WILLIAM J. DEUTSCH ET AL.
November 7, 2018
to recover damages for unjust enrichment, and for other
relief, brought to the Superior Court in the judicial
district of Stamford, where the defendants filed a
counterclaim; thereafter, the court, Genuario,
J., granted the defendants' motion for summary
judgment and rendered judgment for the defendants as to the
plaintiff's complaint, from which the plaintiff appealed.
Reversed; further proceedings.
S. Golub, with whom, on the brief, was Jonathan M. Levine,
for the appellant (plaintiff).
Graff, pro hac vice, with whom, on the brief, were Stephen G.
Walko and Andrea C. Sisca, for the appellees (defendants).
McDonald, D'Auria, Mullins, Kahn, Ecker and Vertefeuille,
narrow issue presented by this appeal is whether the statute
of limitations of the state of Connecticut or the state of
Delaware governs the unjust enrichment claims brought by the
plaintiff, Reclaimant Corp., against the defendants, William
J. Deutsch and Laurence B. Simon, seeking recovery for
alleged overpayments issued to the defendants by the
plaintiff's putative predecessor in interest pursuant to
a limited partnership agreement. The trial court rendered
summary judgment in favor of the defendants, concluding that
the plaintiff's unjust enrichment claims were governed by
Delaware law and were time-barred under the three-year
statute of limitations in the Delaware Revised Uniform
Limited Partnership Act (DRULPA), Del. Code Ann. tit. 6,
§ 17-607 (c) (2005). On appeal, the plaintiff contends that
summary judgment was improper because Connecticut law governs
the timeliness of its unjust enrichment claims and that those
claims timely were filed under Connecticut law.
conclude that Delaware law governs the substantive rights and
liabilities of the parties arising out of the limited
partnership agreement but that Connecticut law governs
matters of judicial administration and procedure. We further
conclude that, because the plaintiff's unjust enrichment
claims have a common-law origin, the limitation period
properly is ‘‘characterized as procedural because
it functions only as a qualification on the remedy to enforce
the preexisting right.'' Baxter v. Sturm, Ruger
& Co., 230 Conn. 335, 347, 644 A.2d 1297 (1994).
Thus, Connecticut law, rather than Delaware law, controls the
timeliness of the plaintiff's claims. We therefore
reverse the judgment of the trial court and remand the case
for further proceedings.
record reveals the following relevant facts and procedural
history. In 2007, the defendants entered into a limited
partnership agreement with SV Special Situations Fund LP (SV
Fund), a Delaware limited partnership formed for the purpose
of investing in and trading securities and other investments.
In early 2008, the defendants redeemed their respective
investments and withdrew from the partnership as of March 31,
2008. Deutsch received approximately 90 percent of the funds
in his capital account, for a total distribution in the
amount of $22, 309, 473.03, and Simon received approximately
90 percent of the funds in his capital account, for a total
distribution in the amount of $2, 176, 785.80.
letters dated September 4, 2012, Scott A. Stagg, the director
of SV Fund, informed each of the defendants that the
‘‘net asset value of your interest in the . . .
Fund was . . . overstated [at the time you redeemed your
investment], resulting in . . . overpayment . . . .''
Stagg alleged that Deutsch had received a total overpayment
in the amount of $7, 047, 974.03 and that Simon had received
a total overpayment in the amount of $724, 557.80, and he
demanded that the defendants return the alleged overpayments
within thirty days.
defendants responded by requesting documentation and
clarification of the alleged overpayments. The defendants
also requested payment of the remaining funds in their
capital accounts, which had been held back at the time of
redemption. Specifically, Deutsch asked for the payment of
$807, 127.97 and Simon asked for the payment of $102, 753.
was liquidated in February, 2013, and its claims against the
defendants were assigned to the plaintiff. On May 8, 2013,
the plaintiff filed a two-count complaint against the
defendants, both of whom reside in Connecticut. In the first
count, the plaintiff alleged that Deutsch had been
‘‘unjustly enriched as a result of receiving and
retaining'' the alleged overpayment in the amount of
$7, 047, 974.03. In the second count, the plaintiff alleged
that Simon had been ‘‘unjustly enriched as a
result of receiving and retaining'' the alleged
overpayment in the amount of $724, 557.80.
defendants moved to strike the complaint as time-barred under
the three-year statute of limitations in § 17-607 (c) of
DRULPA because ‘‘the distributions were made in
2008 and the complaint was not filed until 2013 . . .
.'' The plaintiff opposed the defendants' motion
to strike, contending that, ‘‘if any statute of
limitations applies to the plaintiff's equitable unjust
enrichment claims . . . it is [Connecticut's] six-year
statute [of limitations applicable to contracts] set forth in
[General Statutes] § 52-576 (a), and the plaintiff's
claims are, therefore, not time-barred.'' The trial
court determined that it was ‘‘inappropriate to
decide this potentially dispositive issue within the context
of a motion to strike'' and, therefore, denied the
defendants filed an answer denying that they had been
unjustly enriched and raising the following affirmative
defenses: (1) the plaintiff's claims are barred by §
17-607 (b) of DRULPA, ‘‘which specifies that a
limited partner who unknowingly receives an alleged
overpayment is not liable for returning the amount of that
distribution''; (2) the plaintiff's claims are
barred by the three-year statute of limitations in §
17-607 (c) of DRULPA; (3) the plaintiff's complaint fails
to state a claim on which relief maybe granted because SVFund
‘‘could have prevented and/or addressed any
potential alleged overpayments''; (4) the
plaintiff's claims are barred by the three-year statute
of limitations governing torts in General Statutes §
52-577; (5) the plaintiff ‘‘lacks standing
because [it] has not established its right to bring a cause
of action on behalf of SV Fund''; (6) the plaintiff
‘‘lacks standing because [it] has not established
that SV Fund or its assignees have a right to bring a cause
of action on behalf of 3V Capital Partners,
LP'';(7) the plaintiff's claims are barred
by the doctrine of laches due to its
‘‘inexcusable delay'' in filing suit; (8)
the plaintiff's claims are ‘‘barred by the
doctrine of waiver''; (9) the plaintiff's claims
are ‘‘barred by the doctrine of
estoppel''; (10) the plaintiff's claims
‘‘are barred by the equitable doctrine of unclean
hands''; (11) the plaintiff's claims
‘‘are barred by the doctrine of satisfaction and
accord''; and (12) the plaintiff ‘‘failed
to mitigate its damages, if any exist.'' The
defendants also filed a counterclaim against the plaintiff on
the basis of SV Fund's alleged failure to distribute the
funds remaining in their capital accounts.
plaintiff moved for summary judgment on the defendants'
second and fourth special defenses, contending that
‘‘Connecticut's statute of limitations law
applies to the plaintiff's common-law unjust enrichment
claims'' and ‘‘Connecticut law provides
that either no statute of limitations applies to an equitable
action for unjust enrichment, or, at a minimum, that a
six-year statute of limitations applies, and this action is
timely under either measure.'' The defendants opposed
the plaintiff's motion for summary judgment and moved for
summary judgment on their first, second, third, fourth, and
seventh special defenses. The essence of the defendants'
argument was that the plaintiff's
‘‘contention that Connecticut law applies to
[this] dispute is academic since neither Connecticut nor
Delaware law . . . permit[s] parties to pursue unjust
enrichment claims as a means to rewrite the express terms of
a written agreement governing the payments at issue''
and the plaintiff's unjust enrichment claims are
time-barred under both Delaware and Connecticut law.
trial court's resolution of the parties' competing
motions for summary judgment was guided largely by the fact
that the limited partnership agreement contains a choice of
law provision, which states: ‘‘This [a]greement
and all rights and liabilities of the parties hereto shall be
governed by and construed in accordance with the laws of the
[s]tate of Delaware, without regard to its conflicts of law
principles.'' The trial court observed that §
187 (1) of the Restatement (Second) of Conflict of Laws
‘‘requires that the law of the state chosen by
the parties to govern their contractual rights and duties
will be applied if the particular issue was one which the
parties could have resolved by an explicit provision in their
agreement directed to that issue.'' The trial court
determined that the contractual choice of law provision here
‘‘expressly elects Delaware law for all issues
regarding the parties' rights and liabilities including
those set forth in [§] 17-607 (c) of . . .
DRULPA.'' In arriving at its decision, the trial
court rejected the plaintiff's contention that the choice
of law provision governed the substantive law of the contract
but not procedural matters like the applicable statute of
limitations, reasoning that the ‘‘broad and
clear'' language of the contract
‘‘evidences an intent to include all issues
(whether substantive or procedural) concerning rights, and
all issues concerning liabilities, to be governed by Delaware
law within the breadth of the choice of law
election.'' Having determined that ‘‘the
parties clearly and unambiguously ...