Starboard Res., Inc. v. Henry

• Decision Date: 25 February 2020
• Docket Number: AC 41922
• Citation: 228 A.3d 1042,196 Conn.App. 80
• Court: Connecticut Court of Appeals
• Parties: STARBOARD RESOURCES, INC. v. Charles HENRY III, et al.

196 Conn.App. 80

228 A.3d 1042

STARBOARD RESOURCES, INC.

v.Charles HENRY III, et al.

AC 41922

Appellate Court of Connecticut.

Argued October 18, 2019

Officially released February 25, 2020

Richard S. Gora, Stamford, with whom, on the brief, was Nicole O'Neil, for the appellants (defendant Gregory Imbruce et al.).

David W. Rubin, Stamford, with whom, on the brief, was Jonathan D. Jacobson, for the appellees (Bradford Higgins et al.).

Lavine, Prescott and Moll, Js.

MOLL, J.

In this interpleader action, the Imbruce parties¹ appeal from the trial court's interlocutory judgment of interpleader. On appeal, the Imbruce parties claim that the trial court (1) does not have subject matter jurisdiction over this interpleader action because the plaintiff, Starboard Resources, Inc., lacks standing, (2) erroneously denied the defendant Giddings Investments, LLC's motion to dismiss this interpleader action as moot, (3) improperly rendered the interlocutory judgment of interpleader, and (4) erroneously granted a motion to remand the matter to the arbitrator who had entered an award in an arbitration involving the Imbruce parties and the SOSventures parties.² We affirm the judgment of the trial court.

The following facts, as found by the trial court, Genuario, J. , in a memorandum of decision dated April 11, 2016, as set forth by this court in a prior appeal, and/ or as undisputed in the record, and procedural history are relevant to our resolution of this appeal. This interpleader action "arise[s] out of the ... investment [by Charles Henry III, Ahmed Ammar, John P. Vaile, John Paul Otieno, William Mahoney, Giddings Oil & Gas, L.P., Hunton Oil Partners, L.P., ASYM Energy Fund III, L.P., SOSventures, LLC, Bradford Higgins, Edward M. Conrads, and Robert J. Conrads (Henry parties) ]³ in three limited partnerships: Giddings Oil & Gas, L.P. (Giddings, L.P.), Hunton Oil Partners, L.P. (Hunton, L.P.), and ASYM Energy Fund III, L.P. (ASYM, L.P.). [The Henry parties] are investors and limited partners in each of these limited partnerships. Each of the limited partnerships had a general partner [that] is a limited liability company: Giddings Genpar, LLC (Giddings Genpar), Hunton Oil Genpar, LLC (Hunton Genpar), and ASYM [Capital] III, LLC (ASYM Genpar), respectively. Each of the limited liability companies that served as a general partner of a limited partnership had a manager; the manager of Giddings Genpar was Giddings Investments, LLC, the manager of Hunton Genpar was Glenrose Holdings, LLC, and the manager of ASYM Genpar was ASYM Energy Investments, LLC." (Footnote added; internal quotation marks omitted.) Henry v. Imbruce , 178 Conn. App. 820, 823–24, 177 A.3d 1168 (2017).

In July, 2012, the Henry parties commenced two actions,⁴ which were later consolidated, against the Imbruce parties and the plaintiff. See Henry v. Imbruce , Superior Court, judicial district of Stamford-Norwalk, Complex Litigation Docket, Docket Nos. X08-CV-12-5013927-S and X08-CV-12-6014987-S (Henry actions).⁵ "The [Henry parties] in their complaint alleged that ... Gregory Imbruce ... exercised complete control over the managers and therefore over the general partners and over the limited partnerships.... In their second amended complaint⁶ ... the [Henry parties] alleged various fact patterns pursuant to which they asserted that the ... [Imbruce parties had] made misrepresentations in the marketing of the investments, that the ... [Imbruce parties had] violated the provisions of the Connecticut Uniform Securities Act (CUSA), [ General Statutes § 36b-2 et seq. ], and that the ... [Imbruce parties had] wrongfully diverted assets of the various limited partnerships to their own purposes or accounts. The second amended complaint sound[ed] in [eleven] counts [that] [sought] both injunctive relief and monetary damages, alleging counts that sound[ed] in fraud, breach of fiduciary duty, conversion, civil theft, and violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110b et seq., among other theories of relief. The prayer for relief in the second amended complaint [sought] both equitable relief and monetary damages." (Footnote in original; internal quotation marks omitted.) Henry v. Imbruce , supra, 178 Conn. App. at 824, 177 A.3d 1168.

In August, 2012, pursuant to General Statutes § 52-484,⁷ the plaintiff commenced this interpleader action.

In its complaint, the plaintiff alleged that a dispute had arisen between the various defendants regarding who was entitled to the ownership of certain common stock shares of the plaintiff (shares). The plaintiff further alleged that it had no beneficial interest in the shares and that it was willing to disburse the shares to whomever lawfully was entitled to receive them. As relief, the plaintiff sought an interlocutory judgment of interpleader, a discharge of its liabilities upon disbursement of the shares, and attorney's fees.

"On July 11, 2014, the court granted [a] motion of the ... [Imbruce parties] to stay [the Henry actions and this interpleader action] pending completion of arbitration proceedings, some of which had already begun.... Consistent with the court order staying [the actions], the parties proceeded to arbitration and by subsequent agreement broadened the arbitration beyond that which they had previously agreed to in their limited partnership agreements. The parties proceeded with the arbitration before a single arbitrator.

"On September 10, 2015, the arbitrator rendered an award in favor of the [Henry parties], who as respondents in the arbitration proceeding had filed a counterclaim, including allegations similar in nature to the allegations of the second amended complaint previously described. The award consisted of declaratory awards, monetary damages, awards of [attorney's] fees, interest, injunctive relief requiring an accounting, postjudgment interest, as well as awards of arbitration fees and costs.

"On September 14, 2015, the [Henry parties] filed a motion in the trial court to confirm the arbitration award. On October 13, 2015, the [Imbruce parties] filed an objection to the [Henry parties'] motion to confirm the award and a cross motion to vacate the award accompanied by scores of exhibits. A flurry of procedural and substantive filings followed, until, on February 8, 2016, the court held a hearing on the parties' respective motions. The court, after further briefing, rendered judgments in accordance with the arbitrator's decision on April 11, 2016, confirming the arbitral award." (Footnote omitted; internal quotation marks omitted.) Id., at 825–26, 177 A.3d 1168. The Imbruce parties appealed from the judgments confirming the arbitration award, which this court affirmed on December 26, 2017. Id., at 844, 177 A.3d 1168.

On November 29, 2017, in this interpleader action, the Henry parties filed a motion for an interlocutory judgment of interpleader. Predicated on their belief that, pursuant to the arbitration award, they were the rightful owners of the shares, the Henry parties sought, inter alia, an interlocutory judgment of interpleader and an order granting a separate motion filed by the Henry parties for leave to effect a sale of the shares. The same day, the Henry parties filed a separate motion requesting that, in the event that the trial court construed the arbitration award to be ambiguous as to the ownership of the shares, the court remand the matter to the arbitrator for clarification regarding the ownership of the shares (motion to remand). The Imbruce parties objected to both motions.

On December 29, 2017, Giddings Investments, LLC, filed a motion to dismiss this interpleader action⁸ on the ground that it had become moot because, in its view, the arbitrator had denied the Henry parties' claim to the ownership of the shares and, therefore, no adverse claim to the shares existed. The Henry parties objected to the motion.

On July 24, 2018, after having heard argument from the parties on July 20, 2018, the trial court, Lee, J. , issued orders (1) denying Giddings Investments, LLC's motion to dismiss, (2) granting the Henry parties' motion for an interlocutory judgment of interpleader, and (3) granting the Henry parties' motion to remand. This appeal followed.⁹ Additional facts and procedural history will be set forth as necessary.¹⁰

I

We first address the Imbruce parties' claim that the trial court lacks subject matter jurisdiction to entertain this interpleader action because the plaintiff lacks standing. More specifically, the Imbruce parties assert that the plaintiff's transfer agent,¹¹ a nonparty, is in possession of the shares, thereby depriving the plaintiff of standing to maintain this interpleader action. We are not persuaded.

As a preliminary matter, we note that the Imbruce parties are raising this standing claim for the first time on appeal. "If a party is found to lack standing, the court is without subject matter jurisdiction to determine the cause.... [A] claim that a court lacks subject matter jurisdiction may be raised at any time during the proceedings ... including on appeal .... Because the ... claim implicates the trial court's subject matter jurisdiction, we conclude that it is reviewable even though [it has been] raised ... for the first time on appeal.... The issue of whether a party had standing raises a question of law over which we exercise plenary review....

"Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he [or she] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy.... When standing is put in issue, the question is whether the person whose standing is challenged is a proper party to request an adjudication of the issue ...." (Citations omitted; internal quotation marks omitted.)

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