Opinion
FSTCV186035819S
11-21-2018
NATIONS FUND I, LLC v. Gregory CHELLINO et al.
UNPUBLISHED OPINION
GENUARIO, J.
I. INTRODUCTION
The plaintiff brings this action against two individual defendants who according to the summons reside in Illinois. The plaintiff alleges that each of the defendants executed a written guarantee, guaranteeing the amounts due under two executed equipment leases between the plaintiff as lessor and two separate corporations as lessees. The corporate lessees are not parties to this action.
Both the lease agreements and the guarantees are dated June 5, 2015. According to the return of service, service of process was effectuated pursuant to C.G.S. § 52-59b on the defendant, Gregory Chellino, by leaving a copy of the writ summons and complaint with the clerk in charge with the Office of the Secretary of State of Connecticut and depositing the same with the United States Post Office, postage prepaid, certified mail, return receipt requested to the individual defendants at their last known address. The supplemental return of service includes copies of the green return receipts executed by the defendants, evidencing the actual receipt of the writ summons and complaint by the defendants. The defendants have never entered an appearance and have not responded in any way to the documents and various motions filed by the plaintiffs in this action. On June 12, 2018, the plaintiff moved for judgment as to the defendant, Gregory Chellino (hereinafter the defendant).
The plaintiff is not, at this time, proceeding against the defendant Frank Chellino because the defendant Frank Chellino has filed for protection in accordance with the United States bankruptcy laws
On June 25, 2018, the court declined to enter judgment against the defendant Gregory Chellino citing (1) the failure of the defendant to file a military affidavit and (2) the court’s conclusion that there was nothing in the file upon which the court could determine that it had personal jurisdiction over the defendant. The court noted that the documentation filed by the plaintiff in support of its motion for judgment evidenced that the defendant resided in Illinois and did business in Illinois. None of the documentation indicated that the contract was to be performed in Connecticut. The court concluded "absent some indication that the court has jurisdiction over the defendant the court will decline to enter judgment." (See docket # 103.01.)
The plaintiff has moved the court to reconsider its determination, correctly pointing out that it had in fact filed a military affidavit attached to its motion for judgment along with the various other documents in support of its motion for judgment and arguing that the court could properly exercise jurisdiction over the defendant since the plaintiff had complied with Connecticut’s long arm statute C.G.S. § 52-59b. The plaintiff also argues that the defendant had sufficient contacts with Connecticut to establish jurisdiction and/or waived the issue of personal jurisdiction by Connecticut courts. This court stands corrected with regard to the issue of the filing of the military affidavit and notes that the plaintiff did in fact file a military affidavit evidencing that the defendant is not in the military service. The issue of the personal jurisdiction of Connecticut courts over the defendant requires more discussion.
II. DISCUSSION
The summons, affidavits and documentary evidence filed by the plaintiff evidences the following facts. The defendant is a resident of the state of Illinois. The plaintiff is a corporation organized and existing under the law of the state of Delaware with the principal place of business in Norwalk, Connecticut. The plaintiff as lessor entered into certain equipment leases with two corporations as lessees who are not parties to this action. The two corporations are Chellino Crane, Inc. and Sam J. Chellino Crane Rental, Inc. The leases are dated June 5, 2015. The defendant is not a party to the leases but did sign one of the leases, clearly indicating that he was signing in his capacity as president of Sam J. Chellino Crane Rental, Inc. The codefendant, Frank Chellino, signed the other lease in his capacity as President of Chellino Crane, Inc. The schedule of equipment that is the subject of the leases indicates that the equipment consisted of two cranes each having a value of $648, 654.30 and that the equipment was located in Illinois. There is no indication in the documentation that the equipment was ever located in Connecticut or that there was ever any intent to bring the equipment to Connecticut. The lease agreements, after stating that the rights and obligation of the parties thereunder shall in all respects be governed by and construed in accordance with New York law also states that "the parties agreed that any action or proceeding arising out of or relating to this lease may be commenced in any state or federal court in the state ..." (emphasis added). Of course, the defendant is not a party to the leases.
The defendant did execute a guarantee, guaranteeing the amounts due under the leases. The guarantee provides that the guarantee will be governed and construed in accordance with New York law. However, the guarantee executed by the defendant, unlike the lease, does not contain a provision consenting to jurisdiction in the courts of any state but rather provides that "guarantor agrees that any action or proceeding arising out of or relating to this guarantee may be commenced in any state or federal court in the state of New York ..."
Section 52-59b authorizes service of process in the manner effectuated by the plaintiff over any person who "transacts any business within the state." While
the General Statutes do not define what the phrase ‘transacts any business’ means in the context in section 52-59b ... we construe the term ‘transact any business’ to embrace a single purposeful business transaction.Walshon v. Ballon Stoll Bader and Nadler, P.C. 121 Conn.App. 366, 371 (2010), quoting Zartolas v. Nisenfeld, 184 Conn. 471, 474 (1981).
The difference in the factual patterns between the Walshon and the Zartolas case illustrates the limitations on the phrase ‘transact any business.’ In Zartolas the court concluded that the execution of a warranty deed in Iowa which conveyed real property in Connecticut subjected that defendant to the personal jurisdiction in Connecticut because the execution of the deed, though in Iowa, was a purposeful Connecticut related activity which sufficed to locate the transaction within the state despite the fact that the closing did not take place within the state. The Zartolas court noted that "by owning land in Connecticut the defendants invoked the benefits and protection of Connecticut’s law of real property, including as an incident of ownership the right to sell the property." Zartolis, at 475. The nature of the transaction was sufficient for the Zartolas court to conclude that the execution of the deed though not in Connecticut constituted the transaction of business within Connecticut. However in Walshon the plaintiff retained a New York law firm to represent him in a security fees claim which was to be arbitrated in New York. The Walshon court held that such an activity did not subject the New York law film to the jurisdiction of Connecticut courts even though the defendant knew that the plaintiff resided in Connecticut and the defendant sent the retainer agreement to the plaintiff in Connecticut. The Walshon plaintiff altered a portion of the agreement in Connecticut and mailed it back to New York where the defendant ultimately signed the agreement. The Walshon court held that such contacts were insufficient to confer personal jurisdiction over the New York law firm in the Connecticut courts. Similar to Walshon is Ryan v. Zerulo, 282 Conn. 109 (2007). In Ryan our Supreme Court concluded that a New York accounting firm did not transact business in Connecticut notwithstanding that the accounting firm derived minimal income from Connecticut.
In Solano v. Calegari, 108 Conn.App. 731 (2008), the Appellate Court sustained the trial court’s determination that it did not have personal jurisdiction over the defendant and that the defendant had not transacted business within the state notwithstanding the fact that the plaintiff and the defendant had discussions concerning a loan while the defendant was in Connecticut and that the defendant had requested the loan in Connecticut.
In Zartolas the Supreme Court stated that in determining "whether the plaintiff’s cause of action arose from the defendants’ transaction of business within the state we do not resort to a rigid formula. Rather, we balance considerations of public policy, common sense and the chronology and geography of the relevant factors." Zartolas at 477. In reviewing the facts that have been presented to the court through the affidavits and documentation there is no indication that the defendant ever came to Connecticut. There is no indication that the subject equipment ever was located in Connecticut. There is no indication that the defendant had an obligation to return it to Connecticut. There is no indication that the defendant consented to jurisdiction in Connecticut. While a close reading of the guarantee does indicate that the defendant was obligated to furnish the plaintiff with annual financial statements, the mailing or faxing of such documents to a Connecticut business involving the personal guarantee of amounts due pursuant to a lease of equipment in Illinois does not in and itself constitute the "transaction of business" within the state. Indeed the defendant was not even obliged to mail checks to Connecticut; rather the monthly payment due the pursuant the lease was to be deducted from the account of the corporate lessee on a regular basis.
The defendant by simply guaranteeing payments that were due from a corporation (even assuming the defendant was a principal in that corporation) did not subject himself or consent to the jurisdiction of the Connecticut courts. There is simply no evidence that the defendant transacted business within the state of Connecticut.
To the extent the plaintiff relies on the case of The Doyle Group v. Alaskans for Cuddy, 146 Conn.App. 341 (2013), the court is not persuaded. The Doyle Group case is clearly distinguishable. In Doyle the agreement between the plaintiff and the defendant contemplated that most of the work constituting performance of the contract would take place in Connecticut. In the case at bar there was no work to be performed by the guarantor in Connecticut and the guarantee did not contemplate or require performance in Connecticut. See also Rosenblit v. Danaher 206 Conn. 125, 128 (1988), and Pro-Performances Corporate Services, Inc. v. Goldman 47 Conn.Supp. 476 (2002) (D’Andrea, J.T.R.).
III. CONCLUSION
For all these reasons the court concludes that, based upon the documentation currently before it, the defendant did not transact business in Connecticut within the meaning of the Connecticut General Statutes Section 52-59b and that therefore the court does not have jurisdiction over the defendant. For that reason the court declines to grant judgment in favor of the plaintiff. The court will not dismiss the case at the present time but if the case is not withdrawn and the plaintiff fails to provide the court with evidence from which it can conclude that the defendant has transacted business within this state within thirty days, the court will dismiss the case sua sponte at that time.