Arthur Dicesare v. Stephen Burke (2011)

Memorandum of Decision on Plaintiff's Motion to Reargue (No. 119)

The plaintiff is in the incongruous position of seeking reargument of the court's ruling that the defendant has standing to maintain his counterclaim, and that the court therefore has subject matter jurisdiction over the counterclaim, after the plaintiff had withdrawn during the hearing thereon his motion to dismiss challenging that standing and subject matter jurisdiction.   The court's ruling did no more than restore the status quo ante before the motion to dismiss was filed.

The plaintiff argues that the court should have simply declared the issue of subject matter jurisdiction to be “moot” following the withdrawal of the motion to dismiss, but that would have been an abdication of the court's duty and would have prevented the case from proceeding further.  “The requirement of subject matter jurisdiction cannot be waived by any party and can be raised at any stage of the proceedings ․ As soon as the jurisdiction of the court to decide an issue is called into question, all other action in the case must come to a halt until such a determination is made.”  (Citations omitted.)   Bellman v. West Hartford, 96 Conn.App. 387, 392 (2006).  “[T]he purpose of a reargument is ․ to demonstrate to the court that there is some decision or some principle of law which would have a controlling effect, and which has been overlooked, or that there has been a misapprehension of facts ․ It also may be used to address alleged inconsistencies in the trial court's memorandum of decision as well as claims of law that the [movant] claimed were not addressed by the court ․ [A] motion to reargue [however] is not to be used as an opportunity to have a second bite of the apple or to present additional cases or briefs which could have been presented at the time of the original argument.”  (Citations omitted;  internal quotation marks omitted.)  Opoku v. Grant, 63 Conn.App. 686, 692–93 (2001).

The plaintiff has not demonstrated any decision or controlling principle of law which has been overlooked, or any misapprehension of the facts in evidence.   The plaintiff's grounds for seeking reargument are largely based on the provisions of a certain “B & D Properties, LLC, Buy–Sell Agreement” between the parties, which was not an exhibit before the court at the evidentiary hearing on the motion to dismiss.  (In fact, there was undisputed testimony before the court that B & D Properties, LLC “had no written operating agreement.”)   The plaintiff now asks the court to consider that agreement because other exhibits (Def. Ex. A and B) make reference to it.   Consideration of the content of an agreement not in evidence would be totally improper, and would classically give the plaintiff his “second bite at the apple.”

There is no valid basis to allow reargument.   Based on the evidence before the court, the transfer of defendant's 50% interest in B & D Properties, LLC on September 28, 2002 (Def.Ex. A) was not a transfer of Stephen Burke's entire membership interest so as to make Arthur J. DeCeasare the member with respect to that 50% share.   There was no evidence of compliance with any of the requirements of Conn. Gen.Stat. § 34–172 whereby an assignee of a limited liability company interest can become a member of the LLC with respect to the assigned interest.   The transfer was therefore governed by Conn. Gen.Stat. § 34–170(a) that “․ (2) an assignment [of a limited liability company membership interest] entitles the assignee to receive, to the extent assigned, only the distributions to which the assignor would be entitled;  (3) an assignment of a limited liability company membership interest does not dissolve the limited liability company or entitle the assignee to participate in the management and affairs of the limited liability company or to become or exercise any rights of a member;  [and] (4) until the assignee of a limited liability company becomes a member, the assignor continues to be a member and to have the power to exercise any rights of a member ․” Based on the evidence before the court, then, Stephen Burke continued to have the rights of a member of the company with respect to his original 50% interest at all times before and after September 28, 2002 which would give him standing to maintain this derivative action counterclaim on behalf of B & D Properties, LLC under Conn. Gen.Stat. § 34–187(a)(1).   Mr. Burke's continued membership in the LLC after September 28, 2002 is expressly recognized by the plaintiff's subsequent signature of multiple tax and conveyancing documents listing both the plaintiff and the defendant as members of the company.  (Def. Ex. C, E, F, G–1, G–12 and I.)

It may be that upon a full presentation of the evidence (which was curtailed by the withdrawal of the motion to dismiss) a different result will be proved, but, based on the evidence presented at this hearing, there is no basis for finding a lack of standing or for reconsideration or reargument of the court's ruling.

Order

The Motion for reargument is denied, and the objection thereto is sustained.

Alfred J. Jennings, Jr.,

Judge Trial Referee

Jennings, Alfred J., J.T.R.