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ASPIC, LLC v. Poitier

Court of Appeals of Connecticut

February 13, 2018

ASPIC, LLC
v.
BRACK G. POITIER

          Argued November 28, 2017

         Procedural History

         Action to collect on promissory notes, and for other relief, brought to the Superior Court in the judicial district of New Haven, where the plaintiff served the defendant with notice of an ex parte prejudgment remedy; thereafter, the court, Hon. Howard F. Zoarski, judge trial referee, granted the defendant's motion to dissolve the prejudgment remedy; subsequently, the plaintiff filed an application for a prejudgment remedy; thereafter, the court, Ecker, J., granted the plaintiff's application for a prejudgment remedy, and the defendant appealed to this court. Reversed; further proceedings.

          Mark A. Rosenblum, with whom was Michael D. Blumberg, for the appellant (defendant).

          Timothy A. Diemand, with whom were Jeffrey R. Babbin and, on the brief, Michael Menapace, for the appellee (plaintiff).

          Alvord, Bright and Sullivan, Js.

          OPINION

          BRIGHT, J.

          The defendant, Brack G. Poitier, appeals from the judgment of the trial court granting the pre-judgment remedy application filed by the plaintiff, ASPIC, LLC. The defendant claims that the trial court erred in awarding the plaintiff a $1 million prejudgment remedy because he specifically had pleaded, inter alia, a defense of breach of fiduciary duties, which required the court to shift the burden to the plaintiff to establish fair dealing, and the court failed to do so. He also claims that even if the court appears to have shifted the burden, the record was devoid of evidence to demonstrate fair dealing. Finally, the defendant claims that the trial court failed to make any finding that the plaintiff had met its burden to show that there was probable cause that it would prevail in establishing that the transactions at issue were the product of fair dealing. We agree with the defendant and reverse the judgment of the trial court.

         The following facts, as ascertained from the record, reasonably could have been found by the trial court.[1]The plaintiff is a single member limited liability company, whose sole member is Municipal Capital Appreciation Partners III, L.P. (Muni). The defendant is a general partner in four limited partnerships, GAB Hill Limited Partnership, BHP Limited Partnership, WCH Limited Partnership, and Renaissance Limited Partnership. These partnerships collectively are known as the Court Hill Partnerships (Court Hill). The partnership agreements provide that each general partner has unlimited personal liability for all obligations of the partnerships. Court Hill owns properties that served low income individuals in the New Haven area. In addition to the defendant, George Bumbray and Wendell C. Harp[2] also are general partners in Court Hill, with Harp having been appointed as the managing partner. Harp's company, Renaissance Management Company, Inc. (Renaissance), acts as the managing agent for all of the properties owned by Court Hill.

         On December 24, 2008, Harp, on behalf of Court Hill, signed an amended and restated promissory note in the amount of $2, 039, 763 in substitution for an August, 2008 promissory note.[3] The note purported to memorialize Court Hill's debt for ‘‘operating expenses as of November 30, 2008, plus accrued interest'' by entering into an ‘‘amended and restated promissory note'' with Renaissance for that amount. Harp endorsed this note four times, once for each of the Court Hill member partnerships. Also on December 24, 2008, Harp, on behalf of Court Hill, then entered into an ‘‘amended and restated promissory note, '' in the amount of $817, 692, with Harp, individually. This note also was for ‘‘operating expenses as of November 30, 2008, plus accrued interest thereon.'' Harp also endorsed this note four times, once for each of the Court Hill member partnerships.[4]

         On December 30, 2008, Harp, on behalf of himself and Renaissance, executed a loan agreement and a $1.5 million promissory note with Muni (Muni note). The loan agreement provided in part that $695, 963.94 of the loan would be advanced to Harp and Renaissance ‘‘to be used by [Harp and Renaissance] to repay the promissory note made by [Muni] to Harp, '' and that proceeds from this loan also were to be used to pay federal, state, and local tax liabilities of Harp and/or Renaissance. Schedule 7(f) of the loan agreement contains, inter alia, a listing of the tax obligations of Renaissance: $950, 000 to the Department of Revenue Services; $732, 000 to the Internal Revenue Service; and $3700 to the city of New Haven.

         Harp, Renaissance, and Muni also entered into a ‘‘pledge and security agreement'' on December 30, 2008, whereby Renaissance and Harp pledged as collateral for the Muni note their interests in and rights under the Court Hill notes. Additionally, on April 1, 2009, Harp, Renaissance, and Muni entered into a ‘‘first amendment to pledge and security agreement'' (amended security agreement), which amended the December 30, 2008 pledge and security agreement to include a collateral pledge of two additional notes payable by Court Hill (2009 advance notes), one in favor of Renaissance in the amount of $251, 010 for operating expenses between December 1, 2008, and February 28, 2009, and one in favor of Harp in the amount of $13, 572, also for operating expenses during that same period.

         The entire principal balance of the Muni note was due and payable on December 31, 2010, but no payment ever was made. The note is in default.

         In light of the default on the Muni note and the amended security agreement, Muni held a public sale of the collateral on January 8, 2014, at which it was the highest bidder. Muni thereafter transferred legal title of the collateral to the plaintiff, which now seeks to enforce the Court Hill notes ...


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