Opinion
No. FST CV 085009026 S
June 9, 2009
MEMORANDUM OF DECISION RE MOTION TO STRIKE #139
The plaintiff Patriot National Bank (Patriot), initiated this action by service of writ, summons and complaint dated October 6, 2008, on the defendants, Bobbi, Inc., d/b/a Bobbi Two, Inc., Richard S. Sable, Barbara B. Sable, Sarraco Mechanical Services, Inc., Stock Building Supply, Inc., Best Plumbing Supply, Inc., and Midland Sales, Inc. On February 5, 2009, the plaintiff filed an amended complaint, adding a second count against Richard Sable and Barbara Sable, individually. The plaintiff alleges in its amended complaint: that on April 10, 2006, the defendant, Bobbi, Inc. borrowed $3,171,425 from Patriot, and executed and delivered to Patriot a "Construction Loan Promissory Note" wherein it agreed to repay said indebtedness together with interest pursuant to the terms of the note. In order to secure the note, Bobbi Inc. executed and delivered to Patriot an "Open-End Construction Mortgage Deed" and "Security Agreement (mortgage)," dated April 10, 2006, wherein it conveyed to Patriot a mortgage interest in certain real property it owned, known as, 24 Home Place, Greenwich Connecticut (subject property). On April 10, 2006, the mortgage was recorded in Volume 5153 at Page 2 of the Greenwich land records. On said date, Richard S. Sable and Barbara B. Sable each executed and delivered to and in favor of Patriot a Guaranty by which they jointly and severally guaranteed payment to Patriot of all amounts owing under the note. On November 16, 2007, the parties, Bobbi, Inc., Richard S. Sable, Barbara B. Sable and Patriot, entered into a "Commercial Promissory Note and Mortgage Modification Agreement (agreement)." The agreement modified the terms of the note and mortgage and was recorded in Volume 5522 at Page 311 of the Greenwich land records. The note matured and was due and payable on April 10, 2008.
Patriot further alleges that the note, mortgage, guaranty, and first modification are in default as a result of Bobbi Inc.'s failure to make payments when due at maturity. Patriot asserts that the defendants, Richard S. Sable and Barbara B. Sable, are liable to Patriot for payment of the aforementioned indebtedness of Bobbi Inc., by virtue of the terms of the Guaranty.
On January 9, 2009, the defendants, Bobbi Inc., Richard S. Sable and Barbara B. Sable (the defendants), each filed an answer, special defense and counterclaims. The defendants assert the special defense of unclean hands and counterclaims alleging breach of the covenant of good faith and fair dealing and a CUTPA violation. On January 21, 2009, the plaintiff moved to strike the defendants' special defense and counterclaims. The plaintiff's motion was accompanied by a memorandum of law. On February 25, 2009, the defendants filed an objection to the motion to strike, which was accompanied by a memorandum of law. Thereafter, on March 6, 2009, the plaintiff filed a reply memorandum of law in support of its motion to strike.
As the special defense and counterclaims filed by each of the defendants are predicated on the same factual allegations, the court will refer to said special defense and counterclaims as "the defendant's" special defense and counterclaims.
"The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint . . . to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). "It is fundamental that in determining the sufficiency of a [pleading] challenged by a [party's] motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted." (Internal quotation marks omitted.) Gazo v. Stamford, 255 Conn. 245, 260, 765 A.2d 505 (2001).
Special Defense
"A motion to strike is the proper vehicle by which to contest the legal sufficiency of any special defense contained in an answer to the complaint." Doran v. Waterbury Parking Authority, 35 Conn.Sup. 280, 281, 408 A.2d 277 (1979). "In ruling on the motion to strike, the trial court [has an] obligation to take the facts to be those alleged in the special defenses and to construe the defenses in the manner most favorable to sustaining their legal sufficiency . . . 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 . . . The traditional defenses available in a foreclosure action are payment, discharge, release, satisfaction or invalidity of a lien . . . In recognition that a foreclosure action is an equitable proceeding, courts have allowed mistake, accident, fraud, equitable estoppel, CUTPA, laches, breach of the implied covenant of good faith and fair dealing, tender of deed in lieu of foreclosure and a refusal to agree to a favorable sale to a third party to be pleaded as special defenses . . . Other defenses which have been recognized are usury. unconscionability of interest rate, duress, coercion, material alteration, and lack of consideration . . .
"These special defenses have been recognized as valid special defenses where they were legally sufficient and addressed the making, validity or enforcement of the mortgage and/or note. The rationale behind this is that . . . special defenses which are not limited to the making, validity or enforcement of the note or mortgage fail to assert any connection with the subject matter of the foreclosure action and as such do not arise out of the same transaction as the foreclosure action . . . Further, based on the same rationale, the defenses . . . cannot attack some act or procedure of the lienholder." (Citations omitted; internal quotation marks omitted.) GMAC Mortgage Corp. v. Nieves, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 98 0164925 (January 29, 1999, Tobin, J.).
Our Supreme Court, however, has held that, "because a mortgage foreclosure action is an equitable proceeding, the trial court may consider all relevant circumstances to ensure that complete justice is done." Reynolds v. Ramos, 188 Conn. 316, 320, 449 A.2d 182 (1982). Further, "although equitable power must be exercised equitably . . . [t]he determination of what equity requires in a particular case, the balancing of the equities, is a matter of discretion of the trial court." (Citation omitted.) Raimo v. Quakerford, Superior Court, judicial district of Waterbury, Docket No. CV 08 5008959 (January 22, 2009, Brunetti, J.). "Where the plaintiff's conduct is inequitable, a court may withhold foreclosure on equitable considerations and principles." Southbridge Associates, LLC v. Garofalo, 53 Conn.App. 11, 15, 728 A.2d. 1114 (1999).
In their special defense, the defendants allege that, in an effort to exercise its equitable right to redemption by selling the subject property and paying its debt, Bobbi Inc., attempted to finish construction on the subject premises in order to make them saleable. The defendants further allege: that Bobbi Inc. entered into negotiations with a vendor for the completion of construction. Patriot contacted the vendor and represented that Bobbi Inc. no longer owned the subject premises, a statement that Patriot was false. Patriot instructed the vendor to deal directly with Patriot. The vendor then contacted Patriot's counsel, who did not deny Patriot's representations. As a result of Patriot's false representations, the vendor refused to negotiate with Bobbi Inc. for the purposes of finishing construction on the premises and making them saleable, and potential buyers have refused to negotiate a sale of the subject premises.
"Connecticut follows the `title theory' of mortgages, which provides that on the execution of a mortgage on real property, the mortgagee holds legal title and the mortgagor holds equitable title to the property . . . As the holder of equitable title, also called the equity of redemption, the mortgagor has the right to redeem the legal title on the performance of certain conditions contained within the mortgage instrument . . . The mortgagor continues to be regarded as the owner of the property during the term of the mortgage . . . The equity of redemption gives the mortgagor the right to redeem the legal title previously conveyed by performing whatever conditions are specified in the mortgage, the most important of which is usually the payment of money . . . Generally, foreclosure means to cut off the equity of redemption." (Citations omitted; internal quotation marks omitted.) Ocwen Federal Bank, FSB v. Charles, 95 Conn.App. 315, 322-23, 898 A.2d 197 (2006).
In the defendants' special defense, the defendants do not name the vendor.
The plaintiff moves to strike the defendants' special defense of unclean hands on the grounds that it does not arise out from the same transaction or occurrence as the events of the complaint and that the special defense does not plead facts which show that the plaintiff does not have a cause of action. Specifically, the plaintiff argues that the conduct alleged "occurred long after the [n]ote and other loan documents were executed and clearly does not attack the making validity or enforcement of the [n]ote and [m]ortgage." The plaintiff further argues that the allegations of the special defense do not relate to the defendants' ability to make payments under the terms of the [n]ote and [m]ortgage, and, as a result, even if the allegations were true, they do not constitute a complete defense to the plaintiff's cause of action.
"While the Appellate Courts have not adopted parameters regarding the extent of the `making, validity or enforcement' limitation on special defenses, the issue has been addressed by the Superior Court. Some Superior Court judges 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 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); 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.) . . .
"Some Superior Court judges, however, have rejected the above interpretation of the `making, validity or enforcement' limitation on special defenses that prevents a court from considering post-execution conduct of the mortgagee. See Ocwen Federal Bank, FSB v. Waller, Superior Court, judicial district of Fairfield, Docket No. CV 03 0401138 (March 16, 2004, Stevens, J.) (stating that `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, 273) (`the manner of collection of [the] note in default does impact the enforcement of the note, and [the court] will proceed to consider the equitable defenses on their merits')." (Internal quotation marks omitted.) Housing Development Fund v. 130 Main Street Development, LLC, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 08 5007937 (March 26, 2009, Mintz, J.).
"[Thus,] . . . 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 . . . Second, by definition, some recognized special defenses necessarily involve post-execution behavior of the mortgagee . . . 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 . . . 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.' (Internal quotation marks omitted.) Housing Development Fund v. 130 Main Street Development, LLC, supra, Superior Court, Docket No. CV 08 5007937, citing Liberty Bank v. New London, LP, Superior Court, judicial district of New London, Docket No. CV 4005236 (May 1, 2007, Devine, J.) ( 43 Conn. L. Rptr. 326, 328).
In Connecticut, "courts recognize the doctrine of unclean hands as a defense to foreclosure only in circumstances where the defendant alleges intentional conduct by the defendant as a factual basis for the defense. The party seeking to invoke the clean hands doctrine to bar equitable relief must show that his opponent engaged in wilful misconduct with regard to the matter in litigation." (Internal quotation marks omitted.) TD Banknorth v. Genesis Properties, LLC, Superior Court, judicial district of Danbury, Docket No. CV 08 5004597 (January 15, 2009, Sommer, J.), citing Monetary Funding Group, Inc. v. Pluchino, 87 Conn.App. 401, 407, 867 A.2d 841 (2005).
"The doctrine of unclean hands expresses the principle that where a plaintiff seeks equitable relief, he must show that his conduct has been fair, equitable and honest as to the particular controversy in issue . . . Unless the plaintiff's conduct is of such a character as to be condemned and pronounced wrongful by honest and fair-minded people, the doctrine of unclean hands does not apply . . . Because the doctrine of unclean hands exists to safeguard the integrity of the court . . . [w]here a plaintiff's claim grows out of or depends upon or is inseparably connected with his own prior fraud, a court of equity will, in general, deny him any relief, and will leave him to whatever remedies and defenses at law he may have . . . The doctrine generally applies [only] to the particular transaction under consideration, for the court will not go outside the case for the purpose of examining the conduct of the complainant in other matters or questioning his general character for fair dealing. The wrong must . . . be in regard to the matter in litigation . . . Though an obligation be indirectly connected with an illegal transaction, it will not thereby be barred from enforcement, if the plaintiff does not require the aid of the illegal transaction to make out his case . . ." (Citations omitted; internal quotation marks omitted.) Thompson v. Orcutt, 257 Conn. 301, 310-11, 777 A.2d 670 (2001).
The defendants rely on Thompson v. Orcutt, supra, 257 Conn. 301, in support of their position that plaintiff's alleged conduct warrants a dismissal of this foreclosure action. In Thomspon, the plaintiff sought to foreclose a mortgage on a certain real property. The court held that "under the circumstances of the present case . . . the plaintiff's cause of action to foreclose on the mortgage was directly and inseparably connected to his prior fraud in the bankruptcy court." (Internal quotation marks omitted.) Id., 312. The court noted that, "the plaintiff's alleged ownership of the . . . mortgage would not have existed had he not lied to the bankruptcy trustee and withheld information . . . The original transaction creating the . . . mortgage was not tainted by fraud, but the plaintiff's ability to foreclose on the [defendants'] property in this case depended upon his fraudulent conduct." Id., 313-14. Thus, the court in Thompson applied the doctrine of unclean hands because but for the plaintiff's fraud, the foreclosure action would have been precluded, as the plaintiff would not have owned the mortgage. Id.
Although the defendants are correct in stating that a court may look at the mortgagee's post-default fraudulent conduct, their application on Thompson is misguided. In Thompson, the ability to bring the foreclosure action was dependant on the fraud. Id. In the present case, however, the defendants do not allege that, but for the plaintiff's alleged misrepresentations, they would not be in default under the terms of the note, mortgage, guaranty, and first modification, and, thus, Patriot would be precluded from bringing the foreclosure action. As alleged in the amended complaint, the defendants are in default as a result of their failure to make payment upon maturity of the note. In their special defense, the defendants do not dispute that they were in default under the terms of the note and mortgage, rather they allege that, post-default, the plaintiff made misrepresentations to a third party vendor, and as a result, the vendor refused to negotiate with the defendants for the purposes of finishing construction of the premises and making them saleable.
Thus, although the court finds that, in the present case, the plaintiff's alleged misrepresentations during the post-default period relate to the enforcement of the note and mortgage, the special defense, as alleged, must be stricken, as it does not allege facts that, if true, would bar the plaintiff's cause of action.
Accordingly, the plaintiff's motion to strike the defendants' special defense is granted.
Counterclaims
In their counterclaim, the defendants allege (1) breach of the covenant of good faith and fair dealing; and (2) violation of the Connecticut Unfair Practices Act, General Statutes § 42-110 et seq. (CUTPA). The plaintiff moves to strike the defendant's counterclaims on the ground that they do not arise out of the same set of circumstances as the events of the complaint.
The Connecticut Supreme Court "will not uphold the granting of [a] motion to strike on a ground not alleged in the motion . . ." Blancato v. Feldspar Corp., 203 Conn. 34, 44, 522 A.2d 1235 (1987). Thus, as the plaintiff only moves to strike the defendants' counterclaims on the ground that they do not relate to the making, validity or enforcement of the note and mortgage, the court need not address whether the defendants sufficiently pleaded the legal elements necessary for each claim.
The defendants allege that, in an effort to exercise its equitable right of redemption, the defendant attempted to finish construction on the subject premises. In attempting to do so, the defendant entered into negotiations for completion of construction with a vendor. The plaintiff allegedly contacted the vendor and represented that the defendant no longer owned the subject premises and instructed the vendor to deal directly with the plaintiff. The defendants claim that the plaintiff's conduct was in bad faith and impaired the defendant's ability to exercise its equitable right of redemption.
In response, the plaintiff argues that the alleged facts giving rise to the defendants' counterclaims do not arise out of the same transaction that is the subject of the complaint, and therefore, fail to meet the requirements of Practice Book § 10-10. Specifically, the plaintiff argues that in order to factually support their counterclaim, the defendants rely on the same set of facts which are relied on to support their special defense. Therefore, because the conduct alleged in the special defense arises out of allegations concerning the plaintiff's conduct which occurred after the loan documents were executed and are not "precisely" related to the making, validity or enforcement of the note or mortgage.
Practice Book § 10-10 provides in relevant part: "In any action for legal or equitable relief, any defendant may file counterclaims against any plaintiff . . . provided that each such counterclaim . . . arises out of the transaction or one of the transactions which is the subject of the plaintiff's complaint."
"It is well established that in a foreclosure action, a counterclaim must relate to the making, validity or enforcement of the mortgage note in order to be joined with the complaint." JP Morgan Chase Bank, Trustee v. Rodrigues, 109 Conn.App. 125, 133, 952 A.2d 56 (2008). "This requirement . . . is nothing more than an application of Practice Book § 10-10 . . . [Section] 10-10 provides that [i]n any action for legal or equitable relief, any defendant may file counterclaims against any plaintiff . . . provided that each such counterclaim . . . arises out of the transaction or one of the transactions which is the subject of the plaintiff's complaint . . . In a foreclosure action, the relevant factors for a court to consider in determining whether the [aforementioned] `transaction test' has been met by the counterclaim includes: (1) whether the counterclaim is based on factors outside of the note or mortgage; (2) whether different issues of fact and law are presented by the complaint and counterclaim; and (3) whether separate trials would involve a substantial duplication of effort." (Citations omitted; internal quotation marks omitted.) Eastern Federal Bank v. Krondes, Superior Court, judicial district of New London, Docket No. CV 07 5007447 (September 23, 2008, Martin, J.).
As stated above, post-execution of the mortgagee may be directly related to the `enforcement' of the note or mortgage, and, thus, "given an appropriate factual predicate, the court may conclude that it would be inequitable to allow enforcement in light of the mortgagee's behavior." Housing Development Fund v. 130 Main Street Development, LLC, supra, Superior Court, Docket No. CV 08 5007937, citing Liberty Bank v. New London, LP, Superior Court, judicial district of New London, Docket No. CV 4005236 (May 1, 2007, Devine, J.) ( 43 Conn. L. Rptr. 326, 328).
"Our Appellate Court has stated that a special defense and counterclaim alleging a breach of an implied covenant of good faith and fair dealing . . . are not equitable defenses to a mortgage foreclosure. Fidelity Bank v. Krenisky, 72 Conn.App. 700, 716, [ 807 A.2d 968, cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002]; LaSalle National Bank v. Freshfield Meadows, 69 Conn.App. 824, 835, [ 798 A.2d 445] (2002); . . . New Haven Bank v. LaPlace, 66 Conn.App. 1, 10, [ 783 A.2d 1174] (2001). At first blush, one might conclude that the issue of whether a breach of the covenant of good faith and fair dealing can properly be raised to oppose a foreclosure was definitively decided in the negative. However, closer examination of case law discloses otherwise. The Fidelity case, supra, merely cites to LaSalle, supra, which, in turn, cites to New Haven Bank, supra. The New Haven Bank holding is premised on Southbridge Associates, LLC v. [Garofalo], [ supra, 53 Conn.App. 16-19]. But the Southbridge court never issued such a blanket prohibition. Instead, that case ruled that the particular allegations of a breach of the covenant in that litigation was deficient because they failed to `attack the making, validity or enforcement of the note and mortgage and thus raised no genuine issue of material fact that would warrant a trial.' [Thus,] this court determines that a breach of the covenant of good faith and fair dealing may be a valid specific defense or counterclaim in a foreclosure case but only if the specific breach asserted goes to the making, validity, or enforcement of the note and/or mortgage." (Internal quotation marks omitted.) Robinson v. Robinson, Superior Court, judicial district of Tolland, Docket No. CV 08 5003041 (January 23, 2009, Sferrazza, J.). This court agrees with the analysis in Robinson v. Robinson, supra, Superior Court, Docket No. CV 08 5003041. In Southbridge Associates, LLC v. Garofalo, supra, 53 Conn.App. 11, 13, the defendant "borrowed $3,000,000 from Connecticut Bank and Trust (CBT) pursuant to a note and secured by a mortgage . . . CBT subsequently assigned the notes and mortgages to Fleet National Bank (Fleet) . . . [B]eginning in November 1995, [the defendant] defaulted on the notes, making no payments until March 1996, when Fleet accelerated the notes and demanded full payment. Following the acceleration, Fleet assigned the notes and mortgages to [Southbridge]. [The defendant] offered to purchase the notes from Fleet at a price that he claimed was higher than the amount that [Southbridge] had paid." In affirming the trial court's finding that the defense implied of covenant of good faith and fair dealing did not attack the making, validity or enforcement of the notes and mortgages, the court states that "the loan documents [did] not contain a provision requiring a holder of the notes and mortgages to negotiate with or sell the notes to [the defendant] prior to enforcing its foreclosure rights." Id., 17. Thus, it is clear that the holding in Southbridge did not state that breach of the implied covenant of good faith and fair dealing was not an equitable defense to all foreclosure actions.
Accordingly, as the court determined that the allegations of the plaintiff's alleged misrepresentations attack the enforcement of the note and mortgage, the plaintiff's motion to strike the defendants' first counterclaim on the ground that said allegations do not attack the enforcement of the note and mortgage, is denied.
In their second counterclaim, the defendants incorporate the allegations contained in their first counterclaim, and further allege that the plaintiff engaged in an unfair trade practice by "wrongfully attempting to dissuade other from dealing with the defendant." Additionally, the defendant alleges that the plaintiff engaged in deceptive practices by making false representations to potential vendors and customers to dissuade them from dealing with the defendant.
"CUTPA provides that [n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce . . . In order to enforce this prohibition, CUTPA provides a private cause of action to [a]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a [prohibited] method, act or practice . . . Thus, in order to prevail in a CUTPA action, a plaintiff must establish both that the defendant has engaged in a prohibited act and that, as a result of this act, the plaintiff suffered an injury." (Citations omitted; emphasis in original; internal quotation marks omitted.) Stevenson Lumber Co. Suffield, Inc. v. Chase Associates, Inc., 284 Conn. 205, 213-14, 932 A.2d 401 (2007).
"It is well settled that in determining whether a practice violates CUTPA [the Connecticut Supreme Court has] adopted the criteria set out in the cigarette rule by the federal trade commission for determining when a practice is unfair: (1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers, [competitors or other businesspersons] . . . All three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three." (Internal quotation marks omitted.) Ventres v. Goodspeed Airport, LLC, 275 Conn. 105, 155, 881 A.2d 937 (2005), cert. denied, 547 U.S. 1111, 126 S.Ct. 1913, 164 L.Ed.2d 664 (2006).
"A claim under CUTPA must be pleaded with particularity to allow evaluation of the legal theory upon which the claim is based." (Internal quotation marks omitted.) S.M.S. Textile Mills, Inc. v. Brown, Jacobson, Tillinghast, Lahan King, P.C., 32 Conn.App. 786, 797, 631 A.2d 340, cert. denied, 228 Conn. 903, 634 A.2d 296 (1993). Further, in addition to establishing that "the conduct at issue constitutes an unfair or deceptive trade practice," the plaintiff "must present evidence providing the court with a basis for a reasonable estimate of the damages suffered." A. Secondino Son, Inc. v. LoRicco, 215 Conn. 336, 343, 576 A.2d 464 (1990).
"There are instances in which violations of CUTPA have been upheld as valid counterclaims brought in foreclosure actions. See Cheshire Mortgage Service, Inc. v. Montes, 223 Conn. 80, 105-15, 612 A.2d 1130 (1992); Monetary Funding Group, Inc. v. Pluchino, [ supra], 87 Conn.App. [412-15]." JP Morgan Chase Bank, Trustee v. Rodrigues, supra, 109 Conn.App. 133; see also JP Morgan Chase Bank v. Gilmore, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 04 4001641 (October 25, 2006, Jennings, J.); Mortgage Electronic Registration Systems, Inc. v. Perfido, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 03 0193829 (September 17, 2003, D'Andrea, J.T.R.); American Business Credit, Inc. v. DL Auto Body Towing, Inc., Superior Court, judicial district of New Britain, Docket No. CV 01 05076655 (November 14, 2002, Berger, J.). Thus, it appears that, so long as the allegations of the CUTPA counterclaim relate to the making, validity or enforcement of the note and mortgage, such a counterclaim may be considered in a foreclosure action.
As the court determined that the allegations of the plaintiff's alleged misrepresentations attack the enforcement of the note and mortgage, the plaintiff's motion to strike the defendants' second counterclaim on the ground that said allegations arise out of the same transaction and occurrence, as they do not attack the enforcement of the note and mortgage, is denied.
Conclusion
In conclusion, the plaintiff's motion to strike is granted with respect to the defendants' special defense, as it does not allege facts that, if true, would bar the plaintiff's cause of action.
The plaintiff's motion to strike the defendants' counterclaims on the ground that the allegations do not attack the making, validity or enforcement of the note and mortgage is denied, as the court finds that the plaintiff's alleged misrepresentations during the post-default period relate to the enforcement of the note and mortgage.