ASTORIA FEDERAL MORTGAGE CORPORATION v. GENESIS LIMITED PARTNERSHIP ET AL.
AC 37754
Appellate Court of Connecticut
July 26, 2016
Keller, Mullins and Norcott, Js.
Argued February 11—officially released July 26, 2016
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(Appeal from Superior Court, judicial district of Ansonia-Milford, Hon. John W. Moran, judge trial referee.)
Jane I. Milas, with whom, on the brief, was Jaime Paoletti, for the appellant (defendant Professional Services Group, Inc.).
Stephen G. Walko, with whom were Frank Velardi and, on the brief, Julia E. Braun, for the appellee (substitute plaintiff).
Opinion
KELLER, J. In this foreclosure action, the defendant Professional Services Group, Inc.,1 appeals from the trial court’s judgment granting the motion filed by the plaintiff, Bellmore Partners, Inc.,2 to dismiss the defendant’s cross claim. The defendant claims that the court erred by granting the plaintiff’s motion to dismiss because it improperly concluded that the defendant lacked standing. We agree and accordingly reverse the judgment of the court.
The following procedural history is relevant to this appeal. On October 15, 2009, Astoria Federal Mortgage Corporation (Astoria) filed a four count complaint against Genesis Limited Partnership (Genesis) and the defendant, seeking, inter alia, foreclosure of two mortgages that Genesis had executed and delivered to Astoria for property located at 89 Minerva Street in Derby (Derby property). In the complaint, Astoria alleged that it was in possession of two notes that were secured by two mortgages on the Derby property: (1) a note dated May 14, 2004, wherein Genesis had promised to pay Astoria $210,000; and (2) a note dated June 20, 2005, wherein Genesis had promised to pay Astoria $165,000. Furthermore, Astoria acknowledged that the defendant maintained an encumbrance of record on the Derby property, which it alleged was subordinate in right to the claimed mortgages, ‘‘by virtue of a [m]echanic’s [l]ien in the original principal amount of [$293,800] dated September 8, 2009, and recorded in volume 589 at page 253 of the Derby land records.’’ On October 23, 2009, Astoria filed a motion for default against the defendant for its failure to appear, which the court denied on October 27, 2009. On December 10, 2009, Astoria filed a demand for disclosure of defense against the defendant.
On December 21, 2009, the defendant filed its disclosure of defense and its answer and special defense. In its disclosure of defense and as a special defense, the defendant asserted that it held a valid mechanic’s lien on the Derby property, which was security for construction work
On July 19, 2010, Genesis filed a chapter 11 bankruptcy petition in the United States Bankruptcy Court for the District of Connecticut.
During the pendency of Genesis’ bankruptcy proceedings, the defendant, on August 13, 2011, assigned its mechanic’s lien on the Derby property to Viking Acquisitions, LLC (Viking). On September 30, 2011, this assignment was recorded at volume 633, page 273 of the Derby land records.
On April 12, 2012, the Bankruptcy Court issued an ‘‘Order Regarding Limited Relief from the Automatic Stay,’’ which stated the following: ‘‘The court having held a hearing on March 20, 2012, with respect to the motion for relief from stay filed by [the plaintiff] on January 10, 2011 . . . and the motion for immediate order of relief from stay for violation of court ordered stipulations filed by [the plaintiff] on February 13, 2012 . . . the parties having requested limited relief at the hearing to allow the parties to move forward with proceedings in Connecticut Superior Court as to the extent, validity, and priority of the mechanic’s lien . . . allegedly held by [the defendant] on [the Derby property]; and the court having determined that cause exists to grant limited relief from stay as requested by the parties, it is hereby
‘‘Ordered that relief from the automatic stay is granted, for cause, pursuant to
11 U.S.C. § 362 (d) (1) to allow the parties to move forward with proceedings in Connecticut Superior Court for the limited purpose of determining the extent, validity and priority of the [defendant’s mechanic’s lien]; and it is hereby further‘‘Ordered that relief from the automatic stay is also granted to allow the parties to proceed in Connecticut state court with any appeals from any decision of the Connecticut Superior Court as to the extent, validity, and priority of [the defendant’s mechanic’s lien] . . . .’’3
On April 18, 2012, Astoria moved to substitute the plaintiff in the foreclosure proceeding. The court granted Astoria’s motion on May 14, 2012.
On September 20, 2012, the court granted the plaintiff’s motion for a determination of priorities and ordered the following: ‘‘The court finds the priorities to be (1)
On October 12, 2012, Viking assigned the defendant’s mechanic’s lien back to the defendant, but this assignment was not recorded in the Derby land records until June 26, 2014.
On March 18, 2014, the bankruptcy court dismissed Genesis’ chapter 11 bankruptcy case.
On April 16, 2014, the defendant filed a cross claim against Genesis, in which it sought, inter alia, to foreclose the mechanic’s lien that it held on the Derby property. In its cross claim, the defendant alleged that it had ‘‘furnished materials and rendered services to Genesis in the construction, raising, removal or repairs to the property owned by Genesis,’’ and that it had ‘‘commenced to furnish materials and render services on or about March 12, 2002, and ceased furnishing materials and rendering services on August 20, 2009.’’
On June 17, 2014, the plaintiff filed a motion to dismiss the defendant’s cross claim. In the motion, the plaintiff asserted that the defendant’s cross claim should be dismissed because ‘‘[a]t the time the cross claim was filed, [the defendant] was not the holder of the [mechanic’s] lien and therefore [did] not have standing to pursue foreclosure.’’ In its memorandum of law in support of the motion, which was also filed on June 17, 2014, the plaintiff argued, inter alia, that the defendant did not have standing to foreclose its mechanic’s lien on the Derby property because it had failed to record the October 12, 2012 assignment whereby Viking assigned the mechanic’s lien back to the defendant. Therefore, the plaintiff argued, the defendant did not have standing because it was not the record holder of the lien on April 16, 2014, which was the date on which it filed its cross claim seeking foreclosure of the lien.
On July 15, 2014, the defendant filed its opposition to the plaintiff’s motion to dismiss, wherein it argued that it did have standing to bring its cross claim against Genesis because the October 12, 2012 assignment was valid despite the defendant’s failure to record the assignment prior to its commencement of the foreclosure action. The defendant also asserted that on June 26, 2014, it had recorded the October 12, 2012 assignment in volume 696, page 51 of the Derby land records. The defendant attached a copy of the recorded assignments to its opposition.
On October 14, 2014, the court held a hearing on the plaintiff’s motion to dismiss.5 On January 22, 2015, the court
‘‘Prior thereto, [the defendant] assigned its mechanic’s lien to Viking . . . on August 13, 2011. On September [30], 2011, at 12:13 p.m., this assignment6 was recorded at volume 633, page 273, of the Derby land records.
‘‘Subsequently, on October 12, 2012, Viking . . . assigned the same mechanic’s lien back to [the defendant]. This second assignment was not recorded until 4:01 p.m. on June [26], 2014, at volume 696, page 51, of the Derby land records.
‘‘[The plaintiff], successor to Astoria . . . by virtue of a valid assignment of a note and mortgage, dated September 29, 2010, challenges the standing of [the defendant] to file the present cross claim. It argues that [the defendant] did not own or possess the mechanic’s lien as [the defendant] had assigned its mechanic’s lien to Viking . . . and Viking . . . was the owner of record of the mechanic’s lien on April 16, 2014. . . .
‘‘Reference to
‘‘The motion of [the plaintiff] to dismiss the April 16, 2014 cross claim is granted.’’ (Citation omitted; footnote in original.)
On February 11, 2015, the defendant filed a motion to reargue with respect to the plaintiff’s motion to dismiss. The court denied the defendant’s motion on the same date. This appeal followed.
We address the defendant’s claim that the court erred in granting the plaintiff’s motion to dismiss because it improperly concluded that the defendant lacked standing as a result of its failure to record, prior to filing its cross claim, the October 12, 2012 assignment of the mechanic’s lien. The defendant makes two arguments with respect to this claim: (1) the court erred by improperly interpreting and applying
We begin our analysis of this argument by setting forth the appropriate standard of review. ‘‘The standard of review for a court’s decision on a motion to dismiss . . . is well settled.’’ (Internal quotation
‘‘Trial courts addressing motions to dismiss for lack of subject matter jurisdiction . . . may encounter different situations, depending on the status of the record in the case. . . . Different rules and procedures will apply, depending on the state of the record at the time the motion is filed.
‘‘When a trial court decides a jurisdictional question raised by a pretrial motion to dismiss on the basis of the complaint alone, it must consider the allegations of the complaint in their most favorable light. . . . In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader. . . .
‘‘In contrast, if the complaint is supplemented by undisputed facts established by affidavits submitted in support of the motion to dismiss . . . other types of undisputed evidence . . . and/or public records of which judicial notice may be taken . . . the trial court, in determining the jurisdictional issue, may consider these supplementary undisputed facts and need not conclusively presume the validity of the allegations of the complaint. . . . Rather, those allegations are tempered by the light shed on them by the [supplementary undisputed facts]. . . . If affidavits and/or other evidence submitted in support of a defendant’s motion to dismiss conclusively establish that jurisdiction is lacking, and the plaintiff fails to undermine this conclusion with counteraffidavits . . . or other evidence, the trial court may dismiss the action without further proceedings. . . . If, however, the defendant submits either no proof to rebut the plaintiff’s jurisdictional allegations . . . or only evidence that fails to call those allegations into question . . . the plaintiff need not supply counteraffidavits or other evidence to support the complaint, but may rest on the jurisdictional allegations therein.’’ (Citations omitted; emphasis in original; footnotes omitted; internal quotation marks omitted.) Conboy v. State, 292 Conn. 642, 650–52, 974 A.2d 669 (2009).
On appeal, the defendant argues that the court erred by concluding that it did not have standing to bring its cross claim against Genesis seeking foreclosure of the mechanic’s lien that it held because, pursuant to
‘‘[A] party must have standing to assert a claim in order for the court to
The present appeal raises the issue of whether
‘‘It is an accepted principle of statutory construction that, if possible, the component parts of a statute should be construed harmoniously in order to render an overall reasonable interpretation. . . . [T]he legislature is always presumed to have created a harmonious and consistent body of law . . . . [T]his tenet of statutory construction . . . requires [an appellate court] to read statutes together when they relate to the same subject matter . . . . Accordingly, [i]n determining the meaning of a statute . . . we look not only at the provision at issue, but also to the broader statutory scheme to ensure the coherency of our construction. . . . [T]he General Assembly is always presumed to know all the existing statutes and the effect that its action or nonaction will have upon any one of them.’’ (Citation omitted; internal quotation marks omitted.) Board of Education v. State Board of Education, 278 Conn. 326, 333–34, 898 A.2d 170 (2006).
A mechanic’s lien, also called a construction lien in some jurisdictions, ‘‘is a statutory lien on buildings and other improvements on realty, and on the realty itself, in favor of contractors, materialmen, and other classes of workers, as a security device to help ensure that those who improve real property receive payment even in the absence of a contractual relationship between the lien claimant and the owner of the property.’’ (Footnotes omitted.) 53 Am. Jur. 2d 88–89, Mechanic’s Liens § 1 (2006). The statute that governs mechanic’s liens in Connecticut is
Against this background, we must decide whether the recording requirements set forth in
Our review of
Subsection (i) of
On the basis of our reading of the plain language of these statutes, and in accordance with the principle that statutory provisions that focus on more specific topics should prevail over the requirements of statutes that are more general in their coverage; see Housatonic Railroad Co. v. Commissioner of Revenue Services, supra, 301 Conn. 302; we conclude that the dictates of
We are aware that mechanic’s liens are not completely analogous to mortgages insofar as, unlike mortgages, mechanic’s liens typically are not separated into a note and a deed. Indeed, our Supreme Court has observed that there are ‘‘clear differences’’ between mortgages and mechanic’s liens: ‘‘A mechanic’s lien, unlike a mortgage, is not an agreement or contract between parties but rather a lien upon real estate which the plaintiff seeks to take by force of law and eventually to foreclose. . . . Unlike a mortgage deed, which may be reformed to reflect the contracting parties’ mutual intent, the placement of a mechanic’s lien is a unilateral act in which the lienor bears the burden of demonstrating statutory compliance.’’ (Citation omitted; internal quotation marks omitted.) First Constitution Bank v. Harbor Village Ltd. Partnership, 230 Conn. 807, 821, 646 A.2d 812 (1994). In this same decision, however, our Supreme Court noted that reliance on mortgage law to assess a particular aspect of the law governing mechanic’s liens is appropriate, ‘‘particularly when similar guiding policies are in play.’’ Id., 820.14 In this vein, we think that the principle that the mortgage follows the note, or the debt, can be analogized to mechanic’s liens for purposes of foreclosure standing. Specifically,
Although our research reveals no Connecticut appellate authority that directly supports the proposition that an assignee of a mechanic’s lien need not record an otherwise validly assigned mechanic’s lien in order to have standing to foreclose it, our conclusion is bolstered by this court’s decision in Connecticut Carpenters Benefit Funds v. Burkhard Hotel Partners II, LLC, supra, 83 Conn. App. 352. In that case, this court examined the issue of whether a party that had not directly furnished materials or rendered services on a property subject to a mechanic’s lien nevertheless had standing to foreclose the mechanic’s lien by virtue of the fact that it ‘‘[stood] in the shoes’’ of the employees who had furnished materials and rendered services on the property. Id., 354–55. This court answered this question in the affirmative. Id., 360–61. Although the appeal did not involve the absence of a recordation, let alone the absence of a recordation with respect to an assignment, the case did involve the question of whether a party that appeared to lack statutory standing to foreclose a mechanic’s lien nevertheless fell within the protection of the Connecticut mechanic’s lien statutes, thereby conferring standing to foreclose a mechanic’s lien. Moreover, this court’s reasoning in Connecticut Carpenters Benefit Funds sheds light on the importance of permitting foreclosure of mechanic’s liens in the interest of furnishing laborers with compensation for materials or services that they had provided for the subject property. See id., 358–60.
This court further supported its conclusion that the employee benefits funds had standing to foreclose the mechanic’s lien by referring to the reasoning of decisions from appellate courts in other jurisdictions, which had addressed similar standing issues involving mechanic’s liens, and which had analyzed statutes that were similar in nature to the Connecticut mechanic’s lien statutes insofar as they had to be liberally construed and they protected persons who provided labor or services. Id., 359–60. This court noted the importance of the fact that the parties asserting standing in those cases were found to have standing to enforce mechanic’s liens primarily because they fell within the zone of interests to be protected by the statutes, and they were seeking to enforce the liens for the benefit of the persons who actually had performed the labor that had given rise to the liens. Id., 355, 359–60.
We iterate that the court in the present case was required to consider the allegations in the cross claim in their most favorable light and to indulge every presumption favoring jurisdiction. See Manning v. Feltman, supra, 149 Conn. App. 229–30. The defendant, in its cross claim, asserted that it commenced providing materials and services to the Derby property on March 12, 2002, and that it ceased such provision on August 20, 2009. The defendant also asserted in its cross claim that a principal balance amounting to $293,800 remained due and owing to it for the services and materials provided, that on September 8, 2009, its president caused a certificate of mechanic’s lien in writing to be recorded at volume 589, page 253 of the Derby land records, and that on this same date, it also gave written notice to Genesis communicating its intent to claim a mechanic’s lien. In support of its cross claim, the defendant attached an April 16, 2014 notice of lis pendens ‘‘claiming a foreclosure
The defendant established, by the allegations of its cross claim and proof submitted to the court, that it had been validly assigned a mechanic’s lien for the construction work that it had performed on the Derby property. Thus, the defendant has established that it is entitled to pursue its statutory remedy under
The judgment is reversed and the case is remanded for further proceedings consistent with this opinion.
In this opinion the other judges concurred.
Notes
‘‘(a) Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title, or an application filed under section 5 (a) (3) of the Securities Investor Protection Act of 1970, operates as a stay, applicable to all entities of—
‘‘(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title . . .
‘‘(4) any act to create, perfect, or enforce any lien against property of the estate;
‘‘(5) any act to create, perfect, or enforce against property of the debtor any lien to the extent that such lien secures a claim that arose before the commencement of the case under this title;
‘‘(6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title . . .
‘‘(d) On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay provided under subsection (a) of this section, such by terminating, annulling, modifying, or conditioning such stay—
‘‘(1) for cause, including the lack of adequate protection of an interest in property of such party in interest . . . .’’
‘‘(b) Whenever any mortgage debt is assigned by an instrument in writing containing a sufficient description to identify the mortgage, assignment of rent or assignment of interest in a lease, given as security for the mortgage debt, and that assignment has been executed, attested and acknowledged in the manner prescribed by law for the execution, attestation and acknowledgement of deeds of land, the title held by virtue of the mortgage, assignment of rent or assignment of interest in a lease, shall vest in the assignee. . . .
‘‘(i) An assignment executed in accordance with this section shall operate to assign the interest of the assignor in the mortgage which is the subject of the assignment, even if such interest is, in fact, acquired by the assignor after executing such assignment or does not appear of record until after the execution of such assignment. . . .’’
‘‘(b) The claim is a lien on the land, building and appurtenances or lot or in the event that the materials were furnished or services were rendered in the site development or subdivision of any plot of land, then on the plot of land and the claim takes precedence over any other encumbrance originating after the commencement of the services, or the furnishing of any such materials, subject to apportionment as provided in section 49-36.
‘‘(c) If any such liens exist in favor of two or more persons for materials furnished or services rendered in connection with the same construction, raising, removal or repairs of any building or any of its appurtenances, or in the improvement of any lot, or in the site development or subdivision of any plot of land, no one of those persons shall have any priority over another except as hereinafter provided. . . .
‘‘(i) Any mechanic’s lien may be foreclosed in the same manner as a mortgage.’’