Opinion
No. CV 0569833
June 14, 2005
MEMORANDUM OF DECISION RE MOTION TO STRIKE COUNTERCLAIM IN FORECLOSURE ACTION
In this foreclosure action, the plaintiff moves to strike the defendant's seven-count counterclaim. On June 16, 2004, the plaintiff, Sunset Mortgage, filed the present action seeking to foreclose on a mortgage against the defendant, Alfonso Agolio. On December 23, 2004, the defendant filed a seven-count counterclaim alleging: (1) breach of contract; (2) breach of duty of good faith and fair dealing; (3) fraud; (4) violation of Connecticut Unfair Trade Practices Act, Connecticut General Statutes § 42-110b et seq.; (5) violation of Connecticut Creditor Practices Act, General Statutes § 36a-646; (6) violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692; and (7) negligent infliction of emotional distress. Counts four, five and six of the defendant's counterclaim, however, are hereby abandoned because the defendant did not present the merits of his opposition at oral argument and did not brief the issues in his memorandum of law in opposition to the motion to strike.
On September 27, 2004, the court granted the plaintiff's motion to substitute Bank of New York as the party plaintiff in this action.
The defendant offers no objections to the motion to strike counts four, five and six. They are abandoned and will not be discussed further in this decision. See Raynsford v. JPHM Properties, LLC, Superior Court, judicial district of Windham at Putnam, Docket No. CV 0072666 (April 15, 2005, Riley, J.); Connecticut National Bank v. Anderson, Superior Court, judicial district of Litchfield, Docket No. 0053810 (October 1, 1991, Pickett, J.) (6. C.S.C.R. 943).
"The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint . . . to state a claim upon which relief can be granted." (Internal quotations omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Broadnax v. New Haven, 270 Conn. 133, 173, 851 A.2d 113 (2004). "The court must construe the facts in the [counterclaim] most favorably to the [counterclaim] plaintiff." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997). "Moreover . . . [w]hat is necessarily implied [in an allegation] need not be expressly alleged." (Internal quotation marks omitted.) Commissioner of Labor v. C.J.M Services, Inc., 268 Conn. 283, 292, 842 A.2d 1124 (2003).
"[A] counter claim brought by a defendant in a foreclosure action . . ., must address the making, validity or enforcement of the note and mortgage." (Internal quotation marks omitted.) Homestead Funding Corp. v. Welch, Superior Court, judicial district of Windham at Putnam, Docket No. 067260 (August 28, 2002, Foley, J.). Moreover, "[t]he judges of the Superior Court have held that special defenses arising from the terms of the mortgage documents themselves are valid defenses in a foreclosure action." Morequity, Inc. v. Dunn, Superior Court, judicial district of New London, Docket No. 549371 (September 15, 2000, Hurley, J.T.R.) ( 28 Conn. L. Rptr. 244, 246). In addition, "[t]he use of `shall' in the note creates a condition precedent that must be satisfied prior to foreclosure." Northeast Savings v. Scherban, 47 Conn.App. 225, 228, 702 A.2d 659 (1997), cert. denied, 244 Conn. 907, 714 A.2d 2 (1998); see also Webster Bank v. Eierweiss, Superior Court, judicial district of New Haven, Docket No. CV 960395181 (June 26, 1997, Celotto, J.) ( 19 Conn. L. Rptr. 627, 629).
A Count One: Breach of Contract
The defendant alleges in count one that the plaintiff did not provide notice of the default and notice of acceleration as required in the note. As discussed above, a claim that arises from the terms of the mortgage documents is valid in a foreclosure action. Morequity, Inc., v. Dunn, supra, 28 Conn. L. Rptr. 246; Webster Bank v. Eierweiss, supra, 19 Conn. L. Rptr. 629. Moreover, words, such as "shall," create conditions precedent that must be satisfied prior to a foreclosure. Northeast Savings v. Scherban, supra, 47 Conn.App. 228. The court finds that the defendant has alleged sufficient facts to support a claim of breach of contract in the context of a foreclosure matter because he has alleged that the plaintiff did not provide notice as required by the terms in the note.
B Count Two: Breach of Duty of Good Faith and Fair Dealing
The defendant alleges in count two that the plaintiff breached its duty of good faith and fair dealing to the defendant. "Every contract carries an implied covenant of good faith and fair dealing requiring that neither party do anything that will injure the right of the other to receive the benefits of the agreement." (Internal quotation marks omitted.) Hudson United Bank v. Cinnamon Ridge Corp., 81 Conn.App. 557, 576, 845 A.2d 417 (2004). "An action for breach of the covenant of good faith and fair dealing requires proof of three essential elements, which the plaintiff must duly plead: first, that the plaintiff and the defendant were parties to a contract under which the plaintiff reasonably expected to receive certain benefits; second, that the defendant engaged in conduct that injured the plaintiff's right to receive some or all of those benefits; and third, that when committing the acts by which it injured the plaintiff's right to receive benefits it reasonably expected to receive under the contract, the defendant was acting in bad faith." (Internal quotation marks omitted.) Advanced Financial Services, Inc. v. Savers Property Casualty Ins., Superior Court, judicial district of Hartford, Docket No. CV 04 0833347 (February 9, 2005, Wagner, J.T.R.). "Bad faith means more than mere negligence; it involves a dishonest purpose . . . Bad faith in general implies both actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive." (Internal quotation marks omitted.) Hudson United Bank v. Cinnamon Ridge Corp., supra, 81 Conn.App. 576-77.
The defendant, in the present case, has not alleged sufficient facts to support a claim for a breach of duty of good faith and fair dealing. The defendant has not sufficiently alleged how the plaintiff has acted in bad faith, how the plaintiff misled the defendant after the note and mortgage were executed, nor what were the interested or sinister motives compelling the plaintiff to breach its duty. Therefore, the third element of a breach of the duty of good faith and fair dealing alleging bad faith has not been properly demonstrated or established.
C Count Three: Fraud
The defendant alleges in count three that the plaintiff made false representations concerning the terms of the mortgage and the default provisions which were untrue or known to be untrue. The defendant further alleges that he relied upon the false representations to his detriment by signing the mortgage. In addition, the defendant alleges that if the plaintiff had accurately presented the statement of facts, he would not have signed the mortgage.
"Fraud involves deception practiced in order to induce another to act to her detriment, and which causes that detrimental action . . . The four essential elements of fraud are (1) that a false representation of fact was made; (2) that the party making the representation knew it to be false; (3) that the representation was made to induce action by the other party; and (4) that the other party did so act to her detriment." (Internal quotation marks omitted.) Chase Manhattan Mortgage Corp. v. Machado, 83 Conn.App. 183, 188, 850 A.2d 260 (2004). "Because specific acts must be pleaded, the mere allegation that a fraud has been perpetrated is insufficient." Id. "The general rule is that where a person of mature years and who can read and write, signs or accepts a formal written contract affecting his pecuniary interests, it is [that person's] duty to read it and notice of its contents will be imputed to [that person] if he negligently fails to do so; but this rule is subject to qualifications, including intervention of fraud or artifice, or mistake not due to negligence, and applies only if nothing has been said or done to mislead the person sought to be charged or to put a [person] of reasonable business prudence off . . . guard in the matter." (Internal quotation marks omitted.) First Charter National Bank v. Ross, 29 Conn.App. 667, 671, 617 A.2d 909 (1992), appeal dismissed, 228 Conn. 203, 635 A.2d 796 (1994).
In the present case, the defendant has not alleged sufficient facts to support a cause of action for fraud. The defendant does not allege what fraudulent representation of fact was made by the plaintiff to induce him into signing the note or mortgage. The defendant alleges that he requested the terms of the mortgage to be changed, but that the plaintiff refused. The defendant was aware of this change at the time that he signed the mortgage. The plaintiff's actions do not rise to the level of fraud because the defendant was aware of the contents of the note when he signed it. Moreover, there are no allegations in count three as to how the terms of the mortgage, i.e., the provisions concerning notice of default and acceleration, were false representations of fact. The elements of fraud must be specifically pleaded, and the defendant has not done so.
D Count Seven: Negligent Infliction of Emotional Distress
The defendant alleges in count seven that the plaintiff realized or should have realized that its conduct involved an unreasonable risk of causing him to suffer emotional distress, and that the plaintiff realized or should have realized this distress, if it were caused, might result in bodily harm or illness.
"To prevail on a claim for negligent infliction of emotional distress, the plaintiff must prove that: (1) the defendant's conduct created an unreasonable risk of causing the plaintiff emotional distress; (2) the plaintiff's distress was foreseeable; (3) the emotional distress was severe enough that it might result in illness or bodily harm; and (4) the defendant's conduct was the cause of the plaintiff's distress . . . Moreover, the [pleader must] demonstrate the elements necessary to establish negligence . . . The essential elements . . . are well established: duty; breach of that duty; causation; and actual injury . . . If a court determines, as a matter of law, that a defendant owes no duty to a plaintiff, the plaintiff cannot recover in negligence from the defendant . . . A duty to use care may arise . . . from circumstances under which a reasonable person, knowing what he knew or should have known, would anticipate that harm of the general nature of that suffered was likely to result from his act or failure to act . . . In a cause of action for negligent infliction of emotional distress, the plaintiff has the burden of pleading that the defendant should have realized that its conduct involved an unreasonable risk of causing emotional distress and that that distress, if it were caused, might result in illness or bodily harm." (Citations omitted; internal quotation marks omitted.) Leach v. Collect America, Superior Court, judicial district of New Haven, Docket No. CV 01 0455786 (August 9, 2004, Skolnick, J.). In Leach v. Collect America, the plaintiff filed a five-count amended complaint against the defendants alleging, among other things, negligent infliction of emotional distress. The plaintiff's cause of action arose out of the defendants' attempt to collect an unpaid debt from the plaintiff. The court found that the generalized allegation stating that "[t]he defendant . . . knew or should have known that its . . . conduct will cause plaintiff to lose his credit reputation, suffer mental distress, emotional harm, emotional distress resulting in illness or bodily harm, burdensome financial hardship, damage to relationship with his family and friends, as well as his self-esteem and sense of self-worth," was insufficient, in part, to state a cause of action for negligent infliction of emotional distress because the plaintiff did not allege facts "indicating why the defendant would have known that its conduct may result in distress to the plaintiff. Consequently, the plaintiff has not alleged facts from which it could be found that a legal duty was owed by the defendant to the plaintiff." Id.
In the present case, the defendant has not alleged why the plaintiff would have known that its conduct in attempting to enforce the note and/or mortgage may result in distress to defendant. The defendant does not allege what duty the plaintiff breached in attempting to enforce the note and/or mortgage. As such, the defendant has not alleged sufficient facts to support a claim for negligent infliction of emotional distress.
CONCLUSION
For all the foregoing reasons, the plaintiff's motion to strike is hereby denied as to count one of the defendant's counterclaim. The motion to strike is granted as to counts two, three, four, five, six and seven.
Clarance J. Jones, Judge