Opinion
CV116007326.
12-13-2012
ARMY AVIATION CENTER F.C.U. v. Donald R. BIZEK.
UNPUBLISHED OPINION
COSGROVE, J.
I
BACKGROUND
On January 5, 2011, the plaintiff, Army Aviation Center F.C.U., filed a complaint seeking to enforce a foreign judgment against the defendant, Donald R. Bizek. Following a second request to revise, the plaintiff filed, along with an attached certificate of judgment and final foreign judgment, its second revised complaint on October 17, 2011, in which it alleges the following relevant facts. On February 25, 2005, under case number CV-1998-163 in the Circuit Court of Dale County in Alabama, the plaintiff obtained judgment against the defendant for the principal amount of $27, 853.54, plus costs of $194, for a total of $28, 047.54. The defendant was not present in court at the time that judgment was rendered. The defendant had been, however, represented by counsel in this case for some period of time until that attorney filed a motion to withdraw. The judgment was not obtained by default in appearance or by confession of the judgment.
The plaintiff further alleges that the judgment is unsatisfied in whole or in part. To date, the defendant has not made payments to the plaintiff. As a result, the outstanding balance is $28, 047.54, plus interest at the postjudgment statutory rate of 12 percent per annum, from February 5, 2005, the date of judgment, to December 20, 2010, the date suit was commenced in Connecticut, pursuant to § 8-8-10 of the Code of Alabama. Postjudgment interest in Connecticut, at the court's discretion may be awarded pursuant to § 37-3a of the General Statutes. The enforcement of the judgment has not been stayed, and the plaintiff's filing is made pursuant to General Statutes § 52-607.
The date of commencement of the suit in Connecticut alleged by the plaintiff in its second revised complaint is incorrect. The date mentioned, December 20, 2010, is actually the date the summons was signed. The return of service by the marshal indicates that the action was commenced by service of process on December 29, 2011. The date in the marshal's return appears to be a typographical error, as the action could not have been commenced nearly one year after the summons and complaint were filed with the court.
On January 19, 2012, the defendant filed a revised answer and special defenses. In his answer, the defendant admits that he was not in court when judgment was entered. The defendant denies or claims insufficient knowledge as to all other allegations, and leaves the plaintiff to its proof. The defendant alleges four special defenses: (1) equitable estoppel, (2) payment, (3) default judgment/lack of notice, and (4) violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. With regard to the equitable estoppel, payment, and CUTPA defenses, the defendant alleges the following facts. The defendant was not present in court on the date judgment was entered, and any valid judgment entered by default was for a marginal amount. Originally, this amount was $2, 494.12. Moreover, no credit was given for the collateral taken, including a 1994 Chrysler minivan and property in Alabama. As a result of the facts stated above, the defendant argues that: (1) the plaintiff is equitably estopped from recovering any amounts (equitable estoppel); (2) the plaintiff has more than adequately collected for any amounts it could claim (payment); and (3) because the plaintiff has now claimed more than twenty times the original debt, it has engaged in unscrupulous and harmful activities, and therefore it violated CUTPA. In his third special defense, the defendant argues that he was not present in court on the date judgment was entered, and any judgment, if valid, entered by default, without adequate notice to the defendant, and without providing the defendant with adequate opportunity to actually litigate the claims.
On February 2, 2012, the plaintiff filed a motion to strike the defendant's special defenses on the ground that they are legally insufficient because they do not destroy the plaintiff's cause of action and are not permissible grounds to collaterally attack a foreign judgment. On March 21, 2012, the defendant filed a memorandum in opposition to the plaintiff's motion to strike the special defenses. Finally, on June 11, 2012, the plaintiff filed a reply to the defendant's objection to the motion to strike.
II
DISCUSSION
" [A] plaintiff can [move to strike] a special defense ..." Nowak v. Nowak, 175 Conn. 112, 116, 394 A.2d 716 (1978); see also Connecticut National Bank v. Voog, 233 Conn. 352, 354-55, 659 A.2d 172 (1995) (plaintiff moved to strike special defense that there is no duty for a lender to investigate a borrower's motives or financial status). " In ... ruling on the ... motion to strike, the trial court [has an] obligation to take the facts to be those alleged in the special defenses and to construe the defenses in the manner most favorable to sustaining their legal sufficiency." Connecticut National Bank v. Douglas, 221 Conn. 530, 536, 606 A.2d 684 (1992).
" It is fundamental that in determining the sufficiency of a [pleading] challenged by [an opposing party's] motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted ... Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically." (Internal quotation marks omitted.) Violano v. Fernandez, 280 Conn. 310, 318, 907 A.2d 1188 (2006). Nevertheless, " [i]n deciding upon a motion to strike or a demurrer, a trial court must take the facts to be those alleged in the [pleading] ... and cannot be aided by the assumption of any facts not therein alleged." (Citations omitted; internal quotation marks omitted.) Liljedahl Brothers, Inc. v. Grigsby, 215 Conn. 345, 348, 576 A.2d 149 (1990). " On the other hand, the total absence of any factual allegations specific to the dispute renders [the special defense] legally insufficient." (Internal quotation marks omitted.) Bank of New York v. Saquinaula, Superior Court, judicial district of Fairfield, Docket No. CV 08 5017454 (July 14, 2011, Hartmere, J.).
In support of this motion, the plaintiff argues that the first and second special defenses, both of which allege that the plaintiff failed to apply credits to the debt for collateral taken, attack the merits of the judgment, and are therefore not permissible grounds to attack a foreign judgment. Moreover, the plaintiff argues that the fourth special defense, under CUTPA, is not applicable under Alabama law because CUTPA specifically addresses unfair trade practices committed in Connecticut. The plaintiff also argues that the fourth special defense is legally insufficient and should be stricken because it is based on the allegations of the first two special defenses, which are legally insufficient. With regard to the third special defense, the plaintiff argues that the failure to appear at a hearing when judgment is entered is not a permissible ground to collaterally attack a foreign judgment. The plaintiff also maintains that any failure of the Alabama court system to notify the defendant of the hearing must be addressed in the Alabama courts. Hence, the plaintiff argues that the third special defense should also be stricken. The defendant counters that the defenses pleaded do apply to the enforcement of the judgment since they allege conduct that occurred after the alleged judgment was obtained. Furthermore, the defendant argues that defenses based on failure to apply proper credit are properly pleaded defenses to the enforcement of a judgment. Finally, the plaintiff argues that the legislature did not list payment as a ground for nonrecognition of a foreign judgment in General Statutes § 50a-34 and, therefore, such a defense must be raised in the foreign forum. The plaintiff also argues that the defendant did not respond to the motion to strike with regard to the remaining defenses and that those defenses, therefore, must be stricken.
General Statutes § 50a-34 is part of Connecticut's adoption of the Uniform Foreign Money-Judgments Recognition Act. This act is not applicable to judgments entered by a court of the United States or any state thereof. See General Statutes § 50a-31 (defining " foreign state" as " any governmental unit other than the United States or any state, district, commonwealth, territory or insular possession thereof').
The plaintiff has provided no authority in support of this argument. Moreover, the defendant argues in his memorandum in opposition that all of the defenses are legally sufficient. Accordingly, the plaintiff's argument that the motion should be granted as to certain counts because the defendant failed to oppose the motion as to those counts is without merit.
" The full faith and credit clause of the United States constitution requires a state court to accord to the judgment of another state the same credit, validity and effect as the state that rendered the judgment would give it ... In accordance with this federal mandate, our legislature enacted the Uniform Enforcement of Foreign Judgments Act, General Statutes § 52-604 et seq., ... which permits an out-of-state judgment that has been filed here to be enforced in the same manner as an in-state judgment." (Citation omitted; internal quotation marks omitted.) Nastro v. D'Onofrio, 76 Conn.App. 814, 814-15, 822 A.2d 286 (2003). More specifically, General Statutes § 52-604 defines a " foreign judgment" as " any judgment, decree or order of a court of the United States or of any other court which is entitled to full faith and credit in this state, except one obtained by default in appearance or by confession of judgment."
" Section 52-605 authorizes the summary enforcement of a properly registered foreign judgment." Seaboard Surety Co. v. Waterbury, 38 Conn.Supp. 468, 469, 451 A.2d 291 (App.Sess.1982). " [A] debtor who seeks to challenge the validity of a foreign judgment that has been registered properly in this state may do so only by raising constitutionally permissible defenses ... that destroy the full faith and credit obligation owed to a foreign judgment ... Such defenses include lack of personal jurisdiction or lack of due process." (Citations omitted; internal quotation marks omitted.) Business Alliance Capital Corp. v. Fuselier, 88 Conn.App. 731, 736-37, 871 A.2d 1051 (2005). " Among the defenses implicating the jurisdiction of the out-of-state court is the defense that the foreign judgment was rendered in violation of due process of law because of inadequate notice." Cahaly v. Somers, 89 Conn.App. 816, 820, 877 A.2d 837, cert. denied, 275 Conn. 910, 882 A.2d 669 (2005).
General Statutes § 52-605(a) and (b) provide, in relevant part: " (a) A judgment creditor shall file, with a certified copy of a foreign judgment, in the court in which enforcement of such judgment is sought, a certification that the judgment was not obtained by default in appearance or by confession of judgment ... (b) Such foreign judgment shall be treated in the same manner as a judgment of a court in this state ..."
However, " [t]he right of a judgment creditor to proceed by an action on the judgment or a motion for summary judgment in lieu of complaint instead of proceeding under sections 52-604 to 52-609, inclusive, remains unimpaired." General Statutes § 52-607. " [Section] 52-607 preserved the common-law right of a judgment creditor to bring an independent action on the judgment ... Under § 52-605 a foreign judgment other than one by default of appearance or confession that was duly registered with a Connecticut court could be executed upon locally. These two statutes therefore allow different remedies for a judgment creditor." (Emphasis added.) Seaboard Surety Co. v. Waterbury, supra, 38 Conn.Supp. at 470. A judgment creditor may, as here, bring an action under § 52-607 to enforce a judgment that does not satisfy the requirements of § 52-605. Moreover, an action under General Statutes § 52-607 " allows the debtor to attack collaterally the foreign judgment by establishing facts that would render the foreign judgment void." Id., at 472. " [T]o be successful, a collateral attack must prove a judgment void, not merely voidable ... Broadly stated, this would require proof of the lack of a legally organized court or tribunal; lack of jurisdiction over the subject matter, the parties, or both; or want of power to grant the relief contained in the judgment." (Citation omitted.) Rathkopf v. Pearson, 148 Conn. 260, 265, 170 A.2d 135 (1961). " No such [collateral] attack could be made, however, if the judgment creditor sought to proceed under § 52-605 on a foreign judgment meeting the requirements of that statute." Seaboard Surety Co. v. Waterbury, supra, at 472. Under § 52-607, therefore, a debtor is not limited to constitutionally permissible defenses that destroy the full faith and credit of a foreign judgment, as in an action under § 52-605, but may also collaterally attack a judgment with any special defense that would, if proven, render the judgment void. In the present case, although the plaintiff has alleged facts that satisfy the requirements in § 52-605 that the judgment not be obtained by default in appearance or by confession of judgment, the plaintiff has elected to bring this action under § 52-607.
A
Payment and Equitable Estoppel
" A valid, final judgment is entitled to the same full faith and credit in every court within the United States as that judgment has by law in the courts of the state in which it was rendered." Business Alliance Capital Corp. v. Fuselier, supra, 88 Conn.App. at 739. In order to find out whether a default judgment is a final and valid judgment, one must apply the law of that state. Id. The court in Business Alliance Capital Corp. discussed First Fidelity Savings Bank, N.A. v. Singer, Superior Court, judicial district of Stamford-Norwalk, Docket No. CV 91 0118184 (August 27, 1996, Lewis, J.). The court explained that the First Fidelity Savings Bank judgment also held that the " principle of res judicata barred the defendant from raising, in the Connecticut action, any defense that could have been raised in the New Jersey action." Business Alliance Capital Corp. v. Fuselier, supra, 88 Conn.App. at 740. Specifically, the court in First Fidelity Savings Bank ruled that a defendant cannot properly assert a defense that the plaintiff erred in calculating the amount of payments made in connection with the underlying debt, because such a defense " does not attack the jurisdiction of the foreign court, but rather is a ‘ direct attack, ’ and hence is not a permissible collateral attack on the foreign judgment." First Fidelity Savings Bank, N.A. v. Singer, supra, Superior Court, Docket No. CV 91 0118184. The court in Business Alliance Capital Corp. emphasized, however, that there was a factual distinction between the two cases, because the court in First Fidelity Savings Bank " modified the amount of the New Jersey judgment in light of that plaintiff's concession that it had obtained a partial satisfaction of its judgment from a third party." Business Alliance Capital Corp. v. Fuselier, supra, at 740. In contrast, in Business Alliance Capital Corp., " the defendants [did] not claim that the plaintiff has received any satisfaction for any part of its judgment ." Id.
Under certain circumstances, payment after judgment is rendered can be used as a special defense against a foreign judgment. For instance, a Superior Court decision stated: " ‘ In general, it is permissible to interpose as a defense want of jurisdiction of the court by which the judgment was rendered, ... payment, satisfaction, or release of the judgment, that the judgment was not a final judgment, the statute of limitations, ... and, under certain circumstances, fraud in obtaining the judgment ...’ C.J.S., Judgments, § 874." (Emphasis added.) G & E Enterprises v. Automart, Inc., Superior Court, judicial district of Fairfield, Docket No. 293170 (May 18, 1993, Ballen, J.). A special defense for a claim of payment of a judgment is legally sufficient because it is " not a ‘ direct’ attack on the judgment itself, and because authority exists for allowing a debtor to plead payment as a special defense to a common law action to enforce a foreign judgment." G & E Enterprises v. Automart, Inc., supra, Superior Court, Docket No. 293170. In addition, " the Connecticut Supreme Court has recognized the right of a defendant to assert a set-off against a claim arising from a foreign judgment, provided that the defendant affirmatively plead the set-off." Elliot Bros. Steel Co. v. Pelican Industries, Inc., Superior Court, judicial district of New Britain, Docket No. CV 98 0485884 (April 5, 1999, Graham, J.), citing Peters Production, Inc. v. Dawson, 182 Conn. 526, 528, 438 A.2d 747 (1980); see also Hancock & Estabrook v. Brown, Superior Court, judicial district of Fairfield, Docket No. 306712 (January 23, 1995, Levin, J.), aff'd, 40 Conn.App. 948, 672 A.2d 982 (1996) (holding that defendant's answer, which states that prejudgment payments were made to plaintiff that would reduce amount owed, is an improper collateral attack because foreign court would enforce judgment for amount plaintiff requests, and, hence, Connecticut must also enforce the judgment).
These seemingly contradictory holdings can be explained by a careful analysis of the factual distinctions. First, in cases where there is a valid and final judgment in the foreign court, it is not permissible to raise a special defense or argument in an enforcement action that payments were made before the final judgment was rendered in the foreign court. See Hancock & Estabrook v. Brown, supra, Superior Court, Docket No. 306712; see also Business Alliance Capital Corp. v. Fuselier, supra, 88 Conn.App. at 739-40. Second, a special defense for payment or partial satisfaction of the final foreign judgment is permitted if the alleged payments occurred after the foreign judgment was rendered. See G & E Enterprises v. Automart, Inc., supra, Superior Court, Docket No. 293170. Accordingly, if the court determines that the special defenses asserting payment relate to events taking place after the judgment was rendered, they should not be stricken. However, if the allegations pertain to payment or satisfaction of the debt before judgment was rendered, such defenses would be impermissible collateral attacks on the underlying judgment and, therefore, would be legally insufficient.
In the present case, the special defenses of " payment" and " equitable estoppel" are essentially the same defense, but expressed in slightly different terms. Both defenses assert that the plaintiff failed to apply credits to the debt owed for the collateral taken from the defendant, including a 1994 Chrysler minivan and property in Alabama. The payment special defense argues that the judgment was payed, or at least partially payed for, with the collateral. The equitable estoppel special defense is essentially the same as the payment defense, but adds that the defendant was not present in court when judgment was entered and concludes that the plaintiff should be equitably estopped from recovering any amounts.
" Equitable estoppel is a doctrine that operates in many contexts to bar a party from asserting a right that it otherwise would have but for its own conduct ... In its general application, we have recognized that [t]here are two essential elements to an estoppel— the party must do or say something that is intended or calculated to induce another to believe in the existence of certain facts and to act upon that belief, and the other party, influenced thereby, must actually change his position or do some act to his injury which he otherwise would not have done." (Citations omitted; internal quotation marks omitted.) Glazer v. Dress Barn, Inc., 274 Conn. 33, 60, 873 A.2d 929 (2005). " As a general rule ... a representation or assurance, in order to furnish the basis of an estoppel, must relate to some present or past fact or state of things, as distinguished from mere promises or statements as to the future. The misrepresentation must be one of fact and not of intention to support equitable estoppel." (Internal quotation marks omitted.) TD Bank, N.A. v. M.J. Holdings, LLC, Superior Court, judicial district of New London, Docket No. CV 10 6003386 (February 17, 2011, Devine, J.). There is no case directly addressing the equitable estoppel special defense in this context of a foreign judgment enforcement action.
In this motion to strike, the alleged facts must be taken as admitted, and the defenses must be construed in a manner most favorable to sustaining legal sufficiency. A reasonable interpretation of the allegations is that the defendant's collateral was taken after the foreign judgment was entered. Under this interpretation, the special defenses for equitable estoppel and payment would not be direct attacks on the judgment. Rather, these special defenses would be analogous to the fact pattern in G & E Enterprises v. Automart, Inc., where the court's holding suggested that a special defense for payment or partial satisfaction of the final foreign judgment is permissible if the alleged payments occurred after the foreign judgment was rendered. Consequently, the motion to strike the special defenses of payment and equitable estoppel must be denied because these defenses are proper and could not have been raised in the foreign court, to the extent that they are based on actions and events that occurred after the foreign judgment was entered.
In fact, the first and second special defense allege that " a 1994 Chrysler Minivan ... was repossessed four years later." Although there is some ambiguity, the context of the paragraph suggests that the collateral was taken four years after the date that the judgment was entered in the foreign court.
B
Default Judgment and Lack of Notice
The plaintiff correctly asserts that the failure to appear during a hearing when judgment is entered is not a permissible ground to collaterally attack a foreign judgment, but the plaintiff mistakenly asserts that the failure of the court to provide the defendant with adequate notice of the hearing is also not a proper collateral attack. Under General Statutes § 52-607, a judgment creditor may collaterally attack a judgment by challenging the foreign court's jurisdiction. Even under § 52-605, the defendant may properly challenge a court's jurisdiction by raising a constitutionally permissible defense that destroys the full faith and credit obligation owed to a foreign judgment, such as the lack of due process. See Business Alliance Capital Corp. v. Fuselier, supra, 88 Conn.App. at 736-37; see also Nastro v. D'Onofrio, supra, 76 Conn.App. at 823. One special defense that can implicate the jurisdiction of the out-of-state court is the defense that the foreign judgment was rendered in violation of due process of law because of inadequate notice. See Cahaly v. Somers, supra, 89 Conn.App. at 820 (holding that because the defendants asserted a violation of procedural due process in their post-trial motion and before the Massachusetts Appeals Court, they are barred by the doctrine of res judicata from reasserting the claim that the Massachusetts trial court improperly awarded relief in the form of prejudgment interest without notice or an opportunity to be heard); see also Steve Viglione Sheet Metal Co. v. Sakonchick, 190 Conn. 707, 712 n. 5, 462 A.2d 1037 (1983) (recognizing that the adequacy of notice has due process implications and may affect jurisdiction under some circumstances, but noting that the defendant did not claim any jurisdictional deficiency in the procedure for giving notice of the short calendar hearing in which the award was confirmed). Hence, in the present case, the defendant's allegation that he was not provided adequate notice of the hearing is a special defense that raises due process concerns, and can implicate the Alabama court's jurisdiction. Accordingly, that defense cannot be stricken on the ground asserted by the plaintiff, that is, that inadequacy of notice must be addressed by the Alabama court. As a result, the motion to strike the third special defense is denied.
C
Connecticut Unfair Trade Practices Act (CUTPA)
As mentioned above, under General Statutes § 52-607, a collateral attack must prove a judgment void and not merely voidable, and this requires: proof of the lack of a legally organized court or tribunal; lack of jurisdiction over the subject matter, the parties, or both; or want of power to grant the relief contained in the judgment. Allegations that " purport to allege a claim of violation of the Connecticut Unfair Trade Practices Act ... are not cognizable as a counterclaim in [an] action to enforce a foreign judgment." Harmony Healthcare International, Inc. v. PARCC Healthcare, Inc., Superior Court, judicial district of New Haven, Docket No. CV 07 5009225 (May 14, 2008, Cosgrove, J.). Similarly, the alleged violation of CUTPA is not a valid special defense and is not a proper collateral attack in an action to enforce a foreign judgment. Therefore, the plaintiff's motion to strike the fourth special defense is granted.
Moreover, the plaintiff correctly points out that the CUTPA special defense is not applicable under Alabama law because CUTPA specifically addresses unfair trade practices committed in Connecticut. Even though no Connecticut appellate court has yet addressed the geographical reach of CUTPA, this court has held that " CUTPA does not apply to a violation occurring outside Connecticut unless the violation is tied to a form of trade or commerce intimately associated with Connecticut, or Connecticut choice of law principles dictate the application of Connecticut law." Hyek v. Field Support Services, Inc., Superior Court, judicial district of New London, Docket No. CV 10 5014085 (August 9, 2011, Cosgrove, J.).
III
ORDER
The motion to strike special defense four (violation of CUTPA) is granted, and the motion to strike special defenses one (equitable estoppel), two (payment) and three (default judgment and lack of notice) is denied.