CITY OF HARTFORD v. McKEEVER (2014)

The primary issue that we must resolve in this certified appeal is whether the Appellate Court properly determined as a matter of law that the plaintiff, the city of Hartford, as assignee of the note and mortgage executed by the defendant Brian McKeever,¹ did not take the note and mortgage subject to the defendant's affirmative claims against the assignor, or, instead, the Appellate Court should have recognized and applied an equitable exception to this rule because the assignor or its predecessors had received overpayments on the note on the plaintiff's behalf. The plaintiff, as the assignee of a promissory note and mortgage executed by the defendant, brought an action to foreclose the mortgage. The defendant filed a five count counterclaim seeking, inter alia, an accounting of amounts paid pursuant to the note and recoupment of any excess amounts paid, including amounts that he had paid to the entity that had assigned the note and mortgage to the plaintiff and that entity's predecessors in interest. The trial court rendered judgment in favor of the defendant on his counterclaim and awarded him damages of $195,909. The plaintiff appealed from the judgment of the trial court to the Appellate Court, which reversed the judgment and remanded the case for further proceedings. Hartford v. McKeever, 139 Conn.App. 277, 288, 55 A.3d 787 (2012). We then granted the defendant's petition for certification to appeal to this court. Hartford v. McKeever, 307 Conn. 956,59 A.3d 1191(2013). The issue that we must address on appeal is whether the Appellate Court properly determined that the plaintiff, as the most recent assignee and current holder of the defendant's note, could not be held liable to repay the defendant for sums that were overpaid on the note before it was assigned to the plaintiff.² We answer this question in the affirmative and, therefore, affirm the judgment of the Appellate Court.

The opinion of the Appellate Court sets forth the following facts and procedural history. “In May, 1983, the defendant owned a building in Hartford, known as 206–208 Hamilton Street (property). The property contained multiple units that the defendant rented to tenants. On May 5, 1983, the defendant borrowed a total of $143,065 in two separate loans from the Community Development Corporation (corporation). In one loan transaction (loan one), the defendant and the corporation entered into a promissory note agreement with a principal amount of $28,879. In the other loan transaction (loan two), the defendant and the corporation entered into a promissory note agreement with a principal amount of $114,186. Each loan was secured by a separate mortgage on the property. At the time they entered into the loan agreements, the defendant and the corporation also entered into a separate agreement, entitled ‘Collateral Assignment of Leases and Rentals' (assignment of rents agreement), pursuant to which the corporation was empowered to collect rent directly from the defendant's tenants if he defaulted on his obligation to make payments on the notes.

“Although the corporation immediately assigned its interest in the notes to Colonial Bank, which later became State Street Bank & Trust Company of Connecticut (State Street Bank), the corporation continued to service the loans. In July, 2001, State Street Bank assigned loan two to the plaintiff for the sum of [$1]. By that time, the defendant had fully paid loan one, but the plaintiff determined that the defendant had defaulted on his payment obligations as to loan two. Accordingly, in 2003, the plaintiff brought an action against the defendant to foreclose on the property.

“On April 21, 2003, the defendant filed a five count counterclaim against the plaintiff, claiming: (1) violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42–110a et seq.; (2) violation of the Connecticut Creditors' Collection Practices Act, General Statutes (Rev. to 1993) § 36–243a; (3) breach of the implied covenant of good faith and fair dealing; and (4) breach of a modification agreement previously agreed to by himself and the plaintiff. [The defendant] also sought, in the fifth count, an accounting as to all payments that his tenants had made under the assignment of rents agreement.

“The plaintiff subsequently withdrew its foreclosure complaint, conceding that the defendant had overpaid loan two by $17,397.93. Accordingly, [the plaintiff] offered to compensate [the defendant] in that amount. The defendant, however, declined the plaintiff's offer, electing instead to proceed to trial on his counterclaim to recover what he claimed to have been an overpayment of $195,909 on loan two. The plaintiff filed an answer to the counterclaim, denying its essential allegations, and pleaded as a special defense that CUTPA does not apply to municipalities.

“After a five day trial, the court issued a memorandum of decision in which it concluded that the plaintiff was liable to the defendant for the total amount he claimed to have overpaid on loan two to the plaintiff and all other prior holders of the note. The court therefore awarded him damages of $195,909, albeit without specifying the count of the counterclaim under which it made that award․ [A]pproximately eleven months after the court's November 9, 2010 decision, the plaintiff filed a motion for articulation, requesting for the first time that the court explain, inter alia, under which count of the counterclaim it had found in the defendant's favor. The court responded that, without having access to the court file, it was unable to identify the specific count of the counterclaim under which it had found in the defendant's favor.”³ (Footnotes omitted.) Hartford v. McKeever, supra, 139 Conn.App. at 280–82.

The plaintiff appealed to the Appellate Court claiming that the trial court incorrectly had concluded as a matter of law that, as an assignee, it was liable for the defendant's overpayments to the assignor, State Street Bank, or to any other prior holders of the note. Id., at 282–83. The defendant contended that there was no need for the Appellate Court to consider whether, as a legal matter, an assignee can be held liable for the conduct of its assignor, “because the trial court found, as a factual matter, that the plaintiff was involved from the beginning and specifically that [the corporation] was acting, throughout the history of the loan, as an agent of Colonial Bank which in turn was the plaintiff's trustee.”⁴ Hartford v. McKeever, Conn. Appellate Court Records & Briefs, April Term, 2012, Defendant's Brief pp. 7–8. The defendant contended that the claim that the plaintiff had made in its brief that the corporation was not an agency of the plaintiff was contradicted by a deed of restrictive covenants that had been executed in connection with a regulatory agreement that the defendant entered into as a condition for receiving the loans, and that stated that the plaintiff “has adopted redevelopment plans ․ and has issued and sold [b]onds in the aggregate principal amount of $10,000,000 to provide loans for the financing of the rehabilitation ․ of certain residential real property within the geographical boundaries of the [c]ity of Hartford․”⁵

A majority of the Appellate Court agreed with the plaintiff's legal claim. Accordingly, it reversed the judgment of the trial court and remanded the case for further proceedings. Judge Gruendel authored a dissenting opinion in which he contended that the court should “generally preclude affirmative claims against an assignee arising from the acts or liabilities of the assignor, while at the same time permitting equitable claims that merit exception therefrom .” Hartford v. McKeever, supra, 139 Conn.App. at 298. Judge Gruendel further argued that “[t]he present case is a quintessential example of the need for, and the appropriateness of, that exception․ [T]he plaintiff here was involved in the loan transactions from the beginning, as the trial court specifically found and as the plaintiff admitted in its answer.” (Citation omitted.) Id., at 303 (Gruendel, J., dissenting). In support of this conclusion, Judge Gruendel pointed out that the plaintiff had admitted the portion of the defendant's counterclaim alleging that he had “executed two promissory notes to [the plaintiff] in exchange for [the] loans․”⁶ Id., at 303 n. 14. Judge Gruendel also contended that “the two promissory notes in question were assigned to the trustee bank the very day they were entered into, and thereafter were held at all times by the trustee bank on behalf of the plaintiff.” Id., at 303. In addition, Judge Gruendel pointed out that the plaintiff had admitted in its answer to the defendant's counterclaim that “the rentals were being collected pursuant to a collateral assignment of leases and rentals․ [A] third party was collecting the rent on behalf of [the plaintiff].”⁷ (Emphasis in original; internal quotation marks omitted.) Id., at 305.

In response to Judge Gruendel's argument, the majority of the Appellate Court stated that “the trial court made no finding as to the making or significance of the [plaintiff's] alleged admission [that rents were collected on its behalf] and based no legal conclusion upon it. It is thus not within our power to consider the factual and legal ramifications of the admission on the issues before us․”⁸ Id., at 283 n. 7. The majority further stated that, “where the trial court expressly referred to the plaintiff as the assignee and to State Street Bank and its predecessors in title as the assignors of the subject notes and mortgages—without making any of the findings proposed by the dissent as to the supposed unity of interest between them—we cannot join the dissent in concluding that there was no distinction between the plaintiff, as assignee, and its assignor, or that the transfer of the notes and mortgages between them should be treated as something other than an assignment.” Id.

On appeal to this court, the defendant does not challenge the Appellate Court's legal conclusion that, “[i]n the absence of an express contract provision, an assignee generally does not assume the original responsibilities of the assignor, but he or she may be liable for breach of the terms of the assignment or for his or her failure to perform obligations of the assignor which he or she has assumed.” (Emphasis in original; internal quotation marks omitted.) Id., at 285, quoting 6A C.J.S. 511, Assignments § 115 (2004).⁹ He claims, however, that this court should follow Judge Gruendel's approach and hold that this general rule should not be applied when it would be inequitable to do so. The defendant further contends that it would be inequitable to apply the rule in the present case because the trial court found that the plaintiff had been “involved from the very beginning.”¹⁰ Thus, the defendant implicitly contends that the judgment of the trial court was premised on a holding that the defendant was entitled to recover the full amount of the overpayments from the plaintiff because the corporation was acting as the plaintiff's agent and Colonial Bank and State Street Bank were acting as the plaintiff's trustees. The defendant further contends that the Appellate Court improperly placed the burden of providing an adequate record on appeal on the defendant, who was the appellee in the appeal to the Appellate Court, instead of on the plaintiff, as the appellant. We conclude that the trial court did not hold that the defendant was entitled to recover the full amount of the overpayment from the plaintiff because the corporation, Colonial Bank and State Street Bank were acting on the plaintiff's behalf. Rather, it concluded as a matter of law that the plaintiff, as an assignee, was liable for any claims that the defendant had against the corporation and the banks, as assignors. We further conclude that, because the trial court had not addressed the claim that the defendant raised in the Appellate Court as an alternative ground for affirming the judgment, the Appellate Court was not required to review it.

We begin with the standard of review. The defendant's claim that the trial court held that the defendant was entitled to recover the full amount of the overpayments from the plaintiff because the corporation, Colonial Bank and State Street Bank were acting on its behalf requires us to interpret the judgment of the trial court. “The interpretation of a trial court's judgment presents a question of law over which our review is plenary․ As a general rule, judgments are to be construed in the same fashion as other written instruments․ The determinative factor is the intention of the court as gathered from all parts of the judgment․ The interpretation of a judgment may involve the circumstances surrounding the making of the judgment․ Effect must be given to that which is clearly implied as well as to that which is expressed․ The judgment should admit of a consistent construction as a whole.” (Citation omitted; internal quotation marks omitted.) Sosin v. Sosin, 300 Conn. 205, 217–18, 14 A.3d 307 (2011).

In support of its legal conclusion that the defendant was entitled to recover the full amount that he overpaid on the note from the plaintiff, the trial court relied exclusively on cases and treatises addressing the scope of an obligor's right as a matter of law to recover from the obligee's assignee.¹¹ After citing these legal authorities, the court concluded that the plaintiff “taking the assignment under the obligations of its predecessors is liable to [the defendant] for the full $195,909․” The court also stated that the defendant had “proven that the [plaintiff] is liable for said overpayments by being an assignee of State Street Bank, which in turn was an assignee of [the corporation], and the [plaintiff] took the assignment with all of the obligations it and its predecessors had in these transactions.” Although the trial court stated in the conclusion to its memorandum of decision that “it would be highly inequitable for the [plaintiff, the corporation] and/or State Street Bank to be unjustly enriched by mon[eys] paid by [the defendant] that were not in fact due,” the court did not refer to any of the equitable principles relied on by Judge Gruendel in his dissenting opinion regarding the effect of a “ ‘close relationship and participation between the assignor and assignee” ‘; Hartford v. McKeever, supra, 139 Conn.App. at 302; on the scope of an obligor's rights against the assignee.¹² See id. (Gruendel, J., dissenting) (“[T]he ‘close relationship and participation between the assignor and assignee put [the assignee] on notice of the claims which might arise. Due to his knowledge and participation, [the assignee] was vulnerable to the [obligor's] counterclaim.’ ”), quoting Massey–Ferguson Credit Corp. v. Brown, 173 Mont. 253, 260–61, 567 P.2d 440 (1977). Accordingly, the most reasonable interpretation of the court's statement is that the court concluded that it would be inequitable to deny recovery of the full amount of the defendant's overpayments regardless of whether the plaintiff had such a close relationship with the corporation, Colonial Bank and State Street Bank that it was or should have been on notice of the defendant's overpayments when it executed the assignment in July, 2001. In other words, the court concluded that the law governing the scope of an obligor's rights against an assignee, as the court understood it, was supported by the principle that it is inequitable to prevent an obligor from recovering overpayments to an assignor from the assignee. It did not conclude that a close relationship between the assignor and the assignee supports an equitable claim that an assignee should be subject to affirmative claims based on the conduct of the assignor. We conclude, therefore, that the trial court did not hold that the defendant was entitled to recover the full amount of the overpayments from the plaintiff because the corporation, Colonial Bank and State Street Bank were acting on behalf of the plaintiff. Rather, it concluded that the plaintiff was liable to the defendant as a matter of law by virtue of its status as an assignee of the note and mortgage.

Indeed, neither the trial court nor the defendant has pointed to any evidence that (1) the plaintiff had any reason to know when it became the assignee of the note and mortgage that the defendant had overpaid the loan, or (2) the plaintiff was unjustly enriched by the overpayments.¹³ The only evidence in the record regarding any benefit received by the plaintiff is the testimony of Arthur Greenblatt; see footnote 7 of this opinion; that the plaintiff's bondholders were paid with moneys paid on the defendant's loan, which was clearly contemplated by the regulatory agreement and related documents, such as the deed of restrictive covenants.¹⁴ Although the trial court was entitled to discredit Greenblatt's testimony, it could not have concluded that the plaintiff was aware of or had benefited from the overpayments to its predecessors in the absence of any evidence to that effect.¹⁵ Builders Service Corp., Inc. v. Planning & Zoning Commission, 208 Conn. 267, 293, 545 A.2d 530 (1988) (“a trier of fact cannot, from the disbelief of one party's testimony, infer that an opposing party's allegation, unsupported by any evidence, is correct”). Accordingly, even if the trial court had relied on the equitable principles that Judge Gruendel cited in his dissenting opinion; see Hartford v. McKeever, supra, 139 Conn.App. at 303–305; any conclusion that those principles warrant an exception to the general rule that an assignee does not take an assignment subject to affirmative claims against the assignor would find little, if any, support in the evidence or findings of the trial court. Accordingly, we conclude that the Appellate Court properly determined that the trial court had made no factual findings as to the significance of the relationship between the plaintiff, on the one hand, and the corporation, Colonial Bank and State Street Bank, on the other hand, and that the judgment of the trial court was not based on this relationship or any equitable considerations that flowed from it.

We therefore reject the defendant's claim that the Appellate Court improperly placed the burden of providing an adequate record on appeal on him instead of on the plaintiff. The judgment of the trial court was based solely on its conclusion that, as a matter of law, the defendant, as mortgagor, was entitled to assert any affirmative claims that he had against the corporation, Colonial Bank and State Street Bank against the plaintiff, as assignee of the note and mortgage, and that was the holding that the plaintiff successfully challenged on appeal to the Appellate Court.¹⁶ The Appellate Court was not required to review an alternative ground for affirmance that the defendant had not distinctly raised and the trial court had not directly addressed, especially when the record was inadequate for review of the claim because the trial court had not made the requisite factual findings.¹⁷ See Blumberg Associates Worldwide, Inc. v. Brown & Brown of Connecticut, Inc., 311 Conn. 123, 164, 84 A.3d 840 (2014) (when appellant would be entitled to directed judgment upon prevailing on appeal, “the reviewing court may review an unpreserved, alternative ground for affirmance, or raise the issue sua sponte, only if the claim merits review under the plain error doctrine or [State v. Golding, 213 Conn. 233, 239–40, 567 A.2d 823 (1989) ], or under exceptional circumstances”).¹⁸

Finally, we address the question of the proper disposition of this case. The Appellate Court concluded that the case must be remanded to the trial court, apparently for a determination of the amount owed by the plaintiff to the defendant, if any, in light of the Appellate Court's determination that the plaintiff was not liable for the overpayments to the corporation, Colonial Bank or State Street Bank. See Hartford v. McKeever, supra, 139 Conn. at App. 287 n. 10 (“[T]he [trial] court did not make a determination as to the value of the promissory note at the time that State Street Bank assigned it to the plaintiff. As such, setoff may be warranted .”). Our review of the record reveals, however, that the trial court expressly found that the note had “been paid in full prior to the assignment” and that the amount of the overpayments that had been made to the plaintiff was $56,930. The trial court based these findings on the testimony of the defendant, which the court found credible. Indeed, even in the absence of this express finding, a finding that nothing was due on the note when it was assigned to the plaintiff was implicit in the trial court's finding that the defendant had overpaid the loan before the assignment. Accordingly, we conclude that the Appellate Court's determination that the trial court had made no finding on this issue was incorrect .¹⁹

We note that on appeal to the Appellate Court, the plaintiff challenged this finding of the trial court on the ground that the trial court “did not rely on competent evidence from which [it] could determine the amount of debt because it relied on [the defendant's] self-serving documents․” Hartford v. McKeever, Conn. Appellate Court Records & Briefs, supra, Plaintiff's Brief, Appendix A–5 p. 16. The plaintiff also contended that the defendant's testimony was “speculative” because it was not supported by “e-mails, faxes [or] charts that were exchanged between the parties.” Id., Plaintiff's Reply Brief p. 3. Although the Appellate Court failed to address the plaintiff's claim that the trial court's finding was not supported by the evidence, we may do so.²⁰ See State v. James, 261 Conn. 395, 411, 802 A.2d 820 (2002) (“Normally, when we conclude that the Appellate Court has improperly failed to reach an issue concerning a decision by the trial court, we remand the case to that court for consideration of the merits of that issue. Under our supervisory powers over proceedings on appeal, however, this court also has the authority to address the subject of the trial court's decision.” [Internal quotation marks omitted.] ). We disagree with the plaintiff's claim. First, we are bound by the fact finder's credibility determinations. State v. Gauthier, 73 Conn.App. 781, 787, 809 A.2d 1132 (2002) (“[i]t is the [fact finder's] exclusive province to weigh the conflicting evidence and to determine the credibility of witnesses” [internal quotation marks omitted] ), cert. denied, 262 Conn. 937, 815 A.2d 137 (2003). Second, the defendant testified that his calculations were based on printouts that the corporation had sent him purporting to show the payments that had been made against the loan. Indeed, the plaintiff ultimately conceded in its brief to the Appellate Court that the defendant's calculations as to the amounts that had been overpaid “could possibly have been used for a defense or setoff but not for a viable claim against the [plaintiff].”²¹ Hartford v. McKeever, Conn. Appellate Court Records & Briefs, supra, Plaintiff's Brief, Appendix A–5 p. 17. Accordingly, there is no need for a remand to determine the amount owed by the plaintiff to the defendant.

The remaining issue is the defendant's claim for attorney's fees and interest. The defendant contends that, at trial, the trial court indicated that it would consider the issue of attorney's fees after it rendered its decision on the defendant's counterclaim provided that the defendant filed a request for attorney's fees within thirty days of the decision, and the plaintiff agreed with that procedure. The trial court rendered its decision on November 9, 2010, and on November 23, 2010, the defendant filed: (1) a document captioned “motion for post-judgment interest” in which he stated that “[t]he defendant hereby moves for an [o]rder awarding post-judgment attorney's fees”; (2) a motion for attorney's fees; and a motion for clarification in which he asked the court to clarify its decision with regard to whether he was entitled to prejudgment interest. The trial court apparently never acted on these motions.²² Accordingly, we conclude that the matter should be remanded for further proceedings on those issues.

The judgment of the Appellate Court is affirmed and the case is remanded to that court with direction to remand the case to the trial court for further proceedings consistent with the preceding paragraph.

I agree with the majority that, as a general matter, an innocent assignee of a note and mortgage does not assume the original responsibilities of the assignor and, therefore, is not liable for affirmative claims against the assignor by the obligor. I disagree, however, with the majority's determination that the Appellate Court was not required to address the claim of the named defendant, Brian McKeever (defendant), that it should recognize and apply an equitable exception to this rule. The majority concludes that the Appellate Court was not required to address this claim because the trial court did not address it, and, therefore, the record is inadequate for review. Contrary to the majority's assertion, and as I explain more fully hereinafter, it is clear that the trial court did address the defendant's claim. But even if it had not, the plaintiff, the city of Hartford (city), has never denied the fundamental facts underlying it—namely, that the city always was the real party in interest to the notes and mortgages and, additionally, that all of the defendant's overpayments were collected by the city's trustee¹ on behalf of the city. Indeed, not only did the city admit these facts in its pleadings—admissions that are binding on it² —counsel for the city expressly stated at oral argument before this court that the city never has claimed other wise. In light of these admissions, the majority's conclusion that the record is inadequate for review of the defendant's equitable claim is unsustainable.

In reaching its contrary determination, the majority rejects the defendant's contention that the record is sufficient for appellate review because the trial court expressly found that the city was not an innocent assignee but, rather, was “involved [in the transactions] from the [very] beginning,” that “it would be highly inequitable for the city ․ to be unjustly enriched by [money] paid by [the defendant] that [was] not in fact due,” and that the city “had an interest from the very beginning and over the years in the execution and administration of the mortgages.” Rather than defer to these findings, the majority dismisses them as mere “dicta .” Footnote 12 of the majority opinion. The majority also rejects the defendant's contention that the record is adequate for review because the city never disputed that it was involved in the execution and administration of the notes and mortgages from the beginning, and even admitted in its pleadings that it was a party to those transactions.³ Instead, the majority dismisses the city's admissions as “inexplicable” and posits that “[p]erhaps the [city] intended to admit that it now had the rights of a payee on the subject notes pursuant to the assignment.” Footnote 14 of the majority opinion. Contrary to the majority's assertion, the city's admissions are not inexplicable. Indeed, the city explained them to this court at length at oral argument. When apanel member asked the city's appellate counsel during argument whether the city ever has claimed that the notes and mortgages were not executed and administered by the Community Development Corporation (CDC) solely on behalf of the city, counsel stated: “I don't think the city could ever make that argument.” She then explained that the city was required by law to have a third party execute and administer the loans and mortgages. She stated: “[The] CDC was the mortgage holder [at] the beginning [because] you have to have [a separate] entity handle these transactions․ [You] have to have a trustee ․ collect the money․ Whoever was administering the [mortgage, however] was doing so for the benefit of the city․ I have no reason to contest that statement․ Everything that I reviewed [makes that] pretty clear․ The trust was set up as required by law to act as [a] fiduciary to make sure payments are being applied to satisfy bonds that were issued [by the city].” (Emphasis added.) In light of these concessions, which mirror the admissions contained in the city's pleadings, the majority's repeated assertion that the record is inadequate to review the defendant's claim that the CDC and the trustee were acting at all times on behalf of the city and for the benefit of the city is itself inexplicable.⁴

Furthermore, as Judge Gruendel observed in his dissenting opinion in the Appellate Court, even if the city's admissions were insufficient to establish the essential facts underlying the defendant's equitable claim, there is other evidence in the record that clearly establishes the relationship between the city and the CDC. See Hartford v. McKeever, 139 Conn.App. 277, 291, 55 A.3d 787 (2012) (Gruendel, J., dissenting). For example, “the ‘Deed of Restrictive Covenants' ․ signed by the defendant as part of the loan transactions ․ was admitted into evidence at trial as part of [the city's] exhibit 1. The deed provides that it is granted by the defendant to and for the benefit of ․ the [city] and the [CDC, as program administrator]. The deed [further] state[d] that, in 1982, the [city] sold bonds to raise approximately $10 million for the purpose of providing loans to facilitate the rehabilitation of certain residential properties in Hartford.” (Emphasis added; footnotes omitted.) Id., at 289–90 (Gruendel, J ., dissenting). Moreover, “the [city] in its [A]ppellate [Court] brief sets forth a narrative largely consistent with the court's findings that it was involved in the transactions with the defendant from the beginning. Its [Appellate Court] brief [provides] in relevant part: ‘The two loans were originally part of a redevelopment program [by the city] involving $10 million in tax exempt revenue bonds. The proceeds from the bonds were paid into an account at [the trustee bank] which in turn used a portion of the money to fund the [defendant's] loans. On the date [that the defendant] entered into the two loan transactions, checks were tendered to [the defendant] who executed the two subject promissory notes in favor of [the CDC]. The two notes were immediately assigned to [the trustee bank] ․“ (Emphasis added.) Id., at 290 n. 7 (Gruendel, J., dissenting). Thus, as the city explained to this court, although the original notes and mortgages were executed in favor of the CDC, the CDC's role was strictly that of loan facilitator and administrator, which is why it immediately assigned the notes and mortgages to the city's trustee.

The majority also incorrectly asserts that there is no evidence that “the [city] was unjustly enriched by the [defendant's] overpayments”; text accompanying footnote 13 of the majority opinion; and, therefore, that there was no basis to conclude that the equities favor the defendant. Once again, the majority refuses to acknowledge that the city never has denied that the overpayments were collected by the trustee on its behalf, as required by law, and that the money went directly to the city to pay its bondholders. Indeed, during oral argument, counsel for the city stated that it would have been “fatal” to the city's tax exempt bond program if the money had been used for any other purpose. Thus, contrary to the majority's suggestion, to the extent that the record lacks direct evidence that the city benefited from the defendant's overpayments, it is only because the city never has claimed otherwise. At trial, and on appeal to the Appellate Court, the city disputed only the amount of the overpayments and whether it was legally responsible for overpayments that occurred prior to the assignment.⁵ Consistent with the city's concession in this court, the brief that the city filed in the present appeal does not contain the slightest suggestion that the city did not benefit from the payments made to its bondholders on its behalf. The majority alone makes an unsupported contention to the contrary.

I also disagree with the majority's assertion that the trial court never addressed the defendant's equitable claims, and, as a consequence, the Appellate Court also was not required to address them. At trial and in his posttrial briefs, the defendant maintained that the city, rather than the trustee or the CDC, was always the real party in interest, as evidenced by the loan and mortgage documents and the fact that, “when the bonds were paid, [the trustee] assigned its rights with respect to the [remaining] note and mortgage to the city for [only $1]․ If money was still due under the note and mortgage, why else would the city obtain the right to collect money under the note and mortgage unless it was a real party to the total transaction from the beginning?” Indeed, as I previously discussed, the defendant alleged in his counterclaim that the city was a party to the notes and mortgages, which the city admitted.⁶ The trial court's finding that the city was involved in the transactions from the beginning is obviously responsive to this contention. In his posttrial briefs, the defendant also argued that, because this was a foreclosure action, equitable principles applied and this constituted a separate basis for the trial court to find in favor of the defendant. In his reply brief, the defendant argued: “It is incomprehensible, and certainly not equitable, for the city to now say that the manner in which the loan was serviced, for its benefit, is not the city's ultimate responsibility. Colonial Bank and its successors were the city's trustees. The servicer of the loan was servicing the loan for the city's trustee. Certainly, equity should not allow the actual party in interest to hide behind such an inequitable cloak.” (Emphasis omitted.) The city, of course, never disputed any of the facts underlying this argument. To the contrary, the city's position was and remains a strictly legal one, namely, that this court should adopt a bright line rule that an assignee is never liable for claims against the assignor unless the assignee contractually assumes such liability. As Judge Gruendel explained in his dissenting opinion in the Appellate Court, however, the general rule that an assignee takes a note and mortgage free of any affirmative claims against the assignor should apply only when the assignment constituted an arm's-length transaction between unrelated parties, not when, as in the present case, the assignee was the real party in interest all along. See Hartford v. McKeever, supra, 139 Conn.App. at 301–303 (Gruendel, J., dissenting) (citing and discussing applicable cases and authorities); see also Mas sey-Ferguson Credit Corp. v. Brown, 173 Mont. 253, 260–61, 567 P.2d 440 (1977) (assignee liable for overpayments made to assignor in light of “close relationship and participation between the assignor and assignee”).

Furthermore, although the trial court never specified the count or counts of the counterclaim on which the defendant had prevailed, it expressly noted in its memorandum of decision that the defendant was seeking an accounting from the city. It is well established that “[a]n action for an accounting calls for the application of equitable principles.”⁷ Travis v. St. John, 176 Conn. 69, 74, 404 A.2d 885 (1978). The trial court also addressed the equitable nature of the defendant's claim when it found that “this is a foreclosure action with a counterclaim and, therefore, [is] subject to equitable considerations.” After addressing the parties' legal arguments, the trial court further stated: “Additionally, it would be highly inequitable for the city, [the] CDC and/or [the trustee] to be unjustly enriched by [money] paid by [the defendant] that [was] not in fact due. Accordingly, judgment is entered for the defendant ․ in the total amount of $195,909 .” This finding, as well as the court's finding that the city was involved in the transactions from the beginning, is directly responsive to the defendant's claim that “[i]t is incomprehensible, and certainly not equitable, for the city to now say that the manner in which the loan was serviced, for its benefit, is not the city's ultimate responsibility.” (Emphasis omitted.)

Nevertheless, as I have explained, even if the trial court had not addressed the defendant's equitable claims, there is nothing to prevent this court from doing so on the basis of the pleadings and the undisputed evidence in the record clearly establishing that the CDC was simply a proxy or agent for the city with respect to the execution and administration of the notes and mortgages. Moreover, even if the record required further fact-finding in order to resolve this claim, the proper disposition would be to remand the case to the trial court for additional findings on that issue; the trial court did not address the claim only because it improperly had found in favor of the defendant on another claim, a determination that was based on an incorrect interpretation of the law.⁸ I therefore respectfully dissent.

VERTEFEUILLE, J.

In this opinion ROGERS, C. J., and ZARELLA, EVE–LEIGH and ESPINOSA, Js., concurred.