Rocco Arbitell et al. v. 1080 LLC (2014)

MEMORANDUM OF DECISION RE MOTION FOR APPROVAL OF COMMITTEE SALE/DEED/REPORT/FEES AND EXPENSES/APPRAISER'S FEE (# 194) AND MOTION FOR OBJECTION TO MOTION FOR APPROVAL OF SALE (# 196)

On January 17, 2014, the court entered a judgment of foreclosure of sale in this action.   The court found the debt to be $1,090,625.13 and the fair market value of the property to be $3,075,000.00.   The judgment ordered the sale to occur on October 18, 2014.   Attorney Garon Camassar of New London, Connecticut was appointed the Committee of Sale. In addition to listing the sale information on the judicial website, the Committee, after orders of the court, and consultation with all parties, published this notice of this sale in the Wall Street Journal and in racetrack trade magazines.   A stipulation of the parties further provided that the real estate would be marketed through the Cushman & Wakefield Real Estate Agency.   All parties had the ability to communicate freely and directly with the Cushman & Wakefield Real Estate Agency regarding the listing.

The sale took place on October 18, 2014.   The Committee's appraisal of the property at the time of the sale was $3,000,000.00.   There were six inquiries from parties interested in the sale and four people signed up to bid.   There were six bids entertained by the Committee with the plaintiffs' opening bid of $1,195,000.00.   The plaintiffs continued to increase their bid up to $1,700,000.   The final and accepted bid was $1,750,000.00.   Bruce J. Bemer on behalf of Bemer Enterprises, LLC of 210 Commerce Street, Glastonbury, Connecticut was the successful bidder.   Bemer Enterprises, LLC was not a party to this action.

The defendants, Edward DeMuzzio and CCI, Inc. have objected to the approval of the Committee's report and the sale and request that a new auction sale be scheduled.   DeMuzzio and CCI, Inc. object because the amount of bid was not “high enough to warrant sale to the successful bidder.”   Further, Demuzzio and CCI “suspect” that there were agreements between the top two mortgagees that “may have had a chilling effect” on the bids.

The defendants supported this motion by the affidavit of Edward DeMuzzio.   Mr. DeMuzzio avers that he spoke with the plaintiff, Mr. Arbitell, and Mr. Arbitell explained to him that he would “be better protected if I put my combined debt, in the amount of over $200,000.00, into his bid, to then raise his bid to a higher amount.”   He claims that Mr. Arbitell said that if “I pool my debt with his bid, he would then do the bidding and my debt would be protected.”   Mr. DeMuzzio apparently decided not to pool his debt with Mr. Arbitell.   Mr. Arbitell, one of the plaintiffs in this action, filed an affidavit with the court in which he stated “in an effort to assist subsequent creditors, I bid substantially higher than my debt in an effort to protect subsequent creditors as much as I could without risking my own financial wellbeing.”   The defendant, Shawn Parker, also filed an affidavit detailing the reasons why, despite his substantial third mortgage on the property, that he chose not to bid at the sale.   He stated “we received no consideration whatsoever from anyone in exchange for our not bidding and there were no preconditions whatsoever for our not bidding with Rocco Arbitell, Peter Borelli or anyone else.”

There is nothing in these affidavits that demonstrate an effort to “chill” the bidding on the property.   There is evidence that the plaintiffs did bid in excess of their debt before dropping out of the bidding.   There is nothing to indicate that the defendants Demuzzio and CCI were prevented or dissuaded from registering to bid at the sale.

The court next addresses the defendant's objection to the approval of the sale based upon the difference between the appraised value and the winning bid.   Although there is a substantial difference between the appraised value of the property and the amount of the sale, the court is not confident that a new sale would render any different result, but rather would only incur additional expenses and the continued accrual of interest.   This property was extensively advertised in accordance with the agreement of the parties.   The property was listed for sale with a well known real estate agency prior to the sale date in October 2014.   These marketing efforts did not produce any bids for the property.   There were extensive efforts to generate interest in the property for this forced sale.

For the above reasons, the court approves the committee of sale's report, approves the requested committee fees and expenses and appraisal fees.

Cosgrove, J.

Cosgrove, Emmet L., J.