Lynn v. Bosco ( 2018 )

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JACK E. LYNN ET AL. v. ROBERT J.
BOSCO, SR., ET AL.
(AC 39172)
Prescott, Elgo and Norcott, Js.
Syllabus
The plaintiffs sought, inter alia, a declaratory judgment determining whether
their preemptive rights as shareholders of stock in the defendant corpo-
ration, A Co., were violated in connection with the sale and distribution
of 141 shares of A Co.’s treasury stock to the individual defendants, B,
P, R and W, who constituted A Co.’s board of directors. In their com-
plaint, the plaintiffs alleged that the individual defendants had breached
their fiduciary duties to the plaintiffs by self-dealing and had violated the
plaintiffs’ preemptive rights as shareholders. The individual defendants
moved to strike the complaint on the ground that the plaintiffs had
failed to join a necessary party, A Co., as a defendant. In response, the
plaintiffs filed a motion to cite in A Co. as a defendant for the purpose
of notice only, which the trial court granted. The plaintiffs then filed
an amended complaint, which named A Co. as a defendant but did not
include any allegations against or seek relief from it. Thereafter, the
trial court denied the motion to strike, and the individual defendants
filed an answer, special defenses and a counterclaim, but did not assert
a cross claim against or seek any relief from A Co. Halfway through
the first day of the trial, the court, without objection, released A Co.’s
counsel from attending the remainder of the proceedings because he
had no active role in the litigation, as A Co. was not an adversarial
party. Following the trial, the court rendered judgment in favor of the
plaintiffs in part, finding that their preemptive rights had been violated
by the sale of the shares of A Co.’s treasury stock to the individual
defendants and that B, P and W had engaged in self-dealing by awarding
themselves bonuses in connection with that transaction. The court con-
cluded that the plaintiffs were entitled to equitable relief and requested
that the parties submit proposed remedies but did not indicate that they
should address what role A Co. should play, if any, at the remedy stage.
Thereafter, the court ordered, inter alia, that the subject transaction be
set aside and that A Co. reimburse the present owners of the 141 shares
of stock. On A Co.’s appeal to this court, held that the trial court did
not have the authority to order equitable relief that imposed a remedy
on A Co., as A Co. had no notice that such relief would enter against
it, resulting in unfair surprise to it: the court’s order was inconsistent
with the issues as framed in the pleadings, which did not include any
allegations of wrongdoing against A Co. or seek any relief from it, and
with its finding that B, P and W had engaged in self-dealing in connection
with the subject transaction, and there was nothing in the record that
indicated that the parties litigated the case as if the court might order
A Co. to reimburse the owners of the 141 shares of stock, as the conduct
of counsel and the court during and immediately following the trial was
consistent with the pleadings, in that they did not act as if the parties
had made any allegations against or sought relief from A Co.; moreover,
when the court, without objection, excused A Co.’s counsel on the first
day of the trial, the parties effectively acknowledged that his presence
was unnecessary given the posture of the case, and A Co. relied on the
state of the pleadings in opting not to participate further in the trial.
Argued November 16, 2017—officially released May 29, 2018
Procedural History
Action for, inter alia, a declaratory judgment
determining whether the plaintiffs’ preemptive rights
were violated in connection with the sale of certain
shares of stock, and for other relief, brought to the
Superior Court in the judicial district of New Britain,
where the court, Robaina, J., granted the plaintiffs’
motion to cite in Aerospace Techniques, Inc., as a defen-
dant; thereafter, the named defendant et al. filed a coun-
terclaim; subsequently, the matter was tried to the
court, Hon. Lois Tanzer, judge trial referee; judgment
in part for the plaintiffs on the complaint and on the
counterclaim; thereafter the court, Hon. Lois Tanzer,
judge trial referee, issued a certain order, from which
the plaintiffs and the defendant Aerospace Techniques,
Inc., appealed to this court. Appeal dismissed in part;
judgment reversed in part; further proceedings.
Richard P. Weinstein, with whom, on the brief, was
Sarah Black Lingenheld, for the appellants (defendant
Aerospace Techniques, Inc., and plaintiffs).
Dale M. Clayton, for the appellee (defendant Richard
B. Polivy).
Megan Youngling Carannante, with whom, on the
brief, were Eliot B. Gersten and Johanna S. Katz, for
the appellee (named defendant).
Opinion
ELGO, J. This case is about the propriety of a judicial
remedy binding a company that had been cited in as a
party by the plaintiffs, Jack E. Lynn and Jeffrey Lynn,
for notice purposes only and against whom no allega-
tions had been pleaded. The defendant Aerospace Tech-
niques, Inc. (company),1 appeals from the January 11,
2016 judgment of the trial court ordering the company
to pay the owners of 141 shares of treasury stock issued
to the defendants Clyde E. Warner,2 Robert J. Bosco,
Sr. (Bosco), Anthony Parillo, Jr., and Richard B. Polivy3
in exchange for the return of the 141 shares to the
company. The company claims that the trial court acted
beyond the scope of its authority by entering an order
that imposed a remedy on the company, although nei-
ther party made any allegations against or sought relief
from the company in the operative complaint. We agree
and, accordingly, reverse the judgment of the trial court.
The following facts and procedural history are rele-
vant to this appeal. In 1965, Jack Lynn and two other
individuals incorporated the company under the laws of
Connecticut. Jack Lynn was chairman of the company’s
board of directors (board) from that time until 2011.
In June, 2011, the board, then consisting of Jack Lynn,
Bosco, and Warner, met.4 The board voted to reaffirm
Polivy as the company’s corporate counsel. Bosco and
Warner then voted for Bosco to replace Jack Lynn as
chairman and for Bosco and Warner to replace Jack
Lynn and Jeffrey Lynn in their respective positions as
officers of the company. In October, 2011, Jack Lynn
sent a letter to all shareholders of the company, indicat-
ing that he and Jeffrey Lynn needed thirty-nine shares
of stock to exceed 50 percent ownership of the com-
pany, and offering to purchase the first forty-one shares
offered to him. Later that month, at the annual share-
holder meeting, Jack Lynn was removed from the board,
which then was reconstituted with Bosco, Warner, Pari-
llo, and Polivy as directors.
On December 8, 2011, shareholder Joseph R. Dube
sent a letter to Bosco, offering to sell his 141 shares to
Bosco if the company did not purchase them. At a board
meeting on December 14, 2011, the board agreed to
seek approval from its bank for the company to pur-
chase Dube’s shares and agreed to reissue the shares
at $2000 per share, to be sold and distributed as follows:
forty-seven shares to Bosco, forty-seven shares to Pari-
llo, forty-six shares to Polivy, and one share to Warner
(Dube transaction). The plaintiffs were not aware of
the transaction. After receiving the bank’s approval, the
company paid Dube $100,000 and issued him a promis-
sory note for the outstanding balance of $82,000 in
exchange for his 141 shares of stock. Bosco, Parillo,
and Polivy each provided a promissory note to the com-
pany in exchange for their respective allocation of the
shares, agreeing to pay the company in three install-
ments. As the first installment, Bosco and Parillo each
promised to pay $32,900, and Polivy promised to pay
$32,200. Warner paid the $2000 he owed in cash.
At the December 14, 2011 meeting, the board also
agreed to award and pay performance bonuses of
$32,900 to Bosco, $32,900 to Parillo, and $2000 to War-
ner.5 During the repayment period for their promissory
notes, the board awarded additional bonuses to Bosco,
Parillo, and Warner of approximately $100,000 each.
Polivy never received a bonus.6
In December, 2012, the plaintiffs filed a two count
complaint against the remaining shareholders.7 The
plaintiffs claimed that Bosco, Parillo, Polivy, and War-
ner (individual defendants) (1) acquired stock from the
company in violation of the plaintiffs’ preemptive rights
as stockholders and (2) breached their fiduciary duties
to the plaintiffs by self-dealing and violating the plain-
tiffs’ preemptive rights. The initial complaint did not
name the company as a party.
In January, 2013, the individual defendants moved to
strike the plaintiffs’ complaint, arguing, in part, that
‘‘the plaintiffs fail[ed] to join a proper and necessary
party defendant for the declarative judgment sought
. . . . [The company] is a necessary party to any declar-
atory judgment regarding the preemptive rights held by
its shareholders and any constructive trust that may
(or may not) be created based on the defendants’
alleged ‘self-dealing.’ Additionally, . . . [the company]
is the entity which could grant and/or deny the plaintiffs
preemptive rights, not the individual defendants.’’ In
response, the plaintiffs moved to add the company as
a party defendant, arguing that although ‘‘the plaintiffs
believe that the issue of whether [the company] is a
necessary party may be debatable, in the interests of
moving this case along the plaintiffs ask the court to
grant their motion to cite in [the company] as a party
defendant.’’
The court, Robaina, J., granted the plaintiffs’ motion,
and the plaintiffs filed an amended complaint, naming
the company as a defendant with respect to their claim
of a violation of preemptive rights only.8 The amended
complaint did not include any allegations against or
seek relief from the company. The court, Hon. Jerry
Wagner, judge trial referee, thereafter denied the indi-
vidual defendants’ motion to strike, noting in its memo-
randum of decision that they had conceded that their
argument regarding the plaintiffs’ failure ‘‘to join a
proper and necessary party defendant was moot.’’ In
October, 2013, the individual defendants filed their
answer to the plaintiffs’ complaint, therein asserting
several affirmative and special defenses, and a two
count counterclaim against the plaintiffs. The individual
defendants did not assert a cross claim against or seek
any relief from the company.
In February, 2014, the company moved to strike the
plaintiffs’ complaint for failure ‘‘to state a cause of
action against’’ it. The plaintiffs opposed the company’s
motion, noting that the company’s ‘‘participation in this
case is at the insistence of its board of directors,’’ the
individual defendants in this case. The plaintiffs noted
that the complaint ‘‘merely identifies [the company] as
an additional defendant in its count one in recognition
of the fact that [the company] is, in essence, a mere
stakeholder upon the plaintiff’s claims, including for
declaratory relief, to validate its preemptive rights in
[the company’s] stock . . . .’’ The plaintiffs clarified
that the company ‘‘is not accused of wrongdoing since
its actions were only by virtue of the actions of the
individual defendants.’’ The court, Abrams, J., denied
the company’s motion to strike, and the company
remained named as a defendant.
In May, 2014, the case proceeded to trial. At the com-
mencement of the first day of the two day trial, the
court, Hon. Lois Tanzer, judge trial referee, asked the
parties about the status of the company’s motion to
strike. The plaintiffs’ counsel explained that the motion
had been denied and that the court had decided that
‘‘because it’s a declaratory judgment action there
doesn’t need to be adversity against the [company],
but it should have formal notice or be joined so the
[company] is here.’’ The plaintiffs’ counsel further
stated: ‘‘I did speak to [Mark Block, the company’s
counsel]. It’s my understanding that he’s here to repre-
sent the [company], but I maintain we are not adverse
to the [company]. It’s my understanding he’s not an
active participant.’’ Attorney Block clarified ‘‘that as an
indispensable party, the [company] should be afforded
an opportunity to participate in the proceedings,’’ and
therefore reserved that right. The court noted that it
believed that the company was brought in so that it
could ‘‘protect [its] interest.’’ Halfway through the first
day of the trial, Attorney Block stated: ‘‘[M]y appearance
on behalf of the [company] was as a necessary party
to a declaratory judgment act, and I have no active
role in the litigation, and I’ve discussed the same with
counsel. They have no objection to my being released
from the rest of the trial since there’s no active role I
intend to take at this point.’’ The parties did not object.
The plaintiffs’ counsel further stated that ‘‘it’s just an
added expense for the [company] which I think under
the circumstances is not even necessary.’’ The court
released Attorney Block, and he was not present for
the remainder of the trial.
Importantly, after the trial concluded on May 16, 2014,
but before the court rendered judgment, Warner rea-
ligned himself with the plaintiffs, and, as a result, by
October 10, 2014, the plaintiffs had become majority
shareholders and regained control of the company’s
affairs. Prior to Warner’s realignment, collectively, the
plaintiffs held 950 shares, and the defendants held 1026
shares, of which 605 belonged to Warner. When Warner
‘‘teamed [up] with the [plaintiffs],’’ he and the plaintiffs
became majority shareholders, together holding 1555
shares, and the remaining defendants holding 421
shares.
On November 4, 2014, the plaintiffs moved to reopen
the evidence, arguing that this reorganization provided
them with ‘‘access [to] . . . some substantially damag-
ing evidence which had otherwise been concealed and
unknown to the plaintiffs and even to . . . Warner in
regard to the conduct of Parillo, Polivy, and Bosco
. . . .’’ Soon thereafter, Attorney Block moved to with-
draw his appearance, noting that he had been
‘‘requested to enter an appearance on behalf of the
company to protect the interests of the company
although the only allegations were against the individual
defendants,’’ and that the reorganization put him ‘‘in
the position of representing a corporation which is now
suing its controlling shareholders . . . .’’9 As the com-
pany’s controlling shareholders, the plaintiffs did not
hire a new attorney to represent the company’s inter-
ests. In February, 2015, the court held a hearing on the
plaintiffs’ motion to reopen. The plaintiffs argued that
the new information would ‘‘demonstrate that the testi-
mony given to the court was not . . . accurate, not
forthright in regard to the financial conditions of the
company.’’ On March 23, 2015, the court denied the
motion, reasoning that the evidence proffered related
‘‘to the credibility of testimony and evidence relating
to the financial conditions of [the company] at the time
of the events complained of in the pleadings and not
related to issues of a substantive or material nature.’’
That same day, the court issued its memorandum of
decision, in which it ruled in favor of the plaintiffs
on count one of the complaint and for the individual
defendants on count two.10 At the outset, the court
noted that the company and Bosco, Jr., were ‘‘named
as defendants in count one only and only for the purpose
of notice.’’ The court then found that the 141 shares of
stock that the company reacquired from Dube and then
sold to the individual defendants had been subject to
preemptive rights. The court thus concluded that the
Dube transaction violated the plaintiffs’ preemptive
rights.11 The court also found that Bosco, Parillo, and
Warner had engaged in self-dealing by awarding them-
selves bonuses in connection with the Dube transaction
but that, nevertheless, the plaintiffs had failed to satisfy
all of the elements for a cause of action for breach of
fiduciary duty. Specifically, the plaintiffs did not show
that they had suffered damages or that any such dam-
ages were caused by the individual defendants’ actions.
Upon determining that the plaintiffs were entitled to
equitable relief for the violation of their preemptive
rights, the court ordered all parties to submit proposed
remedies regarding disposition of the 141 Dube shares,
noting that ‘‘[a]side from the form of remedy, there are
questions concerning whether payment or reimburse-
ment by the plaintiffs and/or to the defendants will be
required and, if so, at what per share price.’’
The plaintiffs, as well as Polivy and Parillo, filed pro-
posed remedies. In April, 2015, the plaintiffs proposed
that the 141 shares should be returned to the company
as treasury stock and that the individual defendants
should not receive payment for returning their shares
because their ‘‘source of payment for the shares was
the [company] itself through the self-dealing of the [indi-
vidual] defendants.’’ Additionally, the plaintiffs argued
that ‘‘[i]n the event the court rejects this approach as
to payment . . . the determination of whether or not
payment is to be made to the [individual] defendants
should await an adjudication of the [other] case’’ pend-
ing between these parties. See Lynn v. Bosco, Superior
Court, judicial district of Hartford, Docket No. CV-14-
6063040-S (Lynn II).12 In July, 2015, Parillo proposed
‘‘that the [c]ourt order rescission of the [individual]
defendants’ purchase of the Dube shares from [the com-
pany], with the shares returned to [the company’s] trea-
sury and [the company] simultaneously returning the
consideration the [individual] defendants paid for these
shares.’’ Similarly, Polivy proposed that, upon his return
of his shares to the company, the company should pay
him the $92,000 he paid out of his personal funds for
the shares. The plaintiffs responded that if the court
ordered the company to return the $92,000 to Polivy,
that money should be held in escrow until Lynn II
was resolved.
In December, 2015, the court held a hearing on the
issue. In response to Polivy’s and Parillo’s proposed
remedies, the plaintiffs argued that ‘‘there are no allega-
tions in this case against the [company] and the idea
of [the court] just being able to award money or order
money from the [company] to be paid to one of the
defendants without the [company] being named and
given an opportunity to appear in regard to those issues
. . . would be improper in this case.’’ The plaintiffs
suggested that the appropriate remedy would be for
the court ‘‘to void the . . . transfer to the individual
defendants and then the individual defendants can pur-
sue the [company]’’ for reimbursement.
On January 11, 2016, the court ordered that (1) the
Dube transaction be set aside, (2) the 141 shares be
restored to the company’s treasury, (3) the company
reimburse the owners of the 141 shares, and (4) whether
to leave the 141 shares as treasury stock or to sell them
be decided at the discretion of the board.
In response, counsel for the company filed an appear-
ance on January 26, 2016, and a motion for the court
to reconsider paragraph 3 of its order, reminding the
court that the company had been ‘‘named as a party
only for notice purposes in the litigation pursuant . . .
to the demand of the defendants’’ and that there had
been no ‘‘allegations made against the [company] or
any request for relief sought against the [company].’’
Polivy, Parillo, and Bosco objected to that motion. Fol-
lowing a hearing, the court sustained their objections
and denied the company’s motion to reconsider, reason-
ing that ‘‘the relief sought did include equitable relief
and that’s the way the order was fashioned. Also, with
respect to notice for [the company] in this case, for
notice purposes, and there was actual and constructive
notice.’’ The plaintiffs and the company appealed from
the court’s January 11, 2016 order.13
On appeal, the company claims that the trial court
acted beyond the scope of its authority by entering an
order that imposed a remedy on the company despite
the fact that none of the pleadings contained any allega-
tions against or sought relief from the company. In
response, Bosco and Polivy14 argue that the court did
not err because the plaintiffs had asked for declaratory
judgments concerning ownership rights to the com-
pany’s stock and equitable relief and that the remedy
granted was within this prayer for relief.15 We agree
with the company.
We begin by setting forth the applicable standard of
review and relevant law. ‘‘Any determination regarding
the scope of a court’s subject matter jurisdiction or its
authority to act presents a question of law over which
our review is plenary.’’ Tarro v. Mastriani Realty, LLC,
142 Conn. App. 419, 431, 69 A.3d 956, cert. denied, 309
Conn. 912, 69 A.3d 309 (2013). Generally, ‘‘it is clear
that [t]he court is not permitted to decide issues outside
of those raised in the pleadings.’’ (Internal quotation
marks omitted.) Moulton Brothers, Inc. v. Lemieux, 74
Conn. App. 357, 361, 812 A.2d 129 (2002); see also
Stafford Higgins Industries, Inc. v. Norwalk, 245 Conn.
551, 575, 715 A.2d 46 (1998) (‘‘ordinarily a court may
not grant relief on the basis of an unpleaded claim’’);
Willametz v. Guida-Seibert Dairy Co., 157 Conn. 295,
302, 254 A.2d 473 (1968) (‘‘[i]t is fundamental in our
law that the right of a plaintiff to recover is limited to
the allegations of his complaint’’ [internal quotation
marks omitted]). When reviewing the court’s decisions
regarding the interpretation of pleadings, ‘‘[t]he com-
plaint must be read in its entirety in such a way as to
give effect to the pleading with reference to the general
theory upon which it proceeded, and do substantial
justice between the parties. . . . Our reading of plead-
ings in a manner that advances substantial justice
means that a pleading must be construed reasonably,
to contain all that it fairly means, but carries with it
the related proposition that it must not be contorted
in such a way so as to strain the bounds of rational
comprehension.’’ (Internal quotation marks omitted.)
Provenzano v. Provenzano, 88 Conn. App. 217, 225, 870
A.2d 1085 (2005).
‘‘Pleadings have an essential purpose in the judicial
process.’’ (Internal quotation marks omitted.) Abdo v.
Abdulrahman, 144 Conn. App. 574, 581, 74 A.3d 452(2013). For instance, ‘‘[t]he purpose of the complaint
is to put the defendants on notice of the claims made, to
limit the issues to be decided, and to prevent surprise.’’
(Internal quotation marks omitted.) KMK Insulation,
Inc. v. A. Prete & Son Construction Co., 49 Conn. App.
522, 526, 715 A.2d 799 (1998). ‘‘[T]he concept of notice
concerns notions of fundamental fairness, affording
parties the opportunity to be apprised when their inter-
ests are implicated in a given matter.’’ (Internal quota-
tion marks omitted.) Grovenburg v. Rustle Meadow
Associates, LLC, 174 Conn. App. 18, 82–83, 165 A.3d
193 (2017). ‘‘Whether a complaint gives sufficient notice
is determined in each case with reference to the charac-
ter of the wrong complained of and the underlying pur-
pose of the rule which is to prevent surprise upon the
defendant.’’ (Internal quotation marks omitted.) Ted-
esco v. Stamford, 215 Conn. 450, 459, 576 A.2d 1273(1990).
‘‘[I]t is imperative that the court and opposing counsel
be able to rely on the statement of issues as set forth
in the pleadings. . . . [A]ny judgment should conform
to the pleadings, the issues and the prayers for relief.’’
(Internal quotation marks omitted.) Abdo v. Abdulrah-
man, supra, 144 Conn. App. 581; see also Kawasaki
Kisen Kaisha, Ltd. v. Indomar, Ltd., 173 Conn. 269,
272, 377 A.2d 316 (1977). ‘‘[A] plaintiff may not allege
one cause of action and recover upon another.’’ Foun-
tain Pointe, LLC v. Calpitano, 144 Conn. App. 624, 642,
76 A.3d 636, cert. denied, 310 Conn. 928, 78 A.3d 147(2013). ‘‘The requirement that claims be raised timely
and distinctly . . . recognizes that counsel should not
have the opportunity to surprise an opponent by inter-
jecting a claim when opposing counsel is no longer in
a position to present evidence against such a claim.’’
Swerdloff v. AEG Design/Build, Inc., 209 Conn. 185,
189, 550 A.2d 306 (1988).
‘‘[G]enerally . . . the allegations of the complaint
provide the measure of recovery, and . . . the judg-
ment cannot exceed the claims pleaded, including the
prayer for relief. . . . These requirements . . . are
based on the principle that a pleading must provide
adequate notice of the facts claimed and the issues to be
tried. . . . The fundamental purpose of these pleading
requirements is to prevent surprise of the defendant.
. . . The purpose of these general pleading require-
ments is consistent with the notion that the purpose of
specific pleading requirements . . . is to promote the
identification, narrowing and resolution of issues
before the court.’’ (Citations omitted; internal quotation
marks omitted.) Todd v. Glines, 217 Conn. 1, 9–10, 583
A.2d 1287 (1991).
‘‘[If] the plaintiffs’ prayer for relief seeks not only a
declaratory judgment but also general equitable relief,
the plaintiffs are entitled to invoke the long arm of
equity to receive whatever relief the court may from
the nature of the case deem proper. Any relief can be
granted under the general prayer which is consistent
with the case stated in the complaint and is supported
by the proof provided the defendant will not be sur-
prised or prejudiced thereby.’’ (Internal quotation
marks omitted.) Pamela B. v. Ment, 244 Conn. 296,
308–309, 709 A.2d 1089 (1998); see also Total Aircraft,
LLC v. Nascimento, 93 Conn. App. 576, 580–81, 889
A.2d 950, cert. denied, 277 Conn. 928, 895 A.2d 800(2006). Nevertheless, ‘‘[a]n equitable proceeding does
not provide a trial court with unfettered discretion.
The court cannot ignore the issues as framed in the
pleadings.’’ Warner v. Brochendorff, 136 Conn. App. 24,
34, 43 A.3d 785, cert. denied, 306 Conn. 902, 52 A.3d
728 (2012).
In the present case, the pleadings were not framed
in a way that apprised the company that the court might
order a remedy that would require it to pay the individ-
ual defendants.16 The initial complaint did not name the
company as a defendant. The plaintiffs only later cited
in the company as a defendant in response to the motion
to strike filed by the individual defendants. That motion
focused on the court’s inability to issue a declaratory
judgment in the absence of the company.17 The individ-
ual defendants did not argue that the company was a
necessary party with respect to the court’s ability to
grant any of the other relief requested. Even when
broadly construed, the amended complaint did not con-
tain any allegations against the company. See
Provenzano v. Provenzano, supra, 88 Conn. App. 225(‘‘pleadings must be construed broadly and realisti-
cally’’ [internal quotation marks omitted]).
In response to the company’s motion to strike for
failure to state a cause of action against the company,
the plaintiffs argued that the complaint ‘‘merely identi-
fies [the company] as an additional defendant’’ because
the company is ‘‘a mere stakeholder upon the plaintiff’s
claims, including for declaratory relief . . . .’’ The
plaintiffs did not argue that their complaint sought relief
from the company. The only reference to the company
in the plaintiffs’ prayer for relief was their request for
‘‘a determination as to whether or not the stock of [the
company] is subject to preemptive rights notwithstand-
ing that said stock was acquired from treasury shares.’’
The other requested remedies were for declaratory
judgments concerning the disposition of the stock in
question and the general prayer for ‘‘[s]uch legal or
equitable relief as the court deems appropriate.’’ Simi-
larly, the individual defendants’ answer, affirmative
defenses, and counterclaim did not seek any relief from
the company.
Although ‘‘[a]ny relief can be granted under the gen-
eral prayer [for equitable relief] which is consistent
with the case stated in the complaint and is supported
by the proof’’; (internal quotation marks omitted)
Pamela B. v. Ment, supra, 244 Conn. 308; ‘‘[t]he court
cannot ignore the issues as framed in the pleadings.’’
Warner v. Brochendorff, supra, 136 Conn. App. 34. Here,
the court ordered equitable relief that was inconsistent
with the issues as framed in the pleadings and inconsis-
tent with the court’s finding that Bosco, Parillo, and
Warner engaged in self-dealing, resulting in unfair sur-
prise to the company.18 Throughout the trial, the attor-
neys and the court relied ‘‘on the statement of issues
as set forth in the pleadings’’; (internal quotation marks
omitted) Abdo v. Abdulrahman, supra, 144 Conn. App.
581; which did not involve any potential wrongdoing
on the part of the company.
Nor is there anything in the record that indicates that
the parties litigated as if the court might order the
company to reimburse the individual defendants. See
Stafford Higgins Industries, Inc. v. Norwalk, supra,
245 Conn. 575 (‘‘a court may, despite pleading deficienc-
ies, decide a case on the basis on which it was actually
litigated’’). The conduct of the attorneys and the court
during and immediately following the trial was consis-
tent with the pleadings, in that they did not act as if
the parties had made any allegations against or sought
relief from the company. At the start of the trial, the
plaintiffs maintained that they were ‘‘not adverse to the
[company].’’ The individual defendants did not indicate
that they were adverse to the company or that they
would later seek relief from the company. The court
acknowledged the company’s right to participate so
that it could ‘‘protect [its] interest,’’ and, because the
company had no reason to believe its interests would
be adversely affected, it acted accordingly. For
instance, the company had no reason to file any counter-
claims, present any evidence, or cross-examine any of
the witnesses. After attending the morning of the first
day of trial, Attorney Block requested to be released
from the remainder of the trial because he did not intend
to take an ‘‘active role in the litigation.’’ The parties did
not object, and the court released him. Throughout the
trial, the parties made no allegations against the
company.
Immediately following trial, the plaintiffs regained
control of the company, causing Attorney Block to with-
draw as counsel for the company. The plaintiffs moved
to reopen the evidence, arguing that the reorganization
provided them with access to financial information that
had ‘‘been concealed or unknown to the plaintiffs
. . . .’’ Following a hearing, at which the company was
not represented by legal counsel, the court denied the
plaintiffs’ motion, reasoning that the company’s finan-
cial conditions were not ‘‘of a substantive or material
nature.’’19 This denial, in addition to the conduct of the
parties and the court during the trial, further support
the contention that the court’s order surprised the com-
pany, particularly in light of the language the court used
in its memorandum of decision regarding the trial.
As the court emphasized in its memorandum of deci-
sion, the company and ‘‘Bosco, Jr., are named as defen-
dants in count one only and only for the purpose of
notice.’’ As with the company, the parties did not assert
any allegations against Bosco, Jr.20 Bosco, Jr., had been
named as a defendant so that he could receive notice
of the proceedings and not for the purpose of being
bound by any court order. By classifying both the com-
pany and Bosco, Jr., as defendants ‘‘only for the purpose
of notice,’’ the court implied that the company, likewise,
would not be bound by any order without the opportu-
nity to be heard. Consistent with the absence of any
allegations against the company in the pleadings, the
parties’ conduct at trial, and the court’s classification
of the company as a defendant for notice purposes,
the court did not find that the company committed
any wrongdoing.
In its memorandum of decision, the court also found
that the individual defendants violated the plaintiffs’
preemptive rights and that Bosco, Parillo, and Warner
engaged in self-dealing by awarding themselves
bonuses in connection with the Dube transaction. The
court concluded that the plaintiffs were entitled to equi-
table relief and requested that the parties submit pro-
posed remedies. Specifically, the court noted that
‘‘[a]side from the form of the remedy, there are ques-
tions concerning whether payment or reimbursement
by the plaintiffs and/or to the defendants will be
required and, if so, at what per share price.’’ Although
the company was named as a defendant, the court
observed that the company was a party for notice pur-
poses only and did not indicate that the proposed reme-
dies should address what role the company should play,
if any, at the remedy stage.
Nevertheless, in response to the court’s request for
proposed remedies, Parillo and Polivy proposed that
the court order the company to reimburse the individual
defendants. This was the first mention of that potential
remedy, essentially asking the court to ignore the gen-
eral rule that ‘‘the judgement cannot exceed the claims
pleaded, including the prayer for relief.’’ Todd v. Glines,
supra, 217 Conn. 9. In opposing this proposed remedy,
the plaintiffs’ counsel argued that, ‘‘the idea of Your
Honor just being able to award money or order money
from the [company] to be paid to one of the defendants
without the [company] being named and given an oppor-
tunity to appear in regard to those issues . . . would
be improper in this case. . . . [T]here were no allega-
tions by any of the defendants against the [company]
saying that in the event this court decides to somehow
order a rescission, what, if anything, the [company’s]
obligations to these individuals would be.’’21 Polivy’s
counsel replied that the court had ‘‘decided to provide
equitable relief, [a]nd in providing equitable relief the
court is free to really fashion any kind of remedy that
does equity,’’ including ordering the reimbursement to
the individual defendants.
Although the court had the authority to provide equi-
table relief by virtue of the plaintiffs’ general prayer
for equitable relief, ‘‘an equitable proceeding does not
provide a trial court with unfettered discretion’’ to order
relief against a party who was without notice of the
claims against it. Warner v. Brochendorff, supra, 136
Conn. App. 34. ‘‘The court cannot ignore the issues as
framed in the pleadings.’’ Id. The parties’ pleadings did
not frame the issues in terms of the company’s wrongdo-
ing or obligation to provide them with a remedy. Here,
the first mention of this potential remedy did not occur
until the court held its hearing on proposed remedies
in December, 2015. The issuance of an order of relief
against the company, in the absence of notice of a claim
against it, is inconsistent with the fundamental purpose
of pleading requirements, namely, ‘‘to prevent surprise
of the [party] . . . .’’ Todd v. Glines, supra, 217
Conn. 10.
With no prior notice of any claims against it, the
company was forced to have counsel file an appearance
on its behalf and a motion for reconsideration on Janu-
ary 26, 2016, fifteen days after the court’s order of relief.
In its motion, the company reminded the court that it
had been ‘‘named as a party only for notice purposes
in the litigation’’ and that ‘‘[n]o claims were made
against [the company].’’ The company also reminded
the court of the plaintiffs’ ‘‘motion to reopen the evi-
dence so as to present [the company’s] grave financial
state,’’ which the court denied. The company argued
that it was not in a financial situation where it could
obey the court’s order and that ‘‘reconsideration is war-
ranted to allow [the company] to address what is effec-
tively a claim and request for relief directed to it.’’ As
the plaintiffs’ counsel argued at a hearing on the motion,
‘‘without a complaint against [the company], without
allegations, [the company] never had a chance to put
on its own evidence, to put on a claim of recoupment
or setoff or counterclaim.’’ Nevertheless, the court
denied the company’s motion, stating that ‘‘the relief
sought did include equitable relief and that’s the way
the order was fashioned. Also, with respect to notice
for [the company] in the case, for notice purposes, and
there was actual and constructive notice.’’
Notice of the ongoing litigation, however, is distinct
from notice that the litigants are making a claim against
or seeking relief from a party. As evidenced by the
pleadings as well as the conduct of the parties, the
company had no notice that such relief would enter
against it. Since May 5, 2014, when Attorney Block was
excused during the first day of evidence, the parties
had effectively acknowledged that the presence of
counsel for the company was unnecessary given the
posture of the case. Given that the company relied on
the state of the pleadings and opted not to participate
in the trial, we conclude that the court did not have
the authority to order relief against the company.
Accordingly, further proceedings are necessary.22
The judgment is reversed only as to the court’s order
that the company reimburse the present owners of the
Dube shares and the case is remanded for further pro-
ceedings according to law. The appeal is dismissed as
to the plaintiffs.
In this opinion the other judges concurred.
1
The company was originally named as a defendant in this action but
thereafter came under the control of the plaintiffs. The plaintiffs also
appealed from the judgment of the trial court. At oral argument before this
court, they conceded that they lacked standing to bring this appeal. See,
e.g., State v. Long, 268 Conn. 508, 531–32, 847 A.2d 862 (setting forth test
for aggrievement), cert. denied, 543 U.S. 969, 125 S. Ct. 424, 160 L. Ed. 2d
340 (2004). We agree that they lack standing and, accordingly, dismiss the
appeal as to the plaintiffs.
2
Warner had purchased one of the 141 shares and was named as a defen-
dant in the plaintiffs’ complaint. Warner died during the pendency of the
case, and the plaintiffs withdrew the complaint as to him after the court
rendered judgment but before it ordered the remedy at issue.
3
The plaintiffs also named Robert J. Bosco, Jr., as a defendant for notice
purposes only, as discussed more fully in footnotes 7 and 20 of this opinion.
We refer to him in this opinion as Bosco, Jr.
4
Jeffrey Lynn and Parillo attended as observers.
5
On cross-examination at trial, Bosco could not explain how the board
had determined the amount of each bonus, instead stating that the bonuses
equaled the first installments by coincidence, because it was expedient that
they be the same amount, and because the board felt that these amounts
were appropriate. Warner, in response to being asked whether he had paid
‘‘for that one share of stock with cash,’’ testified, ‘‘[n]o, I was given a bonus
for that.’’
6
The company nevertheless contends, in its brief to this court, that ‘‘the
burden should have been on Polivy to assert a claim against [the company]
for the return of [the] funds’’ he had paid for his shares.
7
Between January and April, 2012, four of the company’s other sharehold-
ers directly sold their shares to Bosco and Parillo (direct transactions).
Following these transactions, the company’s remaining shareholders were
Jack Lynn, Jeffrey Lynn, Bosco, Bosco, Jr., Parillo, Polivy, and Warner. As
noted in footnote 3 of this opinion, Bosco, Jr., was named as a defendant
for notice purposes only. As a shareholder, Bosco, Jr., had an interest in
the proceedings but because he had not ‘‘purchased any of the disputed
shares,’’ neither party made allegations against him or called him as a witness
at trial. See also footnote 20 of this opinion.
8
The plaintiffs later filed a second amended complaint, which is the
operative complaint in this case. It differed solely in the addition of a
sentence clarifying that the transactions that had occurred between the four
shareholders and Bosco and Parillo had occurred directly between them
rather than through the company.
9
Counsel for the individual defendants also withdrew his appearance
because of the conflict created when Warner realigned himself with the
plaintiffs.
10
The court found for the plaintiffs on both counts of the individual
defendants’ counterclaim. Bosco filed an appeal from that judgment, which
this court dismissed for lack of a final judgment because as of that time,
the trial court had made only a finding of liability.
11
The court reasoned that this issue previously had been decided by Judge
Wagner on the individual defendants’ January, 2013 motion to strike, and
that, as that ruling was on a matter of law and was not clearly erroneous,
it became the law of the case.
12
In June, 2014, following the close of evidence, the plaintiffs in the present
case (Lynn I) initiated Lynn II against the individual defendants, as a
derivative action on behalf of the company. Lynn v. Bosco, supra, Superior
Court, Docket No. CV-14-6063040-S. We properly may take judicial notice
of that pleading. See State v. Joseph, 174 Conn. App. 260, 268 n.7, 165 A.3d
241, cert. denied, 327 Conn. 912, 170 A.3d 680 (2017); see also Karp v.
Urban Redevelopment Commission, 162 Conn. 525, 527, 294 A.2d 633 (1972)
(‘‘[t]here is no question . . . concerning our power to take judicial notice
of files of the Superior Court, whether the file is from the case at bar or
otherwise’’); Folsom v. Zoning Board of Appeals, 160 Conn. App. 1, 3 n.3,
124 A.3d 928 (2015) (taking ‘‘judicial notice of the plaintiff’s Superior Court
filings in . . . related actions filed by the plaintiff’’). The plaintiffs’ initial
complaint alleged, in part, that the individual defendants engaged in self-
dealing in connection with the Dube and direct transactions, to ‘‘the special
loss and damage of the [company].’’
In July, 2014, the individual defendants moved to transfer Lynn II from
the judicial district of Hartford to the judicial district of Middlesex or, in
the alternative, to the judicial district of New Britain for consolidation with
Lynn I. The individual defendants also moved to stay Lynn II, pending the
trial court’s decision in Lynn I. In October, 2014, the court, Miller, J.,
transferred Lynn II to the judicial district of New Britain but did not consoli-
date it with Lynn I, and also stayed Lynn II until thirty days following the
decision in Lynn I.
In May, 2015, after the plaintiffs became majority shareholders of the
company, they cited in the company as an additional party plaintiff in Lynn
II, so that it could pursue the action directly. The plaintiffs remained plain-
tiffs in Lynn II until they withdrew from the action in August, 2017, leaving
the company as the sole plaintiff.
The company has since amended the complaint in Lynn II to allege,
essentially, that the individual defendants (1) breached their fiduciary duties
to the company by self-dealing in connection with the Dube and direct
transactions and by otherwise manipulating the company’s affairs, (2)
assisted each other in breaching their fiduciary duties, (3) were unjustly
enriched, and (4) violated the Connecticut Unfair Trade Practices Act, Gen-
eral Statutes § 42-110a et seq.
13
Notably, in May and June, 2017, Polivy and Bosco moved for summary
judgment in Lynn II, arguing that Lynn II ‘‘is barred by the doctrine of res
judicata’’ because ‘‘[a]ll claims advanced in Lynn II . . . are from the same
transaction and were or could have been litigated in Lynn I.’’ In September,
2017, the court, Moll, J., denied Polivy’s and Bosco’s motions, noting that
‘‘[the company] was named as a defendant for notice purposes only’’ and
finding that ‘‘Polivy and Bosco . . . failed to demonstrate that the Lynns
as then minority shareholders and [the company] were in privity at the
relevant time in Lynn I . . . .’’
14
Although an appearance was filed in this appeal on behalf of Parillo,
that appearance was withdrawn on July 13, 2017. Parillo has not filed a
brief in the present appeal.
15
Bosco claims, in his appellate brief, that this court should dismiss this
appeal for lack of aggrievement and, alternatively, as moot. Before reaching
the merits of the company’s appeal, we must first address these claims,
as they relate to the subject matter jurisdiction of this court. Council v.
Commissioner of Correction, 286 Conn. 477, 487, 944 A.2d 340 (2008);
Seymour v. Seymour, 262 Conn. 107, 110, 809 A.2d 1114 (2002).
First, Bosco claims that the plaintiffs and the company were not aggrieved
because in ‘‘determining the ownership of the Dube shares of [the company’s]
stock,’’ the plaintiffs got the relief they requested. As previously noted, at
oral argument before this court, the plaintiffs’ counsel conceded that the
plaintiffs do not have standing. See footnote 1 of this opinion. We reject this
claim as it applies to the company because the company has demonstrated
‘‘a possibility . . . that some legally protected interest . . . has been
adversely affected’’ by the court ordering it to pay the individual defendants.
(Internal quotation marks omitted.) See State v. Long, supra, 268 Conn.
531–32 (setting forth test for standing’s aggrievement requirement).
Second, Bosco claims that the company paid him the amount ordered by
the court and that this payment constituted a satisfaction of judgment that
renders this appeal moot. ‘‘[T]he filing of a satisfaction of judgment does
not render an appeal moot when there is a possibility of restitution or
reimbursement . . . .’’ (Citation omitted.) G Power Investments, LLC v.
GTherm, Inc., 141 Conn. App. 551, 561, 61 A.3d 592 (2013). Here, as the
company’s counsel argued at oral argument, such actions as the company’s
participation in preargument conferences and filing of a brief indicate that
the company did not intend to abandon this appeal. Because this court
could order restitution, this appeal is not moot. See, e.g., Wells Fargo Bank,
NA v. Cornelius, 131 Conn. App. 216, 220, 26 A.3d 700, cert. denied, 302
Conn. 946, 30 A.3d 1 (2011). Additionally, we are mindful of the fact that
the court’s order of damages levied on a party against whom no allegations
were made, if left unresolved by this court, would inject further uncertainty
upon the pending litigation in Lynn II, where the court already has denied
motions for summary judgment on the issue of res judicata. See footnote
13 of this opinion.
16
In addition to claiming that the court exceeded its authority in entering
an order against the company when none of the pleadings contained any
allegations against or sought relief from the company, the company claims
that the court’s entry of the order violated its procedural due process rights
to notice and an opportunity to be heard. With respect to this alternative
claim, the company argues that it lacked ‘‘notice that relief could be entered
against it in the form of required payments to the defendants’’ because ‘‘[the
company] was only a nominal party against whom no claims had been made’’
and no party ‘‘had asserted a prayer for relief seeking any relief from’’ the
company. Although we agree with the company as to its principal claim
and, thus, need not reach this alternative ground, these claims nevertheless
underscore the fact that pleading requirements are, at their core, a notice
issue. See, e.g., Todd v. Glines, supra, 217 Conn. 9–10; KMK Insulation,
Inc. v. A. Prete & Son Construction Co., supra, 49 Conn. App. 525.
17
In cases in which the plaintiffs seek a declaratory judgment, ‘‘[a]ll per-
sons who have an interest in the subject matter of the requested declaratory
judgment that is direct, immediate and adverse to the interest of one or
more of the plaintiffs or defendants in the action shall be made parties to
the action or shall be given reasonable notice thereof.’’ Practice Book § 17-
56 (b). ‘‘This rule is not merely a procedural regulation. It is in recognition
and implementation of the basic principle that due process of law requires
that the rights of no man shall be judicially determined without affording
him a day in court and an opportunity to be heard.’’ (Internal quotation
marks omitted.) Kolenberg v. Board of Education of Stamford, 206 Conn.
113, 124, 536 A.2d 577, cert. denied, 487 U.S. 1236, 108 S. Ct. 2903, 101 L.
Ed. 2d 935 (1988) (interpreting Practice Book (1988) § 390 [now § 17-55]
which provided ‘‘that the court will not render a declaratory judgment ‘unless
all persons having an interest in the subject matter of the complaint are
parties to the action or have reasonable notice thereof’ ’’).
18
On appeal, the company claims, in the alternative, that the remedy was
inequitable in light of the court’s finding that Bosco, Parillo, and Warner
engaged in self-dealing by awarding themselves bonuses to pay for the Dube
shares. ‘‘An equitable award may be found to be error only if it is based on
factual findings that are clearly erroneous . . . or if it is the result of an
abuse of discretion.’’ (Citation omitted.) LaCroix v. LaCroix, 189 Conn. 685,
689–90, 457 A.2d 1076 (1983). Because we reverse the judgment on other
grounds, we need not address whether the court abused its discretion in
fashioning this order.
19
Polivy and Bosco, in their respective briefs to this court, argue that the
individual defendants were ‘‘entitled to a return of the purchase price paid
for [the Dube] stock’’ because ‘‘[t]he plaintiffs . . . failed to present any
evidence to establish that [the company] . . . would suffer damage if it
were found liable for the return of the funds . . . .’’ In making this argument,
Polivy and Bosco omit the undisputed fact that the individual defendants
had been in control of the company throughout the trial and that after the
plaintiffs gained control of the company, the court denied the plaintiffs’
motion to reopen the evidence because the court did not consider the
company’s finances to be material. The court’s unwillingness to hear evi-
dence of the company’s finances demonstrates that the court did not antici-
pate taking the company’s finances into account when fashioning its order.
Additionally, Polivy and Bosco’s argument underscores the importance of
the parties receiving notice of the claims to be decided so that they can
present evidence relevant to those claims.
Notably, the court in Lynn II heard argument from Polivy and Bosco that
res judicata barred the company’s claims because ‘‘[a]ll claims advanced in
Lynn II . . . are from the same transaction and were or could have been
litigated in Lynn I.’’ As that court found, and consistent with this court’s
holding herein, the company was never a plaintiff in this case or in privity
with the plaintiffs and, therefore, had no opportunity to pursue these claims.
20
On the second day of the trial, the following colloquy occurred:
‘‘The Court: . . . Counsel still in agreement with regard to the court’s
excusing Attorney Block for [the company]?
‘‘[The Defendants’ Counsel]: Yes, Your Honor.
‘‘[The Plaintiffs’ Counsel]: Yes, Your Honor.
‘‘The Court: All right. Anything before we begin?
‘‘[The Defendants’ Counsel]: Along those same lines, I just wanted to point
out . . . Bosco, Jr., was named as a defendant and not identified by either
party as a witness. We haven’t had him here because he owns three shares
and he didn’t purchase any of the disputed shares.
‘‘[The Plaintiffs’ Counsel]: The allegations are the same in the complaint.
It was merely to give him notice of the proceedings because he was a
stockholder and in theory has an interest in the proceedings, but we didn’t
make any allegations against . . . Bosco, Jr. He’s not required as far as
we’re concerned.’’
21
The plaintiffs’ counsel suggested that, in light of the court’s finding that
Bosco, Parillo, and Warner paid for these shares with bonuses they received
through self-dealing and of issues outstanding in Lynn II concerning the
propriety of Polivy’s legal fees, the individual defendants should pursue the
company directly for the amount each paid for the Dube shares.
22
We also refer this matter to the chief administrative judge of the civil
division to consider transfer to the Complex Litigation Docket for consolida-
tion with the litigation pending in Lynn II.