227 Conn.App. 474
Conn. App. Ct.2024Background
- Plaintiff Benchmark Municipal Tax Services sought to foreclose a mortgage on property owned by defendant 899 ETG Associates, LLC (899 ETG), which was secured by a note and mortgage modified to increase principal and extend the maturity by 6 months.
- The modification agreement explicitly stated the maturity date "shall not be further extended."
- After default by 899 ETG, defendants requested a further extension, which was refused; plaintiff alleged both default and breach of guarantees by the other defendants (guarantors).
- Defendants asserted a special defense of unclean hands, arguing reliance on an alleged false promise of another extension.
- Trial court granted summary judgment for plaintiff, finding no genuine dispute of material fact due to the terms of the modification agreement, and entered a judgment of strict foreclosure.
- On appeal, the standing of the guarantors was challenged and dismissed, while the foreclosure judgment was affirmed against 899 ETG.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of guarantor defendants | Guarantors lack interest/right to property | None; essentially conceded in supplemental briefing | Guarantors lack standing; appeal dismissed as to them |
| Summary judgment on liability for foreclosure | Clear agreement: no further extension allowed | Unclean hands: modification procured by false promise of extension | No genuine issue; contract clear, parol evidence irrelevant |
| Unclean hands defense | Written modification is integrated, controls terms | Pre-contract promise undercutting written terms creates factual issue | No material fact; contract wording prevails, parol barred |
| Effect of parol evidence (negotiations/affidavits) | Express writing precludes extrinsic evidence | Negotiation history creates material fact about intent | Parol evidence cannot contradict integrated contract |
Key Cases Cited
- World Business Lenders, LLC v. 526-528 North Main Street, LLC, 197 Conn. App. 269 (Conn. App. Ct. 2020) (guarantors not party to foreclosure suit lack standing to appeal)
- U.S. Bank Nat’l Ass’n v. Blowers, 332 Conn. 656 (Conn. 2019) (unclean hands may be based on wrongful post-origination conduct in loan modifications)
- Associated Catalog Merchandisers, Inc. v. Chagnon, 210 Conn. 734 (Conn. 1989) (integration excludes extrinsic negotiation evidence if subject is in writing)
- Fiorillo v. Hartford, 212 Conn. App. 291 (Conn. App. Ct. 2022) (parol evidence cannot contradict terms of integrated contract)
- GMAC Mortgage, LLC v. Ford, 144 Conn. App. 165 (Conn. App. Ct. 2013) (prima facie foreclosure and defense standards)