SOSV Investments, LLC v. Henry
| Decision Date | 09 January 2020 |
| Docket Number | FSTCV196044151S |
| Court | Connecticut Superior Court |
| Parties | SOSV Investments, LLC et al. v. Charles Henry, III |
UNPUBLISHED OPINION
Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Krumeich, Edward T., J.
Defendant has moved to strike the complaint in this declaratory judgment action for failure to join persons who defendant asserts are indispensable parties.[1] For the reasons stated below, the motion is denied.
Practice Book § 17-56 provides:
This action seeks a declaration that former limited partners, who were signatories to an agreement dated February 10, 2014 (the "Agreement") that provided inter alia for sharing legal fees and costs incurred in certain litigation concerning their dissolved partnerships and indemnification (1) are liable to reimburse a pro rata share of said fees and costs paid by plaintiff SOSV Investments, LLC ("SOSV"), and (2) that this obligation was not referred to or superseded by the indemnification provision in the same agreement. The complaint alleges defendant Henry, a limited partner, became the general partner of the partnerships and, along with most of the partners, was party to the Agreement. Henry is the only defendant to this action the other limited partners who were parties to the Agreement were served with notice of the action pursuant to Practice Book § 17-56(b) but are not parties to this action.[2] Henry argues that merely providing notice of suit pursuant to the Practice Book is insufficient and the complaint must be stricken because the limited partner signatories are indispensable parties.
In Sturman v. Socha, 191 Conn. 1, 6-7 (1983), the Supreme Court discussed when a person was an indispensable party to a law suit:
Parties have been characterized as "indispensable" when they "not only have an interest in the controversy, but an interest of such a nature that a final decree cannot be made without either affecting that interest, or leaving the controversy in such condition that its final termination may be wholly inconsistent with equity and good conscience." ... Necessary parties, however, have been described as (Citations omitted).
In 98 Lords Highway, LLC v. 100 Lords Highway, LLC, 138 Conn.App. 776, 786 (2012), the Appellate Court reaffirmed that a non-party generally is not affected by a declaratory judgment:
[A] person who is not a party generally will not be bound by a declaratory ruling ... [A]n interested person who is not notified of the action is subject only to the stare decisis impact of the judgment ... [When] the interested person’s circumstances are sufficiently different from those of the parties, the parties’ representation of the nonparty’s interests may have been weak, but the case will have less precedential effect on the interested person and any future action to which that person may be a party.
In 98 Lords Highway, the Appellate Court cited the Supreme Court’s decision in Batte-Holmgren v. Commissioner of Public Health, 281 Conn. 277, 288-89 (2007), for the proposition that failure to join an indispensable party may implicate due process concerns even though the non-party’s rights or obligations are not directly adjudicated:
While failure to join indispensable parties generally does not implicate a court’s subject matter jurisdiction, such failure "may implicate due process concerns that would compel a court to require notice or joinder before proceeding with the action." Batte-Holmgren v. Commissioner of Public Health, supra, 281 Conn. at 289 ... Batte-Holmgren v. Commissioner of Public Health, supra, at 289-90 ...
In the Batte-Holmgren case the Supreme Court examined due process considerations where, unlike here, interested parties were not given notice of a declaratory judgment action:
Having concluded that failure to provide notice, like noncompliance with the joinder rules, is nonjurisdictional, we also conclude that failure to provide notice, like nonjoinder, may implicate due process concerns that would compel a court to require notice or joinder before proceeding with the action. "[A] court may refuse to proceed with litigation if a claim cannot properly be adjudicated without the presence of those indispensable persons whose substantive rights and interests will be necessarily and materially affected by its outcome ... Joinder of indispensable parties is mandated because due process principles make it essential that [such parties] be given notice and an opportunity to protect [their] interests by making [them] a party to the [action]." ... Thus, we now consider whether this action should be remanded for such a purpose, or whether we may proceed with this appeal consistent with the dictates of due...
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