Opinion
No. HHB CV05-4007723-S
January 10, 2007
MEMORANDUM OF DECISION
These matters came before the court concerning Cianbro Corporation's motion for contempt, and National Eastern Corporation's motions for order and sanctions and for protective order. The court held an evidentiary hearing concerning the motions, at which the parties also presented oral argument. After consideration, the court issues this memorandum of decision concerning the motions.
I Background
The above-captioned proceedings arise from the parties' contractual relationship concerning a construction project. Cianbro Corporation (Cianbro) was retained as a contractor, to replace White Oak Corporation (White Oak), in order to complete the replacement of the Tomlinson Bridge, over the Quinnipiac River, in New Haven, Connecticut. National Eastern Corporation (NEC) originally had agreed to supply White Oak with fabricated steel and miscellaneous steel concerning the project. Cianbro retained NEC to complete its work on the project. In its papers in opposition to the pending motion for contempt, NEC asserts that it is an affiliate of White Oak.
At the conclusion of the project, the parties had several disputes. Cianbro commenced arbitration and NEC counterclaimed therein. The arbitration was conducted by a panel of three arbitrators, pursuant to a written agreement to arbitrate in accordance with the rules of the American Arbitration Association (AAA).
The panel held hearings and the parties presented witnesses and submitted documentary evidence and briefs to the panel. The panel issued an interim award in June 2005 and, in December 2005, a supplemental award. In the interim award, NEC was ordered to pay the sum of $146,508.00 to Cianbro. In the supplemental award, NEC was ordered to pay the additional sum of $300,883.76 to Cianbro, for attorneys fees and for employee time and expenses.
Thereafter, in the above-captioned Docket No. HHB CV05-4008908-S, Cianbro filed its application to confirm arbitration award on December 20, 2005. Within the same file, NEC filed its application to vacate arbitration award on January 17, 2006 (#102). After a hearing held by the court on May 22, 2006, this court issued its memorandum of decision, dated June 28, 2006, in which it granted Cianbro's application to confirm the panel's award and denied NEC's application to vacate the panel's award. That decision is currently the subject of NEC's appeal before the Appellate Court.
The parties appeared before the court on October 16, 2006 for a status conference and on November 21, 2006 for an evidentiary hearing, concerning the following matters:
In Docket No. HHB CV05-4007723-S:
1. Cianbro Corporation's motion for contempt (#108)
2. National Eastern Corporation's motion for order and sanctions (##111, 111.25).
In Docket No. HHB CV05-4008908-S:
3. National Eastern Corporation's motion for protective order (#112).
At the status conference, based on the anticipated evidentiary presentations and the availability of counsel, the court scheduled two days for the evidentiary hearing, November 21-22, 2006.
At the evidentiary hearing on November 21, 2006, NEC stated that it had no witnesses to present and offered two exhibits, which were admitted as full exhibits. These are copies of Cianbro's writ and direction for attachment, dated August 16, 2006 (Exhibit A); and Cianbro's postjudgment interrogatories, dated July 7, 2006 (Exhibit B). Cianbro presented no witnesses or exhibits. Both parties referred the court to the court's previous orders and to pleadings in the court's files. The parties stipulated that Cianbro's service of the writ and direction for attachment on Farmington Savings Bank did not result in the attachment of any of Cianbro's property. The parties also presented oral argument at the hearing. In view of the fact that no further evidence was to be presented, the second day scheduled by the court for the evidentiary hearing was not needed. Additional references to the procedural history are set forth below.
II Discussion A Cianbro's Motion for Contempt
In its motion for contempt, which was filed in Docket No. HHB CV-05-4007723-S, Cianbro contends that NEC should be adjudged to be in contempt for violating the court's (Robinson, J.) orders dated October 31, 2005 and March 27, 2006, in which the court, pursuant to General Statutes § 52-278n and Practice Book §§ 13-13, ordered NEC to disclose assets. "Practice Book 230A [now § 13-13] and General Statutes 52-278n permit the trial court to compel a defendant `to disclose property in which he has an interest or debts owing to him sufficient to satisfy a prejudgment remedy.' " Connecticut National Bank v. Investors Capital Corp., 29 Conn.App. 48, 54, 613 A.2d 1370, cert. denied, 224 Conn. 902, 615 A.2d 1044 (1992).
General Statutes § 52-278n provides, in pertinent part, "(a) The court may, on motion of a party, order an appearing defendant to disclose property in which he has an interest or debts owing to him sufficient to satisfy a prejudgment remedy. The existence, location and extent of the defendant's interest in such property or debts shall be subject to disclosure. The form and terms of disclosure shall be determined by the court." Practice Book § 13-13(a) contains a similar provision.
By order dated October 31, 2005 (#102), the court, Robinson, J., found that probable cause sufficient for the issuance of a prejudgment remedy in the amount of $529,614.35 had been established. By separate order pendente lite, also dated October 31, 2005 (#104), the court, Robinson, J., authorized Cianbro to attach to the value of $529,614.35 the goods or estate of NEC. By modified order, dated January 4, 2006, this amount was reduced to $494,552.92.
In opposing the motion, NEC argues that General Statutes § 52-422, pursuant to which Cianbro sought the prejudgment remedy which is discussed above in footnote 2, does not provide any basis for a finding of contempt. This argument ignores General Statutes § a52-278n and Practice Book § 13-13, as well as the terms of Judge Robinson's orders directing disclosure by NEC, which are discussed below.
The decisional law concerning contempt findings is well-established. " `The interests of orderly government demand that respect and compliance be given to orders issued by courts possessed of jurisdiction of persons and subject matter. One who defies the public authority and willfully refuses his obedience, does so at his peril.' United States v. United Mine Workers, 330 U.S. 258, 303, 67 S.Ct. 677, 91 L.Ed. 884 (1947). `[A]n order issued by a court with jurisdiction over the subject matter and person must be obeyed by the parties until it is reversed by orderly and proper proceedings. Id., 293.' " Rocque v. Design Land Developers of Milford, Inc., 82 Conn.App. 361, 366, 844 A.2d 882 (2004).
Practice Book § 1-13A states, "Any person . . . disobeying any order of a judicial authority in the course of any judicial proceeding may be adjudicated in contempt and appropriately punished . . . Contempt may be either criminal or civil."
Practice Book § 1-21A provides for a coercive and nonpunitive civil contempt order where the dispute is, as here, between private litigants. "The violation of any court order qualifies for criminal contempt sanctions. Where, however, the dispute is between private litigants and the purpose for judicial intervention is remedial, then the contempt is civil, and any sanctions imposed by the judicial authority shall be coercive and nonpunitive, including fines, to ensure compliance and compensate the complainant for losses." Practice Book § 1-21A. See Rizzuto v. Davidson Ladders, Inc., 280 Conn. 225, 241, 905 A.2d 1165 (2006).
"Contempts of court may be classified as either direct or indirect, the test being whether the contempt is offered within or outside the presence of the court . . . [A] finding of indirect civil contempt must be established by sufficient proof that is premised upon competent evidence presented to the trial court in accordance with the rules of procedure as in ordinary cases." (Internal quotation marks omitted.) Legnos v. Legnos, 70 Conn.App. 349, 352, 797 A.2d 1184, cert. denied, 261 Conn. 911, 806 A.2d 48 (2002).
"The contempt remedy is particularly harsh . . . and may be founded solely upon some clear and express direction of the court . . . One cannot be placed in contempt for failure to read the court's mind." (Internal quotation marks omitted.) Sablocky v. Sablocky, 258 Conn. 713, 718, 784 A.2d 890 (2001).
"In a civil contempt proceeding, the movant has the burden of establishing, by a preponderance of the evidence, the existence of a court order and noncompliance with that order." Statewide Grievance Committee v. Zadora, 62 Conn.App. 828, 832, 772 A.2d 681 (2001). "A finding of contempt is a question of fact . . . To constitute contempt, a party's conduct must be wilful . . . Noncompliance alone will not support a judgment of contempt . . . [T]he credibility of witnesses, the findings of fact and the drawing of inferences are all within the province of the trier of fact." (Internal quotation marks omitted.) Keeney v. Buccino, 92 Conn.App. 496, 513, 885 A.2d 1239 (2005).
"Before finding a person in contempt for the wilful violation of a court order, the trial court must consider the circumstances and facts surrounding the violation . . . The fact that the order had not been complied with fully, however, does not dictate that a finding of contempt must enter. It is within the sound discretion of the court to deny a claim for contempt when there is an adequate factual basis to explain the failure to honor the court's order." (Citation omitted; internal quotation marks omitted.) In Re Daniel C., 63 Conn.App. 339, 369, 776 A.2d 487 (2001). "The inability of a party to obey an order of the court, without fault on his part, is a good defense to the charge of contempt . . . The contemnor must establish that he cannot comply, or was unable to do so." (Internal quotation marks omitted.) Keeney v. Buccino, supra, 92 Conn.App. 513-14.
The history of this matter reflects a pattern of noncompliance by NEC with the court's orders for disclosure of assets. In the court's October 31, 2005 order concerning Cianbro's motion for prejudgment disclosure of property and assets (#102), NEC was ordered to "submit on or before December 2, 2005, to the court and to the attorney for [Cianbro] a sworn statement setting forth any and all property, real or personal, in which [NEC] has an interest and any and all debts owing to [NEC]." (Hereafter, the "October 31, 2005 disclosure order.")
When timely compliance by NEC did not occur, Cianbro filed a motion to compel disclosure of property and assets on December 13, 2005 (#105), which referenced the court's previous October 31, 2005 disclosure order. NEC subsequently served on Cianbro, but did not file with the court, an untimely "Notice of Compliance," dated December 29, 2005 (the "Notice of Compliance"). A copy of this pleading was provided to the court at the evidentiary hearing on November 21, 2006 (for ease of reference it is designated as Court Exhibit 1).
In its renewed motion to compel disclosure of property and assets (#107), which was filed on February 15, 2006, Cianbro stated, "[o]n or about December 29, 2005, [NEC] submitted a statement identifying machinery and equipment, furniture and fixtures, electronic data processing equipment and leasehold improvements. [NEC] did not identify any current account information, open contracts, or other financial interests it may have. Neither did it identify raw material or other non-monetary personal property it may have." Cianbro sought compliance with the October 31, 2005 disclosure order.
The court granted the renewed motion to compel disclosure of property and assets by its March 27, 2006 order. Therein, NEC was ordered to comply with the October 31, 2005 disclosure order and ordered to "submit on or before May 15, 2006, to the attorney for the plaintiff a sworn statement setting forth any and all property, real or personal, in which [NEC] has an interest and any and all debts owing to the defendant, including, but not limited to current contracts, current contract rights, current financial accounts and current chattel paper, stock, shares, etc." (Hereafter, the "March 27, 2006 disclosure order.")
Collectively, the court refers below to the October 31, 2005 disclosure order and the March 27, 2006 disclosure order as the "disclosure orders."
NEC did not provide the required sworn statement. After NEC did not comply with the court's March 27, 2006 disclosure order, Cianbro filed its motion for contempt on June 29, 2006. As noted above, in Docket No. HHB CV05-4008908-S, this court issued its memorandum of decision on June 28, 2006, in which it granted Cianbro's application to confirm arbitration award and denied NEC's application to vacate it.
In response to the motion for contempt, NEC filed an objection (#109) and a memorandum of law (#110). NEC argues that its noncompliance was beyond its control. NEC asserts that White Oak's surety, AIG, had loaned funds to White Oak and its affiliates, and that AIG maintains that it has a lien against White Oak's and NEC's assets. NEC also states that "there are not assets owned by NEC that are not encumbered as security to AIG from which Cianbro can obtain payment." See NEC's objection to motion for contempt (#109), p. 2.
The fact that AIG, a non-party, may have a lien on NEC's assets does not mean that disclosure of NEC's assets in compliance with the court's disclosure orders was beyond NEC's control. Apparently, NEC is an operating company which is in possession and control of its financial records. NEC's presentation provides no meaningful excuse for its non-compliance with the court's disclosure orders.
Also, no evidence of AIG's lien was presented to the court. Except for the statement provided by NEC, with its Notice of Compliance, no evidence of NEC's assets has been provided to the court. Instead, NEC submits only argument by counsel, concerning "purported facts," which may not be considered by the court. Schmidt v. Schmidt, 180 Conn. 184, 191 n. 5, 429 A.2d 470 (1980). The argument of counsel is not a substitute for evidence. See Director,** Dept. Of Information Technology v. Freedom of Information Commission, 274 Conn. 179, 191-92, 874 A.2d 785 (2005).
Similarly, NEC's assertion that compliance would cause a garnishment of the general contractors for which NEC is working, and would put it out of business, thereby preventing it from paying its creditors, is not supported by evidence and may not be considered by the court. Also unavailing is NEC's unsupported argument concerning the "net worth of NEC (or lack thereof)." See NEC's objection (#109), page 7.
In addition, NEC, in its objection, page 4, and again in its response memorandum, page 3, NEC makes the unsupported assertion that, in its motion for contempt, Cianbro has admitted that all of the property in which NEC currently claims an interest is subject to prior liens. To the contrary, in paragraph 4 of the motion, all that Cianbro states is that "[s]ubsequent public searches have revealed that all of the property so far disclosed by [NEC] is subject to prior liens, rights or encumbrances or have been assigned as collateral. In most instances, there are multiple secured parties for the same items." NEC has not disclosed all of the property in which it claims an interest. Thus, the record here contrasts with that in Great Country Bank v. Dietter, Superior Court, judicial district of New Haven at New Haven, Docket No. CV 91 0324140 (March 8, 2006, Pittman, J.) ( 40 Conn. L. Rptr. 793). There, the court declined to grant petitions for examination of a judgment debtor where the defendant fully responded to the postjudgment interrogatories, but appeared to be judgment-proof.
NEC also asserts that its Notice of Compliance should be taken by the court as evidence of its good faith. The court is unpersuaded. The Notice of Compliance was untimely. It included a list of property, which provided only part of what was required by the court's October 31, 2005 disclosure order. NEC chose not to comply with the order's requirement that NEC disclose "any and all debts owing to [NEC]." After all, NEC states in its submissions that it has not disclosed its accounts receivables. See NEC's objection, p. 2; NEC's response memorandum, pp. 3-4.
The court also finds unpersuasive NEC's argument that Cianbro's effort to obtain disclosure should be found to be moot, due to Cianbro's knowledge of the whereabouts of NEC's bank account. That knowledge is not the equivalent to the compliance required of NEC by the court's disclosure orders of October 31, 2005 and March 27, 2006.
Thus, this untimely, partial compliance contrasts with the record in Rocque v. Light Sources, Inc., Superior Court, judicial district of Hartford at Hartford, Docket No. CV 98 0581655 (December 13, 2004, Beach, J.) ( 38 Conn. L. Rptr. 424), cited by NEC, where the defendants timely complied with the first order of the court, but did not timely comply with a request for a second, broadened scope of study sought by the plaintiff commissioner of environmental protection. There, the court found it significant that the second, revised scope of study was eventually, untimely filed by the defendants. Here, there was untimely and only partial compliance with the court's October 31, 2005 disclosure order and there has been no compliance with the court's March 27, 2006 disclosure order.
In addition, NEC argues that Practice Book § 13-14, which is entitled "Order for Compliance; Failure to Answer or Comply with Order," includes no reference to contempt. Section 13-14(a) provides, in pertinent part, "If any party . . . has failed to comply with a discovery order made pursuant to Section 13-13, . . . the judicial authority may, on motion, make such order as the ends of justice require." Practice Book § 13-14(b) lists a nonexelusive range of orders which may be entered. See Able Plumbing, Inc. v. Sandak, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 03 0193854 (September 20, 2004, Jennings, J.).
Practice Book § 13-14(b) provides, "Such orders may include the following: (1) The entry of a nonsuit or default against the party failing to comply; (2) The award to the discovering party of the costs of the motion, including a reasonable attorneys fee; (3) The entry of an order that the matters regarding which the discovery was sought or other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order; (4) The entry of an order prohibiting the party who has failed to comply from introducing designated matters in evidence; (5) If the party failing to comply is the plaintiff, the entry of a judgment of dismissal."
Our Supreme Court recently stated, in Rizzuto v. Davidson Ladders, Inc., supra, 280 Conn. 240, that, in certain circumstances § 13-14(b)'s "sanctions are of no use . . ." Section 13-14 does not prevent a plaintiff from "mov[ing] for a finding of civil or criminal contempt; Practice Book § 1-21A . . ." (Footnote omitted.) Id., 280 Conn. 241. Here, for example, where NEC has not provided disclosure in compliance with the court's disclosure orders, the entry of a default or an order that facts shall be taken to be established or precluding NEC from introducing matters into evidence would have no purpose since such an order would not provide what is sought, disclosure of assets. While an award of attorneys fees against NEC would reimburse Cianbro for the costs of pursuing the motion for contempt, it also would not be a substitute for the disclosure of assets by NEC in compliance with the court's disclosure orders. See Practice Book § 13-14(b).
Also, NEC's argument concerning Cianbro's postjudgment interrogatories is not well-founded. NEC notes that the section of Form JD-CV-23a, concerning disclosure of financial accounts, provides that a judgment debtor must disclose "assets up to an amount clearly sufficient in value to ensure full satisfaction of the judgment with interest and costs." See NEC's Exhibit B, Cianbro's postjudgment interrogatories in Docket No. HHB CV-05-4008908-S. Similarly, concerning postjudgment interrogatories, General Statute § Sec. 52-351b(a) provides, "[w]ith respect to assets, the person served is required to reveal information concerning the amount, nature and location of the judgment debtor's nonexempt assets up to an amount clearly sufficient in value to ensure full satisfaction of the judgment with interest and costs . . ." NEC's assertion that its list of assets, which it provided with the Notice of Compliance, is "equal to and well above the judgment amount Cianbro seeks," see NEC's response memorandum, page 5, ignores the fact that NEC contends that the assets which it disclosed are subject to AIG's lien, making them not clearly sufficient in value to ensure full satisfaction of the judgment.
As stated above, NEC has not provided evidence of its financial condition or evidence of any debts owed to it. Disclosure of other assets by NEC may reveal assets which are sufficient to ensure satisfaction of the judgment.
See discussion below concerning NEC's motion for protective order, which is addressed to Cianbro's postjudgment interrogatories.
Similarly unavailing is NEC's argument, which it did not present in its written submissions in opposition to the motion for contempt, and which it apparently raised for the first time in oral argument on November 21, 2006, that the court's order pendente lite, dated October 31, 2005 (Robinson, J.) (#104), which authorized Cianbro to attach NEC's goods or estate, was an order for an attachment under Chapter 904 of the General Statutes, rather than an order pursuant to Chapter 905, authorizing a garnishment. This argument ignores General Statutes § 52-278n and Practice Book § 13-13, discussed above, pursuant to which the court twice, in its disclosure orders, ordered NEC to disclose assets. Those disclosure orders were separate and apart from the order pendente lite. Similarly, in arguing that General Statutes § 52-422 says nothing about disclosure of assets, NEC ignores General Statutes § 52-278n and Practice Book § 13-13.
NEC has not stated that it raised this argument in response to the motions for disclosure which were adjudicated by Judge Robinson.
Section 52-422 provides, in pertinent part, "[a]t any time before an award is rendered pursuant to an arbitration under this chapter, the superior court . . . upon application of any party to the arbitration, may make forthwith such order or decree, issue such process and direct such proceedings as may be necessary to protect the rights of the parties pending the rendering of the award and to secure the satisfaction thereof when rendered and confirmed."
NEC's argument, in its response memorandum, page 5, that the motion for contempt is premature because Cianbro's postjudgment interrogatories were served on July 7, 2006, and Cianbro did not give NEC the requisite thirty days in which to respond to the interrogatories before filing the motion for contempt, is plainly wrong. The motion for contempt is dated and was filed on June 29, 2006. NEC wrongly states that the motion for contempt was filed on July 21, 2006. The motion for contempt pre-dated the interrogatories. It is directed to NEC's lack of compliance with the court's disclosure orders of October 31, 2005 and March 27, 2006, not to lack of compliance with the interrogatories.
Thus, the record here also contrasts with that in Branford Savings Bank v. DelGuidice, Superior Court, judicial district of New Haven at New Haven, Docket No. CV 91 0314280 (August 18, 2004, Pittman, J.)
( 37 Conn. L. Rptr. 687), where, after a judgment debtor failed to answer postjudgment interrogatories, the court declined to issue an order to show cause, but, instead, directed the clerk, upon proof of service of court-approved interrogatories or of an unsatisfied property execution, to issue an order requiring the debtor to appear for examination under the supervision of the court, as provided in General Statutes § 52-397. Apparently, unlike the record here, the record there did not include two previous court orders requiring disclosure of assets.
Section 52-397 provides, in pertinent part, "Any judgment debtor, an execution against whom has been returned unsatisfied in whole or in part or who has failed to respond within thirty days to any postjudgment interrogatories served pursuant to section 52-351b, may be examined on oath, in the court location where the judgment was rendered, concerning his property and means of paying such judgment, before any judge of the Superior Court or before a committee appointed by such judge."
"To establish that the violation of an applicable court order was wilful, the claimant must prove that the violation was committed intentionally, with actual or constructive knowledge of the order and its contents. It thus has been observed that a genuine, good-faith dispute about the true meaning of a court order may sometimes defeat a claim of wilfulness, at least where it misleads the alleged contenmor to honestly believe that his challenged conduct is in fact compliant with that order . . . [T]he rule is well established that unless and until a court order is modified or successfully challenged by proper procedure, it is presumed to be valid and must be obeyed." (Citations omitted.) Keeney v. Buccino, Superior Court, judicial district of Hartford at Hartford, Docket No. CV 93 0530766 (August 31, 2004, Sheldon, J.), affirmed, 92 Conn.App. 496, 885 A.2d 1239 (2005). "Intention is an inference of fact . . ." (Internal quotation marks omitted.) Heyman v. CBS, Inc., 178 Conn. 215, 228, 423 A.2d 887 (1979).
Here, there is no good faith dispute about the meaning of the court's disclosure orders of October 31, 2005 and March 27, 2006. The terms of each were clear and they were directed to NEC. Instead of timely complying, NEC belatedly and only partially complied with the first order. It has not complied with the second order. NEC has presented no valid defense. "[T]he only explanations or excuses . . . offered for [its] challenged conduct are either legally untenable or factually unsupported on the record before the Court." Keeney v. Buccino, Superior Court, judicial district of Hartford at Hartford, Docket No. CV 93 0530766 (August 31, 2004, Sheldon, J.), affirmed, 92 Conn.App. 496, 885 A.2d 1239 (2005).
Based on the record, the court finds that NEC intentionally, and without justification, did not comply with the court's disclosure orders. The record before the court warrants a finding of indirect civil contempt against NEC for its willful violations of the court's disclosure orders.
B NEC's Motion For Protective Order
In NEC's motion for protective order, filed on August 4, 2006 in Docket No. HHB CV05-4008908-S, NEC seeks, pursuant to General Statutes § 52-400a, an order precluding it from having to answer Cianbro's postjudgment interrogatories, dated July 7, 2006, which are discussed above. See NEC's Exhibit B. NEC contends that a court decision in its favor as to Cianbro's motion for contempt should render the interrogatories moot. As set forth above, the court has found NEC to be in indirect civil contempt. The interrogatories are not moot.
Section 52-400a (a) provides, "[o]n motion of a judgment debtor or third person from whom discovery is sought, and for good cause shown, or on its own motion, the court may make any order which justice requires to protect such debtor or third person from annoyance, embarrassment, oppression or undue burden or expense."
In its motion, NEC advances the same unsupported reasoning, concerning AIG's lien against White Oak's and NEC's assets, which it discussed in opposition to the motion for contempt, and which the court addressed above. It reasserts that its assets are encumbered and that they are insufficient to satisfy the judgment, and that Cianbro is aware of the location of NEC's bank account. Similarly, it asserts, again, that if Cianbro garnishes funds due to NEC, NEC will be forced to go out of business, making it unable to pay its creditors. NEC also argues, without evidentiary support, that Cianbro's effort at postjudgment discovery is an attempt to harm White Oak's prosecution of its claims against the State of Connecticut Department of Transportation. The evidence presented is insufficient to support NEC's contentions and does not warrant the entry of a protective order.
The pendency of NEC's appeal of the court's decision confirming the arbitration award does not prevent the pursuit of postjudgment discovery by Cianbro. See All Seasons Services, Inc. v. Guildner, 89 Conn.App. 781, 787-89, 878 A.2d 370 (2005) (service of postjudgment interrogatories is not a proceeding to enforce or carry out the judgment in violation of the automatic stay provided in Practice Book § 61-11(a)).
Practice Book § 61-11(a) provides, in pertinent part, "[e]xcept where otherwise provided by statute or other law, proceedings to enforce or carry out the judgment or order shall be automatically stayed until the time to take an appeal has expired. If an appeal is filed, such proceedings shall be stayed until the final determination of the cause."
NEC has not shown that a protective order excusing it from answering the postjudgment interrogatories is warranted to protect it from annoyance, embarrassment, oppression or undue burden or expense. See General Statutes § 52-400a(a). Accordingly, its motion for protective order is denied. As set forth below, the court orders NEC to comply with the interrogatories, by February 5, 2007. With the period of time which elapsed after the service of the interrogatories and before the filing of NEC's motion for protective order, NEC will have had more than the requisite thirty days in which to respond thereto.
C NEC's Motion For Order And For Sanctions
In its motion for order and sanctions (motion for order), which it filed in Docket No. HHB CV-05-4007723-S, NEC contends that Cianbro engaged in abuses of process, in violation of Practice Book § 61-11(a)'s automatic stay, by serving a writ and direction for attachment upon Farmington Savings Bank on August 17, 2006. See NEC's Exhibit A. At the evidentiary hearing, the parties stipulated that Farmington Savings Bank responded by a letter, dated August 18, 2006, stating that there were no funds to attach when the writ was received.
In addition, NEC asserts that, in so doing, Cianbro improperly took advantage of the court's October 31, 2005 order pendente lite, which NEC claims was invalid when entered, and which, it asserts, in view of NEC's pending appeal of the court's June 28, 2006 decision in Docket No. HHB CV-05-4008908-S, no longer has any weight.
"An action for abuse of process lies against any person using a legal process against another in an improper manner or to accomplish a purpose for which it was not designed . . . Because the tort arises out of the accomplishment of a result that could not be achieved by the proper and successful use of process, the Restatement Second (1977) of Torts, § 682, emphasizes that the gravamen of the action for abuse of process is the use of a legal process . . . against another primarily to accomplish a purpose for which it is not designed . . . Comment b to § 682 explains that the addition of primarily is meant to exclude liability when the process is used for the purpose for which it is intended, but there is an incidental motive of spite or an ulterior purpose of benefit to the defendant." (Citations omitted; emphasis in original; internal quotation marks omitted.) Suffield Development Assoc. L.P. v. National Loan Investors, L.P., 260 Conn. 766, 772-73, 802 A.2d 44 (2002).
In its motion for order, NEC does not allege that Cianbro served the writ of attachment in order to accomplish a purpose for which it is not designed. It does not allege that Cianbro did so with an incidental motive of spite or an ulterior purpose, as opposed to seeking security for the judgment which is currently the subject of NEC's appeal. In the absence of such allegations, NEC has not shown that abuse of process occurred. See, in contrast, the allegations in Suffield Development Assoc. L.P. v. National Loan Investors, L.P., supra.
In Suffield Development Assoc. L.P. v. National Loan Investors, L.P., supra, 260 Conn. 775, the Supreme Court stated, "The plaintiff's amended complaint supports a claim for abuse of process because it alleged that the defendants had misrepresented the amount to which National was entitled as a matter of law under the stipulated judgment, inflated the amount owed, and thereby obtained an excessive execution all for the purpose of coercing the plaintiff into making payment to National. We conclude that such allegations may give rise to a claim for abuse of process because executions are properly obtained and used only in accordance with a valid judgment and in an appropriate amount."
In its motion for order, NEC also argues that the court's June 28, 2006 memorandum of decision, in which it granted Cianbro's application to confirm the arbitration award and denied NEC's application to vacate the arbitration award, although filed only in Docket No. HHB CV-05-4008908-5, also somehow adjudicated Docket No. HHB CV-05-4007723-S as well. In its motion for order, page 3, paragraph 8, NEC states that "Cianbro's Application to Confirm Arbitration Award, filed in this case on September 23, 2005, was fully and finally resolved and adjudicated by Judge Shapiro's decision and . . . the decision is the subject of a timely appeal." Cianbro's application was filed in Docket No. HHB CV-05-4008908-S, not in Docket No. HHB CV-05-4007723-S. While the court's memorandum of decision adjudicated the application to confirm and the application to vacate, it did not adjudicate Docket No. HHB CV-05-4007723-S. Also, it did not consolidate the two matters.
NEC also asserts that the court's order pendente lite, dated October 31, 2005 (#104), was invalid when it entered and "should not have been issued because on that date the arbitration award had been rendered by the arbitrators and was the subject of Cianbro's Application to Confirm. Conn. Gen. Stat. § 52-422 provides explicitly that such an Order may enter only, `at any time before an award is rendered pursuant to an arbitration.' " See NEC's motion for order, page 349.
When the order pendente lite (#104) was issued, the arbitration was ongoing. The arbitrators had issued an interim award, dated June 9, 2005, but had not yet rendered the final award. On December 16, 2005, after the issuance of the court's order pendente lite, as stated above, the arbitration panel issued its supplemental award, awarding to Cianbro an additional sum of more than twice the amount in the interim award. Indeed, NEC noted these dates on page one of its memorandum in support of application to vacate arbitration award, filed in Docket No. HHB CV-05-4008908-S (#103).
Also, as noted in this court's memorandum of decision, dated June 28, 2006, pages 13-14, the panel held a hearing on October 3, 2005, after the interim award was issued, and before the issuance of the supplemental award.
In the court's order pendente lite, Judge Robinson authorized Cianbro to "attach to the value of $529,614.35 the goods or estate of [NEC], subject to amendment of that number to the sum of the final award in the pending arbitration." As noted above, the amount was later modified to $494,552.92 on January 4, 2006, after the supplemental award was rendered. The court's file does not reflect that NEC appealed from the issuance of the order pendente lite. See Goodson v. State, 228 Conn. 106, 114, 635 A.2d 285 (1993).
It is clear that the arbitration was still pending when the order pendente lite was issued in October 2005. See Goodson v. State, 232 Conn. 175, 180, 653 A.2d 177 (1995) ("pending arbitration is an essential condition that must exist before § 52-422 may be invoked"). In addition, the order pendente lite properly was modified to secure satisfaction of the final award.
"Section 52-422 confers on the trial court broad jurisdiction to enter orders and decrees pending an arbitration `as may be necessary to protect the rights of the parties pending the rendering of the award and to secure the satisfaction thereof when rendered and confirmed.' " Goodson v. State, supra, 228 Conn. 112. "The purpose of 52-422 is to protect the rights of the parties pending the resolution of a dispute in another forum." Id., 116. The order pendente lite was issued in accordance with § 52-422, as it was issued prior to the rendering of the supplemental award by the arbitration panel.
Concerning Practice Book § 61-11(a)'s automatic stay, our Appellate Court, in All Seasons Services, Inc. v. Guildner, supra, 89 Conn.App. 785-87, stated that the filing of a judgment lien does not constitute a violation of Practice Book § 61-11 and contrasted the filing of a judgment lien with the stay of enforcement of a judgment lien pending the resolution of an appeal. See General Statutes § 52-356a(a). Also, "a prejudgment remedy may be granted after the entry of judgment but before appellate disposition in order to protect assets to satisfy the judgment. See Gagne v. Vaccaro, 80 Conn.App. 436, 451-54, 835 A.2d 491 (2003), cert. denied, 268 Conn. 920, 846 A.2d 881 (2004)." Tadros v. Tripodi, 87 Conn.App. 321, 335 n. 9, 866 A.2d 610 (2005).
The order pendente lite, which authorized Cianbro to attach property belonging to NEC, was, as stated above, issued pursuant to General Statutes § 52-422, and authorized Cianbro to secure assets from which to satisfy the arbitration award. By the time of the service of the writ of attachment, Cianbro had obtained judgment, which is the subject of NEC's pending appeal. Service of the writ of attachment did not violate the automatic stay. Rather, service thereof was akin to the service of a judgment lien or of a prejudgment remedy pending appeal, the service of which our Appellate Court has stated does not violate the automatic stay.
In oral argument, NEC asserted that Cianbro's writ of attachment improperly sought to garnish NEC's funds under Chapter 905 of the General Statutes, rather than to attach them under Chapter 904. As noted above, the Order Pendete Lite authorized Cianbro to attach NEC's goods or estate pursuant to § 52-422, which is part of Chapter 910 of the General Statutes. NEC's reliance on the distinctions between garnishment and attachment in Chapters 905 and 904 is inapposite. In view of the automatic stay pending appeal, Cianbro may not request an execution under General Statutes § 52-367a (concerning execution against debts due from financial institution).
NEC has not shown that Cianbro engaged in abuse of process. Accordingly, its motion for order and for sanctions is denied.
CONCLUSION
For the reasons stated above, the court, after having duly considered the evidence, written submissions, and arguments presented by the parties, and the parties having had an opportunity to present evidence and be fully heard, hereby orders:
1. The court finds that National Eastern Corporation willfully and deliberately failed to comply with the court's disclosure order of October 31, 2005, that National Eastern Corporation submit, on or before December 2, 2005, to the court and to the attorney for Cianbro Corporation, a sworn statement setting forth any and all property, real or personal, in which the defendant has an interest and any and all debts owing to the defendant.
2. The court further finds that National Eastern Corporation willfully and deliberately failed to comply with the court's disclosure order of March 27, 2006 to comply with the court's disclosure order of October 31, 2005 and to disclose by May 15, 2006 any and all property, real or personal, in which the defendant has an interest and any and all debts owing to the defendant, including but not limited to current contracts, current contract rights, current financial accounts, and current chattel paper, stock, and shares.
3. Cianbro Corporation's motion for contempt (#108) is granted. National Eastern Corporation is adjudged in indirect civil contempt for failure to comply with the court's disclosure orders dated October 31, 2005 and March 27, 2006. National Eastern Corporation may purge itself of this contempt by fully complying with the court's disclosure orders, dated October 31, 2005 and March 27, 2006, by February 5, 2007.
4. In the event that National Eastern Corporation fails to purge itself as provided in this order within the time set forth for the purging from contempt to occur, Cianbro Corporation may apply, on proof, by affidavit, of service of a copy of this order on National Eastern Corporation's attorney; and on proof, by affidavit, of the failure of National Eastern Corporation to purge itself as provided in this order within the time set forth above, for an order directing that National Eastern Corporation be sanctioned.
5. National Eastern Corporation's motion for protective order (#112) is denied.
6. National Eastern Corporation is ordered to comply with Cianbro Corporation's July 7, 2006 Postjudgment Interrogatories by February 5, 2007.
7. National Eastern Corporation's motion for order and for sanctions (#111, 111.50) is denied.
It is so ordered.
CT Page 2175