MEMORANDUM OF DECISION RE APPLICATION FOR TEMPORARY INJUNCTION AND MOTION TO DISCHARGE LIS PENDENS

DOHERTY, JUDGE.

The plaintiff, William Evans, commenced this action against the defendants, Michele A. Evans and John Evans, his sister-in-law and brother, respectively, in four counts, alleging constructive trust, breach of contract, unjust enrichment and estoppel.

In order to preserve his interest in the real property herein after described, and to prevent its sale or conveyance by the defendants, the plaintiff caused a lis pendens to be placed on the land records and has applied to this court for a preliminary injunction and order requiring the defendants to appear before this court and to show cause why the injunctive relief sought by the plaintiff should not be granted.

The defendants have applied to the court for a discharge of the lis pendens.

The parties appeared before the court and were heard and the court reserved decision.

Having considered the arguments of the parties as well as the applicable statutory authority and case law, the court makes the following findings and orders.

The brothers Evans have had a prior history of joint ventures wherein they have acquired, restored or improved and then sold various parcels of real property. The evidence permits the court to find that their dealings in regard to the subject property were similar to prior ventures with a few variations in this case.

The subject property, 69 Arbor Drive, Southport, CT, was discovered by William and he and John agreed to acquire it. In this case, apparently for financial and credit reasons, they called upon their father William Evans, Sr. to actually purchase the house on their behalf which he did sometime in 1989 for $175,000.00.

The first year they owned it, the brothers leased it to students from Fairfield University and took the profits. In 1990, John, his wife Michelle and their family moved into the house. In consideration for his use and occupancy, John was "charged" $1200.00 per month in "imputed" rent for the house and William was "charged" $250.00 per month in "imputed" rent for his use of the garage and the driveway area. He used his portion of the property for storage and truck parking as part of a commercial enterprise. Each of those amounts was subsequently increased nominally.

The rents were "imputed" in the sense that neither actually paid funds to the other, but rather a "record of capital accounting" was maintained to reflect their respective contributions to the cost and maintenance of the property.

Considerable testimony was offered by each brother as to the method of credits and debits and as to what each brother's true proportionate interest was at various times from the acquisition of the property to date. There was considerable dispute as to the correct figures.

It is unrefuted that neither brother ever held record title to the property. In 1990, father executed a deed prepared by John, an attorney, conveying the property to father and Michelle Evans in equal shares. In 1998, father conveyed his one-half interest to Michelle by a deed prepared by John.

In 1999, Michelle refinanced the property increasing the principal by approximately $16,000.00. She was represented in that transaction by John. William was not aware of it and did not share in any funds.

In November 2000, Michelle again refinanced the property for approximately $234,000.00. Once again, she was represented by John. William was not consulted nor did he share in any funds.

The testimony also permits the court to find that the "account" between the brothers was adjusted in May 1998, when, finding himself in need of cash, William was advanced $8,000.00 by John allegedly in exchange for 8% of William's one-half interest in the property. Several months later William allegedly paid to John $5,000.00. Whether that payment was merely a repayment of a loan from John or a re-investment in the "capital account" was disputed by the parties. Obviously it further skewed not only the amount of the account, but also its perceived reason for being.

The defendants have made it clear that they intend to sell the property for approximately $489,000.00 and use the net proceeds from that sale to purchase a new residence for themselves in Pennsylvania. The contract for the sale of the subject property has already been executed. There was no testimony indicating that the plaintiff will receive any portion of those net proceeds. The damage and injury which the plaintiff alleges in his complaint is not merely speculative. The sale of the property will occur absent any order of this court enjoining it.

If their intended plans are realized, the defendants will soon no longer be residents of this state and there is no evidence before the court that any assets of theirs will remain in this state to satisfy a judgment in favor of the plaintiff should one ultimately enter.

I. TEMPORARY INJUNCTION

The purpose of a temporary injunction is to preserve the status quo until final determination of the parties' rights after a hearing on the merits. See Clinton v. Middlesex Mutual Assurance Co., 37 Conn. App. 269, 270 (1995), quoting Olcott v. Pendleton, 128 Conn. 292, 295 (1941).

The questions of irreparable harm and availability of an adequate remedy at law are threshold issues which the court must consider before it can determine whether injunctive relief is warranted. Hartford v. American Arbitration Association, 174 Conn. 472, 476 (1978).

As it is required to, this court has considered the following factors: irreparable and imminent injury; lack of an adequate remedy at law; likelihood of success on the merits; and whether a balancing of the equities favors granting the injunction. See Waterbury Teachers Assn. v. Freedom of Information Commission, 230 Conn. 441, 446 (1994). General Statutes § 52-472.

The evidence and the pleadings indicate that while the plaintiff has a viable cause of action in regard to each of the four counts of his complaint, he, himself, testified that the damages he seeks are strictly monetary damages and if the amount of damages was sufficient, his claims would be satisfied. This is not a case where the plaintiff is seeking to enjoin the defendant from selling the family homestead or from selling a piece of property that the plaintiff, himself, has a right and/or even an interest in retaining for his own purposes. As far as the plaintiff is concerned, the property in the instant case is simply a piece of realty in which he, arguably, has an equitable interest and he has commenced this action to have that interest determined by the court and awarded to him.

The plaintiff has failed to establish that he will be irreparably harmed if the defendants are not enjoined from selling the property and he has not established that he has no adequate remedy at law to prevent the defendants from using the proceeds of such sale in a way that deprives him of such proceeds. For that reason the plaintiff's application for a preliminary or temporary injunction is hereby denied.

II. APPLICATION TO DISCHARGE LIS PENDENS

As noted by the plaintiff in his brief, Connecticut General Statutes Sec. 52-325, et seq., grants to parties the right to record a notice of lis pendens in any action "intended to affect real property." The notice, in and of itself, does not prevent the sale of property to a third party. However, it puts any potential buyer on notice that the property is the subject of litigation and that he acquires it with full knowledge of that fact.

It is not necessary that the action must affect title to real property. Sec. 52-325 (b) provides

As used in this section, actions "intended to affect real property" means (1) actions whose object and purpose is to determine the title or rights of the parties in, to, under or over some particular real property; (2) actions whose object and purpose is to establish or enforce previously acquired interests in real property; (3) actions which may affect in any manner the title to or interest in real property, notwithstanding the main purpose of the action may be other than to affect the title of such real property.

(Emphasis added.)

The imminent sale of a unique piece of real property, which the defendant has established by his pleadings and his testimony is one in which he has a definite equitable interest, are allegations which clearly meet that standard. For that reason, a notice of lis pendens is appropriate provided the plaintiff. In order to prevail against the motion to discharge the lis pendens, the plaintiff herein is required to establish that there is probable cause to sustain the validity of his claim. Sec. 52-325b (a).

In order to determine whether or not the plaintiff has established probable cause to sustain the validity of the claims underlying the cause of action, the court has considered the allegations in each of the four counts of the plaintiff's complaint.

CONSTRUCTIVE TRUST

The defendants argue that the facts alleged by the defendant regarding the nature of the parties' relationship do not permit a determination by the court that a constructive trust, as that concept is defined by case law, can be found to exist in this case.

The court disagrees with that argument posed by the defendants.

"A constructive trust arises whenever another's property has been wrongfully appropriated and converted into a different form . . . [or] when a person who holds title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it." (Citations omitted; internal quotation marks omitted.) Spatola v. Spatola, 4 Conn. App. 79, 81, 492 A.2d 518 (1985), as cited in Jaser v. Fischer, 65 Conn. App. 349, 559 (2001).

"Courts may use the equitable device of a constructive trust to remedy the unjust enrichment which results from not disposing of property as promised after the promise induced someone with whom the promisor shared a confidential relationship to transfer the property to the promisor. Starzec v. Kida, 183 Conn. 41, 49 (1981)." Giulietti v. Giulietti, 65 Conn. App. 813, 860, as cited in Riccio v. Riccio, 75 Conn. App. 556, 558-59 (2003).

Sufficient evidence was elicited at the hearing before the court to permit a finding that the elements of a constructive trust existed in the relationship and the enterprise of the brothers.

BREACH OF CONTRACT

The evidence permits a finding that the business relationship involving the acquisition and maintenance of the subject property constituted a contract between the brothers which, if the plaintiff's claims are established, was breached by the conduct of the defendant John Evans.

UNJUST ENRICHMENT

As with the claim of constructive trust discussed above, the plaintiff has provided the court with sufficient allegations and sufficient facts to establish that, if proven, the defendants may be found to have been unjustly enriched by their unilateral appropriation of the property and by its proposed sale.

ESTOPPEL

The evidence and testimony further permits a claim by the plaintiff that the nature and purpose of the joint venture in acquiring the property and in contributing to its maintenance was such that the defendants are estopped from now claiming that the plaintiff's interest in the property is either nominal or non-existent.

The defendants have put great stock in the fact that the defendant, William Evans, Jr., did not disclose his ownership interest in the subject property to the IRS or to other agencies. The court notes that it was agreed by John and William Evans from the outset that the title to the property would be held by someone other than themselves — that person being their father. Whether or not that decision was for purposes of financing, credit, tax consequences or otherwise, it was agreed and understood that record title would not be in the brothers. Any subsequent failure by the plaintiff to fully disclose his interest in the property may or may not be relevant to the issue of whether he actually owned it or not. Such failure to disclose certainly did not prejudice the defendants who were well aware of his claimed title. The applicability of the "clean hands doctrine" would be more appropriately raised, if at all, as part of the evidence in chief at trial. It may also be the subject of fair comment when it comes to the trier of the facts being made aware of any perceived denial by the defendant that he did, in fact, claim an ownership interest in the subject property. At this stage of the proceedings, however, the "clean hands doctrine" does not mitigate against the burden of the plaintiff in establishing probable cause to sustain the validity of his claim.

"Probable cause is a flexible common sense standard. It does not demand that a belief be correct or more likely true than false." Three S Development Co. v. Santore, 193 Conn. 174, 175, 474 A.2d 795 (1984). It deals with probabilities, and the "application of the factual and practical considerations of everyday life on which reasonable and prudent men act." State v. Wilson, supra, fn8 Ierardi v. Commission on Human Rights Opportunities, supra, 580-81, as cited in Adriani v. Commission on Human Rights and Opportunities, 220 Conn. 307, 316 (1991).

"This probable cause hearing is not a trial on the merits, nor is it intended as such. The plaintiff need not establish his claim by a preponderance of the evidence. The court, while not making a final decision on the merits, weighs the testimony given and the documentary proof presented. The trial court's duty is to weigh the probabilities based on the facts and to exercise its broad discretion in determining whether there is probable cause to sustain the lis pendens." Williams v. Bartlett, 189 Conn. 471, 483, 457 A.2d 290 (1983), as cited in Sanstrom v. Strickland, 11 Conn. App. 211, 212 (1987).

As our Appellate Court reasoned in Cadle Co. v. Gabel, "After our review of the stipulated facts in this case, the law of constructive trusts and the persuasive reasoning of an analogous case, we are convinced that the court, after a trial on the merits, could find that the defendants here similarly were unjustly enriched and that a constructive trust is an appropriate remedy. We therefore conclude that it was not clearly erroneous for the court to find, on the basis of the plaintiff's constructive trust claim, that there was probable cause to sustain the notice of lis pendens." Cadle Co. v. Gable, 69 Conn. App. 279, 293 (2002).

In this case the court finds that there is probable cause to sustain the lis pendens.

For the foregoing reasons, the defendants' application for discharge of lis pendens is hereby denied.

JOSEPH W. DOHERTY, J.