31 Conn. App. 476 | Conn. App. Ct. | 1993
The sole issue in this case is whether the beneficiary of a trust, who, without objection, is substituted for the trustee as the plaintiff in a foreclosure action after title has vested in the trustee, has standing to file a motion for a deficiency judgment. The substitute plaintiff, the beneficial owner of the mortgage, claims that the defendants’ motion to dismiss was improperly granted because the substitute plaintiff had standing to file the motion for a deficiency judgment. We agree and reverse the judgment of the trial court.
The following facts are relevant to the disposition of this appeal. The defendants, Fay Louise Rodia and John A. Rodia, were indebted to the original plaintiff, The Investors Mortgage Company, as trustee, in the amount of $100,000 by their promissory note dated January 13,1989. To secure this note, the defendants gave a blanket mortgage to The Investors Mortgage Company, as trustee, on four separate parcels of land situated in Shelton. That same day, the plaintiff, Moneyhelpers, Inc., entered into a trust agreement with The Investors Mortgage Company whereby the plaintiff would own the mortgage but The Investors Mortgage Company would act as trustee for Money-helpers, Inc., in closing, servicing and administering and holding legal title to the blanket mortgage.
The defendants defaulted on the note. By complaint dated January 15,1991, The Investors Mortgage Company, as trustee, instituted proceedings to foreclose the blanket mortgage. On June 6, 1991, a judgment of
On or about October 11, 1991, The Investors Mortgage Company, as trustee, transferred the subject premises by quitclaim deed to the substitute plaintiff, Moneyhelpers, Inc. On October 30, 1991, The Investors Mortgage Company filed a motion for a deficiency judgment, and a motion to substitute Moneyhelpers, Inc., as the plaintiff. When the motion for a deficiency judgment and the motion to substitute the plaintiff appeared on the court calendar, the defendants requested that the motion for a deficiency judgment go off, to which the Investors Mortgage Company agreed. The defendants, however, had no objection to Moneyhelpers, Inc., being substituted as the plaintiff. The motion to substitute the plaintiff was granted by the court.
On February 18,1992, the defendants filed a motion to dismiss the motion for a deficiency judgment. The trial court held that the substitute plaintiff, Moneyhel-pers, Inc., lacked standing to prosecute the motion for a deficiency judgment because Moneyhelpers, Inc., was not the foreclosing plaintiff as is required by the deficiency judgment statute, General Statutes § 49-14. The trial court decided that the remedy provided by § 49-14 is available only to foreclosing plaintiffs, and, in this case, The Investors Mortgage Company was the foreclosing plaintiff, not Moneyhelpers, Inc. The trial court determined that Moneyhelpers, Inc., lacked the required standing to seek a deficiency judgment and dismissed its motion. We disagree.
We begin our review of the issue of standing with an analysis of the language of paragraph three of the trust agreement between The Investors Mortgage Company and Moneyhelpers, Inc. Paragraph three states “[s]uch blanket mortgage note and mortgage deed shall be held by and in the name of the Company, as Trustee for the benefit of the Mortgage Owner.” Pursuant to General Statutes § 52-106,
The motion to substitute the plaintiff was granted by the court, bringing Moneyhelpers, Inc., into the case in place of The Investors Mortgage Company pursuant to General Statutes § 52-107
We note that the defendants did not object to the motion to substitute the plaintiff. The Supreme Court of Alabama, encountering a similar situation, held that when there is no objection from a defendant to the granting of a motion for substitution of a plaintiff, the defendant may not later claim that the proper party is not present. Magic City Metals, Inc. v. Orange Steel Industries, Inc., 404 So. 2d 57, 58 (Ala. 1981). Here, the defendants cannot now claim that the substituted plaintiff is not the proper party. The motion fully set forth the reasons for the substitution
General Statutes § 49-14 provides that if a deficiency is established, the court shall “render judgment for the plaintiff.” In this case, the deficiency judgment is being requested by the owner of the debt who was substituted for the original plaintiff in this action. After title vested in the trustee, it then conveyed legal title to the premises, via quitclaim deed, to the beneficial owner, Money-helpers, Inc., which at all times owned the underlying obligation. The substitute plaintiff, as owner of the underlying mortgage debt obligation that had been held in trust by The Investors Mortgage Company is the proper party to seek recovery of its own assets. The owner of the underlying obligation is the party seeking the deficiency judgment, and the value of the property foreclosed is being applied to the underlying obligations. Moneyhelpers, Inc., as the owner of the debt, is the plaintiff as contemplated by General Statutes § 49-14 (a).
The defendants were not prejudiced by the fact that Moneyhelpers, Inc., sought a deficiency judgment. As we recently noted in Federal Deposit Ins. Corporation v. Retirement Management Group, Inc., 31 Conn. App. 80, 84, 623 A.2d 517 (1993), “[o]ur rules of practice . . . permit the substitution of parties as the interests
The judgment is reversed and the case is remanded for further proceedings consistent with this opinion.
In this opinion the other judges concurred.
General Statutes § 52-106 provides: “An executor, administrator, or trustee of an express trust may sue or be sued without joining the persons represented by him and beneficially interested in the action.”
General Statutes § 52-107 provides: “The court may determine the controversy as between the parties before it, if it can do so without prejudice to the rights of others; but, if a complete determination cannot be had without the presence of other parties, the court may direct that such other parties be brought in. If a person not a party has an interest or title which the judgment will affect, the court, on his application, shall direct him to be made a party.”
Practice Book § 99 provides: “The court may determine the controversy as between the parties before it, if it can do so without prejudice to the rights of others; but, if a complete determination cannot be had without the presence of other parties, the court may direct that they be brought in. If a person not a party has an interest or title which the judgment will affect, the court, on his motion, shall direct him to be made a party.”
“motion to substitute plaintiff
“This action was commenced by The Investors Mortgage Company, Trustee, to foreclose a Blanket Mortgage on four (4) separate parcels of real estate located in Shelton, Connecticut, owned by the defendants, Fay Louise Rodia and John A. Rodia. Pursuant to a Trust Agreement dated January 13, 1989, The Investors Mortgage Company agreed to act as
“The Court entered a Judgment of Strict Foreclosure and set the law day for the owner of the equity of redemption on October 7,1991. All defendants failed to redeem and title vested in the plaintiff, the investors mortgage company, trustee, on October 9, 1991.
“Pursuant to the terms of the Trust Agreement, The Investors Mortgage Company, Trustee, by Quit Claim Deed, transferred legal title to the subject premises to the mortgage-owner, moneyhelpers, INC.
“The substitute-plaintiff, Moneyhelpers, Inc., believes that the property foreclosed is insufficient to satisfy the debt due and, accordingly, moves to be substituted as the plaintiff in this action so that any deficiency judgment may be rendered in favor of the plaintiff, moneyhelpers, inc., the mortgage owner.”
Practice Book § 103 provides: “Any motion to cite in or admit new parties must comply with Sec. 196 and state briefly the grounds upon which it is made.”
General Statutes § 49-14 (a) provides: “At any time within thirty days after the time limited for redemption has expired, any party to a mortgage foreclosure may file a motion seeking a deficiency judgment. Such motion shall be placed on the short calendar for an evidentiary hearing. Such hearing shall be held not less than fifteen days following the filing of the motion, except as the court may otherwise order. At such hearing the court shall hear the evidence, establish a valuation for the mortgaged property and shall render judgment for the plaintiff for the difference, if any, between such valuation and the plaintiff’s claim. The plaintiff in any further action upon the debt, note or obligation, shall recover only the amount of such judgment.”
General Statutes § 49-1 provides: “The foreclosure of a mortgage is a bar to any further action upon the mortgage debt, note or obligation against the person or persons who are liable for the payment thereof who are made parties to the foreclosure and also against any person or persons upon whom service of process to constitute an action in personam could have been made within this state at the commencement of the foreclosure; but the foreclosure is not a bar to any further action upon the mortgage debt, note or obligation as to any person liable for the payment thereof upon whom service of process to constitute an action in personam could not have been made