Doublewal Corp. v. Toffolon

• Decision Date: 05 March 1985
• Citation: 195 Conn. 384,488 A.2d 444
• Parties: DOUBLEWAL CORPORATION et al. v. Barbara L. TOFFOLON et al. WHITE OAK TRANSPORTATION CORPORATION et al. v. Barbara L. TOFFOLON et al.
• Court: Connecticut Supreme Court

Page 444

488 A.2d 444

195 Conn. 384

DOUBLEWAL CORPORATION et al. v. Barbara L. TOFFOLON et al.

WHITE OAK TRANSPORTATION CORPORATION et al. v. Barbara L. TOFFOLON et al.

Supreme Court of Connecticut.

Argued Jan. 16, 1985.

Decided March 5, 1985.

Francis J. Brady, Hartford, for appellants (plaintiffs Roger L. Toffolon and Marc R. Toffolon).

Steven R. Humphrey, Hartford, with whom were Janet C. Hall, James H. Carter, Hartford, and, on the brief, Lori F. Damrosch, New Haven, for appellees (defendants).

Before PETERS, C.J., and PARSKEY, SHEA, DANNEHY and SCHALLER, JJ.

PETERS, Chief Justice.

The dispositive issue on these appeals is whether the orders issued by the trial court in response to the plaintiffs' applications for temporary injunctions constitute final judgments that are ripe for appellate review. Because we conclude that they are not final judgments, we dismiss the appeals. General Statutes § 52-263; Practice Book § 3000.

The present litigation arises out of disputes concerning the control and management of several interrelated family corporations. In the first case, the plaintiffs are the Doublewal Corporation and Roger L. Toffolon, its president and treasurer. In the second case, the plaintiffs are the White Oak Transportation Corporation, Roger L. Toffolon, its vice-president and secretary, and Marc R. Toffolon, one of its directors. The complaints in both cases accuse the defendants, Barbara Toffolon, John E. Toffolon, Jr., and Penley Toffolon, of wrongful interference with the corporations' duly authorized officers by the improper call of shareholders' and directors' meetings, the improper election of corporate directors and other conduct disruptive of the corporations' business activities. The plaintiffs sought injunctive and declaratory relief, and urged that the corporations be dissolved. Throughout the litigation, the two cases have been tried together.

A brief factual recital is helpful to an understanding of the procedural issues that we must resolve. The plaintiff corporations are two of seven related family corporations that were jointly operated by John E. Toffolon, Sr., and his brother, the plaintiff Roger L. Toffolon, until John Toffolon, Sr., died on February 21, 1982. John Toffolon, Sr., was survived by his wife, Barbara Toffolon, who became the executrix of his estate, by his son, John, Jr., and by his daughter, Penley. Five of the corporations had buy-sell agreements allowing the surviving brother to operate and control the corporations, but the two corporations involved in the present litigation did not.

After the death of John E. Toffolon, Sr., Roger L. Toffolon took exclusive control of the plaintiff corporations. Running them as if they were his sole proprietorships, he held no directors' meetings, released no fiscal information, and rebuffed the efforts of John E. Toffolon, Sr.'s executrix and heirs to participate in their management.

Faced with Roger L. Toffolon's intransigence, Barbara Toffolon, as executrix of the estate of John E. Toffolon, Sr., asked Roger Toffolon to call meetings of the shareholders of the plaintiff corporations. When he did not do so, she herself sent out notices calling for meetings to be held, not in Plainville, Connecticut, where the corporations had their principal place of business, but in New York City, at the offices of her attorneys. ¹ Although Roger L. Toffolon received the notices, he did not attend. In his absence, meetings were held, as noticed, to elect new officers and directors for both corporations.

Since Roger Toffolon did not acquiesce in the actions taken at the New York meetings, the plaintiff corporations became subject to the conflicting instructions of management by their "Connecticut boards" and their "New York boards." It was to resolve these conflicts that the present litigation was instituted.

When the plaintiffs filed their complaints, they simultaneously filed applications for ex parte restraining orders and for temporary injunctions in each case. The trial court, Barall, J., immediately issued the requested temporary restraining orders prohibiting the defendants (the "New York boards") from holding themselves out as directors and officers of the corporations. A hearing on the requested temporary injunctions was held several months later, at a time when the pleadings were not yet closed; ² see Home Oil Co. v. Todd, 195 Conn. 333, 342, 487 A.2d 1095 (1985); and no pretrial discovery had taken place. The trial court, Ripley, J., denied the plaintiffs' applications for injunctive relief in a memorandum of decision filed February 15, 1984.

In its memorandum of decision, designated by the trial court as addressing the plaintiffs' "applications for temporary injunctions," the court made several determinations. The court validated the actions of the "New York boards," finding expressly that "Barbara Toffolon was authorized to call for a meeting, the location was in accord with the by-laws, and further ... as executrix of the estate of John Toffolon, she was entitled to vote the shares as she did, together with others of her persuasion, to elect the officers and directors as reported by the minutes of those two meetings." On this basis, the court ruled that "the application for a temporary and permanent injunction is denied." The court declined to rule, for the time being, either on the plaintiffs' claims that the corporations be dissolved and wound up, or on the defendants' applications, in their counterclaims, that the corporations be placed in the hands of a receiver.

The trial court issued its orders on the applications for temporary injunctions in the form of judgments that recited that the actions taken by the "New York boards" were valid and legal, but that the claims for winding up and dissolution were premature. The judgments then stated, in each case, "that a permanent injunction be denied." When the plaintiffs took appeals from these judgments, the trial court denied postjudgment motions by the defendants seeking to lift the stays that normally attend appellate proceedings, ³ thus leaving the "Connecticut boards" in control during the pendency of the appeals.

In our review of these appeals, we must first decide whether the trial court's orders constituted final judgments, since we ordinarily lack the jurisdiction to hear interlocutory appeals. ⁴ General Statutes § 52-263; Practice Book § 3000. Neither side disputes the general principle that, in the absence of statutory exceptions that are not presently relevant, ⁵ decisions either granting or denying temporary injunctions are not final judgments and are therefore not immediately appealable. Board of Education v. Shelton Education Assn., 173 Conn. 81, 88, 376 A.2d 1080 (1977); Olcott v. Pendleton, 128 Conn. 292, 295, 22 A.2d 633 (1941). The question before us is whether the form or the content of the trial court's orders in these cases removes these appeals from the general rule.

The plaintiffs advance several arguments in support of their position that these appeals are properly here. In broad outline, these arguments break down into two components. First, the plaintiffs argue that the trial court, without regard to its orders denying them injunctive relief, rendered declaratory judgments finally adjudicating the status of the corporations' directors and officers pursuant to General Statutes § 33-315(a). The trial court has therefore finally disposed of all of the issues that pertain to counts one, two, three, four, six and seven of their complaints, and the plaintiffs are entitled to appeal these adverse rulings pursuant to Practice Book § 3001. ⁶ Appeals on these counts are unaffected, according to the plaintiffs, by the fact that other issues with respect to other counts of their complaints are as yet unresolved. ⁷ Second, the plaintiffs argue that the trial court's orders expressly encompassed the denial in each case of a permanent as well as a temporary injunction, and thus were structured by the trial court as final judgments that are immediately appealable. In support of this position, the plaintiffs point to the trial court's postjudgment orders as indicating that the trial court intended to enter judgments that were final and appealable.

Although the plaintiffs' arguments might be persuasive under other circumstances, they cannot prevail here. The difficulty with the plaintiffs' position is two-fold: the state of the pleadings with respect to the plaintiffs' claims under General Statutes § 33-315(a) and the announced scope of the hearings for injunctive relief.

The proposition that the pleadings frame the issues before a trial court is well established in our caselaw. See 1 Stephenson, Conn.Civ.Proc. (2d Ed.1970) § 75. In order to have the right to adjudicate, a trial court must have, "[b]esides jurisdiction of the person of the defendant and of the general subject-matter of the action ... jurisdiction of the precise question which its judgment assumes to decide, or of the particular remedy or relief which it assumes to grant." 1 Black, Judgments (2d Ed.1902) § 242, quoted in New Haven Sand Blast Co. v. Dreisbach, 104 Conn. 322, 329-30, 133 A. 99 (1926); Case v. Bush, 93 Conn. 550, 552-53, 106 A. 822 (1919). "The ultimate basis upon which rests the principle that a judgment must ordinarily be restricted to issues reasonably within the scope of the pleadings is that, as to other issues, the adversary party has never been properly brought before the court and hence the court lacks jurisdiction to determine them.... That which is lacking is, however, jurisdiction over the party and may be waived.... Hence it follows that the parties may, by consent, enlarge the scope of the litigation to include issues not raised in the pleadings." (Citations omitted.) Spitz v. Abrams, 128 Conn. 121, 123, 20 A.2d 616 (1941); see also 1 Stephenson, Conn.Civ.Proc. (2d Ed.1970) § 99.

In the cases before us, the plaintiffs' amended complaints did in fact...