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UCF I Trust 1 LLC v. Dimenna

United States District Court, D. Connecticut

June 29, 2016

UCF I TRUST 1, Plaintiff,
v.
JOHN J. DIMENNA, JR., THOMAS L. KELLY, JR., and WILLIAM A. MERRITT, JR., Defendants.

          RULING ON PENDING MOTIONS

          Victor A. Bolden United States District Judge.

         Plaintiff, UCF I Trust I (“UCF”), initiated this action against Defendants, John J. DiMenna, Jr., Thomas L. Kelly, Jr., and William A. Merritt, Jr., on February 2, 2016, seeking to recover 22, 525, 400, allegedly owed for certain loans in default and to enforce guarantee obligations allegedly made by these three defendants. Pending are Plaintiff’s Motion for Prejudgment Remedy [Doc. No. 8], Motion for Disclosure of Assets [Doc. No. 11], Amended Motion for Prejudgment Remedy [Doc. No. 41], and Motion for Default on the Amended Motion for Prejudgment Remedy as to Defendant DiMenna [Doc. No. 49].

         Plaintiff’s Motion for Prejudgment Remedy is MOOT because Plaintiff’s Amended Motion for Prejudgment Remedy has superseded it. Plaintiff’s motion for default against Defendant DiMenna on the Amended Motion for Prejudgment Remedy is GRANTED because Defendant DiMenna has been properly served and not only has failed to respond to the Amended Motion for Prejudgment Remedy but also has had a default entered against him in the case for his failure to appear at all. See Doc. No. 65. Consequently, Plaintiff’s Amended Motion for Prejudgment Remedy as to Defendant DiMenna is also GRANTED. However, since Defendant DiMenna’s failed to appear in this case and because the Court may only issue such an order as to “an appearing defendant, ” Conn. Gen. Stat.§ 52-278n(a), Plaintiff’s Motion for Disclosure of Assets is DENIED as to Defendant DiMenna.

         Plaintiff’s Amended Motion for Prejudgment Remedy as to Defendants Kelly and Merritt is GRANTED, as modified by the Court, because, for the reasons discussed below, the Court finds probable cause that a judgment in the amount of $555, 074.30 as to Defendant Kelly and $724, 883.56 as to Defendant Merritt will be rendered in favor of Plaintiff. Accordingly, Plaintiff’s Motion for Disclosure of Assets is GRANTED as to Defendants Kelly and Merritt.

         I. LEGAL STANDARD

         Rule 64, Fed. R. Civ. P., provides that, in a federal court, “every remedy is available that, under the law of the state where the court is located, provides for seizing a person or property to secure satisfaction of the potential judgment.” “[A] prejudgment remedy is intended to secure the satisfaction of a judgment should the plaintiff prevail.” Roberts v. TriPlanet Partners, LLC, 950 F.Supp.2d 418, 420 (D. Conn. 2013). Connecticut law “provides for an expansive prejudgment remedy, and it is under Connecticut law that [a plaintiff’s prejudgment remedy] application must be reviewed.” New England Health Care Employees Welfare Fund v. iCare Mgmt., LLC, 792 F.Supp.2d 269, 274 (D. Conn. 2011).

         Under Connecticut law, a prejudgment remedy shall be granted if a court “finds that the plaintiff has shown probable cause that such a judgment will be rendered in the matter in the plaintiff’s favor in the amount of the prejudgment remedy sought.” Conn. Gen.Stat. § 52-278d(a).

Proof of probable cause as a condition of obtaining a prejudgment remedy is not as demanding as proof by a fair preponderance of the evidence. The legal idea of probable cause is a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence and judgment, under the circumstances, in entertaining it. Probable cause is a flexible common sense standard. It does not demand that a belief be correct or more likely true than false. Under this standard, the trial court’s function is to determine whether there is probable cause to believe that a judgment will be rendered in favor of the plaintiff in a trial on the merits.

TES Franchising, LLC v. Feldman, 286 Conn. 132, 137 (2008) (quotation marks and citations omitted).

         II. FINDINGS OF FACT

         After considering all of the evidence presented, the Court finds the following facts for the limited purpose of deciding the Amended Motion for Prejudgment Remedy:

         Defendants Kelly and Merritt first began working together in the 1980s. Together, they formed Seaboard Realty, Inc., as a real estate investment company in approximately 1992. They subsequently hired Defendant DiMenna to operate and manage the company’s real estate, and gave him a 40% share in the company, later increased to a 50% share.

         In January 1996, Defendants changed the structure of their company into a Connecticut limited liability company, Seaboard Realty, LLC. At all relevant times, Seaboard Realty, LLC had three members: Defendant DiMenna, who owned 50 percent, Defendant Merritt, who owned 25%, and Defendant Kelly, who owned 25%. The Seaboard Realty, LLC Operating Agreement requires a majority vote from its members on business decisions. The three members of Seaboard Realty, LLC had regular meetings at which various issues regarding its properties were discussed. Minutes were kept of these meetings.

         Over the course of its existence, Seaboard Realty, LLC, through its affiliates, has had an ownership interest in a number of residential, commercial, and hospital properties, primarily located in Stamford, Connecticut. Park Square West Associates, LLC, a Delaware limited liability company, purchased the apartment complex located at 101 Summer Street, Stamford, Connecticut for approximately $38 million, a purchase financed in part by an $8 million loan from Titan Servicing, LLC. The sole member of Park Square West Associates, LLC is Park Square West Member Associates, LLC, a Connecticut limited liability company with many investors as members.[1] Seaboard Realty, LLC is the managing member and 25 percent owner of Park Square West Member Associates, LLC.

         Seaboard Hotel Associates, LLC is a Delaware limited liability company and at all relevant times was the owner of the Marriott Courtyard Hotel located at 275 Summer Street, Stamford, Connecticut, which it had acquired for approximately $30 million. The sole member of Seaboard Hotel Associates, LLC is Seaboard Hotel Member Associates, LLC, a Connecticut limited liability company with many investors as ...


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