Federal Deposit Insurance v. Peabody, N.E., Inc.

BERDON, J.,

dissenting. Reminiscent of eighteenth century common law pleading, the majority concludes that a third party complaint cannot be amended to allege facts sufficient to establish a court’s jurisdiction. It was my understanding that Connecticut had abandoned this archaic legalism upon entering the twentieth century.1

*106It is certainly true that once a court’s subject matter jurisdiction is challenged a court cannot proceed on the merits until the issue of jurisdiction is resolved affirmatively. Castro v. Viera, 207 Conn. 420, 429, 541 A.2d 1216 (1988) (“the court must ‘fully resolve [any jurisdictional challenges] before proceeding further with the case’ ”). Nevertheless, a court always has jurisdiction to determine whether it has jurisdiction. Golden Hill Paugussett Tribe of Indians v. Southbury, 231 Conn. 563, 570, 651 A.2d 1246 (1995). “A finding of jurisdiction is not a matter within the discretion of a court but a legal determination to be reached upon the facts and the pleadings.” Chrysler Credit Corp. v. Fairfield Chrysler-Plymouth, Inc., 180 Conn. 223, 230, 429 A.2d 478 (1980) (Loiselle, J., concurring). As such, if there is a defect, mistake or informality in the pleading, which is determinative of the jurisdictional challenge, the plaintiff should be permitted to amend his or her complaint as allowed by the rules of practice. See Practice Book §§ 175 and 176.

Similarly, this court has held that when a court’s subject matter jurisdiction is contingent on the finding of certain facts, the court must conduct an evidentiary hearing before dismissing the action for lack of jurisdiction. Standard Tallow Corp. v. Jowdy, 190 Conn. 48, 56, 459 A.2d 503 (1983) (“[w]hen issues of fact are necessary to the determination of a court’s jurisdiction, due process requires that a trial-like hearing be held”). It should then follow that, if a court’s subject matter jurisdiction is dependent upon a plaintiffs pleadings, and those pleadings are insufficient, a corrective *107amendment to the pleading should be allowed before ruling on the motion to dismiss. Accordingly, I would decide the issue on appeal in light of the amended third party complaint2 as the trial court did below.

Nevertheless, the initial third party complaint provides the trial court with jurisdiction. Pursuant to General Statutes § 4-61, “[a]ny person, firm or corporation which has entered into a contract with the state . . . for the design, construction, construction management, repair or alteration of any highway, bridge, building or other public works of the state ... in the event of any disputed claims under such contract . . . [may] bring an action against the state to the superior court for the judicial district of Hartford-New Britain . . . .” (Emphasis added.) In this case, the relevant allegations in the initial third party complaint against the state are as follows: “To the extent [the] plaintiff [Standard Structural Steel, Inc. (Standard), a subcontractor3] incurred the damages and expenses as alleged, such damages and expenses were caused by [the] acts and/ or omissions of the State of Connecticut and not by any acts and/or omissions of [the defendants and third party plaintiffs Peabody International Corporation and Peabody, N.E., Inc. (collectively, Peabody), the general contractor]. ... To the extent that [Peabody is] found responsible to Standard for all or part of the claims set forth in [the Federal Deposit Insurance Corporation’s] Complaint asserting Standard’s claims, [Peabody is] entitled under the law and under the terms and conditions of [its] Contract with the State of Connecticut to recover all such sums from the State of Connecticut Department of Transportation.” In other words, Pea*108body alleges that if it is held liable to Standard, then the state is liable for those damages sustained by Standard pursuant to Peabody’s contract with the state. Albeit contingent, Peabody surely alleges a “disputed claim” with the state.

The majority narrowly construes the term “disputed claim,” and adopts a definition that is not in the best interest of the state. Specifically, the majority holds that a “disputed claim” exists, thereby allowing a general contractor, who has contracted with the state and who is being sued by its subcontractor for damages for which the state would alternatively be responsible, to implead the state as a third party defendant, only if the general contractor admits liability in the action brought by the subcontractor. I disagree. This decision will likely encourage general contractors to increase their rates when contracting with the state, so that they may insure themselves against the burden the court now imposes.

The majority’s holding places a general contractor in an unacceptable “catch-22” situation. The general-contractor must either defend against the subcontractor with the hope that the statute of limitations provided for in § 4-61 does not expire before any adverse judgment is rendered against it, or admit liability to the subcontractor in the hope that it will be able to recover against the state.

“In construing a statute, common sense must be used and courts must assume that a reasonable and rational result was intended.” Kron v. Thelen, 178 Conn. 189, 192, 423 A.2d 857 (1979); see also State v. Roque, 190 Conn. 143, 153, 460 A.2d 26 (1983) (“ ‘[t]hereisno canon against using common sense in construing laws as saying what they obviously mean’ ”). This principle is equally applicable to statutes that constitute a waiver of sovereign immunity. In this case, common sense dictates that the legislature did not intend to exclude *109disputes involving contingent liability from the term “disputed claims” as it is used in § 4-61.

Accordingly, I dissent.

I recognize that Woodmont Assn. v. Milford, 85 Conn. 517, 524, 84 A. 307 (1912), decided eighty-four years ago, supports the majority’s holding today. Interestingly, however, in that case, Justice Wheeler in dissent a1 tempted to usher the court into the twentieth century: “A complaint, defective for lack of a jurisdictional fact, and capable of amendment, should not be dismissed, but the defect left to be met by plea or demurrer which admit of amendment. Our statutes of amendment, as construed by our *106decisions, invite the amendment of every form of defect which will make apleading good. We make no exception where the defects are jurisdictional.” Id., 530.

The majority also relies on Gurliacci v. Mayer, 218 Conn. 531, 545, 590 A.2d 914 (1991), for its holding with respect to this issue. The statement cited by the majority, however, is pure dicta because in Gurliacci, the court determined that the trial court had subject matter jurisdiction. Id.

See footnote 6 of the majority opinion.

As noted in the majority opinion, “the Federal Deposit Insurance Corporation as the receiver of the New Connecticut Bank and Trust Company and the successor in interest to Standard, brought the underlying action against [the defendants-third party plaintiffs], seeking approximately $14.8 million in damages allegedly suffered by Standard.”