155 Conn.App. 290
Conn. App. Ct.2015Background
- Borrowers Julian and Janice Tuttle executed a 2001 note secured by property at 233–235 Monroe Turnpike; they defaulted and foreclosure was filed in 2009.
- On January 22, 2013 the trial court entered judgment of foreclosure by sale, finding fair market value $490,000 and debt owed $135,245.72; defendants did not appeal that judgment.
- Sale was set for May 25, 2013. The borrowers, still occupying the property, denied interior access; sale occurred outdoors in heavy rain.
- Two bidders appeared; winning bid by Donald F. Salomone was $210,500 (about 42.9% below the court’s earlier $490,000 valuation). Committee recommended approval.
- Defendants and secondary mortgagee JPMorgan objected, arguing the sale price was grossly inadequate and deprived defendants of equity; plaintiff and successful bidder argued no irregularity occurred and recent court-ordered appraisal valued the property at $360,000.
- Trial court approved the sale after oral argument and later issued an articulation stating it had "balanced the equities" and approved the sale; defendants appealed the approval.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court abused its discretion by approving a foreclosure sale significantly below prior fair market value | Approval was proper because no fraud, misrepresentation, surprise, or mistake occurred; precedent allows approval even when bids are well below prior appraisal | Sale price was inadequate per se (≈43% below prior fair market value) and unfairly deprived defendants of equity | Court did not abuse discretion; approval affirmed because no procedural irregularity and court balanced equities |
| Whether a particular percentage below appraisal automatically requires rejection of sale | No automatic threshold; prior decisions have upheld very low percentages and equity balancing governs | Sale percentage alone should require rejection to protect owners | No fixed percentage rule; percentage alone insufficient absent evidence sale was unfair or flawed |
| Whether defendants’ speculation that a new sale would yield better bids justifies rejection | Delay prejudices plaintiff; nothing shows a new sale would definitely produce higher bid | Defendants argued chance of better offers justified denying approval | Speculation is insufficient; defendants offered no evidence a new sale would yield better outcome |
| Effect of more recent court-ordered appraisal on adequacy question | Cited new appraisal ($360,000) reducing disparity and supporting approval | Relied on earlier $490,000 valuation to argue inadequacy | New appraisal supported court's equitable balancing and approval |
Key Cases Cited
- First Nat'l Bank of Chicago v. Maynard, 75 Conn. App. 355 (Conn. App. 2003) (limited grounds permit rejection of foreclosure sale: fraud, misrepresentation, surprise, or mistake)
- LaSalle Bank, N.A. v. Randall, 125 Conn. App. 31 (Conn. App. 2010) (appellate approval of a foreclosure sale yielding under 40% of prior fair market value)
- New England Sav. Bank v. Lopez, 227 Conn. 270 (Conn. 1993) (explains foreclosure auction dynamics and why fair market value differs from foreclosure sale results)
- Fidelity Trust Co. v. Irick, 206 Conn. 484 (Conn. 1988) (foreclosure sales commonly produce bids below appraised value and courts may accept or reject sales in discretion)
- Rockville Bank v. Victory Outreach Ministries, Inc., 125 Conn. App. 1 (Conn. App. 2010) (standard of review: abuse of discretion; court must balance equities when approving committee sale)
- Johnson v. de Toledo, 61 Conn. App. 156 (Conn. App. 2000) (presumption that a court-act was properly considered absent demonstration to the contrary)