Deutsche Bank National Trust Company as Trustee, Successor to Acoustic Home v. Marie Gilane Belizaire et al. (2011)

MEMORANDUM OF DECISION

What are the rights and obligations of the lender, property owners and borrower when a mortgage company loaned money secured by a mortgage to a borrower who did not hold title to the subject real property?   The three sets of parties have proposed creative solutions to this situation.

This action was commenced by Acoustic Home Loans, Inc. against the three named defendants returnable November 21, 2006.   There were three amended complaints filed.   The Amended Complaint dated April 18, 2007 (# 120.00) changed the name of the plaintiff from Acoustic Home Loans, Inc. to Deutsche Bank National Trust Company, as Trustee, Successor to Acoustic Home Loans, Inc. The Corrected Second Amended Complaint dated May 7, 2010 (# 162.00) corrected a typographical error changing the name of Acoustic to Acoustic Home Loans, LLC, (hereinafter Acoustic) which is consistent with the executed loan documents.   The operative complaint is the Corrected Second Amended Complaint dated May 7, 2010 (# 162.00) in four counts, The First Count seeks money damages against the defendant, Marie Giliane Belizaire, on the basis of a May 25, 2005 $425,000 promissory note signed only by Marie Giliane Belizaire (hereinafter Belizaire).   The First Count makes no allegations as to a mortgage securing the $425,000 promissory note nor does the First Count seek foreclosure.   The Second Count seeks foreclosure of the real property at 3 Godfrey Street, Norwalk, Connecticut against all three defendants alleging that the other two defendants, Marjorie B. Belizaire and Joziane Bejin a/k/a Joziane Belizaire Turnier, are the record title owners of 3 Godfrey Street, Norwalk, Connecticut but that the non-owner, Belizaire, executed the mortgage deed.   The Third Count seeks an equitable subrogation of the mortgage deed securing the $425,000 promissory note since the $425,000 was used to pay off two mortgages and a judgment lien on the real property at 3 Godfrey Street, Norwalk, Connecticut.   The plaintiff seeks foreclosure of the equitably subrogated $425,000 mortgage.   The Fourth Count seeks money damages against the two property owners, Marjorie B. Belizaire and Joziane Bejin, for unjust enrichment since the $425,000 was used to pay off two mortgages, a judgment lien, real estate taxes and the balance of the loan proceeds was used to pay for certain code correction work, renovations and other improvements to the property at 3 Godfrey Street.

The two record title owner defendants, Marjorie B. Belizaire and Joziane Bejin, hired counsel, who filed May 24, 2010 Answer and Special Defense to Second Amended Complaint dated May 7, 2010 (# 165.00).   They admitted that they are the record title owners of 3 Godfrey Street, Norwalk, Connecticut.   Their Special Defense alleges that these two defendants are “the record title owners of the real estate located at 3 Godfrey Street, Norwalk, Connecticut which property is the subject of this foreclosure action” and that these two defendants “did not sign the Note or Mortgage that is the underlying cause of this action and are not obligated to the Plaintiff on the Note, or subject to the mortgage.”   The plaintiff filed a November 4, 2008 Reply (# 138.00) to this Special Defense admitting that Marjorie B. Belizaire and Joziane Bejin are the only record title owners of the property at 3 Godfrey Street, Norwalk, Connecticut and that Marjorie B. Belizaire and Joziane Bejin did not sign the Note or the Mortgage.   The balance of the Special Defense was denied by the plaintiff.

The defendant, Belizaire, is represented by separate counsel, who filed an Amended Answer, Third Revised Special Defenses and Second Revised Counterclaim dated May 18, 2010 (# 163.00) containing five special defenses and a one-count counterclaim.

The five special defenses are narrative in format and in some respects contain repetitive allegations.   Without outlining each of the five special defenses, this court concludes that Belizaire is alleging that she was “either fraudulently induced, coerced, or the victim of the predecessor to Deutsche Bank National Trust Company as Trustee's (hereinafter “Deutsche Bank”) negligence in not ascertaining that she was not a record owner of the premises described in the Mortgage held by Deutsche Bank”:  that the predecessor in interest to Deutsche Bank “fraudulently misrepresented and attributed income to Belizaire that she did not have, represented incorrectly that she was the owner of the premises and accepted the appraisal of their agent, servant or employee which overvalued the premises, thereby inducing Belizaire to obligate herself to the repayment of the loan for which she did not have the ability to pay and satisfy”;  “Deutsche Bank was aware or should have been aware that defenses existed to the enforcement of the note and mortgage in that at the time the loan was negotiated to Deutsche Bank it was already in default;” “Deutsche Bank is equitably estopped from enforcing the note or foreclosing the mortgage;” “The Note and Mortgage transaction was procedurally and substantially unconscionable;” “Belizaire cannot read the English language and did not understand the nature or effect of the documents she signed.”  “There was no meeting of the minds between Belizaire and Acoustic.   No contract was formed between these parties.   Therefore, Deutsche Bank did not acquire the Promissory Note it seeks to enforce, in that no contract was ever formed between Belizaire and Acoustic, the predecessor to Deutsche Bank.”

The one-count counterclaim realleges certain facts contained within the five special defenses and seeks money damages on the basis that the “Plaintiff is guilty of Unfair Trade Practices in violation of C.G.S. 42-110g et seq. by reason of its knowledge of its predecessor's unscrupulous, dishonest, fraudulent and coercive behavior in procuring a loan from Belizaire, a vulnerable, unwitting and naive victim of commercially outrageous practices which caused her to sign the Note and Mortgage which Plaintiff now seeks to enforce.”   The counterclaim's Demand for Relief seeks punitive damages, money damages, costs, interest and attorney fees.

The plaintiff filed a June 3, 2010 Reply (# 166.00) to pleading # 163.00. It admitted that “the Plaintiff is assignee of its predecessor, Acoustic Home Loans, LLC (hereinafter ‘Acoustic’).”   It admitted “that when Acoustic negotiated the loan to it, the Plaintiff knew that the loan was in default.”   The balance of the allegations of the five special defenses was denied.   In answer to the one-count counterclaim filed by Belizaire, the plaintiff admitted “that at the time she signed the note and mortgage, Belizaire did not own 3 Godfrey Street, Norwalk, Connecticut.”   The plaintiff admitted “that at the time the note and mortgage were negotiated to it, the loan was in default and had been in default for a period of time.”   The plaintiff either denied or alleged insufficient knowledge as to the balance of Belizaire's counterclaim.

The evidence commenced on January 5, 2010 and concluded on September 30, 2010 after ten days of trial.

The court finds the issues for the defendants, Marie Giliane Belizaire, Majorie B. Belizaire and Jozian Bejin, as against the plaintiffs, Deutsche Bank National Trust Company as Trustee, Successor to Acoustic Home Loans, LLC on the plaintiff's First, Second, Third and Fourth Counts of the Corrected Second Amended Complaint dated May 7, 2010 (# 162.00).   The court finds the issues for the defendants, Marjorie B. Belizaire and Jozian Bejin, on their Special Defense dated May 7, 2010 (# 165.00).   The court finds the issues for the defendant, Marie Giliane Belizaire, on her First Special Defense and Fourth Special Defense dated May 18, 2010 (# 163.00).   The court finds the issues for the plaintiff on the defendant's, Marie Giliane Belizaire, Second Special Defense, Third Special Defense and Fifth Special Defense and her one-count Counterclaim dated May 18, 2010 ($163.00).

Judgment enters in favor of the three defendants against the plaintiff.

The court will file an articulated Memorandum of Decision in excess of twenty pages.

BY THE COURT

Hon. Kevin Tierney,Judge Trial Referee

Tierney, Kevin, J.T.R.