Bank of America, N.A. v. Aubut
143 A.3d 638
| Conn. App. Ct. | 2016Background
- In 2009 David and Karen Aubut executed a note and mortgage; David alone signed the note. Payments defaulted beginning August 1, 2011. Bank of America mailed a September 16, 2011 preacceleration notice addressed to David and accelerated the debt.
- Bank of America filed foreclosure in May 2012; mediation occurred 2012–2013; defendants filed bankruptcy in 2013; Nationstar (substitute plaintiff) became assignee and substituted into the action in 2014.
- Nationstar moved for summary judgment on liability, attaching the note, mortgage, the September 16, 2011 notice, an assignment, payment histories, and an affidavit from Fay Janati (Nationstar employee) stating the defendants were notified and in default.
- Defendants opposed, arguing (1) Karen was not given proper preacceleration notice per the mortgage, (2) Janati’s affidavit was unreliable, and (3) special defenses (predatory lending and CUTPA) barred foreclosure; they submitted David Aubut’s affidavit and other documents.
- Trial court granted summary judgment as to liability and later strict foreclosure; court relied on Janati’s affidavit and concluded defendants’ special defenses were legally insufficient or inapplicable against an assignee. Defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether preacceleration notice satisfied mortgage terms | Nationstar: notice (Sept. 16, 2011) complied; Janati’s affidavit says both defendants were notified; only David signed the note, which authorizes notice to him | Aubut: mortgage defines Borrower as both David and Karen; notice was addressed only to David, creating a genuine issue | Court: No genuine issue — Nationstar met its burden; defendants failed to produce specific contrary facts |
| Admissibility/competence of Janati’s affidavit | Nationstar: Janati had personal knowledge from review of business records and was competent despite listing two roles | Aubut: Janati’s affidavit is inconsistent about her position and thus unreliable | Court: No abuse of discretion — affidavit showed personal knowledge and met Practice Book requirements |
| Whether assignee (Nationstar) is subject to defendants’ special defenses | Nationstar: as assignee without assumption, it cannot be liable for assignor’s affirmative claims | Aubut: assignee takes contract subject to defenses that challenge making, validity, or enforcement | Court: Assignee takes contract subject to defenses; trial court erred to the extent it barred defenses solely because of assignee status |
| Legal sufficiency of special defenses (CUTPA and predatory lending) | Nationstar: defenses legally insufficient; CUTPA is a cause of action not a defense; predatory lending not a recognized standalone defense | Aubut: CUTPA and predatory lending (or related equitable doctrines) bar enforcement; alleged facts show loan was unaffordable and predestined to fail | Court: CUTPA cannot be asserted as a special defense in foreclosure; predatory-lending allegations (read broadly) implicate equitable defenses (fraud, unconscionability, unclean hands, estoppel) and raised genuine factual issues — summary judgment improper on that defense |
Key Cases Cited
- Wells Fargo Bank, N.A. v. Strong, 149 Conn. App. 384 (2014) (summary judgment principles in foreclosure; plaintiff must prove ownership, default, and satisfaction of conditions precedent)
- GMAC Mortgage, LLC v. Ford, 144 Conn. App. 165 (2013) (summary judgment in foreclosure context)
- Franklin Credit Management Corp. v. Nicholas, 73 Conn. App. 830 (2002) (note and mortgage construed together; notice as condition precedent)
- Fidelity Bank v. Krenisky, 72 Conn. App. 700 (2002) (proper notice is a condition precedent to foreclosure when required by documents)
- Evans Products Co. v. Clinton Building Supply, Inc., 174 Conn. 512 (1978) (corporate officer affidavits must aver personal knowledge to be competent)
- Hartford v. McKeever, 139 Conn. App. 277 (2012) (assignee takes contract subject to defenses but not to affirmative claims against assignor absent assumption)
- Bender v. Bender, 292 Conn. 696 (2009) (doctrine and standards for unconscionability)
- Ridgefield v. Eppoliti Realty Co., 71 Conn. App. 321 (2002) (clean hands equitable doctrine)
Summary of disposition: reversed as to the predatory‑lending special defense (trial court must deny summary judgment on that defense and proceed further); otherwise, summary judgment on liability and rejection of CUTPA defense were affirmed.