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People's United Bank v. Kudej

Connecticut Superior Court Judicial District of Fairfield at Bridgeport
Apr 27, 2011
2011 Ct. Sup. 10145 (Conn. Super. Ct. 2011)

Opinion

No. CV 10 5029278 S

April 27, 2011


MEMORANDUM OF DECISION RE MOTION TO SUBSTITUTE PROPERTY (#128)


Preliminary Statement

In this collection action, the plaintiff obtained a prejudgment remedy of $115,000. Thereafter, the defendant served an attachment upon defendant's counsel as to funds in its trustee account held for the benefit of the defendant. The defendant, pursuant to CGS § 52-304, filed a motion to substitute a lien on real property owned by the defendant so as to release the funds from the trustee account. The plaintiff objects to the substitution on the grounds that the liquidation value of the real property might not be equal to or greater than the amount of the prejudgment remedy. For the reasons set forth below, the motion is granted.

The defendant's counsel had previously written a check to the defendant from the account. The check was never cashed. The parties are not in agreement as to whether the attachment served is adequate to secure the funds at issue. For purposes of this motion, it is presumed that the funds are properly attached. Thus, resolution of that issue is not necessary in order to resolve the defendant's motion.

Discussion

Under General Statutes 52-304 a defendant whose property has been attached may move to dissolve the attachment by substituting a surety bond or a lien on other property "which has an equal or greater net equity value than the amount secured by such attachment." Brainard v. Smyth Mfg. Co., 178 Conn. 250, 252 (1979). The purpose of the statute is to prevent a plaintiff from abusing the prejudgment remedy of attachment by allowing the defendant to substitute either a lien or bond in lieu of the property originally attached. Id. at 253. Our appellate courts have held that the "language of the statute is clear, precise and unambiguous. There is no necessity for any judicial construction of the statute." Feuser v. Lampron, 6 Conn.App. 350, 353 (1986), citing, Doe v. Manson, 183 Conn. 183, 186 (1981).

Further, there is no question that the provisions of the statute are not discretionary. That is, if the court determines that the proposed substitute has a net equity value that is equal to or greater than the amount of the attachment, the court must grant the motion. Feuser, supra., 6 Conn.App. at 353, citing Capobinco v. Samorak, 102 Conn. 310, 316-17 (1925). "Upon application pursuant to this statutory proceeding, the trial court may only review the request as to the sufficiency of the offered lien or bond. Sachs v. Nussenbaum, 92 Conn. 682, 688, 104 A. 393 (1918)." Id.

The defendant offers a lien on real property located at 38 Rimmon Road, Seymour, Connecticut. He is the owner of the property. Both the plaintiff and the defendant obtained appraisals of the property for purposes of this motion. The plaintiff's appraisal places the fair market value of the property at $175,000.00. The defendant's appraisal places the fair market value of the property at $195,000.00. The only encumbrance on the property is a mortgage to New Alliance Bank with a current pay off value of approximately $9,200.00. Thus, whether the court uses the plaintiff's appraisal, the defendant's appraisal or an average of the two — $185,000.00 — after subtracting the existing encumbrances, the net equity value of the property is well in excess of the prejudgment remedy of $115,000.

Prior to the first hearing of this motion, the defendant in his moving papers had offered only the tax assessor's assessment page to establish value. The plaintiff objected. At the first hearing of this motion, the defendant offered an appraisal to which the plaintiff objected as it did not include any interior inspection of the property. The matter was continued so that the plaintiff and the defendant could each obtain an appraisal, exterior and interior, for purposes of the motion.

The plaintiff argues however that the court should determine and use the "liquidation value" of the property when determining the "net equity value." Our appellate courts have not specifically addressed whether liquidation value is an appropriate measure for real property being offered in substitution under CGS § 52-304. However, in Brainard v. Smyth Mfg. Co., 178 Conn. 250, 252 (1979), the Supreme Court did specifically hold that the trial court's use of fair market value to grant the substitution pursuant to Section 52-304 was proper. Relying at least in part on Brainard, the Appellate Court in Feuser, held that the trial court's denial of the defendant's application for substitution, after finding that the fair market value equaled or exceeded the amount of the original attachment, was improper. Feuser, supra., 6 Conn. App. At 354.

The plaintiff requested an opportunity to provide testimony as to the range of the property's liquidation value. The offer of proof as to that testimony was that the bottom of the range of the liquidated value, less the encumbrance to New Alliance, would have been less than the amount of the attachment. The top of the range, less encumbrances, would exceed the amount of the attachment. Under the circumstances and given the court's ruling, no such additional testimony is necessary.

In Feuser, the trial court had determined both fair market value and liquidation value. However, in that case, either value would have rendered the property of equal or greater value than the amount of the attachment. Thus, no discussion as to which should be used was before the Appellate Court.

Arguably, in so holding, the Appellate Court implicitly adopted the fair market valuation, as opposed to the liquidation value, as the proper measure of the value of the substitute property.

This court finds that the net equity value of the Seymour property, measured by the fair market value less encumbrances, is equal to or greater than the amount of the prejudgment remedy attachment. The motion to substitute a lien on the property in favor of the plaintiff is granted.


Summaries of

People's United Bank v. Kudej

Connecticut Superior Court Judicial District of Fairfield at Bridgeport
Apr 27, 2011
2011 Ct. Sup. 10145 (Conn. Super. Ct. 2011)
Case details for

People's United Bank v. Kudej

Case Details

Full title:PEOPLE'S UNITED BANK v. EDWARD KUDEJ

Court:Connecticut Superior Court Judicial District of Fairfield at Bridgeport

Date published: Apr 27, 2011

Citations

2011 Ct. Sup. 10145 (Conn. Super. Ct. 2011)
51 CLR 824