Deutsche Bank Trust Company Americas v. Sharon L. Lamoureux et al. (2009)

MEMORANDUM OF DECISION RE DEFENDANT'S MOTION TO OPEN JUDGMENT OF STRICT FORECLOSURE

On July 31, 2009, a judgment of strict foreclosure entered in favor of the plaintiff, Deutsche Bank Trust Company Americas, against the real property of the defendant, Sharon L. Lamoureux, located at 374 Pine Hill Road in Sterling in this judicial district.   The law days were set commencing August 31, 2009 and on September 2, 2009 title vested in the plaintiff.   On September 21, 2009, the defendant filed a motion to open the judgment of strict foreclosure and therein the defendant requests that the judgment be set aside.

After a hearing held on October 13, 2009, the court finds the following facts:  The defendant contacted Sabah Kennawi, a certified loan modification specialist, in November 2008 because she found that her two monthly mortgage payments totaled more than she could afford to pay and sought to modify them downward.   Ms. Kennawi then contacted the servicing agency of the plaintiff at that time, Homecoming Financial, with regard to a modification of its mortgage.   Ms. Kennawi advised the defendant to stop paying the mortgages because modification could only occur if the mortgages were in default.   Ms. Kennawi did negotiate a modification of the defendant's second mortgage in February 2009 and negotiations continued with Homecoming Financial without resolution until June 2009 when GMAC became the plaintiff's servicing agent.

On April 16, 2009, the plaintiff filed the present foreclosure action against the real property of the defendant, who was personally served on April 13, 2009.   The defendant told Ms. Kennawi of the filing but did not seek the advice of an attorney nor did she appear herself in the action because of the ongoing negotiations between Ms. Kennawi and the servicing agent of the plaintiff.

When Ms. Kennawi learned that GMAC had replaced Homecoming Financial as servicing agent she began negotiations with GMAC ultimately sending a loan modification package including wage verification sometime in August 2009.   There was also a three-way telephone conversation between the defendant, Ms. Kennawi and a sales representative of GMAC regarding its requirements for modification.

In the meantime, on July 13, 2009, a judgment of strict foreclosure entered and law days were set commencing on August 31, 2009.   This fact was communicated by the defendant to a representative of GMAC, who allegedly assured Ms. Kennawi in late August 2009 that the law day would be extended until September 22, 2009, to allow negotiations to continue and to review the defendant's proposal to modify the existing mortgage.   Apparently the servicing agent never communicated with the plaintiff or its counsel because title vested in the plaintiff on September 2, 2009.   No agreement to modify was reached.   Shortly after September 2, 2009, a realtor engaged by the plaintiff appeared at the Sterling property with the intention of posting a “for sale” sign.   This event prompted the defendant to retain counsel and file the present motion to open the judgment of strict foreclosure.

In resolving the present motion, the court is guided by the limitations set forth in General Statutes § 49-15, which specifically address opening judgments of strict foreclosure.   Shortly prior to the court hearing the present motion, § 49-15 was repealed and substituted with new statutory language in accordance with Public Act 09-209, Section 37, effective October 1, 2009.¹  Accordingly, the new statutory language of § 49-15, applicable to the present motion, provides in relevant part:

(a)(1) Any judgment foreclosing the title to real estate by strict foreclosure may, at the discretion of the court rendering the judgment, upon the written motion of any person having an interest in the judgment and for cause shown, be opened and modified, notwithstanding the limitation imposed by section 52-212a, upon such terms as to costs as the court deems reasonable, provided no such judgment shall be opened after the title has become absolute in any encumbrancer except as provided in subdivision (2) of this subsection.

(2) Any judgment foreclosing the title to real estate by strict foreclosure may be opened after title has become absolute in any encumbrancer upon agreement of each party to the foreclosure action who filed an appearance in the action and any person who acquired an interest in the real estate after title became absolute in any encumbrancer, provided (A) such judgment may not be opened more than four months after the date such judgment was entered or more than thirty days after title became absolute in any encumbrancer, whichever is later, and (B) the rights and interests of each party, regardless of whether the party filed an appearance in the action, and any person who acquired an interest in the real estate after title became absolute in any encumbrancer, are restored to the status that existed on the date the judgment was entered.  (Emphasis added.)

The prior language of § 49-15 provided that no judgments of strict foreclosure shall be opened after the title has become absolute in any encumbrancer, and contained no exception as presently articulated in Subsection (a)(2) of § 49-15.   In the present matter, the court finds that parties have not arrived at an agreement to open the judgment, rather the plaintiff specifically has objected to the opening of the judgment of strict foreclosure, therefore the defendant is asking the court to utilize its equitable discretion in granting this motion.   While the Connecticut courts have yet to interpret and apply § 49-15 following its amendment, effective October 1, 2009, our Supreme Court, under the older and stricter version of § 49-15, has held that although § 49-15 contains the language that no judgment shall be opened after the title has become absolute in any encumbrancer, this does not deprive or limit the trial court of jurisdiction to exercise its equitable discretion, under certain circumstances.

Specifically, in New Milford Savings Bank v. Jajer, 244 Conn. 251, 708 A.2d 1378 (1998), our Supreme Court held that the trial court had equitable jurisdiction to open the judgment of strict foreclosure after title already had vested, where the party requesting the opening was the foreclosing bank.   The bank sought the opening of the judgment in order to amend its complaint to include certain other property owned by the defendant;  the complaint inadvertently had included only two of the three parcels encumbered by the mortgage conveyance.   In Jajer the court noted that “[b]ecause foreclosure is peculiarly an equitable action ․ the court may entertain such questions as are necessary to be determined in order that complete justice may be done ․ In exercising its equitable discretion, however, the court must comply with mandatory statutory provisions that limit the remedies available to a foreclosing mortgagee.”  (Citations omitted;  internal quotation marks omitted.)  Id., 256-57.   The Jajer court specifically stated:  “The equitable nature of foreclosure proceedings [indicates] that § 49-15 does not preclude the trial court from exercising its discretion to open the judgment of strict foreclosure in the circumstances of this case.”  Id., 257.  “[I]t was entirely reasonable for the [trial] court to conclude that the original foreclosure judgment encompassed only the two vacant parcels and not the third improved parcel.”  Id., 258.  “Moreover ․ the legislature's purpose in enacting § 49-15 was not to preclude amendment to correct scrivener's errors, but rather to set out an orderly framework for a mortgagee's exercise of the equity of redemption.”  Id., 258-59.   Accordingly, the Jajer court concluded that “ § 49-15 does not deprive the trial court of jurisdiction to open a judgment of foreclosure to correct an inadvertent omission in a foreclosure complaint.” ²

Furthermore, recent Appellate Court decisions have affirmed the scope and interpretation of the Supreme Court's holding in Jajer.   In First National Bank of Chicago v. Luecken, 66 Conn.App. 606, 785 A.2d 1148 (2001), cert. denied, 259 Conn. 915, 792 A.2d 851 (2002), our Appellate Court disagreed with the defendant's argument that even if title had vested prior to the hearing on the motion to open, the court still had the power to open the judgment pursuant to the holding in Jajer.   The Luecken court held that “[t]he circumstances of Jajer are unique and the court's holding is limited.  Section 49-15 and the case law thereunder make it clear that a court may not open a judgment of strict foreclosure once title has vested.”   Id., 614.   Furthermore, in Connecticut Commercial Lenders, LLC v. Teague, 105 Conn.App. 806, 940 A.2d 831 (2008), affirmed that “Jajer stands for the proposition that the trial court retains jurisdiction to open a judgment of foreclosure to correct an inadvertent omission in a foreclosure complaint.”   Id., 813.

In the present matter, viewed in light of the totality of the circumstances of this case and mindful of the fact that such authority and equitable discretion is to be exercised by a trial court sparingly, if at all, the court holds that the recently amended General Statutes § 49-15 read together with our Supreme Court's holding in Jajer provide no basis for granting the motion to open in the present case, in the absence of an agreement of all the parties.

Based on the foregoing, the court hereby denies the defendant's motion to open the judgment of strict foreclosure.

Potter, J.T.R.

FOOTNOTES

FN1. General Statutes § 49-15 was repealed and amended in accordance with Public Act 09-209, Section 37, and became effective on October 1, 2009.   The hearing regarding the present motion to open the judgment of strict foreclosure was held on October 13, 2009..  FN1. General Statutes § 49-15 was repealed and amended in accordance with Public Act 09-209, Section 37, and became effective on October 1, 2009.   The hearing regarding the present motion to open the judgment of strict foreclosure was held on October 13, 2009.

FN2. Moreover, the Jajer court noted:  “[T]he bank's title to the third parcel was not absolute.   Because no one had absolute title to the third parcel at the time of the bank's motion to open and to amend, § 49-15 did not limit the jurisdiction of the trial court to exercise its equitable discretion and modify the scope of the ․ foreclosure judgment with respect to the third parcel.”  Id., 258..  FN2. Moreover, the Jajer court noted:  “[T]he bank's title to the third parcel was not absolute.   Because no one had absolute title to the third parcel at the time of the bank's motion to open and to amend, § 49-15 did not limit the jurisdiction of the trial court to exercise its equitable discretion and modify the scope of the ․ foreclosure judgment with respect to the third parcel.”  Id., 258.

Potter, Russell F., J.T.R.