Opinion
No. CV 03-0824431
April 3, 2007
MEMORANDUM OF DECISION
In this action for partition the primary issue is the distribution of the proceeds of the sale of the subject property.
The facts are as follows:
On March 10, 1969 Patricia D. Nelson and John F. Catalano each inherited a one-half interest in the property at 24-26 Henry Street, Manchester, Connecticut (hereinafter "the property"), one-half of which each occupied. Subsequently Nelson transferred a life interest of the property to her mother Josephine Dickenson.
On October 26, 1994 John F. Catalano executed a quitclaim deed conveying his interest in the property to himself, his son Anthony E. Catalano and his daughter-in-law Kimberly A. Catalano in survivorship.
On February 21, 1995 a judgment lien was recorded in the Manchester land records against the interest of John F. Catalano in favor of Sears Roebuck, Inc. (hereinafter "Sears").
On May 11, 1995, a judgment lien was recorded in the Manchester land records against the interest of John F. Catalano in the property in favor of G.E. Capital Consumer Card, a/k/a G.E. Card Services (hereinafter "G.E. Capital").
3. On October 26, 1999, a judgment lien was recorded on the Manchester land records against the interest of John F. Catalano in the property in favor of Southern New England Telephone Company (hereinafter "SNET").
On May 27, 2001 the Town of Manchester filed a notice of lien for personal property tax against the interests of Anthony E. Catalano and Kimberly A. Catalano which has been released.
On February 5, 2001, John F. Catalano died intestate leaving his interest in the property, by virtue of the survivorship quit claim deed, to Anthony E. Catalano and Kimberly A. Catalano.
Thus, at the time this action was commenced, title to the property at 24-26 Henry Street, Manchester, Connecticut was held as follows: one-half interest held by plaintiff Patricia Nelson, subject to a life interest in favor of Patricia's mother Josephine Dickenson; one-quarter interest held by Anthony Catalano; and one-quarter interest held by Kimberly A. Bernard, formerly known as Kimberly A. Catalano, their one-quarter interests being subject to the judgment lien of Sears, G.E. Capital, and SNET filed against the former interest of John F. Catalano.
Plaintiff Nelson/Dickenson commenced this petition action in February 2003 claiming defendants Anthony Catalano and Kimberly Catalano had not paid their proportionate share of the expenses relating to the property. On April 23, 2005, David O'Brien was allowed to be cited in as a party defendant by virtue of a lien he claimed he had against the property and he was listed as an added defendant in the amended complaint.
All of the parties, not defaulted, stipulated to a partition sale, and a judgment to that effect entered on June 20, 2006. The sale took place on September 9, 2006 and the highest bidder was Miguel Quinones for the price of $165,000.00. The court approved the sale and awarded committee fees and expenses of $3,773.00.
The court set the date of December 15, 2006 by which claims had to be filed against that $165,000 on deposit in court. The following filed claims within that time limit: plaintiff Nelson/Dickenson based on payment of a disproportionate share of expenses for maintaining the property, in the amount of $11,212.46, plus attorneys fees of $8,445.86; David O'Brien based upon acknowledgment of a debt owed to him by Anthony Catalano in the amount of $32,120, which instrument was recorded in the Manchester Land Records; Kimberly Bernard based upon claims for unpaid child support owed by Anthony Catalano, orthodontist bills, and other expenses in connection with settling the estate of John F. Catalano, and repairs to her and Anthony's portion of the house. The judgment lienors, except SNET, did not file claims.
However, before the validity of these filed claims can be determined and a decision made as to the disposition of the funds deposited in court, a very important issue has to be decided. While this is a partition action, the committee appointed by the court to conduct the sale treated it as a foreclosure action. The committee did not disclose to bidders at the sale that there were prior judgment liens on the property against the interest of John Catalano. The successful bidder and purchaser, Miguel Quinones, clearly paid the purchase price in anticipation that he was receiving clear title. The court itself was complicit in the misconception of the purchaser by its accepting the committee's report and approving the deed.
Accordingly, in exercising its power of equity, the court convened all the interested parties and apprised them that this partition action did not foreclose or eliminate any of the judgment liens. It instructed the committee to obtain releases of those judgment liens by promising to pay for them out of monies held on deposit by this court. This has been done and the releases have been obtained, resulting in the following amounts due to the following judgment lien owners: Sears, $10,726.21; G.E. Capital, $9,400; SNET, $553.64, totaling $20,679.85.
Turning then to the claims of the parties:
I. The Nelson/Dickenson Claim
Dickenson, holding a life interest in one-half of the property, seeks reimbursement for expenses she incurred in connection with the property that should have been borne equally by her and the Catalano/Bernard side, but was, in fact, paid solely by her.
Our law it is well settled that "when one co-tenant has paid a debt or obligation for the benefit of the common property, . . . he is entitled as a matter of right to have his co-tenants refund to him their proportionate shares of the amounts paid." 20 Am.Jur.2d, Co-Tenancy and Joint Ownership, § 58. That principle was adopted by the Connecticut Supreme Court in Azzolina v. Sons of Italy, 119 Conn. 681, 692 (1935), wherein the court said:
Actions for contribution are based upon the principle, equitable in origin but now recognized in courts of law, where one person has been compelled to pay money which others were equally bound to pay, each of the latter in good conscience should contribute to the proportion which he ought to pay of the amount expended to discharge the common burden or obligation.
See also, Chlasta v. Menard, CV 93-04582955, judicial district of Hartford/New Britain at New Britain (Lavine, J., August 19, 1994).
At the trial, plaintiff Dickenson produced evidence to the effect that she had paid utility bills, real estate taxes, homeowner's insurance, and water bills totaling $22,287.43. The court finds she is entitled to half that sum, or $11,143.71 reimbursed from the Catalano/Bernard share of the property.
In addition, the plaintiffs Nelson/Dickenson seeks attorneys fees in the amount of $8,491.36 that they incurred in bringing this action. They argue that this is equitable action, and it is only just that Catalano and Bernard share in the legal fees incurred, because without the institution of this action, the property would not have been sold and the funds would not have been generated.
The Appellate Court has recently affirmed the award of attorneys fees on equitable grounds. In Mangiante v. Niemiec, 98 Conn.App. 567, 575 (2006), the court said,
In light of the practice of our courts in allowing equitable exceptions to the American Rule and on the grant of certain equitable powers under the act [Connecticut Uniform Transfers to Minors Act], we are persuaded that the [trial] court did not abuse its discretion in awarding attorneys fees to preserve the value of the trust to the plaintiff in its entirety. The beneficiary of an account established pursuant to the act should not have to bear the costs of the litigation necessary to establish a custodian's breach of her fiduciary duty owed to the minority beneficiary.
In the instant case, the court notes that, in contrast to the statutory allowance of fees in foreclosure actions (Conn. Gen. Stat. § 52-249), no such statute allows attorneys fees in partition actions. Nor does the plaintiff cite to any cases awarding attorneys fees in such actions. In light of the long history of partition actions in our state and the lack of any authority for an award of counsel fees, the court declines to award them to the plaintiff in this case.
II. The O'Brien Claim
At the outset it is important to state the pertinent law. Conn. Gen. Stat. § 52-502(b) provides:
The proceeds from the [partition] sale after deducting such reasonable costs and expenses as the court directs, shall be distributed by order of the court among all persons interested in the property, in proportion to their interest.
(Emphasis added.)
There are no cases applying the term "persons interested in the property" under Section 52-502(b). However, under Section 52-500 persons interested in the property have included those having an option to purchase the property ( Williams v. Morton, 97 Conn. 514, 517-8 (1922)), and those having a mortgage on the property ( Skadden, Arps, Slate, Meacher Flom v. McGrath, CV 121253, judicial district of Waterbury (Sylvester, J., December 15, 1994)).
O'Brien bases his claim to the proceeds of the share of Anthony Catalano on an acknowledgment of debt that reads as follows:
I, Anthony Eugene Catalano, 26 Henry Street, herein [sic] that I owe outstanding debt to David J. O'Brien the amount of $32,120.00 as a result of loans and payment of bills as far back as 1988. This is the principle and no interest has been added. I have agreed to pay Mr. O'Brien when and if there is a sale of my interest in the property at 26 Henry Street, Manchester, Connecticut. (Emphasis added.)
That document was recorded in the Manchester land records on February 14, 2003. O'Brien claims that it constitutes an equitable mortgage that entitles him to share in the proceeds of the partition sale.
"An equitable mortgage may be constituted by any writing from which the intention to create a lien on specific real property as security for a debt is shown." 59 C.J.S. 65, Mortgages § 13 (1998). Such a mortgage may arise by (1) an attempt to create a mortgage, though imperfectly executed; (2) by an agreement to charge described property as security for money advanced; and (3) where the plaintiff advanced the sum of money to the defendant on the condition that the defendant would execute and deliver a mortgage and defendant failed to do so. 54 Am.Jur.2d § 100, p. 661-62 (1996).
In Connecticut the issue of equitable mortgage has arisen when a party has argued that a land transaction or deed absolute was not a conveyance, but rather a security instrument. See Arvee Construction Co. v. Ardolino, 144 Conn. 7 (1956); Franchi v. Farm Holme, Inc., 191 Conn. 201, 214-16 (1983). In Franchi the court said that whether a deed might be considered an equitable mortgage must be determined by examining "the intention of the parties, ascertained in view of all the circumstances, as to the purpose which the transaction is to effectuate."
In Lynch v. Moser, 72 Conn. 714 (1900), a woman, married prior to 1877, agreed in writing for good consideration to assume a mortgage. The agreement was not signed by her husband, which at that time was necessary to make it enforceable. The court said, "There was an agreement in writing for good consideration to assume a mortgage. As against Mrs. Moser, the mortgage so assumed became a good mortgage. It was in equity the same as though she had herself given the mortgage." at 720.
In all of these cases the essential fact given rise in equity to what is called an equitable mortgage is "the lending of money or giving of credit in reliance upon the agreement that the property involved be security for such loan or debt." Walsh on Mortgages, Callaghan and Co. (1934), section 8, page 42.
In the instant case, the acknowledgment of debt by Anthony Catalano to O'Brien does not state that the subject property would be security for the debt. It only states that Mr. Catalano will pay Mr. O'Brien "when and if there is a sale of my interest in the property at 26 Henry Street, Manchester, Connecticut." That does not express an intent to create a lien upon the property, but simply a time when the debt would be paid. As a consequence, since O'Brien has not proved an interest in the property, his claim must fail and he is not entitled to any share of the proceeds.
III. The Bernard Claim
Kimberly Bernard claims a one-fourth interest in the net proceeds of the sale. She further claims a right to a portion of the Anthony Catalano share based upon unpaid support payments, an orthodontist bill, and certain other bills she feels Mr. Catalano owes her. None of these bills create an interest in the property and so she is not entitled to any portion of the Anthony Catalano share of the proceeds for them. However, she testified at the hearing that she made repairs to half of the house owned by her and Anthony Catalano in the amount of $5,000.00. She did not produce any receipts of bills paid, but the court believes her. She is thus entitled to one-half of that $5,000, or $2,500 from the Anthony Catalano share.
Based on the foregoing, the court calculates the amounts due the parties as follows:
Gross proceeds of sale on deposit with court $165,000.00 Less approved committee fees and expenses — 3,773.00 Less additional committee fees for obtaining judgment lien releases — 250.00 Less additional expenses for recording releases — 129.00 Net proceeds of sale available for distribution to parties $160,848.00 Nelson/Dickenson Share One-half of net proceeds $80,424.00 Plus one-half of real estate taxes, insurance, water, etc. 11,143.71 Amount due Nelson/Dickenson $91,567.71 Bernard/Catalano ShareOne-half of net proceeds $80,424.00 Less following judgment liens against Joseph Catelano interest: Sears -10,726.21 G.E. Capital — 9,400.00 SNET — 553.64 Less one-half of real estate taxes, insurance, water, etc. incurred by Nelson/Dickenson -11,143.71 Amount due Bernard/Catalano $48,600.44 Bernard Share One-half of Bernard/Catalano share $24,300.22 Plus one-half of cost of repair of Bernard/Catalano premises -2,500.00 Amount due Bernard Catalano $26,800.22 Anthony Catalano Share One-half of Bernard/Catalano share $24,300.22 Less one-half of cost of repair of Bernard/Catalano premises -2,500.00 Amount due Anthony Catalano $21,800.22 Payment of Judgment Liens Sears 10,726.21 G.E. Capital 9,400.00 SNET 553.64 $160 848.00 Judgment may enter in favor of plaintiffs Nelson/Dickenson for $91,567.71, defendant Bernard for $26,800.22, defendant Anthony Catalano for $21,800.22, and the following liens may also be paid from the amount on deposit with the court to Sears $10,726.21; to G.E. Capital, $9,400.00, and to SNET $553.64. The claim of defendant David J. O'Brien is denied.