DCR III LLC v. Martin T. Sullivan et al 1 (2010)

MEMORANDUM OF DECISION

This action seeks to foreclose a mortgage encumbering real property known as 28 West Main Street, Southington, Connecticut.   The mortgage secures the payment and obligations of a promissory note from the defendants, Martin T. Sullivan and Arthur E. Sullivan (the “Defendants”).²  The plaintiff, DCR Mortgage III Sub I, LLC (“DCR”), claims that it is a holder of a mortgage and note in the original principal amount of $125,000, and that the defendants, the mortgagors and promisors, have failed to perform their obligations under said mortgage and note.

I

FINDINGS OF FACT

On March 24, 1988, the defendants executed an adjustable rate note (the “Note”) by which they promised to pay to the order of State Savings Bank, formerly Savings and Loan Association of Southington, Inc., the principal sum of $125,000.   In order to secure the note, the defendants also executed an open-end mortgage deed (the “Mortgage”), by which they mortgaged to State Savings Bank a certain piece or parcel of land known as 28 West Main Street, Southington.

In August 2006, DCR purchased from Sovereign Bank the loan made to the defendants.³  DCR purchased the loan using funds from its warehouse lender, Wells Fargo Foothill, Inc. (“WFF, Inc.).   DCR's loan agreement with WFF, Inc., required DCR to grant WFF, Inc., a security interest in the note and mortgage, deliver the documents to WFF, Inc., and endorse the note to WFRF, Inc., by allonge, which it did by a Collateral Assignment of Open-End Mortgage Deed. Plaintiff's Exh. 9. The collateral assignment from DCR to WFF, Inc., provides in relevant part:

DCR MORTGAGE III SUB I, LLC ․ hereby assigns as collateral to WELLS FARGO FOOTHILL, INC ․ and grants to [it] a security interest, in, to and under or arising out of that certain:  (a) Open-End Mortgage, dated as of March 24, 1988, from Donald W. Sullivan, Sr., Martin T. Sullivan, and Arthur E. Sullivan [ ], to and in favor of State Savings Bank ․ TOGETHER WITH the promissory note described in the Mortgage ․

The security interest is, herein created to secure the payment and performance of the (i) Obligations (as defined in [that certain Loan and Security Agreement between DCR and Wells Fargo Foothill, Inc.] ) and the termination of any commitment to lend hereunder, and (ii) all costs reasonably incurred by Wells Fargo Foothill, Inc. to obtain, preserve, perfect and enforce the security interest granted hereby ․

The law governing this secured transaction shall be the [California Commercial Code] and other applicable laws of the State of California ․” (Emphasis added.)   Plaintiff's Exh. 9.

On September 25, 2006, the defendants were sent a letter from the servicing agent of DCR, advising them that a “breach has occurred under the terms of your Note and Mortgage by reason of your failure to pay real estate taxes when due.”   Defendant's Exh. A. The letter indicated that DCR was electing to accelerate the loan, and full payment was demanded on or before October 26, 2006, which at that time was $64,157.20.⁴  Instead, of electing to follow through with the acceleration and commence a foreclosure proceeding, however, DCR negotiated with the defendants a forbearance agreement wherein the defendants were able to pay the delinquent taxes over the course of sixteen plus months.⁵  In addition, the maturity date was modified to November 6, 2007;  monthly payments of $1,000 were due on the first of each month until the loan matured on November 6, 2007, when the full balance was due;  failure to make a monthly payment when due would result in the loan immediately becoming due and payable, without notice or demand;  and the forbearance agreement would govern in the event of any inconsistency between the terms of the forbearance agreement and the terms of the loan documents.   Plaintiff's Exh. 7.⁶ The defendants were represented by counsel, and both defendants acknowledged reading the agreement as well as signing it.

On August 29, 2007, DCR declared another default due to the defendants' failure to pay the May, June, July and August 2007, monthly payments, and sent a letter to the defendants demanding full payment due to their failure to make those payments.   Defendants' Exh. C. On June 18, 2008, the servicing agent for DCR sent another demand letter to the defendants, advising them that a breach has occurred due to their failure to make monthly payments as well as their failure to pay real estate taxes.   Defendants' Exh. D. In June 2009, in anticipation of commencing this foreclosure action, DCR sought a return of the loan documents and a release of the security interest in those documents from WFF, Inc. On June 30, 2009, WFF, Inc., released the security interest and returned the loan documents to DCR.⁷ On August 4, 2009, DCR commenced this foreclosure action.

The operative complaint is dated September 23, 2010.   In response to this complaint, the defendants pled eight special defenses:  (1) Violation of General Statutes § 49-10; 8  (2) Estoppel;  (3) Waiver;  (4) Fraud in the factum;  (5) Estoppel;  (6) Failure to satisfy condition precedent;  (7) Cure;  and (8) Unclean Hands;  and six counterclaims:  (1) Violation of Connecticut Unfair Trade Practices Act (CUTPA);  (2) Breach of contract;  (3) Breach of implied duty of good faith and fair dealing;  (4) Negligence;  (5) Negligent misrepresentation;  and (6) Fraudulent misrepresentation.⁹

DCR is seeking a judgment of strict foreclosure, a finding that the debt owed by the defendants is $55,617.69, plus interest from October 13, 2010, through date of judgment at a rate of $16 per day, as well as finding the value of the subject property to be $350,000.   DCR also seeks an award of appraisal fee of $1,250 and title search fee of $250, and an award of attorneys fees in the amount of $29,867.71.   The defendants seek judgment in their favor on their counterclaims, as well as money damages, interest, punitive damages and attorneys fees.

II

DISCUSSIONA. Claim for Foreclosure

In a mortgage foreclosure action, “[t]o make out its prima facie case, [the mortgagee] ha[s] to prove by a preponderance of the evidence that it was the owner of the note and mortgage and that the [mortgagor] has defaulted on the note.”  Ocwen Federal Bank v. Charles, 95 Conn.App. 315, 319 n.5, 898 A.2d 197 (2006);  Webster Bank v. Flanagan, 51 Conn.App. 733, 750-52, 725 A.2d 975 (1999).   A foreclosure complaint “must contain certain allegations regarding the nature of the interest being foreclosed.   These allegations should include allegations relating to the parties and terms of the operative instruments, the nature of the default giving rise to the right to foreclosure, the amount due and currently owing, the name of the record owner and of the party in possession, and appropriate prayers for relief ․ The terms of the mortgage determine the necessary elements of the plaintiff's prima facie case.”  New England Savings Bank v. Bedford Realty Corp., 246 Conn. 594, 610-11, 717 A.2d 713 (1998).

The court finds that DCR has made out a prima facie case.   In August 2006, DCR purchased the defendants' loan from Sovereign Bank, and at trial produced the original note.   DCR is the owner of the note and mortgage, and was so at the commencement of the foreclosure proceeding.¹⁰  From the time DCR purchased the loan, through commencement of this action in August 2009, the defendants did not object to DCR being the owner of the loan, and, albeit not in accordance with the loan documents, made payments only to DCR. “․ [W]hen the plaintiff had lawful possession of the note and mortgage, and the defendants made payments according to the terms of the note to the plaintiff for nineteen months, the plaintiff was entitled to enforce the note.”  SKW Real Estate LTD. Partnership v. Gallicchio, 49 Conn.App. 563, 571, 716 A.2d 903 (1998).   The defendants defaulted by failing to make the requisite monthly payments under the note as amended by the forbearance agreement, and thus the loan was accelerated by letter of August 29, 2007, and June 18, 2008, even though the forbearance agreement stated that upon failure to make monthly payments as required, the loan would become immediately due and payable “without further notice or demand.”   Plaintiff's Exh. P7, ¶ 4.

B. Defendants' Special Defenses

The defendants have asserted eight special defenses, which have the central theme that DCR “relinquished” ownership of the loan when it granted a security interest in the loan documents to WFF, Inc., in September 2006.   They essentially claim that all actions concerning the administration and collection of the loan by DCR after it granted the security interest, including entering into the forbearance agreement, were void because DCR no longer owned the loan, and therefore was not the “holder” of the note at the commencement of the foreclosure action.

DCR purchased the defendants' loan from funds loaned to it by its warehouse lender, WFF, Inc., Under DCR's loan agreement with WFF, Inc., it must grant WFF, Inc., a security interest in the note and mortgage for each loan it purchases, and endorse the note to WFF, Inc., by allonge.   Accordingly, DCR collaterally assigned a security interest in the note and mortgage and endorsed the note to WFF, Inc., in September 2006.   Furthermore, the governing law for the interpretation ․ of this secured transaction is the applicable laws of the State of California, as provided in the collateral assignment.   See, Plaintiff's Exh. 9.¹¹

Under California law, “[a]n assignee of a contract who received the contract as collateral security for money loaned [does] not accept the benefit of the original contract other than as pledge and [does] not become a party to the original contract or obligate himself to perform the work which the pledged contract required to be performed by the pledgor.”  Stone v. Owens, 105 Cal. 292, 297-98 (1894);  accord Black v. Sullivan, 48 Cal.App.3d 557, 564, 122 Cal.Rptr. 119 (1975);  see also, 4 Miller and Starr, California Real Estate § 10:40 (distinguishing between a pledge and an absolute assignment of a note and mortgage and further noting that a pledge “has a lien on the note and deed of trust only”).

There was never a relinquishment of ownership of the loan by DCR when it granted a security interest to WFF, Inc., which in turn assigned its rights in that security interest to WFF, LLC. In June 2006, in anticipation of this foreclosure action, DCR requested that WFF, LLC, release its security interest in the loan documents and return the same to DCR. This was done by the Reassignment of Mortgage and Loan Documents dated June 30, 2009.   Plaintiff's Exh. 11.¹²

The defendants also contend that DCR was not the holder of the note at the commencement of this action due to the mistake made by WFF, LLC, when it endorsed the note back to DCR but left out the word “Mortgage” in its name.   The similarity in these names amounts to little more than a trivial scrivener's error.   The allonge executed on the same date that WFF, Inc., released its security interest in the loan documents to “DCR Mortgage III, Sub I, LLC.” ¹³ In any event, WFF, LLC, (the correct entity) executed a corrected allonge to DCR Mortgage III, Sub I, LLC, on September 24, 2010.   Plaintiff's Exh. 1.

The defendants also claim that DCR failed to provide them with a proper notice of acceleration.   They argue that the letter sent by DCR dated September 25, 2006, under which it initially elected to accelerate the loan due to the defendants' failure to pay real estate taxes did not comply with the requirement in the mortgage that the lender provide the borrower with a thirty-day notice to cure prior to acceleration.   Defendant's Exh. A. Under the original note executed by the defendants, it provided in relevant part:

“If I am in default, the Note Holder may send me a written notice telling me that if I do not pay the overdue amount by a certain date the Note Holder may require me to pay immediately the full amount of principal which has not been paid and all the interest that I owe on that amount.   That date must be at least 30 days after the date on which the notice is mailed or delivered to me.”  (Emphasis added.)   Plaintiff's Exh. 1.

The mortgage provides in relevant part:

“Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Agreement ․ The notice shall specify:  (a) the default;  (b) the action required to cure the default;  (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured;  and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by the Security Instrument.”  (Emphasis added.)   Plaintiff's Exh. 2.

The defendants are correct in that prior to any acceleration of the loan under the terms of the mortgage DCR was required to give at least thirty (30) days notice of the acceleration.   Proper notice is a condition precedent to an action for foreclosure.   See, New Haven Savings Bank v. LaPlace, 66 Conn.App. 1, 12, 783 A.2d 1174, cert. denied, 258 Conn. 942 (2001).   However, the September 25, 2006, letter provides the total balance of $64,157.20 (which included interest and late charges) was due on October 26, 2006, provided the default was not cured and subsequent payments were timely made.   Moreover, DCR elected not to accelerate the loan AND the parties entered into a forbearance agreement at the end of 2006, which ultimately was a modification of the existing loan.   Most importantly, the default which resulted in the loan actually being accelerated was not the default referenced to in the September 25, 2006, letter but was a subsequent default occurring because of the failure of the defendants to pay the May, June, July, and August 2007, monthly payments after the parties entered into the forbearance agreement.   The forbearance agreement eliminated the requirement in the mortgage that the lender provide the borrowers with a thirty-day notice prior to acceleration.   Plaintiff's Exh. 7, p. 4.¹⁴ The forbearance agreement contains clear and unambiguous language as to the notice provisions.

DCR's claim for foreclosure is predicated on the defendants' defaulting for failing to pay the requisite monthly installment under the forbearance agreement.   Any claims that the defendants may have regarding the first default fail.¹⁵

C. Defendants' Counterclaims 16

1. CUTPA

“[I]n order to prevail in a CUTPA action, a plaintiff must establish both that the defendant has [committed an unfair or deceptive act of practice] and that, as a result of this act, the plaintiff suffered an injury.”  Stevenson Lumber Co-Suffield, Inc. v. Chase Associates, Inc., 284 Conn. 205, 213-14, 932 A.2d 401 (2007).   In determining whether a certain practice or practices violate CUTPA, Connecticut courts apply the cigarette rule, which encompasses the following principles:  “(1) [w]hether the practice, without necessarily having been considered unlawful, offends public policy as it has been established by statutes, the common law or otherwise whether, in other words, it is within at least the penumbra of some common law, statutory or other established concept of unfairness;  (2) whether it is immoral, unethical, oppressive, or unscrupulous;  (3) whether it causes substantial injury to consumers ․” Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 591, 657 A.2d 212 (1995).

The defendants allege that the plaintiff violated CUTPA in a number of ways, specifically:

a.  Issuing a notice of default and acceleration for a mortgage and note it did not have the rightful ownership of;

b. Issuing a notice of default for a mortgage and note that was invalid;

c. Inducing the defendants to enter into a forbearance agreement when the plaintiff did not retain rightful ownership of the loan;

d. Hindering the defendants' efforts to fulfill the obligations under the forbearance agreement;

e.  Demanding interest at a rate that directly contravenes the explicit terms of the forbearance agreement;

f. Transferring ownership of the defendants' loan to RCH Loan Servicing, LLC, with the express intent of defaulting the defendants in order to have all the loan held [sic] DCF Mortgage III, Sub I, LLC liquidated before 2009;  and

g. Attempting to foreclose on the mortgage when the defendants were not in default.   Defendants' Answer and Special Defenses and Counterclaims.

The court has addressed (a), (b) and (c) previously and have found that these claims lack merit.   As to the other claims, either the evidence indicated otherwise, and/or the defendants offered no evidence to support these allegations.   Therefore, the defendants did not establish that DCR violated CUTPA.

2. Breach of contract.

“The elements of breach of a contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party, and damages.”  American Express Centurion Bank v. Head, 115 Conn.App. 10, 971 A.2d 90 (2009).

The defendants argue that the basis for this claim is DCR's alleged failure to comply with the provisions of notice of default and opportunity to cure any default.   Again, this argument fails as the court has found that the acceleration of the note and foreclosure was based upon the forbearance agreement which the parties negotiated, and for which the defendants had benefit of counsel.   Moreover, it appears that the first notice of default which is not the basis of this suit may indeed satisfy the terms of the original note.   The realleging of a claim disposed of by a motion for summary judgment, as well as mischaracterizing the basis of the plaintiff's complaint are not allegations made in good faith.

3. Breach of implied duty of good faith and fair dealing.

“[S]pecial defenses and counterclaims alleging a breach of an implied covenant of good faith and fair dealing ․ are not equitable defenses to a mortgage foreclosure.”  Fidelity Bank v. Krenisky, 72 Conn.App. 700, 716, 807 A.2d 968 (2002);  see also, New Haven Savings Bank v. LaPlace, supra, 66 Conn.App. 10-11 (concluding that the borrower's claim alleging a breach of implied covenant of good faith and fair dealing “were irrelevant to the foreclosure issue because [it did] not attack the making, validity or enforcement of the note or mortgage”).

Not only does this claim fail as a matter of law, but the evidence does not support any of the necessary elements for such a claim.  “Even if a breach of the implied covenant of good faith and fair dealing were an equitable defense to a mortgage foreclosure, the clear language of the mortgage and the note [and the forbearance agreement] fails to support the defendant[s]' claim that the plaintiff breached such an implied covenant because the plaintiff has acted in accordance with its rights as set forth in those documents.”  (Citations omitted.)  Fidelity Bank v. Krenisky, supra, 72 Conn.App. 716-7.

III

CONCLUSION

After careful consideration of all the testimony of the witnesses and the applicable and relevant standards of law, the court finds that the plaintiff has proven that they are the owners of the note and mortgage, and that the defendants have defaulted on the note and mortgage.   Accordingly, the court makes the following findings:

1.  The court enters a default against GTT Corp., GL & N, LLC, Vincent Michael Lombardo,17 and 28 West Main Street, LLC, for failure to appear.

2. The fair market value of the property is $350,000.

3. The debt on the property is $55,617.69 as of October 13, 2010, and per diem interest of $16 from October 13, 2010, until December 17, 2010 is $1,040 for a total debt of $56,657.69.

4. The encumbrances on the property prior to the plaintiff's lien total $12,826.46.

5. The current equity in the property is $280,515.85, considering only the encumbrances represented by the mortgage being foreclosure and any liens having priority over said mortgage.

6. The encumbrances on the property subsequent to the plaintiff's lien total:  $989,438.86.

7. The court awards an appraisal fee of $1,250.

8. The court has reviewed the Affidavit of Attorneys Fees and supporting documentation of corresponding time sheets and invoices.   In light of the defendants' dilatory conduct in this litigation, the court finds the attorneys fees in the amount of $29,867 to be fair and reasonable and makes an award in said amount.   Plaintiff's Exh. 21.   See Smith v. Snyder, 267 Conn. 456, 480, 839 A.2d 589 (2004).

9. The court enters a judgment of foreclosure against the defendants by strict foreclosure.   Law day shall be set for January 24, 2011, against Martin T. Sullivan, Arthur E. Sullivan, and 28 West Main Street, LLC, with subsequent days in the following order:  United States of America;  People's Bank;  GL & N LLC and Vincent Michael Lombardo;  GTT Corp., as Trustee for Onyx Properties Realty Trust.

Swienton, J.

FOOTNOTES

FN2. The original note was executed by the defendants and Donald W. Sullivan, Jr., now deceased.   The subject property was once owned by the defendants, but in September 2008, they transferred it to 28 West Main Street, LLC. Twenty-eight West Main Street, LLC, is a defendant in this action, and has been defaulted for failure to appear.   Said transfer was done without the required approval of the note and mortgage holder..  FN2. The original note was executed by the defendants and Donald W. Sullivan, Jr., now deceased.   The subject property was once owned by the defendants, but in September 2008, they transferred it to 28 West Main Street, LLC. Twenty-eight West Main Street, LLC, is a defendant in this action, and has been defaulted for failure to appear.   Said transfer was done without the required approval of the note and mortgage holder.

FN3. Fleet National Bank, successor to State Savings Bank, had assigned all of its interest to the note, mortgage, and conditional assignment of leases and rentals to Sovereign Bank on September 16, 2003, and the documentation reflecting that assignment was recorded on October 2, 2003, in the Southington Land Records..  FN3. Fleet National Bank, successor to State Savings Bank, had assigned all of its interest to the note, mortgage, and conditional assignment of leases and rentals to Sovereign Bank on September 16, 2003, and the documentation reflecting that assignment was recorded on October 2, 2003, in the Southington Land Records.

FN4. Although this was a demand for the full payment, the letter described how to cure the default, and advised that if the default was cured, the “next regular payment must be made on a timely basis to avoid additional late fees and/or charges.”   The letter could have been read as a notice of default and not necessarily an acceleration of the note..  FN4. Although this was a demand for the full payment, the letter described how to cure the default, and advised that if the default was cured, the “next regular payment must be made on a timely basis to avoid additional late fees and/or charges.”   The letter could have been read as a notice of default and not necessarily an acceleration of the note.

FN5. The defendant, Arthur Sullivan, and the town of Southington entered into an agreement in which the amount of arrearage of property taxes was acknowledged to be $42,642.74, and the town agreed to a payment plan for said arrearage.   Defendants' Exh. B. DCR consented to the agreement, but required the defendants to provide it with a copy of the signed tax agreement before entering into the forbearance agreement.   Plaintiff's Exh. 7, § 7(b)..  FN5. The defendant, Arthur Sullivan, and the town of Southington entered into an agreement in which the amount of arrearage of property taxes was acknowledged to be $42,642.74, and the town agreed to a payment plan for said arrearage.   Defendants' Exh. B. DCR consented to the agreement, but required the defendants to provide it with a copy of the signed tax agreement before entering into the forbearance agreement.   Plaintiff's Exh. 7, § 7(b).

FN6. In addition, the forbearance agreement increased the default interest rate, required the payment of additional fees by the defendants, and called for a balloon payment at the end of the term.   Plaintiff's Exh. 7..  FN6. In addition, the forbearance agreement increased the default interest rate, required the payment of additional fees by the defendants, and called for a balloon payment at the end of the term.   Plaintiff's Exh. 7.

FN7. In November 2008, WFF, Inc., the original secured creditor, assigned all of its rights and interests under its loan agreement with DCR to Wells Fargo Foothill, LLC, (“WFF, LLC”).  Plaintiff's Exh. 20.   This original document was not recorded in the Southington Land Records.   An “Assignment of Mortgage and Loan Documents,” dated November 1, 2008, between WFF, Inc. and WFF, LLC, was recorded in the land records on November 12, 2009.   To make matters more complicated, the reassignment of the mortgage and loan documents to DCR was done first by WFF, Inc., on June 30, 2009, and recorded July 24, 2009.   Plaintiff's Exh. 11.   But since the holder of the loan at that time was really WFF, LLC, a corrected Reassignment of Mortgage and Loan Documents, from WFF, LLC to DCR was executed on October 21, 2009, and recorded on November 12, 2009.   Plaintiff's Exh. 12.   This will be addressed later in this decision..  FN7. In November 2008, WFF, Inc., the original secured creditor, assigned all of its rights and interests under its loan agreement with DCR to Wells Fargo Foothill, LLC, (“WFF, LLC”).  Plaintiff's Exh. 20.   This original document was not recorded in the Southington Land Records.   An “Assignment of Mortgage and Loan Documents,” dated November 1, 2008, between WFF, Inc. and WFF, LLC, was recorded in the land records on November 12, 2009.   To make matters more complicated, the reassignment of the mortgage and loan documents to DCR was done first by WFF, Inc., on June 30, 2009, and recorded July 24, 2009.   Plaintiff's Exh. 11.   But since the holder of the loan at that time was really WFF, LLC, a corrected Reassignment of Mortgage and Loan Documents, from WFF, LLC to DCR was executed on October 21, 2009, and recorded on November 12, 2009.   Plaintiff's Exh. 12.   This will be addressed later in this decision.

FN8. General Statutes § 49-10 deals with assignments of mortgage debt and the requirements thereunder.   The defendants specifically make reference to section (b), which provides:  “Whenever a mortgage debt is assigned by an instrument in writing containing a sufficient description to identify the mortgage, assignment of rent or assignment of interest in a lease, given as security for the mortgage debt, and that assignment has been executed, attested and acknowledged in the manner prescribed by law for the execution, attestation and acknowledgment of deeds of land, the title held by virtue of the mortgage, assignment of rent or assignment of interest in a lease, shall vest in the assignee.”.  FN8. General Statutes § 49-10 deals with assignments of mortgage debt and the requirements thereunder.   The defendants specifically make reference to section (b), which provides:  “Whenever a mortgage debt is assigned by an instrument in writing containing a sufficient description to identify the mortgage, assignment of rent or assignment of interest in a lease, given as security for the mortgage debt, and that assignment has been executed, attested and acknowledged in the manner prescribed by law for the execution, attestation and acknowledgment of deeds of land, the title held by virtue of the mortgage, assignment of rent or assignment of interest in a lease, shall vest in the assignee.”

FN9. The special defense, fraud in the factum, and counterclaims, count four-negligence, count five-negligent misrepresentation, and count six-fraudulent misrepresentation were previously addressed in a motion for summary judgment filed by the plaintiff.   The court by memorandum of decision dated August 16, 2010, granted summary judgment in favor of the plaintiff and against the defendant as to the special defense and counterclaims listed.   Although these were found in a previous amended answer dated May 17, 2010, upon examination they are identical to those contained in the answer to plaintiff's amended complaint, special defenses and counterclaims, dated October 19, 2010.   Accordingly, the court will not address them again..  FN9. The special defense, fraud in the factum, and counterclaims, count four-negligence, count five-negligent misrepresentation, and count six-fraudulent misrepresentation were previously addressed in a motion for summary judgment filed by the plaintiff.   The court by memorandum of decision dated August 16, 2010, granted summary judgment in favor of the plaintiff and against the defendant as to the special defense and counterclaims listed.   Although these were found in a previous amended answer dated May 17, 2010, upon examination they are identical to those contained in the answer to plaintiff's amended complaint, special defenses and counterclaims, dated October 19, 2010.   Accordingly, the court will not address them again.

FN10. Another one of the clerical errors occurred when the Note was endorsed back to DCR from WFF, LLC, in contemplation of this proceeding.   When WFF, LLC, released its security interest and returned the loan documents to DCR, it endorsed the note to DCR III, Sub I, LLC. Plaintiff's Exh. 1, Allonge dated June 30, 2009.   A corrected allonge was executed on September 24, 2010, to DCR Mortgage III, Sub I, LLC. Plaintiff's Exh. 1. While the paper trail in this case can be followed, and clerical errors corrected, obviously this inexcusable carelessness in some cases could make it difficult or impossible for a “holder” to recover..  FN10. Another one of the clerical errors occurred when the Note was endorsed back to DCR from WFF, LLC, in contemplation of this proceeding.   When WFF, LLC, released its security interest and returned the loan documents to DCR, it endorsed the note to DCR III, Sub I, LLC. Plaintiff's Exh. 1, Allonge dated June 30, 2009.   A corrected allonge was executed on September 24, 2010, to DCR Mortgage III, Sub I, LLC. Plaintiff's Exh. 1. While the paper trail in this case can be followed, and clerical errors corrected, obviously this inexcusable carelessness in some cases could make it difficult or impossible for a “holder” to recover.

FN11. “An assignment for security purposes of a promissory note secured by a deed of trust on real property is subject to the provisions of division 9 of the Commercial Code.” See Black v. Sullivan, 48 Cal.App.3d 557, 564 (1975)..  FN11. “An assignment for security purposes of a promissory note secured by a deed of trust on real property is subject to the provisions of division 9 of the Commercial Code.” See Black v. Sullivan, 48 Cal.App.3d 557, 564 (1975).

FN12. As noted above, a series of scrivener's errors was made by WFF, Inc., and WFF, LLC. Correcting documents were executed, and the defendants' contentions that these somehow nullify DCR's status of holder of the note fails..  FN12. As noted above, a series of scrivener's errors was made by WFF, Inc., and WFF, LLC. Correcting documents were executed, and the defendants' contentions that these somehow nullify DCR's status of holder of the note fails.

FN13. Of course, this ALSO was an error, since the correct holder of the security interest at that time was WFF, LLC..  FN13. Of course, this ALSO was an error, since the correct holder of the security interest at that time was WFF, LLC.

FN14. Once the defendants renegotiated the terms of the note under the forbearance agreement, query whether they waived any right to raise this notice requirement at this stage.   See, C.R. Klewin Northeast, LLC v. Bridgeport, 282 Conn. 54, 87, 919 A.2d 1002 (2007) (“Waiver is the intentional relinquishment or abandonment of a known right or privilege ․ Waiver does not have to be express, but may consist of acts of conduct from which a waiver may be implied ․ In other words, wavier may be inferred from the circumstances if it is reasonable to do so”)..  FN14. Once the defendants renegotiated the terms of the note under the forbearance agreement, query whether they waived any right to raise this notice requirement at this stage.   See, C.R. Klewin Northeast, LLC v. Bridgeport, 282 Conn. 54, 87, 919 A.2d 1002 (2007) (“Waiver is the intentional relinquishment or abandonment of a known right or privilege ․ Waiver does not have to be express, but may consist of acts of conduct from which a waiver may be implied ․ In other words, wavier may be inferred from the circumstances if it is reasonable to do so”).

FN15. This also pertains to the claim that the defendants cured their default for failing to pay real estate taxes by entering into an agreement with the town of Southington in October 2006.   Defendants' Exh. B..  FN15. This also pertains to the claim that the defendants cured their default for failing to pay real estate taxes by entering into an agreement with the town of Southington in October 2006.   Defendants' Exh. B.

FN16. As noted in n.9 of this memorandum, counterclaims four, five and six were decided in the plaintiff's favor by the motion for summary judgment, therefore the court will not address these..  FN16. As noted in n.9 of this memorandum, counterclaims four, five and six were decided in the plaintiff's favor by the motion for summary judgment, therefore the court will not address these.

FN17. The court was furnished with a military affidavit for this defendant indicating he was not in the military.   The court was also furnished with an affidavit regarding the federal loss mitigation program..  FN17. The court was furnished with a military affidavit for this defendant indicating he was not in the military.   The court was also furnished with an affidavit regarding the federal loss mitigation program.

Swienton, Cynthia K., J.