163 Conn.App. 827
Conn. App. Ct.2016Background
- In 2007 Thompson executed a balloon note in favor of New Century Mortgage for property in West Hartford; the mortgage named MERS as mortgagee.
- Deutsche Bank (as substitute plaintiff) filed a foreclosure complaint in March 2009 alleging it was holder of the mortgage and note; the mortgage assignment from MERS to Deutsche Bank is dated June 24, 2009.
- A default for failure to plead was entered against Thompson in August 2009; Deutsche Bank moved for judgment of strict foreclosure that same day, but judgment was not entered until September 16, 2013 after mediation and removal attempts.
- Thompson filed for Chapter 7 bankruptcy in November 2013 and received a discharge in April 2014; Deutsche Bank moved to open the foreclosure judgment and reset law days in August 2014 and the court granted that motion in September 2014.
- The appellate record does not contain an endorsed note, any documents showing when Deutsche Bank acquired the note, a trial court memorandum finding on when Deutsche Bank became holder, or any transcripts of proceedings where such a finding might have been made.
- The trial court entered judgment of strict foreclosure; on appeal, Thompson challenged plaintiff’s standing (possession/ownership of the note when suit commenced) and other issues, but the appellate court limited review to the jurisdictional standing question.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff had standing to bring foreclosure because it held the note when suit commenced | Deutsche Bank alleged it was holder of note and mortgage; default by defendant admitted complaint allegations | Thompson argued Deutsche Bank did not possess the note at filing and thus lacked standing; mortgage lien may have been discharged in bankruptcy | Reversed and remanded: appellate review not possible because record lacks evidence and trial court findings about when plaintiff acquired the note; standing (a subject-matter jurisdiction question) must be determined by the trial court with factual findings |
| Whether a defendant’s failure to plead (resulting in default) prevents later challenge to jurisdictional allegations | Plaintiff contended default conclusively established it was holder and defendant cannot now challenge standing | Thompson argued subject-matter jurisdiction cannot be waived and may be raised anytime | Court held default does not cure lack of subject-matter jurisdiction; jurisdictional defects are never waived and must be proven by plaintiff |
| Whether appellate court can make factual findings when record is inadequate | Plaintiff argued note must have been presented to trial court (so record adequate) | Defendant relied on incomplete record and absence of trial findings | Court held appellate courts do not make factual findings; without trial findings or record evidence the standing issue cannot be resolved on appeal |
| Whether trial court should have held an evidentiary hearing on standing when raised | Plaintiff did not press for such a hearing on appeal | Defendant sought review of standing | Court indicated, consistent with precedent, trial court should hold a hearing to determine when plaintiff acquired the note before deciding jurisdiction |
Key Cases Cited
- Peters v. Dept. of Social Services, 273 Conn. 434 (Conn. 2005) (subject-matter jurisdiction may be raised at any time)
- Equity One, Inc. v. Shivers, 310 Conn. 119 (Conn. 2013) (standing is required for subject-matter jurisdiction; holder of note generally has foreclosure standing)
- Deutsche Bank Nat. Trust Co. v. Bialobrzeski, 123 Conn. App. 791 (Conn. App. 2010) (appellate court cannot resolve standing when trial court made no factual finding about when plaintiff acquired the note)
- Kleen Energy Sys., LLC v. Commissioner of Energy & Envtl. Protection, 319 Conn. 367 (Conn. 2015) (subject-matter jurisdictional defects cannot be waived)
- Fort Trumbull Conservancy, LLC v. New London, 265 Conn. 423 (Conn. 2003) (plaintiff bears the burden of proving subject-matter jurisdiction whenever raised)