205 Conn.App. 15
Conn. App. Ct.2021Background
- In 2007 Andreas executed the promissory note (only he signed) and Andreas and Jameela executed the mortgage on the Norwalk property; Andreas later quitclaimed the property to Jameela in their 2009 divorce (decree said she would not assume liability).
- The note was assigned multiple times and was endorsed in blank by JP Morgan; the plaintiff (Goshen Mortgage, LLC) was in possession of the original note when it commenced the foreclosure on October 28, 2016.
- Shortly after commencement the plaintiff recorded an assignment of the mortgage to Goshen Mortgage, LLC as Separate Trustee for GDBT I Trust 2011-1 and moved to substitute that trustee as plaintiff.
- The defendant (Jameela) filed motions to dismiss alleging lack of standing (assignment occurred before suit), which the trial court denied after finding the note was endorsed in blank and the plaintiff had possession at commencement.
- The substitute plaintiff moved for summary judgment as to liability; the court granted it, entered a judgment of strict foreclosure, denied the defendant’s motion to open, and the defendant appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to commence foreclosure | Goshen possessed the original note endorsed in blank at commencement, so it was a holder with standing | Mortgage was assigned before suit; thus Goshen lacked standing to start the action | Held: Goshen had standing—possession of a note endorsed in blank is prima facie evidence of holder status; mortgage assignment does not defeat standing |
| Motion to substitute plaintiff | Substitution clarified trustee status and did not prejudice defendant; §9-16 authorized substitution | Substitution improper because assignment predated commencement and §9-20 (wrong plaintiff) should apply | Held: No abuse of discretion; substitution had no substantive effect and §9-20 was inapplicable because original plaintiff had standing |
| Motions to dismiss | Plaintiff produced the note and affidavit showing possession; no evidentiary challenge by defendant | Defendant repeated lack-of-standing claim and requested evidentiary hearing on when note was acquired | Held: Denied—trial court made express factual finding plaintiff held the note at commencement and defendant produced no evidence to rebut presumption |
| Summary judgment, strict foreclosure, and motion to open | Substitute plaintiff established prima facie case (note, assignments, default, conditions precedent); special defenses unsupported | Defendant raised SEC/trust-document arguments, unclean hands, statute of limitations, and divorce-decree defenses | Held: Summary judgment and strict foreclosure affirmed; special defenses rejected (securitization documents irrelevant to standing; no statute of limitations applicable; divorce decree did not relieve mortgagor status); motion to open denied |
Key Cases Cited
- J.E. Robert Co. v. Signature Properties, LLC, 309 Conn. 307 (2013) (standing requires a real interest; holder entitled to enforce note may foreclose)
- Bank of America, N.A. v. Kydes, 183 Conn. App. 479 (2018) (possession of a note endorsed in blank is prima facie proof of holder status and standing)
- U.S. Bank, N.A. v. Schaeffer, 160 Conn. App. 138 (2015) (summary of standing rules when enforcing a note endorsed in blank)
- Chase Home Finance, LLC v. Fequiere, 119 Conn. App. 570 (2010) (holder of the note may foreclose even if mortgage not assigned; mortgage follows the note)
- Equity One, Inc. v. Shivers, 310 Conn. 119 (2013) (court may rely on counsel’s representation regarding note possession absent fact-based challenge)
- LaSalle Bank, N.A. v. Bialobrzeski, 123 Conn. App. 781 (2010) (where trial court makes no factual finding on when note was acquired, remand for evidentiary hearing may be required)
- Hudson City Savings Bank v. Hellman, 196 Conn. App. 836 (2020) (Practice Book §9-16 substitution discussion; substitution that has no substantive effect is permissible)