Mountview Plaza Associates, Inc. v. World Wide Pet Supply, Inc.

• Decision Date: 13 May 2003
• Docket Number: (AC 23344).
• Citation: 76 Conn. App. 627,820 A.2d 1105
• Court: Connecticut Court of Appeals
• Parties: MOUNTVIEW PLAZA ASSOCIATES, INC. v. WORLD WIDE PET SUPPLY, INC., ET AL.

76 Conn. App. 627

820 A.2d 1105

MOUNTVIEW PLAZA ASSOCIATES, INC. v. WORLD WIDE PET SUPPLY, INC., ET AL.

(AC 23344).

Appellate Court of Connecticut.

Submitted on briefs February 26, 2003.

Officially released May 13, 2003.

Foti, Flynn and West, Js.

Joseph P. Yamin, Eric M. Grant and George G. Mowad II filed a brief for the appellant (plaintiff).

Opinion

WEST, J.

The plaintiff, Mountview Plaza Associates, Inc., appeals from the judgment of the trial court rendered in favor of the defendants Pet Fanatic, LLC (Pet Fanatic), and Jennifer Sachs following the entry of defaults against those defendants. We reverse the judgment of the trial court as to those defendants.

The following facts are relevant to our resolution of the plaintiff's appeal. On September 7, 1995, the plaintiff and the defendant World Wide Pet Supply, Inc. (World Wide Pet), entered into a written agreement under which World Wide Pet agreed to lease certain commercial space from the plaintiff for five years. At the expiration of the lease term, World Wide Pet held over through October, 2001. On October 31, 2001, World Wide Pet abandoned the premises. World Wide Pet did not pay the plaintiff the rent due for its occupancy of the premises during October, 2001, and, in violation of the express terms of the lease, left various shelving units, display materials and general debris in the premises, and damaged a portion of the tile floor. On October 31, 2001, Sachs, the president and sole shareholder of World Wide Pet, formed Pet Fanatic with herself as general manager and sole member. Sachs transferred all of World Wide Pet's assets to Pet Fanatic.

The plaintiff made repeated demands on Sachs, as World Wide Pet's president, to remedy its breaches of the lease agreement. Sachs refused to make payment to the plaintiff, claiming that World Wide Pet was insolvent. Pursuant to the lease agreement, the plaintiff exercised its right to remove the abandoned alterations and improvements, and to seek reimbursement for the cost of the removal and for damage to the premises.

On February 14, 2002, the plaintiff filed a complaint against the defendants. The first count of the complaint alleged a breach of the lease agreement against World Wide Pet, the second count alleged a violation of the Uniform Fraudulent Transfer Act, General Statutes § 52-552a et seq., against Pet Fanatic, and the third count alleged breach of the lease agreement against Sachs as the alter ego of World Wide Pet. On March 18, 2002, the plaintiff filed separate motions for default for failure to appear against each of the three defendants. The defendants were defaulted, and notice of the defaults was sent on April 10, 2002.¹

The court held a hearing in damages on May 22, 2002. Following that hearing, the court rendered judgment, finding that the plaintiff had proven damages in the amount of $21,961.59. The court, however, also found that the plaintiff had failed to pierce the corporate veil. Accordingly, the court rendered judgment in favor of the plaintiff solely against World Wide Pet and rendered judgment in favor of the remaining defendants. The plaintiff subsequently filed a motion to reargue. Following a hearing on the motion, the court denied the motion to reargue. This appeal followed.

"A default admits the material facts that constitute a cause of action . . . and entry of default, when appropriately made, conclusively determines the liability of a defendant." (Citation omitted; internal quotation marks omitted.) Skyler Ltd. Partnership v. S.P. Douthett & Co., 18 Conn. App. 245, 253, 557 A.2d 927, cert. denied, 212 Conn. 802, 560 A.2d 984 (1989). If the allegations of the plaintiff's complaint are sufficient on their face to make out a valid claim for the relief requested, the plaintiff, on the entry of a default against the defendant, need not offer evidence to support those allegations. Carothers v. Butkin Precision Mfg. Co., 37 Conn. App. 208, 209, 655 A.2d 799 (1995). Therefore, the only issue before the court following a default is the determination of damages. See id. A plaintiff ordinarily is entitled to at least nominal damages following an entry of default against a defendant in a legal action. Melfi v. Danbury, 70 Conn. App. 679, 691, 800 A.2d 582, cert. denied, 261 Conn. 922, 806 A.2d 1061 (2002).

"In an action at law, the rule is that the entry of a default operates as a confession by the defaulted defendant of the truth of the material facts alleged in the complaint which are essential to entitle the plaintiff to some of the relief prayed. It is not the equivalent of an admission of all of the facts pleaded. The limit of its effect is to preclude the defaulted defendant from making any further defense and to permit the entry of a judgment against him on the theory that he has admitted such of the facts alleged in the complaint as are essential to such a judgment. It does not follow that the plaintiff is entitled to a judgment for the full amount of the relief claimed. The plaintiff must still prove how much of the judgment prayed for in the complaint he is entitled to receive." (Internal quotation marks omitted.) Murray v. Taylor, 65 Conn. App. 300, 334-35, 782 A.2d 702, cert. denied, 258 Conn. 928, 783 A.2d 1029 (2001).

We turn first to the court's judgment in favor of Pet Fanatic. We note that the judgment rendered by the court did not specifically address whether the plaintiff had alleged such facts in its complaint as would support a finding that the transaction complained of actually was fraudulent. Thus, the court provided no reasons to support its rendering of judgment in favor of the defendant. Implicit in the court's judgment, however, is the finding that the plaintiff failed to prove sufficient material facts as would establish Pet Fanatic's violation of the Uniform Fraudulent Transfer Act.

In cases arising under the Uniform Fraudulent Transfer Act; General Statutes § 52-552a et seq.; the determination of the question of fraudulent intent is an issue of fact. Dietter v. Dietter, 54 Conn. App. 481, 487, 737 A.2d 926, cert. denied, 252 Conn. 906, 743 A.2d 617 (1999). General Statutes § 52-552e (a) provides in relevant part: "A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, if the creditor's claim arose before the transfer was made or the obligation was incurred and if the debtor made the transfer or incurred the obligation: (1) With actual intent to hinder, delay or defraud any creditor of the debtor. . . ." Section 52-552e (b) provides in relevant part that "[i]n determining actual intent under subdivision (1) of subsection (a) of this section, consideration may be given, among other factors, to whether . . . (2) the debtor retained possession or control of the property transferred after the transfer . . . (5) the transfer was of substantially all of the debtor's assets . . . (8) the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred, (9) the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred, [and] (10) the transfer occurred shortly before or shortly after a substantial debt was incurred . . . ." General Statutes § 52-552f (a) provides: "A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation."

The plaintiff's complaint alleged in relevant part that Sachs knew of World Wide Pet's indebtedness to...