LLC v. Scott Sharkey et al. (2012)

TRIAL COURT'S DECISION ON PLAINTIFF'S MOTION TO TERMINATE APPELLATE STAY (# 342)

The parties having been heard by the court on February 28, 2012 in connection with the above captioned plaintiff's motion and the defendants' objection thereto, it is hereby GRANTED.

This matter was tried to the court.   The plaintiff alleged violations of the Connecticut Unfair Trade Practices Act, C.G.S. § 42–110a et seq., fraud, breach of the implied covenant of good faith and fair dealing, unjust enrichment and rescission, negligent misrepresentations, breach of contract, breach of warranties, and numerous fraudulent transfers under the Uniform Fraudulent Transfers Act. By its memorandum of decision dated January 3, 2012, the court entered judgment in favor of the plaintiff on all counts.

Pursuant to Practice Book § 61–11, an automatic stay pending appeal of the trial court may be terminated if upon motion and hearing, “the judge who tried the case is of the opinion (1) that ․ the appeal is taken only for delay, or (2) that the due administration of justice so requires.”   The Court is vested with discretion to terminate the stay.  Northeastern Gas Transmission Co. v. Benedict, 139 Conn. 36, 42043 (1952).   In considering whether such an action would be an appropriate exercise of this court's discretion, the Supreme Court has stated, “[W]hether due administration of justice requires a termination of an automatic stay must involve an analysis in which the following principles are considered:  (1) the likelihood of success on appeal;  (2) the irreparability of injury to be suffered if the stay is lifted;  (3) the effect of the stay on other parties to the proceedings;  and (4) the public interest.”  Griffin Hospital v. Commission on Hospitals, 196 Conn. 451, 456–57 (1985).

Having carefully considered these factors, the court finds that the due administration of justice does require that the stay be lifted in this case.   The evidence presented at trial showed fraud on the part of the defendants by clear and convincing evidence.   This was found both in the initial sale of the franchised hair salons to the plaintiff, as well as in the later transfers of assets by the defendants in an effort to hide and/or dissipate funds which are necessary to satisfy their liability to the plaintiff.   The plaintiff will indeed be irreparably harmed unless the stay is lifted, because given the demonstrated fraudulent activities of the defendants, any of their property that is here today may well be gone tomorrow, let alone over the length of time necessary to adjudicate the appeal.   In addition to the fraudulent activity, given the imminent expiration of certain leases for the franchised hair salons and the impact of that on the plaintiff's business, there is no other sufficient remedy at law short of terminating the stay.   Without such action, the powers of the court to fashion remedies to enforce its judgments would be illusory.

IT IS SO ORDERED,

Blawie, J.

Blawie, John F., J.