154 Conn.App. 367
Conn. App. Ct.2014Background
- In March 2009 Lawendy (defendant) executed a $75,000 commercial note and mortgage, with monthly payments of $537.32 and a final balloon of $71,409.22 due March 20, 2011; the note prohibited oral modifications.
- The March 15, 2011 check for $537.32 was sent by Lawendy (he says by mistake) and received by Noroton (plaintiff); Noroton neither returned nor deposited it.
- After Noroton reminded Lawendy of the March 20 maturity, Lawendy requested a 30–40 day extension; Noroton offered an extension only if Lawendy paid a $5,000 fee and threatened foreclosure if not paid.
- Lawendy did not pay the $5,000 or the March 20 balloon; Noroton commenced foreclosure September 7, 2011.
- The trial court found that the parties mutually agreed to extend the maturity date to April 20, 2011 (based solely on retention of the March 15 check), that a 10-day grace period applied, and that Lawendy was ready, willing and able to pay in April 2011; accordingly it found no default and denied fees; Noroton appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether retention of March 15 installment check modified the note maturity | Retention did not create an extension; written-modification clause and statute of frauds preclude oral change | Retention amounted to acceptance and by conduct the parties modified maturity | Reversed trial court: retention alone and surrounding conduct did not show mutual assent to extend maturity |
| Whether the parties mutually assented to an extension after March 17–19 emails | No mutual assent; emails show Noroton reminded of due date and demanded payoff or fee | Lawendy says later communications and retention show assent to extension | Court of appeals: email exchange shows Noroton refused open-ended extension and conditioned any extension on $5,000 — no mutual assent proven |
| Whether a parol modification or conduct can override written-no-modification clause | Parol or implied-in-fact modification not shown here; conduct insufficient | Conduct may effect modification despite clause; long retention can imply acceptance | Court: although conduct can modify contracts, the specific facts here do not support an implied extension |
| Whether Borst (retention of a check can imply acceptance) controls | Borst inapplicable: check was sent in mistake and subsequent correspondence rebuts any implied acceptance | Borst supports inference from long unexplained retention | Court: Borst inapposite because check was mailed by mistake and later emails show plaintiff denied extension; retention did not signify mutual agreement |
Key Cases Cited
- TD Bank, N.A. v. M.J. Holdings, LLC, 143 Conn. App. 322 (discusses contract formation and requirements for valid modification)
- McKenna v. Woods, 21 Conn. App. 528 (recognizes that conduct of parties can establish modification and that written-modification clauses do not absolutely bar parol modifications)
- Torgerson v. Kenny, 97 Conn. App. 609 (standard for clearly erroneous factual findings on appeal)
- Borst v. Ruff, 137 Conn. 359 (rule that long, unexplained retention of a check may support inference of acceptance — distinguished on facts)
- Flater v. Grace, 291 Conn. 410 (appellate-review rule that claims not preserved or record inadequate will not be reviewed)