Opinion
No. CV09 600 28 03
August 27, 2010
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (#116)
The issue presented in this foreclosure action is whether the court should grant the defendant's motion for summary judgment. Based on the following, the court will grant the defendant's motion for summary judgment as no genuine issues of material fact exist in the present matter and the defendant is entitled to judgment as a matter of law.
BACKGROUND
The present action was commenced on March 11, 2009, by service of process on the defendant, Mary Casey. Thereafter, on March 30, 2009, the plaintiff, Wachovia Bank, filed a single-count complaint. On April 22, 2009, the plaintiff filed an amended complaint seeking foreclosure of certain property and alleging the following facts. On February 13, 2008, the defendant entered into a "Prime Equity Line Agreement" (PELA) with the plaintiff in the amount of $250,000 and secured the PELA by delivering a mortgage on property located at 15 Verna Field Road in the town of Fairfield (the Fairfield property) to the plaintiff. The mortgage was recorded on the Fairfield land records. Since August 2008, the defendant has failed to make payments on the loan and is currently in default under the terms of the PELA and mortgage. The defendant allegedly is the record owner of the property, is in possession of the property and is the owner of the equity of redemption. On April 6, 2009, attorney Stephen M. Carruthers, was appointed as conservator of the defendant's person and estate.
The plaintiff filed the amended complaint within thirty days of the April 7, 2009 return date as required by Practice Book § 10-59. The defendant filed a request to revise on June 15, 2009. The plaintiff filed an objection thereto on June 16, 2009 and that objection was sustained by the court, Maiocco, J., on October 1, 2009. Thus the amended complaint of April 22, 2009, remains the operative complaint in the present action.
On October 22, 2009, Carruthers, on behalf of the defendant, filed an answer and special defenses. In her first special defense, the defendant alleges that the mortgage and note are invalid and unenforceable as the documents were signed by her son, Martin Casey, pursuant to a power of attorney. The defendant further alleges that a conservator had been appointed over her person and estate prior to the execution of the subject instruments and, therefore, any purported power of attorney her son had over her affairs ceased by operation of General Statutes § 45a-562.
The defendant's second special defense alleges that Martin Casey fraudulently represented to the plaintiff that he had a valid power of attorney. The defendant further alleges that the plaintiff was actually and/or constructively aware of Martin Casey's fraudulent conduct by virtue of a notice of pending application for appointment of a conservator recorded on the Fairfield land records on July 9, 2007, and by virtue of Martin Casey's subsequent appointment as the defendant's conservator on July 20, 2007.
The defendant alleges non compos mentis as her third special defense. In particular, the defendant alleges that she was unable to enter into the subject contracts as a conservator had been appointed over her person and estate by the Fairfield Probate Court at the time of their execution and the plaintiff was actually and/or constructively aware that such conservator had been appointed.
Finally, as a fourth special defense, the defendant alleges that she is a stranger to the subject contracts. Specifically, the defendant alleges that her name was implicated in the note and mortgage only by virtue of Martin Casey's illegal conduct in signing her name pursuant to a purported power of attorney.
On February 5, 2010, the defendant filed a motion for summary judgment on the ground that there is no genuine issue of material fact and that judgment should enter in her favor as a matter of law. The defendant has submitted a memorandum of law in support of the motion. The plaintiff filed a memorandum of law in opposition on April 19, 2010. The matter was heard at the foreclosure calendar on May 20, 2010.
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." (Internal quotation marks omitted.) Provencher v. Enfield, 284 Conn. 772, 790-91, 936 A.2d 625 (2007). "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 counter affidavits and concrete evidence." (Internal quotation marks omitted.) CT Page 17052 Little v. Yale University, 92 Conn.App. 232, 235, 884 A.2d 427 (2005), cert. denied, 276 Conn. 936, 891 A.2d 1 (2006).
The defendant argues that she is entitled to summary judgment as there is no genuine issue of material fact that the plaintiff's mortgage on the Fairfield property is invalid and unenforceable. In particular, the defendant argues that the mortgage and note, executed by her son Martin Casey, purportedly pursuant to a power of attorney, were defective because Martin Casey lacked the authority to enter into the subject transactions on her behalf. In support of her position, the defendant raises four arguments: (I) that Martin Casey's purported power of attorney was never recorded on the Fairfield land records, thus invalidating the conveyance (II) that the appointment of Martin Casey as conservator voided any then existing power of attorney he may have had, (III) that the Fairfield Probate Court did not approve of the mortgage prior to Martin Casey executing it on behalf of the defendant and (IV) that the plaintiff had actual and/or constructive notice of the conservatorship and the absence of a power of attorney. In support of her motion, the defendant has submitted a notice of pending application for appointment of a conservator, a Probate Court decree appointing Martin Casey as conservator of the defendant, a copy of the PELA, a copy of the mortgage deed, a fiduciary's probate certificate, a title search report, an affidavit of Carruthers and a copy of the plaintiff's responses to the defendant's requests to admit.
The plaintiff counters that a genuine issue of material fact exists because the defendant has failed to introduce the power of attorney it is claiming to be invalid into evidence. The plaintiff contends that the absence of the documentation creating the power of attorney prevents the court from applying the appropriate choice of law analysis to the present facts. Moreover, the plaintiff argues that the statutory language that the defendant relies on does not support her argument that the underlying mortgage lien is invalid. The plaintiff further argues that Martin Casey failed to file notice of his appointment as conservator of the defendant on the Fairfield land records as required by statute and, thus, the plaintiff did not have notice, constructive or otherwise, that the defendant had no authority to sign the subject mortgage and note. Finally, the plaintiff argues that the defendant neither argued, nor documented in her answer or moving papers, that she did not receive the benefit of the $250,000 PELA.
"In a mortgage foreclosure action, to make out its prima facie case, the foreclosing party ha[s] to prove by a preponderance of the evidence that it was the owner of the note and mortgage and that [the mortgagee] had 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 163 (2003). "Furthermore, the foreclosing party must demonstrate that all conditions precedent to foreclosure, as mandated by the note and mortgage, have been satisfied." Bank of New York v. Conway, 50 Conn.Sup. 189, 194, 916 A.2d 130 (2006), citing Bank of America, FSB v. Hanlon, 65 Conn.App. 577, 581, 783 A.2d 88 (2001).
"Historically, defenses to a foreclosure action have been limited to payment, discharge, release or satisfaction . . . or, if there had never been a valid lien . . . 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." Fidelity Bank v. Krenisky, 72 Conn.App. 700, 705, 807 A.2d 968, cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002).
The defendant supports its motion with an authenticated copy of the subject mortgage. That document contains a signature line bearing the notation "Mary Casey Martin Casey POA." The defendant argues that the plaintiff's lien is invalid because Martin Casey acted outside the scope of his authority as conservator of the defendant in mortgaging the Fairfield property without Probate Court approval. Attached to her memorandum in support of summary judgment the defendant provides a copy of a Probate Court decree establishing that Martin Casey was appointed conservator of the defendant on July 20, 2007. The defendant argues that any power of attorney Martin Casey may have had prior to signing the mortgage documents was extinguished by operation of law when he was appointed conservator.
General Statutes § 1-56j, concerning ceasing powers of attorney, provides: "If a conservator of the estate of the principal is appointed, the power of attorney shall cease at the time of the appointment and the person acting under the power of attorney shall account to the conservator rather than to the principal."
Likewise, § 45a-562(a), which concerns durable powers of attorney, provides in relevant part: "The subsequent disability or incompetence of a principal shall not revoke or terminate the authority of any person who acts under a power of attorney in a writing executed by the principal, if the writing contains the words `this power of attorney shall not be affected by the subsequent disability or incompetence of the principal,' or words of similar import showing the intent of the principal that the authority conferred shall be exercisable notwithstanding the principal's subsequent disability or incompetence . . ." Additionally, § 45a-562(b) provides: "If a conservator of the estate of the principal is appointed after the occurrence of the disability or incompetence referred to in subsection (a) of this section, the power of attorney shall cease at the time of the appointment, and the person acting under the power of attorney shall account to the conservator rather than to the principal."
Had Martin Casey's purported power of attorney existed prior to his appointment as conservator of the defendant, §§ 1-56j and 45a-562 indicate that such power of attorney would have ceased by operation of law and would have required that Martin Casey account to the appointed conservator. Martin Casey himself was the appointed conservator when the mortgage was executed. Thus, Martin Casey's authority pursuant to the alleged power of attorney was subservient to his authority as conservator.
Section 45a-164(a) provides: "Upon the written application of the conservator of the estate of any person, guardian of the estate of any minor, temporary administrator, administrator or trustee appointed by the court, including a trustee of a missing person, or the executor or trustee under any will admitted to probate by the court, after such notice as the court may order and after hearing, the court may authorize the sale or mortgage of the whole or any part of, or any easement or other interest in, any real property in this state of such person, minor, missing person, deceased person or trustee, or of any real property the legal title to which has been acquired by such temporary administrator, administrator, executor or trustee, if the court finds it would be for the best interests of the parties in interest to grant the application."
"A conservator has an implied power to enter into contracts on behalf of his ward's estate where such contracts involve the exercise of the express or implied powers which are granted to the conservator by statute . . . If such a contract has been previously authorized by the Probate Court, or is subsequently approved by that court, the ward's estate will be bound thereto . . . The authorization or approval by the Probate Court, however, is essential, and without it the ward's estate is not liable . . . [A] conservator is powerless to sell his ward's real estate without the prior express authorization of the Probate Court . . ." (Citations omitted.) Elmendorf v. Poprocki, 155 Conn. 115, 118-19, 230 A.2d 1 (1967), citing § 45-238 now § 45a-164. See Kerin v. Stangle, 209 Conn. 260, 267 n. 8, (1988) (conveyance of property requiring Probate Court approval under § 45-238 now § 45a-164); see also Taylor v. Slavtcheff, Superior Court, judicial district of New London, No. CV 06 4006401 (Oct. 4, 2007, Parker, J.T.R.) (Probate Court approval necessary under § 45a-164 to convey estate's real property.) As § 45a-164 concerns both the sale and mortgage of real property, Elemendorf and its progeny apply to the present factual context.
"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). "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). As the plaintiff notes, the defendant has failed to provide the court with a copy of the purported power of attorney. Nevertheless, the absence of documentation memorializing Martin Casey's alleged power of attorney does not create an issue of material fact in the present matter.
Although the plaintiff argues that the court is unable to engage in an appropriate choice of law analysis absent documentation establishing the alleged power of attorney in Martin Casey, the plaintiff fails to cite any law supporting the proposition that a foreign power of attorney would take priority over Connecticut's statutory provisions concerning persons conserved in-state and the disposition of property within the state's bounds. Although there is a dearth of binding case law on this point, the Restatement of Conflict of Laws is instructive. 2 Restatement (Second), Conflict of Laws, Property § 232, p. 34 (1971) provides: "(1) Whether the exercise of a power of attorney transfers an interest in land and the nature of the interest transferred are determined by the law that would be applied by the courts of the situs. (2) These courts would usually apply their own local law in determining such questions." Connecticut's interest in following its own statutory mandates governing property residing in-state and persons conserved in-state is more significant than any hypothetical interest inherent in the grant of a foreign power of attorney for conveyance of real property in Connecticut. Therefore, the absence of the purported power of attorney fails to create an issue of material fact with regard to the appropriate choice of law.
Moreover, Practice Book § 10-3(b) provides: "A party to an action who intends to raise an issue concerning the law of any jurisdiction or governmental unit thereof outside this state shall give notice in his or her pleadings or other reasonable written notice." Although the plaintiff intimates that foreign law may have bearing on a potential choice of law issue, the plaintiff fails to provide reasonable written notice as to the nature of the issue and fails to provide notice as to which jurisdictions' laws are applicable to the present matter."
Had Martin Casey's power of attorney existed prior to his appointment as conservator, such power of attorney would have subsequently been revoked and would have required Martin Casey to account to the conservator. Moreover, had the power of attorney somehow been granted to Martin Casey after his appointment as conservator, a scenario that neither party alleges is the case here, it is incongruous to assume that such appointment would serve to contravene Martin Casey's statutory responsibilities as conservator. To hold differently would render conservatorship ineffectual, as any conservator would have the ability to circumvent Probate Court oversight by granting a power of attorney to oneself.
Furthermore, the defendant would have been unable to grant such authority as she was conserved by the Fairfield Probate Court and, thus, unable to contract.
Section 45a-164 requires approval of a Probate Court to sell or mortgage the real property of a conserved person. The defendant has presented an admissible Probate Court decree establishing that Martin Casey was appointed conservator of the defendant on July 20, 2007, prior to the execution of the subject mortgage and note on February 13, 2008. The plaintiff has failed to present any evidence to rebut this fact. Furthermore, the plaintiff failed to establish that Martin Casey's conservatorship was terminated prior to the execution of the mortgage and note. Thus, Martin Casey was under a statutory duty to seek Probate Court approval of the subject mortgage transaction, which he failed to do. Therefore, there is no genuine issue of material fact that the underlying conveyance is invalid as against the defendant's estate. In the absence of liability under the subject note and mortgage, the defendant, Mary Casey, is entitled to judgment as a matter of law.
The plaintiff raises an additional argument that, because Martin Casey failed to record his appointment as conservator on the Fairfield land records as required by General Statutes § 45a-658, it did not have actual or constructive notice of Martin Casey's conservatorship. However, the defendant has established through its evidentiary submissions that a notice of pending application for the appointment of a conservator was recorded on the Fairfield land records on July 9, 2007. That application clearly states that, pursuant to § 45a-653, no conveyance or contract entered into during the application period will be held valid absent court approval. Thus, the plaintiff, absent any knowledge that a conservator had been appointed, would have been confronted with a recorded document stating that any conveyance of the Fairfield property during the pendency of the application period would be held invalid. Faced with such a warning, the plaintiff nevertheless entered into a contract with Martin Casey mortgaging the Fairfield property without the approval of the Probate Court. The recording of the pending application placed the plaintiff on inquiry notice with regard to the appointment of a conservator and, in the exercise of reasonable diligence, the plaintiff would have discovered Martin Casey's actual appointment. See Farmers Mech. Savings Bank v. First Fed. Savings Loan Assn., 167 Conn. 294, 355 A.2d 260 (1974) (applying equitable doctrine of inquiry notice in real property context).
The plaintiff admits in its memorandum in opposition to summary judgment that "[Martin Casey] may have issues with the [P]robate [C]ourt for signing the mortgage without having [P]robate [C]ourt approval." Additionally, the plaintiff heads section "C" of its memorandum in opposition, "The [c]onservator's failure to obtain [P]robate [C]ourt approval does not affect the validity of the [m]ortgage."
CONCLUSION
For the foregoing reasons, the defendant's motion for summary judgment is granted.