GMAC LLC v. Pamela McCormack (2011)

MEMORANDUM OF DECISION RE MOTION TO DISMISS (NO. 134)

Facts and Procedural History

GMAC Mortgage, LLC, the plaintiff, instituted this foreclosure action against Patricia McCormack, the defendant for the purposes of this decision, by a complaint filed on October 17, 2008.   On September 21, 2010, the plaintiff filed a motion to substitute MidFirst Bank (“MidFirst”) as the party plaintiff because the plaintiff assigned the note and mortgage to MidFirst on September 29, 2004.   The defendant filed an objection to the motion to substitute on September 28, 2010.   The court, Devine, J., denied the plaintiff's motion to substitute on December 10, 2010, and thereby sustained the defendant's objection.

Subsequently, on February 7, 2011, the defendant filed a motion to dismiss and memorandum in support.   The defendant now asserts that the plaintiff lacks standing to bring this foreclosure action against the defendant because it is not the holder of the note and mortgage.   The plaintiff filed its objection to the motion to dismiss and memorandum in opposition on February 17, 2011.   The defendant filed a reply memorandum on March 14, 2011.   The parties appeared for oral argument at short calendar on March 28, 2011.

Discussion

“A motion to dismiss ․ properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court ․ A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction ․ The issue of standing implicates subject matter jurisdiction and is therefore a basis for granting a motion to dismiss.   Practice Book § 10–31(a).  [I]t is the burden of the party who seeks the exercise of jurisdiction in his favor ․ clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute ․ It is well established that, in determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged.”   (Citations omitted;  internal quotation marks omitted.)  Wilcox v. Webster, 294 Conn. 206, 213–14, 982 A.2d 1053 (2009).

In Dime Savings Bank of Wallingford v. Arpaia, 55 Conn.App. 180, 181, 738 A.2d 715 (1999), the Appellate Court addressed the defendant's argument that the trial court lacked subject matter jurisdiction because the original plaintiff, Dime Savings Bank of Wallingford (Dime), obtained an earlier judgment of foreclosure after it assigned the note and mortgage to another party.   Specifically, the critical and undisputed facts were as follows.   The original judgment of foreclosure was rendered on September 10, 1991.   Subsequent to the judgment of September 10, 1991, Dime assigned the subject note and mortgage to Leader Federal Bank for Savings (Leader) on August 30, 1994.   Leader did not move to substitute itself as the plaintiff until August 18, 1995, although the trial court had rendered a judgment of foreclosure by sale on August 7, 1995.   Leader's motion to substitute itself as the plaintiff was granted on October 30, 1995.   The defendant appealed from the judgment of August 7, 1995.   On October 22, 1996, the Appellate Court affirmed the judgment in a per curiam decision.   See id., 182.

On April 8, 1998, after the termination of a bankruptcy stay, Leader filed a motion to open the judgment and set a new sale date.   On August 6, 1998, the trial court granted Leader's motion and set a sale date of October 17, 1998.   The trial court also denied Arpaia's request for permission to file an answer to the foreclosure complaint.   The defendant again appealed.   See id.

The defendant claimed that because Dime assigned its interest in the mortgage, it did not have standing to request the August 7, 1995 judgment.   Consequently, the judgment was invalid because the trial court lacked subject matter jurisdiction.   The Appellate Court disagreed.   See id.

First, the Appellate Court noted:  “In [the defendant's] first appeal, we affirmed the validity of the trial court's August 7, 1995 judgment.   One of the issues in that appeal was whether the trial court abused its discretion in not opening a judgment that [the defendant] claimed was invalid on its face.  [The defendant] argued that because ‘Dime acknowledges that it assigned its interest in the mortgage ․ the judgment is invalid on its face.’   Although now more specifically delineated as a jurisdictional claim, [the defendant's] assertion here turns on the same alleged defect as the claim made in his previous appeal.   The issue has been put to rest.   Even if we assume, arguendo, that the claim here is different from the earlier one, it is without merit.   We conclude that the trial court had subject matter jurisdiction and properly rendered its judgment in favor of Dime.” Id., 183.

The court explained:  “Where a plaintiff lacks standing to sue, the court is without subject matter jurisdiction ․ Standing is the legal right to set judicial machinery in motion.   One cannot rightfully invoke the jurisdiction of the court unless [one] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy ․ Standing, however, is not a technical rule intended to keep aggrieved parties out of court ․ Rather it is a practical concept designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticiable interests and that judicial decisions which may affect the rights of others are forged in hot controversy, with each view fairly and vigorously represented.”  (Citations omitted;  internal quotation marks omitted.)  Id., 183–84.

“Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved ․ The statute authorizing standing in this case is General Statutes § 52–118, which provides in relevant part that ‘[an] assignee ․ may sue ․ in his own name ․’ The legislature's use of the word ‘may’ in the statute indicates that an assignee merely has the option to sue in his name.   Conversely, as the Supreme Court has stated, an assignee also has the option ‘to maintain [an] action in the name of his assignor.  Jacobson v. Robington, 139 Conn. 532, 539, 95 A.2d 66 (1953).”  (Citation omitted;  internal quotation marks omitted.)  Id., 184.

The court concluded:  “In this case, Leader, the assignee and proper plaintiff-in-interest, had standing and rightfully pursued the foreclosure action in the name of Dime, the assignor.   On March 8, 1995, Leader's attorneys filed an appearance in lieu of Dime's attorneys, thereby replacing them.   From that point on, Leader's attorneys represented Leader's interests throughout the case.   Leader then sought and received permission from the trial court to substitute itself in place of Dime. Therefore, [the defendant's] challenge to the trial court's subject matter jurisdiction for lack of standing on the part of Dime is without merit.”  Id.

Moreover, in Wells Fargo Bank, National Assn. v. Murphy, Superior Court, judicial district of Tolland, Docket No. CV 06 6000043 (October 29, 2009, Sferrazza, J.) (48 Conn. L. Rptr. 732, 733), the defendants attempted to oppose summary judgment in a foreclosure action on the ground there existed a genuine issue of material fact as to whether the original plaintiff, Wells Fargo Bank, owned the note secured by the mortgage in question at the time the suit was initiated.   According to the defendants, recorded transactions disclosed conflicting chains of ownership of the note.   They argued that this conflict created a factual controversy as to whether Wells Fargo had standing to bring this foreclosure action.

The court rejected the defendants' argument.  “This contention ․ is based on an erroneous interpretation of the law regarding assignments.   Under the law, both the assignor and assignee of a legal interest have standing to bring a suit against a third party to vindicate that interest.   The assignee is empowered to sue, in the assignee's own name, by virtue of General Statutes § 52–118.   However, under the common law, the assignor retains the right to sue even though the legal interest has been assigned to another ․ The right of the assignor to sue in his own name, as at common law, still exists ․ Either the assignor or assignee is a proper party plaintiff ․ This rule of dual standing applies to foreclosure proceedings ․ More recently, it has been held that an assignee may sue under its own name or that of an assignor.  Dime Savings Bank v. Arpaia, 55 Conn.App. 180, 184 (1999).”  (Citations omitted;  internal quotation marks omitted.)  Id., 733.

The court concluded:  “As an undisputed assignor of the note and mortgage, Wells Fargo had standing to initiate this foreclosure action whether it held the note on the date suit commenced or had assigned it previously.   Because the defendants' only ground for denial of this summary judgment motion is a lack of standing by Wells Fargo to bring this action, summary judgment is granted in favor of the plaintiff as to liability.”  Id., 733.

In the present case, the court is satisfied that the plaintiff has standing to initiate this foreclosure action.¹

Order

For all of the foregoing reasons, the defendant's motion to dismiss is hereby denied.

Devine, J.

FOOTNOTES

FN1. If the plaintiff does not file a motion to add MidFirst as a party plaintiff, the court may do so on its own pursuant to General Statutes § 52–107.   That section states:  “The court may determine the controversy as between the parties before it, if it can do so without prejudice to the rights of others;  but, if a complete determination cannot be had without the presence of other parties, the court may direct that such other parties be brought in.   If a person not a party has an interest or title which the judgment will affect, the court, on his application, shall direct him to be made a party.”.  FN1. If the plaintiff does not file a motion to add MidFirst as a party plaintiff, the court may do so on its own pursuant to General Statutes § 52–107.   That section states:  “The court may determine the controversy as between the parties before it, if it can do so without prejudice to the rights of others;  but, if a complete determination cannot be had without the presence of other parties, the court may direct that such other parties be brought in.   If a person not a party has an interest or title which the judgment will affect, the court, on his application, shall direct him to be made a party.”

Devine, James J., J.