Opinion
No. FST CV 095013113 S
October 26, 2010
MEMORANDUM OF DECISION RE MOTION TO DISSOLVE LIS PENDENS
FACTUAL AND PROCEDURAL BACKGROUND
The plaintiff, Lia Joseph, filed this civil action against the defendant, Denis Joseph, by complaint dated October 19, 2009 with return date of November 24, 2009. The plaintiff also filed a Notice of Lis Pendens for the property that is the subject of the instant action at 44 Brookridge Drive, Greenwich, Connecticut, (the "property"). The defendant has filed this motion to dissolve the lis pendens.
The parties to this action are mother and son. On or about June 2003, they agreed to purchase the property for purposes of investment. The property had a house which was demolished in February 2004 to build a new structure on the property. The plaintiff was involved in the original work to survey the property, to address some asbestos issues and worked with the original architect and contractors. The property was purchased in the name of the defendant. The plaintiff contends that she contributed approximately $980,000 to purchase the property and build the house that has been completed on the property. The parties entered into a written agreement for a sharing of the profits after sale based upon reimbursement and deductions. The plaintiff has alleged that the defendant has failed to allocate profits and has utilized the property in such a manner that it will benefit his investments and impact the sharing of the profits based upon the agreement of the parties. The plaintiff contends that an accounting should be done but the defendant has not provided such although he has employed an accountant to review some of the records. Although the house was marketed for sale, to date the house has not been sold. The defendant is not actively seeking to sell the property at this time.
DISCUSSION
The plaintiff filed a notice of lis pendens in accordance with General Statutes § 52-325 in conjunction with the filling of the present action. The defendant has filed a motion to dissolve the lis pendens pursuant to § 52-325a. The court conducted a hearing on July 19, 2010 and August 30, 2010.
General Statutes § 52-325 provides: (a) In any action in a court of this state or in a court of the United States (1) the plaintiff or his attorney, at the time the action is commenced or afterwards, . . . may cause to be recorded in the office of the town clerk of each town in which the property is situated a notice of lis pendens, containing the names of the parties, the nature and object of the action, the court to which it is returnable and the term, session or return day thereof, the date of the process and the description of the party . . . Such notice shall, from the time of the recording only, be notice to any person thereafter acquiring any interest in such property of the pendency of the action, . . ."
General Statutes § 52-325a provides: (a) Whenever a notice of lis pendens is recorded against any real property pursuant to subsection (a) of section 52-325, the property owner, if the action has not then been returned to court, may make application, together with a proposed order and summons, the superior court for the judicial district to which the action is made returnable. Or to any judge thereof, that a hearing or hearings be held to determine whether such notice of lis pendens should be discharged.
The notice of lis pendens puts "potential buyers of real estate and creditors of its owners on notice that the real estate may be subject to pending adverse interests that may affect the title or right to the property." Garcia v. Brooks Street Associates, 209 Conn. 15, 22, 546 A.2d 275 (1988). ". . . [T]he effect of the lis pendens is simply to give notice to the world of the remedy being sought. The lis pendens creates no additional right in the property on the part of the plaintiff, but simply allows third parties to know that a lawsuit is pending in which the plaintiff is seeking to establish such a right." (Citations omitted.) Wallingford Staffordshire v. Staffordshire, 42 Conn.Sup. 241, 250 615 A.2d 188 (1992) "[A] notice of lis pendens ensures that the [litigant's] claim cannot be defeated by a prejudgment transfer of the property . . . [T]he lis pendens procedure provides security for payment of the claim pending final resolution of the case." Williams v. Bartlett, 189 Conn. 471, 479-80, 457 A.2d 290, appeal dismissed, 464 U.S. 801, 104 S.Ct. 46 (1983). The property owner burdened by the notice of lis pendens may challenge its validity on two independent grounds: (1) absence of probable cause to sustain the lis pendens claim, or (2) noncompliance with the procedural requirements of an effective lis pendens notice. Dunham v. Dunham, 217 Conn. 24, 35, 584 A.2d 445 (1991). The defendant has challenged the notice of lis pendens on the first ground.
When the defendant seeks to dissolve the lis pendens, the plaintiff is required to establish probable cause to sustain the validity of the claims. The burden of proof is upon the plaintiff to demonstrate that there is probable cause. Our rules regarding the standard of proof for establishing probable cause are well settled. It is important to remember that the plaintiff does not have to establish that he will prevail, only that there is probable cause to sustain the validity of the claim. Village Linc Corporation v. Children's Store, Inc., 31 Conn.App. 652, 657, 626 A.2d 813 (1993), citing Dow v. Condon, 525 A.2d 935 (1987). "The legal idea of probable cause is a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence and judgment, under the circumstances, in entertaining it. Wall v. Toomy, 52 Conn. 35, 36 (1884). Probable cause is a flexible common sense standard. It does not demand that a belief be correct or more likely true than false. Texas v. Brown, 460 U.S. 730, 103 S.Ct. 1535 (1983).
The complaint in this matter consists of three counts. The first count is based upon the written agreement and the funds contributed by the plaintiff. The second count contends that there is a constructive trust and that the plaintiff is entitled to a partition. The third count alleges that there was an oral agreement for the purchase and development of the property with the profits to be divided in a 60-40 split that takes into consideration expenses and an accounting of the finances.
"The trial courts' duty is to weigh the probabilities based on the facts and to exercise its broad discretion in determining whether there is probable cause to sustain the lis pendens." (Citations omitted.) Sanstrom v. Strickland, 11 Conn.App. 211, 212, 525 A.2d 989 (1987).
Although the testimony and the evidence were in some respects conflicting, the court finds that the following testimony is credible and provides sufficient probable cause for the plaintiff's claims as to the purchase, development and ongoing dealings with the property. Both the defendant and the plaintiff testified about the plaintiff's original involvement with the building of the residence. The plaintiff provided some of the invoices that evidence her involvement in the lumber, windows, garage doors, and stairs. (Pl. Exh. 4.) The plaintiff provided a written agreement signed by both partied and dated November 15, 2005, that supports her claim that the parties had been working together. (Pl. Exh. 3.) The defendant in his testimony countered that the plaintiff did not take as active a part as she contends. However, the defendant never denies that the plaintiff assisted in some manner. He simply denies the extent. However, the plaintiff has presented not only her testimony but evidence in support of the fact that it was accepted that she owned the property for purposes of the development. (Pl. Exhs. 3 and 5.) The written agreement sets forth a basis for sharing of the profits after the equity contributions have been determined. The concern that has been expressed by the plaintiff during the course of her testimony is a concern that the property which is in the defendant's name has been utilized for other investments without an accounting and that the property is not being marketed. There was evidence introduced by the plaintiff that supports a reasonable basis to believe that the defendant has utilized the property as collateral for other investments which may have an impact on the written or oral agreement of the parties for profit sharing. Thus, the profits originally expected may have been jeopardized. (Pl. Exhs. 7, 8, 9, and 10.) While the amount of the distribution is uncertain, the agreement that was entered into by the parties supports the plaintiff's claims.
The defendant contends that the funds did not come from the plaintiff for the development. In support of his position he provided the testimony of Ms. Startup who did a basic review of the financial records supplied by the defendant. However, Ms. Startup was unable to testify as to the authenticity or completeness of the records to provide a full forensic review. She described her role as a little more than a bookkeeping role. She describes some of the loans to the property but had not done a thorough analysis of the property financing and had received documents from the defendant that were not complete.
Although the defendant has challenged the plaintiff's notice of lis pendens, there is sufficient testimony and evidence to lead a reasonable person to believe that the plaintiff contributed financially as well as a consultant to the rebuilding of the property. There are issues as to the extent of her involvement but this does not negate her interest in the property and the value of the property to obtain her share of the profits, if any.
CONCLUSION
Based upon the above, the court finds that there is probable cause to sustain the validity of the plaintiff's claims to support the maintenance of the lis pendens. Therefore, the motion to dissolve the lis pendens is denied.