206 Conn.App. 54
Conn. App. Ct.2021Background
- In June 2009 plaintiff lent the defendants $300,000 under a promissory note and loan agreement that required a mortgage on Wilton property as security; a valid mortgage was never recorded.
- Defendants made payments through 2016 but a balance remained; plaintiff declared the loan in default by letter dated September 12, 2016.
- The note’s default provision required notice “by certified mail, postage prepaid or personal delivery” and a five‑day cure period; the court found defendants actually received the September 12 default letter though it was not sent by certified mail.
- Plaintiff sued in November 2017; after a bench trial the court found breach of contract and awarded $388,530.76 plus per diem interest, rejecting defendants’ special defense that notice was a condition precedent not satisfied.
- Defendants also claimed a $120,000 credit for 1,000,000 shares of American Energy Group (AEG) stock allegedly transferred December 11, 2015 (valued at $0.12/share).
- The trial court declined the full $120,000 credit, finding the shares’ value and marketability at the time of default were uncertain, that the plaintiff could not access the shares until January 2017, and credited only documented sales ($13,249) and treated unsold shares separately.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff satisfied the note's notice-of-default condition (method of delivery) | Onthank substantially complied; defendants had actual receipt and suffered no prejudice | Defendants: strict compliance required (certified mail or personal delivery); absence defeats enforcement | Court: Affirmed — substantial compliance applies where actual notice occurred and no prejudice; judgment for plaintiff affirmed |
| Whether defendants were entitled to a $120,000 credit for 1,000,000 AEG shares | Plaintiff: shares were not liquid or accessible at default; value fluctuated; only documented sales creditable | Defendants: shares transferred Dec 11, 2015 and had $0.12/share value, so $120,000 credit owed | Court: Affirmed trial court — record lacked reliable evidence of value/marketability at default; plaintiff could not access shares until Jan 2017; credited only documented sales |
Key Cases Cited
- Fidelity Bank v. Krenisky, 72 Conn. App. 700 (contract/notice substantial compliance applied to mortgage notice)
- Mortgage Electronic Registration Sys., Inc. v. Goduto, 110 Conn. App. 367 (substantial compliance with notice where actual notice and no prejudice)
- Aurora Loan Servs., LLC v. Condron, 181 Conn. App. 248 (limitations on applying substantial performance where proof-of-delivery required)
- Pack 2000, Inc. v. Cushman, 311 Conn. 662 (doctrine of substantial performance and material breach analysis)
- American Diamond Exchange, Inc. v. Alpert, 302 Conn. 494 (damages require an evidentiary foundation allowing reasonable estimate)
- Meribear Productions, Inc. v. Frank, 328 Conn. 709 (clarifying treatment of inconsistent alternate theories such as unjust enrichment vs. breach of contract)