HSqd, LLC v. Morinville
Filing
98
ORDER denying 81 Motion to Strike. See attached ruling. Signed by Judge Holly B. Fitzsimmons on 3/18/2013. (Garcia, M.)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
HSQD, LLC
v.
PAUL MORINVILLE
:
:
:
:
:
:
:
CIV. NO. 3:11CV1225 (WWE)
RULING ON DEFENDANT’S MOTION TO STRIKE PLAINTIFF’S APPLICATION
FOR PREJUDGMENT REMEDY AND MOTION FOR DISCLOSURE OF ASSETS [DOC.
#81]
On January 3, 2013, plaintiff HSqd, LLC filed a motion for
prejudgment remedy [Doc. #74], and a motion for disclosure of
assets [Doc. #76].
These motions are supported by the
declaration HSqd’s sole managing member, Brian Hollander.
Pending before the Court is defendant Paul Morinville’s motion
to strike HSqd’s application for prejudgment remedy and motion
for disclosure of assets [Doc. #81], to which plaintiff HSqd has
filed a response in opposition. [Doc. #92].
For the reasons
that follow, defendant’s motion to strike [Doc. #81] is DENIED.
1.
Background
HSqd brings this action to recover damages for, inter alia,
breach of an alleged partnership agreement.
HSqd is a
Connecticut limited liability company, controlled by a sole
member manager, Brian Hollander.
“HSqd’s business is to partner
with individuals and companies who own intellectual property for
the purpose of successfully monetizing specified intellectual
property by actively participating in all monetization related
1
decisions, and where appropriate, raising and/or providing the
capital needed to support the monetization program.” (Hollander
Decl., Doc. #74-1, at ¶6).
In January 2010, defendant was
introduced to HSqd as the owner of a U.S. patent portfolio,
which consisted of pending patent applications and infringed
patents generating revenue (“Patent Portfolio”).
Between
January 2010 and January 2011, HSqd worked with defendant, and
allegedly formed a partnership, to monetize the patents and
applications in the Patent Portfolio.
Plaintiff alleges that
defendant breached the alleged partnership agreement, and
additionally made an unauthorized sale of certain patents for
defendant’s sole financial benefit. Defendant disputes the
formation of a partnership.
2.
Applicable Law
HSqd has applied for a
prejudgment remedy (“PJR”) pursuant
to Connecticut1 General Statute § 52-278c, which requires that
the application include:
An affidavit sworn to by the plaintiff or any
competent affiant setting forth a statement of
facts sufficient to show that there is probable
cause that a judgment in the amount of the
prejudgment remedy sought, or in an amount
greater than the amount of the prejudgment remedy
sought, taking into account any known defenses,
counterclaims or set-offs, will be rendered in
1
Because the Court sits in diversity, the substantive law of the
forum state applies. Stephens v. Norwalk Hosp., 162 F. Supp. 2d
36, 39 (D. Conn. 2001) (noting the “undisputed principle that a
federal court sitting in diversity applies the substantive law
of the forum state.”).
2
the matter in favor of the plaintiff[.]
Conn. Gen. Stat. § 52-278c(a)(2).
The supporting affidavit must
contain “factual rather than conclusory allegations.”
Kukanskis
v. Griffith, 180 Conn. 501, 503 (1980) (discussing affidavit
required to support ex parte application for prejudgment
remedy).
In addressing PJR applications, the “trial court's
function is to determine whether there is probable cause to
believe that a judgment will be rendered in favor of the
plaintiff in a trial on the merits.” Calfee v. Usman, 224 Conn.
29, 36-37 (1992) (citation omitted).
The PJR statute further
contemplates that a hearing will be held to determine whether
the requested prejudgment remedy should be granted.
See Conn.
Gen. Stat. § 52-278c(d).
3.
Discussion
Defendant moves to strike portions of Brian Hollander’s
declaration in support of HSqd’s motion for prejudgment remedy,
and thus plaintiff’s motions for prejudgment remedy and
disclosure of assets.
As an initial matter, the defendant cites
to various cases2 in the “Legal Standard” section of his brief,
supporting the position that a court may strike inadmissible
portions of an affidavit. (Def. Memo. Supp. Mt. Strike, Doc.
2
Nodoushani v. S. Conn. State Univ., No. 11-4536-cv, 2013 WL
149898 (2d Cir. Jan. 15, 2013); S. Concrete Co. v. U.S. Steel
Corp., 394 F. Supp. 362, 381 (N.D. Ga. 1975); Hatch v. Boulder
Town Council, No. 2:01-CV-00071 PGC, 2007 WL 2985001 (D. Utah
Oct. 10, 2007).
3
#81-1, at 3).
However, these cases relate to affidavits made in
the summary judgment context.
Summary judgment invokes far
different procedures and burdens than those involved in an
application for prejudgment remedy.
Prevailing on summary
judgment requires a movant to establish “no genuine dispute as
to any material fact”, Fed. R. Civ. P. 56(a), an exacting
requirement. See, e.g., Smith v. Mabstoa/NYCTA, No. 02 Civ.
220(PKC), 2005 WL 1123730, at *2 (S.D.N.Y. May 11, 2005) (noting
that summary judgment movant’s burden “remains high” even where
no opposition filed).
Moreover, the Federal Rules of Civil
Procedure mandate that affidavits made in support of a motion
for summary judgment “be made on personal knowledge, [] set
forth such facts as would be admissible in evidence, and show
affirmatively that the affiant is competent to testify to the
matters stated therein.” Fed. R. Civ. P. 56(e).
By contrast, to
prevail on an application for prejudgment remedy, a party must
“provide[] enough evidence to meet the relatively low standard
of showing that there is probable cause that a judgment in the
amount sought as prejudgment remedy, or greater, will be
rendered in favor of the plaintiff.”
Fishman v. Vantage Point
Ass’n, Inc., No. CV054004288S, 2006 WL 3008219, at *1 (Conn.
Super. Ct. Oct. 5, 2006) (citing See Conn. Gen. Stat. § 52278d).
The Connecticut PJR statute does not require that a
supporting affidavit comport with the requirements of an
4
affidavit to support a motion for summary judgment.
See Conn.
Gen. Stat. 52-278c(a)(2). Indeed, defendant has failed to point
to any PJR equivalent of Rule 56.
Accordingly, for the reasons
that follow, defendant’s motion to strike is DENIED.
a. References to alleged documentary evidence
Defendant objects to seventeen paragraphs3 of the Hollander
declaration on the basis that Hollander “provides vague and
self-serving descriptions of dozens of documents without
attaching any of the documents themselves [to the declaration].”
Defendant relies on various summary judgment cases, including
N.Y. ex rel. Spitzer v. Saint Francis Hosp., 94 F. Supp. 2d 423,
425 (S.D.N.Y. 2000), for the position that where a party wishes
to have a court consider documents not yet part of the record,
the documents must be attached to, and authenticated by, an
appropriate affidavit.4
However, the Court does not find this
authority applicable to a declaration in support of a PJR
application where the Connecticut PJR statute “allows[s] a
plaintiff to introduce at the hearing additional evidence to
3
Specifically paragraphs: 10, 18, 20-21, 24-25, 27-28, 29, 3134, 37-38, 40, and 42.
4
Defendant cites an additional three cases in support of his
argument, which the Court finds distinguishable. Kukanskis v.
Griffith, 180 Conn. 501 (1980), and Fermont Div. Dynamics Corp.
v. Smith, 178 Conn. 393 (1979), discuss ex parte PJR
applications, a procedure distinguishable from that invoked in
the present case. Moreover, in Davila v. Secure Pharm. Plus,
329 F. Supp. 2d 311 (D. Conn. 2004), the plaintiff failed to
submit an affidavit in support of his PJR application, and
accordingly the Court found plaintiff failed to comply with
Conn. Gen. Stat. § 52-278c(a)(2). Id.
5
buttress his initial affidavit, just as the defendant may
introduce at the hearing additional evidence to the contrary.”
Glanz v. Testa, 200 Conn. 406, 409-10 (1986).
Here, the Court does not find the seventeen challenged
paragraphs of the Hollander declaration objectionable for the
purposes of the initial PJR application.
Indeed, it is apparent
that Hollander, the sole managing member of HSqd, has personal
knowledge of the documents described in the declaration and is
competent to attest to their contents.
Even in the summary
judgment context, “Affiants may testify as to the contents of
records they reviewed in their official capacity.”
Saint
Francis Hosp., 94 F. Supp. 2d at 426. To the extent defendant
argues that it has not received adequate notice of the proof on
which HSqd relies, the defendants may always seek this
information through a request for production.
Accordingly, the
Court denies defendant’s request to strike these paragraphs of
the Hollander declaration.
b. References to hearsay statements
Defendant next argues that the Court should strike various
paragraphs5 of the Hollander declaration because they are
inadmissible and unreliable hearsay.
The paragraphs of the
Hollander declaration that defendant seeks to strike all attest
to statements made by defendant, or defendant’s attorney,
5
Specifically paragraphs: 11, 15-16, 19, 23, 26-27, 38, and 40.
6
Stephen Sprinkle.
Federal Rule of Evidence 801(c) defines hearsay as “a
statement that: (1) the declarant does not make while testifying
at the current trial or hearing; and (2) a party offers in
evidence to provide the truth of the matter asserted in the
statement.”
Rule 801 also defines statements that are not
hearsay, including an opposing party’s statement, that “is
offered against an opposing party and: (A) was made by the
party[…]; (B) is one the party manifested that it adopted or
believed to be true; (C) was made by a person whom the party
authorized to make a statement on the subject; [or] (D) was made
by the party’s agent or employee on a matter within the scope of
that relationship while it existed […]” Fed. R. Evid.
801(d)(2)(A)-(D).
It is well established that a party’s own
statement, or that made by his agent, such as an attorney, is
non-hearsay.
See Amnesty America v. Town of W. Hartford, 361
F.3d 113, 132 n. 13 (2d Cir. 2004)(noting that letters from
party’s attorney “are statements of the party-opponent or its
agents, and thus may be admissible non-hearsay under Fed. R.
Evid. 801(d)(2).”); United States v. Gotti, 457 F. Supp. 2d 395,
397 (S.D.N.Y. 2006) (“A party’s own statements are admissible as
non-hearsay admissions regardless of whether such statements
were against his interest when made.”) (citation and internal
quotations omitted). Fed. R. Evid. 801(2)(A) comm. note (“A
7
party’s own statement is the classic example of an admission.”).
The Court has carefully reviewed the challenged portions of
the Hollander declaration.
The nine challenged paragraphs all
attest to statements made by defendant, or his attorney, Mr.
Sprinkle, are offered by the plaintiff against defendant, and
are “classic example[s] of an admission.”
Accordingly, the
Court finds these nine challenged paragraphs of the Hollander
declaration do not constitute inadmissible hearsay, and
therefore declines to strike them from the declaration.
c. References to knowledge of third parties
Defendant next seeks to strike four paragraphs6 of the
Hollander declaration on the basis that they consist of
“speculations about what third parties may or may not know” and
are not based on personal knowledge.7 The Court construes this as
an argument that Hollander is not a competent witness to testify
as to the matters contained in the challenged paragraphs.
“Generally, affidavits must be made on the affiant’s
personal knowledge of the facts alleged in the petition.
The
affidavit must in some way show that the affiant is personally
familiar with the facts so that he could personally testify as a
witness.”
State v. Sunrise Herbal Remedies, Inc., 296 Conn.
556, 571-72 (2010) (citing 3 Am. Jur. 2d 397, Affidavits § 14
6
Specifically, paragraphs 17, 24-25, and 35.
Again, the cases relied on by defendant in support of his
argument pertain to affidavits in the summary judgment context.
7
8
(2002)).
Indeed, “the touchstone of competence is personal
knowledge”, which “is variously described as knowledge acquired
firsthand or from observation.”
Sunrise Herbal Remedies, 296
Conn. at 573.
Defendant seeks to strike paragraph 17 of the Hollander
declaration on the grounds that it is speculative.
Paragraph 17
states in part, “By the end of this January 2010 call it was
obvious to [Hollander] that neither [defendant], nor anyone who
had advised [defendant] in the past ten years, had considered
the possible impact of an employment agreement on [defendant’s]
ownership of any patent rights he conceived of while working at
dell.”
Defendant states that Hollander does not have personal
knowledge of whether defendant, or any of his advisors, had
considered such an impact. The remaining three challenged
paragraphs all attest to certain actions taken by HSqd and/or
Hollander with defendant’s “knowledge” and/or “knowledge and
approval”.
Defendant submits that Hollander lacks the first-
hand knowledge concerning what defendant knew or did not know at
the time.
As an initial matter, the Court notes that the Hollander
declaration, made under penalty of perjury, states that it is
“made on personal knowledge.” (Hollander Decl., at ¶1).
None of
the paragraphs defendant objects to indicate they were made on
“information and belief”.
See, e.g., Lujan v. Cabana Mgmt.,
9
Inc., 284 F.R.D. 50, 65 (E.D.N.Y. 2012) (defendants challenged
Rule 23 declarations on
basis that the affiants lacked personal
knowledge; in rejecting this argument, the court noted, in part,
that all but one declaration specifically attested that the
declaration was made on personal knowledge). The Court has
carefully reviewed the challenged paragraphs of the Hollander
declaration.
Paragraph 17 of the Hollander declaration attests
to Hollander’s perceptions and/or conclusions gleaned from
dealings with defendant and/or his attorney.
The same is true
for the remaining challenged paragraphs; namely that Hollander
attests to his conclusions derived from his interactions with
defendant and/or his attorney over time.
Because “[a] witness’s
conclusions based on personal observations over time may
constitute personal knowledge”, the Court declines to strike
these paragraphs.
Saint Francis Hosp., 94 F. Supp. 2d at 425
(citing S.E.C. v. Singer, 786 F. Supp. 1158, 1167 (S.D.N.Y.
1992)); Colabufo v. Continental Cas. Co., No. 04-CV-1863
(TCP)(MLO), 2006 WL 1210919, at *6 (E.D.N.Y. April 27, 2006)
(“An affiant may testify to conclusions based on her personal
observations over time.
Similarly, witnesses may testify to and
summarize their impressions.”) (citations omitted).8
8
Additionally, the Court reminds defendant that he will have a
“second bite at the apple”, namely an opportunity to crossexamine Hollander at the prejudgment remedy hearing, as well as
to present evidence to refute that presented by HSqd.
10
4.
Conclusion
For the foregoing reasons, Defendant’s motion to strike
[Doc. #81] is DENIED.
This is not a Recommended Ruling.
This
is an order reviewable pursuant to the “clearly erroneous”
statutory standard of review.
28 U.S.C. § 636(b)(1)(A); Fed. R.
Civ. P. 72(A); and D. Conn. L. Civ. R. 72.2.
As such, it is an
order of the Court unless reversed or modified by the district
judge upon motion timely made.
SO ORDERED at Bridgeport this 18th day of March 2013.
_______/s/__________________
HOLLY B. FITZSIMMONS
UNITED STATES MAGISTRATE JUDGE
11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?