Opinion
No. FST CV 09 5010388 S
August 1, 2011
MEMORANDUM OF DECISION RE MOTION TO DISMISS #185
The plaintiff, JP Morgan Chase Bank, National Association, brings this mortgage foreclosure action against the defendants, Michael Porzio (Porzio), L. Michael Porzio (collectively, the defendants) and JP Morgan Chase Bank, National Association. In the operative pleading, which is the plaintiff's second amended complaint dated March 23, 2010, the plaintiff alleges the following facts that are relevant to the disposition of the motion that is presently before the court. On March 1, 2007, the defendants executed a $2.5 million promissory note in favor of Washington Mutual Bank, FA (Washington Mutual) in exchange for a mortgage for premises located at 2 Angora Road in Westport. This mortgage deed was recorded on the Westport land records on April 23, 2007. On September 25, 2008, the United States Office of Thrift Supervision seized Washington Mutual's assets and placed it into receivership with the Federal Deposit Insurance Corporation (FDIC). The FDIC then sold Washington Mutual and its assets to the plaintiff. As a result of these events, in the second amended complaint, the plaintiff alleges that it is "the holder of said Note and Mortgage." Once the defendants defaulted by virtue of their nonpayment under the terms of the subject note, the plaintiff commenced foreclosure proceedings by service of process on February 11, 2009.
The defendant JP Morgan Chase Bank, National Association is listed on the summons but it has not filed an appearance. Consequently, all subsequent references to "the defendants" in this memorandum of decision will only mean the defendants Michael Porzio and L. Michael Porzio.
Following the filing of the March 23, 2010 second amended complaint, the plaintiff made two attempts to amend its complaint. On December 14, 2010, the plaintiff filed a request for leave to file a "third amended complaint." The defendants filed a timely objection to this request, which was sustained by the court, Mintz, J, on January 24, 2011. On January 31, 2011, the plaintiff filed a request for leave to file a "fourth amended complaint," to which the defendants also objected. To date, there has been no court ruling on this objection. Therefore, the March 23, 2010 second amended complaint remains the operative complaint in this case.
Although the plaintiff alleges in paragraph one of the second amended complaint that a true and accurate copy of the subject note is attached as exhibit B, there is no such attachment to the second amended complaint. Nevertheless, the revised complaint filed with the court on June 24, 2009, did have a copy of the note attached.
When the plaintiff filed a request for leave to file a third amended complaint on December 14, 2010, the plaintiff included a proposed complaint that indicated it had attached a copy of the note that is at issue in this case. Contrary to this allegation, there was no such note attached. Accordingly, on December 29, 2010, the plaintiff filed another copy of this proposed third amended complaint that had a copy of the subject note included. The plaintiff also attached a lost note affidavit dated April 6, 2007, from Christie H. Hill wherein she stated, for the first time, that the note at issue is lost.
After this revelation, Porzio filed a motion to dismiss and a supporting memorandum of law on February 24, 2011. Attached to Porzio's motion to dismiss is an affidavit that was executed by Porzio himself. Porzio moves to dismiss this action on the ground that the plaintiff lacked standing to bring this action, and, as a result, the court does not have subject matter jurisdiction. On March 29, 2011, the plaintiff filed a memorandum of law in opposition to Porzio's motion. Attached to the plaintiff's memorandum of law in opposition are: (1) an unauthenticated copy of a press release and bank acquisition information dated September 25, 2008, indicating that the plaintiff had obtained the banking operations of Washington Mutual; (2) the notarized affidavit of Eric Waller, who is a home lending senior research specialist with the plaintiff; (3) a copy of the subject open-ended mortgage deed; (4) a copy of the purchase assumption agreement between the plaintiff and Washington Mutual; (5) an affidavit recorded on the Westport land records that was made by a representative of the FDIC, Robert C. Shoppe, in which Shoppe attests that on September 25, 2008, the plaintiff became the owner of Washington Mutual's loan commitments by operation of law and (6) a copy of Hill's "lost note affidavit," which attaches a copy of the subject lost note. The parties appeared before the court for an evidentiary hearing on July 1, 2011, in which the court heard the testimony of the defendant Porzio and Peter Katsikas, who is employed as a home lending research officer for the plaintiff.
Both Michael Porzio and L. Michael Porzio have a pro se appearance in the courthouse records. Michael Porzio is also represented by Attorney David A. Scalzi. Only Michael Porzio has filed the motion to dismiss that is currently before the court and he is the only defendant who argued this motion in front of the court. As Michael Porzio is not an attorney and cannot act as counsel for L. Michael Porzio, it must be assumed that he is the only defendant who is a party to this motion to dismiss. Furthermore, for the sake of brevity, Michael Porzio will be known as "Porzio" for the rest of this memorandum of decision.
The rest of these documents are appropriately authenticated by Waller's affidavit.
As a threshold matter, the plaintiff first argues that Porzio's motion to dismiss should be denied because it does not comply with Practice Book §§ 10-31 and 11-10, in that the motion does not include a legally proper memorandum of law. Specifically, the plaintiff argues that "Porzio's purported memorandum of law is completely devoid of any law and authority, but rather is self-serving conclusory drivel without any legal support." As a result of this infirmity, the plaintiff argues that Porzio's motion to dismiss should be denied irrespective of the merits of the motion. Although the memorandum of law that was filed with Porzio's motion to dismiss does not provide the court with citations to any relevant legal authority other than Practice Book § 10-33, which states that subject matter jurisdiction can never be waived, Porzio's motion does contain some citations to applicable Connecticut case law. Given the statements made in both Porzio's motion and memorandum of law in support of the motion, it is clear that he is moving to dismiss this action on standing and subject matter jurisdiction grounds. Therefore, the plaintiff cannot claim that it has been prejudiced by any technical violations of the Practice Book rules. Moreover, it should be noted that Porzio filed his motion and supporting memorandum of law as a self-represented party, and under the spirit of Practice Book § 1-8, the court will not strictly interpret the rules of practice against a self-represented individual. See, e.g., Hill v. Williams, 74 Conn.App. 654, 655-56, cert. denied, 263 Conn. 918 (2003) (stating that "[i]t is the established policy of the Connecticut courts to be solicitous of [self-represented] litigants and when it does not interfere with the rights of other parties to construe the rules of practice liberally in favor of the [self-represented] party . . . The modern trend, which is followed in Connecticut, is to construe pleadings broadly and realistically, rather than narrowly and technically"). Furthermore, the law is clear that standing implicates the court's subject matter jurisdiction and "[a] possible absence of subject matter jurisdiction must be addressed and decided whenever the issue is raised." (Internal quotation marks omitted.) Soracco v. Williams Scotsman, Inc., 292 Conn. 86, 92 (2009). As Porzio has brought an issue regarding subject matter jurisdiction to the court's attention, it must address the merits of his motion to dismiss.
Practice Book § 10-31(a) provides in relevant part: "This motion [to dismiss] shall always be filed with a supporting memorandum of law . . ."
Practice Book § 11-10 provides in relevant part: "A memorandum of law briefly outlining the claims of law and authority pertinent thereto shall be filed and served by the movant with the following motions and requests . . . (2) motions to dismiss except those filed pursuant to Section 14-3 . . ."
Practice Book § 1-8 provides: "The design of these rules being to facilitate business and advance justice, they will be interpreted liberally in any case where it shall be manifest that a strict adherence to them will work surprise or injustice."
"A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Beecher v. Mohegan Tribe of Indians of Connecticut, 282 Conn. 130, 134 (2007). "The issue of standing implicates subject matter jurisdiction and is therefore a basis for granting a motion to dismiss . . . [I]t is the burden of the party who seeks the exercise of jurisdiction in his favor . . . clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute . . . It is well established that, in determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged." (Internal quotation marks omitted.) Association Resources, Inc. v. Wall, 298 Conn. 145, 164 (2010).
"Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless [one] has, in an individual or representative capacity, some real interest in the cause of action . . . Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved . . . The fundamental test for determining [classical] aggrievement encompasses a well-settled twofold determination: first, the party claiming aggrievement must successfully demonstrate a specific personal and legal interest in the subject matter of the decision, as distinguished from a general interest, such as is the concern of all the members of the community as a whole. Second, the party claiming aggrievement must successfully establish that the specific personal and legal interest has been specially and injuriously affected by the decision." (Internal quotation marks omitted.) St. Paul Travelers Cos, Inc. v. Kuehl, 299 Conn. 800, 809 (2011). "Standing is not a technical rule intended to keep aggrieved parties out of court; nor is it a test of substantive rights. Rather it is a practical concept designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticiable interests and that judicial decisions which may affect the rights of others are forged in hot controversy, with each view fairly and vigorously represented." (Internal quotation marks omitted.) Burton v. Commissioner of Environmental Protection, 291 Conn. 789, 802 (2009).
The crux of Porzio's argument is that he is entitled to dismissal of this case because the plaintiff lacked standing to institute this action. Specifically, Porzio points to the fact that the plaintiff never had physical possession of the subject note because the note was lost before the plaintiff obtained Washington Mutual's assets in the fall of 2008, and, as a result, Porzio contends that the plaintiff did not have standing to commence foreclosure proceedings against him. Porzio also argues that the plaintiff committed a fraud upon the court when it alleged in its pleadings that it was the holder of the note, and Porzio contends that this fact is sufficient for the court to grant his motion to dismiss. In response, the plaintiff argues that it is not necessary for it to possess physically the note in order to have standing to maintain this action. Therefore, the plaintiff contends that it has standing to bring foreclosure proceedings even though the note is currently lost and it never had possession of it.
At the July 1, 2011 hearing before this court, Katsikas gave the following relevant and credible testimony. Katsikas stated that he was hired to work at Washington Mutual in April 2002. On September 25, 2008, the plaintiff acquired the assets of Washington Mutual from the FDIC. Katsikas also testified that following the plaintiff's acquisition of Washington Mutual's assets, he has been employed as a home lending research officer with the plaintiff. The court concludes that this chain of events was within Katsikas' personal knowledge because he was employed at Washington Mutual before it was put into receivership by the FDIC and he continued to work for the plaintiff after the asset transfer. While he was on the witness stand, Katsikas also referenced the "lost note affidavit" made by Washington Mutual employee Hill. In her affidavit, Hill attests that on April 6, 2007, she made a diligent search of Washington Mutual's records and she was unable to locate the promissory note that was executed by Porzio on March 1, 2007. Accordingly, it is clear that the subject note was missing before the transfer of Washington Mutual's assets to the plaintiff.
A copy of Hill's notarized affidavit was also attached to the plaintiff's memorandum of law in opposition to Porzio's motion to dismiss.
Despite this fact, Katsikas further testified that he has become familiar with Porzio's account through his review of computer records. Following a review of these records, Katsikas concluded that the plaintiff is currently the "investor and servicer" of the note and mortgage for Porzio's property at 2 Angora Road in Westport. The court finds that Katsikas' testimony was credible in this regard. Katsikas' testimony regarding the fact that the plaintiff obtained ownership of the subject mortgage is further supported by the affidavit of the FDIC representative Shoppe that is attached to the plaintiff's memorandum of law in opposition. In that affidavit, Shoppe attests that "[p]ursuant to the terms and conditions of a Purchase and Assumption Agreement between the FDIC as receiver of Washington Mutual and [the plaintiff], dated September 25, 2008 . . . [the plaintiff] acquired certain of the assets, including all loans and all loan commitments, of Washington Mutual." Additionally, although the original note is missing, there are copies of the note that have been provided to the court. These copies clearly demonstrate that both of the defendants signed a mortgage deed in favor of Washington Mutual on March 1, 2007, and Porzio signed the subject note on that same date. Although Porzio was unwilling to admit during his testimony that the copies of these documents accurately reflect his signature, the court does not find his testimony on this matter to be credible. Notably, Porzio does not dispute that he executed a mortgage and note in favor of Washington Mutual on March 1, 2007. Consequently, the court concludes that Porzio signed a mortgage and note in favor of Washington Mutual on that date and the plaintiff is now the owner of this debt secured by the mortgage.
Conn. Code of Evid. § 10-2 provides: "A copy of a writing, recording or photograph is admissible to the same extent as an original unless (A) a genuine question is raised as to the authenticity of the original or the accuracy of the copy, or (B) under the circumstances it would be unfair to admit the copy in lieu of the original."
Conn. Code of Evid. § 10-3 further provides in relevant part: "The original of a writing, recording or photograph is not required, and other evidence of the contents of such writing, recording or photograph is admissible if:
(1) Originals lost or destroyed. All originals are lost or have been destroyed, unless the proponent destroyed or otherwise failed to produce the originals for the purpose of avoiding production of an original . . ."
Having reached this determination, the court is left with a situation where the plaintiff is the owner of the mortgage but it was never in physical possession of the note. Therefore, this case is clearly governed by the Connecticut Supreme Court's holding in New England Savings Bank v. Bedford Realty Corp., 238 Conn. 745 (1996). In the New England Savings Bank case, the named plaintiff instituted foreclosure proceedings against the defendant (Bedford). During the pendency of the foreclosure case, New England Savings Bank became insolvent and the FDIC was appointed as receiver. The FDIC assigned New England Savings Bank's interest in the mortgage loan at issue to Citizens Savings Bank, which, in turn, assigned the mortgage loan to GHR, D.C., Inc (GHR). Id., 746-48. At some point in time during these assignments, the original promissory note was lost. Following GHR's substitution as a party plaintiff, the defendant argued that GHR was precluded from obtaining a judgment of strict foreclosure because it never possessed the lost promissory note and it could not establish the requirements of General Statutes § 42a-3-309.
General Statutes § 42a-3-309 provides: "(a) A person not in possession of an instrument is entitled to enforce the instrument if (i) the person was in possession of the instrument and entitled to enforce it when loss of possession occurred, (ii) the loss of possession was not the result of a transfer by the person or a lawful seizure, and (iii) the person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.
"(b) A person seeking enforcement of an instrument under subsection (a) must prove the terms of the instrument and the person's right to enforce the instrument. If that proof is made, section 42a-3-308 applies to the case as if the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means."
When rejecting the defendant's argument, the Supreme Court stated that "Bedford's argument is founded upon the premise that an action to foreclose a mortgage and an action to enforce a note are inextricably linked. It is well established [however] that the [mortgagee] is entitled to pursue its remedy at law on the notes, or to pursue its remedy in equity upon the mortgage, or to pursue both. A note and a mortgage given to secure it are separate instruments, executed for different purposes and in this State action for foreclosure of the mortgage and upon the note are regarded and treated, in practice, as separate and distinct causes of action, although both may be pursued in a foreclosure suit . . . Bedford does not dispute that a note and a mortgage were executed and that the underlying debt exists. GHR is seeking to enforce a debt, evidenced by a promissory note, through the equitable remedy of foreclosure. The mortgage secures the indebtedness itself, not the written evidence of it . . . Because GHR has chosen to pursue the equitable action of foreclosure of the mortgage, rather than a legal action on the note, the fact that GHR never possessed the lost promissory note is not fatal to its foreclosure of the mortgage." (Citations omitted; internal quotation marks omitted.) New England Savings Bank v. Bedford Realty Corp., supra, 238 Conn. 759-60. As succinctly phrased by the Appellate Court, "[t]he law is clear that it is unnecessary for a plaintiff to possess a note at the time it was lost" in order to have standing to commence foreclosure proceedings. Bankers Trust of California, N.A. v. Neal, 64 Conn.App. 154, 157 (2001).
In the present case, the evidence before the court indicates that Porzio executed a note and mortgage in favor of Washington Mutual on March 1, 2007. The plaintiff is now the owner of this debt secured by the mortgage pursuant to its assumption of Washington Mutual's assets via the transfer from the FDIC on September 25, 2008. The plaintiff did not commence this action against the defendants until February 11, 2009. Consequently, the plaintiff has standing to foreclose the subject mortgage even though it never physically possessed the note. The plaintiff was clearly the owner of the debt secured by the mortgage on the date that it brought this action.
Nevertheless, the court is still quite displeased with the manner in which the plaintiff has conducted itself in this case. When this action was commenced in February 2009, the plaintiff was aware that it did not have physical possession of the note. Despite this knowledge, the plaintiff still alleged in its complaint that it was "the holder of said Note and Mortgage." Additionally, the plaintiff waited until December 2010, to reveal the fact that the note was lost to the court and the defendants. Although it has been determined that the fact that the plaintiff did not have a physical copy of the original note in its possession does not render the plaintiff without standing to bring this action, the court still concludes that it was misleading for the plaintiff not to provide all interested parties with this relevant information.
Despite the fact that the court has concluded that the plaintiff misrepresented some facts in this case, it is difficult to see what remedy the court could provide to Porzio. In Bankers Trust of California, N.A. v. Neal, supra, 64 Conn.App. 154, the Appellate Court addressed a similar situation as that which is found in the present case, and its discussion in that case is instructive. Following the commencement of foreclosure proceedings in the Bankers Trust case, the named plaintiff assigned its mortgage to United Companies Lending Corporation (United) and United lost the note before the start of trial. At trial, United submitted a lost note affidavit indicating that although it had been assigned the mortgage, it could not locate the note. The trial court rendered a judgment of strict foreclosure. On appeal, the defendants argued that the Appellate Court should reverse the trial court because "United did not timely present them with the lost note affidavit and that they were surprised to see it at the foreclosure hearing." Id., 157. When ruling on the defendants' appeal, the Appellate Court stated that "[t]he defendants raise numerous questions concerning possible technical errors in the pleading and processing of the case in the trial court, but we are unable to discern what practical relief we can grant to the defendants. The best they could achieve would be a remand for new proceedings. The defendants do not dispute that the note is in default and that United has a right to foreclose the mortgage. New proceedings would not change those facts; the sole result would be a delay in the eventual and inevitable outcome of the case." Id., 157-58. The defendants "now have had adequate time to study the affidavit, and a reversal because they were surprised last time would accomplish nothing." Id., 157.
Like the defendants in Bankers Trust, the crux of Porzio's fraud argument is that the plaintiff knew about the lost note before it brought the foreclosure case and that the plaintiff should have pleaded as such in its original complaint. Although the court agrees that the plaintiff probably should have alleged that the note was lost in its initial complaint, the fact remains that the plaintiff still had standing to initiate foreclosure proceedings even though it did not have physical possession of the note. Moreover, even though the plaintiff delayed in furnishing any information regarding the lost note to the relevant parties, Porzio is now aware of the fact that the note is lost and he has ample time to adjust his case strategy accordingly. Therefore, even though the court is certainly not condoning the plaintiff's sloppy pleading and withholding of information, the Appellate Court's decision in Bankers Trust suggests that the court should not provide Porzio with any remedy for the plaintiff's malfeasances.
Accordingly, for all of the reasons stated above, the court denies Porzio's motion to dismiss for lack of subject matter jurisdiction.