BANK OF NEW YORK MELLON AS TRUSTEE FOR BS ALT 2005 v. LLC (2018)

SUMMARY ORDER

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.

Appellants Sonja Bell and Johnathan Bell (the “Bells”), pro se, appeal a judgment following a bench trial, entered pursuant to Federal Rule of Civil Procedure 54(b), granting strict foreclosure in favor of Appellee Bank of New York Mellon (the “Bank”), as Trustee for BS ALT A 2005–9. We assume the parties' familiarity with the underlying facts, the procedural history of the case, and the issues on appeal.

On a judgment after a bench trial, this Court reviews factual findings for clear error and legal conclusions de novo. See, e.g., Grace v. Corbis–Sygma, 487 F.3d 113, 118 (2d Cir. 2007).

We conclude that the district court had subject–matter jurisdiction, which was not barred by the prior exclusive jurisdiction doctrine; that the Bank's mortgage foreclosure claim was not barred by any statute of limitations; that the Bank satisfied the conditions precedent to foreclosure; that the right to jury trial was not infringed; and that it was proper to sever the Bells' counterclaims and enter judgment as to foreclosure while other claims remained pending. We affirm for substantially the reasons stated by the district court in its thorough December 18, 2014 and February 24, 2015 decisions.

1. The Bells argue that complete diversity of citizenship was absent. However, the district court had federal question jurisdiction because the Federal Deposit Insurance Corporation (“FDIC”) was named as a defendant. See 12 U.S.C. § 1819(b)(2)(A) (providing that, with inapplicable exceptions, “all suits of a civil nature at common law or in equity to which the [FDIC], in any capacity, is a party shall be deemed to arise under the laws of the United States”).

2. The prior exclusive jurisdiction doctrine does not deprive the Court of jurisdiction. The Bells' request for unspecified equitable relief and “[a]ll such relief as is available” pursuant to the Connecticut Unfair Trade Practices Act is not sufficient to invoke the state court's in rem jurisdiction.

3. The mortgage foreclosure action was not time–barred under Conn. Gen. Stat. § 52–588. “[A] statute of limitations does not bar a mortgage foreclosure.” FDIC v. Owen, 88 Conn.App. 806, 873 A.2d 1003, 1008 (2005).

4. There is no dispute that the Bells received the March 11, 2011 default and demand letter, and the district court did not err in finding that the Bells received the notice of forfeiture sent on June 18, 2007. These notices satisfied the disputed conditions precedent to foreclosure notwithstanding technical errors. Substantial compliance with Connecticut mortgage notice provisions is sufficient, and where a defendant has actual notice and is not harmed by a deficient notice, “literal enforcement ․ would serve no purpose.” Fidelity Bank v. Krenisky, 72 Conn.App. 700, 807 A.2d 968, 977 (2002).

5. The Bells' 7th Amendment right to trial by jury was not offended by the determination of the strict foreclosure claim via bench trial. As the district court concluded, that right is not triggered by the foreclosure/deficiency claim, see Damsky v. Zavatt, 289 F.2d 46, 56 (2d Cir. 1961), or by the Bells' counterclaims pursuant to the Connecticut Unfair Trade Practices Act.

6. The district court did not err in finding that severance of the Bells' counterclaims was in the interest of justice and judicial economy, particularly given Connecticut's strong policy in favor of expeditious determinations in foreclosure actions. See Conn. Gen. Stat. § 52–192 (noting that foreclosures, among other categories of cases, “shall have precedence over all other civil actions in respect to the order of trial”). We also agree that it was appropriate to render judgment as to foreclosure while counterclaims and attorneys' fees claims were pending.

We have considered all of Appellants' remaining arguments and find them to be without merit. Accordingly, we AFFIRM the judgment of the district court.