Arian Prevalla v. Anthony Cresswell (2013)

MEMORANDUM OF DECISION RE MOTION TO QUASH (# 157)

FACTS

The plaintiff, Arian Prevalla (plaintiff), commenced this action by writ, summons and complaint against the defendant, Anthony Cresswell (defendant) on June 8, 2010.   The complaint is a seven-count complaint and alleges the following.   On or about November 7, 2006, Connecticut Flight Academy, LLC (CFA) was incorporated in the State of Connecticut by both the plaintiff and the defendant.   CFA did not have a written operating agreement, but each member was fifty percent owner.   On or about November 10, 2006, CFA purchased an aircraft, Piper Warrior from Peter Gray LLC for the price of $49,000.   The money for this purchase was loaned to CFA by the plaintiff.   On or about October 1, 2007, CFA purchased Metro Flight Services, LLC at Hartford Brainard Airport, for $180,000, with money loaned by the plaintiff.   To memorialize the loans made by the plaintiff, CFA signed a demand promissory note for $250,000 and UCC liens were placed on a total of five aircraft owned by CFA.

In December 2008, CFA became a Federal Aviation Administration (FAA) Part 141 certified school.   This certification was a valuable asset to the school, because it allowed the training of foreign flight students and permitted the school to support foreign students with M1 visas issued by the United States Citizenship and Immigration Services (USCIS).   On January 29, 2009, Connecticut Air Taxi, LLC was incorporated by both the plaintiff and the defendant.   On August 9, 2009, Connecticut Air Taxi received its air charter license from the FAA. In September 2009, the City of Meriden requested a proposal to build and operate the Meriden Markham Airport as a fixed based operator.   The plaintiff and defendant formed an unincorporated partnership (the partnership) for the purpose of creating a new entity to be known as the Meriden Aviation Group, LLC (MAG), to solicit certain other investors to invest in the to-be formed entity, in the obtaining of the contract to build and operate the Meriden Markham Airport as a fixed based operator.   The partnership acted as a promoter for MAG, as it was an unincorporated entity.   In or around October 2009, discussions took place with three other investors for the contribution of significant financial investment wherein both the plaintiff and the defendant would invest $75,000 each as a match to the other investor's investment.   The defendant was unable to raise the required funds and as a result, the plaintiff agreed to provide the funds subject to an oral agreement that the defendant would work exclusively with the defendant for the purpose of forming MAG and obtaining outside investors.

The defendant agreed to work exclusively with the plaintiff for the purpose of forming MAG, obtaining outside investors, and obtaining the contract to build and operate the Meriden Markham Airport as a fixed based operator.   In January 2010, the defendant solicited other investors with whom the plaintiff had been actively negotiating and with whom they were in the final stages of negotiating MAG, to invest only with him and to form an entity different than MAG, thereby taking the opportunity from the plaintiff and MAG. The defendant also made discrediting and disparaging remarks regarding the plaintiff's credit worthiness, marital fidelity and relations, his ability to operate MAG, or to succeed with the contract to build and operate the Meriden Markham Airport as a fixed based operator.   The plaintiff further alleges that on or around the same period of time, the defendant sought to increase his personal withdrawals from CFA, expense business items through CFA, and to have CFA pay his personal income tax liabilities, all in an effort to independently obtain sufficient funds to invest in a new entity to compete with MAG. MAG was ultimately never formed and this lawsuit between the plaintiff and defendant ensued.

Count one of the complaint alleges breach of the partnership agreement;  count two alleges breach of contract with the plaintiff;  count three alleges bad faith breach of partnership agreement;  count four alleges bad faith breach of the partnership;  count five alleges breach of fiduciary duty as it relates to the partnership;  count six alleges a CUTPA violation;  and count seven alleges tortious interference with business opportunity.

On July 27, 2010, the defendant filed an answer and counterclaim.   In his counterclaim, the defendant alleges the following.   In 2004, he and the plaintiff teamed up to pursue a flight instruction business known as CFA. At that time the plaintiff had no experience in the aviation industry and was being taught to fly by the defendant.   The defendant had an existing following of flight students whom he was instructing along with thirty years of aviation experience.   The parties anticipated that the defendant would bring to the business venture his aviation experience and his existing student base and that the plaintiff would bring to the business venture capital and business experience.   The defendant admits that both he and the plaintiff formed CFA on or about November 2006, and that both are equal co-owners of CFA and that CFA has no operating agreement.   Over time the business grew and CFA acquired a fleet of six aircraft.   The defendant as a pilot, was the chief flight instructor and managed the maintenance and all aviation related activities for CFA. The dispute began to arise between the plaintiff and defendant at or about the time the defendant sought a business opportunity with the City of Meriden.   In 2009, the defendant became aware of the City's lease for the fixed base operator of the Meriden Markham airport was scheduled to expire at the end of June 2010.   The defendant alerted the plaintiff to this opportunity and both entered into an oral agreement to submit a proposal and bid on behalf of CFA to become the City of Meriden's fixed base operator and to take any other steps necessary in order to secure the contract.   The defendant alleges that both he and the plaintiff agreed that a bid should be submitted on behalf of CFA and that a new entity, of which the plaintiff and defendant would be equal 50% co-owners would be formed to enter into the contract to be the fixed base operator for the Meriden Markham Airport.   The defendant took the lead on preparing the bid, as it required expertise and knowledge that he had and the defendant did not.

On December 8, 2009, the defendant submitted the bid.   Serious negotiations were entered into between the City and defendant.   The defendant worked with the City to consummate the award of a lucrative contract to the plaintiff's and defendant's new entity to be the fixed base operator for the Meriden Markham Airport.   It was during this time, January 2010, that the defendant advised the plaintiff that he wanted to have more access and input with regard to the finances and financial decisions for CFA. The defendant asked the plaintiff to include him in the decision making process with regard to CFA's finances, to allow him access to CFA's books, to have monthly finance meetings for the purpose of reviewing CFA's books and to change the way CFA had just performed its year-end close.   The defendant also informed the plaintiff that he objected to the plaintiff's withdrawal from CFA's operating account of $25,000 which purportedly represented interest to the plaintiff on his loan to CFA of $250,000.   The defendant also advised the plaintiff that he wanted an increase in his weekly draw from CFA because it was he who was running the day-to-day operations of the business including the management of the flight school and daily flight lessons.

During the January 2010 meeting the defendant also informed the plaintiff that he wanted to get an operating agreement in place for the entity which they were going to form in anticipation of the City of Meriden's award to them of the Meriden Markham Airport contract.   The defendant also advised the plaintiff that he wanted to formalize their interest in Connecticut Air Taxi by creating an LLC and put an operating agreement in place and that he also wanted to put an operating agreement in place for CFA. It was after this meeting, and the defendant raising his concerns with the plaintiff, that a dispute arose which led to the present lawsuit.

In response to the defendant's concerns the plaintiff gave the defendant three ultimatums.   After receiving the three ultimatums, the defendant alleges that he attempted to negotiate with the plaintiff regarding a buyout of CFA, to no avail.   The defendant further alleges that it was after this meeting when the plaintiff decided to breach his contract with the defendant by pursuing the contract with the City of Meriden for a different entity in which the defendant would have no interest, and without the defendant's involvement.   At this time the plaintiff advised the defendant that he wanted to take the lead on their negotiations and dealings with the City. As plaintiff alleges in his complaint that the defendant sought to essentially close him out of the City of Meriden deal, the defendant likewise alleges that the plaintiff proceeded to negotiate with the City without the defendant's involvement.   According to the defendant, on or about May 24, 2010, a draft Memorandum of Understanding (MOU) between the City and MAG was prepared by the City and provided to the plaintiff.   The defendant alleges that MAG was crossed out on the MOU and that MAG was substituted with Meriden Aviators, LLC. The plaintiff then proceeded to secretly negotiate with the City, substituting the new entity from which the plaintiff intended to exclude the defendant.   The defendant alleges that despite the defendant not having any ownership interest in the new entity, the plaintiff planned to have the new entity use CFA and CFA's assets to provide the flight instruction contemplated in the MOU and use Connecticut Air Taxi's air charter services to provide the air charter services contemplated in the MOU. This new entity of which the plaintiff is a member became known as Meriden Aviators, LLC and was formed by the plaintiff on May 24, 2010.

On June 6, 2010, the Meriden City Council approved a final version of the MOU between Meriden Aviators and the City to move forward with an award of a five-year contract with an option to renew for another ten years to Meriden Aviators.   On July 2, 2010, Meriden Aviators, LLC entered into a contract for fixed based operator services with the City of Meriden for the operation of the Meriden Markham Airport and at the plaintiff's direction, used CFA's planes, flight simulator and other assets and personnel to provide flight instructions and to otherwise service the contract with the City.

The defendant alleges that the plaintiff's substitution of an entity owned by the plaintiff to the exclusion of the defendant, as the party to the MOU and, later a contract with the City of Meriden for a fixed base operator of the Meriden Markham Airport, was a breach of the plaintiff's contract with the defendant to bid and obtain the corporate opportunity jointly, as equal partners.

In his answer, although the defendant admits to some of the material allegations in the plaintiff's complaint, he also denies many of the material allegations.   The counterclaim consists of nine counts.   Count one alleges a breach of contract as to the plaintiff and Meriden Aviators, LLC;  count two alleges usurpation of corporate opportunity as to the plaintiff and Meriden Aviators;  count three alleges a breach of fiduciary duty as to the plaintiff, count four seeks a dissolution of CFA and appointment of receiver;  count five alleges a CUTPA violation as to the plaintiff and Meriden Aviation;  count six alleges statutory theft as to the plaintiff;  count seven is an action for an accounting of CFA;  count eight alleges unjust enrichment as to the plaintiff and Meriden Aviators;  and count nine alleges defamation as to the plaintiff.   The defendant seeks a dissolution of CFA and the appointment of a receiver;  an accounting and judgment for the amount found due on such accounting;  money damages;  interests and attorneys fees;  and treble damages.

The plaintiff has noticed the deposition of a nonparty.   The defendant has objected to the deposition and has moved to quash the deposition.¹  The plaintiff has objected to the defendant's motion.   The matter was scheduled on this court's April 22, 2013 nonarguable short calendar.

TRIAL COURT STANDARDS

“A subpoena is an appropriate process for the production of documents that are relevant to the matter before the court ․ It may not be used, however, for the purpose of conducting a fishing expedition into the papers of a party or a stranger to the proceedings.  Three S. Development Co. v. Santore, 193 Conn. 174, 179, 474 A.2d 795 (1984).   Once a subpoena has been issued, under Practice Book § 13:28(e), the court in which the cause is pending may either “(1) quash or modify the subpoena if it is unreasonable and oppressive or if it seeks the production of materials not subject to production under the provisions of [Practice Book sections 13–2 through 13–5], or (2) condition denial of the motion upon the advancement by the party who requested the subpoena of the reasonable cost of producing the materials sought.”   Practice Book § 13–28(e).

Section 13–5's requirement for a showing of good cause for entry of a protective order requires a “showing [that] must involve a particular and specific demonstration of fact, as distinguished from stereotyped and conclusory statements.”   Lawrence Langerman, Trustee et al. v. John Morganti, Superior Court, Judicial District of Danbury, Docket No. CV03–0348185S (September 18, 2003, Bellis, J.) 2003 Ct.Sup. 10878, 35 Conn. L. Rptr. 492.   Moreover, it has long been “recognized that granting or denial of a discovery request rests in the sound discretion of the [trial] court ․” Barry v. Quality Steel Products, Inc., 280 Conn. 1, 16–17 (2006).   And, in ruling on discovery matters, including motions to quash deposition notices or subpoenas, the court is obligated to take a reasoned and logical approach to the relevant contest between the parties.   See. e.g. Blumenthal v. Kimber Manufacturing, 265 Conn. 1, 7–8 (2003).

Practice Book § 13–2 provides in relevant part:  “In any civil action ․ where the judicial authority finds it reasonably probable that evidence outside the record will be required, a party may obtain in accordance with the provisions of this chapter discovery of information or disclosure, production and inspection of papers, books, documents and electronically stored information material to the subject matter involved in the pending action, which are not privileged, whether the discovery or disclosure relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, and which are within the knowledge, possession or power of the party or person to whom the discovery is addressed.   Discovery shall be permitted if the disclosure sought would be of assistance in the prosecution or defense of the action and if it can be provided by the disclosing party or person with substantially greater facility than it could otherwise be obtained by the party seeking disclosure.   It shall not be ground for objection that the information sought will be inadmissible at trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence ․”

The plaintiff Arian Prevalla has noticed the deposition of a Mr. Jarir Aburabia, who is not a party in this action.   Mr. Aburabia is a fact witness who the plaintiff claims was a student, presumably at the Connecticut Flight Academy, the business jointly owned by the plaintiff and defendant, and which is the subject of this lawsuit.   The plaintiff further claims that Mr. Aburabia was also a witness to the development and discussion of the business relationship between the plaintiff and the defendant.   The defendant has moved to quash the deposition notice of Mr. Jarir Aburabia on grounds that “Mr. Aburabian has no knowledge with regard to any issue which has a bearing on the claims or counterclaims in this case.”   Defendant's Memorandum of Law in Support of Motion to Quash.   The defendant gives no other grounds for moving to quash the deposition.

DISCUSSION

The plaintiff argues that Mr. Aburabia is the appropriate person who should have objected to the subpoena and not the defendant, based on the language of section 13–28(d) and (e) which provides in subsection (d) that “[t]he person to whom a subpoena is directed may within 15 days object” or as set forth in subsection (e), the judicial authority may, “upon motion [by the person subpoenaed] quash or modify the subpoena if it is unreasonable and oppressive or it seeks the production of materials not subject to production ․ or (2) condition denial of the motion upon the advancement by the party who requested the subpoena of the reasonable cost of producing the materials being sought.”

In this case it is the defendant rather than the person served with the subpoena who is seeking protection from the effects of compliance.   Although the language of Practice Book § 13–28(e) provides that a person served with a subpoena may file a motion to quash, it has been held that a plaintiff seeking to protect her interests from the effects of a non-party's compliance with a subpoena may do so by filing a motion for a protective order “to prevent the defendant from conducting depositions of nonparty witnesses.”  Cahn v. Cahn, 26 Conn.App. 720, 728 (1992).   Although it was the plaintiff in Cahn that sought protection of her interests from the effects of a non-party's compliance with a subpoena, the court sees no reason why a defendant could not do the same.   Thus, this court will not deny the defendant's motion to quash the deposition based upon the plaintiff's procedural argument.

As to the substantive reasons given by the defendant for quashing the deposition, he does not argue that it is unreasonable and oppressive, nor does the defendant set forth how he would be prejudiced by the taking of Aburabia's deposition.   The defendant argues that Mr. Aburabia is not a party to this case, was never an owner or employee of CFA and has no connection to or personal knowledge of any of the issues in this case.   The defendant argues that Arburabia is a friend of the plaintiff and has no personal knowledge with regard to the business dispute.   Essentially the defendant is claiming that Arburabia's testimony is irrelevant and immaterial and not reasonably calculated to lead to admissible evidence.   The plaintiff, on the other hand, claims that Arburabia's testimony is relevant to the issues in the lawsuit because he was a student at CFA and witness to the development and dissolution of the business relationship between Cresswell and Prevalla.   The heart of this lawsuit stems from the business relationship between the plaintiff and defendant and the disputes which arose from that business relationship.   To the extent that Arburabia has personal knowledge about the business relationship between the plaintiff and the defendant, and any disputes which arose from that business relationship, which are relevant to the issues raised in the present lawsuit, he can testify to that knowledge.

Practice Book § 1–8 provides:  “The design of these rules being to facilitate business and advance justice, they will be interpreted liberally in any case where it shall be manifest that a strict adherence to them will work surprise or injustice.”  “The Connecticut Supreme Court historically has placed a liberal interpretation upon the rules of discovery.”  Housing Authority v. Boyd, 36 Conn.Sup. 47, 49, 410 A.2d 494 (1979);  see also Sanderson v. Steve Snyder Enterprises, Inc., 196 Conn. 134, 140, 491 A.2d 389 (1985) (holding that Connecticut has liberal discovery policies and practices).  “The rules are not set in stone.   Every case has to be considered separately, but the spirit of the rules is more greatly enhanced by liberal discovery.”  Vargas v. Yale–New Haven Hospital, 47 Conn.Sup. 1, 4, 768 A.2d 967 (2000) (37 Conn. L. Rptr. 135).

Our Supreme Court has repeatedly held that “․ this jurisdiction has liberal discovery doctrines.”  Tianti v. William Raveis Real Estate, Inc., 231 Conn. 690, 651 A.2d 1286 (1995).   With this in mind, the defendant has failed to present to the court why the plaintiff should be precluded from taking the deposition of Arburabia who has knowledge of the business relationship between the parties and the dissolution of the business.   The defendant's motion to quash is therefore DENIED.   The court is mindful, however, that our discovery rules are not to be used as a fishing expedition.   Therefore, while the court denies the defendant's motion to quash Arburabia's deposition, his deposition should be limited to any personal knowledge he has about the development and dissolution of the business relationship between the plaintiff and defendant.   It is so ordered.

Wilson, J.

FOOTNOTES

FN1. It is not clear from the parties' filings if a subpoena was issued to Mr. Arburabia along with the notice of his deposition..  FN1. It is not clear from the parties' filings if a subpoena was issued to Mr. Arburabia along with the notice of his deposition.

Wilson, Robin L., J.