Opinion
FSTCV156025957S
01-03-2018
Robert KOST v. SIGNAL LAKE OPERATIONS, LLC
UNPUBLISHED OPINION
MEMORANDUM OF DECISION re MOTION TO IMPLEAD (# 156.00)
The court notes that the term " implead" generally if not always refers to the process by which a defendant brings in another party who may be liable to the defendant. Compare, Practice Book § § 10-11 and 11-10 and General Statutes § 52-102a, with Practice Book § § 9-18 and 9-22 and General Statutes § § 52-102, 52-103 and 52-107. The term used in the caption, even if erroneous, does not dictate the proper analysis, Machado v. Taylor, 326 Conn. 396, 402 (2017).
POVODATOR, J.
Background
This is a lawsuit in which each of eight plaintiffs claims that the defendants owe the plaintiff substantial sums of money- hundreds of thousands of dollars if not into seven figures. See, e.g., # 101.00, the application for a prejudgment remedy in which individualized claims are recited.
Currently before the court is the plaintiffs’ application to cite in a new defendant, based on a claim of fraudulent conveyance of property by the individual defendant to the proposed defendant. The defendants have filed an objection (# 159.00), and the motion has appeared on a calendar as a non-arguable matter.
As recited in the motion, as well as the record before the court, certain facts are necessary for an understanding of the issue, and its timing. The individual defendant was served with suit papers, commencing this proceeding, in July 2015. In that same month- on July 7, 2015- the individual defendant quitclaimed real property to his wife, but the deed was not recorded on the land records until almost 3 weeks later, two days after the defendant actually had been served with the process commencing this action. Approximately one year later, in connection with discovery related to assets subject to an order of attachment, the individual defendant denied having transferred any property in a period of time that encompassed July 2015. Approximately one year later, in August 2017, the defendant acknowledged in a deposition that he had, in fact, executed a quitclaim deed in favor of his wife, in July 2015. That appears to have precipitated the motion currently before the court.
Discussion
As noted, currently before the court is the plaintiffs’ application to cite in the individual defendant’s wife as a party, for purposes of asserting a claim of fraudulent conveyance. The defendants have objected to the motion, and the matter appeared as a non-arguable matter on the court’s calendar for January 2, 2018. (The motion was filed on December 11, 2017 and the objection was filed on December 29, 2017.)
In support of their objection, the defendants have cited a number of authorities, but those authorities are generally inapposite. None of the cases cited appear to stand for the proposition that the defendants ultimately are implicitly arguing- that it would be improper if not error for the court to grant the motion. The court will address the issues and authorities cited in the defendants’ objection, roughly in the order presented.
The defendants cite and discuss In re Devon B., 264 Conn. 572 (2003). The decision includes a discussion of the proper characterization of a party as a necessary party, eventually concluding that the trial court had erred by failing to cite in a necessary party. This case, however, does not involve a failure to cite in a necessary party, nor is it necessary (as will be discussed below) for the proposed defendant to be characterized as a necessary party. Therefore, other than a general discussion of citing in necessary parties, the case sheds no light on the issue before the court.
The defendants also cite and rely upon a trial court decision, Yoshu, LLC v. Ward, No. HHDCV095033580S, 2010 WL 3448065, at *7 (Conn.Super.Ct. Aug. 6, 2010), but in that case, it was the defendant who sought to compel parties to be brought in, over the objection of the plaintiff. Not only is the case procedurally distinct for that reason, but the decision also rejects the notion that the only relevant standard to be applied by the court relates to whether a party is necessary (or arguably as an extension, indispensable).
Since the proposed defendants are not necessary parties to this action, the Court now addresses the issue of whether it should exercise its discretion to make them parties to this proceeding anyway. It is well established that, pursuant to section 52-102(1), the trial court has discretion to decide whether to allow the addition of a party to pending legal proceedings where that party is not a necessary party. See A. Secondino & Son, Inc. v. LoRicco, 19 Conn.App. 8, 14, 561 A.2d 142 (1989).
A recurring theme in this discussion is the distinction between necessary parties who " shall" be made parties pursuant to General Statutes § 52-102(2) and parties who may have an interest adverse to the plaintiff who " may" be made parties to the proceeding pursuant to § 52-102(1).
The defendants also cite Jordaan v. Wayland, No. CV065004384, 2007 WL 3317678, at *2 (Conn.Super.Ct. Oct. 22, 2007), claiming that it contains the following statement: " It is true that there may be a cause of action by the present defendants against the parties to be cited in, but those interests are separable from those of the parties before the court." Aside from the fact that the paragraph contained that quote commences with the recognition that " [i]t is very clear that this court has wide discretion to decide this motion, " the defendants fail to note a critical procedural aspect of the case/decision- trial was already well underway when the court issued this decision. The court’s comments about the lack of necessity of bringing in additional parties, then, undoubtedly was heavily influenced by the fact that there is a recitation that there already had been some 35 days or more of trial, as of the date of this decision.
The defendants then cite Nadler v. Goldberg, J.D. New Haven, CV94 0355747, 1994 WL 385962, at *1 (Conn.Super.Ct. July 15, 1994), for the proposition that " [w]here the interests of a proposed added party are separable from those of the parties before the court, so that the court can proceed to a decree and to complete and final justice without affecting other persons not before the court, joinder is not appropriate, " in turn referencing Sturman v. Socha, 191 Conn. 1, 6-7 (1983), as authority. The language is there, but the context tells a different story- in both cases.
In Nadler, the quoted language is in response to the essentially conclusory but unsupported contention that the prospective party was necessary. The language of the decision in this regard is particularly telling:
The plaintiff claims in support of his motion to cite in Fiorello Barucca as an additional defendant, that he is a party necessary for complete determination of the issues involved in his dispute with the defendant. The proposed complaint against Barucca does not claim that he had an interest in the realty partnership at issue in the action for an accounting but asserts that Goldberg gave Barucca the use of funds converted by Goldberg from assets of the realty partnership. The proposed complaint against Barucca does not allege that he currently holds funds belonging to the realty partnership, nor does it allege that Barucca was the recipient of a fraudulent conveyance. Basically, the proposed claim of conspiracy against Barucca concerns allegations of what Goldberg did with assets of the partnership. (Emphasis added.)
As reflected by the emphasized language, the presence of a claim of fraudulent transfer might have (likely would have?) resulted in a different outcome.
Sturman v. Socha, 191 Conn. 1, 6-7 (1983), is referenced as authority in the Nadler decision, but again the context is highly distinguishable, Putting aside that the language relied upon in Nadler was part of a discussion of claimed status as a necessary or perhaps even indispensable party, the issue on appeal was not in the context of the discretion inherent in a decision as to whether to add a party, but rather was in the context of what amounted to a request for a continuance when the case had been reached for trial. As if that were not enough of a contextual distinction, the proposed party had already been the subject of a motion to be added as a party, which had been granted, but due to delays and difficulties in seeking the actual addition of the party (the State), the continuance had been requested. Other than recognizing that the trial court, if it had had better information when the motion to add the party was before it, might not have chosen to grant the motion, the decision has little relevance to a decision as to whether to grant a motion at this time, in this context.
Far closer to the situation at hand is Grasso Associates Financial Planning v. Horvath, No. NNHCV126030337S, 2015 WL 2167180, at *2 (Conn.Super.Ct. Apr. 9, 2015). The court in Grasso did deny an application to add a party based on a claim of fraudulent conveyance, but there are at least two highly significant distinctions. First, in Grasso, there was a serious question as to mootness, as the alleged transferee " [argued] in her memorandum that the issues regarding the alleged fraudulent transfers have been now rendered moot as she has arranged for both properties to be transferred back to the defendant." In addition, the decision recited that the motion to cite in the party had been filed less than two months prior to trial, and was argued to the court approximately two weeks prior to trial. The court is unaware of any claim of mootness in this case, and as of the writing of this decision, the case is not assigned for trial such that imminence of trial cannot be a consideration.
Most of the objection is directed to attempting to negate the proposed defendant’s status as a necessary party. The final section of the defendants’ objection addresses the court’s authority to add a defendant in the exercise of discretion, and cites a case in that regard. As with most of the cases cited by the defendants, A. Secondino & Son, Inc. v. LoRicco, 19 Conn.App. 8, 14 (1989), contains language that, out of context, arguably is favorable to the defendants’ position, but in context provides no support. In A. Secondino, a relative of the defendant sought permission to intervene, and the court sustained the plaintiff’s objection, largely based on the perception that the motion had been filed as a means of further delay of a long-delayed foreclosure. A decision rejecting a motion perceived to be a pretextual delay tactic in a foreclosure proceeding- where delay is often a strategic goal- sheds little light on the exercise of discretion in this case.
Synthesizing these decisions, whether to grant or deny a motion seeking to add a new party-defendant is a matter entrusted to the discretion of the court. The defendants have not cited any decision in which an appellate court has concluded that it had been an abuse of discretion for the court to have granted such a motion, and all of the cases cited in which a trial court had denied such a motion had good reasons to deny the request.
From the opposite perspective, there are a number of cases in which fraudulent conveyance claims have been joined with substantive claims in the same proceeding; see, e.g., Denison Development Co. v. Gunther, 189 Conn. 333, 455 A.2d 1340 (1983); Zapolsky v. Sacks, 191 Conn. 194, 464 A.2d 30 (1983); Shawmut Bank v. Brooks Dev. Corp., 46 Conn.App. 399, 404, 699 A.2d 283 (1997). In other instances, a separate substantive action has been consolidated with a related fraudulent conveyance claim and tried together; see, e.g., Tyers v. Coma, 214 Conn. 8, 570 A.2d 186 (1990); Certain Underwriters at Lloyd’s, London v. Cooperman, 289 Conn. 383, 957 A.2d 836 (2008).
The court cannot give any weight to the defendants’ conclusory claim of potential prejudice (" Aside from doing nothing to facilitate a complete determination of the issues in the underlying complaint, the granting of Defendants’ motion would prejudice Defendants by injecting issues into this case that have nothing to do with the merits of the allegations while potentially negatively influencing the ultimate trier of fact"). If that is intended as a reference to the factfinder being made aware of the existence of the transfer itself, that is a matter that properly could be brought to the attention of the factfinder even in the absence of a claim of fraudulent transfer. See, Young v. Falk, 34 Conn.App. 852, 856-57, 643 A.2d 1314, 1317 (1994). The plaintiffs clearly believe that the fraudulent conveyance issue is part of their global claim, and the court is unaware of any prejudice that should/could be of concern to the court, were it to grant the motion at this time.
Conclusion
The court already has alluded to the permissive nature of adding a party under authority of General Statutes § 52-102. Less directly applicable but recognizing the broad discretionary authority of the court, Practice Book § 9-19 provides that " [n]ew parties may be added and summoned in ... by order of the judicial authority, at any stage of the cause, as it deems the interests of justice require." Practice Book § 9-18 gives the court discretion to determine whether " a complete determination cannot be had without the presence of other parties." These provisions overlap but are not congruent with the authorities cited by the defendants relating to necessary parties. The court perceives there to be an efficiency in treating the fraudulent conveyance aspect as part of a " complete determination, " given the role of defendant Stuck (the allegedly-fraudulent grantor) in all phases of the dispute.
Trial courts have wide discretion with respect to decisions as to whether to add a party. The court need not decide whether the proposed defendant is a necessary party, nor need the court determine applicability of all factors that have been recognized in various decisions relating to addition of parties. Rather, to the extent that it is not uncommon for fraudulent conveyance claims to be tried along with the relevant underlying substantive claims, the court believes it appropriate to grant the motion. The defendants have not identified any persuasive negative factor, particularly since a denial of the motion likely would result in the alternate course of action mentioned in some of the cases, and implied by the defendants as the proper remedy- a separate action alleging fraudulent conveyance- which then might well end up being tried with this case even if technically a separate file/action.
Given the absence of any designated date for trial of this matter as currently constituted, even if there were to be a separate proceeding for fraudulent conveyance, there is a possibility if not likelihood that the matters would be consolidated for purposes of trial.
For all these reasons, then, the motion is granted, and the objection is overruled.