Sovereign Bank v. Harrison
194 A.3d 1284
Conn. App. Ct.2018Background
- Sovereign Bank sued Harrison in 2010 to foreclose a mortgage on her Norwalk property, alleging default on a $200,000 note.
- Harrison filed an answer with three special defenses (misrepresentation/fraud in first two; third alleged the plaintiff did not properly account for payments).
- The plaintiff unilaterally withdrew the state foreclosure action in November 2015 and shortly thereafter filed a federal foreclosure action against Harrison.
- At the time of withdrawal there was no effective counterclaim pending; Harrison later sought leave to amend and then moved to "restore" her special defenses/counterclaim to the docket, arguing the third special defense was a counterclaim that survived withdrawal under Practice Book §10-55.
- The trial court granted the motion to restore, concluding the third special defense arose from the same transaction and therefore was a counterclaim that survived withdrawal.
- Sovereign appealed, arguing the third special defense did not state an independent cause of action and thus the trial court lacked authority to restore the case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court had authority to restore the case to the docket after plaintiff withdrew the action | The court lacked authority because no counterclaim existed when plaintiff withdrew; the third special defense did not assert an independent cause of action or request affirmative relief | The third special defense was properly construed as a counterclaim and thus survived withdrawal under Practice Book §10-55 | Reversed: court lacked authority — the third special defense was not a counterclaim and did not survive withdrawal |
| Whether an allegation that the plaintiff failed to account for payments can be a counterclaim | Such an allegation did not plead facts entitling Harrison to affirmative relief and is defensive in nature | That allegation related to the same transaction and thus could be treated as a counterclaim | Held defensive only: it challenges debt amount and is a special defense, not an independent cause of action |
| Proper standard to distinguish counterclaim vs special defense | Plaintiff argued the court should determine if the pleading asserts an independent cause of action/requests relief | Defendant relied on "same transaction" analysis from setoff/counterclaim cases to characterize it as a counterclaim | Court of Appeals: must ask whether pleading alleges a cause of action entitling affirmative relief; transaction test alone is insufficient |
Key Cases Cited
- 225 Associates v. Connecticut Housing Finance Authority, 65 Conn. App. 112 (Conn. App. 2001) (discusses transaction test in distinguishing counterclaims and setoffs)
- Boothe v. Armstrong, 80 Conn. 218 (Conn. 1907) (withdrawal by plaintiff does not impair defendant’s right to prosecute a previously filed counterclaim)
- Bank of America, N.A. v. Aubut, 167 Conn. App. 347 (Conn. App. 2016) (explains a special defense operates defensively and does not seek affirmative relief)