Opinion
No. 399294
January 8, 2004
MEMORANDUM OF DECISION
On December 18, 2003, the court denied the defendant's motion to open the judgment and denied the defendant's motion for a protective order to prevent the plaintiff from executing on its judgment against debts due the defendant from the defendant's third-party customers. This memorandum articulates the basis for the court's denial of the protective order.
This was an application to confirm an arbitration award of $788,605.00. It was tried together with another application filed by the plaintiff in this judicial district (Docket No. CV 02 390363) seeking to vacate an arbitration award to the defendant in the amount of $800,000 plus interest.
The plaintiff's application to vacate the arbitration award in favor of the defendant was hotly contested. This application was not. At the hearing on the applications, held on February 20, 2003, the defendant's attorney stated with respect to the application to confirm: "[A]s much as we disagree with it, there are no — there are no statutory bases for us to challenge it, and we don't. Toward the conclusion of the hearing, the defendant's attorney further stated: "My only request, Your Honor, would be that you hold off confirming [the plaintiff's] part of the award until you issue the decision on our part of the award, because the monies are about a wash. I'm assuming that you'll rule in our favor which, of course, we hope you will, because at the end of the day it's going to be a wash."
On April 23, 2003, however, the court issued a memorandum of decision granting the plaintiff's application to vacate the arbitration award in favor of the defendant in Docket No. CV 02 390363 [ 34 Conn. L. Rptr. 545]. That same day, the court issued an order in this file stating that the application to confirm was granted. On May 2, 2003, the plaintiff filed a motion for judgment confirming the arbitration award. On May 19, 2003 that motion was granted by the court.
The memorandum of decision granting the plaintiff's application to vacate in Docket No. 02 329294, stated: "The WPCA [plaintiff] brought an application to confirm the arbitrator's award on its counterclaim. The parties agree that the application to confirm, which is the subject of another proceeding, may be granted."
The defendant did not appeal the judgment of the court granting the application to vacate the award. The plaintiff thereupon sought to execute the judgment in its favor on third-party customers of the defendant.
On September 23, 2003, the defendant filed a motion seeking protective order against the plaintiff's attempts to execute its judgment on the defendant's customers. The motion, which purports to be based on General Statutes § 52-400a, alleges: "(a) that the arbitration . . . is still unresolved, and WPCA continues to face an indebtedness of $800,000 plus interest to PSG; (b) that PSG is willing to post a bond to satisfy any legitimate claims; (c) that this attempted third party execution against PSG's customers will cause embarrassment and undue burden and expense (including a proposed $118,296 in marshal's fees) and (d) in light of PSG's longstanding presence in Connecticut, this third party execution is totally unnecessary to secure any debt that may ultimately be owing by PSG to WPCA." In its motion, the defendant also sought permission, pursuant to General Statutes § 52-380f, to substitute a cash bond to secure the judgment in this matter "until such time as the pending matters between [the defendant] and [the plaintiff] are resolved."
General Statutes § 52-400a provides:
(a) On motion of a judgment debtor or third person from whom discovery is sought, and for good cause shown, or on its own motion, the court may make any order which justice requires to protect such debtor or third person from annoyance, embarrassment, oppression or undue burden or expense.
(b) On motion of a judgment debtor alleging that the judgment creditor is engaged in any illegal levy or in any other practices for the purpose of collecting his judgment which violate state or federal law, or on its own motion, the court may render such protective order as justice requires.
(c) On motion of the judgment debtor or an interested third person, the court may direct the order of execution against specified property of the judgment debtor.
The defendant is not entitled to relief under General Statutes § 52-400a. First the plaintiff is not seeking discovery within the ambit of subsection (a) of that statute. Second, there has been no showing that the plaintiff is engaged in an illegal levy or other illegal practice within the meaning of subsection (b). Finally, the plaintiff has not specified property to which the court may limit the execution, as provided in subsection (c) of General Statutes § 52-400a.
The defendant's reliance on General Statutes § 52-380f as a basis for its request that it be allowed "to substitute a cash bond to secure the subject judgment" is inapposite. General Statutes § 52-380f provides for the discharge of a judgment lien which "covers more than sufficient property to reasonably secure the judgment." A judgment lien is a statutorily prescribed document. A judgment lien on real property is "placed on any real property by recording, in the town clerk's office in the town where the real, property lies, a judgment lien certificate" pursuant to General Statutes § 52-380a. A judgment lien against personal property is filed with the secretary of state pursuant to General Statutes § 52-355a. The execution sought by the plaintiff is not a judgment lien within the meaning of General Statutes § 52-380f. See generally Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 260 Conn. 766, 773-74 (2002); Community Progress, Inc. v. White, 187 Conn. 128, 131 (1982); City National Bank v. Stoeckel, 103 Conn. 732, 737 (1926); Staples v. Hendrick, 89 Conn. 100, 102 (1915); see also General Statutes §§ 52-380a, 52-356a, 52-261. For the same reasons, General Statutes § 52-380e, which provides for the substitution of a bond with surety for a lien against real or personal property, is inapplicable.
General Statutes § 52-380f provides: "Any person interested, as a subsequent encumbrancer or otherwise, in any real or personal property covered by a judgment lien may apply to the court for discharge of the lien as to a portion of the property, alleging that the lien covers more than sufficient property to reasonably secure the judgment. The court may, on notice to all interested parties and on proof of such allegation, discharge from the lien any of the property which is not needed for the reasonable security of the judgment debt. The judgment creditor shall release any property so discharged by sending a release sufficient under section 52-380d by first class mail, postage prepaid, to the judgment debtor."
General Statutes § 52-380e provides: "When a lien is placed on any real or personal property pursuant to section 52-355a or 52-380a, the judgment debtor may apply to the court to discharge the lien on substitution of (1) a bond with surety or (2) a lien on any other property of the judgment debtor which has an equal or greater net equity value than the amount secured by the lien. The court shall order such a discharge on notice to all interested parties and a determination after hearing of the sufficiency of the substitution. The judgment creditor shall release any lien so discharged by sending a release sufficient under section 52-380d by first class mail, postage prepaid, to the judgment debtor."
Notwithstanding the inapplicability of these statutes, the court recognizes that it has inherent powers with respect to executions. "While a court ordinarily will not interfere with the right of a judgment creditor to collect his debt, courts have a general supervising control over the processes of execution, and for the purpose of preventing injustice, an execution is within the inherent, equitable control of the court. 30 Am.Jur.2d, Executions § 3; Reisinger v. Magee, 158 Pa. 280; Markofski v. Yanks, 297 Pa. 74. And equity will interfere if it appears that the execution would be against good conscience. Smoot v. Judd, 161 Mo. 673; 30 Am.Jur.2d, Executions § 637. If the judgment debtor discloses to the court some compelling reason why the judgment should not be enforced against him at the present time and offers to establish allegations made by him upon resort to some independent proceedings, the debtor should be allowed to establish his claim therein. Wiggin v. Janvrin, 47 N.H. 295." Goodlatte v. Liberty Mutual Ins. Co., 27 Conn. Sup. 382, 385, 239 A.2d 546 (1967).
However, there has been no showing that injustice or inequity would befall the defendant if the plaintiff is permitted to execute on its judgment now. A judgment is the highest form of debt. Platts v. Pacific Federal Savings, 62 Idaho 340, 351, 111 P.2d 1093 (1941) (Givens, J., dissenting in part, concurring in part). The arbitration of the claim that the defendant has against the plaintiff may, as the present controversy has demonstrated, take a good deal of time to resolve and may again fail to resolve in favor of the defendant. The bond that the defendant is willing to post would not satisfy the plaintiff's judgment now but, rather, would secure it for future satisfaction. The embarrassment that the defendant has suffered as a result of executions being served on its customers is an unfortunate but hardly unusual consequence of a creditor's attempts to satisfy a judgment. While the court will intervene where a creditor engages in conduct primarily for the purpose of embarrassing a debtor; General Statutes § 52-400a(c); Suffield Development Associates, Ltd Partnership v. National Loan Investors, L.P., supra, 260 Conn. 772-77; there is no showing that such is the case here. Finally, there is no claim that the defendant cannot now satisfy the judgment if it wishes to do so without substantially interrupting its ability to do business.
For these reasons, the motion for protective order is denied.
BY THE COURT BRUCE L. LEVIN, JUDGE OF THE SUPERIOR COURT.