Opinion
No. CV 03-089747S
August 22, 2003
MEMORANDUM OF DECISION RE MOTION TO STRIKE SPECIAL DEFENSE AND COUNTERCLAIMS (#106)
In this foreclosure action the plaintiff has moved to strike the special defense (that "[t]he defendant cured the default") and four counterclaims (unfair debt collection practices violating 15 U.S.C. § 1692 et seq., unfair trade practices violating General Statutes "§ 42-110b and/or 36a-53b"; violation of General Statutes § 42-288a; and violation of 15 U.S.C. § 1692d). The bases for the motion to strike are several-fold: legal insufficiency; not addressing the making, validity, or enforcement of the note or mortgage; not arising out of the same transaction as the complaint; and failing to establish causes of action. In addition, the plaintiff's memorandum raises the issue of whether the counterclaims violate the statute of frauds. For the reasons set forth below, the motion to strike is granted.
The motion to strike does not specify non-compliance with the statute of frauds as a basis, but the plaintiff's memorandum of law in support of the motion to strike clearly indicates plaintiff's reliance on the statute of frauds as a basis for striking the first, second, and fourth counts of the counterclaim. Defendant did not object to the plaintiff's omission of this ground in its motion to strike and briefed the issue herself.
Generally, "[i]n ruling on a motion to strike the trial court is limited to considering the grounds specified in the motion." Meredith v. Police Commission, 182 Conn. 138, 140, 438 A.2d 27 (1980). "[G]rounds other than those specified should not be considered by the trial court in passing upon a motion to strike . . ." Internal quotation marks omitted.) Gazo v. Stamford, 255 Conn. 245, 259, 765 A.2d 505 (2001). Since the plaintiff did not object to this deficiency, however, the court has discretion to consider this argument. See, Brouchard v. People's Bank, 219 Conn. 465, 468 n. 4, 594 A.2d 1 (1991).
Schatz v. Frederick, Superior Court, judicial district of New Haven at New Haven, Docket No. CV 03-0474928 S (June 16, 2003, Harper, J.) ( 34 Conn.L.Rptr. 744).
"The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaints . . . to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Peter-Michael, Inc. v. Sea Shell Associates, 244 Conn. 269, 270, 709 A.2d 558 (1998). "In ruling on a motion to strike, the court is limited to the facts alleged in the complaint. The court must construe the facts in the complaint most favorably to the plaintiff . . . A motion to strike is property granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged." (Citation omitted; internal quotation marks omitted.) Novametrix Medical Systems, Inc. v. BOC Group, Inc., 224 Conn. 210, 215, 618 A.2d 25 (1992).
A. The Special Defense
"The purpose of a special defense is to plead facts that are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action." (Internal quotation marks omitted.) Danbury v. Dana Investment Corp., 249 Conn. 1, 17, 730 A.2d 1128 (1999). "A party wanting to contest the legal sufficiency of a special defense may do so by filing a motion to strike." Barasso v. Rear Still Hill Road, LLC, 64 Conn. App. 9, 13, 779 A.2d 198 (2001). The plaintiff argues that the defendant's special defense should be stricken because it does not consist of any facts other than a self-serving statement that the "defendant cured the default." The plaintiff asserts that the defendant's special defense contains no facts to support it and is, therefore, a legal conclusion. In opposition, the defendant argues that her special defense is a plain and concise statement of material fact that fully discloses the ground for her defense, payment.
Allegations that are "merely conclusions of law [in a complaint] and absent sufficient alleged facts to support them, are subject to a motion to strike . . . The trial court may not seek beyond the complaint for facts not alleged." (Internal quotation marks omitted.) Cavallo v. Derby Savings Bank, 188 Conn. 281, 285-86, 449 A.2d 986 (1982). "A motion to strike admits all facts well pleaded; it does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings." (Emphasis in original; internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 588, 693 A.2d 293 (1997).
In Homeside Lending v. Martin, Superior Court, judicial district of New London, Docket No. 561110 (August 7, 2002, Martin, J.), a foreclosure action, the court denied the plaintiff's motion to strike the defendant's special defense of payment. The special defense read: "The defendant has made all payments as required and the acceleration is wrongful." Id. The court found that this defense was not a legal conclusion because "[w]hether the defendant made all of his mortgage payments is a question of fact. If the plaintiff wanted the defendant to make more specific allegations regarding the individual payments made by the defendant, it could have filed a request to revise pursuant to Practice Book § 10-35." Id. This case is distinguishable from Homeside Lending in that the special defense here is not one of payment. The defendant alleges merely that she "cured the default." (Defendant's Special Defense, p. 1.) The defendant does not allege in what manner she cured the default. Contrary to defendant's argument, she fails to allege any facts that indicate a special defense of payment. She simply alleges that the default was cured. Because a trial court may not look beyond the pleadings for facts not alleged, the special defense is legally insufficient because it is a mere conclusion of law.
B. Counterclaims
"A motion to strike tests the legal sufficiency of a cause of action and may properly be used to challenge the sufficiency of a counterclaim. Practice Book § 152 [now Practice Book § 10-39]." Fairfield Lease Corp. v. Romano's Auto Service, 4 Conn. App. 495, 496, 495 A.2d 286 (1985). The defendant's counterclaims all arise from the same factual allegations. She claims that she became ill in September 2002, failed to make the mortgage payment in December 2002 or January 2003, and made various efforts to contact the mortgagee. In early January 2003 she alleges she received a letter from a law firm that identified itself as "authorized by the Servicer (Ocwen Federal Bank FSB) . . . to contact you regarding the status of your account." That letter informed her she had the right to cure or reinstate the loan. It specified the balance due and provided an address for her to make payment. She further alleges that later that month she received a letter from Ocwen's Early Intervention Unit that urged her to "settle your account" and to call "to discuss your situation and possible payment arrangements." She then alleges that in February 2003, she placed such a call "and since the account was not yet in foreclosure an agreed upon payment was set. $1747.18 was immediately sent out." That payment, along with the February mortgage payment, was returned to her. She claims that these facts establish the various causes of action alleged in the counterclaim.
Under Practice Book § 10-10, a party may file a counterclaim for any cause of action that "arises out of the transaction or one of the transactions which is the subject of the plaintiff's complaint; . . ." In the context of foreclosures, the Appellate Court has directed that counterclaims do not arise out of the same transaction unless they address the making, validity or enforcement of the note. See Southbridge Assoc. v. Garofalo, 53 Conn. App. 11, 728 A.2d 1114 (1999), cert. den., 249 Conn. 919, 733 A.2d 229 (1999). All the facts alleged here arise out of the mortgagee's efforts to enforce its note. In its efforts to do so, plaintiff's predecessor wrote defendant and solicited conduct on her part to cure or reinstate the loan. The resulting acts alleged in the special defense all arose out of those letters sent by the mortgagee seeking to enforce the mortgage.
The plaintiff argues in its memorandum of law in support of its motion to strike that counts one, two and four of defendant's counterclaim should be stricken on the ground that they violate the statute of frauds, General Statutes § 52-550, because they contain allegations that an oral agreement was reached between the defendant and the plaintiff allowing the defendant to make a partial payment of insufficient funds, the "agreed upon payment." (Defendant's Counterclaim, p. 2.) It argues that the defendant fails to allege, as required by the statute of frauds, that this oral agreement was reduced to writing.
Section 52-550 (a) of the General Statutes provides in relevant part: "(a) No civil action may be maintained in the following cases unless the agreement, or a memorandum of the agreement is made in writing and signed by the party, or the agent of the party, to be charged: . . . (4) upon any agreement for the sale of real property or any interest in or concerning real property . . ."
In Glastonbury Bank Trust Co. v. Corbett Construction, Superior Court, judicial district of New London, Docket No. 521355 (October 15, 1992) (Walsh, J, 7 Conn.L.Rptr. 519, 7 CSCR 1320), the court held that a forbearance agreement falls within the statute of frauds. The court found that while no Connecticut cases had addressed the issue, courts of several other jurisdictions had concluded that "an alleged oral agreement not to foreclose was between the mortgagor and the mortgagee. As between these parties, the mortgage represented an interest in land. The agreement not to foreclose was therefore an agreement to surrender an interest in land. As such, the agreement was within the statute of frauds." Accord Source One v. Dziurzynski, Superior Court, judicial district of Stamford, Docket No. CV 95-0 145337 (May 22, 1996, Hickey, J.) ( 17 Conn.L.Rptr. 29); FGB Realty Advisors, Inc. v. Seven Winds Realty, et al., Superior Court, judicial district of Litchfield, Docket CV 94-0066261 (December 22, 1995, Pickett, J.); Fifty/Unionoreo v. Russell Sirianni Associates et al., Superior Court, judicial district of New Haven, Docket No. CV 94-0356903S (June 7, 1995, DeMayo, S.T.R.)
In opposition, the defendant argues that she does not allege that the parties entered into a forbearance agreement. Rather, she merely alleges payment to cure the default and a refusal to accept the payment by the plaintiff. She argues that the payment and acceptance of late mortgage payments do not fall with the statute of frauds.
Forbearance has been defined as: The renunciation, repudiation, abandonment or surrender of some claim, right, privilege, or of the opportunity to take advantage of some defect, irregularity, or wrong. An expressed or implied relinquishment of a legal right . . . The Restatement (Second), Contracts, Sec. 90, (1973) further defines forbearance: A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise, but the remedy granted for breach of the promise may be limited as justice requires.
(Citation omitted.) 4000 Park Avenue, LLC v. Italian Community Center of Greater Bridgeport, Inc., Superior Court, judicial district of Fairfield at Bridgeport, Docket No. 40841 (October 14, 1999, McKeever, J.).
The alleged oral payment agreement between the parties constitutes a forbearance agreement. The account was in default and, pursuant to the terms of the mortgage, the plaintiff was entitled to accelerate the amount due under the note and commence a foreclosure action unless the defendant paid the entire amount due under the note within thirty days of default. Contrary to the defendant's argument, she did not make a payment that was an obligation already set by the terms of the mortgage. She admits that her check for $1,747.18 was for the January mortgage payment, that the amount of this check represents a reduced payment allegedly agreed upon by the parties, and that she sent this check after the thirty-day grace period had expired. The plaintiff refused to accept this payment and returned the check to the defendant. Therefore, the alleged agreement represents a promise that the defendant would reasonably have expected to induce the plaintiff to forbear from demanding payment in full or commencing foreclosure. Consequently, the oral agreement was a forbearance agreement and, because the defendant failed to allege that the agreement was reduced to writing, counts one, two and four of defendant's counterclaim are violate the statute of frauds and must be stricken.
The defendant's tender of the $1,747.18 check, a unilateral act seeking to enforce an alleged oral contract, did not constitute partial performance taking counts one, two and four out of the scope of the statute of frauds. See Levesque Builders, Inc. v. Hoerle, 49 Conn. App. 751, 756, 717 A.2d 252 (1998).
Finally, the defendant concedes that count three of her counterclaim fails to state a claim upon which relief may be granted. Therefore, the motion to strike count three must be granted.
For the above reasons, the plaintiff's motion to strike the defendant's special defense and counterclaims is GRANTED.
BY THE COURT
STEPHEN F. FRAZZINI JUDGE OF THE SUPERIOR COURT