Greenberg, Rhein & Margolis, Inc. v. Norris-Faye Horton Enterprises, Inc.

588 A.2d 185, 218 Conn. 162, 14 U.C.C. Rep. Serv. 2d (West) 500, 1991 Conn. LEXIS 86
CourtSupreme Court of Connecticut
DecidedMarch 26, 1991
Docket14159
StatusPublished
Cited by22 cases

This text of 588 A.2d 185 (Greenberg, Rhein & Margolis, Inc. v. Norris-Faye Horton Enterprises, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Greenberg, Rhein & Margolis, Inc. v. Norris-Faye Horton Enterprises, Inc., 588 A.2d 185, 218 Conn. 162, 14 U.C.C. Rep. Serv. 2d (West) 500, 1991 Conn. LEXIS 86 (Colo. 1991).

Opinion

Peters, C. J.

The only issue on this appeal is whether the trial court abused its discretion in denying an application for a prejudgment remedy. The plaintiff, Green-berg, Rhein and Margolis, Inc., brought an action against the corporate defendant, Norris-Faye Horton Enterprises, Inc., and the individual defendant, Faye T. Horton (Horton), to recover the balance due on insurance premiums paid by the plaintiff. In conjunction with the filing of this complaint, the plaintiff sought to attach real property personally owned by Horton. After a hearing held pursuant to General Statutes § 52-278d,1 the trial court denied the plaintiffs application on the ground that the plaintiff had failed to show probable cause for its issuance. The plaintiff appealed to the Appellate Court in accordance with the provisions of General Statutes § 52-278l (a) (1).2 We transferred the appeal to this court pursuant to Practice Book § 4023 and now affirm.

The evidence presented by the plaintiff at the probable cause hearing consisted of the testimony of the plaintiffs vice president, David Margolis, and the contents of two documents3 that were admitted by stipu[164]*164lation. Margolis testified that the plaintiff was seeking reimbursement from the defendants for $3968 in insurance premiums that the plaintiff had become obligated to pay the Union Trust Company because of an indemnity agreement contained on the back of an “Insurance Premium Financing Note and Security Agreement” (insurance premium note or note).

The insurance premium note memorialized the obligation of the “maker-debtor,” described at the top of the note as the corporate defendant, to pay $6000 in designated installments to its payee, the Union Trust Company. The note stipulated that its proceeds were to be used to pay the balance of insurance premiums owed by “the debtor” to the Aetna Casualty and Surety Company under insurance policies designated by policy number. At the bottom of the note, in the place designated in the form for the signature of “Maker-Debtor(s),” appeared the signature of “Faye T. Horton.” Horton’s signature was not accompanied by any express indication that she was signing as representative of the corporate defendant.

The back of the insurance premium note contained a printed “warranty” to be given by an insurance agent or broker; this warranty was signed by Margolis on behalf of the plaintiff. The warranty identified “the debtor” as the insured designated in the insurance policy on the front of the note and represented that whoever had signed on behalf of a corporate entity had authority to do so. The warranty also contained an indemnity clause in which the warrantor promised to hold the Union Trust Company harmless from any loss arising out of the financing arrangement.

On the strength of the plaintiff’s allegation that its rights against the defendants arose out of the indemnity agreement on the back of the insurance premium [165]*165note, the plaintiff claimed that it had an enforceable claim against Horton personally because she had signed the insurance premium note on its front. The plaintiffs complaint, however, contained no allegation that the plaintiff was the holder, transferee or assignee of the insurance premium note. Margolis, on cross-examination, was unable to clarify on what theory the plaintiff, as a stranger to the note, was entitled to invoke the liability that a maker of the note might have to its payee, the Union Trust Company. Furthermore, Margolis conceded, on cross-examination, that the insured “debtor” on whose behalf the premiums had been paid was the corporate defendant, not Horton. Finally, the plaintiffs counsel, in his argument before the trial court, withdrew any claim that Horton had signed as guarantor, contending instead that she was liable merely because she had signed as the debtor.4

On this state of the record, the trial court concluded that there had been “no showing of probable cause as to the defendant Faye Horton” and denied the plaintiffs application for a prejudgment remedy as to her real property. The plaintiff maintains that this ruling should be reversed because Horton was personally obligated on the insurance premium note: (1) as an ambiguous signer of an instrument, in accordance with the provisions of General Statutes § 42a-3-403;5 or (2) as [166]*166an accommodation maker of an instrument, in accordance with the provisions of General Statutes § 42a-3-415.6

At the outset, we note the limited role that our case law assigns to appellate review of a trial court’s broad discretion to deny or to grant a prejudgment remedy. It is the trial court that must determine, in light of its assessment of the legal issues and the credibility of the witnesses, whether a plaintiff has sustained the burden of showing probable cause to sustain the validity of its claim. We decide only whether the determination of the trial court constituted clear error. New England Land Co. v. DeMarkey, 213 Conn. 612, 620-21, 569 A.2d 1098 (1990); Dow & Condon, Inc. v. Anderson, 203 Conn. 475, 479-80, 525 A.2d 935 (1987); Solomon v. Aberman, 196 Conn. 359, 364, 493 A.2d 193 (1985); Three S. Development Co. v. Santore, 193 Conn. 174, 176, 474 A.2d 795 (1984); William M. Raveis & Associates, Inc. v. Kimball, 186 Conn. 329, 333, 441 A.2d 200 (1982); Augeri v. C. F. Wooding Co., 173 Conn. 426, 429, 378 A.2d 538 (1977). Applying this standard of review to the record in this case, we conclude that the plaintiff cannot prevail.

[167]*167The plaintiffs principal contention is that Horton is personally liable because she failed to identify her signature on the insurance premium note as that of a representative of the corporate defendant. Her personal liability arises, according to the plaintiff, because she signed her name without specifying that she was signing as agent for, or officer of, the corporate defendant. The plaintiff maintains that, by virtue of the provisions of § 42a-3-403 (2), the ambiguity of Horton’s signature imposed upon her the obligation of establishing that she was not personally liable, and that she failed to meet this burden at the trial court hearing. Although § 42a-3-403 (2) was not specifically brought to the attention of the trial court, we will presume, for present purposes, that this issue was adequately preserved to warrant appellate review.

An understanding of the import of the provisions of § 42a-3-403 (2) requires an examination of a number of sections in General Statutes §§ 42a-3-101 through 42a-3-805, otherwise known as article 3 of the Uniform Commercial Code. The plaintiff relies on that part of § 42a-3-403 (2) which provides: “An authorized representative who signs his own name to an instrument . . .

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Bluebook (online)
588 A.2d 185, 218 Conn. 162, 14 U.C.C. Rep. Serv. 2d (West) 500, 1991 Conn. LEXIS 86, Counsel Stack Legal Research, https://law.counselstack.com/opinion/greenberg-rhein-margolis-inc-v-norris-faye-horton-enterprises-inc-conn-1991.