Opinion
No. X07-CV03 0081757S
October 10, 2003
MEMORANDUM OF DECISION RE DEFENDANT UNIVERSITY OF MIAMI'S MOTION TO DISMISS
The defendant, the University of Miami, moves to dismiss, based on a lack of personal and subject matter jurisdiction, the lawsuit filed by the plaintiffs, the University of Connecticut, the University of Pittsburgh, Rutgers University, and the University of West Virginia. The grounds for this motion are (1) that the defendant, a foreign corporation, falls outside the ambit of our long-arm statutes; (2) that the defendant has insufficient contacts with Connecticut to establish personal jurisdiction over it without violating its due process rights; (3) that the nonresident plaintiffs lack standing to pursue this matter; and (4) an absence of ripeness.
On September 29, 2003, the court afforded the parties a Standard Tallow hearing, Standard Tallow v. Jowdy, 190 Conn. 48 (1983). At that hearing, the defendant abandoned the ripeness claim.
The plaintiffs' complaint alleges that the defendant, by misrepresentations and surreptitiously negotiating a switch of its membership from the Big East, an intercollegiate athletic conference, to the Atlantic Coast Conference (ACC), another such conference, has breached its fiduciary duties to the plaintiffs, other Big East member schools; breached the covenant of good faith and fair dealing; incurred liability for promissory and equitable estoppel; violated the Connecticut Unfair Trade Practices Act (CUTPA); received unjust enrichment; and engaged in civil conspiracy with the ACC, all to the economic detriment of the plaintiffs.
I
The absence of personal jurisdiction is properly raised by a motion to dismiss. Chrysler Credit Corp. v. Fairfield Chrysler-Plymouth, Inc., 180 Conn. 223, 226 (1980). The motion to dismiss admits all well-pleaded facts, and the complaint is construed most favorably toward sustaining jurisdiction. American Laundry Machinery, Inc. v. State, 190 Conn. 212, 217 (1983). However, once a defendant attacks the acquisition of personal jurisdiction over it by means of a long-arm statute, the burden of demonstrating personal jurisdiction over the defendant rests on the plaintiff. Standard Tallow Corp. v. Jowdy, supra, 54; Hersey v. Lonrho, Inc., 73 Conn. App. 78, 88 (2002).
General Statutes § 33-1219 (f) confers personal jurisdiction upon Connecticut courts over a foreign corporation for "any cause of action arising . . . [o]ut of any contract made in this state or to be performed in this state . . ." The Amended and Restated Constitution of the Big East Conference, dated April 16, 2001, is such a contract with respect to the defendant, a signatory to that constitution.
Section 3.04 of that agreement provides, in part, that "all members must participate in such men's and women's varsity sports in which the Conference sponsors an in-season or postseason Conference Championship unless waived by the vote of two-thirds (2/3) of the Members in accordance with the procedures set forth in the Policy Manual (as defined in Article X)."
Section 3.05 obligates the defendant to "abide by the terms and provisions of the Constitution." That section further requires that the defendant "will participate in all television and broadcast events and arrangements, and in all post-season events, in accordance with the terms of all contracts and agreements, including, without limitation, bowl agreements, as shall be entered into by the Conference (collectively, the "Broadcast Agreements"), and will otherwise perform and comply with all obligations under Broadcast Agreements, including, but not limited to, those which:
(i) assign, license or otherwise allocate or transfer television, cable television and other broadcast, rebroadcast, Internet or any other form of audio and video transmission rights and revenues, including rights and revenues that may be owned or controlled by Individual Members of the Conference for Intra-Conference and Inter-Conference sports competitions;
(ii) entitle the Conference to receive payments as a result of or in connection with television, cable television and other broadcasts, rebroadcast, Internet or any other form of audio and video transmission of Intra-Conference, Inter-Conference and post-season sports competitions;
(iii) obligate the Conference Members to participate in Intra-Conference, Inter-Conference and post-season sports competitions (in which Conference Members have otherwise agreed to participate) pursuant to terms established by such Broadcast Agreements.
It is conceded that the Big East sponsors in-season or post-season conference championship events which occasionally take place in Connecticut. By its terms, the agreement mandates the defendant to participate in such events which are sited in Connecticut and to share in the revenues generated by the broadcast of these events. Consequently, the court holds that the defendant has entered into a contract which is expected to be performed, in part, in Connecticut. Partial performance of a contract in Connecticut satisfies the long-arm statute requirements. Miller v. American Bank Note Holographics, Superior Court, D.N. CV01 0181986, Stamford J.D. (August 28, 2002), Lewis, J.T.R.; Margolin v. Specialty Publishers, Superior Court, D.N. CV93 0306754, Fairfield J.D. (March 14, 1995), Hauser, J.; see also Chevette v. New Mexico U-Haul Co., 7 Conn. App. 617, 620 (1986).
Next, the court must determine whether any cause of action alleged in the complaint arises out of that contract. Viewing the allegations of the complaint as true and in a light favorable to the plaintiffs, the court concludes that this condition of the long-arm statute, § 33-1219 (f), is satisfied, also.
The first count of the complaint avers that the defendant owed a fiduciary duty to the other Big East schools "by virtue of their joint participation" in the conference and that this fiduciary duty emanates from, among other sources, the constitution in question. The plaintiffs allege that the actions of the defendant in misrepresenting its intentions and secretly negotiating a defection to the ACC damaged the Big East and the athletic programs of the other members and the opportunity to produce revenues in contravention of the defendant's promise to promote the welfare of these other programs. As noted above, whether the plaintiffs can prove these allegations at trial is immaterial. For purposes of the court's decision on this motion, the court must take these factual allegations at face value.
The defendant asserts that the absence of any count specifically alleging a breach of contract is fatal to the plaintiffs' claim that personal jurisdiction over the defendant obtains under § 33-1219 (f). The court disagrees with this assertion. Subsection 33-1219 (f) only requires that a cause of action "arise" out of the contract. If the legislature wished to restrict personal jurisdiction over foreign corporations to actions for breach of contract, it could easily have said so.
In the present case, the plaintiffs claim that the defendant's action undermines the status of the Big East, negatively impacts the athletic programs of the loyal members, and diminishes prospective revenue. In Section 2.01 of the agreement the signatories acknowledge that membership in the Big East entails assisting the sports programs of all the members, promoting the welfare of such programs, and establishing friendly relationships among the members. The plaintiffs' claims of breach of fiduciary duty and the covenant of good faith and fair dealing clearly arise out of the terms of the constitution and the purposes and obligations stated therein. Indeed, a breach of the covenant of good faith and fair dealing only arises in the context of a contract or contractual relationship. Celentano v. Oaks Condominium Assoc., 265 Conn. 579, 617 (2003).
It should be noted that under our long-arm statutes, the phrase "arising out of" does not even "require a causal connection between the defendant's forum-directed activities and the plaintiff's lawsuit," Thomason v. Chemical Bank, 234 Conn. 281, 290 (1995), although, as mentioned below, such a connection does exist in this case. The court rules that § 33-1219 (f) applies to the defendant based on the specific allegations of this case.
II
When a defendant moves to dismiss based on a lack of personal jurisdiction, a two-part inquiry is necessary. Knipple v. Viking Communications, Ltd., 236 Conn. 602, 606 (1996). If the court determines that a long-arm statute reaches a defendant, the court must then decide whether the exercise of personal jurisdiction over the defendant would violate the principles of due process. Id. Once again, the plaintiffs bear the burden of proving compliance with the dictates of due process. Id., 607.
"As a matter of federal law, state courts may exercise `specific' personal jurisdiction over a defendant whenever a cause of action `arises out of' the defendant's contacts with the forum." Thomason v. Chemical Bank, supra, 287. The court finds that such specific personal jurisdiction exists in this case.
In contrast to the meaning of "arises out of" for purposes of evaluating the applicability of our long-arm statutes, due process, based on specific jurisdiction, requires "some sort of causal connection between the defendant's forum contacts and the plaintiff's injuries." Id. In the present case, the plaintiffs allege that the defendant was to engage in Big East athletic events, some of which would occur in Connecticut. They further claim that substantial revenues would flow from such contests and be shared among Big East member schools. Also, the University of Connecticut alleges that it invested large sums to construct a football facility based on the contractual duties undertaken by the defendant. All the plaintiffs claim that economic damages directly flow from the misrepresentations and breach of fiduciary duty and the covenant of good faith and fair dealing emanating from the agreement entered into by the defendant, which agreement is to be performed, at least in part, in Connecticut.
The court finds that the allegations in the complaint, if true, would demonstrate a causal connection between the defendant's contact with Connecticut, namely the athletic events participated in by the defendant in Connecticut under the agreement; the revenues generated by such Connecticut contests; the weakening of the Big East, including a Connecticut member, precipitated by the departure of the defendant; and the inducement of the University of Connecticut to expend large sums to participate in Big East football games, and the injuries claimed by the plaintiffs. If the defendant is found to be liable, it will be because of the duties spawned by the Big East constitution. But for the contractual relationships with the plaintiffs, which is founded by virtue of that agreement, it is doubtful any liability would inure against the defendant.
The court concludes that the exercise of specific personal jurisdiction over the defendant in this case comports with the constitutional mandates of due process. Having determined that our long-arm statute, § 33-1219 (f), applies and that due process permits it, the court has valid personal jurisdiction over the defendant.
III
The defendant also contends that the court lacks subject matter jurisdiction to adjudicate the claims of the University of Pittsburgh, Rutgers University, and the University of West Virginia because those institutions are not located in Connecticut. This contention is based on the wording of our long-arm statute which only allows a "resident of this state" to subject foreign corporations to suit in Connecticut. According to the defendant, these nonresident schools lack "standing" to maintain this action against it.
The absence of standing to bring an action implicates subject matter jurisdiction. Ragin v. Lee, 78 Conn. App. 848, 859 (2003). But standing is not "a technical rule" designed to oust aggrieved parties from court. Frillici v. Westport, 264 Conn. 266, 280 (2003). The concept of standing focuses on whether a plaintiff is a proper party to assert the particular claim in issue. Id., 281.
In this case, the defendant makes no claim that the nonresident plaintiffs lack aggrievement. Instead, the defendant argues that, because the nonresident schools cannot take advantage of our long-arm statute, they are improper parties to initiate this action. The court rejects this argument.
Subject matter jurisdiction is the power of the court to hear and adjudicate cases of the general type or class to which the particular case belongs. In Re Shonna K., 77 Conn. App. 246, 250 (2003). Nothing bars the nonresident plaintiffs in this matter from bringing the type or class of claims alleged in the complaint in Connecticut. Certainly, if the defendant were a Connecticut resident or otherwise amenable to service of process, the court would have subject matter jurisdiction to decide the dispute.
The inability of the nonresident plaintiffs to take advantage of our long-arm statute merely deprives them of the opportunity to acquire personal jurisdiction over a foreign corporation. This impediment does not prevent this court from determining the case once personal jurisdiction over the defendant has been obtained by some other means. Because personal jurisdiction has been secured by virtue of the University of Connecticut utilizing our long-arm statute, the nonresident plaintiffs may also bring their claims against the defendant in that suit.
In addition, General Statutes § 52-101 expressly provides that "[a]ll persons having an interest in the subject of a civil action, and in obtaining the judgment demanded, may be joined as plaintiffs . . ." The nonresident plaintiffs surely come within the purview of this joinder statute.
The court holds that the nonresident plaintiffs are proper parties to join in the bringing of this action against the defendant.
The defendant's motion to dismiss is denied.
Sferrazza, J.