Opinion
No. FSTCV05-4004925S.
November 28, 2006.
Memorandum of Decision on Motion to Dismiss (No. 112)
This foreclosure action was commenced in June 2005 by Washington Mutual Bank, FA ("Washington Mutual") claiming to be the holder of a first mortgage loan on premises in New Canaan owned by the defendants Suneeta Krishna and Jayardman Krishna. In September 2005 Washington Mutual filed a Motion to Substitute Party Plaintiff, asking that its assignee, EMC Mortgage Corporation ("EMC") be substituted as plaintiff because ". . . since the commencement of the above-entitled action, it has assigned the subject mortgage deed and note, and the cause of action, to EMC Mortgage Corporation by written instrument, a copy of which is annexed hereto as Exhibit A." The Motion to Substitute Party Plaintiff was granted by the court (R. Tobin, J.) On September 19, 2005 and EMC is now the plaintiff in the case.
Now before the court is the April 18, 2006 Motion to Dismiss filed by the Krishna defendants, claiming that the court lacks subject matter jurisdiction because, in fact, the assignment of the note and mortgage from Washington Mutual to EMC had taken place on March 20, 2003, more than two years prior to the commencement of this action, and not ". . . since the commencement of the above-entitled action . . .," as Washington Mutual had claimed in its Motion to Substitute Party Plaintiff, and therefore the action was commenced by a party without standing to bring the action.
The "Assignment of Mortgage" copy attached as Exhibit A to the Motion to Substitute Party Plaintiff is dated March 20, 2003.
Discussion
The court notes from the summons that the case was commenced by " Washington Mutual Bank FA c/o EMC Mortgage Corporation." This is therefore situation where the case was commenced by the assignee in the name of the assignor.
Although an assignee of a mortgage is able to foreclose in its own name, it is free to prosecute the action in the name of the assignor. Dime Savings Bank of Wallingford v. Nichlas B. Arapi, 55 Conn.App. 180 (1999), C.G.S. 52-118; Jacobson v. Robington, 139 Conn. 532 (1953).
Dennis R. Carron and Geoffrey K. Milne, Connecticut Foreclosures, 4th Ed. § 4.02A1
In Dime Savings Bank of Wallingford, cited supra, the original lender Dime Savings Bank of Wallingford had commenced the case in its own name and then had assigned the note before judgment of foreclosure in favor of Dime had entered. Rejecting the defendants' argument that the court lacked subject matter jurisdiction at the time the judgment entered, the appellate Court said:
"Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved." Steeneck v. University of Bridgeport, supra, 235 Conn. 579. The statute authorizing standing in this case is General Statutes § 52-118 which provides in relevant part that "[an assignee . . . may sue . . . in his own name . . ." The legislature's use of the word "may" in the statute indicates that an assignee merely has the option to sue in his name. Conversely, as the Supreme Court has stated, an assignee also has the option "to maintain [an] action in the name of his assignor." Jacobson v. Robington, 139 Conn. 532, 539, 95 A.2d 66 (1953).
In this case Leader, the assignee and proper plaintiff in interest, had standing and rightfully pursued the foreclosure action in the name of Dime, the assignor . . . Therefore, Arpaia's challenge to the trial court's jurisdiction for lack of standing on the part of Dime is without merit.
55 Conn.App. at 184.
Facts very similar to this case were presented in Century Mortgage Co. v. George, 35 Conn. App. 326 (1994). Although Century Mortgage Co. had previously assigned the mortgage to Freddie Mac, nonetheless it, and not Freddie Mac, commenced the foreclosure. Prior to the entry of judgment, Freddie Mac did move to be substituted as plaintiff. The trial court denied the motion to substitute because the defendant had filed a counterclaim against Century Mortgage Co. The trial court, instead, added Freddie Mac as an additional plaintiff and the case proceeded to judgment on the merits in favor of the defendants, which judgment was affirmed on appeal, without either court questioning subject matter jurisdiction because the case had been commenced by Century Mortgage after it had assigned the mortgage to Freddie Mac.
The court also finds in this case that Washington Mutual had standing to commence the action because it was the record holder of the first mortgage on the defendants' home. There is no indication on the copy of the Assignment of Mortgage attached to the Motion to Substitute Party plaintiff that the assignment was recorded on the New Canaan land records at anytime, and plaintiff's counsel has represented to the court, without contradiction, that ". . . the Assignment of Mortgage had not been recorded at the commencement of this action . . ." (Memorandum of Law in Support of Plaintiff's Objection to Defendant's Motion to Dismiss, p. 3). "Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy." Dow Condon, Inc. v. Brookfield Development Corp., 266 Conn. 572, 579 (2003). As the holder of record of the mortgage being foreclosed, Washington Mutual had a sufficient legal interest in the subject matter of this controversy to support standing to sue. Furthermore, having assigned the note and mortgage to EMC without limiting recourse or warranties in any way, Washington Mutual may have retained contingent liabilities associated with the note, as a further indication of a continuing interest in the subject matter of the controversy. See 6 Am.Jur.2d, Assignments § 155-160.
See "Assignment of Mortgage" dated March 20, 2003 attached as Exhibit A to Motion to Substitute Party Plaintiff, which contains no words of limitation or exclusion of assignor's warranties.
Finally, even if Washington Mutual did lack standing to bring this action at the outset, that would be a curable defect under Conn. Gen. Stat. § 52-109 which allows a substituted plaintiff to enter case "[w]hen any action has been commenced in the name of the wrong person as plaintiff . . ." Federal Deposit Insurance Corporation v. Retirement Management Group, Inc., 31 Conn.App. 80 (1993), cert. denied, 226 Conn. 908 (1993); Health Research Group v. Kennedy, 82 F.R.D. 21 (D.D.C. 1979). Since the Motion to Substitute Party Plaintiff had been granted prior to the filing of the Motion to Dismiss, any possible lack of standing had been cured and remedied by EMC's replacement of Washington Mutual as the plaintiff. This case can be distinguished from First Franklin Financial Corp. v. Davis, Docket No. HHBCV05-40070555, Superior Court, Judicial District of New Britain at New Britain (March 24, 2006, Shaban, J.), 2006 Ct.Sup. 6331, 41 Conn. L. Rptr. 111, cited by the defendants at oral argument. In First Franklin Corp. the court was simultaneously considering the plaintiff's motion to substitute party plaintiff and the court's sua sponte suggestion of lack of subject matter jurisdiction. On the particular facts of that case the court found that substitution would not be allowed under § 52-109 and entered a finding of no subject matter jurisdiction. Here, the motion to substitute had been granted prior to the motion to dismiss, thereby curing any lack of standing prior to the court's consideration of subject matter jurisdiction.
Order
For the foregoing reasons the Motion to Dismiss is denied.