Jurisdictional Statement — Bartlett v. Williams

Office - Supreme Court, U.S.

FILED

jUL 13 1963

ALEXANDER L. STEVAS.

CLERK

No. 82-2059

Iu The

Supreme Court Of The United States

OCTOBER TERM, 1982

JOBN R. BARTLETT, JR., and

FARVIEW BUILDERS CORPORATION OF CONNECTICUT

Appellants

Ve

BURCH WILLIAMS,

JUDITH W. GIBBONS, and

SUZANNE W. LA PRADE

Appellees

ON APPEAL FROM THE CONNECTICUT SUPREME COURT

P.O. Box 119

Danbury, Connecticut

06810

(203 )748-2299

QUESTION PRESENTED

Is Fourteenth Amendment procedural due

process satisfied when the only protection

afforded the owner of land sequestered under a lis

pendens statute is a post-sequestration hearing?

TABLE OF CONTENTS

GCUCSELON POSONEOE ...ccececccecsaccocecces 7.

CEE R n iicccncccccorccccccucces 3

Grounds Of Jurisdiction....scccccceseccees 3

Constitutional provisions and statutes.... 6

Statement Of thE CAGC..ccccceerecceseseces 12

Federal Question is substantial........... 14

Appendix

OPANLON DELOWscccccccerscescsccececs a7

NOtice Of APPEAL .ocevecceevccecvccees 31

TABLE OF AUTHORITIES

United States Constitution, 14th Amendment 6

United States Code, Title 28, §1257(2).... 3

Fuentes v. Shevin, 407 U.S. 67.-eeeeceeees 14

Lynch v. Household Finance Corporation,

405 U.S. A A ho bb he i hh eeecueds 14, 15

Mercantile National Bank v. Langdeau,

371 U.S- RR EE RI TR on SA 5

Mitchell v. W.T. Grant Company,

416 U.S. 5 Te 14

Snaidach v. Family Finance Corporation of

BO VAs oak cccccececebccncecccececce 14

JURISDICTIONAL STATEMENT

STATE CIVIL CASE

OPINION BELOW

The official citation to the opinion of the

Connecticut Supreme Court from which the appellant

seeks review is Burch Williams et al. v. John R.

Bartlett, Jr., et al., 189 Connecticut Reports

471.

JURISDICTION

This is an appeal seeking review of a

judgment of the Connectiut Supreme Court, entered

March 15, 1983, in which the validity of

Connecticut's Lis Pendens statute (Public Act 8l-

8) was sustained as against a 14th Amendment Due

Process challenge. Notice of appeal was filed in

the Connecticut Supreme Court on June 10, 1983.

Jurisdiction of this appeal is conferred on

the United States Supreme Court by United States

Code Title 28, Section 1257(2).

The original underlying action has not yet

gone to final judgment. The trial court has

ordered that a judgment of dismissal enter @m June

10, 1983 for lack of diligence in prosecution. As

of the date of this writing, the appellants have

not received notice that such a judgment has

entered.

The status of the underlying action notwit-

hstanding, the finality requirement is met herein

by the following facts:

1. The statute creating the remedy

provides that an order of the trial court granting

or denying a motion to discharge a lis pendens is

a final judgment for the purpose of appeal.

Public Act 81-8, $4 (now Connecticut General

Statutes, §52-325b).

2. The appellants’ due process claim,

appealable under state law, is that the lis

pendens. remedy, in providing no other protections

for a defendant land owner than a post-

sequestration hearing, fails to adequately balance

the interests of the parties. This is a separate

and independent matter, collateral to the merits

and not enmeshed in the factual and legal issues

comprising the plaintiffs' cause of action. See,

Mercantile National Bank v. Langdeau, 371 U.S.

555, 558. It must be reviewed in the state

courts, if at all, by an appeal taken within seven

days of the entry of the order. Public Act 81-8,

§4(b). Therefore, final judgments of the state's

highest court cannot be obtained in such matters

at the end of the underlying action. Moreover,

since a lis pendens is merged into a final

judgment in the action and is collateral thereto,

eny error in the lis pendens order would be harm

less or, perhaps, mooted. The situation is one

which is capable of repetition, yet would avoid

review. To require a party in these circumstance

to await review by this court until resolution of

the underlying action would preclude effective

review.

CONSTITUTIONAL PROVISIONS AND STATUTES

Amendment XIV to the United States Constitu-

tion provides, in pertinent part:

“Section 1. ...[NJo State shall...deprive any

person of...property, without due process of

Connecticut Public Act No. 81-8 (now

designated as Connecticut General Statutes,

Sections 52-325 through 52-3254) provides, in

pertinent part:

“Section 1. (a) In any action in a

court of this state or in a court of the United

States (1) the plaintiff or his attorney, at the

time the action is commenced or afterwards, or (2)

a defendant, when he sets up an affirmative cause

of action in his answer and demands substantive

relief at the time the answer is filed, if the

action is intended to affect real property, may

cause to be recorded in the office of the town

clerk of each town in which the property is

situated a notice of lis pendens, containing the

names of the parties, the nature and object of the

action, the court to which it is returnable and

the term, session or return day thereof, the date

of the process and the description of the

property. Such notice shall, from the time of the

recording only, be notice to any person thereafter

acquiring any interest in such property of the

pendency of the action; and each person whose

conveyance or encumbrance is subsequently executed

or subsequently recorded or whose interest is

thereafter obtained, by descent or otherwise,

shall be deemed to be a subsequent purchaser or

encumbrancer, and shall be bound by all

proceedings taken after the recording of such

notice, to the same extent as if he were made a

party to the action. For the purpose of this

section an action shall be deemed to be pending

from the time of the recording of such notice;

provided such notice shall be of no avail unless

service of the process is completed within the

time provided by law. This section shall be

construed to apply to mechanics’ liens and all

other inchoate liens, certificates of which are

recorded subsequent to the recording of the notice

of the pendency of the action; and, in suits to

foreclose mortgages or other liens, the persons

whose conveyances or encumbrances are subsequently

executed or subsequently recorded shall forfeit

their rights thereunder, unless they apply to the

court in which such action is brought to be made

parties thereto, prior to the date when the

judgment or decree in such action is rendered.

"(b) As used in this section, actions

“intended to affect real property" means (1)

actions whose object and purpose is to determine

the title or rights of the parties in, to, under

or over some particular real property; (2) actions

whose object and purpose is to establish or

enforce previously acquired interests in real

property; (3) actions which may affect in any

manner the title to or interest in real property,

notwithstanding the main purpose of the action may

be other than to affect the title of such real

property.

"(c) Notwithstanding the provisions of

subsection (a) no recorded notice of lis pendens

shall be valid or constitute constructive notice

thereof unless the party recording such notice,

not later than thirty days after such recording,

serves a true and attested copy of the recorded

notice of lis pendens upon the owner of record of

the property affected thereby....

“Sec. 2. (a) Whenever a notice of lis

pendens is recorded against any real property

pursuant to subsection [l](a) of...this act, the

property owner, if the action has not then been

returned to court, may make application, together

with a proposed order and summons, to the superior

court for the judicial district to which the

action is made returnable, or to any judge

thereof, that a hearing or hearings be held to

determine whether such notice of lis pendens

should be discharged. The court or judge shall

thereupon order reasonable notice of such applica-

tion to be given to the plaintiff and shall set a

date or dates for the hearing or hearings to be

held thereon.... At least seven days notice shall

10

be given to the plaintiff prior to the date of

such hearing.... (c) If the action for which

such notice of lis pendens was recorded, is

pending before any court, the property owner may

at any time...move that such notice of lis pendens

be discharged of record.

“Sec. 3. (a) Upon the hearing held on

the application or motion set roru. 18 seccivl «

of this act, the plaintiff shall first be required

to establish that there is probable cause to

sustain the validity of his claim. Any property

owner entitled to notice under subsection (c)

of...section 1 of this act, may appeal and be

heard on the issue.

"“(b) Upon consideration of the facts

before it, the court or judge may: (1) Deny the

application or motion if probable cause to sustain

the validity of the claim is established, or (2)

order such notice of lis pendens discharged of

1l

record if probable cause to sustain the validity

of the plaintiff's claim is not established.

"Sec. 4. (a) Any order entered as provided in

subsection (b) of section 3 of this act shall be

deemed a final jutigment for the purpose of appeal.

"(b) No appeal shall be taken from such

order except within seven days thereof...."

STATEMENT OF THE CASE

With the following exceptions, the facts

material to consideration of the question

presented are adequately set forth in the opinion

of the Connecticut Supreme Court (Appendix, pages

18-20). The evidence also showed that the

partnership's real properties were held by it with

the intent of selling them at a profit. As of the

filing of the notice of lis pendens, the

properties had already been encumbered with

mortgage indebtedness in order to provide the

12

partnership with funds with which to develop and

carry them. The total mortgaged indebtedness at

that time exceeded $1,500,00.00 with a monthly

carrying charge of approximately $20,000.00.

Due process deficiencies in the lis pendens

statute were raised orally in the court of first

instance at the end of the testimony in the lis

pendens discharge hearing. The court declined

consideration of written memoranda from the

parties and immediately issued an oral memorandum

of decision in which it declined, also, to address

the claimed constitutional issue. Since the

notice of lis pen“ens was sustained,

defendant/appellants' constitutional claims were

necessarily rejected, sub silento. Due process

ageficiencies were again raised 1n tne Comeccicur

Supreme Court, both in the defendant/appellants'

brief and, more broadly, in oral argument. The

13

appellate court passed directly on the question

presented and held that, in view of the nonposses-

sory nature of the sequestration, a post-filing

hearing under the statute provides sufficient

protection to the property owner to satisfy

procedural due process requirements under the

fourteenth amendment.

THE FEDERAL QUESTION IS SUBSTANTIAL

The question presented by this appeal is

sufficiently substantial to have been partially

addressed by this Court in such cases as

Sniadach v. Family Finance Corporation of Bay View,

395 U.S. 339, Lynch v. Household Finance

Corporation, 405 U.S. 538, Fuentes v. Shevin, 407

U.S. 67, and Mitchell v. W.T. Grant Company, 416

U.S. 602. It involves the content of the 14th

Amendment Due Process Clause as applied to the

sequestration of private property. The previous

14

cases set forth the minimum procedural protections

in various circumstances in the sense that some

sort of judicial hearing was required. They left

open the question of whether such a hearing,

alone, adequately protects private property

interests.

At stake is the enforcement of a state

statute of general application which has been

challenged on constitutional grounds. Just such a

federal question was found to have been

substantial in Lynch v. Household Finance

Corporation, 405 U.S. 538, 541 at note 5. Indeed,

the framers of the 14th Amendment deemed the

federal interest therein to be so substantial

that, in Section 5, they provided Congress with

the power (and, presumably, the duty) to enrorce

it with appropriate legislation. The federal

question presented in this appeal is so

iS

significant and of such importance in the daily

affairs of the citizens and businesses of this

country that the Court should devote its resources

to its resoluticn.

Respectfully submitted,

by the Appellants,

John R. Bartlett, Jr., and

Farview Builders Corporation

of Connecticut

By

Donald A. Mitchell,

their Attorney

P.O. Box 119

Danbury, Connecticut 06810

16

March 15, 1983

CONNECTICUT LAW JOURNAL

189 Conn 471 MARCH, 1983 471

Williams v. Bartlett

Burcu WILLIAMS ET AL. v. JOHN R. Bart ett, JR.,

ET AL.

(10889)

Speziace, C. J., Perens, ParsKey, SHEA and GRILLO, Js.

The statutory (Public Acts 1981, No. 81-8) lis pendens procedure

may be utilized only in an action intended to affect real prop-

erty. More, where a property owner seeks discharge of a

notice of lis pendens, the party who filed it has the burden of

establishing probable cause that he will prevail in his action.

The defendants B and F Co. appealed to this court from the trial

court’s judgment denying their application for discharge of

a notice of lis pendens which the plaintiffs had filed in con-

junction with a lawsuit against, inter alios, B and F Co. Held:

1, Public Acts 1981, No. 81-8 mevts the minimum requirements of

procedural due process, notwithstanding that fact that it pro-

vides for a hearing only after the notice of lis pendens has been

filed and the further fact that it does not allow the property

owner to substitute security for the lis pendens.

2. The claim of B and F Co. that the trial court’s conclusion “that

there was probable cause that the plaintiff will prevail in this

action,” was not sufficient to demonstrate probable success in an

action intended to affect real property was unavailing.

3. The trial court could reasonably have found that there was prob-

able cause that the plaintiffs would prevail in their action.

Argued December 9, 1982—decision released March 15, 1983

Action for an injunction restraining the defend-

ants from engaging in any transaction affecting

title to certain real property, to convey real prop-

*This conclusion makes it unnecessary to reach any question con-

cerning the validity of the search of the residence on Dudley Street

in which the evidence seized was generated by the search of the car.

(APPENDIX 17)

CONNECTICUT LAW JOURNAL March 15, 1983

472 MARCH, 1983 189 Conn 471

Williams v. Bartlett

erty, and for other relief, brought to the Superior

Court in the judicial district of Danbury, where the

defendants applied for a discharge of a notice of

lis pendens which had been filed upon the bringing

of the action; the court, Sullivan, J., denied the

application, from which the defendants appealed to

this court. No error.

Donald A. Mitchell, for the appellants (defend-

ants).

Carter LaPrade, for the appellees (plaintiffs).

Grito, J. This appeal from the trial court’s

judgment denying an application to discharge a

notice of lis pendens raises the following issues:

(1) whether the lis pendens statute comports with

procedural due process guarantees; (2) whether

the trial court applied the correct standard by

which the propriety of a notice of lis pendens is

tested; and (3) whether the evidence presented is

sufficient to sustain the trial court’s decision.

Th trial court could reasonably have found the

following: In 1970 the plaintiff Burch Williams

and the defendant John R. Bartlett, Jr. formed

Barwil, Ltd., a limited partnership created under

the laws of the state of Florida. The purpose of

the partnership was to provide a vehicle for real

estate investment. Bartlett became Barwil’s gen-

eral partner, while Williams became one of its lim-

ited partners. Between 1970 and 1975 Barwil

acquired real property located in both Florida and

Connecticut.

In 1975, it became apparent that some of Barwil’s

partners were interested in further investment

only in relation to Florida realty, while others

(APPENDIX 18)

March 15, 1983 CONNECTICUT LAW JOURNAL Page 17

189 Conn 471 MARCH, 1983 473

Williams v. Bartlett

wished to pursue real estate investment opportuni-

ties solely in Connecticut. Accordingly, two new

limited partnerships were formed under Florida

law. The Florida real estate assets of Barwil were

transferred to Suni Pines, Ltd., while the Connect-

icut real estate held by Barwil was to be conveyed

to FWZ, Ltd.’ (hereinafter FWZ).

Under the certificate of partnership of FW2Z, the

three general partners of FWZ were the defendant

John R. Bartlett, Jr., Barwil, Ltd., and Barwil

Corporation, a Florida corporation whose president

is John R. Bartlett, Jr. The plaintiff Burch

Williams, a limited partner in FWZ, contributed

approximately $110,000 to FWZ.

On May 13, 1981, the plaintiffs, who include

Burch Williams and other limited partners of FWZ,

instituted the present action against John R.

Bartlett, Jr.. FWZ and the Farview Builders Cor-

poration of Connecticut, a Florida corporation

whose president is John R. Bartiett, Jr.? The com-

plaint alleged, inter alia, that Bartlett (1) misrepre-

sented the assets of FWZ and Barwil, Ltd. to his

limited partners with the intent that they rely

thereon; (2) conveyed real property in Connecticut

*Article 5 of the Certificate of Limited Partnership of FWZ

states: “Contributions by General Partners—Barwil, Ltd. shall

contribute to this partnership its interest in all of the real property

located in the State of Connecticut in which Barwil, Ltd. has any

interest, outright, as a partner in another partnership or otherwise

and its interest in all other assets relating thereto, which said prop-

erties are generally referred to as Farview Farm 106-acre residential

subdivision and Georgetown I, II and III 125-aere industrial prop-

erty and 140-acre residential property. Said properties are being

contributed subject to all mortgages, liens and encumbrances and

all other liabilities relating to said properties. Barwil Corporation

shall not make a contribution to this partnership.”

*The complaint was subsequently withdrawn as to the defendant

FWZ due to a defect in service. A motion to reinstate FWZ as a

party is currently pending before the trial court.

{ADDONNTY %301

Page 18 CONNEC’ LAW JOURNAL March 15, 1983

474 MARCH, 1983 189 Conn 471

Williams v. Bartlett

rightfully belonging to FWZ to himself or entities

which he controlled, including Farview Builders

Corporation, for inadequate consideration; and (3)

sold or mortgaged Connecticut rea] property right-

fully belonging to FWZ without returning the pro-

ceeds to WZ. The complaint described the affected

real property as land known as Farview Farm and

Georgetown I, IT and IIT, located in the towns of

Redding and Weston, Connecticut. In their prayer

for relief, the plaintiffs seek, inter alia, (1) injune-

tive relief restraining the defendants from engaging

in any transactions affecting title to the real prop-

erty pending resolution of the action; (2) an injunce-

tion compelling conveyance to FWZ of the real

property rightfully belonging to it; and (3) disso-

lution of FWZ, with winding up by the plaintiffs.

In conjunction with their complaint, the plaintiffs

caused to be filed, on May 13, 1981, a notice of lis

pendens on the land records where the disputed

realty is located. The lis pendens describes three

separate parcels of land, one of which is divided

into multiple lots. Two of these parcels are held

in the name of John R. Bartlett, Jr., with the excep-

tion of three lots, which are held in the name of

Farview Biiilders Corporation. The remaining par-

cel is held in the name of Barwil, Ltd.

On June 1, 1981, the defendants Bartlett and

Farview Builders Corporation applied for dis-

charge of the notice of lis pendens.* Public Acts

1981, No. 81-8 § 2, Hearings on the defendants’

application were held before the court, Sullivan, J.,

on June 15 and 22, 1981. After hearing the relevant

*As the defendant Barwil, Ltd. did not apply to discharge the

notice of lis pendens, the trial court considered the validity of the

lis pendens only with respect to the real property held by John R.

Bartlett, Jr. and Farview Builders Corporation, and our review is

(APPENDIX 20)

March 15, 1983 CONNECTICUT LAW JOURNAL Page 19

189 Conn 471 MARCH, 1983 475

Williams v. Bartlett

evidence, the court concluded that there was prob-

able cause that the plaintiffs would prevail in their

action, and therefore denied the defendants’ appli-

eation for discharge of the notice of lis pendens.

From this judgment the defendants take the pres-

ent appeal.

The defendants first contest the constitutional

validity of the lis pendens statute, General Statutes

§ 52-325, as amended by Public Acts 1981, No. 81-8."

* Public Acts 1981, No. 81-8, entitled “An Act Concerning Notice

of Lis Pendens,” provides in pertinent part as follows:

“Section 1. (a) In any action in a court of this state or in a

court of the United States (1) the plaintiff or his attorney, at the

time the action is commenced or afterwards, or (2) a defendant,

when he sets up an affirmative cause of action in his answer und

demands substantive relief at the time the answer is filed, if the

action is intended to affect real property, may cause to be recorded

in the office of the town clerk of each town in which the property

is situated a notice of lis pendens, containing the names of the

parties, the nature and object of the action, the court to which it

is returnable and the term, session or return day thereof, the date

of the process and the description of the property. Such notice

shall, from the time of the recording only, be notice to any person

thereafter acquiring any interest in such property of the pendency

of the action; and each person whose conveyance or encumbrance is

subsequently executed or subsequently recorded or whose interest is

thereafter obtained, by descent or otherwise, shall be deemed to be

a subsequent purchaser or encumbrancer, and shall be bound by all

proceedings taken after the recording of such notice, to the same

extent as if he were made a party to the action. For the purpose

of this section an action shall be deemed to be pending from the

time of the recording of such notice; provided such notice shall be

of no avail unless service of the process is completed within the

time provided by law. This section shall be construed to apply to

mechanics’ liens and all other inchoate liens, certificates of which

are recorded subsequent to the recording of the notice of the pend-

ency of the action; and, in suits to foreclose mortgages or other

liens, the persons whose conveyances or encumbrances are subse-

quently executed or subsequently recorded shall forfeit their rights

thereunder, unless they apply to the court in which such action is

brought to be made parties thereto, prior to the date when the

judgment or decree in such action is rendered.

“(b) As used in this section, actions “intended to affect real

property” means (1) actions whose object and purpose is to deter-

(APPENDIX 21)

Page 20 CONNECTICUT LAW JOURNAL __ March 15, 1988

476 MARCH, 1983 189 Conn 471

Williams v. Bartlett

They argue that the act, which provides only for

a post-filing hearing and does not contain a bonding

provision or any other mechanism whereby the

property owner may substitute security to obtain

release of the lis pendens, in constitutionally infirm

under principles of procedural due process. We

disagree.

We note, first, that due process “is not a tech-

nical conception with a fixed content unrelated to

time, place and circumstances.” Cafeteria & Res-

taurant Workers Local 473 v. McElroy, 367 U.S.

mine the title or rights of the parties in, to, under or over some

particular real property; (2) actions whose object und purpose

is to establish or enforce previously acquired interests in real prop-

erty; (3) actions which may affect in any manner the title to or

interest in real property, notwithstanding the main purpose of the

action may be other than to affect the title of such real prop-

erty. : ..

“Sec. 2. (a) Whenever a notice of lis pendens is recorded against

any real property pursuant to subsection (a) of section 52-325,

as amended by section 1 of this act, the property owner, if the

action has not then been returned to court, may make application,

together with a proposed order and summons, to the superior court

for the judicial district to which the action is made returnable, or to

any judge thereof, that a hearing or hearings be held to determine

whether such notice of lis pendens should be discharged. The court

or judge shall thereupon order reasonable notice of such applica-

tion to be given to the plaintit and shall set a data ot dates {oF

the hearing or hearings to be held thereon. If such plaintiff is not

a resident of this state such notice shall be given by personal

service, registered or certified mail, publication or such other method

as the court or judge shall direct. At least seven days notice shall

be given to the plaintiff prior to the date of such hearing. . . .

“See. 3. (a) Upon the hearing held on the application or motion

set forth in section 2 of this act, the plaintiff shall first be required

to establish that there is probable cause to sustain the validity

of his claim. Any property owner entitled to notice under sub-

section (c) of section 52-325, as amended by section 1 of this act,

may appeal and be heard on the issue.

“(b) Upon consideration of the facts before it, the court or judge

may: 1) Deny the application or motion if probable cause to sus-

tain the validity of the claim is established, or (2) order such notice

of lis pendens discharged of record if probable cause to sustain the

validity of the plaintiffs claim is not established.”

{/ADDOAMNTY 944

March 15, 1983 CONNECTICUT LAW JOURNAL Page 21

7

189 Conn 471 MARCH, 1983 47

Williams v. Bartlett

886, 895, 81 S. Ct. 1743, 6 L. Ed. 2d 1230 (1961).

Rather, it is a flexible doctrine, requiring “such

procedurai protections as the particular situation

demands.” Morrissey v. Brewer, 408 U.S. 471, 481,

92 S. Ct. 2593, 33 L. Ed. 2d 484 (1972). The United

States Supreme Court, in Mathews v. Eldridge, 424

U.S. 319, 96 S. Ct. 893, 47 L. Ed. 2d 18 (1976), cre-

ated a three-part balancing test for determining

what procedural safeguards are required by due

process: (1) the private interests affected; (2) the

risk of an erroneous deprivation of such interests

by the present procedures, coupled with the prob-

able value of additional or substitute safeguards;

(3) the governmental interests, including the addi-

tional fiscal and administrative burdens which

would be created by different procedural require-

ments. Id., 334-35; see Society for Savings v.

Chestnut Estates, Inc., 176 Conn. 563, 572-73, 409

A.2d 1020 (1979). Moreover, in the context of a

challenged sequestration procedure, the court has

characterized the test as whether the statutory

scheme “effects a constitutional accommodation

[between] the conflicting interests of the parties.”

Mitchell v. W. T. Grant Co., 416 U.S. 600, 607, 94

S. Ct. 1895, 46 L. Bd. 8d 406 (1974).

This court has previously considered the consti-

tutional validity, under the fourteenth amendment

to the federal constitution and article first, § 10

of the Connecticut constitution, of both a mechanics

lien statute and the previous lis pendens statute.

Roundhouse Construction Corporation vy. Telesco

Masons Supplies Co., 168 Conn. 371, 362 A.2d 778,

vacated, 423 U.S. 809, 96 S. Ct. 20, 46 L. Ed. 2d 29

(1975) (remanded to consider whether judgment

based upon federal or state constitutional grounds,

or both), aff’d on remand, 170 Conn. 155, 365 A.2d

JADDENNDTY 92)

CONNECTICUT LAW JOURNAL March 15, 1983

Page 22

478 MARCH, 1983 189 Conn 471

Williams v. Bartlett

393 (decision based on both state and federal con-

stitutional grounds), cert. denied, 429 U.S, 889, 97

S. Ct. 246, 50 L. Ed. 2d 172 (1976) (adequate state

ground); Kukanskis v. Griffith, 180 Conn. 501, 430

A.2d 21 (1980). In both decisions, we held that the

absence of statutory provisions providing the prop-

erty owner with a hearing “at a meaningful time

and in a meaningful manner” violated due process

principles under both the federal and state consti-

tutions. Roundhouse Construction Corporation v.

Telesco Masons Supplies Co., supra, 385; Kukan-

skis v. Griffith, supra, 510-11.

Guided by these precedents, we turn to a consid-

eration of whether the current lis pendens statute,

with its provision for a post-filing hearing, com-

ports with procedural due process.’ In order to

*We are cognizant of the fact that several courts, when con-

fronted with constitutional challenges to lis pendens statutes, have

construed the procedure as an insufficient deprivation of property

to warrant the protections of due process. E.g., Batey v. Digirolamo,

418 F. Sup. 695, 697 (D. Hawaii 1976); Debral Realty, Inc. v.

DiChiara, Mass. , 420 N.E.2d 343, 348 (1981); George v.

Oakhurst Realty, Inc., 414 A.2d 471, 474 (R.I. 1980), We do not,

however, subscribe to this construction. Concededly, the lis pendens

procedure does not deprive a property owner of possession, use or

« no

enjoyment of the affected real sstats: Nevertheless; the notice of

lis pendens unquestionably interferes with an owner’s right to sell

or mortgage his realty and this, in our view, constitutes a sufficient

deprivation so as to invoke the protections of procedural due process,

Kukanskis v. Griffith, 180 Conn. 501, 509, 430 A.2d 21 (1980).

We are further cognizant of the “state action” requirement con-

tained within the fourteenth amendment. The mere legislative

authorization of the lis pendens procedure, as embodied within

Public Acts 1981, No. 81-8, does not create sufficient state involve-

ment to trigger fourteenth amendment due process protections. See

Flagg Bros., Inc. v. Brooks, 436 U.8. 149, 164-66, 98 8. Ct. 1729, :

56 L. Ed. 2d 185 (1978). Pursuant to Public Acts 1981, No, 81-8,

however, the notice of lis pendens must be filud with the clerk of

the town in which the property is located, who in turn records the

notice upon the land records. This participation by a public official

in the deprivation of property rights creates sufficient state action

to invoke the fourteenth amendment and article first, § 10, of the

{ADDPNNTY YA

CONNECTICUT LAW JOURNAL _ Page 23

March 15, 1983

189 Conn 471 MARCH, 1983 479

Williams v, Lartlett

determine what constitutes a hearing at a mean-

ingful time and in a meaningful manner, we look

first to the nature of the property interest affected.

Certainly the deprivation caused by the notice of

lis pendens is considerably less severe than a total

deprivation of the property interest, where due

process mandates a pre-seizure hearing. E.g.,

Fuentes v. Shevin, 407 U.S. 67, 96, 92 S. Ct. 1983,

32 L. Ed. 2d 556, reh. denied, 409 U.S, 902, 93 S. Ct.

177, 34 L. Ed. 2d 165 (1972) (seizure of household

goods). Nor can the interest at stake in the present

case be construed as a deprivation of property

essential to meet the owner’s basic needs, See

Goldberg v. Kelly, 397 U.S. 254, 264, 90S. Ct. 1011,

25 L. Ed. 2d 287 (1970) (termination of welfare

benefits) ; Sniadach v. Family Finance Corporation,

395 U.S. 337, 341-42, 89 S. Ct. 1820, 23 L. Ed. 2d

349 (1969) (garnishment of wages). The depriva-

tion in Fuentes, Goldberg and Sniadach was blatant

and total, thus requiring a pre-seizure hearing. The

degree of deprivation under Public Acts 1981,

No. 81-8, however, is at all times nonpossessory.

Indeed, unless the property owner has any inten-

tion of alienating or mortga ing the realty, the

Rung We seswa h aby wea a Vteawy y

effect of sn lis pendens procedure is de minimis.

Turning to a consideration of the plaintiffs’ inter-

est in the procedure, we note that a notice of lis

pendens ensures that the plaintiffs’ claim cannot

be defeated by a prejudgment transfer of the prop-

erty. Because of the uniqueness of real estate, this

Connecticut constitution. See North Georgia Finishing, Inc. v.

Di-Chem Inc., 419 U.S. 601, 602-604, 95 S. Ct. 719, 42 L. Ed. 2d

751 (1974). As the Flagg Bros. court noted, “[t]}he constitutional

protection attaches not because ...a clerk issued a ministerial

writ out of court, but because as a result of that writ the prop-

erty ... was seized ... by the affirmative command of the [state]

law ....” Flagg Bros. Inc. v. Brooks, supra, 161, n.10.

(APPENDIX 25)

CONNECTICUT LAW JOURNAL March 15, 1983

480 MARCH, 1983 189 Conn 471

Williams v. Bartlett

function is particularly important where the com-

plaint seeks specific performance relative to the

affected property. Even where the plaintiff seeks

only recovery of funds allegedly invested in the

burdened real estate, or where the plaintiff asserts

a partial ownership interest therein, the lis pendens

procedure provides security for payment of the

claim pending final resolution of the case.

Moreover, the state possesses a legitimate inter-

est in the challenged lis pendens procedure. In

enacting Public Acts 1981, No. 81-8, the legislature

created a specified procedure whereby the rights

of third-party purchasers are readily defined. “The

doctrine underlying lis pendens is that a person

who deals with property while it is in litigation

does so at his peril....” (Citations omitted.)

Kunkanskis v. Griffith, supra, 507. Further, “{i]f

the power of the courts to determine the rights of

the parties to real property could be defeated by its

transfer, pendente lite, to a purchaser without

notice, additional litigation would be spawned and

the publie’s confidence in the judicial process could

be undermined.” Chrysler Corporation v. Fedders

deat dinediel Ww we ry? WUbeuvie ¥. 4 CUUCTS

Corporation, 670 F.2d 1316, 1329 (3d Cir. 1982).

In view of the limited effect caused by the filing

of the notice of lis pendens upon the property of

the record owner, when balanced against the inter-

ests of the state and the party utilizing the lis

pendens procedure, we are unable to conclude that

Public Acts 1981, No. 81-8 fails to comport with

the requirements of due process. The prompt post-

filing hearing afforded under the statute eliminates

the risk of an erroneous deprivation of property

interests. We therefore hold that General Statutes

§ 52-325, as amended by Public Acts 1981, No. 81-8,

meets the minimum requirements of procedural due

(APPENDIX 26)

March 15, 1983 CONNECTICUT LAW JOURNAL ss Page 25

189 Conn 471 MARCH, 1983 481

Williams v. Bartlett

process under the fourteenth amendment and arti-

cle first, § 10 of the Connecticut constitution.‘

The defendants next attack the scope of the legal

standard employed by the trial court in determining

the propriety of the notice of lis pendens. They

assert that the conclusion of the trial court, “that

there was probable cause that the plaintiff will pre-

vail in this action,” was not sufficient to demon-

strate probable success in an action intended to

affect real property. We disagree.

Utilization of the lis pendens procedure is, of

course, restricted to those actions intended to affect

real property. Public Acts 1981, No. 81-8 $1 (a).

As employed within the statute, actions intended to

affect real property means, inter alia, “actions

which may affect in any manner the title to or inter-

est in real property, notwithstanding the main pur-

pose of the action may be other than to affect the

title of such real property.” Public Acts 1981, No.

81-8 §1 (a) (3). At the probable cause hearing,

the plaintiffs produced the following uncontro-

verted evidence. The defendant Bartlett, individu-

ally and in his capacity as general partner of Bar-

wil, Ltd. and president of Barwil Corporation,

signed the certificate of limited partnership of

FWZ. Article 5 thereof recites that Barwil, Ltd.

will contribute its Connecticut realty, the descrip-

tion of which corresponds to the property presently

* Because Public Acts 1981, No. 81-8, provides a property owner

with a hearing “at a meaningful time and in a meaningful manner”;

Kukanskis v. Griffith, 180 Conn. 501, 509-510, 430 A.2d 21 (1980);

we do not construe the absence of « bonding provision as rendering

the statute constitutionally infirm. Indeed, because of the unique-

ness of real property, substituting security to obtain the release of

a lis pendens might impair the adequacy of the remedy for the

successful litigant. See Robert Lawrence Associates, Inc. v. Del

Vecchio, 178 Conn. 1, 18-19, 420 A.2d 1142 (1979).

(APPENDIX 27)

CONNECTICUT LAW JOURNAL March 15, 1983

Page 26

482 MARCH, 1983 189 Conn 471

Williams v. Bartlett

burdened by the notice of lis pendens, to FWZ. See

footnote 1. Relying on this representation, the

plaintiffs invested approximately $110,000 in FW2Z.

On June 9, 1980, Bartlett wrote the Barwil limited

partners, informing them that the Connecticut real

property of Barwil, Ltd. was transferred to F WZ.’

None of the subject properties was transferred to

WZ, although between 1976 and 1980 the defend-

ant Bartlett made approximately 126 title trans-

actions involving the realty subject to the lis

pendens, including transfers to himself or to enti-

ties which he controlled.

Thus there was sufficient evidence presented at

the hearing justifying a finding of probable cause

to the effect that the defendant Bartlett misappro-

priated partnership property while occupying a

position which equity recognizes as that of a fidu-

eiary.© Such misappropriation constitutes fraud

as a matter of law. Maruca v. Phillips, 139 Conn.

79, 81, 90 A.2d 159 (1952). These factors satisfy

the requirements relative to the imposition of a

constructive trust.2 See Zack v. Guzauskas, 171

*The June, 1980 memorandum to Barwil’s partners regarding

the partnership’s general equity and signed by the defendant Bart-

lett reads in pertinent part us follows; “You will reeull that as of

September 1, 1975, all properties were transferred to new partner-

ships to provide funds for carrying and other purposes... . The

Connecticut properties were transferred to FWZ, Ltd., a Florida

limited partnership, again with Barwil, Ltd. as general partner.”

*The defendant Bartlett, as the general partner of both Barwil,

Ltd. and FWZ, oceupied a fiduciary positiun with respect to the

plaintiffs, whom he owed “the duty of rendering true accounts and

full information about everything which affeets the partnership.”

Weidlich y. Weidlich, 147 Conn. 160, 164, 157 A.2d 910 (1960);

see C & S Research Corporation v. Molton Co., 36 Conn, Sup. 619,

622, 422 A.2d 331 (1980); 60 Am. Jur. 2d, Partnership § 123.

* Although the defendants seek to utilize the statute of frauds as

a bar to any claim of relief that might affect real property, we

note that the statute is not applicable to trusts arising by operation

of law. Hieble v. Hieble, 164 Coun. 56, 59, 316 A.2d 777 (1972).

(APPENDIX 28)

March 15, 1983 CONNECTICUT LAW JOURNAL Page 27

189 Conn 471 MARCH, 1983 483

Williams v. Bartlett

Conn. 98, 103-105, 368 A.2d 193 (1976); Harper v.

Adametz, 142 Conn. 218, 225, 113 A.2d 136 (1955).

We conclude that there was a sufficient showing of

probable cause to justify the imposition of equita-

ble relief, as sought in the complaint, affecting the

title to or interests in the burdened real estate."

Similarly, we are not persuaded by the defend-

ants’ final claim that there was insufficient evidence

from which the trial court could find probable cause

that the plaintiffs would prevail in their action.

A probable cause hearing is not intended to be a

trial on the merits, nor does it require the plaintiffs

to establish their claims by a preponderance of the

evidence. McCahill v. Town & Country Associates,

Lid., 185 Conn. (43 CLJ 3, p. 9) 440 A.2d 801 (1981).

“The task of the trial court is essentially one of

weighing probabilities; that task requires the exer-

cise of broad discretion. The court, in making its

determination of probable cause, does so on the

basis of the facts before it.” Id.

As previously stated, the plaintiffs presented

uncontroverted evidence that the defendant Bart-

lett fraudulently misappropriated real property

rightfully belonging to FWZ. The sole witness at

the probable cause hearing was the plaintiff

With respect to the defendants’ ciaim that the statute of limitations

bars the action, the letter from the defendant Bartlett to the part-

ners of Barwil, Ltd.; see footnote 7, supra; could possibly be con-

strued as a promise to convey the property, thus removing the bar

created by the statute of limitations. See Whitehouse v. Sammis,

178 Conn. 529, 533, 423 A.2d 163 (1979). Further, “[c]ourts, apply-

ing equitable principles, have laid down the doctrine of equitable

estoppel by which a defendant may be estopped by his conduct from

asserting defenses such as the statute of limitations.” Morris v.

Costa, 174 Conn. 592, 599, 392 A.2d 468 (1978).

“The further claim of the defendants that Public Acts 1981,

No. 81-8 does not apply to real property held as “inventory” lacks

merit. The statute makes no such distinction.

(APPENDIX 29)

CONNECTICUT LAW JOURNAL March 15, 193

484 MARCH, 1983 189 Conn 484

Williams, whom the trial court specifically found

to be honest and candid Moreover, the plaintiffs

introduced over seventy-five exhibits showing title

transactions made by the defendants with respect

to the affected real estate. Although it was the

plaintiffs’ burden to establish probable cause as to

the validity of their claim; Public Acts 1981, No.

81-8 §3; the defendants did not produce any evi-

dence to rebut the plaintiffs’ contentions. Under

these circumstances, we conclude that the trial court

could reasonably have found as it did.

There is no error.

In this opinion the other judges concurred.

(APPENDIX 30)

No. 10889 )

)

BURCH WILLIAMS, ) SUPREME COURT

JUDITH W. GIBBONS and )

SUZANNE W. LA PRADE, )

Plaintif£/Appelicos )

)

) DANBURY JUDICIAL

) DISTRICT

)

V.

JOHN R. BARTLETT, JR-,

FARVIEW BUILDERS CORPORATION ) JUNE 10, 1983

OF CONNECTICUT )

Defendant/Appellants, )

FwzZ. LTD., Defendant )

NOTICE OF APPEAL TO THE

SUPREME COURT OF THE UNITED STATES

Notice is hereby given that John R. Bartlett,

Jr., and Farview Builders Corporation of

Connecticut, defendant/ appellants above named,

hereby appeal to the Supreme Court of the United

States from the final order of the Connecticut

Supreme Court sustaining the validity of

Connecticut Public Act No. 81-8 entered in this

action on March 15, 1983.

This appeal is taken pursuant to United

States Code Title 28, Section 1257(2).

John R. Bartlett, Jr., and

iene : Farview Builders Corporation

ao. of Connecticut

eG. hee a J MI By oe

Pye a Donald A. Mitchell,

yo te Meio their Attorney

US UO WVNOD P.O. Box 119

Danbury, Connecticut 06810

(203 ) 748-2299

~

'

of

(APPENDIX 31)