Eastern Savings Bank v. John Capone, Jr. et al. (2012)

MEMORANDUM OF DECISION No. 134

On October 29, 2010, the plaintiff, Eastern Savings Bank, FSB, filed a complaint sounding in mortgage foreclosure against the defendants, John Joseph Capone, Jr. and Rene Capone.¹  On October 31, 2011, the defendants filed an amended answer, special defenses and counterclaims.   The defendants have alleged four special defenses:  (1) fraud in the inducement, (2) unclean hands, (3) fraudulent misrepresentation and (4) unconscionable mortgage loan.   The defendants have also set forth five counterclaims:  (1) fraud, (2) fraudulent misrepresentation, (3) negligent and intentional misrepresentation, (4) negligence and (5) violation of CUTPA.

On December 29, 2011, the plaintiff filed a motion to strike the amended special defenses and counterclaims filed by the defendants.   The defendants filed a memorandum in opposition to the plaintiff's motion on February 22, 2012 and a supplemental memorandum on February 29, 2012.   This matter was heard at short calendar on March 12, 2012.

The plaintiff first moves to strike paragraphs thirty-six through fifty-one of the defendants' statement of facts on the grounds that each paragraph relates to settlement discussions and many of the alleged facts refer to events that occurred after the foreclosure.  “[O]nly an entire count of a counterclaim or an entire special defense can be subject to a motion to strike, unless the individual paragraph embodies an entire cause of action or defense.”  (Internal quotation marks omitted.)   Jascowski v. Ross, Superior Court, judicial district of New London, Docket No. CV 06 5000425 (March 9, 2011, Cosgrove, J.).   Moreover, “[t]he admissibility of evidence is not properly raised on a motion to strike.   The purpose of a motion to strike is to test the legal sufficiency of the pleadings.   The admissibility of evidence goes to the proof of the facts pleaded, not to their legal sufficiency.”  (Internal quotation marks omitted.)   New London Board of Education v. Hartford Fire Ins., Superior Court, judicial district of New London, Docket No. 527732 (January 6, 1994, Austin, J.).   Accordingly, the plaintiff's motion to strike paragraphs thirty-six through fifty-one of the defendants' statement of facts is denied.

The principal dispute between the parties concerns whether the loan at issue was a consumer loan.   The plaintiff argues that it was not a consumer loan and, therefore, the defendants' special defenses and counterclaims are inapplicable.   Further, the plaintiff argues that the defendants' claims and defenses based on state law are preempted by federal law.²  The defendants counter that it was a consumer loan and, even if it was a commercial loan, it was unduly oppressive.

“An action of foreclosure is peculiarly an equitable action ․ Hence, the court may consider all relevant circumstances to ensure that complete justice is done ․ [T]he determination of what equity requires in a particular case, the balancing of the equities, is a matter for the discretion of the trial court ․ Discretion means a legal discretion, to be exercised in conformity with the spirit of the law and in a manner to subserve and not to impede or defeat the ends of substantial justice ․ For that reason, equitable remedies are not bound by formula but are molded to the needs of justice.”  (Citations omitted;  internal quotation marks omitted.)  McKeever v. Fiore, 78 Conn.App. 783, 788, 829 A.2d 846 (2003).

In the present case, the defendants have asserted that the loan documents were represented by the plaintiff as pertaining to a consumer loan.   The court cannot presently determine what a balancing of the equities requires in this case.   Accordingly, the plaintiff's motion to strike the defendants' amended special defenses and counterclaims is hereby denied.

The Court,

Cosgrove, J.

FOOTNOTES

FN1. Michael J. Capone and John Joseph Capone, Jr. are also named as defendants in this action in their capacities as the co-executors of the estate of John Capone..  FN1. Michael J. Capone and John Joseph Capone, Jr. are also named as defendants in this action in their capacities as the co-executors of the estate of John Capone.

FN2. The plaintiff also argues that the defendants' counterclaims and special defenses are not limited to the making, validity or enforcement of the note or mortgage.   However, “notwithstanding the language used by some Superior Court decisions, a court may consider the mortgagee's conduct throughout the course of the parties' relationship.”  Liberty Bank v. New London, LP, Superior Court, judicial district of New London, Docket No. 4005236 (May 1, 2007, Devine, J.) (43 Conn. L. Rptr. 326, 328).   Additionally, the plaintiff argues that the defendants' special defenses and counterclaims are barred by the applicable statutes of limitations.   The general rule, however, is that a claim that an action is barred by the lapse of the applicable statute of limitations is not properly raised by a motion to strike.  Greco v. United Technologies Corp., 277 Conn. 337, 344 n.12, 890 A.2d 1269 (2006).   Accordingly, the plaintiff's motion to strike for these reasons is denied..  FN2. The plaintiff also argues that the defendants' counterclaims and special defenses are not limited to the making, validity or enforcement of the note or mortgage.   However, “notwithstanding the language used by some Superior Court decisions, a court may consider the mortgagee's conduct throughout the course of the parties' relationship.”  Liberty Bank v. New London, LP, Superior Court, judicial district of New London, Docket No. 4005236 (May 1, 2007, Devine, J.) (43 Conn. L. Rptr. 326, 328).   Additionally, the plaintiff argues that the defendants' special defenses and counterclaims are barred by the applicable statutes of limitations.   The general rule, however, is that a claim that an action is barred by the lapse of the applicable statute of limitations is not properly raised by a motion to strike.  Greco v. United Technologies Corp., 277 Conn. 337, 344 n.12, 890 A.2d 1269 (2006).   Accordingly, the plaintiff's motion to strike for these reasons is denied.

Cosgrove, Emmet L., J.