Opinion
No. CV07 600 06 35
November 28, 2007
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (# 113)
This matter is before the court on the plaintiff's motion for summary judgment.
On February 13, 2007, the plaintiff, U.S. Bank National Association, filed a one-count revised complaint seeking to foreclose on property located at 165 Nordstrand Avenue in Fairfield, Connecticut, owned by the defendant, Barton D. Meyer. The defendant borrowed $220,000 from BNC Mortgage and received a mortgage on that property on March 18, 2005. The plaintiff alleges that the mortgage was assigned to it and that it is the holder of the note and the mortgage. The plaintiff claims that the defendant is in default on the note and that it provided the defendant with written notice of the default but that the defendant has failed to cure the default. As a result, the plaintiff elected to accelerate the balance due on the note.
The defendant filed his answer to the revised complaint on May 14, 2007. In his answer, the defendant asserted four special defenses: (1) that the plaintiff had failed to comply with the terms and conditions of the note and mortgage deed; (2) that the plaintiff had failed to satisfy conditions precedent to the exercise and remedies under the note and mortgage deed; (3) that the plaintiff improperly accelerated the subject loan, and (4) that the plaintiff is not a proper party to the action. On May 18, 2007, the plaintiff filed a motion to strike all four special defenses. On June 18, 2007, the plaintiff's motion to strike the defendant's special defenses was granted by Judge Stodolink on the ground that fact pleading for the special defenses was lacking. The plaintiff moves for summary judgment with respect to liability only on the ground that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. The motion for summary judgment, a supporting memorandum of law, and a supporting affidavit and exhibits were filed on July 17, 2007. The defendant filed a memorandum of law in opposition with a supporting affidavit on August 1, 2007. The plaintiff filed a reply memorandum of law on August 3, 2007, and the defendant filed a supplemental memorandum of law in opposition on August 7, 2007. The plaintiff filed a reply memorandum of law to the defendant's supplemental memorandum on August 10, 2007. The court heard the motion for summary judgment at short calendar on August 27, 2007.
"Summary judgment is a method of resolving litigation when 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 . . . The motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried." (Citations omitted.) Wilson v. New Haven, 213 Conn. 277, 279, 567 A.2d 829 (1989). "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). "However, since litigants ordinarily have a constitutional right to have issues of fact decided by a jury . . . the moving party for summary judgment is held to a strict standard . . . of demonstrating his entitlement to summary judgment." (Citation omitted; internal quotation marks omitted.) Kakadelis v. DeFabritis, 191 Conn. 276, 282, 464 A.2d 57 (1983).
"As the party moving for summary judgment, the [movant] is required to support its motion with supporting documentation, including affidavits." Heyman Associates No. 1. v. Ins. Co. of Pennsylvania, 231 Conn. 756, 796, 653 A.2d 122 (1995). Likewise, "[t]he existence of the genuine issue of material fact must be demonstrated by counteraffidavits and concrete evidence." (Internal quotation marks omitted.) DeCorso v. Watchtower Bible Tract Society of New York, Inc., 78 Conn.App. 865, 871, 829 A.2d 38, cert. denied, 266 Conn. 931, 837 A.2d 805 (2003). The court may consider not only the facts presented by the parties' affidavits and exhibits, but also the "inferences which could be reasonably and logically drawn from A.2d 596 (1969). "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.) Johnson v. Atkinson, 283 Conn. 243, 253, 926 A.2d 656 (2007).
The plaintiff has alleged and the evidence reveals that the defendant executed a note and mortgage, that it is the owner and holder of the note and mortgage, and that he defaulted by failing to make payments. The plaintiff concludes, therefore, that it is entitled to judgment as a matter of law. In support of its motion, the plaintiff submits the following evidence: (1) the signed and sworn affidavit of China Brown, Vice President Loan Documentation with America's Servicing Company (ASC); (2) an authenticated copy of the note and mortgage; (3) an authenticated copy of the assignment of mortgage; and (4) an authenticated copy of a letter giving notice to the defendant of his default.
The documents attached to the plaintiff's motion are authenticated by the affidavit of China Brown.
The defendant first attacks the plaintiff's standing to bring suit. The defendant maintains that at the time the plaintiff commenced this action, it was not the owner of the subject note and mortgage. He challenges the validity and appropriateness of the note, emphasizing that the plaintiff has failed to state the date on which it acquired the note or the manner in which the plaintiff acquired the note.
"If a party is found to lack standing, the court is without subject matter jurisdiction to determine the cause . . . A determination regarding a trial court's subject matter jurisdiction is a question of law . . . The requirement of subject matter jurisdiction cannot be waived by any party and can be raised at any stage in the proceedings . . ." (Internal quotation marks omitted.) Windels v. Environmental Protection Commission, 284 Conn. 268, 287-88, (2007).
The affidavit provided by the plaintiff states that the note was bearer paper and was in possession of the plaintiff prior to the commencement of this action: "[P]rior to the initiation of the present foreclosure action the Note was endorsed in Blank by BNC Mortgage, Inc. upon an Allonge to the Note, making same bearer paper upon which the Plaintiff, U.S. Bank National Association, as Trustee For The Structure Asset Investment Loan Trust, 2005-8, became the owner and holder of the Note. The Plaintiff as the owner and holder of the Note then provided the original Note to its counsel (Hunt Leibert Jacobson, P.C.) to commence the present foreclosure action on its behalf." There is a rebuttable presumption in Connecticut that the possessor of a bearer note is a holder in due course. "The possession by the bearer of a note indorsed in blank imports prima facie that he acquired the note in good faith for value and in the course of business, before maturity and without notice of any circumstances impeaching its validity. The production of the note establishes his case prima facie against the makers and he may rest there . . . It [is] for the defendant to set up and prove the facts which limit or change the plaintiff's rights." (Internal quotation marks omitted.) SKW Real Estate Ltd. Partnership v. Gallicchio, 49 Conn.App. 563, 571, 716 A.2d 903 (1998). The defendant's counteraffidavit does not address the issue of the ownership of the note.
The defendant further argues that the plaintiff lacked standing by emphasizing that the plaintiff's authenticated assignment of mortgage was dated in April of 2007, at least four months after this action was commenced. The ownership of the mortgage is, however, irrelevant to the question of standing as the holder of the mortgage is not, under Connecticut law, properly able to bring a foreclosure action. "[T]he legislature did not intend to permit the holder of the mortgage, without having been assigned the note, the ability to foreclose on the property." (Citation omitted.) Fleet National Bank v. Nazareth, 75 Conn.App. 791, 795, 818 A.2d 69 (2003).
In Connecticut, it is the note holder, not the mortgage holder, who is allowed to foreclose on a property. "General Statutes § 49-17 permits the holder of a negotiable instrument that is secured by a mortgage to foreclose on the mortgage even when the mortgage has not yet been assigned to him . . . The statute codifies the common law principle of long standing that `the mortgage follows the note,' pursuant to which only the rightful owner of the note has the right to enforce the mortgage." (Citation omitted.) Bankers Trust Co. of California, N.A. v. Vaneck, 95 Conn.App. 390, 391, 818 A.2d 69 (2003).
The evidence demonstrates that the plaintiff was in possession of the note prior to the commencement of this action and is sufficient for this court to presume, absent any evidence to the contrary, that the plaintiff was the owner of the note prior to the commencement of this action. Accordingly, the court finds that the plaintiff had standing to bring this action.
The defendant further opposes the plaintiff's motion for summary judgment on the basis that the plaintiff did not comply with the mortgage's notice requirement insofar as it failed to properly specify the action required to cure the default. "[W]hen the terms of the note and mortgage require notice of default, proper notice is a condition precedent to an action for foreclosure." (Internal quotation marks omitted.) Emigrant Mortgage Corp. v. D'Agostino, 94 Conn.App. 793, 800, 896 A.2d 814, cert. denied, 278 Conn. 919, 901 A.2d 34 (2006).
"[I]t is well established that [n]otices of default and acceleration are controlled by the mortgage documents. Construction of a mortgage deed is governed by the same rules of interpretation that apply to written instruments or contracts generally, and to deeds particularly." (Internal quotation marks omitted.) Emigrant Mortgage Corp. v. D'Agostino, supra, 94 Conn.App. 793, 798-99. Moreover, "[a] promissory note is nothing more than a written contract for the payment of money, and, as such, contract law applies." (Internal quotation marks omitted.) Id., 799.
The mortgage document required that notice prior to acceleration "shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and foreclosure or sale of the Property."
As an exhibit, the plaintiff has attached a copy of the letter sent by ASC, the servicing company, to the defendant dated October 16, 2006, notifying the defendant that his loan was in default. The letter is authenticated by the affidavit of China Brown.
In his counteraffidavit, the defendant attests that the language in the letter was vague and unclear regarding what was required to cure the default; specifically, the defendant claims he was confused by the following passage:
To avoid the possibility of acceleration you must pay
$3,809.61 By October 31, 2006, 2:00 P.M. Central Time
$5,704.50 By November 15, 2006, 2:00 P.M. Central Time
The defendant argues that the letter failed to specify the action required to cure the default and thus did not fulfill the terms of the mortgage note. Because the deed is controlled by contract law, the question of proper notice essentially is a question of proper performance on the part of the bank that sent the letter. The common law holds that questions of performance are questions of fact to be decided by a fact finder; thus, the question of proper notice is a question of fact. Because proper notice is mandatory before acceleration of the loan and the commencement of the foreclosure proceeding, the question of proper notice is a question of material fact for a fact finder to decide.
The plaintiff, in its reply memorandum, asserts that the notice letter is "clear" and that the letter states the amount currently in default and the amount that he must pay to cure the default by the end of the month and at the end of thirty days. While the plaintiff discusses the notice letter in a certain amount of detail, it fails to discuss or controvert the facts that were attested to in the defendant's affidavit. The plaintiff additionally argues that the notice was given in writing and that the notice was properly mailed to the defendant; these facts are neither in dispute nor dispostive regarding the issue at hand. Once the defendant has raised an issue of material fact in opposing a motion for summary judgment, the burden falls on the plaintiff to demonstrate that the issues raised by the defendant are either not material, not factual, or not in actual dispute. The plaintiff in the present case has failed to meet that burden.
For the forgoing reasons, defendant in this case has demonstrated the existence of a genuine issue of material fact with respect to the sufficiency of the notice. As the non-moving party has sufficiently demonstrated that a material issue of fact remains for a fact finder to decide, the court need not reach the remaining issues presented by the parties. Therefore, the plaintiff's motion for summary judgment is denied.