196 Conn.App. 80
Conn. App. Ct.2020Background
- Starboard Resources, Inc. filed an interpleader under Conn. Gen. Stat. § 52-484 to determine ownership of certain Starboard common shares claimed by multiple parties (the Henry parties/Group H, the Imbruce parties/Group I, and SOSventures/Group S).
- The Henry parties had separately sued the Imbruce parties and Starboard alleging fraud, breach of fiduciary duty, conversion, civil theft, CUTPA violations, and sought equitable relief and damages; those claims were stayed and submitted to arbitration.
- The arbitrator issued an award favoring the Henry parties, but the award did not explicitly resolve ownership of the Starboard shares; the award concluded that all claims not expressly granted were denied.
- The Henry parties moved in the interpleader action for an interlocutory judgment of interpleader and, alternatively, for remand to the arbitrator to clarify ownership of the shares; Giddings (part of Group I) moved to dismiss the interpleader as moot, arguing no adverse claim existed.
- The trial court denied the motion to dismiss, granted the interlocutory judgment of interpleader, and remanded the ownership question to the arbitrator for clarification; the Imbruce parties appealed, challenging standing, mootness/interpleader, and the remand (including functus officio concerns).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Starboard lacks standing because a nonparty transfer agent holds the shares | Starboard (plaintiff) is a disinterested stakeholder and has constructive possession via its transfer agent and can direct transfers | Imbruce: transfer agent’s possession means Starboard lacks possession/standing, so court lacks subject matter jurisdiction | Court: Starboard has constructive possession and authority over its transfer agent; standing challenge fails and jurisdiction exists |
| Whether interpleader is moot / whether trial court erred by denying Giddings’s motion to dismiss and entering interlocutory interpleader | Starboard: complaint alleged competing claims facially sufficient to invoke interpleader; interlocutory judgment is appropriate to preserve process | Imbruce/Giddings: arbitrator denied Henry’s request for shares so SOSventures lacks an adverse claim and interpleader is moot | Court: premature to resolve merits of competing claims at this stage; pleading facially shows adverse claims; denial of dismissal and interlocutory judgment proper |
| Whether remanding to arbitrator improperly reopens or vacates award or violates functus officio | Henry: award entitled them to the shares or, if ambiguous, remand for clarification is appropriate | Imbruce: remand effectively reopens/vacates the award or asks arbitrator to redecide a decided issue, violating functus officio | Court: remand for clarification is permitted where award is ambiguous; court did not vacate award nor violate functus officio because ownership issue was susceptible to multiple reasonable interpretations |
Key Cases Cited
- Trikona Advisers Ltd. v. Haida Investments Ltd., 318 Conn. 476 (Conn. 2015) (explains two-step structure of interpleader and standard for interlocutory judgment)
- Hartford Steam Boiler Inspection & Ins. Co. v. Underwriters at Lloyd’s & Cos. Collective, 271 Conn. 474 (Conn. 2004) (permits remand to arbitrator for clarification; discusses functus officio exceptions)
- Gold v. Rowland, 296 Conn. 186 (Conn. 2010) (standards for motion to dismiss review)
- Premier Capital, LLC v. Shaw, 189 Conn. App. 1 (Conn. App. 2019) (standing principles and review of questions of law)
- All Seasons Services, Inc. v. Guildner, 94 Conn. App. 1 (Conn. App. 2006) (award is ambiguous if susceptible to more than one interpretation; courts typically remand for clarification)
- Lee v. Duncan, 88 Conn. App. 319 (Conn. App. 2005) (agency principle: principal’s right to direct transfer agent supports constructive possession)
- Henry v. Imbruce, 178 Conn. App. 820 (Conn. App. 2017) (prior appeal in same litigation confirming arbitration award and relevant procedural history)