Farmington Savings Bank v. LLC (2010)

RULING ON PLAINTIFF'S MOTION FOR DEFICIENCY JUDGMENT (# 123)

The plaintiff, Farmington Savings Bank, has moved for a deficiency judgment.   The primary issue in dispute is the correct valuation of the subject property.   The plaintiff contends that the property should be valued at $480,000.   The defendants, Columbus Realty, LLC, James C. Earl, and Linda Stuckman, contend that the property should be valued at approximately $500,000.   As discussed below, the court concludes that under all of the circumstances presented, a compromise figure of $490,000 most accurately reflects fair market value.   The parties agree that the mortgage property was not redeemed and that title vested in the plaintiff on November 11, 2009.   The parties further agree that the amount of the debt is $553,177.57.   Therefore, a deficiency judgment in the amount of $63,177.57, shall enter.

FACTS

On August 31, 2009, a judgment of strict foreclosure entered as to a residence at 1 Whispering Pines Lane in Goshen, Connecticut.   At that time, the court found the fair market value of the property to be $480,000.   That finding was based on the oath of appraiser filed by the plaintiff.   The defendants did not challenge the plaintiff's appraisal, nor did they oppose the entry of the judgment.   The plaintiff asserts that the correct valuation of the property, as of the date that title vested in the plaintiff, was $480,000.   On December 1, 2009, the plaintiff filed its motion for a deficiency judgment.   On January 5, 2010, the defendants filed an objection to the motion, contending that the property should be valued at $500,000.

On July 26, 2010, the parties appeared to argue the motion for a deficiency judgment.   At that time, the plaintiff presented expert testimony by Donald Stern, an appraiser with the firm of Calciano and Stern.¹  Stern testified that the property's value on November 11, 2009, was $480,000.   The defendants also presented expert testimony, offering Russell S. Gaidosz of Castle Appraisal Services, LLC. Gaidosz testified that the property's value, on November 11, 2009, was $500,000.

DISCUSSION

General Statutes § 49-14(a) permits “any party to a mortgage foreclosure [to] file a motion seeking a deficiency judgment.”   At a hearing on such a motion “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.”  Id. “The value of the premises on the date that title becomes vested in the mortgagee determines whether the mortgagee is entitled to a deficiency judgment.”  Di Diego v. Zarro, 19 Conn.App. 291, 294, 562 A.2d 555 (1989).   In order to obtain a deficiency judgment, “the plaintiff [is] required to prove that the property was worth less than the amount of the debt on the date of the vesting of title.   She therefore [has] the burden of presenting sufficient evidence for the trial court to determine the value of the property on that date.”  Eichman v. J & J Building Co., 216 Conn. 443, 451, 582 A.2d 182 (1990).

“The determination of [a property's] value by a court is the expression of the court's opinion aided ordinarily by the opinions of expert witnesses, and reached by weighing those opinions in light of all the circumstances in evidence bearing upon value and its own general knowledge of the elements going to establish it.”  (Internal quotation marks omitted.)  Harford Federal Savings & Loan Assn. v. Tucker, 196 Conn. 172, 183, 491 A.2d 1084, cert. denied, 474 U.S. 920, 106 S.Ct. 250, 88 L.Ed.2d 258 (1985).  “[T]he determination of the credibility of expert witnesses and the weight to be accorded their testimony is within the province of the trier of facts, who is privileged to adopt whatever testimony he reasonably believes to be credible.”  Id. “When confronted with conflicting evidence as to valuation the trier may properly conclude that under all the circumstances a compromise figure most accurately reflects fair market value.”  (Internal quotation marks omitted.)  Eichman v. J & J Building Co., supra, 216 Conn., 451, 452.

Both appraisers conducted what was referred to as “drive by” appraisals, a fact that limited their ability to bring more precision to their ultimate opinions.   Stern, who appraised the subject property at $480,000, identified three comparable properties as a part of his appraisal.   He acknowledged that he had some difficulty in finding directly comparable properties and was compelled to make adjustments, some of which were significant, relative to various aspects of the “comparable” properties in order to use those properties as a basis for appraising the subject property.

Gaidosz, who appraised the subject property at $500,000, used comparables that, unlike Stern's comparables, did not require significant adjustments.   Consequently, he testified, his comparables provide a better basis on which to evaluate the subject property.   He testified that larger adjustments regarding “comparable” properties make those properties less useful in an appraiser's analysis.   In short, as the adjustments grow larger, the property becomes less of a “comparable.”   On the other hand, Gaidosz acknowledged that most of the comparables on which he relied are, unlike the subject property, near a lake.   He also acknowledged that the subject property has been on the market for at least six months, with an asking price of $500,000.   The latter fact tends to undercut Gaidosz' conclusion that $500,000 represents an. accurate value for the property.

In summary, each appraiser raised valid points that, to some extent, call into question the conclusion drawn by the other.   This is therefore a classic situation for which a compromise figure most accurately reflects the fair market value.   This is particularly true when the competing appraisals are, relatively speaking, not significantly different.   Therefore, taking all of the foregoing testimony and documentary evidence into consideration, the court finds that a compromise figure of $490,000 most accurately reflects the fair market value of the subject property.   The amount of debt on the date that title vested in the plaintiff was $553,177.57.   Therefore, a deficiency judgment in the amount of $63,177.57 shall enter.

So ordered.

BY THE COURT,

John A. Danaher III

FOOTNOTES

FN1. Stern prepared the appraisal and the oath of appraisal that were before the court when the judgment of strict foreclosure entered on August 31, 2009..  FN1. Stern prepared the appraisal and the oath of appraisal that were before the court when the judgment of strict foreclosure entered on August 31, 2009.

Danaher, John A., J.