Jamie Goodman v. Sholeh Janati (2011)

MEMORANDUM OF DECISION RE PREJUDGMENT REMEDY APPLICATION

The plaintiff Jamie Goodman seeks a prejudgment remedy against the defendant Sholeh Janati.   Goodman was formerly married to Keith Styrcula who is now romantically involved with the defendant Janati.   Styrcula has financial support obligations to Goodman and the children of their marriage under a separation agreement made in 2004, and a contempt order entered by the Honorable Dennis Harrigan of the Superior Court in early 2010.   These obligations have largely been unmet.

In the proposed complaint accompanying the plaintiff's application for prejudgment remedy, the plaintiff alleges that Styrcula “created a scheme to defraud the [p]laintiff by diverting and hiding his income to (sic) the defendant in order to avoid paying ․ alimony and child support,” and that Janati was a knowing participant in this scheme.   The proposed complaint alleges fraud and intentional and negligent infliction of emotional harm.

A prejudgment remedy (PJR) may be granted if probable cause is found that a judgment will be rendered in favor of the plaintiff in a sum equal to or greater than the PJR sought.  General Statutes § 52–278(a)(1).  “Probable cause” has been repeatedly, if inartfully, defined by Connecticut courts as “A bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence and judgment, under the circumstances, in entertaining it.”  TES Franchising, LLC v. Feldman, 286 Conn. 132, 137 (2008) [quoting Wall v. Toomey, 52 Conn. 35, 36 (1884) ].   In general, the probable cause standard is not as demanding as proof by a preponderance of the evidence Id. Ledgebrook Condominium Association v. Lusk Corp., 172 Conn. 577, 584 (1977).

The application was heard by this court on June 1, 2011 and again on June 30, 2011.   The thrust of Goodman's claims involve income purportedly earned by Strycula over the past few years through various annual conferences and “expos” held under the aegis of Structured Products Association, LLC (SPA) an organization formed by Styrcula in 2004, and which he is the only member of.   “Structured products” are a type of financial investment apparently created by banks and other financial institutions.   There was no quick or easily understandable definition or explanation of a structured product provided during the hearing, and this court will not embarrass itself by attempting to give one here.   Suffice it to say that Styrcula is a well-known individual in the structured product field who is often called on for comments on the subject by the media.

The plaintiff presented evidence through Styrcula about the finances of the SPA conferences (usually two days in length, in the spring) and expos (usually one day, in the fall).   At least at the outset, Strycula played a significant role in creating the conferences and arranging for the speakers and panelists.   At the 2006 conference, the conference brochure notes he made brief opening remarks on both days.   That conference was actually run by Financial Research Associates, LLC (FRA) which collected the conference fees from attendees and sponsorship fees from sponsors.   Janati was associated with FRA at the time.   Styrcula testified that attendance fees, stated to be $1,695.00 in the 2006 brochure were often not fully charged or paid.   A half dozen or so sponsors might contribute as much as $5,000.00 to $7,000.00 a piece to support the event.   Styrcula testified that the costs of a conference were around $50,000.00.   Styrcula and SPA received no money from these events, and this is the heart of one of the plaintiff's claims of fraud.   Goodman contends that income from the conferences and expos is being wilfully and fraudulently diverted from Styrcula to Janati who was associated with FRA in 2005, and sometime thereafter began running the conferences and expos herself under the trade name Pomegranate.

There is little, if any, evidence to support this claim.   The unrebutted and credible evidence from Styrcula and Marc Scherer, an experienced event manager called by the defendant to testify, was that speakers and panelists do not get paid at these business conferences.   The visibility and renown obtained from participation is considered compensation enough.   In addition, there was no evidence that SPA received any income from the conferences and expos.   Styrucla testified, credibly, that he formed SPA as an advocacy group.   It has an e-mail list, but no employees, or bank account.   While the events took place under SPA's name, the revenues, and the risks, went to the event manager, e.g. FRA or later, Pomegranate.   Apparently, there was never any expectation that SPA would receive income or bear any loss arising from the events.   Therefore, Goodman has not met the rather low burden of proof for a PJR of establishing that income from the conferences was fraudulently diverted to Janati from Styrucla or SPA.

The court is of a similar mind with respect to Goodman's claim that Janati was entitled to receive fifteen percent of gross receipts of the various conferences and this is income that should be attributable to Styrcula.   The court does not accept this claim for several reasons.   First, unlike the purported expert testimony of Kitty Kelly, an event planner, that a planner usually received a commission of ten to fifteen percent of the event's budget, without accepting any monetary risk if the event was unsuccessful, Janati was not an event planner for a fee.   She was an organizer who paid the bills for all event accommodations, food, beverages, labor, audio-visual equipment and the like with her own funds and at her own risk.   Thus, Ms. Kelly's testimony was of little value.   Second, it was Janati's money which was spent to put on the conferences.   While Styrcula's expertise was undoubtedly instrumental in attracting participants and attendees, this type of contribution is generally not compensable according to Mr. Scherer, who sometimes used an uncompensated advisory council to select speakers.

The court finds insufficient evidence to support a granting of PJR in any amount based on the aiding and abetting a fraud claim against Janati.   There is little doubt that Janati and Styrcula have found mutual benefit from each other regardless of the romantic aspect.   He lives in her house and she pays many of his expenses.   However, there is a dearth of evidence that income was improperly diverted from Styrucla, or put another way, that Janati did not legitimately earn the income from the SPA events.   In short, the evidence does not establish probable cause to that there was a scheme to defraud Goodman by putting money in Janati's pocket that belonged to Styrcula.

Nor is there sufficient evidence to establish probable cause for the claims of negligent or intentional infliction of emotional harm.   To establish a claim of intentional infliction of emotional distress, a defendant's conduct must be extreme and outrageous.   For a negligent infliction of emotional distress claim the defendant's conduct must be unreasonable creating a foreseeable risk of harm.   See Olson v. Bristol–Burlington Health District, 87 Conn.App. 1, 7 (2005);  Kontos v. Laurel House, Inc., Superior Court, judicial district of Stamford–Norwalk at Stamford, CV 06 5001408 (January 27, 2007, Adams, J.) [42 Conn. L. Rptr. 709].   While the court can be sympathetic to Goodman's circumstances in light of Styrcula's defalcations, the fact remains that Janati owes no duty to pay alimony or child support to Goodman.   Janati's conduct in receiving income for her work in connection with organizing the SPA functions was not extreme, outrageous or unreasonable.

For the reasons stated above the application for a PJR is denied.

TAGGART D. ADAMS

JUDGE TRIAL REFEREE

Adams, Taggart D., J.