Deutsche Bank AG v. Vik
| Docket Number | AC 44586 |
| Decision Date | 23 August 2022 |
| Citation | 214 Conn.App. 487,281 A.3d 12 |
| Parties | DEUTSCHE BANK AG v. Caroline VIK et al. |
| Court | Connecticut Court of Appeals |
Monte E. Frank, Hartford, with whom was Johanna S. Katz, for the appellants (defendants).
Thomas D. Goldberg, Stamford, with whom were John W. Cerreta, Hartford, and Jennifer M. Palmer, Stamford, and, on the brief, Michael Schoeneberger, Stamford, David G. Januszewski, and Sheila C. Ramesh, pro hac vice, for the appellee (plaintiff).
Elgo, Clark and Lavine, Js.
The defendants, Alexander Vik (Alexander) and Caroline Vik (Caroline), appeal from the judgment of the trial court denying their motion to dismiss, in which they asserted that the claims brought by the plaintiff, Deutsche Bank AG, were barred by the litigation privilege. On appeal, the defendants claim that the court improperly concluded that the litigation privilege does not bar the plaintiff's claims of tortious interference with business expectancy and violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. We agree and, accordingly, reverse the judgment of the trial court.
For purposes of this appeal, we take the facts as alleged in the complaint as true and construe them in a manner most favorable to the pleader. See Tyler v. Tatoian , 164 Conn. App. 82, 84, 137 A.3d 801, cert. denied, 321 Conn. 908, 135 A.3d 710 (2016). The plaintiff's complaint is comprised of 173 paragraphs of allegations relating to its long running attempt to collect on amounts owed to it by nonparty Sebastian Holdings, Inc. (SHI). The plaintiff alleges that SHI is a shell company, which until 2015, was solely owned and controlled by Alexander. Despite transferring his shares in SHI and resigning from its board of directors, Alexander continues to dominate and control SHI today. Since 2008, when SHI first became indebted to the plaintiff, Alexander, with other entities and individuals acting on his behalf, allegedly has employed various tactics to obstruct the plaintiff's collection efforts. These include, inter alia, concealing assets, fabricating documents, and undertaking fraudulent transfers. The plaintiff alleges that, in 2013, the Commercial Court, Queen's Bench Division of the High Court of Justice of England and Wales (English court) rendered a judgment ordering SHI to pay amounts due to the plaintiff (English judgment) and finding that Alexander had fabricated evidence and lied under oath. With interest, the plaintiff alleges that the amount of the English judgment now exceeds $300 million.
At all times, SHI has claimed that it lacks sufficient assets to satisfy the English judgment. The plaintiff alleges that, since 2013, it has vigorously sought to enforce the English judgment by undertaking a global enforcement effort, including the filing of actions in Connecticut, New York, Delaware, Pennsylvania, the United Kingdom, and Norway. Certain of these enforcement actions sought judgments declaring Alexander personally liable for the English judgment as SHI's alter ego. The complaints in those actions also detail Alexander's long history of shuffling and concealing assets from the plaintiff.
The plaintiff alleges that, in 2008, SHI found itself facing hundreds of millions of dollars in losses arising from, among other things, risky trading on margin in the foreign exchange market. As a result of these losses, SHI faced margin calls from its prime broker, the plaintiff. Knowing that SHI faced large losses, the plaintiff alleges that, in October, 2008, Alexander caused SHI to transfer approximately $1 billion worth of assets out of SHI. As a result of the October, 2008 transfers, the plaintiff alleges that Alexander falsely claimed that SHI had insufficient assets, leaving the plaintiff with an unpaid debt of more than $235 million. The present action concerns one such asset: shares in a Norwegian software company, Confirmit AS (Confirmit). To that end, the plaintiff alleges that, in 2008, Alexander wrongfully caused SHI to transfer the shares in Confirmit to his personal account in order to keep those shares beyond the plaintiff's reach.
The plaintiff further alleges that the English court found that the shares of Confirmit were one portion of the approximately $1 billion of assets that Alexander drained from SHI to avoid paying the plaintiff the amount it is owed. The plaintiff claims that, in 2015, Alexander again purported to transfer those same shares, this time to his father, Erik Martin Vik (Erik), while the shares were the subject of litigation with the plaintiff. The plaintiff alleges that it sought an execution lien on the Confirmit shares in 2016. Following a lengthy legal battle, which included a full trial and appeals to the Norwegian Supreme Court, the plaintiff alleges that the Oslo Court of Probate, Bankruptcy, and Enforcement (Oslo enforcement court) invalidated both the 2008 and 2015 transfers of Confirmit shares. As a result, the shares reverted to SHI and were thus subject to enforcement. In April, 2016, the plaintiff filed a petition with the Oslo enforcement court to execute a lien on the Confirmit shares, which was ultimately granted by the court. On March 8, 2017, the plaintiff filed a petition seeking a forced sale of the Confirmit shares. Following a two year postponement due to the pendency of appeals regarding the execution lien, the plaintiff submitted a request to continue the enforcement process of the Confirmit shares on May 27, 2019. The plaintiff alleges that, on June 12, 2019, the enforcement officer issued a decision to commence the sale, and, on July 8, 2019, named nonparty ABG Sundal Collier ASA (ABG) as the sales assistant for the forced sale. Rather than allow the sale of Confirmit shares to proceed, the plaintiff alleges that the defendants and related parties engaged in a series of maneuvers designed to inject doubt and uncertainty into the sales process. The plaintiff alleges that these tactics included manufacturing false evidence, submitting a bad faith bid by Alexander to acquire Confirmit, and, importantly for present purposes, commencing frivolous legal actions and appeals.
The plaintiff alleges that, among the most egregious of these tactics, is the defendants’ fabrication of a document purporting to grant Alexander's daughter, Caroline, a right of first refusal to acquire the Confirmit shares (ROFR). The plaintiff alleges that, upon information and belief, the ROFR was forged and backdated to enable the defendants to interfere with the court-ordered sale of Confirmit. With this allegedly false document in hand, the plaintiff alleges that Caroline proceeded to commence litigation in the United States District Court for the District of Connecticut against ABG seeking to enjoin the Confirmit sale midway through the bidding process. The District Court granted an ex parte temporary restraining order (TRO), and subsequently, with the consent of the parties, kept the TRO in place until December 6, 2019, pending a decision on Caroline's application for a preliminary injunction. The plaintiff alleges that, After the District Court denied her application for a preliminary injunction on December 4, 2019, the plaintiff alleges that Caroline voluntarily dismissed her "frivolous action." The plaintiff alleges that two days later, on December 6, 2019, Caroline filed a separate but substantially similar petition for a preliminary injunction with the Oslo enforcement court, asking the court to stop any sale of the Confirmit shares that did not respect the ROFR agreement.
In support of its tortious interference with business expectancy claim, the plaintiff incorporates by reference the aforementioned allegations and further alleges, inter alia, that the defendants brought "frivolous," "meritless," or "baseless" legal claims or appeals in an effort to undermine or reverse the sale of Confirmit sales. The plaintiff further alleges that the English judgment formed a business relationship between the plaintiff and SHI insofar as the English court determined that SHI owed the plaintiff $235,646,355. The plaintiff alleges that it has sought to realize this business expectation by enforcing the English judgment in various jurisdictions, including in Connecticut. The plaintiff alleges that Caroline's lawsuits in Connecticut federal court and Norway were Among other allegations, the plaintiff alleges that The plaintiff alleges that "[the] interference with the business of Confirmit, whether through manipulating the board of directors or prolonging the enforcement lien with adverse effects, is cumulative, and the ongoing legal battles are similarly detrimental." The plaintiff alleges that, as a result of the defendants’ intentional interference with the plaintiff's business relationships and expectations, the market value of the Confirmit shares dropped from $150 million to $65 million.
In support of its CUTPA claim, the plaintiff incorporates all of its allegations in support of its tortious interference claim...
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