JP v. Michael Porzio et al. (2013)

MEMORANDUM OF DECISION ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT DATED OCTOBER 26, 2012 (# 239.00)

Do a series of mistakes and typographical errors cause the foreclosing plaintiff's Motion for Summary Judgment to be denied?   That is one of the questions before this court.

This court has applied all the requisite standards for decisions by trial courts in Motions for Summary Judgment without the need to restate those standards in this Memorandum of Decision.   Covello v. Darien, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket No. FST CV 08–5008909 S (October 22, 2010, Tierney, J.T.R.) [51 Conn. L. Rptr. 40];  Forrest v. Sothebys International Realty, Inc. et al., Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket No. FST CV 11–6010200 S (January 9, 2013, Tierney, J.T.R.).

The plaintiff commenced this foreclosure action by a February 8, 2009 complaint.   The Complaint was served on February 11, 2009.   The Operative Complaint is the Fourth Amended Complaint dated January 31, 2011 (# 181.00).   It alleges that on March 1, 2007 Michael Porzio and L. Michael Porzio borrowed $2,500,000 from Washington Mutual Bank, FA secured by a first mortgage on their property at 2 Angora Road, Westport, Connecticut.   Paragraph 4 of the Fourth Amended Complaint alleges that Washington Mutual Bank, FA (WAMU) was placed into receivership with the Federal Deposit Insurance Corporation in 2008 and “thereafter the FDIC sold WAMU, its subsidiaries arid assets to the Plaintiff.”   The plaintiff is JP Morgan Chase Bank, National Association.   The plaintiff alleges that it is “the holder of said Note and Mortgage.”   The plaintiff further alleges that the Note and Mortgage are in default by virtue of nonpayment of installments of principal and interest due on March 1, 2008 and each and every month thereafter.

The plaintiff is represented by two separate law firms in this litigation.   Both the defendants, Michael Porzio and L. Michael Porzio, have filed self-represented appearances.   Except for the filing of his self-represented appearance, the defendant, L. Michael Porzio, has filed no pleadings or documents nor has he appeared in court.   All defendants' pleadings filed and court appearances have been by the individual defendant, Michael Porzio.

There have been extensive pleadings filed during this four and one-half-year-old litigation.   The Plaintiff's Motion for Summary Judgment dated October 26, 2012 (# 239.00) now before the court requests a judgment against all defendants as to liability.   The motion claims that its supporting documents establish a prima facie case for foreclosure by demonstrating that it is the holder of the note and mortgage, that the loan is in default, and the borrowers were properly notified of the existence of the default in accordance with the terms of the loan documents.   The plaintiff further argues that despite the nine Special Defenses and a speaking Answer filed by the defendant, Michael Porzio, on February 22, 2013 (# 263.00), the plaintiff is entitled to summary judgment.   Both parties filed extensive memorandum and documentation in support of their respective positions.   Both parties objected to the inclusion of certain documents for this court's consideration of the Motion for Summary Judgment.   The court held an extensive hearing and rendered decisions concerning the documents that will be considered by the court.   This court will read and consider all Memorandum of Law submitted by the parties.

The court will read and consider the following documents attached by the plaintiff to its Memorandum of Law in Support of Plaintiff's Motion for Summary Judgment dated October 26, 2012 (# 240.00);  Exhibit A, the 28–page September 7, 2012 deposition of Michael Porzio;  Exhibit B, the April 12, 2012 responses by Michael Porzio to the plaintiff's October 21, 2011 Request for Interrogatories and Production;  Exhibit C, a twelve-page Memorandum of Decision Re:  Motion to Dismiss # 185 issued by Judge Mintz on August 1, 2011 (# 193.00) [52 Conn. L. Rptr. 435];  and Exhibit D, sixty-six pages of trial court decisions.   The court also will consider the affidavit of Eric Waller dated October 19, 2012 (# 241.00) along with the following exhibits attached to the Eric Waller affidavit;  Exhibit A, the March 1, 2007 note;  Exhibit B, the March 1, 2007 mortgage deed;  Exhibit C, the Purchase and Assumption Agreement of thirty-nine numbered pages and four pages of title and table of contents dated September 25, 2008 between the FDIC and JP Morgan Chase Bank, National Associations;  and Exhibit D, a two-page April 21, 2008 default notice letter sent to the defendant, Michael Porzio.   Although the plaintiff filed an Affidavit of Lost Note dated July 17, 2013 (# 271.00), at oral argument the plaintiff withdrew that Affidavit of Lost Note from this court's consideration, leaving the Affidavit of Lost Note as an otherwise a viable pleading in this litigation.   The court notes that pleading # 240.00 is 209 pages and pleading # 241.00 is 75 pages.

The defendant, Michael Porzio, submitted more than 2,800 pages of memorandum, cases, documents, depositions, and agreements in opposition to the Motion for Summary Judgment.   After oral argument, the court ordered that the following documents filed by Michael Porzio will be read and considered by this court in opposition to the plaintiff's Motion for Summary Judgment.

The defendant filed Defendants' Objection to Plaintiff's Motion for Summary Judgment dated December 28, 2012 (# 246.00).   Five separate exhibits were attached thereto with each marked as a separate numbered pleading;  (# 248.00, # 249.00, # 250.00, # 251.00 and # 252.00).   From Exhibit # 252.00, the following documents will be read and considered by this court;  Exhibit E, Javahori v. JP Morgan Chase Bank NA, United States District Court, Central District of California, Case No. CV 10–08185(ODW) decision dated June 2, 2011;  Exhibit F, Kim v. JP Morgan Chase Bank, State of Michigan, Court of Appeals, No. 302528 decision dated January 12, 2012;  Exhibit H, a September 25, 2008 Purchase and Assumption Agreement between FDIC and JP Morgan Chase Bank, National Association with four pages of title and table of contents and 39 numbered pages, but only if that the document is different than Exhibit C in the Eric Waller affidavit (# 241.00).   Exhibit G, a 330–page Lawrence Nardi deposition taken in a Florida foreclosure lawsuit, JP Morgan Chase Bank v. Waisome, pending in the Circuit Court of the Fifth Judicial District in and for Lake County, Florida, docket number 2009 CA 005717.   Those portions of this Lawrence Nardi deposition as claimed by the defendant, Michael Porzio, must be delineated in detail in pleading to be filed by Michael Porzio by August 26, 2013.   That pleading will disclose the relevant pages of the Lawrence Nardi deposition that Michael Porzio wants the court to read and consider.   The court may still read and consider portions of the Lawrence Nardi deposition if Michael Porzio fails to file that delineation pleading.  Stuart v. Stuart, 112 Conn.App. 160, 184 (2009).

The court will read and consider Saxon Mortgage Services, Inc. v. Hillery, pending in the United States District Court, Northern District of California docket number C–08–4357 EMC decision dated December 9, 2008.   The court will also read and consider the defendant's July 30, 2013 Motion to Dismiss with Prejudice, which contains no attached documents (# 274.00).   The court will read and consider defendant's Motion for Summary Judgment dated July 30, 2013, which contains no attached documents. (# 275.00.) The court will read and consider defendant's July 31, 2013 Memorandum of Law in Support of Defendant's Motion to Dismiss with Prejudice, which contains no attached documents (# 277.00).   The court stated on the court record that it will not consider nor act on the Motion to Dismiss itself (# 274.00) nor the Motion for Summary Judgment itself (# 275.00).   Finally, the court will consider the decision of JP Morgan Chase Bank v. Butler pending in the Supreme Court of Kings County docket number 1686/10 (7–5–2013), decision dated July 5, 2013 by Arthur M. Schack, J.

After examination of the pleadings, the Memoranda in support of, and in opposition to the Motion for Summary Judgment, and the documents supporting the parties' respective positions, the court concludes that a number of mistakes and typographical errors were made by the plaintiff, its predecessor in title, and the plaintiff's representatives that affected this litigation.   The court is now going to outline some of those events.

1. A March 1, 2007 $2,500,000 promissory note was secured by a mortgage recorded in the Westport Land Records.   The recordation of the mortgage deed did not occur until April 23, 2007.   The resulting $2,500,000 mortgage deed was recorded in the Westport Land Records in Volume 2789 at page 180.   According to paragraph 8(a) of the Fourth Amended Complaint (# 181.00), a $2,500,000 mortgage dated March 16, 2007 in favor of “JP Morgan Chase Bank, National Association f/k/a Washington Mutual Bank f/k/a Washington Mutual Bank, FA” was recorded in the Westport Land Records on March 16, 2007 in Volume 2781 at page 337.   As to that mortgage referenced in paragraph 8(a), the plaintiff alleged:  “Upon information and belief, it was intended that this mortgage be recorded subsequent to the Plaintiff's mortgage.”   The plaintiff has prosecuted the March 1, 2007 $2,500,000 promissory note and has alleged to be secured by a first mortgage on the real property at 2 Angora Road, Westport, Connecticut.   From the plaintiff's own pleadings, the plaintiff has judicially admitted that the March 1, 2007 $2,500,000 mortgage is secured only by a second mortgage.

2. The defendant, Michael Porzio, has alleged in his First Special Defense dated February 22, 2013 (# 263.00):  “It has just been discovered by Defendant that JP Morgan Chase Bank has filed a fraudulent and deceptive document in the Westport Land Records entitled Subordination Of Mortgage.”   It appears that such a document was recorded on the Westport Land Records which mentions the fact that it secures a $2,500,000 promissory note.   It is not clear from these allegations whether this Subordination Of Mortgage document is directed to the March 1, 2007 $2,500,000 promissory note or the March 16, 2007 $2,500,000 promissory note.

3. The mortgage deed recorded in Book 2789 Page 180 of the Westport Land Records described the lender as Washington Mutual Bank, FA. The plaintiff's complaint in paragraph 1 indicates that the promissory note was payable to the order of Washington Mutual Bank, FA. The defendant's Third Special Defense (# 263.00) states:  “The alleged Lender Washington Mutual Bank, FA ceased to exist on April 4, 2005 with a legal name change to Washington Mutual Bank.” If in fact the lender was Washington Mutual Bank, FA, it no longer was Washington Mutual Bank, FA as of some date in 2005, there is a material issue of fact as to the viability of the March 1, 2007 $2,500,000 promissory note and mortgage deed in favor of Washington Mutual Bank, FA.

4. The plaintiff filed two affidavits of lost notes;  the first by Christie H. Hill dated April 6, 2007 on file (# 181.00, Exhibit B);  the second by Vasti Powell dated March 5, 2012 (# 271.00).   Neither of these two affidavits of lost notes were submitted to the court by the parties concerning the issues on the Motion for Summary Judgment.   A review of the court file demonstrates that a substantial number of pleadings concerning the accuracy and viability of these two affidavits were filed including a July 31, 2013 Motion to Strike filed by the defendant, Michael Porzio (# 276.00).   The only evidence of the status of the lost note is contained in Judge Mintz's twelve-page Memorandum of Decision Re:  Motion to Dismiss # 185 dated August 1, 2011 (# 193.00).   Judge Mintz on page 2 outlined the history of the plaintiff's amendments to its complaint, all of which allege that the plaintiff “is the holder of said note and mortgage.”   The original complaint, the Amended Complaint and the Third Amended Complaint dated December 14, 2010 all contain the same allegations.   So too does the Fourth Amended Complaint, the operative complaint in this case.   No where within the allegations of any complaint it is alleged that the note is lost.   Judge Mintz noted that fact in his Memorandum (# 193.00, page 2):  “The plaintiff also attached a lost note affidavit dated April 6, 2007, from Christie H. Hill wherein she stated, for the first time, that the note at issue is lost.”   Judge Mintz noted:  “When the plaintiff filed a request for leave to file a third amendment complaint on December 14, 2010, the plaintiff included a proposed complaint that indicated it had attached a copy of the note that is at issue in this case.   Contrary to this allegation, there was no such note attached.” (# 193.00, page 2.) The date the note was lost is a material issue of fact.

5. The operative complaint, the Fourth Amended Complaint dated January 31, 2011, alleges that the plaintiff is the holder of the note.   That complaint fails to allege that the physical note has been lost.   That complaint fails to allege the date on or about, when the note was lost or when it was discovered by the plaintiff that the note was lost.

6. Michael Porzio's deposition was taken and a photocopy of the March 1, 2007 promissory note was tendered to him for examination at his deposition.   Inquiries were made as to whether the photocopy of the note contains the photocopy of Michael Porzio's signature.   Michael Porzio responded to the effect that he always signs his name in blue ink.   The photocopy process only produced a black and white version of all of the signatures and therefore he could not adequately identify whether the promissory note that was produced at the deposition contained his signature.   He demanded that the original promissory note be produced for his examination in order for him to accurately testify as to whether or not the note contains his original signature.   No copy of the promissory note was produced in court for the undersigned's examination at the hearing on this Motion for Summary Judgment.   It appears that no color copy of the original of the promissory note has been produced by the plaintiff at any time.   The original of the note has never been produced by the plaintiff in this litigation.   Although the plaintiff may successfully prosecute a foreclosure when the note has been lost, the authenticity of signature of Michael Porzio on the photocopy of the note is a material issue of fact.

7. The photocopy of the promissory note contains a stamp on the signature page that states “Pay to the order of Without Recourse WASHINGTON MUTUAL BANK, FA By CYNTHIA RILEY, VICE PRESIDENT.”   Although the defendants do not concede, the court finds that this is a blank endorsement.   The endorsement contains no date.   This fact, the defendant argues, demonstrates that the plaintiff never had physical possession of the original note because the note was lost before Washington Mutual's assets were transferred by the FDIC in September 2008.   No affidavit or documentation is before this court concerning the handling and location of the original promissory note from the closing on March 1, 2007 until the end of 2008 when the FDIC procedures had been completed.   Judge Mintz discussed this situation:  “Having reached this determination, the court is left with a situation where the plaintiff is the owner of the mortgage but it was never in possession of the note.” (# 193.00, page 8.) That status raises an issue of material fact.

8. Judge Mintz's criticism of the plaintiff's attorneys in handling this file is worthy of citation:  “Nevertheless, the court is still quite displeased with the manner in which the plaintiff has conducted itself in this case.   When this action was commenced in February 2009, the plaintiff was aware it did not have physical possession of the note.   Despite this knowledge, the plaintiff still alleged in its complaint that it was ‘the holder of said Note and Mortgage.’   Additionally, the plaintiff waited until December 2010, to reveal the fact that the note was lost to the court and the defendants.   Although it has been determined from the fact that the plaintiff did not have a physical copy of the original note in its possession does not render the plaintiff without standing to bring this action, the court still concludes it was misleading for the plaintiff not to provide all interested parties with this relevant information.” (# 193.00, pages 10–11.)   Judge Mintz further characterized the plaintiff's litigation practice in this case by using the following phrases in his Memorandum of Decision:  “․ plaintiff misrepresented some facts of this case,” “plaintiff knew about the lost note before it brought the foreclosure case and that the plaintiff should have pleaded as such in its original complaint,” “the plaintiff probably should have alleged that the note was lost in its initial complaint,” “the plaintiff delayed in furnishing any information regarding the lost note to the relevant parties,” and “plaintiff's sloppy pleading and withholding of information.” (# 193.00, pages 11, 12.)

9. Judge Mintz is not the first Judge to be critical concerning the litigation acts of JP Morgan Chase, National Association.   JP Morgan Chase Bank v. Butler, Superior Court of the State of New York, Kings County, 2013 N.Y. Slip Op 51050(U) docket number 1686/10 (7–5–2013) decided on July 5, 2013.   Judge Arthur M. Schack in a detailed decision castigated the JP Morgan Chase Bank, National Association lawsuit that involved the distribution of the proceeds of a sale of real property, a small 5,000 square foot residential lot in Brooklyn, New York that had been the subject of a $490,000 first mortgage issued in 2007 by Washington Mutual Bank, FA. Judge Schack found that JP Morgan Chase Bank, National Association and its litigation team furnished misrepresentations to the court, and engaged in continued subterfuge, and bad faith in violation of C.P.L.R. Rule 3408 including lost note claims by counsel for Chase.   The defendant, Butler, on January 30, 2007 refinanced his home by executing a note and mortgage with Washington Mutual Bank, FA for $450,000 which was duly recorded in the office of City Register of the City of New York on March 7, 2007.   In 2008 there was a dispute between Washington Mutual and the defendant, Butler, about a $10 late payment, which precipitated a series of correspondence and miscommunications between the parties.   JP Morgan Chase Bank, National Association alleged that it was the owner of the Butler note and mortgage having acquired the rights by a September 25, 2008 Purchase and Assumption Agreement from the FDIC when Washington Mutual Bank, FA failed.   Foreclosure litigation commenced.   The Butlers were eventually able to sell the property privately without completing the foreclosure procedure with court approval, they deposited $490,000 with the Clerk of the Supreme Court for a determination in the foreclosure action as to who was entitled to those funds.   The plaintiff was JP Morgan Chase Bank, National Association and the defendants were Frederick Butler et al.   The underlying foreclosure complaint alleged that JP Morgan Chase Bank, National Association was the owner of the mortgage and note.   The trial court, after hearing all the evidence, made the following findings:  “This case is troubling because various counsel for CHASE falsely claimed for almost two years, from January 20, 2010 until December 2011, that CHASE was the owner of the mortgage and note.   Ultimately, in late 2011, after the subject mortgage had been satisfied, plaintiff CHASE's counsel admitted, in opposition to defendant BUTLER's October 26, 2011 order to show cause, that plaintiff CHASE did not own the BUTLER mortgage and note, but only the servicing rights to it.   CHASE's counsel in its opposition papers, “submitted an affidavit, dated December 9, 2011, from Greg DeCastro, Director/Servicing Management of FANNIE MAE, claiming that FANNIE MAE had acquired from WAMU the BUTLER Mortgage and Note and ‘Chase is the servicer of the loan.’  “ The trial court noted that:  “The Automated City Register Information System (ACRIS) does not show any assignments of the WAMU mortgage to FANNIE MAE or CHASE.”  “Thus, plaintiff CHASE ultimately acknowledged that FANNIE MAE is the ‘Wizard of Oz’ operating behind the curtain, and the real owner of the subject BUTLER note and mortgage.”   The trial court relied on the September 25, 2008, documents which no doubt are the identical documents that are before this court, as the Purchase and Assumption Agreement.   The trial court further found that:  “CHASE, despite its assertions to the contrary for almost two years in the instant action, purchased the servicing rights to WAMU's mortgages and notes, not the actual mortgages and notes.”

10. On a number of occasions during oral argument the court noted that the plaintiff's allegation in all its complaints stated that:  “The Plaintiff is the holder of said Note and Mortgage.”   The court inquired of the plaintiff as to whether or not it intended to amend the allegations to allege that the plaintiff is the owner, the partial owner, the investor, the partial investor, the holder of rights to receive funds and/or the servicer of the note and mortgage.   The plaintiff represented to court that it is the plaintiff's intention to prosecute this foreclosure on the allegation that continues in paragraph 5:  “The Plaintiff is the holder of said Note and Mortgage.”   The court further followed up by asking whether or not the plaintiff intended to amend its complaint to allege that JP Morgan Chase, National Association is the servicer and therefore entitled to foreclose under the provisions of J.E. Robert and Company v. Signature Properties, LLC, 309 Conn. 307, 318 (2013), officially released on July 16, 2013.   To this question the plaintiff's counsel answered:  NO.

11. The court has examined the September 25, 2008 Purchase and Assumption Agreement.   Ex. 5 There is no specific chronological date for the closing.   Bank Closing is defined on page 2 as “the close of business of the Failed Bank on the date which the Chartering Authority closed such institution.”   The date of that event closing the institution had to have been known prior to September 25, 2008, the date of the Purchase and Assumption Agreement, and must have occurred prior to September 25, 2008.   Despite the fact that the Bank Closing date was known, no chronological Bank Closing date is contained in the Purchase and Assumption Agreement.  “Settlement Date” is defined on page 7 as “the first Business Day immediately prior to the day which is one hundred eighty (180) days after Bank Closing, or such other date prior thereto as may be agreed by the Receiver and the Assuming Bank. The Receiver, in its discretion may extend the Settlement Date.” This creates a material issue of fact as to whether, if ever, the transaction set forth in the Purchase and Assumption Agreement ever closed and title to whatever assets existed passed to JP Morgan Chase Bank, National Association.

12. The court notes that there is no exhibit or schedule attached to the Purchase and Assumption Agreement in which any mortgage or any asset of Washington Mutual Bank is set forth.   This $2,500,000 mortgage is not included anywhere within the Purchase and Assumption Agreement.   There is no place for any specific investment or mortgage asset to be included as an Exhibit or Schedule within the body of the Purchase and Assumption Agreement.   There is no computer printout, listing Quicken type program, or spreadsheet attached to the Purchase and Assumption Agreement.   There is no specific description or nature of assets that are being sold and conveyed.   The agreement itself is silent on the exact nature of the assets of Washington Mutual and the related rights that were being sold and conveyed.   Certain assets were to be listed in Schedule 3.1.a. There is no such Schedule 3.1.a. Ex. 5, page 9, paragraph 3.1.   The only assets sold were the “right, title and interest of the Receiver,” which assets are not further described in the Purchase and Assumption Agreements.   Ex. 5, page 9, paragraph 3.1.   There is a material issue of fact as to whether this March 1, 2007 $2,500,000 mortgage and note was an asset sold to JP Morgan Chase Bank, National Association by the FDIC pursuant to the September 25, 2008 Purchase and Assumption Agreement.

13. The salient portions of the Lawrence Nardi deposition discloses that he has not been able to locate any assignment of any mortgage whatsoever from Washington Mutual Bank through the FDIC and/or from the FDIC to JP Morgan Chase Bank, National Association for the Florida mortgage in question.   So too in that Florida foreclosure no such assignment has been furnished to the court.   No list of assets, affidavits, bill of sale, or in any other documentary form that refers to this March 1, 2007 $2,500,000 mortgage on 2 Angora Road, Westport, Connecticut has been furnished to this court.   This too is a material issue of fact.

This court is disturbed by the limited information that it has in this file concerning Washington Mutual Bank, FA, its change of name from and to Washington Mutual Bank, the receivership by FDIC, the take over thereafter by JP Morgan Chase Bank, National Association, and the effect of the Purchase and Assumption Agreement.   Judge Schack expressed those concerns more vocally.   A trial is the opportunity for all of the facts to be presented to a court.   This court believes that the light of day should shine on every single fact.   This matter should be tried.

The court believes that the errors that have been made by the plaintiff, its predecessors in title, and its litigation team are sufficient to qualify as a material issue of fact in addition to the other material issues of fact already found by this court.

The plaintiff's Motion for Summary Judgment dated October 26, 2012 (# 239.00) is hereby denied.

BY THE COURT

Hon. Kevin Tierney

Judge Trial Referee

Tierney, Kevin, J.T.R.