JK SCANLAN CO. v. CONSTRUCTION GROUP, INC.

• Decision Date: 02 December 2003
• Docket Number: (AC 23486)
• Court: Connecticut Court of Appeals
• Parties: J.K. SCANLAN COMPANY, INC. v. THE CONSTRUCTION GROUP, INC., ET AL.

80 Conn. App. 345

835 A.2d 79

J.K. SCANLAN COMPANY, INC. v. THE CONSTRUCTION GROUP, INC., ET AL.

(AC 23486)

Appellate Court of Connecticut.

Argued September 9, 2003.

Officially released December 2, 2003.

West, DiPentima and Peters, Js. Glenn L. Formica, for the appellant-appellee (plaintiff).

Gerald A. Del Piano, with whom was P. Jo Anne Burgh, for the appellees-appellants (named defendant et al.).

Opinion

DiPENTIMA, J.

The plaintiff appeals and the defendants cross appeal from the trial court's order of a prejudgment remedy.¹ The plaintiff, the J.K. Scanlan Company, Inc., sought such a remedy incident to its action against the defendants The Construction Group, Inc. (Construction Group), Midstate Metal Building Company, LLC, Northeast Panel Company, LLC, and Bertrand Rompre. The court granted the plaintiff's application for a prejudgment remedy in the amount of $42,500. On appeal, the plaintiff claims that the court failed to award the full amount it requested on the basis of successor liability as alleged in the fourth count of the complaint.

On cross appeal, the defendants claim that the court improperly (1) found that the plaintiff sufficiently had established entitlement to a prejudgment remedy although the plaintiff failed to present evidence of probable damages, (2) found that the plaintiff sufficiently had established a fraudulent transfer although it presented no evidence of fraud, (3) granted the prejudgment remedy as to Rompre although no evidence was introduced to justify piercing the corporate veil, and (4) granted the prejudgment remedy as to Northeast Panel Company, LLC, and Midstate Metal Building Company, LLC. We affirm the judgment of the trial court in all respects.

The following facts and procedural history are relevant to resolve the issues raised on appeal and cross appeal. On July 21, 1998, the plaintiff filed a cross claim against Construction Group, which was doing business as Midstate Metal Building Company (DBA Metal), in a Massachusetts action against the plaintiff regarding a dispute following a public works project for which the plaintiff had served as a general contractor. Construction Group did not appear, and on October 27, 1999, a default judgment in the amount of $85,301.54 was rendered against it in the Essex County trial court of the commonwealth of Massachusetts (Massachusetts judgment). As the general contractor, the plaintiff was required to pay the judgment for the negligence and breach of contract of Construction Group. In January, 1998, Rompre, the president and sole shareholder of Construction Group, in effect transformed Northeast Panel Company into a limited liability company, Northeast Panel, LLC, and in February, 1999, Rompre likewise transformed DBA Metal into Midstate Metal Building Company, LLC. Rompre remained the controlling member, and the newly formed limited liability companies continued the businesses of their predecessor DBAs.

On December 29, 2001, the plaintiff brought a complaint on the Massachusetts judgment in the Hartford Superior Court. See J.K. Scanlan Company, Inc. v. The Construction Group, Inc. by its Mid-State Metal Building Company Division, Superior Court, judicial district of Hartford, Docket No. 0804527 (December 29, 2001). Construction Group filed an appearance but did not plead. The court, Schuman, J., rendered judgment against Construction Group for $103,189.74 after a hearing in damages (Connecticut judgment). The plaintiff was unsuccessful in its attempt to collect on the judgment.

On January 8, 2002, the plaintiff commenced the action at issue in this appeal. The plaintiff alleged that (1) the defendants had violated General Statutes § 52-552a et seq., the Uniform Fraudulent Transfer Act, (2) the defendants had violated General Statutes § 42-110a et seq., the Connecticut Unfair Trade Practices Act, (3) the defendants had committed fraud, and (4) that the defendants Midstate Metal Building Company, LLC, and Northeast Panel Company, LLC, were liable for the full amount of the Connecticut judgment as the successors in interest to Construction Group.² On April 30, 2002, the plaintiff applied for a prejudgment remedy, and, on September 6, 2002, the court heard testimony and argument with respect to the application. On September 10, 2002, the court ordered a prejudgment remedy against Construction Group, Midstate Metal Building Company, LLC, Northeast Panel Company, LLC, and Rompre in the amount of $42,500. These appeals followed.

At the outset, we set forth the relevant portions of the prejudgment remedy statutes. General Statutes § 52-278d (a) provides in relevant part that a hearing on a prejudgment remedy "shall be limited to a determination of . . . whether or not there is probable cause that a judgment in the amount of the prejudgment remedy sought, or in an amount greater than the amount of the prejudgment remedy sought, taking into account any defenses, counterclaims or set-offs, will be rendered in the matter in favor of the plaintiff . . . . If the court, upon consideration of the facts before it and taking into account any . . . counterclaims . . . finds that the plaintiff has shown probable cause that such a judgment will be rendered in the matter in the plaintiff's favor in the amount of the prejudgment remedy sought and finds that a prejudgment remedy securing the judgment should be granted, the prejudgment remedy applied for shall be granted as requested or as modified by the court. . . ."

The role of the court in considering an award of a prejudgment remedy is well established. "Pursuant to our prejudgment remedy statutes . . . the trial court's function is to determine whether there is probable cause to believe that a judgment will be rendered in favor of the plaintiff in a trial on the merits. . . . The hearing in probable cause for the issuance of a prejudgment remedy is not contemplated to be a full scale trial on the merits of the plaintiff's claim. The plaintiff does not have to establish that he will prevail, only that there is probable cause to sustain the validity of the claim. . . . The court's role in such a hearing is to determine probable success by weighing probabilities." (Citations omitted; internal quotation marks omitted.) Bank of Boston Connecticut v. Schlesinger, 220 Conn. 152, 156, 595 A.2d 872 (1991).

"The legal idea of probable cause is a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence and judgment, under the circumstances, in entertaining it. . . . Probable cause is a flexible common sense standard. It does not demand that a belief be correct or more likely true than false." (Citation omitted; emphasis in original; internal quotation marks omitted.) Three S. Development Co. v. Santore, 193 Conn. 174, 175, 474 A.2d 795 (1984).

"Appellate review of a trial court's broad discretion to deny or grant a prejudgment remedy is limited to a determination of whether the trial court's rulings constituted clear error." State v. Ham, 253 Conn. 566, 568, 755 A.2d 176 (2000). "It is the trial court that must determine, in light of its assessment of the legal issues and the credibility of the witnesses, whether a plaintiff has sustained the burden of showing probable cause to sustain the validity of its claim. We decide only whether the determination of the trial court constituted clear error." Greenberg, Rhein & Margolis, Inc. v. Norris-Faye Horton Enterprises, Inc., 218 Conn. 162, 166, 588 A.2d 185 (1991).

I APPEAL

The plaintiff claims that the court improperly granted a prejudgment remedy of only $42,500 of the Massachusetts judgment on the basis of successor liability in the fourth count of the plaintiff's complaint. The court's memorandum of decision is not clear as to which legal theory it applied, and because the plaintiff failed to file a motion for articulation, the issue of successor liability is not properly before us.

Our Supreme Court has held that where essential facts are undisputed and the claim involves a question of law, the record is adequate for review. See Community Action for Greater Middlesex County, Inc. v. American Alliance Ins. Co., 254 Conn. 387, 395-96, 757 A.2d 1074 (2000) (where de novo review applies and facts not disputed, precise legal analysis undertaken by trial court not essential to appellate review of issue). Thus, where a case presents a question of law, this court is required to provide de novo review....