Pinpat Aquisition Corporation v. Royal Woodcraft, Inc. (2011)

MEMORANDUM OF DECISION RE MOTION TO DISMISS # 139

The plaintiff, Pinpat Acquisition Corporation, has brought this omitted party foreclosure action against the defendant, Royal Woodcraft, Inc. In the operative pleading, which is the revised complaint dated September 23, 2009, the plaintiff alleges the following facts that are relevant to the disposition of the motion that is presently before the court.   On January 6, 2006, Mountain Wood, LLC, Janet Silver and Nicola Tarzia borrowed $5,543,000 from Patriot National Bank. In order to secure the indebtedness arising from this note, Mountain Wood, LLC executed and delivered to Patriot National Bank an open-end construction mortgage deed and security agreement regarding property located at 20B Baldwin Farms South in Greenwich.   Mountain Wood, LLC eventually fell behind on its mortgage payments, and, as a result, Patriot National Bank commenced foreclosure proceedings on September 22, 2008.   On April 24, 2009, Patriot National Bank assigned the subject note and mortgage to the plaintiff.   The plaintiff then obtained a judgment of strict foreclosure on May 4, 2009, and the court set the first law day as June 2, 2009.   Following the property owners' failure to redeem, title vested with the plaintiff on June 9, 2009.

As the defendant was not included in the original action to foreclose the mortgage, the plaintiff then commenced the current case to foreclose the defendant's interest in the subject property.   The plaintiff alleges that the defendant may claim an interest in the property as a result of its $47,952.50 mechanic's lien that was recorded on the Greenwich land records on July 18, 2008.   According to the plaintiff, this mechanic's lien is “subsequent in time and right and subordinate” to the plaintiff's interest in the property.   On December 4, 2009, the plaintiff filed a motion for summary judgment in the present case.   This motion was granted by the court, Mintz, J., on June 7, 2010.   Following the court's granting of a motion to reargue, the court again granted summary judgment in the plaintiff's favor on July 19, 2010.   The plaintiff then filed a motion for judgment of strict foreclosure.   At the present time, this motion has yet to be ruled on by the court.

On March 18, 2011, the defendant filed the motion to dismiss that is presently before the court.   The defendant also filed a memorandum of law in support of its motion and attached a certified transcript of the deposition of Martin Murphy, the plaintiff's vice president.   The sole ground raised in the defendant's motion is that this action is moot because the plaintiff no longer has a mortgage on the property and there is no current amount due other than a deficiency judgment.   On March 31, 2011, the plaintiff filed a memorandum of law in opposition to the plaintiff's motion.   The parties appeared before the court and argued this motion on June 3, 2011.

“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.”  (Internal quotation marks omitted.)  Beecher v. Mohegan Tribe of Indians of Connecticut, 282 Conn. 130, 134 (2007).  “When a ․ court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light ․ In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader.”   (Internal quotation marks omitted.)  Cogswell v. American Transit Ins. Co., 282 Conn. 505, 516 (2007).   Pursuant to Practice Book § 10–31, issues regarding the court's subject matter jurisdiction are properly raised via a motion to dismiss.  “Mootness is a threshold issue that implicates subject matter jurisdiction, which imposes a duty on the court to dismiss a case if the court can no longer grant practical relief to the parties.”  (Internal quotation marks omitted.)  Curley v. Kaiser, 112 Conn.App. 213, 229 (2009).

In its memorandum of law, the defendant argues that its motion to dismiss should be granted because this action is moot.   Specifically, the defendant contends that because there is presently no mortgage on the property and the plaintiff is no longer owed any money under the terms of the note, that the court cannot provide the plaintiff with any relief.   In response, the plaintiff argues that omitted party foreclosure actions are directly authorized by General Statutes § 49–30, and, as a result, the debt that is currently owed is not relevant.   The plaintiff contends that the issue to be determined in this case is the status of the debt at the time of the original judgment of foreclosure.   According to the plaintiff, if the defendant's position were correct, there would never be a circumstance where a foreclosing mortgagee could invoke § 49–30 to cure the omission of a junior lienholder.   Consequently, the plaintiff states that the defendant's position is without any legal merit.

Section 49–30 provides:  “When a mortgage or lien on real estate has been foreclosed and one or more parties owning any interest in or holding an encumbrance on such real estate subsequent or subordinate to such mortgage or lien has been omitted or has not been foreclosed of such interest or encumbrance because of improper service of process or for any other reason, all other parties foreclosed by the foreclosure judgment shall be bound thereby as fully as if no such omission or defect had occurred and shall not retain any equity or right to redeem such foreclosed real estate.   Such omission or failure to properly foreclose such party or parties may be completely cured and cleared by deed or foreclosure or other proper legal proceedings to which the only necessary parties shall be the party acquiring such foreclosure title, or his successor in title, and the party or parties thus not foreclosed, or their respective successors in title.”  (Emphasis added.)   Consequently, by its plain language, § 49–30 authorizes the type of action that has been brought by the plaintiff in this case.

“The purpose of § 49–30 is to provide for a cure in the event that a party is omitted from foreclosure proceedings.   This purpose is unambiguously apparent from the statutory language and its delineation of the methods of curing the omission ‘by deed or foreclosure or other legal proceedings.’   “ Federal Deposit Ins. Corp. v. Bombero, 37 Conn.App. 764, 769 (1995), appeal dismissed, 236 Conn. 774 (1996);  see also Mortgage Electronic Registration Systems, Inc. v. White, 278 Conn. 219, 229 (2006).   As explained by one Superior Court judge, “[a]n action under ․ § 49–30 is essentially one to quiet title.   The mechanism to do so can take the form of a foreclosure action, but the substantive considerations for the court are only to determine whether the party ‘owning any interest in or holding an encumbrance on the real estate subsequent or subordinate to such [foreclosed] mortgage or lien has been omitted or has not been foreclosed because of improper service of process or for any other reason ․’ The task of the court is a narrow one, and essentially consists of examining the record or taking evidence to answer two questions:  1)[w]as there an omitted party, and, if so, 2) under the circumstances of the first foreclosure, would that party's interest or encumbrance have been foreclosed in the original action?”  (Citation omitted;  emphasis in original.)   American Business Credit, Inc. v. Cancellaro, Superior Court, judicial district of Waterbury, Docket No. CV 02 0170465 (March 11, 2003, Pittman, J.) [34 Conn. L. Rptr. 237].

If the court were to adopt the defendant's position, it would completely eviscerate § 49–30.   By its plain terms, § 49–30 can only be invoked once there has been an original judgment of foreclosure in which a party was omitted.   Once that occurs, there would no longer be any debt, other than a potential deficiency judgment, that is owed under the terms of the mortgage note.   See National City Mortgage Co. v. Stoecker, 92 Conn.App. 787, 793–94, cert. denied, 277 Conn. 925 (2006) (stating that “[a] judgment of strict foreclosure, when it becomes absolute and all rights of redemption are cut off, constitutes an appropriation of the mortgaged property to satisfy the mortgage debt ․ In sum, in a strict foreclosure, the vesting of title operates to reduce the debt by the value of the property”).  Section 49–30 then explicitly allows a foreclosing plaintiff to bring a subsequent action to cure its omission of a party from the original foreclosure.  “It is a basic tenet of statutory construction that the legislature [does] not intend to enact meaningless provisions ․ [I]n construing statutes, [courts] presume that there is a purpose behind every sentence, clause, or phrase used in an act and that no part of a statute is superfluous ․ Because [e]very word and phrase [of a statute] is presumed to have meaning ․ [a statute] must be construed, if possible, such that no clause, sentence or word shall be superfluous, void or insignificant.”  (Internal quotation marks omitted.)  Lopa v. Brinker International, Inc., 296 Conn. 426, 433 (2010).   If this court were to hold that there needed to be a remaining debt in order to bring an omitted party foreclosure action under § 49–30, it would effectively render that statute meaningless.   Accordingly, the court determines that the defendant's argument regarding mootness is without merit, and, therefore, it denies the defendant's motion to dismiss.

BY THE COURT

MINTZ, J.

Mintz, Douglas C., J.