Rhode Island Hospital Trust National Bank v. Trust

Foti, J.,

dissenting. I must respectfully disagree with the view of the majority that we are without jurisdiction to entertain this appeal. I would conclude that jurisdiction is not lacking because the granting of the plaintiffs application for a preliminary injunction here is a final judgment within the context of General Statutes § 52-278a because it is an integral part of the prejudgment remedy.

*34By its complaint, the plaintiff, a Rhode Island banking institution, seeks to recover funds allegedly due it pursuant to an agreement between it and the defendant. By the agreement, the defendant, a resident of New Hampshire, guaranteed 50 percent of a promissory note from a limited partnership of which he is a partner to the plaintiff. The defendant also guaranteed, by the agreement, the payment of all interest on the note and the punctual completion of a facility being built by the partnership.

The plaintiff filed an application for the prejudgment remedy of attachment seeking an order of attachment of eleven million dollars of property belonging to the defendant. By separate request entitled “application for preliminary injunction and order to show cause” the plaintiff also sought an order compelling the defendant to bring the defendant’s stock certificates in a company known as The Time Limited, Inc., into the state of Connecticut to secure the order of attachment.

The court found, after a hearing, that the loan was in default, and that the balance owed at that time was $9,641,066 plus interest of $236,820 with a per diem interest of $2,945. The defendant argued to the trial court that probable cause had not been established.1 He further argued that his assets far exceeded the plaintiff’s claim making a prejudgment remedy unwarranted, and that no equitable relief in the form of a mandatory injunction was available to the plaintiff because it was not a creditor, in that it had not yet obtained a judgment.

The court, by a single order, granted a prejudgment remedy of attachment in the amount of $7,743,955 in *35favor of the plaintiff, and further ordered the defendant to bring into Connecticut and turn over to a Connecticut deputy sheriff, public securities in an amount sufficient to satisfy the attachment, and private securities if the public securities were not sufficient to satisfy the attachment.

1 agree that we must first determine whether we have jurisdiction to entertain this appeal. The plaintiff argues that the appeal should be dismissed because the court’s granting of its application for a preliminary injunction is not a final judgment.

Although an order granting a prejudgment remedy following a hearing is deemed a final judgment for purposes of appeal; General Statutes § 52-278d; the granting or denying of a temporary injunction, absent a statutory exception, is generally considered interlocutory and therefore is not an appealable final judgment; Board of Education v. Shelton Education Assn., 173 Conn. 81, 88, 376 A.2d 1080 (1977). It is also clear that a temporary restraining order is not a prejudgment remedy. General Statutes § 52-278a (d).2

Neither party disputes the general principle that, in the absence of statutory exceptions, a decision granting a temporary injunction is not immediately appeal-able because it is not a final judgment. Olcott v. Pendelton, 128 Conn. 292, 295, 22 A.2d 633 (1941). “The question before us is whether the form or the content of the trial court’s orders removes [this appeal] from the general rule.” (Emphasis added.) Doublewal Corporation v. Toffolon, 195 Conn. 384, 389, 488 A.2d 444 (1985).

*36A threshold question to be answered in determining whether this order is an exception to the general rule is whether the order appealed from is, in fact, one order or two separate orders for purposes of appealability. The majority contends that the attachment and the preliminary mandatory injunction are two independent orders, and that, therefore, only the attachment portion of the order may be appealed. I agree with the majority that a combination of remedies must be comprised solely of statutorily defined prejudgment remedies for the combination to qualify as a prejudgment remedy under General Statutes § 52-278a. This analysis, however, leads me to a conclusion different from that of the majority. I conclude that under these circumstances the attachment and the mandatory injunction are so mutually dependent that they form a single prejudgment remedy, an attachment.

The defendant has a right to appeal the prejudgment remedy order, but, if he can appeal only the attachment portion of the remedy, that review would be essentially an empty right because the attachment alone is a nullity unless there is something to attach.

The trial court itself, in discussing the intent behind General Statutes § 42a-8-317 (6),3 characterized an attachment under the facts presented to be ineffectual unless accompanied by the ability to reach the defend*37ant’s assets. The court, in its memorandum of decision, stated: “This court concludes that despite the position espoused by the defendant . . . the legislature of this state by enacting this statute specifically intended to provide a mechanism for a creditor to effect an attachment of stock certificate located in a foreign state.”

To hold that the attachment and the preliminary mandatory injunction are independent orders leads to a bizarre result where the attachment is appealable, but the portion of the order which effectuated the prejudgment remedy is not. “An interpretation of a statute that would have it function in a ‘difficult and possibly bizarre’ fashion must be avoided. Texaco Refining & Marketing Co. v. Commissioner, 202 Conn. 583, 593, 522 A.2d 771 (1987) . . . .” (Citation omitted.) Ford Motor Credit Co. v. B. W. Beardsley, Inc., 208 Conn. 13, 19, 542 A.2d 1159 (1988). We must use common sense in construing a statute and assume that the legislature intended to accomplish a reasonable and rational result and to avoid absurd results; King v. Board of Education, 203 Conn. 324, 332-33, 524 A.2d 1131 (1987). It appears clear from the record that both the parties and the court considered the injunctive element a necessary part of the prejudgment remedy. The plaintiff in its trial brief described the relief requested as a prejudgment remedy consisting of an attachment and an injunction, and at the hearing the plaintiff’s counsel stated: “We are conditioning the attachment with an injunction.”

The plaintiff’s position both at trial and on appeal is that the injunction is an essential and inseparable portion of the prejudgment relief since it could not attach the securities unless they were first transported into this state. Further, the plaintiff’s application for prejudgment remedy specifically refers to its application requesting the court to compel the defendant to bring certain stock certificates into this state, and its *38application for preliminary injunction states that “[s]aid preliminary injunction is required in order to reach securities that could not otherwise be attached or levied upon and to aid the court’s jurisdiction in securing a proper prejudgment remedy against the defendant.”

The court treated the mandatory injunction as an integral part of the prejudgment remedy as is evident by the order. The court did not intend to grant relief in the form of a “temporary restraining order” but rather the court’s reasoning is that General Statutes § 42a-8-317 (6) is a necessary and appropriate mechanism by which to effectuate an attachment under the particular facts of this case. This order in the form of a temporary mandatory injunction is an integral part of the prejudgment remedy. The form and content of the order remove this appeal from the general rule. Cf. Doublewal Corporation v. Toffolon, supra. I must therefore conclude that this appeal was taken from a judgment deemed to be final and appealable under General Statutes §§ 52-278d and 52-278a (d). The defendant is thus entitled to review of the merits of his appeal which I now address.4

The defendant first argues that the court’s order to compel is improper in that that court lacked jurisdiction over his out-of-state securities because the plaintiff is not a creditor of his under General Statutes § 42a-8-317. He claims that since the statute must be confined to its terms and made applicable only to creditors, the plaintiff, a litigating party at the outset of this lawsuit, is a mere claimant, not yet found to be a creditor by virtue of a rendered judgment.

The defendant’s contention presupposes the meaning of the term “creditor” in General Statutes § 42a-8-317 (6) to mean “judgment creditor.” I do not *39agree. A judgment creditor is merely one category of creditor. Creditor is defined in the Uniform Commercial Code: “ ‘Creditor’ includes a general creditor, a secured creditor, a lien creditor and any representative of creditors, including an assignee for the benefit of creditors, a trustee in bankruptcy, a receiver in equity and an executor or administrator of an insolvent debtor’s or assignor’s estate.” General Statutes § 42a-l-201 (12). By the express terms of the statute, remedy afforded by General Statutes § 42a-8-317 (6) is available to all creditors and is not limited to judgment creditors.5

The defendant next claims that the court’s order to compel is improper because the record fails to demonstrate that damages would not be an adequate remedy or that the plaintiff would be irreparably harmed if the order did not issue.

To obtain temporary injunctive relief the plaintiff must establish that protectable interests are at stake, that it will prevail, to a reasonable certainty, subsequent to a final hearing on its application for permanent injunction, and also irreparable injury and lack of an adequate remedy at law. Covenant Radio Corporation v. Ten Eighty Corporation, 35 Conn. Sup. 1, 3, 390 A.2d 949 (1977). “The principal purpose of such an injunction is to preserve the status quo until the rights of the parties can be finally determined after a hearing on the merits. Deming v. Bradstreet, 85 Conn. 650, 659, 84 Atl. 116 [1912]. In deciding whether it should be granted . . . the court is called upon to balance the results which may be caused to one party or the other, *40and if it appears that to deny ... it may result in great harm to the plaintiff and little to the defendant, the court may well exercise its discretion in favor of granting ... it, unless indeed, it is very clear that the plaintiff is without legal right.” Olcott v. Pendelton, supra.

The court must consider the probable outcome of the litigation, and whether an irreparable loss will result unless the status quo is preserved. “These considerations involve essentially the application of familiar equitable principles in the context of adjusting the rights of the parties during the pendency of litigation until a final determination on the merits.” Griffin Hospital v. Commission on Hospitals & Health Care, 196 Conn. 451, 458, 493 A.2d 229 (1985).

The court, after a finding of probable cause, effectuated the plaintiffs right of attachment, by the order to compel,6 recognizing that without that injunctive relief the plaintiffs right of attachment would be meaningless. The prejudgment remedy of attachment provides necessary security for the creditor by protecting it from the uncertainties of future events. The defendant’s present ability to satisfy his probable present debt is the status quo that must be maintained for the prejudgment remedy to be meaningful. The court properly concluded that the plaintiff could be irreparably harmed unless it was allowed to secure the defendant’s property because property that is here today may be gone tomorrow.

The defendant argues that an equitable remedy is inappropriate in this case because there is a sufficient remedy at law. Although money damages would be a *41sufficient remedy in this case, and the defendant maintains a net worth several multiples in excess of the requisite amount, there is no assurance that a judgment obtained against the defendant would not be valueless. Only present security for the enforceability of that probable future judgment ensures the purpose of the prejudgment remedy to preserve the status quo.

I would, in sum, conclude that this appeal was taken from a final judgment, and affirm the judgment on the merits.

Although the defendant has appealed from the court’s order granting the prejudgment remedy dated April 3, 1990, his statement of issues on appeal is limited to the mandatory injunction, and does not attack the finding of probable cause for the attachment.

A prejudgment remedy is defined as any “remedy or combination of remedies that enables a person by way of attachment ... to deprive the defendant in a civil action, or affect the use, possession or enjoyment by such defendant of, his property prior to final judgment but shall not include a temporary restraining order.” (Emphasis added.) General Statutes § 52-278a (d).

General Statutes § 42a-8-317 as pertinent provides: “creditors’ rights. (1) Subject to the exceptions in subsections (3) and (4), no attachment or levy upon a certificated security or any share or other interest represented thereby which is outstanding is valid until the security is actually seized by the officer making the attachment or levy, but a certificated security which has been surrendered to the issuer may be reached by a creditor by legal process at the issuer’s chief executive office in the United States. . . .

“(6) A creditor whose debtor is the owner of a security is entitled to aid from courts of appropriate jurisdiction, by injunction or otherwise, in reaching the security or in satisfying the claim by means allowed at law or in equity in regard to property that cannot readily be reached by ordinary legal process.”

See State v. Figueroa, 22 Conn. App. 73, 83, 576 A.2d 553 (1990) (Lavery, J., dissenting).

General Statutes §§ 49-86 and 49-89 demonstrate by their language that one may be a creditor without first having judgment rendered in his favor. Also General Statutes § 52-285 provides that unless the requirements for the recording of a certificate of attachment are followed “such estate shall not be held against any other creditor” which also shows that one may be a creditor prior to judgment.

Because I have concluded that the court had the statutory authority to compel the defendant to deliver his out-of-state securities into Connecticut in order to effectuate the prejudgment attachment, there is no need to discuss the court’s inherent power to act in this regard.