LLC v. Joshua Kobyluck (2011)

MEMORANDUM OF DECISION RE MOTION TO DISMISS, No. 121

FACTS

On June 18, 2010, the plaintiffs, Ginseng House, LLC, Choon Ok Jeon and B & D Salem Realty, LLC (B & D Salem), filed an amended two-count complaint against the defendant, Joshua Kobyluck, alleging defamation and tortious interference.   The complaint alleges that the defendant made defamatory statements concerning the plaintiffs Jeon and Ginseng House's business at a hearing before the planning and zoning commission for the town of Salem, Connecticut.   As a result of the alleged statements, the plaintiffs Jeon and Ginseng House allege that they lost business and have been unable to pay rent due to the plaintiff B & D Salem, their landlord.   Further, the complaint alleges that the defendant tortiously interfered with Jeon and Ginseng House's contractual relationships with their customers and with their landlord, B & D Salem.

The defendant filed a motion to dismiss the claims brought by the plaintiff B & D Salem on January 13, 2011, arguing that B & D Salem lacks standing to sue him.¹  The motion is accompanied by a memorandum of law.   The plaintiffs filed a memorandum of law in opposition to the defendant's motion to dismiss on January 28, 2011.

DISCUSSION

“If a party is found to lack standing, the court is without subject matter jurisdiction to determine the cause ․ Subject matter jurisdiction involves the authority of the court to adjudicate the type of controversy presented by the action before it.”  (Internal quotation marks omitted.)  Frillici v. Westport, 264 Conn. 266, 280, 823 A.2d 1172 (2003).  “[A] subject matter jurisdictional defect may not be waived ․ [or jurisdiction] conferred by the parties, explicitly or implicitly ․ [T]he question of subject matter jurisdiction ․ once raised, either by a party or by the court itself ․ must be answered before the court may decide the case.”  (Internal quotation marks omitted.)  Batte–Holmgren v. Commissioner of Public Health, 281 Conn. 277, 283, 914 A.2d 996 (2007).  “The proper procedural vehicle for disputing a party's standing is a motion to dismiss.”  (Internal quotation marks omitted.)  D'Eramo v. Smith, 273 Conn. 610, 615 n.6, 872 A.2d 408 (2005).   “[T]he plaintiff ultimately bears the burden of establishing standing.”   Seymour v. Region One Board of Education, 274 Conn. 92, 104, 874 A.2d 742, cert. denied, 126 S.Ct. 659, 163 L.Ed.2d 526 (2005).

In the present case, the defendant argues that B & D Salem lacks standing on the ground that B & D Salem did not suffer a direct loss sufficient to invoke this court's jurisdiction.   In response, the plaintiffs appear to concede that B & D Salem does not have standing to pursue the defamation claim and instead focus on the tortious interference claim, arguing that the defendant's action interfered with the contractual relationship between tenants, Ginseng House and Jeon, and their landlord, B & D Salem.

“Standing is the legal right to set judicial machinery in motion.   One cannot rightfully invoke the jurisdiction of the court unless he [or she] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy.”  (Internal quotation marks omitted.)  West Farms Mall, LLC v. West Hartford, 279 Conn. 1, 11, 901 A.2d 649 (2006).  “[I]f the injuries claimed by the plaintiff are remote, indirect or derivative with respect to the defendant's conduct, the plaintiff is not the proper party to assert them and lacks standing to do so.   Where, for example, the harms asserted to have been suffered directly by a plaintiff are in reality derivative of injuries to a third party, the injuries are not direct but are indirect, and the plaintiff has no standing to assert them.”  Ganim v. Smith & Wesson Corp., 258 Conn. 313, 347–48, 780 A.2d 98 (2001).  “The task of the court in a case such as this is to determine whether the facts, as stated in the complaint and taken as true, demonstrate that the injuries, on one hand, are direct or, on the other hand, are indirect, remote or derivative.”  Id., 348.

Our Supreme Court has “identified three policy factors to guide courts in their application of the general principle that plaintiffs with indirect injuries lack standing to sue ․ First, the more indirect an injury is, the more difficult it becomes to determine the amount of plaintiff's damages attributable to the wrongdoing as opposed to other, independent factors.   Second, recognizing claims by the indirectly injured would require courts to adopt complicated rules apportioning damages among plaintiffs removed at different levels of injury from the violative acts, in order to avoid the risk of multiple recoveries.   Third, struggling with the first two problems is unnecessary where there are directly injured parties who can remedy the harm without these attendant problems.”  (Citation omitted.)  Id., 353.

In the present case, paragraph five of both counts alleges that the defendant “stated that there is ‘a prostitution ring going on at Salem Four Corners' a number of times.”   While this allegedly defamatory statement could affect B & D Salem as the owner of property at the shopping center Salem Four Corners, nowhere in the complaint does B & D Salem allege that it suffered any direct damages as a result of the defendant's actions.   Rather, paragraph seven of count one alleges that the defendant's action resulted in a dramatic loss of income and business for Ginseng Spa, the business owned and operated by the plaintiffs Jeon and Ginseng House.   Moreover, paragraph eight of count one unequivocally alleges that the only damages suffered by B & D Salem are that Jeon and Ginseng House are now no longer able to pay rent due to B & D Salem under their rental agreement.   Also, paragraphs seven and nine of count two allege that the defendant's conduct interfered with the business relationship between Jeon and B & D Realty;  that relationship, however, is limited to “the payment of rental obligations.”   In their memorandum in opposition to the motion to dismiss, the plaintiffs admit that B & D Salem's damages are the rental payments due that have not been made.   Thus, it is clear that the injuries claimed by B & D Salem in both counts are derivative of Jeon and Ginseng House's injuries.

Applying the three-factor test from Ganim v. Smith & Wesson Corp., supra, 258 Conn. 353, the court concludes that B & D Salem lacks standing to pursue these two claims against the defendant.   First, the inability of B & D Salem's tenant to pay rent could be attributable to other, independent factors that would be difficult to determine.   Second, if all three plaintiffs were to recover from the defendant, there would be a risk of multiple recoveries because each plaintiff seeks the same source of damages (loss of rent) and apportioning the claims would prove complicated.   Third, the need to struggle with these first two factors is unnecessary given that the plaintiffs Jeon and Ginseng House are directly injured parties who can remedy the harm.   See Connecticut State Medical Society v. Oxford Health Plans (CT), Inc., 272 Conn. 469, 481, 863 A.2d 645 (2005) (“applying the first two considerations is unnecessary when there are directly injured parties who can remedy the harm”);  West Hartford v. Murtha Cullina, LLP, 85 Conn.App. 15, 23, 857 A.2d 354 (2004) (“Ganim, however, makes it explicitly clear that if the court finds that there is a better suited, directly injured party to bring suit, the third factor can be dispositive without the requirement of further analysis”).   Should Jeon and Ginseng House recover against the defendant in this action, they would be able to pay the rent that is owed to B & D Salem, thus making B & D Salem whole and remedying its indirect losses.

CONCLUSION

For the foregoing reasons, the court hereby grants the defendant's motion to dismiss the claims brought by the plaintiff B & D Salem Realty, LLC on the ground that this plaintiff lacks standing.

Martin, J.

FOOTNOTES

FN1. This court, Martin, J., previously denied the defendant's motion for summary judgment on September 1, 2010 [50 Conn. L. Rptr. 345]..  FN1. This court, Martin, J., previously denied the defendant's motion for summary judgment on September 1, 2010 [50 Conn. L. Rptr. 345].

Martin, Robert A., J.