Key Investments v. Bjorn R. Koritz
-- July 21, 2011
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT
The plaintiff brought this breach of contract action against the defendant following his alleged default on a loan agreement with the plaintiff. The plaintiff alleges that the defendant, over time and on three separate occasions, borrowed a total of $400,000.00 which the defendant agreed to repay on a monthly basis with interest. The plaintiff alleges that the defendant defaulted on his repayment obligations, thereby triggering an acceleration of the repayment obligation. The plaintiff moves for summary judgment. The defendant opposes summary judgment on the basis that the plaintiff has produced insufficient evidence to establish that it is entitled to judgment as a matter of law. The defendant's arguments as to the amount claimed due and owing are persuasive. For the reasons set forth below, the motion is granted as to liability only.
Standard of Review
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. PB § 17–44; Appleton v. Board of Education, 254 Conn. 205 (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. This evidentiary foundation must be demonstrated with counter-affidavits and concrete evidence. Pion v. Southern New England Telephone, 44 Conn.App. 657, 663 (1997). A party's conclusory statements may not be sufficient to establish the existence of a disputed material fact, even if in affidavit form. Gupta v. New Britain General Hospital, 239 Conn. 574, 583 (1996).
Supporting and opposing affidavits must be made on personal knowledge and must set forth such facts as would be admissible in evidence. PB § 17–46. Indeed, only evidence that would be admissible at trial may be used to support or oppose a motion for summary judgment. Great Country Bank v. Pastore, 241 Conn. 423, 436 (1997).
Until the moving party comes forward with evidence which would establish that he is entitled to judgment as a matter of law, the non-moving party is under no obligation to produce any evidence. Ramirez v. Health Net of the Northeast, Inc. 285 Conn. 1, 10–11 (2008).
The plaintiff avers that on November 17, 2006, it loaned $250,000.00 to the defendant and that this loan was documented in a written Note. A Mortgage and Security Agreement of the same date, which referenced the Note was recorded on the Greenwich land records. The Court has a copy of the Mortgage and Security Agreement which references the Note, but the original note or a copy thereof, has not been submitted. Thereafter, the parties entered into a First Amended and Restated Note dated February 26, 2007, a copy of which has been provided. The First Amended and Restated Note provides that the principle amount of the November 17, 2006 loan was increased by $100,000.00 so that the total amount of the loan was $350,000.00. The First Amended and Restated Note also included default provisions, waivers and remedies available in the event of a default. Thereafter, the defendant executed a Second Modification of Mortgage and Mortgage Note dated May 25, 2007, a copy of which was provided. The Second Modification provides that the principle amount of the loan was increased to $400,000.00. It thereafter incorporated by reference the Mortgage and Note of November 17, 2006.
The plaintiff alleges that the defendant stopped making his obligatory payments under the terms of the Note, thereby defaulting on the terms of the Note, resulting in an acceleration of the amount due and owing. The plaintiff also seeks costs, attorneys fees and interest.
The authenticity of the documents provided are admitted by the defendant in his answer. The defendant further admits that the plaintiff loaned him $400,000.00. He admits executing the Second Modification, the most recent of the loan documents at issue. The defendant admits that he promised to pay back to the plaintiff the principal balance plus interest by monthly payments of principal and interest. The defendant further admits that he “stopped making his obligatory payments thereby breaching his agreement,” though he denies that such a breach has resulted in late charges being due or owing. The defendant denies the remaining allegations in the complaint.
To address those issues which remain in dispute, the plaintiff offered the affidavit of Mary Gleckner, an agent of the plaintiff, Key Investments, and a person familiar with the books and records thereof, to include the account of the defendant. In addition to those matters already admitted by the defendant, Ms. Gleckner avers that the plaintiff provided notice to the defendant of the default and accelerated the payment due date under the terms of the agreement. Indeed, both the Mortgage and Security Agreement dated November 17, 2006 and the Amended and Restated Note provides for acceleration in the event of a default by the defendant.
The defendant argues that the plaintiff has failed in its initial burden of establishing it is entitled to judgment as a matter of law because it has failed to produce the original Note dated November 17, 2006. He argues that the Second Modification is ambiguous as to whether it includes the provisions of the Amended and Restated Note, or whether it incorporates only the provisions of the November 17, 2006 Note. Thus, at least with respect to the issue of acceleration, on which the Second Modification is silent, the defendant claims a material issue of fact. This court disagrees. An examination of the Second Modification reveals that the Mortgage and Security Agreement dated November 17, 2006 are reaffirmed as well. Any potential ambiguity is thereby rendered irrelevant because both the First Amended and Restated Note and the Mortgage and Security Agreement dated November 17, 2006 provide for acceleration.
The Second Modification expressly provides that “All other terms and conditions of the Mortgage and Mortgage Note shall remain in full force and effect without further modification.1 “The Mortgage” is defined as the November 17, 2006 Mortgage and Security Agreement.2 The Mortgage and Security Agreement of November 17, 2006, which was executed and recorded at the time of the original Note, provides at paragraph 16 for acceleration upon default. It provides: “If the Lender declares that the Borrower is in default, the Borrower must immediately pay the full amount of all unpaid principal, interest, other amounts due on the Note and this Mortgage and the Lender's costs of collection and reasonable attorneys fees.” Therefore, whether the original Note is available or not, under the express terms of the available agreements on which there are no disputes, upon default, the full amount became immediately due and owing. Simply because the court does not know whether the November 17, 2006 Note included an acceleration provision does not, in and of itself, render the plaintiff's proof inadequate.
With this issue resolved, the court looks to the evidence in support of the breach of contract claim. “The elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages.” (Internal quotation marks omitted.) Chiulli v. Zola, 97 Conn.App. 699, 706–07, 905 A.2d 1236 (2006).
The defendant has admitted that the plaintiff loaned him $400,000.00 and that he agreed to repay the loan in monthly installments. The Glecker Affidavit, the documents submitted and the defendant's admissions establish the essential terms of the agreement to include that the defendant would make monthly payments to the plaintiff. The defendant admits and the Gleckner Affidavit confirms that the defendant did not make the obligatory payments under the terms of the loan agreement. The Gleckner Affidavit and the documents submitted, see supra, establish that the failure to make those payments placed the defendant in default, thus triggering the acceleration provisions “under the terms of [the defendant's] agreement.” 3
The evidence submitted is sufficient to establish that the defendant is liable to the plaintiff as alleged in the complaint as a matter of law. Insofar as the plaintiff has met its initial burden, it becomes incumbent upon the defendant to produced evidence on the issue of liability to the contrary.4 He has failed to do so. Summary judgment as to liability will enter in favor of the plaintiff.
The evidence submitted however is not conclusive on the issue of damages. The plaintiff is directed to claim the matter for a hearing in damages.
K. DOOLEY J.
1. FN1. In his opposition, the defendant misquotes the Second Modification, deleting that portion which incorporates the Mortgage and Security Agreement.
2. FN2. The Second Modification also states that the Lender is in possession of the February 26, 2007 modification, though this document is not included in the definition of “the Mortgage.” While this might lead to ambiguity as to which document applies, the fact that both include the same acceleration provision renders the ambiguity meaningless.
3. FN3. The plaintiff erroneously refers to the First Amended and Restated Note as the “First Modification.” While it was in fact, a first modification, it was not so titled.
4. FN4. The defendant's claim that the missing Note is a bar to summary judgment rests entirely on the Note's absence in the context of a claimed ambiguity in the documents submitted. There is no claim nor evidence that the terms of the November 17, 2006 Note would in any way preclude this collection action or be the basis for any special defense or right of set off.
Dooley, Kari A., J.