8372 | Conn. App. Ct. | Jul 31, 1990
The defendants
The following facts are relevant to this appeal. On October 14, 1987, CNB commenced an action to foreclose a mortgage granted by the named defendant on certain real property to secure a $997,919.67 variable rate promissory note.
On July 17, 1989, CNB’s motion for judgment of strict foreclosure was heard. At that hearing, the bank submitted an affidavit of debt to the court stating that the amount of the defendants’ debt was $1,268,074. This amount included the entire face value of the note, as there had been no principal repayments, as well as accrued interest, late charges and an appraisal fee.
The defendants opposed the submission of the bank’s affidavit of debt because they did not receive any documentation verifying that the interest rates actually changed on the dates claimed by the bank.
CNB also requested an award of $25,000 as reasonable attorney’s fees. In support of its request, the bank submitted an affidavit of attorney’s fees and itemized billing statements. Further, CNB explained to the court the history of the loan and its repeated attempts to refinance this and other Owen family loans. The defendants, while not objecting to an award of attorney’s fees, argued that the amount should be “substantially less”
Subsequent to this hearing, CNB provided the defendants with documentation that showed the specific time periods for which the various rates of interest were in effect, but did not provide the defendants with copies of internal bank memoranda showing the authorization for the interest rate changes.
On August 21,1989, the defendants’ motion to open the judgment was heard. The defendants asserted that the judgment of strict foreclosure should be opened because CNB failed to provide them with the agreed upon documentation. CNB’s counsel represented to the court that the requested information concerning authorizations does not exist, and submitted an affidavit prepared by a bank officer to that effect.
I
The defendants first claim that the trial court incorrectly calculated the plaintiff’s debt. Relying on Burritt Mutual Savings Bank of New Britain v. Tucker,
It is true that the plaintiff has the burden of proof to establish any allegations that are denied by the defendant. Streicher v. Resch, 20 Conn. App. 714" court="Conn. App. Ct." date_filed="1990-02-27" href="https://app.midpage.ai/document/streicher-v-resch-7853609?utm_source=webapp" opinion_id="7853609">20 Conn. App. 714, 716, 570 A.2d 230 (1990). It is also true that in a mortgage foreclosure action, a fundamental allegation that must be proved by the plaintiff is the amount of the debt. See D. Caron, Connecticut Foreclosures (2d Ed.) § 5.02A2. A hearing to present evidence on the amount of the debt may not be required, however, if a summary procedure is employed pursuant to Practice Book § 527.
A defense is “[t]hat which is offered and alleged by a party proceeded against in an action or suit, as a reason in law or fact why the plaintiff should not recover or establish what he seeks. . . .” Black’s Law Dictionary (5th Ed.). In a mortgage foreclosure action, a defense to the amount of the debt must be based on
We conclude that a mere claim of insufficient knowledge as to the correctness of the amount stated in the affidavit of debt is not a defense for purposes of § 527. To allow an insufficient knowledge claim to rise to the level of a defense would remove any incentive for the mortgagor to gather facts during the discovery process or to keep records. A defendant mortgagor should not be able to use a hearing on a motion for judgment of foreclosure to accomplish what he should have done previously through interrogatories or a deposition.
Further, it does not escape appellate scrutiny that after the plaintiff filed a demand for disclosure of defenses, the defendants, on January 19, 1988, were defaulted for failure to disclose. We can discern no reason for allowing the defendants to claim, some eighteen months later, in a hearing on the motion for judgment of foreclosure that they do in fact have a defense, especially when their claim is merely that they have insufficient information.
In addition, when a defendant mortgagor stipulates to the amount of the indebtedness, he is ordinarily barred from later contesting it. A stipulation is generally dispositive of that issue. Cf. Westco Corporation v. AMK Construction Co., 1 Conn. App. 521" court="Conn. App. Ct." date_filed="1984-02-08" href="https://app.midpage.ai/document/westco-corp-v-amk-const-co-inc-3323569?utm_source=webapp" opinion_id="3323569">1 Conn. App. 521, 523, 473 A.2d 340, cert. denied, 193 Conn. 803" court="Conn." date_filed="1984-05-23" href="https://app.midpage.ai/document/state-v-bruno-7838996?utm_source=webapp" opinion_id="7838996">193 Conn. 803, 475 A.2d 1104 (1984) (issue concerning the interpretation of an agreement completely resolved by factual stipulation of the parties). A stipulation is a contract, and, as such, the construction of that contract is controlled by the parties’ intent. Albert Mendel & Sons, Inc. v. Krough, 4
At the July 17 hearing, an exchange between counsel occurred before the court in which the defendants consented to the amount of debt as stated in the affidavit subject to the plaintiff’s providing supporting documentation.
Finally, the defendants’ reliance on Burritt Mutual Savings Bank of New Britain v. Tucker, supra, is misplaced. In Burritt, because the defendant had clearly interposed a defense concerning the amount of the mortgage debt, the court improperly used the § 527 summary procedure in relying on the affidavit of debt. Here, the defendants have failed to articulate any
II
The defendants’ next claim is that the court improperly denied their motion to open the judgment. They argue that, because the subject documentation was not provided, there is reasonable cause for opening the judgment and a good defense exists as to the accuracy and determination of the debt. We disagree.
Under General Statutes § 49-15,
The defendants here have failed to show that the trial court abused its discretion or committed an error of law. The defendants never asserted a defense with regard to the debt prior to the rendering of the judgment of strict foreclosure. Therefore, any claim that they had a good defense to open that judgment and challenge the amount of the debt is equally without merit.
Ill
The defendants’ final claim is that the court awarded an incorrect amount of attorney’s fees to the plaintiff.
CNB submitted a detailed itemized twenty-five page bill accounting for $47,265 that particularized the time and nature of legal services rendered by its counsel in connection with all of the Owen family loans, the combined total of which exceeded two million dollars. Accompanying this accounting was a statement prepared by counsel that attributed $25,000 to the note that is the subject of the foreclosure action. After a hearing on the attorney’s fees, the court reduced that amount by $7500, allowing $17,500 as a reasonable fee. The note executed by the named defendant stated that it was responsible for “all costs, expenses and attorney’s fees incurred in any action to collect this Note or to foreclose any mortgage, or other agreement securing this Note or in protecting or sustaining the lien of such mortgage, or other agreement or in any litigation or controversy arising from or connected with said mortgage, or other agreement of this Note.”
Where a contract provides for the payment of attorney’s fees by a defaulting party, those fees are recoverable solely as a contract right. Litton Industries Credit Corporation v. Catanuto, 175 Conn. 69" court="Conn." date_filed="1978-05-02" href="https://app.midpage.ai/document/litton-industries-credit-corp-v-catanuto-6595148?utm_source=webapp" opinion_id="6595148">175 Conn. 69, 76, 394 A.2d 191 (1978). Therefore, the language of the note governs the award of fees, and we need not consider General Statutes § 52-249 (allowance of reasonable attorney’s fees in a foreclosure action). Such “attorney’s fees incurred” language has been interpreted by our Supreme Court in Storm Associates, Inc. v. Baumgold, 186 Conn. 237" court="Conn." date_filed="1982-02-09" href="https://app.midpage.ai/document/storm-associates-inc-v-baumgold-2282887?utm_source=webapp" opinion_id="2282887">186 Conn. 237, 245-46, 440 A.2d 306" court="Conn." date_filed="1982-02-09" href="https://app.midpage.ai/document/storm-associates-inc-v-baumgold-2282887?utm_source=webapp" opinion_id="2282887">440 A.2d 306 (1982), as permitting recovery “upon the presentation of an attor
While the defendants excepted to the court’s award of $17,500, they never asked the court for an articulation of that award. There is no dispute regarding the documentation of the entire bill. Rather, the defendants contend that the allocation of that total amount to the subject note was arbitrary. Given the sparse record regarding the court’s decision to award $17,500, and the fact that this note is approximately one half of the total outstanding Owen family loans, we cannot say, in light of Storm Associates, Inc., that the court abused its discretion in awarding this amount. See Hoenig v. Lubetkin, 137 Conn. 516, 525, 79 A.2d 278 (1951).
The judgment is affirmed.
In this opinion the other judges concurred.
The defendants are the named defendant, Nicholas E. Owen II, Richard Owen, Joseph Owen and Edmond Owen, Sr. The named defendant exe
CNB also sought to recover against the various guarantors of the note. See footnote 1, supra.
We note that the judgment file states:
“The Court . . . finds . . . the sum of $1,285,574.00, which sum includes an attorney’s fee of $17,500.00, is due the plaintiff on the debt . . . and that the plaintiff, as items of cost, is entitled to an appraisal fee of $1,300.00 . . . .” The appraisal fee apparently was awarded to the plaintiff twice. Because the defendants did not raise any such claim before this court, and because we can make no definitive determination as to this issue, we will not disturb the trial court’s finding.
Defendants' Counsel: “For the record, all I’m looking for is some kind of notification within the bank, showing that the rates changed on particular dates. And that’s it. And it’s fine and well for him to give me a computer printout, saying this is the computer. It still doesn’t answer my question. . . . [T]he bank is required to have a printout or a writing, indicating to all of its customers as to the change of rates at a particular time. And if that documentation, which is maybe a dozen or so of those, are provided, then we don’t have to have a hearing.”
See also footnote 5, infra.
Defendants’ Counsel: “I need something, some documentation as to the fact that these rates changed on the dates they claim they’ve been changed. That’s it. I don’t have to hear anyone testify. All he has to do is furnish me with internal memos or whatever they do, telling me that the rates changed. I don’t have to have a hearing. ” (Emphasis added.)
Plaintiff’s Counsel: “Your Honor, as I understand the stipulation was that we were to provide any hard document as to the interest rate changes. That’s what they were requesting—whether or not the rates had changed as they said, and there is no such documentation. We live in a computer age. These things are done by computer. There is not a hard document that’s produced every time the base interest rate changes.
“We did send to counsel a printout of the change [oq the document and they have got that document which we submit. That document which we submitted complies with what the court ordered as documentation.
“I handed counsel an affidavit, and I’ll submit one to Your Honor, from the office in the bank that sets the interest rate changes which basically says what I have just told you, which is that there is no hard document; it is done by computer and by telephone calls within the banks.”
Practice Book § 527 provides that “[i]n any action to foreclose a mortgage where no defense as to the amount of the mortgage debt is interposed, such debt may be proved by presenting to the court the original note and mortgage, together with the affidavit of the plaintiff or other person familiar with the indebtedness, stating what amount, including interest to the date of the hearing, is due, and that there is no setoff or counterclaim thereto.” (Emphasis added.)
“[The Court]: Okay. Where do we stand, gentlemen?
“[Plaintiff’s Counsel]: Where we stand, Your Honor, is Attorney Charmoy has indicated that he would agree to allow a finding of the debt today, subject to my providing him with the documentation to support that within, what, two weeks?
“[Defendants’ Counsel]: I would think two weeks. You’ll send a copy to the court and a copy to me?
“[Plaintiff’s Counsel]: Yes.
“[Defendants’ Counsel]: All right. And if I don’t get the documentation, then I’ll have to move to reopen.
“[The Court]: So the debt is as reflected in the affidavit which is one million, two hundred sixty-eight thousand, seventy-four dollars.”
“[Defendants’ Counsel]: Provided that, again, that documentation is not received from two weeks from today, that the court reopen the judgment.
“[Plaintiffs Counsel]: We would have no objections to a motion to reopen on that basis.
“[The Court]: All right. What else do we have to address at this point?”
General Statutes § 49-15 provides in pertinent part that “[a]ny judgment foreclosing the title to real estate by strict foreclosure may, at the discretion of the court rendering the same, upon the written motion of any person having an interest therein, and for cause shown, be opened and modified, notwithstanding the limitation imposed by section 52-212a, upon such terms as to costs as the court deems reasonable . . . .”