November 28, 2017
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.
A. Rosenblum, with whom was Michael D. Blumberg, for the
Timothy A. Diemand, with whom were Jeffrey R. Babbin and, on
the brief, Michael Menapace, for the appellee (plaintiff).
Alvord, Bright and Sullivan, Js.
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.
following facts, as ascertained from the record, reasonably
could have been found by the trial court.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 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.
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. 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
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.
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.
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.
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