Opinion
No. CV-08-5004972-S
January 25, 2011
RULING RE DEFENDANT'S MOTION TO RESTORE CASE TO DOCKET (#150)
The defendant, Tissa Funding Corporation ("Tissa") moves for an order restoring this case to the docket. The defendant claims that the plaintiff cannot withdraw this case without leave of court, and that leave should not be given under the circumstances of this case. The plaintiff replies that this matter did not progress to the point where it was necessary for the plaintiff to request leave of court before withdrawing the case. The motion to restore the case to the docket is denied.
FACTS
The plaintiff brought this complaint on October 31, 2008. The complaint alleged that defendants Winchester Estates, LLC ("Winchester Estates"), and Aurora Rosa ("Rosa") were indebted to the plaintiff in the amount of $340,000 based upon a promissory note signed on April 19, 2006. The note is allegedly secured by properties owned by Winchester Estates and by Rosa, individually. Thereafter, on August 7, 2007, Tissa loaned $4,000,000 to Winchester Estates. That loan, subordinate to the Pension Services loan, is also secured by a mortgage on Winchester Estates properties.
Pension Services brought this action to foreclose on its loan to Winchester Estates and Rosa. On March 19, 2009, Tissa moved for summary judgment, challenging the validity of the Pension Services loan. In the course of briefing that motion, Tissa made numerous serious allegations, the most significant of which is that Pension Services deliberately arranged for an invalid loan as to Winchester Estates. Tissa claims that the plaintiff caused Rosa to execute loan documents, not only on her own behalf, but also as manager of Winchester Estates. Tissa claims that Rosa had no authority to enter into the loan agreement on behalf of Winchester Estates. It claims that the loan proceeds went to Rosa personally and not to Winchester Estates. Finally, Pension Services claims that the entire loan arrangement was a scheme to use Winchester Estates' assets as a means to effect repayment of a personal debt owed to Monte Klein, a principal of Pension Services. The person who owed the debt to Klein was an individual who allegedly had a personal relationship with Rosa.
Tissa's allegations, if true, are serious and troubling for a variety of reasons. However, Tissa's claims could not be resolved in a motion for summary judgment. The court denied the motion on July 12, 2010, due to the presence of genuine issues of material fact. Thereafter, on September 7, 2010, the plaintiff withdrew the case as to all defendants based on "discussion of parties on their own." On September 23, 2010, defendants Winchester Estates and Rosa withdrew their third-party complaint and on September 28, 2010, also withdrew their counterclaim.
On September 14, 2010, Tissa moved to restore this case to the docket. This matter came before the court and was heard on November 1, 2010.
DISCUSSION
Tissa claims that its motion for summary judgment, and the hearing and oral argument relative to that motion, constitute a "hearing on the merits of the case," thus implicating General Statutes § 52-80. That section provides, in relevant part, that "[t]he plaintiff may withdraw any action so returned to and entered in the docket of any court, before the commencement of a hearing on the merits thereof. After the commencement of a hearing on an issue of fact in any such action, the plaintiff may withdraw such action, or any other party thereto may withdraw any cross complaint or counterclaim filed therein by him, only by leave of court for cause shown."
Tissa argues, next, that there is insufficient cause to permit the withdrawal of this case. On the contrary, Tissa argues that it would unjust to deprive Tissa of its opportunity to litigate the validity of the plaintiff's lien.
The plaintiff objects to Tissa's motion, arguing that the fact that Tissa lost a motion for summary judgment does not preclude the plaintiff from exercising its right to unilaterally withdraw its complaint. The plaintiff argues, further, that there is no merit to Tissa's claims because Tissa has no standing to challenge the plaintiff's loan to Winchester Services and Rosa.
Neither party cites to authority that directly resolves the question of whether a hearing on a motion for summary judgment in a foreclosure action is "a hearing on the merits of the case" or a "hearing on an issue of fact," as those phrases are used in General Statutes § 52-80. A review of the case law cited by the parties, however, is instructive.
Tissa relies, first, on Tevolini v. Tevolini, 66 Conn.App. 16, 783 A.2d 1157 (2001), for the purpose of determining what constitutes a hearing. Tevolini does, indeed, describe what constitutes a "hearing," but it does not do so in the context of General Statutes § 52-80. Tissa next cites to Boone v. Backus Hospital, 102 Conn.App. 305, 925 A.2d 432 (2007), for the proposition that summary judgment is a decision on the merits of the case. In Boone, the court granted a motion for summary judgment. Boone did not, however, address the question of whether the grant of a motion for summary judgment means that the court decided an issue of fact for the purposes of General Statutes § 52-80.
Tissa asserts that "[a] hearing on the merits occurs as soon as court-initiated fact finding has commenced." In fact, the question of whether the court has commenced "a hearing on an issue of fact" in the context of General Statutes § 52-80 depends, in part, on the nature of the proceeding in which Section 52-80 is invoked. For example, in Spears v. Kerars Realty Co., 171 Conn. 699, 372 A.2d 121 (1976), our Supreme Court addressed the application of General Statutes § 52-80 in an action for dissolution of a corporation. In such an action, brought pursuant to General Statutes § 33-382, the petition typically seeks the appointment of an appraiser who ascertains the value of the corporate stock. Once the appraiser makes his recommendation, "the court's function is limited to rendering a judgment based upon the facts found by the appraiser . . . and although the court may reject the appraiser's report, it does not itself determine the facts of the case." (Citation omitted.) Id., 702. Thus, the only "hearing on an issue of fact" in such a case "consists of the proceedings, if any, before the appraiser." Id., 703. Therefore, once the appraiser commences the procedures to be followed in arriving at his appraisal, "the plaintiff's right to withdraw his action without leave of court [is] terminated." Barra v. Ridgefield Card Gift Gallery, Ltd., 194 Conn. 400, 404, 480 A.2d 552 (1984). At that point, pursuant to General Statutes § 52-80, a plaintiff must seek leave of court and show cause before he can withdraw his complaint. Id.
A different situation is presented in the marital dissolution context. In Grimm v. Grimm, 74 Conn.App. 406, 409 n. 2, 812 A.2d 152 (2002), cert. denied, 263 Conn. 911, 821 A.2d 766 (2003), the court concluded that, in such a context, the provisions of General Statutes § 52-80 "apply anytime after the court has conducted a hearing on any contested issue, including a pendente lite hearing."
Tissa relies on both Barra v. Ridgefield Card Gift Gallery, Ltd., supra, 194 Conn. 400, and Grimm v. Grimm, supra, 74 Conn.App. 406, in support of its motion. The question presented is whether either case controls in a foreclosure action following the denial of a motion for summary judgment. Some guidance is provided by Murray v. IBM Corp., Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket Nos. CV900107653, CV900107981, and CV900107618 (February 22, 1991, Katz, J.) ( 3 Conn. L. Rptr. 290). In Murray, the defendant moved for dismissal based on lack of personal jurisdiction. Id. The court held a full evidentiary hearing on the motion over a period of several days, and multiple witnesses testified in the course of the hearing. Nonetheless, the court focused on the language in General Statutes § 52-80 that permits a plaintiff to withdraw any action "before the commencement of a hearing on the merits thereof." The court found that a hearing on a motion to dismiss is a limited hearing on a limited issue "and cannot be transposed into a hearing on the merits." Id., 290. The court concluded that the phrase "hearing on the merits" "refers to the trial of the issues of fact raised by the complaint and `joined' by the answer to the complaint." Id., 291. See also Colandrea v. Eastland Properties, Inc., Superior Court, judicial district of Ansonia-Milford, Docket No. CV 900033271 (September 3, 1992, McGrath, J.) ( 7 Conn. L. Rptr. 281) (plaintiff need not seek leave of court to withdraw complaint even after a prejudgment remedy hearing, since such a hearing is not a hearing on the merits of the action; it simply determines whether there is probable cause to sustain the plaintiff's claims).
The issue before this court is more straight forward than the one presented in Murray. Not only does a hearing on a motion for summary judgment not constitute a hearing "on the merits," but it does not even involve findings of fact. The court's role in deciding a motion for summary judgment is not to make factual findings of any kind. "[I]ssue-finding, rather than issue-determination, is the key to the procedure . . . [T]he trial court does not sit as the trier of fact when ruling on a motion for summary judgment.[Its] function is not to decide issues of material fact, but rather to determine whether any such issues exist." (Internal quotation marks omitted.) Keller v. Beckenstein, 117 Conn.App. 550, 557-58, 979 A.2d 1055, cert. denied, 294 Conn. 913, 983 A.2d 274 (2009).
If a court addresses a motion for summary judgment and finds that no genuine issues of material fact exist, the motion for summary judgment will be granted. If it is granted, then the court will enter judgment on the merits and no issue pertaining to "withdrawal" can exist. Even so, the entry of judgment under the foregoing circumstances does not mean that that court decided any of the "facts" of the case. It means that the court decided, as a matter of law, that there were no genuine issues of material fact to be decided. If a motion for summary judgment is denied, then no judgment on the merits will enter. The denial of a motion for summary judgment means that the court has concluded, as a matter of law, that genuine issues of material fact exist and must be resolved on the merits before judgment can enter. Consequently, the denial of a motion for summary judgment does not mean that the court held a hearing on the merits or on an issue of fact, as those phrases are used in General Statutes § 52-80.
Although the court agrees with the plaintiff that it did not require leave of court nor was it required to show cause before withdrawing its complaint, there remains the question of whether there is an alternative basis for restoring this case to the docket. The question of whether a case should be restored to the docket is one of judicial discretion. Sicaris v. Hartford, 44 Conn.App. 771, 779, 692 A.2d 1290, cert. denied, 241 Conn. 916, 696 A.2d 340 (1997).
The court will exercise its discretion and restore a case to the docket when, for example, a party has engaged in sharp practice and failure to restore the case will result in clear injustice to the moving party. In A.I. Credit Corp. v. M.A. Gronski, Inc., Superior Court, judicial district of New Haven, Docket Number CV010452088 (March 11, 2003, Silbert, J.) ( 34 Conn. L. Rptr. 317), the plaintiff filed a motion for summary judgment that was granted, resulting in a judgment of more than $20,000 in favor of the plaintiff. The plaintiff then executed a garnishment against the defendant's bank account. The defendant moved to open. That motion was granted because the defendant's counsel had not been made aware of the fact that the motion for summary judgment was going forward. A.I. Credit Corp. v. M.A. Gronski, Inc., Superior Court, judicial district of New Haven, Docket No. CV010452088 (October 3, 2002, Silbert, J.) ( 33 Conn. L. Rptr. 216). Four days after the motion to open was granted, the plaintiff withdrew the action. A.I. Credit Corp. v. M.A. Gronski, Inc., supra, 34 Conn. L. Rptr. Even though the motion to open was granted, the plaintiff declined to return the disputed funds, arguing that "possession is nine-tenths of law." Id. The court had little difficulty in determining that under the foregoing circumstances, allowing the withdrawal to stand clearly worked an injustice on the defendant. Id., 319. See Byrd v. Leszcynsiki, Superior Court, Docket No. CV 960564251 (August 25, 2000, Berger, J.) ( 28 Conn. L. Rptr. 88) (plaintiff was precluded from calling expert witnesses due to late disclosure. He withdrew his case prior to trial and then attempted to file a second, virtually identical cause of action. The court exercised its discretion to restore the case to the docket).
The question of whether the court should exercise its discretion to restore this case is a close one. Tissa has alleged that the plaintiff's lien was obtained through fraud, and that the plaintiff's lien adversely affects Tissa's interest in the Winchester Estates properties. Tissa claims that prior to the withdrawal it received a letter indicating that the plaintiff had agreed that the obligations to the plaintiff's principal would be met by Rosa and not by Winchester Estates. After the withdrawal was filed, however, Tissa learned that the plaintiff would not release its lien on the Winchester properties.
Notwithstanding the foregoing, the court will not exercise its discretion to restore this matter. The plaintiff disputed the motion for summary judgment, arguing that the mortgage it holds is valid. The court denied Tissa's motion, finding the presence of genuine issues of material fact. The plaintiff asserts that it did not make any misrepresentations to Tissa prior to the withdrawal of the complaint. The plaintiff notes that the letter to which Tissa refers was authored by a co-defendant and not the plaintiff.
Finally, and most significantly, this case is unlike A.I. Credit Corp. v. M.A. Gronski, Inc., supra, 34 Conn. L. Rptr. 317, in that if the court declined to restore that case to the docket, the defendant would have been forced to bring its own action to recover the funds that the plaintiff acquired through garnishment. Here, Tissa has already brought a separate action against Winchester Estates, Tissa Funding Corp. v. Winchester Estates, LLC, et al., Docket No. CV 09 5006686, seeking to foreclose upon its interest in Winchester Estates properties. That complaint references the interest that Pension Services may claim in the Winchester Estates properties based upon the April 16, 2006, mortgage that it holds.
If Tissa succeeds in obtaining a judgment of foreclosure, it will then move for a determination of priorities. In the context of addressing that motion, it would appear that Tissa will have an opportunity to present its claim that the mortgage held by Pension Services is invalid and not entitled to priority over Tissa's mortgage on the Winchester Estates properties. See Lincoln Savings Bank, FSB v. Sittenfeld, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 89 0100188 (March 6, 1991, Lewis, J.). See also Caron, Connecticut Foreclosures (4th ed. 2004) § 5.02D3, pp. 143-44. Indeed, the plaintiff argued, in its opposition to the motion to restore the case to the docket, that "Tissa has another action pending, where it seeks to foreclose the same property . . . and such action is not prevented or prejudiced by the plaintiff's withdrawal of action." (Emphasis added). The court interprets the foregoing statement to be an admission by the plaintiff that Tissa will be able to raise every claim in its own action that it would have been able to raise in this case.
For all of the foregoing reasons, the court will not exercise its discretion to restore this case to the docket. The motion to restore is denied.
So ordered.