Opinion
No. TTD CV 08 5003873
December 15, 2009
MEMORANDUM OF DECISION
The defendant moves to dismiss, for lack of subject matter jurisdiction, this lawsuit filed by the present plaintiff. Specifically, the defendant contends that that plaintiff never acquired the right to collect on the debt which is at the core of this action.
The plaintiff, Atlantic Credit and Finance, Inc. (ACF), commenced this action on November 20, 2008. It alleges in its complaint that it purchased the debt in question from the original lender. This allegation proved incorrect in that the debt was obtained, instead, by a subsidiary of ACF, namely Atlantic Credit and Finance Special Finance Unit, LLC. In response to the defendant's filing of this motion to dismiss, on November 19, 2009, ACF, on December 1, 2009, moved to add its subsidiary as a party plaintiff. This decision addresses both motions.
The defendant argues that, because the parent corporation never owned the obligation upon which this suit is based in its own name, ACF lacks standing to pursue this case. The defendant further argues that the resultant absence of subject matter jurisdiction precludes the court from considering ACF's motion to add its subsidiary LLC as a plaintiff.
Because the subsidiary is a separate legal entity from the parent corporation, ACF cannot initiate suit based on the subsidiary's ownership of the underlying obligation. Cardi Materials Corp. v. Connecticut Landscaping Bruzzi Corp., 77 Conn.App. 578, 581-82 (2003). However, the court rejects the defendant's argument that, therefore, it lacks power to grant the plaintiff's motion to add its subsidiary as a party plaintiff. General Statutes § 52-109 permits the addition of a proper plaintiff where the action was "commenced in the name of the wrong person," through mistake. It is abundantly clear that the parent corporation in this case mistakenly sued in its own name when the proper plaintiff ought to have been its subsidiary.
The defendant places great reliance in its argument on the case of America's Wholesale Lender v. Pagano, 87 Conn.App. 474 (2005), to support its position that § 52-109, and its counterpart Rule of Practice § 9-20, are unavailable to save this action. That case is distinguishable from the present scenario, however.
In America's Wholesale Lender v. Pagano, supra, the named plaintiff was a fictitious party incapable of bringing a lawsuit. Id., 475. "America's Wholesale Lender" was merely a trade name used by Countryside Home Loans, Inc., a legal entity which was the actual holder of the mortgage note being foreclosed in that case. Id. Our Appellate Court observed that "[a]lthough a corporation is a legal entity with legal capacity to sue, a fictitious or assumed business name, a trade name, is not a legal entity . . ." Id., 477. A fictitious business cannot confer subject matter jurisdiction upon a court. Id. The Appellate Court further held that such a nonlegal party had no recourse to any remedial statute, such as § 52-123, which would otherwise allow a court to overlook a misnomer. Id., 478. Any action commenced by the nonexistent entity was void ab initio. Id. "We decline, however, to extend the use of § 52-123 in this manner to a plaintiff that has used a fictitious name for itself when commencing an action." Id., (Emphasis in original.)
By contrast, in the present matter ACF is unquestionably a legal entity capable of initiating legal action. Its sui juris status differentiates this plaintiff from the fictitious plaintiff in America's Wholesale Lender, case, supra. To disallow a legal entity from taking advantage of § 52-109 and Practice Book § 9-20 would eviscerate these remedial provisions and thwart the obvious purpose, i.e. to rescue from dismissal cases in which the wrong legal entity mistakenly commenced suit.
The court adopts the excellent analysis presented by Judge Corradino on this issue in Wilson v. Zemba, 49 Conn.Sup. 542 [ 38 Conn. L. Rptr. 272] (2004). There, the court refused to engage in the "lock-step" logic of denying the remedy afforded by statute to remove an impediment to continuing an action based on circumstantial errors, such as labeling the parent rather than the child as the plaintiff. Likewise, a parent corporation can avail itself of § 52-109 and Practice Book § 9-20 to add its subsidiary as a plaintiff to avoid dismissal based on a circumstantial misnomer.
For these reasons, the motion to add the LLC as a plaintiff is granted, and the motion to dismiss is denied.