Opinion
X10UWYCV126016130
04-08-2016
Angelo Tedesco, Trustee et al. v. Resjimi Agolli et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT
Kari A. Dooley, Judge.
Preliminary Statement
This is an action to foreclose a mortgage covering several parcels of real property located in Waterbury, Connecticut, each of which is owned by defendant Fikri Development, LLC (Fikri). Defendant Resjimi Agolli (Agolli) is currently the sole member of Fikri. Plaintiff filed a motion for summary judgment claiming that there is no genuine issue of material fact with respect to liability in this matter. The defendants, Agolli and Fikri, oppose summary judgment on the grounds that genuine issues of material fact exist with respect to their special defenses to the foreclosure action. The court heard oral argument on December 23, 2015. For the reasons set forth below, the Motion for Summary Judgment is DENIED. Further, in light of the conclusions reached herein, the court, sua sponte, vacates the prior order of the court by which this case was consolidated with two other matters, Fikri Development, LLC v. The Private Mortgage Fund, LLC, Dkt. No. X10 UWY CV12-6013458 and GMA Real Estate Portfolio, LLC v. Fikri Development, LLC, Dkt. No. X10 UWY CV126015100. This case will be tried separately from those two cases, which remain consolidated for trial.
Discussion
A party seeking summary judgment has the very heavy burden of demonstrating the absence of any genuine issue of material facts which, under applicable principles of law, entitle him to judgment as a matter of law. P.B. § 17-49; Appleton v. Board of Education, 254 Conn. 205, 757 A.2d 1059 (2000). Conversely, the party opposing such a motion must provide an evidentiary foundation to show the existence of a genuine issue of material fact. Id. Our Appellate Court has recently had occasion to discuss summary judgment in the foreclosure context.
" A material fact is a fact that will make a difference in the outcome of the case . . . Once the moving party has presented evidence in support of the motion for summary judgment, the opposing party must present evidence that demonstrates the existence of some disputed factual issue . . . It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact . . . are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book [§ 17-45] . . . The movant has the burden of showing the nonexistence of such issues but the evidence thus presented, if otherwise sufficient, is not rebutted by the bald statement that an issue of fact does exist . . . To oppose a motion for summary judgment successfully, the nonmovant must recite specific facts . . . which contradict those stated in the movant's affidavits and documents . . ."
Further, because the plaintiff sought summary judgment in a foreclosure action, which is an equitable proceeding, we note that the trial court may examine all relevant factors to ensure that complete justice is done . . . 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.) Fidelity Bank v. Krenisky, 72 Conn.App. 700, 704-05, 807 A.2d 968, cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002).
In order to establish a prima facie case in a mortgage foreclosure action, the plaintiff must prove by a preponderance of the evidence that it is the owner of the note and mortgage, that the defendant mortgagor has defaulted on the note and that any conditions precedent to foreclosure, as established by the note and mortgage, have been satisfied . . . Thus, a court may properly grant summary judgment as to liability in a foreclosure action if the complaint and supporting affidavits establish an undisputed prima facie case and the defendant fails to assert any legally sufficient special defense. (Citations omitted.) GMAC Mortgage, LLC v. Ford, 144 Conn.App. 165, 176, 73 A.3d 742 (2013).Wells Fargo Bank, N.A. v. Strong, 149 Conn.App. 384, 391-92, 89 A.3d 392 (2014).
Here, the plaintiff has established that there is no genuine issue of material fact with respect to its prima facie case. Indeed, the defendants do not offer any evidence or claim to the contrary. By way of documentary and testamentary evidence the following facts are not in dispute. In 2010, Fikri had mortgaged multiple properties in exchange for funds loaned by The Private Mortgage Fund, LLC (PMF), an entity owned and operated by Joseph Antonios. Antonios was also the manager of Fikri, empowered by the Fikri Operating Agreement, to enter into the loan transactions. Ostensibly, Antonios was using the funds to develop the properties for which mortgages were given. In 2010, the plaintiff, through its predecessor Trustee, acquired the mortgage and underlying note. Fikri defaulted under the terms of that note and the plaintiff commenced a foreclosure action in the judicial district of Waterbury. By way of a settlement of that matter, the plaintiff agreed to a partial payment of arrears through the sale of one of the parcels of property; a refinance of the remaining debt, to include a Promissory Note in the amount of $571,901.12 which was secured by a mortgage on four parcels of property (the subject Note and Mortgage Deed). The settlement removed Agolli's personal residence from those parcels of realty previous mortgaged to the plaintiff and lowered the interest rate on the debt from 10% to 5%.
Angelo Tedesco was the Trustee of the Angelo Tedesco Money Purchase Plan. He has since passed away. Current Trustee, Scott Tedesco is his son.
The closing on the refinance occurred on July 26, 2011 and the then pending foreclosure action was thereafter withdrawn. Subsequently, Fikri defaulted under the terms of the subject Note by failing to make payments when they came due. The plaintiff is the current holder of the Note, secured by the mortgage on the four properties in question. As indicated, none of these facts are in dispute. However, the defendants do contend that summary judgment is not appropriate because there are genuine issues of material fact as to their special defenses. Those special defenses include: (a) there was no meeting of the minds with respect to the subject Note and Mortgage Deed; (b) intentional misrepresentation; (c) duress; (d) lack of consideration; (e) negligent misrepresentation.
" 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 . . . [I]f the mortgagor is prevented by accident, mistake or fraud, from fulfilling a condition of the mortgage, foreclosure cannot be had . . . Fidelity Bank v. Krenisky, 72 Conn.App. 700, 705-06, 807 A.2d 968 (2002). The principle that a special defense must relate to the making validity or enforcement of the note or mortgage " was . . . considered to include events leading up to the execution of the loan documents . . . D. Caron & G. Milne, Connecticut Foreclosures (4th Ed. 2004) § 28.05A, p. 612." TD Bank, N.A. v. M.J. Holdings, LLC, 143 Conn.App. 322, 328, 71 A.3d 541 (2013).
When relying upon a special defense to defeat summary judgment, a defendant must produce an evidentiary basis to support the defense in order to survive summary judgment. See, One West Bank, FSB v. Reinoso, 2012 WL 2044807, at *3 (Conn.Super.) (May 10, 2012, Hartmere, J.) Although the defendants rely upon many special defenses, they need only to demonstrate a genuine issue of material fact as to one legally sufficient special defense in order to defeat a motion for summary judgment. Union Trust Co. v. Jackson, 42 Conn.App. 413, 417, 679 A.2d 421 (1996). Therefore, the court must determine whether any of the defendants' special defenses preclude the court from rendering summary judgment in favor of the plaintiff.
A. Intentional or Negligent Misrepresentation
In addition to the undisputed facts above, by way of special defense, the defendants allege, in substance, that Antonios' use of the Fikri properties to obtain funds was part of a fraudulent scheme. They allege that Antonios did not use the monies to develop the properties aspromised but rather diverted the funds to his own use. The defendants further aver that the plaintiff in this action provided the funding to PMF in connection with the initial Fikri loan and mortgage; that the assignment/purchase of the note and mortgage by plaintiff was designed to satisfy an unrelated debt that both the plaintiff and PMF had to a separate lending institution; that the plaintiff knew or should have known that Antonios/PMF was defrauding Fikri; that the plaintiff as the " beneficial owner" of PMF acted in concert with Antonios/PMF in so doing. By way of escalating rhetoric, the defendants assert that Antonios and Angelo Tedesco " engaged in a plot to plunder Mrs. Agolli's life savings." For purposes of this motion, the court accepts as accurate the allegations against Antonios. The question for this court is whether there is a genuine issue of material fact as to whether the allegations against the plaintiff are supported by the evidence presented to the court, specifically, whether Tedesco was in league with Antonios.
Indeed, the defendants assert these allegations against Antonios/PMF (among others) in an action which is also pending on this court's docket.
In support of these allegations, and in an effort to raise a genuine issue of material fact, the defendants offer the testimony of Agolli's son, Nick, who worked with Antonios for 16 years in the mortgage brokerage business. He testified that Angelo Tedesco had a business relationship with Antonios and was in the office at least once per month, usually to pick up funds that were due to him. From the fact of this ongoing and perhaps longstanding business relationship, and Tedesco's recurring presence in the office, the defendants ask this court to infer treachery on the part of Tedesco. In addition, the defendants rely on the fact that the funds obtained may have been used to pay a third-party creditor to the benefit of Tedesco and Antonios. From this, the defendants ask this court to infer knowledge that Antonios' conduct vis-a-vis Fikri was fraudulent. This the court cannot do. Whether the plaintiff provided funding for the initial loan is not evidence that plaintiff was aware or should have been aware of Antonios' alleged misuse of the funds. Plaintiff was simply the lender. That the plaintiff may have had an ongoing and longstanding business relationship with Antonios is not evidence that plaintiff was the " beneficial owner" of PMF, or that Antonios' conduct can be imputed to plaintiff. The defendants have offered no evidence to support their suspicion of nefarious conduct on the part of the plaintiff. They rely upon cynicism, innuendo and conjecture. Viewing the evidence in the light most favorable to the non-moving party, there is no genuine issue of material fact as to the special defenses of intentional or negligent misrepresentations with respect to the making, validity or enforceability of the subject Note and Mortgage Deed. These special defenses do not defeat summary judgment as to liability.
It is unclear that the plaintiff had any duty to the defendants in connection with the settlement of the underlying foreclosure, from which a negligence claim would arise. " A lender has the right to further its own interest in a mortgage transaction and is not under a duty to represent the customer's interest." Southbridge Associates, LLC v. Garofalo, 53 Conn.App. 11, 19, 728 A.2d 1114 (1999).
The defendants also rely on events which occurred from 2007 to 2009 and include an assertion that the original purchase of the mortgages by plaintiff from PMF in 2010 was not valid. Again, this conduct implicates Antonios' potential liability to the defendants but does not further the defendants' theory that Tedesco was knowingly involved in Antonios' activities.
B. No Meeting of the Minds
The defendants also aver that there was no meeting of the minds necessary to create an enforceable contract at the July 26, 2011 closing. A meeting of the minds is an essential element to contract formation. " If there has been a misunderstanding between the parties, or a misapprehension by one or both so that their minds have never met, no contract has been entered into by them and the court will not make for them a contract which they themselves did not make." (Internal quotation marks omitted.) Sullivan v. Thorndike, 137 Conn.App. 223, 229, 48 A.3d 130 (2012)." Summerhill, LLC v. City of Meriden, 162 Conn.App. 469, 474-75, 131 A.3d 1225 (2016).
Here, this special defense has several aspects to it. The special defense as filed appears to rely on the plaintiff's involvement in the Antonios deception as discussed above. The defendants assert that as a result of the plaintiff's involvement therein, and the hiding from Fikri as to the true state of affairs, no meeting of the minds was achieved. To the extent that the defendants rely upon plaintiff's knowledge of or involvement in Antonios' alleged chicanery, for the reasons set forth above, this special defense does not defeat summary judgment as to liability.
Although not entirely clear in the pleadings, through the summary judgment briefing and arguments, the defendants also avers as part of this special defense that Agolli did not have the legal authority to bind Fikri at the time she executed the closing documents. On this issue, additional facts are necessary.
Prior to the July 26, 2011 closing, Antonios was the manager of Fikri and Agolli and Antonios' wife Gina were the only members of Fikri. The relationship between Antonios and Agolli was such that a determination was made to remove both Mr. and Mrs. Antonios from any further involvement with Fikri, and to make Agolli the sole member. The plaintiff was aware of this plan. The parties contemplated that this change of members and manager would occur prior to the closing of the refinance. Proceeding in this fashion would allow Agolli to execute the necessary documents on behalf of Fikri and to bind Fikri.
In conjunction with the July 26, 2011 closing, Attorney Tim Sullivan, representing Fikri, provided an opinion letter to the plaintiff in which, inter alia, he represented that Agolli is the sole member of Fikri and able to bind Fikri with respect to the subject Note and Mortgage Deed required under the terms of the refinance. At the July 26, 2011 closing, Sullivan also provided a copy of a loan subordination agreement and mortgage by which a mortgage granted to Antonios was subordinated to the subject Note and Mortgage Deed. Agolli had signed each of these documents on behalf of Fikri.
To resolve outstanding disputes between Antonios and Agolli, Antonios was given a mortgage on these same properties in the approximate amount of $88,000. The plaintiff was aware of this aspect of the transaction but required that the Antonios' mortgage be subordinated by agreement to the plaintiff's mortgage. Fikri is alleged to have defaulted on that obligation as well. This mortgage is the subject of a separate foreclosure action which is also pending on this court's docket.
At the closing, Agolli signed the subject Note as well as the Open End Mortgage Deed on behalf of Fikri. This is where the agreement as to what actually happened ends.
Attorney Sullivan testified at his deposition that all of the steps necessary to effectuate the closing occurred prior to the closing. He testified that he met with Joseph Antonios as well as Agolli prior to the closing; that the documents required to remove Gina as a member and Joseph as the manager were executed prior to the closing; that the $88K mortgage in favor of Antonios was thereafter executed. Counsel for Tedesco at the closing, Attorney Michael Margolis testified by way of Affidavit. He avers that, at the closing, Gina and Joseph Antonios, Attorney Sullivan, Agolli and Suzana Zenko, Agolli's daughter, were in a different room, discussing the change of membership in Fikri. That prior to the closing, Attorney Sullivan, Joseph and Gina Antonios and Agolli represented to him that the change in ownership was completed and that in conjunction with that change, Fikri had given Antonios the $88K mortgage on the properties. Attorney Margolis further avers that he was provided a copy of the mortgage subordination agreement, executed by Agolli on behalf of Fikri.
The defendants rely upon the documents themselves to raise a genuine issue of material fact. The various documents signed in connection with the closing are fraught with inconsistencies.
The " Debt Subordination Agreement" by which Antonios' mortgage was subordinated to the plaintiff's mortgage indicates on the front page that it is " made this 26th day of July 2011." However, the signature page (p. 7), which contains no substantive provisions, reflects a date of July 15, 2011. Further confusing the issue, at pages 9 and 10, Attorney Sullivan witnessed the signatures as being the " free act and deed" of each signatory. With respect to Agolli's signature, the document reflects that it was signed in Milford, Ct on July 14, 2011. With respect to Tedesco's signature, it reflects that it was signed in Hartford County, at Waterbury on July 14, 2011. And although Attorney Sullivan serves as the witness, the document itself reflects that Attorney Margolis would be the witness to the Tedesco signature. Finally, with respect to Antonios' signature, the document reflects that it was signed in Waterbury on July 26, 2011. The " Limited Liability Company Resolution and General Certificate, " signed by Agolli and provided to the plaintiff provides that " Resmije Agolli, as of the date of this Certificate, is the sole member of [Fikri], and that the " LLC has approved the refinance" and that Agolli is authorized and empowered to effectuate the closing of the refinance. The document reflects that the date of the refinance is July 26, 2011. However, the Certificate itself is dated July 29, 2011. It is sworn to and subscribed before Attorney Sullivan, who also indicated a date of July 29, 2011. Further, the Certificate references the Refinance documents as being dated July 14, 2011.
The " Interim Notice of Change of Manager/Member, " Form LCINC-1-1.0, from the Secretary of State, reflects that Joseph Antonios has ceased to be the manager of Fikri and that Gina Antonios has ceased to be a member of Fikri. This document was filed with the Secretary of State on August 8, 2011, and bears an execution date of July 27, 2011.
In addition, Gina Antonios does not recall signing the document and Attorney Sullivan does not recall the circumstances under which she signed it.
The Opinion Letter provided by Attorney Sullivan is dated both July 14, 2011 and July 26, 2011. It indicates a closing date of July 14, 2011.
Lastly, consistent with the testimony of Attorney Sullivan and Margolis, the subject Note and Mortgage Deed as well as the mortgage given to Antonios, are consistent throughout as having been executed by Agolli on July 26, 2011.
Attorney Sullivan and plaintiff ascribe these inconsistencies to oversight or error. Perhaps that is correct and perhaps the trier of fact will conclude that Agolli was authorized to bind Fikri on July 26, 2011 as she purported to do. But as to whether Agolli could bind Fikri, a genuine issue of material fact exists.
The Motion for Summary Judgment is therefore denied.
The court need not address the remainder of the defendants' special defenses.