Federated Capital Corp. v. Joshua I. Lushinks dba Advanced Landscape (2013)

MEMORANDUM OF DECISION RE DEFENDANT'S MOTION TO DISMISS (# 102)

I. INTRODUCTION

The defendant, Joshua Lushinks, has filed the motion to dismiss that is now before the court on the ground that he is not individually liable for his corporation's debts.   For the reasons that follow, the motion to dismiss is denied.

II. FACTS

The plaintiff, Federated Capital Corporation, DBA Federated Financial Corporation of America, commenced this suit by way of a one-count complaint served on the defendant, Joshua Lushinks, DBA Advanced Landscape, on December 11, 2012.   In its complaint, the plaintiff alleges that the defendant contracted with Advanta Bank Corporation (Advanta) to obtain a credit card in exchange for a promise to repay Advanta all sums charged to the card with interest.   Thereafter Advanta assigned its rights under the contract to the plaintiff.   The plaintiff alleges that the defendant has breached the agreement by failing to repay the plaintiff a presently outstanding sum of $15,858.34.   The plaintiff now seeks money damages, attorneys fees, interest and costs for the alleged breach.

On January 30, 2013, the defendant moved to dismiss the plaintiff's claims, arguing that the court lacks subject matter jurisdiction because the plaintiff does not having standing to assert a claim against the defendant in his individual capacity.   In support of his motion, the defendant has attached (1) a sworn affidavit attesting that he was the President of Advanced Landscape Masonry and Supply Corporation (Advanced Landscape) prior to its dissolution on or about April 25, 2007, and (2) a notice from the secretary of the state's office dated April 26, 2007, acknowledging that it had received Advanced Landscape's certificate of dissolution.

On March 1, 2013, the plaintiff objected to the defendant's motion.   In its supporting memorandum, it argues the terms of the agreement between the plaintiff and the defendant expressly provided that the signing individual—the plaintiff—assumed personal liability for all amounts due on the account.   In support of its objection, it has attached (1) invoices reflecting the defendant's use of the credit card, (2) a copy of the online application the defendant used to apply for the credit card and (3) a copy of the agreement between the plaintiff and the defendant.   On March 18, 2013, the parties argued this matter at the short calendar.

As more fully discussed below, the defendant's motion is denied.   Assuming, arguendo, that the defendant is not a proper party in this case, naming an improper party does not create a jurisdictional defect.   Consequently, a motion to dismiss is not the appropriate procedural vehicle for the defendant's argument.

DISCUSSION

“A motion to dismiss ․ properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court.”  (Internal quotation marks omitted.)  Housatonic Railroad Co. v. Commissioner of Revenue Services, 301 Conn. 268, 274, 21 A.3d 759 (2011).  “A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction.”  (Internal quotation marks omitted.)  Dayner v. Archdiocese of Hartford, 301 Conn. 759, 774, 23 A.3d 1192 (2012).  “Pursuant to the rules of practice, a motion to dismiss is the appropriate motion for raising a lack of subject matter jurisdiction.”  St. George v. Gordon, 264 Conn. 538, 545, 825 A.2d 90 (2003).  “In general, a motion to dismiss is the proper procedural vehicle to raise a claim that the court lacks subject matter jurisdiction over the action.”  Bellman v. West Hartford, 96 Conn.App. 387, 392, 900 A.2d 82 (2006).

The defendant argues that the plaintiff does not have standing to assert a claim against the defendant individually because he was not a party to the agreement with the plaintiff.   Specifically, the defendant argues that the actual party to the contract with the plaintiff was Advanced Landscape, which was an independent corporation rather than the individual defendant doing business as Advanced Landscape.   The defendant further contends that the agreement attached to the plaintiff's complaint is not a personal guarantee executed by the defendant that meets the requirements of the statute of frauds.¹  Accordingly, the defendant argues, the plaintiff has failed to allege facts sufficient to establish its standing to assert its claim against the defendant.

The plaintiff argues in response that the express terms of the agreement provided that the signing individual assumed individual liability for the corporation's debts, even if the corporation became insolvent.   Moreover, the plaintiff contends that the statute of frauds is not applicable because the defendant's guarantee was an original undertaking and not a collateral one.²

The defendant's argument misconstrues our standard governing standing.  “When standing is put in issue, the question is whether the person whose standing is challenged is a proper party to request an adjudication of the issue and not whether the controversy is otherwise justiciable, or whether, on the merits, the plaintiff has a legally protected interest that the defendant's action has invaded.”  (Emphasis added;  internal quotation marks omitted.)  Steeneck v. University of Bridgeport, 235 Conn. 572, 579, 668 A.2d 688 (1995).   In the present case, the defendant's argument fails because it essentially challenges his status as a party to the plaintiff's action and not the plaintiff's standing to bring it.  “Naming an improper person as a party in a legal action constitutes misjoinder.”  Zanoni v. Hudon, 42 Conn.App. 70, 73, 678 A.2d 12 (1996).  “The exclusive remedy for misjoinder of parties is by motion to strike.”  (Internal quotation marks omitted.)  Hilton v. New Haven, 233 Conn. 701, 723 n.23, 661 A.2d 973 (1995);  see also Practice Book § 11–3 (same).

Consequently, even if the defendant is correct that the plaintiff has not asserted a valid claim against him individually—and the court need not determine now whether he is—the plaintiff bringing suit against an improper party is not a defect that deprives the court of jurisdiction.   See Murphy v. Mariners Walk Ass'n, Inc., Superior Court, judicial district of Ansonia–Milford at Milford, Docket No. CV 04 4000999 (April 26, 2005, Ronan, J.) (“naming a wrong defendant will not implicate subject matter jurisdiction if the court still retains the authority to oversee the particular legal controversy”);  McDermott v. Seven Stars Express, Superior Court, judicial district of New Haven, Docket No. CV 02 0461183 (September 27, 2004, Zoarski, J.) (“[s]uing the wrong party, if in fact this defendant is the wrong party, is not a jurisdictional defect” [internal quotation marks omitted] );  Arcal Corp. v. Smith, Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 97 0159514 (November 23, 1998, Lewis, J.) (“Defendant's allegations attempt to establish that he and the corporation he worked for are two separate entities.   These allegations, even if true, are not proper grounds for a motion to dismiss”).

Similarly, the collateral issue raised at oral argument regarding whether the defendant contracted with Advanta in a representational or individual capacity is a factual one that implicates the adequacy of the plaintiff's claims and not the court's jurisdiction over them.   See Townsend v. Atwater, 5 Day (Conn.) 298, 307 (1812) (“[w]hether the defendants contracted in their individual capacity, or as agents ․ was a question of fact, depending upon the evidence, and was very properly left to the jury”);  Bednaz v. Shelansky, Superior Court, judicial district of Hartford, Docket No. CV 08 5019133 (September 10, 2008, Dubay, J.) (“[t]he issue of whether the defendant can be sued in his individual capacity and whether he was acting as an officer of a corporation when he entered into the contract with the plaintiff is a question of fact to be decided by the trier of fact, or by a pretrial motion, such as a motion for summary judgment”).

Accordingly, the grounds raised in the defendant's motion to dismiss are not proper grounds on which to dismiss the plaintiff's claims.

CONCLUSION

For the foregoing reasons the defendant's motion to dismiss is denied.

Mullins, J.

FOOTNOTES

FN1. The defendant does not cite specifically to the statute of frauds in his brief, but it may be inferred from his argument that he refers to General Statutes § 52–550(a)(2), which provides that “[n]o civil action may be maintained in the following cases unless the agreement, or a memorandum of the agreement, is made in writing and signed by the party, or the agent of the party, to be charged:  ․ (2) against any person upon any special promise to answer for the debt, default or miscarriage of another ․”.  FN1. The defendant does not cite specifically to the statute of frauds in his brief, but it may be inferred from his argument that he refers to General Statutes § 52–550(a)(2), which provides that “[n]o civil action may be maintained in the following cases unless the agreement, or a memorandum of the agreement, is made in writing and signed by the party, or the agent of the party, to be charged:  ․ (2) against any person upon any special promise to answer for the debt, default or miscarriage of another ․”

FN2. The parties' arguments regarding the statute of frauds are premature.   The court's task in deciding the defendant's motion to dismiss is not to determine whether the agreement at issue is subject to or complies with the statute of frauds, but whether the agreement's noncompliance with the statute of frauds deprives the court of subject matter jurisdiction.   Our Supreme Court has answered that question in the negative.   See McCutcheon & Burr, Inc. v. Berman, 218 Conn. 512, 527 n.16, 590 A.2d 438 (1991) (neither § 52–550 nor General Statutes § 52–577 create a jurisdictional bar);  see also Gello v. Stevens, Superior Court, judicial district of New Haven, Docket No. CV 09 5030093 (December 14, 2010, Robinson, J.) (“it is improper for the defendants to use the statute of frauds as a vehicle to assert lack of subject matter jurisdiction on a motion to dismiss”)..  FN2. The parties' arguments regarding the statute of frauds are premature.   The court's task in deciding the defendant's motion to dismiss is not to determine whether the agreement at issue is subject to or complies with the statute of frauds, but whether the agreement's noncompliance with the statute of frauds deprives the court of subject matter jurisdiction.   Our Supreme Court has answered that question in the negative.   See McCutcheon & Burr, Inc. v. Berman, 218 Conn. 512, 527 n.16, 590 A.2d 438 (1991) (neither § 52–550 nor General Statutes § 52–577 create a jurisdictional bar);  see also Gello v. Stevens, Superior Court, judicial district of New Haven, Docket No. CV 09 5030093 (December 14, 2010, Robinson, J.) (“it is improper for the defendants to use the statute of frauds as a vehicle to assert lack of subject matter jurisdiction on a motion to dismiss”).

Mullins, Raheem, J.