Chatsworth Village Homeowners Association, Inc. v. Bruce E. Burke et al. (2013)

MEMORANDUM OF DECISION RE CROSS MOTIONS FOR PARTIAL SUMMARY JUDGMENT

This case is an action by the plaintiff, Chatsworth Village Homeowners Association, Inc., seeking, inter alia, to foreclose on its “superpriority” lien for common expense assessments against a condominium unit allegedly owned by the defendants, Bruce and Barbara Burke.   The defendant, Bank of America National Association (defendant), is the current holder of a first mortgage on the subject condominium unit.   The defendant has filed an answer with a special defense.   The special defense alleges that the defendant previously paid all sums owed to the plaintiff with respect to the unit through the date of its payment in 2011 during a previous foreclosure action by the plaintiff, thereby satisfying the superpriority lien.   It further argues that the plaintiff can only assert its superpriority lien once, and that it has already exercised its rights.   Accordingly, the defendant filed a motion for partial summary judgment as to that special defense, seeking to establish its priority status in the case over the plaintiff's lien.   Doc. No. 117.00.   During the pendency of this motion, the legislature passed, and the governor signed into law, Public Acts 2013, No. 13–156.   The plaintiff argues that the Act resolves this exact issue in its favor, in effect affording it the right to enforce a superpriority lien each time it arises.   It objects to the defendant's motion (Doc. No. 122.00) and cross moves for partial summary judgment in its favor on this issue.   Doc. No. 123.00.   The defendant objects.   Doc. No. 125.00.   The court, after hearing, agrees with the plaintiff.   The plaintiff's superpriority lien can be asserted again in the instant case, and its lien is senior to the defendant's first mortgage.   Accordingly, the defendant's motion (Doc. No. 117.00) is denied.   The plaintiff's objection (Doc. No. 122.00) is sustained.   The plaintiff's motion (Doc. No. 123.00) is granted.   The defendant's objection (Doc. No. 125.00) is overruled.   The defendant's request for costs and attorneys fees for defending this action is denied.   The case shall proceed consistent with this decision.

I

The law governing summary judgment is well settled.   As our Appellate Court has summarized:

Practice Book § [17–49] requires that 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.   A material fact is a fact that will make a difference in the result of the case ․ The facts at issue are those alleged in the pleadings.  (Citation omitted;  internal quotation marks omitted.)   Gohel v. Allstate Ins. Co., 61 Conn.App. 806, 809, 768 A.2d 950 (2001).

* * * *

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.  (Citations omitted;  internal quotation marks omitted.)  Allstate Ins. Co. v. Barron, 269 Conn. 394, 405, 848 A.2d 1165 (2004).

It is frequently stated in Connecticut's case law that, pursuant to Practice Book §§ 17–45 and 17–46, a party opposing a summary judgment motion “must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact.”  Harvey v. Boehringer Ingelheim Corp., 52 Conn.App. 1, 4, 724 A.2d 1143 (1999).   As noted by the trial court in this case, typically “[d]emonstrating a genuine issue requires a showing of evidentiary facts or substantial evidence outside the pleadings from which material facts alleged in the pleadings can be warrantably inferred.”   (Internal quotation marks omitted.)  New Milford Savings Bank v. Roina, 38 Conn.App. 240, 244, 659 A.2d 1226, cert. denied, 235 Conn. 915, 665 A.2d 609 (1995).   Moreover, “[t]o establish the existence of a material fact, it is not enough for the party opposing summary judgment merely to assert the existence of a disputed issue ․ Such assertions are insufficient regardless of whether they are contained in a complaint or a brief ․ Further, unadmitted allegations in the pleadings do not constitute proof of the existence of a genuine issue as to any material fact.”  (Citations omitted;  internal quotation marks omitted.)  Id., 244–45.

Rockwell v. Quintner, 96 Conn.App. 221, 227–29, 899 A.2d 738, cert. denied, 280 Conn. 917, 908 A.2d 538 (2006).

The Practice Book further mandates that “[a]ny adverse party shall at least five days before the date the motion is to be considered on short calendar file opposing affidavits and other available documentary evidence.   Affidavits, and other documentary proof not already part of the file, shall be filed and served as are pleadings.”  Practice Book § 17–45.  “Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.   Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto.”  Practice Book § 17–46.

II

The material facts are not in dispute:  In 2009, the defendant Bank of America's predecessor in interest commenced an action to foreclose on the subject first mortgage against the condominium unit allegedly owned by the Burkes in a case entitled Country Home Loans Servicing LP v. Bruce E. Burke et al., Doc. No. HHD CV–09–5028216–S.   In that action, the plaintiff, unit owners' association, is a named defendant.

In that action, the Burkes appeared through counsel.   The mortgage foreclosure action was in the court foreclosure mediation program for over three years while the defendant and the Burkes explored loss mitigation options or other settlement.   The program was finally terminated on May 25, 2012, when the Burkes declined further mediation.   Other delays were caused by the fact that the Burkes filed a notice of bankruptcy with the court on May 16, 2011, which stayed all proceedings.   That stay was lifted on September 25, 2011, after the bankruptcy case was closed.   Thus, that foreclosure case is still pending, but the case file shows practically no action since May 25, 2012.

In the meantime, in 2011, the plaintiff initiated its own foreclosure action to foreclose on its lien for unpaid common expense assessments in a case entitled Chatsworth Village Homeowners Association v. Bruce E. Burke et al., Doc. No. HHD CV–11–6024610–S.   In that action, the defendant, Bank of America, was named as a defendant.   In that case, the plaintiff alleged that a portion of its lien had a priority over the defendant and other lien holders to the extent of the value of six months of assessments, plus attorneys fees and costs, pursuant to General Statutes § 47–258(b) ¹ (the “superpriority” lien).

That case was resolved on or about September 23, 2011, when the defendant, Bank of America, paid the entire debt owed by the Burkes to the unit owners' association.   That foreclosure action was withdrawn on November 16, 2011, accordingly.

Less than four months after withdrawing that action, however, the plaintiff commenced another foreclosure action:  the above entitled action.   In the instant case, the plaintiff alleges that the Burkes, again, have an outstanding balance due for unpaid common assessments giving rise to another lien, and it seeks to foreclose on that lien.   Again, it alleges that a portion of its lien has a priority over the defendant and other lien holders to the extent of the value of six months of assessments, plus attorneys fees and costs, pursuant to General Statutes § 47–258(b) (the “superpriority” lien).   Again, the defendant, Bank of America, is named as a defendant.

The defendant filed an answer with special defense in the instant case on August 7, 2013.   The special defense alleges that because it previously paid all sums owed to the plaintiff with respect to the unit through the date of its payment in 2011 during the previous foreclosure action by the plaintiff, the defendant has satisfied the plaintiff's superpriority lien and that lien cannot be asserted again.   Therefore, it argues, its first mortgage now should be afforded priority over the plaintiff's lien consistent with the common-law rule that first in time is first in right.  Hudson House Condominium Assn., Inc. v. Brooks, 223 Conn. 610, 614, 611 A.2d 862 (1992).   It has filed a motion for partial summary judgment seeking a court ruling to determine its priority status accordingly.

The plaintiff objects.   The plaintiff, further, has filed its own motion for partial summary judgment arguing that during the pendency of the defendant's motion, the legislature passed, and the governor signed into law, Public Acts 2013, No. 13–156.   That Act, it argues, increased the priority portion of its lien to the first nine months of unpaid common assessments.   Most significantly, plaintiff argues that the Act now makes clear that a unit owners' association superpriority lien “arises in every foreclosure action brought under ․ § 47–258, regardless of whether or not a prior foreclosure action was brought, or a prior foreclosure judgment was paid and satisfied.”   Plaintiff's Memorandum of September 5, 2013, p. 5. Accordingly, the plaintiff seeks a determination securing its priority position.   The defendant objects to the plaintiff's motion for summary judgment.

III

The issues are discussed seriatim:

A

The first issue is whether General Statutes § 47–258 allows a unit owners' association to use its superpriority lien more than once.   The statute was amended, effective on passage (June 24, 2013), and was made applicable to all actions pending on and actions filed on or after said date.   It now provides, in pertinent part, as follows:

(b) Notwithstanding any provision in the declaration or bylaws to the contrary, a lien under this section is prior to all other liens and encumbrances on a unit except (1) liens and encumbrances recorded before the recordation of the declaration and, in a cooperative, liens and encumbrances which the association creates, assumes or takes subject to, (2) a first or second security interest on the unit recorded before the date on which the assessment sought to be enforced became delinquent, or, in a cooperative, a first or second security interest encumbering only the unit owner's interest and perfected before the date on which the assessment sought to be enforced became delinquent, and (3) liens for real property taxes and other governmental assessments or charges against the unit or cooperative.   In all actions brought to foreclose a lien under this section or a security interest described in subdivision (2) of this subsection, the lien is also prior to all security interests described in subdivision (2) of this subsection to the extent of (A) an amount equal to the common expense assessments based on the periodic budget adopted by the association pursuant to subsection (a) of section 47–257 which would have become due in the absence of acceleration during the nine months immediately preceding institution of an action to enforce either the association's lien or a security interest described in subdivision (2) of this subsection, excluding any late fees, interest or fines which may be assessed by the association during the nine-month period, and (B) the association's costs and attorneys fees in enforcing its lien.   A lien for any assessment or fine specified in subsection (a) of this section shall have the priority provided for in this subsection in an amount not to exceed the amount specified in subparagraph (A) of this subsection.   This subsection does not affect the priority of mechanics ‘ or materialmen's liens or the priority of liens for other assessments made by the association.

General Statutes § 47–258(b) as amended by Public Act No. 13–156 § 1 (emphasis added).

Plaintiff argues that the emphasized language of the statute, added by the legislature in the 2013 public act, expresses the rule that the association's priority lien is not a one-time benefit to an association that disappears once a prior lien is satisfied.   Rather, by enacting this amendment, the legislature reaffirmed that the purpose of the statutory priority lien as set forth in this statutory scheme is to protect the common interest communities, and that the priority lien arises in every foreclosure action brought under General Statutes § 47–258, regardless of whether or not a prior foreclosure action was brought, or a prior foreclosure judgment was paid and satisfied.   The defendant relies on cases decided prior to the legislative amendment, which held that the superpriority lien arises once;  and, if paid, it cannot arise again.   See, e.g., Lake Ridge Condo Assoc. v. Vega, Superior Court, judicial district of New Haven, Doc. No. CV 11–6021568–S (November 30, 2012, Maronich, J.)[55 Conn. L. Rptr. 164];  Lake Ridge Condo Assoc. v. Vega, Superior Court, judicial district of New Haven, Doc. No. CV 11–6021568–S (June 25, 2012, Zemetis, J.);   River Glen Condo.   Ass'n v. Woulfe, Superior Court, judicial district of Litchfield, Doc. No. CV 94–0065776 (April 20, 1995, Walsh, J.) [14 Conn. L. Rptr. 101].   Furthermore, it argues that neither the language of the new act nor the legislative history compels a different result.

Whether this statute allows a unit owners' association to assert its superpriorty lien only once in a foreclosure action, or in any number of them, is a matter of statutory interpretation.  “The principles that govern statutory construction are well established.   When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature ․ In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply ․ In seeking to determine that meaning, General Statutes § 1–2z directs us first to consider the text of the statute itself and its relationship to other statutes.   If after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered ․ When a statute is not plain and unambiguous, we also look for interpretive guidance to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter ․” (Citations omitted;  internal quotation marks omitted.)  Grady v. Somers, 294 Conn. 324, 333, 984 A.2d 684 (2009).

This statute is unambiguous.   The new language, emphasized above, clearly applies in “all” actions, not just the first action.   The word “all” means “[b]eing or representing the entire or total number, amount or quantity.”   American Heritage Dictionary of the English Language (2011).   Thus, the language allows a superpriority lien to be asserted in multiple actions, not just the first foreclosure action.   There is no language, either express or implied, limiting the lien to one use in one foreclosure action.

Moreover, the court has reviewed the Senate and House Debates and Committee hearing record.   That legislative history clearly confirms that the amendment was intended to clarify the law, and that the language was amended in direct response to the case law cited by the defendant.   The amendment was intended to permit a superpriority lien to be asserted in multiple actions, not just the first foreclosure action.   The pertinent part of the House debates on point is as follows:

Essentially, this came to us out of some conflicting case law out of the Superior Courts interpreting 47–258, which are the statutes for condo associations to recoup the nonpayment of condo fees, and what I would really do is urge people to really focus on Lines 19 and 20 and the word[s], in all actions brought, and why that's important words.

Essentially, we want to clarify that the priority of condo association liens is perpetually renewing.   It's not just a one-time evergreen lien if you will.   It's not, you only get one bite of the apple to have that priority lien.   It happens every single time that you bring a new action, and that's very, very important.

So again, to clarify the conflicting case law, it is a perpetually renewing priority lien.

Remarks of Rep. Matthew Ritter 2013 Sess. (May 16, 2013, p. 214–15).

The fact that this legislative history categorizes the amendment as a clarification is also significant.  “An amendment which in effect construes and clarifies a prior statute must be accepted as the legislative declaration of the meaning of the original act ․ Furthermore, an amendment that is intended to clarify the intent of an earlier act necessarily has retroactive effect.”   (Citation omitted;  internal quotation marks omitted.)  Samnard Assocs., LLC v. City of New Britain, 140 Conn.App. 290, 297, 58 A.3d 377 (2013).   The legislative history clearly indicates that a unit owners' association superpriorty lien is, in the terms utilized in the debates, “perpetually renewable” or “evergreen.”

Accordingly, the court finds that the plaintiff is eligible to assert its second superpriority lien in this action even though its prior lien was paid in full.

B

The next issue is whether it would be equitable to allow the plaintiff to assert its lien for a second time.   The defendant argues that it has already paid one lien, and to force it to make serial payments for consecutive liens would be inequitable.   It argues that it would be fair to leave the plaintiff to its remedy of proceeding against the Burkes on the portion of its lien without affording superpriority or, in the alternative, bring an action against the unit owners for money damages.   The court is not persuaded.  “While the [defendant] may disagree with the equities of the [superpriority lien rules], this is a matter not for the judiciary, but rather for the legislature that enacted the statute.”  Hudson House Condominium Assn., Inc. v. Brooks, supra, 223 Conn. 616.

IV

For all of the foregoing reasons, the defendant's motion (Doc. No. 117.00) is denied.   The plaintiff's objection (Doc. No. 122.00) is sustained.   The plaintiff's motion (Doc. No. 123.00) is granted.   The defendant's objection (Doc. No. 125.00) is overruled.   The defendant's request for costs and attorneys fees for defending this action is denied.   The case shall proceed consistent with this decision.

Robert F. Vacchelli

Judge, Superior Court

FOOTNOTES

FN1. The statute gives priority to “an amount equal to the common expense assessments ․ which would have become due in the absence of acceleration during the six months immediately preceding institution of an action to enforce ․ the association's lien ․” General Statutes § 47–258(b).  The temporal limit was extended to nine months by Public Acts 2013, No. 13–156 § 1..  FN1. The statute gives priority to “an amount equal to the common expense assessments ․ which would have become due in the absence of acceleration during the six months immediately preceding institution of an action to enforce ․ the association's lien ․” General Statutes § 47–258(b).  The temporal limit was extended to nine months by Public Acts 2013, No. 13–156 § 1.

Vacchelli, Robert F., J.