Opinion
FSTCV196041622S
10-25-2019
AAA Advantage Carting & Demolition Service, LLC v. Joseph Capone
UNPUBLISHED OPINION
Judge (with first initial, no space for Sullivan, Dorsey, and Walsh):Krumeich, Edward T., J.
MEMORANDUM OF DECISION
KRUMEICH, J.
Defendant Joseph Capone has moved for summary judgment on the ground that the claim for statutory theft under C.G.S. § 52-564 is barred by the applicable statute of limitations, C.G.S. § 52-577. Plaintiff AAA Advantage Carting & Demolition Service, LLC ("AAA") has asserted that the accidental failure of suit statute, C.G.S. § 52-592, applies to preserve this action that otherwise would be barred by expiration of the limitations period. For the reasons stated below, the motion is denied.
The Standards for Deciding a Motion for Summary Judgment
"The standards ... [for] review of a ... motion for summary judgment are well established. Practice Book [§ 17-49] provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law ... In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party ... The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law ... and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact ... A material fact ... [is] a fact which will make a difference in the result of the case ..." DiPietro v. Farmington Sports Arena, LLC, 306 Conn. 107, 115-16 (2012), quoting H.O.R.S.E. of Connecticut, Inc. v. Washington, 258 Conn. 553, 558-60 (2001). (Citations omitted.)
"In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact. The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law. The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes" any real doubt as to the existence of any genuine issue of material fact ... As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent ..." Zielinski v. Kotsoris, 279 Conn. 312, 318 (2006).
Once the movant for summary judgment has satisfied the initial burden of showing the absence of a material issue of fact, the burden shifts to the opponent to establish that there is a genuine issue of material fact: "it is then ‘incumbent upon the party opposing summary judgment to establish a factual predicate from which it can be determined, as a matter of law, that a genuine issue of material fact exists." Iacurci v. Sax, 313 Conn. 786, 799 (2014), quoting Connell v. Colwell, 214 Conn. 242, 251 (1990).
The Accidental Failure of Suit Statute Applies to Toll the Statute of Limitations.
The Accidental Failure of Suit Statute, C.G.S. § 52-592, provides in pertinent part:
(a) If any action, commenced within the time limited by law, has failed one or more times to be tried on its merits ... because the action has been dismissed for want of jurisdiction ... the plaintiff ... may commence a new action ... for the same cause at any time within one year after the determination of the original action or after the reversal of the judgment ... (c) If an appeal is had from any such judgment to the Supreme Court or Appellate Court, the time the case is pending upon appeal shall be excluded in computing the time as above limited.
In this case plaintiff AAA has sued defendant for statutory theft pursuant to C.G.S. § 52-564 for removal of $17,000 from a bank account belonging to plaintiff. The background of the previous case between the two members of AAA was explained by the Appellate Court in Bongiorno v. Capone, 185 Conn.App. 176 (2018). In that case Judge Tierney accepted the report of an attorney trial referee and entered judgment in favor of Mr. Bongiorno based on defendant’s removal of the funds from the AAA account. See Bongiorno v. Capone, 2017 WL 1194761 *6 (Conn.Super. 2017) (Tierney, J.T.R.). The Appellate Court affirmed the breach of contract award based on removal of funds from the account, but reversed the statutory theft judgment on jurisdictional grounds for lack of standing because the account belonged to AAA, a limited liability company which is a separate entity from its members, not Mr. Bongiorno as an individual member. 185 Conn.App. at 197-98, 200-01.
On September 7, 2012, the parties executed a settlement agreement, which expressly incorporated the term sheet and its provisions. The settlement agreement provided that, upon its execution, the plaintiff would purchase from the defendant, and the defendant would sell to the plaintiff, the defendant’s 50 percent interest in the company for the purchase price of $200,000, and that upon the delivery of the purchase price to the defendant, he would execute and deliver to the plaintiff an assignment of his membership interest, irrevocably transferring his 50 percent interest in the company to the plaintiff. The settlement agreement further provided that the defendant would deliver certain specific property to the plaintiff at the time of transfer, or as soon as possible thereafter. The settlement agreement provided that, immediately following the transfer of his membership interest, the defendant would have no ownership or any other interest in the company and no authority to act on the company’s behalf, and that he would be deemed to have resigned from any and all positions within the company. The settlement agreement also included provisions as to mutual special releases and remedies. The parties released each other from any and all actions against each other relating to the company, except with respect to any breach of the settlement agreement or the term sheet. The parties agreed that, should a party breach the settlement agreement or the term sheet, the nonbreaching party would not be prohibited from pursuing or being entitled to available redress, including the recovery of damages. On August 29, 2012, the day after the binding term sheet was signed, the defendant withdrew $17,000 from a checking account owned by the company. On September 7, 2012, the parties executed the settlement agreement, and the defendant signed an assignment of membership interest, conveying all of his rights, title and interest in his 50 percent membership interest in the company to the plaintiff in exchange for the purchase price of $200,000." Bongiorno, 185 Conn.App. at 180-85 (footnotes omitted). "The plaintiff and the defendant are brothers-in-law. For many years, both owned 50 percent interests in the company ... In 2012, however, they decided to end their business relationship. To that end, the plaintiff and the defendant signed two documents by which they agreed that the defendant would convey his 50 percent interest in the company to the plaintiff for the sum of $200,000. The parties first signed a ‘binding term sheet’ on August 28, 2012, which provided that the plaintiff would purchase the defendant’s interest in the company for $200,000, and that their agreement to make purchase and sale became enforceable on that date. Pursuant to the term sheet, the parties agreed to execute a ‘settlement agreement’ no later than September 7, 2012, at which time the plaintiff would pay the defendant the agreed upon purchase price, and the defendant would convey his 50 percent interest in the company to the plaintiff. Although the term sheet did not specifically define what was to be included in the company’s assets as of that date, August 28, 2012, it did specify that the defendant’s attorneys were to send to the plaintiff’s attorneys a list of all of the defendant’s personal property then located in the company offices, that the defendant must remove such property by September 1, 2012, and that the defendant must remove all confidential or trade secret information of the company from his personal files. The term sheet did not include a reference to any checking account belonging to the company.
Defendant asserts that, for the same reason that Mr. Bongiorno lacked standing, AAA cannot take advantage of the Accidental Failure of Suit statute to preserve the statutory theft claim that otherwise would be barred under the three-year statute of limitations of C.G.S. § 52-577 because C.G.S. § 52-592 is limited to "the plaintiff ... [who] may commence a new action ... for the same cause" and AAA was not plaintiff in the first action, Mr. Bongiorno was the plaintiff.
Two Superior Court decisions support defendant’s position. In Wise v. City of Stamford, 1992 WL 24357 *2 (Conn.Super. 1992) (Flynn, J.), Judge Flynn granted a motion to strike a claim despite the savings statute based on the statutory language holding "[f]or this plaintiff to avail herself of § 52-592, she must have been the plaintiff in the new action." In Star Net Insurance Co. v. Southern Connecticut Restoration, LLC, 2018 WL 4523952 *3-4 (Conn.Super. 2018) (Blue, J.), Judge Blue granted a summary judgment motion to dismiss a claim to collect a debt as barred under the six-year contract statute of limitations of C.G.S. § 52-576 and held an action to collect the debt by plaintiff was not saved by a prior action to collect the same debt by an affiliated corporation. Judge Blue held that C.G.S.
§ 52-592 was inapplicable because the decision to substitute one plaintiff for the other in the original action was not an "accident" in that it was "neither unexpected nor unintended" but a deliberate decision to switch plaintiffs to an entity who lost on the merits because it was not creditor on the debt.
In Apex Power Sports, LLC v. Scarpa, 2016 WL 888397 *1 (Conn.Super. 2016) (Lager, J.) , Judge Lager faced a similar fact situation in which a 50% member of a limited liability company was found to lack standing to pursue the company’s claims against the other 50% member. Judge Lager declined to grant summary judgment to dismiss a subsequent suit by the company on the same claim concluding there was a genuine issue of fact as to the identity of the parties required by C.G.S. § 52-292 citing the Supreme Court’s decision in Isaac v. Mount Sinai Hospital, 210 Conn. 721, (1989):
In Isaac v. Mount Sinai Hospital, supra, 210 Conn. at 733, the Supreme Court concluded "that total identity of plaintiffs is not a prerequisite to the application of the statute." Section 52-592(a) may apply if the change in parties "is merely nominal or the interest represented in the renewed action is identical with that in the original action." ... The controlling-determinations are "the essence" of the original plaintiff’s status and the interest that the original plaintiff represented.
Judge Lager commented that "[t]his is a case where the court cannot determine whether the identity of parties, which is one prerequisite to the remedial application of § 52-592, is satisfied because there is a factual vacuum." 2016 WL 888397 *2.
The leading case is Isaac, 210 Conn. at 728, in which the Supreme Court stressed the liberality of interpretation applied to this savings statute: "[w]e have consistently held that our accidental failure of suit statute, General Statute’s 52-592, is remedial and is to be liberally interpreted.’ Ross Realty Corporation v. Surkis, 163 Conn. 388, 393, 311 A.2d 74 (1972) ..." The Supreme Court in Isaac quoted and adopted Judge Cardozo’s opinion in Gaines v. New York, 215 N.Y. 533, 540 (1915):
In Gaines v. New York, supra, 215 N.Y. at 539, 109 N.E. 594, the original action had been brought to a court that lacked subject matter jurisdiction. In upholding the maintenance of the plaintiff’s subsequent suit under the savings statute Judge Cardozo said: "The [saving] statute is designed to insure to the diligent suitor the right to a hearing in court till he reaches a judgment on the merits. Its broad and liberal purpose is not to be frittered away by any narrow construction. The important consideration is that by invoking judicial aid, a litigant gives timely notice to his adversary of a present purpose to maintain his rights before the courts." Id. We, likewise, decline to "fritter away" the strong remedial purpose of our saving statute, § 52-592. 210 Conn. at 733.
The Isaac Court held that "total identity of plaintiffs is not a prerequisite to application of the statute." Id. at 732.
The defendants Mt. Sinai Hospital, St. Francis Hospital and Richard B. Weltman also briefed the argument that § 52-592 is inapplicable because the plaintiff in the first suit is not the same plaintiff as in the subsequent suit. They claim that the person actually bringing the first suit was Deborah Isaac, individually, as opposed to Deborah Isaac, administratrix, who brought the second suit. It is difficult to conceive of a closer identity of interest than that found in this case. The defendants’ argument ignores the fact that the named plaintiff in each case was "Deborah Isaac, Administratrix." The fact that Deborah Isaac in the first case was not, in fact, the administratrix of the estate of Redgnard Isaac does not destroy the identity of interest but merely paves the way for the plaintiff’s invocation of § 52-592. "[A] change of parties does not preclude an application of [a saving] statute where the change is merely nominal or the interest represented in the renewed action is identical with that in the original action." 51 Am.Jur.2d, Limitations of Actions § 318. In light of the remedial purpose of § 52-592, we conclude that total identity of plaintiffs is not a prerequisite to application of the statute. We look, instead, to the essence of the plaintiff’s status and the interest she represented. Deborah Isaac was the purported administratrix of Redgnard Isaac’s estate in the first instance and the actual administratrix in the second case. The cause of action and the claimed factual background, as well as all defendants, were identical in both instances. Accordingly, application of § 52-592 to this case is not precluded. 210 Conn. at 732-33.
Looking at "the essence of plaintiff’s status and the interest [it] represented" the Court concludes, as in Isaac, 210 Conn. at 733, "[t]he cause of action and the claimed factual background, as well as defendants, were identical in both instances." The crux of the claim in both cases was the unauthorized removal of $17,000 from AAA’s account. Defendant was on notice of the claim against him within the statute of limitations so the purpose of that statute was satisfied. Thus, this is not a case where application of the savings statute would "render statutes of limitation virtually meaningless," Skibeck v. Avon, 24 Conn.App. 239, 243 (1991), as defendant argued.
Defendant submitted an affidavit on this motion to which was appended a copy of an unsuccessful motion to cite AAA into the original action after the appeal had been decided, that was denied by Judge Genuario as outside the scope of remand. Both parties referred the Court to the history of the first case and undisputed facts as to the parties and claims therein reflected in the written decisions of the trial and appellate courts cited above. Unlike Judge Lager in Apex, 2016 WL 888397 *2, this Court was not faced with a "factual vacuum" but could conduct the analysis outlined in Isaac, 210 Conn. at 732-33, based on the undisputed facts presented by the parties.
Clearly, the policies barring stale claims that underlay statutes of limitation may be implicated where the second suit is against a different defendant, as in Davis v. Toys R Us-Delaware, 2008 WL 5481591 *2 (Conn.Super. 2008) (Robinson, J.), which inherently raises different issues concerning defendant’s notice of claim and ability to marshal a defense as opposed to a suit where the same cause of action is alleged against the same defendant, albeit with a different but related plaintiff. However, in the proper case, where there is sufficient "identity of interest" between the parties, suit against a different defendant will not preclude application of C.G.S. § 52-592. See Contadini v. Devito, 71 Conn.App. 697, 702 (2002).
The dismissal of the first case on appeal, after Mr. Bongiorno had prevailed at trial, for lack of standing was a matter of form, not a disposition on the merits, which is precisely the sort of claim C.G.S. § 52-592 was designed to save from expiration of the limitations period while the first suit is litigated. Although the plaintiffs in the two actions are different persons "the interest represented in the renewed action is identical with that in the original action." Id. at 733 (citation omitted). In Issac the Court observed "[i]t is difficult to conceive of a closer identity of interest than that found in this case," id. at 732; the same could be said here: in a suit between two 50% members of AAA, who other than Mr. Bongiorno could pursue this claim against his co-member? By statute a member of a limited liability company who may not sue in his individual capacity, may bring a derivative claim on behalf of the company. See Scarfo v. Snow, 168 Conn.App. 482, 500-01 (2016). The mistake Mr. Bongiorno made was to make a direct claim in the original action rather than a derivative claim on behalf of AAA, a mistake he rectified in this action. This satisfied the requirement that "the prior suit failed ‘in circumstances such as mistake, inadvertence or excusable neglect.’" Estela v. Bristol Hospital, Inc., 179 Conn.App. 196, 207 (2018), quoting Ruddock v. Burrowes, 243 Conn. 569, 577 (1998). Consistent with the "broad construction" given this remedial statute, see Contadini, 71 Conn.App. at 700, the Court concludes that C.G.S. § 52-592(a) applies and the suit is not barred by C.G.S. § 52-577.
"A limited liability company is a distinct legal entity whose existence is separate from its members ... A limited liability company has the power to sue or be sued in its own name: ... or may be a party to an action through a suit brought in its name by a member ... A member may not sue in an individual capacity to recover for an injury the basis of which is a wrong to the limited liability company." Scarfo, 168 Conn.App. at 501, quoting Wasko v. Farley, 108 Conn.App. 156, 170 (2008) (emphasis added).
The motion for summary judgment is denied.