Deutsche Bank National Trust Co. v. Perez
146 Conn. App. 833
Conn. App. Ct.2013Background
- Plaintiff-bank filed for reformation of a $1,576,000 mortgage on a Norwalk property in June 2009 to include Shaw as a mortgagor due to mutual mistake.
- Perez and Shaw jointly owned the property as of 2005; Shaw held a one-half interest.
- Shaw was not a signatory to the May 11, 2006 mortgage and didn’t participate in obtaining the loan.
- Closing occurred without Shaw; deed to Shaw was not delivered/accepted as part of the mortgage transaction.
- Trial court found mutual mistake and reformed the mortgage to include Shaw; foreclosure judgment followed on the reformed mortgage.
- Court of appeals reversed in part, holding the court lacked authority to reform to add Shaw and remanded for judgment accordingly.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court had authority to reform the mortgage to add Shaw. | Plaintiff argues mutual mistake warranted reformation to include Shaw as mortgagor. | Shaw was not a signatory and never agreed to mortgage her interest; court lacked authority to add a party. | Abuse of discretion; court exceeded authority by adding Shaw as mortgagor. |
| Whether clear, substantial and convincing evidence supported reformation. | Record showed mutual intent to secure loan with Shaw’s interest. | No evidence Shaw participated; no signs of her involvement or intent. | Insufficient evidence to support reformation. |
| Whether foreclosure on the reformed mortgage was proper given the reformational defect. | Foreclosure sought on reformed instrument. | Foreclosure on erroneously reformed mortgage was improper. | Foreclosure on the reformed mortgage was improper; judgment reversed for that count. |
| Whether the quitclaim deed delivery/acceptance affected the mortgage validity. | Delivery/acceptance implied Shaw’s ownership and validity of the mortgage. | Delivery/acceptance questioned; deed issues disputed. | Court’s findings implied delivery and acceptance; no merit to affirmance on this ground. |
Key Cases Cited
- Lopinto v. Haines, 185 Conn. 527 (Conn. 1981) (reformation requires mutual mistake and convincing evidence)
- Greenwich Contracting Co. v. Bonwit Construction Co., 156 Conn. 123 (Conn. 1968) (reformation requires clear, substantial and convincing evidence)
- Hoffman v. Fidelity & Casualty Co., 125 Conn. 440 (Conn. 1939) (court cannot supply an agreement never made; limited to correcting writing to reflect preexisting agreement)
- Croall v. Kohler, 106 Conn. App. 788 (Conn. App. 2008) (review of equitable discretion; abuse requires unreasonableness or injustice)
- Derby Savings Bank v. Oliwa, 49 Conn. App. 602 (Conn. App. 1998) (equitable review standards for reformation/foreclosure)