Opinion
No. CV08 402 36 05S
March 11, 2010
MEMORANDUM OF DECISION
On January 31, 2008, the plaintiff, Michael Simko, Jr., filed a verified complaint against Vincent M. Simko, Sr. and the Simko Law Firm, LLC (SLF). The plaintiff seeks to dissolve SLF under General Statutes § 34-207 on the grounds that "it is not reasonably practicable to carry on the firm business in conformity with the articles of organization as the members have been unable to agree upon the day to day operation of the firm . . ." The defendants have filed this motion to dismiss the verified complaint on the grounds that the plaintiff lacks standing to bring suit.
"The issue of standing implicates subject matter jurisdiction and is therefore a basis for granting a motion to dismiss. Practice Book § 10-31(a)." (Internal quotation marks omitted.)
May v. Coffey, 291 Conn. 106, 113, 967 A.2d 495 (2009). "When a [trial] court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light . . . In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal quotation marks omitted.) "[A] court cannot make a critical factual finding based on memoranda and documents submitted by the parties." Coughlin v. Waterbury, 61 Conn.App. 310, 315, 763 A.2d 1058 (2001). See also Kenny v. Banks, 289 Conn. 529, 534, 958 A.2d 750 (2008) (because defendant disputed factual issues, plaintiff was entitled to present evidence in support of her version thereof, and trial court improperly denied her that opportunity).
"[T]he plaintiff bears the burden of proving subject matter jurisdiction, whenever and however raised." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. New London, 265 Conn. 423, 430 n. 12, 829 A.2d 801 (2003). "[I]t is the burden of the party who seeks the exercise of jurisdiction in his favor . . . clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute." (Internal quotation marks omitted.) May v. Coffey, supra, 291 Conn. 113. "[I]n determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged." (Internal quotation marks omitted.) Connor v. Statewide Grievance Committee, 260 Conn. 435, 443, 797 A.2d 1081 (2002).
As a preliminary matter, the plaintiff must satisfy his burden that he has subject matter jurisdiction to bring his claims before the court. The plaintiff's verified complaint alleges that he was a member of SLF, that substantial differences had arisen in the administration and law practice of SLF and that it was not reasonably practicable to carry on firm business pursuant to § 34-207. The plaintiff's requested relief included the dissolution and winding up of SLF. Based on his pleading, the verified complaint alleges "facts demonstrating that [the plaintiff] is a proper party to invoke judicial resolution of the dispute." (Internal quotation marks omitted.) May v. Coffey, supra, 291 Conn. 113.
The defendants now move to dismiss on the ground that the plaintiff fails to meet the statutory requirements for standing in an action against a limited liability company. In support of their motion to dismiss the defendants argue that the plaintiff dissociated himself from SLF on December 31, 2007 by the voluntary act of forming a new limited liability corporation with another attorney. Because he voluntarily dissociating himself from SLF, the defendants argue that the plaintiff was no longer a "member" when he filed his verified complaint on January 31, 2008, and therefore lacks standing to seek the judicial dissolution of SLF under § 34-207 and the winding up of SLF under § 34-208(a). In his memorandum in opposition to the motion to dismiss, the plaintiff argues that he has standing because he had not dissociated himself from SLF when he filed suit, that the defendants have admitted on the record that the plaintiff is a "member" of SLF and, alternatively, he has standing because he is "classically aggrieved."
The dissolution of a limited liability corporation is governed by Part XI of chapter thirty-four of the Connecticut General Statutes. Section 34-207 provides: "On application by or for a member, the superior court . . . may order dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement." (Emphasis added.) Section 34-208(a) provides: "[T]he business and affairs of the limited liability company may be wound up . . . (2) on application of any member or legal representative or assignee thereof, by the superior court . . . if one of the members or managers of the limited liability company have engaged in wrongful conduct, or upon other cause shown." (Emphasis added.)
Events of dissociation are governed by General Statutes § 34-180, which provides in subsection (a): "[A] person ceases to be a member of a limited liability company upon the occurrence of one or more of the following events: (1) The member withdraws by voluntary act from the limited liability company as provided in subsection . . . of this section . . ." Section 34-180c provides that "the member may [withdraw by voluntary act] at any time by giving thirty days' written notice to the other members, or such other notice as provided for in writing in the operating agreement." (Emphasis added.)
In support of its motion to dismiss, the defendants have attached exhibits purporting to demonstrate the plaintiff's dissociative acts. These exhibits include four letters sent by the plaintiff representing that he was no longer a part of SLF, the affidavit of Vincent M. Simko, Sr. and a judicial order in the defendants' recent motion for summary judgment in this action. The first two of the letters, dated December 16, 2007 and January 4, 2008, notified SLF clients that the plaintiff was going to establish or had established a new law firm that became operational on January 1, 2008 and that the plaintiff would be leaving SLF on the same date. The third letter, dated March 25, 2008, is addressed to the SLF professional liability insurer and states that the plaintiff was no longer "of counsel" at SLF. The final letter, dated August 28, 2008, is from the Simko Law Firm, LLC, and states that the plaintiff left SLF on December 31, 2007.
The affidavit of Vincent M. Simko, Sr., affirms that the plaintiff filed articles of organization for a new law firm on December 20, 2007, associated with another attorney prior to December 31, 2007, and reasserts the contents of the letters discussed above. The judicial order denying the defendants' motion for summary judgment notes that the plaintiff considered himself disassociated from SLF as of the close of business December 31, 2007. The court did not, however, make any finding that "the plaintiff ceased to be a member of the LLC pursuant to General Statutes § 34-180 (4), on which the defendants rely in their memorandum." Simko v. Simko, Superior Court, judicial district of Fairfield, Docket No. CV 08 4023605 (December 11, 2009, Levin, J.).
In contrast to the motion for summary judgment, the instant motion to dismiss is brought under § 34-180(a)(1), an entirely different basis for the plaintiff's lack of subject matter jurisdiction. As such, the order has no bearing on the instant motion. Furthermore, it is axiomatic that an individual's intent to dissociate or that they consider themselves dissociated are quite different from fulfilling the statutory requirements to affect a voluntary dissociation.
The defendants claim, and the plaintiff does not contest, that SLF has no formal operating agreement and therefore the text of § 34-180 provides the controlling language for dissociation by a voluntary act. Section 34-180 provides that an LLC member may withdraw by a voluntary act "at any time by giving thirty days' written notice to the other members, or such other notice as provided for in writing in the operating agreement . . ." (Emphasis added.) General Statutes § 34-180c; see also Radding v. Freedom Choice Mortgage, LLC, Superior Court, judicial district of Hartford, Docket No. CV 970571812 (May 29, 2001, Hennessey, J.), aff'd, 76 Conn.App. 366, 820 A.2d 317 (2003) (finding LLC member who was also an employee retained his LLC membership after his employment was terminated because he was not given written notice pursuant to the § 34-180 dissociation requirements). As such, in order for the plaintiff to have dissociated by voluntary act he had to give written notice of dissociation to the defendants by January 1, 2008, thirty days before he filed the verified complaint on January 31, 2008.
Only one of the defendants' exhibits, a letter from the plaintiff to a SLF client dated used in the above December 16, 2007, is dated prior to January 1, 2008. Nevertheless, § 34-180 provides that written notice of dissociation be given to "other members," not to third parties. Because no written notice of dissociation from the plaintiff appears on the court record, the defendants have not established that the plaintiff had dissociated himself from SLF, or that he lacked standing when he filed the verified complaint on January 31, 2008.
Even were more evidence of the plaintiff's dissociation placed before the court, the issue of the plaintiff's dissociation is an issue of fact. "A court cannot make a critical factual finding based on memoranda and documents submitted by the parties," especially based on "the complaint and the affidavits, both of which contained controverted facts." Coughlin v. Waterbury, supra, 61 Conn.App. 315-16. In addition, the plaintiff has alleged that Simko Sr. planned to retire in early 2008 and that his "dissociative acts" were steps made in anticipation of winding up the SLF practice. This creates other uncertainties such that the court is not convinced that the plaintiff intended to totally dissociate himself from SLF at the point he filed suit. This is particularly true because when determining subject matter jurisdiction "every presumption favoring jurisdiction should be indulged." Connor v. Statewide Grievance Committee, supra, 260 Conn. 443.
Based on the above conclusions, the defendants motion to dismiss is denied.