Opinion
FSTCV096002588S
02-08-2016
Aurora Loan Services, LLC v. Karen Condron et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
Donna Nelson Heller, J.
Aurora Loan Services, LLC (Aurora Loan or the original plaintiff) commenced this action, returnable December 8, 2009, against the defendants Karen Condron (Mrs. Condron), James L. Condron (Mr. Condron), National City Bank (National City), People's United Bank, f/k/a People's Bank (People's United), and Rosenthal & Rosenthal, Inc. (Rosenthal) to foreclose a mortgage on real property owned by Mr. Condron and Mrs. Condron (collectively, the Condrons) and located at 92 Chestnut Hill Road, Wilton, Connecticut 06897 (the Chestnut Hill Road property). Defaults were entered against People's United and Rosenthal for their failure to appear on August 25, 2015 (#112.01). National City was defaulted for its failure to plead on March 8, 2010 (#113.86).
On June 4, 2010, the Condrons filed a notice of bankruptcy (#109.00), in which they represented that they had filed a petition under Chapter 7 of the United States Bankruptcy Code on May 10, 2010. On July 8, 2010, Aurora Loan filed a notice of relief from stay (#110.00), in which it stated that the United States Bankruptcy Court for the District of Connecticut had granted its petition for relief from the automatic stay on June 25, 2010 so that this foreclosure action could proceed. The Condrons filed an answer with special defenses and counterclaim (#116.00) and a disclosure of defense (#117.00) on September 27, 2010.
On April 8, 2013, Aurora Loan moved to substitute Nationstar Mortgage, LLC (Nationstar or the plaintiff) as the plaintiff in this action (#148.00). The court (Mintz, J.) granted the motion to substitute on May 1, 2013 (#148.86).
On December 10, 2013, the plaintiff filed a request for leave to amend and an amended complaint (#151.00). The Condrons filed an answer with special defense to the amended complaint on January 10, 2014 (#152.00), and they withdrew their counterclaim on February 20, 2014 (#160.00). The plaintiff replied to the special defense on August 18, 2014 (#177.00). The Condrons withdrew the special defense on August 31, 2015 (#205.00).
The plaintiff moved for summary judgment against the Condrons as to liability only on December 9, 2014 (#187.00). On April 20, 2015, the court (Mintz, J.) denied the motion for summary judgment (#187.01).
On August 24, 2015, the plaintiff filed a foreclosure worksheet (Form JD-CV-77) (#198.00) and an affidavit of attorneys fees (#199.00). The Condrons filed their trial memorandum on August 24, 2015 (#196.00). The plaintiff filed its trial memorandum on August 25, 2015 (#200.00). The plaintiff filed a revised affidavit of attorneys fees on August 26, 2015 (#204.00).
This action was tried to the court on August 25, 2015. The court heard testimony from Keith Kovalic (Mr. Kovalic), a litigation resolution analyst for the plaintiff, reviewed the exhibits that were admitted into evidence and the parties' stipulation of facts for trial, and took judicial notice of the contents of the court file, including the foreclosure worksheet and the revised attorneys fees affidavit. The parties filed post-trial memoranda on September 25, 2015 (#206.00; #208.00) and reply memoranda on October 9, 2015 (#210.00; #211.00).
I
After considering all of the testimony and documentary evidence admitted, the parties' stipulation of facts for trial, and the contents of the court file judicially noticed, and having had the opportunity to observe the witness, the court makes the following findings of fact. On February 16, 2007, the Condrons executed and delivered an adjustable rate promissory note (the note) payable to the order of Lehman Brothers Bank, FSB (Lehman Brothers Bank) in the original principal amount of $980,000. To secure the note, the Condrons executed and delivered a mortgage (the mortgage) on February 16, 2007 to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Lehman Brothers Bank, on the Chestnut Hill Road property. The Condrons are the record owners and in possession of the Chestnut Hill Road property. The mortgage was recorded on February 23, 2007 in the land records of the Town of Wilton, in Volume 1924 at Page 210.
Plaintiff's Exhibit 1.
Plaintiff's Exhibit 2.
Lehman Brothers Bank specially endorsed the note to Lehman Brothers Holdings, Inc. (Lehman Brothers Holdings). Lehman Brothers Holdings endorsed the note in blank.
Structured Assets Securities Corporation, as depositor; Wells Fargo Bank, N.A., not in its individual capacity, but solely as trustee (Wells Fargo, as trustee); Aurora Loan, as master servicer; and Lehman Brothers Holdings entered into a written trust agreement, dated as of March 1, 2007 (the trust agreement). Under the trust agreement, the note and the mortgage became part of the trust fund of the trust that was thereby created. Wells Fargo, as trustee, is the owner of the debt under the trust agreement.
Exhibit 5. The trust agreement is also known as a pooling and servicing agreement.
Aurora Loan, or any successor in interest, is identified as the master servicer and as a servicer in Section 1.01 of the trust agreement. Section 9.04(a) of the trust agreement provides in pertinent part that the master servicer and each servicer " shall have full power and authority (to the extent provided in the applicable Servicing Agreement) to do any and all things that it may deem necessary or desirable in connection with the servicing and administration of the Mortgage Loans, including but not limited to the power and authority . . . to effectuate foreclosure or other conversion of the ownership of the Mortgaged Property securing any Mortgage Loan . . ." Section 9.04(a) further provides that " [t]he Trustee shall furnish the Master Servicer or a Servicer, upon request, with any powers of attorney prepared by the Master Servicer or such Servicer empowering the Master Servicer or such Servicer . . . to foreclose upon or otherwise liquidate Mortgaged Property, and to appeal, prosecute or defend in any court action relating to the Mortgage Loans or the Mortgaged Property . . ." Section 9.20(a) of the trust agreement provides in pertinent part that " [t]he Master Servicer shall use its reasonable best efforts to, or to cause each Servicer to, foreclose upon, repossess or otherwise comparably convert the ownership of Mortgaged Properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments, all in accordance with the applicable Servicing Agreement."
The plaintiff is a successor in interest to Aurora Loan.
Aurora Loan, as servicer and master servicer, and Lehman Brothers Holdings, as seller, entered into a written servicing agreement dated as of March 1, 2007 (the servicing agreement).
Plaintiff's Exhibit 6.
Aurora Loan, or any successor in interest, is identified as the master servicer and as a servicer in Article I of the servicing agreement. Section 3.01 of the servicing agreement provides that " [t]he Servicer, as an independent contractor, shall service and administer the Mortgage Loans from and after the Closing Date or Servicing Transfer Date, as applicable, and shall have full power and authority, acting alone, to do any and all things in connection with such servicing and administration which the Servicer may deem necessary or desirable, consistent with the terms of this Agreement and with Accepted Servicing Practices." Section 3.02 of the servicing agreement provides that " the Servicer shall proceed diligently to collect all payments due under each of the Mortgage Loans when the same shall become due and payable . . ."
MERS, as nominee for Lehman Brothers Bank, assigned the mortgage to Aurora Loan by virtue of a corporate assignment of mortgage recorded September 14, 2009 in Volume 2079 at Page 16 of the Wilton land records. Aurora Loan assigned the mortgage to the plaintiff by virtue of a corporate assignment of mortgage recorded March 4, 2013 in Volume 2310 at Page 142 of the Wilton land records.
Pursuant to the interest-only addendum to the note, the Condrons were to make monthly payments of interest every month for the first 120 payments, commencing on April 1, 2007. The initial monthly payment was in the amount of $5,716.67. Section 2 of the note provided that interest was to be charged on the unpaid principal balance at an annual rate of 7.00 percent. This rate was subject to change on March 1, 2012 and on the first day of every sixth month thereafter, up to a maximum interest rate of 13.00 percent.
The Condrons have been in default on the note and mortgage since on or before May 1, 2009. Section 7 of the note provides for notice of default and acceleration, late charges, and payment of the note holder's costs and expenses, including reasonable attorneys fees. Under Section 8 of the note, any notice to the borrower is to be given by delivering it or by mailing it by first class mail to the property address, unless the borrower gives the note holder notice of a different address or applicable law requires a different method of giving notice.
Section 22 of the mortgage provides for the lender to give notice to the borrower prior to acceleration in the event of the borrower's default. As set forth in Section 22, the notice was to specify: " (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and foreclosure or sale of the Property." The notice was also required to inform the borrower of " the right to reinstate after acceleration and the right to assert in court the non-existence of a default or any other defense of the Borrower to acceleration and foreclosure or sale." Section 22 also provided that the " Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys fees and costs of title evidence."
Section 15 of the mortgage provides that all notices are to be in writing, and any notice to the borrower " shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise. The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender."
On June 19, 2009, Aurora Loan, as the servicer of the loan at the time, sent a letter to the Condrons, by certified mail, return receipt requested, notifying them that the loan was in default and advising them of the amount required to cure the default and reinstate the loan as of that date. On the same date, Aurora Loan also provided notice to the Condrons by certified mail of their rights under the Emergency Mortgage Assistance Program (EMAP), pursuant to the provisions of General Statutes § 8-265cc, et seq. The Condrons claim that they did not receive either the default notice or the EMAP notice from Aurora Loan. No evidence was offered to show that either notice had been returned to Aurora Loan by the United States Postal Service (the USPS or the postal service) with an endorsement showing failure of delivery.
The parties stipulated that the Condrons, if called to testify, would testify that they did not receive either the default notice, as required by the mortgage, or the EMAP notice, as required by the statute.
The Condrons failed to cure the default. Aurora Loan elected to accelerate the balance due on the note, declare the note due in full, and foreclose the mortgage securing the note. Aurora Loan provided notice to the Condrons pursuant to General Statutes § 49-31d, et seq. with the original summons and complaint in this action.
On August 22, 2012, Wells Fargo, as trustee, provided a limited power of attorney to the plaintiff, as assignee of Aurora Loan, which authorizes the plaintiff, a mortgage servicer, to prosecute this foreclosure action. The limited power of attorney provides in pertinent part that the plaintiff has " full authority and power to execute and deliver on behalf of the Trustee . . . all documents and instruments necessary to conduct any (a) foreclosure, or (b) the taking of any deed in lieu of foreclosure, or (c) any judicial or non-judicial foreclosure or termination, cancellation, or rescission of any such foreclosure, or (d) any similar procedure (collectively, as applicable, a 'Foreclosure') . . ."
Plaintiff's Exhibit 7.
The plaintiff was in possession of the note and presented it to the court and to counsel for the Condrons for inspection at the foreclosure trial. The parties stipulated that the amount due and owing on the note as of August 25, 2015 was $1,531,904.76.
By agreement, a copy of the note was admitted into evidence as a full exhibit, Plaintiff's Exhibit 1.
The parties also stipulated that the fair market value of the property was $850,000 as of August 25, 2015, the date of trial.
The parties stipulated that the fair market value of the Chestnut Hill Road property was $850,000 for purposes of this proceeding only. The Condrons have reserved their right to present evidence as to the value of the property in any subsequent action for a deficiency.
Both the original plaintiff and the plaintiff advanced funds and incurred costs and expenses associated with enforcing the mortgage, including attorneys fees. According to the revised affidavit of attorneys fees submitted by counsel for the plaintiff, the attorneys fees incurred totaled $14,362.00.
II
The Condrons contend that the plaintiff lacks standing to pursue this foreclosure action because it was not unequivocally authorized by Wells Fargo, as trustee, to prosecute this action in its own name. In response, the plaintiff maintains that it has standing because it was the holder of the note, and it was authorized under the trust agreement, the servicing agreement, and the limited power of attorney from Wells Fargo, as trustee, to pursue this foreclosure action.
" The question of standing implicates a court's subject matter jurisdiction . . . [A] court does not have subject matter jurisdiction over claims brought by persons who do not have standing." (Citations omitted; internal quotation marks omitted.) Orsi v. Senatore, 230 Conn. 459, 470, 645 A.2d 986 (1994). " Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he [or she] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy . . . When standing is put in issue, the question is whether the person whose standing is challenged is a proper party to request an adjudication of the issue . . . Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved." (Citation omitted; internal quotation marks omitted.) Kawecki v. Saas, 132 Conn.App. 644, 648, 33 A.3d 778 (2011).
In U.S. Bank, National Assn. v. Schaeffer, 160 Conn.App. 138, 125 A.3d 263 (2015), our Appellate Court summarized the rules for standing in foreclosure actions: " When a holder seeks to enforce a note through foreclosure, the holder must produce the note. The note must be sufficiently endorsed so as to demonstrate that the foreclosing party is a holder, either by a specific endorsement to that party or by means of a blank endorsement to bearer. If the foreclosing party shows that it is a valid holder of the note and can produce the note, it is presumed that the foreclosing party is the rightful owner of the debt. That presumption may be rebutted by the defending party, but the burden is on the defending party to provide sufficient proof that the holder of the note is not the owner of the debt, for example, by showing that ownership of the debt had passed to another party. It is not sufficient to provide that proof, however, merely by pointing to some documentary lacuna in the chain of title that might give rise to the possibility that some other party owns the debt. In order to rebut the presumption, the defendant must prove that someone else is the owner of the note and debt. Absent that proof, the plaintiff may rest its standing to foreclose on its status as the holder of the note." (Emphasis in original; footnote omitted.) Id. at 150.
The note, which is endorsed in blank, is a negotiable instrument under General Statutes § 42a-3-104(a). As set forth in General Statutes § 42a-1-201(b)(21)(A), the term " holder" is defined as, inter alia, " [t]he person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession . . ." General Statutes § 42a-1-201(b). " The holder is the person or entity in possession of the instrument if the instrument is payable to bearer . . . When an instrument is endorsed in blank, it becomes payable to bearer and may be negotiated by transfer of possession alone . . ." Citations omitted; footnotes omitted; internal quotation marks omitted.) Equity One, Inc. v. Shivers, 310 Conn. 119, 126-27, 74 A.3d 1225 (2013). " Being the holder of a note satisfies the plaintiff's burden of demonstrating that it is the owner of the note because under our law, the note holder is presumed to be the owner of the debt, and unless the presumption is rebutted, may foreclose the mortgage under § 49-17. The possession by the bearer of a note [e]ndorsed in blank imports prima facie [evidence] that he acquired the note in good faith for value and in the course of business, before maturity and without notice of any circumstances impeaching its validity. The production of the note [endorsed in blank] establishes his case prima facie against the makers and he may rest there . . . It [is] for the defendant to set up and prove the facts which limit or change the plaintiff's rights . . ." (Citations omitted; internal quotation marks omitted.) American Home Mortgage Servicing, Inc. v. Reilly, 157 Conn.App. 127, 133-34, 117 A.3d 500 (2015). Although the plaintiff is the holder of the note, Wells Fargo, as trustee, is the owner of the debt. Therefore, the plaintiff must establish that it has standing to prosecute this action by virtue of the authority granted to it under the trust agreement, the servicing agreement, and the limited power of attorney from Wells Fargo, as trustee, to foreclose on the mortgage securing the note. " [I]t is the foreclosing party's burden, when the issue of standing is raised, to demonstrate by way of proper documentation that it has the right to enforce the note. It may, for example, produce documents showing a valid transfer of the right to enforce the note between the original holder and the foreclosing party." U.S. Bank National Assn. v. Schaeffer, supra, 160 Conn.App. at 150-51. " [A] plaintiff, in establishing the loan servicer's authority to enforce the instrument, must provide sufficient evidence of such authority to demonstrate that the principals unequivocally manifested their intention to authorize the [the loan servicer] to exercise [those] rights . . ." (Internal quotation marks omitted.) J.E. Robert Co. v. Signature Properties, LLC, 309 Conn. 307, 328 n.19, 71 A.3d 492 (2013).
The burden-shifting analysis was articulated in RMS Residential Properties, LLC v. Miller, 303 Conn. 224, 32 A.3d 307 (2011), and subsequently clarified in J.E. Robert Co. v. Signature Properties, LLC, 309 Conn. 307, 71 A.3d 492 (2013): " Our statement in RMS Residential Properties, LLC v. Miller, supra, 303 Conn. at 231-32, that 'a holder of a note is presumed to be the owner of the debt, and unless the presumption is rebutted, may foreclose the mortgage under [General Statutes] § 49-17, ' was not intended to suggest that mere proof that someone other than the party seeking to foreclose is the owner of the note will require dismissal for lack of standing. Rather, under such circumstances, the burden would shift back to the plaintiff to demonstrate that the owner has vested it with the right to receive the money secured by the note . . . With respect to the plaintiff's ultimate burden, however . . . [i]t is a fundamental precept of the law to expect a foreclosing party to actually be in possession of its claimed interest in the note, and have the proper supporting documentation in hand when filing suit, showing the history of the note, so the defendant is duly apprised of the rights of the plaintiff . . . Therefore, in cases in which a nonholder transferee seeks to enforce a note in foreclosure proceedings, if the defendants dispute the plaintiff's right to enforce the note, the plaintiff must prove that right." (Citations omitted; internal quotation marks omitted.) Id. at 325-26 n.18.
The trust agreement, the servicing agreement, and the limited power of attorney were admitted into evidence. Under Section 9.04 of the trust agreement, the plaintiff, as the successor in interest to Aurora Loan, has " full power and authority" to " effectuate" the foreclosure of the mortgage. The limited power of attorney also authorizes the plaintiff to foreclose the mortgage. These documents, together with the testimony of Mr. Kovalic, based on his personal knowledge and his review of the plaintiff's business records, satisfied the plaintiff's burden of proving that it was authorized to enforce the debt and prosecute the action to foreclose the mortgage. See American Home Mortgage Servicing, Inc. v. Reilly, supra, 157 Conn.App. at 136-37.
The Condrons' suggestion that the use of the word " effectuate" in the trust agreement somehow diminishes the plaintiff's authority to foreclose the mortgage is unavailing.
The Condrons contend that the plaintiff cannot prosecute this action because the controlling documents do not specifically state that the plaintiff is authorized to pursue the foreclosure action in its own name. The court does not agree. The scope of the loan servicer's authority need not be expressly defined by the supporting documents, but may be inferred based on the owner's general intent in granting the servicer the right to act on behalf of the owner. See J.E. Robert Co. v. Signature Properties, LLC, supra, 309 Conn. at 329-30. Moreover, because the trust agreement grants broad authority to the servicer, while requiring the servicer to obtain the trustee's written consent before initiating an action in the name of the trustee, it logically follows that the servicer may proceed to foreclose in its own name. See id. at 331, n.22. Accordingly, the court finds that the plaintiff has standing to prosecute this foreclosure action.
III
The Condrons also contend that the plaintiff is barred from pursuing this foreclosure action because (i) the plaintiff did not prove that Aurora Loan mailed the notice of default, dated June 19, 2009, to them, and (ii) the notice of default was sent to them by certified mail, rather than first class mail, thus there is no presumption of delivery. As to the Condrons' first claim, the court credits the testimony of Mr. Kovalic, based on his personal knowledge of the plaintiff's records, including records maintained in its computer system, and his experience in the industry.
Mr. Kovalic testified that the plaintiff regularly keeps records regarding the loans that it is servicing; that it is the normal course of the plaintiff's business to keep those records; that he reviews those records as part of his responsibilities; and that he was familiar with the plaintiff's business records concerning the Condrons' loan. Mr. Kovalic further testified that based on his review of the relevant records, the notations in the file, and the copy of the default letter itself, the default letter was mailed to the Condrons by certified mail on June 19, 2009. See RMS Residential Properties, LLC v. Miller, 303 Conn. 224, 235-36, 32 A.3d 307 (2011), overruled on other grounds by J.E. Robert Co. v. Signature Properties, LLC, 309 Conn. 307, 325 n.18, 71 A.3d 492 (2013) (affiant had personal knowledge of business records related to underlying transaction; Bank of America, N.A. v. Harris, Superior Court, judicial district of Danbury, Docket No. CV-09-6001626-S (July 18, 2014, Shaban, J.) (58 Conn. L. Rptr. 595) (affiant need only have personal knowledge of business records relating to account and production and mailing of default notices generally). The court finds that the plaintiff has proven by a preponderance of the evidence that the default letter was sent to the Condrons on June 19, 2009 by certified mail.
Mr. Kovalic testified that these records include basic loan information, all the collections notes, the escrow history, the payment history, and any communications to or from the borrower.
With respect to the second claim, the Condrons contend that, because Aurora Loan sent the default letter by certified mail, return receipt requested, it had elected to send notice " by other means" --i.e., not by first class mail--and, therefore, the notice was not deemed to have been given under Section 15 of the mortgage unless and until it was delivered to them. Absent proof of actual delivery, they argue, Aurora Loan did not comply with the notice provisions of the mortgage. The plaintiff maintains that mailing the default letter to the Condrons by certified mail complied with Section 15 of the mortgage, which provides for notice to be sent by first class mail, and thus notice to the Condrons was deemed to have been given when it was mailed.
A plaintiff must prove that it complied with all conditions precedent prior to commencing a foreclosure action. Bank of America v. Hanlon, 65 Conn.App. 577, 581, 783 A.2d 88 (2001); see also Thomaston Savings Bank v. Hardisty, Superior Court, judicial district of Litchfield, Docket No. CV-09-5006672-S, (September 13, 2010, Roche, J.) (" The foreclosing party must demonstrate that all conditions precedent to foreclosure, as mandated by the note and mortgage, have been satisfied"). " The right of a mortgagee to initiate a foreclosure action against a defaulting debtor depends on the mortgagee's compliance with the notice provisions contained in the mortgage." (Citations omitted.) Mortgage Electronic Registration Systems, Inc. v. Goduto, 110 Conn.App. 367, 368, 955 A.2d 544, cert. denied, 289 Conn. 956, 961 A.2d 420 (2008). " Where the terms of the note and mortgage require notice of default, proper notice is a condition precedent to an action for foreclosure." (Citations omitted; internal quotation marks omitted.) Fidelity Bank v. Krenisky, 72 Conn.App. 700, 707, 807 A.2d 968, cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002).
Aurora Loan was required to give notice of default to the Condrons under Section 22 of the mortgage prior to commencing this foreclosure action. Section 15 of the mortgage provides for notice to be given by " first class mail" or by " other means." While the intended result of each method of delivery is the same--the borrowers are notified that their loan is in default--the corresponding burden of proof is not. In addition to the express language of Section 15 of the mortgage, which provides that notice sent by first class mail shall be deemed given upon mailing, a notice sent by first class mail carries a presumption of receipt under the mailbox rule. " The mailbox rule, a general principle of contract law, provides that a properly stamped and addressed letter that is placed into a mailbox or handed over to the United States Postal Service raises a rebuttable presumption that it will be received." (Citation omitted; internal quotation marks omitted.) Butts v. Bysiewicz, 298 Conn. 665, 677 n.8, 5 A.3d 932 (2010). In other words, when a notice is sent by first class mail, actual delivery is presumed under the mailbox rule, and the intended recipient bears the burden to disprove actual delivery. In contrast, a notice sent by other means carries no such presumption of receipt, and the sender has the burden of proving actual delivery. The question for the court, therefore, is whether the default letter sent to the Condrons by certified mail is entitled to a presumption of receipt, like a notice sent by first class mail, or whether the plaintiff has the burden of proving actual delivery, as if the default letter were sent by other means.
Connecticut courts have applied the mailbox rule when correspondence is sent by certified mail. Our Appellate Court has held that a grievance complaint sent by certified mail was entitled to a presumption of actual delivery under the mailbox rule. Daniels v. Statewide Grievance Committee, 72 Conn.App. 203, 211-12, 804 A.2d 1027 (2002). See also Miniter v. Statewide Grievance Comm., Superior Court, judicial district of Hartford, Docket No. CV-07-4029199-S, (June 3, 2009, Elgo, J.) aff'd per curiam, 120 Conn.App. 904, 991 A.2d 1119, cert. denied, 297 Conn. 912, 995 A.2d 639 (2010) (failure to rebut presumption of timely notice sent by certified mail). Courts have also applied the mailbox rule when notices of default and acceleration were sent by certified mail in foreclosure actions. See Citimortgage, Inc. v. Speer, Superior Court, judicial district of New London, Docket No. CV-09-6001411-S, (February 17, 2011, Devine, J.) (written notice sent by certified mail satisfied condition precedent to foreclosure); Key Bank of New York, N.A. v. Paup, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV-92-0290077-S (November 10, 1994, Rodriguez, J.) (same). Cf. Echavarria v. Nat'l Grange Mut. Ins. Co., 275 Conn. 408, 414-15, 880 A.2d 882 (2005) (mailbox rule applicable where notice of cancellation of insurance policy sent by mail evidenced by certificate of mailing, pursuant to General Statutes § 38a-343(a), which expressly provides that " [n]o notice of cancellation of a policy . . . may be effective unless sent, by registered or certified mail or by mail evidenced by a certificate of mailing").
The Condrons have cited two Superior Court decisions in support of their argument that mailing a notice by certified mail is not the same as mailing it by first class mail: Taylor v. Commissioner of Revenue Services, 48 Conn.Supp. 410, 849 A.2d 26 (2004) and Hanson v. Statewide Grievance Committee, Superior Court, judicial district of Hartford, Docket No. CV05-4015926-S, (July 24, 2006, Tanzer, J.). In Taylor v. Commissioner of Revenue Services, supra, 48 Conn.Supp. at 418-19, the court found that where the commissioner had the discretion under General Statutes § 12-2f to serve a notice of assessment by first class mail or by certified mail, with return receipt, the use of certified mail converted the notice from notice by mail to notice by personal service. In Hanson v. Statewide Grievance Committee, supra, Superior Court, Docket No. CV-05-4015926-S, the court concluded that the plaintiff had failed to comply with Practice Book § 2-38(a)(2) because he mailed a copy of the appeal by first class mail rather than by certified mail, as required by the Practice Book. Neither of these decisions is on point. Unlike the plaintiff in Hanson, Aurora Loan did not depart from a specific Practice Book rule when it sent the default notice to the Condrons by certified mail. At issue in Taylor was the commissioner's service of an assessment notice under the provisions of General Statutes § 12-2f, not a lender's mailing of a default notice under the terms of a mortgage.
The Condrons also cite decision from other jurisdictions in which courts interpreting similar default and acceleration provisions have held that notices sent by certified mail do not fall within the mailbox rule. See, e.g., National City Mortgage Company v. Richards, 182 Ohio App.3d 534, 2009 Ohio 2556, 913 N.E.2d 1007 (Ohio App. 2009).
In re Frazier, 394 B.R. 399, 400-01 (Bankr.E.D.Va. 2008), the federal bankruptcy court decision cited by the Condrons, is also inapposite. In re Frazier addressed the issue of whether mailing a summons and complaint by certified mail satisfied Bankruptcy Rule 7004(b)(9), which requires that a summons and complaint be mailed by first class mail.
The central flaw in the Condrons' argument--that notice sent by certified mail is not the same as notice sent by first class mail--is that certified mail is first class mail, with tracking services for which the sender pays additional fees. Indeed, " certified mail" is more appropriately identified as " certified mail service, " which the postal service describes as providing " a mailer of First-Class Mail, First-Class Package Service, or Priority Mail (except Critical Mail) with a mailing receipt and electronic confirmation of the date, location, and time of the delivery or attempted delivery." USPS, Mail Classification Schedule § 1505.5.1, p. 132 (January 15, 2016). A notice sent by first class mail, deemed given upon mailing, is not invalidated when a sender purchases additional certified mail services to confirm its subsequent delivery.
" Notices of default and acceleration are controlled by the mortgage documents. Construction of a mortgage deed is governed by the same rules of interpretation that apply to written instruments or contracts generally, and to deeds particularly. The primary rule of construction is to ascertain the intention of the parties . . . A promissory note and a mortgage deed are deemed parts of one transaction and must be construed together as such." (Citation omitted; internal quotation marks omitted.) Webster Bank v. Oakley, 265 Conn. 539, 547, 830 A.2d 139 (2003). Section 15 of the mortgage reflects the parties' intention that a notice to the Condrons be deemed given when mailed by first class mail. Sending the default letter by certified mail--i.e., by first class mail, with a mailing receipt and tracking--does not defeat the intent of the notice provision set forth in Section 15.
Even if the court found that Aurora Loan's mailing the default letter to the Condrons by certified mail was not equivalent to mailing the letter by first class mail, the court would nonetheless conclude that Aurora Loan had substantially complied with the provisions of Section 15 of the mortgage when it sent the default letter to the Condrons by certified mail. " Exact compliance with the notice requirement is not necessary, provided the notice of default substantially complied with the relevant notice requirements." (Internal quotation marks omitted.) Savings Bank of Danbury v. 60 Shelter Rock Associates, LLC, Superior Court, judicial district of Danbury, Docket No. CV-11-6006248-S, (June 5, 2013, Pavia, J.) (discussing compliance with notice requirements of General Statutes § 8-265ee(a)). " [T]he general rule with respect to compliance with contract terms . . . is not one of strict compliance, but substantial compliance . . . The doctrine of substantial compliance is closely intertwined with the doctrine of substantial performance . . . The doctrine of substantial performance shields contracting parties from the harsh effects of being held to the letter of their agreements. Pursuant to the doctrine of substantial performance, a technical breach of the terms of a contract is excused, not because compliance with the terms is objectively impossible, but because actual performance is so similar to the required performance that any breach that may have been committed is immaterial." (Citations omitted; internal quotation marks omitted.) Pack 2000, Inc. v. Cushman, 311 Conn. 662, 675, 89 A.3d 869 (2014).
In Bank of America National Association v. Nino, Superior Court, judicial district of Stamford-Norwalk, Docket No. CV-10-6004691-S, (July 1, 2014, Tierney, J.T.R.), the court addressed the issue of whether sending an EMAP notice by first class mail satisfied General Statutes § 8-265ee, which requires that the notice be sent to the address of the property securing the mortgage by " registered, or certified mail, postage prepaid." General Statutes § 8-265ee. The court concluded that " mailing by First Class mail with the sender having already paid for the postage of a notice that complies with the statute, note and indeed in all other respects, is substantial compliance with the form of mailing. The court finds that substantial compliance with the mailing of the notice under Gen. Stat. § 8-265ee permits the plaintiff to commence this foreclosure action and to continue to prosecute the foreclosure." Id.
Aurora Loan's mailing of the default letter to the Condrons by certified mail substantially complied with Section 15 of the mortgage. The default letter was addressed to the Condrons, the borrowers on the mortgage. It contained the information that Section 22 of the mortgage requires to be included. It was mailed by certified mail, return receipt requested, to the Chestnut Hill Road property, and it was deemed given when sent, as provided in Section 15 of the mortgage. The Condrons' claim that they did not receive the notice of default is not sufficient to rebut the presumption of receipt. " A mere denial of receipt is insufficient to rebut the presumption that mail was received." (Citation omitted.) Volikas v. Kmart, Superior Court, judicial district of Ansonia-Milford, Docket No. CV-01-0076466-S, (Jan. 12, 2004, Robinson, A., J.). The plaintiff has proven compliance with the notice provisions of the mortgage by a preponderance of the evidence, thus satisfying this condition precedent to foreclosure.
IV
The Condrons also contend that the plaintiff did not prove that Aurora Loan mailed the June 19, 2009 EMAP notice to them by certified mail, in compliance with the requirements of General Statutes § 8-265ee(a). Compliance with the notice requirements of General Statutes § 8-265ee is a condition precedent to commencing a foreclosure action and implicates subject matter jurisdiction. People's United Bank v. Wright, Superior Court, judicial district of Stamford-Norwalk, Docket No. CV-10-6004126-S (March 30, 2015, Mottolese, J.T.R.) (60 Conn. L. Rptr. 69).
The court again credits the testimony of Mr. Kovalic, which was based on his personal knowledge of the plaintiff's business records relevant to this foreclosure action, that the EMAP notice was sent to the Condrons on June 19, 2009 by certified mail. See Embrace Home Loans, Inc. v. Richardson, Superior Court, judicial district of New London, Docket No. CV-12-6015030-S, (February 6, 2015, Cosgrove, J.) (plaintiff submitted various letters and affidavits that it complied with requirements); Bank of America, N.A. v. Nino, supra, Superior Court, Docket No. CV-10-6004691-S, (letter emanating from service provider's computer system and styled " Emergency Mortgage Assistance Program Notice (EMAP)" satisfied the notice requirements of both mortgage and General Statutes § 8-265ee when mailed to property address); Wells Fargo Bank N.A. v. Gary, Superior Court, judicial district of New Haven, Docket No. CV-10-6016192-S, (September 26, 2011, Zemetis, J.) (affidavit attesting to compliance with the dictates of General Statutes § 8-265ee and a copy of the correspondence suffices).
Mr. Kovalic also pointed out the certified mail tracking number and the bar code at the top of the EMAP notice (Plaintiff's Exhibit 9).
The mailbox rule is implicit in General Statutes § 8-265ee. The statute does not require proof that an EMAP notice was delivered, but only that it was sent by registered or certified mail prior to commencement of a foreclosure action. General Statutes § 8-265ee(a). The Condrons' denial of receipt of the EMAP notice is an insufficient basis for rebutting the presumption that the notice was received. The plaintiff has proven by a preponderance of the evidence that the EMAP notice was sent to the Condrons by certified mail on June 19, 2009.
V
Having found that the plaintiff has standing to prosecute this foreclosure action and that all of the conditions precedent to foreclosure have been satisfied, the court now turns to the remaining elements of the plaintiff's foreclosure case. " In order to establish a prima facie case in a mortgage foreclosure action, the plaintiff must prove by a preponderance of the evidence that it is the owner of the note and mortgage, that the defendant mortgagor has defaulted on the note and that any conditions precedent to foreclosure, as established by the note and mortgage, have been satisfied." (Citations omitted.) GMAC Mortgage, LLC v. Ford, 144 Conn.App. 165, 176, 73 A.3d 742 (2013). Where the plaintiff is the holder of the note, " [t]he production of the note [endorsed in blank] establishes his case prima facie against the makers . . ." (Internal quotation marks omitted.) RMS Residential Properties, LLC v. Miller, supra, 303 Conn. at 231-32. The plaintiff has proven the requisite elements of its case. Accordingly, the court finds the issues in this foreclosure action for the plaintiff.
The parties stipulated that the debt as of August 25, 2015 was $1,531,904.76. As no evidence was offered regarding the current interest rate on the note or the amount of interest accruing daily, the court has not added the interest that accrued from August 25, 2015 to the debt. Accordingly, based on the stipulation of the parties, the court finds the debt as of February 5, 2016 to be $1,531,904, 76.
The court finds the fair market value of the Chestnut Hill Road property to be $850,000, based on the stipulation of the parties.
The plaintiff filed a revised affidavit of attorneys fees (#206.00) on August 26, 2015. As set forth in the affidavit, the attorneys fees through August 25, 2015 totaled $14,362.00, based on 66.8 hours at a rate of $215.00 per hour. The court finds that the affidavit complies with Smith v. Snyder, 267 Conn. 456, 472, 479, 839 A.2d 589 (2004). The court awards attorneys fees to the plaintiff pursuant to the terms of the note and the mortgage in the amount of $14,362.00.
The court adds to the debt the following sums: $14,362.00 (attorneys fees); $350.00 (appraisal fee); and $225.00 (title search fee). The court finds that the total debt of $1,546,841.70 far exceeds the fair market value of the Chestnut Hill Road property. Accordingly, the court enters a judgment of strict foreclosure.
The law days are assigned to the parties in the inverse order of their priority. The court sets the first law day as Tuesday, April 12, 2016. The Condrons shall have the first law day; Rosenthal shall have the second law day; People's United shall have the third law day; and National City shall have the fourth law day. If there is no prior redemption of the Chestnut Hill Road property, title shall vest in the plaintiff.
The plaintiff shall notify all non-appearing defendants that a judgment of strict foreclosure was ordered by this court on this date pursuant to Practice Book § 17-22 and the Superior Court Standing Orders JD-CV-104, Rev. 4-11.