189 Conn. App. 30
Conn. App. Ct.2019Background
- Ion Bank loaned J.C.C. Custom Homes $170,000 secured by various vehicles; J.C.C. defaulted. Rock On and the Ciappettas provided additional security and guarantees.
- Ion assigned its interest in the promissory note to Nutmeg Financial Holdings, LLC on June 30, 2016 (and later assigned related security agreements on August 16, 2016).
- Ion commenced a replevin action on July 1, 2016, naming itself as the plaintiff and alleging a right to immediate possession of the collateral; the writ included affidavit and bond.
- Within 30 days Ion filed a document titled “Plaintiff’s Amended Complaint” that substituted Nutmeg as the named plaintiff, citing Practice Book § 10-59.
- Defendants moved to dismiss for lack of subject matter jurisdiction, arguing Ion lacked standing because it had assigned the note before suit; the trial court granted the motion, concluding Ion had no standing when suit was filed and that substitution required court approval under § 52-109/Practice Book § 9-20.
- Ion appealed, arguing (1) the § 10-59 amendment cured standing, (2) the amended complaint should be treated as a motion to substitute, and (3) an assignor may maintain suit in the name of its assignor or on behalf of its assignee.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether filing an amended complaint under Practice Book § 10-59 automatically substitutes a new plaintiff and cures standing | § 10-59 permits amending “any defect” within 30 days, so Ion’s amendment substituted Nutmeg by operation of law | § 10-59 governs pleadings, not jurisdictional party defects; substitution of plaintiffs is governed by Practice Book § 9-20/§ 52-109 and requires court approval | Held: § 10-59 does not authorize unilateral substitution of the plaintiff to cure a standing defect; amendments under § 10-59 cannot be used to correct jurisdictional party defects |
| Whether Ion’s amended complaint should be treated as a motion to substitute under § 52-109 / Practice Book § 9-20 (so the court could exercise discretion to allow substitution) | The amended complaint was effectively a timely request to substitute Nutmeg and should be treated as a motion to substitute | Substitution requires an application (motion) and a court order exercising discretion; Ion did not file a motion or memorandum per practice rules, and defendants objected | Held: Court properly required a formal motion; it did not abuse discretion by refusing to treat the amended complaint as a motion to substitute |
| Whether an assignor (Ion) retains standing to bring enforcement/replevin on behalf of its assignee (Nutmeg) | Relying on Jacobson, an assignee can maintain suit in the name of its assignor; Ion contends it could bring the action in its name for Nutmeg’s benefit | UCC (Art. 3) controls negotiable instruments: only a person entitled to enforce (holder or equivalent) may enforce a note; Ion had assigned the note before suit and was not a holder or person entitled to enforce | Held: Ion lacked authority under § 42a-3-301 to enforce the note when suit was filed; the court questioned Jacobson’s continued viability under the UCC and concluded Ion did not have standing |
| Whether the initial complaint could be construed as filed by Nutmeg in the name of Ion | Ion argues the complaint should be read as Nutmeg suing in Ion’s name | Defendants point to the complaint’s plain allegations that Ion was the party entitled to possession and absence of jurisdictional facts showing Ion acted for Nutmeg | Held: The initial complaint alleged Ion itself had the right to immediate possession and contained no facts that it acted on behalf of Nutmeg; it cannot be construed as an action by Nutmeg in Ion’s name |
Key Cases Cited
- J.E. Robert Co. v. Signature Properties, LLC, 309 Conn. 307 (Conn. 2013) (defines standing as the right to invoke judicial machinery and explains jurisdictional consequences)
- Fairfield Merrittview Ltd. Partnership v. Norwalk, 320 Conn. 535 (Conn. 2016) (discusses § 52-109 substitution: court may allow substitution to cure standing defects when action was commenced in wrong name through mistake)
- Jacobson v. Robington, 139 Conn. 532 (Conn. 1953) (pre-UCC decision permitting an assignee to maintain action in assignor’s name)
- U.S. Bank, N.A. v. Ugrin, 150 Conn. App. 393 (Conn. App. 2014) (describing who is a person entitled to enforce a negotiable instrument under the UCC)