Opinion
No. FBT-CV09-4027552S
November 10, 2009
MEMORANDUM OF DECISION
FACTS
Before the court is the defendant Alan Sorkin's motion to open the judgment entered on March 2, 2009, granting the plaintiff Devore Associates, LLC's application to compel arbitration. The following facts and procedural history are relevant to the motion to open. The application claims that on August 31, 2005, the plaintiff entered into a written agreement to perform landscape architectural services for the defendant for a fee. The agreement contained an arbitration clause: "If a claim, dispute or other matters in question between the parties to this agreement arise out of or relate to this agreement of the breach thereof, the parties agree to endeavor to obtain settlement in an amicable manner by recourse to mediation or arbitration under the applicable rules of the American Arbitration Association [the arbitration association], or by other mutually agreed to means. If arbitration becomes necessary, the award rendered by the arbitrators shall be final and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof." Thereafter, a fee dispute developed between the parties. On May 9, 2008, the plaintiff initiated an arbitration proceeding with the arbitration association. The defendant submitted a response on May 27, 2008 in which he admitted to the execution of the agreement between them and filed a counterclaim for damages. The parties agreed to attempt to settle the matter by mediation. On October 10, 2008, the parties attended a mediation session but failed to settle. On that same date, the plaintiff attempted to obtain a date for the arbitration hearing. The arbitration association assigned an arbitrator, who endeavored to conduct a prehearing conference to set the discovery and hearing schedule. The defendant refused to participate in that hearing. The defendant claims that he is not obligated to proceed with the arbitration but instead "will be proceeding in [the courts in New York]. He disputes all of the clauses in the purported contract" and notes that the clause regarding arbitration states that the dispute will be by recourse to mediation or arbitration, not to both.
On February 2, 2009, the plaintiff filed an application for an order by the court to compel arbitration. The application alleges, inter alia, that the defendant "has neglected and refused to perform the agreement for arbitration, although [the plaintiff] is ready and willing to perform . . ." Submitted with the plaintiff's application is the state marshal's attested copy of service of process on the defendant on February 9, 2009. The marshal states: "I made service . . . upon the defendant . . . by leaving a true and attested copy of the original Application for Order to Compel/Proceed with Arbitration, Unsigned Order, Order for Hearing, Unsigned Summons for Hearing . . . in the office of the Secretary of the State of Connecticut . . . And Afterwards, in Trumbull . . . I made further service upon [the defendant] by depositing in a U.S. Post Office, a letter, postage paid, certified return receipt requested . . . directed to Alan M. Sorkin, 25 High Meadows Road, Mt. Kisco, NY 10549." On March 2, 2009, the application was granted and a default judgment was entered against the defendant by the court.
The defendant filed an appearance on April 7, 2009, as evidenced by the date stamped on it.
On May 18, 2009, the defendant filed a motion to open the judgment on the ground that, pursuant to General Statutes § 52-59b(a) the long-arm statute, the court did not have personal jurisdiction over him when it granted the default judgment on the plaintiff's application to compel arbitration. In support of his motion, the defendant filed a memorandum of law and a copy of Alan Sorkin's sworn affidavit. On June 26, 2009, the plaintiff filed a memorandum in opposition. On June 29, 2009, the defendant filed a reply memorandum and submitted a copy of the sworn affidavit of Diane Devore, the sole member of the plaintiff's limited liability corporation. The motion was before the court on August 10, 2009.
DISCUSSION
A motion to open a default judgment that has been rendered is governed by Practice Book § 17-43 and General Statutes § 52-212. These two essentially mirror each other. Section 17-43 provides: "(a) Any judgment rendered or decree passed upon a default or nonsuit may be set aside within four months succeeding the date on which notice was sent, and the case reinstated on the docket on such terms in respect to costs as the judicial authority deems reasonable, upon the written motion of any party or person prejudiced thereby, showing reasonable cause, or that a good cause of action or defense in whole or in part existed at the time of the rendition of such judgment or the passage of such decree, and that the plaintiff or the defendant was prevented by mistake, accident or other reasonable cause from prosecuting or appearing to make the same. Such written motion shall be verified by the oath of the complainant or the complainant's attorney, shall state in general terms the nature of the claim or defense and shall particularly set forth the reason why the plaintiff or the defendant failed to appear. The judicial authority shall order reasonable notice of the pendency of such written motion to be given to the adverse party, and may enjoin that party against enforcing such judgment or decree until the decision upon such written motion . . ." Section 52-212 provides: "(a) Any judgment rendered or decree passed upon a default or nonsuit in the Superior Court may be set aside, within four months following the date on which it was rendered or passed, and the case reinstated on the docket, on such terms in respect to costs as the court deems reasonable, upon the complaint or written motion of any party or person prejudiced thereby, showing reasonable cause, or that a good cause of action or defense in whole or in part existed at the time of the rendition of the judgment or the passage of the decree, and that the plaintiff or defendant was prevented by mistake, accident or other reasonable cause from prosecuting the action or making the defense. (b) The complaint or written motion shall be verified by the oath of the complainant or his attorney, shall state in general terms the nature of the claim or defense and shall particularly set forth the reason why the plaintiff or defendant failed to appear. (c) The court shall order reasonable notice of the pendency of the complaint or written motion to be given to the adverse party, and may enjoin him against enforcing the judgment or decree until the decision upon the complaint or written motion."
Practice Book § 17-42 sets forth the procedure for a motion to open a default where the judgment has not been rendered; Lawton v. Weiner, 91 Conn.App. 698, 711 n. 8, 882 A.2d 151 (2005); and Practice Book § 17-32 sets forth the procedure allowing a defendant who has been defaulted for a failure to plead before a judgment has been rendered, to set aside the default by filing an answer. In the present case, the court granted the plaintiff's application to compel arbitration pursuant to Connecticut General Statutes § 52-410, and that order became a final judgment. See Dewart v. Northeastern Gas Transmission Co., 139 Conn. 512, 514 (1953). As such, § 17-43 applies.
"In deciding a motion to open a judgment of default pursuant to § 52-212, the court must use a two-prong test. Tsitardis v. Tsitardis, 100 Conn.App. 115, 118-19 [ 916 A.2d 877] (2007). To qualify for relief from [a] default judgment: (1) there must be a showing that a good defense, the nature of which is set forth in the motion, existed at the time that judgment was rendered and (2) the party seeking to set aside the judgment must have been prevented from making the defense because of mistake, accident, or other reasonable cause." A. Secondino Son, Inc. v. LoRicco, 19 Conn.App. 8, 13 [ 561 A.2d 142] (1989).
"It is established that under the second prong of the test set forth in § 52-212 that a defendant seeking to reopen a default must make a showing that the defense [used to satisfy the first prong] was not at that time raised by reason of mistake, accident or other reasonable cause. Eastern Elevator Co. v. Scalzi, 193 Conn. 128, 131 [ 474 A.2d 456] (1984); Rino Gnesi Co. v. Abriglio, 83 Conn.App. 707, 712 [ 850 A.2d 1118] (2004). In making that determination, `[n]egligence is no ground for vacating a judgment and the denial of a motion to open a default judgment should not be held an abuse of discretion where the failure to assert a defense was the result of negligence.' McCarthy v. Ward Leonard Electric Company, CT Page 18335 104 Conn.App. 535, 546 [ 935 A.2d 189] (2007), quoting from Woodruff v. Riley, 78 Conn.App. 466, 471 [ 827 A.2d 743] cert. denied, 266 Conn. 922 [835 A.2d 474] (2003)." (Internal quotation marks omitted.) Jackson v. Bridgeport, Superior Court, judicial district of Fairfield, Docket No. CV97 0347984 (July 18, 2008, Arnold, J.).
"Although §§ 52-212 [opening a judgment upon default] and 52-212a [opening a civil judgment] normally limit the authority [of the trial court] to open judgments to a four month period, these statutes do not preclude the opening of a default judgment that is rendered without jurisdiction over a defendant. The prefatory words of § 52-212a establish that the four month limitation only operates [u]nless otherwise provided by law . . . As a matter of law, in the absence of jurisdiction over the parties, a judgment is void ab initio and is subject to both direct and collateral attack." (Internal quotation marks omitted.) Wilkinson v. Boats Unlimited, Inc., 236 Conn. 78, 83-84, 670 A.2d 1296 (1996). "A trial court's authority to open such judgments does not arise from . . . § 52-212(a) or from Practice Book [ § 17-43] but from its inherent power to open a judgment rendered without jurisdiction." General Motors Acceptance Corp. v. Humphrey, 13 Conn.App. 223, 228, 535 A.2d 396 (1988). In other words, a court always has the inherent authority to open a judgment by default, irrespective of the four-month rule in § 17-43 and § 52-212(a), if the judgment was rendered without jurisdiction over the parties. Id.
In the present case, the defendant moved to timely open the judgment on May 18, 2009, within four months of the default judgment entered on March 2, 2009, on the ground that the court lacked personal jurisdiction over him under § 52-59b(a). He argues in his memorandum that he did not respond to the application to compel arbitration since the Connecticut court had no personal jurisdiction over him, and, therefore, any judgment rendered against him would be deemed invalid. He further argues that because the plaintiff has not alleged that he transacted business in Connecticut, that he committed a tortious act within the state of Connecticut, that he owns, uses, or possesses real property within the state, or that the action arises out of his use of a computer within the state, the courts lacked jurisdiction over him under the long-arm statute § 52-59b(a) Additionally, the defendant asserts that the language of the arbitration clause is too vague and leaves "to the will of the parties whether to submit to arbitration."
In response, the plaintiff counters that where facts are in dispute such as whether the defendant has sufficient contacts with Connecticut to be brought into court under the long-arm statute, an evidentiary hearing must be held. The plaintiff also argues that the defendant's failure to appear in court to contest jurisdiction is not a good cause to open the judgment because the defendant's "choice not to appear and contest jurisdiction before the hearing was simply negligence," and "negligence is no ground for vacating a judgment." The plaintiff further argues that the arbitration clause "is clear and unambiguous in that it requires [the defendant] to arbitrate," and "even if the language were ambiguous, [the defendant] waived the right to contest arbitration by his active [participation] in the [arbitration association's] proceedings."
Subsequently, the defendant in his reply memorandum reiterated that the plaintiff has pleaded no facts which confer long-arm jurisdiction over him and, on that basis alone, the motion to open should be granted. The defendant points out that, based on Diane Devore's sworn affidavit, submitted with his reply memorandum, she attests that she met with the defendant in New York, that the contract was prepared in Connecticut, that she mailed it to his residence in New York where he signed it, and that she participated in numerous meetings in New York and conducted site meetings in New York, in contrast to his conduct with Connecticut that was limited to returning the contract to Connecticut by mail, exchanging emails and paying the bills to an address in Connecticut. He, therefore, maintains that, as sworn to by Ms. Devore, no facts show that he was "conducting business in Connecticut, engaging in any form of conduct conferring jurisdiction under the long arm statute, or acting in any way such that an exercise of long-arm jurisdiction would satisfy due process." The defendant posits that the reason why the plaintiff seeks arbitration in Connecticut is to avoid New York law which prohibits mandatory arbitration clauses in consumer contracts, such as the one he entered into with the plaintiff.
The court will first address whether there existed a good defense at the time of the rendition of the judgment by default against the defendant. Section 52-59b provides in relevant part: "(a) As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nonresident individual . . . 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."
If "the applicable long-arm statute authorizes the assertion of jurisdiction over the defendant] . . . [the court's] 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, 236 Conn. 602, 606, 674 A.2d 426 (1996).
The defendant contests that he transacted any business in Connecticut as required under 52-59b and had any sufficient contacts in Connecticut to confer jurisdiction. "The term `transacting business,' as used in § 52-59b(a)(1), is not broadly interpreted in Connecticut . . . Several factors are relevant to the consideration of whether an out-of-state defendant has `transacted business' in Connecticut, including: (1) whether the defendant has an on-going contractual relationship with a [Connecticut] corporation; (2) whether the contract was negotiated or executed in [Connecticut] and whether, after executing a contract with a [Connecticut] business, the defendant visited [Connecticut] for the purpose of meeting with parties to the contract regarding the relationship; (3) what the choice-of-law clause is in any such contract; and (4) whether the contract requires franchisees to send notices and payments into the forum state or subjects them to supervision by the corporation in the forum state." (Citations omitted; internal quotation marks omitted.) Vertrue, Inc. v. Meshkin, 429 F.Sup.2d 479, 489-90 (D.Conn. 2006).
"All factors are relevant, however, no one factor is dispositive; the ultimate determination is based on the totality of the circumstances . . . A court must consider the totality of the circumstances when determining the existence of purposeful activity, and may not subject the defendant to jurisdiction based on `random,' `fortuitous,' or `attenuated' contacts . . . Although a single purposeful business transaction might be sufficient to confer jurisdiction, courts generally do not apply a rigid formula but balance considerations of public policy, common sense, and the chronology and geography of the irrelevant factors . . . Courts should examine the nature and quality, rather than the amount of Connecticut contacts to determine whether there was purposeful activity . . . The inquiry focuses on whether the defendant engaged in some purposeful activity here . . . in connection with the matter in suit." (Citations omitted; internal quotation marks omitted.) Vertrue, Inc. v. Meshkin, supra, 429 F.Sup.2d 490. In Vertrue, the court concluded that the defendant's "two, day-long business trips to Connecticut and numerous phone conversations, e-mails, mail and facsimile transmissions over an extended period of time for the purpose of negotiating, entering into and carrying out an agreement with a Connecticut corporation certainly qualifi[ed] as `transacting business.'" Id., 491.
In his affidavit the defendant attests to the following: he is a resident of and employed in New York, he neither owns nor does he conduct business in Connecticut, he retained the plaintiff to design a pool and perform some landscaping for his New York home, all of the work took place in New York and the dispute over fees arose from it, he did not respond to papers received by him in the mail from the state of Connecticut court on the advice of his counsel who told him that Connecticut had no personal jurisdiction over him, he brought a lawsuit in New York to resolve this dispute and retained new counsel, he is appearing now to contest jurisdiction over him, and he believes that the present action was commenced in bad faith since he never set foot into the state of Connecticut for purposes of "the Devore engagement."
In addition, the defendant submitted Diane Devore's affidavit that she had filed in support of her motion to compel arbitration in "the related matter pending before the United States District Court for the Southern District of New York." Therein, she attested to the following: her business is located in Connecticut, she is licensed to do business in both New York and Connecticut, she met with the defendant and his wife in New York to discuss the project for the property located in New York, she prepared a contract and mailed it from her Connecticut office to his New York home, in order to perform the work, she made telephone calls from her office to government agencies, consultants in New York and consultants hired from Connecticut to assist in performing structural engineering and drawings, she participated in numerous meetings in New York with consultants hired by the plaintiff, she prepared bid packages to construction companies located in New York and Connecticut, she arranged for municipal approval applications to be obtained, prepared and submitted in New York but the work to do that was performed primarily in Connecticut over the telephone, internet and mail, and she prepared and mailed bills from Connecticut to the plaintiff in New York.
The fact that the contract required the defendant to mail payments to the plaintiff's Connecticut address "is not sufficient to establish performance of a contract under this state's long arm statute." Santa Buckley Energy v. Blue Sky Holdings, Inc., Superior Court, judicial district of Fairfield, Docket No. CV 09 5021606 (May 27, 2009, Bellis, J.).
Even assuming the defendant satisfied the first prong for opening a motion for default, this would not end the court's inquiry. To open a judgment by default, the court must determine not only that the defendant has asserted a valid defense, but also that the defense was not at that time raised by reason of mistake, accident or other reasonable cause. The defendant has glossed over this prong, and has provided no case law or argument to establish any reasonable cause, other than to argue that there is a valid defense.
In Rowe v. Goulet, 89 Conn.App. 836, 875 A.2d 564 (2005), the court denied the motion to open under Practice Book § 17-42 on the ground that no good cause could be shown by the defendant. The court stated that a default should not be opened "when the defendant admits that he received actual notice and chose to disregard the court's authority . . . Negligence is no ground for vacating a judgment, and it has been consistently held that the denial of a motion to open a default judgment should not be held an abuse of discretion where the failure to assert a defense was the result of negligence." (Internal quotation marks omitted.) Id., 842. Although Rowe was decided under § 17-42, it cited to Woodruff v. Riley, 78 Conn.App. 466, 471, 827 A.2d 743, cert. denied, 266 Conn. 922, 835 A.2d 474 (2003), which was decided under Practice Book § 17-43 and § 52-212. Additionally, in Black v. Universal C.I.T. Credit Corp, 150 Conn. 188, 194, 187 A.2d 243 (1962), the court stated that a default judgment should not be opened where the defaulted party "had a reasonable opportunity to avoid the entry of the default and interpose whatever defense he had." See also State v. Ritz-Realty Corp., 63 Conn.App. 544, 550, 776, A.2d 1195 (2001) (defendant's claim of counsel's negligence and reckless conduct was insufficient to "show that any defense was not at the time raised by reason of `mistake, accident or other reasonable cause'" to justify opening a default judgment); Altberg v. Paul Kovacs Tire Shop, Inc., 31 Conn.App. 634, 639, 626 A.2d 804 (1993) (defense counsel's statements that a search of his office did not reveal the motion for judgment or notice of short calendar hearing were insufficient to show that defendant was prevented by mistake, accident or other reasonable cause from defending, but rather it was the result of negligence); Genung's, Inc. v. Rice, 33 Conn.Sup. 554, 558-59, 362 A.2d 540 (App.Sess. 1976) (appellate session denied the motion to open despite defendant's claims that she was not properly served).
In Woodruff v. Riley, supra, 78 Conn.App. 472, the court noted that, even if the defendant had a good defense of improper service, the motion to open would not be set aside because she failed to satisfy the second prong of the test. The defendant had "acknowledge her handwriting on the postal service receipt but gave the notice unopened to her husband from whom she was separating." The court held that "the defendant failed to appear and to defend against the action due to negligence, which was [a] sufficient reason to deny the motion to open the judgment . . ." In Bank of Boston Connecticut v. Kershnar, Superior Court, judicial district of New Haven at Meriden, Docket No. CV 92 0241050 (Aug. 28, 2006, Taylor, J.) ( 42 Conn. L. Rptr. 9), the court noted that the Supreme Court had indicated in Wilkinson v. Boats Unlimited, Inc., supra, 236 Conn. 78 that a defendant's "inequitable delay in filing a motion to open judgment is a ground for denying the motion despite a defendant's claim of lack of personal jurisdiction." Based on this precedent, the court in Bank of Boston held that because the defendant had waited five years after receiving actual notice of the judgment to file his motion to open, the court could see "no equitable reason to open the judgment, notwithstanding the defendant's allegation of lack of personal jurisdiction."
In Jackson v. Bridgeport, supra, Docket No. CV 97 0347984, a case involving a judgment of default and a motion to dismiss, the defendant, Professional Service Group (PSG), moved to set aside the default entered against it on October 17, 2003 and the subsequent judgment as a result of the default, and further moved to dismiss the complaint against it. The defendant therein argued that the court lacked personal jurisdiction over it because the plaintiff never effectuated proper service of process upon the defendant. In resolving the motion to open, the court stated, "[n]ormally, the court would first address PSG's motion to open the default judgment of October 17, 2003 before addressing the issues in the motion to dismiss. To open the default, however, the court must determine if PSG was prevented from asserting a valid defense and was prevented from doing so because of mistake, accident or reasonable cause, other than negligence." Therefore, the court addressed the merits of the motion to open the default judgment and the motion to dismiss in a concurrent, simultaneous analysis.
The court in Jackson stated that the "record establishe[d] that PSG never received a copy of the writ, summons and complaint and was not aware of the pending action and the subsequent jury trial which resulted in the judgment against PSG in the amount of $50,000. In determining this the court [found that] the failure to assert this defense was not the result of negligence on the part of PSG. The motion to [open] or set aside the default judgment dated July 20, 2007 was timely filed in that plaintiff's counsel notified PSG of the $50,000 jury verdict or about June 14, 2007, by writing to the President of PSG, at PSG's principal office in Houston, Texas, in an attempt to collect the $50,000 verdict. As stated, to obtain relief from a judgment rendered after a default, two things must concur. There must be a showing that (1) a good defense, the nature of which must be set forth, existed at the time judgment was rendered, and (2) the party seeking to set aside the judgment was prevented from making that defense because of mistake, accident or other reasonable cause. Since the conjunctive `and' meaning `in addition to' is employed between the parts of the two-prong test, both tests must be met." (Internal quotation marks omitted.) Jackson v. Bridgeport, supra, Superior Court Docket No. CV 97 0347984. The court concluded that PSG satisfied the first prong of the necessary test based on the plaintiff's failure to serve PSG in accordance with General Statutes § 33-929. "PSG therefore was prevented from appearing and asserting a valid defense to the claims of the plaintiff." Further, since the default judgment was more than five years old, the court opened the judgment under its inherent authority.
Other cases that have examined whether good cause existed in the Superior Court include Charbonneau v. Charbonneau, Superior Court, judicial district of Putnam, Docket No FA 97 0056898 (November 24, 1997, Potter, J.) (20 Conn. L. Rptr 696), in which the court denied the motion to open because the defendant had actual notice of the dissolution action, despite the defective abode service and Angiolillo v. Tradesource, Inc., Superior Court, complex litigation docket at Stamford, Docket No. X08 CV 03 4000294 (February 6, 2008, Jennings, J.) in which the court determined that the negligence of the defendant's prior counsel in failing to appear at trial and negligence of his new counsel in failing to enter an appearance did not constitute good cause to open the default judgment.
In the present case, even if the defendant could satisfactorily establish that he had a valid defense, the court must find that the defendant was prevented by reasonable cause from asserting his defense. As set forth in his affidavit, the defendant received service though the mail, and "[o]n advice of counsel," chose not to respond, "as the Connecticut state court does not have personal jurisdiction over me." Instead, as pointed out by the plaintiff in his objection, the defendant, through New York counsel, Attorney McKenna, in an ex parte communication to the court, sent a "Request for Adjournment" to the court; this request was neither certified to opposing counsel nor was it accepted by the clerk's office, as it was unaccompanied by any appearance of counsel. That "Request for Adjournment," improper as it was, established that the defendant was aware of the March 2, 2009 hearing date, as did the accompanying letter from Attorney McKenna.
The court informed plaintiff's counsel of the "Request for Adjournment" on the record, at the March 2, 2009 hearing.
The defendant knew of the March 2, 2009 hearing, and was not prevented from filing an appearance, or having counsel file an appearance on his behalf, and, if necessary, move for a continuance. Instead, the defendant simply chose to ignore the hearing. The defendant's decision not to enter an appearance and respond because he decided that he was not subject to the Connecticut court's jurisdiction over him was the result of a deliberate decision to disregard the hearing and cannot be deemed to be a reasonable cause for his nonappearance. Simply put, the defendant was not prevented from interposing his defense because of mistake, accident, or other reasonable cause.
Accordingly, the defendant's motion to open is denied.