Embrace Home Loans, Inc. v. Sarah Richardson et al. (2015)

MEMORANDUM OF DECISION RE MOTION TO DISMISS # 207

In this motion, the plaintiff asserts, for the first time in this litigation, that the plaintiff's assignor, Advanced Financial Services, Inc., was not registered in the State of Connecticut to do business and therefore the assignee/plaintiff, Embrace Home Loans, Inc., may not enforce the promissory note and mortgage executed by the defendants, Sarah and Darren Richardson.

The self-represented defendant, Sarah Richardson, asserts that she has conducted research in the Connecticut office of the Secretary of State and she has determined that the plaintiff had no authority to transact business in this state.   In her memorandum in support of the motion to dismiss, the defendant makes additional arguments that were not raised by her motion.   These arguments are muddled in their explication.   They describe, in the defendants' opinion, a vast financial conspiracy facilitated by MERS.

The “Advanced” hustlers were in effect playing an arbitrage game, and might as well have been placing puts and calls on the Chicago Mercantile Exchange;  they were forward-selling securities certificates to investors and on the back-end of the arbitrage sending the funds to unwitting closing attorneys in exchange for what looked for all the world as mortgage loan contracts.   “Advanced” was an early version of a hedge fund.   With all the pass-through sales to investors already locked in, compliments of the credit history and personal information solicited from the unwary homeowners seeking financing, it became a risk-free interest-rate arbitrage.   There was no risk as all the deals were pre-sold as evidenced by the pre-printed MIN numbers.

Nothing in this explication addresses the principal issue in this litigation, the signing of a promissory note, in exchange for funds delivered and to be used at the direction of the defendants and the simple failure of the defendants to pay the note in accordance with its terms.   None of the assertions made are supported by affidavit or documentation.

The plaintiff objects to this motion to dismiss.   It argues that there is no legal or factual basis to dismiss the foreclosure action.'The plaintiff further points the court's attention to Connecticut General Statutes § 33–920(b)(7) and (8) which creates exceptions for the requirement that a foreign corporation must obtain a certificate of authority from the Connecticut Secretary of State's office in order to transact business.   Specifically that language provides “(b) the following activities, among others, do not constitute transacting business within the meeting of subsection (a) of this section:  ․ (7) creating or acquiring indebtedness, mortgages and security interest in real or personal property;  (8) securing or collecting debts or enforcing mortgages and security interests in the property securing the debts;  ․”

* * *

This foreclosure action has been pending before this court since October of 2012.   At the commencement of this action, the defendants availed themselves of the opportunity to participate in the foreclosure mediation process.   This process ended with the defendants being offered a non-HAMP loss mitigation modification of the underlying loan.   For reasons not revealed by the record, the modification of the loan was not accepted and this case continued with the foreclosure process.

The plaintiff filed a motion for summary judgment in July of 2014.   The court granted the motion for summary judgment in favor of the plaintiff as to liability only in February of 2015.   The court during the course of that process examined the blue ink originals of the note and mortgage in question and found that the plaintiff, Embrace Home Loans, Inc., had established the prima facie case to proceed with the foreclosure action.   In a subsequent motion for summary judgment directed at the defendants' counterclaims, the court also granted the motion for summary judgment.

The court finds persuasive the statutory authority identified by the plaintiff that the issue of whether or not the original mortgagee was registered to transact business in the state of Connecticut is relevant because the nature of the business transaction here falls within a statutory exemption.   The arguments raised by the defendants as they relate to the “MERS” are not supported and are unpersuasive in light of the court's earlier findings, that the plaintiff had standing to pursue this foreclosure action and that they had established a prima facie case in favor of liability on the underlying note and mortgage.

The motion to dismiss is denied.

Cosgrove, J.

Cosgrove, Emmet L., J.