Argued
March 11, 2019
Procedural
History
Action
to recover damages for, inter alia, the allegedly fraudulent
transfer of certain property to the named defendant, and for
other relief, brought to the Superior Court in the judicial
district of Middlesex, where the court, Aurigemma,
J., granted the named defendant's motion for summary
judgment and rendered judgment thereon; thereafter, the court
denied the plaintiff's motion to reargue, and the
plaintiff appealed to this court. Affirmed.
Rowena
A. Moffett, for the appellant (plaintiff).
Kenneth J. McDonnell, with whom, on the brief, was Michael L.
McGlinchey, for the appellee (named defendant).
Prescott, Elgo and Bishop, Js.
OPINION
PRESCOTT, J.
In this
commercial dispute relating to the sale of certain property
belonging to two fitness centers, the plaintiff, Brant Smith,
appeals from the summary judgment rendered in favor of the
defendant Marshview Fitness, LLC.[1] The trial court concluded
that the defendant was entitled to summary judgment because
the transfer of certain property, in which the plaintiff
claims to have had an economic interest, was not fraudulent,
as a matter of law, under either the common law or the
Uniform Fraudulent Transfer Act (UFTA), General Statutes
§ 52-552a et seq. In doing so, the trial court also
rejected the plaintiffs related claim under the Connecticut
Unfair Trade Practices Act (CUTPA), General Statutes §
42-110a et seq.
On
appeal, the plaintiff claims, among other things,
[2]that
the trial court improperly (1) concluded that the transfer at
issue was not fraudulent under the common law or UFTA because
the property that was transferred did not constitute
"assets," (2) rejected his CUTPA claim on the
ground that it was based solely on his allegations of
fraudulent transfer, and (3) denied his motion to reargue. We
affirm the judgment of the trial court.
The
trial court set forth the following factual and procedural
history. "The plaintiff was the owner of two fitness
centers that had been operated as 'Shoreline Health and
Fitness' in Clinton and Old Saybrook, Connecticut. On
September 15, 2010, the plaintiff and his former partners
sold the businesses to Ryan Rothschild. Rothschild bought the
businesses through two separate companies, SHF-Clinton, LLC,
and SHF-Old Saybrook, LLC (SHF entities). The Rothschild/SHF
entities' purchase of the plaintiffs fitness centers was
financed by Wells Fargo Bank [Wells Fargo] under a program
sponsored by the United States Small Business Administration
[SBA]. The principal amount of the Wells Fargo loan at the
time of the plaintiff's sale to the SHF entities was $1.2
million. That loan was secured by a security interest in the
assets of the SHF entities, which was prior in right to the
security interest of the plaintiff.
"As
part consideration for the sale to Rothschild, the plaintiff
took back a promissory note for $150, 000 and another note
for $300, 000. Rothschild defaulted on the notes, and the
plaintiff commenced [an action] against him titled Smith
v. Rothschild, [Superior Court, judicial district of
Middlesex, Docket No. CV-14-6012641-S] (Rothschild action).
In that case, the plaintiff filed a motion for temporary
injunction and court-ordered inspection of company records
dated October 21, 2014. That motion sought to enjoin
Rothschild from selling the interests or assets of the SHF
entities and an order permitting the plaintiff to inspect and
copy the books and records of the SHF entities. The plaintiff
never sought a hearing or otherwise proceeded on the
foregoing motion.
"In
connection with the motion for temporary injunction, the
plaintiff signed an affidavit in which he averred that the
$300, 000 note referred to above was secured by a security
agreement [that] gave the plaintiff 'a continuing
security interest in all of the assets of [the SHF
entities].' . . . [The plaintiff] also averred that
'I maintain that I am entitled to a right of first
refusal with respect to any proposed sale of the [SHF
entities].' . . .
"While
the plaintiff was litigating his claims against Rothschild,
he was simultaneously negotiating with Rothschild to purchase
the assets of the SHF entities. The plaintiffs offer to
purchase the assets of the SHF entities was accepted by
Rothschild. However, Wells Fargo did not accept the offer
because SBA regulations prohibited repurchase of the assets
by the plaintiff, a former owner. At that time, Rothschild
and the SHF entities owed Wells Fargo in excess of $800, 000
on the SBA loan used to purchase the assets from the
plaintiff. Wells Fargo had to agree to release its security
interest in the SHF entities' assets before [they] could
be sold.
"[The
defendant] was the landlord for the SHF-Clin-ton fitness
center. The members of [the defendant] are Todd Pozefsky and
John Giannotti. After the plaintiffs failed attempt to
purchase the assets of the SHF entities, Pozefsky and
Giannotti negotiated with Rothschild for the purpose of
purchasing the assets of the SHF entities so that Rothschild
would voluntarily vacate the [defendant's] premises.
"[The
defendant] reached an agreement with Rothschild to purchase
the assets of the SHF entities. The agreement was approved by
Wells Fargo, which agreed to accept $100, 000 to release its
security interest in the SHF entities' assets, even
though its loan exceeded $800, 000. Wells Fargo approved the
sale by Rothschild contingent on the plaintiff receiving no
more than $63, 500 in exchange for the release of his
subordinate security interest in the assets of the SHF
entities. At his deposition, the plaintiff admitted that he
was aware of the [defendant's] purchase, and that he was
represented by counsel in the preparation of ...