Opinion
No. CV 97 0406638 S
March 22, 2004
MEMORANDUM OF DECISION
Before the court is plaintiff Frank Verderame's Motion for Summary Judgment dated July 14, 2003.
On July 2, 1998, Frank Verderame filed a two-count amended complaint against the defendants, Anderson Sunnyside Farm Associates (Anderson) and Trinity Estates Development Corporation (Trinity), seeking foreclosure of a mortgage, possession of the mortgaged property, a deficiency judgment, the appointment of a receiver to collect rent and profits from the mortgaged property and an order for reasonable weekly payments by the defendants.
The amended complaint alleges that on or about June 9, 1995, Trinity mortgaged certain property to Frank Verderame to secure a note in the amount of $1.7 million. The note was made payable to Frank Verderame on or before June 9, 1996. On or about June 27, 1995, Trinity sold and transferred its right, title and interest in the property to Anderson by virtue of a quitclaim deed. The amended complaint alleges that as of June 9, 1996, Frank Verderame still owned the note and mortgage and that Trinity was in default of its payment due under the note. The balance of the principal sum of the mortgage, together with all costs, expenses and attorneys fees was allegedly in excess of $1.8 million. Frank Verderame allegedly exercised the option contained in the note and mortgage deed to accelerate and declare the balance of the principal sum to be due and payable. On November 12, 1997, Frank Verderame commenced the present action by service of process to foreclose the mortgage executed by Trinity on the property owned and solely possessed by Anderson.
On April 24, 2000, Anthony Verderame, Frank Verderame's son, filed a motion to substitute as party plaintiff, in which it stated that Frank Verderame had died on May 1, 1999. The court granted the motion on May 22, 2000. Any reference herein to the plaintiff is solely to Anthony Verderame.
On October 5, 2000, the defendants filed a revised answer, five special defenses and a three-count counterclaim dated October 3, 2000. On November 6, 2000, the plaintiff filed a motion to strike the defendants' revised special defenses. On July 25, 2001, the defendants, seeking to add a sixth special defense, filed a request for leave to amend their revised answer, special defenses and counterclaim with the proposed amendments appended thereto. The plaintiff did not object to the defendants' request for leave to amend. On August 31, 2001, the court, Celotto, J., purportedly addressing the defendants' revised special defenses of October 3, 2000, granted the plaintiff's motion to strike the first, second, fourth and fifth special defenses, but denied the motion to strike the third special defense. The defendants, in their third special defense, allege that "the note and mortgage are void, invalid and unenforceable because they are unconscionable in their terms in that the interest rate(s) imposed pursuant to the [n]ote are usurious."
The defendants' sixth special defense provides: "Plaintiff's (or plaintiff's decedent's) acceptance of a deed in lieu of foreclosure to property known as 216 Laurel Street, East Haven, Connecticut cancelled and/or extinguished the debt at issue by operation of law, thereby rendering plaintiff's mortgage on 301 Kings Highway, North Haven, Connecticut (which is the subject of this action) unenforceable and barring this action as a matter of law."
On February 14, 2002, the plaintiff filed a motion for summary judgment as to the defendants' third special defense. In support of his motion, the plaintiff submitted a memorandum of law, his own signed and sworn affidavit and other documentary evidence. The court, Arnold, J., denied the plaintiff's motion for summary judgment because (1) the motion for summary judgment as to the third special defense was improper; and (2) the plaintiff's affidavit set forth conclusory and inadmissible statements that contradicted the mandates of Practice Book § 17-46. Verderame v. Anderson Sunnyside Farm Associates, Superior Court, judicial district of New Haven, Docket No. CV 97 0406638 (May 1, 2003, Arnold, J.).
On July 14, 2003, the plaintiff filed a motion for summary judgment as to the complaint on the grounds that there are no genuine issues of material fact in dispute and the plaintiff is entitled to judgment as a matter of law. In support of his motion, the plaintiff has submitted a memorandum of law and his own signed and sworn affidavit. The defendants have not filed a memorandum of law in opposition to the plaintiff's motion for summary judgment.
"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.) Webster Bank v. Oakley, 265 Conn. 539, 545, 830 A.2d 139 (2003). "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 judgment as a matter of law . . ." (Citation omitted; internal quotation marks omitted.) Appleton v. Board of Education, 254 Conn. 205, 209, 757 A.2d 1059 (2000). "[T]he 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.) Schilberg Integrated Metals Corp. v. Continental Casualty Co., 263 Conn. 245, 252, 819 A.2d 773 (2003).
"[T]he `genuine issue' aspect of summary judgment requires the parties to bring forward before trial evidentiary facts, or substantial evidence outside the pleadings, from which the material facts alleged in the pleadings can warrantably be inferred . . . A material fact has been defined adequately and simply as a fact which will make a difference in the result of the case." (Citation omitted; internal quotation marks omitted.) Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 556, 791 A.2d 489 (2002). "The existence of the genuine issue of material fact must be demonstrated by counter affidavits and concrete evidence . . . If the affidavits and the other supporting documents [submitted by the nonmovant] are inadequate, then the court is justified in granting the summary judgment, assuming that the movant has met his burden of proof . . . When a party files a motion for summary judgment and there [are] no contradictory affidavits, the court properly [decides] the motion by looking only to the sufficiency of the [movant's] affidavits and other proof." (Internal quotation marks omitted.) DeCorso v. Watchtower Bible Tract Society of New York, Inc., 78 Conn. App. 865, 871, 829 A.2d 38 (2003); see also Heyman Associates No. 1 v. Insurance Co. of Pennsylvania, 231 Conn. 756, 795, 653 A.2d 122 (1995).
In the present case, the plaintiff argues in his memorandum of law in support of his motion for summary judgment that "no issue of material fact exists as to the claim made by the defendants in their third count." The plaintiff argues that, pursuant to General Statutes § 37-9(3), a bona fide mortgage for an amount in excess of $5,000 with an interest rate greater than 12 percent per annum is exempt from the operation of the usury statute, General Statutes § 37-4. The plaintiff argues that the transaction between Trinity and Frank Verderame is exempt from the usury statute because it provided for a bona fide mortgage in excess of $5,000. Section 37-4 provides in relevant part that "[n]o person and no firm or corporation or agent thereof . . . shall . . . directly or indirectly, loan money to any person and, directly or indirectly, charge, demand, accept or make any agreement to receive therefor interest at a rate greater than twelve per cent per annum." Section 37-9 provides in relevant part, however, that "[t]he provisions of [section] 37-4 . . . shall not affect: . . . (3) any bona fide mortgage of real property for a sum in excess of five thousand dollars . . ." See Associated East Mortgage Co. v. Highland Park, Inc., 172 Conn. 395, 405, 374 A.2d 1070 (1977) (finding that the exemption from usury in § 37-9(3) of any bona fide mortgage of real property for a sum in excess of five thousand dollars makes a defense of usury unavailable in a suit for foreclosure of a mortgage); Ferrigno v. Cromwell Development Associates, 244 Conn. 189, 202, 708 A.2d 1371 (1998) (finding that "the defense of usury is not available to the defendants because § 37-9(3) exempts the secured loan, not only the mortgage conveyance securing the loan, from the operation of § 37-4").
The plaintiff intended to state in his memorandum of law in support of his motion for summary judgment that "no issue of material fact exists as to the claim made by the defendants in their third special defense." (Emphasis added.) The rest of the plaintiff's memorandum of law in support of his motion for summary judgment addresses the defendants' third special defense, which alleges usury and uconscionability.
The plaintiff argues that his action to recover principal or interest on the mortgage is not prohibited, despite the language of General Statutes § 37-8, which provides in relevant part that "[n]o action shall be brought to recover principal or interest, or any part thereof, on any loan prohibited by [section] 37-4 . . . " Furthermore, the plaintiff argues in his memorandum of law in support of his motion for summary judgment that the terms of the note and mortgage were not unconscionable because the individual defendant mortgagor "was an experienced real estate speculator who has been engaged in the development of numerous properties in this state and who borrowed substantial funds from other lenders at comparably high rates." The plaintiff argues, therefore, that no genuine issues of material fact exist as to the complaint because the mortgage is exempt from the usury statute and the terms of the note and mortgage are not unconscionable, which were alleged by the defendants in their third special defense.
"In a mortgage foreclosure action, [t]o make out its prima facie case, [the foreclosing party has] to prove by a preponderance of the evidence that it [is] the owner of the note and mortgage and that [the mortgagee has] defaulted on the note." (Internal quotation marks omitted.) Franklin Credit Management Corp. v. Nicholas, 73 Conn. App. 830, 838, 812 A.2d 51 (2002), cert. denied, 262 Conn. 937, 815 A.2d 136 (2003). "In addition, the plaintiff must show that there is no genuine issue of material fact that it has satisfied any condition precedent to foreclosure mandated by the terms of the mortgage deed. See Citicorp Mortgage, Inc. v. Porto, 41 Conn. App. 598, 602, 677 A.2d 10 (1996) . . ." (Citation omitted.) Nusbaum Parrino v. Harrick, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 00 0179122 (January 17, 2002, Hickey, J.). "Where 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.) Fidelity Bank v. Krenisky, 72 Conn. App. 700, 707, 807 A.2d 968, cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002).
In the present case, the plaintiff has not met his burden of showing the absence of any genuine issue of material fact and the plaintiff is not entitled to judgment as a matter of law. The plaintiff's entire memorandum of law in support of his motion for summary judgment addresses the defendants' claims in their third special defense that the note and mortgage are void and unenforceable because they are unconscionable in their terms and that the interest rates imposed by the note are usurious. The sole argument set forth in the plaintiff's memorandum of law in support is that there is no genuine issue of material fact in this case because. (1) the agreement between Trinity and Frank Verderame provided for a bona fide mortgage for an amount in excess of $5,000, thereby exempting it from the usury statute pursuant to § 37-9(3), even though the interest rate imposed was greater than 12 percent per annum; and (2) the individual defendant mortgagor who handled the transaction was an experienced real estate speculator. The plaintiff's memorandum of law in support of the present motion for summary judgment makes precisely the same arguments as his memorandum of law in support of his motion for summary judgment as to the defendant's third special defense, which was filed on February 14, 2002, and decided by the court on May 1, 2003. Verderame v. Anderson Sunnyside Farm Associates, supra, Superior Court, Docket No. CV 97 0406638. In that decision, the court, Arnold, J., denied the plaintiff's motion for summary judgment as to the third special defense as being improper and stated that "[e]ven if the [third] special defense was to fail . . . the plaintiff's motion and supporting documents do not remove from dispute, facts relevant to determining whether they are entitled to judgment as a matter of law on the complaint itself, as the material allegations have been denied." Id. Judge Arnold further stated that "[d]isposition of the third special defense in this case would still not leave the plaintiff in a position where the plaintiff would be entitled to judgment on his complaint as a matter of law." Id. Obviously. Judge Arnold recognized that genuine issues of material fact exist in this case despite a disposition of the defendants' third special defense.
The plaintiff does not address the elements of the prima facie case for a mortgage foreclosure action in his memorandum of law in support of his motion for summary judgment. The amended complaint alleges that the plaintiff is the owner and holder of the note and the mortgage and that payment under the note is in default and the debt is now due and unpaid. However, the defendants did not admit in their amended answer that the note and mortgage are in default, that the debt is due and unpaid and that the balance of the principal sum of the mortgage is in excess of $1.8 million.
Further, that the plaintiff's affidavit, which he submitted as his only factual support for his motion for summary judgment, does not prove by a preponderance of the evidence that payment under the note is in default and the debt is now due and unpaid. It is noted that the plaintiff's affidavit in support of the present motion for summary judgment contains substantially similar language as the plaintiff's affidavit in support of his motion for summary judgment as to the defendants' third special defense. Judge Arnold, in his decision denying the plaintiff's motion for summary judgment as to the defendants' third special defense, held that the plaintiff's affidavit met none of the criteria set forth in Practice Book § 17-46 for a proper affidavit in support of a motion for summary judgment. Verderame v. Anderson Sunnyside Farm Associates, supra, Superior Court, Docket No. CV 970406638.
Practice Book § 17-46 provides: "Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto."
In his affidavit, the plaintiff attests that he had been a part of the transaction in this case "from the beginning" and that he "signed many of the checks associated with this transaction and received all of the documentation during the course of the transaction." The plaintiff has failed, however, to submit any certified copies of these checks or any of the documentation that he received. Further, that the plaintiff's affidavit contains several conclusory statements regarding the specifics of the transaction and the prior dealings of the individual defendant mortgagor. The affidavit does not contain statements that establish that the defendants have defaulted on the note. Furthermore, it is noted that the plaintiff, throughout his affidavit, refers to exhibits and that none of these exhibits are attached to the affidavit as certified papers. The court finds that the plaintiff has not established a prima facie case for the foreclosure of a mortgage and that the plaintiff has failed to meet his burden of showing the absence of any genuine issue of material fact. Genuine issues of material fact exist as to whether the note is in default and whether the debt has been extinguished by the plaintiff's acceptance of a deed in lieu of foreclosure, which is alleged by the defendants in their sixth special defense. Therefore, plaintiff's motion for summary judgment is denied.
By the Court,
Skolnick, J.