MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (#122)

JAMES J. DEVINE, JUDGE.

The present action was filed by the plaintiff, Liberty Bank, against the defendants, New London Limited Partnership (partnership), Mohegan Land Company, and George H. Waterman, III. In the first count of a two-count revised complaint filed on February 21, 2006, the plaintiff alleges that on May 29, 2002, the partnership executed a promissory note in the amount of $815,000 plus interest, which was secured by a mortgage on the premises of 223 State Street, New London. The plaintiff alleges that the partnership defaulted under the terms of the note and mortgage, and the plaintiff subsequently exercised its option to accelerate the loan. The partnership failed to pay the total debt upon written demand. In count two, the plaintiff alleges that Waterman and Mohegan Land Company are liable for the debt of the partnership by virtue of a written guarantee executed on May 29, 2002. The plaintiff seeks, inter alia, foreclosure of the mortgage deed and a deficiency judgment against the defendants.

Presently before the court is the plaintiff's motion for summary judgment as to liability only filed on October 3, 2006. The motion was accompanied by a memorandum of law, as well as documentary evidence. The plaintiff contends that the submitted evidence demonstrates that there is no genuine issue of material fact that the plaintiff can establish the defendants' liability. The plaintiff further contends that the defendants' special defenses of waiver and equitable estoppel are not valid because they do not relate to the "making, validity or enforcement" of the note or mortgage. The plaintiff also argues that the presence of a nonwaiver clause in the loan documents effectively bars a waiver defense.

On November 8, 2006, the defendants filed a memorandum of law in opposition to summary judgment, accompanied by documentary evidence. The defendants do not contest the plaintiff's ability to make out a prima facie case. See Franklin Credit Management Corp. v. Nicholas, 73 Conn.App. 830, 838, 812 A.2d 51 (2002), cert. denied, 262 Conn. 937, CT Page 5928 815 A.2d 136 (2003). Rather, the defendants argue that there is a genuine issue of material fact as to the special defenses, which are legally sufficient in a foreclosure action. The parties argued the motion on January 11, 2007.

DISCUSSION

"A summary judgment, interlocutory in character, may be rendered on the issue of liability alone . . ." Practice Book § 17-50. "Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the 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. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Internal quotation marks omitted.) Neuhaus v. Decholnoky, 280 Conn. 190, 199, 905 A.2d 1135 (2006). When a defendant has asserted special defenses, "[o]nly one of [the] defenses needs to be valid in order to overcome [a] motion for summary judgment. [S]ince a single valid defense may defeat recovery, [a movant's] motion for summary judgment should be denied when any defense presents significant fact issues that should be tried." (Internal quotation marks omitted.) Union Trust Co. v. Jackson, 42 Conn.App. 413, 417, 679 A.2d 421 (1996).

MAKING, VALIDITY AND ENFORCEMENT LIMITATION ON SPECIAL DEFENSES

Before discussing the defendants' particular special defenses, it is first necessary to squarely address the plaintiff's argument that a valid special defense in a foreclosure action may not rely on behavior or conduct of the mortgagee occurring after execution of the note and mortgage. The plaintiff contends that, as a matter of law, such facts are not related to the "making, validity or enforcement" of the note or mortgage. The plaintiff has strenuously maintained this position throughout the proceedings on this motion for summary judgment, as well as in connection with a prior motion to strike the special defenses. There is no dispute that the defendants rely entirely on conduct of the mortgagee that occurred after execution of the loan documents.

"Historically, defenses to a foreclosure action have been limited to payment, discharge, release or satisfaction . . . or, if there had never been a valid lien . . . The purpose of a special defense is to plead facts that are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action . . . A valid special defense at law to a foreclosure proceeding must be legally sufficient and address the making, validity or enforcement of the mortgage, the note or both . . . Where the plaintiff's conduct is inequitable, a court may withhold foreclosure on equitable considerations and principles . . . [O]ur courts have permitted several equitable defenses to a foreclosure action." (Internal quotation marks omitted.) Chase Manhattan Mortgage Corp. v. Machado, 83 Conn.App. 183, 187-88, 850 A.2d 260 (2004).

It is recognized that the plaintiff's argument is not without support in language used by some Superior Court decisions discussing the extent of the "making, validity or enforcement" limitation on special defenses. In fact, this court itself has relied on language used by other Superior Court judges that have construed the limitation to bar special defenses or counterclaims relying on "acts or procedures" of the mortgagee, "behavior of the mortgagee," and events developing post-execution and throughout "the course of the relationship" between the mortgagor and mortgagee. See, e.g., Mortgage Electronics Registration Systems, Inc. v. Venditto, Superior Court, judicial district of New London, Docket No. 4002228 (October 28, 2005, Devine, J.) ( 40 Conn. L. Rptr. 209).

It is highlighted, however, that while this construction of "making, validity or enforcement" has been utilized by Superior Court judges for well over a decade; see Morgan Guaranty Trust Co. v. Davis, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 94 0141885 (November 1, 1995, Nadeau, J.); it has not been adopted by our Supreme Court or Appellate Court. It is also noted that some Superior Court judges have rejected a construction of "making, validity or enforcement" that prevents a court from considering post-execution conduct of the mortgagee. See, e.g., Ocwen Federal Bank FSB v. Waller, Superior Court, judicial district of Fairfield, Docket No. CV 03 0401138 (March 16, 2004, Stevens, J.) ("Simply because the allegations concern events after the execution of the mortgage does not make the claims automatically meritless . . . Indeed, by definition, the `enforcement' of a mortgage may involve conduct occurring after the execution of the mortgage."); Fleet National Bank v. Squillacote, Superior Court, judicial district of New Britain, Docket No. CV 99 0497487 (October 30, 2003, Cohn, J.) ( 36 Conn. L. Rptr. 270) ("the manner of collection of this note in default does impact the enforcement of the note, and [the court] will proceed to consider the equitable defenses on their merits").

It appears to this court that, notwithstanding the language used by some Superior Court decisions, a court may consider the mortgagee's conduct throughout the course of the parties' relationship. The basis of this conclusion is three-fold. First, due consideration must be given to the broad equitable powers of the trial court. "An action of foreclosure is peculiarly an equitable action . . . Hence, the court may consider all relevant circumstances to ensure that complete justice is done . . . The determination of what equity requires in a particular case, the balancing of the equities, is a matter for the discretion of the trial court . . . Discretion means a legal discretion, to be exercised in conformity with the spirit of the law and in a manner to subserve and not to impede or defeat the ends of substantial justice . . . For that reason, equitable remedies are not bound by formula but are molded to the needs of justice." (Citations omitted; internal quotation marks omitted.) McKeever v. Fiore, 78 Conn.App. 783, 788, 829 A.2d 846 (2003).

Second, by definition, some recognized special defenses necessarily involve post-execution behavior of the mortgagee. Examples include abandonment of security; see Glotzer v. Keyes, 125 Conn. 227, 5 A.2d 1 (1939); and laches. See Lasalle National Bank v. Shook, 67 Conn.App. 93, 98-99, 787 A.2d 32 (2001). Third, our Supreme Court and Appellate Court have clearly taken into consideration post-execution conduct of the parties when evaluating defenses to a foreclosure action. See, e.g., Thompson v. Orcutt, 257 Conn. 301, 777 A.2d 670 (2001) (although execution of mortgage was not tainted, doctrine of unclean hands applied where subsequent fraudulent behavior in bankruptcy court allowed plaintiff to bring foreclosure action); McKeever v. Fiore, supra, 78 Conn.App. 783 (2003) (court upheld application of the doctrine of unclean hands based on facts arising post-default and during the course of litigation); Glotzer v. Keyes, supra, 125 Conn. 227 (abandonment of security); Petterson v. Weinstock, 106 Conn. 436, 444 (1927) (in holding that the defendant's mistake subsequent to execution of the loan documents may be a defense to foreclosure, the court explained that "[t]he conduct of the parties in bringing about the present situation should be examined").

Simply stated, allowing a defendant to craft a defense that is based on facts associated with the mortgagee's post-execution behavior is not inimical to the requirement that a special defense in a foreclosure action relate to the "making, validity or enforcement" of the note or mortgage. Such behavior of the mortgagee throughout the course of the relationship may be directly related to the "enforcement" of the note or mortgage. That is, given an appropriate factual predicate, the court may conclude that it would be inequitable to allow enforcement in light of the mortgagee's behavior. Of course, it may often be that post-execution conduct of the mortgagee will not provide a sufficient basis for a special defense. This will be a result of a failure to satisfy the requirements of Practice Book § 10-50, not a result of a per se prohibition on inquiry into the course of the relationship between the mortgagor and mortgagee.

EQUITABLE ESTOPPEL DEFENSE

The next issue is whether there exists a genuine issue of material fact as to a special defense in this case. The defendants have asserted the defenses of equitable estoppel and waiver. Equitable estoppel is a valid special defense in a foreclosure action. See Barasso v. Rear Still Hill Road, LLC, 81 Conn.App. 798, 805, 842 A.2d 1134 (2004). "Equitable estoppel is a doctrine that operates in many contexts to bar a party from asserting a right that it otherwise would have but for its own conduct . . . In its general application, we have recognized that [t]here are two essential elements to an estoppel — the party must do or say something that is intended or calculated to induce another to believe in the existence of certain facts and to act upon that belief, and the other party, influenced thereby, must actually change his position or do some act to his injury which he otherwise would not have done." (Citations omitted; internal quotation marks omitted.) Glazer v. Dress Barn, Inc., 274 Conn. 33, 60, 873 A.2d 929 (2005). "Strong public policies have long formed the basis of the doctrine of equitable estoppel. The office of an equitable estoppel is to show what equity and good conscience require, under the particular circumstances of the case, irrespective of what might otherwise be the legal rights of the parties . . . No one is ever estopped from asserting what would otherwise be his right, unless to allow its assertion would enable him to do a wrong . . ." (Citation omitted; internal quotation marks omitted.) W. v. W., 256 Conn. 657, 661, 779 A.2d 716 (2001).

The defendant Waterman has submitted a sworn affidavit attesting to the facts underlying the special defenses. While the plaintiff may dispute some of Waterman's averments, they must be taken as true for purposes of deciding the motion for summary judgment. Waterman claims the relevant facts are as follows.

Prior to the loan, the subject property was appraised by the mortgagee to be $1.25 million. Subsequent to the loan, the partnership has invested over $2.5 million of capital beyond the debt on renovating and improving the subject property. Following these renovations, the bank appraised the property at slightly over $2 million. Therefore, the appraised value of the property is over twice the amount remaining due under the terms of the note. Originally and for sometime after the date of the loan, Waterman's primary dealing with the plaintiff was through Paul LaMonica who was a loan officer and vice president of the bank. LaMonica "appreciated and accepted the fact that due to the condition of the building and its prior history that the cash flow on the property was tight and depended upon the timely payment of rent by the tenants." LaMonica also knew that the partnership "was investing substantial funds into the building to make capital improvements increasing its value." The partnership "tendered and the plaintiff accepted without reservation or protest at least twenty (20) monthly payments over a three year period that were late according to the strict terms of the loan . . . The bank accepted each of these payments without any protest and further charged [the partnership] a late fee for the privilege of paying late."

"On several occasions, beginning early in the relationship with the bank, [Waterman] spoke with LaMonica to discuss the fact that a payment would be late or that a monthly payment had not been made by the [tenth] of the month. On each of these occasions LaMonica and [Waterman] agreed upon a date when the subject payment would be made without a mention of default. LaMonica's concern was that the monthly payment be made before the end of the month. LaMonica never indicated that the bank was insisting that the monthly payments be made by the due date or that the loan was in poor stead with the bank because payments were being made late. In fact, LaMonica and [Waterman] discussed the bank making an additional loan so that [the partnership] could renovate the building further, which discussions ended when LaMonica left the bank. In reliance on these conversations, [Waterman] continued to properly tender monthly payments in accordance with the well-established dealings between [the partnership] and the bank."

The plaintiff did not give the defendants notice that this course of dealing would no longer be acceptable. Waterman further stated in his affidavit that "had I known that the plaintiff would strictly interpret the due date identified in the loan documents, notwithstanding assurances from the plaintiff that this would not be the case, and contrary to our established course of conduct, I would have made timely payments rather than risk acceleration of the loan." The statement that the defendants would have made timely payment if notified of the change is supported by the substantial amount of money that was apparently available for capital improvements ($2.5 million over a three-year period), as well as the attempt to bring the account current shortly after the loan was accelerated, which is evidenced by a copy of the check attached to the defendants' objection to summary judgment.

The submitted evidence demonstrates a genuine issue of material fact exists regarding the special defense of equitable estoppel. The plaintiff's consistent pattern of accepting late payments without protest, combined with the surrounding circumstances, provides evidence of conduct that may have induced the defendants to believe in the existence of certain facts, i.e., that the plaintiff would continue its collection of the debt in accordance with established past practice. In other words, based on the course of the relationship, the defendants may have reasonably been led to believe that, absent some type of notice to the contrary, the plaintiff would continue to be satisfied with accepting a late payment along with a late fee. Furthermore, Waterman's averments indicate that the defendants changed their position in reliance on their belief regarding the plaintiff's conduct. The defendant stated that if the defendants had known that the plaintiff would not continue being lenient, then the payment would have been made within the first ten days of the month.

WAIVER DEFENSE

The same facts that support the equitable estoppel defense, also create a genuine issue of material fact as to the special defense of waiver, which is a valid defense in a foreclosure action. See Southbridge Associates, LLC v. Garofalo, 53 Conn.App. 11, 20, 728 A.2d 1114, cert. denied, 249 Conn. 919, 733 A.2d 229 (1999). "Waiver is the intentional relinquishment or abandonment of a known right or privilege . . . [V]arious statutory and contract rights may be waived . . . Waiver is based upon a species of the principle of estoppel and where applicable it will be enforced as the estoppel would be enforced . . . Estoppel has its roots in equity and stems from the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed . . . Waiver does not have to be express, but may consist of acts or conduct from which waiver may be implied . . . In other words, waiver may be inferred from the circumstances if it is reasonable to do so." (Citation omitted; internal quotation marks omitted.) C.R. Klewin Northeast, LLC v. Bridgeport, 282 Conn. 54, 87 (2007).

"Waiver is a question of fact." AFSCME, Council 4, Local 704 v. Dept. of Public Health, 272 Conn. 617, 622, 866 A.2d 582 (2005). Putting aside the effect of the nonwaiver clause for the moment, Waterman's affidavit presents a factual predicate for a finding of implied waiver arising from acts and conduct. Under these circumstances, the issue of waiver is not amenable to summary judgment.

This court's decision regarding the potential applicability of equitable estoppel and waiver in the present case is consistent with the position of the Restatement of the Law, Third, Property (Mortgages), § 8.1. Section 8.1(d), provides in relevant part: "A mortgagor may defeat acceleration and reinstate the mortgage obligation by paying or tendering to the mortgagee the amount due and owing at the time of tender in the absence of acceleration and by performing any other duty in default the mortgagor is obligated to perform in the absence of acceleration if . . . (2) the mortgagee has waived its right to accelerate; or (3) the mortgagee has engaged in fraud, bad faith, or other conduct making acceleration unconscionable." The comments explain that "under Subsection (d)(2), a court may relieve a mortgagor from the consequences of acceleration and permit reinstatement of the mortgage where it determines that the mortgagee waived its rights to accelerate. However, because mortgagee forbearance should not be discouraged, a waiver will not be easily established. Thus, a mere failure to accelerate after one or two payment defaults will not operate as a waiver of the mortgagee's right to accelerate because of later defaults . . . On the other hand, waiver is appropriately found where there has been a consistent prior pattern of acceptance of late payments by the mortgagee . . ."

NONWAIVER CLAUSES

The next issue is whether the presence of nonwaiver clauses in the loan documents conclusively bar otherwise viable defenses of equitable estoppel and waiver. The relevant clauses in the note and mortgage are as follows. Paragraph 20 of the mortgage deed states: "It is agreed that the grantee's failure to exercise any rights hereunder upon any default shall not be deemed to be a waiver or relinquishment of its right to do so with respect to said default or upon any subsequent default." Paragraph 9 of the note states: "The liability of Maker and any subsequent endorser, guarantor or other accommodation maker under this Note is unconditional and shall not be affected by an extension of time, renewal, waiver or any other modification whatsoever, granted or consented to by the holder. Any failure by the holder to exercise any right it may have under this Note is not a waiver of the holder's right to exercise the same or any other right at any other time." Finally, paragraph 10 of the note states, "No agreement by the holder to change, waive or release the terms of this Note will be valid unless it is in writing and signed by Maker and the holder."

There is no appellate authority on the precise issue of whether a nonwaiver clause conclusively bars the defenses of equitable estoppel and waiver in the context of a foreclosure action. Our Supreme Court's decisions in S.H.V.C., Inc. v. Roy, 188 Conn. 503, 450 A.2d 351 (1982) and Christensen v. Cutaia, 211 Conn. 613, 560 A.2d 456 (1989) tend to indicate that a nonwaiver clause would bar both defenses. Some Superior Court judges have in fact interpreted Christensen to bar waiver defenses in mortgage foreclosure actions. See, e.g., Ocwen Federal Bank FSB v. Weinberg, Superior Court, judicial district of New London, Docket No. 547629 (August 11, 1999, Mihalakos, J.); Chase Manhattan Bank v. Holmberg, Superior Court, judicial district of Fairfield, Docket No. CV 01 384648 (July 24, 2002, Thim, J.). As discussed below, this court finds both S.H.V.C., Inc. and Christensen to be materially distinguishable from the present case, and therefore concludes that the presence of nonwaiver clauses in the loan documents does not present a complete bar to the defenses of waiver and equitable estoppel.

In S.H.V.C., Inc. v. Roy, supra, 188 Conn. 503, the plaintiff sought to remove the defendant for late payment of rent. Id., 505. Under a written lease, the plaintiff had the right to take this action if the defendant failed to pay rent before the tenth day of the month. Id. A provision of the lease stated that the plaintiff may exercise this right "notwithstanding any former waiver." Id. It was noted that the lease at issue came within the statute of frauds and, therefore, any modification to material terms would have to be in writing. Id., 506. The court explained that "[t]he nonwaiver clause at issue has the effect of assuring that certain conduct, such as forebearance, may not carry the legal consequences which might ensue absent prior agreement." Id. The court highlighted that "the trial court found [the nonwaiver clause] to be clearly bargained for by the parties." Id., 507. The court rejected the defendant's argument that prior notification of strict enforcement was necessary, as the nonwaiver clause "provided just such a warning." Id.

In Christensen v. Cutaia, supra, 211 Conn. 613, our Supreme Court upheld the granting of summary judgment in an action for recovery under promissory notes. The notes contained nonwaiver clauses. The defendant's payments had been untimely from the outset. Id., 616. Importantly, after receiving several late payments, "the plaintiff informed the defendant, directly as well as through an employee, that he would no longer tolerate late payment." Id. During litigation, the defendant argued that waiver could be inferred from "the plaintiff's actions in accepting and cashing previous late payments." Id., 619. The court found this to be "untenable in light of the language in the notes expressly providing that `[f]ailure of the holder hereof to assert any right herein shall not be deemed to be a waiver thereof.' While inconsistent conduct may, under certain circumstances, be deemed a waiver of a right to acceleration, the insertion of a nonwaiver clause is designed to avoid exactly such an inference. The defendant drafted these notes himself and we therefore construe the included clause against him strictly . . . Further, the notes provided that any waiver shall not `be effective, unless in writing signed by the party against whom enforcement of any waiver is sought.' Neither the defendant's pleadings nor his affidavits have alleged the existence of any such writing." (Citation omitted.) Id., 619.

Both S.H.V.C., Inc. and Christensen are distinguishable from the present case. In S.H.V.C., Inc. v. Roy, supra, 188 Conn. 503, the court explicitly distinguished a mortgage foreclosure action from the coverage of its holding. In reaching its holding on the nonwaiver clause, the court noted that a case involving a mortgage foreclosure is "readily distinguishable" from the case before it. Id., 507. The court explained: "[A] mortgage foreclosure . . . where giving effect to the nonwaiver clause would result in a much harsher result than in the present case, is a situation where courts are traditionally more lenient." Id. S.H.V.C., Inc. v. Roy, supra, 188 Conn. 503, is also distinguishable because the lessee relied solely on the acceptance of prior late payments. Id., 511. The present defendants rely on more than silent receipt of tardy payments. Waterman's affidavit indicates that communications with LaMonica supported the belief that late payments would not be problematic so long as they were tendered before the end of the month. This belief was also buttressed by ongoing discussions about the plaintiff making an additional loan. This may have contributed to a belief that the status quo was quite acceptable.

Christensen v. Cutaia, supra, 211 Conn. 613, is distinguishable on multiple grounds. First, it involved an action on promissory notes only, not a foreclosure action. Second, the defendant in that case drafted the notes and, therefore, the nonwaiver clause was interpreted "against him strictly." Id., 620. In the present case, it appears that the loan documents submitted to this court are standard form contracts drafted by the plaintiff. No evidence has been presented to the contrary. Finally, and most importantly, the defendant in Christensen was directly informed that late payments would no longer be tolerated. Id., 616. In light of Justice Peters' dissent in S.H.V.C., Inc., there can be little doubt that this fact is crucial to the holding in Christensen, which was also written by Justice Peters. The importance of prior notice before changing well-established practices cannot be understated, as it is at the heart of the law of waiver and equitable estoppel. See 13 S. Williston, Contracts (4th Ed. 2000) § 39:20, p. 581 ("having once waived strict compliance with the terms of a contract, a party can assert its right to strict compliance in the future only by notifying the other party of its intent to do so . . ."). In short, reasonable notice defeats claims of equitable estoppel and waiver because it demonstrates no relinquishment, and makes any future reliance unreasonable. In the present case, there was no notice given to the defendants.

Based on the distinguishing features of the present case, this court holds that the nonwaiver clauses do not conclusively bar the defendants' special defenses. This conclusion is supported by the Restatement of the Law, Third, Property (Mortgages), § 8.1, which includes the following discussion in the comments section: "Mortgagees sometimes seek to avoid the waiver defense to acceleration by including an `anti-waiver' provision in the mortgage documents. While such a provision may, in close cases, tip the balance against a finding of waiver . . . it usually will not be dispositive on the waiver issue. For example, its effect will be negated where the pattern of accepting late payments is sufficiently continuous and prolonged to justify the conclusion that the mortgagee has abandoned or waived the protection of the provision."

Other jurisdictions have reached a similar conclusion regarding nonwaiver clauses. See, e.g., Sanson v. Gonzales, 142 Ariz. 30, 688 P.2d 676 (Ariz.Ct.App. 1984); Nassau Trust Co. v. Montrose Concrete Products Corp., 56 N.Y.2d 175, 451 N.Y.S.2d 663, 436 N.E.2d 1265 (1982); Fisher v. Tiffin, 275 Ore. 437, 551 P.2d 1061 (1976). The reasoning of courts finding a waiver defense viable despite a nonwaiver clause is exemplified in Woods v. Monticello Development Co., 656 P.2d 1324 (Colo.Ct.App. 1982), where the court held that "non-waiver provisions do not necessarily preclude a waiver by course of performance . . ." Id., 1327. "The trial court found the [non-waiver] clause precluded a finding of waiver by course of conduct. The weight of authority conflicts with this view, and rather is to the effect that an anti-waiver clause, like any other term in the contract, is itself subject to waiver or modification by course of performance . . . We adopt the above rule for Colorado, and find that the buyers should have the opportunity to prove, if [they] can, that [the seller's] conduct in toto regarding timeliness was so pervasive that in the eyes of a reasonable debtor it spoke louder than [the] word . . . of the `anti-waiver' clause, which in effect counseled against reliance on conduct indulging default." (Citation omitted; internal quotation marks omitted.) Id.

Just as a court of equity has the power to relieve a mortgagor from the effect of an operative acceleration clause, so may the court relieve the mortgagor from the effect of a nonwaiver clause if there is a sufficient factual predicate. As discussed above, it is emphasized here that the defendants rely on facts beyond the mere silent acceptance of late payments to establish their defenses. They point to the facts and circumstances surrounding the late payments, particularly the communications between LaMonica and Waterman. The court, as fact finder, may agree with the defendants that the circumstances either amount to a waiver or give rise to an equitable estoppel. This is true notwithstanding the nonwaiver clauses, which, although part of the court's inquiry, should not be the end of the inquiry.

Based upon the above analysis, the defendants have asserted valid special defenses in this foreclosure action. They have also presented the court with documentary evidence demonstrating a genuine issue of material fact as to the defenses. It should be left to the trier of fact to determine whether the defendant can prove either defense by a fair preponderance of the evidence.

ORDER

The plaintiff's motion for summary judgment #122 is hereby denied.