Opinion
No. FST CV 11 6009120
June 9, 2011
MEMORANDUM OF DECISION RE MOTION TO DISCLOSE ASSETS (101.00)
The plaintiffs have moved for an order directing the defendant to disclose assets pursuant to General Statutes § 52-278n. According to the plaintiffs' motion and the court file, a writ of attachment in the amount of $550,000.00 was served on the defendant on April 5, 2011 in accordance with the provisions of General Statutes § 52-278f which authorizes an attorney for the plaintiff to issue a writ for a pre-judgment remedy without the necessity of obtaining a court order. Specifically, Section 52-278f states:
"In an action upon a commercial transaction, as defined in section 52-278a, wherein the defendant has waived his right to a notice and hearing under sections to 52-278a to 52-278g, inclusive, the attorney for the plaintiff shall issue the writ for a pre-judgment remedy without securing a court order provided that (1) the complaint shall set forth a copy of the waiver; (2) the plaintiff shall file an affidavit sworn to by the plaintiff or any competent affiant setting forth a statement of facts sufficient to show that there is probable cause that a judgment in the amount of the pre-judgment remedy sought, or in an mount greater than the amount of the pre-judgment remedy sought, taking into account any known defenses, counterclaims or set-offs, will be rendered in the matter in favor of the plaintiff; and (3) the plaintiff shall include in the process served on the defendant a notice satisfying the requirements of subsections (b) and (c) of section 52-278e."
The defendant has objected to the motion to disclose assets. The primary thrust of the objection is that General Statutes § 52-278n does not authorize the court to grant a motion to disclose when a pre-judgment remedy has been obtained pursuant to Section 52-278f. For this argument the defendant relies on Section 52-278n(c) which states:
The court may order disclosure at any time prior to final judgment after it has determined that the party filing the disclosure has, pursuant to Sections 52-278d, 52-278e or 52-278i, probable cause sufficient for the granting of a pre-judgment remedy.
Sections 52-278d, 52-278e and 52-278i all authorize the issuance of pre-judgment remedy after a party has made a showing to the court that grounds for such a remedy exist [i.e., § 52-278d (after a hearing and a finding of probable cause that a judgment will be obtained by the plaintiff); § 52-278e (after plaintiff has shown exigent circumstances justifying issuance of the writ before a hearing) and § 52-278i (writ issued to counterclaiming defendant after hearing)]. It is Smartequip's argument that Section 52-278n(c) limits a court's authority to grant a motion to disclose assets to cases where probable cause has been found after a hearing or an ex parte writ has been issued pursuant to Section 52-278e.
The court rejects this argument. The argument ignores the express authorization set forth in Section 52-278n(a) that a:
court may, on motion of a party, order an appearing defendant to disclose property in which he has an interest or debts owing to him sufficient to satisfy a pre-judgment remedy.
The Shucarts' motion for disclosure of assets is directly covered by this statute. Smartequip is an appearing defendant, and there is an existing pre-judgment remedy by virtue of the provisions of Section 52-278f. The requirements of Section 52-278f have been fulfilled, and the defendant does not contend otherwise. According to the complaint James Shucart lent $450,000.00 to Smartequip and Christopher Shucart lent $50,000.00 to Smartequip. In return, Smartequip executed interest bearing promissory notes to both plaintiffs in the aggregate amount of $500,000.00 payable in August 2010. The complaint alleges defaults on both notes. Both notes contained the following statements by Smartequip made in capital letters:
THE MAKER HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING TO THE EXTENT PERMITTED UNDER ANY APPLICABLE STATE, FEDERAL OR OTHER LAW OR REGULATION, WITH RESPECT TO ANY PRE-JUDGMENT REMEDY THAT THE PARTY MAY USE.
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EACH OF THE PAYEE AND THE MAKER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION.
Therefore, Smartequip entered into a commercial transaction with the plaintiffs and effectively waived the right to notice and hearing with respect to a pre-judgment remedy. The Shucarts subsequently commenced this civil action and served the affidavits and notice required by Section 52-278f.
A commercial transaction is defined in General Statutes § 52-278a as a transaction which is not a consumer transaction, and the latter is defined as a transaction when an individual obligates himself to pay for goods or services or money loaned for personal purposes.
The argument made by Smartequip relies on a tenet of statutory construction known as "expressio unius est exclusio alterius" which means, roughly, that a statute that references certain matters excludes all other matters that might have been included. See Hatt v. Burlington Coat Factory, 263 Conn. 279, 295 (2003). Thus, the defendant argues that since Section 52-278n(c) states that a court may order disclosure of assets after it has determined there is probable cause to sustain a granting of a pre-judgment remedy pursuant to proceedings under Sections 52-278d, 278e and 278i, that is the only time a court may order disclosure. This argument is unpersuasive for several reasons. First, as noted before, Section 52-278n has another provision, subsection (a), which expressly authorizes disclosure of assets in this case where a pre-judgment remedy is already in effect. Therefore, subsection (c) relied on by the defendant is not the exclusive provision referencing circumstances as to when disclosure may be granted. Second, subsection (c) only deals with circumstances when a court has issued or is about to issue a pre-judgment remedy; that subsection has no applicability to the circumstance in this case where, as authorized by law, an attorney has issued the writ. Third, the interpretation proffered by the defendant lacks a common sense basis. Connecticut's pre-judgment remedy statute allows commercial parties, such as the defendant here, presumably advised by counsel and experience in business transactions to waive the statute's notice and hearing provisions voluntarily. This is precisely what Smartequip did. It would be somewhat anomalous to give Smartequip, who has yet to challenge the pre-judgment remedy, greater protections against disclosure of its assets than another defendant who has not waived but demanded a hearing and contested the issue of liability from the beginning. Connecticut law requires courts to construe statutes based on their language and relationship with other statutes. If the plain language of the statute does not compel absurd or unworkable results, the plain language controls the interpretation. General Statutes § 1-2z. In this case, the court finds that the plain language of Section 52-278n authorizes the granting of a motion to disclose when the pre-judgment remedy is procured under Section 52-278f.
Finally, the defendant contends that no disclosure should be granted because there is no authority for a supplemental pre-judgment remedy or to modify a pre-judgment remedy upward. This is an argument of dubious merit. General Statutes § 52-278k; The Wintonbury Group v. Roamtree, 39 Conn.App. 149, 153 (1995). More importantly, however, plaintiffs have not made application to supplement or increase the pre-judgment remedy and the question is not properly before the court.
For the reasons stated above, the motion to disclose assets is granted. The defendant Smartequip, Inc., is ordered to disclose all assets which Smartequip, Inc has an ownership interest in, and any and all debts due it.