Floyd T. Underkoffler v. Bank of America (2011)

MEMORANDUM OF DECISION

This action concerns the alleged failure of the Defendant, Bank of America (“BOA”) to deliver a release of mortgage in compliance with Connecticut General Statutes § 49–8 (the statute).   The Plaintiff, Floyd Underkoffler (“the Plaintiff”) alleges that, after paying off his mortgage in full, BOA gave him a release of mortgage which did not clear the record title of the property because BOA was not the record holder of the mortgage.

The statute provides for statutory damages and penalties if a mortgagee fails to comply within the sixty (60) day time frame at a rate of $200.00 per week up to a maximum of $5,000.00 (25 weeks @ $200 per week).

At trial, the parties filed a stipulation of facts dated December 9, 2010, which read as follows:

“(1) From February 12, 1988, until August 4, 2008, the Plaintiff owned property known as 2 Beckwith Road, Montville (Oakdale), Connecticut.

(2) Beginning February 19, 1988, said property was encumbered by a mortgage from the Plaintiff to New England Savings Bank dated February 12, 1988, and recorded in Volume 197, at Page 926, of the Montville, Connecticut Land Records.

(3) On or about August 6, 2008, the Plaintiff through closing counsel paid off the subject mortgage loan to the Defendant Bank of America in accordance with Defendant's Payoff Statement.   Exhibit B to the Complaint is a copy of part of said Payoff Statement.

(4) On or about August 6, 2008, along with said payoff of the subject mortgage loan, the Defendant was notified of Plaintiff's request for a Release of Mortgage.

(5) On or about August 14, 2008, the Defendant executed an instrument entitled “Mortgage Release, Satisfaction and Discharge,” a copy of which is Exhibit A to Defendant's Amended Answer.

(6) Defendant caused said “Mortgage Release, Satisfaction and Discharge” to be recorded on August 18, 2008, in Volume 528, at Page 695, of the Montville, Connecticut Land Records.”

Accordingly, the full payment and written demand required by the statute are admitted.

Plaintiff alleges, as above, that BOA never provided him with a proper “release” of mortgage.   BOA contends that it complied with C.G.S. Section 49–8 by delivering to the Plaintiff a document entitled “ “Mortgage Release, Satisfaction, and Discharge,” purporting to release the Plaintiff's mortgage.

It is not contested that the document provided as the “release” would have been an appropriate “release” if BOA had been the record holder of the mortgage.   The Plaintiff's position is that this document does not meet the requirements of Section 49–8 because it does not effectively release the mortgage in that it was executed by BOA, which was not the record holder of the mortgage.

This matter was tried before this court on December 21, 2010.   Two witnesses testified at trial, namely (1) the Plaintiff, Floyd T. Underkoffler and (2) attorney Stephen Maggiola, the Plaintiffs expert witness who testified as to the chain of title with respect to the property known as 2 Beckwith Road, Montville, CT (“the Property”).

From the evidence presented at the trial, including reasonable and logical inferences from the same, and taking into account the court's evaluation of the credibility of the witnesses the following facts (in addition to the stipulation) are found.

The Plaintiff executed a mortgage in favor of New England Savings Bank on or about February 12, 1988 (“the Mortgage”).   The Mortgage was recorded as an encumbrance against the Property on February 19, 1988 in Volume 197, Page 926 of the Montville Land Records.   At some point in 2000, the Plaintiff began making payments to BOA without knowing whether BOA was the servicer or the holder of the mortgage.   Payments of the mortgage were made by the plaintiff to BOA until 2008 when the property was sold.

On August 4, 2008, the plaintiff sold the Property to his children.   At the closing of the sale BOA had provided a payoff statement indicating the balance due.   From the closing proceeds full payment was made to BOA. In a letter transmitting the full payoff of the Mortgage, Plaintiff, through his counsel, made written demand of BOA for a release of mortgage.   The Plaintiff conveyed title to the Property to his children by way of Warranty Deed which covenanted that the Plaintiff was conveying clear and marketable title.   On August 18, 2008, BOA caused to be recorded on the Montville Land Records a document entitled “Mortgage Release, Satisfaction, and Discharge,” purporting to release the Plaintiff's mortgage.

The land records of the town of Montville, Connecticut, do not indicate that BOA is the record holder of the mortgage in question here.   The mortgage remains an encumbrance of record against the Property.

The issue then to be resolved by the court is whether BOA has complied with the terms of the statute by providing and recording the “release” that it did.   The parties disagree as to that issue.

Connecticut General Statutes 49–8.

C.G.S. § 49–8 provides in relevant part:

(a) The mortgagee or a person authorized by law to release the mortgage shall execute and deliver a release to the extent of the satisfaction tendered before or against receipt of the release:  (1) Upon the satisfaction of the mortgage ․

(c) The mortgagee or plaintiff or the plaintiff's attorney, as the case may be, shall execute and deliver a release within sixty days from the date a written request for a release of such encumbrance (1) was sent to such mortgagee, plaintiff or plaintiff's attorney, at the person's last-known address by registered or certified mail, postage prepaid return receipt requested, or (2) was received by such mortgagee, plaintiff or plaintiff's attorney from a private messenger or courier service or through any means of communication, including electronic communication, reasonably calculated to give the person the written request or a copy of it.   The mortgagee or plaintiff shall be liable for damages to any person aggrieved at the rate of two hundred dollars for each week after the expiration of such sixty days up to a maximum of five thousand dollars or in an amount equal to the loss sustained by such aggrieved person as a result of the failure of the mortgagee or plaintiff or the plaintiff's attorney to execute and deliver a release, whichever is greater, plus costs and reasonable attorneys fees.

C.G.S. § 49–8 (emphasis added).

In interpreting statutes this Court is guided by certain well-established canons of statutory construction.

We presume that the legislature intends sensible results from the statutes it enacts ․ Therefore, we read each statute in a manner that will not thwart its intended purpose or lead to absurd results ․ Words in a statute must be given their plain and ordinary meaning ․ unless the context indicates that a different meaning was intended ․ General Statutes § 1–1(a) provides:  ‘In the construction of the statutes, words and phrases shall be construed according to the commonly approved usage of the language;  and technical words and phrases, and such as have acquired a peculiar and appropriate meaning in the law, shall be construed and understood accordingly’ ․ Our fundamental objective is to ascertain and give effect to the apparent intent of the legislature ․ We seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of the case ․

State v. Pommer, 110 Conn.App. 608, 614–15 (2008) (internal citations and quotation marks omitted) (internal brackets omitted).

The plaintiff claims that to comply with the intent of the statute any “release” provided must of necessity be one that has the effect of clearing the title on the land records of the mortgage purported to be “released.”   Otherwise, the plaintiff contends the statute would have no effect.   The debt would be paid but the obligation would continue to appear on the land records creating an encumbrance.

The defendant, on the other hand, claims that the plain meaning of the statute simply requires the party requested (in this case BOA) to provide a release whether or not that release has the effect of clearing the title of the mortgage.   BOA claims that the “release” given satisfied the statute.

Both parties have extensively briefed their respective claims.

“The words of a statute are to be construed with common sense ․ If a statute is capable of two constructions, one that is rational and effective in accomplishing the evident legislative object, and the other leading to bizarre results destructive of that purpose, the former should prevail.”  State v. Pommer, 110 Conn.App. 616–17 (internal citations and quotation marks omitted) (internal brackets omitted).

The court is persuaded by the plaintiff's claim.   The statute requires by its plain terms a release which has the effect of clearing the title of the mortgage in exchange for the full payment.   The court finds for the plaintiff on the first count of the complaint.

The plaintiff has not briefed his claim of a violation of CUTPA as alleged in the second count of the complaint and the same is considered abandoned.

With respect to the issue of plaintiff's damages the court must consider the statute.

Connecticut General Statutes § 49–8 provides, in pertinent part:

The mortgagee or plaintiff shall be liable for damages to any person aggrieved at the rate of two hundred dollars for each week after the expiration of such sixty days up to a maximum of five thousand dollars or in an amount equal to the loss sustained by such aggrieved person as a result of the failure of the mortgagee or plaintiff or the plaintiff's attorney to execute and deliver a release, whichever is greater, plus costs and reasonable attorneys fees.

The Plaintiff is an aggrieved person under the statute.   He made full payment of his Mortgage and did not receive a release having the effect of clearing the title of the lien of the Mortgage.   He conveyed title to the property by warranty deed which covenanted that he was conveying clear and marketable title.

The court awards damages to the plaintiff as follows:

Considering the time involved as above, plaintiff is entitled to the maximum statutory penalty of $5,000.00 (25 weeks @ $200 per week).

The statute provides for attorneys fees.   The plaintiff has provided an affidavit in that regard the amount of which the court finds unreasonable considering the amount at issue in this matter.   Accordingly, giving consideration to the many factors set forth under rule 1.5(a) of the Rules of Professional Conduct, to the extent that they are evident for the evidence in this case, and its own knowledge as to fees for legal services and the reasonableness of the same under the circumstances, the court determines that an award of attorneys fees in the amount of $5,000 to be reasonable and is hereby awarded to the plaintiff from the defendant.   See Rodriguez v. Ancona, 88 Conn.App. 193, 202 (2005);  O'Brien v. Seyer, 183 Conn. 199, 206 (1981).

Costs are awarded to the plaintiff as provided by law.

The plaintiff filed in this case an Offer of Compromise pursuant to Connecticut General Statutes § 52–192a in the amount of $5,000.

This Offer was not accepted by BOA within the thirty (30) day timeframe.   Therefore the Plaintiff is entitled to statutory interest at the rate of 8% from the date the Complaint was filed (January 12, 2010) through the date of a ruling in the Plaintiff's favor as set forth above.   That amount is $447.12.

In the Prayer for Relief attached to his Complaint, the Plaintiff requests “any other legal and equitable relief that this Court may deem just and proper.”   Here, the plaintiff in his brief has invited the court to utilize that recitation to support the issuance of a mandatory injunction requiring BOA to provide plaintiff with a release which has the effect of clearing the title to the property.   Whatever other remedy may be available to the plaintiff, the court declines to expand this case to that extent.

Judgment may enter for the plaintiff as above, with costs.

Robert C. Leuba

Leuba, Robert C., J.T.R.