Opinion
NNHCV146051096S
11-12-2015
Brack Poitier et al. v. Laura Sklaver, Esq. et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE DEFENDANTS' MOTION TO DISMISS (#111)
Elpedio N. Vitale, J.
Pursuant to Connecticut Practice Book § § 10-30(a) and 10-33, the defendants, Laura Sklaver, Esq. and Susman, Duffy & Segaloff, P.C. (the " Defendants"), move to dismiss the Plaintiffs' Complaint for lack of subject matter jurisdiction. The defendants argue that the plaintiff, Brack Poitier (" Plaintiff"), has failed to invoke the court's subject matter jurisdiction because (1) he lacks standing to bring this action in his individual capacity as the defendants owed him no duty; (2) he lacks standing to bring this action derivatively due to a clear and irreconcilable conflict of interest; and (3) he lacks standing to bring a derivative action pursuant to the partnerships' Agreements of Limited Partnership and Connecticut Law. As such, the defendants' contend, this court lacks subject matter jurisdiction over each of the plaintiffs' claims and the Complaint should be dismissed.
The plaintiffs have objected and assert that the " complaint is properly before the court, and defendants' arguments to the contrary are without merit."
Nature of the Proceedings
The issues before the court arise out of an alleged transaction which occurred on November 4, 2011, in which four limited partnerships each sold all, or substantially all, of their assets to one of four limited liability companies. On March 4, 2015, the plaintiffs filed an eight-count revised complaint. In the complaint, the plaintiffs allege that the individual plaintiff, Brack Poitier, brings the action on behalf of four other plaintiffs, which are each limited partnerships, Renaissance Hill L.P., WCH, L.P., GAB Hill, L.P., and BHP, L.P. (the partnerships). The plaintiffs bring claims of professional negligence against two defendants: Laura Sklaver, an attorney; and Susman, Duffy & Segaloff, P.C. (law firm), a law firm that allegedly represented the partnerships in various business transactions. In counts one, three, five and seven, the plaintiffs bring claims of professional negligence on behalf of each of the four partnerships respectively against Sklaver. In counts two, four, six, and eight, the plaintiffs bring claims of professional negligence on behalf of each of the four partnerships respectively against the law firm. In the revised complaint, the plaintiffs allege the following facts.
The plaintiff filed a revised complaint following an order of the court, dated February 25, 2015, which granted the defendants' request to revise filed on January 26, 2015.
Poitier is and was at all relevant times a general partner in each of the partnerships. Each partnership consisted of a limited partner and three general partners: Brack Poitier, Wendall C. Harp, and George Bumbray. Attorney Sklaver and the law firm, her employer, represented the partnerships in various business transactions. On November 4, 2011, Renaissance Hill, L.P., sold all, or substantially all of its assets to a third party, Renaissance ASPIC, LLC. On that date, similarly, WCH, L.P., GAB Hill, L.P., and BHP, L.P., each sold all, or substantially all, of its assets respectively to ROB WH, LLC, HOW WH, LLC, and LEG WH, LLC. Sklaver and the law firm represented the partnerships and the LLCs in the sales. The LLCs were owned by one of the general partners, Harp, who, without the knowledge or consent of the other general partners or the limited partner, consummated the sales of the partnerships' assets to the LLCs. The sales were conducted in violation of the partnerships' operating agreements (the agreements) and were made on terms unfairly and inequitably favoring the LLCs. The LLCs were not required to pay money to acquire the partnerships' assets, and instead: (1) executed a " surplus cash note, " which required no payment until December 31, 2014, and could be extended indefinitely thereafter in the LLCs' discretion; and (2) assumed responsibility for previously executed, illusory promissory notes concerning nonexistent debts signed by Harp on behalf of the partnerships, in favor of Harp and a company owned by his son, Matthew Harp.
Renaissance ASPIC, LLC, ROB WH, LLC, HOW, LLC, and LEG WH, LLC will be collectively referred to as the LLCs. The transaction by which the assets from the four limited partnerships were transferred to the four LLCs will be referred to as the sale.
The plaintiffs allege that Sklaver and the law firm were negligent in their acts and/or omissions as attorneys for the partnerships in the following ways: They allowed the sales to proceed despite the fact that she knew, or in the exercise of reasonable care should have known, that the sales were not properly authorized by the partnerships; they failed to seek or obtain consent from the other general partners for the sales; they failed to inform the other general partners of the sales or their terms; they failed to advise the partnerships of the fact that the terms of the sales were grossly unreasonable and unfavorable; they failed to warn the partnerships, their general partners and/or their limited partner that the sales and their terms were designed to divest the assets of the partnerships for little or no actual consideration; they allowed Harp to encumber the assets of the partnerships through the use of illusory promissory notes signed by Harp on behalf of the partnerships for fictitious debts claimed to be owed to him and a company owned by his son, Matthew; they failed to inform or warn the plaintiffs' other general partners of Harp's attempts to encumber the partnerships' assets through the use of promissory notes; they failed to reasonably investigate or determine whether the promissory notes signed by Harp alleging debts owed by the partnerships to him and a company owned by his son were legitimate; they represented both parties in each sale under a conflict of interest without obtaining independent counsel for the partnerships. As a direct and proximate result of the defendants' negligence, the partnerships lost possession of valuable real property and have been forced to retain counsel and commence legal proceedings in an attempt to mitigate their losses to their financial detriment.
The plaintiffs have attempted on numerous occasions, personally and through counsel, to communicate with the other remaining general partner, Bumbray, to secure his consent to bring the present action. Bumbray has neglected and/or refused to communicate with Poitier or his counsel. As such, securing majority consent of the partnerships' general partners to proceed with this action would be futile and would cause irreparable injury to the plaintiffs because delay in filing an action would jeopardize the plaintiffs' ability to bring the claims set forth in the complaint. In their prayer for relief, the plaintiffs seek an award of damages, costs, and such other " fair, just, and reasonable" relief.
The defendants filed the present motion to dismiss on April 27, 2015, along with a memorandum of law in support and several exhibits. Specifically, the defendants included (A) a copy of partnership agreements for Renaissance Hill, L.P., WCH, L.P., GAB Hill, L.P., and BHP, L.P., and (B) a copy of the writs of summons and complaints filed in several other civil actions brought by the plaintiffs in the present action against various defendants allegedly involved in the transactions at issue in the present action. The plaintiffs filed a memorandum in opposition to the motion on May 21, 2015, accompanied by an affidavit of Poitier. The defendants filed a reply on July 16, 2015. On July 20, 2015, the parties argued this motion at short calendar.
DISCUSSION
" [A] motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court." (Internal quotation marks omitted.) Santorso v. Bristol Hospital, 308 Conn. 338, 350, 63 A.3d 940 (2013). " A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) MacDermid, Inc. v. Leonetti, 310 Conn. 616, 626, 79 A.3d 60 (2013). " A motion to dismiss shall be used to assert . . . lack of jurisdiction over the subject matter . . ." Practice Book § 10-30.
" [B]ecause the issue of standing implicates subject matter jurisdiction, it may be a proper basis for granting a motion to dismiss." Electrical Contractors, Inc. v. Dept. of Education, 303 Conn. 402, 413, 35 A.3d 188 (2012). " If . . . the plaintiff's standing does not adequately appear from all materials of record, the complaint must be dismissed." (Internal quotation marks omitted.) Burton v. Dominion Nuclear Connecticut, Inc., 300 Conn. 542, 550, 23 A.3d 1176 (2011).
" When a trial court decides a jurisdictional question raised by a pretrial motion to dismiss on the basis of the complaint alone, it must consider the allegations of the complaint in their most favorable light . . . In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal quotation marks omitted.) Conboy v. State, 292 Conn. 642, 650-51, 974 A.2d 669 (2009). " In contrast, if the complaint is supplemented by undisputed facts established by affidavits submitted in support of the motion to dismiss . . . other types of undisputed evidence . . . and/or public records of which judicial notice may be taken . . . the trial court, in determining the jurisdictional issue, may consider these supplementary undisputed facts and need not conclusively presume the validity of the allegations of the complaint . . . Rather, those allegations are tempered by the light shed on them by the [supplementary undisputed facts] . . . If affidavits and/or other evidence submitted in support of a defendant's motion to dismiss conclusively establish that jurisdiction is lacking, and the plaintiff fails to undermine this conclusion with counteraffidavits . . . or other evidence, the trial court may dismiss the action without further proceedings . . . If, however, the defendant submits either no proof to rebut the plaintiff's jurisdictional allegations . . . or only evidence that fails to call those allegations into question . . . the plaintiff need not supply counteraffidavits or other evidence to support the complaint, but may rest on the jurisdictional allegations therein." (Citations omitted; emphasis in original; footnote omitted; internal quotation marks omitted.) Id., 651-52.
" The plaintiff bears the burden of proving subject matter jurisdiction, whenever and however raised." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. New London, 265 Conn. 423, 430 n.12, 829 A.2d 801 (2003). " [I]t is the burden of the party who seeks the exercise of jurisdiction in his favor . . . clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute . . . It is well established that, in determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged." (Internal quotation marks omitted.) Financial Consulting, LLC v. Commissioner of Insurance, 315 Conn. 196, 226, 105 A.3d 210 (2015).
In their motion to dismiss, the defendants argue that the court lacks subject matter jurisdiction over the plaintiffs' claims because: (1) Poitier lacks standing to bring this action in his individual capacity as the defendants owed him no duty; (2) even if he had properly pleaded derivative claims, he lacks standing to bring this action derivatively due to a clear and irreconcilable conflict of interest; and (3) he lacks standing to bring this action pursuant to the partnership agreements and Connecticut law. In their memorandum in opposition, the plaintiffs counter that Poitier has standing to bring this action as all causes of action are derivative, that the partnerships are permitted to wind up their affairs, which includes bringing this action, that Poitier can adequately represent the partnerships, and, thus, that the court has subject matter jurisdiction. In their reply, the defendants reiterate that Poitier lacks standing, because: (1) Poitier lacks the requisite authority to unilaterally wind up the affairs of the partnerships pursuant to the partnership agreements and Connecticut state law; and (2) Poitier has a conflict of interest in representing the partnerships.
I
The defendants first argue that Poitier lacks standing to bring this action in his individual capacity because the defendants owed him no duty. In support, the defendants argue that the professional negligence claims set forth in the complaint present individual, not derivative, claims. Because the allegations support a claim that Poitier was injured directly and independently from the partnerships, the defendants argue, in that Poitier was not informed of the transactions or their terms, the plaintiffs allege a breach of a duty owed to Poitier individually in his capacity as a general partner, not a breach of duty owed to the partnerships. They further support their assertion that the plaintiffs' claims are individual with their argument that the plaintiffs cannot claim that the partnerships were uninformed because Harp, the managing general partner of the partnerships, was aware of, consented to, and had authority to approve the sales. The defendants assert that Poitier lacks standing to assert his claims because the defendants did not owe him a duty as he was not their client.
In their memorandum in opposition, the plaintiffs do not address this ground of the motion beyond their statement in a footnote that this argument " will not be briefed . . . insofar as there is no disagreement that the causes of action in this case are all derivative and not individual." (Plaintiffs' memorandum in opposition, p. 4 n.2.) The plaintiffs, therefore, do not contest the defendants' argument that Attorney Sklaver and the law firm did not owe him a duty of care individually; instead, they maintain that Poitier has standing to bring the claims set forth in the complaint because they are derivative.
As a threshold matter, the court agrees that Poitier would lack standing to assert claims of professional negligence against the defendants if they were brought on behalf of him individually, because the plaintiff has not alleged facts or offered evidence to demonstrate that the defendants owed him a duty as their client. " As a general rule, attorneys are not liable to persons other than their clients for the negligent rendering of services." Krawczyk v. Stingle, 208 Conn. 239, 244, 543 A.2d 733 (1988). Courts have noted the possible " chilling effect of third party intrusion into an attorney's primary duty of loyalty to the best interests of his or her client." Mozzochi v. Beck, 204 Conn. 490, 501, 529 A.2d 171 (1987); see also Prescott Investors, Inc. v. Blum, 762 F.Supp. 1553, 1557 (D. Conn. 1991) (" Connecticut has been cautious in expanding attorney liability"). As a result, he would lack standing to assert any such claims on his own behalf.
The plaintiffs' standing, therefore, turns initially on whether the claims in the complaint are properly characterized as derivative or individual claims. Our Supreme Court has addressed the distinction " between the right of a shareholder to bring suit in an individual capacity as the sole party injured, and his right to sue derivatively on behalf of the corporation alleged to be injured." Yanow v. Teal Industries, Inc., 178 Conn. 262, 281, 422 A.2d 311 (1979). " [I]t is axiomatic that a claim of injury, the basis of which is a wrong to the corporation, must be brought in a derivative suit, with the plaintiff proceeding secondarily, deriving his rights from the corporation which is alleged to have been wronged." (Internal quotations omitted.) Fink v. Golenbock, 238 Conn. 183, 200, 680 A.2d 1243 (1996). " It is, however, well settled that if the injury is one to the plaintiff as a stockholder, and to him individually, and not to the corporation, as where an alleged fraud perpetrated by the corporation has affected the plaintiff directly, the cause of action is personal and individual." Yanow v. Teal Industries, Inc., supra, 281-82. " Such claims-of looting the corporation and of failure of the directors to disclose important facts concerning corporate transactions-state personal, as opposed to derivative, causes of action." Id., 283. In Yanow, the claims determined to be individual in nature alleged that the defendants breached their fiduciary duty owed as the corporate majority to the plaintiff minority shareholder by engaging in business transactions that deprived the plaintiff of income and assets. See id. By contrast, the court found that other claims brought by the plaintiff, in which the plaintiff alleged a breach of the duty owed to the corporation, which were based on the same business transactions, were derivative in nature because the plaintiff alleged as its primary claim an injury to the company, pursued by the plaintiff on behalf of the company.
In the present case, the plaintiffs allege in the complaint that the defendants owed a duty to the partnerships to represent them with the standard of care and skill that attorneys undertaking similar matters in Connecticut ordinarily possess and practice, and that the defendants breached that duty by failing to act in accordance with that standard. (Revised complaint, counts one through eight, PP12 and 13.) They further allege that this standard was breached in several ways, including the defendants' allowance of the sales to proceed despite the fact that the sales were not properly authorized by the partnerships and the defendants' representation of both parties to each sale despite conflicts of interest. The plaintiffs also allege that the defendants failed to advise the partnerships that the terms of the sales were grossly unreasonable and unfavorable, failed to advise them that the sale terms were designed to divest the partnerships of their assets for no actual consideration; allowed a general partner to encumber assets through the use of illusory promissory notes; and that they failed to reasonably investigate the promissory notes involved in the sale. As a result of these alleged breaches, the plaintiffs allege, the partnerships were harmed in that they lost valuable real property and they were forced to retain counsel and commence legal proceedings, to their financial detriment. The plaintiffs do not allege that Poitier suffered any harm individually; rather, they allege that he brings this action derivatively pursuant to General Statutes § § 52-572j and 34-34b et seq. Moreover, the plaintiffs do not seek relief directed in Poitier's favor individually, rather, they seek an award to the partnerships. Accordingly, the court concludes that the claims stated in the complaint are derivative.
General Statutes § 52-572j provides in relevant part: " (a) Whenever any corporation or any unincorporated association fails to enforce a right which may properly be asserted by it, a derivative action may be brought by one or more shareholders or members to enforce the right, provided the shareholder or member was a shareholder or member at the time of the transaction of which he complained or his membership thereafter devolved on him by operation . . . The derivative action may not be maintained if it appears that the plaintiff does not fairly and adequately represent the interests of the shareholders or members similarly situated in enforcing the right of the corporation or association . . ."
General Statutes § 34-34b provides: " In a derivative action, the plaintiff shall be a partner at the time of bringing the action and (1) at the time of the transaction of which he complains or (2) his status as a partner had devolved upon him by operation of law or pursuant to the terms of the partnership agreement from a person who was a partner at the time of the transaction." In the complaint, the plaintiffs cite General Statutes " § 534-34b, " which does not exist. Based on the parties' arguments and the claims at issue in this case, it is clear that the plaintiffs intended to cite § 34-34b.
II
The next issue to be addressed is whether Poitier lacks standing to bring this action derivatively due to a conflict of interest. The defendants argue that even if the plaintiffs have properly pleaded derivative claims, Poitier has an irreconcilable conflict of interest. The first basis for this argument is that he cannot fairly and adequately represent the limited partnerships in this action because his interests are not coextensive with those of the other general partners and limited partner of the partnerships he seeks to represent. In support, the defendants maintain that the other partners are either neutral or directly opposed to the plaintiffs' action, specifically that one of the two other general partners, Harp, was the partner who consummated the sales, that RFC, the limited partner, was owned and managed by Harp, and that the only other partner, Bumbray, according the plaintiffs' own allegations, has neglected and/or refused to communicate with the plaintiffs regarding the action and has, therefore, remained neutral. The defendants further argue that the plaintiffs have a conflict of interest because they brought another action against the parties to the sales at issue and because they brought a grievance complaint against the law firm.
The plaintiffs counter that these factors do not demonstrate a conflict of interest. They maintain that the allegations in the complaint show that Poitier is an adequate and fair representative. They further maintain that they have alleged claims of injury to the partnerships, not Poitier individually, and that the other actions brought by the plaintiffs against the parties to the sales transactions at issue are not in conflict with the claims brought in the present case, because Poitier is not simultaneously suing on behalf of the partnerships while also suing the partnerships that he seeks to represent. They maintain that Poitier's interests, therefore are in no way adverse to the interests of the partnerships. Finally, the plaintiffs argue that the ethical grievance filed against the defendants does not present a conflict of interest because the defendants are not members of the partnerships involved in this case.
General Statutes § 34-34b and § 34-34c set forth the requirements for a derivative action pursuant to the Revised Uniform Limited Partnership Act. The General Statutes also set forth requirements for derivative actions in the context of business corporations stating that a " derivative action may not be maintained if it appears that the plaintiff does not fairly and adequately represent the interests of the shareholders or members similarly situated in enforcing the right of the corporation or association." (Emphasis added.) General Statutes § 52-572j(a). This requirement has been applied in Connecticut case law to other corporate forms. See, e.g., Calpitano v. Fountain Pointe, LLC, Superior Court, judicial district of New Britain, Docket No. CV-12-6014893-S (January 21, 2014, Swienton, J.) (applying § 52-572j to a plaintiff member of a limited liability company in a derivative action). Additionally, " the Federal Rules of Civil Procedure have explicitly provided that a derivative action may not be maintained if it appears that the plaintiff does not fairly and adequately represent the interests of the shareholders or members similarly situated in enforcing the right of the corporation or association." (Internal quotation marks omitted.) Barrett v. Southern Connecticut Gas Co., 172 Conn. 362, 372, 374 A.2d 1051 (1977), citing Fed.R.Civ.P.23.1.
" The statute [§ 52-572j(a)] requires fair and adequate representation in order to avoid possible antagonism between the interests of the representative and those of the class, antagonism which may lead to conflicts such that the interests of the other stockholders are disregarded in the management of the case." (Emphasis added.) Fink v. Golenbock, supra, 238 Conn. 204. " Whether a plaintiff is an appropriate representative is fact-specific and depends upon any number of factors . . . [F]actors the court may consider include: (1) whether the named plaintiff is the real party in interest; (2) the plaintiff's familiarity with the litigation and willingness to learn about the suit; (3) the degree of control exercised by attorneys over the litigation; (4) the degree of support given to the plaintiff by the other shareholders; (5) the plaintiff's personal commitment to the action; (6) the remedies sought by the plaintiff, (7) the relative magnitude of the plaintiff's personal interests as compared to the plaintiff's interest in the derivative action itself, and (8) the plaintiff's vindictiveness towards the other shareholders." (Footnote omitted.) Id., 205. " [T]he . . . factors are nonexclusive and interrelated, and . . . it is frequently a combination of factors that guides a court in determining whether a plaintiff meets the requirements of fair and adequate representation . . . Not all factors will come into play in all cases, and in some cases there may be additional factors for the court to consider. The key is whether the nominal plaintiff's . . . interests and issues [are] coextensive with those of the class of shareholder he seeks to represent, and whether he is able to assure the trial court that as a representative, he will put up a real fight." (Citations omitted; internal quotation marks omitted.) Id., 205-06.
The court is not persuaded by the defendants' attempt to analogize the facts of the present case to those of Barrett v. Southern Connecticut Gas Co, supra, 172 Conn. 362, and Calpitano v. Fountain Pointe, LLC, supra, Superior Court, Docket No. CV-12-6014893-S. In Barrett, the plaintiff did not satisfy the fair and adequate representative standard because he sought to act on behalf of a corporation while at the same time bringing an individual action seeking damages from that corporation. Similarly, in Calpitano, the court found that the plaintiff, a 50 percent shareholder of a limited liability company, lacked standing to bring a derivative action due to an irreconcilable conflict of interest because she, at the same time, maintained a personal action seeking possession of property and monetary damages from the company. In both cases, the plaintiffs pursued actions against the same companies while simultaneously seeking to represent those companies in derivative actions.
The matter before this court is distinguishable from these cases. As noted above, the plaintiffs bring the present action derivatively seeking damages on behalf of the partnerships. Unlike the plaintiffs in Barrett and Calpitano, the defendant is not, at the same time, bringing an individual action on his own behalf against the partnerships or that is otherwise inconsistent with the interests of the partnerships. The grievance complaint against the law firm is also unlikely to present any conflict of interest. The claims that would be at issue in the plaintiffs' two separate claims against the same defendants could not create a conflict that would render Poitier unsuitable as a representative of the partnerships because the defendants are not alleged to be members of the partnerships, nor have the defendants presented any evidence to demonstrate how this could present a conflict.
Additionally, the court concludes that many of the factors listed in the nonexhaustive list in Fink support a finding that Poitier is a fair and adequate representative of the partnerships. For example, by pursuing this litigation, he has demonstrated that he is committed to the litigation and that he has familiarity with the suit. Further, he seeks remedies solely for the benefit of the partnerships and would benefit only indirectly if the partnerships are first benefitted, which demonstrates that his personal interests are subservient to his interest in obtaining recourse for the partnerships. Any personal interest that the plaintiff would derive from the suit flows directly, and solely, from his status as a general partner. For all of these reasons, a dismissal is not warranted on the ground that a conflict of interest exists.
III
Finally, the court must consider whether Poitier lacks standing to bring a derivative action pursuant to the partnership agreements and Connecticut law. The defendants argue that, under Connecticut law, the partnerships dissolved upon the death of one of the general partners, Harp, and, although the remaining partners could have elected to continue the partnerships thereafter, no such election was made. Therefore, they argue, Poitier lacks standing to sue derivatively on behalf of the partnerships because they are dissolved and must be wound up. They maintain that because the partnership agreements do not permit any partner other than Harp to act unilaterally, Poitier is not authorized to bring this action.
In opposition, the plaintiffs argue that a dissolved partnership is permitted to wind up its affairs, which includes prosecuting and defendant lawsuits. Accordingly, they maintain, the plaintiffs are not barred from bringing the present action. In response, the defendants contend that although dissolved partnerships are permitted to wind up their affairs, which could include bringing lawsuits, Poitier is not permitted under the partnership agreements to wind up the partnerships' affairs unilaterally, without the consent of the remaining partners. They maintain that, under the partnership agreements, the remaining general partners were required to notify the limited partner in writing of their election to continue the partnerships within ninety days of Harp's death, which they did not do.
A copy of the amended and restated agreements of each of the limited partnership was filed with the defendants' motion to dismiss. Article 1 of the agreements provides that the parties to the agreements agree to conduct business as partnerships under " the Act, " which is defined in article 2 of the agreements as the " Revised Uniform Limited Partnership Act as adopted in the State of Connecticut" (the act). Article 3.c provides in relevant part that " each of the General Partners hereby designates Harp as the managing general partner of the Partnership with full power to act on behalf of the Partnership and the General Partners to manage the affairs of the Partnership and to do all things he deems necessary and desirable in accordance with this Agreement, and he shall have all powers pursuant thereto, including, but not limited to, the right to execute all documents on behalf of the Partnership which require execution by the Partnership. Unless explicitly stated to the contrary, all powers granted to the General Partners pursuant to the terms of the Agreement may be performed by Harp alone . . ." (Emphasis added.) Article 4 of the agreements further provides: " The term of the Partnership . . . shall continue until the earliest of (a) December 31, 2033; (b) the removal, retirement, death, resignation, assignment for the benefit of creditors, or adjudication of bankruptcy of any General Partner . . . unless the Partnership is continued pursuant to the provisions of Paragraph J of Article 12 hereof or Paragraph c of Article 19 hereof . . ." (Emphasis added.) The provisions referenced in Article 4 do not state the method by which any such election shall be made or communicated, but paragraph c.ii requires any such election to be exercised within ninety days of the death of a partner. The plaintiffs do not dispute that no such election was made in the present case.
According to the act, a " limited partnership is dissolved and its affairs shall be wound up upon the happening of the first to occur of the following . . . an event of withdrawal of a general partner unless at the time there is at least one other general partner and the partnership agreement permits the business of the limited partnership to be carried on by the remaining general partner and that partner does so, but the limited partnership is not dissolved and is not required to be wound up by reason of any event of withdrawal, if, within ninety days after the withdrawal, all partners agree in writing to continue the business of the limited partnership and to the appointment of one or more additional general partners if necessary or desired." General Statutes § 34-28a. " Except as provided in the partnership agreement, the general partners who have not wrongfully dissolved a limited partnership . . . may wind up the limited partnership's affairs . . ." General Statutes § 34-28c. Winding up includes the ability to " prosecute and defend suits, whether civil, criminal or administrative." General Statutes § 34-28c. " A partnership that is dissolved does not immediately cease to exist." Dana Investment Corp. v. Schlesinger, 46 Conn.Supp. 527, 537, 759 A.2d 161 (1998). In Suffield Dev. Assocs. L.P. v. Nat'l Loan Investors, L.P., Superior Court, judicial district of Hartford, Docket No. CV-99-0590031-S (February 17, 2005, Sheldon, J.), the court held that " until all winding-up activity is at an end--in other words, until all activity concluding the affairs of the limited partnership, including the prosecution and defense of lawsuits, is finally over--the limited partnership is not cancelled, and thus continues to exist . . ." (Emphasis omitted.) Id.
Under the relevant portions of the agreements and the act set forth above, the defendants are correct that the partnerships would have been dissolved as a result of the death of one of the general partners, Harp. Nevertheless, neither the agreements nor the act sets forth any restrictions on the ability of individual general partners with regard to the bringing of derivative suits on behalf of the dissolved partnership, other than the requirements set forth in General Statutes § § 34-34a through 34-34d. In relevant part, the act provides: " In a derivative action, the plaintiff shall be a partner at the time of bringing the action and (1) at the time of the transaction of which he complains or (2) his status as a partner had devolved upon him by operation of law or pursuant to the terms of the partnership agreement from a person who was a partner at the time of the transaction." (Emphasis added.) General Statutes § 34-34b. The act further provides: " In a derivative action, the complaint shall set forth with particularity the effort of the plaintiff to secure initiation of the action by a general partner or the reasons for not making the effort." General Statutes § 34-34c.
The defendants rely on Vecchitto v. Vecchitto, Superior Court, judicial district of Middlesex, Docket No. CV-08-4008482-S (October 20, 2009, Burgdorff J.) , in support of their argument that the only remaining function of a dissolved partnership is to be wound up. They argue that the present case is analogous because the remaining partners in the present case did not elect to continue the partnership and their only remaining function, therefore, was to wind up the affairs of the partnership. The motion to strike in Vecchitto, however, was granted because the action sought to enforce a partnership agreement that was no longer in effect. That case does not stand for the proposition that a dissolved partnership is otherwise precluded from prosecuting lawsuits, which are specifically authorized as part of the winding up of a partnership by § 34-28c (" the persons winding up the affairs of the limited partnership may, in the name of, and for and on behalf of the limited partnership, prosecute and defend suits").
The court therefore concludes that the plaintiffs satisfy the requirements set forth in the act for bringing this derivative action. The plaintiffs have alleged, and the defendants do not dispute, that Poitier was a partner at the time of the transactions at issue and that he remains a partner of the dissolved partnerships, to the extent that the partnerships have not completed the process of winding up. Poitier satisfies the requirements of § 34-34b and is a proper plaintiff to bring the action. The plaintiffs have also satisfied the pleading requirements § 34-34c. The plaintiffs allege that Poitier " attempted on numerous occasions, both personally and through counsel, to communicate with . . . Bumbray, to secure his consent to bring the instant action; however, Bumbray has neglected and/or refused to communicate with Plaintiff or his counsel." (Revised complaint, counts one through eight, P17.) The plaintiffs further allege that " [s]ecuring majority consent of Plaintiff's general partners to proceed with this action would be futile in light of the above-mentioned refusal to communicate. In addition, irreparable injury to the Plaintiff would occur in that delay in the filing of this action would jeopardize Plaintiff's ability to bring the claims set forth herein." (Revised complaint, counts one through eight, P18.) Based on these allegations, read in the light most favorable to the plaintiff, the statutory requirement to " set forth with particularity the effort of the plaintiff to secure initiation of the action by a general partner or the reasons for not making the effort" has been met both by paragraph 17, which describes the efforts of Poitier and his counsel, and paragraph 18, which explains the reasons for not making further efforts.
CONCLUSION
For the foregoing reasons, the Motion to Dismiss is denied.