197 Conn.App. 269
Conn. App. Ct.2020Background:
- Lender (originally World Business Lenders, LLC; substituted by WBL SPE II, LLC) sued 526-528 North Main Street, LLC (mortgagor) and Elissa E. Speer (guarantor) in an amended two‑count complaint: count one sought strict foreclosure of a mortgage; count two sought to enforce Speer’s continuing guarantee of the note.
- The mortgagor and guarantor were defaulted; the trial court entered a judgment of strict foreclosure (later updated), with law days reset after motions to open; Speer filed multiple appeals (two dismissed as untimely) and timely appealed the August 6, 2018 updated judgment.
- Speer argued the note/mortgage charged over 120% interest and was unconscionable, the amended complaint failed to describe the property, and the substitute plaintiff lacked standing when the amended complaint was filed.
- The appellate court considered whether Speer, as a guarantor, had standing to challenge the foreclosure judgment (count one) and whether a final judgment existed as to the guarantee claim (count two).
- Court dismissed the appeal as to count one for lack of subject matter jurisdiction because a guarantor has no legal interest in the secured property and thus no standing to appeal a foreclosure; appeal as to count two was dismissed for lack of a final judgment because no trial court judgment had been entered on the guarantee count.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of foreclosure (unconscionable interest / prepayment) | Foreclosure proper; plaintiff entitled to enforce note and mortgage | Note/mortgage unconscionable (over 120% interest) and prepayment asserted — court erred in ordering foreclosure | Dismissed as to foreclosure: Speer lacks standing to raise these defects because she is a guarantor with no property interest |
| Sufficiency of amended complaint property description | Amended complaint adequate to foreclose | Amended complaint failed to describe the property being foreclosed | Not reached on merits; appeal as to foreclosure dismissed for lack of standing |
| Standing of substitute plaintiff at date of amended complaint | Substitute plaintiff (WBL SPE II) had proper title/standing via assignments | Substitute plaintiff lacked standing when amended complaint filed | Not reached on merits because guarantor lacks standing to challenge foreclosure |
| Finality of judgment on guarantee claim (count two) | Judgment as to count two existed / appeal permissible | No final judgment on guarantee count; matter still pending below | Appeal dismissed as to count two for lack of a final judgment |
Key Cases Cited
- Webster Bank v. Zak, 259 Conn. 766 (discusses standing and the practical concept of standing)
- JP Morgan Chase Bank, N.A. v. Winthrop Properties, LLC, 312 Conn. 662 (guarantors are not parties to foreclosure and lack rights to redeem; cannot be made parties to foreclosure)
- Federal National Mortgage Assn. v. Bridgeport Portfolio, LLC, 150 Conn. App. 610 (App. Ct. decision regarding guarantor’s interest in foreclosure; subsequently treated as superseded by Winthrop)
- Deutsche Bank National Trust Co. v. Thompson, 163 Conn. App. 827 (standing and subject matter jurisdiction principles in foreclosure appeals)