DocketNumber: No. 100039
Citation Numbers: 1992 Conn. Super. Ct. 5511, 7 Conn. Super. Ct. 828
Judges: <footnote_body>[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]</footnote_body> GAFFNEY, JUDGE
Filed Date: 6/18/1992
Status: Non-Precedential
Modified Date: 7/5/2016
The court has for its consideration a motion of the co-defendants, James R. and Carol King (husband and wife), to dismiss two counts of the plaintiff's eleven-count complaint, which two counts have been brought against these defendants in their personal capacity. The remaining counts of the complaint are directed against the named defendant, a Florida corporation known as Beverage Service and Equipment, Inc. (BSE). The lawsuit arises out of a 1989 contract between BSE and the named plaintiff (NECP), a Delaware corporation whose principal place of business was in Waterbury. Pursuant to the contract, BSE was to supply and install certain soft drink bottling equipment on premises of the plaintiff in Waterbury. CT Page 5512
As a part of the NECP-BSE contract, the Kings, who are officers and owners of 80% of BSE stock, were required personally to sign an unconditional guaranty in which they agreed, if the defendant corporation failed to deliver the equipment called for by the contract, to refund to the plaintiff all deposits and advance payments which BSE received. The guaranty imposed no duty upon the Kings to provide any goods or services within the State of Connecticut.
The main thrust of the complaint is based on the alleged failure of the defendant to deliver all of the equipment and properly to install the operating lines. The ninth count of the complaint sounds in tortious interference with a business relationship and is directed against both BSE and Mrs. King, while the eleventh count is directed against both Mr. and Mrs. King on what is alleged to be a breach of their contract of guaranty.
The Kings' dismissal motion is predicated on a claimed lack of in personam jurisdiction. They represent themselves to be Florida residents who do no business in Connecticut and own no property in this state. The plaintiff objects to the motion and argues that in personam jurisdiction attaches to the Kings pursuant to Connecticut's long-arm statute,
A hearing was held on the corporate defendant's application for a prejudgment remedy which has reference to a counterclaim brought against the plaintiff. Both Mr. and Mrs. King testified at the hearing and through counsel they agree, as does the plaintiff through its counsel, that all of the evidence required to decide the subject motion was presented during the hearing; and neither side wishes to to present additional evidence. Kingsley v. Sadi International Co.,
In analyzing the co-defendants' jurisdictional challenge the court makes a two-part inquiry:
"The first inquiry is whether the applicable state long-arm statute authorizes the assertion of jurisdiction over the defendants, and if the statutory requirements are met, whether the exercise of in personam jurisdiction would violate constitutional principles of due process." Hart, Nininger Campbell Associates v. Rogers,
16 Conn. App. 619 ,624 (1988).
1. In order for a court of this state to assert personal jurisdiction over a nonresident defendant pursuant to
Although the term "transacts any business" is undefined in the statute (
Obviously, the narrow issue presented is whether the execution of the personal guaranty constituted a single purposeful business transaction within the state such as will support application of Connecticut's long-arm statute (52-59 [b][a][1].) Since the statute was enacted by the legislature using the New York statute as a model, judicial interpretation given to the New York statute has some significance. Zartolas v. Nisenfeld, supra.
In deciding the issue, this court relies for its support on Savin v. Ranier,
In quoting from Zartolas, Chief Judge Oakes endorsed the significance of the New York statute and judicial interpretation thereof. "New York courts interpreting the comparable provision," he writes, "have declined to exercise jurisdiction when the only contact maintained by the defendant with the forum state was that New York was designated as the site for payment on a promissory note . . . . Ranier's only purposeful contact with Connecticut was in obtaining financing for his share of the New York business from a Connecticut resident. Yet as the New York cases make clear, such contact, without more, is insufficient confer jurisdiction under Connecticut's long-arm statute." Id., 306-07. The court concluded that "even if there were statutory authority for jurisdiction . . . exercise of jurisdiction over Ranier would raise due process concerns." Id., 307. Quoting from Hanson v. Denckla,
A New York appellate court, on facts jurisdictionally similar to those of the instant case, recently reversed a lower court decision denying a defendant's dismissal motion. First Nat. Bank and Trust Co. v. Wilson,
"Generally, an out-of-state note made payable in New York does not, in and of itself, confer jurisdiction over the non-domiciliary [cases cited]. It has long been held that New York may not extend long-arm jurisdiction over a non-domiciliary who was never physically present in New York, and who never agreed to provide any goods or services here other than a promise to a New York corporation that he would make good if a corporation of another state defaulted on its debt." p. 469.
The decision of the New York court (above) suggests that it might agree, as the instant plaintiff urges, that the giving of a personal guaranty was "a business transaction," at least in the general context. On the contrary, it is quite clear that the court would find that such guaranty, without more, is by no means tantamount to the transaction of business which, with the help of the long-arm, will confer jurisdiction over a non-resident.
The plaintiff attaches importance to language of the guaranty which has reference to the economic benefit which performance of the contract would provide to the Kings. The argument is unpersuasive. The obligation to perform was that of BSE, and any benefit to the Kings would come only indirectly in their capacity as shareholders of the corporation.
It is worth noting again that the guaranty was drafted by the plaintiff's counsel or representative, executed by the Kings in Florida, and, significantly and by its plain language, was to be construed by the law of Florida. (Citicorp International Trading Co., Inc. v. Western Oil Refining Co.,
There is no evidence that the matter of the guaranty was negotiated or even discussed during Mr. King's visits to Connecticut. CT Page 5515 The visits, it is clear, were in his capacity as corporate officer and for the purpose of negotiating an agreement between his company and NECP. Plt. Mem. of Law, p. 12. Under such circumstances in personam jurisdiction over a corporate director does not stem in symbiotic-fashion from jurisdiction over the corporation. It is the director's own personal contacts with the forum state which control. Mozes on behalf of General Electric Co. v. Welch,
In summary, the plaintiff has failed to establish that the co-defendants transacted business within the State of Connecticut such as would confer in personam jurisdiction based on the allegations of the eleventh count of the complaint.
2. The plaintiff alleges in the ninth count of its complaint that to the co-defendant Mrs. King tortiously interfered with a business relationship which the plaintiff had with a Connecticut lending institution from whom the plaintiff borrowed its working capital. Specifically, it is claimed that Mrs. King, by telephone from Florida, communicated information to UST Bank/Connecticut that deliberately misrepresented the plaintiff's credit and financial security in connection with the BSE contract. The communication, it is claimed, undermined the trust and confidence of the lender in its business relationship with NECP.
The plaintiff objects to the defendant King's motion on the authority of Connecticut's long-arm statute.
A. 51-59b(a)(2) permits a court of this state to exercise personal jurisdiction over a non-resident individual if that person "commits a tortious act within the state." Although there is little or no authority under Connecticut case law, New York's statutorily analogous provision has been the subject of judicial interpretation.
The plaintiff argues that "[a]lthough the call is claimed to originate in Florida, the wrong was performed in Connecticut . . . where the misrepresentations were received and the damage occurred." Plt. Mem. of Law, p. 8. On the strength of New York case law, this court rejects that argument. Regardless of where the harm is suffered, the tort must be committed in Connecticut, and the defendant must be physically present within the state at the time of commission. Roth v. El Al Israel Airlines, Ltd.,
The co-defendant's physical presence in Florida when making the telephone call is dispositive of the issue. CT Page 5516
B.
"When a court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light." Reynolds v. Soffer,
(1) Resolving the claims which the complaint raises in its ninth count on the above basis and on the basis of the affidavits and evidence presented, the court is unable to conclude that the defendant King's telephone call to the plaintiff's lender institution was other than personal, tortious and reasonably likely to produce consequences to the plaintiff within this state.
The testimony of Mr. King and the affidavit which he and Mrs. King supplied in support of the motion, examined in the light of the applicable standard, satisfy the court that the NECP contract would cause their business to grow and their shareholdings to increase in value. It is reasonable to infer that Mrs. King's office salary and dividend receipts would also experience monetary enhancement, and language of the guaranty lends further support to such conclusion ("Guarantors expect to derive direct economic benefit as a result of the transaction described in the Contact Documents"). In short, there is sufficient support, for the instant purpose, to conclude that the defendant Mrs. King derived substantial revenue from interstate commerce.
(2) That Connecticut's long-arm statute (
"The twin touchstones of due process analysis under the minimum contacts doctrine are foreseeability and fairness." U.S. Trust Co. v. Bohart,
Recognizing that it is only minimum contacts which must be shown, the defendant's execution, with her husband, of a personal guaranty which potentially exposed her to financial liability to a Connecticut corporation based on a contract to be performed in Connecticut; the economic benefit to Mrs. King as an officer and shareholder of the company which contracted to perform work in Connecticut; and her personal telephone call to the plaintiff's working capital lender in Connecticut in order to transmit information which bore on financial aspects of the contract (Rose v. Franchetti,
In summary, the plaintiff has established in personam jurisdiction over the co-defendant Mrs. King pursuant to
3. The motion of the defendants James R. and Carol King to dismiss the eleventh count of the complaint is granted.
The motion of the defendant Carol King to dismiss the ninth count of the complaint is denied.