Opinion
No. HHD-CV07-4028460S
May 21, 2009
MEMORANDUM OF DECISION
BOND PENDING APPEAL I STATEMENT OF CASE
On April 27, 2009, the Appellate Court granted the plaintiff's motion for review and issued a stay pending appeal of the order granting the motions to dissolve the prejudgment attachment. In addition the matter was remanded for a determination of what bond or security, if any, the plaintiff should be required to post pursuant to the provisions of General Statutes § 52-278l(c).
On May 8, 2009, the plaintiff filed a memorandum of law regarding bond pending appeal. On May 8, 2009, the defendants, Sunrise Herbal Remedies, Inc., Sage Advice, Inc., Valerie Hawk-Hoffman, and David Hoffman, filed both a request that plaintiff post a bond to protect the defendants' interest in property that is subject to attachment and a request that plaintiff post a bond to indemnify the defendants for damages that will accrue as a result of the stay. On May 8, 2009, Wachovia Bank, N.A. (Wachovia) filed both a memorandum of law regarding the plaintiff's posting of a bond and a motion for order regarding the disbursement of escrow funds. The matter was heard on May 15, 2009.
II DISCUSSION
At this time, the court will only address the issue under remand, what bond or security, if any, the plaintiff should be required to post pursuant to General Statutes § 52-278l(c).
In its pleadings, the plaintiff contends that: "It is not clear that the State should be subject to a bond requirement." (Plaintiff's Motion for a Stay Pending Appeal, 3/12/09, p. 6-7.) To determine what bond or security, if any, the plaintiff should be required to post pursuant to § 52-278l(c), the court must interpret the relevant statute. See Sassone v. Lepore, 226 Conn. 773, 785, 629 A.2d 357 (1993) ("Because the right to a prejudgment remedy of attachment is purely statutory . . . the authority of a trial court to require a security bond or other security for the protection of the property owner whose property is being attached is a question of statutory construction.")
"The principles that govern statutory construction are well established. When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature . . . In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply . . . In seeking to determine that meaning, General Statutes § 1-2z directs us first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered . . . When a statute is not plain and unambiguous, we also look for interpretive guidance to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter . . ." (Internal quotation marks omitted.) Friezo v. Friezo, 281 Conn. 166, 181-82, 914 A.2d 533 (2007).
The statute in question, General Statutes § 52-278l(c), provides: "No such order shall be stayed by the taking of an appeal except upon the order of the judge who made such order, and any such stay shall be granted only if the party taking the appeal posts a bond, with surety, in a sum determined by such judge to be sufficient to indemnify the adverse party for any damages which may accrue as a result of such stay." This subsection applies to the granting of a motion to dissolve a prejudgment attachment. General Statutes § 52-278/(a)(2).
Based on the rules of statutory construction, the plain language of § 52-278l(c) is clear that a stay is granted only if the appellant posts a bond with sufficient surety for any damages that may accrue. See Office of Consumer Counsel v. Dept. of Public Utility Control, 246 Conn. 18, 29, 716 A.2d 78 (1998) ("if the language of a statute is plain and unambiguous, we need look no further than the words themselves because we assume that the language expresses the legislature's intent . . ."); CT Page 8364 State v. Baker, 195 Conn. 598, 602, 489 A.2d 1041 (1985) ("[i]t has often been said that the legislative intent is to be found not in what the legislature meant to say, but in the meaning of what it did say. Courts may not by construction supply omissions in a statute, or add exceptions merely because it appears to them that good reasons exist for adding them"); Battersby v. Battersby, 218 Conn. 467, 470-71, 590 A.2d 427 (1991) ("[t]wo longstanding rules of statutory construction are that a court may not by construction supply omissions in a statute simply because it appears that good reasons exist for adding them . . . and that a court must construe a statute as it finds it, without reference to whether it thinks the statute would have been or could be improved by the inclusion of other provisions"); Nichols v. Warren, 209 Conn. 191, 198 n. 5, 550 A.2d 309 (1988) ("[a] statute does not become ambiguous solely because the parties disagree as to its meaning"). The General Statutes § 52-278l(c) bond requirement applies to any "party taking the appeal," including the state.
Furthermore, other states with similar appeal bond requirements, where the state is exempt from such requirements, have explicit statutory exemptions for the state. See Ohio Rev. Code Ann. § 2505.12 (West 2006) ("[a]n appellant is not required to give a supersedeas bond in connection with any of the following: (A) An appeal by any of the following: . . . (2) The state or any political subdivision of the state; (3) Any public officer of the state or of any of its political subdivisions who is suing or is sued solely in the public officer's representative capacity as that officer . . ."); Mich. Comp. Laws Serv. § 600.2611 (LexisNexis 2004) ("[i]n any suit or proceeding in which the state, or any state officer duly authorized for that purpose, or any corporate body in charge of any state institution, or any municipal corporation, is a party, no bond shall be required to be given by any such party as a prerequisite to the taking of an appeal, or the making of an order staying proceedings"). Unlike other states, the plaintiff is not expressly exempt from the § 52-278l(c) bond posting requirement.
The plaintiff places much weight on the case of Cayuga Indian Nation of New York v. Pataki, 188 F.Sup.2d 223 (N.D.N.Y 2002), rev'd on other grounds, 413 F.3d 266 (2005). There, the District Court for the Northern District of New York waived the supersedeas bond required by the federal rules of civil procedure when the state of New York moved for a stay pending appeal. Cayuga Indian Nation of New York v. Pataki, supra, 188 F.Sup.2d 249. In addition to considering factors similar to those raised by the state in the present case, the District Court for the Northern District of New York, a federal court, was weary of the implications for "state sovereignty and federalism," were a federal court to require that a state post such a bond. Id., 255. "While, as sometimes stated, the Federal Rules of Civil Procedure have the force of law . . . their proper administration . . . is left largely to the discretion of the trial court." (Citations omitted.) Vernor's Ginger Ale Bottling Corp. of Boston v. Hiresideal Bottling Co., 8 F.R.D. 240, 241 (1948). In contrast to Cayuga Indian Nation of New York, the bond requirement in Connecticut is set out in plain and unambiguous language in § 52-278l(c).
The state further argues that it should not be required to post a bond because "1) the State's treasury provides ample surety against any possible loss that might be caused by the stay and a bond therefore is not necessary, and 2) the defendants cannot prove that they will suffer any compensable damages that might be the proximate result of a stay, or the amount of such damages, and a bond is therefore not needed." (State's Memorandum of Law Regarding Bond Pending Appeal, 5/8/09, pp. 3-4.)
While there is no case law applying the bond requirement of § 52-278l(c) to the state, Connecticut's eminent domain condemnation statute allows the judge to require that the "condemning authority" post a bond. General Statutes § 48-13 provides in relevant part: "Such condemning authority shall be responsible to the owner . . . and such court or judge may require the filing of a bond or deposit of surety to indemnify the owner . . . of property for such damage." Although the General Statutes § 48-13 bond requirement is discretionary, the availability of such a bond requirement shows that there is no general exemption for government entities from bond requirements in Connecticut. See e.g. Clinton v. Schrempp, Superior Court, judicial district of Middlesex, Docket No. CV 04 4000684 (January 14, 2005, Silbert, J.) [38 Conn. L. Rptr. 572] (the court considered requiring bond but found government's minimal intrusion did not warrant one); see also, Darien v. Estate of D'Addario, 258 Conn. 663, 784 A.2d 337 (2001); Darien v. Duhaime, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 99 0173270 (November 18, 1999, Karazin, J.); Murphy v. Waterford, Superior Court, judicial district of New London, Docket No. 520173 (July 9, 1992, Healey, J.T.R.).
The plaintiff also relies on Cayuga Indian Nation of New York in arguing that the court should consider that the state has ample resources in determining what bond or security, if any, the plaintiff should be required to post. In deciding to waive the bond requirement in that case, the court weighed heavily the "unusual circumstances" present, including the issues of state sovereignty and federalism, the large face value of the judgment ($247,911,999.42), and the practicalities of posting such a large bond. Cayuga Indian Nation of New York v. Pataki, supra, 188 F.Sup.2d 256. The instant case, however, involves a straightforward application of the statutory prejudgment remedy procedure under Chapter 903a of the General Statutes. See also Connecticut v. Doehr, 501 U.S. 1, 111 S.Ct. 2105, 115 L.Ed.2d 1 (1991) (discussing due process requirements for prejudgment remedies).
Consistent with the rules of statutory construction, it follows that the state's argument that a general bond requirement should not apply to the state because the state has access to ample funds is not persuasive, when the state, as a condemning authority, may be required to post a bond. See Stern v. Alied Van Lines, Inc., 246 Conn. 170, 180, 717 A.2d 195 (1998) ("[i]t is well settled that `[t]he legislature is presumed to be aware and to have knowledge of all existing statutes and the effect which its own action or nonaction may have on them'"); In re Valerie D., 223 Conn. 492, 533, 613 A.2d 748 (1992) ("[s]tatutes are to be construed consistently with other relevant statutes, because we presume that the legislature intended to create a coherent body of law"); State v. DeJesus, 288 Conn. 418, 443, 953 A.2d 45 (2008) ("[t]he legislature is always presumed to have created a harmonious and consistent body of law . . . [T]his tenet of statutory construction . . . requires [this court] to read statutes together when they relate to the same subject matter . . . Accordingly, [i]n determining the meaning of a statute . . . we look not only at the provision at issue, but also to the broader statutory scheme to ensure the coherency of our construction").
The plaintiff's other argument is that the bond is only required where the defendant could suffer damages and, in the present case, "the defendants cannot prove that they will suffer any compensable damages that might be the proximate result of a stay." (State's Memorandum of Law Regarding Bond Pending Appeal, 5/8/09, pp. 3-4.) General Statutes § 52-278/ does not appear to require such a strict standard, requiring only that "damages . . . may accrue as a result." (Emphasis added.)
The state further argues that any damages which may accrue are not the proximate result of a stay. This argument is not persuasive. In this case, the disputed property is money held in an escrow account. The defendants claim that they would suffer damages by accruing additional interest on a note that they otherwise would be able to repay. The defendants attached an affidavit from a Recovery Specialist at Wachovia which attests to the interest. Further possible damages listed by the defendants are the legal costs of appeal. (Request That Plaintiff Post a Bond to Indemnify the Defendants for Damages That Will Accrue as a Result of the Stay, 5/8/09, pp. 4-5.) The court has already found that: "The defendants have suffered financially during the pendency of the attachment, and would continue to suffer if the attachment is not dissolved. A stay would also have an adverse effect on Wachovia, which the state has not made any claims against." State v. Sunrise Herbal Remedies, Inc., Superior Court, judicial district of Hartford, Docket No. CV 07 4028460 (April 3, 2009, Bentivegna, J.); State v. Hoffman, Superior Court, judicial district of Hartford, Docket No. CV 07 4029220 (April 3, 2009, Bentivegna, J.). After hearing, it is clear that damages may accrue as a result of the stay. But for the state's appeal of the order granting the motions to dissolve the prejudgment attachment, the defendants would have access to the funds in escrow to pay their ordinary expenses and attorneys fees. In addition, significant costs are accruing relating to the Wachovia loan, including interest and legal expenses.
The defendants and Wachovia have established that damages may accrue as a result of the stay. A bond, with surety, is necessary to further indemnify the defendants and Wachovia for any such damages. Pursuant to § 52-278l(c), the state is required to post a bond, with surety, to indemnify the defendants and Wachovia during the pendency of the appeal.
III CONCLUSION AND ORDER
For the above-stated reasons, the court enters the following orders regarding the posting of bond pending appeal:
1. Pursuant to General Statutes § 52-2781(c), the plaintiff is required to post a bond, with surety, in the amount of $475,000.00, within thirty calendar days from today.
2. The defendants and Wachovia are ordered to submit, in writing, any requested bond language to the plaintiff within seven calendar days from today.