Robert Foisie v. Riverheights Development, Inc. (2016)

MEMORANDUM OF DECISION RE MOTION TO DISMISS (# 127)

On October 23, 2015, the plaintiff, Robert Foisie, having withdrawn his complaint, filed a motion to dismiss the defendant Riverheights Development, Inc.'s counterclaim on the ground that the defendant does not have standing to make the claims, the issues are moot, and the filing of the action was a breach of the defendant's fiduciary duty.  On October 28, 2015, the defendant filed its objection to the motion to dismiss.  On January 27, 2016, the plaintiff filed a supplemental memorandum in support of his motion to dismiss.  The defendant also filed a supplemental memorandum on January 28, 2016.  The matter was heard on the short calendar on November 30, 2016.

Procedural posture.  The plaintiff filed his complaint on August 21, 2015.  The defendant filed its answer and counterclaim on October 14, 2015.  On October 20, 2015, the plaintiff withdrew his complaint.  In the counterclaim which is the subject of this motion to dismiss, the defendant alleges the following facts.  On or about February 2, 2010, the defendant executed and delivered promissory notes in the amount of $1,000,000 and $234,000 to the plaintiff.  Both notes were secured by mortgages.  In the fall of 2014, the plaintiff assigned to Michael Foisie, as a gift, the notes that were originally given to the plaintiff.  As assignee, Michael Foisie is the only person legally entitled to demand payment on the notes and enforce the mortgage.  On or about July 17, 2015, the plaintiff caused demand for payment on the notes, even though he knew that he did not have the right to demand payment and knew that he had assigned the notes to Michael Foisie.  The plaintiff then commenced this foreclosure proceeding for the mortgages securing the note.  The plaintiff caused a lis pendens to be recorded, stating that he was foreclosing the mortgages and was seeking possession of the mortgaged premises.

The defendant further alleges that the mortgaged property is owned by the defendant and contains a partially constructed condominium complex.  The defendant has been actively engaged in the marketing and sale of units on the property.  The publication of the lis pendens constituted a false statement as to the title of defendant's property.  The plaintiff also made several derogatory statements including that:  (1) funding for the project is in default;  (2) the plaintiff is entitled to foreclose;  (3) the project is in financial distress;  (4) the defendant may not remain in possession of the property;  (5) the defendant is in eminent danger of loss of its title;  and (6) the defendant cannot convey marketable title to units or the yet to be developed property.  The plaintiff's intentional misstatements were made to retaliate against Michael Foisie, who replaced the plaintiff as manager of a Nevada limited liability company.  The plaintiff's statements have diminished the value of the defendant's property.  The plaintiff's actions were deceptive or unfair in the following ways:  (1) the plaintiff demanded payment of the defendant for debts the plaintiff had no right to collect;  (2) the plaintiff misrepresented to the parties and the court that he was the holder of the promissory notes when the plaintiff knew he was not;  (3) the plaintiff lodged a false and misleading lis pendens in the Norwich Land Records in order to interfere with the defendant's property rights and to damage the value of the property;  and (4) the plaintiff initiated [the now withdrawn] action against the defendant without probable cause for the purpose of retaliating against Michael Foisie.  As a result of these actions the defendant has suffered damages.

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.)  Santorso v. Bristol Hospital, 308 Conn. 338, 350, 63 A.3d 940 (2013).  “A court deciding a motion to dismiss must determine not the merits of the claim or even its legal sufficiency, but rather, whether the claim is one that the court has jurisdiction to hear and decide.”  (Internal quotation marks omitted.)  Hinde v. Specialized Education of Connecticut, Inc., 147 Conn.App. 730, 740–41, 84 A.3d 895 (2014).  “[I]t is the burden of the party who seeks the exercise of jurisdiction in his favor ․ clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute ․ It is well established that, in determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged.”  (Internal quotation marks omitted.)  Financial Consulting, LLC v. Commissioner of Insurance, 315 Conn. 196, 226, 105 A.3d 210 (2015).

In his memorandum of law in support of the motion to dismiss, the plaintiff argues that the defendant does not have standing to make the claims, the issues are moot because the plaintiff's complaint was withdrawn, and the filing of the action was a breach of the defendant's fiduciary duty.  In response, the defendant argues that the defendant is the only one who could have standing, the issues are not moot because the slander of title occurred at the filing of the lis pendens and that breach of a fiduciary duty is not a valid ground for granting a motion to dismiss.  In his supplemental memorandum, the plaintiff argues that because the defendant has filed an entirely separate action,¹ which includes Michael Foisie as a plaintiff as well, the defendant has shown it does not have standing.  The plaintiff believes that the filing of this action makes it clear that the defendant in this case does not have standing.  In the defendant's supplemental memorandum, he states that the new action is against a different defendant, Thomas Cross, and for a completely different cause of action.

“[T]he standing doctrine requires a plaintiff to demonstrate two facts.”  Schaghticoke Tribal Nation v. Harrison, 264 Conn. 829, 832, 826 A.2d 1102 (2003).  Those two facts are “ordinarily held to have been met when a complainant makes a colorable claim of direct injury [that the complainant] has suffered or is likely to suffer, in an individual or representative capacity.  Such a personal stake in the outcome of the controversy ․ provides the requisite assurance of concrete adverseness and diligent advocacy.”  (Emphasis omitted;  internal quotation marks omitted.)  Ramos v. Vernon, 254 Conn. 799, 809, 761 A.2d 705 (2000).  “Mootness ․ implicates subject matter jurisdiction, which imposes a duty on the court to dismiss a case if the court can no longer grant practical relief to the parties.  Mootness presents a circumstance wherein the issue before the court has been resolved or had lost its significance because of a change in the condition of affairs between the parties.”  (Internal quotation marks omitted.)  State v. Begley, 122 Conn.App. 546, 551, 2 A.3d 1 (2010).  “A case becomes moot when due to intervening circumstances a controversy between the parties no longer exists.”  (Internal quotation marks omitted.)  Domestic Violence Services of Greater New Haven, Inc. v. Freedom of Information Commission, 240 Conn. 1, 7, 688 A.2d 314 (1997).

“A cause of action for slander of title consists of the uttering or publication of a false statement derogatory to the [defendant's] title, with malice, causing special damages as a result of diminished value of the [defendant's] property in the eyes of third parties.  The publication must be false, and the [defendant] must have an estate or interest in the property slandered.”  (Internal quotation marks omitted.)  Elm Street Builders, Inc. v. Enterprise Park Condominium Assn., Inc., 63 Conn.App. 657, 669–70, 778 A.2d 237 (2001).  “The determination of whether a [fiduciary] duty exists between individuals is a question of law.”  (Internal quotation marks omitted.)  Biller Associates v. Peterken, 269 Conn. 716, 721, 849 A.2d 847 (2004).  Once a duty is found to exist, the trier of fact may determine if that duty has been violated.  Id., 722.

In the present case, the defendant is the owner of the property on which the lis pendens has been recorded.  As owner of the property, the defendant has an interest in the property.  When the plaintiff filed this action for foreclosure against the property and gave notice of his litigation by filing the lis pendens on the land record he published a statement that could cause damage to the reputation of the property if the statement was inaccurate.  Since the defendant is the owner of the property damaged by false statements it has standing to bring the claim.  Even though the foreclosure action was withdrawn, the present case is not moot.  The attempted foreclosure and the lis pendens may have caused damages to the value of the defendant's property.  The issue of damages, as well as whether the statements were false and done with malice, is unresolved.  There are still matters for a fact finder to decide and therefore the action is not moot.  The existence of a fiduciary duty, or the breach of a fiduciary duty, does not implicate the court's subject matter jurisdiction and therefore may not be considered on a motion to dismiss.  Finally, the plaintiff's argument, in its supplemental memorandum, does not create a lack of subject matter jurisdiction for the court.  The new action is for a completely different cause of action and therefore has different standing requirements.  The cause of action in this case, slander of title, requires a person to have an interest in the property that was allegedly slandered.  Here, the defendant owns the property that was slandered and therefore has standing to file a slander of title action.

CONCLUSION

For the foregoing reasons, motion to dismiss is denied.

Cosgrove, J.

FOOTNOTES

FN1. Riverheights Development, Inc. v. Cross, Superior Court, judicial district of Hartford, Docket No. CV–16–6065527–S (Filed:  January 25, 2016)..  FN1. Riverheights Development, Inc. v. Cross, Superior Court, judicial district of Hartford, Docket No. CV–16–6065527–S (Filed:  January 25, 2016).

Cosgrove, Emmet L., J.