacts with the state were only in their business capacity. Alternatively, Curran argues that even if his actions constitute the transaction of business, he has not had sufficient minimum contacts with Connecticut to allow the court to exercise personal jurisdiction over him. Curran contends that general jurisdiction is lacking because he does not have any continuous and systematic contacts with the state and that the court is without specific jurisdiction since Maxus reaped any and all benefits from the alleged contract, not him.
The plaintiff argues that Curran's own affidavit establishes that he attended a meeting in Connecticut, sent letters to Connecticut and engaged in phone conversations regarding the alleged contract. As such, the plaintiff argues that Curran did transact business in Connecticut and his contacts with the state during the alleged business transactions are sufficient to satisfy the minimum contacts requirements of the due process clause.
"When a defendant files a motion to dismiss challenging the court's jurisdiction, a two part inquiry is required. The trial court must first decide whether the applicable state long-arm statute authorizes the assertion of jurisdiction over the [defendant]. If the statutory requirements [are] met, its second obligation [is] then to decide whether the exercise of jurisdiction over the [defendant] would violate constitutional principles of due process." (Internal quotation marks omitted.) Knipple v. Viking Communications, Ltd., supra, 236 Conn. 606.
Section 52-59b(a) provides in relevant part that "a court may exercise personal jurisdiction over any nonresident individual . . . who in person or through an agent: (1) [t]ransacts any business within the state . . ." "The statute does not define what the phrase `transact any business' means, but . . . [the Supreme Court has] construed it to embrace a single purposeful business transaction . . . [Additionally] in enacting § 52-59b, the legislature used New York Civil Practice Law § 302 . . . as a model . . . [The Supreme Court] therefore [found] pertinent the judicial interpretation given to that New York statute . . . It is, therefore, helpful to look to New York precedent on the subject." (Citations omitted; internal quotation marks omitted.) Under Par Associates, L.L.C. v. Wash Depot A., Inc., 47 Conn.Sup. 319, 322, 793 A.2d 300 (2001) ( 31 Conn. L. Rptr. 20).
The thrust of Curran's argument is that he is protected by the "fiduciary shield" doctrine. "[T]he `fiduciary shield' doctrine is based upon the notion that it is unfair to subject a corporate employee personally to suit in a foreign jurisdiction when his only contacts with that jurisdiction have been undertaken on behalf of his corporate employer." (Internal quotation marks omitted.) Id., 326. "As it happens, a substantial body of jurisprudence on the `fiduciary shield' doctrine exists . . . [S]quadrons of citations can be mustered in support of either side of the debate . . ." Id., 325.
This court, however, is in agreement with the reasoning of Judge Blue in Under Par Associates, L.L.C., supra, 47 Conn.Sup. 319, where the court concluded "that the `fiduciary shield' doctrine finds no place in the text or underlying policy of § 52-59b." Id., 327. As Judge Blue reasoned, "[t]his doctrine of `fiduciary shield' . . . emerged with little notice and with no critical examination as a novel principle by way of dicta in a series of decisions of the New York state and federal courts in the mid-sixties just as a more liberal and relaxed rule was developing in federal courts in favor of the application of state long-arm statutes themselves . . . The doctrine was initially considered to be a substantive requirement of New York law . . . In 1988, however, the New York Court of Appeals rejected the doctrine in . . . Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 522 N.E.2d 40, 527 N.Y.S.2d 195 (1988)." (Citations omitted; internal quotation marks omitted.) Id., 325-26.
Furthermore, "[t]he equitable concerns which motivated development of the doctrine are amply protected by constitutional due process requisites which guarantee that jurisdiction over a nonresident will be sustained only when the demand for his presence is reasonable and consistent with notions of fair play and substantial justice." (Internal quotation marks omitted.) Id., 326. Additionally, "the `fiduciary shield' doctrine is undesirable as a matter of public policy . . . It unfairly prejudices plaintiffs who seek relief against defendants conducting affairs in this State." (Citation omitted; internal quotation marks omitted.) Id.
In the present case, the complaint alleges that Curran, acting as an agent and on behalf of Maxus, presented the plaintiff with a proposal to obtain a loan of ten million dollars. The complaint further alleges that the plaintiff executed the proposal. A copy of the proposal, attached to the complaint, shows that Curran signed the proposal on behalf of Maxus. Additionally, Curran avers that he visited Connecticut for a meeting on the proposal and that he sent the original proposal to the plaintiff. The complaint, combined with Curran's affidavit, satisfy the court that Curran transacted business in Connecticut and, therefore, § 52-59b authorizes jurisdiction over him.
Since the statutory requirements of § 52-59b are met, the court must next "decide whether the exercise of jurisdiction over [Curran] would violate constitutional principles of due process." (Internal quotation marks omitted.) Knipple v. Viking Communications, Ltd., supra, 236 Conn. 606. Curran's main due process argument appears to be very similar to the defendant's arguments in Under Par Associates, L.L.C. v. Wash Depot A., Inc., supra, 47 Conn.Sup. 327. As such, this court is once again inclined to adopt the reasoning of Judge Blue in Under Par Associates, L.L.C., Id.
"[The corporate officer's] argument has been effectively answered by the Supreme Court of the United States, which has emphatically rejected automatic jurisdictional immunity for corporate agents. In Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984), the court considered a libel action brought against the named defendant, an Ohio corporation, and its owner, the well-known publisher Larry Flynt, in the United States District Court for the District of New Hampshire. The court found that jurisdiction could be constitutionally asserted against the named defendant. With respect to Flynt, the court rejected the suggestion that employees who act in their official capacity are somehow shielded from suit in their individual capacity . . . Rather, [e]ach defendant's contacts with the forum State must be assessed individually . . . The District Court's jurisdiction over Flynt thus turned on his contact with the forum state and not on his corporate capacity. A similar analysis applies . . . in the present case." (Citations omitted; internal quotation marks omitted.) Under Par Associates, L.L.C. v. Wash Depot A., Inc., supra, 47 Conn.Sup. 327.
"The United States Supreme Court has held that the test to be applied in considering the reach of personal jurisdiction is whether (1) the nonresident party has created a substantial connection to the forum state by action purposefully directed toward the forum state or otherwise invoking the benefits and protections of the laws of the state, and (2) the exercise of jurisdiction based on those minimum contacts would not offend traditional notions of fair play and substantial justice." Panganiban v. Panganiban, 54 Conn.App. 634, 639, 736 A.2d 190, cert. denied, 251 Conn. 920, 742 A.2d 359 (1999). "The second step includes a consideration of whether the nonresident would reasonably anticipate being haled into court in the forum state." Sobol Family Partnership v. Cushman Wakefield, Superior Court, complex litigation docket at Middlesex, Docket No. X04 CV 04 4003559 (November 1, 2005, Beach, J.) ( 40 Conn. L. Rptr. 214, 215), citing United States Trust Co. v. Hobart, 197 Conn. 34, 41, 495 A.2d 1034 (1985).
"A similar analysis applies to [Curran] in the present case. The long arm statute applies to him because he was transacting business in Connecticut. The plaintiff's demand for his presence in a Connecticut judicial forum is reasonable and consistent with notions of `fair play and substantial justice.'" Under Par Associates, L.L.C. v. Wash Depot A., Inc., supra, 47 Conn.Sup. 327-28. Although Curran avers that he owns no stock in Maxus, the plaintiff's complaint alleges that Curran, acting as an agent and on behalf of Maxus, presented the plaintiff with a proposal to obtain a loan of ten million dollars and the proposal was signed by Curran, on behalf of Maxus. Additionally, Curran avers that he visited Connecticut for a meeting on the proposal, that he sent the original proposal to the plaintiff and that he communicated with the plaintiff by letter and telephone. The court finds that Curran's actions were purposefully directed toward Connecticut and were similar to the defendant in Under Par Associates, L.L.C., Id. "Although there is no evidence that [Curran] gained any direct benefit from the [proposal] in question . . . rarely, if ever, does a corporate agent not derive some benefit from acting on behalf of his principal." (Internal quotation marks omitted.) Id., 328.
"Under these circumstances, a Connecticut court's exercise of jurisdiction over [a corporate officer] is not unfair. This conclusion is reinforced by the nature of the most likely trial scenario. The court's jurisdiction over the corporate defendant . . . is unquestioned. [Curran] would undoubtedly be a witness in any trial of [the plaintiff's] case against [Maxus] and would have to come to Connecticut for that purpose . . . That being so . . . the inconvenience he faces if made a party to the suit individually is minimal and, as a result, notions of fairness do not require us to shield him from the reach of the long arm statute." (Internal quotation marks omitted.) Id., 328.
For the foregoing reasons, the motion to dismiss is denied.