Gen. Elec. Capital Corp. v. Metz Family Enters., LLC, 34196.

• Decision Date: 19 March 2013
• Docket Number: No. 34196.,34196.
• Citation: 141 Conn.App. 412,61 A.3d 1154
• Court: Connecticut Court of Appeals
• Parties: GENERAL ELECTRIC CAPITAL CORPORATION v. METZ FAMILY ENTERPRISES, LLC, et al.

141 Conn.App. 412

61 A.3d 1154

GENERAL ELECTRIC CAPITAL CORPORATION

v.METZ FAMILY ENTERPRISES, LLC, et al.

No. 34196.

Appellate Court of Connecticut.

Argued Sept. 27, 2012.

Decided March 19, 2013.

James M. Nugent, with whom, on the brief, was James R. Winkel, Milford, for the appellants (defendants).

David A. Reif, with whom, on the brief, were Charles D. Ray, Hartford, and Matthew A. Weiner, for the appellee (plaintiff).

GRUENDEL, ESPINOSA and

SCHALLER, Js.^*

ESPINOSA, J.

The defendants, Metz Family Enterprises, LLC (Metz Family), Alicia Metz and Lauren H. Simons, appeal from the judgment of the trial court granting an application for a prejudgment remedy made by the plaintiff, General Electric Capital Corporation, in the underlying breach of contract action. The defendants claim that the trial court (1) lacked personal jurisdiction over Metz Family, (2) violated the prejudgment remedy statute, General Statutes § 52–278c,¹ by granting a prejudgment remedy when the forum selection clause in a promissory note between the plaintiff and Metz Family prohibited the underlying complaint to which the prejudgment remedy application was attached from being filed in Connecticut, and (3) granted an excessively large prejudgment remedy. We reverse the judgment of the trial court with respect to the prejudgment remedy imposed against Metz Family and affirm the judgment with respect to Metz and Simons.

The following facts as found by the court are relevant to our resolution of this appeal. The plaintiff is a Delaware corporation with its principal place of business in Connecticut. Metz Family is a limited liability corporation organized under the laws of New York and has its chief executive offices in Connecticut. The individual defendants, Metz and Simons, reside in Connecticut. Metz Family owns real property and/or has transacted business in Connecticut.

The court found that “[t]hrough a promissory note dated July 27, 2006, Metz Family, as maker, promised to pay the plaintiff the principal sum of $1.6 million with interest on the unpaid balance. On January 21, 2009, Metz Family and the plaintiff executed a modification agreement for the sole purpose of modifying the payment schedule set forth in the promissory note. The plaintiff allege[d] that Metz Family breached its obligations under the promissory note by failing to pay installment payments due in March and April, 2011. The plaintiff issued notice to Metz Family that it was in default and demanded past due payments. Thereafter, the plaintiff exercised its right under the promissory note and modification agreement to accelerate the obligations of Metz Family. Metz Family failed to pay its accelerated obligations. [On May 17, 2011, the plaintiff filed a three count complaint against the defendants.] Count one of the complaint alleges breach of contract against Metz Family.

“Counts two and three of the complaint allege breach of guaranty against [Metz and Simons], respectively. The complaint alleges that Metz and Simons signed individual guaranty agreements as a necessary condition for the plaintiff to enter into the promissory note with Metz Family. Upon the default by Metz Family, the plaintiff informed Metz and Simons that Metz Family had failed to make the installment payment(s) due and demanded that Metz and/or Simons satisfy the past due payment(s). Neither Metz nor Simons made payment on the amount due to the plaintiff. Thereafter, the plaintiff informed Metz and Simons that it was exercising its right to accelerate Metz Family's obligations and demanded that Metz and/or Simons, as guarantors, make payment in full. Neither Metz nor Simons satisfied the obligation under the respective individual guaranty agreements to pay the accelerated obligations of Metz Family.” The complaint alleged that $1,078,211.96 plus interest, default interest and late charges, in excess of $87,182.05 was due and owing at the time the complaint was filed.

On June 17, 2011, the defendants filed a motion to dismiss the plaintiff's complaint, claiming that Connecticut was an improper venue for the action. The defendants claimed that the forum selection clause ² in the note designated New York as the exclusive jurisdiction in which Metz Family and the plaintiff agreed to resolve any legal claims arising out of the agreement.³ In a memorandum of decision filed July 13, 2011, the court denied the defendants' motion to dismiss. In a September 8, 2011 articulation of its memorandum of decision, the court further explained the rationale for its denial of the motion to dismiss, as set forth in part II of this opinion.

On May 31, 2011, fourteen days after filing its complaint, the plaintiff filed an application for prejudgment remedy against the defendants, seeking attachment of the defendants' real and personal property in the amount of $1.5 million. Beginning in August, 2011, a hearing on the plaintiff's motion for a prejudgment remedy took place over several days. The hearing focused on jurisdiction, choice of law and the value of a West-wind aircraft in the plaintiff's possession at that time.

In its December 29, 2011 memorandum of decision on the plaintiff's application for a prejudgment remedy, the court found “[t]he defendants [to be] jointly liable on a promissory note which is now in default and on which there [was] a balance of $1,165,394.01 as of the time of acceleration on April 13, 2011. There [was] additional interest of $168,966 between [April 13, 2011] and February 1, 2012, the estimated time for sale of the collateral securing the loan at an estimated sale price of $330,000. The balance due after sale of the plane will, therefore, be approximately $1,004,360.17. Interest due on this balance from February 1, 2012, until an estimated trial date of June 1, 2012, [was] $59,436.10.” The court also concluded that there was probable cause that the plaintiff would recover attorney's fees of approximately $200,000. Based on these findings, the court concluded that there was probable cause to find that the plaintiff would secure a judgment against the defendants. The court concluded that a prejudgment remedy of $1.5 million was a reasonable amount and granted the plaintiff permission to attach the assets of the defendants valued at that same amount. The defendants now appeal from the judgment granting the plaintiff's application for a prejudgment remedy. Additional facts will be set forth as necessary.

I

Metz Family claims that the court lacked personal jurisdiction over it because Metz Family did not have sufficient contacts with Connecticut necessary for the court to exercise personal jurisdiction over it.⁴ Because Metz Family failed to argue a lack of personal jurisdiction to the court, we conclude that Metz Family waived its right to claim a lack of personal jurisdiction.

The following additional undisputed facts are relevant to our resolution of this claim. In their motion to dismiss, the defendants stated that the court lacked jurisdiction over them and that “there is also a tenuous relationship to the state of Connecticut, separate and apart from the parties' specific choice of New York as jurisdiction for any disputes.” Referring to this statement, in its September 8, 2011 articulation, the court found that the defendants failed to brief adequately any implicit argument that they lacked sufficient minimum contacts with Connecticut to satisfy the due process requirements needed to establish personal jurisdiction. The court stated that it “considers the defendants' jurisdictional argument to be based solely on the existence of a forum selection clause.” On October 7, 2011, Metz Family filed an answer and special defenses to the plaintiff's complaint.

We first set forth our standard of review and the relevant legal principles governing the defendants' claim. “Because a challenge to the personal jurisdictionof the trial court is a question of law, our review is plenary.” Myrtle Mews Assn., Inc. v. Bordes, 125 Conn.App. 12, 15, 6 A.3d 163 (2010). “[A] party waives the right to dispute personal jurisdiction unless that party files a motion to dismiss within thirty days of the filing of an appearance.... Unless the issue of personal jurisdiction is raised by a timely motion to dismiss, any challenge to the court's personal jurisdiction over the defendant is lost.... As noted by our Supreme Court, under our rules of practice, the filing of a responsive pleading operates as a waiver of a future challenge of the court's personal jurisdiction over a party.” (Internal quotation marks omitted.) Schaghticoke Indian Tribe v. Rost, 138 Conn.App. 204, 211, 50 A.3d 411 (2012); see also Practice Book § 10–32.

Because we agree with the court's conclusion that the defendants' jurisdictional argument in their motion to dismiss was based solely on the existence of a forum selection clause, and, thus was based on their claim of improper venue, we conclude that Metz Family failed to timely move to dismiss the action for lack of personal jurisdiction. Accordingly, having filed an answer and special defenses to the plaintiff's complaint without timely moving to dismiss the action for lack of personal jurisdiction, Metz Family waived its right later to attack the court's judgment on personal jurisdiction grounds. Schaghticoke Indian Tribe v. Rost, supra, 138 Conn.App. at 211–12, 50 A.3d 411.

II

The defendants next claim that the court erred by granting the plaintiff's prejudgment remedy application because it was invalid under § 52–278c. The defendants argue that the forum selection clause in the note between the plaintiff and Metz Family designates New York as the exclusive forum for the resolution of a dispute arising out of the note in which only legal relief is sought. The defendants argue that the forum selection clause would make it unreasonable for a Connecticut court to exercise its jurisdiction over Metz Family in a legal action like the one presented in the underlying complaint to...