David Caban et al. v. LLC (2011)

MEMORANDUM OF DECISION

I. Procedural Background

This action came to this court by multi-count complaint on November 11, 2008, alleging conduct by the defendant in the nature of fraud and misrepresentation and various related claims.   Plaintiffs requested damages and other equitable relief.   After considerable interlocutory pleading the complaint was amended on January 25, 2011.   The case was assigned for trial before this court.   The plaintiffs appeared for trial but the defendant defaulted in appearance.   Upon motion of the plaintiffs, the court entered a default against the defendant for failure to appear at trial and the matter proceeded as a hearing in damages.   David Caban, one of the plaintiffs, testified as to the events involved in the real estate matter in question.   Several exhibits were received in evidence which together outlined the transaction between the plaintiffs and the defendant as it related to the real estate at 47 Hamilton Avenue, Norwich, Connecticut.

II. Facts

From the evidence produced at the hearing, including reasonable and logical inferences from the same, the following facts are found by the court.

The plaintiffs, David Caban and Yamixa Sosa (hereinafter “plaintiffs”), are and were at all times material to this complaint residents of Norwich, New London County.

Defendant, Platinum Investments LLC (hereinafter “defendant”), is a Connecticut limited liability company with an address of 8 West Avenue, East Hampton, Connecticut, and was at all times material to this complaint doing business in New London County, and engaged in offering foreclosure prevention options.

On or about April 1, 2008, defendant contacted plaintiffs and held itself out as an expert in foreclosure rescue options.   Defendant, by its member, met with plaintiffs to inspect their home located at 47 Hamilton Avenue, Norwich, Connecticut, the property being described in a Warranty Deed recorded on January 4, 2005 in Volume 2033, Page 301 of the Norwich Land Records.

Defendant represented to plaintiffs that it would purchase their home for $100.00 and assume the mortgage of $179,733.00 to prevent plaintiffs from the consequences of foreclosure.

Defendant made the representations to induce plaintiffs, whom defendant knew were experiencing financial difficulty, to sign a residential purchase agreement and to convey their home to defendant.

Defendant presented plaintiffs with a Purchase and Sales Agreement which defendant induced plaintiffs to sign through representations that this would save plaintiffs' home from foreclosure.   The agreement prohibited plaintiffs from committing any action or making any statements orally or written that would cause the lender to learn of the transfer.

In reliance on defendant's representations that it would assume the mortgage and/or pay it off, plaintiffs were induced to sign the real estate contract and execute a deed to their home to defendant.

Defendant demanded that plaintiffs immediately leave home, moved in tenants, represented to tenants that it was the owner of 47 Hamilton Avenue, Norwich, Connecticut, collected a security deposit and rents from tenants in the approximate amount of $9,450, and failed to make any payment to the lender, Countrywide Home Loans, Inc.

Defendant represented to plaintiffs, both orally and in writing, at all relevant times that it was fully current in paying plaintiffs' mortgage and would pay off the entire mortgage in due course.

The representations mentioned above were false, and the defendant knew they were false when defendant made them, and defendant made them to deceive plaintiffs.

As a result of defendant's acts and failure to pay off the mortgage, a foreclosure action was commenced against plaintiffs by the lender, Countrywide Home Loan, with a Docket Number KNL–CV–08–5008722, in the Judicial District of New London at New London by writ and summons dated September 24, 2008, which resulted in a judgment of strict foreclosure on May 11, 2009.

As a direct result of the conduct of the defendant, as above, the plaintiffs were deprived of the use and enjoyment of their said property for a period of 5 months.   The value of the use of the property was the amount collected as monthly rent by defendants, i.e., $1,450.00 per month for a total of $7,250.00.

III. Law

“The essential elements of an action in common law fraud ․ are that:  (1) a false representation was made as a statement of fact;  (2) it was untrue and known to be untrue by the party making it;  (3) it was made to induce the other party to act upon it;  and (4) the other party did so act upon the false representation to his injury ․ Under a fraud claim of this type, the party to whom the false representation was made claims to have relied on that representation and to have suffered harm as a result of the reliance.”   (Citation omitted;  internal quotation marks omitted.)  Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 260 Conn. 777–78 (2002).

“[A]t common law, fraud must be proven by clear and convincing evidence.”   Stuart v. Stuart, 297 Conn. 26, 40, 996 A.2d 259 (2010).

IV. Conclusion

The plaintiffs have sustained the high standard of proof required for a claim of fraud.   The court finds that the plaintiffs were defrauded by the conduct of the defendant which resulted in their mortgage not being paid and the resulting loss of their house in foreclosure.   Moreover, the plaintiffs were deprived of the possession and enjoyment of their premises at 47 Hamilton Avenue, Norwich, Connecticut, for a period of 5 months.

Judgment may enter for the plaintiffs as against the defendant, Platinum Investments L.L.C., in the amount of $7,250.00 together with costs.

Robert C. Leuba, JTR

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