U.S. Bank National Assn., Trustee v. Blowers
172 A.3d 837
| Conn. App. Ct. | 2017Background
- Defendants executed a 2005 promissory note and mortgage; mortgage later assigned to plaintiff trustee. Defendants defaulted and plaintiff commenced foreclosure in February 2014.
- Parties engaged in court-sponsored foreclosure mediation and multiple loan-modification negotiations; no final, binding modification was alleged in the pleadings.
- Defendants filed an answer (April 17, 2015) with three special defenses (equitable estoppel, unclean hands, unjust enrichment — the latter later withdrawn) and three counterclaims (negligence, CUTPA, unjust enrichment — unjust enrichment withdrawn). Allegations centered on mortgagee/servicer conduct during negotiation and mediation.
- Plaintiff moved to strike the special defenses and counterclaims under Practice Book § 10-10 and governing foreclosure jurisprudence; the trial court granted the motion and later entered a judgment of strict foreclosure.
- Defendant Piper appealed, arguing the court misapplied the transaction test, too narrowly construed the scope of “enforcement,” and erred in factual findings; the majority affirmed, a dissent would have reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether special defenses were legally sufficient in foreclosure | Special defenses must directly relate to the making, validity, or enforcement of the note/mortgage; these defenses did not | The transaction test (Practice Book §10-10 logic) or equitable allowances should permit these defenses based on related misconduct | Affirmed: special defenses stricken — they did not relate to making, validity, or enforcement absent a binding modification |
| Whether counterclaims could survive under Practice Book §10-10 (transaction test) | Counterclaims must have a reasonable nexus to making, validity, or enforcement of the note/mortgage; these lacked that nexus | Broader transaction test should allow counterclaims based on conduct during modification/mediation that arose from same transaction | Affirmed: counterclaims stricken — lacked sufficient nexus to the note/mortgage enforcement |
| Whether courts should abandon the making/validity/enforcement requirement for foreclosure pleadings | Maintain existing standard to promote judicial economy and avoid chilling modification/mediation participation | Adopt a straightforward, broader transaction test to allow related claims and equitable redress in foreclosure context | Declined to change precedent; court refused to adopt the broader transaction test |
| Whether conduct during modification/mediation can qualify as "enforcement" absent a binding modification | "Enforcement" does not include post‑default modification/mediation conduct unless it affects enforceability (e.g., a binding modification was made and breached) | Post‑default misconduct can affect enforcement even without a finalized modification; enforcement should be construed broadly | Affirmed: mediation/negotiation misconduct does not meet enforcement element unless a binding modification altered enforceability |
Key Cases Cited
- Barasso v. Rear Still Hill Road, LLC, 64 Conn. App. 9 (explaining motion to strike standard and construction of special defenses)
- LaSalle Nat'l Bank v. Freshfield Meadows, LLC, 69 Conn. App. 824 (outlining permissible equitable defenses in foreclosure)
- U.S. Bank Nat'l Assn. v. Sorrentino, 158 Conn. App. 84 (holding misconduct during mediation/modification negotiations lacks reasonable nexus to making/validity/enforcement absent more)
- Thompson v. Orcutt, 257 Conn. 301 (Supreme Court allowing equitable defense of unclean hands when plaintiff's prior fraud was inseparably connected to claim)
- CitiMortgage, Inc. v. Rey, 150 Conn. App. 595 (clarifying that counterclaims need a reasonable nexus to making/validity/enforcement under §10-10)
- JP Morgan Chase Bank, Trustee v. Rodrigues, 109 Conn. App. 125 (describing transaction test purpose and joinder under Practice Book §10-10)