Opinion
CV146024874
07-29-2016
Wells Fargo Bank, National Association as Trustee for Asset Backed Securities Corporation Home Equity Loan Trust, Series 00MC 2005-HE6, Asset Backed Pass Through Certificate, Series 00MC 2005-HE6 v. Paul Bisonnette
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT
Mark H. Taylor, J.
I
BACKGROUND
In this action to foreclose a residential mortgage, the plaintiff has filed a Motion for Summary Judgment to which the defendant objects. The genesis of the defendant's primary objection to summary judgment involves his longstanding disagreement with the lender over the underlying loan transaction to refinance his home, which occurred on May 5, 2005. Affidavit In Opposition To Motion for Summary Judgment, paragraphs 6 and 17.
The plaintiff in this matter is Wells Fargo Bank, National Association, As Trustee For Asset Backed Securities Corporation Home Equity Loan Trust, Series 00MC 2005-HE6, Asset Backed Pass Through Certificate, Series 00MC 2005-HE6 (Wells Fargo). This is the plaintiff's third action to foreclose the mortgage on the defendant's home. The first was filed in 2007, and the second was filed in 2011. Wells Fargo filed this third foreclosure action on August 29, 2014, which the defendant answered on June 11, 2015. The answer included eighteen special defenses and three counterclaims. The defendant's three counterclaims have since been withdrawn and are no longer before the court.
II
SUMMARY JUDGMENT
" Pursuant to Practice Book § 17-49, 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." (Citations omitted; internal quotation marks omitted.) J.E. Robert Co. v. Signature Properties, LLC, 309 Conn. 307, 333, 71 A.3d 492 (2013).
III
FACTS AND DISCUSSION
The plaintiff seeks to foreclose on a mortgage loan in the amount of $229,500 that the defendant originally obtained to refinance his home in 2005, as allegedly modified in 2012. Underlying the longstanding dispute between the parties is the defendant's assertion that the amount and interest rate of this mortgage note were in excess of his loan application agreement. As evidence of this, the plaintiff offers his signed loan application, dated May 5, 2005, in which the loan amount is stated as $212,500.00, at the annual interest rate of 7.5 percent. Exhibit 19.
Unless otherwise indicated, " Exhibit" references the separate filing of exhibits, filed in support of the defendant's objection to summary judgment.
According to the closing Settlement Statement, used to refinance the defendant's mortgage (HUD 1), the loan amount is stated as $229,500, $17,000 higher than the loan application. The mortgage note that the defendant signed is consistent with this higher loan amount of $229,500. The annual interest rate on this note is 7.9 percent, which is 0.4 percent higher than the rate stated on his loan application.
In addition, the defendant asserts that the refinanced mortgage payoff amount was in excess of what he owed on his old mortgage. The HUD 1 reflects a disbursement to Option One Mortgage of $193,636.23, apparently disbursed for the release of the existing mortgage. This amount is approximately $9,000 higher than the mortgage lien reflected on his loan application of $184,702. Exhibit 4; Plaintiff's Reply Brief, Exhibit D. The defendant also contends that the old mortgage has not been released, although he offers no evidence in support of this claim.
Although neither of these exhibits are supported by affidavits as to their authenticity, defendant does not appear to dispute the fact that the inconsistencies between the transaction he expected and the mortgage he entered into, as represented in the HUD 1, show the nature of the dispute between the parties.
Although the defendant states that he has not received a release of his earlier mortgage to Option One Mortgage, there is no evidence showing that the current mortgage is a second mortgage or that the earlier, refinanced mortgage note has been enforced or is enforceable. Furthermore, the current mortgage note was endorsed to Option One Mortgage, the refinanced mortgagee. It is therefore doubtful that Option One Mortgage would have mistakenly purchased a second mortgage note on the same property.
A
Standing
The court has reviewed the voluminous briefs and exhibits provided by the parties, both in support and in opposition to the plaintiff's motion for summary judgment. Among his numerous claims, the defendant questions the standing of the plaintiff to bring this action. The court will therefore begin its analysis by addressing the issue of standing, as it implicates the subject matter jurisdiction of the court.
At the hearing on the motion for summary judgment held on May 16, 2016, the plaintiff presented the original note and mortgage deed for review including by the defendant. The court concluded that they were originals, bearing the acknowledged, original signatures of the defendant and of witnesses, where appropriate. Although many of the defendant's objections to summary judgment focus upon the authenticity of these documents, he offered no specific objections to their authenticity at the hearing. He primarily maintains that they do not reflect his understanding of the agreed-upon loan amount, interest rate and mortgage payoff.
Possession of a mortgage note endorsed in blank, as established here, creates a presumption that the plaintiff has the right to enforce the mortgage. J.E. Robert Co., Inc. v. Signature Properties, LLC, 309 Conn. 307, 71 A.3d 492 (2013). The question presented is whether, based upon the evidence, the defendant has met his burden of rebutting the presumption of the plaintiff's standing as the holder of the mortgage note endorsed in blank.
The nature of this burden of rebuttal has been summarized recently by our Appellate Court, as follows: " If the foreclosing party shows that it is a valid holder of the note and can produce the note, it is presumed that the foreclosing party is the rightful owner of the debt. That presumption may be rebutted by the defending party, but the burden is on the defending party to provide sufficient proof that the holder of the note is not the owner of the debt, for example, by showing that ownership of the debt had passed to another party. It is not sufficient to provide that proof, however, merely by pointing to some documentary lacuna in the chain of title that might give rise to the possibility that some other party owns the debt. In order to rebut the presumption, the defendant must prove that someone else is the owner of the note and debt. Absent that proof, the plaintiff may rest its standing to foreclose on its status as the holder of the note." (Emphasis in original.) U.S. Bank, National Ass'n v. Schaeffer, 160 Conn.App. 138, 150, 125 A.3d 262 (2015).
Over the course of many years, the defendant has sought redress regarding this mortgage transaction. Reflective of the modern secondary market for securitized mortgage debt, the defendant has worked and corresponded with many business entities claiming rights of ownership, enforcement and the servicing of his mortgage. These entities included Option One Mortgage, which endorsed the note in blank; American Home Mortgage, which purportedly modified the mortgage note in 2009 and 2012; Homeward Servicing; Ocwen; Homestar Direct; and Opteum Financial Services dba Homestar Direct, a business entity of particular concern to the defendant.
The defendant maintains that he arranged his mortgage with an agent of Homestar Direct. Although Opteum Financial Services, LLC (Opteum) was the original mortgage lender, it apparently did business as Homestar Direct, as reflected in the defendant's " Borrower's Certification & Authorization." Exhibit 1. Homestar Direct is also identified as a " division of Opteum" on letterhead provided to the court. Defendant's Brief in Opposition, Exhibits 21 & 22. Among the assertions in the defendant's affidavit and exhibits is that Opteum dba Homestar Direct was not licensed in New Jersey at the time of the mortgage loan transaction on May 5, 2005. Notably, the mortgage note and deed use the name " Opteum Financial Services, LLC, A New Jersey Limited Liability Co., " as well as on the initial assignment to Option One Mortgage Corporation. However, the name Homestar Direct appears nowhere on the mortgage note and deed.
The defendant offers exhibits to show that Opteum dba Homestar Direct was not a licensed mortgage lender or broker at the time of the closing. The defendant has also provided documentation of the fact that Opteum itself was established under Delaware state law on October 4, 2004. The defendant has additionally offered evidence from the Connecticut Banking Department that " Opteum Financial Services, LLC" was, in fact licensed as of May 1, 2005, but not as " a dba (doing business as) . . . registered at that time." Exhibit 16. In an email colloquy between the defendant and, apparently, a Connecticut Banking official, the question presented was whether Opteum was licensed at a Paramus, New Jersey location. From these alleged facts, the court concludes that Opteum was licensed at the time of the mortgage transaction, but not licensed for doing business in the name of Homestar Direct.
The defendant offers these facts in support of his conclusion that Opteum dba Homestar Direct lacked legal capacity to enter into a mortgage with him on May 5, 2005 and, therefore, the mortgage transaction is void and unenforceable. At the hearing, the defendant presented this argument and additional supporting facts are discussed in paragraph 8 of his affidavit, attached to his objection. Although the defendant concedes that Opteum dba Homestar Direct was licensed in December 2006, this question does not appear to involve a material fact, at least regarding standing, because his mortgage note and deed agreements were entered into with Opteum, not Homestar Direct. Although it is unclear from the documents provided, it appears that the defendant's mortgage broker or agent was with Opteum dba Homestar Direct. Exhibit 1.
Assuming these facts to be material to his defenses, generally, the defendant cites the licensing requirements for mortgage brokers lenders, codified at General Statutes § 36a-485 et seq. In his brief, he specifically refers to General Statutes § 36a-486(a), which provides in relevant part: " No person shall engage in the business of making residential mortgage loans or act as a mortgage broker in this state unless such person has first obtained the required license . . . in accordance with the provisions of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b." He then refers to subsection (d), as follows: " Each residential mortgage loan taken, offered, negotiated, solicited, arranged, placed, found, made, processed or underwritten without a license shall constitute a separate violation for purposes of section 36a-50."
In his brief, the subsection is mistakenly cited as (c).
The penalty for violations of these mortgage banking and brokerage statutes include a combination of restitution and disgorgement, and are within the jurisdiction of, and determined by, the Commissioner of Banking. For any harm committed by an unlicensed mortgage broker, therefore, an individual would find their remedy before the Banking Commissioner pursuant to General Statutes § 36a-50.
General Statutes § 36a-50(c) provides; " Whenever the commissioner finds as the result of an investigation that any person has violated any provision of the general statutes within the jurisdiction of the commissioner, or any regulation, rule or order adopted or issued under such provisions, the commissioner may, in addition to any other remedy authorized by law, order such person to (1) make restitution of any sums shown to have been obtained in violation of any such provision, regulation, rule or order plus interest at the legal rate set forth in section 37-1; (2) provide disgorgement of any sums shown to have been obtained in violation of any such provision, regulation, rule or order; or (3) both make restitution and provide disgorgement in accordance with subdivisions (1) and (2) of this subsection. After the commissioner issues such an order, the person named in the order may, not later than fourteen days after the receipt of such order, file a written request for a hearing. The order shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending. Any such hearing shall be held in accordance with the provisions of chapter 54."
The defendant offers no authority showing that a mortgage transaction arranged through an unlicensed mortgage broker is void, ab initio, or otherwise provides a legal defense to foreclosure. Therefore, the court concludes that Homestar Direct's involvement in arranging this mortgage transaction does not vitiate the standing of the plaintiff as the holder of the note. In drawing this legal conclusion, the court considers it important that the mortgage note and deed were entered into with Opteum, a fully licensed mortgage lender at the time of the transaction.
Further, the defendant has presented no evidence of an assignment, transfer or enforcement of the mortgage note by any entity other than the plaintiff. The defendant has therefore failed to meet his burden of rebutting the presumption of standing under Schaeffer, supra, 160 Conn.App. 150. Based upon this conclusion, the court finds that Wells Fargo is the proper plaintiff, as it is the holder of the mortgage note endorsed in blank and has the right to enforce the mortgage pursuant to J.E. Robert Co., Inc., supra, 309 Conn. 325.
For these reasons, the motion for summary judgment on the first special defense of standing and second for capacity, as well as the third and fourth for illegal transaction, is granted.
B
Rescission
The court will now address the question of rescission of the 2005 mortgage transaction pursuant to the Truth In Lending Act, 15 U.S.C. § 1635(a) (TILA). The defendant has presented evidence that the mortgage documents in the possession of the plaintiff are inconsistent with the mortgage transaction for which he bargained. The defendant asserts in his affidavit that he did not receive copies of the mortgage documents, signed at the closing on May 5, 2005, at which he had no legal representation, despite paying $550 for legal services. Over eight months later on January 23, 2006, he attests to the fact that, for the first time, he received his Federal Truth-In-Lending Disclosure statement and that the next day, on January 24, 2006, he received copies of the mortgage note and HUD 1 settlement statement, all of which were signed and dated on May 5, 2005.
Due to inconsistencies between the mortgage documents he received and the mortgage he believed he bargained for, the defendant exercised his right to rescind the transaction on January 26, 2006 pursuant to TILA, to which he received no response. The defendant asserts that his written rescission was timely because it occurred within three days of receipt of required TILA disclosures.
The plaintiff counters that the defendant's attempted rescission was untimely. Evidence in support of this conclusion includes a TILA notice of the defendant's right to cancel the mortgage transaction, signed on May 5, 2005. The signed right to cancel document includes an acknowledgement of receipt of two copies of the right to cancel form, contrary to the defendant's sworn statement that he received no copies of any closing documents. Affidavit in Opposition to Motion for Summary Judgment, Paragraph 8. The plaintiff concludes, therefore, that the defendant's three-day right of rescission pursuant to TILA had long expired prior to his attempt to do so on January 26, 2006.
This document, however, was submitted in the plaintiff's reply brief, which did not include an affidavit in support of its authenticity, as required by the business records exception to the rule against hearsay. Interestingly, the defendant has provided the court with a Federal Truth-In-Lending Disclosure Statement, also signed by him on the date of the closing on May 5, 2005, with a disconcertingly different loan amount of $224,150.000 and a different rate of interest, set at 8.096 percent. Exhibit 2.
The right of rescission pursuant to TILA arises " in the case of any consumer credit transaction . . . in which a security interest, including any such interest arising by operation of law, is or will be retained or acquired in any property which is used as the principal dwelling of the person to whom credit is extended, the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section together with a statement containing the material disclosures required under this subchapter, whichever is later, by notifying the creditor, in accordance with regulations of the Board, of his intention to do so . . ." 15 U.S.C. § 1635(a), see also General Statutes § 36a-683(j).
" The primary public policy underlying TILA is to promote 'the informed use of consumer credit.' 12 C.F.R. § 226.1(b). Title 15 of the United States Code, § 1601(a) states in relevant part that 'the purpose of [TILA is] to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, ' and to protect the consumer against inaccurate and unfair credit billing and credit card practices. The House of Representatives report accompanying TILA provides that '[y]our committee believes that . . . the credit disclosure features of [TILA] . . . [are] fundamental to its legislative purpose . This aspect of the bill is designed to provide consumers with basic information in connection with their credit transactions so that they may effectively " comparison shop" for credit in order to obtain credit on the most favorable terms available in the market place.' H.Rep. No. 1040, 90th Cong., 1st Sess. 18, reprinted in 1968 U.S. Code Cong. & Admin. News 1962, 1975. Thus, TILA seeks to effectuate its public policy of promoting the informed use of credit by requiring lenders to disclose credit terms to consumers." (Emphasis in original.) Cheshire Mortgage Serv., Inc. v. Montes, 223 Conn. 80, 107-08, 612 A.2d 1130 (1992).
The plaintiff has produced an unauthenticated TILA right to cancel, signed by the defendant, acknowledging the receipt of copies of the document. This document, even if authenticated, does not end the evidentiary inquiry. It would merely establish a rebuttable presumption that two copies of the TILA disclosure were provided. " Notwithstanding any rule of evidence, written acknowledgment of receipt of any disclosures required under this subchapter by a person to whom information, forms, and a statement is required to be given pursuant to this section does no more than create a rebuttable presumption of delivery thereof." 15 U.S.C. § 1635.
The defendant has sworn in rebuttal that he received no copies of closing documents until January 23-24, 2006, upon which he rescinded the transaction within three days on January 26. Standing alone, this would represent a dispute regarding a material fact. The plaintiff, however, argues that the defendant ratified the original mortgage transaction of May 5, 2005 by making payments on the original mortgage note and through subsequent modifications of the note.
C
Modification
In further support of the existence of an enforceable loan, the plaintiff asserts that the defendant made payments on the original mortgage note and subsequently entered into two modifications of the original loan in 2009 and 2012. In response to these claims, the defendant asserts that, although he paid the original mortgage loan for several months, he did so only to avoid default until he received documentation of the mortgage transaction in January of 2006. As to the alleged modifications of the mortgage note, the defendant asserts that his signature on the loan modification contract in 2012 was subject to the acceptance of a contemporaneously signed and delivered counter-offer, to which he received no response. Exhibit 7. The defendant further asserts that both the 2012 and 2009 modifications are void and cannot be modified or ratified by a subsequent modification of the mortgage note.
Plaintiff's Motion for Summary Judgment, Exhibit D.
The court will begin with an analysis of ratification resulting from mortgage payments made by the defendant between the time of the closing on May 5, 2005 and his claimed rescission in January 2006. Ratification is " [t]he acceptance of the results of the act with an intent to ratify, and with full knowledge of all the material circumstances . . ." (Internal quotation marks omitted.) Hartford Accident & Indemnity Co. v. South Windsor Bank & Trust Co., 171 Conn. 63, 72, 368 A.2d 76 (1976).
The defendant has stated in his affidavit that he was not provided with any mortgage closing documents until January 23-24, 2006. There is a dispute of fact between the parties, therefore, of whether the defendant ratified his mortgage by making payments with " full knowledge of all the material circumstances" of the mortgage transaction. Although the plaintiff provides evidence that the defendant paid his mortgage for several months after exercising his right of rescission under TILA in January, he states that he did so to preserve his right to refinance the mortgage, as misrepresented by the mortgagee. Plaintiff's Reply Brief, Exhibit B. In the court's view, this does not represent an intention to ratify the 2005 mortgage and represents a material issue of fact.
An additional and, perhaps, superseding question raised by the plaintiff is whether the defendant's subsequent, alleged modifications of the mortgage note resulted in ratification. The defendant clearly raises a dispute of fact over whether he entered into the 2012 modification, by producing evidence of a contemporaneous counter-offer. Before determining whether this disputed fact is material, however, the court must also evaluate the question presented of an earlier modification of the defendant's mortgage in 2009.
In its motion for summary judgment, the plaintiff provides a copy of the defendant's mortgage modification, entered into on March 1, 2009 with American Home Mortgage Servicing, Inc. Plaintiff's Motion for Summary Judgment, Exhibit D. The modification is signed by the defendant and recites the fact that it is a modification of his May 5, 2005 mortgage note and deed. The principal amount is identified as $289,858.69, with annual interest set at 7.9 percent.
Despite the presentation of this evidence in the motion for summary judgment, however, the 2009 modification is not alleged in the complaint. The court therefore finds the 2009 modification to be immaterial to the dispute between the parties, absent an amended complaint with the inclusion of this allegation.
D
Void v. Voidable Contract
The defendant asserts that the underlying mortgage note he signed in 2005 is void and may not be modified as a matter of law. This legal claim is based upon § 1635(b) of TILA, which provides, in relevant part: " When an obligor exercises his right to rescind under subsection (a) of this section, he is not liable for any finance or other charge, and any security interest given by the obligor, including any such interest arising by operation of law, becomes void upon such a rescission . . ." (Emphasis added.)
" The sequence of rescission and tender set forth in § 1635(b) is a reordering of the common-law rules governing rescission. Under common-law rescission, the rescinding party must first tender the property that he has received under the agreement before the contract may be considered void . . . Once the rescinding party has performed his obligations, the contract becomes void and the rescinding party may then bring an action in replevin or assumpsit to insure that the nonrescinding party will restore him to the position that he was in prior to entering into the agreement, i.e., return earnest money or monthly payments and void all security interests . . . Under Connecticut law, as a condition precedent to rescission, the parties to a contract must be restored to their original position as nearly as possible . . . Under § 1635(b), however, all that the [obligor] need do is notify the creditor of his intent to rescind. The agreement is then automatically rescinded . . ." (Citations omitted; internal quotations marks omitted.) Family Financial Services, Inc. v. Spencer, 41 Conn.App. 754, 769-70, 677 A.2d 479 (1996). Section 1635(b) continues as follows: " Within 20 days after receipt of a notice of rescission, the creditor shall return to the obligor any money or property given as earnest money, downpayment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the obligor, the obligor may retain possession of it. Upon the performance of the creditor's obligations under this section, the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value . . . The procedures prescribed by this subsection shall apply except when otherwise ordered by a court."
The specific language of TILA states that, upon rescission, elements of the contract " become void, " such as the security interest and liability for any finance or other charge. Based upon this statutory language, the court concludes that mortgage transactions are voidable by consumers under TILA, but are not void ab initio where, for example, a contract is determined to be unlawful or entered into without capacity.
" A void contract is a 'contract that is of no legal effect, so that there is really no contract in existence at all.' Black's Law Dictionary (7th Ed. 1999). '[E]very contract made for or about any matter or thing which is prohibited and made unlawful by statute is a void contract . . .' (Internal quotation marks omitted.) Solomon v. Gilmore, 248 Conn. 769, 785, 731 A.2d 280 (1999)." Blumberg Associates Worldwide, Inc. v. Brown & Brown of Connecticut, Inc., Superior Court, judicial district of Hartford, Docket No. CV-08-5023532-S, (August 8, 2014, Sheridan, J.). Municipal contracts are an exception, as " [a]n illegal contract can be ratified by the municipal body with power to make the contract." John J. Brennan Construction Corp., Inc. v. Shelton, 187 Conn. 695, 712, 448 A.2d 180 (1982). In the present case, there is no allegation of fraud. Instead, the mortgage was different than the mortgage the defendant bargained for with Opteum dba Homestar Direct. By analogy to the common law, " [f]raud in the inducement of a contract ordinarily renders the contract merely voidable at the option of the defrauded party, who also has the choice of affirming the contract and suing for damages." A. Sangivanni & Sons v. F.M. Floryan & Co., 158 Conn. 467, 472, 262 A.2d 159 (1969). Therefore, if a fraudulent contract is voidable, the defendant's mortgage transaction must be voidable, as well.
The distinction between void and voidable contracts is noteworthy. A voidable contract may be ratified and " ratification of a voidable contract is ordinarily a matter of intent." Gengaro v. New Haven, 118 Conn.App. 642, 651-52, 984 A.2d 1133 (2009). Therefore, ratification remains a material question of fact. Community Collaborative of Bridgeport, Inc. v. Ganim, 241 Conn. 546, 563, 698 A.2d 245, 255 (1997).
For these reasons, the motion for summary judgment on the eighteenth special defense of rescission and the fourteenth special defense, asserting no modification in 2012, are denied. Because there is a genuine issue of material fact regarding the defendant's ratification of the 2005 mortgage note, the plaintiff's motion is denied as to the fifth special defense of negligent misrepresentation, the sixth special defense of intentional concealment and the seventh special defense of unconscionability.
In addition to the material issue of ratification in 2012, the plaintiff relies upon the assertion that, as an assignee, it may not be held accountable for defenses arising from the actions of the original lender. Although this may be true regarding affirmative claims, the plaintiff has not established that its status as an assignee would bar such defenses to foreclosure. Generally, " an assignee of a contract takes it subject to all defenses which might have been asserted against the assignor . . . but does not take it subject to affirmative claims against the assignor arising from the assignor's prior conduct without express assumption of such liability by the assignee." (Citations omitted; emphasis in original; internal quotation marks omitted.) Hartford v. McKeever, 139 Conn.App. 277, 285-86, 55 A.3d 787, aff'd on other grounds by 314 Conn. 255, 101 A.3d 229 (2012). The plaintiff has therefore not met its burden for summary judgment to be granted on the fifth, sixth and seventh special defenses.
E
Unclean Hands
The eleventh and twelfth special defenses allege unclean, hands. Together, they allege discovery abuse and filing this action based upon false and misleading information regarding the original mortgage documents. " 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." (Citation omitted.) Thompson v. Orcutt, 257 Conn. 301, 310, 777 A.2d 670, 676 (2001).
Abuse of discovery finds its remedy in Chapter 13 of the Practice Book and any sanctions imposed traditionally follow noncompliance with a court order. In addition, any sanction imposed is required to be proportional to the abuse, as determined by the court. " The factors to be considered by the court include: (1) whether noncompliance was caused by inability, rather than wilfulness, bad faith or other fault; (2) whether and to what extent noncompliance caused prejudice to the other party, including the importance of the information sought to that party's case; and (3) which sanction would, under the circumstances of the case, be an appropriate judicial response to the noncomplying party's conduct." Millbrook Owners Ass'n, Inc. v. Hamilton Standard, 257 Conn. 1, 15, 776 A.2d 1115, 1125 (2001).
Absent an order of compliance pursuant to Practice Book § 13-14, the allegation of discovery abuse in the present case does not, in the court's view, rise to the level of a special defense to foreclosure. For abuse of discovery to become a special defense to foreclosure, the abuse would have to be compelling and commensurate to the sanction of dismissal.
The eleventh and twelfth special defenses additionally allege false and misleading information regarding the original mortgage documents provided, in this action and through discovery, in contravention of a Judgment and Consent Order. At the hearing in this matter, the plaintiff provided the original mortgage documents and assignments for inspection by the court. In response, the defendant asserted no specific claims of material fact, disputing their accuracy or authenticity. In his brief, the defendant asserts that the mortgage note and deed were altered. However, the alterations of the mortgage deed, as shown in Exhibits 12 and 13 of his Memorandum in Opposition, merely reveal a difference in the address to which the original instrument was to be returned upon recording. Exhibit 13 shows that the mortgage deed was to be returned to Opteum. This name and address were crossed out in Exhibit 12 and substituted with the return address of U.S. Recordings, Inc. This document is consistent with a certified copy of the recorded mortgage deed, as shown in Exhibit 25.
In the court's view, these inconsistencies do not amount to evidence of fraud or misrepresentation of any kind. They instead appear to represent copies of the same mortgage deed at different stages of a process, ending in its recording on the land records, with the original document returned to U.S. Recordings, Inc. The more substantive claim made is that pages of the mortgage were substituted; however, no credible evidence was presented to support this claim in rebuttal to the authenticity of the original mortgage, presented in court.
In the defendant's brief, for example, he asserts that pages of the mortgage may have been substituted, but offers no evidence of this assertion. See Defendant's Brief in Opposition, Exhibit 4, p. 28.
The court has also reviewed the assignments of the mortgage deed and is satisfied that there is a complete chain of title to Wells Fargo. Inasmuch as possession of the mortgage note, endorsed in blank, is presumptive evidence of ownership of the underlying debt and the attendant right to foreclose, the fact that the mortgage deed may have been returned to an entity other than an assignee of the mortgage or the owner or holder of the note is of no substantive consequence.
In reviewing the original mortgage note in possession of the plaintiff, Wells Fargo, the court found that the note is specially endorsed by Opteum, the original lender, to Option One and then, by attached allonge, a blank endorsement by Option One. The defendant submits an unendorsed copy of the same note as evidence of alteration or tampering. The fact that there is a copy of the original note with no endorsements is not evidence of wrongful alteration. In fact, if the defendant received a copy of the original note at the closing, it would have been provided without subsequent endorsements. Endorsements are, in fact, lawful and expected alterations of a mortgage note.
For these reasons, the motion for summary judgment is granted as to the eleventh and twelfth special defenses of unclean hands.
E
Other Special Defenses
The defendant raises numerous, other special defenses. The eighth is for default and has no merit or basis in the evidence presented. The ninth for alteration of the note has no basis in credible evidence, as indicated previously. The tenth special defense for alleged alteration of the mortgage deed is not material to the question of whether the mortgage note is enforceable. The thirteenth special defense, requiring conditions precedent for Ocwen Loan Servicing, LLC to file a foreclosure, was not established in the evidence in rebuttal to the plaintiff's presumptive right to foreclose as the holder of the mortgage note. There is no basis in fact for the fifteenth special defense of payment, to rebut the accelerated mortgage debt owed to the plaintiff. This special defense appears to assert that the underlying debt has been paid by subsequent holders of the note. This is the expected course of conduct between holders of mortgage notes and does not alter the defendant's obligation to pay the underlying debt. The sixteenth defense of statute of limitations and seventeenth for laches were not presented as issues to the court and appear to have no basis in fact or at law, this being the third foreclosure on the third iteration of the note.
F
Plaintiff's Affidavit
The defendant asserts numerous flaws in the plaintiff's affidavit in support of summary judgment that are without merit. The plaintiff's affidavit is sworn to by a Loan Analyst for Ocwen Financial Corporation, whose indirect subsidiary is Ocwen Loan Servicing. Ocwen Loan Servicing, the loan servicer in this case for the plaintiff, Wells Fargo, is authorized as attorney in fact for Wells Fargo. Plaintiff's Motion for Summary Judgment, Exhibit A. The plaintiff's affidavit is based upon the affiant's personal review of business records, consistent with the hearsay exception provided for in General Statutes § 52-180 and supported by her understanding of the methodology used in the creation of these business records. See Midland Funding, LLC v. Mitchell-James, 163 Conn.App. 648, 657-58, 137 A.3d 1 (2016), (affiant must have " some working acquaintance with methods by which such records are made").
This reference involves the second Exhibit A, attached to the plaintiff's brief.
The defendant offers no evidence to the contrary and, instead, generally attacks the form of the sworn affidavit, the affiant's authority in relation to the plaintiff and her personal knowledge of the underlying facts of the case. " The defendant provides no authority . . . that precludes affiants from obtaining personal knowledge of underlying transactions by review of business records. Under General Statutes § 52-180, to be competent to testify, the affiant need only have personal knowledge of the relevant business records." (Footnote omitted.) RMS Residential Properties, LLC v. Miller, 303 Conn. 224, 235-36, 32 A.3d 307 (2011), overruled on other grounds by J.E. Robert Co. v. Signature Properties, LLC, supra, 309 Conn. 307.
IV
CONCLUSION
The motion for summary judgment is granted in part and denied in part.