Opinion
No. CV-H 7971
March 8, 2010
MEMORANDUM OF DECISION MOTION TO DISMISS
The plaintiff, Williamsburg Developers, LLC, commenced this action on September 30, 2009, against the defendant, J. Jill, LLC. The plaintiff has filed an application for a temporary injunction and prejudgment remedy. The defendant filed a timely motion to dismiss on October 23, 2009.
For the purpose of this motion, the parties have stipulated to the following facts:
The plaintiff is a Virginia limited liability company that is based in West Hartford, Connecticut whose address is listed with both the Virginia and Connecticut secretaries of the state as
433 South Main Street, West Hartford, Connecticut. On October 20, 2009, after the plaintiff commenced the present action, the Connecticut secretary of the state issued the plaintiff a certificate of authority.
The subject of the lawsuit is a lease for a shopping center in Williamsburg, Virginia. The plaintiff seeks money damages for breach of the lease arising out of nonpayment of rent. The plaintiff's affiliate, Developers Realty Inc. d/b/a Developers Realty Corp., (DRC) manages the shopping center. All of DRC's employees work in West Hartford, and neither the plaintiff nor DRC have any employees in Virginia.
The plaintiff seek rent and damages arising out of default in payment of rent due under the lease including, but not limited to reasonable attorney's fees.
The defendant is a New Hampshire limited liability company, which "conducts a substantial portion of its business from its offices in Massachusetts." (Def.'s Mem. Supp. Mot. Dismiss, p. 2.) The defendant's offices are in Hingham, Massachusetts, which is approximately two hours and fifteen minutes from Hartford by car. The defendant also conducts business relevant to this matter in New York. It signed the subject lease in New York, and may call as a witness an employee of an affiliate (Talbots, Inc.) who works in Rye Brook, New York. Rye Brook is approximately one hour and forty minutes from Hartford by car.
If the plaintiff were to bring this action in Massachusetts, the proper venue would be the Plymouth County Superior Court, which sits in Brockton and Plymouth. Rye Brook is approximately three hours and thirty-eight minutes from Brockton and three hours and fifty-one minutes from Plymouth by car.
The defendant operates, or until recently operated, approximately six stores in Connecticut and is registered to do business in Connecticut as a foreign limited liability corporation. It is wholly owned by Talbots, Inc., and operates approximately five stores in Connecticut.
The defendant signed the subject lease in New York on February 12, 2007. At that time, the plaintiff had not signed the lease. On February 12, 2007, the defendant's counsel transmitted four copies of the lease — signed by the defendant only — to the plaintiff in West Hartford with a cover letter stating: "Enclosed please find four (4) copies of the above-referenced lease, all of which have been signed on behalf of [the defendant]. I will expect to receive back from you two (2) fully executed and dated copies of the lease after signature on behalf of [the plaintiff]. Please note that the lease will not be enforceable against the parties nor will my clients accept delivery of the premises until the lease has been fully executed and signed copies distributed to the parties."
On February 13, 2007, the plaintiff signed the lease in West Hartford and sent two fully signed copies to the defendant with a letter stating: "Please find enclosed two (2) fully executed originals of the Deed of Lease by and between [the plaintiff] and [the defendant] dated as of today's date." Pursuant to the terms of the lease, the rent was payable to West Hartford.
The defendant has filed a motion to dismiss pursuant to Practice Book § 10-31, which provides in relevant part: "(a) The motion to dismiss shall be used to assert (1) lack of jurisdiction over the subject matter, (2) lack of jurisdiction over the person, (3) improper venue, (4) insufficiency of process, and (5) insufficiency of service of process. . . ."
"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. . . . A motion to dismiss tests . . . whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Talenti v. Morgan Brother Manhattan Storage Co., 113 Conn. App. 845, 849, 968 A.2d 933 (2009).
The defendant raises three grounds on the face of its motion to dismiss. First, the defendant argues that Connecticut is an inappropriate venue for the plaintiff's claim. Second, the defendant contends that even if venue were appropriate, the case should be dismiss under the doctrine of forum non conveniens. Third, the defendant argues that the plaintiff is barred from bringing its claims in Connecticut because it lacked a certificate of authority when it commenced the action.
I Venue
First, the defendant argues that the plaintiff's complaint should be dismissed because venue is improper in the judicial district of Hartford and, furthermore, no proper venue exists in Connecticut for this action. The plaintiff counters that it has brought this claim to an appropriate venue.
Practice Book § 10-31 provides in relevant part: "(a) The motion to dismiss shall be used to assert . . . (3) improper venue. . . ." Because both parties are foreign limited liability companies, General Statutes § 51-345 (c) (4) governs venue in this matter. Section 51-345 (c) (4) provides: "In all actions by a corporation, except actions made returnable under subsection (b), (d) or (g) of this section, civil process shall be made returnable as follows: . . . (4) If the plaintiff is a foreign corporation and the defendant is a corporation, domestic or foreign, to the judicial district where (A) the injury occurred, (B) the transaction occurred, or (C) the property is located or lawfully attached."
Although Connecticut's venue statute does not specifically govern actions between foreign limited liability companies, the defendant has conceded in its memorandum in support of its motion to dismiss that General Statutes § 51-345 (c) (4) governs venue in this matter.
One judge of the Superior Court has held that where an action concerns two nonresident parties, the transaction and the injury do not occur in Connecticut, and no property is located or lawfully attached in this state, then the action must be dismissed because the legislature has provided no venue to return process. Citibank v. Cotton, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 92 0124559 (October 28, 1992, Sylvester, J.). A subsequent trial court decision, however, has held that Connecticut could be a proper venue where the trial court had jurisdiction over the parties: "If the court has both subject matter and in personam jurisdiction, the case cannot sensibly be dismissed for want of venue. General Statutes § 51-351 provides that: `No cause shall fail on the ground that it has been made returnable to an improper location.' The Connecticut Superior Court is a court of statewide jurisdiction. Our Supreme Court has explained that: `[O]utside the area of administrative appeals, venue is not a jurisdictional but a procedural question. . . .' State v. Kelley, 206 Conn. 323, 332, 537 A.2d 483 (1998)." Betensky v. Opcon Associates, Inc., 46 Conn. Sup. 110, 117, 738 A.2d 1171 (1999).
In Betensky, Judge Blue addressed the question of venue as follows: "So what is the court to do if it has jurisdiction but no venue and the case cannot be transferred to another judicial district because no other judicial district has venue either? This is obviously a conundrum, but it is a conundrum with only one solution that is consistent with fundamental judicial values. Courts, as institutions, have an obligation to hear cases properly brought before them. Chief Justice John Marshall long ago explained that this obligation lies at the heart of the judicial function: It is most true that this Court will not take jurisdiction if it should not; but it is equally true, that it must take jurisdiction if it should. The judiciary cannot, as the legislature may, avoid a measure because it approaches the confines of the constitution. We cannot pass it by because it is doubtful. With whatever doubts, with whatever difficulties, a case may be attended, we must decide it, if it be brought before us. We have no more right to decline the exercise of jurisdiction which is given, than to usurp that which is not given." (Internal quotation marks omitted.) Id., 117-18.
The defendant argues that the court should not follow Betensky because that case appears to contradict Practice Book § 10-31 (a) (3), which allows dismissal based on "improper venue." This argument ignores the facts at issue in Betensky. In that case, the court found that it had personal and subject matter jurisdiction over the parties but neither Connecticut nor any judicial district within the state was an appropriate venue for returning process. In other cases where Practice Book § 10-31 (a) (3) is asserted as a ground for dismissal, however, there has been no dispute that process may be returned within Connecticut; rather, the issue is whether a particular judicial district is an appropriate venue. In such cases, courts have held that the motion to dismiss for improper venue is treated as a motion to transfer venue. See, e.g., Sprague v. Commission on Human Rights Opportunities, 3 Conn. App. 484, 486-87, 489 A.2d 1064 (1985); Jaber Publications, LLC v. DLC Ventures, LLC, Superior Court, judicial district of New Haven at Meriden, Docket No. CV 09 5005026 (June 8, 2009, Fischer, J.). Thus, Betensky does not render Practice Book § 10-31 (a) (3) meaningless, as other courts continue to apply that provision in situations where venue is improper within a judicial district.
The defendant further argues that because Connecticut's venue statute, General Statutes § 51-345, does not provide for an action between two nonresident parties where neither the transaction nor the injury takes place in Connecticut, and where no property is located or attached in this state, then the action must be dismissed notwithstanding General Statutes § 51-351. See Citibank v. Cotton, supra, Superior Court, Docket No. CV 92 0124559. Essentially, the defendant has argued that because no venue is appropriate in Connecticut, then § 51-351 cannot save the action from dismissal because that statute only governs the transfer of cases within the state between judicial districts.
The merits of the defendant's argument, however, need not be addressed by the court because Connecticut is an appropriate venue pursuant to § 51-345 (c) (4). The breach of lease occurred in Connecticut, where the plaintiff maintains its office. Even if, as the defendant contends, critical business decisions regarding the leased property were made at the defendant's office in Massachusetts, it has been stipulated that all payments made under the lease were to be sent to the plaintiff's West Hartford, Connecticut office. Although the parties have not provided a case on point, "[i]n an action involving the breach of an agreement for the payment of money, it is the general rule that the cause of action accrues where payment is to be made. . . ." 77 Am. Jur. 2d, Venue § 37 (2006). Thus, Connecticut is a proper venue for this action because it is the place where the injury of non-payment of rent occurred.
II Forum non conveniens
The defendant further argues that the court should grant its motion to dismiss on the ground of forum non conveniens.
"[T]he overriding inquiry in a forum non conveniens motion is not whether some other forum might be a good one, or even a better one than the [plaintiffs'] chosen forum. The question to be answered is whether [the plaintiffs'] chosen forum is itself inappropriate or unfair because of the various private and public interest considerations involved. . . . Accordingly, the trial court, in exercising its structured discretion, should place its thumb firmly on the [plaintiffs'] side of the scale, as a representation of the strong presumption in favor of the [plaintiffs'] chosen forum, before attempting to balance the private and public interest factors relevant to a forum non conveniens motion.
"When, as in the present action, the plaintiffs are foreign to their chosen forum, the trial court must readjust the downward pressure of its thumb, but not remove it altogether from the plaintiffs' side of the scale. Even though the plaintiffs' preference has a diminished impact because the plaintiffs are themselves strangers to their chosen forum . . . Connecticut continues to have a responsibility to those foreign plaintiffs who properly invoke the jurisdiction of this forum. . . . [Therefore] [w]hile the weight to be given to the choice of a domestic forum by foreign plaintiffs is diminished, their entitlement to a preference does not disappear entirely. The defendants challenging the propriety of this choice continue to bear the burden to demonstrate why the presumption in favor of [the plaintiffs'] choice, weakened though it may be, should be disturbed." (Internal quotation marks omitted.) Durkin v. Intevac, Inc., 258 Conn. 454, 465, 782 A.2d 103 (2001).
Our Supreme Court has adopted a four-step process to analyze forum non conveniens claims. "First, the court should determine whether an adequate alternative forum exists that possesses jurisdiction over the whole case. . . . Second, the court should consider all relevant private interest factors with a strong presumption in favor of . . . the plaintiffs' initial choice of forum. . . . Third, if the balance of private interest factors is equal, the court should consider whether any public interest factors tip the balance in favor of trying the case in the foreign forum. . . . Finally, if the public interest factors tip the balance in favor of trying the case in the foreign forum, the court must . . . ensure that [the] plaintiffs can reinstate their [action] in the alternative forum without undue inconvenience or prejudice." (Citations omitted; internal quotation marks omitted.) Durkin v. Intevac, Inc., supra, 258 Conn. 466.
The defendant argues that Massachusetts and Virginia are each an adequate forum for hearing this dispute. Both states could have jurisdiction over the entire case. The defendant negotiated the lease in Massachusetts and conducts significant business activities in that state. The defendant also leased property in Virginia and this case will be governed by Virginia substantive law. Therefore, the defendant has met its initial burden of showing that an adequate alternate forum exists for bringing this action.
Although the state law governing the case is not discussed in the parties' stipulation of facts, the lease between the parties, made on February 13, 2007, indicates that "[t]his lease shall be governed by and construed pursuant to the laws of the state in which the Premises are located. . . ." Lease, Article 29 (n). The "premises," meaning the shopping center, is located in Virginia, and, therefore, Virginia law governs the subject lease.
Next, the defendant must overcome the strong presumption favoring the plaintiff's forum choice in light of the private interest factors provided by our Supreme Court. "[T]he relevant private interest factors are: (1) the relative ease of access to sources of proof; (2) the availability of compulsory process for the attendance of unwilling witnesses, and the cost of obtaining attendance of willing witnesses; (3) the possibility of viewing the accident scene if such viewing is appropriate to the action; (4) the enforceability of a judgment; (5) the relative advantages and obstacles to a fair trial; and (6) all other practical problems that make the trial of a case easy, expeditious and inexpensive. . . . We examine each of these factors in turn, keeping in mind that, consistent with the flexibility necessary in a forum non conveniens analysis, no single factor should be given undue weight." (Citation omitted.) Durkin v. Intevac, Inc., supra, 258 Conn. 467.
The defendant contends that the private interest factors favor bringing this action in either Massachusetts or Virginia. According to the defendant, the private interests favoring Massachusetts are that the defendant operates a significant portion of its business in Massachusetts and a number of the defendant's witnesses, evidence, and assets are located there. In particular, the defendant's financial records are located in Massachusetts.
The plaintiff, however, points out that its witnesses and evidence are in the Hartford, Connecticut area. As noted previously, Hingham, Massachusetts, where the defendant's office is located, is about two hours and fifteen minutes from Hartford by car. The plaintiff argues that this distance does not present a substantial hardship outweighing the presumption favoring the plaintiff's forum choice. Furthermore, the defendant may call as a witness an employee of an affiliate (Talbots, Inc.) who works in Rye Brook, New York. Rye Brook is approximately one hour and forty minutes from Hartford by car, which is a shorter drive than a trip to Massachusetts.
Alternately, the defendant contends that the private interest factors also favor Virginia because the plaintiff is a limited liability company, a majority of the plaintiff's witnesses, evidence and assets may be located in Virginia, the subject property is located in Virginia, and the case is governed by Virginia law. In response, the plaintiff contends that its witnesses and evidence are, in fact, located in Connecticut, and that no witnesses for the plaintiff are located in Virginia.
The court finds that the defendant has failed to establish that the private interest factors favor a forum other than Connecticut. The defendant couches its argument on the first prong of the private interest factor analysis, "the relative ease of access to sources of proof," but has not demonstrated that bringing the case in Connecticut will present significant hurdles to presenting its witnesses or evidence. Therefore, the court need not address the other steps in the forum non conveniens analysis.
III
Certificate of Authority
Finally, the defendant argues that this case should be dismissed because the plaintiff brought the action prior to obtaining a certificate of authority from Connecticut's secretary of the state. The plaintiff contends that the failure to obtaining a certificate of authority is a curable defect, and that it addressed the problem by obtaining a certificate of authority on October 20, 2009.
The parties do not appear to contest the threshold issue of whether the plaintiff was "transacting business" in Connecticut.
General Statutes § 34-233 (a) provides: "A foreign limited liability company transacting business in this state may not maintain an action, suit or proceeding in a court of this state until it has registered in this state." The parties have not found case law addressing whether a "foreign limited liability company" that has commenced an action without first obtaining a certificate of authority may cure that defect by later filing a certificate. The judges of the Superior Court have considered this issue in the context of actions brought by foreign corporations, however, and they appear to be split on whether obtaining a certificate during the pendency of an action cures the defect.
This split stems, in part, from the Appellate Court's decision in Poly-Pak Corp. of America v. Barrett, 1 Conn. App. 99, 468 A.2d 1260 (1983). In that case, the court upheld a trial court's granting of a defendant's motion to dismiss where the plaintiff had successfully moved to substitute a foreign successor corporation that had not filed for a certificate of authority. Id., 103. The court held that "whether the plaintiff was a foreign corporation or its successor, it is nonetheless barred . . . from maintaining this action and is thus not entitled to set the machinery of the courts in operation." (Internal quotation marks omitted.) Id.
Later in that opinion, however, the Appellate Court noted that, during the hearing on the motion to dismiss, the trial court had denied the plaintiff's request to introduce evidence of its subsequent filing of a certificate of authority for the successor corporation. Id., 104. The Appellate Court upheld the trial court's decision not to hear evidence of the late filing because "[i]f the court had granted the plaintiffs request, it would clearly have resulted in prejudice to the defendant." Id. Nevertheless, the Appellate Court noted that "[i]n the present case, [the plaintiff] could have at any time during the course of the trial filed a certificate of authority with the secretary of this state. Failure to do so until the defendant moved to dismiss the action does not constitute inadvertence or mistake by [the plaintiff]" that would justify the introduction of new evidence. Id. See also Trevek Enterprises, Inc. v. Victory Contracting Corp., 107 Conn. App. 574, CT Page 4728 580, 945 A.2d 1056 (2008) (noting that "a foreign corporation could have at any time during the course of the trial filed a certificate of authority with the secretary of the state.").
Significantly, the court notes that the plaintiff sought to introduce evidence of its corporate status after it rested its case in chief and during oral argument on defendant's motion to dismiss. Id., 104.
Following Poly-Pak Corp. of America v. Barrett, supra, 1 Conn. App. 99, the trial courts have split on the issue of whether a foreign corporation must have a certificate of authority to transact business at the time it commences an action to avoid dismissal. Some judges of the Superior Court have held that the language in Poly-Pak suggesting that the plaintiff could "at any time during the course of the trial filed a certificate of authority with the secretary of this state" countenances the practice of filing a certificate during the pendency of an action. See, e.g., Kraft Foodservice, Inc. v. Fine Host Corp., Superior Court judicial district of Stamford-Norwalk at Stamford, Docket No. 137174 (April 18, 1995, D'Andrea, J.) ( 14 Conn. L. Rptr. 44); Independence Broadcasting Corp. v. Goodwill, Superior Court, judicial district of Danbury, Docket No. CV 96 0324680 (October 29, 1998, Petroni, J.).
These courts buttress this position by analyzing the plain language of the statute. Both the statutes dealing with foreign corporations and the statute addressing foreign limited liability companies provide that the foreign entity may not "maintain" an action in this jurisdiction without obtaining a certificate of authority. As one judge of the Superior Court reasoned, "the certificate of authority when applicable is required not in the initiation of the complaint but in its maintenance" and maintaining an action means to "uphold, continue on foot, and keep from collapse a suit already begun." (Internal quotation marks omitted.) Arrett Sales Corp. v. D'Amore, Superior Court, judicial district of Hartford, Docket No. CV 90 0387575 (February 10, 1992, Spada, J.) ( 5 Conn. L. Rptr. 801). Because the statutes provide "that a certificate of authority is required to `maintain' or continue to prosecute an action, rather than to commence or initiate an action, [they indicate] that the failure of a foreign corporation to have a certificate at the time it begins an action can be cured by its acquisition of a certificate before judgment is rendered." Ellis Graphics Corp. v. Admax Corp., Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 94 0140053 (October 10, 1995, Lewis, J.).
By contrast, other judges of the Superior Court have relied on the language in Poly-Pak noting that the failure to obtain the certificate of authority would result in not being "entitled to set the machinery of the courts in operation" to hold that the certificate must be obtained prior to initiating the suit. Confidence Management Systems, Inc. v. Summit Services Group, Inc., Superior Court, judicial district of Waterbury, Docket No. 0131551 (September 25, 1996, Fasano, J.) ( CT Page 4729 17 Conn. L. Rptr. 661); Gallagher Co. v. Milford, Superior Court, judicial district of Ansonia-Milford, Docket No. 024680 (May 2, 1991, Fuller, J.). "The language of Poly-Pak appears to make no distinction between the terms `maintain' and `commence,' since setting the machinery of the Court in motion must certainly be the equivalent of commencing a suit." Springfield Plumbing Supply, Inc. v. Clinton Building Supply, Inc., Superior Court, judicial district of Tolland, Docket No. 43066 (December 16, 1991, Klaczak, J.) ( 5 Conn. L. Rptr. 355).
In light of the Appellate Court's suggestion in Poly Pak that the foreign entity could have "at any time during the course of the trial filed a certificate of authority with the secretary of this state"; Poly-Pak Corp. of America v. Barrett, supra, 1 Conn. App. 104; the fact that the plaintiff actually filed for the certificate of authority on October 20, 2009-three weeks after commencing this lawsuit and three days prior to the defendant's filing of the motion to dismiss; and the plain language of § 34-233 (a), which requires a foreign entity to obtain a certificate of authority to "maintain," as opposed to "commence" an action, the court is persuaded that the defendant's motion to dismiss the plaintiff's complaint on the ground that the plaintiff filed for a certificate after commencing the action must be denied.
CONCLUSION
For all the foregoing reasons, the defendant's motion to dismiss is hereby denied.