Sullo v. Foodservicewarehouse.com, LLC

Joseph Sullo v. Foodservicewarehouse.com, LLC et al

No. CV166067424S

Superior Court of Connecticut, Judicial District of Hartford, Hartford

April 27, 2017

UNPUBLISHED OPINION

MEMORANDUM OF DECISION RE MOTION TO DISMISS (#109)

Jane S. Scholl, J.

Introduction

The amended complaint here alleges that the plaintiff, Joseph Sullo, owned and operated Restaurant Supply, LLC, located in Hartford, Connecticut. Restaurant Supply was a member of FoodServiceWarehouse.com, LLC, (FSW). The defendant, Madhu Natarajan, who resided in Colorado, was a member of the Management Committee of FSW. On or about August 1, 2015, FSW borrowed $1, 000, 000 from Sullo pursuant to a promissory note and security agreement. The terms of the note were negotiated with Sullo while he was in Connecticut and the funds were wired from a bank branch located in Connecticut. Pursuant to the terms of the note the entire balance of the principal and interest was payable any time after thirty days written notice demanding payment. In February 2016, Sullo made such demand, yet FSW has failed to pay the principal and accrued interest to Sullo. Count One of the amended complaint makes a claim for breach of contract as to FSW. In Count Two Sullo makes a claim of misrepresentation as to the defendant Natarajan. Sullo claims that Natarajan represented to him that FSW was in a temporary cash-flow shortage and needed a bridge loan until it secured other financing. Natarajan represented that the loan would be required for no more than sixty days. Sullo claims that Natarajan individually and as a member of the FSW management committee misrepresented facts to Sullo in a number of ways and that he knew or should have known that his statements were false. In Count Three the plaintiff also makes a negligence claim as to Natarajan claiming that Natarajan was negligent and careless in entering into the note between FSW and Sullo.

The defendant, Madhu Natarajan, has moved to dismiss this action as to him claiming that the court cannot exercise personal jurisdiction over him. The court heard argument on the motion on February 6, 2017.^[1]

Discussion

Natarajan claims that he is not a resident of Connecticut, that he has never had any presence in Connecticut, and there is no basis under the longarm statute for this court to exercise any jurisdiction over him.

" When a defendant challenges personal jurisdiction in a motion to dismiss, the court must undertake a two-part inquiry to determine the propriety of its exercising such jurisdiction over the defendant. The trial court must first decide whether the applicable state longarm statute authorizes the assertion of jurisdiction over the [defendant]. If the statutory requirements [are] met, its second obligation [is] then to decide whether the exercise of jurisdiction over the [defendant] would violate constitutional principles of due process . . . Thus, based on the facts in the record, this court must determine: first, whether [the long-arm statute] properly applies to the defendant; and, second, if the statutory threshold is met, whether the defendant has the requisite minimum contacts with this state sufficient to satisfy constitutional due process concerns." (Citations omitted; internal quotation marks omitted.) Cogswell v American Transit Insurance Company, 282 Conn. 505 514-15, 923 A.2d 638 (2007). " If the defendant challenging the court's personal jurisdiction is a foreign corporation or a nonresident individual, it is the plaintiff's burden to prove the court's jurisdiction . . . Thus, once the defendant contested personal jurisdiction in the present case, it was the plaintiff's burden to produce evidence adequate to establish such jurisdiction. (Citation omitted.) Id., 515-6.

The complaint alleges that Natarajan resides in Colorado. In his affidavit Natarajan states that during the times relevant to the complaint he resided in Colorado but he is currently a resident of Texas. He further states that he has never traveled to Connecticut or transacted business here.

Jurisdiction over a non-resident is governed by General Statutes § 52-59b. That statute states: " (a) As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nonresident individual, foreign partnership or foreign voluntary association, or over the executor or administrator of such nonresident individual, foreign partnership or foreign voluntary association, who in person or through an agent: (1) Transacts any business within the state; (2) commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act . ."

The plaintiff posits that the court has personal jurisdiction over Natarajan because he transacted business in this state. The plaintiff claims that the representations about the need for the loan and the terms of the loan were made by the defendant by email, telephone, and text message to the plaintiff while the plaintiff was in Connecticut. The plaintiff claims that this is sufficient to support the court's exercise of jurisdiction over Natarajan. Natarajan admits that he " discussed the terms of the bridge loan with Sullo on a handful of occasions via telephone and/or email." He was also CEO of FSW at that time and signed the note on behalf of FSW. The defendant argues that these facts do not support a conclusion that he transacted business in Connecticut.

The plaintiff cites The Doyle Group v. Alaskans for Cuddy, 146 Conn.App. 341, 77 A.3d 880 (2013), in support of his position. There the plaintiff sued for money due for consulting work performed from Connecticut for the defendant non-residents. The consulting services were provided via numerous e-mails and telephone calls to the defendants. The individual defendant claimed that he was not a resident of Connecticut, he signed the subject contract outside of Connecticut, he never physically had been present in Connecticut for any purpose related to the subject of the cause of action, he never had engaged in any business activity in Connecticut, he had no physical presence in Connecticut, and he owned no property, bank accounts, or business interests in Connecticut. The plaintiff's representative stated that it offers political consulting services and has offices only in Hartford, Connecticut. The court held: " [A]lthough the term '[t]ransacts any business' is not defined by statute, [our Supreme Court has] construed the term to embrace a single purposeful business transaction . . . In the present case, the court reasonably could have concluded from the allegations of the amended complaint and the affidavits of the parties that Cuddy transacted business in Connecticut . . . Moreover, our review of the record demonstrates there is a factual basis that supports the court's legal conclusion. The first paragraph of the contract recites that the plaintiff is a Connecticut company, and that it has no presence outside of Connecticut. Pursuant to his affidavit, Cuddy engaged in negotiations with the plaintiff, signed the contract for services to be performed by the plaintiff in Connecticut mailed the contract and his personal check to the plaintiff in Connecticut, and engaged in telephone calls and e-mail communication arising from the contract. We conclude that the allegations of the amended complaint and the parties' affidavits constitute conduct that falls within the scope of '[t]ransacts any business within the state' pursuant to § 52-59b. [A] nonresident individual who has not entered this state physically nevertheless may be subject to jurisdiction in this state under § 52-59b(a)(1) if that individual has invoked the benefits and protection of Connecticut's laws by virtue of his or her purposeful Connecticut related activity . . . [D]etermination of whether exercise of personal jurisdiction satisfies due process will vary with the quality and nature of the defendant's activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum [s]tate thus invoking the benefits and protections of its laws . . . In the present case, the allegations of the amended complaint are sufficient to demonstrate that Cuddy purposefully conducted activities in this state when he signed a contract in which he agreed to have the plaintiff provide political consulting services from Connecticut and mailed that contract along with his personal $10, 000 check to the plaintiff at its place of business in Connecticut." (Citations omitted; internal quotation marks omitted; footnote omitted.) Id., 347-9. The defendant argues that Doyle is distinguishable because there the services were not for a single act, as here, but consisted of ongoing tasks performed by the Connecticut company for the out of state resident. Yet in Doyle the Court cited the decision in Zartolas v. Nisenfeld, 184 Conn. 471, 474, 440 A.2d 179 (1981), where the court held " the term 'transacts any business' to embrace a single purposeful business transaction . . . The term 'transacts any business' extends beyond the typical commercial enterprise to include the execution of a warranty deed pursuant to a single sale of real property." (Citations omitted.) Thus the term " transacts any business" in General Statutes § 52-59b(a)(1) encompasses the single loan transaction which is the subject of the complaint here.

In support of his position the defendant also cites Solano v. Calegari, 108 Conn.App. 731, 739-40, 949 A.2d 1257 cert. denied, 289 Conn. 943, 959 A.2d 1010 (2008), and the cases cited by the court there. But the court concluded that: " The nonspecific nature of the [trial] court's findings do not permit us properly to...