Old Republic Insurance Company v. Bonnie L. DeCosta et al. (2011)

MEMORANDUM OF DECISION

This is an action in which the plaintiff, Old Republic Insurance Company, as assignee of Sharonview Federal Credit Union (Sharonview), seeks to recover sums due from the defendants, Bonnie L. DeCosta and Robert N. DeCosta, under an open-end home equity credit agreement (the agreement) entered into between the defendants and Sharonview providing for an unsecured revolving line of credit to the defendants.   The defendants claim that the agreement from Sharonview to the plaintiff is unenforceable against the defendants because of a failure by the plaintiffs to comply with the requirements for an assignment under General Statutes § 49–10.

During the trial before the court, an officer of the plaintiff testified that the plaintiff insured the agreement, paid Sharonview for its loss under the agreement and received an assignment from Sharonview of the agreement.   The officer testified that she had the original of the assignment in her file, but the original assignment was not reviewed by the court nor entered into evidence.   A photocopy of the assignment was marked Plaintiff's Exhibit 4 for identification, but the photocopy was not entered into evidence.   The officer testified that the amount owing to the plaintiff under the agreement was $36,657.77.

General Statutes § 49–10 provides, in part, as follows:

(a) As used in this section, “mortgage debt” means a debt or other obligation secured by mortgage, assignment of rent or assignment of interest in a lease.

(b) Whenever any 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.

In their briefs, counsel for both parties rely upon provisions of § 49–10 in support of their arguments as to the validity of the assignment.   However, § 49–10(a) defines “mortgage debt” as used in § 49–10 to be “a debt or other obligation secured by mortgage, assignment of rent or assignment of interests in a lease.”   The agreement in the present case is an unsecured line of credit and does not fall within the definition of “mortgage debt” as set forth in § 49–10(a).   Therefore, the assignment of the agreement is not subject to requirements set forth in § 49–10(b), which the plaintiff claims the court had to review to determine if the assignment was valid.

The court heard the testimony of the plaintiff's officer as to the assignment of the agreement and has reviewed Plaintiff's Exhibit 4, a copy of a check dated January 5, 2005, in the amount of $22,323.51 from the plaintiff to Sharonview to cover the amount owed on the agreement by the defendants at the time of the assignment.

Based on the foregoing, the court finds that the assignment from Sharonview to the plaintiff was valid.

Accordingly, the court finds for the plaintiff against the defendants in the amount of $36,637.77, plus attorneys fees of $3,000.00.   The court makes no award of costs.

Seymour L. Hendel, JTR

Hendel, Seymour L., J.T.R.