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Sullivan v. Krawski

Connecticut Superior Court, Judicial District of Hartford at Hartford
Aug 31, 2001
2001 Ct. Sup. 12124 (Conn. Super. Ct. 2001)

Opinion

No. CV 92-0703872

August 31, 2001


MEMORANDUM OF DECISION MOTIONS TO DISMISS


The events giving rise to the pending motions to dismiss originate with a bankruptcy petition filed by the defendant, William J. Krawski, on February 14, 1992. Several months following the petition, on December 29, 1992, the plaintiff, Commissioner of Transportation, filed with the clerk of the Superior Court a notice of condemnation and assessment of damages pursuant to General Statutes §§ 13a-73 (b), 13a-73 (e) and 13b-23 for the layout, alteration, extension, drainage, widening, change of grade and improvement of the highway commonly known as Buckland Road. (Plaintiff's Notice of Condemnation and Assessment of Damages.) The assessment of damages was $800.

General Statutes § 13a-73 (b) provides in relevant part: "The commissioner may take any land he finds necessary for the layout, alteration, extension, widening, change of grade or improvement of any state highway . . . and the owner of such land shall be paid by the state for all damages and the state shall receive from such owner the amount or value of all benefits resulting from such taking, layout, alteration, extension, widening, change of grade or other improvement."

General Statutes § 13a-73 (e) provides in relevant part: "The commissioner may take any land (1) which is necessary for the construction of any ditch, drain, gutter or other structure which is required for the purpose of draining any state highway. . . . The commissioner may assess benefits and damages caused by any such construction and for the taking of any such land under the provisions of subsection (b) of this section. . . ."

General Statutes § 13b-23 provides: "The commissioner shall have such additional powers, incidental to the express powers granted under this chapter and title 13 a, as may be necessary or proper for the effective performance of his powers and duties."

It was not until May 24, 2000, that the defendant filed an appeal from the assessment of damages. Presently before the court are three motions to dismiss, two filed by the plaintiff and one by the defendant. In a motion to dismiss filed on July 31, 2000, the plaintiff seeks to dismiss the condemnation appeal on the ground that the court lacks subject matter jurisdiction. In a motion filed on February 2, 2001, the plaintiff also seeks to dismiss the condemnation appeal on the ground that the defendant has failed to prosecute the appeal with due diligence. Finally, in a motion filed on March 12, 2001, the defendant seeks to dismiss the condemnation on the ground that the notice of condemnation filed on December 29, 1992, violated the automatic stay provision of the Bankruptcy Code, 11 U.S.C. § 362 (a)(3), thus depriving this court of jurisdiction to affect the subject property. For the reasons articulated below, all the motions to dismiss are denied.

I

"A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court." (Internal quotation marks omitted.) Borden v. Planning Zoning Commission, 58 Conn. App. 399, 405, 755 A.2d 224, cert. denied, 254 Conn. 921, 759 A.2d 1023 (2000). Under Practice Book § 10-31(a) "[t]he motion to dismiss shall be used to assert (1) lack of jurisdiction over the subject matter. . . ." (Internal quotation marks omitted.)Altfeter v. Naugatuck, 53 Conn. App. 791, 797, 732 A.2d 207 (1999). "A court has subject matter jurisdiction if it has the authority to hear a particular type of legal controversy. This jurisdiction relates to the court's competency to exercise power." (Internal quotation marks omitted.) Ford v. Commissioner of Correction, 59 Conn. App. 823, 826, 758 A.2d 853 (2000). "[O]nce the question of lack of jurisdiction of a court is raised, [it] must be disposed of no matter in what form it is presented . . . and the court must fully resolve it before proceeding further with the case. . . . Where a decision as to whether a court has subject matter jurisdiction is required, every presumption favoring jurisdiction should be indulged." (Internal quotation marks omitted.)Olympia Mortgage Corp. v. Klein, 61 Conn. App. 305, 307, 763 A.2d 1055 (2001). "A motion to dismiss for lack of subject matter jurisdiction may be made at any time." Stroiney v. Crescent Lake Tax District, 205 Conn. 290, 294, 533 A.2d 208 (1987).

II PLAINTIFF'S FIRST MOTION TO DISMISS

In its motion filed on July 31, 2000, the plaintiff moves to dismiss the condemnation appeal on the grounds that (1) the condemnation appeal is untimely and that the governing statute of limitation is jurisdictional in nature; (2) the summons mandated under General Statutes § 52-45a was not attached to the complaint; and (3) service of process took place less than twelve days prior to the expiration of the return date set by the court's order of notice, and the remedial provisions found within General Statutes § 52-57 do not apply to judicially established return dates. The defendant objects to the motion to dismiss on the grounds that (1) the six-month statute of limitations does not apply because the underlying condemnation violated the automatic stay provision of the bankruptcy code; (2) the order of notice was sufficient to commence an appeal from a statement of compensation; and (3) the return was not late.

General Statutes § 52-45a provides in relevant part: "Civil actions shall be commenced by legal process consisting of a writ of summons or attachment, describing the parties, the court to which it is returnable, the return day, the date and place for the filing of an appearance and information required by the Office of the Chief Court Administrator."

General Statutes § 52-57 provides in relevant part: "Except as otherwise provided, process in any civil action shall be served by leaving a true and attested copy of it, including the declaration or complaint, with the defendant, or at his usual place of abode, in this state."

A CT Page 12126

The plaintiff first argues that the statute governing the present condemnation is General Statutes § 13a-76 and not § 8-132 as the defendant alleges. Hence, the plaintiff argues that the defendant's condemnation appeal should be dismissed because the defendant did not comply with § 13a-76. Section 13a-76 contains almost identical language as § 8-132. Due to the similarity of the statutes, the court finds that the defendant's claim pursuant to § 8-132 is analogous to a claim brought pursuant to § 13a-76, and consequently, case law interpreting the provisions of § 8-132 is instructive.

General Statutes § 13a-76 provides in relevant part: "Any person claiming to be aggrieved by the assessment of such special damages or such special benefits by the commissioner may, at any time within six months after the same has been so filed, apply to the superior court for the judicial district within which such land is situated or, if said court is not in session, to any judge thereof for a reassessment of such damages or such benefits so far as the same affect such applicant, and said court or judge, after causing notice of the pendency of such application to be given to said commissioner, shall appoint a judge trial referee to make such reassessment of such damages or such benefits."

General Statutes § 8-132 provides in relevant part: "Any person claiming to be aggrieved by the statement of compensation filed by the redevelopment agency may, at any time within six months after the same has been filed, apply to the superior court for the judicial district in which such property is situated, or, if said court is not in session, to any judge thereof, for a review of such statement of compensation so far as the same affects such applicant, and said court or such judge, after causing notice of the pendency of such application to be given to said redevelopment agency, shall appoint a state referee to make a review of the statement of compensation."

"A claim that an action is barred by the lapse of the statute of limitations must be pleaded as a special defense. . . ." Forbes v. Ballaro, 31 Conn. App. 235, 239, 624 A.2d 389 (1993). "Where . . . a specific time limitation is contained within a statute that creates a right of action that did not exist at common law, then the remedy exists only during the prescribed period and not thereafter. . . . In such cases, the time limitation is not to be treated as an ordinary statute of limitation, but rather is a limitation on the liability itself, and not of the remedy alone. . . . [U]nder such circumstances, the time limitation is a substantive and jurisdictional prerequisite, which may be raised [by the court] at any time, even by the court sua sponte, and may not be waived." (Internal quotation marks omitted.) Ambroise v. William Raveis Real Estate, Inc., 226 Conn. 757, 766-67, 628 A.2d 1303 (1993).

"The provisions of § 8-132 provide an efficient procedure for vindicating the common-law right to just compensation for a taking of property by eminent domain. This statute alters the process by which a property owner must seek just compensation, but does not create a right to just compensation that would not otherwise be available." Karp v. Urban Redevelopment Commission, 162 Conn. 525, 530, 294 A.2d 633 (1972). "Section 8-132 is not in the nature of a conditional statute in which the limitation is actually a part of a newly created right, and thus determinative of jurisdiction. The limitation is on the remedy alone. Compliance with the time requirement for taking an appeal is not a prerequisite to the existence of the right of action; it is only a limitation analogous to the usual statute of limitation. The limitation is to be regarded as creating a condition subsequent, by which an existing right is cut off by the nonperformance of the condition, rather than a condition precedent to a continuing right." (Internal quotation marks omitted.) Id. "A defense predicated on a condition subsequent, and limitations generally, need not be anticipated and negatived by the plaintiff. They may properly be left to be pleaded by the defendant." Id., 531-32.

For the foregoing reasons, the court finds that the time limitation in § 13a-76 is to be treated as an ordinary statute of limitation, and, therefore, the plaintiff's claim that the defendant's appeal is barred by the lapse of the statute of limitations must be pleaded as a special defense. Id; see also Glotzer v. Manchester, Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. 385110 (August 29, 1991, Wagner, J.) (holding that a motion to dismiss an appeal from an assessment of damages on the ground that the plaintiff failed to apply to the court for review of compensation within the six-month period specified in § 8-132 was a defense that should be specially pleaded).

B

The plaintiff argues pursuant to Bristol v. Milano, 45 Conn. Sup. 605, 608-12, 732 A.2d 835 (December 1, 1998, Bieluch, J.), that the court lacks subject matter jurisdiction because the summons mandated under General Statutes § 52-45a was not attached to the defendant's appeal. The defendant argues that the order of notice by the Superior Court clerk to the plaintiff was sufficient to commence an appeal from a statement of compensation.

"Although a writ of summons is a prerequisite to the commencement of a civil action; General Statutes § 52-45a; we conclude that an appeal from commissioners' actions is not a "commencement' of a civil action. Such an action, when it comes to the Superior Court, is not an original one, but a continuation of an action [already] commenced. . . ." Goodman v. Bank of Boston Connecticut, 27 Conn. App. 333, 339, 606 A.2d 994 (1992). "Although applications for review of statements of compensation have been initiated by way of the filing of a separate action in the Superior Court . . . [§ 8-132] does not require such a procedure. A statutory right to appeal may be taken advantage of only by strict compliance with the statutory provisions by which it is created. . . . The language of § 8-132 simply does not mandate the initiation of a separate action to test the adequacy of a condemnation award. When the legislature has required that a separate action be brought in similar matters, it has specifically provided the procedure to be followed. . . . The statute involved in this case requires only that a condemnee `apply' to the Superior Court, and, thereafter, the court will cause "notice of the pendency of [the] application to be given to said [redevelopment agency]. . . .' Thus, under the statutory scheme of § 8-132, the court bears the responsibility for giving notice to the town, a responsibility normally associated with one who initiates a cause of action. See General Statutes § 52-45a." (Emphasis in original; internal quotation marks omitted.) Killingly v. Wells, 18 Conn. App. 508, 513, 558 A.2d 1039, cert. denied, 212 Conn. 807, 563 A.2d 1357 (1989). "[W]e find that § 8-132 does not mandate the filing of a separate action to contest a statement of condemnation. . . ." Id.

Killingly v. Wells, supra, 18 Conn. App. 508, led to the initiation of policy memo CV-97-33 entitled "Highway and Redevelopment Condemnation Policies and Procedures," which created a procedure for the Superior Court clerks to follow when an appeal is taken from a statement of compensation pursuant to § 8-132 and § 13a-76. Policy memo CV-97-33 provides in relevant part: "Upon the filing of a statement of compensation, pursuant to [General Statutes §] 8-129 or an assessment of damages and benefits, pursuant to [General Statutes §] 13a-73 (b) the clerk's office is to collect a fee of $2.00 as required by [General Statutes §] 52-259. . . . A civil docket number is to be assigned to the case and a civil file is to be created.
"Pursuant to [General Statutes §] 8-132, if the condemnee does not agree with the statement of compensation filed by the redevelopment agency, the condemnee may file with the Superior Court an application for review of the statement of compensation.
"Upon the filing of the application for reassessment of damages and benefits or the application for review of the statement of compensation, the application is to be placed in the existing court file containing the assessment of damages and benefits or the statement of compensation. As a result of the above change in procedure, only one court file will exist."

In Bristol v. Milano, supra, 45 Conn. Sup. 610, Judge Bieluch concluded that Killingly v. Wells, supra, 18 Conn. App. 508, "was issued in error, and the policy and procedure enforced by the Superior Court under memorandum CV-97-33 is contrary to our long established law, procedure and practice in condemnation proceedings." Subsequently, the court went on to say that "[t]he dicta in Killingly and its subsequent implementation in policy CV-97-33 are contrary to, and invalidated by two prior holdings of our Supreme Court [ Simmons v. State, 160 Conn. 492, 494 n. 1, 280 A.2d 351 (1971); Karp v. Urban Redevelopment Commission, 162 Conn. 525, 527, 294 A.2d 633 (1972)] reaffirming our long established practice and procedure in condemnation actions under the provisions of § 8-132." Id., 611. Judge Bieluch has subsequently reiterated this position several times. See, e.g., Commissioner of Transportation v. Knight, Superior Court, judicial district of Windham at Putnam, Docket No. 61515 (January 22, 2001, Bieluch, J.); Commissioner of Transportation v. Blanchard Rossetto Enterprises, Superior Court, judicial district of Hartford, Docket No. 573857 (August 28, 2000, Bieluch, J.); Commissioner of Transportation v. Ruggiero, Superior Court, judicial district of Hartford, Docket No. 582031 (June 29, 1999, Bieluch, J.).

Nevertheless, in light of applicable appellate authority, the court declines to follow the reasoning and recommendation set forth in Bristol v. Milano, supra, 45 Conn. Sup. 605. See Goodman v. Bank of Boston Connecticut, supra, 27 Conn. App. 339, and Killingly v. Wells, supra, 18 Conn. App. 513. Rather, the court finds that the defendant did not have to initiate the action with a writ of summons attached to a complaint. See also Commissioner v. Wong, Superior Court, judicial district of Danbury at Danbury, Docket No. 337044 (August 15, 2000, Moraghan, J.) ( 27 Conn. L. Rptr. 669) (procedure under § 13a-76 does not require writ of summons); DOT v. Tuck-It-Away Bridgeport, Inc., Superior Court, judicial district of Fairfield at Bridgeport, Docket No. 363646 (August 9, 2000, Melville, J.) ( 27 Conn. L. Rptr. 674) (procedure under § 8-132 does not require writ of summons).

C

Finally, the plaintiff argues that the court lacks subject matter jurisdiction because the service of process took place less than twelve days prior to the expiration of the return date. The defendant argues that the return was not late.

The plaintiff argues that the return date was set for June 15, 2000, and that the order of notice was delivered to the plaintiff on June 9, 2000.

The defendant argues that the return date was set for June 27, 2000, and that by serving the plaintiff on June 9, 2000, the plaintiff had eighteen days notice before the return date.

General Statutes § 52-46 provides in relevant part: "Civil process . . . shall be served . . . if returnable to the Superior Court, at least twelve days, inclusive, before [the return date]." "[This] statute is mandatory and failure to comply with its requirements as to the time when process shall be served renders the proceeding voidable and subject to abatement." (Internal quotation marks omitted.) Rogozinski v. American Food Service Equipment Corp., 211 Conn. 431, 433, 559 A.2d 1110 (1989).

Even assuming without deciding that § 52-46 is applicable to the notice required under § 13a-76, the plaintiff's argument must fail. A review of the court file shows the return date was set for June 27, 2000. The sheriff's return of service indicates that process was served on the plaintiff on June 9, 2000. The court finds that the defendant successfully served process on the plaintiff at least twelve days before the designated return date.

For all the foregoing reasons, the court denies the plaintiff's motion to dismiss the defendant's condemnation appeal on the ground that the court lacks subject matter jurisdiction.

III

On February 2, 2001, the plaintiff filed a second motion to dismiss the defendant's condemnation appeal for failure to prosecute with due diligence pursuant to Practice Book § 14-3 on the grounds that (1) the property owner, i.e., the defendant has failed to prosecute the condemnation appeal with due diligence; (2) the defendant filed a withdrawal of the condemnation which the plaintiff received on August 9, 2000, which was misleading; and (3) the defendant's delay of almost six months in filing his memorandum of law in opposition to the plaintiff's first motion to dismiss, filed July 31, 2000, evidenced an undue delay thereby warranting the sanction of dismissal. In his opposing memorandum, the defendant counters that (1) the withdrawal the defendant prepared and erroneously sent to the plaintiff was never filed with the court; (2) the defendant did not intend to withdraw the condemnation appeal as is evidenced by his response to the plaintiff's request for admissions which were mailed to the plaintiff after the withdrawal was erroneously sent; (3) the plaintiff was not harmed by the defendant's delay in filing the memorandum of law in opposition to the plaintiff's motion to dismiss; and (4) the sanction for dismissal for failure to prosecute with due diligence is extreme and should not be granted.

Practice Book § 14-3 provides in relevant part: "If a party shall fail to prosecute an action with reasonable diligence, the judicial authority may, after hearing, on motion by any party to the action pursuant to Section 11-1, or on its own motion, render a judgment dismissing the action with costs." "This section was intended to give the trial courts an additional tool to implement the movement of cases and to prevent cases from clogging the docket because of the lack of diligent prosecution. . . . The ultimate determination regarding a motion to dismiss for lack of diligence is within the sound discretion of the court. This discretion is properly exercised if the case has been on the docket for an unduly protracted period or the court is satisfied from the record or otherwise that there is no real intent to prosecute, particularly if the party fails to appear at the time the case was assigned for trial on a dormant list." (Citation omitted.) Nickerson v. Gachim, 183 Conn. 413, 415, 439 A.2d 379 (1981). "Under § [ 14-3], the trial court is confronted with endless gradations of diligence, and in its sound discretion, the court must determine whether the party's diligence falls within the `reasonable' section of the diligence spectrum." (Internal quotation marks omitted.) Lacasse v. Burns, 214 Conn. 464, 474, 572 A.2d 357 (1990). "It is the policy of the law to bring about a trial on the merits of a dispute whenever possible and to secure for the litigant his day in court." Snow v. Calise, 174 Conn. 567, 574, 392 A.2d 440 (1978).

The court finds that (1) the condemnation appeal has not been on the docket for an unduly protracted period of time; (2) nothing in the record or elsewhere indicates that the defendant does not have the real intent to prosecute the condemnation appeal, i.e., the defendant did not file a withdrawal with the court and the court is satisfied that the withdrawal sent to the plaintiff was done erroneously; and (3) under all the circumstances, the sanction of dismissal is not warranted. See Nickerson v. Gachim, supra, 183 Conn. 415. Further, it is unclear how the defendant's delay in filing his memorandum of law in opposition to the plaintiff's motion to dismiss evidenced an undue delay with regard to the prosecution of his condemnation appeal. Practice Book § 10-31 requires the party objecting to the motion to dismiss to file and serve a memorandum "at least five days before the motion is to be considered on the short calendar. . . ." The motion was heard on February 20, 2001, and the plaintiff's memorandum in opposition was filed on January 22, 2001, well within the requirements of § 10-31.

For the foregoing reasons, the plaintiff's motion to dismiss the defendant's condemnation appeal for failure to prosecute with due diligence is denied.

IV DEFENDANT'S MOTION TO DISMISS

On March 12, 2001, the defendant filed a motion to dismiss the condemnation on the ground that the court lacks subject matter jurisdiction because (1) his filing for bankruptcy prior to the commencement of the condemnation activated the automatic stay provision of 11 U.S.C. § 362, which enjoins the commencement of any judicial proceeding against the defendant or his estate; (2) the condemnation does not fall within any exception to the stay provision; (3) the plaintiff has not sought to modify the stay in the bankruptcy court; (4) this court has the jurisdiction to decide whether the taking constituted a violation of the automatic stay provision; and finally, (5) once the defendant filed for bankruptcy, this court had no jurisdiction to affect the property subject of the notice of condemnation filed by the plaintiff. The plaintiff opposes the defendant's motion on the grounds that (1) the condemnation matured upon the lapse of the bankruptcy stay; (2) the condemnation was reinstated upon the expiration of the bankruptcy stay; and (3) the defendant's current challenge is untimely. At oral argument before this court on May 7, 2001, the plaintiff argued that actions taken in violation of the automatic stay are voidable, that it would be inequitable to allow the defendant to claim any protections of the automatic stay and that the doctrine of laches prohibits the defendant from seeking to dismiss the condemnation.

On more than one occasion during the oral arguments held on the motions subject of the memorandum, the court, Peck, J., invited the plaintiff to address whether any of the exemption provisions in 11 U.S.C. § 362 (b) applied to the underlying condemnation which appeared to have occurred in violation of the automatic stay provisions of the Bankruptcy Code. Despite this invitation, the plaintiff failed to address the issue either in argument or in its written papers.

A

A debtor who has filed a bankruptcy petition obtains an automatic stay of proceedings under 11 U.S.C. § 362 (a)(1) for "the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case" in the bankruptcy court. This is an automatic stay that deprives a state court of jurisdiction regarding any claim against the debtor. See Kalb v. Feuerstein, 308 U.S. 433, 438-39, 60 S.Ct. 343, 84 L.Ed. 370 (1940). "The States cannot, in the exercise of control over local laws and practice, vest state courts with power to violate the [automatic stay]." Id., 439. "Furthermore, recourse to bankruptcy and the concomitant right to an automatic stay of state court proceedings are fundamental debtor protections provided by the bankruptcy laws. . . ." (Internal quotation marks omitted.) Society for Savings v. Stramaglia, 225 Conn. 105, 112, 621 A.2d 1317 (1993). "The scope of the automatic stay is extremely broad, and should apply to almost any type of formal or informal action against the debtor or the property of the estate." (Internal quotation marks omitted.) In re Ormond Beach Associates Ltd. Partnership, 185 B.R. 408, 412 (Bkrtcy.D.Conn. 1995).

The plaintiff argues that when a property owner is in bankruptcy, the notice of condemnation and assessment of damages acts as a lis pendens. Therefore, once the bankruptcy court has entered a judgment dismissing or discharging the bankruptcy and the bankruptcy case has come to an end, the bankruptcy stay automatically lapses and the notice of condemnation and assessment of damages matures vesting title in the State of Connecticut. (Plaintiff's Memorandum of Law in Opposition, dated March 26, 2001, p. 7.)

"A lis pendens is a notice of a claim made in respect to property which is the subject of a pending suit, but it does not of itself create an encumbrance upon the property." In re Kodo Properties, Inc., 63 B.R. 588, 589 (Bkrtcy. E.D.N.Y. 1986). "A notice of lis pendens is appropriate where the pending action will in some way, either directly or indirectly, affect the title to or an interest in the real property itself." First Constitutional Bank v. Harbor Village Ltd. Partnership, 37 Conn. App. 698, 703, 657 A.2d 1110 (1995). "The doctrine underlying lis pendens is that a person who deals with property while it is in litigation does so at his peril. . . . [I]f the power of the courts to determine the rights of the parties to real property could be defeated by its transfer, [during the pendency of litigation], to a purchaser without notice, additional litigation would be spawned and the public's confidence in the judicial process could be undermined." (Internal quotation marks omitted.) Id., 704.

The plaintiff has cited no authority nor could any be found for the proposition that when a property owner has filed for bankruptcy, the subsequent notice of condemnation and assessment of damages acts as a lis pendens which matures upon the lapse of the bankruptcy stay.

B

The plaintiff next argues pursuant to In re Linton, 35 B.R. 695, 696 (Bkrtcy.D.Idaho, 1983), that this court under 11 U.S.C. § 349 (b), should reinstate the condemnation which occurred after the filing of the bankruptcy petition and in violation of the bankruptcy stay. "Subsection (b) specifies that the dismissal reinstates proceedings or custodianships that were superseded by the bankruptcy case, reinstates avoided transfers, reinstates voided liens, vacates any order, judgment, or transfer ordered as a result of the avoidance of a transfer, and revests the property of the estate in the entity in which the property was vested at the commencement of the case. The court is permitted to order a different result for cause. The basic purpose of the subsection is to undo the bankruptcy case, as far as practicable, and to restore all property rights to the position in which they were found at the commencement of the case." (Emphasis added.) H.R. Rep. No. 95-595 to accompany H.R. 8200, 95th Cong., 1st Sess., pp. 337-38 (1977).

Bankruptcy Code § 349 describes the effect of the dismissal of a bankruptcy case and provides in relevant part:
"(b) Unless the court, for cause, orders otherwise, a dismissal of a case other than under 742 of this title —
"(1) reinstates —
"(A) any proceeding or custodianship superseded under section 543 of this title [ 11 USCS § 543];
"(B) any transfer avoided under section 522, 544, 545, 547, 548, 549, or 724(a) of this title, or preserved under section 510(c)(2), 522 (i)(2), or 551 of this title; and
"(C) any lien voided under section 506(d) of this title;
"(2) vacates any order, judgment, or transfer ordered, under section 522(i)(1), 542, 550, or 553 of this title; and
"(3) revests the property of the estate in the entity in which such property was vested immediately before the commencement of the case under this title."

In Gugliotti v. Michaud, Superior Court, judicial district of Waterbury at Waterbury, Docket No. 127511 (April 10, 1996, Kulawiz, J.) ( 16 Conn. L. Rptr. 463), a receiver of rents brought a motion for contempt in a foreclosure action. The appointment of the receiver occurred after the filing of the defendant's bankruptcy petition in violation of the automatic stay. The receiver sought to avoid the consequences of the plaintiff's violation of the automatic stay by arguing that the subsequent dismissal of the defendant's bankruptcy case pursuant to Bankruptcy Code § 349 served to "reinstate" his appointment as receiver of rents. Id., 464. In support of this argument, the receiver relied exclusively upon In Re Linton, supra, 35 B.R. 695, "for the proposition that the dismissal of a bankruptcy case validates actions taken in violation of the automatic stay." Gugliotti v. Michaud, supra, 16 Conn. L. Rptr. 464.

In denying the motion for contempt, the court in Gugliotti v. Michaud, supra, 16 Conn. L. Rptr. 465, noted the policy considerations expressed in the Third Circuit by the Bankruptcy Court for the District of New Jersey in Matter of Cappadonna, 154 B.R. 639 (Bkrtcy.D.N.J. 1993). InMatter of Cappadonna, supra 154 B.R. 642, in denying the mortgagee's petition for relief from the automatic stay in order to continue the foreclosure proceeding, the court explained that "[s]hould the court allow a creditor, who . . . obtains judgment in violation of their automatic stay, to ratify that judgment once the debtor is outside of bankruptcy protection, what will stop all creditors from proceeding to judgment in violation of the stay? This would certainly defeat the purpose of the automatic stay, which is to afford protection to debtors and enable them to focus attention on their bankruptcy proceeding."Gugliotti v. Michaud, supra, 16 Conn. L. Rptr. 465. In accordance withMatter of Cappadonna, supra 154 B.R. 642, the court in Gugliotti v. Michaud, supra, 16 Conn. L. Rptr. 465, rejected the receiver's argument holding that the "dismissal of the bankruptcy proceeding, in no way affects the status of a void order. Although a dismissal of the bankruptcy action lifts the stay as to future actions, it in no way reinstates prior actions brought in violation of the automatic stay."

Based on the foregoing, the court finds that § 349(b) did not reinstate the condemnation following the subsequent dismissal of the bankruptcy case because the adoption of this position "would make it impossible to return the rights of the parties to the position in which they were found at the commencement of the case." Gugliotti v. Michaud, supra, 16 Conn. L. Rptr. 465; see also In re Eden Associates, 13 B.R. 578, 585 (Bkrtcy.S.D.N.Y. 1981) (the court refused to reinstate a foreclosure sale, conducted after the filing of the bankruptcy petition, where the foreclosing party knew of the filing and of the debtor's claimed interest in the property).

C

The plaintiff argues pursuant to Edwards v. Bridgeport Hydraulic Co., 152 Conn. 684, 691, 211 A.2d 679 (1965), that the defendant's challenge to the condemnation is untimely because "a party seeking relief under an inverse condemnation claim or seeking other relief under Article First Section Eleven of the Connecticut Constitution has three years to bring his action." (Plaintiff's Memorandum of Law in Opposition, dated March 26, 2001, p. 8.)

The court finds that the defendant is not seeking relief under inverse condemnation or Section 11 of Article First of the Constitution of the State of Connecticut. Furthermore, the three year statute of limitations in Edwards v. Bridgeport Hydraulic Co., supra, 152 Conn. 691, is General Statutes § 52-577 which provides that: "No action founded upon a tort shall be brought but within three years from the date of the act or omission complained of." The defendant's motion to dismiss is not an "action founded upon a tort." Rather, it is a motion to dismiss based on lack of subject matter jurisdiction which may be made at any time.Stroiney v. Crescent Lake Tax District, supra, 205 Conn. 294. Therefore, the court finds that § 52-577 is inapplicable to the defendant's motion to dismiss.

"Inverse condemnation should be distinguished from eminent domain. Eminent domain refers to a legal proceeding in which a government asserts its authority to condemn property. . . . Inverse condemnation is a shorthand description of the maimer in which a landowner recovers just compensation for a taking of his property when condemnation proceedings have not been instituted." (Internal quotation marks omitted.) Santini v. Connecticut Hazardous Waste Management Service, 251 Conn. 121, 130 n. 14, 739 A.2d 680 (1999).

Section 11 of Article First of the Constitution of the State of Connecticut provides:
"The property of no person shall be taken for public use, without just compensation therefor."

D

The plaintiff further claims that actions taken in violation of the automatic stay are voidable and that it would be inequitable to allow the defendant to claim the protection of the automatic stay provision. "Generally, acts taken in violation of the automatic stay are void and of null effect." In re Philao Realty Co., 185 B.R. 676, 679 (Bkrtcy.E.D. N.Y. 1995); In re 48th Street Steakhouse, Inc., 835 F.2d 427, 431 (2d Cir. 1987), cert. denied,Rockefeller Group, Inc. v. 48th Street Steakhouse, Inc., 485 U.S. 1035, 108 S.Ct. 1596, 99 L.Ed.2d 910 (1988). "Authorities are split as to whether an action taken in violation of the automatic stay is void or voidable. . . . Although the Second Circuit has stated that such actions are void . . . bankruptcy courts within the circuit have more recently reached the opposite conclusion. . . . A number of Courts of Appeals have also determined that actions in violation of the automatic stay are voidable rather than void." (Citations omitted.) Dott v. Metz, 1997 U.S. Dist. LEXIS 15592 (E.D.N.Y. 1997).

Although this decision reflects that this case was reversed and remanded, despite an extensive search, no official citation for this opinion could be located.

While the foregoing authorities are split, the plaintiff has cited no authority nor could any be found vesting state courts with the power to hear and determine whether actions taken in violation of the automatic stay are void or voidable. Consequently, the court finds that it may not determine whether the condemnation, which was improperly bought during the pendency of the bankruptcy stay, is voidable so as to retroactively reinstate it.

E

Finally, the plaintiff argues pursuant to Thornton v. First State Bank of Jodin, 4 F.3d 650, 653 (8th Cir. 1993), that the doctrine of laches prohibits the defendant from seeking to dismiss the condemnation on the ground that the plaintiff violated the automatic stay. "Laches is defined as the neglect or delay in bringing suit to remedy an alleged wrong, which taken together with lapse of time and other circumstances, causes prejudice to the adverse party. . . ." (Internal quotation marks omitted.) Goldwasser v. Smith Corana Corp., 817 F. Sup. 263, 273 (D.Conn. 1993), aff'd, 26 F.3d 137 (Fed. Cir. 1994). Thus, "[l]aches is an equitable defense. . . ." K.P. v. Juzwic, 891 F. Sup. 703, 715 (D.Conn. 1995). The court finds that the plaintiff is attempting to use the doctrine of laches as a sword rather than a shield, i.e., the defendant has not initiated a suit against the plaintiff, but instead seeks to dismiss the condemnation brought by the plaintiff against the defendant. Laches, however, is as an equitable defense. K.P. v. Juzwic, supra, 891 F. Sup. 715. The plaintiff's claim of laches is without merit and cannot be asserted under the circumstances.

In Thornton v. First State Bank of Jonlin, supra, 4 F.3d 653, the Court of Appeals held that it was within the district court's discretion to apply the doctrine of laches to dismiss count four of the plaintiff's complaint, the claim alleging that the defendant violated the automatic stay order issued by the bankruptcy court.

Although, the court rejects the arguments raised by the plaintiff in opposition to the defendant's motion to dismiss, it finds, nonetheless, that there is no basis to dismiss the case on the grounds raised by the defendant. While the bankruptcy stay may oust the jurisdiction of the state court so as to stay its power to proceed without the consent of the bankruptcy court while the bankruptcy petition remains pending, this court fundamentally has subject matter jurisdiction over condemnation proceedings. See Kalb v. Feuerstein, supra, 308 U.S. 433, 438-39, 60 S.Ct. 343, 84 L.Ed. 370 (1940); Prudential Ins. Co. v. Calabrese, Superior Court, judicial district of Waterbury, Docket No. 127550 (March 15, 1996, Pellegrino, J.) ( 16 CLR 247). Counsel for the parties have indicated that the defendant has been discharged from bankruptcy so that his petition is no longer pending. However, this court has no official confirmation of that fact. Accordingly, the defendant's motion to dismiss on the grounds that this court lacks subject matter jurisdiction is denied.

There are procedural mechanisms available to the parties that will move this case forward. For example, the plaintiff has never applied to the bankruptcy court for retroactive relief from the automatic stay in accordance with Bankruptcy Code § 362(d). The Bankruptcy Code § 362(d) empowers the bankruptcy court to grant relief from the automatic stay and provides in pertinent part that "[o]n request of a party . . . the court shall grant relief from the stay . . . by terminating, annulling, modifying, or conditioning such stay." "The inclusion of the word annulling in the statute indicates a legislative intent to apply certain types of relief retroactively and validate proceedings that would otherwise be void ab initio. . . . [S]ection 362 gives the bankruptcy court wide latitude in crafting relief from the automatic stay, including the power to grant retroactive relief from the stay. . . . Research reveals widespread support for the proposition that a bankruptcy court may "annul' an automatic stay so as to retroactively reinstate a claim which was improperly brought during the pendency of the stay." (Citations omitted; internal quotation marks omitted.) Prudential Ins. Co. v. Calabrese, Superior Court, judicial district of Waterbury, Docket No. 127550 (March 15, 1996, Pellegrino, J.) ( 16 CLR 247).

CONCLUSION

For all the foregoing reasons, the plaintiff's motions to dismiss are denied. The defendant's motion to dismiss is also denied.

Peck, J.


Summaries of

Sullivan v. Krawski

Connecticut Superior Court, Judicial District of Hartford at Hartford
Aug 31, 2001
2001 Ct. Sup. 12124 (Conn. Super. Ct. 2001)
Case details for

Sullivan v. Krawski

Case Details

Full title:JAMES F. SULLIVAN, COMMISSIONER OF TRANSPORTATION OF THE STATE OF…

Court:Connecticut Superior Court, Judicial District of Hartford at Hartford

Date published: Aug 31, 2001

Citations

2001 Ct. Sup. 12124 (Conn. Super. Ct. 2001)
30 CLR 492