William Blacker, Jr. et al v. Mark S. Crapo et al (2010)

MEMORANDUM OF DECISION RE PLAINTIFFS' MOTION TO STRIKE (# 109)

The plaintiffs, William R. Blacker, Jr. and Terri Blacker, have moved to strike two special defenses filed by one of the defendants, One West Bank, FSB (One West).   For the following reasons, the plaintiffs' motion to strike is granted as to both counts.

FACTS

The plaintiffs seek to foreclose a judgment lien in the amount of $41,699, against property owned jointly by Mark S. Crapo and Ilze Crapo.   The complaint alleges that the property, originally owned by Mark S. Crapo alone, was quitclaimed to himself and Ilze Crapo on October 7, 2005.   The plaintiffs' judgment lien was recorded on April 11, 2007.   One West claims an interest in the same property based upon a note and mortgage in the amount of $257,000, recorded more than four months later, on August 17, 2007.

On May 6, 2010, One West filed two special defenses.   The first special defense asserts that One West holds a mortgage, the proceeds of which were used, in part, to pay off and release a mortgage that was prior in right to the plaintiffs' judgment lien.   The first special defense is based upon the doctrine of equitable subrogation.   The second special defense asserts that the plaintiffs' claim must be limited to a one-half interest in the subject property.

On May 21, 2010, the plaintiffs filed a motion to strike both of One West's special defenses on the ground that they are legally insufficient to bar a foreclosure judgment and to state their respective causes of action.   One West filed an objection to the plaintiffs' motion to strike on May 28, 2010.   This matter was heard at the short calendar on June 7, 2010.

DISCUSSION

Practice Book § 10-39 provides in relevant part:  “(a) Whenever any party wishes to contest ․ (5) the legal sufficiency of any answer to any complaint ․ or any part of that answer including any special defense contained therein, that party may do so by filing a motion to strike tile contested pleading or part thereof.”  “A motion to strike admits all facts well pleaded;  it does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings.”  (Emphasis in original;  internal quotation marks omitted.)  Faulkner v. United Technologies Corp., 240 Conn. 576, 588, 693 A.2d 293 (1997).   The court must “construe the [pleading] in the manner most favorable to sustaining its legal sufficiency.”  (Internal quotation marks omitted.)  American Progressive Life & Health Ins. Co. of New York v. Better Benefits, LLC, 292 Conn. 111, 120, 971 A.2d 17 (2009).   In ruling on a motion to strike a special defense or special defenses, “[t]he role of the trial court [is] to examine the [special defenses], construed in favor of [the defendant], to determine whether the [pleading party has] stated ․ legally sufficient [special defenses].”  (Internal quotation marks omitted.)  Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 378, 698 A.2d 859 (1997).

I

THE FIRST SPECIAL DEFENSE

In their motion to strike, the plaintiffs argue that the first special defense should be stricken because equitable subrogation is insufficient as a special defense since it does not bar the entry of a foreclosure judgment.   Additionally, the plaintiffs argue that even if equitable subrogation is appropriate as a special defense, One West has failed to plead sufficient facts to support all of the elements of equitable subrogation.   In response, One West argues that it has alleged sufficient facts to support the application of the doctrine of equitable subrogation.

“As a general rule, facts must be pleaded as a special defense when they are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action ․ The fundamental purpose of a special defense, like other pleadings, is to apprise the court and opposing counsel of the issues to be tried, so that basic issues are not concealed until the trial is underway ․ Whether facts must be specially pleaded depends on the nature of those facts in relation to the contested issues.”  Coughlin v. Anderson, 270 Conn. 487, 501, 853 A.2d 460 (2004).   Equitable subrogation has been pleaded as a special defense in a number of cases.   See, e.g., Rosenbilt v. Williams, 57 Conn.App. 788, 792 n.6, 750 A.2d 1131, cert. denied, 254 Conn. 206, 755 A.2d 882 (2000);  Cottiero v. Ifkovic, 35 Conn.App. 682, 685, 647 A.2d 9, cert. denied, 231 Conn. 938, 651 A.2d 262 (1994);  Sovereign Bank v.2d Family, LLC, Superior Court, judicial district of New London, Docket No. CV 09 5012519 (December 21, 2009, Devine, J.);   Rosenblit v. Wadman, Superior Court, judicial district of New Britain, Docket No. CV 07 5004120 (May 26, 2009, Vacchelli, J.);   AJJ Enterprises, LLC v. Herns, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 05 4005882 (December 26, 2006, Jennings, J.).

The doctrine of “equitable subrogation is broad enough to include every instance in which one person, not acting as a mere volunteer or intruder, pays a debt for which another is primarily liable, and which in equity and good conscience should have been discharged by the latter.”  Allstate Ins. Co. v. Palumbo, 296 Conn. 253, 259 (2010).   Our Supreme Court has recognized that “one who advances money to discharge a prior lien on real ․ property and takes a new mortgage as security is entitled to be subrogated to the rights under the prior lien against the holder of an intervening lien of which he was ignorant.”  Home Owners' Loan Corp. v. Sears, Roebuck & Co., 123 Conn. 232, 237, 193 A. 769 (1937).   Equitable subrogation will, in limited circumstances, permit the rearrangement of the priorities of the parties, based upon fairness and justice.  Independence One Mortgage Corp. v. Katsaros, 43 Conn.App. 71, 73, 681 A.2d 1005 (1996).   In dealing with equitable subrogation claims, excusable ignorance must be pleaded and proven before relief can be granted.   Id., 74-75.

As to the plaintiffs' first argument on the first special defense, the court concludes that equitable subrogation is an appropriate special defense.   Although One West's first special defense, if successful, will not bar the foreclosure action;  see generally Connecticut National Bank v. Esposito, 210 Conn. 221, 222-24, 554 A.2d 735 (1989);  it will bar the plaintiffs from foreclosing against One West. Id. Moreover, as noted above, equitable subrogation has been asserted as a special defense in a number of cases, and the general purpose of a special defense is to create an opportunity for a defendant to assert facts that are consistent with the allegations of the complaint but which, if proven, will demonstrate that the defendant has no cause of action.

The plaintiffs' second argument regarding the first special defense is that One West has failed to plead sufficient facts to support the doctrine of equitable subrogation.   One West's first special defense provides:  “Part of the loan proceeds from the Indymac Mortgage were used to pay off and release a previous mortgage that was prior in right to the Plaintiffs' Judgment Lien. If Plaintiff's Judgment Lien were determined to be prior in right to the Indymac Mortgage, the Plaintiffs would be unjustly enriched, in that part of the loan proceeds from the Indymac Mortgage were used to pay off and release a prior mortgage that had been prior in right to Plaintiffs' Judgment Lien. The Indymac Mortgage is therefore prior in right to the Plaintiffs' Judgment Lien under the doctrine of equitable subrogation.”

The court assumes as true the claim that the loan proceeds from the mortgage assigned to One West were used to pay off and release a previous mortgage that was prior in right to the plaintiffs' judgment lien.   The question now presented is whether One West, having failed to assert that it was ignorant of the intervening lien held by the plaintiffs, has stated a legally sufficient special defense.   The court concludes that One West has failed to plead a key element of equitable subrogation.   It is because of the ignorance of intervening rights that, in appropriate cases, equitable subrogation may be available to provide relief.   One West has made no such claim.   Therefore, the motion to strike the first special defense is granted.

II

THE SECOND SPECIAL DEFENSE

As with the first special defense, the plaintiffs argue that One West's second special defense is legally insufficient because it does not bar the entry of a foreclosure judgment.   The plaintiffs also argue that One West's second special defense does not plead “necessary, sufficient or appropriate facts.”   In response, One West argues that “it was prudent to plead this Special.   Defense to ensure that the Court is aware, and opposing counsel is aware, that Plaintiffs' Judgment Lien only attaches to Mark Crapo's one half interest in the Property.”   One West appears to acknowledge, however, that its second special defense, if successful, will not bar the entry of a foreclosure judgment in this case.

Although a special defense generally pleads facts that, if proven, will defeat the plaintiff's cause of action, a special defense can also serve to “apprise the court and opposing counsel of the issues to be tried, so that basic issues are not concealed until the trial is underway.”  (Internal quotation marks omitted.)  Coughlin v. Anderson, supra, 270 Conn. 501.   Pleading a special defense that merely serves to “apprise the court and opposing counsel of the issues to be tried” can assist the court and the parties because it helps to avoid mistake and surprise.   It can also protect a cautious defendant, in that evidence he might seek to introduce pursuant to a general denial would be barred if the trial court were to conclude that the evidence at issue can only be raised as a special defense.

In this case, One West's second special defense provides:  “Plaintiffs are only claiming an interest in Defendant Mark Crapo's one half interest in the subject property.   Therefore, any judgment rendered in favor of Plaintiffs only relates to Defendant Mark Crapo's one half interest in the subject property.”   One West asserts in its memorandum that it has a priority over the plaintiffs' judgment lien and that it has a priority claim on the entirety of the property at issue, not merely the one-half interest that is allegedly subject to the plaintiffs' judgment lien.   If the foregoing facts are all true, the plaintiffs will be precluded from foreclosing on One West's alleged interest in the entirety of the property.   The second special defense does not, however, assert that One West has a priority interest in entirety of the property;  that claim appears only in One West's memorandum.   Further, the interest of Ilze Crapo in the subject property is not new information;  it appears in paragraph eight of the plaintiffs' complaint.   Finally, since Ms. Crapo is not a party to this case, it is readily apparent that the plaintiffs cannot foreclose any interest that she may have.   See Practice Book § 10-69;  see also D. Caron & G. Milne, Connecticut Foreclosures (4th Ed.2004) § 4.03, p. 69.   Consequently, the second special defense does not sufficiently apprise the court of “issues to be tried,” and the second special defense cannot stand.

CONCLUSION

For the foregoing reasons, the court concludes that One West's first and second special defenses fail to plead sufficient facts.   Thus, the motion to strike is granted as to both counts.

So ordered.

BY THE COURT

Danaher, J.

Danaher, John A., J.