247 Conn. 575 | Conn. | 1999
Opinion
The two principal issues in this appeal are: (1) whether a condominium owners’ association may seek a deficiency judgment under General Statutes § 49-14
The parties have stipulated to the following facts. Prior to bringing the present action, pursuant to the Common Interest Ownership Act (act), General Statutes § 47-200 et seq., specifically § 47-258, the plaintiff brought a foreclosure action against the defendant to foreclose its statutory lien for unpaid common charges. The trial court rendered a judgment of strict foreclosure, determined that the defendant’s total debt secured by the lien was $74,596.01, awarded $1500 in attorney’s fees and $1653.60 in costs, and set law days.
The defendant responded by filing a motion for summary judgment, claiming that the present action was barred by res judicata because the plaintiff unsuccessfully had sought a deficiency judgment in the prior foreclosure action. The defendant claimed that, even if the plaintiff had not been required to seek a deficiency judgment pursuant to § 49-14, it chose to do so, and therefore, the trial court’s denial of the plaintiffs deficiency judgment motion precluded any further litigation to collect the same debt. The defendant further argued that the debt itself no longer existed because it had merged into the foreclosure judgment. In a pretrial memorandum of decision dated November 1,1996, Hon. Jerry Wagner, judge trial referee, denied the motion for summary judgment, concluding that the present action
In his posttrial memorandum of decision, however, Judge Freed concluded otherwise. Specifically, the court held that, in the foreclosure action, after the trial court had established the amount due the plaintiff, and after Shawmut had redeemed the condominium units, the plaintiff had a choice either to pursue a deficiency judgment pursuant to § 49-14 or to bring a separate action to collect the remaining debt. The court further reasoned, however, that because the plaintiff by motion had pursued a deficiency judgment, which was denied as untimely, the doctrine of res judicata barred the plaintiff from subsequently bringing an action to collect the unrecovered sum from the prior foreclosure action. Accordingly, the trial court rendered judgment for the plaintiff for only $19,070.06, which sum consisted of $11,556 that the parties had stipulated represented the common charges for May and June of 1995, plus $5026.66 in interest and $2487.40 in attorney’s fees incurred in the present action.
On appeal, the plaintiffs principal claim is that, pursuant to § 47-258, a condominium association can bring an action for unpaid common charges following a foreclosure action for whatever debt remained unsatisfied after judgment in the foreclosure action. Additionally, as part of this action, the plaintiff seeks common charges that accrued between the dates of judgment and redemption, and costs and attorney’s fees incurred in connection with the collection of the debt.
We agree with the plaintiff that § 49-14 did not provide a remedy available to the plaintiff and we reverse the
I
We first address the plaintiffs claim that the trial court improperly determined that the plaintiff could have obtained a deficiency judgment pursuant to § 49-14 in an action to foreclose a common charges lien created by § 47-258 in which a first mortgagee had redeemed by paying the plaintiffs statutory superpriority. We agree with the plaintiff.
Whether the plaintiff, under the circumstances of this case, could seek a deficiency judgment is a matter of statutory interpretation and is an issue of first impression for this court. Statutoiy interpretation is a matter of law, and, therefore, the trial court’s judgment is subject to plenary review. See Shawmut Mortgage Co. v. Wheat, 245 Conn. 744, 748, 717 A.2d 664 (1998). Well settled principles govern such a review. When we construe a statute, “ [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature. ... In seeking to discern that intent, we look to the words of the statute itself, to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter. . . . Furthermore, [w]e presume that laws are enacted in view of existing relevant statutes . . . because the legislature is presumed to have created a consistent body of law.” (Citations omitted; internal quotation marks omitted.) Conway v. Wilton, 238 Conn. 653, 663-64, 680 A.2d 242 (1996). We construe each sentence, clause or phrase to have a purpose behind it. State v. Ayala, 222 Conn. 331, 346, 610 A.2d 1162
Regarding the act specifically, we have stated that, “[i]n determining whether [the act] affords the relief that the [plaintiff] seeks, it is axiomatic that we strive to ascertain and give effect to the apparent intent of the legislature. . . . In addition, we consider the statute as a whole with a view toward reconciling its parts in order to obtain a sensible and rational overall interpretation.” (Citations omitted; internal quotation marks omitted.) Nicotra Wieler Investment Management, Inc. v. Grower, 207 Conn. 441, 451, 541 A.2d 1226 (1988).
The act, which is largely modeled after the Uniform Common Interest Ownership Act, was created in order to provide unit owners and their associations with consumer protection rights, as well as to afford developers, lenders and title insurers with flexibility and certainty in establishing common interest communities. Conn. Joint Standing Committee Hearings, Judiciary, Pt. 6, 1983 Sess., pp. 1821-24, remarks of William Breetz;
Section 47-258 also expressly permits actions based on personal liability for unpaid common charges. Section 47-258 (f) provides: “This section does not prohibit actions to recover sums for which subsection (a) of this section creates a lien or prohibit an association from taking a deed in lieu of foreclosure.” Hence, contrary to the defendant’s arguments, § 47-258 (f) allows an association to sue a unit owner based on the owner’s personal liability, in addition to the association’s statutory right to foreclose on its lien. The final phrase, “in lieu of foreclosure,” merely modifies “taking a deed,” thereby leaving intact the express statement that there is no bar to such a course of action. Furthermore, the defendant’s argument that subsections (f) and (j), read together, limit an association’s choices to either an action on the debt or a foreclosure action, is without merit. Section 47-258 (j) provides that “[t]he [condominium] association’s lien may be foreclosed in like manner
We turn our attention next to § 49-14, which permits a party in a mortgage foreclosure to file a motion for a deficiency judgment to recover postredemption unpaid debt in certain situations.
The history of mortgage foreclosures and the development of deficiency judgments help to explain the
Today deficiency judgments are calculated pursuant to § 49-14 (a), which provides in relevant part: “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. ... 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 plaintiffs claim. The plaintiff in any further action upon the debt, note or obligation, shall
As previously stated, we have read § 49-14 to apply to statutorily created judgment lien foreclosures pursuant to a provision similar to § 47-258 (j). Fairfield Plumbing & Heating Supply Corp. v. Kosa, supra, 220 Conn. 651. It follows, therefore, that § 49-14 should also apply to statutorily created liens for common charges. In Fairfield Plumbing & Heating Supply Corp., however, title vested in the party foreclosing the judgment hen. There is no analogous legal precedent for applying § 49-14 to the present situation, in which title did not vest in the foreclosing party who brought the claim for a deficiency judgment.
On its face, § 49-14 (a) applies only where there has been no redemption and title has vested in the foreclosing plaintiff. Although § 49-14 provides that “any party to a mortgage foreclosure may file a motion seeking a deficiency judgment”; (emphasis added); these words do not change our analysis, because the moving party must still have possession of the property in question in order for there to be a valuation and a corresponding calculation of a deficiency. In the present case, a deficiency cannot be calculated under § 49-14 (a) because the plaintiffs claimed deficiency is not created by inadequate value in the premises being foreclosed; rather, it arises as a result of the split priority.
Our conclusion is further supported by the fact that, although this case creates an issue of first impression, our reading of § 49-14 (a) is consistent with our prior cases involving § 49-14 (a). For example, we have made it clear-that “strict compliance with [§ 49-14 (a)’s] provisions [is] a condition precedent to the entry of a deficiency judgment. . . . The necessity of a definite rule of general application and, as well, an unvarying adherence to it, is manifest. Departures from it, if permitted, might lead to grave abuse.” (Internal quotation marks omitted.) Simsbury Bank & Trust Co. v. Ray Carlson Lumber Co., 154 Conn. 216, 218, 224 A.2d 544 (1966).
More specifically, we have explained that it is a mandatory statutory requirement that a hearing be held at which 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 plaintiffs claim. ’ ” First Bank v. Simpson, 199 Conn. 368, 371, 507 A.2d 997 (1986), quoting Practice Book § 528, now § 23-19. In our discussion of the proper method of calculating a deficiency in Fairfield Plumbing & Heating Supply Corp. v. Kosa, supra, 220 Conn. 647, we specified that
The defendant asserts that the relevant language of § 49-14 — “establish a valuation for the mortgaged property” — refers to the amount of money Shawmut paid the plaintiff when it redeemed on its law day. This argument has no merit. Although such a reading creates a mathematical equation upon which the remaining debt could be calculated, there is no basis in the statutory language, its legislative history, or in any of our prior readings of § 49-14 for the defendant’s claim that “valuation” is not linked to the value of the property.
In summary, we conclude that the plaintiff was not able to bring a deficiency judgment claim in the former action pursuant to § 49-14 because the first mortgagee redeemed by paying the plaintiffs statutory superpriority.
II
We next address whether § 49-1 or the doctrine of res judicata bars the plaintiff from bringing the present action. We find no bar to the present action.
The defendant contends that, in the context of common charges liens, as well as mortgage foreclosures, § 49-1 mandates that the plaintiff must choose between bringing a foreclosure action or an action on the debt. Hence, according to the defendant, § 49-1 bars the present action because the plaintiff chose to bring the foreclosure action under § 47-258. We disagree.
The application of § 49-1 is also an issue of statutory interpretation to which we will give plenary review. Necessarily, it will be governed by the aforementioned principles of statutory construction.
We begin with the language of the relevant statutes. Section 49-1 provides in relevant part: “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 . . . .” Accordingly, on its face, § 49-1 applies only to mortgage foreclosures. Furthermore, there is no explicit statutory bar to further actions after the common charges lien foreclosure action. On the contrary, subsection (f) of § 47-258
Our interpretation of § 49-1 is consistent with our reading of § 49-14, and the historical developments of the act and mortgage foreclosure law. Having rejected an interpretation of § 49-14 allowing for a deficiency
Our conclusion is further supported by the act’s mandate of liberal construction. Generally, the act must be
Finally, our holding that § 49-1 does not apply to liens for common charges is also consistent with our analogous decision in Fairfield Plumbing & Heating Supply Corp. v. Kosa, supra, 220 Conn. 649. In that case, we explained that, unlike a mortgage foreclosure judgment, a judgment of foreclosure on a judgment lien does not extinguish the original judgment, which remains valid as to any uncollected portion. Id. It was implicit in our holding that § 49-1 did not apply to judgment lien foreclosures. Similarly, the original common charges debt is not extinguished by a foreclosure action based on a statutorily created lien, hence § 49-1 does not bar further actions on the debt.
In contrast, the defendant claims that the statement in § 47-258 (j) that an association lien “may be foreclosed in like manner as a mortgage on real property” invokes the bar contained in § 49-1. We are not persuaded. Subsection (j) of § 47-258 governs only the procedures for foreclosing mortgages on real property. Section 49-1, in contrast, does not relate to the manner in which a mortgage is foreclosed, but, rather, serves
B
The defendant also argues that the present action is barred by the doctrine of res judicata because of the plaintiffs previous unsuccessful pursuit of a deficiency judgment. Although the plaintiff moved for a deficiency judgment pursuant to § 49-14, which motion was denied as untimely, the plaintiff counters that res judicata does not apply to the present action because it was not legally able to seek a deficiency judgment in the prior foreclosure action. As we have previously stated, we agree with the plaintiff that a deficiency judgment was not available under the circumstances of this case and, therefore, the doctrine of res judicata does not apply.
The applicability of res judicata also raises a question of law, and is, therefore, subject to our plenary review. See Tirozzi v. Shelby Ins. Co., 50 Conn. App. 680, 684, 719 A.2d 62 (1998). “[U]nder the doctrine of res judicata, or claim preclusion, a former judgment on a claim, if rendered on the merits, is an absolute bar to a subsequent action on the same claim ... [or any claim based on the same operative facts that] might have been made. . . . [T]he appropriate inquiry with respect to [claim] preclusion is whether the party had an adequate opportunity to litigate the matter in the earlier proceeding . . . .” (Emphasis altered; internal quotation marks omitted.) Connecticut National Bank v. Rytman, 241 Conn. 24, 43-44, 694 A.2d 1246 (1997). We have further stated that “a decision whether to apply the doctrine of res judicata to claims that have not actually been litigated should be made based upon a consideration
We conclude that the doctrine of res judicata does not bar- the present action for two reasons. First, its application would have to be predicated on the fact that the plaintiff already had brought a deficiency judgment action on the outstanding debt. We have determined, however, that the plaintiff was not able to bring such a claim in its foreclosure action. Thus, res judicata cannot bar the plaintiff because it brought an action it was not entitled to bring. See Swift v. McPherson, 232 U.S. 51, 56, 34 S. Ct. 239, 58 L. Ed. 499 (1914) (dismissal is not on merits if dismissed for want of jurisdiction); see also Trans World Airlines, Inc. v. Hughes, 317 A.2d 114, 119 (Del. 1974) (judgment based on defective pleadings or lack of jurisdiction in prior action will not serve as bar to second action), aff'd, 336 A.2d 572, cert. denied, 423 U.S. 841, 96 S. Ct. 72, 46 L. Ed. 2d 61 (1975). Although the doctrine of res judicata may bar an action that a party did bring or could have brought, Delahunty v. Massachusetts Mutual Life Ins. Co., supra, 236 Conn. 589; the fact that the plaintiff could not legally have obtained a deficiency judgment in the prior action, as we have concluded, precludes the application of that strand of the res judicata doctrine. Second, even if the plaintiffs deficiency judgment claim could be challenged under the doctrine of res judicata, the doctrine would not apply in the present action because the trial court’s dismissal was based on untimeliness and not on the merits of the claim. See Connecticut National Bank v. Rytman, supra, 241 Conn. 43. In summary, we conclude that the trial court improperly determined that the doctrine of res judicata bars the present action.
The final issue on appeal is whether collateral estoppel bars the plaintiff from requesting the attorney’s fees and costs that had accrued, had been requested, but had been denied by the trial court in the prior foreclosure action.
Collateral estoppel, like its cousin res judicata, presents a question of law that we review de novo. See Tirozzi v. Shelby Ins. Co., supra, 50 Conn. App. 684. “Collateral estoppel, or issue preclusion, prohibits the relitigation of an issue when that issue was actually litigated and necessarily determined in a prior action. . . . For an issue to be subject to collateral estoppel, it must have been fully and fairly litigated in the first action. It also must have been actually decided and the decision must have been necessary to the judgment.” (Citations omitted; internal quotation marks omitted.) Aetna Casualty & Surety Co. v. Jones, 220 Conn. 285, 296, 596 A.2d 414 (1991).
In the prior foreclosure action, the trial court made a factual determination in the award of attorney’s fees and costs pursuant to § 47-258 (g).
IV
In conclusion, we hold that the plaintiff did not have available the remedy of a deficiency judgment in the prior foreclosure action. In addition, we conclude that neither § 49-1 nor the doctrine of res judicata bars the present action. We do, however, limit the plaintiffs claim to: (1) the unrecovered common charges debt ($59,596.01); (2) the common charges that accrued between the dates of the foreclosure judgment and redemption ($11,556) plus 18 percent interest per annum; and (3) the costs and attorney’s fees incurred solely in connection with the present action.
The judgment is reversed and the case is remanded with direction to render judgment for the plaintiff for its debt, common charges, costs, and its reasonable attorney’s fees in this action.
In this opinion the other justices concurred.
General Statutes § 49-14 provides: “(a) At any time within thirty days after tire 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 plaintiffs claim. The plaintiff in any further action upon the debt, note or obligation, shall recover only the amount of such judgment.
“(b) Upon the motion of any party and for good cause shown, the court may refer such motion to a state referee, who shall have and exercise the powers of the court with respect to trial, judgment and appeal in such case.
“(c) Any party to a mortgage foreclosure who has moved for an appraisal
“(d) Any appeal pending in the Supreme Court with regard to any deficiency judgment or proceedings relating thereto shall be stayed until a hearing is held pursuant to subsection (a) of this section. Any appellant in such an appeal shall have the right for a period of thirty days after the rendering of judgment pursuant to subsection (a) of this section to amend his appeal. There shall be no stay of such an appeal if no motion has been filed pursuant to this section on or before November 1, 1979.”
General Statutes § 47-258 provides: “(a) The association lias a statutory lien on a unit for any assessment levied against that unit or fines imposed against its unit owner. Unless the declaration otherwise provides, fees, charges, late charges, fines and interest charged pursuant to subdivisions (10), (11) and (12) of subsection (a) of section 47-244 are enforceable as assessments under this section. If an assessment is payable in instalments, the full amount of the assessment is a lien from the time the first instalment thereof becomes due.
“(b) A lien under this section is prior to all other liens and encumbrances on a unit except (1) liens and encumbrances recorded before the recordation of the declaration and, in a cooperative, liens and encumbrances which the association creates, assumes or takes subject to, (2) a first or second security interest on the unit recorded before the date on which the assessment sought to be enforced became delinquent, or, in a cooperative, a first or second security interest encumbering only 1he unit owner’s interest and perfected before the date on which the assessment sought to be enforced became delinquent, and (3) liens for real property taxes and other governmental assessments or charges against the unit or cooperative. The lien is also prior to all security interests described in subdivision (2) of this subseclion to the extent, of (A) an amount equal to the common expense assessments based on the periodic budget adopted by the association pursuant to subsection (a) of section 47-257 which would have become due in the absence of acceleration during the six months immediately preceding institution of an action to enforce either the association’s lien or a security interest described in subdivision (2) of this subsection and (B) the association’s costs and attorney's fees in enforcing its lien. A lien for any assessment or fine specified in subsection (a) of this section shall have the priority provided for in this subsection in an amount not to exceed the amount specified in subparagraph (A) of this subsection. This subsection does not affect the priority of mechanics’ or materialmen’s liens or the priority of liens for
“(c) Unless the declaration otherwise provides, if two or more associations have liens for assessments created at any time on the same property, those liens have equal priority.
“(d) Recording of the declaration constitutes record notice and perfection of the lien. No further recordation of any claim of lien for assessment under this section is required.
“(e) A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within two years after the full amount of the assessments becomes due; provided, that if an owner of a unit subject to a lien under this section files a petition for relief under the United States Bankruptcy Code, the period of time for instituting proceedings to enforce the association’s lien shall be tolled until thirty days after the automatic stay of proceedings under Section 362 of the Bankruptcy Code is lifted.
“(f) This section does not prohibit actions to recover sums for which subsection (a) of this section creates a lien or prohibit an association from taking a deed in lieu of foreclosure.
“(g) A judgment or decree in any action brought under this section shall include costs and reasonable attorney’s fees for the prevailing party.
“(h) The association on written request shall furnish to a unit owner a statement in recordable form setting forth the amount of unpaid assessments against the unit. The statement shall be furnished within ten business days after receipt of the request and is binding on the association, the executive board and every unit owner.
“(i) In a cooperative, on nonpayment of an assessment on a unit, the unit owner may be evicted in the same manner as provided by law in the case of an unlawful holdover by a tenant, and the lien may be foreclosed as provided by this section.
“(J) The association’s lien may be foreclosed in like manner as a mortgage on real property.
“(k) In any action by the association to collect assessments or to foreclose a lien for unpaid assessments, the court may appoint a receiver of the unit owner pursuant to section 52-504 to collect all sums alleged to be due from that unit owner prior to or during the pendency of the action. The court may order the receiver to pay any sums held by the receiver to the association during the pendency of the action to the extent of the association’s common expense assessments based on aperiodic budget adopted by the association pursuant to subsection (a) of section 47-257.
“© If a holder of a first or second security interest on a unit forecloses that security interest, the purchaser at the foreclosure sale is not liable for any unpaid assessments against that unit which became due before the sale, other than the assessments which are prior to that security interest under subsection (b) of this section. Any unpaid assessments not satisfied from the proceeds of sale become common expenses collectible from all the unit owners, including the purchaser.”
The plaintiff had requested $5000 in legal fees and $3470.60 in costs.
See footnote 1 of this opinion for the text of § 49-14.
General Statutes § 47-257 provides in relevant part: “(a) Until the association makes a common expense assessment, the declarant shall pay all common expenses. After an assessment has been made by the association, assessments shall be made at least annually, based on a budget adopted at least annually by the association.
“(b) Except for assessments under subsections (c), (d) and (e) of this section, all common expenses shall be assessed against all the units in accordance with the allocations set forth in the declaration pursuant to subsections (a) and (b) of section 47-226. Any past due common expense assessment or instalment thereof bears interest at the rate established by the association not exceeding eighteen per cent per year. . . .”
See footnote 2 of this opinion for the text of § 47-258 (f).
Specifically, the plaintiff is seeking costs and attorney’s fees that had been requested but denied by the trial court in the prior foreclosure action, as well as costs and attorney’s fees incurred in the present action.
General Statutes § 49-1 provides in relevant part: “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
The plaintiff also argues that the doctrine of stare decisis bound Judge Freed and, therefore, required him to follow Judge Wagner’s decision regarding the defendant’s motion for summary judgment. We disagree. The applicable doctrine is not stare decisis, but the law of the case, which did not bind Judge Freed. See Breen v. Phelps, 186 Conn. 86, 98-99, 439 A.2d 1066 (1982) (“A judge is not bound to follow the decisions of another judge made at an earlier stage of the proceedings, and if the same point is again raised he has the same right to reconsider the question as if he had himself made the original decision. . . . [0]ne judge may, in a proper case, vacate, modify, or depart from an interlocutory order or ruling of another judge in the same case, upon a question of law.” [Citations omitted; internal quotation marks omitted.]).
Since the act’s inception, 1995 amendments have transformed the act so that it substantially conforms with the 1994 version of the Uniform Common Interest Ownership Act See, e.g., Public Acts 1995, No. 95-187.
See footnote 1 of this opinion for the text of § 49-14.
General Statutes § 52-380a (c), which was at issue in Fairfield Plumbing & Heating Supply Corp. v. Kosa, supra, 220 Conn. 643, provides in relevant part: “A judgment lien on real property may be foreclosed or redeemed in the same manner as mortgages on the same property. . . .”
General Statutes § 49-1 in part codifies this common-law rule. Section 49-1 provides in relevant part: “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 . . . .”
Public Acts 1833, c. 18, §§ 1 and 2.
The split priority, making six months of common charges and attorney’s fees and costs prior to first and second mortgage liens, and the remainder of the common charges hen prior to many other hens, creates a unique situation in which the superpriority held by condominium associations will often be paid by first mortgagees, but part of the debt is still owed to them. Therefore, the deficiency is created by the spht priority, not as a result of the value of the property being insufficient to satisfy the debt. See generally D. Caron, supra, § 12.07.
See footnote 2 of this opinion for the text of § 47-258 (f).
These attorney’s fees and costs are distinct from the $2487.40 in attorney’s fees that the trial court awarded the plaintiff for pursuing this action.
See footnote 2 of this opinion for the text of § 47-258 (g).
See footnote 3 of this opinion and its accompanying text.