Connecticut Nat'l Mtg. Co. v. Knudsen

Full title: CONNECTICUT NATIONAL MORTGAGE COMPANY v. LISE-LOTTE KNUDSEN AKA LISA…

Court: Connecticut Superior Court Judicial District of Danbury at Danbury

Date published: Sep 17, 2007

2007 Ct. Sup. 15583 (Conn. Super. Ct. 2007)

Opinion

No. CV89-0299519S

September 17, 2007

MEMORANDUM OF DECISION ON THE DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

HEIDI G. WINSLOW, JUDGE.

By a motion for summary judgment filed August 3, 2007, the defendant claims there is no genuine issue of material fact and the defendant is entitled to summary judgment as a matter of law. The defendant claims that the substitute plaintiff indisputably is not the owner of the original promissory note and therefore cannot proceed with enforcement of the foreclosure judgment. The motion for summary judgment is denied.

BACKGROUND

The defendant's motion is the latest pleading in a lengthy mortgage foreclosure case filed in October 1989. Judgment entered in favor of G.E. Capital Asset Management Corporation, as assignee of the original plaintiff, on May 23, 1994, Leheny, J. On that date, the original promissory note and mortgage deed were entered into evidence. The Superior Court in Danbury took physical possession of the documents. The original promissory note and mortgage deed have remained in the custody of the Danbury court clerk since May 1994. The Appellate Court affirmed the judgment of foreclosure per curiam and remanded for the setting of a new sale date. Connecticut National Mortgage Company v. Knudsen, 39 Conn.App. 936, 667 A.2d 1307 (1995). The court, Hull, STR, set a new sale date of September 13, 1997. Upon the denial of the defendant's motion to extend the sale date, Stodolink, J, the defendant filed her next appeal on September 5, 1997. The defendant was unsuccessful in that appeal. Subsequent law suits brought by the defendant against the plaintiff's successors and assigns resulted in summary judgments for the successors and assigns; per curiam affirmations by the Appellate Court; and denials of certification to the Supreme Court. Those lawsuits caused extensive delay in the application for a new foreclosure sale date.

On October 3, 2005, the court granted the substitution of Ingomar Limited Partnership (Ingomar) as the plaintiff. The defendant made no objection to the substitution. On that date, the court, Mintz J, also opened the judgment for the limited purpose of recalculating the debt and setting a new sale date. The court postponed the setting of a new sale date until Ingomar could produce more information as to the chain of six assignments of the promissory note and mortgage deed since entry of the judgment of foreclosure in 1994. The court invited Ingomar to file a document explaining the transfers of the note and mortgage. The court made clear that the judgment was opened for the limited purpose of determining whether Ingomar was entitled to collect on the note. The foreclosure judgment on the mortgage was not to be retried. The court stated that if the defendant questioned Ingomar's right as alleged owner of the note to collect on that note, then an evidentiary hearing would be required. The court urged Ingomar to file an "amended complaint" reciting the chain of ownership of the note. Despite the court's explanation that the "amended complaint" was for a limited purpose and was not to be an opportunity for the underlying mortgage foreclosure judgment to be retried, the defendant has treated the "amended complaint" as a reopening of the judgment for all purposes.

On August 28, 2006, the court, Mintz, J., granted a motion to substitute Christiana Bank and Trust Company, as trustee of the Sequoia Funding Trust, (the substitute plaintiff) in place of Ingomar. The defendant made no objection to the substitution. In November 2006, the defendant filed a "motion for nonsuit" pointing to the failure by the substitute plaintiff to file an "amended complaint." The court, Mintz, J., treated the motion for nonsuit as a motion for order. On February 5, 2007, the court ordered the substitute plaintiff to file an "amended complaint" by March 1, 2007, to show the chain of custody of the original promissory note and its current location. On March 1, 2007, the substitute plaintiff filed an "amended complaint" complying with the order.

On March 14, 2007, the defendant filed a motion to dismiss claiming that the substitute plaintiff lacked standing because the substitute plaintiff was not the owner of the note. After a full evidentiary hearing on June 26, 2007, the court, Shaban, J., found the facts in favor of the substitute plaintiff and denied the motion to dismiss. The hearing de facto served the purpose originally contemplated by Judge Mintz to determine whether the substitute plaintiff was the owner of the note for the purpose of allocation of rights on a sale day to be set by the court. By written decision dated July 3, 2007, the court, Shaban, J., found that the substitute plaintiff presented credible witness and documentary evidence and proved that it had standing to proceed. The defendant next filed this motion for summary judgment on August 3, 2007.

CT Page 15585

DISCUSSION

"[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." Practice Book § 17-49 "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 moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled to judgment as a matter of law." Sherwood v. Danbury Hospital, 278 Conn. 163, 179, 896 A.2d 777 (2006). To sustain her burden of proving no genuine issue of material fact, the defendant has submitted her own affidavit. She claims that the witness and documents produced by the substitute plaintiff at the June 26, 2007 hearing before Judge Shaban were inadequate to show the transfer of the mortgage to the substitute plaintiff. The defendant argues that because the substitute plaintiff produced no timely counter affidavit, the court is required to accept the defendant's conclusive statement about the quality of the evidence at the June 26, 2007 hearing. Judge Shaban found that the substitute plaintiff produced credible evidence at the June 26, 2007 hearing as to the transfer of the mortgage. Connecticut National Mortgage Co. v. Knudsen, Superior Court, Judicial District of Danbury, Docket No. CV 89 0299519 (July 3, 2007, Shaban, J.). The allegation of the defendant's affidavit concerning the quality of the evidence is contradicted by the decision of Judge Shaban. This court is not required to accept as fact a statement that is clearly not fact merely because the opposing party failed to file an affidavit denying the statement. Judge Shaban's written decision denying the defendant's motion to dismiss speaks for itself. The defendant may not overturn that decision merely by stating in an affidavit that her characterization of the evidence is more accurate than the judge's assessment. The defendant's affidavit lacks credibility. This court is not an appellate court. This court accepts Judge Shaban's findings and decision as the existing law of the case. If there is no genuine issue of material fact, it is because the facts have already been determined by the court to be contrary to the claims of the defendant.

"Because a mortgage foreclosure action is an equitable proceeding, the trial court may consider all relevant circumstances to ensure that complete justice is done. Although equitable power must be exercised equitably, . . . 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." (Citations omitted; internal quotation marks omitted.) Reynolds v. Ramos, 188 Conn. 316, 320, 449 A.2d 182 (1982). "Either a forfeiture or a windfall should be avoided if possible." (Citations omitted.) Society for Savings v. Stramaglia, 225 Conn. 105, 110, 621 A.2d 1317 (1993). Both the motion to dismiss and the motion for summary judgment claim that the substitute plaintiff is not the proper entity to enforce the foreclosure judgment because the substitute plaintiff has never possessed the original note. There is a fundamental flaw in the defendant's assumption that an action to foreclose a mortgage and an action to enforce a note are inextricably linked. "It is well established . . . that the [mortgagee] is entitled to pursue its remedy at law on the notes, or to pursue its remedy in equity upon the mortgage, or to pursue both. A note and a mortgage given to secure it are separate instruments, executed for different purposes and in this . . . action for foreclosure of the mortgage and upon the note are regarded and treated, in practice, as separate and distinct causes of action, although both may be pursued in a foreclosure suit." (Internal quotation marks omitted.) New England Savings Bank v. Bedford Realty Corp., 238 Conn. 745, 759, 680 A.2d 301 (1996), rev'd after remand, 246 Conn. 594, 717 A.2d 713 (1998). "Thus, whatever restrictions [the uniform commercial code] might put upon the enforcement of personal liability based solely upon a lost note, they do not prohibit [a mortgagee] from pursuing an action of foreclosure to enforce the terms of the mortgage." New England Savings Bank v. Bedford Realty Corp., supra, 238 Conn. 760. This is an action utilizing the equitable remedy of foreclosure. The request of Judge Mintz for information concerning the location of the original note and the transfers of the note does not compromise the ability of the substitute plaintiff to enforce the existing mortgage foreclosure judgment, provided the plaintiff was properly substituted.

"The manner in which to bring a title taken by an assignment pending suit to the attention of the court is by and in an application for a change of parties . . . No new cause of action, in such case, has arisen; there has been simply a transfer of the right of action for the original cause . . . The substitution was effected when the order that it be made was passed. Nothing further was required to put the new plaintiff in the shoes of the former plaintiff." (Internal quotation marks omitted.) F.P., Inc. v. Collegium Wethersfield Ltd., 33 Conn. 826, 831, 639 A.2d 527 (1994), cert. denied 229 Conn. 917, 642 A.2d 1211 (1994). The defendant is a bit late in raising any claim that the substitute plaintiff was not properly substituted. The substitution of Ingomar as plaintiff on October 3, 2005, happened without any objection from the defendant. The foreclosure case had already gone to judgment and been appealed twice unsuccessfully by the defendant. The defendant made no objection to the substitution of Ingomar and took no timely appeal of that substitution. The insertion of the substitute plaintiff on August 28, 2006, occurred without any objection from the defendant. The defendant took no appeal from that decision to substitute the current plaintiff. "[W]hen there is no objection from a defendant to the granting of a motion for substitution of a plaintiff, the defendant may not later claim that the proper party is not present." Investors Mortgage Co. v. Rodia, 31 Conn.App. 476, 481, 625 A.2d 833 (1993). If the defendant decided to forego an objection to the substitute plaintiff in order to rely upon a motion to dismiss claiming lack of standing, she gambled and lost. The assignee of a mortgage can proceed in his own right to redeem. Newman v. Gaul, 102 Conn. 425, 435, 129 A. 221 (1925). "[A]ll things done in the case by or in favor of the original plaintiff, except so far as they may be changed by order of court, remain for the benefit of the plaintiff who succeeds him, as if done by and for him originally and just as if no change of parties had been made." Bowen, Admr. v. Nat Life Assoc., 63 Conn. 460, 476, 27 A. 1059 (1893).

"[T]here is a substantive distinction between opening a judgment to modify or to alter incidental terms of the judgment, leaving the essence of the original judgment intact, and opening a judgment to set it aside." RAL Management, Inc. v. Valley View Associates, 278 Conn. 672, 690, 899 A.2d 586 (2006). When the only changes to the original judgment are substitution of a party or extension of a sale date, the substantive terms of the original judgment remain unchanged. RAL Management, Inc. v. Valley View Associates, supra, 278 Conn. 691.

CONCLUSION

The original judgment is unassailable. This court cannot order summary judgment for the defendant, even if the defendant's affidavit claims were accurate and credible. The judgment was never opened for the purpose of revisiting its substance, but solely to substitute the plaintiff and set a new sale date. The defendant did not raise in a timely fashion the claim that the substitute plaintiff does not stand in the shoes of the judgment plaintiff. To the extent that the defendant was allowed to question the substitute plaintiff's status as owner of the note, the defendant has had her day in court after bringing a "motion to dismiss." The defendant now asks this court to sit in review of the decision of Judge Mintz in August 2006, to allow the substitution of the current plaintiff and the decision of Judge Shaban that the substitute plaintiff is the proper entity to execute the foreclosure judgment. The current location of the original note (in the evidence file of the court clerk) is a red herring. The substitute plaintiff properly stands in the shoes of the judgment plaintiff for purposes of enforcing the judgment. The judgment is not now open for any purpose other than the setting of a new sale date and the conditions of sale. "[W]hen in an action to foreclose a mortgage, there is a substitution of a new plaintiff arising out of the assignment of the underlying debt and security, it is not necessary for the substitute plaintiff to file an amended complaint." F.P., Inc. v. Collegium Wethersfield Ltd., supra, 33 Conn.App. 831. No answer or response is expected or appropriate to the "amended complaint" in this case.

ORDERS

The defendant is hereby barred from filing any motion to strike, request to revise, motion for order, answer, special defenses, counterclaim or cross-complaint in response to the "amended complaint." The defendant's motion for summary judgment is denied.