Opinion
CV156023248S
01-14-2016
Wells Fargo Bank, N.A. v. Kasie Munson et al
UNPUBLISHED OPINION
Filed January 15, 2016,
MEMORANDUM OF DECISION ON PLAINTIFF'S MOTION TO STRIKE (#121)
Emmet L. Cosgrove, J.
On January 9, 2015, the plaintiff, Wells Fargo Bank, N.A., commenced this foreclosure action against the defendants, Kasie Munson, Michael Bellaria, and the Mohegan Tribal Gaming Authority. The plaintiff is the holder of a judgment lien on property once owned by the judgment debtor, Michael Bellaria. Subsequently Bellaria sold the property to the defendant Munson. On July 8, 2015, Bellaria filed a motion to strike himself as a party to this action on the ground of misjoinder. The plaintiff filed a memorandum in opposition on September 8, 2015. On October 5, 2015, the motion was heard at short calendar. The motion is denied because Bellaria is a proper party to this action.
FACTS
In its complaint, the plaintiff alleges the following facts. The plaintiff, as successor in interest to Wachovia Bank, N.A., commenced an action against Innonet, LLC and Bellaria on May 25, 2011. The court entered judgment against Innonet, LLC and Bellaria in Wells Fargo Bank, N.A. v. Innonet, LLC, Superior Court, judicial district of New London, Docket No. CV11-6009525-S (November 2, 2011, Purtill, J.), on November 2, 2011. On November 17, 2011, with the judgment wholly unsatisfied, the plaintiff obtained a judgment lien for $696,464.17 on real estate then owned by Michael and Dorothy Bellaria known as 12 Riverbend Road, Old Lyme, Connecticut. The lien was recorded the next day in the Office of the Town Clerk of Old Lyme. Twenty-two months later, on September 6, 2013, the Bellarias conveyed the property to Kasie Munson by warranty deed. The judgment remains unpaid and is due and owing. Other encumbrances include the following: unpaid taxes due and owing to the town of Old Lyme on the Grand List of 2013; possible unpaid water use charges; and rights of possible tenants or parties in possession. The Mohegan Tribal Gaming Authority obtained a judgment lien on the property of $98,370.70 on December 6, 2011 and recorded on December 8, 2011. Munson currently owns the property. The plaintiff brings this action to foreclose on the judgment lien, take immediate and exclusive possession of the property, and seeks attorneys fees and costs.
On July 8, 2015, the defendant Bellarias filed a motion to strike on the ground of misjoinder. On September 8, 2015, the plaintiff filed a memorandum of law in opposition to the motion to strike. The motion was heard at short calendar on October 5, 2015.
Munson and the Mohegan Tribal Gaming Authority are not parties to this motion and have not submitted briefs in support or opposition. Accordingly, all references to the defendant, herein, are to Bellaria.
DISCUSSION
" [T]he exclusive remedy for misjoinder of parties . . . is by motion to strike." Bender v. Bender, 292 Conn. 696, 722 n.23, 975 A.2d 636 (2009); see also Practice Book § 11-3. " Naming an improper person as a party in a legal action constitutes misjoinder." (Internal quotation marks omitted.) Bloom v. Miklovich, 111 Conn.App. 323, 329, 958 A.2d 1283 (2008). " [The court] construe[s] the complaint in the manner most favorable to sustaining its legal sufficiency . . . It is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted." (Internal quotation marks omitted.) Coppola Construction Co. v. Hoffman Enterprises Ltd. Partnership, 309 Conn. 342, 350, 71 A.3d 480 (2013). " A motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged." (Internal quotation marks omitted.) Santorso v. Bristol Hospital, 308 Conn. 338, 349, 63 A.3d 940 (2013). " In ruling on a motion to strike the trial court is limited to considering the grounds specified in the motion." Meredith v. Police Commission, 182 Conn. 138, 140, 438 A.2d 27 (1980).
In his memorandum in support of the motion to strike, the defendant argues that he is misjoined in this action. Specifically, he argues, the complaint fails to state a claim on which relief can be granted because he has no interest in the subject property and no equitable right of redemption or possession which may be foreclosed. In its memorandum of law in opposition to the motion to strike, the plaintiff argues that the defendant is a proper party because he has interests that will be affected in this action. Specifically, it concedes that the defendant possesses no legal interest to foreclose but contends that his interests are affected by foreclosure because he is responsible for the underlying satisfaction of the judgment. Consequently, the plaintiff argues that a deficiency calculation in this action would affect the defendant's interests and not Munson's.
The defendant's argument regarding a lack of equity in the property at the time the judgment lien was attached and a short sale of the property are not properly before the court. See Zirinsky v. Zirinsky, 87 Conn.App. 257, 268-69 n.9, 865 A.2d 488, cert. denied, 273 Conn. 916, 871 A.2d 372 (2005) (" It is well established that a motion to strike must be considered within the confines of the pleadings and not external documents . . . We are limited . . . to a consideration of the facts alleged in the complaint" [internal quotation marks omitted]); see also Rowe v. Godou, 209 Conn. 273, 278, 550 A.2d 1073 (1988) (in ruling on motion to strike, the court cannot resort to information outside of complaint). Accordingly, the court does not consider those facts or arguments.
General Statutes § 52-380a(c) provides in relevant part: " A judgment lien on real property may be foreclosed or redeemed in the same manner as mortgages on the same property . . ." " To understand who are proper parties when a mortgagee pursues the remedy of foreclosure, one must recognize that Connecticut follows the title theory of mortgages, which provides that on the execution of a mortgage on real property, the mortgagee holds legal title and the mortgagor holds equitable title to the property . . . As the holder of equitable title, also called the equity of redemption, the mortgagor [or a subsequent grantee] has the right to redeem the legal title on the performance of certain conditions contained within the mortgage instrument . . . The purpose of the foreclosure is to extinguish the mortgagor's equitable right of redemption that he retained when he granted legal title to his property to the mortgagee following the execution of the mortgage . . . The mortgagee's title does not become absolute, however, until all eligible parties have failed to exercise their rights to redeem the property . . . Eligible parties include not only the mortgagor or the mortgagor's successor, but also subsequent encumbrancers on the property." (Citations omitted; internal quotation marks omitted.) JP Morgan Chase Bank, N.A. v. Winthrop Properties, LLC, 312 Conn. 662, 673-74, 94 A.3d 622 (2014). Accordingly, the proper parties to a foreclosure action are the mortgagor, the mortgagee, and those who have acquired any interest from them subsequent to the mortgage. See also De Wolf v. A.& W. Sprague Mfg. Co., 49 Conn. 282, 286 (1881).
In the present case, the plaintiff claims in its complaint that the defendant sold the property subject to the lien to Munson on September 6, 2013 and that she is the owner of the subject property. Absent from the complaint is any allegation that the defendant holds a legal or equitable interest in the property. Consequently, as alleged in the complaint, Munson is the sole owner and the defendant is without an equitable right of redemption or possession to be foreclosed.
The plaintiff concedes in its memorandum in opposition that the defendant possesses no legal interest to foreclose but argues that he is a proper party because he will remain liable for any deficiency remaining on the debt owed. Although the deficiency judgment proceeding provided by General Statutes § 49-14 does not apply to judgment liens on its face, the Supreme Court in Fairfield Plumbing & Heating Supply Corp. v. Kosa, 220 Conn. 643, 651, 600 A.2d 1 (1991), held that the procedure is available for actions to foreclose judgment liens. " A deficiency judgment provides a means for a mortgagee to recover any balance due on the mortgage note that was not satisfied by the foreclosure judgment . . . It is the only means of satisfying a mortgage debt when the security is inadequate to make the foreclosing plaintiff whole . . . Furthermore, a deficiency proceeding has a very limited purpose. In the hearing contemplated under § 49-14 to obtain a deficiency judgment, the court, after hearing the party's appraisers, determines the value of the property and calculates any deficiency. This deficiency judgment procedure presumes the amount of the debt as established by the foreclosure judgment and merely provides for a hearing on the value of the property." (Citation omitted; internal quotation marks omitted.) FDIC v. Voll, 38 Conn.App. 198, 208, 660 A.2d 358, cert. denied, 235 Conn. 903, 665 A.2d 901 (1995).
General Statutes § 49-14 provides:
(a) At any time within thirty days after the time limited for redemption has expired, any party to a mortgage foreclosure may file a motion seeking a deficiency judgment. Such motion shall be placed on the short calendar for an evidentiary hearing. Such hearing shall be held not less than fifteen days following the filing of the motion, except as the court may otherwise order. At such hearing the court shall hear the evidence, establish a valuation for the mortgaged property and shall render judgment for the plaintiff for the difference, if any, between such valuation and the plaintiff's claim. The plaintiff in any further action upon the debt, note or obligation, shall recover only the amount of such judgment. (b) Upon the motion of any party and for good cause shown, the court may refer such motion to a state referee, who shall have and exercise the powers of the court with respect to trial, judgment and appeal in such case. (c) Any party to a mortgage foreclosure who has moved for an appraisal of property for the purpose of obtaining a deficiency judgment, but has not been granted a deficiency judgment, or has not received full satisfaction of any deficiency judgment obtained subsequent to the filing of such motion, may make a motion to the court for a deficiency judgment as set forth in subsection (a) of this section. If such motion is made on or before November 1, 1979, such moving party shall be deemed to have complied with all of the requirements of subsection (a) of this section and shall be entitled to the benefit of any deficiency judgment rendered pursuant to said subsection (a). (d) Any appeal pending in the Supreme Court with regard to any deficiency judgment or proceedings relating thereto shall be stayed until a hearing is held pursuant to subsection (a) of this section. Any appellant in such an appeal shall have the right for a period of thirty days after the rendering of judgment pursuant to subsection (a) of this section to amend his appeal. There shall be no stay of such an appeal if no motion has been filed pursuant to this section on or before November 1, 1979.
" [T]he remedy of a deficiency judgment is necessary in mortgage foreclosures because a judgment of foreclosure precludes further proceedings on the underlying debt. Concededly, a judgment of foreclosure does not have the same effect on a judgment lien. Foreclosing on a judgment lien does not extinguish the original judgment, which continues to be valid as to any uncollected portion . . . It is true that, unlike a mortgagee, a judgment lienor may pursue a debtor in a separate action, i.e., through execution pursuant to General Statutes § 52-350f. Thus, the process for obtaining a deficiency judgment contained in § 49-14(a) is not absolutely necessary to a judgment creditor left with a partially unsatisfied judgment following a strict foreclosure. Undoubtedly, however, in a separate action maintained by the judgment creditor, the debtor would raise the claim of whole or partial satisfaction of the debt in a set-off. At that point, in order to calculate the amount of the judgment that had been satisfied through strict foreclosure, the court would be required to determine the value of the property at the time of foreclosure. This becomes increasingly difficult as time passes. Outside of the process prescribed by § 49-14(a), there is no other procedural framework for establishing the value of the property contemporaneously with a strict foreclosure on a judgment lien . . . Thus, even though the alternative procedure of bringing a separate action may be available to a judgment lienor, it is far more efficient for the parties and the court to have the issue of valuation determined as part of the foreclosure proceeding rather than as part of a subsequent action." (Citation omitted; footnote omitted.) Fairfield Plumbing & Heating Supply Corp. v. Kosa, supra, 220 Conn. 649-50.
General Statutes § 52-350f provides: " A money judgment may be enforced against any property of the judgment debtor unless the property is exempt from application to the satisfaction of the judgment under section 52-352a, 52-352b, 52-352d or 52-361a, or any other provision of the general statutes or federal law. The money judgment may be enforced, by execution or by foreclosure of a real property lien, to the amount of the money judgment with (1) all statutory costs and fees as provided by the general statutes, (2) interest as provided by chapter 6731 on the money judgment and on the costs incurred in obtaining the judgment, and (3) any attorneys fees allowed pursuant to section 52-400c."
The Supreme Court's efficiency language in Fairfield Plumbing & Heating Supply Corp. v. Kosa, supra, is applicable in the present case. As alleged in the complaint, while the defendant is not an owner of the property nor does he have an equitable right of redemption, he does have an interest in the outcome of the foreclosure action because he may be personally liable for any deficiency. First, the defendant has an interest in the calculation of the debt, determined by the court at the entry of the foreclosure judgment, or any potential prior executions that partially or fully satisfied the judgment lien. Second, if foreclosure is granted, the plaintiff, or any party, may utilize the deficiency judgment model under § 49-14 to determine whether the foreclosure action has satisfied the debt. This timely procedure is more efficient than a separate action months or years in the future. In the deficiency hearing, the defendant could contest the plaintiff's valuation of the property. Practice Book § 23-19. Additionally, the plaintiff could present his own appraisal of the property to ensure that the judgment satisfies the debt. Practice Book § 23-19. Consequently, the defendant has an interest in the outcome of the foreclosure because he may be liable for any deficiency remaining and it is more efficient to include the defendant in this action. The defendant is a proper party to the action.
CONCLUSION
For the foregoing reasons, the motion to strike is denied.