Opinion
No. LLI CV 08 5004882
February 5, 2010
MEMORANDUM OF DECISION
This is an action to foreclose a mortgage. This memorandum of decision will address a motion for summary judgment (#132) filed by some of the defendants. For the reasons given, the motion for summary judgment must be granted.
FACTS
The facts recited here are very similar to those recited in the court's memorandum of decision dated January 21, 2010, in which the court denied Mortgage Electronic Registration Systems, Inc.'s motion for summary judgment (#129). Note, however, that this memorandum may include facts that were irrelevant to the January 21, 2010 decision and may exclude facts that were relevant to the first decision but that are not particularly relevant on the present motion.
On October 16, 2008, the plaintiff, Holly Flor, filed a complaint against R. Bourgeois Antiques, LLC, Barbara Bourgeois and Arnaud Bourgeois (hereinafter the Bourgeois defendants), as well as Mortgage Electronic Registration Systems, Inc. and American Mortgage Network, Inc. In her complaint, the plaintiff alleges the following facts. The Bourgeois defendants gave the plaintiff a note dated January 1, 2004, in which they promised to pay the plaintiff the principal sum of $128,500 with interest. In order to secure that note, Barbara Bourgeois mortgaged a parcel of land to the plaintiff, located at 270 Main Street South, Woodbury, Connecticut, (hereinafter the Woodbury property) by providing a mortgage deed in her name, also dated January 1, 2004. Since September 2007, the Bourgeois defendants have failed to pay the principal and interest due on the note and, as a result, the plaintiff is exercising her option to declare the note in default and the entire balance due and payable.
Arnaud Bourgeois and Barbara Bourgeois refer to "B. Bourgeois Antiques, LLC," not "R. Bourgeois Antiques, LLC." This memorandum refers to R. Bourgeois Antiques, LLC because it is the name used in the complaint and summons.
The plaintiff also alleges that Mortgage Electronic Registration Systems, Inc. (hereinafter Mortgage Electronic), as a nominee for American Mortgage Network, Inc. (hereinafter American Mortgage), has a subsequent and subordinate interest in the Woodbury property as a result of a mortgage deed dated June 21, 2005, securing a note in the amount of $725,000, and a mortgage deed dated June 21, 2005, securing a debt of future advances not exceeding $152,000. Additionally, the plaintiff alleges, Barbara Bourgeois is the record owner of the mortgaged premises, and the Bourgeois defendants are in possession of those premises. The plaintiff seeks a foreclosure of the mortgage, among other remedies. The plaintiff attaches the alleged note and mortgage deed to her complaint. The January 1, 2004 date is listed at the top of both documents and before the signatures at the end of the mortgage deed.
On December 12, 2008, the Bourgeois defendants filed an answer to the plaintiff's complaint. In their answer, the Bourgeois defendants deny that they promised to pay the principal sum of $128,500 together with interest to the plaintiff by a note of January 1, 2004, and they also deny that Barbara Bourgeois, by a mortgage deed of the same date, mortgaged the Woodbury property to the plaintiff to secure that note. The Bourgeois defendants admit, however, that Barbara Bourgeois is the record owner of the Woodbury property and that Barbara Bourgeois and Arnaud Bourgeois are in possession of the property. On January 27, 2009, Mortgage Electronic filed requests for admission, to which the plaintiff filed responses on March 23, 2009. In those responses, the plaintiff admits that she and R.V. Mangels owned the Woodbury property on January 1, 2004, and that Barbara Bourgeois lacked a right to bargain, sell, mortgage or convey that property as of the same date. The plaintiff also admits that she does not possess a power of attorney executed by Barbara Bourgeois appointing Arnaud Bourgeois as her attorney in fact as of January 1, 2004. Finally, the plaintiff admits that she and R.V. Mangels conveyed their entire interest in the Woodbury property to Barbara Bourgeois on March 8, 2004.
Hereinafter Mortgage Electronic refers to Mortgage Electronic acting on behalf of American Mortgage.
The plaintiff submitted revised responses to Mortgage Electronic's April 13, 2009 requests for admissions on July 13, 2009. In response to the statement: "On March 8, 2004, Holly Flor and R.V. Mangels conveyed all their interest in the [Woodbury] property . . . to Barbara Bourgeois," the plaintiff replied: "Holly Flor and R.V. Mangels conveyed title to the . . . [Woodbury] property and acquired a mortgage title interest in the premises from Barbara Bourgeois." The plaintiff also admitted that she did not loan Barbara Bourgeois any money on January 1, 2004, as a result of the mortgage and note dated January 1, 2004.
In response to Mortgage Electronic's requests for admissions, dated April 13, 2009, Barbara Bourgeois and R. Bourgeois Antiques, LLC admit the following. The plaintiff and R.V. Mangels conveyed all of their interest in the Woodbury property to Barbara Bourgeois on March 8, 2004. Barbara Bourgeois, acting through Arnaud Bourgeois, executed two mortgages to Greenpoint Mortgage Funding, Inc. (hereinafter Greenpoint) on March 8, 2004, and those mortgages were used to purchase the Woodbury property. On June 21, 2005, Barbara Bourgeois executed two open-end mortgage deeds to Mortgage Electronic in order to refinance her Greenpoint mortgages. The plaintiff did not loan Barbara Bourgeois any money on January 1, 2004, as a result of the mortgage and note dated January 1, 2004, nor did she loan Barbara Bourgeois any money at any point in time as a result of the mortgage and note dated January 1, 2004. Moreover, Barbara Bourgeois did not have knowledge of the plaintiff's mortgage dated January 1, 2004, at the time she gave the mortgages to Mortgage Electronic, nor did she disclose the existence of the plaintiff's mortgage to Mortgage Electronic. Arnaud Bourgeois' responses to Mortgage Electronic's requests for admission, also dated April 13, 2009, and submitted with Mortgage Electronic's motion for summary judgment, are consistent with Barbara Bourgeois and R. Bourgeois Antiques, LLC's responses. In their respective responses to Mortgage Electronic's requests for admissions, the Bourgeois defendants also admit that Barbara Bourgeois did not authorize Arnaud Bourgeois to execute a mortgage or note to the plaintiff at any time.
On August 31, 2009, the Bourgeois defendants filed the motion for summary judgment that is presently before this court along with a supporting memorandum of law and an exhibit. The issue before the court on this motion is whether the court should grant the Bourgeois defendants' motion for summary judgment on the ground that there are no questions of material fact and: (1) the plaintiff's mortgage and note are invalid; and/or (2) the mortgage secures a sum of zero dollars. On October 5, 2009, the plaintiff filed a memorandum of law in opposition to Bourgeois defendants' motion for summary judgment. This matter was heard at the short calendar on October 13, 2009.
DISCUSSION
"Summary judgment is a method of resolving litigation when pleadings, affidavits, and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Wilson v. New Haven, 213 Conn. 277, 279, 567 A.2d 829 (1989). "The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law. The courts hold the movant to a strict standard . . . As the burden of proof is on the movant, the evidence must be viewed in a light most favorable to the opponent . . . When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue . . . Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue." (Internal quotation marks omitted.) Zielinski v. Kotsoris, 279 Conn. 312, 318-19, 901 A.2d 1207 (2006).
"An important exception exists . . . to the general rule that a party opposing summary judgment must provide evidentiary support for its opposition, and that exception has been articulated in our jurisprudence with less frequency than has the general rule. On a motion by [the] defendant for summary judgment the burden is on the defendant to negate each claim as framed by the complaint . . . It necessarily follows that it is only [o]nce [the] defendant's burden in establishing [their] entitlement to summary judgment is met [that] the burden shifts to [the] [nonmovant] to show that a genuine issue of fact exists justifying a trial." (Internal quotation marks omitted.) Gianetti v. United Healthcare, 99 Conn.App. 136, 141, 912 A.2d 1093 (2007).
In their motion for summary judgment and their supporting memorandum of law, the Bourgeois defendants raise two major arguments. First, they argue, the mortgage and note are invalid as a matter of law, and second, they argue, the mortgage secures a sum of zero dollars because its face indicates a sum of zero dollars. As to the validity issue, the Bourgeois defendants raise three specific arguments. First, the Bourgeois defendants argue, the undisputed facts demonstrate that the mortgage is invalid because the alleged mortgagor, Barbara Bourgeois, lacked an ownership interest in the property at the time the mortgage was allegedly given on January 1, 2004, and the mortgagee, the plaintiff, owned the property at that time. Second, they argue, the mortgage and note are invalid because a power of attorney did not exist as of January 1, 2004. Third, they argue, the note and mortgage are invalid because they represent a commercial and business transaction, and the power of attorney that the plaintiff relies upon does not confer authority to enter into business transactions.
Prior to addressing this issue in their memorandum, the Bourgeois defendants deny that they ever provided the note and mortgage to the plaintiff that is attached to the plaintiff's complaint. Rather, they allege, "to the extent [the plaintiff] obtained these documents from [the Bourgeois defendants], they were obtained by fraud and misrepresentation." Regardless, they argue, these fraud and misrepresentation claims need not be adjudicated at this point in time because the note and mortgage are invalid.
As to the second major argument about the sum referenced in the mortgage deed, the Bourgeois defendants argue that a mortgage "is a contract to be interpreted by reviewing the document," and the alleged mortgage in question secures a sum of zero dollars. In support of their motion, the Bourgeois defendants submit an "asset purchase agreement." The Bourgeois defendants also represent that they "rely upon and incorporate by reference . . . the documents submitted by the [co-defendant Mortgage Electronic] as part of its motion for summary judgment dated August 4, 2009. In particular, [the Bourgeois defendants] rely upon a copy of the alleged power of attorney dated March 3, 2004, [which was submitted as exhibit 3 with Mortgage Electronic's motion] and the plaintiff's July 13, 2009 responses to [Mortgage Electronic's] request for admissions."
In reply, the plaintiff alleges that the Bourgeois defendants have not established that the mortgage deed is invalid, and, at minimum, there is a factual issue in dispute. As to Bourgeois defendants' first argument about invalidity, the plaintiff concedes that if the mortgage was actually executed and conveyed on January 1, 2004, the Bourgeois defendants' argument might have merit. The plaintiff contends, however, that the mortgage deed was executed on March 8, 2004, as attested to by Attorney D'Alton in an affidavit that is submitted with, and attached to, the plaintiff's memorandum in opposition. As to the second argument that both the mortgage and the note are invalid because a power of attorney was not in existence at the time both were executed, the plaintiff argues that the Bourgeois defendants offer no evidence to dispute the fact that the mortgage deed was executed on March 8, 2004, after the power of attorney was executed. Rather, they simply allege that the power of attorney was executed after a January 1, 2004 conveyance. Thus, the plaintiff argues, this argument also lacks merit given that the mortgage was executed on March 8, 2004, after the power of attorney was executed. As to the third and final argument about the invalidity of the note and mortgage, the plaintiff argues that the mortgage transaction with the Bourgeois defendants was of a personal nature, not a business nature, and she attaches her own affidavit in which she attests to this fact. Finally, the plaintiff argues, the Bourgeois defendants have not offered any evidence to support this argument. Rather, the plaintiff contends, the Bourgeois defendants attach to their motion "a partial copy of what appears to be an unexecuted, working draft with no evidence or other explanation of what it is or purports to be."
Prior to addressing the substantive arguments, the plaintiff, in her memorandum in opposition, calls the court's attention to a "preliminary matter." The plaintiff notes that this case is scheduled for trial on May 19, 2010, and the Bourgeois defendants did not obtain the court's permission, as required by Practice Book § 17-44, before they filed their motion for summary judgment. Despite this argument, a scheduling order issued by this court on July 14, 2009, notes "that any motions for summary judgment shall be filed on or before September 1, 2009." Thus, when the Bourgeois defendants filed their motion on August 31, 2009, it was in accordance with the court's order.
In her affidavit, Attorney D'Alton states that the plaintiff and Arnaud Bourgeois directed her to "draft a note for the signatures of B. Bourgeois Antiques, LLC, Barbara Bourgeois and Arnaud Bourgeois" in December 2003 and that she was advised that the note was "to be secured by a mortgage deed against property known as 270 Main Street South in . . . Woodbury, Connecticut, which was to be acquired and owned by Barbara Bourgeois." Attorney D `Alton also states that she prepared this note and delivered it to the plaintiff and that on March 8, 2004, she represented Greenpoint in a mortgage transaction in connection with the sale of the Woodbury property from the plaintiff and R.V. Mangels to Barbara Bourgeois. Since Attorney D'Alton had been advised that Barbara Bourgeois was unable to attend the closing, she prepared a power of attorney form for Barbara Bourgeois that was approved by the Connecticut Attorneys Title Insurance Company prior to the closing. Attorney D'Alton states that Arnaud Bourgeois attended the closing on March 8, 2004, and delivered the executed the power of attorney to her. Then, she attests, Arnaud Bourgeois executed the Greenpoint mortgage documents. Additionally, Attorney D'Alton states, Arnaud Bourgeois executed the note and mortgage deed that Attorney D'Alton had prepared in December 2003 after he executed the Greenpoint mortgages. Finally, Attorney D'Alton alleges: "The mortgage [to the plaintiff] was left with me with instructions that it should not be recorded until I was told to do so by Holly Flor. In early May 2005, Holly Flor contacted me and advised me that the mortgage should be recorded, which I did on May 9, 2005."
As to the Bourgeois defendants' second major argument, that the mortgage deed secures a sum of zero dollars, the plaintiff contends that the "deed indicates that the debt secured by the mortgage is evidenced by a note, a copy of which is appended to the mortgage instrument." Moreover, the plaintiff argues, this note evidences a debt of $128,500. The plaintiff submits the following documents with her motion in opposition: (1) an affidavit from Theresa B. D'Alton, the attorney who allegedly drafted the January 1, 2004 note at the request of the plaintiff and Arnaud Bourgeois, and who prepared the power of attorney form at issue; (2) a certified copy of the statutory power of attorney form at issue; (3) partial copies of the note and mortgage deed; and (4) an affidavit of the plaintiff in which she attests that the "debt which is represented by the note is comprised of a number of personal loans from me to Barbara Bourgeois and Arnaud Bourgeois as well as other personal obligations owed to me by them. Some of the funds advanced to them may have been used by them for their business purposes, however I have always considered the debt as a personal obligation from them to me.
See footnote 7.
"A critical component of any foreclosure action is the existence of a valid, legally enforceable mortgage instrument." Deutsche Bank National Trust Co. v. Gue, Superior Court, judicial district of Fairfield, Docket No. CV 08 5015120 (November 5 2008, Doherty, J.) ( 46 Conn. L. Rptr. 581, 582). General Statutes § 47-36aa(b)(1) provides: "Any deed, mortgage . . . or other instrument made for the purpose of conveying, leasing, mortgaging or affecting any interest in real property in this state recorded after January 1, 1997, which instrument contains any one or more of the following defects or omissions is as valid as if it had been executed without the defect or omission: (1) The instrument contains an incorrect statement of the date of execution or omits the date of execution."
In the present matter, the dates on the mortgage, the note and the power of attorney are at the center of the Bourgeois defendants' first two arguments regarding invalidity. Despite the Bourgeois defendants' arguments that both the mortgage and note are invalid because they were conveyed on January 1, 2004, before Barbara Bourgeois had an ownership interest in the property and before the power of attorney form was executed on March 3, 2004, the plaintiff, in her admissions, suggests that the mortgage was executed on March 8, 2004, despite the January 1, 2004 date. Although the plaintiff's complaint is a judicial admission, so too are her responses to Mortgage Electronic's request for admission, which Mortgage Electronic submitted with its motion for summary judgment and which the Bourgeois defendants rely upon in the present matter. Thus, the date of mortgage execution is in dispute, despite the Bourgeois defendants' representation otherwise. Furthermore, the plaintiff has never explicitly alleged that the mortgage and note were executed on January 1, 2004, as the Bourgeois defendants claim. Rather, she only referenced the note and deed dated January 1, 2004, in her complaint and attached the note and deed to her complaint.
See generally East Haven Builders Supply, Inc. v. Fanton, 80 Conn.App. 734, 744, 837 A.2d 866 (2004) ("A party's response to a request for admissions is binding as a judicial admission unless the judicial authority permits withdrawal or amendment").
Moreover, although the requests for admissions do not specifically address the date that the note was executed, Attorney D'Alton attests, in an affidavit submitted with the plaintiff's motion in opposition, that both the note and the mortgage were executed on March 8, 2004, despite the January 1, 2004 date on both documents. Since § 47-36aa(b)(1) operates to correct the mortgage execution date, and a mortgage and note are a part of the same transaction, the Bourgeois defendants have not established that the mortgage and note were executed on January 1, 2004. As a result, the Bourgeois defendants have not established invalidity on their first two arguments. The question remains, however, whether the Bourgeois defendants have established invalidity on the ground that the statutory power of attorney form did not authorize Arnaud Bourgeois to enter into this transaction on behalf of Barbara Bourgeois.
See New Haven Savings Bank v. LaPlace, 66 Conn.App. 1, 12, 783 A.2d 1174, cert. denied, CT Page 4605 258 Conn. 942, 786 A.2d 426 (2001). ("A promissory note and a mortgage deed are deemed parts of one transaction and must be construed together as such.")
The "[c]onstruction of a mortgage deed is governed by the same rules of interpretation that apply to written instruments or contracts generally, and to deeds particularly." (Internal quotation marks omitted.) New Haven Savings Bank v. LaPlace, 66 Conn.App. 1, 12, 783 A.2d 1174, cert. denied, 258 Conn. 942, 786 A.2d 426 (2001). Moreover,"[a] promissory note and a mortgage deed are deemed parts of one transaction and must be construed together as such." Id. "A promissory note is nothing more than a written contract for the payment of money, and, as such contract law applies." Emigrant Mortgage Co. v. D'Agostino, 94 Conn.App. 793, 799, 896 A.2d 814 (2006). "[A] contract must be construed to effectuate the intent of the parties, which is determined from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction . . . Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its term . . . [T]he mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous . . . If the language of the contract is susceptible to more than one reasonable interpretation, the contract is ambiguous . . . By contrast, language is unambiguous when it has a definite and precise meaning . . . concerning which there is no reasonable basis for a difference of opinion." (Citations omitted; internal quotation marks omitted.) Poole v. Waterbury, 266 Conn. 68, 87-88, 831 A.2d 211 (2003). "When only one interpretation of a contract is possible, the court need not look outside the four corners of the contract." Id., 89.
The same standard applies to power of attorney forms. "A power of attorney is an instrument in writing authorizing another to act as one's agent. The person holding a power of attorney is known as an attorney-in-fact thus distinguishing him from an attorney at law . . . The rules governing the interpretation of written instruments generally govern the construction of powers of attorney. First and foremost the intention of the parties as it existed at the time the powers were granted is to be ascertained. Next, and when ascertained, that intention is to be given effect. The intention is to be ascertained from the writing alone, if possible." (Internal quotation marks omitted.) Gerardo v. Laraia, Superior Court, judicial district of New Britain, Housing Session, Docket No. CVN-9809-1696-BU (January 31, 2001, Tanzer, J.). "Where [a] provision in the agreement disclaiming an agency relationship is consistent with the provisions of the rest of the agreement, that statement can and should be given credence as indicative of the intent of the parties." Beckenstein v. Potter Carrier, Inc., 191 Conn. 120, 137, 464 A.2d 6 (1983).
In the present matter, the statutory power of attorney form that was submitted with Mortgage Electronic's motion for summary judgment, which the Bourgeois defendants rely on by reference and which the plaintiff attaches to her memorandum in opposition, provides in relevant part: "Strike out and initial in the opposite box any one or more of the subdivisions as to which the Principal does NOT desire to give the agent authority." The following lines are stricken and initialed with the letters "BB:" "(D) business operating transactions; (F) estate transactions; (G) personal relationships and affairs; (H) records, reports and statements; and (I) any and all other matters." (Emphasis added.) The following lines remain clear, and thus, the power of attorney form appears to give the agent authority to enter into: "(A) real estate transactions; (B) chattel and goods transactions; (C) banking transactions; and (E) insurance transactions."
The note at issue, which was attached to the plaintiff's complaint, provides: "The Undersigns hereby represents that one of them is a limited liability corporation, organized for profit and they are all engaged in commercial pursuits, and that indebtedness incurred under the terms and conditions of this Promissory Note and the Asset Purchase Agreement is in connection with and for use in commercial, manufacturing, industrial or other nonconsumer pursuits, and that the funds received by it hereunder will be utilized in business or investment activities, and not for consumer purposes." Additionally, the last paragraph on page two of the note provides in bold face type and in relevant part: "The undersigns acknowledges that this promissory note and the transactions in connection with it constitute commercial transactions within the meaning of Section 52-278a of the Connecticut General Statutes." Finally, the note provides: "This promissory note is secured by a mortgage deed." Then the signature line provides: "B. Bourgeois Antiques, LLC, By: Barbara Bourgeois; Barbara Bourgeois, Individually; Arnaud Bourgeois, Individually." The signatures for each of the three parties appear to be identical.
Section 52-278a, which provides a definition of "commercial transaction" in the context of prejudgment remedies provides in relevant part: (a) `Commercial transaction' means a transaction which is not a consumer transaction. (b) `Consumer transaction' means a transaction in which a natural person obligates himself to pay for goods sold or leased, services rendered or moneys loaned for personal, family or household purposes." (Emphasis added.)
The mortgage deed that accompanies the note provides that it is a "commercial mortgage deed securing [a] balloon variable interest rate note," and also provides in paragraph seventeen: "The Grantor warrants and represents that all representations set forth in the Asset Purchase Agreement dated as of December 31, 2003 and in any affidavits required to be executed as a part of the . . . mortgage are true and correct and incorporated herein . . ." The mortgage deed is signed: "Barbara Bourgeois acting by Arnaud Bourgeois, her attorney in fact."
The court may not consider the alleged "asset purchase agreement" that the Bourgeois defendants submit with their motion for summary judgment. In their memorandum in support of the motion for summary judgment the Bourgeois defendants note that although the plaintiff did not append a copy of this "asset purchase agreement" to her complaint, she did produce a document titled "asset purchase agreement" that is undated, unsigned and without a signature page. Regardless, "before a document may be considered by the court in support of a motion for summary judgment, there must be a preliminary showing of [the document's] genuineness, i.e., that the proffered item of evidence is what its proponent claims it to be. The requirement of authentication applies to all types of evidence, including writings . . . Documents in support of or in opposition to a motion for summary judgment may be authenticated in a variety of ways, including, but not limited to, a certified copy of a document or the addition of an affidavit by a person with personal knowledge that the offered evidence is a true and accurate representation of what its proponent claims it to be." (Citation omitted; internal quotation marks omitted.) New Haven v. Pantani, 89 Conn.App. 675, 679, 874 A.2d 849 (2005). The "asset purchase agreement" is not certified, and the Bourgeois defendants have not provided an affidavit to attest to the document's genuineness. Moreover, the mortgage deed references an asset purchase agreement dated on December 31, 2003, and the attached document carries no such date. Thus, the court may not consider this document in ruling on the present motion for summary judgment.
The Bourgeois defendants argue that a plain reading of the power of attorney form shows Barbara Bourgeois did not intend to authorize Arnaud Bourgeois to enter into "business operating transactions" because that line was stricken and initialed by Barbara Bourgeois. Moreover, the Bourgeois defendants allege, the note and mortgage represent a business operating transaction because business operating transactions may include mortgage executions pursuant to General Statutes § 1-48(7). In her memorandum in opposition, the plaintiff disputes the recognition of this transaction as a "business operating transaction" and also suggests that the "asset purchase agreement" has not been authenticated. Moreover, in an affidavit attached to her memorandum in opposition, the plaintiff attests: "The debt which is represented by the note is comprised of a number of personal loans from me to Barbara Bourgeois and Arnaud Bourgeois as well as other personal obligations owed to me by them. Some of the funds advanced to them may have been used by them for their business purposes, however, I have always considered the debt as a personal obligation from them to me."
Section 1-48 provides in relevant part: "In a statutory short form power of attorney, the language conferring general authority with respect to business operating transactions shall be construed to mean that the principal authorizes the agent: . . . (7) to execute, acknowledge, seal and deliver any deed, assignment, mortgage, lease, notice, consent, agreement, authorization, check or other instrument which the agent deems useful for the accomplishment of any of the purposes enumerated in this section . . ."
Even though the court is unable to consider the "asset purchase agreement," which would likely illuminate upon the transaction behind the note and mortgage deed, both the power of attorney form and the note clearly and unambiguously spell out the intention behind this transaction. Thus, whether the note and mortgage are invalid as a result of the alleged deficiency in the power of attorney form and the note's language is a question of law, not fact. The power of attorney prohibits Arnaud Bourgeois from entering into "business operating transactions" on behalf of Barbara Bourgeois. Section 1-48, which defines "business operating transactions," encompasses the power to execute a mortgage. Even disregarding the bold face language at the bottom of the note that references commercial transactions in the context of prejudgment remedies, the note clearly states that the loan is for commercial purposes. Thus, Arnaud Bourgeois did not have the authority to execute the note and the mortgage deed for Barbara Bourgeois because the note represents a "business operating transaction." Moreover, even if the mortgage deed could be construed as a "real estate transaction," as defined in § 1-44, which this power of attorney form authorizes, the mortgage deed in this case was given as collateral for the note, and the note represents a business operating transaction. Since the note is invalid as against Barbara Bourgeois and R. Bourgeois Antiques, LLC, and the mortgage deed is signed only by Barbara Bourgeois through her attorney in fact, the mortgage deed is also invalid because it attempts to secure an unauthorized business operating transaction.
See footnote 12.
Section 1-48 provides in relevant part: "In a statutory short form power of attorney, the language conferring general authority with respect to business operating transactions shall be construed to mean that the principal authorizes the agent: (1) To the extent that an agent is permitted by law thus to act for a principal, to discharge and perform any duty or liability and also to exercise any right, power, privilege or option which the principal has, or claims to have, under any contract of partnership whether the principal is a general or special partner thereunder; to enforce the terms of any such partnership agreement for the protection of the principal, by action, proceeding or otherwise, as the agent deems desirable or necessary, and to defend, submit to arbitration, settle or compromise any action or other legal proceeding to which the principal is a party because of his membership in said partnership . . . (3) with respect to any business enterprise which is owned solely by the principal (A) to continue, modify, renegotiate, extend and terminate any contractual arrangements made with any person, firm, association or corporation by or on behalf of the principal with respect thereto prior to the creation of the agency . . . (7) to execute, acknowledge, seal and deliver any deed, assignment, mortgage, lease, notice, consent, agreement, authorization, check or other instrument which the agent deems useful for the accomplishment of any of the purposes enumerated in this section . . . (10) in general, and in addition to all the specific acts in this section enumerated, to do any other act or acts, which the principal can do through an agent, in connection with any business operated by the principal, which the agent deems desirable or necessary for the furtherance or protection of the interests of the principal. All powers described in this section shall be exercisable equally with respect to any business in which the principal is interested at the creation of the agency or in which the principal shall thereafter become interested, and whether operated in the state of Connecticut or elsewhere."
See footnote 11.
The note is also invalid as against R. Bourgeois Antiques, LLC because the signature line at the end of the note reads "R. Bourgeois Antiques, LLC, by Barbara Bourgeois." This indicates that Barbara Bourgeois was the signatory for R. Bourgeois Antiques, LLC. It has already been established that Arnaud Bourgeois did not have the authority to enter into business operating transactions on Barbara Bourgeois' behalf. Thus, he could not have signed for her individually or on her behalf for R. Bourgeois Antiques, LLC. Regardless, Arnaud Bourgeois did have the authority to sign the note on his own behalf, which he did, as indicated by the line at the end of the note that is signed "Arnaud Bourgeois, Individually." The only binding signature on the mortgage deed, however, is that of "Barbara Bourgeois acting by Arnaud Bourgeois, her attorney in fact." Thus, the mortgage deed is not enforceable against Arnaud Bourgeois individually, even if the note may be enforceable against him individually.
Section 1-44 provides in relevant part: "In a statutory short form power of attorney, the language conferring general authority with respect to real estate transactions shall be construed to mean that the principal authorizes the agent: (1) To accept as a gift, or as security for a loan, to reject, to demand, to buy, to lease, to receive, or otherwise to acquire either ownership or possession of any estate or interest in land; (2) to sell, to exchange, to convey either with or without covenants, to quit claim, to release, to surrender, to mortgage, to encumber, to partition or to consent to the partitioning, to revoke, create or modify a trust, to grant options concerning, to lease or to sublet, or otherwise to dispose of, any estate or interest in land . . . (9) to execute, to acknowledge, to seal and to deliver any deed, revocation, declaration or modification of trust, mortgage, lease, notice, check or other instrument which the agent may think useful for the accomplishment of any of the purposes enumerated in this section . . . (12) in general, and in addition to all the specific acts in this section enumerated, to do any other act or acts, which the principal can do through an agent, with respect to any estate or interest in land. All powers described in this section shall be exercisable equally with respect to any estate or interest in land owned by the principal at the giving of the power of attorney or thereafter acquired, and whether located in the state of Connecticut or elsewhere."
See footnote 17.
Furthermore, although the plaintiff attests that the note represents a series of personal obligations owed to her by the Bourgeois defendants, her interpretation of the transaction as a personal one, rather than a business transaction, does not raise an issue of material fact when the plain language of the power of attorney form and the note are clear and unambiguous. Moreover, the plaintiff does not argue that the language of the power of attorney form or the note should be interpreted in any other way, and, in her affidavit, the plaintiff essentially concedes that the Bourgeois defendants may have used the money for business purposes. Even looking at these documents in a light most favorable to the plaintiff, it cannot be said that Arnaud Bourgeois had the authority to enter into this transaction on behalf of Barbara Bourgeois, individually, or on behalf of R. Bourgeois Antiques, LLC by Barbara Bourgeois. Therefore, the Bourgeois defendants have established that the note is invalid as a matter of law as to Barbara Bourgeois and R. Bourgeois Antiques, LLC and, as a result, the mortgage deed, which is only signed by Barbara Bourgeois through Arnaud Bourgeois, is also invalid as a matter of law. Since a foreclosure action requires a valid, legally enforceable mortgage instrument, and the Bourgeois defendants have established that the plaintiff does not have a valid mortgage deed from Barbara Bourgeois, the court must grant summary judgment on this ground.
Since the court has already concluded the mortgage deed is invalid as a matter of law, the court need not reach the final issue of whether the mortgage deed secures a sum of zero dollars. If, however, the mortgage deed was valid and the court were to reach that question, the mortgage deed at issue would not secure a sum of zero dollars. This is because a mortgage deed and note are part of the same transaction and must be construed together. See New Haven Savings Bank v. LaPlace, supra, 66 Conn.App. 1, 12. In the present matter, the note references a debt of $128,500, even though the mortgage deed leaves the debt line blank.
CONCLUSION
For the foregoing reasons, the Bourgeois defendants' motion for summary judgment is granted.