Opinion
No. CV97 0406638 S
May 1, 2003
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT
The plaintiff has filed a motion for summary judgment pursuant to Practice Book § 17-44 only as to the defendants' third special defense. The third special defense states:
The note and mortgage alleged are void, invalid and unenforceable because they are unconscionable in their terms in that the interest rate (s) imposed pursuant to the note are usurious.
In support of its motion for summary judgment, the plaintiff argues that courts in Connecticut have consistently held that the exemption from usury in General Statute § 37-9 (3) of any bona fide mortgage of real property for a sum in excess of five thousand dollars "makes a defense of usury unavailable in a suit for foreclosure of a mortgage." Associated East Mortgage Co. v. Highland Park, Inc., 172 Conn. 395, 405, 374 A.2d 1070 (1977). The plaintiff also argues that the note which the mortgage secured is not unconscionable.
Sec. 37-9 (3). Loans to which prohibitions do not apply reads in relevant part:
The provisions of sections 37-4, 37-5 and 37-6 shall not affect: . . . (3) any bona fide mortgage of real property for a sum in excess of five thousand dollars.
The defendant in opposing the motion for summary judgment argues that summary judgment as to a special defense is not available to the plaintiff, as Practice Book § 17-44 includes no provision for summary judgment on a special defense. The defendant notes that the plaintiff's previous attempt to eliminate the third special defense, by way of a motion to strike, was denied by the court (Celotto, J.) on August 31, 2001. The defendant also claims the plaintiff has conducted no discovery and consequently, has submitted nothing more than conclusory and inadmissible statements in his own affidavit in support of the motion. Lastly, the defendant argues that its third special defense is dependent on all of the circumstances surrounding the loan, many of which the parties dispute, and, therefore, the issues raised by the third special defense regarding usury and the alleged unconscionable note, are issues which are inappropriate for summary judgment.
In ruling on a motion for summary judgment, the court must first review the relevant standard of law for such motions. "A Motion for Summary Judgment is designed to eliminate the delay and expense of litigating an issue where there is no real issue to be tried." Wilson v. New Haven, 213 Conn. 277, 279, 567 A.2d 829 (1989). "In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the non-moving party." Hertz Corp. v. Federal Ins. Co., 245 Conn. 374, 381, 713 A.2d 820 (1998). In ruling on a motion for summary judgment, the court's function is not to decide issues of material fact, but rather to determine whether any issues exist. Nolan v. Borkowski, 206 Conn. 495, 500, 538 A.2d 1031 (1988). The moving party has the burden of demonstrating the absence of any genuine issue of material fact. Hertz Corp. v. Federal Ins. Corp., supra, 245 Conn. 381. "The opposing party must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact." Id. "A material fact is a fact which will make a difference in the result of a case." Suarez v. Dickmont Plastics Corp., 229 Conn. 99, 639 A.2d 507 (1994). The test used by the court is to determine if the moving party would be entitled to a directed verdict if the same set of facts were presented at trial. Connell v. Colwell, 214 Conn. 242, 246-47, 571 A.2d 116 (1990). A directed verdict is properly rendered if a trier of fact cannot reasonably and legally find in any fashion other than that directed. Santopietro v. New Haven, 239 Conn. 207, 225, 682 A.2d 106 (1996).
I.
A summary of the factual and procedural background is necessary. The plaintiff, on November 3, 1997, commenced this action to foreclose a mortgage on property now owned by the defendant (hereafter "Anderson"), which mortgage was executed by Anderson's predecessor in title, the defendant Trinity Development Corporation (hereafter "Trinity") to secure a debt in the amount of $1,700,000. The defendant Trinity, in its answer, has admitted that on June 9, 1995, Trinity executed a mortgage in favor of Frank Verderame and alleges in the First Count of its Counterclaim that the mortgage was given as security for a note in the amount of $1,700,000 from Trinity to Verderame. The blanket mortgage encumbered two separate parcels of real property. The facts surrounding the making of the note and the giving of the mortgage, however, are disputed.
On its face the note imposes an interest rate of approaching 30 percent according to the defendants, as the note requires the defendant Trinity to pay $1,700,000 at the end of one year, while requiring the plaintiff to advance only $1,300,000. The defendants contend that, in fact, the plaintiff advanced only $800,000 of the $1,300,000 he had promised to pay. Yet, the plaintiff continues to demand repayment of the $1,700,000, which effectively raises the interest rate to almost 70 percent per year under the note. The defendants additionally claim that the plaintiff has refused to credit Trinity with the repayment of $200,000 made on February 15, 1996. This refusal by the plaintiff to credit this payment would impose an effective interest rate of more than 80 percent per year under the note.
Trinity also alleges that it has substantially or completely repaid the note at issue in this foreclosure action by way of a deed in lieu of foreclosure, which was given to the plaintiff in November 1996.
The defendant raised five special defenses to this action and filed a three-count counterclaim. On August 31, 2001, the court granted the plaintiff's motion to strike the first, second, fourth and fifth special defenses, but denied the motion to strike the third special defense which is the subject of this motion for summary judgment. The court then ordered that the case be stricken from the foreclosure docket.
II.
The decisions of the Connecticut Superior Court are almost in unanimous agreement that a motion for summary judgment as to a special defense is improper. Such a motion is improper because Practice Book § 17-44 does not provide for summary judgment on special defenses. Duborg v. Osborn, Superior Court, judicial district of Litchfield, Docket No. 06570 (July 5, 1995, Pickett, J.); Bond v. General Accident Insurance Company, Superior Court, judicial district of New London, No. 538646 (Sept. 4, 1998, Handy, J.) 1998 Ct. Sup. 10273, 23 Conn.L.Rptr. 181.
Even if the special defense was to fail, however, the plaintiffs' motion and supporting documents do not remove from dispute, facts relevant to determining whether they are entitled to judgment as a matter of law on the complaint itself, as the material allegations have been denied. "Where a motion for summary judgment shows that there are no facts in dispute with respect not only to the special defenses but also the underlying complaint, summary judgment may be appropriate. Most Superior Court judges who have considered the issue, however, have concluded that a motion for summary judgment solely as to special defenses is procedurally improper." Smith v. National Grange Mutual Ins. Co., No. CV95-0250908S, Superior Court, judicial district of New Haven at Meriden (August 29, 1996, Silbert, J.) 1996 Ct. Sup. 5252-A, 17 Conn.L.Rptr. 522; see also, Bycoski v. Gagne, Superior Court, judicial district of Tolland, at Rockville, Docket No. 52555 (August 18, 1994, Hammer, J.) 12 Conn.L.Rptr. 433; Ney v. Branch, Superior Court, judicial district of New Haven at New Haven, Docket No. 0368932 (September 27, 1995, Hodgson, J.).
"In other words, while summary judgment should not be rendered unavailable merely because of the interposition of a special defense, this is not such a case. Even without the special defenses, the pleadings and other documents would still leave in dispute fundamental issues . . ." Smith v. National Grange Mutual Ins. Co., supra, No. CV95-0250908S, Superior Court, judicial district of New Haven at Meriden (August 29, 1996, Silbert, J.) 1996 Ct. Sup. 5252-A, 17 Conn.L.Rptr. 522. Disposition of the third special defense in this case would still not leave the plaintiff in a position where the plaintiff would be entitled to judgment on his complaint as a matter of law.
Additionally, the only factual support for the plaintiff's motion for summary judgment is the affidavit of the executor of Frank Verderame's Estate. The executor played no part in the transaction underlying the case. The affidavit of the executor in his affidavit makes statements concerning the specifics of the transaction, but the only foundation for these statements are an unspecified "familiarity with the personal affairs and business records of Frank Verderame." There are statements of facts with which there is no evidence that the decedent had any personal knowledge. Practice Book § 17-46 provides that an affidavit in support of a motion for summary judgment must be "made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." The affidavit by Anthony Verderame, Executor for the Estate of Frank Verderame meets none of these criteria. Only evidence that would be admissible at trial may be used to support or oppose a motion for summary judgment." Home Ins. Co. v. Aetna Life and Casualty, 235 Conn. 185, 202-03, 663 A.2d 1001 (1995).
Accordingly, for the reasons stated herein, the plaintiff's motion for summary judgment, as to the defendants' third special defense, is hereby denied.
THE COURT
By Arnold, J.