Opinion
No. CV-09-5006672S
September 13, 2010
MEMORANDUM OF DECISION RE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (#123)
ISSUE
Whether the court should grant the plaintiff's motion for summary judgment (#123) on the ground that there is no genuine issue of material fact. The court finds that summary judgment is to be granted, as the plaintiff has established a prima facie case for a mortgage foreclosure and the defendants' special defenses are legally insufficient.
FACTS
On July 31, 2009, the plaintiff, Thomaston Savings Bank, filed this two-count complaint against the defendants, Matthew Hardisty and Patricia Hardisty. The plaintiff alleges the following facts in the operative complaint. On August 31, 2007, the defendants became indebted to the plaintiff for $233,200 based on a note made payable to Thomaston Savings Bank. To secure the note the defendants exercised a mortgage on 16 Crestview Road, Plymouth, CT. Thomaston Savings Bank advanced the sum of $233,200 to the defendants pursuant to the note. The defendants failed to make payments on the note and, subsequently, the plaintiff made demand for the entire payment of the note. The note provides that in the event of default the holder is entitled to recover all costs and charges and expenses, including reasonable attorneys fees. Inclusive of interest the balance on the note is $247,810.54. Prior in right are an inchoate lien for real estate taxes held by the town and a lien for sewer use fees in the amount of $230 held by the town. The complaint includes a second count, alleging that the defendants also owe on a consumer real estate secured note for $7,700. The second note was also secured on August 31, 2007. It is alleged that the defendants owe $8,029.89 on the consumer real estate secured note. The plaintiff seeks foreclosure of the mortgage, possession of the property, appointment of receiver of rents, money damages, attorneys fees, interest and cost of suit. Attached to the complaint is a notice to consumers, pursuant to the Federal Fair Debt Collection Practices Act, a copy of the note, a copy of the mortgage deed, a schedule describing the land, lis pendens and the consumer real estate secured note.
The plaintiff, as a result of its subsequent real estate secured note, also includes itself as a defendant. For purposes of this motion, "the defendants" refers to Matthew Hardisty and Patricia Hardisty.
On July 21, 2010, the plaintiff moved for summary judgment (#123) against the defendants. Attached to the plaintiff's motion and memorandum of law are copies of the mortgage deed, note, the defendants' answers and special defenses, a schedule d form labeled "creditors holding and secured claims" and a notarized affidavit from a representative of Thomaston Savings Bank. The defendants filed an objection to the motion (#125) on August 9, 2010, accompanied by an affidavit attesting to the defendants' indebtedness. On August 9, 2010, the motion was heard at short calendar.
DISCUSSION
"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 . . . The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law . . . and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact." (Internal quotation marks omitted.) Martinelli v. Fusi, 290 Conn. 347, 354-55, 963 A.2d 640 (2009).
I. Prima Facie Case for Foreclosure
In the present case, the plaintiff argues that there is no genuine issue as to any material fact since the defendants have admitted to execution of the note and mortgage. The plaintiff argues that these admissions coupled with past admissions in bankruptcy court, where the defendants admitted being indebted to the plaintiff, establish a prima facie case for foreclosure on the mortgage. Further, the plaintiff claims that the defendants' special defenses are legally invalid and do not create a genuine issue of material fact. In opposition, the defendants argue that the special defenses are legally recognizable. In the first defense, the defendants allege that the plaintiff agreed to restructure the mortgage prior to the defendants' bankruptcy, but did not follow though. Next, they allege that they relied on the plaintiff's misrepresentations by not including the mortgage in the bankruptcy proceedings. Finally, the defendants allege that the plaintiff failed to provide the defendants with adequate and timely notice pursuant to General Statutes § 8-265ee.
The court must first address whether the plaintiff has established a prima facie case for foreclosure on the mortgage, before determining the validity of the defendants' special defenses. "In a mortgage foreclosure action, [t]o make out its prima facie case, [the foreclosing party] had to prove by a preponderance of the evidence that it was the owner of the note and mortgage and that [the mortgagor] had defaulted on the note . . . At common law, the only defenses to an action of this character would have been payment, discharge, release or satisfaction . . . or, if there had never been a valid lien." (Citation omitted; internal quotation marks omitted.) Franklin Credit Management Corp. v. Nicholas, 73 Conn.App. 830, 838, 812 A.2d 51 (2002). "Furthermore, the foreclosing party must demonstrate that all conditions precedent to foreclosure, as mandated by the note and mortgage, have been satisfied." TD Banknorth, N.A. v. Norwich River, LLC, Superior Court, judicial district of New London, Docket No. CV07510407 (July 29, 2008, Martin, J.); see also Bank of America, FSB v. Hanlon, 65 Conn.App. 577, 581, 783 A.2d 88 (2001). "[T]he admission of the truth of an allegation in a pleading is a judicial admission conclusive on the pleader . . . [The] admission in a pleading or answer is binding on the party making it, and may be viewed as a conclusive or judicial admission . . ." (Internal quotation marks omitted.) Fillion v. Hannon, 106 Conn.App. 745, 753 n. 8, 943 A.2d 528 (2008).
The plaintiff has attached to their complaint a notice to consumers, pursuant to the Federal Fair Debt Collection Practices Act, a copy of the note, the mortgage deed, "Schedule A" describing the land, lis pendens and the consumer real estate secured note. Additionally, all of the documents are attached to the plaintiff's motion, along with the affidavit of a representative of Thomaston Savings Bank attesting to the note. The defendants have attached an affidavit, signed by Patricia Hardisty, that details their financial hardship and alleged agreement with the plaintiff to modify the mortgage. By way of the defendants' answer and special defenses and memorandum of law, they have admitted execution of the note and mortgage. Although the defendants have not admitted all of the allegations, the plaintiff has demonstrated by a preponderance of the evidence that it is the holder of both notes and the mortgage. The court also finds that the plaintiff's documentary evidence satisfies the conditions precedent to the mortgage. As a result, the plaintiff has established a prima facie case for a mortgage foreclosure.
II. Defendant's Special Defenses
As the plaintiff has established a prima facie case for foreclosure on the mortgage, the court must determine whether the defendants' special defenses are legally sufficient. "When a complaint and supporting affidavits establish an undisputed prima facie case for a foreclosure action, a court must only determine whether the special defense is legally sufficient before granting summary judgment." LaSalle National Bank v. Shook, Superior Court, judicial district of New London, Docket No. CV 549266 (July 13, 2000, Martin, J.), aff'd, 67 Conn.App. 93, 787 A.2d 32 (2001). "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." (Internal quotation marks omitted.) Fidelity Bank v. Krenisky, 72 Conn.App. 700, 705, 807 A.2d 968, cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002). "Summary judgment in favor of the defendant is properly granted if the defendant in its motion raises at least one legally sufficient defense that would bar the plaintiff's claim and involves no triable issue of fact." (Internal quotation marks omitted.) Serrano v. Burns, 248 Conn. 419, 424, 727 A.2d 1276 (1999). "Only one of the defendant's 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).
In the first special defense, the defendants allege that they had an agreement with the plaintiff to restructure the mortgage after bankruptcy proceedings had concluded. Likewise, in the second special defense the defendants allege that they relied on the plaintiff's misrepresentations in excluding the mortgage from the bankruptcy proceedings. Neither of these defenses raise a legally sufficient defense that would bar the plaintiff's claim. The defenses do not address the making, validity or enforcement of the mortgage or the note, but rather deal with the mortgagor's actions in allegedly entering into a subsequent agreement with the defendants. Therefore, neither defense creates an issue of fact.
In the third special defense, the defendants allege that the plaintiff failed to comply with § 8-265ee. The foreclosing party must demonstrate that all conditions precedent to foreclosure, as mandated by the note and mortgage, have been satisfied. See Bank of America, FSB v. Hanlon, 65 Conn.App. 577, 581, 783 A.2d 88 (2001). "While courts have recognized equitable defenses in foreclosure actions, they have generally only been considered proper when they attack the making, validity or enforcement of the lien, rather than some act or procedure of the lienholder . . . The rationale behind this is that counterclaims and 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 . . . Moreover, courts have held that defenses to foreclosure are recognized when they attack the note itself rather than some behavior of the mortgagor." (Citations omitted; internal quotation marks omitted.) Eastern Savings Bank FSB v. Mara, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 05 4006305 (June 5, 2006, Dooley, J.); see also Southbridge Associates, LLC v. Garofalo, 53 Conn.App. 11, 16, 728 A.2d 1114, cert. denied, 249 Conn. 919, 733 A.2d 229 (1999) (upholding the decision of the trial court that the "special defense . . . did not attack the making, validity or enforcement of the note and mortgage and thus raised no issue of material fact that would warrant a trial").
General Statutes § 8-265ee(a) provides: "On and after July 1, 2008, a mortgagee who desires to foreclose upon a mortgage which satisfies the standards contained in subdivisions (1), (3), (10), (11) and (12) of subsection (e) of section 8-265ff, shall give notice to the mortgagor by registered, or certified mail, postage prepaid at the address of the property which is secured by the mortgage. No such mortgagee may commence a foreclosure of a mortgage prior to mailing such notice. Such notice shall advise the mortgagor of his delinquency or other default under the mortgage and shall state that the mortgagor has sixty days from the date of such notice in which to (1) have a face-to-face meeting, telephone or other conference acceptable to the authority with the mortgagee or a face-to-face meeting with a consumer credit counseling agency to attempt to resolve the delinquency or default by restructuring the loan payment schedule or otherwise, and (2) contact the authority, at an address and phone number contained in the notice, to obtain information and apply for emergency mortgage assistance payments if the mortgagor and mortgagee are unable to resolve the delinquency or default."
Specifically, the defendants argue in their third special defense that the plaintiff, by failing to comply with § 8-265ee, has not satisfied a necessary condition precedent to bringing the foreclosure action. In the defendants' opposition to the present motion they argue that the action was commenced prior to the expiration of the sixty-day period required by the statute. Further, they argue that disclosure was inadequate, as it failed to notify the defendants of their right to a face-to-face conference and only stated the defendants had thirty days to respond to the notice.
"The presence . . . of an alleged adverse claim is not sufficient to defeat a motion for summary judgment. A party must substantiate his adverse claim by specifically showing that there is a genuine issue of material fact together with the evidence disclosing the existence of such an issue." Farrell v. Farrell, 182 Conn. 34, 39, 438 A.2d 415 (1980). "Even if a special defense is a valid defense to a foreclosure action, and even if such a defense is sufficiently pled, the defendant still must produce sufficient evidence to support the defense in order to survive summary judgment. There really can't be any practical claim or considerations of fairness which support a defendant's argument that in this situation he or she shouldn't be expected to support the special defense. The defendant would submit argument, affidavits, documents, and anything else permitted by the practice book to support the special defense. A contrary ruling would in effect mean that whenever a special defense is filed in a case it cannot be disposed of by way of summary judgment, at least as long as it raises factual issues." (Internal quotation marks omitted.) WM Specialty Mortgage, LLC v. Brandt, Superior Court, judicial district of Ansonia-Milford, Docket No. CV095001157 (February 10, 2009, Moran, J.).
The defendants' third special defense is not sufficient to defeat the plaintiff's motion for summary judgment. The defense fails because it does not in itself create an issue of fact. The only evidence the defendants have provided to the court is an affidavit; however, the affidavit does not state that the defendants did not receive proper notice or any notice as argued in their opposition papers. The court in Wachovia Mortgage, FSB v. Johnstone, Superior Court, judicial district of New Haven, Docket No. CV 08 5021547 (January 13, 2009, Hadden, J.T.R.), was also faced with a special defense, in a foreclosure action, alleging that the plaintiff did not comply with the notice requirements of § 8-265ee. The court held that the plaintiff had filed adequate documentation to establish a prima facie case for a mortgage foreclosure and that the defendants' special defense was legally insufficient, as they did not file any documentation to support their special defense and raise an issue of fact. Id. In the present case, the defendants have also failed to file anything raising an issue of material fact concerning whether the plaintiff has complied with the notice requirements, pursuant to § 8-265ee. The affidavit does not attest to the plaintiff's failure to provide notice of default and is therefore legally insufficient.
The defendants have also alleged that the terms of the notice did not comply with the statute. Despite these allegations, the defendants have not provided the court with documentation raising an issue of material fact as to the plaintiff's compliance with the statute. Therefore, the defendants' special defenses fail to raise a genuine issue of material fact to prevent foreclosure.
Although the issue of adequate notice pursuant to the recently enacted § 8-265ee has not been discussed by courts in this state, our Appellate Court has held that exact compliance with a notice requirement in a mortgage is not necessary, so long as "the notice of default substantially complied with the relevant notice provision" then the special defense of improper notice is legally insufficient. Fidelity Bank v. Krenisky, 72 Conn.App. 700, 714-15, 807 A.2d 968 (2002).
CONCLUSION
Therefore, the court concludes that the motion for summary judgment is to be granted.