Wilkinson v. Boats Unlimited, Inc.

• Decision Date: 13 February 1996
• Docket Number: No. 15239,15239
• Citation: 670 A.2d 1296,236 Conn. 78
• Court: Connecticut Supreme Court
• Parties: Jeffrey C. WILKINSON v. BOATS UNLIMITED, INC., et al.

Page 1296

670 A.2d 1296

236 Conn. 78

Jeffrey C. WILKINSON v. BOATS UNLIMITED, INC., et al.

No. 15239.

Supreme Court of Connecticut.

Argued Jan. 18, 1996.

Decided Feb. 13, 1996.

Eric Watt Wiechmann, with whom, on the brief, were William H. Narwold and George B. Wilkinson, Hartford, for appellant (defendant Bayliner Marine Corporation).

K. Wynne Bohonnon, with whom, on the brief, were R. William Bohonnon, Westport, David M. Bohonnon, New Haven, and John L. Senning, Essex, for appellee (plaintiff).

Before PETERS, C.J., and CALLAHAN, BORDEN, KATZ and PALMER, JJ.

PETERS, Chief Justice.

This appeal challenges the validity of a default judgment on the ground that the trial court rendering the judgment lacked personal jurisdiction over a foreign corporation. The plaintiff, Jeffrey C. Wilkinson, filed a complaint to recover damages for the loss of a vessel sold to him by the defendant Boats Unlimited, Inc. (Boats Unlimited), and manufactured by the defendant Bayliner Marine Corporation (Bayliner). The trial court, Arena, J., granted the plaintiff's motion for a default judgment against the defendants for failure to appear and, after a hearing in damages, rendered a judgment on March 26, 1992, against both defendants in the amount of $168,342.79. On October 18, 1994, Bayliner moved to set aside the default judgment rendered against it. The trial court, Stanley, J., denied Bayliner's motion. Bayliner then appealed to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199(c). We reverse the judgment of the trial court.

For the purpose of the present appeal, the record reveals the following pertinent facts. On June 22, 1989, the plaintiff purchased a vessel from Boats Unlimited, a Connecticut vendor, for $152,850. The vessel had been manufactured by Bayliner, a Delaware corporation with its principal place of business in the state of Washington. On August 20, 1989, while the plaintiff was boating on Long Island Sound, the vessel sank as a result of the explosion of its exhaust and muffler system. The plaintiff survived, but the vessel was not recovered. The plaintiff filed a claim against his insurance company, Middlesex Mutual Assurance Company (Middlesex), which paid him for the loss of the vessel. By virtue of this payment and an express contractual agreement, Middlesex, which is a Connecticut corporation, became subrogated to the plaintiff's rights to sue for all property damage resulting from the loss of the vessel.

On August 23, 1990, the plaintiff, then a resident of Connecticut, filed a personal injury action to recover damages arising out of the sinking. Bayliner appeared to defend against that action and removed it to federal court. In a deposition taken in conjunction with the federal action, the plaintiff stated under oath that he had moved his residency from Connecticut to the state of Pennsylvania in November, 1990. The federal action concluded in December, 1993, when a jury awarded the plaintiff nominal damages of $1.

On August 17, 1991, during the pendency of the personal injury action in federal court, Middlesex filed the present complaint for property damages in the name of the plaintiff. Although the nominal plaintiff was no longer a resident of Connecticut at that time, in the summons attached to the complaint his address was given as 32 Florence Avenue, Wallingford, Connecticut. Bayliner filed no appearance in this action. A default judgment was rendered against Bayliner on March 26, 1992.

After unsuccessfully attempting to levy on the default judgment in Connecticut, Middlesex, suing in the name of the plaintiff, brought an action on the judgment in the state of Washington, where Bayliner has its principal place of business. Bayliner defended against that suit by alleging, inter alia, that the Connecticut default judgment was void for lack of personal jurisdiction under General Statutes § 33-411(c) ¹ because the nominal plaintiff had not been a Connecticut resident when he filed his August 17, 1991 complaint. The Superior Court for Snohomish County agreed with Bayliner, but the Washington Appellate Court reversed, ruling that Bayliner had failed to establish that the nominal plaintiff had not been a resident of Connecticut at the relevant time. The Washington Appellate Court did not reach the nominal plaintiff's alternate ground that Middlesex, as a Connecticut corporate resident and as the nominal plaintiff's subrogee, could itself invoke § 33-411(c) as the real party in interest. Upon further appeal by Bayliner to the Supreme Court of Washington, that court granted a motion for review but stayed its action pending the decision of this court.

After the adverse ruling of the Washington Appellate Court, Bayliner moved the Connecticut trial court to set aside the default judgment. The trial court denied Bayliner's motion. The trial court agreed with Bayliner that, because the motion alleged an absence of personal jurisdiction, it could properly be filed even though more than four months had passed since the rendition of the default judgment. See General Statutes §§ 52-212 and 52-212a. ² On the merits of the motion, the trial court acknowledged the argument by Bayliner that a person such as the nominal plaintiff, who was not a resident of this state when the action was initiated, could not obtain jurisdiction over Bayliner, a foreign corporation, under § 33-411(c). The trial court also acknowledged the argument by Middlesex that the relevant residency was not that of the nominal plaintiff but that of Middlesex, the real party in interest, which conducts business within Connecticut. Without resolving either argument under § 33-411(c), the trial court held that the facts on the record established an alternate ground for jurisdiction over Bayliner under General Statutes § 33-411(b), which authorizes the exercise of long arm jurisdiction over "[e]very foreign corporation which transacts business in this state in violation of [General Statutes §§ ] 33-395 or 33-396...." ³

This appeal raises two issues. The first issue concerns the validity of the trial court's exercise of its authority to consider opening the default judgment after the expiration of the four month time period established by § 52-212. ⁴ The nominal plaintiff relies on this ground as an alternate basis for upholding the judgment of the trial court. The second issue concerns the validity of the trial court's construction of § 33-411(b) and the alternate arguments concerning the applicability of § 33-411(c) to sustain the exercise of jurisdiction over Bayliner in the factual circumstances of this case. We agree with Bayliner on both issues. As the trial court concluded, it had the authority to consider Bayliner's motion to open the default judgment. Contrary to the holding of the trial court, however, the default judgment was voidable for lack of personal jurisdiction over Bayliner and Bayliner's motion to set aside the default judgment therefore should have been granted.

I

Although §§ 52-212 and 52-212a ⁵ normally limit the authority to open judgments to a four month period, these statutes do not preclude the opening of a default judgment that is rendered without jurisdiction over a defendant. The prefatory words of § 52-212a establish that the four month limitation only operates "[u]nless otherwise provided by law...." As a matter of law, in the absence of jurisdiction over the parties, a judgment "is void ab initio and is subject to both direct and collateral attack." Broaca v. Broaca, 181 Conn. 463, 467, 435 A.2d 1016 (1980); Trichilo v. Trichilo, 190 Conn. 774, 777-78, 462 A.2d 1048 (1983). The trial court properly relied upon these principles in its inquiry into the jurisdictional underpinnings of the default judgment.

The nominal plaintiff claims that Bayliner was nonetheless not entitled to relief because Bayliner had delayed inequitably in filing its motion to set aside the default judgment. That contention is predicated on factual assumptions regarding the time when Bayliner had actual notice of the nominal plaintiff's nonresidency, but that claim was not distinctly presented to the trial court, and the trial court, therefore, made no finding as to this issue. ⁶ Even if such a fact had been established, however, the exercise of equitable authority is vested in the discretion of the trial court and is subject only to limited review on appeal. "We do not undertake a plenary review of the merits of a decision of the trial court to grant or to deny a motion to open a judgment. The only issue on appeal is whether the trial court has acted unreasonably and in clear abuse of its discretion." In re Baby Girl B., 224 Conn. 263, 294-95, 618 A.2d 1 (1992); Gillis v. Gillis, 214 Conn. 336, 340-41, 572 A.2d 323 (1990); Celanese Fiber v. Pic Yarns, Inc., 184 Conn. 461, 467, 440 A.2d 159 (1981). On the record before us, we are persuaded that the trial court did not abuse its discretion in addressing the merits of Bayliner's jurisdictional attack on the default judgment rendered against it.

II

The principal issue before the trial court, and before us on appeal, is whether the default judgment rendered against Bayliner should be set aside because of the alleged absence of personal jurisdiction over Bayliner as a foreign corporation. This issue has two parts. First, Bayliner argues that the trial court improperly found personal jurisdiction under § 33-411(b). Second, Bayliner argues that the trial court could not properly have found personal jurisdiction under § 33-411(c) because, when the action was initiated, the nominal plaintiff did not satisfy the statutory requirement of being a resident of this state. As a rejoinder to this argument, the nominal plaintiff contends that the trial court properly could have found personal jurisdiction under § 33-411(c) because the relevant residency is that of the real party in interest, Middlesex, which can satisfy...