GMAC LLC v. Roberto C. Fernandez et al. (2011)

MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT [# 147]

The plaintiff, GMAC Mortgage, LLC filed the present motion for summary judgment as to liability only, accompanied by a memorandum of law in support of its motion, on September 7, 2011.   The defendants, Roberto C. Fernandez and Susan M. Fernandez, filed an objection to the plaintiff's motion on September 27, 2011.   The court heard argument on the motion at short calendar on October 11, 2011.

BACKGROUND

On March 17, 2010, the plaintiff commenced the present foreclosure action against the defendants by virtue of a writ, summons and complaint dated March 3, 2010, with a return date of April 6, 2010.   In its complaint, the plaintiff alleges that the defendants executed a note dated April 24, 2008, pursuant to which the defendants became obligated to repay the plaintiff the original principal amount of $388,408.00, together with interest and all costs of collection as set forth in the terms of the note and mortgage.   To secure the note, the defendants executed and delivered to Mortgage Electronic Registration Systems, Inc. (Mortgage Electronic), as nominee for the plaintiff, a mortgage on the premises known as 304 E Hebron Turnpike, Lebanon, Connecticut (the property).   Said mortgage was dated April 24, 2008, and recorded May 2, 2008, in Volume 255 at Page 833 of the Lebanon Land Records.   The mortgage was thereafter assigned to the plaintiff by virtue of an assignment of mortgage dated March 10, 2010, and recorded May 13, 2010, in Volume 266 at Page 879 of the Lebanon Land Records.   The defendants have failed to make a payment on the loan since September 1, 2009.

On August 19, 2010, the plaintiff filed an affidavit of debt signed by Jeffrey Stephan, a limited signing officer for the plaintiff.   The court, Cosgrove, J., entered a judgment of strict foreclosure on August 23, 2010, with a law date of October 12, 2010.   On October 6, 2010, the plaintiff filed a motion to open and extend the law date to November 15, 2010 so that the plaintiff “may address a potential document execution issue which may impact this matter.”   This court reopened judgment by order dated October 12, 2010.

On May 23, 2011, the defendants filed an answer and four special defenses alleging fraud, unclean hands, a violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42–110b (CUTPA) and a violation of Federal Rule of Civil Procedure 56, respectively.   The defendants filed a counterclaim and cross complaint on August 18, 2011, realleging the special defenses as separate causes of action.   The plaintiff now moves for summary judgment as to liability only.

DISCUSSION

“Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.   In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.”  (Internal quotation marks omitted.)  Sherman v. Ronco, 294 Conn. 548, 553–54, 985 A.2d 1042 (2010).

“In ruling on a motion for summary judgment, the court's function is not to decide issues of material fact, but rather to determine whether any such issues exist.”  Nolan v. Borkowski, 206 Conn. 495, 500, 538 A.2d 1031 (1988).  “In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact.   The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law.   The courts hold the movant to a strict standard.   To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ․ As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent ․ When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ․ Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue ․ It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue.   Mere assertions of fact ․ are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17–45].”  (Internal quotation marks omitted.)   Zielinski v. Kotsoris, 279 Conn. 312, 318–19, 901 A.2d 1207 (2006).

I

“In a mortgage foreclosure action, to make out its prima facie case, [the foreclosing party has] to prove by a preponderance of the evidence that it [is] the owner of the note and mortgage and that [the mortgagee has] defaulted on the note.”  (Internal quotation marks omitted.)  Franklin Credit Management Corp. v. Nicholas, 73 Conn.App. 830, 838, 812 A.2d 51 (2002), cert. denied, 262 Conn. 937, 815 A.2d 136 (2003).  “Furthermore, the foreclosing party must demonstrate that all conditions precedent to foreclosure, as mandated by the note and mortgage, have been satisfied.”   Washington Mutual Bank, F.A. v. Martins, Superior Court, judicial district of New London, Docket No. CV 03 0564550 (March 23, 2004, Martin, J.).

In support of its motion for summary judgment, the plaintiff submitted copies of both the note and mortgage, signed by the defendants, and the assignment of mortgage agreement from Mortgage Electronic to the plaintiff.   The plaintiff also submitted an affidavit of debt signed by Katrina Jordan, an authorized officer for the plaintiff, which details that the note and mortgage have been assigned to the plaintiff and that the defendant has defaulted on the loan.   In their objection, the defendants do not contest that they have defaulted, but assert that the complaint was sworn and attested to prior to the date that the mortgage was assigned to the plaintiff, and therefore, the plaintiff was not in possession of the note and mortgage at that time, and lacks standing to bring the present action.

The defendants' standing argument is controlled by Chase Home Finance, LLC v. Fequiere, 119 Conn.App. 570, 989 A.2d 606, cert. denied, 295 Conn. 922, 991 A.2d 564 (2010), in which our Appellate Court stated:  “General Statutes § 49–17 permits the holder of a negotiable instrument that is secured by a mortgage to foreclose on the mortgage even when the mortgage has not yet been assigned to him ․ The statute codifies the common-law principle of long standing that the mortgage follows the note, pursuant to which only the rightful owner of the note has the right to enforce the mortgage ․ Our legislature, by adopting § 49–17, has provide[d] an avenue for the holder of the note to foreclose on the property when the mortgage has not been assigned to him.”  (Citations omitted;  internal quotation marks omitted.)  Id., 576–77.  “[S]ubstantive law provides that a holder has standing to foreclose on property even before the corresponding mortgage has been assigned to that holder.”   CitiMortgage, Inc. v. Claricoates, Superior Court, judicial district of Tolland, Docket No. CV 11 6003181 (September 14, 2011, Baldini, J.).

The defendants argue that the plaintiffs do not have standing to bring the present action because the complaint was dated March 3, 2010, but the mortgage was not assigned to the plaintiffs until March 10, 2010, and the assignment was not recorded until May 13, 2010.   As a result, the defendants claim that Jordan's affidavit stating that the plaintiff was the holder of the note at the time the action was filed is false, and summary judgment should be denied.   As discussed herein, however, “a holder has standing to foreclose on property even before the corresponding mortgage has been assigned to that holder.”  (Emphasis added.)  Citimortgage, Inc. v. Claricoates, supra, Docket No. CV 11 6003181.

The plaintiff does not dispute that the assignment occurred after the present action was initiated.   Pursuant to Jordan's affidavit, submitted by the plaintiff, the plaintiff is the holder of the note, and “[o]n or before February 10, 2010, [prior to the filing of the plaintiff's complaint,] the [p]laintiff became and at all times since then has been the party entitled to collect the debt evidenced by the [n]ote and is the party entitled to enforce the [m]ortgage securing the debt.”   The defendants offered no evidence to counter Jordan's sworn statement that the plaintiff was the holder of the note at the time it commenced the present action, and for purposes of a motion for summary judgment, “[m]ere assertions of fact ․ are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17–45].”  (Internal quotation marks omitted.)  Zielinski v. Kotsoris, supra, 279 Conn. 318–19.   As a result, the court concludes that the plaintiff was the holder of the note at the time it commenced the present foreclosure action, and therefore, it has standing to bring its claim.

Accordingly, the plaintiff has demonstrated that there is no genuine issue of material fact as to the plaintiff's ownership of the note and mortgage, or as to the defendants' default.   Therefore, the plaintiff has established its prima facie case for a mortgage foreclosure.

II

“When a complaint and supporting affidavits establish an undisputed prima facie case for a foreclosure action, a court must only determine whether [a] special defense is legally sufficient before granting summary judgment.”   LaSalle National Bank v. Shook, Superior Court, judicial district of New London, Docket No. CV 99 0549266 (July 13, 2000, Martin, J.), aff'd, 67 Conn.App. 93, 787 A.2d 32 (2001).  “[T]he purpose of a special defense is to plead facts that are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action.”   (Internal quotation marks omitted.)  Braffman v. Bank of America Corp., 297 Conn. 501, 519, 998 A.2d 1169 (2010).  “If a plaintiff in a foreclosure action has shown that it is entitled to foreclose, then the burden is on the defendant to produce evidence supporting its special defenses in order to create a genuine issue of material fact;  valid, legally sufficient special defenses alone do not.”   WM Specialty Mortgage, LLC v. Brandt, Superior Court, judicial district of Ansonia–Milford, Docket No. CV 09 5001157 (February 10, 2009, Moran, J.T.R.).

“A valid special defense at law to a foreclosure proceeding must be legally sufficient and address the making, validity or enforcement of the mortgage, the note or both.”  (Internal quotation marks omitted.)  Mortgage Electronic Registration Systems, Inc. v. Goduto, 110 Conn.App. 367, 369 n.2, 955 A.2d 544, cert. denied, 289 Conn. 956, 961 A.2d 420 (2008).  “[S]pecial defenses which are not limited to the making, validity or enforcement of the note or mortgage fail to assert any connection with the subject matter of the foreclosure action and as such do not arise out of the same transaction as the foreclosure action.”  (Internal quotation marks omitted.)   Eastern Savings Bank, FSB v. Mara, Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 05 4006305 (June 5, 2006, Dooley, J.).

“The phrase ‘making validity or enforcement’ has been interpreted by the trial courts to mean the execution and delivery of an enforceable instrument, not occurrences by the parties that arise during the course of their relationship.”   Mortgage Electronic Registration Systems, Inc. v. Venditto, Superior Court, judicial district of New London, Docket No. CV 05 4002228 (October 28, 2005, Devine, J.) (40 Conn. L. Rptr. 209, 211).  “The courts of our jurisdiction have held that special defenses and counterclaims alleging post-default conduct by the plaintiff are invalid because they do not relate to the making, validity and enforcement of the note and mortgage.”   Charter Oak Federal Credit Union v. Paige, Superior Court, judicial district of New London, Docket No. CV 07 5003656 (February 19, 2009, Devine, J.);   see First Nationwide Mortgage Corp. v. Gooden, Superior Court, judicial district of New London, Docket No. CV 00 0555982 (May 25, 2001, Martin, J.) (striking counterclaim concerning alleged improprieties occurring during foreclosure process);  Ocwen Federal Bank, FSB v. Weinberg, judicial district of New London, Docket No. CV 98 0547029 (August 11, 1999, Mihalakos, J.) (striking special defense alleging plaintiff failed to properly calculate owed debt and accept payments in timely manner);  Dime Savings Bank of New York FSB v. Furey, judicial district of Ansonia–Milford, Docket No. CV 94 0047557 (April 1, 1996, Curran, J.) (striking special defense citing plaintiff's failure to negotiate loan terms after default);  Federal National Mortgage Assn. v. Mallozzi, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 98 0165698 (February 10, 1999, Hickey, J.) (striking special defense dealing with lender's conduct subsequent to mortgage execution).

In the present case, the defendants' four special defenses, alleging fraud, unclean hands and violations of CUTPA and Federal Rule of Civil Procedure 56, claim, in short, that the plaintiff's foreclosure action cannot be based on Stephan's affidavit of debt, because Stephan indicated in cases brought in other jurisdictions that he did not have personal knowledge of the information contained in the documents he executed on behalf of the plaintiff.   The defendants further allege that the plaintiff knew that Stephan's affidavit was not properly executed, but failed to provide the court with an additional affidavit of debt when it filed its motion to open and extend the law date.   The defendants claim that the plaintiff is barred from foreclosing against the property due to the actions of a robosigner who did not have personal knowledge of the information attested to in the affidavit.

The defendants' emphasis on the previous affidavit of Stephan does not prevent the plaintiff to pursue summary judgment based on new Jordan affidavit, unchallenged as to its corrections and/or validity.   The plaintiff's motion in seeking summary judgment is not based on Stephan's affidavit of debt.   The plaintiff submits and relies upon Jordan's duly authenticated affidavit of debt in support of its motion for summary judgment.   The defendants have failed to provide any evidence indicating that the court should discredit Jordan's sworn statements.   The mere fact that Stephan's affidavit was originally filed in the present case does not prevent the court from entering summary judgment in the plaintiff's favor in light of the plaintiff's subsequent submission of Jordan's testimony by affidavit.

Moreover, all of the allegations made in the defendants' special defenses relate to alleged post-default conduct by the plaintiff, which “are invalid because they do not relate to the making, validity and enforcement of the note and mortgage.”  Charter Oak Federal Credit Union v. Paige, supra, Docket No. CV 07 5003656.   As a result, the defendants' special defenses are legally insufficient, and do not raise a genuine issue of material fact that could defeat the present motion.   Therefore, the plaintiff's motion for summary judgment as to liability only must be granted.

CONCLUSION

Based on the foregoing, the court hereby grants the plaintiff's motion for summary judgment as to liability only.

Devine, J.

Devine, James J., J.