WELLS FARGO BANK, N.A. v. JAMES R. FITZPATRICK ET AL.
(AC 41113)
Appellate Court of Connecticut
Argued December 12, 2018—officially released May 21, 2019
Keller, Elgo and Bright, Js.
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Syllabus
The plaintiff bank sought to foreclose a mortgage on certain real property owned by the defendants J and M. In May, 2009, the plaintiff sent the defendants a letter notifying them that their loan was in default and advising them of the amount required to cure the default and its intent to accelerate the balance due if the default was not cured. When the default was not cured, the plaintiff commenced a foreclosure action, in which the law firm B Co. filed an appearance on behalf of the defendants. After that action was dismissed for dormancy in May, 2014, H Co., the law firm acting as counsel for the plaintiff, sent a letter to B Co. in June, 2014, instead of the property address, notifying them that the defendants’ loan was in default. The defendants failed to cure the default and the plaintiff commenced a second foreclosure action in September, 2014. B Co. again entered an appearance on behalf of the defendants. Following a trial, the court denied a motion to dismiss filed by the defendants, in which they alleged that the plaintiff had failed to establish a notice of default against the defendants, which is a condition precedent to the foreclosure. The trial court considered the 2009 letter and the 2014 letter jointly as substantively affording the defendants the requisite notice. The trial court then concluded that the plaintiff was entitled to a judgment of foreclosure by sale, and that although the defendants had proven their special defense of unclean hands, they failed to prove their special defenses of laches and failure to mitigate damages. On the defendants’ appeal to this court, held:
- The defendants’ claim that the plaintiff had failed to provide them with proper notice as required by the mortgage deed was unavailing; the trial court properly determined that the 2009 and 2014 letters together substantially complied with the notice requirements of the mortgage deed, as counsel for the defendants conceded at trial that the contents of the 2014 letter satisfied the notice requirements of the mortgage, the defendants did not dispute that they received the 2014 letter, they claimed no prejudice from the manner in which they received it, and they had received the 2009 letter prior to the first foreclosure action in which they had actively participated, and, therefore, it was indisputable that they had actual notice of their default and the possibility that they faced a foreclosure action when the second action was commenced.
- The trial court‘s finding that the defendants did not prove their special defense of laches was not clearly erroneous; the defendant did not submit any evidence from which the court could have found that they were prejudiced by any alleged delay of the plaintiff in pursuing the foreclosure action, and the trial court reduced the interest that accrued while the first foreclosure action was pending, which equitably addressed any delay in the first foreclosure action.
Procedural History
Action to foreclose a mortgage on certain real property owned by the named defendant et al., and for other relief, brought to the Superior Court in the judicial district of Fairfield, where the court, Hon. Richard P. Gilardi, judge trial referee, granted the plaintiff‘s motion to cite in Carbone Financing Services, LLC, as a party defendant; thereafter, the named defendant et al. were defaulted for failure to plead; subsequently, the court, Hon. Alfred J. Jennings, Jr., judge trial referee, granted the motion filed by the named defendant et al. to open the default; thereafter, the court, Hon. Alfred J. Jennings, Jr., judge trial referee, granted the plaintiff‘s motion to dismiss the counterclaim filed by the named defendant et al.; subsequently, the court, Hon. Alfred J. Jennings, Jr., judge trial referee, denied the motion to dismiss filed by the named defendant et al. and granted in part the plaintiff‘s motion for a judgment of strict foreclosure and rendered a judgment of foreclosure by sale, from which the named defendant et al. appealed to this court. Affirmed.
David M. Bizar, with whom was J. Patrick Kennedy, for the appellee (plaintiff).
Opinion
ELGO, J. The defendants, James R. Fitzpatrick
The following facts and procedural history are relevant to the present appeal. On January 31, 2003, the defendants executed and delivered a promissory note payable to World Savings Bank, FSB, in the original principal amount of $315,000. The loan was secured by a mortgage deed on the property. The mortgage deed was executed and delivered on January 31, 2003. Effective December 31, 2007, World Savings Bank, FSB, was renamed Wachovia Mortgage, FSB (Wachovia).
The defendants have been in default on the note and mortgage deed since March 1, 2009. On May 13, 2009, Wachovia sent a letter to the defendants at the property address by first class mail and certified mail, notifying them that the loan was in default and advising them of the amount required to cure the default and its intent to accelerate if the default was not cured (2009 letter). When the defendants failed to cure the default, Wachovia elected to accelerate the balance due on the note, declare the note due in full, and foreclose the mortgage deed securing the note. Wachovia commenced a foreclosure action against the defendants on July 27, 2009 (first foreclosure action). Berchem Moses, P.C. (Berchem Moses),2 filed an appearance on behalf of the defendants on August 4, 2009. Effective November 1, 2009, Wachovia converted to a national bank with the name Wells Fargo Bank Southwest, National Association, and merged with and into the plaintiff.3 The first foreclosure action was in foreclosure mediation for approximately two years; the mediation period was terminated by the court on September 29, 2011. The first foreclosure action subsequently was dismissed for dormancy on May 8, 2014.
On June 19, 2014, the law firm formerly known as Hunt Leibert Jacobson, P.C., acting in its capacity as counsel to the plaintiff, sent a letter by certified mail, return receipt requested, to Berchem Moses notifying them, inter alia, that the note was in default (2014 letter). The 2014 letter listed the plaintiff as the creditor, the loan number, and the property address and stated, in relevant part: “Dear BERCHEM MOSES & DEVLIN PC: We are writing to you as counsel for BERCHEM MOSES & DEVLIN PC, MARSHA A FITZPATRICK. Please be advised that this office represents WELLS FARGO BANK, N.A., who is the holder of a certain Note (the ‘Note‘) and Open-End Mortgage
The defendants failed to cure the default and the plaintiff elected to accelerate the balance due on the note, to declare the note due in full, and to institute foreclosure of the mortgage deed securing the note. The plaintiff then commenced the present foreclosure action against the defendants on September 26, 2014. On October 21, 2014, Berchem Moses entered an appearance on behalf of the defendants. On September 16, 2016, the plaintiff‘s motion to default the defendants for failure to plead was granted. On that same date, the defendants filed a motion to open the default and filed their answer with three special defenses and a counterclaim.4 The defendants’ motion to open the default was granted on September 28, 2016.
The action was tried to the court on July 18, 2017. At the close of the plaintiff‘s case, the defendants moved to dismiss the case “based upon the plaintiff‘s failure to establish a prima facie case, specifically their failure to establish a notice of default against the defendants, which is a condition precedent to the foreclosure.” After a recess, the court denied the defendants’ motion to dismiss. The court, relying on Mortgage Electronic Registration Systems, Inc. v. Goduto, 110 Conn. App. 367, 955 A.2d 544, cert. denied, 289 Conn. 956, 961 A.2d 420 (2008), considered the 2009 letter and the 2014 letter jointly as substantively affording the defendants the requisite notice in paragraph twenty-two of the mortgage deed. The court further noted the absence of any prejudice to the defendants, and that the 2014 letter was sent to the defendants’ counsel within approximately thirty days of the dismissal of the first foreclosure case. In its memorandum of decision, the court concluded that the plaintiff was entitled to a judgment of foreclosure by sale against the defendants. The court also concluded that the defendants had proven their first special defense of unclean hands,5 but failed to prove
I
The defendants first claim that the plaintiff failed to provide them with proper notice as required by paragraphs fifteen and twenty-two of the mortgage deed. Specifically, the defendants argue that the contents of the 2014 letter should not be considered by the court because it was sent to Berchem Moses instead of the property address and further contend that the 2009 letter considered alone does not constitute sufficient notice.6 In the alternative, the defendants argue that the 2009 letter and 2014 letter together do not constitute sufficient notice.
In response, the plaintiff contends that, “by admitting the adequacy of [the] notice in their answer to the complaint and by failing to file a special defense,” the defendants have waived their right to challenge the sufficiency of the notice.7 The plaintiff argues that the defendants admitted that the notice was adequate in their answer when they did not specifically deny paragraph six of the complaint, which states: “The plaintiff has provided written notice in accordance with the note and mortgage to the defendant(s) of the default under the note and mortgage, but said defendant(s) have failed and neglected to cure the default. The plaintiff has elected to accelerate the balance due on said note, to declare said note to be due in full and to foreclose the mortgage securing said note.” In response, the defendants answered: “The allegations of paragraph 6 are admitted to the extent that the plaintiff declared the note in default and elected to accelerate the balance due, declared the note to [be] due in full and commenced a foreclosure of the mortgage. The defendants deny that monies are owed to the plaintiff.” The plaintiff asks us to read this as a judicially binding admission by the defendants that the plaintiff had provided them with compliant notice under the note and mortgage deed. Although we decline to read the defendants’ answer so broadly, we note that the defendants in their answer did not deny that they had received the 2014 letter sent to Berchem Moses. Indeed, the defendants have never advanced that argument and, instead, contend that the 2014 letter was improper notice because it was not sent to the property address.
“In construing a deed, a court must consider the language and terms of the instrument as a whole. . . . Moreover, the words [in the deed] are to be given their ordinary popular meaning, unless their context, or the circumstances, show that a special meaning was intended. . . .
“A promissory note is nothing more than a written contract for the payment of money, and, as such, contract law applies. . . . In construing a contract, the controlling factor is normally the intent expressed in the contract, not the intent which the parties may have had or which the court believes they ought to have had. . . . Where . . . there is clear and definitive contract language, the scope and meaning of that language is not a question of fact but a question of law. . . . In such a situation our scope of review is plenary, and is not limited by the clearly erroneous standard. . . . The court will not torture words to impart ambiguity where ordinary meaning leaves no room for ambiguity. . . .
“Notice provisions in mortgage documents usually require default notices to contain specific information, which serves a very clear and specific purpose; it informs mortgagors of their rights so that they may act to protect them. Therefore, when the terms of the note and mortgage require notice of default, proper notice is a condition precedent to an action for foreclosure. . . . Consequently, we must determine whether such a condition precedent was satisfied in the present case.” (Citations omitted; internal quotation marks omitted.) Emigrant Mortgage Co. v. D‘Agostino, 94 Conn. App. 793, 798-800, 896 A.2d 814, cert. denied, 278 Conn. 919, 901 A.2d 43 (2006).
Paragraphs twenty-two and fifteen of the mortgage deed contain the relevant notice provisions in the present case.
Although they challenged the manner in which the 2014 letter was sent, the defendants conceded before the trial court that the contents of the 2014 letter provide “everything specifically required by the mortgage.”8 Accordingly, we will not entertain on appeal their claim that the 2014 letter was substantively inadequate. See White v. Mazda Motor of America, Inc., 313 Conn. 610, 619, 99 A.3d 1079 (2014) (“Our appellate courts, as a general practice, will not review claims made for the first time on appeal. We repeatedly have held that [a] party cannot present a case to the trial court on one theory and then seek appellate relief on a different one . . . .” [Internal quotation marks omitted.]).
The defendants principally rely on this court‘s decision in Aurora Loan Services, LLC v. Condron, 181 Conn. App. 248, 186 A.3d 708 (2018), to support their position that, because the 2014 letter was not sent to them at the property address as required by paragraph fifteen of the mortgage, “there is no evidence of actual delivery
This court has applied the doctrine of substantial compliance to contract notice provisions. See Mortgage Electronic Registration Systems, Inc. v. Goduto, supra, 110 Conn. App. 373 (mortgage notice provision required plaintiff to afford defendants thirty days notice to cure default); Twenty-Four Merrill Street Condominium Assn., Inc. v. Murray, 96 Conn. App. 616, 624-25, 902 A.2d 24 (2006) (condominium association bylaws required written notice within thirty days of decision); Fidelity Bank v. Krenisky, 72 Conn. App. 700, 714-15, 807 A.2d 968 (mortgage notice provision required plaintiff to inform defendants that they may assert in court nonexistence of default or other defense), cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002). In Mortgage Electronic Registration Systems, Inc. v. Goduto, supra, 376, this court affirmed the trial court‘s judgment “on the alternate ground that by sending a second notice letter, the plaintiff substantially complied with the notice requirements in the defendant‘s mortgage.” It concluded that “the two notices [of default], read jointly, substantially afforded the debtor the requisite notice.” Id., 368. This court explained that “[i]n deciding whether proper notice was given, we . . . look primarily to the actual notice received rather than asking whether there has been a punctilious adherence to formality . . . . Although generally contracts should be enforced as written, we will not require mechanistic compliance with the letter of notice provisions if the particular circumstances of a case show that the actual notice received resulted in no prejudice and fairly apprised the noticed party of its contractual rights.” (Citation omitted; internal quotation marks omitted.) Id., 375.
In the present case, counsel for the defendants conceded at trial that the 2014 letter satisfied the notice requirements in paragraph twenty-two of the mortgage. The defendants do not dispute that they received the 2014 letter and they claim no prejudice from the manner in which they
II
The defendants also claim that the court improperly failed to find that they had proven their special defense of laches. In response, the plaintiff argues that the defendants failed to meet their burden of proving laches. We agree with the plaintiff.
“The standard of review that governs appellate claims with respect to the law of laches is well established. A conclusion that a plaintiff has been guilty of laches is one of fact for the trier and not one that can be made by this court, unless the subordinate facts found make such a conclusion inevitable as a matter of law. . . . We must defer to the court‘s findings of fact unless they are clearly erroneous. . . .
“The defense of laches, if proven, bars a plaintiff from seeking equitable relief . . . . First, there must have been a delay that was inexcusable, and, second, that delay must have prejudiced the defendant. . . . The burden is on the party alleging laches to establish that defense. . . . The mere lapse of time does not constitute laches . . . unless it results in prejudice to the [opposing party] . . . as where, for example, the [opposing party] is led to change his position with respect to the matter in question.” (Emphasis added; internal quotation marks omitted.) R. F. Daddario & Sons, Inc. v. Shelansky, 123 Conn. App. 725, 737, 3 A.3d 957 (2010).
The defendants argue that they are entitled to a finding of laches because “the plaintiff has allowed a period of over nine years to pass in this foreclosure action. During that time it has failed to pursue this matter with due diligence, and has failed to comply with the specific terms of the note and mortgage regarding the alleged default.” The defendants, however, have failed to assert, before the trial court or on appeal, how they have been prejudiced. Indeed, no evidence was submitted on which the court could have found that the defendants suffered any prejudice and, in fact, the court reduced the interest that accrued while the first foreclosure action was pending, which equitably addressed any delay in the first foreclosure action. See footnote 5 of this opinion. The only evidence presented by the defendants in this action consisted of their request that the court take judicial notice of the first foreclosure action. Accordingly, because the defendants did not submit any evidence from which the court could have found that they were prejudiced, we conclude that the court‘s finding that the defendants did not prove their special defense of laches was not clearly erroneous. See Wolyniec v. Wolyniec, 188 Conn. App. 53, 68, 203 A.3d 1269 (2019) (“[a]lthough the court made no express findings of fact with respect to laches . . . [a]fter examining the record in the present case, we conclude that no evidence was admitted from which the court could have found that the plaintiff was prejudiced by the defendant‘s delay in filing her motion for contempt” [internal quotation marks omitted]); Carpender v. Sigel, 142 Conn. App. 379, 387, 67 A.3d 1011 (2013) (“In the present case, no evidence was admitted on which the court could have found that the plaintiff was prejudiced . . . . Accordingly,
The judgment is affirmed.
In this opinion the other judges concurred.