U.S. Bank, N.A. v. Kenneth Coley (2011)

MEMORANDUM OF DECISION ON DEFENDANT'S MOTION FOR ATTORNEYS FEES

Two issues are presented by defendant's motion for attorneys fees.   The first is whether the court may adjudicate a defendant's motion for attorneys fees where a plaintiff's underlying claim was previously dismissed for lack of subject matter jurisdiction.   The second issue presented is whether in this mortgage foreclosure action the defendant, Kenneth Coley, is entitled to attorneys fees pursuant to General Statutes § 42–150bb, a statute which concerns attorneys fees in actions based on consumer contracts.

BACKGROUND

On July 23, 2007, the plaintiff, U.S. Bank, N.A.,¹ filed a foreclosure complaint against the defendant, Kenneth Coley.

The plaintiff alleged the following facts in its foreclosure complaint.   The defendant and Jeanette Coley owned real property located in Fairfield, Connecticut.²  On December 29, 2004, the defendant and Coley executed and delivered a note for a loan in the original principal amount of $650,000, to Finance America, LLC. To secure the note, the defendant and Coley executed and delivered a mortgage to Mortgage Electronic Registration Systems, Inc. as Nominee for Finance America, LLC. On January 4, 2005, the mortgage was recorded in the Fairfield land records.   The plaintiff was assigned the mortgage as a “Successor–In–Interest to Wachovia Bank, N.A., as Indenture Trustee for Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset–Backed Certificates, Series 2005–A6.”   The assignment of mortgage was to be recorded in the Fairfield land records.

The plaintiff further alleged that it was the holder of the note and mortgage and that the defendant defaulted on the note and mortgage.   On March 30, 2009, the court, Doherty, J., entered a judgment of strict foreclosure against the defendant.   The judgment subsequently was opened, modified and reentered several times.   On March 3, 2011, the defendant filed a motion to dismiss.   According to the defendant, the plaintiff lacked standing to prosecute the foreclosure action.   On April 15, 2011, the court heard oral argument and conducted an evidentiary hearing.   On June 10, 2011, the court granted the defendant's motion to dismiss on the ground that the court lacked subject matter jurisdiction over the plaintiff's foreclosure action.

On July 11, 2011, the defendant filed a motion for attorneys fees pursuant to Practice Book § 11–21 ³ and General Statutes § 42–150bb.⁴  In support of his motion, the defendant submits the following documents:  (1) An affidavit executed by the defendant's counsel, Bridget Cusack, and (2) an affidavit executed by the defendant.⁵  On July 20, 2011, the plaintiff filed a memorandum in opposition to the defendant's motion.   On August 1, 2011, the plaintiff filed a supplemental memorandum in opposition to the defendant's motion.   On August 22, 2011, the defendant filed a reply memorandum.   This matter was heard at short calendar on September 12, 2011.

DISCUSSION

In his memorandum, the defendant argues that he is entitled to $6,007.50 in attorneys fees on the following grounds:  (1) The note and mortgage are contracts for purposes of § 42–150bb;  (2) the note and mortgage provide the plaintiff with attorneys fees for costs associated with the defendant's default;  (3) the defendant prevailed against the plaintiff's foreclosure action;  and (4) the amount of attorneys fees sought by the defendant is reasonable.

In its opposition memoranda, the plaintiff asserts that the court lacks jurisdiction to consider the defendant's motion, as the plaintiff's foreclosure action was previously dismissed for lack of subject matter jurisdiction.   The plaintiff further argues that § 42–150bb is not applicable to a mortgage transaction.   Moreover, the plaintiff asserts that the amount of attorneys fees sought by the defendant is unreasonable and inaccurate.   As a result, the plaintiff argues that the court should deny the defendant's motion for attorneys fees.⁶

In his reply memorandum, the defendant contends that the court may consider the present motion, as it does not concern the merits of the plaintiff's underlying foreclosure action.   Furthermore, the defendant asserts that the attorneys fees sought are reasonable and the hourly fee is customarily charged for similar legal services.   As a result, the defendant maintains that he is entitled to the requested attorneys fees pursuant to § 42–150bb.

I

As a threshold issue, the court must determine whether it may decide the defendant's motion for attorneys fees.  “[Our Supreme Court] has long recognized that the Superior Court has jurisdiction of all matters expressly committed to it and all others cognizable by any law court of which the exclusive jurisdiction is not given to some other court.   The fact that no other court has exclusive jurisdiction in any matter is sufficient to give the Superior Court jurisdiction over that matter.”  (Internal quotation marks omitted.)  In re Matthew F., 297 Conn. 673, 695, 4 A.3d 248 (2010).  “[T]he general rule of jurisdiction ․ is that nothing shall be intended to be out of the jurisdiction of a Superior Court but that which specially appears to be so;  and ․ nothing shall be intended to be within the jurisdiction of an inferior court but that which is expressly so alleged ․ [N]o court is to be ousted of its jurisdiction by implication.”  (Internal quotation marks omitted.)  Raftopol v. Ramey, 299 Conn. 681, 695, 12 A.3d 783 (2011).

“If a party is found to lack standing, the court is without subject matter jurisdiction to determine the cause.”  (Internal quotation marks omitted.)   Luster v. Luster, 128 Conn.App. 259, 265, 17 A.3d 1068 (2011).  “Once it becomes clear that [a] trial court [lacks] subject matter jurisdiction to hear the [action], any further discussion of the merits is pure dicta ․ If the trial court issues a decision on the merits of a case over which it lacks subject matter jurisdiction, the decision constitutes an advisory opinion ․ Such an opinion is not a judgment and is not binding on anyone.”  (Citations omitted;  internal quotation marks omitted.)  PHH Mortgage Corp. v. Cameron, 130 Conn.App. 238, 242, 22 A.3d 1282 (2011).

“It is well established by both the United States Supreme Court and Connecticut precedents that a request for attorneys fees is not a motion to open, set aside, alter, or modify a judgment, but rather ‘raises legal issues collateral to the main cause of action ․’ White v. New Hampshire Dept. of Employment Security, 455 U.S. 445, 451, 102 S.Ct. 1162, 71 L.Ed.3d 325 (1982).   The United States Supreme Court held in White that, ‘[r]egardless of when attorneys fees are requested, the court's decision of entitlement to fees ․ require[s] an inquiry separate from the decision on the merits—an inquiry that cannot even commence until one party has prevailed.’  “ (Internal quotation marks omitted.)  Neiditz v. Housing Authority, 42 Conn.App. 409, 411–12, 679 A.2d 987 (1996);  see also Lindo v. Lindo, 48 Conn.App. 645, 652, 710 A.2d 1387 (1998) (“[a] trial court's award of [statutorily authorized] attorneys fees ․ is not a ruling on the ‘merits' of the underlying action”).   Accordingly, a lack of subject matter jurisdiction over an underlying claim does not deprive the court of its function to decide whether a prevailing party is entitled to statutorily authorized attorneys fees.⁷

In the present case, the court dismissed the plaintiff's foreclosure action on the ground that the plaintiff lacked standing.   While the court lacked subject matter jurisdiction to adjudicate the plaintiff's underlying claim, the defendant's motion for attorneys fees does not require a decision on its merits.   As a result, the plaintiff's argument fails, as it is proper for the court to decide whether the defendant is entitled to attorneys fees.

II

Next, the court must decide whether the mortgage falls within the purview of § 42–150bb for purposes of recovering attorneys fees.  “The general rule of law known as the American rule is that attorneys fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a contractual or statutory exception ․ This rule is generally followed throughout the country ․ Connecticut adheres to the American rule ․ There are few exceptions.   For example, a specific contractual term may provide for the recovery of attorneys fees and costs ․ or a statute may confer such rights ․ The law expects parties to bear their own litigation expenses, except where the legislature has dictated otherwise by way of statute.”   (Citation omitted;  internal quotation marks omitted.)  Aaron Manor, Inc., v. Irving, 126 Conn.App. 646, 656–57, 12 A.3d 584, cert. granted on other grounds, 301 Conn. 908, 19 A.3d 178 (2011).

“[T]he proper procedural vehicle for requesting an award of attorneys fees pursuant to § 42–150bb is a motion for attorneys fees pursuant to ․ § 11–21.”  (Internal quotation marks omitted.)   Id., 663 n.2, citing Traystman, Coric & Keramidas, P.C. v. Daigle, 282 Conn. 418, 432, 922 A.2d 1056 (2007).  Section 42–150bb provides in relevant part:  “Whenever any contract or lease entered into on or after October 1, 1979, to which a consumer is a party, provides for the attorneys fee of the commercial party to be paid by the consumer, an attorneys fee shall be awarded as a matter of law to the consumer who successfully prosecutes or defends an action or a counterclaim based upon the contract or lease ․ For the purposes of this section, ‘commercial party’ means the seller, creditor, lessor or assignee of any of them, and ‘consumer’ means the buyer, debtor, lessee or personal representative of any of them.   The provisions of this section shall apply only to contracts or leases in which the money, property or service which is the subject of the transaction is primarily for personal, family or household purposes.”  “When faced with a motion for counsel fees pursuant to § 42–150bb, a court must ․ determine whether the contract at issue is the type of contract for which attorneys fees may be recovered.”  Tyler E. Lyman, Inc. v. Lodrini, 78 Conn.App. 582, 587, 828 A.2d 676 (2003).

“[T]he purpose of § 42–150bb is to make attorneys fees clauses ‘reciprocal’ in order to bring parity between a commercial party and a consumer.   The legislature was concerned with remedying an inequitable situation:  What [the statute] does is give some equity to the situation.   At the present time, many form contracts include attorneys fees provisions for the commercial party, and even though ․ that [commercial] party may be wrong and a consumer successfully defends an action against him, or her, [the consumer] would not be entitled to receive attorneys fees in defending that action.”  (Internal quotation marks omitted.)  Aaron Manor, Inc. v. Irving, supra, 126 Conn.App. 658.   Therefore, “[§ ]42–150bb clearly authorizes an award of attorneys fees to the consumer who successfully prosecutes or defends an action or a counterclaim on a consumer contract or lease.”  (Internal quotation marks omitted.)  Id., 657.

In Bank of New York v. Bell, 52 Conn.Sup. 32, 23 A.3d 121 (2011) [51 Conn. L. Rptr. 862];  the trial court, Satter, J., discussed the application of § 42–150bb to a foreclosure action.   In Bell, a plaintiff attempted to foreclose a mortgage upon a defendant's home.  Id., 33.   After three years of discovery, the plaintiff withdrew its claims and the defendant filed a motion for attorneys fees pursuant to § 42–150bb.  Id., 33–34.   In granting the defendant's motion, the court held, inter alia, that “the plain meaning of a contract ‘primarily for personal, family or household purposes' clearly includes a mortgage on the mortgagor's home.”  Id., 38.   Thus, the mortgage was a contract for purposes of recovering attorneys fees pursuant to § 42–150bb.  Id.;  see also State Street Bank & Trust Co. v. Knight, Superior Court, judicial district of Tolland, Docket No. CV 03 0080718 (August 26, 2003, Scholl, J.) (35 Conn. L. Rptr. 330) (awarding attorneys fees under § 42–150bb where the defendant successfully defended against a foreclosure action);  see also Burleigh v. Norwood Federal Savings & Loan Assn., 669 F.Sup. 48, 50 (D.Conn.1987) (“[t]he mortgage documents are within [§ 42–150bb] and their inclusion is dictated by the purpose of the statute”).

In the present case, the court follows the reasoning of Bell and concludes that under § 42–150bb, the defendant's mortgage is a contract “in which the ․ property ․ which is the subject of the transaction ․ is primarily for personal, family or household purposes.”   Furthermore, the defendant successfully defended against the plaintiff's claim, which resulted in a dismissal of the foreclosure action.   See Trugreen Landcare, LLC v. Elm City Development & Construction Services, LLC, 101 Conn.App. 11, 15, 919 A.2d 1077 (2007) (“a party is a ‘prevailing party’ when a judgment has been ordered in the party's favor, irrespective of the route by which he received that judgment” [internal quotation marks omitted] ).   Moreover, §§ 14 and 22 of the mortgage provide the plaintiff with reasonable attorneys fees for costs associated with the defendant's default.   Accordingly, the defendant may recover attorneys fees, as the mortgage falls within the purview of § 42–150bb.

The plaintiff cites Liapes v. Beaulieu, 18 Conn.App. 329, 557 A.2d 934 (1989), in support of its argument that § 42–150bb does not apply to a mortgage transaction.   In Liapes, the plaintiff commenced an action to collect the debt owed on a promissory note.  Id., 330.   The underlying transaction involved the sale of real property by the plaintiff to the defendant, who failed to record the deed in the land records.   Id., n.2. After the defendant paid the note in full, the plaintiff sought and was awarded attorneys fees pursuant to General Statutes § 42–150aa.⁸  Id., 331.   The defendant appealed the trial court's judgment on the ground that the award of counsel fees under § 42–150aa was improper.  Id., 330.

On appeal, our Appellate Court relied on General Statutes § 42–151 ⁹ in order to define a “contract” under § 42–150aa.   Id., 331 n.3. Section 42–151 defines a consumer contract, inter alia, as borrowing up to $25,000, paying up to $25,000 to buy or lease personal property or services, or leasing any residential dwelling.   The court held that “the parties ․ contemplated a mortgage on real estate to secure payment of a loan in an amount exceeding $25,000, and ․ no consumer contract or lease [was] involved in [the] case.”   Id., 331.   The Appellate Court held that, “[i]t [was] clear that the transaction between [the] parties [did] not fall within the meaning of the definition of the term ‘consumer contract.’  “ Id., 331 n.3. The court, however, did not decide whether the transaction was “primarily for personal, family or household purposes.”

The holding in Liapes is readily distinguishable from the present case.   In Rizzo Pool Co. v. Del Grosso, 240 Conn. 58, 689 A.2d 1097 (1997), our Supreme Court rejected a plaintiff's argument that the court should rely on § 42–151 for the definition of a “contract” under § 42–150bb.   According to our Supreme Court, “[§ ]42–150bb provides its own definition of the type of contract for which attorneys fees may be recovered.   It contains ․ no suggestion that § 42–151 should apply ․ We find no reason under the facts and circumstances of this case to look beyond § 42–150bb to define its scope or to limit its application.”  Id., 72.   As a result, the plaintiff's argument in the present case is unavailing.

CONCLUSION

Based on the foregoing, the defendant is entitled to recover attorneys fees pursuant to § 42–150bb.   The defendant's motion for attorneys fees is granted.   Because the parties contest the amount of attorneys fees to be awarded, the amount of attorneys fees will be determined upon the completion of an evidentiary hearing before the court on a subsequent date.

HARTMERE, J.

FOOTNOTES

FN1. The plaintiff's full name is “U.S. Bank National Association, Successor–In–Interest to Wachovia Bank, National Association as Indenture Trustee for Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset–Back Certificates, Series 2005–A6.”.  FN1. The plaintiff's full name is “U.S. Bank National Association, Successor–In–Interest to Wachovia Bank, National Association as Indenture Trustee for Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset–Back Certificates, Series 2005–A6.”

FN2. For purposes of this decision, “the defendant” refers only to Kenneth Coley.   Jeanette Coley will be referred to as “Coley.”.  FN2. For purposes of this decision, “the defendant” refers only to Kenneth Coley.   Jeanette Coley will be referred to as “Coley.”

FN3. Section 11–21 provides in relevant part:  “Motions for attorneys fees shall be filed with the trial court within thirty days following the date on which the final judgment of the trial court was rendered ․ Nothing in this section shall be deemed to affect an award of attorneys fees assessed as a component of damages.”.  FN3. Section 11–21 provides in relevant part:  “Motions for attorneys fees shall be filed with the trial court within thirty days following the date on which the final judgment of the trial court was rendered ․ Nothing in this section shall be deemed to affect an award of attorneys fees assessed as a component of damages.”

FN4. Section 42–150bb provides in relevant part:  “Whenever any contract or lease entered into on or after October 1, 1979, to which a consumer is a party, provides for the attorneys fee of the commercial party to be paid by the consumer, an attorneys fee shall be awarded as a matter of law to the consumer who successfully prosecutes or defends an action or a counterclaim based upon the contract or lease ․ For the purposes of this section, ‘commercial party’ means the seller, creditor, lessor or assignee of any of them, and ‘consumer’ means the buyer, debtor, lessee or personal representative of any of them.   The provisions of this section shall apply only to contracts or leases in which the money, property or service which is the subject of the transaction is primarily for personal, family or household purposes.”.  FN4. Section 42–150bb provides in relevant part:  “Whenever any contract or lease entered into on or after October 1, 1979, to which a consumer is a party, provides for the attorneys fee of the commercial party to be paid by the consumer, an attorneys fee shall be awarded as a matter of law to the consumer who successfully prosecutes or defends an action or a counterclaim based upon the contract or lease ․ For the purposes of this section, ‘commercial party’ means the seller, creditor, lessor or assignee of any of them, and ‘consumer’ means the buyer, debtor, lessee or personal representative of any of them.   The provisions of this section shall apply only to contracts or leases in which the money, property or service which is the subject of the transaction is primarily for personal, family or household purposes.”

FN5. While the defendant fails to attach the note and mortgage to his motion, the court takes judicial notice of their contents, as the documents were previously attached to motions filed in the present case.   See Borkowski v. Borkowski, 228 Conn. 729, 746 n.6, 638 A 2d 1060 (1994) (“a trial court may take judicial notice of the court file in the same case”)..  FN5. While the defendant fails to attach the note and mortgage to his motion, the court takes judicial notice of their contents, as the documents were previously attached to motions filed in the present case.   See Borkowski v. Borkowski, 228 Conn. 729, 746 n.6, 638 A 2d 1060 (1994) (“a trial court may take judicial notice of the court file in the same case”).

FN6. The plaintiff does not dispute that the mortgage provides the plaintiff with attorneys fees upon the defendant's default or that the defendant prevailed against the plaintiff's underlying claim..  FN6. The plaintiff does not dispute that the mortgage provides the plaintiff with attorneys fees upon the defendant's default or that the defendant prevailed against the plaintiff's underlying claim.

FN7. See Plainville Housing Authority v. Gulka, Superior Court, judicial district of New Britain, Housing Session, Docket No. NBSP 053968 (December 17, 2010, Gilligan, J.) (51 Conn. L. Rptr. 839, 840) (holding that a lack of subject matter jurisdiction over a plaintiff's underlying claim does not strip the court of jurisdiction to decide a defendant's motion for attorneys fees)..  FN7. See Plainville Housing Authority v. Gulka, Superior Court, judicial district of New Britain, Housing Session, Docket No. NBSP 053968 (December 17, 2010, Gilligan, J.) (51 Conn. L. Rptr. 839, 840) (holding that a lack of subject matter jurisdiction over a plaintiff's underlying claim does not strip the court of jurisdiction to decide a defendant's motion for attorneys fees).

FN8. Section 42–150aa provides in relevant part:  “The holder of any contract or lease entered into on or after October 1, 1979, the subject of which is money, property or services intended to be used primarily for personal, family or household purposes and which contains a provision for payment for attorneys fees of a creditor, seller or lessor, shall not receive, claim or collect any payment for attorneys fees (1) for an attorney who is a salaried employee of such holder or (2) prior to the commencement of a lawsuit.”.  FN8. Section 42–150aa provides in relevant part:  “The holder of any contract or lease entered into on or after October 1, 1979, the subject of which is money, property or services intended to be used primarily for personal, family or household purposes and which contains a provision for payment for attorneys fees of a creditor, seller or lessor, shall not receive, claim or collect any payment for attorneys fees (1) for an attorney who is a salaried employee of such holder or (2) prior to the commencement of a lawsuit.”

FN9. Section 42–151 provides in relevant part:  “Consumer contract.   A written agreement is a ‘consumer contract,’ if:  (1) A consumer enters into the agreement primarily for personal, family or household purposes;  and (2) The agreement is one in which the consumer:  (A) Borrows up to twenty-five thousand dollars or receives up to twenty-five thousand dollars in credit from a person who lends money or extends credit in the ordinary course of business:  or (B) agrees to pay up to twenty-five thousand dollars to buy or lease personal property or services from a person who is acting in the ordinary course of business:  or (C) leases any residential dwelling.”.  FN9. Section 42–151 provides in relevant part:  “Consumer contract.   A written agreement is a ‘consumer contract,’ if:  (1) A consumer enters into the agreement primarily for personal, family or household purposes;  and (2) The agreement is one in which the consumer:  (A) Borrows up to twenty-five thousand dollars or receives up to twenty-five thousand dollars in credit from a person who lends money or extends credit in the ordinary course of business:  or (B) agrees to pay up to twenty-five thousand dollars to buy or lease personal property or services from a person who is acting in the ordinary course of business:  or (C) leases any residential dwelling.”

Hartmere, Michael, J.