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Walsh v. St. Denis

United States District Court, D. Connecticut

September 20, 2017

KENNETH G. WALSH
v.
FRANCIS ST. DENIS

          RULING ON RENEWED PLAINTIFF'S EMERGENCY APPLICATION FOR PREJUDGMENT REMEDY [Doc. #15]

          HON. SARAH A. L. MERRIAM UNITED STATES MAGISTRATE JUDGE

         Plaintiff Kenneth G. Walsh (“plaintiff”) has filed a renewed application for prejudgment remedy. [Doc. #15].[1] For the reasons articulated below, the Court GRANTS, in part, plaintiff's Renewed Emergency Application for Prejudgment Remedy [Doc. #15] (“motion for PJR”).

         I. BACKGROUND

         Plaintiff brings this action against Francis St. Denis (“defendant” or “Francis St. Denis”), the father of plaintiff's former employer Thomas St. Denis. Plaintiff alleges that on January 5, 2015, Thomas St. Denis fraudulently transferred assets to defendant at a time when Thomas St. Denis and his companies “owed Plaintiff in excess of $59, 000 for unpaid wages[.]” Doc. #1, Complaint at ¶53.

         Plaintiff's Complaint asserts three causes of action against defendant, Francis St. Denis: (1) “Actual Fraud” in violation of the Connecticut Uniform Fraudulent Transfer Act (“CUFTA”), section 52-552e(a)(1) of the Connecticut General Statutes; (2) “Constructive Fraud” in violation of CUFTA, section 52-552e(a)(2) of the Connecticut General Statutes; and (3) common law fraudulent transfer. See generally Doc. #1, Complaint.

         Simultaneously with the Complaint, plaintiff filed an Ex Parte Application for Prejudgment Remedy (“initial PJR application”). [Doc. #2]. On June 23, 2017, Judge Alvin W. Thompson referred the initial PJR application to the undersigned. [Doc. #8]. On June 26, 2017, the Court denied, without prejudice to re-filing, plaintiff's initial PJR application on the grounds that: (1) plaintiff had failed to demonstrate circumstances warranting ex parte consideration of his application pursuant to Connecticut General Statutes section 52-278e; and (2) plaintiff's application was procedurally defective pursuant to Connecticut General Statutes section 52-278d. See generally Doc. #9.

         On July 24, 2017, plaintiff filed a motion for default against defendant Francis St. Denis for failure to respond to the Complaint. [Doc. #13]. The Clerk of the Court granted that motion on July 25, 2017, and required that plaintiff file a motion for default judgment by August 24, 2017. [Doc. #14].

         On July 27, 2017, plaintiff filed the motion for PJR, with two supporting affidavits. [Doc. #15]. On this same date, plaintiff also filed a Motion to Disclose Property and Assets. [Doc. #16]. On July 28, 2017, Judge Thompson referred those motions to the undersigned. [Doc. #17]. On August 9, 2017, the Court denied plaintiff's Motion to Disclose Property and Assets because it sought the disclosure of assets from a non-appearing defendant, which is prohibited by the plain language of the applicable Connecticut statute. See Doc. #19 (relying on Conn. Gen. Stat. §52-278n(a)). The Court scheduled an evidentiary hearing on plaintiff's motion for PJR for September 5, 2017 [Doc. #20], and entered a pre-hearing scheduling order and order for hearing and notice. [Doc. ##21, 22].

         In compliance with the Court's order, plaintiff filed a pre-hearing memorandum in further support of his motion for PJR. [Doc. #25]. Following a partially granted request for an extension of time to August 30, 2017, [Doc. #24], on August 31, 2017, plaintiff filed his Motion for Default Judgment as to defendant Francis St. Denis. [Doc. #26].

         The Court held an evidentiary hearing on plaintiff's motion for PJR on September 5, 2017. [Doc. #29]. In support of plaintiff's motion, in addition to his own testimony, plaintiff presented the testimony of: the general manager of Norwalk Self Storage, Kurt Price; Thomas St. Denis' former accountant, Paul Costello; and the estranged wife of Thomas St. Denis, Daelte Lima St. Denis. See Doc. #30. Plaintiff also offered documentary exhibits in support of his motion for PJR. See id.[2]

         II. PROBABLE CAUSE STANDARD

         Although the Federal Rules of Civil Procedure govern the conduct of an action in federal court, state law determines when and how a provisional remedy may be obtained. See Fed.R.Civ.P. 64; Bahrain Telecomm. Co. v. DiscoveryTel, Inc., 476 F.Supp.2d 176, 183 (D. Conn. 2007). “Under Connecticut law, a prejudgment remedy is appropriate if the court, upon consideration of the facts before it and taking into account any defenses, counterclaims or setoffs, claims of exemption and claims of adequate insurance, 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.” Roberts v. TriPlanet Partners, LLC, 950 F.Supp.2d 418, 420 (D. Conn. 2013) (internal quotation marks omitted) (quoting Conn. Gen. Stat. §52-278d(a)).

         “Probable cause is a flexible common sense standard. It does not demand that a belief be correct or more likely true than false.” TES Franchising, LLC v. Feldman, 943 A.2d 406, 411 (Conn. 2008) (citation omitted). Connecticut courts have defined “probable cause” in this context

as “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.” Three S. Development Co. v. Santore, 193 Conn. 174, 175, 474 A.2d 795 (1984) (citation omitted). Thus, the plaintiff does not have to prove its case by a preponderance of the evidence, but must show that there is probable cause to sustain the validity of the claim. New England Land Co., Ltd. v. De Markey, 213 Conn. 612, 620, 569 A.2d 1098 (1990).

Walpole Woodworkers, Inc. v. Atlas Fencing, Inc., 218 F.Supp.2d 247, 249 (D. Conn. 2002). “A probable cause hearing for the issuance of a prejudgment remedy is not contemplated to be a full scale trial on the merits of the plaintiff's claim. Rather, 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.” Roberts, 950 F.Supp.2d at 421 (internal citations and quotation marks omitted).

         “When a plaintiff is seeking a prejudgment remedy based on a fraudulent transfer, ‘the plaintiff must establish probable cause to believe that it can prove by clear and convincing evidence that the transfer was fraudulent.'” Cendant Corp. v. Shelton, 473 F.Supp.2d 307, 312 (D. Conn. 2007) (quoting Hull v. Joyner, No. CV055000206S, 2006 WL 2605708, at *3 (Conn. Super. Ct. Aug. 25, 2006)).

         III. DISCUSSION

         Plaintiff's motion seeks the entry of a prejudgment remedy (“PJR”) on the entirety of his Complaint. See generally Doc. #15. Plaintiff's motion seeks to secure assets in two separate locations: (1) Unit 4331, located at the Norwalk Self Storage facility, held in the name of defendant Francis St. Denis; and (2) two trailers parked on property in Weston, Connecticut, which property is owned by a limited liability company allegedly controlled by Thomas St. Denis. See Doc. #15 at 2. The proposed order attached to plaintiff's motion for PJR seeks a PJR in the amount of $156, 015.63. See Doc. #15-2. This amount roughly matches a judgment entered against Thomas St. Denis for wages owed to plaintiff, plus interest, attorney's fees, and other statutorily prescribed damages. See Doc. #1, Complaint at ¶47. At the September 5, 2017, evidentiary hearing, plaintiff clarified that he seeks a PJR against defendant Francis St. Denis in the amount of $59, 375.00, and seeks to attach only storage unit 4331, and any contents contained therein, located at the Norwalk Self Storage facility.

         At the direction of the Court, on September 7, 2017, plaintiff filed a supplemental submission addressing: (1) the evidence before the Court supporting plaintiff's claim for a PJR on his common law fraudulent transfer claim; and (2) the import, if any, of the possibility that the property held within the storage unit is the marital property of Thomas St. Denis and Daelte Lima St. Denis. See Doc. #31. In his supplemental submission, plaintiff limits his motion for PJR to Count I of the Complaint, which alleges actual fraud pursuant to CUFTA. See Doc. #31 at 3.[3]

         Accordingly, the Court turns to whether plaintiff has established probable cause to support the entry of a PJR on Count I of the Complaint.

         A. Findings of Fact

         After considering the well-pleaded allegations of the Complaint, [4] and the evidence presented at the September 5, 2017, evidentiary hearing, the Court finds the following facts established ...


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