160 Conn.App. 748
Conn. App. Ct.2015Background
- People’s United Bank sought to foreclose on two adjacent parcels (2131 and 2136 Fairfield Beach Rd.) securing a $900,000 note after default; mortgage recorded and assigned to the plaintiff.
- The trial court entered a foreclosure-by-sale judgment in July 2012 finding value at $900,000; sale dates were repeatedly continued after storm damage (Hurricane Sandy) destroyed the main residence and a town demolition lien was recorded.
- Multiple appraisals and related oath returns were filed; some documents referenced only 2131, others referenced both 2131 and 2136; appraised values fluctuated (e.g., $955,000; $900,000; $705,000).
- The judicial auction notice and property description advertised both parcels; sale occurred April 12, 2014, with People’s United as sole bidder at $396,000 (subject to liens/taxes).
- Defendant Sarno objected to court approval of the committee sale, arguing the committee’s appraisal was defective because it appraised only one parcel (omitting the 0.02-acre parcel) and thus depressed bidding/marketability.
- Trial court approved the sale; defendant appealed claiming the court abused its discretion in approving an unfair/ commercially unreasonable sale.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the committee appraisal (and resulting sale) defective because it considered only parcel 2131, excluding 2136? | Appraisal was adequate and surrounding materials (notice, website, property description) identified both parcels; appraisal ambiguities did not show a fatal defect. | Appraisal omitted 2136, which reduced marketability and likely discouraged bidders; sale was commercially unreasonable. | Court affirmed: appraisal ambiguity not fatal; record showed both parcels were advertised and court did not abuse its discretion. |
| Did the low bid require rejection of the sale as inadequate per se? | Low bids are not unusual; the bank’s bid was a substantial fraction of appraised values and within court’s equitable discretion to approve. | The $396,000 bid was well below earlier appraised fair market value, evidencing unfairness. | Court held there is no fixed percentage threshold; here bid represented 56% of committee appraisal and 86% of plaintiff’s appraisal—approval not an abuse of discretion. |
| Should the foreclosure have been converted to strict foreclosure or a new sale ordered? | Sale should be approved; equitable factors and marketing suffice to uphold sale. | Defendant requested conversion/new sale due to defective appraisal and marketing failures. | Court exercised equitable discretion to approve sale rather than convert or order new sale. |
| Was the trial court’s approval of the committee sale an abuse of discretion? | Approval was within the court’s equitable discretion given the record and appraisals. | Approval was an abuse because sale was materially unfair/unreasonable. | Court concluded no abuse of discretion; judgment affirmed. |
Key Cases Cited
- First Connecticut Capital, LLC v. Homes of Westport, LLC, 112 Conn. App. 750 (Conn. App. 2009) (standard of review for approval of committee sale is abuse of discretion)
- Dime Sav. Bank of N.Y. v. Grisel, 36 Conn. App. 313 (Conn. App. 1994) (trial court in foreclosure may refuse to confirm sale on equitable grounds; appraisal guides court)
- Fidelity Trust Co. v. Irick, 206 Conn. 484 (Conn. 1988) (foreclosure by sale vs strict foreclosure lies within trial court’s discretion)
- Nat’l City Real Estate Servs., LLC v. Tuttle, 155 Conn. App. 290 (Conn. App. 2015) (no fixed percentage rule for adequacy of sale price; sales yielding substantially less than appraised value can still be approved)