Frank Petrucci v. LLC (2014)

MEMORANDUM OF DECISION RE MOTION TO DISMISS

FACTS

On July 19, 2010, the plaintiff, Frank Petrucci, filed an application to release an artificer's lien in substitution for a bond pursuant to General Statutes § 49–61.   In the application, the plaintiff alleges that he is the owner of a 1970 Plymouth Roadrunner Hemi (the vehicle) bearing a vehicle identification number of RM21R0G193989, which is situated in East Windsor, Connecticut.   The plaintiff further alleges that on February 10, 2009, the defendant, Labrecque Autocraft, LLC, placed a lien against the vehicle in the amount of $6,911.77 for services claimed to have been rendered and for materials furnished by the defendant in the restoration and/or repair of the vehicle.   Based upon these representations, the plaintiff seeks to contest the lien and wishes to have it released by the substitution of a bond pursuant to § 49–61, conditioned that he will pay the amount determined by the court to the defendant or its assigns secured by the lien.

On August 12, 2010, the defendant moved to dismiss the plaintiff's application on the ground that the court lacks subject matter jurisdiction over the present action.   In the accompanying memorandum of law, the defendant claims that the plaintiff lacks standing.   The defendant claims that the plaintiff is not the owner of the vehicle inasmuch as the plaintiff surrendered any and all rights to the vehicle when he filed for chapter seven bankruptcy protection with the United States Bankruptcy Court for the District of New Jersey in May of 2009.   Based upon the bankruptcy filing, the defendant claims that the vehicle is an asset of the bankruptcy estate and therefore that all causes of action, including relief that the plaintiff seeks in the present application, belong to the chapter seven trustee, and not to the plaintiff.   The defendant further notes that the plaintiff was discharged as a debtor in the bankruptcy proceeding on June 29, 2010 and that the case remains open and that the bankruptcy trustee has not abandoned the vehicle.

The plaintiff subsequently filed an objection to the defendant's motion wherein he argues that he has demonstrated that he has standing because he has a legal and/or equitable interest in the vehicle even if the proceeds generated from an auction of the vehicle might be paid to the trustee in bankruptcy.

DISCUSSION

“The grounds which may be asserted in [a motion to dismiss] are:  (1) lack of jurisdiction over the subject matter;  (2) lack of jurisdiction over the person;  (3) improper venue;  (4) insufficiency of process;  and (5) insufficiency of service of process.”  Zizka v. Water Pollution Control Authority, 195 Conn. 682, 687, 490 A.2d 509 (1985), citing Practice Book § 143, which is now § 10–31.  “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).

“[B]ecause the issue of standing implicates subject matter jurisdiction it may be a proper basis for granting a motion to dismiss.”  Electrical Contractors, Inc. v. Dept. of Education, 303 Conn. 402, 413, 35 A.3d 188 (2012).  “Standing is the legal right to set judicial machinery in motion.   One cannot rightfully invoke the jurisdiction of the court unless he [or she] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy ․ Standing is not a technical rule intended to keep aggrieved parties out of court;  nor is it a test of substantive rights.   Rather it is a practical concept designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticiable interests and that judicial decisions which may affect the rights of others are forged in hot controversy, with each view fairly and vigorously represented.”  (Internal quotation marks omitted.)  West Farms Mall, LLC v. West Hartford, 279 Conn. 1, 11, 901 A.2d 649 (2006).

“When a ․ court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light ․ In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader ․ The motion to dismiss ․ admits all facts which are well pleaded, invokes the existing record and must be decided upon that alone ․ Where, however ․ the motion is accompanied by supporting affidavits containing undisputed facts, the court may look to their content for determination of the jurisdictional issue ․” (Citation omitted;  internal quotation marks omitted.)  Cogswell v. American Transit Ins. Co., 282 Conn. 505, 516, 923 A.2d 638 (2007).

“If affidavits and/or other evidence submitted in support of a defendant's motion to dismiss conclusively establish that jurisdiction is lacking, and the plaintiff fails to undermine this conclusive with counteraffidavits ․ or other evidence, the trial court may dismiss the action without further proceedings ․ If, however, the defendant submits either no proof to rebut the plaintiff's jurisdictional allegations ․ or only evidence that fails to call those allegations into question ․ the plaintiff need not supply counteraffidavits or other evidence to support the complaint, but may rest on the jurisdictional allegations therein.”  (Citations omitted.)  Conboy v. State, 292 Conn. 642, 652, 974 A.2d 669 (2009).

In the present case, the court cannot merely rely on the plaintiff's allegations in his application.   The defendant has submitted evidence in support of its contention that the plaintiff lacks standing.   If this evidence demonstrates that the plaintiff lacks standing and the plaintiff fails to refute this evidence, then this court is within its discretion to grant the defendant's motion to dismiss.

General Statutes § 49–61(a) provides:  “The owner of any personal property which is held by one who claims to be a bailee for hire of that personal property and to have a lien in consequence thereof, or anyone having a legal or equitable interest in that property, may apply in writing to any judge of the Superior Court, within whose jurisdiction that personal property is held or the lienor resides, to dissolve the lien upon the substitution of a bond with surety.”  (Emphasis added.)  General Statutes § 49–61(a).   The plaintiff claims that she is the owner and/or has a legal or equitable interest in the vehicle in question and therefore has standing to file the present application.   The defendant refutes the plaintiff's position by arguing that the plaintiff filed for bankruptcy and therefore is no longer the owner of this vehicle and no longer has a legal or equitable interest therein.   In support of this contention, the defendant has provided as evidence a copy of the plaintiff's voluntary petition for bankruptcy, which was filed in the United States Bankruptcy Court, District of New Jersey.   This petition reflects that the plaintiff filed for chapter seven bankruptcy on May 19, 2009.¹  The defendant has also provided the court with the plaintiff's amended schedule of personal property filed in connection with the bankruptcy petition, which reflects that the plaintiff and his spouse listed as personal property a “1970 Plymouth Roadrunner” under the subsection entitled “[a]utomobiles, trucks, trailers, and other vehicles and accessories.”   The defendant has also provided the court with a document reflecting the plaintiff's claimed exemptions.   The property exemption schedule reflects that the plaintiff and his spouse as debtors claimed exemptions in the 1970 Plymouth Roadrunner, specifically, one exemption for $2,975 pursuant to 11 U.S.C. § 522(d)(2) ² and the other for $7,797.60 pursuant to § 522(d)(5).³  The exemption schedule also reflects that, without deducting the claimed exemptions, the estimated value of the 1970 Plymouth Roadrunner is $20,000.   The defendant has also submitted as evidence a docket report from the bankruptcy proceeding, which reflects that the plaintiff and his spouse were discharged from bankruptcy on June 29, 2010.⁴  Based upon the evidence submitted, the defendant contends that the plaintiff has no legal or equitable interest left in the vehicle inasmuch as the vehicle is now property of the bankruptcy estate.   The court will now evaluate whether this evidence establishes that jurisdiction is lacking.

When a bankruptcy petition is filed, the United States Code provides that:  “(a) The commencement of a case under section 301, 302, or 303 of this title creates an estate.   Such estate is comprised of all the following property, wherever located and by whomever held:  (1) Except as provided in subsections (b) and (c)(2) of this section, all legal or equitable interests of the debtor in property as of the commencement of the case ․ “ (Emphasis added.)  11 U.S.C. § 541(a)(1).   Based upon this law, the defendant contends that the vehicle is part of the bankruptcy estate and therefore that the plaintiff has no standing to bring the present application.

“Once a debtor files for relief, an estate is created.  11 U.S.C. § 541.   A debtor may exempt property from the estate.  11 U.S.C. § 522(b).  If a debtor claims an exemption in an asset which is property of the estate and no party files a timely objection to that exemption, the asset is exempt.  11 U.S.C. § 522(1).   The Supreme Court explained that an exemption ‘is an interest withdrawn from the estate (and hence from the creditors) for the benefit of the debtor.’  Owen v. Owen, 500 U.S. 305, 308, 111 S.Ct. 1833, 114 L.Ed.2d 350 (1991).”  (Footnote omitted.)  In re McCabe, 356 B.R. 314, 315–16 (Bankr.D.Mass.2006).

If the value of the property claimed for exemption exceeds the value of the claimed exemption, however, case law provides that such property remains an asset of the bankruptcy estate.  “ ‘Certainly, if there is any equity in an asset after deducting the liens and the exemption, it remains property of the estate.’  ․ In re Barksdale, 281 B.R. 548, 552 (Bankr.D.N.J.2002) (‘Thus the debtor's residence, to the extent that it exceeds the amount of the exemption claimed, remains property of the estate.’).   Other courts have ruled similarly.   See ․ Klein v. Chappell (In re Chappell), 373 B.R. 73 (9th Cir. BAP2007) (ruling debtors' exemption was for dollar amount, not for asset itself and reviewing history of such rulings in Ninth Circuit);  Vu v. Kendall (In re Viet Vu), 245 B.R. 644, 647 (9th Cir. BAP2000) (‘The Ninth Circuit has consistently held without limitation that under § 541(a)(6), the estate is entitled to postpetition appreciation.’);  In re Cormier, 382 B.R. 377 (Bankr.W.D.Mich.2008) (ruling debtors entitled to exempt only the amount of the exemption and not the asset in its entirety);  In re Raffone, 381 B.R. 30, 35–37 (Bankr.D.Conn.2008);  In re Ruppel, 368 B.R. 42, 44 n.3 (Bankr.D.Or.2007) (‘If property has value beyond the amount exempted, however, or if it appreciates beyond the exempt amount post-petition, the nonexempt amount is property which may be administered by the trustee’);  In re Farthing, 340 B.R. 376, 380 (Bankr.D.Ariz.2006) (‘The house itself, as distinguished from the Debtors' inchoate interest in a portion of its possible proceeds, remained property of the estate ’);  In re Jones, 357 B.R. 888, 896 (Bankr.M.D.Ga.2005) (‘if the debtor ․ claims an exemption of $5,000, then the debtor will be limited to the dollar amount claimed, and any net proceeds including appreciation will benefit the bankruptcy estate’) ․” (Citation omitted;  emphasis added.)  In re Leung, 385 B.R. 489, 494–95 (Bankr.D.Mass.2008);  see also In re Covington, 368 B.R. 38, 40 n.1 (Bankr.E.D.Cal.2006) (“[I]f the property declared exempt by the debtor has value beyond the exemption amount, or if it appreciates beyond the exemption amount after the petition is filed, the nonexempt amount or appreciation is property of the estate that may be administered by the trustee”).

The evidence that the defendant submitted reflects that the plaintiff indeed claimed exemptions in the vehicle, but that the value of the vehicle exceeds the value of the claimed exemptions.   The foregoing case law dictates that even if the plaintiff's exemptions are valid,⁵ there is equity in the vehicle that exceeds the value of the exemptions and therefore that the vehicle remains an asset of the estate and that the exemptions, if valid, are only as to the dollar amount, not as to the asset itself.   The court is of the opinion that the defendant has met the burden of demonstrating through its evidence that the plaintiff is not an owner of the vehicle and nor does the plaintiff have legal or equitable interest in the vehicle within the meaning of § 49–61(a).   The plaintiff has wholly failed to refute the defendant's evidence ⁶ or raise any legal basis for demonstrating that he has standing.⁷  “It is undisputed that the plaintiff has the burden of proof on the issue of standing and that unless the claimant has standing, the trial court does not have subject matter jurisdiction.”  Gay & Lesbian Law Students Assn. v. Board of Trustees, 236 Conn. 453, 465 n.8, 673 A.2d 484 (1996).   Inasmuch as the plaintiff has failed to carry his burden of refuting the defendant's evidence that the plaintiff is not the owner of the vehicle and does not have a legal or equitable interest in the vehicle, the court concludes that the plaintiff lacks standing to bring the instant application.⁸

CONCLUSION

Based upon the foregoing, the court lacks subject matter jurisdiction over the present action;  therefore, the defendant's motion to dismiss is granted.

ANTONIO C. ROBAINA

FOOTNOTES

FN1. This petition filed in the United States Bankruptcy Court, District of New Jersey reflects a bankruptcy petition number of 09–22817–RG.   The petition reflects that the plaintiff filed for bankruptcy jointly with his spouse, Tara L. Petrucci..  FN1. This petition filed in the United States Bankruptcy Court, District of New Jersey reflects a bankruptcy petition number of 09–22817–RG.   The petition reflects that the plaintiff filed for bankruptcy jointly with his spouse, Tara L. Petrucci.

FN2. Section 522(d)(2) provides an exemption for a portion of the debtor's interest in one motor vehicle..  FN2. Section 522(d)(2) provides an exemption for a portion of the debtor's interest in one motor vehicle.

FN3. Section 522(d)(5) provides that “[t]he debtor's aggregate interest in any property, not to exceed in value $1,225 plus up to $11,500 of any unused amount of the exemption provided under paragraph (1) of this subsection” may be exempted.  11 U.S.C. § 522(d)(5)..  FN3. Section 522(d)(5) provides that “[t]he debtor's aggregate interest in any property, not to exceed in value $1,225 plus up to $11,500 of any unused amount of the exemption provided under paragraph (1) of this subsection” may be exempted.  11 U.S.C. § 522(d)(5).

FN4. The docket sheet also reflects that after the plaintiff and his spouse were discharged as debtors, the case remained pending.   The plaintiff has not submitted any evidence to show that the case is no longer pending..  FN4. The docket sheet also reflects that after the plaintiff and his spouse were discharged as debtors, the case remained pending.   The plaintiff has not submitted any evidence to show that the case is no longer pending.

FN5. There has been no evidence presented by either party to shed light on the status and/or validity of these claimed exemptions.   This court's decision is not intended to supplement or impact the bankruptcy court's finding on the aforementioned exemptions in the plaintiff's bankruptcy petition..  FN5. There has been no evidence presented by either party to shed light on the status and/or validity of these claimed exemptions.   This court's decision is not intended to supplement or impact the bankruptcy court's finding on the aforementioned exemptions in the plaintiff's bankruptcy petition.

FN6. The plaintiff submitted two documents as supporting evidence.   The first appears to be a void certificate of title of the vehicle, which reflects that the plaintiff, at one point, may have had title to the vehicle.   The plaintiff also submitted a letter dated May 19, 2010 from the law firm of Forman Holt Eliades and Raven, LLC. The letter is addressed to Frank Petrucci, Jeffrey Raymond, John Robacynski, and Gerald Macan and advises the addressees that the 1970 Plymouth Roadrunner is encumbered by valid liens held by the defendant, Labrecque Autocraft, LLC, and Roy Raneri.   The letter also advises the addressees of a hearing regarding the trustee's notice of intention to sell the vehicle.   Neither of these documents tends to refute the defendant's supporting evidence..  FN6. The plaintiff submitted two documents as supporting evidence.   The first appears to be a void certificate of title of the vehicle, which reflects that the plaintiff, at one point, may have had title to the vehicle.   The plaintiff also submitted a letter dated May 19, 2010 from the law firm of Forman Holt Eliades and Raven, LLC. The letter is addressed to Frank Petrucci, Jeffrey Raymond, John Robacynski, and Gerald Macan and advises the addressees that the 1970 Plymouth Roadrunner is encumbered by valid liens held by the defendant, Labrecque Autocraft, LLC, and Roy Raneri.   The letter also advises the addressees of a hearing regarding the trustee's notice of intention to sell the vehicle.   Neither of these documents tends to refute the defendant's supporting evidence.

FN7. It is noteworthy that the plaintiff did not raise the argument that his claimed exemptions may create some sort of legal or equitable interest in the vehicle..  FN7. It is noteworthy that the plaintiff did not raise the argument that his claimed exemptions may create some sort of legal or equitable interest in the vehicle.

FN8. In addition to claiming that the plaintiff lacks standing to petition for such relief because he is not the owner of the vehicle and does not have any legal or equitable interest therein, the defendant argues that the plaintiff's application was untimely and that the doctrines of estoppel and unclean hands apply because the plaintiff initially failed to disclose the vehicle on the bankruptcy schedule and then subsequently attempted to recover it improperly.   Inasmuch as the court resolves the defendant's motion through an analysis of the plaintiff's legal or equitable interest in the vehicle, the court need not address the defendant's arguments regarding the timeliness of the application, unclean hands, and estoppel..  FN8. In addition to claiming that the plaintiff lacks standing to petition for such relief because he is not the owner of the vehicle and does not have any legal or equitable interest therein, the defendant argues that the plaintiff's application was untimely and that the doctrines of estoppel and unclean hands apply because the plaintiff initially failed to disclose the vehicle on the bankruptcy schedule and then subsequently attempted to recover it improperly.   Inasmuch as the court resolves the defendant's motion through an analysis of the plaintiff's legal or equitable interest in the vehicle, the court need not address the defendant's arguments regarding the timeliness of the application, unclean hands, and estoppel.

Robaina, Antonio C., J.