CHFA v. Hussein Elazazy et al. (2013)

MEMORANDUM OF DECISION

This is the latest installment in a long-running dispute over ownership rights in an affordable housing project in Simsbury, Connecticut known as Eno Farms.   The plaintiff, CHFA–Small Properties, Inc., brings this action against eight individual tenant defendants and the Eno Farm Tenant Association, Inc. to quiet title and to recover in tort for slander of title.   The central issue is whether the tenant defendants possess some manner of equitable or beneficial ownership rights in Eno Farms property or in their individual units, such that they can rightfully challenge the record title of the plaintiff.

I BACKGROUND AND PROCEDURAL HISTORY

This property has been the subject of much litigation.   This background summary sets forth facts which do not appear to be the subject of dispute between the parties, and borrows heavily from prior decisions of Judges Satter,¹ DosSantos ² and Oliver,³ as well as from the plaintiff's January 2, 2013 brief filed after the hearing on the temporary injunction and thereafter incorporated by reference into the plaintiff's September 16, 2013 post-trial brief.⁴

In 1883, Amos Eno conveyed to the Town of Simsbury a 140–acre parcel of undeveloped land, with the requirement that the parcel be “used for the occupation, maintenance and support of the Town poor ․ and for no other purpose whatsoever.”

In June 1991, the Town of Simsbury set aside approximately ten acres of the land donated by Eno to be used for low- and moderate-income housing.   On June 28, 1991, the Town leased that 10–acre parcel to CIL Housing, Incorporated (“CIL Housing”) for a term of ninety-nine years pursuant to a written “Ground Lease.”   The Ground Lease provided that the land would be used only for “residential purposes and only for occupancy by Low and Moderate Income Residents,” pursuant to a plan of development submitted by CIL Housing for construction of approximately fifty housing units.   The Ground Lease also provided that any and all improvements constructed, placed or maintained by CIL Housing on any part of the leased parcel during the term of the lease would be and would remain the property of CIL Housing.

CIL Housing created the Eno Farms Limited Partnership (“EFLP”) and assigned its interest in the 99–year Ground Lease to EFLP. EFLP financed construction of what came to be known as “Eno Farms” through CHFA and the State of Connecticut.   EFLP granted a First Leasehold Mortgage to CHFA to secure a loan in the amount of $1,495,000.   EFLP also granted a Second Leasehold Mortgage to the State of Connecticut to secure a loan in the amount of $2,782,000.   The Second Leasehold Mortgage was ultimately assigned by the State of Connecticut to CHFA. EFLP also qualified the project as a low-income housing project pursuant to the Internal Revenue Service Code in order to obtain Low Income Housing Tax Credits.   EFLP thereafter sold those tax credits to outside investors.

On December 28, 1993, the plaintiff executed a Declaration of Cooperative making the project a limited equity leasehold cooperative pursuant to Section 47–242(a) of the Connecticut General Statutes.   The Declaration of Cooperative restricts the occupancy of the rental units to low- and moderate-income tenants, specifies income qualifications for those tenants, and sets forth restrictions on alienation of those units.

Pursuant to the Declaration of Cooperative, the plaintiff created Eno Farms Cooperative Association, Inc. (“the Association”).   The Association was comprised of members who occupied their respective units pursuant to continually renewing lease agreements for one-year terms.   Article IX of the Declaration of Cooperative provides that the “interests allocated to each unit” include a “percentage interest in the Association,” a “percentage of liability for the common expenses,” and “one vote in Association matters.”   Section 10.4 of the Declaration of Cooperative provides that each Member of the Association is “entitled to a Proprietary Lease representing such member's right to occupy a unit.”   If a member of the Association decides to vacate their rental unit while in good standing (a “departing Member”), Section 10.2 of the Declaration of Cooperative assigns a monetary value to the departing Member's “interest in the Association and his or her right to occupy the unit during the year of membership.”

In 2006, CHFA declared EFLP in default under the terms of the First and Second Leasehold Mortgages.   Thereafter, CHFA commenced a foreclosure action in the Superior Court, Judicial District of Hartford at Hartford.⁵  The Association appeared in that action, was represented by counsel, and on behalf of its member tenants, opposed the foreclosure.   Among other claims, the Association argued that its members held an ownership interest in the property to be foreclosed.

After a trial in which the parties fully, fairly and comprehensively litigated the question of ownership rights in Eno Farms, the court, Satter, J.T.R., issued its Memorandum of Decision on June 12, 2009.   The court rejected all the special defenses asserted by the Association, including its claim that “the residents and the Association are the owners of the project,” stating that “CHFA itself, never promised home ownership to the Association or residents of Eno Farms, nor was there evidence of reliance upon a nonexistent promise.   Finally, the evidence is that no conveyance by deed or otherwise conferred ownership of Eno Farms upon the Association ․ As a consequence, the court concludes that the Association's special defense to the foreclosure counts has not been factually proven and is legally invalid.”   The court entered a judgment of strict foreclosure in favor of CHFA.

CHFA acquired title to the Property, subject to the Ground Lease, on August 12, 2009.   On August 14, 2009, CHFA recorded a Certificate of Foreclosure in Volume 780 at Page 506 of the Simsbury Land Records.   On October 26, 2009, CHFA assigned its interests in Eno Farms to the plaintiff in this action, CHFA–Small Properties, Inc. From that date forward, the plaintiff CHFA–Small Properties, Inc. has been the owner of the Eno Farms property, subject to the terms of the Ground Lease with the Town of Simsbury.

In May of 2011, the plaintiff, acting through its property management agent, Konover Residential Corporation, commenced summary process actions against the defendant-lessees Hussein Elazazy, Khan M. Rafi, Melissa Torreiro, Janusz Stolarczyk, and Razin Syed in Superior Court, Housing Session for the Judicial District of Hartford.⁶

The defendant-lessees appeared in each of those actions, were represented by counsel, and strongly contested the summary process actions.   The defendant-lessees renewed their claim of ownership of the Eno Farms project and title superior to that of the plaintiff.   In two separate decisions, the court, Oliver, J., rejected the defendant-lessees' ownership claims.   The court held that “the issue of whether the defendants own the subject dwellings at Eno Farms was fully, fairly and apparently exhaustively litigated in a prior proceeding” and necessarily determined in the court's judgment in Connecticut Housing Finance Authority v. Eno Farms Ltd. Partnership, Superior Court, Judicial District of Hartford at Hartford, Docket No. CV 07–5008995 (June 12, 2009, Satter, J.T.R.) [48 Conn. L. Rptr. 66].   Thus, the court held that the defendants were collaterally estopped from contesting ownership.   But, even if collateral estoppel did not apply, the court, based on its own assessment of the evidence, held that the plaintiff “established, by a fair preponderance of the evidence ․ ownership of the Eno Farms Housing Complex, including each of the subject dwellings, based on the evidence adduced at trial” and that the defendants “failed to prove, by a fair preponderance of the evidence, a superior title to any of the subject premises.”

The defendant-lessees filed a motion to reargue, which was subsequently denied, and then appealed from the summary process judgments.   Those appeals are currently pending.⁷

On June 6, 2012, the Plaintiff entered into an agreement to sell the Eno Farms Project to Equity Management Corporation (“EMC”) for $3,010,000 and scheduled a closing to occur within forty-five days.   The agreement required the Plaintiff to provide “good and marketable title” to EMC.

Defendants' counsel learned of the pending sale through a town meeting required to obtain the Town of Simsbury's consent to the sale.   Shortly after the Town Meeting, on or about June 27, 2012, the defendants caused a document styled “Verified Claim of an Interest of Any Kind of Land Preserving and Keeping Effective That Interest per C.G.S. § 47–33f” (hereinafter the “Verified Claim”) to be recorded on the Simsbury Land Records in Volume 837 at Page 631.

EMC learned of the recording of the Verified Claim and refused to close the transaction, and continues to refuse to close the transaction, because the plaintiff cannot provide good and marketable title.   In addition, EMC has asserted that the plaintiff breached the agreement for purchase and sale and has demanded a massive reduction in the purchase price and damages to reimburse it for its expenses.

On or about July 30, 2012, the Plaintiff demanded that the Defendants withdraw or release the Verified Claim from the Simsbury Land Records.   The Defendants refused.

The Plaintiff commenced this action on October 12, 2012.   The amended complaint is in four counts.   The First Count seeks a judgment determining the rights of the parties in the property and settling the title thereto.   The Second Count seeks money damages based on common-law slander of title.   The Third Count is a claim for damages and attorneys fees based on General Statutes § 47–33j.   The Fourth Count requests temporary and permanent injunctive relief in the form of an order requiring the defendants to release certain documents filed on the Simsbury Land Records which are clouding the title to plaintiff's property,⁸ and prospective injunctive relief prohibiting the defendants from filing any similar documents on the Simsbury Land Records in the future.

On November 9, 2012, after service of the Application for Injunction and Verified Complaint, the defendants recorded a second document on the Simsbury Land Records, entitled “First Amended Verified Claim of an Interest of Any Kind in Land Preserving and Keeping Effective that Interest per C.G.S. § 47–33f.”

The court conducted a hearing on the plaintiff's application for a temporary injunction on December 12, 2012.   On April 30, 2013, the court, Sheridan, J., issued a temporary injunction, finding that the plaintiff had sustained its burden of demonstrating no adequate remedy at law, irreparable harm, likelihood of success on the merits, and a balance of equities tipping in its favor.   The court ordered that the defendants caused to be filed on the Simsbury Land Records instruments releasing or otherwise discharging the “Verified Claim” and the “First Amended Verified Claim.”   The court also prohibited the defendants from recording any other document or instrument on the Simsbury Land Records concerning the disputed property in this action.   The required releases were filed on the Simsbury Land Records and the matter was then set down for trial.

The court heard evidence in the trial on August 30, 2013.   By agreement of the parties, the exhibits from the preliminary injunction hearing were made full exhibits in the trial, and the transcript from the December 2012 temporary injunction hearing (testimony of Pasquale Giuliano) was also made an exhibit (Exhibit 36).   The court heard testimony from the defendants and from counsel for the plaintiff regarding attorneys fees.   Both parties filed post-trial briefs.

II FINDINGS OF FACT AND CONCLUSIONS OF LAW

This court, having carefully reviewed the documentary exhibits and evaluated the demeanor and credibility of the witnesses, having analyzed and weighed the evidence according to the applicable standards of law, and having considered the parties' arguments made to the court, makes the following findings of fact and conclusions of law.

1. The plaintiff, CHFA–Small Properties Inc., is the sole, absolute record owner of the real property located at 1602 Hopmeadow Street, Simsbury Connecticut, commonly known as “Eno Farms,” subject to a Ground Lease in favor of the Town of Simsbury.

2. The issue of ownership of the real property located at 1602 Hopmeadow Street, Simsbury Connecticut, commonly known as “Eno Farms,” was fully, fairly and comprehensively litigated in the prior proceeding captioned Connecticut Housing Finance Authority v. Eno Farms Ltd. Partnership, Superior Court, Judicial District of Hartford at Hartford, Docket No. CV 07–5008995 (June 12, 2009, Satter, J.T.R.) [48 Conn. L. Rptr. 66], and was actually decided in favor of the plaintiff's predecessor in interest (CHFA).   A decision on that issue was necessary to the court's entry of a judgment of strict foreclosure in that action.

3. The issue of ownership of the real property located at 1602 Hopmeadow Street, Simsbury Connecticut, commonly known as “Eno Farms,” was fully, fairly and comprehensively litigated in prior proceeding the Housing Session of the Superior Court in under docket numbers HDSP–161528, HDSP–161529, HDSP–161530, HDSP–161531, and HDSP–161532 (See Summary Process Memorandum of Decision and Memorandum of Decision re Motion to Dismiss dated August 31, 2012, Oliver J.) and was actually decided in favor of the plaintiff.   A decision on that issue was necessary to the court's entry of a judgment for possession of the premises.

4. The Ground Lease between CIL Housing and the Town of Simsbury does not, by its express terms or by implication, convey to the defendants any ownership interest in any of the real property associated with Eno Farms to the defendants.

5. The Declaration of Cooperative does not, by its express terms or by implication, convey to the defendants any ownership interest in any of the real property associated with Eno Farms.

6. The Proprietary Leases between the defendants and Eno Farms Cooperative Association, Inc. do not, by their express terms or by implication, convey to the defendants any ownership interest in any of the real property associated with Eno Farms.

7. Members of the Eno Farms Cooperative Association, Inc., including the defendants in this case, never held any ownership interest in the Eno Farms project, the units, or any other real property located at 1602 Hopmeadow Street, Simsbury Connecticut.

8. The defendants approved and authorized the recording of the “Verified Claims” and “First Amended Verified Claims” on the Simsbury Land Records.

9. In making the decision to approve and authorize the recording of the “Verified Claims” and “First Amended Verified Claims,” the defendants relied in good faith on the advice of their lawyer, John L. Giuletti.

10. The “Verified Claims” and “First Amended Verified Claims” (until released in compliance with the temporary injunction issued by this court) were a cloud on the plaintiff's title in that they created doubt about the ability of the plaintiff to convey marketable title to Eno Farms, free and clear of any claim of interest by the defendants.

III ANALYSIS

A. First Count:  Quiet Title—C.G.S. § 47–31

Quiet title actions are authorized by Section 47–31 of the General Statutes.   The statute provides:  “The court shall hear the several claims and determine the rights of the parties, whether derived from deeds, wills or other instruments or sources of title and may determine the construction of the same and render judgment determining the questions and disputes and quieting and settling the title to property.”   Such an action is “a judicial mechanism for parties asserting competing interests in real or personal property.”   Remington Investments Inc. v. National Properties, Inc., 49 Conn.App. 789, 797 (1998).

The plaintiff CHFA–Small Properties claims title to the disputed property by operation of deed.   One who claims title by deed is claiming that he has good record title which entitles him to a judgment of ownership.  Devita v. Esposito, 13 Conn.App. 101, 106, 535 A.2d 364 (1987).   In the present case the court finds, based on a thorough analysis of deeds, leases, certificates of foreclosure, and other instruments of title, that there is a clear and unbroken chain of title with respect to the disputed property from Amos Eno to the Town of Simsbury to the present plaintiff, and that therefore the plaintiff is the record owner of the leasehold interest described in Exhibit A to the complaint, commonly known as “Eno Farms,” subject to the Ground Lease in favor of the Town of Simsbury.

C.G.S. § 47–31(f) requires a court in a quiet title action to “hear the several claims and determine the rights of the parties, whether derived from deeds, wills or other instruments or sources of title, and ․ determine the construction of the same, and render judgment determining the questions and disputes and quieting and settling the title to the property.”

In the present case the court finds that the “claims ․ questions and disputes” regarding title to the real property at Eno Farms have been previously adjudicated in the Superior Court on two different occasions and their re-litigation is barred by the application of the doctrine of collateral estoppel.   See, generally, DeLaurentis v. New Haven, 220 Conn. 225, 597 A.2d 807 (1991).

This conclusion requires that judgment be entered in favor of the plaintiff on the First Count of the Complaint seeking to quiet title, and obviates any consideration of the defendants' arguments as to “equitable title” and “ownership interest” in their residences.   However, given the history of this case and the potential for appeal, the court will state its findings and conclusions as to those arguments so, should an appeal be taken, all potentially dispositive issues might be considered.

Defendants claim that the plaintiff, having acquired its interest subject to the Ground Lease, must convey the Eno Farms improvements to the defendants because the land was “dedicated for home ownership.”   The defendants focus on the following recital which appears in the Ground Lease

WHEREAS, the Town is the owner of certain property located in the Town of Simsbury and has dedicated such property for the creation of home ownership opportunities for low and moderate income people, who otherwise would be denied such opportunities because of limited financial resources;  and

WHEREAS, the Town is hereby leasing said property to CIL [Housing] for the development of housing in furtherance of these charitable purposes.

The defendants claim that these “Whereas” clauses created a “servitude” that runs with the land, that the defendants are the intended beneficiaries of this servitude, and that they are entitled to enforce it pursuant to Wykeham Rise, LLC v. Federer, 305 Conn. 448, 52 A.3d 702 (2012).  (“Although the third party beneficiary doctrine was originally developed in the law of contracts, [our Supreme Court] has recognized that third party beneficiaries may enforce covenants in land.”  Id., 473.)

“A servitude is created if the owner of the property to be burdened enters into a contract or makes a conveyance intended to create a servitude.   See 1 Restatement (Third), § 2.1, p. 51 (2000).”  Schwartz v. Murphy, 74 Conn.App. 286, 290, 812 A.2d 87 (2002), cert. denied, 263 Conn. 908, 819 A.2d 841 (2003).  “In the construction of a deed or grant, the language is to be construed in connection with, and in reference to, the nature and condition of the subject matter of the grant at the time the instrument is executed, and the obvious purpose the parties had in view.”  (Emphasis in original;  internal quotation marks omitted.)  Id., 291.  “The proper test to determine whether a [contract] ․ creates a third-party beneficiary relationship is whether the parties to the [contract] ․ intended to create a direct obligation from one party to the [contract] ․ to the third party [beneficiary].”  (Internal quotation marks omitted.)  Gateway Co. v. DiNoia, 232 Conn. 223, 231, 654 A.2d 342.

“[I]n construing a deed [or other conveyance], a court must consider the language and terms of the instrument as a whole ․ Our basic rule of construction is that recognition will be given to the expressed intention of the parties to a deed or other conveyance, and that it shall, if possible, be so construed as to effectuate the intent of the parties ․ In arriving at the intent expressed ․ in the language used, however, it is always admissible to consider the situation of the parties and the circumstances connected with the transaction, and every part of the writing should be considered with the help of that evidence ․ The construction of a deed in order to ascertain the intent expressed in the deed presents a question of law and requires consideration of all its relevant provisions in light of the surrounding circumstances.”  (Internal quotation marks omitted.)  Wykeham Rise, LLC v. Federer, 305 Conn. 448, 456–57, 52 A.3d 702 (2012).

Applying these principles to the Ground Lease, the court notes that, other than the aforementioned “whereas” clause, the defendants have not identified any other provision in the Ground Lease or other evidence to support their contention that the parties to the Ground Lease intended to create an obligation to other persons, including themselves.   As a general rule, a “whereas” clause is only a recital and does not create any substantive obligations.  “[R]ecitals in a contract, such as ‘whereas' clauses, are merely explanations of the circumstances surrounding the execution of the contract, and are not binding obligations unless referred to in the operative provisions of the contract ․ [A]lthough a statement in a whereas clause may be useful in interpreting an ambiguous operative clause, it cannot create any right beyond those arising from the operative terms of the document.”  DeMorais v. Wisniowski, 81 Conn.App. 595, 610–11, 841 A.2d 226, cert. denied, 268 Conn. 923, 848 A.2d 472 (2004).

The reference in the recitals to the concept of “home ownership opportunities” for low- or moderate-income persons is not repeated or implemented in the operative provisions of the lease and is undoubtedly an anomaly.   To infer from that solitary clause the creation of an obligation to convey ownership rights in the residential units directly to their occupants would certainly be contrary to the intent of Article IX of the Ground Lease, which expressly states:

9.1 TRANSFER OF IMPROVEMENTS:  It is the intent of Lessee, upon completion of the Improvements on the Leased Premises in accordance with the Plan of Development, to transfer the improvements and assign this Lease to a Limited Equity Cooperative to be created by Lessees, which shall be comprised of Low and Moderate Income Residents, or to transfer the Improvements to a separate entity in furtherance of low and moderate income housing purposes and to assign this Lease to a Limited Equity Cooperative.

Considering the intent of the parties to the Ground Lease, as expressed in the document itself, and considering every part of the writing as well as the situation of the parties and the circumstances connected with the transaction;  the court concludes that the intent of the parties was to lease the land to CIL Housing for the development of housing accessible to low- and moderate-income persons through the vehicle of a Limited Equity Cooperative.   The court further concludes that the defendants herein were not third-party beneficiaries of any servitude, dedication for home ownership, or other substantive interest created by the Ground Lease between the Town of Simsbury and CIL Housing.

Therefore, the court finds the issues in favor of the plaintiff and against the defendants as to the First Count of the Complaint seeking a judgment as to the rights of the parties and settling the title to the Eno Farms Property

B. Second Count:  Common–Law Slander of Title

Under Connecticut law, slander of title occurs through “[t]he uttering or publication of a false statement derogatory to the plaintiff's title, with malice, causing special damages as a result of diminished value of the plaintiff's property in the eyes of third parties.   The publication must be false, and the plaintiff must have an estate or interest in the property slandered.   Pecuniary damages must be shown in order to prevail on such a claim.”  Elm Street Builders, Inc. v. Enterprise Park Condo.   Ass'n., Inc., 63 Conn.App. 657, 669–70 (2001) (quoting 50 Am.Jur.2d, Libel and Slander § 554 (1995)).

The plaintiff has satisfied the first element of slander of title by demonstrating that, at all relevant times, it maintained title to the property.   The plaintiff has also satisfied the second element of slander of title by establishing a “publication” derogatory to the plaintiff's title by the defendants' recording of the “Verified Claim” and the “First Amended Verified Claim” on the Simsbury Land Records.   The plaintiff has also satisfied the third element of its claim:  the “Verified Claim” and the “First Amended Verified Claim” were “false,” in the sense that they were factually incorrect and untrue, and derogatory to the plaintiff's title.

The deciding question is whether the defendants made false statements with “malice.”   Our Appellate Court has recently examined in detail the element of malice in a slander of title claim.

As there is little appellate case law regarding the actual malice element of a slander of title claim, we turn to the precedents of common-law slander to guide our analysis.  “Whether a defendant has knowledge of the falsity of a defamatory statement is a question within the province of the trier of fact ․ The proper inquiry is whether a defendant believes, honestly and in good faith, in the truth of his statements and whether he has grounds for such belief ․ Notably, however, a trial court is not required merely to accept a defendant's self-serving assertion that he published a defamatory statement without knowing that it was false.”  (Citations omitted.)  Gambardella v. Apple Health Care, Inc., 291 Conn. 620, 638, 969 A.2d 736 (2009).

“[A]ctual malice requires a showing that a statement was made with knowledge that it was false or with reckless disregard for its truth ․ A negligent misstatement of fact will not suffice;  the evidence must demonstrate a purposeful avoidance of the truth ․ Further, proof that a defamatory falsehood has been uttered with bad or corrupt motive or with an intent to inflict harm will not be sufficient to support a finding of actual malice ․ although such evidence may assist in drawing an inference of knowledge or reckless disregard of falsity.”  (Citations omitted;  internal quotation marks omitted.)  Id., 637–38.

Fountain Pointe, LLC v. Calpitano, 144 Conn.App. 624, 655–56, cert. denied, 310 Conn. 928 (2013).

The plaintiff offered testimony and argument regarding the timing of the filing of the Verified Claim (immediately prior to the pending closing with EMC) as proof of an intentional effort to disrupt the sale of the property and therefore as evidence of ill will or malice on the part of the defendants.   In response, the defendants have asserted the special defense of “advice of counsel,” namely that as regards the content and the timing of the Verified Claim, they relied upon the advice provided to them by their retained legal counsel, John L. Giuletti, an attorney “duly licensed in Connecticut for 40 years.”

The plaintiff argues that defendants have not met their burden of factual proof as to all the elements of the “advice of counsel” defense as applied in common-law claims for vexatious litigation, See, e.g., Vandersluis v. Weil, 176 Conn. 353, 361, 407 A.2d 982 (1978) and Verspyck v. Franco, 274 Conn. 105, 112 (2005) (“The defendant has the burden of proof with respect to this special defense”).   Specifically, the plaintiff argues that the defendants did not prove that the advice that they received and upon which they relied was based upon a “full and fair statement of all facts” within their knowledge.   The court disagrees.   The testimony of several defendants makes it clear that they were fully aware of their factual circumstances in the wake of the dissolution of the cooperative and the summary process actions and had discussed them at length with Atty. Giuletti.   They continued to believe they had legal rights based on the proprietary leases.   The plaintiff suggests that somehow a “full and fair statement of the facts” would have led the defendants to a conclusion contrary to that of their lawyer, i.e., that they had no legal rights in the property and they should not file the verified claims.   That is a clearly unrealistic view of the requirement that a client seeking advice of an attorney make a “full and fair statement of all facts” within his knowledge.

Moreover, in this context the claim of reliance upon advice of counsel is a circumstance indicating good faith which the trier of fact is entitled to consider when determining the element of malice.   Evidence that the defendants in good faith followed the advice of their counsel as to their legal rights and steps to be taken to protect those rights would certainly inform the determination of whether “a statement was made with knowledge that it was false or with reckless disregard for its truth.”  Fountain Pointe, LLC v. Calpitano, supra, 144 Conn.App. at 656 (2013).   Compare, Lawless v. DeRosa, Superior Court, Judicial District of Danbury at Danbury, Docket No. CV 07 5002260 (January 23, 2009, Shaban, J.) (in slander of title action, court determined that recording of purchase and sale agreement for real property was “not done with malice on the part of the defendant, but rather on the basis of advice from counsel”).

The court carefully assessed the testimony of the defendants at trial.   All of the defendants credibly testified that they relied upon the advice of Attorney Giuletti in deciding to authorize the filing of the Verified Claim on the Simsbury Land Records.   One defendant stated “we filed it ․ because we believed in our attorney.”   Another specifically testified that the Verified Claim was “filed under the advisement of Attorney Giuletti ․ [we] ․ followed what the attorney recommended.”   Another defendant conceded that the verified claim was filed in her name, but maintained that “my lawyer did it, I didn't.”   Another defendant agreed with the plaintiff that “we can't go against the law ․ but you need to ask our attorney why we [filed the Verified Claim].”

The court views these defendants as common citizens who are unschooled in the law.   They relied on the advice of their attorney as to the existence of a legal right and the best means to legally protect that right.   Although that attorney's advice—objectively viewed by persons with legal training—was in many ways erroneous, misguided, and imprudent, the court does not believe that the lay defendants' reliance upon that advice was unreasonable or unwarranted.   The defendants did not act with a bad or corrupt motive, they did not act with reckless disregard of the falsity of their statement, and they did not set out to inflict harm on the plaintiff.   Accordingly, the court finds that that the plaintiff has failed to sustain its burden of proof as to its claim that the recording of the “Verified Claim” and the “First Amended Verified Claim” was done by the defendants with malice.

Given this finding, the court need not address the remaining elements of slander of title, namely, the proof of special damages resulting from the diminished value of the plaintiff's property in the eyes of third parties, and the pecuniary damages actually suffered.

Judgment will enter for the defendants as to Second Count of the complaint.

C. Third Count:  Recording an Instrument for the Purpose of Slandering Title to Land (C.G.S. § 47–33j)

Section 47–33j provides that “No person may use the privilege of recording notices under sections 47–33f and 47–33g for the purpose of slandering the title to land.   In any action brought for the purpose of quieting title to land, if the court finds that any person has recorded a claim for that purpose only, the court shall award the plaintiff all the costs of the action, including such attorneys fees as the court may allow to the plaintiff, and in addition, shall decree that the defendant asserting the claim shall pay to the plaintiff all damages the plaintiff may have sustained as the result of such notice of claim having been so recorded.”

In a recent decision specifically reviewing Section 47–33j, our Appellate Court made it quite clear that a party seeking recovery under that statute must prove all the elements of common-law slander of title, including malice.   Fountain Pointe, LLC v. Calpitano, 144 Conn.App. 624, 655–56, cert. denied, 310 Conn. 928 (2013).   As previously stated with respect to the common-law slander of title claim in the Second Count, the plaintiff has failed to meet its burden of proof as to the element of malice.   Therefore, slander of title has not been proven, and judgment must also enter for the defendants as to the Third Count of the complaint.

D. Fourth Count:  Injunctive Relief

The plaintiff seeking injunctive relief bears the burden of proving facts which will establish irreparable harm and the lack of adequate remedy at law.   Commissioner of Correction v. Coleman, 303 Conn. 800, 810, 38 A.3d 84 (2012).   Before a permanent injunction may be issued, it must be decided upon facts proved at trial.  H.O. Canfield Co. v. United Construction Workers, 134 Conn. 623, 626, 60 A.2d 176 (1948).   The plaintiffs must demonstrate actual success on the merits rather than a likelihood of success, as is required when a preliminary injunction is requested.  Waterbury Teachers Assn. v. Freedom of Information Commission, 230 Conn. 441, 446, 645 A.2d 978 (1994).

In the present case, the plaintiff has demonstrated actual success on the merits as to their quiet title claim.   This court finds, as other courts have found, that the plaintiff is the sole, absolute owner of the real property located at 1602 Hopmeadow Street, Simsbury Connecticut, commonly known as “Eno Farms,” subject to a Ground Lease in favor of the Town of Simsbury, but free of any claims of title by the defendants.

“The request for injunctive relief is addressed to the sound discretion of the trial court ․ In exercising its discretion, the court, in a proper case, may consider and balance the injury complained of with that which will result from interference by injunction ․ The issuance of an injunction and the scope and quantum of injunctive relief rests in the sound discretion of the trier.”   (Citations omitted;  internal quotation marks omitted.)  Tomasso Bros, Inc. v. October Twenty–Four, Inc., 230 Conn. 641, 648, 646 A.2d 133 (1994).   However, “the relief granted must be compatible with the equities of the case.”  (Internal quotation marks omitted.)  Castonguay v. Plourde, 46 Conn.App. 251, 267, 699 A.2d 226, cert. denied, 243 Conn. 931, 701 A.2d 660 (1997).

This court finds based on the facts in this case, the equities clearly lie in favor of the plaintiff.   Moreover, the court finds that there is a realistic possibility that the defendants, or more likely their attorney, may attempt to make additional filings on the Simsbury Land Records in the future under the guise of “giving notice” of claims or purported legal rights.   The court infers this possibility from statements of defendants' counsel in his pleadings, such as:

defendants' counsel's expressed intent (which apparently was only prevented by the court's entry of a temporary injunction) to “file a Second Amended Verified Claim on the land records in their behalf reflecting factual findings and legal opinions of the Hon. Sheridan.”  (See January 2, 2012 Answer and Special Defense, Docket Entry # 130, at p. 11.)

defendants' counsel's strongly held view, expressed on multiple occasions, that by virtue of “covenants running with the land” contained in the Ground Lease and the Declaration and Agreement of Restrictive Covenants, the defendants—and not the plaintiff—are the “rightful owners” of the Eno Farms property and that the plaintiff's lawyers, by failing to restore this “property” to its “rightful owner,” are sanctioning “larceny” and committing some form of ethical misconduct.  (See, e.g., “Memorandum in Support of Defendants' Motion for a P.B. § 2–32(a)(2)(F) Finding,” Docket Entry # 189.)

defendants' counsel's claims that he has only recently uncovered evidence of a “larcenous scheme”—dating back to 1993—to deprive the defendants of their residences.  (September 16, 2013 Memorandum in Support of “Motion to Correct Record and Belatedly File Defendants' Exhibit D,” Docket Entry # 196.)

defendants' counsel's reference to a potential claim that “[o]ne or more of the remaining 45 households of person in lawful occupancy or possession of their respect [sic.] ‘single family residences' at Eno Farms may claim some right to the Property or parts thereof which are adverse to the title of the Plaintiff.”  (Defendants' September 16, 2013 “After–Trial Brief” at p. 18.)

Given the history of this case and the possibility that future groundless filings on the land records would again cloud the plaintiff's title and lead to further litigation, harm and detriment, a permanent injunction is appropriate.

IV CONCLUSION

On the basis of the foregoing findings of fact and conclusions of law, the court finds, and enters judgment in this action to declare, that the plaintiff, CHFA–Small Properties, Inc., is the sole, absolute record owner of the real property located at 1602 Hopmeadow Street, Simsbury Connecticut, commonly known as “Eno Farms,” subject to a Ground Lease in favor of the Town of Simsbury, free of any claims of title by the defendants Eno Farm Tenant Association, Inc., Hussein Elazazy, Fathia Rassyoun, M. Rafi Khan, Farhan Khan, Melissa Torreiro, Janusz Stolarczyk, Razin Syed and Rizuana Afag.

Judgment will enter for the defendants on the Second and Third Counts of the Complaint.

The court grants the plaintiff's request for a permanent injunction in the Fourth Count, and the order of permanent injunction is set forth below.

V ORDER

A permanent injunction shall and hereby does enter against the defendants Eno Farm Tenant Association, Inc., Hussein Elazazy, Fathia Rassyoun, M. Rafi Khan, Farhan Khan, Melissa Torreiro, Janusz Stolarczyk, Razin Syed and Rizuana Afag, enjoining and prohibiting them from recording any document or instrument on the Simsbury Land Records which asserts an interest in, makes a claim regarding, or purports to give notice concerning the plaintiff's real property located at the street address of 1602 Hopmeadow Street, Simsbury, In the event of any such filing, upon application by the plaintiff, the court may order a fine assessed against the defendants, jointly and severally, in an amount not to exceed $100.00 per day per violation.

This order shall be effective against and bind all parties to this action, as well as their officers, agents, servants, employees, and attorneys.

So ordered.

BY THE COURT,

Sheridan, J.

FOOTNOTES

FN1. Connecticut Housing Finance Authority v. Eno Farms Ltd. Partnership, Superior Court, Judicial District of Hartford at Hartford, Docket No. CV 07–5008995 (June 12, 2009, Satter, J.T.R) [48 Conn. L. Rptr. 66]..  FN1. Connecticut Housing Finance Authority v. Eno Farms Ltd. Partnership, Superior Court, Judicial District of Hartford at Hartford, Docket No. CV 07–5008995 (June 12, 2009, Satter, J.T.R) [48 Conn. L. Rptr. 66].

FN2. Eno Farms Ltd. Partnership v. Pouncey, Connecticut Superior Court, Judicial District of Hartford Housing Session at Hartford, Docket No. HDSP–129798 (Nov. 19, 2004, dos Santos, J.) [38 Conn. L. Rptr. 316]..  FN2. Eno Farms Ltd. Partnership v. Pouncey, Connecticut Superior Court, Judicial District of Hartford Housing Session at Hartford, Docket No. HDSP–129798 (Nov. 19, 2004, dos Santos, J.) [38 Conn. L. Rptr. 316].

FN3. Summary Process Memorandum of Decision and Memorandum of Decision re Motion to Dismiss, HDSP–161528, HDSP–161529, HDSP–161530, HDSP–161531, and HDSP–161532 (August 31, 2012, Oliver J.)..  FN3. Summary Process Memorandum of Decision and Memorandum of Decision re Motion to Dismiss, HDSP–161528, HDSP–161529, HDSP–161530, HDSP–161531, and HDSP–161532 (August 31, 2012, Oliver J.).

FN4. The defendants referred the court to their filings on the Simsbury Land Records and to their January 2, 2013 Answer and Special Defenses for “the Defendants' version of the facts.”  (Defendants' January 2, 2013 Memorandum of Law at p. 1.) Regrettably, the court found the defendants' recitations of the operative facts to be less than helpful.   Much of the defendants' briefing re-hashed prior “ethical” and procedural battles with opposing counsel and did nothing to advance the court's understanding of the underlying facts.   The legal theory was even more obscure..  FN4. The defendants referred the court to their filings on the Simsbury Land Records and to their January 2, 2013 Answer and Special Defenses for “the Defendants' version of the facts.”  (Defendants' January 2, 2013 Memorandum of Law at p. 1.) Regrettably, the court found the defendants' recitations of the operative facts to be less than helpful.   Much of the defendants' briefing re-hashed prior “ethical” and procedural battles with opposing counsel and did nothing to advance the court's understanding of the underlying facts.   The legal theory was even more obscure.

FN5. Docket No. HHD–CV–07–5008995–S..  FN5. Docket No. HHD–CV–07–5008995–S.

FN6. Summary Process actions HDSP–161528, HDSP–161529, HDSP–161530, HDSP–161531, and HDSP–161532..  FN6. Summary Process actions HDSP–161528, HDSP–161529, HDSP–161530, HDSP–161531, and HDSP–161532.

FN7. See Docket Nos. AC 35068, AC 35069, AC 35070, AC 35072, and AC 35073..  FN7. See Docket Nos. AC 35068, AC 35069, AC 35070, AC 35072, and AC 35073.

FN8. As a result of the court's entry of a temporary injunction, discussed infra, releases have been recorded on the Simsbury Land Records..  FN8. As a result of the court's entry of a temporary injunction, discussed infra, releases have been recorded on the Simsbury Land Records.

Sheridan, David M., J.