J.P. Alexandre, LLC v. Egbuna

• Decision Date: 07 August 2012
• Docket Number: No. 33475.,33475.
• Citation: 137 Conn.App. 340,49 A.3d 222
• Court: Connecticut Court of Appeals
• Parties: J.P. ALEXANDRE, LLC, et al. v. Louis O. EGBUNA et al.

137 Conn.App. 340

49 A.3d 222

J.P. ALEXANDRE, LLC, et al.

v.Louis O. EGBUNA et al.

No. 33475.

Appellate Court of Connecticut.

Argued April 17, 2012.

Decided Aug. 7, 2012.

Thomas A. Amato, Manchester, for the appellants (plaintiffs).

Kirsten S.P. Rigney, assistant attorney general, with whom were, Robert W. Clark, special counsel, and, on the brief, George Jepsen, attorney general, for the appellees (defendants).

DIPENTIMA, C.J., and BEAR and WEST, Js.

DiPENTIMA, C.J.

The plaintiffs, Yvon J. Alexandre (Alexandre) and J.P. Alexandre, LLC (LLC), appeal from the summary judgment rendered by the trial court in favor of the defendants, Louis O. Egbuna and Paul Greenfield. On appeal, the plaintiffs claim that the court improperly concluded that (1) it lacked subject matter jurisdiction over the LLC's federal constitutional claims arising under 42 U.S.C. § 1983¹ and (2) the Connecticut Taxpayer's Bill of Rights, General Statutes § 12–39n, afforded no relief to the LLC. ² We agree with the court that it lacked subject matter jurisdiction over the plaintiffs' claims, but we conclude that it should have rendered a judgment of dismissal rather than summary judgment. Accordingly, we reverse the judgment of the trial court and remand the case with direction to render a judgment of dismissal.

The record reveals the following relevant facts as alleged in the operative complaint and set forth by the court in its memorandum of decision and procedural history. Alexandre does business as and is the sole owner of the LLC, an entity that owns and operates a restaurant and nightclub in Hartford. The plaintiffs kept permanent records of their sale of food and alcohol items on “Z-reports,” which are printed summaries of daily cash transactions, rather than printouts of original cash register receipts. At all relevant times, Alexandre filed quarterly state sales and use tax returns for the LLC with the department of revenue services (department). In December, 2001, Egbuna, a revenue examiner with the department, advised Alexandre that the department intended to perform an audit of the LLC's sales and use tax obligations. On or about August 8, 2005, Egbuna released his final sales and use tax audit report, which covered the period from October, 1999, through March 31, 2005. The final report showed a tax deficiency of $155,536.77, plus interest of $60,322.74 and penalties, including a 25 percent fraud penalty of $38,884.26, for a total assessment of $256,743.77.³

In August, 2005, after a hearing was held at the department, the tax assessment was affirmed. The plaintiffs filed an official protest of the assessment and requested a formal hearing. On December 13, 2005, the department recorded tax liens on the LLC's property and on Alexandre's personal property, which were authorized by Greenfield, the tax unit manager for the audit division. On December 27, 2005, before a hearing was scheduled on the official protest of the assessment, the department served the plaintiffs with a tax warrant. According to the complaint, following service of the warrant by a state marshal, the marshal began to harass Alexandre, demanding full payment of the deficiency assessment plus a marshal's fee of $15,777.92.

In October, 2006, the department's appellate division remanded Alexandre's appeal of the tax deficiency assessment to the examination division for reconsideration. On reconsideration, the original deficiency amount of $155,536.77 was decreased to $94,690.22 and the 25 percent intent to evade penalty was decreased to a negligence penalty of 15 percent. Alexandre appealed the department's final tax deficiency assessment to the Superior Court pursuant to General Statutes § 12–422. See Alexandre v. Law, Superior Court, judicial district of New Britain, Docket No. CV–07–4015060–S, 2009 WL 941976 (March 17, 2009) (47 Conn. L. Rptr. 393). On appeal to the Superior Court, Alexandre claimed that the department erroneously concluded that his failure to keep and maintain original cash register tapes violated agency regulations and deprived the auditor of the ability to verify the LLC's sales activity. Alexandre further claimed that the jeopardy assessment imposed against him was improper. The court affirmed the department's conclusion that original cash register tapes were necessary to conduct a proper audit of the LLC pursuant to General Statutes §§ 12–426(3), 12–145(a) and § 12–2–12(b) of the regulations of Connecticut State Agencies, but that there was no reasonable basis for the jeopardy assessment under General Statutes § 12–417(1). The court accordingly vacated the 15 percent negligence penalty and ordered that the $15,777.92 marshal's fee be removed from the final assessment. Alexandre v. Law, supra, Superior Court, Docket No. CV–07–4015060–S.⁴

Turning to the relevant procedural history in the case before us, in August, 2009, the plaintiffs filed the operative complaint consisting of ten counts. In count one, the LLC sought damages from Egbuna for wanton, reckless and malicious conduct. In the second count, Alexandre sought damages from Greenfield for intentional infliction of emotional distress. In counts three and four, the LLC sought damages from Egbuna under § 1983 for alleged violation, under color of state law, of its rights under the equal protection clause of the fourteenth amendment to the United States constitution. In counts five and six, the LLC sought damages from Egbuna under article first, § 20, of the Connecticut constitution. In counts seven and eight, the LLC sought damages from Egbuna under § 1983 for alleged violation, under color of state law, of its rights under the due process clause of the fifth and fourteenth amendments to the United States constitution. Finally, in counts nine and ten, the plaintiffs sought damages from both defendants on theories of common-law civil conspiracy, and on a federal statutory claim, pursuant to 42 U.S.C. § 1985(3), of civil conspiracy to violate their civil rights under color of state law. After filing an answer and special defenses, the defendants filed a motion for summary judgment on all counts on a number of grounds, including lack of subject matter jurisdiction.⁵ The court granted the defendants' motion for summary judgment for lack of subject matter jurisdiction as to all of the counts. This appeal followed. In this appeal, the plaintiffs challenge only the court's granting of summary judgment as to their federal statutory and constitutional claims and the court's conclusion that § 12–39n does not create or authorize an independent tort cause of action.⁶ The plaintiffs do not appeal from the court's granting of summary judgment on the remaining counts.

Our standard of review is well established. “Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.... The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled to judgment as a matter of law.... On appeal, we must determine whether the legal conclusions reached by the trial court are legally and logically correct and whether they find support in the facts set out in the memorandum of decision of the trial court.... Our review of the trial court's decision to grant [a] ... motion for summary judgment is plenary....

“An appellate court's review of a trial court decision is circumscribed by the appropriate standard of review.... When ... the trial court draws conclusions of law, our review is plenary and we must decide whether its conclusions are legally and logically correct and find support in the facts that appear in the record.” (Citation omitted; internal quotation marks omitted.) Biro v. Matz, 132 Conn.App. 272, 277–78, 33 A.3d 742 (2011).

I

The plaintiffs claim that the court improperly concluded that it lacked subject matter jurisdiction over the LLC's federal constitutional claims arising under § 1983, specifically, counts three, four, seven and eight of the operative complaint. The defendants respond that § 12–422 provides an adequate legal remedy, and, therefore, the plaintiffs have no right to bring an action under § 1983 for these alleged injuries. We agree with the defendants.

“Subject matter jurisdiction involves the authority of the court to adjudicate the type of controversy presented by the action before it.... [A] court lacks discretion to consider the merits of the case over which it is without jurisdiction.... The objection of want of jurisdiction may be made at any time ... [a]nd the court or tribunal may act on its own motion, and should do so when the lack of jurisdiction is called to its attention.... The requirement of subject matter jurisdiction cannot be waived by any party and can be raised at any stage [of] the proceedings.” (Internal quotation marks omitted.) Massey v. Branford, 119 Conn.App. 453, 459–60, 988 A.2d 370, cert. denied, 295 Conn. 921, 991 A.2d 565 (2010).

The plaintiffs begin their argument by asserting that the court improperly invoked the exhaustion doctrine in precluding their federal claims. They misconstrue the court's analysis. The plaintiffs argue that the court effectively invoked the doctrine of exhaustion, because “administrative remedies would include a tax appeal such as that countenanced by [§] 12–422.” Here, the court stated that the plaintiffs need not exhaust their state administrative remedies before asserting § 1983claims. The court emphasized, however, on the basis of controlling precedent from our Supreme Court, that a party has no right to bring a federal statutory action under § 1983 in connection with a state's collection...