Robert Dorin et al. v. LLC (2010)

MEMORANDUM OF DECISION RE MOTION TO DISMISS # 101

FACTUAL AND PROCEDURAL BACKGROUND

The plaintiffs, Robert Dorin and Nordic Empire Corporation-Panama (Nordic Empire-Panama), have brought this civil action against the defendants, Interactive Brokers, LLC (the defendant),¹ Credit Suisse-Deutschland (Credit Suisse),² Patrick Dorin ³ and Nordic Empire Corporation-St.   Vincent (Nordic Empire-St.   Vincent).  In their complaint, the plaintiffs allege the following fact.   In August 2004, Patrick Dorin, who is the plaintiff, Robert Dorin's son, convinced his father to form a corporation in Panama “for the purpose of investment and in light of the allegedly favorable tax benefits of such a corporation.”   Consequently, on August 31, 2004, Nordic Empire-Panama was incorporated under Panamian law.   The next day, Patrick Dorin formed a corporation with the same name under the laws of St. Vincent and the Grenadines.   On September 23, 2004, Patrick Dorin opened a securities trading account with the defendant, which is a securities trading company located in Greenwich.   In doing so, Patrick Dorin informed the defendant that he was the principal of the Nordic Empire Corporation and that he was ready to invest corporate funds into a brokerage account.   When opening this securities trading account, Patrick Dorin provided the defendant with the financial information and account numbers for Nordic Empire-Panama, but he used documentation for Nordic Empire-St.   Vincent.  The plaintiffs allege that the defendant was negligent in that it “failed to investigate whether the St. Vincent Corporation was authorized to withdraw funds from the Panamanian corporation's accounts.”   Although Nordic Empire-St.   Vincent had no authority to take funds from Nordic Empire-Panama's account, Patrick Dorin withdrew substantial sums of money from Nordic Empire-Panama's account with Credit Suisse and deposited them with the defendant.   As a result of all of this conduct, the plaintiffs allege various legal claims against each of the defendants.

In a reverse of the procedure established by Connecticut law, the plaintiffs filed their complaint and writ of summons with the court on November 17, 2009.   The return date provided on the summons is February 23, 2010.   The complaint was not served on the defendant until February 17, 2010.⁴

On March 26, 2010, the defendant filed a timely motion to dismiss ⁵ as well as a memorandum of law in support.   The defendant moves to dismiss the complaint in its entirety based on insufficient process and insufficient service of process.   Attached to the defendant's motion as exhibits are:  (1) a copy of the summons and complaint in the present case;  (2) the case detail from the Judicial Branch's website and (3) the sworn affidavit of Arnold J. Feist, who is the defendant's chief compliance officer.   On both April 8, 2010 and May 20, 2010, the plaintiffs filed a memorandum of law in opposition to the defendant's motion.⁶  Attached to the plaintiffs' opposition is a copy of the return of service from state marshal Paul L. Verille.   The court heard oral argument in this matter at short calendar on May 24, 2010.

DISCUSSION

“A motion to dismiss ․ properly attacks jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court ․ A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction.”  (Internal quotation marks omitted.)  Cox v. Aiken, 278 Conn. 204, 210-11, 897 A.2d 71 (2006);  see also Kozlowski v. Commissioner of Transportation, 274 Conn. 497, 501, 876 A.2d 1148 (2005);  Filippi v. Sullivan, 273 Conn. 1, 866 A.2d 599 (2005).  “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 ․ In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader.”  (Internal quotation marks omitted.)  Cogswell v. American Transit Ins. Co., 282 Conn. 505, 516, 923 A.2d 638 (2007).  “Jurisdiction over the person, jurisdiction over the subject-matter, and jurisdiction to render the particular judgment are three separate elements of the jurisdiction of a court ․ Facts showing the service of process in time, form, and manner sufficient to satisfy the requirements of mandatory statutes in that regard are essential to jurisdiction over the person.”  (Emphasis in original;  internal quotation marks omitted.)   Bridgeport v. Debek, 210 Conn. 175, 179-80, 554 A.2d 728 (1989).

In its memorandum of law, the defendant raises three principal arguments as to why the court should grant its motion to dismiss.   First, the defendant contends that service of process was defective because the defendant was not served with process within twelve days before the return date as required by General Statutes § 52-46.   This statue provides:  “Civil process, if returnable to the Supreme Court, shall be served at least thirty days, inclusive, before the day of the sitting of the court, and if returnable to the Superior Court, at least twelve day, inclusive, before such day.”  “[O]ur Supreme Court [has] held that the requirements in this statute ․ are mandatory.”  Vierra v. Uniroyal, Inc., 28 Conn.Sup. 489, 492, 266 A.2d 900 (1970), citing Daley v. Board of Police Commissioner, 133 Conn. 716, 719, 54 A.2d 501 (1947).  “Proper service of process is not some mere technicality.   Proper service of process gives a court power to render a judgment which will satisfy due process under the 14th amendment of the federal constitution and equivalent provisions of the Connecticut constitution and which will be entitled to recognition under the full faith and credit clause of the federal constitution ․ All process must be served at least twelve days before the return date, including the day of service and excluding the return day.   General Statutes § 52-46.”  (Citation omitted;  internal quotation marks omitted.)  Hibner v. Bruening, 78 Conn.App. 456, 458, 828 A.2d 150 (2003).

In the present case, the return date provided on the summons is February 23, 2010.   State marshal Verille did not serve process on the defendant until February 17, 2010.   Accordingly, there is no question that the plaintiffs violated § 52-46 when commencing this action because the defendant was served fewer than twelve days before the return date.

Next, the defendant argues that service of process was improper because the plaintiffs served the complaint after it was filed with the court, which is contrary to the required statutory procedure in Connecticut.7  General Statutes § 52-46a provides:  “Process in civil actions returnable to the Supreme Court shall be returned to its clerk at least twenty days before the return day and, if returnable to the Superior Court, except process in summary process actions and petitions for paternity and support, to the clerk of such court at least six days before the return day.”  “[T]he requirement of § 52-46a to return process in civil actions to the clerk of the Superior Court at least six days before the return date is mandatory and failure to comply with its requirements renders the proceeding voidable, rather than void, and subject to abatement ․ [O]nce an action has been brought by service of process on the defendant, a trial court may thereafter dismiss the action for failure to return the service of process within the mandated time period.”  (Citation omitted;  internal quotation marks omitted.)  Coppola v. Coppola, 243 Conn. 657, 661-62, 707 A.2d 281 (1998).

Ironically, the plaintiff's complete failure to adhere to the statutory service of process requirements leaves them with a plausible argument that they returned process to the court at least six days before the return date.   As the plaintiff incorrectly filed their complaint and writ of summons with the court before serving process, they did send at least some of the process to the court more than six days before the return date.   Nevertheless, the clear import of Connecticut's statutory scheme is that process is first served on the defendant and then returned to the court.  General Statutes § 52-45a provides:  “Civil actions shall be commenced by legal process consisting of a writ of summons or attachment, describing the parties, the court to which it is returnable, the return day, the date and place for the filing of an appearance and information required by the Office of the Chief Court Administrator.   The writ shall be accompanied by the plaintiff's complaint.”   After complying with § 52-45a, § 52-46a requires that the plaintiff return this process to the court.   As “[l]egal actions in Connecticut are commenced by service of process.”  Rios v. CCMC Corp., 106 Conn.App. 810, 820, 943 A.2d 544 (2008);  and the plaintiffs failed to return process to the court more than six days before the return date.   The plaintiffs have not complied with § 52-46a.

Finally, the defendant notes that there is no evidence that its co-defendants, Nordic Empire-St.   Vincent and Patrick Dorin were served with process.   The defendants argues that these defendants “are key players in this litigation and it would be unfair to proceed without an indication that they have been served with the Complaint.”   According to the appearance filed with the court on February 24, 2010, the defendant's general counsel Juli Aylesworth has only entered an appearance for the defendant.   As Attorney Aylesworth does not represent either Nordic Empire-St.   Vincent or Patrick Dorin, it would appear that she lacks the legal authority to argue that this case should be dismissed because these defendants were not served with process.   See Practice Book § 3-7(a) (“Except by leave of the judicial authority, no attorney shall be permitted to appear in court or to be heard in behalf of a party until the attorney's appearance has been entered”).   Furthermore, the defendant has provided no authority that it is entitled to dismissal because of the plaintiffs' failure to serve its co-defendants.

In their memorandum of law in opposition, the plaintiffs do not dispute that they served process in violation of § 52-46 and § 52-46a.   Nevertheless, the plaintiffs raise a number of arguments as to why their failure to serve process correctly can be excused.   First, the plaintiffs argue that the court should not grant the motion to dismiss because of Connecticut's policy to try cases on the merits and forgive circumstantial defects.   In support of this position, the plaintiffs cite to General Statutes § 52-123.   This statute provides “No writ, pleading, judgment or any kind of proceeding in court or course of justice shall be abated, suspended, set aside or reversed for any kind of circumstantial errors, mistakes or defects, if the person and the cause may be rightly understood and intended by the court.”  “[D]espite its facially expansive language, § 52-123 and its predecessors have been uniformly limited in their application to defects in the writ.”  Rogozinski v. American Food Service Equipment Corp., 211 Conn. 431, 435, 559 A.2d 1110 (1989).  “The statute is used to provide relief from defects in the text of the writ itself but is not available to cure irregularities in the service or return of process.”  Id., 434.   Although the plaintiffs have attempted to demonstrate the applicability of § 52-123 by arguing that it was a clerical mistake to omit Patrick Dorin from the summons, the real issue in this case is the plaintiffs' failure to serve process according to the statutory requirements.   Accordingly, § 52-123 is inapplicable to the present case.

Next, the plaintiffs note that they have effectuated service on three of the four defendants, and that the only reason that they have not served Patrick Dorin is because he is believed to be hiding from the law somewhere in France.   As previously noted, this argument is immaterial to the motion presently before the court because it does not change the fact that the plaintiffs failed to serve process on the defendant in accordance with § 52-46 and § 52-46a.

The plaintiffs also argue that they have “had a number of telephone conferences on this matter, their [the defendant's] counsel acknowledged service on both sides [and] wanted to ‘work things out.’   Even as we were continuing to discuss the factual basis for the case, counsel for [the defendant] filed the instant motion on the 30th day after filing appearances.   Given [the defendant's] acceptance of service, this court, pursuant to doctrines of estoppel and waiver, should hold that [the defendant] waived its right to dismiss the matter based on improper service ․” The plaintiffs have provided the court with no authority for the proposition that the defendant waives its right to file a motion to dismiss for insufficient process or insufficient service of process based on discussions with opposing counsel about the merits of a case or choosing to wait until the thirtieth day following the appearance of counsel to file the motion.   In fact, Practice Book § 10-30 clearly provides that:  “Any defendant, wishing to contest the court's jurisdiction, may do so even after having entered a general appearance, but must do so by filing a motion to dismiss within thirty days of the filing of an appearance.”   As the defendant in the present case has filed a timely motion to dismiss, it has not waived its right to file a motion to dismiss based on improper service of process.

Finally, the plaintiffs argue that they should be permitted to amend the return date and to re-serve the defendant.   Notably, the plaintiffs have filed no motion to amend the return date;  nor have they filed an amended complaint with a new return date.   Nevertheless, Connecticut is typically liberal in allowing amendments to civil process.  General Statutes § 52-72 provides:  “(a) Any court shall allow a proper amendment to civil process which has been made returnable to the wrong return day or is for any reason defective, upon payment of cost taxable upon sustaining a plea in Abatement.”  “Section 52-72 is a remedial statute that must be liberally construed in favor of those whom the legislature intended to benefit ․ The legislature, in enacting § 52-72, expressed an intent to reject the draconian result of dismissal of the plaintiff's cause of action because of a defect involving the return date.”   (Citations omitted.)  Coppola v. Coppola, supra, 243 Conn. 664-65.   In order to invoke § 52-72, however, the suggested amended return date “must comply with the time limitations set for the in [General Statutes] § 52-48(b).  Section 52-48(b) requires that ‘[a]ll process shall be made returnable not later than two months after the return date of the process ․’ Section 52-48(b), therefore, with its two month limit, circumscribes the extent to which a return date may be amended.” ⁸  Id., 666-67.  “The date of the process, of course, refers to the date of the writ of summons or attachment which must be accompanied by the complaint.”  (Internal quotation marks omitted.)   Haylett v. Commission on Human Rights & Opportunities, 207 Conn. 547, 554-55, 541 A.2d 494 (1988).   In the present case, the date listed on the writ of summons is February 23, 2010.   As more than two months have passed since that date, the plaintiffs cannot amend their return date to comply with the requirements of § 52-48(b).  Accordingly, the plaintiffs cannot avail themselves of § 52-72 and amend the return date in order to be in compliance with § 52-46 and § 52-46a.   Therefore, the plaintiffs have presented no valid arguments that would allow the court to overlook the fact that they served process on the defendant in violation of § 52-46 and § 52-46a.

CONCLUSION

For all of the reasons stated above, the motion to dismiss is granted as to the defendant Interactive Brokers, LLC.

THE COURT,

Brazzel-Massaro, J.

FOOTNOTES

FN1. As the only defendant that is a party to the motion to dismiss that is presently before the court, Interactive Brokers, LLC, will hereinafter be referred to as “the defendant.”.  FN1. As the only defendant that is a party to the motion to dismiss that is presently before the court, Interactive Brokers, LLC, will hereinafter be referred to as “the defendant.”

FN2. By notice filed on April 30, 2010, the plaintiffs withdrew this action against Credit Suisse..  FN2. By notice filed on April 30, 2010, the plaintiffs withdrew this action against Credit Suisse.

FN3. Although he is not listed on the writ of summons, Patrick Dorin is named as a defendant in the complaint..  FN3. Although he is not listed on the writ of summons, Patrick Dorin is named as a defendant in the complaint.

FN4. The court notes that the plaintiffs' law firm is located in New York City. Under New York law, actions are commenced by first filing the complaint with the clerk of court;  CPLR 304;  then serving process on the defendant within 120 days.  CPLR 306-b.   Additionally, the Federal Rules are similar in that the complaint is filed with the clerk pursuant to Fed.R.Civ.P. 3 and within 120 days serve in accordance with Fed.R.Civ.P. 4(m).  Consequently, even though the procedure employed by the plaintiffs was wrong under Connecticut law, it would have been correct had this case been brought in New York..  FN4. The court notes that the plaintiffs' law firm is located in New York City. Under New York law, actions are commenced by first filing the complaint with the clerk of court;  CPLR 304;  then serving process on the defendant within 120 days.  CPLR 306-b.   Additionally, the Federal Rules are similar in that the complaint is filed with the clerk pursuant to Fed.R.Civ.P. 3 and within 120 days serve in accordance with Fed.R.Civ.P. 4(m).  Consequently, even though the procedure employed by the plaintiffs was wrong under Connecticut law, it would have been correct had this case been brought in New York.

FN5. Counsel for the defendant filed an appearance on February 24, 2010.   This motion challenging the court's personal jurisdiction was filed exactly thirty days after the appearance of the defendant's counsel, and therefore, it is considered timely.  Practice Book § 10-30..  FN5. Counsel for the defendant filed an appearance on February 24, 2010.   This motion challenging the court's personal jurisdiction was filed exactly thirty days after the appearance of the defendant's counsel, and therefore, it is considered timely.  Practice Book § 10-30.

FN6. The plaintiff filed their memorandum of law in opposition on two separate dates.   The document filed with the court on both of these dates is the same..  FN6. The plaintiff filed their memorandum of law in opposition on two separate dates.   The document filed with the court on both of these dates is the same.

FN7. In the text of its motion and memorandum of law, the defendant originally cited General Statutes § 52-48(b) for the proposition that a complaint must be served on a defendant before it is filed with the court.  Section 52-48 provides the timing sequence for determining a legally valid return day, not the requirements for when process must be returned to court.   At oral argument before this court on May 24, 2010, the defendant's counsel brought this error in its brief to the court's attention.   Consequently, the plaintiffs' counsel was on notice of the fact that the defendant's motion and memorandum of law cited to an incorrect statute.   The plaintiffs did not indicate that this error caused them any prejudice.   Accordingly, this memorandum will analyze the applicable legal issues under the correct statute..  FN7. In the text of its motion and memorandum of law, the defendant originally cited General Statutes § 52-48(b) for the proposition that a complaint must be served on a defendant before it is filed with the court.  Section 52-48 provides the timing sequence for determining a legally valid return day, not the requirements for when process must be returned to court.   At oral argument before this court on May 24, 2010, the defendant's counsel brought this error in its brief to the court's attention.   Consequently, the plaintiffs' counsel was on notice of the fact that the defendant's motion and memorandum of law cited to an incorrect statute.   The plaintiffs did not indicate that this error caused them any prejudice.   Accordingly, this memorandum will analyze the applicable legal issues under the correct statute.

FN8. General Statutes § 52-48(b) provides:  “All process shall be made returnable not later than two months after the date of the process and shall designate the place where court is to be held.”.  FN8. General Statutes § 52-48(b) provides:  “All process shall be made returnable not later than two months after the date of the process and shall designate the place where court is to be held.”

Brazzel-Massaro, Barbara, J.