Hotz Corp. v. Carabetta, 14668

• Decision Date: 03 August 1993
• Docket Number: No. 14668,14668
• Citation: 226 Conn. 812,629 A.2d 377
• Court: Connecticut Supreme Court
• Parties: HOTZ CORPORATION v. Joseph F. CARABETTA et al.

Page 377

629 A.2d 377

226 Conn. 812

HOTZ CORPORATION v. Joseph F. CARABETTA et al.

No. 14668.

Supreme Court of Connecticut.

Argued June 10, 1993.

Decided Aug. 3, 1993.

Dominic J. Aprile, Lakewood, NJ, pro hac vice, with whom was Thomas E. Katon, New Haven, for appellants (defendants).

Thomas G. Librizzi, with whom, on the brief, was Brian Preleski, Hartford, for appellee (plaintiff).

Before CALLAHAN, BORDEN, BERDON, KATZ and PALMER, JJ.

PER CURIAM.

The principal issue in this appeal is whether the defendants, Joseph F. Carabetta and Carabetta Enterprises, Inc. (Carabetta Enterprises), were afforded "the right to appear and be heard," pursuant to General Statutes § 52-278d(a), ¹ before the trial court granted the plaintiff Hotz Corporation's application for prejudgment remedy.

The following facts are relevant to the disposition of this appeal. In November, 1988, the plaintiff entered into a written subcontract with Carabetta Builders, Inc. (Carabetta Builders), ² to fabricate and supply structural steel, joists and metal decking for the construction of a high-rise condominium project in New Jersey. A dispute arose between the parties concerning the delivery of the steel and payment for it. Pursuant to the terms of the subcontract, the parties proceeded to arbitration. During arbitration, the plaintiff sought damages for breach of the subcontract by Carabetta Builders, claiming that it had failed to tender timely payments to the plaintiff. Carabetta Builders counterclaimed, seeking damages for the plaintiff's alleged failure to compute a lump sum contract price and to fabricate sufficient building materials as provided in the subcontract. On July 12 1989, Joseph Carabetta allegedly personally guaranteed full payment to the plaintiff of all sums owed under the subcontract. The arbitrator subsequently awarded $2,470,701 in favor of the plaintiff. The trial court, Schaller, J., confirmed the award and denied Carabetta Builders' application to vacate the award. ³

The plaintiff made a demand to Joseph Carabetta for payment, and when payment was not forthcoming, the plaintiff filed an application for prejudgment remedy, ⁴ which is the subject of this appeal. In the unsigned complaint filed with the application, the plaintiff alleged that it had suspended the fabrication and shipment of steel under the subcontract when Carabetta Builders failed to pay past due amounts, that the arbitrator of disputes between the parties had awarded $2,470,701 in its favor, and that Joseph Carabetta had breached the guarantee agreement by refusing to pay the plaintiff any part of the arbitration award. In addition, the plaintiff alleged that Carabetta Enterprises was liable for the judgment against Carabetta Builders because the two corporate entities were "indistinguishable," because Carabetta Enterprises "was directly involved in the day to day administration of the [s]ubcontract," and because Carabetta Enterprises had advised the plaintiff, in writing, that it could rely upon the financial strength and assets of Carabetta Enterprises to ensure payment of all sums owed under the subcontract.

On March 30, 1992, the trial court, DeMayo, J., held a hearing, at which the defendants filed a motion to stay pending arbitration of issues relating to Joseph Carabetta's alleged personal guarantee and a memorandum in opposition to the plaintiff's application for prejudgment remedy. On April 29, 1992, the trial court granted the plaintiff's application for prejudgment remedy in the amount of $2,750,000. The trial court did not rule on the motion to stay pending arbitration. The defendants appealed from the trial court's order granting the plaintiff's application for prejudgment remedy to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199(c). We reverse the order of the trial court.

Section 52-278d(a) mandates that "[t]he defendant shall have the right to appear and be heard at the hearing ... to [determine] whether ... there is probable cause to sustain the validity of the plaintiff's claim." The defendants claim that the trial court violated this statutory mandate and deprived them of due process of law under the state and federal constitutions when it granted the plaintiff's application for prejudgment remedy without first holding an evidentiary hearing. The plaintiff insists that the defendants received a hearing to establish probable cause on March 30, 1992, prior to the issuance of the prejudgment remedy. The plaintiff argues that the hearing satisfied § 52-278d(a) and state and federal due process protections because the defendants were represented by counsel, submitted factual affidavits and made legal argument.

At present, we need not determine whether a court session at which the parties are represented by counsel, introduce affidavits and make legal argument generally constitutes a "hearing" within the meaning of § 52-278d(a) and sufficiently safeguards against the deprivation of property without due process of law. Rather, in view of the particular facts of this case, we conclude that it was improper for the trial court to grant the plaintiff's application for prejudgment remedy without first ruling on the stay, and in the event that the stay was denied, without first holding an evidentiary hearing. The defendants had indicated to both the trial court and opposing counsel that they intended to introduce...