LVS v. John S. Carusone et al. (2013)

RULING RE DEFENDANT'S MOTION TO DISMISS # 129

On March 1, 2013, the defendant filed this motion to dismiss this foreclosure action pursuant to Practice Book § 10–31(a).   The essence of the defendant's argument is that the plaintiff lacks standing because it is not the holder of the note.   The defendant alleges that at the time the plaintiff commenced the action it was neither the note holder nor did it receive an assignment of the note “in blank” permitting it to pursue collection on the note.   The defendant further contends the plaintiff is not the proper party to invoke judicial resolution of the dispute.   Therefore, the defendant contends that court lacks subject matter jurisdiction in this case.

The plaintiff brought this action to foreclose a mortgage by way of complaint dated August 6, 2012 bearing a return date of August 28, 2012.   The plaintiff contends that on October 18, 1999, the open end mortgage, the adjustable rate note and the condominium rider were given to Washington Mutual Bank, FA, the original lender by John S. Carusone.   All of the foregoing documents were recorded in the East Hartford land records.   On March 7, 2007, Sheila Beame, Assistant Vice President of Washington Mutual Bank provided an affidavit of lost note.   On March 12, 2007, Washington Mutual Bank, FA assigned said mortgage and Allonge to Note to EMC Mortgage Corporation which was recorded on October 18, 2007 in volume 2955 at page 78 of East Hartford land records.

The assignment specifically states that:

the said Assignor hereby assigns unto the above-named Assignee, the said Mortgage together with the Note or other evidence of Indebtedness (the “Note”), said Note having original principal sum of $400,000.00 with interest, secured thereby, together with all moneys now owing or that may thereafter become due owing in respect thereof ․

On May 19 2011, the said mortgage was again assigned to U.S. Bank National Association, the present plaintiff, as Legal Title Trustee for LVS Title Trust by an assignment of mortgage recorded September 19, 2011 in the East Hartford land records.   In part, the assignment states:

Together with the note or obligation described in the said mortgage, endorsed to the Assignee this date and all money due to and become due therein, with interest ․

The plaintiff, U.S. Bank filed an objection to the defendant's motion to dismiss pursuant to Practice Book § 10–31(b).  The Plaintiff raises essentially two arguments in opposition to motion to dismiss.   First, the possession of the original note is not necessary to maintain a foreclosure action.   The plaintiff asserts that it is entitled to the sums due under the subject note, and therefore this court has subject matter jurisdiction.   The original note was given by John S. Carusone a/k/a John Carusone on October 18, 1999 in favor of Washington Mutual, FA. The plaintiff provided an ‘affidavit of affidavit of lost note.’   The copy of lost note signed by the defendant was provided to the court.   The defendant did not dispute its authenticity.   The court finds the copy of the note to be authentic.   Plaintiff argues that although the original note has been lost, physical possession of the note does not preclude the foreclosure action.   To support its position it cites New England Savings Bank v. Bedford Realty, 278 Conn. 745, 760 (1996).   The plaintiff correctly avers that the defendant in his affidavit neither objects to the loan amount owed nor does he attack the validity of the note.

Plaintiff further argues that it has chosen to pursue the “equitable” action of foreclosure of the mortgage, rather than a “legal” action on the note.   The plaintiff concedes that it never possessed the lost promissory note, but correctly avers that non-possession of the note is not fatal to its foreclosure of the mortgage.   The plaintiff correctly asserts that the note is merely evidence of the indebtedness.  “A bill or note is not a debt, it is only a primary evidence of a debt;  where this is lost, impaired or destroyed bona fide, it may be supplied by secondary evidence ․ The loss of a bill or note alters not the rights of the owner, but merely renders secondary evidence necessary and proper.”   See Silicon Valley Bank v. Miracle Faith World Outreach, Inc., 140 Conn.App. 827, 833 (2013), the Appellate Court cited New England Savings Bank, supra.

“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.)  Wilcox v. Webster Ins., Inc., 294 Conn. 206, 213, 982 A.2d 1053 (2009).  “The grounds which may be asserted in this motion are:  (1) lack of jurisdiction over the subject matter;  (2) lack of jurisdiction over the person;  (3) improper venue;  (4) insufficiency of process;  and (5) insufficiency of service of process.”  Zizka v. Water Pollution Control Authority, 195 Conn. 682, 687, 490 A.2d 509 (1985).

“Standing is the legal right to set judicial machinery in motion.   One cannot rightfully invoke the jurisdiction of the court unless he [or she] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy.”  (Internal quotation marks omitted.)  Bysiewicz v. Dinardo, 298 Conn. 748, 758, 6 A.3d 726 (2010).

“Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved.”  (Internal quotation marks omitted.)  St. Paul Travelers Cos. v. Kuehl, 299 Conn. 800, 809, 12 A.3d 852 (2011).  “Statutory aggrievement exists by legislative fiat, not by judicial analysis of the particular facts of the case.   In other words, in cases of statutory aggrievement, particular legislation grants standing to those who claim injury to an interest protected by that legislation.”   (Internal quotation marks omitted.)  Andross v. West Hartford, 285 Conn. 309, 322, 939 A.2d 1146 (2008).   In the present case, as noted above, the plaintiff has standing as an assignee to enforce all the money due and become due therein with interest under the note along with the obligation of mortgage.

The crux of the defendant's argument is that the note has been lost for a while so it could not be assigned.   The assignment was improper and therefore, plaintiff lacks standing.   The defendant further argues that the cases cited by the plaintiff are distinct from the present case.   In both instances i.e., New England Savings Bank v. Bedford Realty, and Silicon Valley Bank v. Miracle Faith World Outreach, Inc., supra, the plaintiffs were original lenders and the note holders.   The notes were lost while in their possession, and both provided affidavit of lost note, i.e., secondary evidence such as a copy of the lost note.   The court notes that the defendant does not cite any case law or any other authority to support his claim.

The Appellate Court of Connecticut in the case of Citymortgage, Inc. v. Gaudiano, 142 Conn.App. 440 (2013), stated that “When a ․ court decides a ․ 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 facts to be those alleged in the complaint, including those fact necessarily implied from the allegations, construing them in a manner most favorable to the pleader.”  (Internal quotation marks omitted.)  Bellman v. West Hartford, 96 Conn.App. 387, 393, 900 A.2d 82 (2006).

Further, in addition to admitting all facts well pleaded, the motion to dismiss “invokes any record that accompanies the motion, including supporting affidavits that contained undisputed facts.”  (Internal quotation marks omitted.)  Henriquez v. Allegre, 68 Conn.App. 238, 242, 789 A.2d 1142 (2002).   In this case, the court has considered the entire record and the affidavits provided by both parties.   The court finds that copy of the note is authentic.   Further, the defendant's affidavit neither objects to the loan amount owed nor does attack the validity of the note.

The court finds from all of the foregoing that the defendant's motion is without merit and is not persuasive.   Therefore, defendant's motion to dismiss is hereby denied.

M. Nawaz Wahla, J.

Wahla, M. Nawaz, J.