Ferrara v. Ryen Munro & Tripping Gnome Farm, LLC

• Decision Date: 23 March 2018
• Docket Number: Civil Action No. 3: 16–CV–950 (CSH)
• Citation: 585 B.R. 269
• Parties: Louis FERRARA, Melissa Ferrara, and New England Alpacas, Plaintiffs, v. Ryen MUNRO and Tripping Gnome Farm, LLC, Defendants.
• Court: U.S. District Court — District of Connecticut

585 B.R. 269

Louis FERRARA, Melissa Ferrara, and New England Alpacas, Plaintiffs,

v.Ryen MUNRO and Tripping Gnome Farm, LLC, Defendants.

Civil Action No. 3: 16–CV–950 (CSH)

United States District Court, D. Connecticut.

Signed March 23, 2018

John J. Radshaw, III, New Haven, CT, Doug Dubitsky, North Windham, CT, for Plaintiffs.

George M. Purtill, Purtill, Purtill, Pfeffer & Jocoby, South Glastonbury, CT, Daniel L. Rosenthal, Portland, ME, for Defendants.

RULING ON DEFENDANTS' MOTION TO DISMISS

HAIGHT, Senior District Judge:

I. INTRODUCTION

This breach of contract action, relating to failure to pay commissions on the sale of alpacas, is currently before the Court on Defendants' Motion to Dismiss, Doc. 14.¹ When filed, the motion was on behalf of both the individual defendant (Ryen Munro) and the corporate defendant (Tripping Gnome Farm, LLC) (sometimes, "TGF"). Subsequently, and while the motion to dismiss was pending, TGF filed a voluntary petition for bankruptcy in the District of Maine. This Ruling resolves the motion to dismiss the complaint, and also considers the changed circumstances resulting from TGF's bankruptcy proceeding.

According to the allegations of the complaint, Plaintiffs Louis Ferrara and Melissa Ferrara are citizens of Connecticut. The Ferraras do business under the trade name of the third Plaintiff, New England Alpacas, whose principal place of business is located in Killingworth, Connecticut.

Plaintiffs bring this action against defendants Ryen Munro and Tripping Gnome Farm, LLC ("Defendants"), seeking contractual damages "arising from the Defendants' refusal to pay the Plaintiffs commission on the Defendants' sale of certain alpaca[s] to non-party Pamela Brewster and her company Stillmeadow Farm, LLC," located in Stonington, Connecticut. Doc. 1 ("Complaint"), ¶ 1. Plaintiffs allege that they entered into a binding contract with Defendants "under which the Defendants were obligated to pay the Plaintiffs a commission on the sale of alpacas by Defendants to Ms. Brewster and her company during a two-year period ending June 19, 2013." Id. With respect to these alpaca sales, however, Defendants have allegedly "repeatedly refused to pay [Plaintiffs] the commission owed." Id.

In their Complaint, Plaintiffs have included the following state law claims against both Defendants: breach of contract, unjust enrichment, breach of the implied covenant of good faith and fair dealing, and violation of Connecticut's Unfair Trade Practices, Conn. Gen. Stat. § 42–110a, et seq. In addition, Plaintiffs assert a claim against individual defendant Munro for tortious interference with contractual relations. Since Plaintiffs assert only state law claims, they base this Court's subject matter jurisdiction solely on diversity of citizenship under 28 U.S.C. § 1332(a)(1).² Doc. 1, ¶ 2.

Pending before the Court is Defendants' "Motion to Dismiss" pursuant to Rules 12(b)(2), b(3), and b(6) of the Federal Rules of Civil Procedure. Doc. 14. In particular, defendant Ryen Munro moves to dismiss the action against him for lack of personal jurisdiction under Rule 12(b)(2). In addition, both defendants, Munro and Tripping Gnome Farm, LLC, move to dismiss the action based on Connecticut's "prior pending action doctrine," which, as Defendants assert, "applies in this diversity case, as well as federal abstention principles."³ Doc. 14, at 1.

II. NOTICE OF BANKRUPTCY FILING BY TRIPPING GNOME FARM, LLC

The Court previously intended to resolve the motion to dismiss [Doc. 14] in its entirety herein. However, on October 10, 2017, counsel for Tripping Gnome Farm, LLC ("TGF") filed a notice of "Suggestion of Bankruptcy," informing the Court that on October 6, 2017, TGF filed a voluntary petition for relief under Chapter 7 of Title 11 of the United States Bankruptcy Code, 11 U.S.C. § 101 et seq., in the United States Bankruptcy Court for the District of Maine.⁴ Doc. 32.

In the notice of bankruptcy, TGF's counsel stated, "[p]ursuant to Section 362(a) of the Code, this action is stayed." That is something of an overstatement. Pursuant to 11 U.S.C. § 362(a), the captioned action in this Court was automatically stayed against TGF, the defendant debtor upon the filing of its bankruptcy petition in the District of Maine. As to individual defendant Ryen Munro, there has been no suggestion to the Court, or evidence presented, that a bankruptcy filing was made by him as an individual. In general, the automatic stay is limited to debtors and does not encompass non-bankrupt co-defendants. See Teachers Ins. & Annuity Ass'n of America v. Butler , 803 F.2d 61, 65 (2d Cir. 1986) ("It is well-established that stays pursuant to § 362(a) are limited to debtors and do not encompass non-bankrupt co-defendants."); see also Queenie, Ltd. v. Nygard Int'l, 321 F.3d 282, 287 (2d Cir. 2003) ("[A] suit against a codefendant is not automatically stayed by the debtor's bankruptcy filing." ) (quoting 3 Collier on Bankruptcy § 362.03[3][d] (15th ed.2002) ); Thomson Kernaghan & Co. v. Global Intellicom, Inc. , Nos. 99 Civ. 3005(DLC), 99 Civ. 3015(DLC), 2000 WL 640653, at *14 (S.D.N.Y. May 17, 2000) (Except in "unusual circumstances," " Section 362 limits the extension of an automatic stay to a proceeding against the debtor"— i.e. , does not encompass non-bankrupt co-defendants.); In re Metal Center , 31 B.R. 458, 462 (Bankr. D.Conn.1983) ("Generally, the automatic stay does not apply to proceedings against nondebtors."); Austin v. Unarco Indus., Inc. , 705 F.2d 1, 4–5 (1st Cir.1983) ("[T]he Bankruptcy Court was correct in deciding that the automatic stay provisions of 11 U.S.C. § 362(a) apply only to the bankrupt debtor."), cert. denied , 463 U.S. 1247, 104 S.Ct. 34, 77 L.Ed.2d 1454 (1983).

Because there has been no showing that defendant Munro is a bankruptcy debtor, there is no applicable § 362(a) stay of this action against him.⁵ Accordingly, the action is stayed against debtor TGF, but remains active with respect to defendant Munro.⁶ The Court will proceed in resolving the motion to dismiss as to this non-debtor individual defendant. In light of the stay, claims pending against TGF will not be impacted by the Court's ruling on the motion to dismiss. Those claims will remain in effect and stayed.

III. BACKGROUND

The main dispute at issue in this case arises from an alleged contract which Plaintiffs assert they entered with Tripping Gnome Farm, LLC (also "TGF"). Prior to June 20, 2011, Plaintiffs engaged "in the business of buying, raising, selling and brokering the sale of alpacas" at their place of business in Killingworth, Connecticut. Doc. 1, ¶ 8. Plaintiffs allege that Defendants, who "engaged in the business of breeding, raising, selling, and brokering the sales of alpacas," deceived them into disclosing the name of an interested alpaca buyer "by falsely leading the Plaintiffs to believe that if [they] did so, the Defendants would pay [them] the commissions set forth in the Contract." Doc. 1, ¶¶ 9, 64. Thereafter, by "refusing to pay the agreed-to commissions, and by Munro preventing TGF from doing so, the Defendants gained an unfair business advantage over the Plaintiffs and all other similar businesses in that the Defendants illegally and unfairly made their products and services cheaper to sell to Connecticut residents." Id. , ¶ 65. Plaintiffs allege that Defendants' conduct has been "immoral, unethical, oppressive, ... unscrupulous," and offensive to the public policy of Connecticut. Id., ¶ 68.

In contrast, Defendants allege that no binding written contract exists because, inter alia , Defendants "never signed." Doc. 15, at 1. Munro states in his Declaration that "[t]he Plaintiffs and the Defendant Tripping Gnome Farm, LLC never agreed on the terms of the Master Contract that was sent" and "[t]his lawsuit is based on the unsigned, draft Master Contract." Doc. 16, ¶¶ 8–9. The alleged "Agreement," as presented by Plaintiffs, contains only the signatures of Melissa Ferrara and Louis Ferrara. Doc. 22, Ex. A ("Brokering and Boarding Contract"), at 12. No signature of Ryen Munro, in either his individual capacity or as a member or manager of TGF, appears on that contract.

Defendants argue that, despite the lack of a binding contract, Plaintiffs have commenced a series of "four cases between Defendants and Plaintiffs" regarding this same contract dispute. Id. , at 1–2. Defendants describe the four cases as follows:

(1) an action that Tripping Gnome filed in the Cumberland County, Maine Superior Court (PORSC–CV–2014–00157), seeking a declaratory judgment with respect to the parties' rights and obligations (the "Maine Case");

(2) an action that Plaintiffs subsequently filed in Connecticut Superior Court (MMXCV14–6011790–S) (the "First Connecticut Case"), as a result of which the Maine Case was stayed;

(3) another action that Plaintiffs filed in Connecticut Superior Court (MMX–CV15–6013059–S) (the "Pending Connecticut Case"), which is nearly identical to both the First Connecticut Case and the instant case and which was filed after rulings adverse to Plaintiffs in the First Connecticut Case, thus allowing Plaintiffs to continue to pursue essentially the same case regardless of those adverse rulings; and

(4) now, the present case, in this federal Court.

Doc. 15, at 1–2.

Defendants state that three of the four cases—"all but the First Connecticut Case [ (2), above], which Plaintiffs voluntarily withdrew after filing the Pending Connecticut case"—remain. Id. , at 2. According to Defendants, Plaintiffs have "repeatedly and unjustifiably tried to drag Ryen Munro into... three Connecticut cases as a party despite the absence of any allegations that Mr. Munro acted in any capacity other than as a manager of Tripping Gnome." Id. Moreover, each time the Connecticut Superior Court has ruled against Plaintiffs, they "have disregarded the ruling and tried again." Id. Defendants conclude that the present action before this Court is "no more than the latest harassing effort to pursue Ryen Munro,...