Opinion
No. CV-03-0081402
December 7, 2004
MEMORANDUM OF DECISION RE MOTION FOR CONTEMPT ( # 138)
This is a foreclosure action in which a judgment of foreclosure by sale was entered on December 15, 2003 with a sale date set of February 28, 2004. Over the objection of a lien holder, JM Builders, LLC, on April 5, 2004 the court approved the committee's report and the sale of the property to the Plaintiff, JP Morgan Chase Bank, as Trustee. Notice of the court's order was sent by the court on April 15, 2004. The bond for deed required that "transfer of the title be within thirty (30) days from either the approval of the sale by the Superior Court or the date of the final determination of any appeal from such approval, or any other time as the Court may order." On April 23, 2004 the Committee deed approved by the court was recorded in the land records. On April 26, 2004 JM Builders filed an appeal from the decision approving the sale. The Plaintiff filed a Motion to Terminate the Stay on May 10, 2004 which was denied by the Court on July 22, 2004. On October 20, 2004, after discovering that the committee deed had already been recorded and being unable to resolve the matter with the Plaintiff or the Committee, JM Builders filed a Motion for Contempt, requesting that an order of contempt be entered against the Plaintiff for violation of the automatic stay imposed pursuant to Practice Book § 61-11 and this court's denial of the termination of the automatic stay.
The Plaintiff objects to the Motion for Contempt claiming that a stay is in effect and therefore the court cannot act on the Motion.
It is clear to this court that the approval of the sale is an appealable decision to which the automatic stay provisions of the Practice Book attach. "`The [judicial] sale is not absolute until confirmed. The order of confirmation gives the judicial sanction of the court, and when made it relates back to the time of the sale . . .' (Emphasis added; internal quotation marks omitted.). Raymond v. Gilman, 111 Conn. 605, 613-14, 151 A. 248 (1930), `[D]ecisional law has established that the right of redemption survives the auction and is not foreclosed out until the court approves the sale.' D. Caron, Connecticut Foreclosures (2d Ed. 1989 Sup. 1995-96) § 9.02B, p. 150, citing Raymond v. Gilman, supra, 613; see also In the Matter of Loubier, 6 B.R. 298, 303 (D.Conn. 1980) ('[I]n Connecticut, the law is that the rights of a mortgagor in mortgaged property are terminated by confirmation of a foreclosure sale . . . When the foreclosure sale . . . was confirmed by [the] superior court . . . at that moment, [the mortgagor's] equity of redemption in the property was terminated . . .'). This is so because `[o]nly after a sale has been confirmed and ratified by the court does it become complete.' Citicorp Mortgage, Inc. v. Burgos, 227 Conn. 116, 120, 629 A.2d 410 (1993); see also Mariners Savings Bank v. Duca, 98 Conn. 147, 152-53, 118 A. 820 (1922) ('It has been generally held that an equitable judicial sale requires confirmation or ratification before it can become complete and create legal rights and liabilities between or among the parties legally interested . . . For until confirmation, the bids are mere offers to purchase, the contract is not complete, and the purchaser cannot be in default thereunder . . . [T]he ratification of the sale is in a way the focal point of the proceeding after the judgment therein.' [Citations omitted; internal quotation marks omitted.]); Hartford Federal Savings Loan Assn. v. Tucker, 13 Conn.App. 239, 247, 536 A.2d 962, cert. denied, 207 Conn. 805, 540 A.2d 373 (1988) ('[u]nder Connecticut law, a judicial sale becomes complete and creates a legal right to obligations among parties when it is confirmed and ratified by the court') . . . This case law is consistent with the implicit assumption in a related statute, which recognizes that the foreclosed property may be redeemed at any time prior to the confirmation of the sale by the trial court. Specifically, General Statutes § 49-25 provides in pertinent part that `[u]pon motion of the owner of the equity of redemption, the court shall appoint a second appraiser in its decree. If the plaintiff is the purchaser at sale, or if the property is redeemed at any time prior to the approval of the sale, or if for any reason the sale does not take place, the expense of the sale and appraisal or appraisals shall be paid by the plaintiff and be taxed with the costs of the case . . .' (Emphasis added.)" Washington Trust Company v. Smith, 241 Conn. 734, 742-3 (1997).
Practice Book § 61-11 provides that: "Except where otherwise provided by statute or other law, proceedings to enforce or carry out the judgment or order appealed from shall be automatically stayed until the time to take an appeal has expired." General Statutes § 49-26 also provides that "[w]hen a sale has been made pursuant to a judgment therefor and ratified by the court, a conveyance of the property sold shall be executed by the person appointed to make the sale, which conveyance shall vest in the purchaser the same estate that would have vested in the mortgagee or lienholder if the mortgage or lien had been foreclosed by strict foreclosure, and to this extent such conveyance shall be valid against all parties to the cause and their privies, but against no other persons. The court, at the time of or after ratification of the sale, may order possession of the property sold to be delivered to the purchaser and may issue an execution of ejectment after the time for appeal of the ratification of the sale has expired."
Pursuant to General Statutes § 49-26, once the sale has been approved, the judgment is carried out by execution of the conveyance. Although the court may order possession in the purchaser at the time of the ratification of the sale as well, the statute provides that no action to physically oust anyone of possession can occur until the time for appeal has expired. Therefore any proceeding to enforce the judgment, that is, execution of the conveyance or ejectment, cannot occur until after the appeal period has expired or the automatic stay has been lifted. This is consistent with the provisions of the Practice Book.
In City of Norwich v. Avery, Superior Court, judicial district of New London at Norwich (Martin, J., January 16, 2001) the court was faced with the same factual situation as presented here. A foreclosure sale was ordered and held, a closing took place and the deed recorded, and then an appeal from the approval of the sale was filed. In answer to a request for advice as to how legal title to the property should be held pending the appeal of the approval of the sale, the court held: "`Under Connecticut law, a judicial sale becomes complete and creates a legal right to obligations among parties when it is confirmed and ratified by the court.' Hartford Federal Savings Loan Assn. v. Tucker, 13 Conn.App. 239, 247, 536 A.2d 962 (1988); see also General Statutes § 49-24 through § 49-26. Once a closing has been held where the purchaser has taken title to the subject premises, the purchaser is the owner of the property. Devane v. Cannon, et al, Superior Court, judicial district of New Haven Housing Session, Docket No. 9803-54055 (April 17, 1998, Levin, J.). In the present case, not only has the court confirmed and ratified the sale of the property, but title of the property has been transferred to the purchaser and the deed has been recorded. Therefore, title remains in the possession of the owner of the property, the City of Norwich, pending the appeal of the approval of the sale of the property." The decision does not indicate whether a motion to terminate the automatic stay had been acted upon.
However, in Connecticut Savings Bank v. Howes, 9 Conn.App. 446, 447-8 (1987), the court had approved a committee sale of the defendant's property at public auction pursuant to an earlier judgment of foreclosure. The defendant appealed from the approval of the committee sale and allowance of fees and expenses but the appeal was dismissed. Thereafter, the defendant filed a motion to open the trial court judgment previously appealed and the motion was denied for lack of jurisdiction. On appeal from that decision the Appellate Court held: "Since absolute title has passed to the plaintiff, the remedy which the defendant seeks by appeal is no longer available. There is no practical relief which this court could grant to the defendant. The appeal is, therefore, moot. See Connecticut Foundry Co. v. Intl. Ladies Garment Workers Union, 177 Conn. 17, 19, 411 A.2d 1 (1979); cf. Schroeter v. Salvati, 6 Conn.App. 622, 506 A.2d 1083 (1986)."
Thus the action of conveying the title to the purchaser pursuant to General Statutes § 49-26 could moot any appeal since it serves to vest title in the purchaser. Obviously such an action is in contravention of the automatic stay provisions of the Practice Book. In Devane v. Cannon, Superior Court, judicial district of New Haven Housing Session, Docket No. SPNH 9803-54055 (Levin, J., April 17, 1998), the purchaser in a foreclosure sale took title prior to an appeal being brought from denial of the prior owner's motion for advice requesting that the court allow him to redeem the property. The court there held that an order ratifying a foreclosure sale is a final judgment to which the provisions of Practice Book § 61-11 applies and that "[a]n execution and delivery of the committee's deed to the purchaser would have been violative of the automatic stay mandated by [§ 61-11] and subject to defeasance."
Therefore the automatic stay provisions of the Practice Book have been violated here. Since the parties affected by the action of the committee in prematurely conveying title to the property are before the court in that the Plaintiff was the successful purchaser, the court can enter an appropriate order to remedy the violation. The Plaintiff's position that the court cannot rule on the Motion for the Contempt because of the automatic stay is without merit. Such a position would leave the court powerless to remedy a clear violation of a stay, and thus the rules as established by the Superior Court.
It is therefore ordered that the Plaintiff execute and word a deed conveying the subject property back to the Committee. It is also ordered that the Plaintiff pay JM Builders, LLC, $1,000 as attorneys fees. Both orders to be complied with within 10 days of the date of this decision.
Jane S. Scholl, J.