Edith Masulli v. Charles Framularo (2013)

MEMORANDUM OF DECISION

The plaintiff, Edith Masulli, brought the present action seeking discharge of a mortgage on her property through an application for order to discharge mortgage on September 3, 2013.   The plaintiff argues for discharge under General Statutes § 49–13, under the statute of limitations in General Statutes § 42a–3–118(b), and under the doctrine of laches.   The application was served on the defendant, Charles Framularo, the holder of a security interest on the plaintiff's property, on September 12, 2013.

The following facts were asserted in the parties' testimony and in their briefs.   In 1979 the defendant claims that he loaned $4,100 to the plaintiff's father, a carpenter who was doing work for him at the time.   In exchange for the $4,100, the plaintiff's father and mother signed a note and mortgage (defendant's mortgage) prepared by the defendant's brother, a lawyer, with an interest rate of 12%, which was payable on demand and secured by the father and mother's property at 99 Anton Drive, Bridgeport, Connecticut (the property).   A copy of the mortgage and note was submitted to the court.   The defendant stated that he made numerous attempts to collect the money by visiting the plaintiff's father in person, but that he eventually gave up, assuming that he could recover his money either when the plaintiff's father died or he sold the property.   He stated that the current total of interest and principal was $20,977.70, that he is a retired public school teacher of limited means himself and that he always thought that he would be paid back eventually.

The plaintiff testified that she received the property by quitclaim deed from her parents in 1991 and that she knew nothing about the mortgage.   The plaintiff's parents have since passed away.   Death notices were placed in the newspaper.   The plaintiff refinanced the property approximately ten years ago, taking on a mortgage (first bank mortgage).   The title search at the time did not reveal the defendant's mortgage.   Recently, she again borrowed against the property, with both herself and her sister liable on the note, in order to make necessary home repairs, which included new siding for the property and repairs to the bathroom (second bank mortgage).   The title search for this loan did uncover the defendant's mortgage.   The loan proceeds from the second bank mortgage were used to pay off the first bank mortgage and the remainder was placed in escrow pending the discharge or payment of the defendant's mortgage.   The plaintiff's sister, who shares the property with her, also testified, corroborating the plaintiff's testimony regarding their financial situation and the necessity of home repairs.

General Statutes § 49–13, entitled “Petition for discharge of mortgage or ineffective attachment, lis pendens or lien,” provides in relevant part:

“(a) When the record title to real property is encumbered (1) by any undischarged mortgage, and ․ (B) the promissory note or other written evidence of the indebtedness secured by the mortgage is payable on demand and seventeen years have passed without any payment on account of such note or other written evidence of indebtedness ․ the person owning the property, or the equity in the property, may bring a petition to the superior court for the judicial district in which the property is situated, setting forth the facts and claiming a judgment as provided in this section.   The plaintiff may also claim in the petition damages as set forth in section 49–8 if the plaintiff is aggrieved by the failure of the defendant to execute the release prescribed in said section.

“(b) The petition shall be served upon all persons interested in the mortgage ․ in the manner provided by law for process in civil actions ․

“(c) Such notice having been given according to the order and duly proven, the court may proceed to a hearing of the cause at such time as it deems proper, and, if no evidence is offered of any payment on account of the debt secured by the mortgage within a period set out in subsection (a) of this section, or of any other act within such a period as provided in said subsection (a) in recognition of its existence as a valid mortgage ․ the court may render a judgment reciting the facts and its findings in relation thereto and declaring the mortgage ․ invalid as a lien against the real estate, and may order payment of any balance of indebtedness due on the mortgage or foreclosure judgment to the clerk of the court to be held for the benefit of the mortgagee or the persons interested and to be paid to the mortgagee by the clerk of the court upon application of the mortgagee or persons interested following the execution of a release of mortgage.

“(d) Upon deposit of the balance of indebtedness with the clerk, such judgment shall issue, which judgment shall, within thirty days thereafter, be recorded in the land records of the town in which the property is situated, and the encumbrance created by the mortgage, foreclosure judgment, attachment, lis pendens or other lien shall be null and void and totally discharged.   The town clerk of the town in which the real estate is situated shall, upon the request of any person interested, record a discharge of such encumbrance in the land records.” ¹

The plaintiff argues that she has squarely complied with the requirements of General Statutes § 49–13, and that her difficult situation justifies the court ordering discharge of the mortgage and declining to order payment of the balance of indebtedness.   The defendant argues that the mortgage is in dispute, therefore § 49–13 is inapplicable, that the plaintiff's situation does not justify the court discharging the mortgage, and that the statute requires the court to order payment before a discharge can issue.

Both parties are in agreement that a period of over 17 years passed during which no action was taken on the mortgage.   The plaintiff made no payments and the defendant made no efforts to collect, whether in writing or orally.   The defendant, however, suggests that the mortgage is nonetheless “in dispute” pursuant to Gordon v. Tufano, 188 Conn. 477, 450 A.2d 852 (1982), and Martino v. Scalzo, 113 Conn.App. 240, 249 (2009), because he has stated in an affidavit that he believes the mortgage to be in dispute.

In Gordon, the Supreme Court states that General Statutes § 49–13 “[provides] a simple method whereby a mortgage, the invalidity of which is undisputed, may be declared invalid by the court and removed as a cloud on the title to the property ․ The statute gives the court no jurisdiction to determine the validity or invalidity of a disputed mortgage of long standing. ”  (Emphasis in original.)  Gordon v. Tufano, supra, 188 Conn. 483.   In Martin v. Scalzo, 113 Conn.App. 240, 248 n.7, 967 A.2d 339 (2009), the Appellate Court stated that “[i]t is well settled that § 49–13 allows a court to remove a mortgage which is undisputed and does not empower a court to determine the validity of a disputed mortgage ․” In Gordon, the court determined that the mortgage in question had been discussed by the parties during the 17–year period, and that the defendant had informed the plaintiff that the property could be taken from her.  Gordon v. Tufano, supra, 188 Conn. 483.   The court determined that this conversation placed the mortgage in dispute.  Id., 484.   The court also cited with approval a New Jersey case discussing the New Jersey parallel to § 49–13, which stated that a court may not discharge a mortgage when the mortgagee or a representative of the mortgagee contests the discharge.  Id., 484–85.   The Connecticut statute, in contrast, references “any other act within such a period as provided in said subsection (a) in recognition of its existence as a valid mortgage” without any reference to the defendant's appearance to contest the mortgage as evidence of validity.  General Statutes § 49–13.   In Martin, the court discussed § 49–13 in dicta;  the main decision was related to the applicability of the statute of limitations.   Prior to briefly discussing § 49–13, the court stated that “the plaintiff has made no argument that she satisfied the procedural directives of § 49–13.”  Martin v. Scalzo, supra, 113 Conn.App. 248 n.7.

The key to determining whether General Statutes § 49–13(a)(1)(B) applies is whether there has been a payment or other recognition of the validity of the mortgage within the 17–year period.  Gordon demonstrates that an oral conversation is sufficient, but it does not demonstrate that the defendant can merely declare that the mortgage is disputed and bar the plaintiff's action under § 49–13.   Other judges of the Superior Court have looked to whether there were any payments or other actions within the statutory period, either the seventeen-year period in § 49–13(a)(1)(B) which applies to the present case, or the six-year period in § 49–13(a)(1)(A).   See Easton Memorial Gardens, Inc. v. Piccolo, Superior Court, judicial district of Fairfield, Docket No. CV–99–0361504–S (May 25, 2000, Mottolese, J.) [27 Conn. L. Rptr. 225] (no mortgage payment or other act within six years under § 49–13(a)(1)(A));  Smith v. Mid Eastern Mortgage & Investment Associates, Superior Court, judicial district of Ansonia–Milford, Docket No. CV–98–063120–S (May 24, 1999, Flynn, J.) [24 Conn. L. Rptr. 558] (no mortgage payment or other act within six years under § 49–13(a)(1)(A));  Quinnipiac Lodge No. 1 Independent Order of Odd Fellows v. Lacey, Superior Court, judicial district of New Haven, Docket No. CV–97–0395244–S (March 7, 1997, DeMayo, J.T.R.) (no mortgage payment or other act within the seventeen-year period).   Here, it is clear that the plaintiff did not make any payments for well over seventeen years, and that the defendant did nothing to alert the plaintiff that the mortgage was still on the property.   The parties also have not disputed that service was proper under § 49–13(b).  The court therefore may declare the mortgage invalid pursuant to § 49–13(c).  The remaining legal issue is whether the court is required to order payment of the balance of the indebtedness, as asserted by the defendant, or whether payment is discretionary, as suggested by the plaintiff.

The Supreme Court in Lesser v. Lesser, 134 Conn. 418, 427, 58 A.2d 512 (1948) “[declined] to hold, as urged by the defendant, that a plaintiff seeking the affirmative relief of the cancellation of a mortgage, unenforceable because of lapse of time, must pay the debt recited in the mortgage deed, with interest, as a condition of securing relief.”   The defendant has suggested that the Lesser ruling is inapplicable, because the statute in effect at the time contained no provision regarding payment, while the current statute does.   This court finds, however, that the current statute allows for the court's discretion as to payment.   It states in General Statutes § 49–13(c) that the court “may order payment of any balance of indebtedness due on the mortgage ․” The defendant claims that § 49–13(d), “[u]pon deposit of the balance of indebtedness with the clerk, such judgment shall issue ․” demonstrates that the court must order payment for judgment to issue.   This court, however, finds that Section (d) only comes into effect if the court utilizes its discretion under Section (c).  The court therefore may consider whether to require payment in balancing the equities.   This conclusion is reinforced by other Superior Court cases.   Easton Memorial Gardens, Inc. v. Piccolo, Superior Court, judicial district of Fairfield, supra, Docket No. CV–99–0361504–S (court used its discretion under § 49–13 to decline to order payment);  Smith v. Mid Eastern Mortgage & Investment Associates, supra, Docket No. CV–98–063120–S (the court in its discretion ordered payment of principal, but not interest, minus plaintiff's attorneys fees);  Quinnipiac Lodge No. 1 Independent Order of Odd Fellows v. Lacey, supra, Docket No. CV–97–0395244–S (court made no reference to payment of balance of indebtedness).

In determining whether to declare the mortgage invalid and whether to order payment, the court will look to the equities of the parties' situations.   The plaintiff and her sister are both of very limited means, and the repairs they seek to make appear vital to the continued habitability of their dwelling.   Based on their testimony, it is clear that they obtained no benefit from this mortgage, nor did they even know it existed until the title search for the second bank mortgage.   The plaintiff testified that he is a retired public school teacher.   He also asserted that, unlike a commercial lender such as a bank, he is unable to absorb the loss if the court discharges the mortgage without requiring payment.   Given his decades-long failure to attempt any type of collection, the court does not credit this suggestion.   It appears instead that he forgot about this loan until the plaintiff moved to discharge it.

In addition, the plaintiff's claims of laches and the statute of limitations contained in General Statutes § 42a–3–118(b) weigh on the court's decision.   The defendant asserts that both of these claims may be made as defenses, but may not be affirmatively used to discharge a mortgage.   He further argues that the statute of limitations, if applicable, would bar collection on the note, but would still allow for foreclosure of the mortgage.   The court need not reach these issues because it chooses to apply General Statutes § 49–13, but in determining whether to order payment of the balance of the indebtedness it is mindful that the defendant faces multiple other potential barriers should he attempt a collection or foreclosure action.

Based on the foregoing, the court concludes that the mortgage dated August 1, 1979 by and between Edith Masulli and Joseph Masulli and the defendant, Charles V. Framularo, Jr., on the property at 99 Anton Drive, Bridgeport, Connecticut, recorded on August 1, 1979, in Volume 1611 at Page 995 of the Land Records of the City of Bridgeport, Connecticut, is hereby discharged, and that no payment of the balance of indebtedness needs to be paid.

GILARDI, J.T.R.

FOOTNOTES

FN1. General Statutes § 49–13 provides:Sec. 49–13.  Petition for discharge of mortgage or ineffective attachment, lis pendens or lien.(a) When the record title to real property is encumbered (1) by any undischarged mortgage, and (A) the mortgagor or those owning the mortgagor's interest therein have been in undisturbed possession of the property for at least six years after the expiration of the time limited in the mortgage for the full performance of the conditions thereof, and for six years next preceding the commencement of any action under this section, or (B) the promissory note or other written evidence of the indebtedness secured by the mortgage is payable on demand and seventeen years have passed without any payment on account of such note or other written evidence of indebtedness, or (C) the mortgage does not disclose the time when the note or indebtedness is payable or disclose the time for full performance of the conditions of the mortgage and ten years have passed without any payment on account of the promissory note or other written evidence of indebtedness, or (D) the note or evidence of indebtedness has been paid or a bona fide offer and tender of the payment has been made pursuant to section 49–8, or (E) the mortgage has become invalid, and in any of such cases no release of the encumbrance to secure such note or evidence of indebtedness has been given, or (2) by a foreclosed mortgage and the mortgagor has made a bona fide offer and tender of payment of the foreclosure judgment on or before the mortgagor's law day and the mortgagee has refused to accept payment, or (3) by an attachment, lis pendens or other lien which has become of no effect, the person owning the property, or the equity in the property, may bring a petition to the superior court for the judicial district in which the property is situated, setting forth the facts and claiming a judgment as provided in this section.   The plaintiff may also claim in the petition damages as set forth in section 49–8 if the plaintiff is aggrieved by the failure of the defendant to execute the release prescribed in said section.(b) The petition shall be served upon all persons interested in the mortgage, attachment, lis pendens or other lien in the manner provided by law for process in civil actions and, in any action where the parties who may have an interest in the property and should be made parties thereto cannot be located by and are unknown to the petitioner in the action, the petitioner or the petitioner's attorney shall annex to the petition in the action an affidavit stating that the petitioner does not know who the interested parties are or where they reside, or, if the party interested in the property is a corporation whose corporate existence has been legally terminated, or the corporation is no longer in existence or doing business, and the petitioner or the petitioner's attorney states that fact in an affidavit, the court to which the action is brought or the clerk, assistant clerk or any judge thereof may make such order relative to the notice which shall be given in the cause as the court, clerk, assistant clerk or judge deems reasonable.(c) Such notice having been given according to the order and duly proven, the court may proceed to a hearing of the cause at such time as it deems proper, and, if no evidence is offered of any payment on account of the debt secured by the mortgage within a period set out in subsection (a) of this section, or of any other act within such a period as provided in said subsection (a) in recognition of its existence as a valid mortgage, or if the court finds the mortgage has been satisfied but no release given as evidence of such satisfaction, or if the court finds that a bona fide offer and tender of payment of the foreclosure judgment or mortgage has been made and refused, or if the court finds the attachment, lis pendens or other lien has become of no effect, the court may render a judgment reciting the facts and its findings in relation thereto and declaring the mortgage, foreclosure judgment, attachment, lis pendens or other lien invalid as a lien against the real estate, and may order payment of any balance of indebtedness due on the mortgage or foreclosure judgment to the clerk of the court to be held for the benefit of the mortgagee or the persons interested and to be paid to the mortgagee by the clerk of the court upon application of the mortgagee or persons interested following the execution of a release of mortgage.(d) Upon deposit of the balance of indebtedness with the clerk, such judgment shall issue, which judgment shall, within thirty days thereafter, be recorded in the land records of the town in which the property is situated, and the encumbrance created by the mortgage, foreclosure judgment, attachment, lis pendens or other lien shall be null and void and totally discharged.   The town clerk of the town in which the real estate is situated shall, upon the request of any person interested, record a discharge of such encumbrance in the land records..  FN1. General Statutes § 49–13 provides:Sec. 49–13.  Petition for discharge of mortgage or ineffective attachment, lis pendens or lien.(a) When the record title to real property is encumbered (1) by any undischarged mortgage, and (A) the mortgagor or those owning the mortgagor's interest therein have been in undisturbed possession of the property for at least six years after the expiration of the time limited in the mortgage for the full performance of the conditions thereof, and for six years next preceding the commencement of any action under this section, or (B) the promissory note or other written evidence of the indebtedness secured by the mortgage is payable on demand and seventeen years have passed without any payment on account of such note or other written evidence of indebtedness, or (C) the mortgage does not disclose the time when the note or indebtedness is payable or disclose the time for full performance of the conditions of the mortgage and ten years have passed without any payment on account of the promissory note or other written evidence of indebtedness, or (D) the note or evidence of indebtedness has been paid or a bona fide offer and tender of the payment has been made pursuant to section 49–8, or (E) the mortgage has become invalid, and in any of such cases no release of the encumbrance to secure such note or evidence of indebtedness has been given, or (2) by a foreclosed mortgage and the mortgagor has made a bona fide offer and tender of payment of the foreclosure judgment on or before the mortgagor's law day and the mortgagee has refused to accept payment, or (3) by an attachment, lis pendens or other lien which has become of no effect, the person owning the property, or the equity in the property, may bring a petition to the superior court for the judicial district in which the property is situated, setting forth the facts and claiming a judgment as provided in this section.   The plaintiff may also claim in the petition damages as set forth in section 49–8 if the plaintiff is aggrieved by the failure of the defendant to execute the release prescribed in said section.(b) The petition shall be served upon all persons interested in the mortgage, attachment, lis pendens or other lien in the manner provided by law for process in civil actions and, in any action where the parties who may have an interest in the property and should be made parties thereto cannot be located by and are unknown to the petitioner in the action, the petitioner or the petitioner's attorney shall annex to the petition in the action an affidavit stating that the petitioner does not know who the interested parties are or where they reside, or, if the party interested in the property is a corporation whose corporate existence has been legally terminated, or the corporation is no longer in existence or doing business, and the petitioner or the petitioner's attorney states that fact in an affidavit, the court to which the action is brought or the clerk, assistant clerk or any judge thereof may make such order relative to the notice which shall be given in the cause as the court, clerk, assistant clerk or judge deems reasonable.(c) Such notice having been given according to the order and duly proven, the court may proceed to a hearing of the cause at such time as it deems proper, and, if no evidence is offered of any payment on account of the debt secured by the mortgage within a period set out in subsection (a) of this section, or of any other act within such a period as provided in said subsection (a) in recognition of its existence as a valid mortgage, or if the court finds the mortgage has been satisfied but no release given as evidence of such satisfaction, or if the court finds that a bona fide offer and tender of payment of the foreclosure judgment or mortgage has been made and refused, or if the court finds the attachment, lis pendens or other lien has become of no effect, the court may render a judgment reciting the facts and its findings in relation thereto and declaring the mortgage, foreclosure judgment, attachment, lis pendens or other lien invalid as a lien against the real estate, and may order payment of any balance of indebtedness due on the mortgage or foreclosure judgment to the clerk of the court to be held for the benefit of the mortgagee or the persons interested and to be paid to the mortgagee by the clerk of the court upon application of the mortgagee or persons interested following the execution of a release of mortgage.(d) Upon deposit of the balance of indebtedness with the clerk, such judgment shall issue, which judgment shall, within thirty days thereafter, be recorded in the land records of the town in which the property is situated, and the encumbrance created by the mortgage, foreclosure judgment, attachment, lis pendens or other lien shall be null and void and totally discharged.   The town clerk of the town in which the real estate is situated shall, upon the request of any person interested, record a discharge of such encumbrance in the land records.

Gilardi, Richard P., J.T.R.