Shawmut Bank, N.A. v. Valley Farms, 14411

• Decision Date: 09 June 1992
• Docket Number: No. 14411,14411
• Citation: 610 A.2d 652,222 Conn. 361
• Court: Connecticut Supreme Court
• Parties: SHAWMUT BANK, N.A. v. VALLEY FARMS, et al.

Page 652

610 A.2d 652

222 Conn. 361

SHAWMUT BANK, N.A. v. VALLEY FARMS, et al.

No. 14411.

Supreme Court of Connecticut.

Argued Feb. 11, 1992.

Decided June 9, 1992.

Richard P. Weinstein, with whom was Jennifer Jaff, for appellants (defendants).

Robert M. Dombroff, with whom, on the brief, was Stephen W. Aronson, for appellee (plaintiff).

Before PETERS, C.J., and CALLAHAN, COVELLO, BORDEN and BERDON, JJ.

BORDEN, Associate Justice.

The principal issue in this appeal is the constitutionality, under the due process clause of the fourteenth amendment to the United States constitution, of our statutory scheme regarding the action of replevin codified in General Statutes § 52-515 et seq. The defendant partnerships, Valley Farms, Maple Shade Farms, Starr Farms and REM Motor Rental, appeal ¹ from the judgment of the trial court granting the application of the plaintiff, Shawmut Bank, N.A., ² for a prejudgment remedy of replevin of certain property of the defendants. The defendants claim that: (1) the statutory scheme authorizing replevin ³ violates the federal due process clause; and (2) the property sought to be replevied is exempt from execution and, therefore, from replevin by way of a prejudgment remedy. We affirm the judgment of the trial court.

For purposes of this appeal, the following facts are undisputed. The defendants operate farms in Connecticut. Pursuant to a series of documents consisting of certain letter agreements, demand promissory notes, security agreements and guaranties executed by the defendants in 1985, 1986 and 1991, the plaintiff loaned the defendants $1,200,000, and the defendants granted the plaintiff a security interest in all the defendants' assets, including equipment, inventory, livestock and feed. The second of the letter agreements provided that, upon default, the defendants would voluntarily surrender possession of the collateral to the plaintiff. Despite the defendants' default on repayment of the loan, they refused to comply with the plaintiff's request for possession of the collateral. The plaintiff thereupon brought this action.

The plaintiff filed an application for a prejudgment remedy alleging that there was probable cause to believe that a judgment would be rendered against the defendants, and sought an order of the court "directing that the following prejudgment remedy be issued to secure the sum of One Million Five Hundred Thousand ($1,500,000.00) Dollars, to wit: To replevy the goods and chattels described on Exhibit AA attached hereto." Exhibit AA listed, in general terms, all the livestock, feed and equipment owned by the four defendants, and also listed, by model year and serial number, certain equipment owned by defendants Valley Farms and REM Motor Rental. Attached to the application was an eight page affidavit of Kevin C. Murphy, a vice president of the plaintiff, describing the transactions between the plaintiff and the defendants. Attached to the affidavit were copies of the various letter agreements, promissory notes, security agreements, and guaranties of the defendants. Also attached to the application was an unsigned writ, summons and complaint alleging, inter alia, that the defendants had wrongfully refused to turn the collateral over to the plaintiff, and requesting, in the prayer for relief, immediate possession of the collateral, monetary damages if the collateral could not be replevied to the plaintiff, damages for wrongful detention of the collateral, attorneys' fees, and other equitable relief.

Pursuant to an order of the trial court, the court conducted an evidentiary hearing on July 29, 1991. After the hearing, the trial court found probable cause that judgment would be rendered in the matter in favor of the plaintiff, and also found the total indebtedness of the defendants to the plaintiff to be $1,080,000. The court did not, however, issue an order of replevin. Instead, it continued the case for two weeks in order for the parties to file briefs on the defendants' claim that the property was exempt from a prejudgment remedy. Also, in response to an argument of the defendants, the court ruled that the plaintiff's application was defective because it lacked an affidavit of the actual value of the property to be replevied and a proper bond. See General Statutes § 52-518 as set out in footnote 3, supra. The court instructed the plaintiff to amend its application in order to remedy these defects.

The parties returned to court on August 12, 1991. Prior to that date, the plaintiff had filed an affidavit evaluating the collateral at $3,150,000, and a bond in the amount of $6,300,000, twice the value of the collateral. After oral arguments, the trial court granted the plaintiff's application. It ordered that the plaintiff could replevy the collateral to the value of $3,150,000. ⁴ This appeal followed.

I

We first consider the defendants' claim, rejected by the trial court, that the property sought to be replevied was exempt from prejudgment remedy attachment because it constituted "[t]ools, books, instruments and farm animals which are necessary to the exemptioner in the course of his or her occupation or profession." ⁵ General Statutes § 52-352b(b). ⁶ We agree with the trial court and the plaintiff that the exemptions from post-judgment remedies, and therefore from prejudgment attachment, afforded by General Statutes § 52-352b, apply only to "property of any natural person" under that statute and, therefore, do not apply to property of partnerships, like the defendants. ⁷

Section 52-352b, which is part of chapter 906, entitled "Postjudgment Procedures," exempts from postjudgment procedures certain "property of any natural person." Although the term "natural person" is not defined in chapter 906, it clearly means a human being, as opposed to an artificial or juristic entity. First, the types of property that are exempt under § 52-352b, other than the "[t]ools, books, instruments and farm animals" referred to in subsection (b), are the types normally associated with individuals, not legal entities. ⁸ Furthermore, the legislature has consistently used the term "natural person" in order to distinguish it from a partnership. See, e.g., General Statutes § 1-18a(c) (" 'Person' means natural person, partnership, association or society."); General Statutes § 33-374d(10) (" 'Person' means a natural person, company, partnership, foreign or domestic corporation, trust, unincorporated organization, government or any other entity or political subdivision, agency or instrumentality of a government...."); General Statutes § 34-9(12) (" 'Person' means a natural person, partnership, limited partnership, foreign limited partnership, trust, estate, association or corporation."). Finally, except where a word or phrase has a technical meaning or has acquired "a peculiar and appropriate meaning in the law," a statutory word or phrase "shall be construed according to the commonly approved usage of the language." General Statutes § 1-1(a). Consistent with that rule of construction, "natural person" means "a human being as distinguished in law from an artificial or juristic person." Webster's Third New International Dictionary.

We are unpersuaded by the defendants' argument that excluding partnerships from the exemption of § 52-352b would "render the exemption meaningless as applied to the few remaining small family farms" because "every family that owns and operates a farm collectively could be deemed to be a partnership...." Unlike these defendants, who have chosen to operate their farms in the partnership form, others remain free to own their farm assets in individual or joint ownership forms and thereby retain the statutory exemption available to natural persons. See, e.g., Gangl v. Gangl, 281 N.W.2d 574 (N.D.1979) (family farm not a partnership). These defendants presumably saw some legal advantage to operating the farms as partnerships. Having done so, they must accept any legal disadvantage that arises from the limitation of § 52-352b to property owned by a natural person.

II

We turn, therefore, to the defendants' principal claim, namely, that the statutory scheme for replevin of goods on its face fails to satisfy due process of law. The defendants identify three "procedural inadequacies in the statutory scheme" that, they argue, render the statutory scheme, and thus this replevin order, invalid: (1) an ex parte replevin is permitted upon a showing only of probable cause rather than of exigent circumstances; (2) General Statutes § 52-521 provides for a challenge to the amount and form of the bond only after the seizure has occurred; and (3) the statutes do not require that the property to be replevied be identified. Recognizing that, as the applicable statutes were interpreted and applied by the trial court in this case, each of these requirements was either met or was inapplicable, ⁹ the defendants argue that the statutes must be viewed facially, rather than as applied, because they "are unconstitutional in every application," and that, therefore, "the fact that the court was willing to give [the defendants] more process than the statutes authorize does not save the statutes from constitutional challenge." We disagree.

First, we reject the contention that we are required to gauge the constitutionality of our replevin statutes on their face without regard to the particular facts of this case or the interpretation placed on the statutory language by the trial court. "The United States Supreme Court has noted that to mount a facial challenge to a statute, one must establish that no set of circumstances exists under which the Act would be valid. The fact that the [Act] might operate unconstitutionally under some conceivable set of circumstances is insufficient to render it wholly invalid, since we have not recognized an 'overbreadth' doctrine outside the limited context of the First Amendment. Schall v. Martin, [467 U.S. 253, 269 n. 18, 104 S.Ct. 2403,...