Opinion
Nos. X02 UWY-CV-07-5007876S, X02 UWY-CV-07-5007877S
May 9, 2008
MEMORANDUM OF DECISION RE MOTIONS TO STRIKE; MOTION TO DISMISS
I. BACKGROUND
The plaintiffs in the above-entitled actions are the Town of West Hartford (hereinafter referred to as the "Town"), the West Hartford Town Council (hereinafter referred to as the "Town Council"), Raymond Road Associates, BBS Development, LLC. And Blue Back Square, LLC. Plaintiffs, in cooperation with certain developers and owners, designed and developed Blue Back Square, a residential, commercial, and retail development in West Hartford Center. Blue Back Square had its grand opening on November 3, 2007.
It is alleged that the defendants in this action are the owners and operators of Westfarms Mall (hereinafter referred to as the "Mall"), a regional retail mall located partly in the Town. It is further alleged that throughout the planning and development of Blue Back Square, all of the defendants collectively participated in a tortious, anti-competitive campaign conceived and implemented to forestall the Blue Back Square project solely to preserve the Mall's competitive position. Specifically, it is alleged that the defendants abused the legal process by filing and prosecuting a series of objectively baseless and vexatious legal proceedings and tortiously interfered with plaintiffs' contractual and beneficial business relationships. It is also specifically alleged that each of the defendants, either directly through senior officers or through their agents, participated in their anti-competitive campaign by funding and controlling the alleged baseless litigation and by improperly discouraging and threatening actual and potential tenants of Blue Back Square.
Defendant Taubman Centers, Inc. (hereinafter referred to as "TCI") is a publicly created real estate investment trust, which owns approximately 61% and is the managing partner of defendant, The Taubman Group Limited Partnership (hereinafter referred to as "TRG"). TCI is engaged in the business of the ownership, development, acquisition, and operation of regional shopping centers. It is a Michigan Corporation with its principal place of business in Michigan. It owns approximately 22 shopping centers in 10 states. TCI conducts its retail mall business entirely through TRG. Although TRG has no employees, TCI has designated certain individuals as authorized representatives of TRG.
TCI and TRG hold ownership interests in the Taubman shopping centers, including approximately a 79% general partner interest in defendant West Farms Associates (hereinafter referred to as "WFA"), a Connecticut general partnership with its principal place of business in Farmington, Connecticut. TRG is a general partner in WFA. TRG is a Delaware limited partnership with its principal place of business in Michigan. WFA owns the 100% member interest in defendant West Farms Mall, LLC (hereinafter referred to as "WFM"), a Delaware limited liability company with its principal place of business in Farmington, Connecticut. WFM owns the Mall. It has no employees.
TRG owns 99% of defendant The Taubman Company LLC (hereinafter referred to as "TTC"). TTC is a Delaware limited liability company which manages the shopping centers owned by TRG, including the Mall. TTC employs the management team at the Mall and does not have a direct or indirect ownership interest in the Mall or in any of the other Taubman entities.
On December 20, 2007, Certain Defendants filed a Motion to Dismiss this action. TCI and TRG are the only parties with viable motions at this time. The grounds for the Joint Motion to Dismiss are that TCI and TRG are not subject to personal jurisdiction in Connecticut and that TRG was not properly served with process. On March 17, 2008, plaintiffs filed an objection to the Motion to Dismiss. On April 15, 2008, Certain Defendants filed a Motion to Strike certain attachments to the plaintiffs' objection. On April 11, 2008, the plaintiffs filed a Supplemental Brief in the matter. On April 23, 2008, Certain Defendants filed an objection to the filing of the Supplemental Brief. The Court heard arguments in the matter on April 28, 2008, at which time it reserved decisions on the motions.
II. DISCUSSION A. Motions To Strike
TCI and TRG have moved to strike the citation to certain deposition testimony contained in the plaintiffs' objection to the Motion to Dismiss. The deposition and hearing testimony was developed in a different case and defendants claim that it does not qualify as former testimony in this case because the plaintiffs have failed to show that: (1) the witness is unavailable to testify in this case, (2) the issues in this case and the case in which the prior testimony was developed are the same, and (3) the Movants had an opportunity to develop the testimony during the prior proceeding. Defendants have also moved to strike the plaintiff's Supplemental Brief in Support of their objection to the Motion to Dismiss on the grounds that said brief is based exclusively upon the inadmissible hearsay testimony of Stephen J. Kieras, an employee of the Taubman Company LLC, adduced in a separate unrelated matter.
The Code of Evidence provides that it "applies to all proceedings in the superior court in which facts in dispute are found, except as otherwise provided by the Code, the General Statutes or the Practice Book." Ct. Code Ev. Sec 1-1(b). Motions to Dismiss, as proceedings in which the Practice Book provides for the reception of affidavits taken outside of the courtroom, are subject to that exception. Section 10-31(a) of the Ct. Practice Book provides, in relevant part, that:
This motion shall always be filed with a supporting memorandum of law, and where appropriate, with supporting affidavits as to facts not apparent on the record.
In their argument, plaintiffs equate the use of the term affidavits in Section 10-31(a) with the term deposition, since they both relate to sworn testimony out of court. However, it is interesting to note that in Section 17-45 of the Practice Book, which relates to Summary Judgment, the rule reads, in relevant part:
A motion for summary judgment shall be supported by such documents as may be appropriate, including but not limited to affidavits, certified transcripts of testimony under oath, disclosures, written admissions and the like.
Certainly, where the framers of the Practice Book intended to do so, they were quite capable of distinguishing between affidavits and certified transcripts under oath, yet in Section 10-31 they limited the supporting material to affidavits when certain facts did not appear on the record.
It must be noted that, although both sides had the opportunity to request testimony regarding the Motion to Dismiss, neither side availed themselves of that opportunity.
In view of the exception contained in Section 10-31 of the Practice Book, it is the view of this Court that the Ct. Code of Evidence is modified, in this section of the Practice Book, by the allowance of affidavits. Therefore, the Court must review the applicable sections contained in the Practice Book for guidance.
Practice Book Section 13-31 provides for the use of depositions in Court Proceedings. Said rule provides, in relevant part, that:
. . . upon the hearing of a motion or an interlocutory proceeding, any part or all of a deposition, so far as admissible under the rules of evidence applied as though the witness were there present and testifying, may be used against any party who was present or represented at the taking of the deposition or who had reasonable notice thereof in accordance with any of the following provisions:
(3) The deposition of a party or of anyone who at the time of the taking of the deposition was an officer, director, or managing agent or employee or a person designated under Section 13-27(h) to testify on behalf of a public or private corporation, partnership or association or governmental agency which is a party may be used by an adverse party for any purpose.
All of the deposition and hearing testimony in question was developed in different cases, involving different issues. Neither TCI nor TRG were parties to the proceedings. Practice Book Section 13-31 does not allow the use of deposition transcripts against a party not present or represented at a deposition. Accordingly, both Motions to Strike are granted and the Court will consider the Motion to Dismiss without consulting the materials which have been stricken. See Robichaud v. Hewlett-Packard, Superior Court, complex litigation docket at Waterbury, Docket No. CV01 0165706S (October 25, 2002, Hodgson, J.).
B. Motion to Dismiss
A two-part inquiry is required when a nonresident or foreign defendant challenges the court's jurisdiction over it. First, the court must determine "whether the applicable long-arm statute authorizes the assertion of jurisdiction over the defendant." Knipple v. Viking Communications, Ltd., 236 Conn. 602, 606, 674 A.2d 426 (1996). If the statutory requirements are met, the court must then decide whether the exercise of personal jurisdiction would violate the constitutional principles of due process. Id.
The plaintiff has the burden to establish the existence of personal jurisdiction. Standard Tallow Corp. v. Jowdy, 190 Conn. 48, 54, 459 A.2d 503 (1983). "Conclusory allegations are not enough to establish personal jurisdiction." Harris v. Wells, 832 F.Sup. 31, 34 (D.Conn. 1993). Moreover, the court does not presume the truth of the plaintiff's allegations necessary to confer personal jurisdiction. Standard Tallow, supra, at 53. Nor may the plaintiff rely on general allegations that "all defendants committed tortious conduct." Those Certain Underwriters Subscribing to Policy No. 834/FB9700166 v. Wayne, Superior Court, complex litigation docket at Waterbury, Docket No. CV02 0173606S (June 17, 2003, Schuman, J.).
TRG is a foreign limited partnership. Therefore, in order to establish a basis for the exercise of personal jurisdiction over TRG, plaintiffs must prove that their causes of action arose from an act of TRG enumerated in the longarm statute applicable to foreign partnerships, General Statutes Section 52-59b(a). Under this statute:
As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any . . . foreign partnership . . . who in person or through an agent: (1) Transacts any business within the state; (2) commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; (3) commits a tortious act outside the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if such person or agent (A) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (B) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce; (4) owns, uses or possesses any real property situated within the state; or (5) uses a computer, as defined in subdivision (1) of subsection (a) of section 53-451, or a computer network, as defined in subdivision (3) of subsection (a) of said section, located within the state.
Plaintiffs argue that the Court may exercise long-arm jurisdiction over TRG, a foreign partnership, because it, "in person or through an agent . . . committed a tortious act within the state . . ." In support of this assertion, plaintiff's claim that they "specifically allege" in their Amended Complaint that "TRG and its affiliates filed, prosecuted, paid for and controlled litigation" and tried to "discourage Crate Barrel, an essential tenant, from locating at Blue Back Square." However, a review of the Amended Complaint suggests that the plaintiffs have made the same general allegations against all defendants and have not specifically alleged any tortious conduct against either TRG or TCI. These general allegations are insufficient to establish jurisdiction. Speter v. Shikowitz, Superior Court, Judicial District of Stamford/Norwalk at Stamford. Docket No. CV02 0188488S (Sept. 16, 2002, Karazin, J.). Further, group allegations that all defendants engaged in tortious conduct are not sufficient to establish longarm jurisdiction over a particular defendant. See Those Certain Underwriters, supra. Rather, plaintiffs must present jurisdictional facts as to each defendant.
Plaintiffs also argue that they may exercise jurisdiction over TRG because it is a partner in a Connecticut partnership, namely, WFA, and that the actions of WFA may be imputed to TRG. The acts of West Farms Associates and of West Farms cannot be deemed to be TRG's acts. By statute, TRG, as a partner of West Farms Associates, is its agent for the purpose of its business. See Conn. Gen Stat. Section 34-322. However, West Farms Associates (the partnership) is not, by statute, the agent of TRG (the partner). "A person who is a member or manager of a limited liability company is not liable, solely by reason of being a member or manager . . . for . . . liability of the limited liability company, whether arising in contract, tort, or otherwise . . ." Conn. Gen. Stat. Sec. 34-133(a). The New York cases cited by the plaintiffs do not apply to this case because the Connecticut statute has the specific wording cited above. Moreover, the only specified act of West Farms Associates alleged is that it "paid the cost" of the actions alleged in the Amended Complaint. It has been held that it is not independently tortious to finance another's litigation. AroCHEM International. Inc. v. Buirkle, 968 F.2d 266 (2d Cir. 1992).
TRG has submitted an affidavit indicating that it did not, in person or through an agent, engage in any of the acts enumerated in the longarm statute. While the review of this conclusory affidavit does not end the Court's inquiry, and is too self-serving to be overly persuasive, it remains for the plaintiffs to establish jurisdiction in the matter. See Lauria v. Mennes, Superior Court, Judicial District of Stamford/Norwalk at Stamford. Docket No. CV07 5003950 S (Oct. 2, 2007, Taggart, J.).
A further basis for the plaintiffs' claims against TRG appears to be that TRG owns a partnership interest in the partnership (West Farms Associates) that owns a membership interest in the limited liability company (West Farms) that owns Westfarms Mall. This fact, however, is insufficient to subject TRG to personal jurisdiction in Connecticut. Rather "each defendant's contacts with the forum State must be assessed individually," and the Court's inquiry is whether TRG engaged in activities within the state so as to confer jurisdiction, not whether any other defendant engaged in activities within the state. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 781 n. 13 (1984). Jurisdiction over a subsidiary cannot be leveraged into jurisdiction over the parent. Bucchere v. Briniker International, Inc., 49 Conn.Sup. 441, 446, 891 A.2d 1008 (2005). See Also Keeton, supra.
During oral argument, counsel for the plaintiff's Town and Town Council stressed the fact that jurisdiction is conferred on TRG because it committed a tort in Michigan which had effect in Connecticut. The tort alleged is the decision to proceed with the litigation and finance the prior litigation. There is also an allegation that TRG attempted to interfere with Crate Barrel, a prospective tenant of Blue Back Square. However, all of the allegations in this regard relate to all of the defendants. While the officers of some of the companies may be similar, it remains the burden of the plaintiffs to establish sufficient facts to establish jurisdiction in Connecticut.
Plaintiffs also suggest that the fact that defendants filed a Trade Name Certificate with the Town of Farmington in 1993 should be sufficient to prove that TRG was transacting business in Connecticut. However, "Jurisdiction is to be determined at the time of the service of the complaint." Connecticut Artcraft Corp. v. Smith, 574 F.Sup. 626, 630 (D.Conn. 1983). In November 2006, almost one year before the plaintiffs filed their complaint, TRG filed with the Secretary of State of Connecticut a certificate canceling its registration to do business in Connecticut. Therefore, plaintiff's argument in this regard must fail.
Plaintiffs have failed to establish that the Court has jurisdiction in this matter as to TRG pursuant to Conn. Gen. Stat. 52-59b(a).
TCI is a foreign corporation. Therefore, to establish personal jurisdiction over TCI, plaintiffs must prove that their causes of action arose from an act of TCI enumerated in the longarm statute applicable to foreign corporations, General Statutes Section 33-929(f). Under this statute:
Every foreign corporation shall be subject to suit in this state, by a resident of this state or by a person having a usual place of business in this state, whether or not such foreign corporation is transacting or has transacted business in this state and whether or not it is engaged exclusively in interstate or foreign commerce, on any cause of action arising as follows: (1) Out of any contract made in this state or to be performed in this state; (2) out of any business solicited in this state by mail or otherwise if the corporation has repeatedly so solicited business, whether the orders or offers relating thereto were accepted within or without the state; (3) out of the production, manufacture or distribution of goods by such corporation with the reasonable expectation that such goods are to be used or consumed in this state and are so used and consumed, regardless of how or where the goods were produced, manufactured, marketed or sold or whether or not through the medium of independent contractors or dealers; or (4) out of tortious conduct in this state, whether arising out of repeated activity or single acts, and whether arising out of misfeasance or nonfeasance.
The Amended Complaint does not specifically allege that TCI engaged in any of the enumerated acts. This fact, by itself is sufficient grounds for dismissal. Pitruzello v. Muro, 70 Conn.App. 309, 311, 798 A.2d 469 (2002).
The fact that TCI owns a partnership interest in the limited partnership (TRG) that owns a partnership interest in the partnership (West Farms Associates) that owns a membership interest in the limited liability company (West Farms) that owns the Westfarms Mall, is insufficient to subject TCI to personal jurisdiction in Connecticut. See Bucchere, supra, at 446.
The plaintiffs, it appears to the Court, are asking that the Court treat all of the defendants under the general umbrella of the Taubman Company. However, the law requires the plaintiffs to establish jurisdictional facts as to each defendant. After reviewing all of the appropriate affidavits, evidence and briefs submitted, the Court concludes that the plaintiffs have failed to establish the necessary jurisdictional requisites for TRG and TCI pursuant to the applicable statutes. The plaintiffs, therefore, have failed to sustain their burden. Accordingly, the Court grants the defendants TRG and TCI joint motion to dismiss.
In addition, the court finds that service on TRG was made on the Corporation Service Company. The Corporation Service Company, as established by affidavit and supporting documents, is not the authorized agent of TRG. The authorization for service was cancelled approximately one year prior to the service. Therefore, the service of process on TRG is insufficient and the Amended Complaint must be dismissed against it on this second ground. Conn. Gen. Stat. Section 52-59b(c).
III. CONCLUSION
Based upon the foregoing reasons, defendants TRG and TCI Joint Motion to Dismiss is granted.