Llc v. Yah Realty Llc.

• Decision Date: 20 July 2010
• Docket Number: No. 18486.,18486.
• Citation: 1 A.3d 1026,297 Conn. 489
• Court: Connecticut Supreme Court
• Parties: VINCENT METRO, LLC v. YAH REALTY, LLC, et al.

297 Conn. 489

1 A.3d 1026

VINCENT METRO, LLC

v.YAH REALTY, LLC, et al.

No. 18486.

Supreme Court of Connecticut.

Argued April 28, 2010.

Decided July 20, 2010.

Peter E. Ricciardi, Hamden, with whom was Albert J. Oneto IV, for the appellant (plaintiff).

Kenneth A. Votre, New Haven, with whom, on the brief, was Michele D. Sensale, Hartford, for the appellees (defendants).

ROGERS, C.J., and KATZ, PALMER, VERTEFEUILLE, ZARELLA and McLACHLAN, Js. ^*

KATZ, J.

The plaintiff, Vincent Metro, LLC, appeals ¹ from the judgment of the trial court, dismissing as moot its interpleader action in which it sought: (1) an order determining the rights of the defendants, YAH Realty, LLC (YAH Realty), John Fitzpatrick and Rose Fitzpatrick, to a deposit held by the plaintiff in its capacity as a real estate broker; (2) an order discharging the plaintiff from any obligation to the defendants; and (3) reasonable attorney's fees and costs. The dispositive issue in this appeal is whether the trial court, A. Robinson, J., properly concluded that the interpleader action had been rendered moot by a stipulation among the defendants that the contested funds should be paid to YAH Realty. ² We conclude that the trial court improperly determined that the plaintiff's action was moot because there was practical relief that could be afforded to the plaintiff. Accordingly, we reverse the judgment of the trial court.

The record reveals the following facts, as found by the trial court or otherwise undisputed, and procedural history. In July, 2005, the plaintiff entered into an agreement with YAH Realty according to which the plaintiff would act as a listing agent for a property owned by YAH Realty and would receive a commission if the property was sold as a result of the plaintiff's efforts. The plaintiff procured John Fitzpatrick as a buyer, ³ and thereafter YAH Realty and John Fitzpatrick entered into a purchase and sale agreement on that property. In accordance with the agreement, Rose Fitzpatrick provided $20,000 as the deposit on the property, which the plaintiff thereafter deposited into its real estate trust account pursuant to General Statutes § 20-324k(a). YAH Realty and John Fitzpatrick were unable to complete the transaction and, in September, 2006, they officially terminated the proposed sale. Initially, YAH Realty, John Fitzpatrick and Rose Fitzpatrick each made conflicting requests to the plaintiff for the return of the deposit. ⁴

The plaintiff subsequently commenced the underlying interpleader action, pursuant to General Statutes § 52-484, ⁵ seeking: (1) an order determining the rights of the defendants to the $20,000 deposit; (2) an order discharging the plaintiff from any obligation to the defendants arising out of their claims to those funds; and (3) reasonable attorney's fees and costs. The trial court, Licari, J., entered an interlocutory judgment of interpleader, and the plaintiff deposited the contested funds with the clerk of the court on December 29, 2006.

Sometime between January and March, 2007, the defendants reached an agreement that the funds should be returned to YAH Realty, and on March 2, 2007, they filed a motion for an order to release the funds to YAH Realty. Judge Licari denied the motion without prejudice. The defendants then filed a joint answer, in which they asserted five counterclaims against the plaintiff relating to its allegedly wrongful conduct in failing to return the deposit. The defendants also filed separate statements of claim, in which they again asserted contradictory claims about the disbursement of the funds. The plaintiff subsequently moved for summary judgment on both its interpleader action and the defendants' counterclaims. ⁶ The defendants filed an objection to the plaintiff's motion and a cross motion for summary judgment on the plaintiff's interpleader action. Along with that motion, the defendants filed a stipulation stating that all three defendants had agreed that an order for release of the funds should be entered, releasing all funds contained in escrow to YAH Realty. ⁷ Although the stipulation was signed by the defendants' attorney, it was not signed by any of the defendants.

Following argument on the merits of the motions for summary judgment, the trial court, A. Robinson, J., issued a memorandum of decision declining to rule on those motions, on the ground that it had determined, sua sponte, that the plaintiff's interpleader action should be dismissed as moot. The court concluded that, although the action had been proper at its inception because the defendants initially had made conflicting claims to the funds, when the defendants reached an agreement as to the disbursement of the funds, the action became moot. Specifically, the court reasoned: “The defendants' stipulation concedes that the funds should be returned to [YAH Realty]. Therefore, there are no disputed facts as to where the funds should go, and the court lacks subject matter jurisdiction to entertain the motions for summary judgment concerning the interpleader action.” The court further explained: “The task of the court in an interpleader action is to determine which of the adverse and competing claims to a particular fund is entitled to the fund. As a result of the defendants' agreement that the funds be released to [YAH Realty] there are no longer issues in dispute regarding claims to the escrow funds.... The court can no longer grant any practical relief. The issue is moot.” This appeal followed.

On appeal, the plaintiff claims that the trial court improperly dismissed its interpleader action as moot because the defendants' stipulation did not conclusively resolve the issues of whether the plaintiff should be discharged of any liability to the defendants arising out of their conflicting claims to the funds, and whether the plaintiff should be permitted to recover its costs and attorney's fees pursuant to § 52-484. We agree with the plaintiff that the stipulation did not conclusively resolve its liability on the funds and, therefore, the trial court could have afforded additional practical relief to the plaintiff. ⁸ Accordingly, we conclude that the dismissal of the plaintiff's interpleader action was improper.

Whether an action is moot implicates a court's subject matter jurisdiction and is therefore a question of law over which we exercise plenary review. Connecticut Coalition for Justice in Education Funding, Inc. v. Rell, 295 Conn. 240, 255, 990 A.2d 206 (2010). “A case is considered moot if [the trial] court cannot grant the appellant any practical relief through its disposition of the merits....” (Internal quotation marks omitted.) Valvo v. Freedom of Information Commission, 294 Conn. 534, 541, 985 A.2d 1052 (2010).

Our analysis of the plaintiff's claim that the defendants' stipulation did not conclusively resolve whether the plaintiff was discharged of any liability to the defendants arising out of their conflicting claims to the funds turns in part on the unique character of actions in the nature of interpleader pursuant to § 52-484. Although interpleader originally derived from common law and equity, in 1983, the legislature adopted “a broad statutory bill in the nature of interpleader that did not incorporate the traditional equitable restriction [s] [on interpleader]. Except for the addition of a provision for costs and fees and for a few trivial language modifications, this statute remains as Connecticut's interpleader rule.” 2 E. Stephenson, Connecticut Civil Procedure (3d Ed. 2002) § 225(b). The current version of the interpleader statute provides in relevant part: “Whenever any person has, or is alleged to have, any money or other property in his possession which is claimed by two or more persons, either he, or any of the persons claiming the same, may bring a complaint in equity, in the nature of a bill of interpleader, to any court which by law has equitable jurisdiction of the parties and amount in controversy, making all persons parties who claim to be entitled to or interested in such money or other property. Such court shall hear and determine all questions which may arise in the case....” General Statutes § 52-484.

It is well established that the primary purpose of an interpleader action is to shield the stakeholder from conflicting claims to funds controlled by that stakeholder. See, e.g., Nash v. Smith, 6 Conn. 421, 424 (1827) (“[t]he object of the bill [of interpleader] is two-fold; first, to indemnify the plaintiff; and secondly, to prevent a multiplicity of suits”); 2 E. Stephenson, supra, at § 225(a) (“[i]nterpleader is a broad joinder device to facilitate consolidation of related claims so as to avoid multiple litigation as well as protection against multiple liability”); see also Washington Electric Cooperative, Inc. v. Paterson, Walke & Pratt, P.C., 985 F.2d 677, 679 (2d Cir.1993) (“[r]ooted in equity, interpleader is a handy tool to protect a stakeholder from multiple liability and the vexation of defending multiple claims to the same fund”). Accordingly, interpleader actions are proper only when a stakeholder faces two or more adverse claims to the same property. See Ackerman v. Union & New Haven Trust Co., 90 Conn. 63, 69, 96 A. 149 (1915) (interpleader involves “triangular dispute”); Union Trust Co. v. Stamford Trust Co., 72 Conn. 86, 93, 43 A. 555 (1899) (interpleader proper when there is “single duty for which there has been a double demand”).

Actions pursuant § 52-484 involve “two distinct parts, the first of which is an interlocutory judgment of interpleader....

An interlocutory judgment of interpleader, which determines whether interpleader lies, traditionally precedes adjudication of the claims.” (Internal quotation marks omitted.) Gold v. Rowland, 296 Conn. 186, 216 n. 24, 994 A.2d 106 (2010); see also Practice Book § 23-44 (“No trial on the merits of an interpleader action shall be had until [1] an interlocutory judgment of interpleader shall have...