Opinion
No. CV 07 5004315
June 9, 2010
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT [#150]
BACKGROUND
On September 4, 2007, the plaintiff, PHH Mortgage Corporation f/k/a PHH Mortgage Services, filed the present foreclosure action against the defendant, Sylvester Traylor. In its complaint, the plaintiff alleges the following facts. The defendant executed a note dated December 9, 2004, pursuant to which he became obligated to repay Emporio, LLC (Emporio) the original principal amount of $37,000, together with interest and all costs of collection as set forth in the terms of the note and mortgage. To secure the note, the defendant executed and delivered a mortgage to Emporio on a parcel of land, together with the improvements thereon, located at 881 Vauxhall Street Extension, Waterford, Connecticut (the property). Said mortgage was dated December 9, 2004, and recorded on March 14, 2005, in Volume 764 at Page 289 of the Waterford land records. The mortgage was subsequently assigned to the plaintiff pursuant to an assignment of mortgage, dated December 14, 2005, and recorded on December 23, 2005, in Volume 841 at Page 180 of the Waterford land records. The defendant has failed to make a payment on the loan since February 1, 2005.
On November 28, 2008, the defendant filed an amended answer and special defense, in which he alleged a violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110b (CUTPA). In his special defense, the defendant alleges the following facts. The defendant entered two transactions with Albert R. Annunziata, the principal and sole member of Emporio, to borrow personal loans from Emporio for $5,000 on October 6, 2004, and for another $5,000 on October 8, 2004. On October 18, 2004, at the suggestion of Annunziata and Jack Gregory, a representative for Temple Investments, LLC (Temple), the defendant entered into a purchase and sale agreement (the agreement), pursuant to which the defendant sold the property to Temple, which would assume ownership of the property on December 6, 2004. Under the terms of the agreement, Temple would pay the defendant $25,000 in cash, which represented the remaining equity in the property after the first mortgage was paid off; and the defendant would continue to make the first mortgage payments until Temple found another purchaser. The agreement also recited a $18,000 deposit, and the amounts previously loaned to the defendant by Emporio were recharacterized as advances on said deposit.
According to the defendant's allegations, Emporio made the defendant's first mortgage payments on October 18, 2004, and on October 21, 2004. As of October 18, 2004, Emporio had advanced $18,200 to the defendant, of which $200 had been paid to Annunziata as an attorneys fee. On that date, Emporio induced the defendant to sign a deed and note for $18,000 to secure the deposit advances under the agreement. The defendant did not understand that the deed and note recited different obligations between the parties than the agreement, or that the deed and note characterized the deposit advances as commercial transactions. The defendant's reliance on the promises and misrepresentations made by Annunziata induced him to sign the deed and note.
The defendant further alleges that Temple subsequently breached its obligation pursuant to the agreement to purchase the property. The note had a maturity date of February 1, 2005, but Emporio did not attempt to foreclose on the property due to the existence of the defendant's defense of fraudulent conduct against it. The plaintiff, after failing in earlier litigation to obtain possession of the property, approached Emporio and arranged to purchase the defaulted note for an amount greater than that originally advanced by Emporio to the defendant on or after March 14, 2005. The transaction involving the defaulted note between the parties was not a typical secondary mortgage purchase, and the plaintiff entered the agreement with the intent to conspire with Emporio to target the defendant and obtain possession of the property.
On June 22, 2009, the plaintiff filed a motion for summary judgment as to liability only against the defendant. The plaintiff filed a memorandum in support of its motion. On April 20, 2010, the defendant filed an objection to the plaintiff's motion, together with his memorandum of law. The plaintiff filed a supplemental memorandum of law in support of its motion on May 11, 2010.
LAW AND ANALYSIS
"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.) Provencher v. Enfield, 284 Conn. 772, 790-91, 936 A.2d 625 (2007).
"In ruling on a motion for summary judgment, the court's function is not to decide issues of material fact, but rather to determine whether any such issues exist." Nolan v. Borkowski, 206 Conn. 495, 500, 538 A.2d 1031 (1988). "In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact. The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law. The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact . . . As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent . . . When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue . . . Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue." (Internal quotation marks omitted.) Zielinski v. Kotsoris, 279 Conn. 312, 318-19, 901 A.2d 1207 (2006).
"The traditional defenses available to a foreclosure defendant are payment, discharge, release, satisfaction or invalidity of a lien . . . Additional defenses available to a foreclosure defendant are mistake, accident, unclean hands, breach of implied covenant of good faith and fair dealing, equitable estoppel, laches, CUTPA, and refusal to agree to a favorable sale to a third party." (Citation omitted; internal quotation marks omitted.) Antonio v. Johnson, Superior Court, judicial district of New London at Norwich, Docket No. CV 05 4103360 (October 23, 2007, Devine, J.). "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 . . . Our courts have permitted several equitable defenses to a foreclosure action." (Internal quotation marks omitted.) Chase Manhattan Mortgage Corp. v. Machado, 83 Conn.App. 183, 188, 850 A.2d 260 (2004).
The plaintiff argues that its motion for summary judgment should be granted because the defendant's special defense fails to allege any fraud on the part of the plaintiff, or that the plaintiff was aware of or participated in any fraud associated with Emporio. The defendant counters that the plaintiff's motion for summary judgment should be denied because the defendant's special defense alleges that the plaintiff intentionally purchased a defaulted mortgage with the sole purpose of conspiring with Emporio to target the defendant and obtain possession of the property.
"CUTPA provides in relevant part 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. General Statutes § 42-110b(a). It is well settled that in determining whether a practice violates CUTPA [our appellate courts] have 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.) Centimark Corp. v. Village Manor Associates Ltd. Partnership, 113 Conn.App. 509, 523, 967 A.2d. 550, cert. denied, 292 Conn. 907, 973 A.2d 103 (2009). "Whether a practice is unfair and constitutes a violation of CUTPA is a question of fact." (Internal quotation marks omitted.) Kosiorek v. Smigelski, 112 Conn.App. 315, 321, 962 A.2d 880 (2009).
In the present case, the defendant alleges that the plaintiff conspired with Emporio to purchase the defaulted note for purposes of targeting the defendant and taking possession of the property. "In light of the remedial nature of CUTPA [and] the mandate that it is to be interpreted `generously' to implement its remedial purpose . . . [it has been held] that a person who . . . conspires with another who commits an unfair trade practice may be liable for the other's action." (Citation omitted; internal quotation marks omitted.) Feen v. Benefit Plan Administrators, Inc., Superior Court, judicial district of New Haven, Docket No. CV 99 0406726 (September 7, 2000, Levin, J.) ( 28 Conn. L. Rptr. 137, 141). Viewing the evidence in the light most favorable to the defendant, a genuine issue of material fact exists as to whether the plaintiff's conduct constitutes a violation of CUTPA, and therefore, the defendant's special defense is legally sufficient. As a result, the plaintiff's motion for summary judgment as to liability only must be denied.
ORDER
Based on the foregoing, the court hereby denies the plaintiff's motion for summary judgment as to liability only.