JP Morgan Chase Bank, N.A. v. Winthrop Properties, LLC
2012 Conn. App. LEXIS 396
Conn. App. Ct.2012Background
- Guarantors jointly and severally guaranteed repayment of a 2005 loan secured by a mortgage on 1533 Chapel Street, New Haven.
- Foreclosure filed on the note and mortgage; plaintiff sought a deficiency judgment alongside foreclosure.
- Judgment of strict foreclosure entered June 28, 2010; property title vested in plaintiff after the law days expired.
- Plaintiff filed a deficiency judgment motion Oct. 14, 2010, but it was untimely under § 49-14; plaintiff abandoned adjudication of the motion.
- Plaintiff sought damages on count two (guarantee) in Jan. 2011; guarantors objected on the theory that § 49-1 barred further action after untimely deficiency filing.
- Court granted motion to strike guarantors’ notice of defense May 12, 2011; subsequently issued a deficiency judgment against guarantors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 49-1 bars further action against guarantors after strict foreclosure. | Plaintiff argues untimely deficiency filing is still actionable against guarantors under the guarantee. | Guarantors contend § 49-1 bars any post-foreclosure action against obligors when deficiency judgment not timely sought under § 49-14. | Yes; § 49-1 bars further action against guarantors and supports reversal. |
| Whether guarantors’ notice of defense alleging § 49-1-barred collection is legally sufficient. | Strike of defense proper because guaranty action is independent and not barred. | Notice of defense raises a legally sufficient bar to recovery against guarantors under § 49-1. | Guarantors’ defense is legally sufficient; court erred in striking. |
Key Cases Cited
- Linden Condominium Assn., Inc. v. McKenna, 247 Conn. 676 (Conn. 1999) (strict compliance with § 49-14 is a condition precedent to deficiency judgment)
- First Bank v. Simpson, 199 Conn. 368 (Conn. 1986) (§ 49-1 bar to further action after foreclosure; deficiency judgment as sole remedy when security is inadequate)
- M’Ewen v. Welles, 1 Root 202 (1790) (earliest allowance of deficiency-type remedies; historical lineage of mortgage deficiency)
- Factor v. Fallbrook, Inc., 25 Conn. App. 159 (Conn. App. 1991) (historical context of mortgage foreclosure remedies)
- Mahon v. B.V. Unitron Mfg., Inc., 284 Conn. 645 (Conn. 2007) (merits of joinder and multiple theories in mortgage actions)
- JP Morgan Chase Bank, Trustee v. Rodrigues, 109 Conn. App. 125 (Conn. App. 2008) (standard for reviewing motions to strike considering pleadings and defenses)
- Connecticut Bank & Trust Co. v. Boston Post Ltd. Partnership, (unofficial; cited in opinion) () (propound of strike analysis and separation of causes of action)