Opinion
HHDCV146048825
12-28-2015
U.S. Bank National Association v. Robin Blowers et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
Kevin G. Dubay, J.
FACTS
On February 13, 2014, the plaintiff, U.S. Bank National Association, commenced this foreclosure action against the defendants, Robin Blowers, Mitchell Piper, and C& I Solutions, LLC. In the complaint the plaintiff alleges that on or about August 2, 2005, the defendants executed a note for a loan in the amount of $488,000 and are now in default for that loan. The plaintiff has elected to accelerate the balance due on the note, to declare the note to be due in full, and to foreclose the mortgage securing the note. Subsequent to the filing of this complaint the parties participated in the foreclosure mediation program, however, the parties were unable to reach an agreement. On April 17, 2014, the defendants filed their answer, special defenses, and counterclaims. In their answer the defendants admitted that they executed a loan on or about August 2, 2005. In their special defenses the defendants allege facts sounding in equitable estoppel, unjust enrichment, and unclean hands. The defendants' counterclaims sound in negligence, violation of CUTPA, and unjust enrichment.
On February 7, 2014, the defendants, Mitchell Piper, Robin Blowers, Farmington Valley Landscape LLC, Land Rover Capital Group, C& I Solutions, LLC, and Viking Fuel Oil Co., were served with process. Farmington Valley Landscape LLC, Land Rover Capital Group, and Viking Fuel Oil Co. did not file their appearances. On February 24, 2014, C& I Solutions, LLC filed their appearance and on March 25, 2014, Robin Blowers and Mitchell Piper filed their appearances. The counterclaims and special defenses, which is the subject of the plaintiff's motion to strike, were filed by Robin Blowers and Mitchell Piper, therefore Robin and Mitchell will be referred to, collectively, as the defendants.
On July 17, 2015, the plaintiff filed a motion to strike the defendants' special defenses and counterclaims on the ground that they do not relate to the subject of the foreclosure complaint. On September 16, 2015, the defendants filed a memorandum in opposition to the plaintiff's motion to strike. On October 21, 2015, the plaintiff filed a reply brief. The court heard oral arguments at short calendar on November 9, 2015.
DISCUSSION
" 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). " [A] plaintiff can [move to strike] a . . . counterclaim." Nowak v. Nowak, 175 Conn. 112, 116, 394 A.2d 716 (1978). " A counterclaim has been defined as 'a cause of action existing in favor of a defendant against a plaintiff which a defendant pleads to diminish, defeat or otherwise affect a plaintiff's claim and also allows a recovery by the defendant.' . . . In other words, a counterclaim is a cause of action . . . on which the defendant might have secured affirmative relief had he sued the plaintiff in a separate action." (Citations omitted; internal quotation marks omitted.) Historic District Commission v. Sciame, 152 Conn.App. 161, 176, 99 A.3d 207, cert. denied, 314 Conn. 933, 102 A.3d 84 (2014). " A motion to strike tests the legal sufficiency of a cause of action and may properly be used to challenge the sufficiency of a counterclaim." (Internal quotation marks omitted.) Cadle Co. v. D'Addario, 131 Conn.App. 223, 235, 26 A.3d 682 (2011). " In addition to challenging the legal sufficiency of a complaint or counterclaim, our rules of practice provide that a party may challenge by way of a motion to strike the legal sufficiency of an answer, 'including any special defenses contained therein . . .' Practice Book § 10-39; see also Practice Book § 10-6." GMAC Mortgage, LLC v. Ford, 144 Conn.App. 165, 179-80, 73 A.3d 742 (2013). " A motion to strike admits all facts well pleaded; it does not admit legal conclusions or the truth or accuracy of opinions stated in pleadings." (Emphasis in original; internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 588, 693 A.2d 293 (1997). When ruling on a motion to strike, the court must construe the facts most favorably to the nonmoving party and " [i]f facts provable under the allegations would support a defense or a cause of action, the motion to strike must be denied." RK Constructors, Inc. v. Fusco Corp, 231 Conn. 381, 384, 650 A.2d 153 (1994).
The plaintiff argues that the defendants' counterclaim should be stricken because they fail the transaction test promulgated in Practice Book § 10-10 as they do not have a sufficient connection to the making, validity or enforcement of the note and mortgage. The plaintiff also argues that the defendants' special defenses should be stricken because they do not directly attack the making, enforcement or validity of the note and mortgage to pass the transaction test. The defendant argues that because foreclosures are equitable proceedings the " making, validity, or enforcement" test cannot be used to strike the special defenses or counterclaims. The defendant also argues that the transaction test applies and their counterclaims and special defenses relate to the enforcement of their note and mortgage.
A
Counterclaims
" A counterclaim that has been filed in contravention of our rules of practice is legally insufficient. Section 10-10 of the Practice Book provides in relevant part 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 . . . This court previously has held that in a foreclosure action, a counterclaim must relate to the making, validity or enforcement of the mortgage note in order to properly be joined with the complaint." (Internal quotation marks omitted.) U.S. Bank National Assn. v. Sorrentino, 158 Conn.App. 84, 95, 118 A.3d 607 (2015). " [T]his court has clarified that a proper application of Practice Book § 10-10 in a foreclosure context requires consideration of whether a counterclaim has some reasonable nexus to, rather than directly attacks, the making, validity or enforcement of the mortgage or note." Id., 96. " [R]elevant considerations in determining whether the transaction test has been met include whether the same issues of fact and law are presented by the complaint and the [counter]claim and whether separate trials on each of the respective claims would involve a substantial duplication of effort by the parties and the courts." CitiMortgage, Inc. v. Rey, 150 Conn.App. 595, 606, 92 A.3d 278 (2014).
In the present case, the defendants have failed to assert factual allegations underlying their counterclaims that have a reasonable nexus to the making, validity or enforcement of the mortgage or note. The defendants assert negligence, violation of the Connecticut Unfair Trade Practices Act (CUTPA), and unjust enrichment as counterclaims. The defendants allege that the plaintiff was negligent in some of the following ways: 1) the plaintiff's servicer erroneously informed the defendants' insurance company that they were not living in the house which led to the cancellation of their insurance policy, 2) during mediation, the plaintiff's representative often showed up late, 3) in mediation sessions, the defendants were routinely provided with conflicting information by the plaintiff's representative, and 4) through a combination of duplicative, exhaustive, and ever-changing requests, the plaintiff took years to evaluate the defendants for a loan modification. The defendants allege that the plaintiff violated CUTPA in some of the following ways: 1) by repeatedly requesting duplicative, unnecessary documentation updates to documentation during the modification process, 2) by communicating false information to the defendants' insurance carrier, and 3) making material misrepresentations including but not limited to misrepresenting to the defendants the availability of principal forgiveness. The defendants assert unjust enrichment as a counterclaim on the basis that the plaintiff benefitted from its actions and the actions of its servicer without compensating the defendants in that it charged them for the interest that continued to accrue and the cost of commencing and pursuing a foreclosure action, all while botching the loan modification process. All of the conduct alleged in the defendants' counterclaims relate to activities that took place during the foreclosure mediation program and, therefore, subsequent to the execution of the note or mortgage. The defendants have failed to show how any of the activities relate to the making, validity, or enforcement of the note or mortgage. Therefore, the counterclaims, pursuant to Practice Book § 10-10, must be stricken.
The present case is similar to U.S. Bank National Assn. v. Sorrentino, 158 Conn.App. 84, 87, 118 A.3d 607 (2014), where the court granted the plaintiff's motion for summary judgment on the foreclosure complaint as to liability, and also rendered summary judgment for the plaintiff on the defendants' counterclaims. In Sorrentino, the plaintiff filed a foreclosure action, and subsequent to the filing of the action the parties participated in the foreclosure mediation program where they were unable to reach any agreement. Id., 88. The defendants filed an answer to the foreclosure complaint which included eleven special defenses and five counterclaims. Id. " [The defendants'] [c]ounterclaims one, two, four, and five . . . sounded respectively in equitable estoppel, breach of the covenant of good faith and fair dealing, unclean hands, and fraud, were all premised on a common set of factual allegations that alleged improper conduct by the plaintiff during the foreclosure mediation proceedings." Id. The plaintiff, thereafter, sought an order granting summary judgment as to liability and the plaintiff also challenged the propriety of the defendants' counterclaims and special defenses. Id., 90. The defendants filed a memorandum in opposition to the motion for summary judgment which did not address the substance of the plaintiff's arguments regarding the legal sufficiency of the various counterclaims and the defendants did not file any affidavits or any other evidence in support of their opposition. Id., 91. Although the plaintiff in Sorrentino filed a motion for summary judgment, they filed it to attack the legal sufficiency of the defendants' counterclaims. " [O]ur Supreme Court has held that a motion for summary judgment also may be used to challenge the pleading's legal sufficiency provided that the party seeking summary judgment can establish as a matter of law both that the cause of action alleged is legally insufficient and, more importantly, that any defect in the pleading could not be cured by repleading, which the nonmoving party would have had an opportunity to do if the alleged insufficiency had been raised by way of a motion to strike." Id., 94. The court then held that the counterclaims were legally insufficient and incurable because, even when viewed in a light most favorable to the defendants as the nonmoving party, all the allegations underlying those counterclaims are addressed to the plaintiff's improper conduct during the foreclosure mediation program. Id., 97. The mediation foreclosure program did not begin until after the execution of the note and mortgage, and after the foreclosure action was commenced, and thus, did not reasonably relate to the making, validity or enforcement of the note or mortgage. Id.
In the present case, the defendants argue that Sorrentino is distinguishable both procedurally and factually. The defendants assert that Sorrentino is significantly different because it was decided on a motion for summary judgment, whereas in the present case, the plaintiff has filed a motion to strike and therefore the defendants' pleadings, in the present case, must be taken as admitted. The defendants rely on language in Sorrentino where the Appellate Court quotes the trial court stating, " [their] supplemental objection mentions several Superior Court cases where special defenses similar to those [they have] alleged were not stricken. However, the court is not considering a motion to strike. In opposition to a motion for summary judgment, the defendants must present some concrete evidence to support [their] defenses and counterclaims . . . [They have] failed to do so . . . The defendants [ have ] presented no evidence to support any of [ their ] arguments ." (Emphasis in original.) Id., 92. When the court in Sorrentino makes this assertion, however, it makes it for the proposition that the plaintiff did not raise a motion to strike, in which case the defendants could have presented case law to show that their allegations were sufficient. Instead the plaintiff in Sorrentino raised a motion for summary judgment, where the defendants had to submit evidence to support the factual allegations in their counterclaims, which the defendants failed to do. It would be contrary to logic that a motion for summary judgment granted based on legal insufficiency of the pleadings, which is the standard to grant a motion to strike, would reach a different result than when a party raises a motion to strike on similar facts. The only difference is what happens after the motion is granted; when a motion for summary judgment is granted on the basis of legal sufficiency the party is unable to replead, whereas with a motion to strike the party is entitled to replead.
The defendants also urge the court to rely on CitiMortgage, Inc. v. Rey, 150 Conn.App. 595, 92 A.3d 278 (2014), however, Rey aligns with Sorrentino and differs factually from the present case. In Rey the parties entered into a forbearance agreement in mediation. Id., 597-98. The plaintiff then instituted a foreclosure action and the defendant, by way of counterclaim, alleged that the plaintiff's pursuit of the remedy of foreclosure was in contravention of the terms of the parties' forbearance agreement. Id., 599. The plaintiff then filed a motion for summary judgment in which it argued that it was entitled to a judgment on liability not only on the basis of the original note and mortgage, but also on the basis of the defendant's alleged failure to fulfill her duties under the forbearance agreement. Id. The court held that there was a sufficient nexus between the counterclaims and the making, validity or enforcement of the note. Id., 609. The court reasoned that the forbearance agreement was entered into between the parties during this litigation and in regard to the subject of the note and mortgage because the defendant claimed that the forbearance agreement should have restrained the plaintiff's pursuit of the equitable remedy of foreclosure. Id., 608. Furthermore, the defendant claimed that the plaintiff had entered into an agreement to forbear from pursing foreclosure, thus directly implicating the plaintiff's right, in equity, to seek the remedy of a judgment by foreclosure. Id. Thus, the plaintiff incorporated the forbearance agreement into the enforceability of the original note. Id., 609. Also, in seeking summary judgment, the plaintiff directly invoked the terms of the forbearance agreement in asserting its right to proceed to a judgment of foreclosure. Id.
Contrastingly, in the present case the parties did not enter into a forbearance agreement, in fact the parties could not reach an agreement at the mediation. Thus, no forbearance agreement was incorporated into the enforceability of the original note as the parties in Rey . Also in the present case the plaintiff did not base its claim on any forbearance agreement, or conduct between the parties, that happened post execution of the mortgage or note. If, as in Rey, the parties in the present case would have reached a forbearance agreement and the plaintiff agreed to refrain from seeking a foreclosure, such agreement would go to the enforceability of the note or mortgage. Furthermore, if the plaintiff in the present case was claiming that the defendants were not in compliance with their forbearance agreement, as the plaintiff in Rey was asserting, there would be a sufficient nexus because it would pertain to the specific subject of the plaintiff's complaint. The defendants do not allege that the plaintiff is seeking a foreclosure is in contravention of a modified agreement. In fact, the facts alleged are insufficient to even show that a modified agreement existed which replaced or changed the terms of the original agreement. The defendants only allege that there were trial modifications and that at the end of mediation the parties were unable to reach a proper modification agreement.
The defendants assert that in April 2012 the State Banking Commission was able to get them a modification, however, the defendants defaulted under this modification and the defendants do not allege that the modification altered the terms of the original note in such a way that affected the making, validity or enforcement of the note or mortgage. Furthermore, at mediation the defendants were offered a loan modification, but by the time it was presented the financials were four months out of date. The parties were unable to reach an agreement.
For the reasons stated therein, the plaintiff's motion to strike the defendants' counterclaims is granted because the counterclaims do not have a sufficient nexus to the making, validity or enforcement of the note and mortgage.
B
Special Defenses
" 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." TD Bank, N.A. v. J& M Holdings, LLC, 143 Conn.App. 340, 343, 70 A.3d 156 (2013).
" Historically, defenses to a foreclosure action have been limited to payment, discharge release or satisfaction . . . or, if there had never been a valid lien . . . 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 . . . [O]ur courts have permitted several equitable defenses to a foreclosure action. [I]f the mortgagor is prevented by accident, mistake or fraud, from fulfilling a condition of the mortgage, foreclosure cannot be had . . . Other equitable defenses that our Supreme Court has recognized in foreclosure actions include unconscionability . . . abandonment of security . . . and usury . . . Practically speaking, however, neither this court nor our Supreme Court has ever expressed a finite list of equitable defenses available in a foreclosure action. Typically, [t]he assertion of equitable defenses to a mortgage foreclosure requires that the defenses [also] challenge the making, validity and enforcement of the loan note and mortgage. This principle was . . . considered to include events leading up to the execution of the loan documents, exclusive of issues involving administration of the loan, such as misapplication of payments . . . Nevertheless, given the equitable nature of a foreclosure action, events subsequent to the execution of the loan documents also have been considered." (Citations omitted; internal quotation marks omitted.) TD Bank, N.A. v. M.J. Holdings, LLC, 143 Conn.App. 322, 327-28, 71 A.3d 541 (2013). In the present case the defendants assert three special defenses: equitable estoppel, unclean hands, and unjust enrichment.
" [B]ecause a mortgage foreclosure action is an equitable proceeding, the trial 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 . . . Where the plaintiff's conduct is inequitable, a court may withhold foreclosure on equitable considerations and principles . . . We further note that [e]quitable remedies are not bound by formula but are molded to the needs of justice . . . Our Supreme Court has endorsed the principle that [a] court of equity does full and equal justice to all having an interest in the subject-matter by tersely expressing that [e]quity never does anything by halves . . . The principle of [this] maxim embraces the well-established doctrine . . . that when equity once acquires jurisdiction it will retain it so as to afford complete relief." (Citation omitted; internal quotation marks omitted.) TD Bank, N.A. v. M.J. Holdings, LLC, 143 Conn.App. 322, 326-27, 71 A.3d 541 (2013).
The court will first address the defendants' special defense of equitable estoppel. " [T]raditional mortgage foreclosure standards . . . permit the assertion of special defenses, including equitable estoppel." Congress Street Condominium Assn, Inc. v. Anderson, 132 Conn.App. 536, 544, 33 A.3d 274 (2011). " The doctrine of equitable estoppel is well established. [W]here one, by his words or actions, intentionally causes another to believe in the existence of a certain state of things, and thereby induces him to act on that belief, so as injuriously to affect his previous position, he is [precluded] from averring a different state of things as existing at the time . . . Our Supreme Court . . . stated, in the context of an equitable estoppel claim, that [t]here are two essential elements to an estoppel: the party must do or say something which is intended or calculated to induce another to believe in the existence of certain facts and to act upon that belief, and the other party, influenced thereby, must actually change his position or do something to his injury which he otherwise would not have done. Estoppel rests on the misleading conduct of one party to the prejudice of the other . . . Broadly speaking, the essential elements of an equitable estoppel . . . as related to the party to be estopped, are: (1) conduct which amounts to false representation or concealment of material facts, or, at least, which is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) the intention, or at least the expectation, that such conduct shall be acted upon by, or influence, the other party or other person; and (3) knowledge, actual or constructive, of the real facts." (Citations omitted; internal quotation marks omitted.) Johnnycake Mountain Associates v. Ochs, 104 Conn.App. 194, 208-09, 932 A.2d 472 (2007), cert. denied, 286 Conn. 906, 944 A.2d 978 (2008). In addition to sufficiently pleading equitable estoppel, the alleged conduct must relate to the making, validity or enforcement of the note or mortgage. See TD Bank, N.A. v. M.J. Holdings, supra, 143 Conn.App. 327.
To support their special defense of equitable estoppel, the defendants in the present case assert the following factual allegations: 1) four different trial modifications, 2) on March 25, 2012, the plaintiff's servicer offered to modify the existing loan and the plaintiff's servicer informed the defendants that they would reduce the amount owed to the market value of the property with a short payoff if the defendants could find a bank to refinance them, 3) in April 2012, the defendants contacted the State Banking Commission which resulted in an immediate modification being received, 4) in July 2012, the defendants received notice that the monthly payment on the modified loan was increasing by nearly 20%, 5) the defendants continued to make payments under the May 2012 modification until they were informed they would not be accepted because they were partial payments. When viewing the allegations in the light most favorable to the defendants, the allegations show that the misleading conduct of the plaintiff's servicer was calculated to induce the defendants to believe that they were going to get a loan modification and the defendants acted upon the information provided by the plaintiff's servicer by making payments under the May 2012 modification. Therefore, the allegations are sufficient to support a claim of equitable estoppel, nonetheless, the defendants claim of equitable estoppel does not address the making, validity or enforcement of the mortgage or note. The defendants do not allege that the parties entered into a modification which made the original loan agreement unenforceable or which changed the circumstances under which the plaintiff could enforce its authority to seek a foreclosure under the original note or mortgage. Nor do the defendants allege that the original loan agreement is invalid due to conduct by the plaintiff subsequent to the execution of the loan.
" If a valid subsequent agreement purporting to modify the original loan agreement, was in fact, entered into, then original loan agreement may no longer be enforceable to the extent that it was contractually modified. This scenario affects the validity and enforcement of the original loan agreement." TD Bank, N.A. v. J& M Holdings, LLC, supra, 143 Conn.App. 347. In the present case, it seems that at one point the parties entered into a modification, however, the allegations leave the court to believe that it was not a permanent modification and the defendants defaulted under the modified agreement and therefore the plaintiff was able to seek the equitable relief of foreclosure. The defendants allege that, " In April 2012, said Defendants contacted the State Banking Commission, which intervened on said Defendants' behalf, resulting in an immediate modification being received." Subsequently this modification was increased by 20% making payments unaffordable to the plaintiffs and during the mediation program the plaintiff's servicer offered a modification but by the time it was offered the financials were four months out of date. Thus, based on these allegations, it does not seem to be that the parties entered into a modification which affected the plaintiff's ability to enforce the original note or mortgage.
" Under established principles of contract law, an agreement must be definite and certain as to its terms and requirements . . . [W]here the memorandum appears [to be] no more than a statement of some of the essential features of a proposed contract and not a complete statement of all the essential terms, [a party] has failed to prove the existence of an agreement." (Internal quotation marks omitted.) Friedman v. Donenfeld, 92 Conn.App. 33, 39, 882 A.2d 1286, cert. denied, 276 Conn. 930, 889 A.2d 817 (2005). " [Likewise], [for a valid modification to exist, there must be mutual assent to the meaning and conditions of the modification and the parties must assent to the same thing in the same sense . . . Modification of a contract may be inferred from the attendant circumstances and conduct of the parties . . . A modification of an agreement must be supported by valid consideration and requires a party to do, or promise to do, something further than, or different from, that which he is already bound to do." (Citation omitted; internal quotation marks omitted.) Harley v. Indian Spring Land Co., 123 Conn.App. 800, 821-22, 3 A.3d 992 (2010).
The defendants next assert unjust enrichment as a special defense. To support the allegation of unjust enrichment the defendants incorporate the facts of the equitable estoppel special defense and further allege the following. That the plaintiff benefitted from its actions without compensating the defendants in that it charged them for the interest that continued to accrue and the costs of commencing and pursuing a foreclosure action against them, while botching the attempts at a proper modification, which was reasonably attainable but for the acts and omissions of the plaintiff and its servicer. The defendants suffered financial harm as a result of the plaintiff's actions, and the acts and omissions of the plaintiff and its servicer related to the plaintiff's enforcement of the subject note and mortgage and the defendants attempted to cure the default alleged in the complaint.
" The elements of unjust enrichment are well established. [A party] seeking recovery for unjust enrichment must prove (1) that the [opposing party] was benefitted, (2) that [the opposing party] unjustly did not pay the plaintiffs for the benefit, and (3) that the failure of payment was to the [opposing party's] detriment." (Internal quotation marks omitted.) Rossman v. Morasco, 115 Conn.App. 234, 248, 974 A.2d 1, cert. denied, 293 Conn. 923, 980 A.2d 912 (2009). " Decisions of the superior court have addressed [whether unjust enrichment is a recognized special defense under Connecticut law], however, and have determined that the special defense of unjust enrichment is without merit because unjust enrichment is a cause of action which permits a recovery; it is not a defense which precludes recovery by another party. Unjust enrichment is a doctrine which allows the restoration of a party of something which he was deprived." See Town of Weston v. Omnipoint Communications, Inc., Superior Court, judicial district of Stamford, Docket No. CV-NO5876 (May 27, 2004, Cocco, J.) (37 Conn. L. Rptr. 926); see also Citibank v. Fisher, Superior Court, judicial district of Litchfield, Docket No. CV-11-6004082-S (May 9, 2012, Pickard, J.). Even if this court was to recognize unjust enrichment as a proper special defense, the defendants still face the same problem as they do with their equitable estoppel claim. This allegation of unjust enrichment does not relate to the making, validity, or enforcement of the note or mortgage; simply asserting that it relates to the plaintiff's enforcement of the subject note and mortgage is not sufficient because Connecticut is a fact pleading state and a motion to strike does not admit legal conclusions.
Lastly, the defendants in the present case assert unclean hands as a special defense. " 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." Thompson v. Orcutt, 257 Conn. 301, 310, 777 A.2d 670 (2001). " In [ Thompson v. Orcutt, 257 Conn. 301, 777 A.2d 670 (2001), ] our Supreme Court considered actions by the plaintiff subsequent to the execution of the note and mortgage--in particular, fraudulent conduct in a bankruptcy proceeding--to be directly and inseparably connected to the foreclosure action to support the defendants' equitable defense of unclean hands. In doing so, our Supreme Court found that [t]he original transaction creating the . . . mortgage was not tainted with fraud, but the plaintiff's ability to foreclose on the defendants' property . . . depended upon his fraudulent conduct in the bankruptcy proceeding. If the . . . mortgage had been administered as an asset of the bankruptcy estate, the plaintiff would have had no means of bringing this foreclosure action . . . The plaintiff perpetrated the fraud in the bankruptcy court in order to retain title to the . . . mortgage; he would have had no cause to the foreclosure on the . . . mortgage without the fraud. Thus, although the actions constituting unclean hands occurred after the execution of the original loan documents, those actions directly impacted the enforceability of those loan documents." (Citations omitted; internal quotation marks omitted.) TD Bank, N.A. v. M.J. Holdings, LLC, supra, 143 Conn.App. 328.
In the present case the defendants similarly incorporated the allegations from the equitable estoppel special defense and further allege that the plaintiff and its servicer conducted themselves in willful or reckless disregard of the harmful consequences of their solicitations and that the plaintiff and its servicer failed to conduct themselves in an honest and equitable manner. The defendants have alleged sufficient facts to support the special defense of unclean hands, however, the conduct asserted does not relate to the making, validity, or enforcement of the note or mortgage. The conduct complained of happened subsequent to the execution of the note or mortgage, and although that is not determinative of whether it relates to the making, validity, or enforceability of the note or mortgage, it is something the court considers. Also the conduct that the defendants complain of relates to actions that occurred when attempting to modify the loan agreement. The plaintiff's servicer's tardiness or providing conflicting information in mediation sessions does not relate to the plaintiff's ability to enforce the note or mortgage. Nor does the way the plaintiff and its servicer conducted themselves throughout negotiation affect the validity or enforcement of the note.
For the foregoing reasons the court strikes the defendants' special defenses.
CONCLUSION
For the foregoing reasons, the court grants the plaintiff's motion to strike the defendants' counterclaims and special defenses.