Opinion
CV096001681
12-13-2017
AURORA LOAN SERVICES, LLC v. Joyce DECORMIER
UNPUBLISHED OPINION
OPINION
Cosgrove, J.
The substitute plaintiff, Nationstar Mortgage, LLC refiled this motion for summary judgment on August 8, 2017. Previously the court had denied the plaintiff’s motion for summary judgment on account of new appellate law that caused the court to reconsider its earlier decision striking special defenses and counterclaims filed by the defendant Joyce DeCormier. The court heard argument and on April 28, 2017 rendered a decision vacating its earlier decision striking the special defenses of the defendant . D.E. 218.5. The court denied the motion to strike the first, second, fourth and fifth special defenses. It struck the claims for personal injury damages and the third and sixth special defenses. See D.E. 246. On August 8, 2017 the plaintiff refiled this motion for summary judgment. It asserts that it is entitled to judgment on its complaint and that the defendant’s special defenses are not legally sufficient. In support of its motion the plaintiff filed affidavits from Christy Vieau dated on June 26, 2017 and December 1, 2017.
See Docket Entry 237.50. " Since the filing of this case, there has been a Connecticut Supreme Court decision, Cefaratti v. Aranow, 321 Conn. 593, 141 A.3d 752 (2016), and an Appellate Court decision, Bank of America, N.A. v. Aubut, 167 Conn.App. 347 (2016), that raise concerns with this court as to whether its earlier decision in striking the defenses in the defendant’s November 3, 2014 Revised Amended Special Defenses Per Plaintiff’s Motion to Strike (# 214) was proper. For this reason and the foregoing reasons, the plaintiff’s motion for summary judgment is denied without prejudice. Furthermore, the court requests, sua sponte, additional argument on whether the court properly struck the special defenses."
The court’s ruling striking the counterclaims of the defendant was not disturbed.
The defendant opposes this motion and filed two affidavits which she asserts create genuine issues of material fact.
DISCUSSION
" Summary judgment shall be rendered forthwith if the pleadings, affidavits and other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law ... In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Citation omitted; internal quotation marks omitted.) Vendrella v. Astriab Family Ltd. Partnership, 311 Conn. 301, 313 (2014). " A genuine issue of material fact exists if a reasonable [fact finder] could return a verdict for the nonmoving party." (Internal quotation marks omitted.) Johnson v. Walden University, 839 F.Supp.2d 518, 526 (D.Conn. 2011). " [I]t is the movant who has the burden of showing the nonexistence of any issue of fact ... When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ... Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue." (Internal quotation marks omitted.) Romprey v. Safeco Ins. Co. of America, 310 Conn. 304, 319-20 (2013). Evidence, for the purposes of a summary judgment motion, means affidavits made upon personal knowledge of " such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Connecticut Practice Book Sec. 17-44. Further documents must be sworn or certified copies. Any other material submitted in support or opposition of the motion must demonstrate that the proffer would be admissible under some section of the Connecticut Code of Evidence. Much of the material submitted by the defendant does not meet these standards.
" 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 ... Thus, a court may properly grant summary judgment as to liability in a foreclosure action if the complaint and supporting affidavits establish an undisputed prima facie case and the defendant fails to assert any legally sufficient special defense." (Citations omitted.) GMAC Mortgage v. Ford, 144 Conn.App. 165, 176 (2013) " A mortgagee that seeks summary judgment in a foreclosure action has the evidentiary burden of showing that there is no genuine issue of material fact as to any of the prima facie elements, including that it is the owner of the debt. Appellate courts in this state have held that that burden is satisfied when the mortgagee includes in its submissions to the court a sworn affidavit averring that the mortgagee is the holder of the promissory note in question at the time it commenced the action." Id., 177. " [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 § 49-17 ... The production of the note establishes [the plaintiff’s] 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." (Internal quotation marks omitted.) Equity One, Inc. v. Shivers, 310 Conn. 119, 135 (2013).
" When a complaint and supporting affidavits establish an undisputed prima facie case for a foreclosure action, a court must only determine whether [a] special defense is legally sufficient before granting summary judgment ... Nevertheless, the opposing party only needs to demonstrate the applicability of one legally sufficient special defense in order to defeat a motion for summary judgment ... [A movant’s] motion for summary judgment should be denied when any defense presents significant fact issues that should be tried." (Internal quotation marks omitted.) Bank of America v. Derisme, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV-09-6003691 (July 22, 2014) (Tyma, J.).
" Historically, defenses to a foreclosure have been limited to payment, discharge, release, or satisfaction ... or, if there had ever been a valid lien ... 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 ... A valid special defense at law to a foreclosure proceeding must be legally sufficient and address the making, validity or enforcement of the mortgage, the note, or both." (Internal quotation marks omitted.) Fidelity Bank v. Krenisky, 72 Conn.App. 700, 705 (2002). Allegations of specific facts must be pleaded in support of special defenses. See Practice Book § 10-50. In determining whether special defenses to mortgage foreclosure are sufficient to defeat a plaintiff’s summary judgment motion, the specific issue before the court is " whether the defendant has raised by way of counterevidence material issues of fact to be resolved by the trier of fact in support of [their] numerous special defenses." Bank of America v. Derisme, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV-09-6003691 (July 22, 2014) (Tyma, J.)
In the case of Bank of America v. Aubut, 143 A.3d 638, 167 Conn.App. 347 (2016), the court engaged in an analysis of the equitable special defenses available in a foreclosure action. While not expressly recognizing a defense of predatory lending, the court noted that the factual underpinnings of such a defense fell within the ambit of recognized equitable defenses. " The allegations, read broadly and realistically, set forth a general theory that the facts known to the original plaintiff concerning the financial situation of David Aubut were such that, at the time that the parties entered into the subject loan, the original plaintiff knew or should have known that the loan would fail. Stated otherwise, the defendants assert that because the facts were such that the original plaintiff offered David Aubut a loan that it knew or should have known was " destined to fail from [its] inception, " the substitute plaintiff should not be permitted to enforce the subject note and mortgage." Bank of America v. Aubut, supra at 660.
1. The Plaintiff’s Prima Facie Case
On June 26, 2017, the plaintiff filed an affidavit in support of this motion for summary judgment. (D.E. 247, Vieau Affidavit.) The affidavit was signed by Christy Vieau, a Document Execution Specialist with the plaintiff. In the affidavit, Ms. Vieau indicated that she was personally familiar with and had personal knowledge of the books and records of the plaintiff. The affidavit indicates that on January 4, 2007, that the defendant, Joyce DeCormier, executed and delivered a note in the original principal amount of $204,000.00 to GreenPoint Mortgage Funding, Inc. (hereinafter GreenPoint. The note had been endorsed in blank by Green Point. The affidavit further states that on the same date that the note was executed and delivered, that the defendant, DeCormier, conveyed a mortgage deed of her interest in certain real property known as 640-642 Old Hartford Road, Colchester, Connecticut. This mortgage was held in the name of Mortgage Electronic Registration Systems, Inc. (MERS) as a nominee for GreenPoint Mortgage Funding, Inc., and, thereafter, on September 28, 2009, MERS assigned the mortgage to Aurora Loan Services, LLC. A corrective assignment was recorded on the land records in 2012. On October 24, 2012, the DeCormier mortgage was assigned to the substitute plaintiff, Nationstar.
Prior to the commencement of this action, the note that was endorsed in blank was sent by bailee letter to plaintiff’s counsel. The Vieau affidavit identifies the default event as the failure to make the payment due on June 1, 2009, that notice of the default was provided to Joyce DeCormier. The defendant was further advised of her rights under the Emergency Mortgage Assistance Program. Vieau affies that " at the time of the commencement of this action, the plaintiff was the holder of the Note and it or its agents were in physical possession of the original Note endorsed in blank. The Substitute plaintiff is the current holder of the Note, is the mortgagee of record and it or its agents are in physical possession of the original Note endorsed in blank."
In other affidavits in this file, the defendant admitted that she intentionally stopped making payments on the loan when she " discovered" that this was a negative amortizing loan.
Vieau, in her June affidavit provided copies of the Uniform Residential Loan Application signed by the defendant. (Vieau Affidavit, Ex. 2H.) Her mortgage application listed debts to IndyMac (balance $161,799) and Chase (balance $45,411). In addition the application disclosed $7,490 of monthly income.
In December the plaintiff filed an additional affidavit with the permission of the court. (D.E. 252, Vieau December Affidavit.) In the December 1, 2017 affidavit, Ms. Vieau produces copies of the Mortgage Loan Origination Agreement (Ex. J), the Prepayment Penalty Disclosure (Ex. K), the Borrowers’ Certification and Authorization (Ex. L) and the Loan Document Certification Form (Ex. M) that were signed by the defendant DeCormier at the time she applied for the loan in December of 2006 and at the January 4, 2007 closing of the subject loan. These documents and the mortgage application were submitted in conjunction with the validity of the defendant’s special defenses.
Based upon an examination of these affidavits and attached documents, the court is satisfied that the substitute plaintiff, Nationstar Mortgage, LLC, has satisfied its burden of providing admissible evidence that would allow the court to find that they had made a prima facie case, that they are entitled to file this action and prevail if there are no defenses.
2. The Defendant’s Special Defenses
The Special Defenses filed by the defendant allege Fraud in Factum, Fraudulent Inducement by Intentional Misrepresentation, Unconscionability and Unclean Hands. The key to determining the legal sufficiency of these defenses depends in substantial part on whether there was any conduct of the mortgagee, GreenPoint, that clothed the mortgage broker, Charlene Day, with authority as the mortgagee’s agent.
In order to establish that GreenPoint is liable for any alleged misrepresentation, fraud or inequitable conduct of Charlene Day, the defendant must show conduct of the principal, GreenPoint, that created an apparent agency in Day. " The apparent power of an agent is to be determined by the acts of the principal and not by the acts of the agent; a principal is responsible for the acts of an agent within his apparent authority only where the principal himself by his acts or conduct has clothed the agent with the appearance of authority and not where the agent’s own conduct created the apparent authority. Fireman’s Fund Indemnity Co. v. Longshore Beach Country Club, Inc., 127 Conn. 493, 497 (1941).
The defendant has not produced any evidence that an actual agency relationship existed between Charlene Day, her employer Guaranty Mortgage and Financial Services, Inc. (hereinafter Guaranty) and the mortgagee, GreenPoint. She therefore must establish that there was conduct of GreenPoint that she could reasonably rely upon to form a belief that Day was an authorized agent of GreenPoint. She cannot rely solely on the conduct of Day.
The defendant, Joyce DeCormier, has filed two affidavits in opposition to this motion for summary judgment. In her January 25, 2016 affidavit she affies that she was " tricked and deceived by the conduct of individuals, acting in concert ... GreenPoint Mortgage Funding, Inc., ... through misleading documents and deceptive information provided by said GreenPoint through the medium of one Charlene Day, and agent of Guarantee Mortgage Financial Services, an individual who had an ongoing relationship with GreenPoint ..." Further Decormier claims to have been misled into believing that the attorney at the closing was representing her rather than the mortgagee. She claims she never would have refinanced if she knew then what she knows now. The affidavit does not specify which documents were misleading or what statements of Ms. Day or the attorney were deceptive.
In her second affidavit, dated September 19, 2017, Decormier does provide more details. DeCormier states that in November of 2006 she was worried about her ability to sustain her current mortgage payments. She was approached by Day who stated " that she had recently attended a GreenPoint Mortgage Funding, Inc. training lecture promoting the marketing of an exciting new refinancing product, namely a fixed low interest 2-2.5 percent loan to simple borrowers that would greatly benefit me and my situation and which GreenPoint would then refinance in 5 years." Day allegedly produced a GreenPoint appraisal of the home. The affidavit continues: " At all times in this matter Charlene Day appeared to me to speak for and represent GreenPoint Mortgage Funding, Inc., since she spoke with authority as to what GreenPoint would do, handled the application process with GreenPoint documents and handled the closing in my home ..." Neither Ms. Day nor the attorney at the closing " mentioned the hidden deceptive terms of the loan or the secret " prepayment allonge ..." " I had been deceived by GreenPoint and Day signing ... for a negative amortizing loan which was cleverly devised by its creator to conceal the fact that my debt would increase the more payments I made in a loan now illegal in Connecticut ..." " I have been a victim of predatory lending and misrepresentation and fraud by Day and GreenPoint ..."
No copy of the appraisal was produced.
No GreenPoint documents have been produced other than the note and mortgage in this case.
The only prepayment allonge produced in this case is a PREPAYMENT PENALTY DISCLOSURE signed by DeCormier and produced in the Vieau December Affidavit.
Ms. DeCormier relies upon these affidavits to create a genuine issue of a material fact that would require the denial of the plaintiff’s motion. There are multiple difficulties with this reliance. Many of Ms. DeCormier’s statement are conclusory in nature or not admissible under our code of evidence. They describe acts and statements of an individual or entity that are not a party to this action, Charlene Day or Guaranty Mortgage and Financial Services, LLC. The only documents that the court has identified from the submissions of the parties that mention GreenPoint are the Note and Mortgage documents.
Many of the statements made by the defendant in her affidavit are contradicted by the documents produced by the plaintiff that were signed by the defendant at the time of the application and at the time of the closing of the subject loan. The defendant has not contested the accuracy of these documents. The following are examples of the contradictions.
The Mortgage Loan Origination Agreement (Vieau affidavit, Ex. J). This document signed by the defendant on December 6, 2006 identifies Guaranty (Ms. Day’s employer) as a mortgage broker for this loan. The document, signed by defendant on December 8, 2006 states " we (Guaranty) are acting as an independent contractor and not as your agent. We will enter into separate independent contractor agreements with various lenders." There is nothing in this document describing the relationship between GreenPoint and Guaranty as an agency relationship. It specifically notifies the signer, DeCormier, of an independent contractor relationship.
The Uniform Residential Loan Application (Vieau affidavit, Ex. H). This application, signed by the defendant on December 8, 2006, is a form generated by Guaranty. It discloses defendant’s monthly income of $7,490.00 and monthly mortgage and credit card payments of approximately $2,400.00 per month. It is purportedly signed by Charlene Day, as interviewer, and the form identifies Ms. Day as an employee of Guaranty. There is no mention of GreenPoint on the application. There is no indication in the application of significant financial distress.
The Loan Document Certification Form (Vieau affidavit, Ex. M). This document is signed by the Defendant and Ms. Day on behalf of Guaranty on December 8, 2006. There is no mention of GreenPoint Mortgage Funding. There is no identification of Charlene Day as an agent of GreenPoint.
The Promissory Note (Vieau affidavit, Ex. A). The promissory note signed by the defendant on January 4, 2007 contains the following language in bold type at the top of the first page of the note:
THE NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN THE INTEREST RATE AND THE MONTHLY PAYMENT. THE MONTHLY PAYMENT INCREASES WILL HAVE LIMITS WHICH COULD RESULT IN THE PRINCIPAL AMOUNT I MUST REPAY BEING LARGER THAN THE AMOUNT I ORIGINALLY BORROWED, BUT NOT MORE THAN $234,600.00. THE INTEREST RATE CAN NEVER EXCEED THE LIMIT STATED IN THE NOTE AND RIDER. A BALLOON PAYMENT MAY BE DUE AT MATURITY.
While perhaps the defendant did not understand this language, she did choose to sign the note and the mortgage. This language advised the defendant that the principal amount of the note might increase. Calculation of the interest rate and the circumstances under which the principal would increase might be difficult, but it was clear that the principal might increase.
The Prepayment Penalty Disclosure (Vieau affidavit, Ex. K). This document was signed by the defendant on January 4, 2007. The document states, in part, " I have read and understand the prepayment penalty provisions as outlined in this disclosure."
The court has reviewed the documentation of this loan and mortgage transaction and the affidavits to determine if there is support for the defendant’s special defenses of Fraud in Factum, Fraudulent Inducement by Intentional Misrepresentation, Unconscionability and Unclean Hands.
The defendant has not produced any admissible evidence that Charlene Day was an agent or apparent agent of the mortgagee, GreenPoint. Neither Day, who is reportedly deceased, nor Guaranty are parties to this action. The claims made by the defendant are based upon the alleged statements of Day. Even if there were misrepresentations, fraud or inequitable conduct, there is no foundation to lay responsibility for those statements to the mortgagee or its subsequent assignees, including the substitute plaintiff in this action.
In multiple places on the documents created during the application process and the formation of the note and mortgage there are declarations that the defendant was dealing with a mortgage broker rather than the lender. The Loan Origination Agreement that the defendant signed state that Guaranty would enter into independent contractor agreements with various lenders. There is no factual foundation to impute the conduct of Guaranty and its employee, Charlene Day, to the mortgagee, GreenPoint.
The sole documents that mention GreenPoint are the note and mortgage. While this was a complex transaction, these instruments contained several red flags highlighting the particular provisions of which the defendant now complains. The language of the loan documents highlighted that the loan included a prepayment penalty and that the principal amount of the loan could increase.
Any fraud in factual, fraudulent misrepresentations or unclean hands in this case, if any, might lie at the feet of the mortgage broker or its employee. The defendant has not demonstrated or produced admissible evidence that would allow the court to conclude that there is a factual foundation for a legally sufficient special defense, this foreclosure action.
The defendant also raises a defense of unconscionability. She properly notes that in 2009 Connecticut passed legislation prohibiting the issuance of negative amortizing loans. See C.G.S. § 36a-760e. This loan, however, predates the effective date of this legislation. The loan documents do not hide the fact that the principal of this loan might increase. The loan application represents that the defendant had more than $7,000 of monthly income. The minimum monthly payment on the loan was calculated at slightly more than $600 per month.
The defendant strives to bring her case within the penumbra of Bank of America v. Aubut, 167 Conn.App. 347 (2016). Aubut is distinguishable on several grounds. Aubut is a direct transaction between borrower and lender. There was no mortgage broker between the parties. Further, the application in Aubut put the lender on notice of the financial insecurity of the borrower. Here the application demonstrates adequate income.
Unfortunately, for the defendant, she has not provided a factual foundation for the court to find that her defenses to this foreclosure are legally sufficient.
For these reasons, the motion for summary judgment filed by the substitute plaintiff, Nationstar Mortgage, LLC, is granted as to liability only.