162 Conn.App. 750
Conn. App. Ct.2016Background
- Success, Inc. executed a $525,000 promissory note and two mortgages on 520 Success Avenue on June 26, 2007; it defaulted on payments as of April 1, 2009.
- AS Peleus, LLC (plaintiff) sent a default/acceleration notice April 18, 2013 and commenced foreclosure in May 2013, alleging it had owned and held the note and mortgages since December 14, 2012.
- At a one-day bench trial the plaintiff introduced the original note showing a chain of special endorsements (allonges) terminating in a special endorsement to AS Peleus, LLC, and certified copies of the mortgage deeds.
- The plaintiff also called Russell Schaub, COO of its mortgage servicer (Gregory Funding, LLC), who testified without objection that the plaintiff purchased the loan in December 2012 and that he was authorized to testify for the plaintiff.
- The defendant introduced no evidence at trial, raised no contemporaneous objection to Schaub’s testimony, and later challenged Schaub’s agency only in a posttrial brief.
- The trial court found the plaintiff was the owner and holder of the note and mortgages, awarded strict foreclosure, and entered a judgment for the plaintiff; Success appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff was owner/holder of the note and had standing to foreclose | Plaintiff produced original note with special endorsement to AS Peleus and default notice; production creates prima facie case of ownership | Defendant left burden to plaintiff at trial and argued chain/ownership was defective | Affirmed — trial court’s factual finding that plaintiff was owner/holder was not clearly erroneous; production of endorsed note and uncontradicted evidence sufficed |
| Admissibility/weight of servicer testimony (agency/authorization) | Schaub was authorized and familiar with plaintiff’s records; his testimony established ownership and standing | Testimony was improper because plaintiff did not prove Schaub was an agent of AS Peleus; testimony should not be credited | Affirmed — defendant failed to preserve evidentiary/agency objection by not objecting at trial; appellate review barred; trial court could credit Schaub’s testimony |
Key Cases Cited
- RMS Residential Properties, LLC v. Miller, 303 Conn. 224 (Conn. 2011) (production of the endorsed original note establishes a holder’s prima facie case to enforce the debt)
- J.E. Robert Co. v. Signature Properties, LLC, 309 Conn. 307 (Conn. 2013) (addresses holder/possession principles in foreclosure actions)
- Deutsche Bank Nat. Trust Co. v. Bliss, 159 Conn. App. 483 (Conn. App. 2015) (servicer employee testimony may establish holder status when witness is familiar with books and records)
- Murtha v. Hartford, 303 Conn. 1 (Conn. 2011) (clearly erroneous standard governs trial court factual findings)
- Equity One, Inc. v. Shivers, 310 Conn. 119 (Conn. 2013) (defendant’s failure to contest plaintiff’s possession/ownership at trial forecloses rebuttal on appeal)