148 Conn. App. 359
Conn. App. Ct.2014Background
- In 1997 R.S. Silver Enterprises, Inc. (plaintiff) entered a participation agreement with SPD Associates (now Riversedge Partners) under which plaintiff invested $1,250,000 and obtained contractual rights to share future economic proceeds from a Greenwich commercial building.
- Plaintiff sued the defendants in October 2006 for breach of that participation agreement and sought damages and an accounting; defendants answered with 22 special defenses and counterclaims.
- Plaintiff moved to strike 16 special defenses; the trial court (Downey, J.) struck several defenses including the defendants’ 2nd, 4th, 6th and 21st special defenses. The trial proceeded and the court (Jennings, J. referee) awarded plaintiff $2,602,323 on the breach of contract claim.
- The defendants appealed only the strikes of the four special defenses; they argued among other things that the 21st alleged an assignment of the contract to a third party, which, if true, would defeat plaintiff’s claim and deprive the court of subject-matter jurisdiction due to lack of standing.
- The appellate court reviewed the pleadings de novo, concluded the 21st special defense sufficiently alleged facts that could defeat the complaint and, importantly, could show lack of standing (a jurisdictional defect), and ordered remand for factual resolution of that jurisdictional issue before addressing other issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of defendants’ 21st special defense alleging assignment of plaintiff’s rights | Plaintiff argued the defense was legally insufficient and should be struck | Defendants argued they alleged an assignment of all rights to R.S. Silver & Co., LLC, which, if true, extinguished plaintiff’s rights and defeated the suit | The 21st defense was sufficient; striking it was improper because proven facts would defeat the action |
| Standing/subject-matter jurisdiction due to alleged assignment | Plaintiff proceeded on merits; maintained court had jurisdiction | Defendants argued assignment meant plaintiff lacked a personal, legal interest and thus lacked standing | Court held assignment allegation raises a jurisdictional issue that must be resolved before merits; remand required for factual findings |
| Appropriateness of striking special defenses (general standard) | Plaintiff contended several defenses were not recognized or improperly pleaded | Defendants contended pleaded facts (including jurisdictional facts) must be taken as admitted for motion-to-strike review | Court applied plenary review and reversed as to the 21st defense; other strikes not resolved here due to jurisdictional priority |
| Sequencing of jurisdictional issues vs. merits adjudication | Plaintiff argued trial court properly proceeded to trial and judgment | Defendants argued jurisdictional defect should have been decided first | Court held trial court must decide jurisdictional questions first; remand ordered to determine standing |
Key Cases Cited
- Violano v. Fernandez, 280 Conn. 310 (discusses motion to strike standard and pleading construction)
- Bozelko v. Milici, 139 Conn. App. 536 (assignment transfers exclusive rights and extinguishes assignor’s rights)
- New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 511 (court must decide subject-matter jurisdiction before other issues)
- Gillon v. Bysiewicz, 105 Conn. App. 654 (criticizes adopting a party’s brief as the court’s reasoning)