Opinion
No. X04-CV 96-0125207 S
October 3, 2003
MEMORANDUM OF DECISION RE MOTION TO DISSOLVE BOND
The issue presented by this motion is whether a defendant may substitute as sufficient security in one case a money judgment it obtained in a related case between substantially the same parties in lieu of the prejudgment remedy bond previously posted. The procedural history of this case and the related case are of assistance in resolution of the issue. This action was brought by the Town of Windham to recover past due real estates taxes from the defendant for certain property owned by it in Willimantic, formerly operated as a textile mill. On May 7, 1997 the court granted a prejudgment remedy to attach assets of the defendant in the amount of $375,000 (Sfezzarra, J.). After entry of the prejudgment remedy, a bond was substituted in lieu of the attachment. It is that bond which defendant now seeks to dissolve.
Defendant claims that a judgment slightly in excess of $1.7 million dollars in the related action, hereafter referred to as Northeast Alliance, is adequate security for the Town's claims. The plaintiff Town disputes that the judgment obtained is adequate as the judgment is not yet final and is or will soon be appealed. For the reasons set forth in detail below, the court denies the motion to dissolve the bond, finding that the plaintiff is entitled to the protection provided by the bond until such time as the related action has been conclusively determined. The court concludes the present judgment in the related case is not "sufficient" substitute security for the bond posted.
Northeast CT. Economic Alliance, Inc. v. ATC Partnership, Inc., Superior Court, Complex Litigation Docket at Norwich, Docket Number X04-CV94 0124630S, an appeal from a statement of compensation filed upon the taking of the property known as Windham Mills. On February 14, 2003, a judgment awarding the defendant in that case $1,721,165.00 entered, which judgment was later clarified to provide the amount of $1,752,365.00. In addition to the two cases above referenced, there are two more related cases between the parties, which remain pending. See also Northeast CT Economic Alliance, Inc. v. ATC Partnership, 256 Conn. 813, 776 A.2d 1068 (2001), reversing the earlier judgment and remanding the case for a new trial, the conclusion of which remand is the case above cited.
I. DISCUSSION
The court has discretion to modify or vacate existing prejudgment remedies. Conn. General Statutes § 52-278k provides that:
The court may, upon any application for prejudgment remedy under Section 52-278c, 52-278e, 52-278h or 52-278i, modify the prejudgment remedy requested as may be warranted by the circumstances. The court may, upon motion and after hearing, at any time modify or vacate any prejudgment remedy granted or issued under this chapter upon the presentation of evidence which would have justified such court in modifying or denying such prejudgment remedy under the standards applicable at an initial hearing.
The motion to dissolve the bond previously posted thus implicates this portion of the prejudgment remedy statute. Before the modification requested could be granted, the evidence presented to the court must therefore be that evidence which would be adequate in an initial hearing. But by considering the initial hearing, the defendant does not raise the question of whether or not there is not probable cause to sustain the validity of the claim. Since the defendant claims that the judgment in the related case provides adequate security for the potential judgment to be secured in this case, the defendant argues for the substitution of one form of security with another.
The statutory prejudgment remedy scheme appears to contemplate "sufficient other security" as a form of prejudgment remedy under § 52-278n(d) where a defendant, upon receiving an order to disclose assets, may move for substitution of bond or "other sufficient security." Here, after the conclusion of the original prejudgment hearing, the court ordered the defendant to disclose assets and when the plaintiff moved to attach certain bank accounts, the bond in question was posted. So the original posture of the orders in this case indicates this is not so much a motion to dissolve the bond as to substitute other security in lieu of a bond, pursuant to Section § 52-278n.
In whatever manner the motion is styled, proposing to substitute the judgment in Northeast Alliance as security for another case presents troublesome issues. Leaving aside the practical nature of the assignment of the defendant's interest in a judgment in another case, there is first the question of what is meant by adequate security. The court could locate no Connecticut case law guidance on this subject, and concludes, based on the statutory language, that the proposed substitute asset must have some value equal to the original prejudgment remedy granted to render it "sufficient," that is to say worth at least $375,000. As an initial unexamined proposition, without question an asset with a value of $1,700,000 is sufficient, assuming the judgment in the related case can be said to have such a value.
The court notes that the mechanics by which such security would be provided to the Town of Windham were not addressed by the parties. Presumably, like the bond, there would have to be some assignment of at least a portion of the judgment in Northeast Alliance to the plaintiff in the present case.
The plaintiff argues the judgment is not adequate, since the judgment is not final and it is entitled in the case at bar to the protection of its bond. So the court must determine, whether, for these purposes, the judgment in Northeast Alliance may be treated as final. The depth of the legal quagmire the court must navigate is noted by the Supreme Court in Preisner v. Aetna Casualty Surety Co., 203 Conn. 407, 413-15, 525 A.2d 83 (1987). The court stated:
As this court has previously noted, the effect of a pending appeal upon an otherwise final judgment has aptly been characterized as [o]ne of the most troublesome problems in applying the rule of finality [of judgments], because this is an area in which [t]here are no technically precise and universally recognized rules . . . In the absence of universally applicable rules we have recognized that the relationship between a pending appeal and a judgment depends upon the nature of the issue that is to be addressed. Accordingly, a trial court judgment has been held to be final, despite a pending appeal, insofar as the issue was the triggering of the statute of limitations; the continuing validity of interlocutory alimony orders; or the applicability of the rules of res judicata. In Bissell, we held that such a judgment was not final for the purpose of determining the law governing mortgage foreclosures when that law was amended during the pendency of an appeal. The finality of a trial court judgment is not directly affected by the fact that an appeal automatically stays the enforcement of a judgment. See Practice Book 4046 (formerly 3065). The stay does not vacate the judgment obtained by the successful litigant. It merely denies that party" the immediate fruits of his or her victory"; in order to protect the full and unhampered exercise of the right of appellate review. Correlatively, an order of execution, in the absence of a stay, does not moot the justiciability of a pending appeal. If a judgment has been satisfied before it is reversed . . . the law raises an obligation in the party to the record, who has received the benefit of the erroneous judgment, to make restitution to the other party for what he has lost; and the mode of proceeding to effect this object must be regulated according to circumstances. (Citations omitted.)
The finality of a judgment depends, therefore, on the determination of any appeal. If the trial court's judgment is sustained, or the appeal dismissed, the final judgment ordinarily is that of the trial court. If however, there is reversible error, the final judgment is that of the appellate court.
The parties have cited for the court certain unreported cases and other cases for the court's consideration. Those cases, while instructive, do not address the issues raised by this motion. They all concern themselves with whether a party can appropriately either obtain or continue a prejudgment remedy when the trial court has entered judgment and the matter is then appealed. See Connecticut National Bank v. Giacomi, Superior Court, judicial district of Waterbury, Docket No. 105860 (April 7, 1994, Blue, J.); Winsted Land Development v. Design Collaborative Architects, Superior Court, Docket No. CV 960071571S, judicial district of Litchfield, 25 Conn. L. Rptr. 618 (October 20, 1999, Frazzini, J.); Coble v. Maloney, Superior Court, judicial district of Waterbury, Docket No. 089843, 8 Conn. L. Rptr. 136 (Jan. 4, 1993, Blue, J.); Town of Brookfield v. Greenridge, Inc., 35 Conn. Sup. 49, 393 A.2d 1316 (Super.Ct. 1977, Devita, J.).
In this instance, Northeast Alliance raises complex issues of valuation regarding the condemnation compensation award. The case has already been the subject of one appeal. At the conclusion of the first appeal, it was remanded to the trial court for a new trial, based on the principles announced and given the unique character of the textile mills, issues of environmental remediation costs and funds available for that purpose. The present decision addresses those issues. While it is not for this court to take a position on whether or not any appeal would be successful, it can be said with some certainty that the outcome is not assured. The court finds that the present money judgment in Northeast Alliance is not adequate "sufficient" security to the plaintiff for any ultimate judgment it may secure in this municipal tax collection case. For all the foregoing reasons, the defendant's motion to dissolve the bond is denied.
Northeast CT Economic Alliance, Inc. v. ATC Partnership, 256 Conn. 813, 776 A.2d 1068 (2001), directing the court to conduct a new trial and to include the environmental remediation costs in its valuation of the property condemnation award.
BY THE COURT
BARBARA M. QUINN, JUDGE