Opinion
LLICV186019087S
02-28-2019
UNITED CONSTRUCTION & ENGINEERING, INC. v. Maureen JEROME et al.
UNPUBLISHED OPINION
Bentivegna, J.
I
STATEMENT OF THE CASE
This is a dispute regarding the construction of a residence and pool. In the complaint, dated June 25, 2018, the plaintiff alleges the following claims against the defendant, Maureen Jerome (Jerome): First Count— breach of contract; and Second Count— unjust enrichment. The plaintiff alleges that Jerome, and not an entity by the name of ARTLIFEdesign, LLC, was the owner of the parcel of real property on which the residence and pool that were subject of the agreement were to be constructed. The original complaint has a return date of July 24, 2018.
On October 12, 2018, Jerome filed an amended motion for joinder of necessary party (#105) to join Artlife, LLC as a necessary party on the ground that Artlife, LLC, under its unregistered trade name ARTLIFEdesign, LLC had entered into the contract that is the subject of this action., which Jerome claimed is "clearly evidenced" by the invoices sent from the plaintiff to the defendant were addressed to ARTLIFEdesign, LLC and Artlife, LLC paid directly to the plaintiff close to $1.9 million over the course of an eleven-month time period. Jerome further contended that Artlife, LLC has substantial setoffs and counterclaims adverse to the plaintiff and should be joined as a party in order for the court to make a complete determination of the issues. The plaintiff filed an objection to Jerome’s amended motion for joinder (#106), on October 12, 2018, on the grounds that Artlife, LLC is not a party to the agreement and does not own the property; there is no such legal entity as ARTLIFEdesign, LLC despite the agreement noting such; and there is no evidence of a trade name certificate for ARTLIFEdesign LLC. Jerome filed a reply to the plaintiff’s objection (#107), on October 25, 2018, arguing that a trade name need not be registered provided the limited partnership has filed a certificate or registered with the Secretary of State and there were payments made from Artlife, LLC to the plaintiff. The plaintiff filed a surreply (#109) to Jerome’s reply on October 26, 2018, arguing again that there is no valid entity or trade name certificate in the name of "ARTLIFEdesign, LLC," and, accordingly the plaintiff does not have a claim against Artlife, LLC. On November 15, 2018, the court granted the amended motion for joinder of necessary party moving to join Artlife, LLC as a necessary party. See (Order #105.20).
Thereafter, the plaintiff filed a request for leave to file an amended complaint (#111) and the defendants filed a motion for discharge of invalid notice of lis pendens (#113). The parties filed respective objections and reply memoranda. Both matters were heard at civil short calendar on February 19, 2019.
II
DISCUSSION
A
Request For Leave To File Amended Complaint (#111)
The plaintiff has filed a request for leave to file an amended complaint (#111) on December 14, 2018, to set forth causes of action against the recently-added defendant, Artlife, LLC, and to revise the causes of action against Jerome. The amended complaint alleges the following: First Count— breach of contract as to Jerome; Second Count— unjust enrichment as to Jerome; Third Count— fraudulent conveyance as to Jerome and Artlife, LLC; Fourth Count— violation of the Uniform Fraudulent Conveyance Act as to Jerome and Artlife, LLC; Fifth Count— breach of contract as to Artlife, LLC; and Sixth Count— unjust enrichment as to Artlife, LLC. The plaintiff alleges that, on or about August 4, 2018, Jerome quitclaimed the property located at 250 Belgo Road, Salisbury to Artlife, LLC for consideration paid, but less than one hundred dollars, and said quit claim deed was recorded on September 7, 2018, on the Salisbury Land Record, after the filing of the original complaint.
The defendants have filed an objection (#114) to the plaintiff’s request for leave to file an amended complaint as to the fraudulent conveyance claims contained in Third and Fourth Counts, as well as the respective claims for relief pursuant to Practice Book § 10-60, on the ground that the transfer complained of was made to a party to this action and remains property of the transferee through her ownership of the transferor and Jerome has more than substantial assets to satisfy the judgment in this matter, with or without said property. In addition, the defendants argue that adding said counts along with the improperly filed lis pendens is merely an attempt to avoid the requirements of the pre judgment remedy statute as a lis pendens is only available to those who claim an interest in the realty which, in fact, the plaintiff has not and cannot claim.
The plaintiff filed a reply memorandum to the defendants’ objection (#117) arguing that permitting her to amend the complaint to include the fraudulent conveyance claims will not work an injustice on either party and will not unduly delay a trial. In addition, the plaintiff argues that the defendants’ claim that the plaintiff will not be able to ultimately prevail on the merits relative to the claims asserted is not a proper basis to object to an amendment and if the amendments are allowed, the defendants may file whatever responsive pleading they choose at that time.
Practice Book § 10-60 provides in relevant part: "(a) Except as provided in Section 10-66, a party may amend his or her pleadings or other parts of the record or proceedings at any time subsequent to that stated in the preceding section in the following manner ... (3) By filing a request for leave to file an amendment together with: (a) the amended pleading or other parts of the record or proceedings ... If an opposing party shall have objection to any part of such request or the amendment appended thereto, such objection in writing ... shall ... be ... placed upon the next short calendar list. (b) The judicial authority may restrain such amendments so far as may be necessary to compel the parties to join issue in a reasonable time for trial. If the amendment occasions delay in the trial or inconvenience to the other party, the judicial authority may award costs in its discretion in favor of the other party." Process may be amended as of right within thirty days. General Statutes § 52-128; Practice Book § 10-59. After thirty days, amendments may be made only by consent or court order. Practice Book § 10-60. In this case, the original complaint has a return date of July 24, 2018.
"While our courts have been liberal in permitting amendments ... this liberality has limitations. Amendments should be made seasonably. Factors to be considered in passing on a motion to amend are the length of the delay, fairness to the opposing parties and the negligence, if any, of the party offering the amendment ... The motion to amend is addressed to the trial court’s discretion which may be exercised to restrain the amendment of pleadings so far as necessary to prevent unreasonable delay of the trial ... Whether to allow an amendment is a matter left to the sound discretion of the trial court." (Citations omitted; internal quotation marks omitted.) Wagner v. Clark Equipment Co., 259 Conn. 114, 128, 788 A.2d 83 (2002). "The essential tests are whether the ruling of the court will work an injustice to either the plaintiff or the defendant and whether the granting of the motion will unduly delay a trial." (Internal quotation marks omitted.) Summitwood Development, LLC v. Roberts, 130 Conn.App. 792, 800, 25 A.3d 721, cert. denied, 302 Conn. 942, 29 A.3d 467 (2011), and cert. denied, 565 U.S. 1260, 132 S.Ct. 1745, 182 L.Ed.2d 530 (2012). Unless there is some sound reason for denying the motion to amend, a request to do so should be granted. Falby v. Zarembski, 221 Conn. 14, 24, 602 A.2d 1 (1992) (court should have allowed the amendment because original complaint had two causes of action in one count). Practice Book § 10-60(b) provides that the court "may restrain such amendments so far as may be necessary to compel the parties to join issue in a reasonable time for trial" and may award costs to the opposing party if the amendment causes delay or inconvenience. See also Jacob v. Dometic Origo AB, 100 Conn.App. 107, 112-13, 916 A.2d 872, cert. granted, 282 Conn. 922, 925 A.2d 1103 (2007) (appeal withdrawn August 7, 2007) (court abused discretion in denying request because amendment was necessary to plaintiff’s claim and did not prejudice defendant); Billy & Leo, LLC v. Michaelidis, 87 Conn.App. 710, 715, 867 A.2d 119 (2005) (not an abuse of discretion to deny motion when brought a day prior to start of trial adding a new cause of action related to the same transaction but arising out of a different set of facts).
In the present case, the factors weigh in favor of allowing the plaintiff to file the amended complaint. There is no real concern regarding the length of the delay as the case is not scheduled to be tried until March 17, 2020. On October 12, 2018, it was Jerome who filed an amended motion for joinder of necessary party, Artlife, LLC. This motion was granted over the plaintiff’s objection on November 15, 2018. Under the circumstances, allowing the plaintiff to amend the complaint to set forth causes of action against the recently added defendant, Artlife, LLC, and to revise the causes of action against Jerome does not raise any fairness issues. The record does not reflect any negligence by the plaintiff in terms of offering the amendment. In summary, the amendment of the complaint will not work an injustice to the defendant and will not unduly delay the trial. "The proper procedural vehicle to challenge the legal sufficiency of a proposed pleading is a motion to strike, rather than an objection to a motion to amend. See Practice Book § 10-39." Rizzuto v. Davidson Ladders, Inc., 280 Conn. 225, 256, 905 A.2d 1165 (2006). If the amended complaint is allowed, the defendants may file whatever responsive pleading they choose as allowed by the practice book. See Practice Book § 10-6. As noted in Falby v. Zarembski, supra, 221 Conn. 24, "unless there is some sound reason for denying permission to amend in order to remedy mispleading, [a request to do so] should be granted." Accordingly, the request for leave to file the amended complaint (#111) is granted and the objection (#114) is overruled.
B
Motion For Discharge of Invalid Notice of Lis Pendens (#113)
The defendants have filed a motion for discharge of invalid notice of lis pendens (#113) on the ground that a lis pendens, pursuant to General Statutes § 52-325, is only available to those claiming an interest in realty upon commencement of an action, while the plaintiff has merely brought an action for damages allegedly due under a construction contract. By filing the notice, the plaintiff has attempted to avoid the statutory prejudgment remedies scheme. The plaintiff objects to the motion for discharge lis pendens (#116) and on the ground that the defendants’ argument that the lis pendens must be discharged because the notice was filed after the commencement of the original action has no merit. The defendants replied to the plaintiff’s objection (#119) and denies that the transfer was fraudulent in nature. The plaintiff has failed to demonstrate how such conveyance or transfer left Jerome unable to meet her obligations, which is a requirement when alleging fraudulent conveyance. In addition, the plaintiff must show that there is probable cause to believe that it can prove by clear and convincing evidence that said conveyance by Jerome to Artlife, LLC was fraudulent.
Section 52-325d provides: "In any action in which (1) a notice of lis pendens was recorded which is not intended to affect real property, or (2) the recorded notice does not contain the information required by subsection (a) of section 52-325 or section 46b-80, as the case may be, or (3) service of process or service of the certified copy of the notice of lis pendens was not made in accordance with statutory requirements, or (4) when, for any other reason, the recorded notice of lis pendens never became effective or has become of no effect, any interested party may file a motion requesting the court to discharge the recorded notice of lis pendens. If the court finds that such notice never became effective or has become of no effect, it shall issue its order declaring that such notice of lis pendens is invalid and discharged, and that the same does not constitute constructive notice. A certified copy of such order may be recorded in the land records of the town in which the notice of lis pendens was recorded."
"A notice of lis pendens warns all persons that certain property is the subject matter of litigation and that any interests acquired during the pendency of the action are subject to its outcome ... Accordingly, any party whose interest in the property arose during the interim period is subject to the final judgment." (Citations omitted; internal quotation marks omitted.) Lee v. Duncan, 88 Conn.App. 319, 329, 870 A.2d 1, cert. denied, 274 Conn. 902, 876 A.2d 12 (2005). "[A] notice of lis pendens ensures that the [litigant’s] claim cannot be defeated by a prejudgment transfer of the property ... [and] provides security for payment of the claim pending final resolution of the case." (Internal quotation marks omitted.) Donenfeld v. Friedman, 79 Conn.App. 64, 67-68, 829 A.2d 107 (2003). General Statutes § 52-325(b) provides in relevant part that "actions ‘intended to affect real property’ means (1) actions whose object and purpose is to determine the title or rights of the parties in, to, under or over some particular real property; (2) actions whose object and purpose is to establish or enforce previously acquired interests in real property; (3) actions which may affect in any manner the title to or interest in real property, notwithstanding the main purpose of the action may be other than to affect the title of such real property."
"Generally, a notice of lis pendens is simply a notice that, when properly recorded, warns third parties, such as prospective purchasers, that the title to the property is in litigation; [t]he doctrine underlying lis pendens is that a person who deals with property while it is in litigation does so at his peril ... An encumbrance is a burden on the title and, as such, impedes its transfer ... In certain types of actions, such as a quiet title action brought by a person claiming by adverse possession, a lis pendens rises to the level of an independent encumbrance in favor of that person, who otherwise has no record interest in the subject property. In a foreclosure of a ... lien ... the lis pendens does not create an interest that is separate and distinct from the underlying interest being foreclosed. The sole purpose of the lis pendens in such an action is to give constructive notice to persons who may subsequently acquire an interest in the property, and cause them to be bound by the proceedings. Consequently, if the underlying ... lien has been released, the continued presence of an unreleased lis pendens noticing a foreclosure of that encumbrance is inconsequential and does not impair marketability ... In other words, in such circumstances, the lis pendens is not an encumbrance or burden on the record title of the subject property. Failure to release a lis pendens, which gives notice of the pendency of an action to foreclose a mortgage or lien, does not impair marketability if the underlying mortgage or lien has itself been released or if there has been a final judgment in the foreclosure action." (Citations omitted; internal quotation marks omitted.) Ghent v. Meadowhaven Condominium, Inc., 77 Conn.App. 276, 284-85, 823 A.2d 355 (2003).
If the underlying litigation is other than the foreclosure of a mortgage or lien, the person filing the notice of lis pendens must serve a true and attested copy of the recorded notice of lis pendens upon the owner(s) of record of the property not later than 30 days after recording the notice. General Statutes § 52-325(c); Williams v. Bartlett, 189 Conn. 471, 478-81, 457 A.2d 290 (1983).
"A notice of lis pendens is appropriate in any case where the outcome of the case will in some way, either directly or indirectly, affect the title to or an interest in real property ... As [General Statutes] § 52-325(a) provides, the purpose of [notice of lis pendens] is to bind any subsequent purchaser or encumbrancer ‘as if he were made a party to the action’ described in the lis pendens. [A] notice of lis pendens ensures that the [litigant’s] claim cannot be defeated by a prejudgment transfer of the property ... [T]he lis pendens procedure provides security for payment of the claim pending final resolution of the case ... The governing statutes contemplate that a property owner burdened by a notice of lis pendens may rightfully challenge its validity on two independent grounds: (1) the absence of probable cause to sustain the lis pendens claim; or (2) non-compliance with the procedural requirement of an effective lis pendens notice ..." (Citation omitted; internal quotation marks omitted.) Corsino v. Telesca, 32 Conn.App. 627, 632-33, 630 A.2d 154, cert. denied, 227 Conn. 931, 632 A.2d 703 (1993).
The "sole purpose of a hearing on an application to discharge a notice of lis pendens is to determine whether there exists probable cause to sustain the lis pendens ... [T]he ultimate merits of the case are not argued by counsel or decided by the court, but rather, such a hearing is conducted within the parameters of General Statutes § 52-325b." Donenfeld v. Friedman, supra, 79 Conn.App. 67; see also Williams v. Bartlett, supra, 189 Conn. 483-84.
When a motion or application to discharge a lis pendens is filed and scheduled for a hearing, the plaintiff must satisfy the statutory requirements. Section 52-325b(a) provides in relevant part that: "Upon the hearing held on the application or motion set forth in section 52-325a, the plaintiff shall first be required to establish that there is probable cause to sustain the validity of his claim and, if the action alleges an illegal, invalid or defective transfer of an interest in real property, that the initial illegal, invalid or defective transfer of an interest in real property occurred less than sixty years prior to the commencement of the action."
After a hearing has been held on the application, the court must determine whether sufficient evidence of probable cause was presented. Section 52-325b(b) provides: "Upon consideration of the facts before it, the court or judge may: (1) Deny the application or motion if (A) probable cause to sustain the validity of the claim is established, or (B) in an action that alleges an illegal, invalid or defective transfer of an interest in real property, probable cause to sustain the validity of the claim is established and the initial illegal, invalid or defective transfer of an interest in real property occurred less than sixty years prior to the commencement of the action; or (2) order such notice of lis pendens discharged of record if (A) probable cause to sustain the validity of the plaintiff’s claim is not established, or (B) in an action that alleges an illegal, invalid or defective transfer of an interest in real property, the initial illegal, invalid or defective transfer of an interest in real property occurred sixty years or more prior to the commencement of the action."
In sum, the burden is on the plaintiff to establish that there is probable cause to sustain the validity of the claim. § 52-325b(a); Corsino v. Telesca, supra, 32 Conn.App. 631 (court properly found probable cause to sustain the notice of lis pendens). The court may either grant or deny the application or motion or order that the notice of lis pendens be discharged. § 52-325b(b).
At the civil short calendar hearing, the plaintiff offered argument in support of the lis pendens, but no evidence was presented in support of the lis pendens. Based on the circumstances, probable cause to sustain the validity of the plaintiff’s claim has not been established. Accordingly, the defendants’ motion for discharge of invalid notice of lis pendens (#113) is granted and the plaintiff’s objection to the motion for discharge lis pendens (#116) is overruled. The court hereby issues an order declaring that such notice of lis pendens is invalid and discharged.
III
CONCLUSION
For the foregoing reasons, the request for leave to file the amended complaint (#111) is granted and the objection (#114) is overruled; and the defendants’ motion for discharge of invalid notice of lis pendens (#113) is granted and the plaintiff’s objection to the motion for discharge lis pendens (#116) is overruled.
SO ORDERED.