Jonathan S. METCALF
Michael FITZGERALD et al.
March 29, 2019
[Copyrighted Material Omitted]
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from the Superior Court in the judicial district of
Waterbury, where the court, Roraback, J.
L. Elstein, Bridgeport, with whom was John J. Ribas, for the
A. Yahwak, for the appellees (named defendant et al.).
E. Sheehan, with whom were Timothy J. Holzman and, on the
brief, Robert W. Cassot, Hartford, for the appellees
(defendant Alderman & Alderman, LLC, et al.).
C. J., and Palmer, McDonald, DAuria, Kahn and Ecker, Js.
Conn. 3] In this appeal, we are asked to determine whether
the United States Bankruptcy Code provisions permitting
courts to assess penalties and sanctions preempt state law
claims for vexatious litigation and violation of the
Connecticut Unfair Trade Practices Act (CUTPA), General
Statutes § 42-110a et seq. The plaintiff, Jonathan S.
Metcalf, brought state law claims against the defendants,
Michael Fitzgerald, Ion Bank (bank), Myles H. Alderman, Jr.,
and Alderman & Alderman, LLC (law firm), for alleged
vexatious litigation and for unfair and deceptive business
acts or practices during the plaintiffs underlying
bankruptcy proceeding. The plaintiff appeals from the trial
courts granting of the motion to dismiss filed by Alderman
and the law firm, for lack of subject matter jurisdiction on
the ground that federal bankruptcy law preempts the claims.
The trial court determined that the outcome of the motion was
controlled by the Appellate Courts decision in Lewis v.
Chelsea G.C.A. Realty Partnership, L.P., 86 Conn.App.
596, 862 A.2d 368 (2004), cert. denied, 273 Conn. 909, 870
A.2d 1079 (2005). The court in Lewis held that the
Bankruptcy Code preempted CUTPA and vexatious litigation
claims for alleged abuse of the bankruptcy process.
Id., at 605-607, 862 A.2d 368. The plaintiff
contends that the court in Lewis did not properly
evaluate each of the three types of preemption by which
Congress manifests its intent to preempt state law and failed
to consider the relevant Bankruptcy Code provisions. See 11
U.S.C. § 105 (2012); Fed. R. Bankr. P. 9011. We disagree and
affirm the judgment of the trial court.
following facts, as set forth in the plaintiffs complaint,
and procedural history are relevant to our review of the
plaintiffs claim. The plaintiffs business, Metcalf Paving
Company, filed a chapter 11 bankruptcy petition in 2009. See
11 U.S.C. § 1101 et seq. (2012). The Metcalf Paving Company
bankruptcy thereafter was converted [333 Conn. 4] to a case
under chapter 7 of the Bankruptcy Code. See 11 U.S.C. § 701
(2012). The plaintiff then filed individually for bankruptcy
under chapter 7. The bank, one of the plaintiffs creditors
in the bankruptcy proceeding, subsequently commenced an
adversary proceeding against the plaintiff under § § 523 (a)
and 727 (a) (7) of the Bankruptcy Code. Under these
provisions, the bank objected to the discharge of the
plaintiffs debt, asserting, among other allegations, that
the plaintiff had failed to deliver a check, failed to
provide documents, failed to disclose a website that he
allegedly used for a new business, took possession of
expensive machinery, unlawfully transferred property,
destroyed property of the estate, defrauded creditors, and
fraudulently withheld information from the chapter 7 trustee.
In response, the plaintiff presented evidence to the
Bankruptcy Court to contradict the allegations and moved for
summary judgment. Upon reviewing the plaintiffs evidence,
the bank moved to dismiss the adversary proceeding. The
Bankruptcy Court granted the motion to dismiss.
plaintiff subsequently commenced this action in the Superior
Court. In his complaint, the plaintiff set forth claims for
vexatious litigation against all the defendants, and CUTPA
claims against Fitzgerald and the bank. In support of the
vexatious litigation claims, the plaintiff alleged that the
defendants had initiated the adversary proceeding without
probable cause and with malice, maintained the proceeding
without probable cause and with malice, and, as a result,
caused him to suffer damages. The plaintiff claimed that the
defendants knew or should have known that the allegations
they made during the adversary proceeding were without
factual merit and were barred by the applicable statute of
limitations. In support of the CUTPA claims, the plaintiff
alleged that Fitzgerald and the bank repeatedly engaged in
unfair and deceptive acts or practices
[333 Conn. 5] during the bankruptcy proceeding, and that
their conduct had been so frequent as to constitute a general
business practice. The plaintiff claimed damages that
included attorneys fees, losses from an inability to manage
his business affairs, emotional distress, expenditures of
time, effort and resources, and injuries to his business and
professional reputation. The plaintiff alleged that he was
entitled to damages and costs under the common law, double
damages and treble damages under Connecticuts vexatious
litigation statute, General Statutes § 52-568, and punitive
damages and attorneys fees under CUTPA. See General Statutes
and the law firm moved to dismiss the vexatious litigation
claims on the ground that the claims arose from conduct that
allegedly had taken place within a bankruptcy proceeding and
were, therefore, preempted by the Bankruptcy Code. The trial
court agreed, granted the motion to dismiss the vexatious
litigation claims and, on its own motion and for the same
reason, dismissed the remaining counts of the complaint,
including the CUTPA claims, for lack of subject matter
jurisdiction. The trial court cited Lewis v. Chelsea
G.C.A. Realty Partnership, L.P., supra, 86 Conn.App. at
596, 862 A.2d 368, in support of its decision.
Lewis, the Appellate Court held that bankruptcy law
preempted state law CUTPA and vexatious litigation claims.
Id., at 605-607, 862 A.2d 368. The Appellate Court
reasoned that "[t]he exclusivity of federal jurisdiction
over bankruptcy proceedings, the complexity and
comprehensiveness of Congress regulation in the area of
bankruptcy law and the existence of federal sanctions for the
filing of frivolous and malicious pleadings in bankruptcy
must be read as Congress implicit rejection of alternative
remedies such as those the plaintiff seeks."
Id., at 605, 862 A.2d 368. Accordingly, the court in
Lewis remanded the [333 Conn. 6] case to the trial
court with direction to dismiss the action. Id., at
607, 862 A.2d 368.
the trial courts dismissal of the present action, the
plaintiff timely appealed to the Appellate Court. The appeal
was then transferred from the Appellate Court to this court.
See General Statutes § 51-199 (c); Practice Book § 65-1.
appeal, the plaintiffs sole claim is that the trial court
incorrectly concluded that federal bankruptcy law preempted
his state law claims for vexatious litigation and violations
of CUTPA. Specifically, the plaintiff argues
that this court should not follow the holding in
Lewis because that court failed to conduct a proper
preemption analysis. Additionally, the plaintiff argues that
his state law claims are neither expressly nor implicitly
preempted and do not conflict with Congress objectives in
the Bankruptcy Code. We disagree.
begin with our well established standard of review for
reviewing a trial courts decision on a motion to dismiss:
"A motion to dismiss tests, inter alia, whether, on the
face of the record, the court is without jurisdiction....
[O]ur review of the courts ultimate legal conclusion and
resulting [determination] of the motion to [333 Conn. 7]
dismiss will be de novo.... When a ... court decides a
jurisdictional question raised by a pretrial motion to
dismiss, it must consider the allegations of the complaint in
their most favorable light.... In this regard, a court must
take the facts to be those alleged in the complaint,
including those facts necessarily implied from the
allegations, construing them in a manner most favorable to
the pleader.... The motion to dismiss ... admits all facts
which are well pleaded, invokes the existing record and must
be decided upon that alone.... In undertaking this review, we
are mindful of the well established notion that, in
determining whether a court has subject matter jurisdiction,
every presumption favoring jurisdiction should be
indulged." (Internal quotation marks omitted.) Dorry
v. Garden, 313 Conn. 516, 521, 98 A.3d 55 (2014).
to the legal principles at issue, we note that the supremacy
clause of the United States constitution; see U.S. Const.,
art. VI, cl. 2; provides that federal law "shall be the
supreme Law of the Land; and the Judges in every [S]tate
shall be bound thereby, any Thing in the Constitution or Laws
of any [S]tate to the Contrary notwithstanding.... Under this
principle, Congress has the power to pre-empt state
law." (Citation omitted; internal quotation marks
omitted.) Arizona v. United States, 567 U.S. 387,
399, 132 S.Ct. 2492, 183 L.Ed.2d 351 (2012).
bankruptcy clause of the United States constitution grants
Congress the power "[t]o establish ... uniform Laws on
the subject of Bankruptcies throughout the United States
...." U.S. Const., art. I, § 8, cl. 4. District courts
of the United States have "original and exclusive
jurisdiction of all cases under title 11." 28 U.S.C. §
1334 (a) (2012). Through title 11 of the United States Code,
Congress provided "a comprehensive federal system of
penalties and protections to govern the orderly conduct of
debtors affairs and creditors rights." [333 Conn. 8]
Eastern Equipment & Services Corp. v. Factory Point
National Bank,236 F.3d 117, 120 (2d Cir. 2001); see 11
U.S.C. § 101 et seq. (2012). As for sanctions for abuse of
the bankruptcy process, the Bankruptcy Code provides a
variety of remedies. See, e.g., 11 U.S.C. § 105 (a) (2012)