Homecomings Fin. Network v. Starbala

Full title: HOMECOMINGS FINANCIAL NETWORK, INC. v. BEVERLY STARBALA ET AL

Court: Connecticut Superior Court Judicial District of New Haven at New Haven

Date published: Jan 8, 2009

2009 Ct. Sup. 1099 (Conn. Super. Ct. 2009)

47 CLR 11

Opinion

No. CV-02-0458985

January 8, 2009

MEMORANDUM OF DECISION RE DEFENDANT'S MOTION TO DISMISS (#180)

JAMES W. ABRAMS, Judge.

By Motion dated December 11, 2008, defendants Beverley Starbala and Steve Starbala seek to dismiss plaintiffs' foreclosure complaint for lack of jurisdiction based on the following grounds: 1) The Mortgage at issue is invalid because it contains a recitation that the Note was executed by both defendants when, in fact, it was only executed by Beverly Starbala; and 2) The Assignment to plaintiff is invalid because the volume and page number of the Mortgage was inserted after the Assignment was executed.

Plaintiff filed an Objection to defendants' Motion to Dismiss dated December 23, 2008 and the parties presented oral argument before the Court on January 5, 2009.

I Motion to Dismiss Standard

"The standard of review for a court's decision on a motion to dismiss is well settled. A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction . . . When a . . . court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light . . . In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader . . . The motion to dismiss . . . admits all facts which are well pleaded, invokes the existing record and must be decided upon that alone." (Citations omitted; internal quotation marks omitted.) Cogswell v. American Transit Ins. Co., 282 Conn. 505, 516 (2007).

II Is the Mortgage Valid? CT Page 1100

Defendants argue that because the Mortgage at issue purports to secure a debt from both Beverly Starbala and Steve Starbala when, in fact, only Beverly Starbala is party to the Note, the Mortgage does not secure the same debt as exists in the Note and is therefore invalid. Plaintiff maintains that the fact that defendants admitted plaintiff's inaccurate allegation that both parties signed the Note in their Answer serves to resolve the issue. Given the fact that both parties essentially admit that their pleadings are inaccurate on the critical issue of which parties executed the Note, the Court is mystified why neither party has seen fit to amend the defective pleadings; an action the Court would almost certainly allow: "In the interest of justice courts are liberal in permitting amendments; unless there is a sound reason, refusal to allow an amendment is an abuse of discretion." Tedesco v. Julius C. Pagano, Inc., 182 Conn. 339, 341 (1980).

Regardless, the critical issue in this matter is whether the Mortgage is, in fact, valid given that it contains the mischaracterization of the parties to the Note. In FDIC v. Hennessee, 966 F.2d 534 (10th Cir. 1992), the Court rejected a challenge to the validity of a mortgage where the discrepancy between the note and the mortgage was far greater than that which exists in this matter. The case involved a series of notes and mortgages involving several family members and one of the mortgages contained language indicating that it was securing a note from a son to his mother when, in fact, the parties to the note were the son and a lender. In rejecting the son's argument that this inconsistency rendered the note invalid, the Court looked to the intent of the parties and found that the discrepancy was essentially a "scrivener's error." Id., 538. In this case, the Court finds that the statement in the Mortgage that both parties executed the Note is essentially a scrivener's error as the parties intended that the Mortgage at issue secure the Note at issue. As a result, the Mortgage is valid.

Is the Assignment Valid?

Defendants argue that the Assignment to plaintiff is invalid because the volume and page number of the Mortgage were inserted after it was executed. A material post-execution alteration will render an assignment invalid: "In modern times, the general rule is that an alteration of an instrument, in order to discharge a party or parties, must be material." NationsBank of Virginia v. Micci, Docket No. 95-0049046, Judicial District of Ansonia/Milford at Milford (June 17, 1998, Curran, J.), citing 4 Am.Jur.2d 7, Alteration of Instruments § 3 (1995).

As a result, the determinative issue in this case is whether the post-execution insertion of the volume and page number of the Mortgage constituted a material alteration of the Assignment. In Micci, the Court found that the post-execution insertion of the name of the assignee and the date of the mortgage did not materially alter the obligations of the parties and that the Assignment was valid: "An alteration of a contract is material if it would, if effective, vary any party's legal relations with the maker of the alteration or adversely affect that party's legal relations with a third person." Id., citing 4 Am.Jur.2d 7, Alteration of Instruments § 4 (1995). It cannot be plausibly argued that the post-execution insertion of the volume and page number of the Mortgage in the Assignment at issue served to affect the legal obligations of any of the parties involved and, as a result, the Court finds the Assignment valid.

IV Conclusion

Defendants' Motion to Dismiss is hereby denied in its entirety.