Kenneth Hill v. New Alliance Bank (2012)

MEMORANDUM OF DECISION IN RE DEFENDANT'S MOTION TO CITE IN THIRD PARTY DEFENDANT

The defendant, New Alliance Bank,¹ has moved to cite in a third party defendant, Daphne Benas, on the grounds that Benas is a necessary party to the present action with a direct interest that may be affected by any judgment entered herein.   For the reasons set forth below, the defendant's motion is granted.

The following facts are not in dispute.   The defendant holds a mortgage on certain real property owned by a non-party, MBMB, LLC. The loan documents between MBMB and the defendant included a certain guaranty executed by Daphne Benas, the proposed third-party defendant, pursuant to which Benas guaranteed all liabilities owed by MBMB to the defendant.   At some point, a building on the property in question sustained significant damage when water pipes ruptured within it.   The plaintiff alleges in his complaint that, in response to this property damage, he was retained by the defendant to assist in obtaining insurance proceeds from the insurance company of MBMB, and also to provide project management services on the property while it was being repaired.

In the instant action, the plaintiff claims that after he helped to secure the insurance proceeds in question, the defendant then wrongly applied those proceeds in satisfaction of sums due on the mortgage debt and failed to compensate the plaintiff for his services.   Although the plaintiff's action sounds in breach of contract, there is considerable disagreement between the plaintiff and defendant regarding the extent to which the plaintiff's claims relate to and arise out of the loan and mortgage entered into by the defendant and MBMB. The defendant contends that the present matter is tied inexorably to the loan and mortgage, and that, accordingly, the defendant may seek indemnification from Benas, pursuant to the terms of her guaranty, for the costs and fees (including attorneys fees) incurred by the defendant in the course of this litigation.   On that basis, the defendant moves to cite in Benas as a necessary party.   The plaintiff, on the other hand, sees the instant action as a separate claim wholly unrelated to the loan between the defendant and MBMB, and therefore entirely outside the scope of the Benas guaranty.   The plaintiff therefore objects to the defendant's effort to cite in Benas as a third-party defendant.

Under the circumstances present here, the court concludes that Benas is a necessary party and thus is appropriately joined in this action.  “General Statutes § 52–102 now makes it mandatory for a trial court to grant a party's motion to add a person as a party if that person is necessary for a complete determination or settlement of any question involved therein.”  Donner v. Kearse, 234 Conn. 660, 669 (1995).  “Necessary parties ․ are those [p]ersons having an interest in the controversy, and who ought to be made parties, in order that the court may act on that rule which requires it to decide on, and finally determine the entire controversy, and do complete justice, by adjusting all the rights involved in it.”  Napoletano v. CIGNA Healthcare of Connecticut, Inc., 238 Conn. 216, 225 n.10 (1997).   In this case, as noted, the defendant asserts that the proposed third-party defendant's guaranty is available as a source from which the defendant may seek to recover the costs and fees incurred by the defendant in its defense of this action.   The plaintiff strongly disagrees with this assertion.   This difference of opinion will be resolved not by this court at this juncture of these proceedings, but when all of the issues presented by this case are finally adjudicated.   What is significant at this point, however, is that the broad language of Benas' guaranty could expose her to substantial economic liability.   As such, Benas has a direct interest in the outcome of this case—an interest that she alone possesses and is entitled herself to protect.

In reaching this conclusion, the court takes note that Benas is already currently involved in litigation that arises generally from the above-described relationship between the defendant and MBMB. There is now pending a separate action entitled MBMB, LLC v. New Alliance Bank, Superior Court, judicial district of New Haven, Docket No. CV10–6011842.²  In that case, MBMB has raised claims against the defendant concerning the defendant's use of the same insurance proceeds that are at issue in the matter now before this court.   The defendant in that action sought permission of the court to cite in Benas as a third-party defendant based on the same guaranty that the defendant seeks to rely upon here.   The court there granted the defendant's motion to cite in Benas and, since that time, Benas has appeared through counsel and has filed an answer and special defenses to the third-party complaint.   The pleadings in that case have been closed and the matter has been claimed to the trial list.

Given that Benas is currently involved in this closely related litigation, the court rejects the plaintiff's assertion that it would be “wholly inappropriate” to cite Benas in as a party to this action as well.   Little prejudice, if any, should arise from her joinder here since she is already litigating in the other case similar (if not identical) questions surrounding the terms and reach of her guaranty.   Consequently, her joinder here should not occasion any significant delay in the resolution of the present matter or in any other way prejudice the rights of the plaintiff.   See A. Secondino & Son, Inc., 19 Conn.App. 8, 14 (1989), citing Lettieri v. American Savings Bank, 182 Conn. 1, 13 (1980) (possible prejudice to an existing party in an action is a relevant factor in determining whether joinder of another is appropriate).   Indeed, in light of the possibility that the two cases themselves could be joined, it would seem “wholly inappropriate” not to join Benas here.   Simply put, in the same way that Benas' participation in the related action was deemed necessary to a fair resolution there, her participation here is equally necessary in order for the court to determine the entire controversy at issue in the present action and to do complete justice to all interested parties.

The defendant's motion to cite in a third-party defendant is hereby granted.

THE COURT

Gold, J.

FOOTNOTES

FN1. Since the filing of the instant motion, the defendant moved to substitute First Niagara Bank, National Association, as the named defendant in the place of New Alliance Bank, following the merger of those institutions.   That motion was granted on July 21, 2011.   See Order # 115.10..  FN1. Since the filing of the instant motion, the defendant moved to substitute First Niagara Bank, National Association, as the named defendant in the place of New Alliance Bank, following the merger of those institutions.   That motion was granted on July 21, 2011.   See Order # 115.10.

FN2. In this other case, as in the instant one, First Niagara Bank, National Association has been substituted as the named defendant.   See note 1, supra..  FN2. In this other case, as in the instant one, First Niagara Bank, National Association has been substituted as the named defendant.   See note 1, supra.

Gold, David P., J.