TD BANK, N.A. v. JOHN J. DORAN, JR., ET AL.
(AC 37001)
Connecticut Appellate Court
Argued October 26, 2015—officially released January 19, 2016
DiPentima, C. J., and Lavine and Alvord, Js.
(Appeal from Superior Court, judicial district of Middlesex, Marcus, J. [foreclosure judgment]; Domnarski, J. [deficiency judgment].)
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Matthew S. Carlone, for the appellant (named defendant et al.).
Pierre-Yves Kolakowski, for the appellee (plaintiff).
Opinion
DiPENTIMA, C. J. The defendants John J. Doran, Jr., and Jodie Chase1 appeal from the deficiency judgment rendered by the trial court in favor of the plaintiff, TD Bank, N.A.,2 in the amount of $167,022.23. On appeal, the defendants claim that the court (1) improperly concluded that their special defense of laches was not relevant to the deficiency judgment proceeding and (2) erroneously found that the plaintiff did not
The following facts and procedural history are relevant to this appeal. The defendants, a married couple, executed a $525,000 home equity line of credit note in 2002, mortgaging their home located at 103 Meadow Woods Road, Deep River (property) to secure the debt. Due to the foreclosure of another mortgage on the property not pertinent to this appeal, the defendants vacated the property in March, 2008.
The plaintiff commenced the underlying foreclosure action to this appeal by summons and complaint dated May 4, 2012, with a return date of June 12, 2012. In its prayer for relief, the plaintiff sought, inter alia, a deficiency judgment against the defendants. The defendants entered appearances on June 12, 2012, as self-represented parties. On June 29, 2012, the plaintiff moved for default for failure to plead pursuant to Practice Book § 17-32 (a). On July 20, 2012, the defendants filed a pleading entitled ‘‘Defense’’ acknowledging, in relevant part, that because the mortgage had been in arrears for sixteen months at that point and interest, taxes, and penalties were accruing, ‘‘the potential for a deficiency against . . . the defendants existed.’’ The motion for default was granted on August 2, 2012.
The plaintiff filed a motion for judgment of strict foreclosure on November 8, 2012. The court held a hearing on this motion on September 3, 2013, which the defendants did not attend.3 On the same day, the court granted the motion for judgment of strict foreclosure establishing that (1) the defendants’ debt was $551,537.51 and (2) the fair market value of the property was $450,000. The law day was set for October 7, 2013. See Practice Book § 23-17. The defendants did not seek to reargue; see Practice Book § 11-12; or to open the judgment; see
On October 22, 2013, the plaintiff filed a timely motion for deficiency judgment pursuant to
At the June 10, 2014 hearing on the motion for deficiency judgment, the defendants were represented by counsel. At the outset, the plaintiff informed the court that the parties had reached a stipulation regarding the value of the property. Specifically, the parties agreed that as of October 28, 2012, the value was $550,000; as of July 3, 2013, the value was $450,000; and as of October 8, 2013, the value was $400,000. The court then allowed the defendants
Chase testified in support of the laches defense. She explained that, after receiving notice of the foreclosure action and the property’s appraised value of $550,000, the defendants decided in November, 2012, not to challenge the foreclosure because it would not lead to a deficiency. Chase acknowledged that the defendants received notice in July, 2013, that the property was worth less than the debt. Chase, nonetheless, asserted, ‘‘If we felt that we were going to be in a position where we would have a deficiency, we would have taken action.’’ On cross-examination, Chase testified in relevant part that she could not recall if they had filed any documents objecting to the strict foreclosure, or if Doran had received an appraisal of the property in August, 2013, or if they had attended the September, 2013 strict foreclosure hearing. Moreover, when questioned by the court, Chase insisted that the defendants ‘‘repeatedly asked [the plaintiff] to foreclose’’ on the property. She conceded, however, that once the foreclosure action was filed, the defendants took no action to move the foreclosure action along.
Ultimately, the court overruled the defendants’ objection and rendered a deficiency judgment in favor of the plaintiff. As to the laches defense, the court concluded that the defendants failed to carry their burden for two reasons. First, evidence that the defendants asked the plaintiff to foreclose on the property years earlier was ‘‘not relevant to the issue before the court [because] it is an issue that could have been raised in the foreclosure proceeding at the time of [that] judgment.’’ Second, as to the deficiency judgment proceeding, the defendants did not prove laches because the court could not find that the plaintiff inexcusably delayed the foreclosure action, noting the 180 day moratorium that had been in place. See footnote 3 of this opinion. The court determined that the deficiency amounted to $167,022.23. In its calculations, the court relied on the amended calculation of deficiency judgment provided by the plaintiff that fixed the value of the property at $400,000. This appeal followed.
On appeal, the defendants make two claims. First, they argue that the court improperly concluded that the special defense of laches was irrelevant to the deficiency judgment. Specifically, the defendants contend that they could not have raised laches at the strict foreclosure hearing because they could not have shown that they were prejudiced by the plaintiff’s delay in foreclosing on the property. Second, the defendants claim that the court’s finding that the plaintiff had not inexcusably delayed the foreclosure proceeding was erroneous. The thrust of the latter claim centers on the court’s taking judicial notice, which the defendants contend was erroneous, of the United States Department of Housing and Urban Development letters establishing a 180 day moratorium on foreclosures in the wake of Hurricane Sandy.
Because we agree with the court as to the defendants’ first claim, we need not address their second claim. Therefore, the dispositive issue on appeal is whether the defendants, after the judgment of strict foreclosure was rendered and not appealed, the law day passed, and title vested, could raise the special defense of laches at the deficiency judgment hearing. The court answered in the negative, and, for the reasons stated herein, we agree.
We begin our analysis by setting forth the applicable standard of review and principles of law. ‘‘The defense of laches, if proven, bars a plaintiff from [obtaining] equitable relief in a case in which there
‘‘In Connecticut, a mortgagee has legal title to the mortgaged property and the mortgagor has equitable title, also called the equity of redemption. . . . The equity of redemption gives the mortgagor the right to redeem the legal title previously conveyed by performing whatever conditions are specified in the mortgage, the most important of which is usually the payment of money. . . . Under our law, an action for strict foreclosure is brought by a mortgagee who, holding legal title, seeks not to enforce a forfeiture but rather to foreclose an equity of redemption unless the mortgagor satisfies the debt on or before his law day.’’ (Citations omitted.) Barclays Bank of New York v. Ivler, 20 Conn. App. 163, 166, 565 A.2d 252, cert. denied, 213 Conn. 809, 568 A.2d 792 (1989).
‘‘Under
The purpose of a strict foreclosure hearing is distinct from that of a deficiency judgment hearing. ‘‘[I]n a strict foreclosure, the vesting of title operates to reduce the debt by the value of the property.’’ National City Mortgage Co. v. Stoecker, 92 Conn. App. 787, 794, 888 A.2d 95, cert. denied, 277 Conn. 925, 895 A.2d 799 (2006). Thus, the strict foreclosure hearing establishes the amount of the debt owed by the defendant. See Federal Deposit Ins. Corp. v. Voll, 38 Conn. App. 198, 209–210, 660 A.2d 358, cert. denied, 235 Conn. 903, 665 A.2d 901 (1995). As contemplated by
The judgment is affirmed.
In this opinion the other judges concurred.