File No. CV-12-6016130-S
Superior Court, Complex Litigation Docket at Waterbury
June 21, 2016
2016 Conn. Super. LEXIS 1632
DOOLEY, J.
APPENDIX; Memorandum filed June 21, 2016; * Affirmed. Tedesco v. Agolli, 182 Conn. App. 291, A.3d (2018).
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Proceedings
Action to foreclose a mortgage on certain real property owned by named defendant et al. Judgment for plaintiff as to liability.
Jeremy S. Donnelly, for the substitute plaintiff Scott Tedesco, trustee of the Heritage Builders of Waterbury, LLC, 401 (k) Profit Sharing Plan.
Justin J. Garcia, for the named defendant et al.
Opinion
DOOLEY, J.
PRELIMINARY STATEMENT
This is an action to foreclose a mortgage covering several parcels of real property located in Waterbury, Connecticut, each of which is owned by the defendant Fikri Development, LLC (Fikri). The properties at issue are: (1) 3743 East Main Street; (2) 3496 East Main Street; (3) 51 Matteson Road; and (4) 3514 Main Street. The defendant Resjimi Agolli (Agolli) is currently the sole member of Fikri. The defendants assert several special defenses to the foreclosure action. Trial was conducted over the course of three days in May, 2016. The court heard testimony from seven witnesses and admitted numerous documents into evidence. Simultaneous trial briefs were submitted on June 1, 2016. The court has considered the testimony and evidence introduced, the arguments set forth in the parties’ memoranda, the authorities cited therein, and renders this decision based thereupon. For the reasons set forth below, judgment will enter in favor of the plaintiff as to liability.
FACTUAL FINDINGS
‘‘In a case tried before a court, the trial judge is the sole arbiter of the credibility of the witnesses and the weight to be given specific testimony. . . . It is within the province of the trial court, as the fact finder, to weigh the evidence presented
Agolli came to the United States in 1967 from what is now Macedonia as a young woman newly married to Fikri Agolli. She and her husband settled in the Waterbury area where they raised three children. Eventually, Agolli‘s husband owned and operated a diner in Waterbury, at which Agolli sometimes worked. As the children grew, they helped in the diner as well. Ultimately, each of the children pursued
During his life, Agolli‘s husband had purchased numerous parcels of undeveloped property in the Waterbury area. After his passing, Agolli became the owner of these parcels.
Joseph Antonios was a local mortgage broker who ran his own business, Metro Mortgage. He also owned and operated The Private Mortgage Fund, LLC (The PMF), which financed mortgage loans. Fesnik Agolli (Nik), Agolli‘s son, worked for Antonios’ mortgage brokerage business for approximately fourteen years. He is presently a police officer for the city of Waterbury. During the time that Nik Agolli worked for Metro Mortgage, Antonios became well known to and a friend of the Agolli family. He would often accompany Nik Agolli to Agolli‘s home for dinner. The Agollis liked and trusted Antonios. In 2007, Antonios began discussions with Agolli about developing her properties so that they would generate cash flow for Agolli.2 Fikri was formed and Agolli transferred all of her real estate holdings into Fikri, to include her personal residence. Agolli was a 50 percent member; Antonios’ wife, Gina, was a 50 percent member; and Antonios was made the manager.3 The arrangement called for Antonios, as the manager, to develop the properties. The operating agreement gave Antonios broad and largely unfettered authority to act on behalf of Fikri.
Between 2008 and 2010, Antonios borrowed hundreds of thousands of dollars on behalf of Fikri, securing these loans with the properties Agolli had transferred into Fikri. Some of these loans were financed by the Angelo P. Tedesco Money Purchase Pension Plan (ATMPPP). Angelo Tedesco was a local property developer. He had a business relationship with Antonios, and would, at times, provide the funds through which The PMF extended loans. In 2008, Antonios arranged for The PMF to loan Fikri $750,000. This debt was secured by a mortgage on the four properties at issue here, as well as Agolli‘s personal residence located at 375 Maybrook Road, Waterbury, Connecticut, and an undeveloped parcel of land located on Austen Road in Waterbury, Connecticut. In 2010, Tedesco, as Trustee of the ATMPPP, agreed to take an assignment of this note and mortgage. In connection therewith, Agolli, on behalf of Fikri, signed a Note and Mortgage Modification Agreement, to include a new Promissory Note dated January 12, 2010 (exhibit B). This transaction closed on or about January 12, 2010. The Promissory Note contained a 10 percent interest rate and a payment schedule of interest only for twelve months with the principal due in full on January 12, 2011.
By service of a writ of summons and complaint filed September 3, 2010, Angelo Tedesco as Trustee of the ATMPPP commenced a foreclosure action against Agolli and Fikri.5 Fikri and Agolli were represented by Attorney Timothy Sullivan of Mahaney, Geghan & Sullivan. Attorney Sullivan was a childhood friend of Nik Agolli and had known the Agolli family for many years. Nik Agolli asked Attorney Sullivan to defend the foreclosure with the primary objective being the securing and safeguarding of Agolli‘s personal residence on Maybrook Road in Waterbury, Connecticut.
Although it is not clear precisely when the relationship between Agolli and Antonios soured, following the filing of the foreclosure action, the determination was made to remove both Joseph and Gina Antonios from any further involvement with Fikri. Also during this time period, Agolli spoke directly with Angelo Tedesco in an effort to resolve the foreclosure and satisfy Fikri‘s debt to the ATMPPP. She testified that she asked him whether he intended to leave her ‘‘out on the street‘’ with nothing. Agolli wanted Tedesco to accept $500,000 from the anticipated sale of one of the parcels of property in full satisfaction of Fikri‘s debt.
Attorney Sullivan eventually worked out a resolution of the foreclosure action with Tedesco, who was represented by Attorney Paul Margolis. The debt would be refinanced as follows. Fikri would consummate the sale of property located on Austen Road, Waterbury, Connecticut, from which $290,000 would be paid to Tedesco to pay down the outstanding Fikri debt. Fikri would sign a new Promissory Note in the reduced amount of approximately $571,000. The new Note would bear interest at 5 percent, instead of the previous interest rate of 10 percent. The new Note would be secured by the four properties at issue here, but Agolli‘s personal residence would no longer be on the mortgage, protecting her home in the event of future default. The new Note required no payments for approximately six months, to give Fikri time to either sell or develop the
Attorney Sullivan testified that he had regular communications with Nik Agolli, Suzi (Agolli) Zenko, as well as Agolli herself, regarding the terms of the refinance and settlement of the pending foreclosure. He testified that he sent all draft documents to Suzi because she is an attorney. Although there were a few discussions with Antonios, Attorney Sullivan was aware that Antonios was being removed from Fikri and he took his direction from the Agollis. Consistent with Attorney Sullivan‘s testimony, Antonios denied that he was the architect of the refinance or that he negotiated its terms on behalf of Fikri.6 He was being removed from Fikri, so that limited his involvement to participating in the execution of the negotiated agreement as necessary.
However, Nik Agolli and Agolli testified that Attorney Sullivan never discussed the terms of the refinance with them until the morning of the closing. Agolli further testified that she believed Tedesco had accepted her proposal to resolve Fikri‘s debt by the payment of $500,000 from the proceeds of the Austen Road sale, contingent upon his receipt and review of the purchase and sale contract. She testified that she asked Attorney Sullivan to send the contract to Tedesco and that she believed he had done so. Based upon these discussions, Agolli testified that she believed that the closing which occurred was not a refinance at all, but a resolution of Fikri‘s debt to Tedesco. She testified that she was ‘‘surprised‘’ to learn that she would be asked to sign a new Note or that there would continue to be mortgages on some of her property. Her testimony is not credited. To accept this testimony would be to completely ignore or discredit the testimony of Attorney Sullivan, Antonios, and Attorney Margolis,7 each of whom had the same understanding of how this refinance came to pass, and whose understanding is entirely consistent with the documents created and signed by Agolli on behalf of Fikri.
On July 26, 2011, the closing on the refinance of the Fikri debt occurred in various stages at Attorney Sullivan‘s office. Present at various times was Agolli, Nik Agolli, Suzi (Agolli) Zenko, Attorney Sullivan, Attorney Margolis, Joseph Antonios and perhaps others.8 Fikri sold property located on Austen Road, Waterbury, Connecticut, to a disinterested purchaser. The sale proceeds were used to pay off encumbrances on that property, leaving approximately $290,000 for the paydown of the Tedesco debt.9 Gina and Joseph Antonios
Thereafter, Agolli, individually and on behalf of Fikri, executed the documents necessary to effectuate the settlement with Tedesco and the refinance of the debt. These include the Promissory Note (exhibit 1) at issue in this foreclosure and the Open End Mortgage Deed, Security Agreement and Fixture Filing (exhibit 2), which secured the Note. She understood that Fikri would remain indebted to Tedesco under the terms of the new Note and refinance. She understood that she was, at that time, the sole member of Fikri and that
she was binding Fikri under the terms of the agreement.
As agreed, Tedesco filed a withdrawal of the foreclosure action on July 27, 2011,10 indicating thereon that the dispute had been ‘‘resolved by discussion of the parties on their own.‘’ During this time, though it is not clear precisely when, Angelo Tedesco was diagnosed with cancer. Prior to his passing, Scott Tedesco, his son, became the Trustee of the ATMPPP. The note and mortgage were thereafter transferred to the current plaintiff, the Heritage Builders of Waterbury, LLC, for which Scott Tedesco is also the Trustee. The plaintiff remains in possession of the Note, signed by Agolli on behalf of Fikri.
The first payment under the Note was due February 1, 2012. Fikri failed to make that payment and each payment due thereafter. The Note is in default.
DISCUSSION
‘‘In order to establish a prima facie case in a mortgage foreclosure action, the plaintiff must prove by a preponderance of the evidence that it is the owner of the note and mortgage, that the defendant mortgagor has defaulted on the note and that any conditions precedent to foreclosure, as established by the note and mortgage, have been satisfied.‘’ (Internal quotation marks omitted.) Wells Fargo Bank, N.A. v. Strong, 149 Conn. App. 384, 392, 89 A.3d 392, cert. denied, 312 Conn. 923, 94 A.3d 1202 (2014).
Here, based upon the facts found above, the plaintiff has established its prima facie case. The plaintiff is the current holder of the Note and Mortgage Deed securing the Note and the Note is in default. The defendants do not dispute these findings and there are no conditions precedent to foreclosure which have been identified as unmet.
The defendants rely instead upon several special defenses: no meeting of the minds; duress and lack of consideration. Each will be discussed in turn.
The defendants bear the burden of proving their special defenses. See Emigrant Mortgage Co. v. D‘Agostino, 94 Conn. App. 793, 802, 896 A.2d 814, cert. denied, 278 Conn. 919, 901 A.2d 43 (2006). Although the defendants may rely upon more than one special defense, they need only establish one in order to defeat a finding of liability. See Union Trust Co. v. Jackson, 42 Conn. App. 413, 417, 679 A.2d 421 (1996).
A
Lack of Consideration
‘‘To be enforceable, a contract must be supported by valuable consideration. . . . The doctrine of consideration is fundamental in the law of contracts, the general rule being that in the absence of consideration an executory promise is unenforceable.‘’ (Citation omitted; internal quotation marks omitted.) Connecticut National Bank v. Voog, 233 Conn. 352, 366, 659 A.2d 172 (1995). ‘‘[C]onsideration is [t]hat which is bargained-for by the promisor and given in exchange for the promise by the promisee . . . . [T]he doctrine of consideration does not require or imply an equal exchange between the contracting parties. . . . Consideration consists of a benefit to the party promising, or a loss or detriment to the party whom the promise is made.‘’ (Internal quotation marks omitted.) Thoma v. Oxford Performance Materials, Inc., 153 Conn. App. 50, 56, 100 A.3d 917 (2014). ‘‘Consideration . . . requires intent by the parties to incur benefits or detriments at the time an agreement is entered into.‘’ Id., 57. ‘‘Whether an agreement is supported by consideration is a factual inquiry reserved for the trier of fact . . . .‘’ (Internal quotation marks omitted.) Viera v. Cohen, 283 Conn. 412, 442, 927 A.2d 843 (2007).
The court concludes that the Note and Mortgage Deed were supported by consideration and are therefore enforceable.
First, both the Note and the Mortgage Deed contain an acknowledgement by the defendants that both are signed upon receipt of consideration. The Note states that it is given ‘‘FOR VALUE RECEIVED.‘’ The Mortgage Deed provides: ‘‘KNOW YE, that Fikri Development, LLC . . . (the ‘Mortgagor‘) for the consideration of One Dollar ($1.00) and other valuable consideration received to the Mortgagor‘s full satisfaction . . . does hereby give, grant . . . .‘’ Declarations such as these are generally sufficient to satisfy the consideration requirements of a binding contract. See Milford Bank v. Phoenix Contracting Group, Inc., 143 Conn. App. 519, 529–30, 72 A.3d 55 (2013).
Even absent these declarations, the evidence established that the defendants, in fact, received good and valuable consideration
asserted and which was poised to go to judgment. Furthermore, the debt was restructured at a lower interest rate; the Note allowed for a six month grace period during which no payments would be due; and the mortgage deed no longer extended to Agolli‘s personal residence, removing any risk that she would lose her home in the event of a future default. The defendants’ arguments to the contrary are not persuasive.11
B
Duress
‘‘The classical or common law definition of duress is any wrongful act of one person that compels a manifestation of apparent assent by another to a transaction without his volition. . . . The defendant must prove: [1] a wrongful act or threat [2] that left the victim no reasonable alternative, and [3] to which the victim in fact acceded, and that [4] the resulting transaction was unfair to the victim. . . . The wrongful conduct at issue could take virtually any form, but must induce a fearful state of mind in the other party, which makes it impossible for [the party] to exercise his own free will.‘’ (Citation omitted; internal quotation marks omitted.). Chase Manhattan Mortgage Corp. v. Machado, 83 Conn. App. 183, 189–90, 850 A.2d 260 (2004).
The defendants presented no evidence to support this special defense. The defendants do not identify any wrongful act or threat by Tedesco. Agolli did not testify that she felt any fear or threat at the closing as a result of any conduct by Tedesco or otherwise. Agolli did not testify that her free will was overborne. The resulting transaction, as noted above, was not unfair to Fikri or Agolli and indeed provided an opportunity for Fikri to right its ship and for Agolli to keep her home from foreclosure.
Agolli testified that she did not like the deal. Nik Agolli testified that in his opinion, his mother ‘‘had no choice.‘’ The testimony derives from the viewpoint that Antonios had defrauded Agolli and Fikri leaving her ‘‘with no choice‘’ but to proceed with the refinance.12 This is insufficient. See Chase Manhattan Mortgage Corp. v. Machado, supra, 83 Conn. App. 190 (‘‘[w]e will not invalidate a mortgage agreement against the mortgagee unless it participated in the alleged duress or had reason to know of its existence‘‘). The question is whether Tedesco‘s conduct placed Agolli under duress. It did not.13 See Noble v. White, 66 Conn. App. 54, 59, 783 A.2d 1145 (2001) (‘‘[w]here a
citing Smedley Co. v. Lansing, 35 Conn. Supp. 578, 579, 398 A.2d 1208 (1978); see also Twachtman v. Hastings, Superior Court, judicial district of Tolland, Docket No. CV-95-57307-S (July 23, 1997) (Hon. Harry T. Hammer, judge trial referee) (20 Conn. L. Rptr. 145), aff‘d, 52 Conn. App. 661, 727 A.2d 791 (consent secured by the pressure of financial circumstance is not sufficient to establish duress), cert. denied, 249 Conn. 930, 733 A.2d 851 (1999).
The defendants failed to prove the special defense of duress.
C
No Meeting of the Minds
Last, the defendants claim that there was no meeting of the minds as between Agolli and Tedesco with respect to the Note and Mortgage Deed. The argument is twofold. The defendants claim that Agolli could not legally bind Fikri at the time she executed the Note and Mortgage Deed purporting to do so. The defendants also claim that she did not have an adequate understanding of the transaction.
‘‘In order for an enforceable contract to exist, the court must find that the parties’ minds had truly met. . . . If there has been a misunderstanding between the parties, or a misapprehension by one or both so that their minds have never met, no contract has been entered into by them and the court will not make for them a contract which they themselves did not make.‘’ (Internal quotation marks omitted.) Milford Bank v. Phoenix Contracting Group., Inc., supra, 143 Conn. App. 527–28. ‘’ ‘Meeting of the minds’ is defined as ‘mutual agreement and assent of two parties to contract to substance and terms. It is an agreement reached by the parties to a contract and expressed therein, or as the equivalent of mutual assent or mutual obligation.’ Black‘s Law Dictionary (6th Ed. 1990). This definition refers to fundamental misunderstandings between the parties as to what are the essential elements or subjects of the contract. It refers to the terms of the contract, not to the power of one party to execute a contract as the agent of another.‘’ Sicaras v. Hartford, 44 Conn. App. 771, 784, 692 A.2d 1240, cert. denied, 241 Conn. 916, 696 A.2d 340 (1997).14
When an agreement is reduced to writing and signed by all parties, the agreement itself is substantial evidence that a meeting of the minds has occurred. See Tsionis v. Martens, 116 Conn. App. 568, 577–78, 976 A.2d 53 (2009) (‘‘[i]n light of the fact that a contract existed in written form that was signed by both parties, the plaintiffs’ argument that a meeting of the minds did not occur is contrary to the evidence provided to the court‘‘); see also Reid v. Landsberger, 123 Conn. App. 260, 268, 1 A.3d 1149 (‘‘[b]ecause the agreement existed in written form and was signed by all parties, [the defen-
dant‘s] argument that a meeting of the minds did not occur is not supported by the evidence, at least where there is no mutual mistake as to the fundamental promises‘‘), cert. denied, 298 Conn. 933, 10 A.3d 517 (2010).
Nonetheless, the defendants argue that Agolli was inadequately advised as to the terms of the settlement and refinance by Attorney Sullivan; that Attorney Sullivan did not explain the content of the documents; that her lack of proficiency in reading and writing English prevented her from understanding the documents she signed. As noted previously, the court credited Attorney Sullivan‘s testimony that he not only negotiated the terms of the settlement and refinance with input from, and at the direction of, Agolli as well as her children, but also that he explained the closing documents to Agolli. Perhaps Agolli had hoped for a different outcome but she was represented by counsel, she was involved in the negotiation; counsel explained the documentation to her and she understood and agreed to the terms of the refinance. The special defense on this basis is therefore not proven.
The defendants next argue that Agolli did not have the authority to bind Fikri. At the summary judgment phase of this litigation, the defendants relied upon the inconsistencies in the dates which appeared in the various closing documents to raise a genuine issue of material fact as to whether Joe and Gina Antonios were removed from Fikri prior to Agolli‘s signing of the Note and Mortgage Deed in which she purports to act on behalf of Fikri as its sole member. As a factual matter, that argument was laid to rest by, inter alia, Agolli‘s testimony:
‘‘Q. [By Attorney Donnelly]: Now, I want to bring you back, again, to that July 26th, 2011 closing. Do you understand?
‘‘A. Yes.
‘‘Q. Okay, Now your home was removed; we‘ve been over that, correct?
‘‘A. Yes.
‘‘Q. In addition, the interest rate was lowered from 10 percent to 5 percent on the loan, correct?
‘‘A. Yes. Uh-huh.
‘‘Q. And you‘re aware that. Also, on that date, you were able to remove Mr. Antonios and Mrs. Antonios from being involved in Fikri Development, correct?
‘‘A. Yes.
‘‘Q. All right. So, the removed—they were removed on that day.
‘‘A. Yes.
‘‘Q. And after—and you signed those loan documents representing Fikri Development, correct?
‘‘A. Yes. . . .
‘‘Q. Well, I will rephrase. So, you just stated that Mr. and Mrs. Antonios were removed from the company, true?
‘‘A. Yes.
‘‘Q. Okay, so you were the only remaining member at the time you signed the documents that you signed on July 26th.
‘‘A. Yes.
‘‘Q. Okay, so, by doing so you represented to my client that you had the ability to sign for Fikri Development, correct?
‘‘A. Yes.‘’ (May 12, 2016 transcript, pp. 18–19.)
Agolli‘s testimony is entirely consistent with the testimony of Antonios, Attorney Sullivan and Suzi Zenko15 as well as the executed closing documents.
This argument is largely premised on ‘‘facts‘’ which are not supported by the body of evidence. The defendants assert that ‘‘[n]one of the formalities necessary for Fikri to validly execute documents were ever followed.‘’ Attorney Sullivan was not questioned about such ‘‘formalities,‘’ the requirements of the Act, or even what he did or did not do to effectuate the removal of Joe and Gina Antonios. The defendants assert further that ‘‘Mrs. Antonios never provided written notice to Fikri,‘’ as required under the Act. Mrs. Antonios was asked whether she gave written notice. She replied that she did not recall. This is not evidence from which the court can infer that no written notice was given. The defendants aver that ‘‘Mrs. Agolli and Mrs. Antonios never voted to remove Mr. Antonios as manager.‘’ The court recalls neither testimony nor documentary evidence to support this assertion. Ironically, the defendants aver that ‘‘there is no evidence Mrs. Agolli ever even spoke with Mrs. Antonios about removal of Mr. Antonios.‘’ It is likely there was no evidence because this issue was not adequately raised prior to trial. However, the lack of evidence as to whether the procedural mechanisms necessary to removal were complied with inures to the defendants’ detriment. The defendants bear the burden of proof with respect to their special defense. See Emigrant Mortgage Co. v. D‘Agostino, supra, 94 Conn. App. 802.
In any event and most importantly the evidence is
both overwhelming and consistent that the removal of Joseph and Gina Antonios occurred prior to the closing on the refinance.
For all of the foregoing reasons, the defendants failed to prove the special defense of no meeting of the minds.
Judgment will enter in favor of the Plaintiff as to liability.
DOOLEY, J.