Opinion
FSTCV106004691S
12-31-2015
Bank of America, National Association v. Ludys Nino
UNPUBLISHED OPINION
CORRECTED MEMORANDUM OF DECISION (CORRECTION TO MEMORANDUM OF DECISION DATED JULY 1, 2014 CORRECTIONS MADE WERE RE RECALCULATION OF DEBT FINDING OF DEFAULT AND ISSUANCE OF PAYMENT CREDITS)
Hon. Kevin Tierney, Judge Trial Referee.
This contested residential foreclosure lawsuit was tried over six days, four of which involved the taking of testimony. The evidentiary hearing on the Motion to Reargue (#224.00) took five trial days.
The court makes the following findings of fact and legal conclusions:
The operative complaint is the plaintiff's Revised Complaint dated October 19, 2011 (#124.00). Paragraph three of the complaint alleges: " On or about December 11, 2006, the Defendant(s), Ludys Nino, executed and delivered to Washington Mutual Bank, FA, a Note (the 'Note') for a loan in the original principal amount of $780,000.00." Paragraph 4 of the Revised Complaint alleges that the mortgage deed was executed and delivered to Washington Mutual Bank, FA, on December 11, 2006 and recorded in the Greenwich Land Records on December 20, 2006. Paragraph 4 further states that the mortgage " is to be assigned to Bank of America National Association." Paragraph 4 continues with the following allegations: " The Plaintiff, Bank of America National Association, is the holder of said Note. The Plaintiff has standing in this foreclosure action by virtue of C.G.S. § 49-17." The court finds that the plaintiff is Bank of America National Association and throughout this litigation, the only plaintiff has been Bank of America National Association.
At trial the plaintiff offered the testimony of Frank Dean from Westerville, Ohio. Mr. Dean is a home loan research officer for JP Morgan Chase Bank, the servicer of this mortgage loan on behalf of the plaintiff, Bank of America National Association. Mr. Dean testified that he was familiar with the business records of this loan and was able to review the computer records and the original documents. Through Mr. Dean's testimony three exhibits were offered: Exhibit 1, a five-page Fixed/Adjustable Rate Note dated December 11, 2006 in the face amount of $780,000 due on January 1, 2037, Ludys Nino as borrower and Washington Mutual Bank, FA as lender; Exhibit 2, an Open-End Mortgage Deed for property at 25 Alexander Street, Greenwich, Connecticut from Ludys Nino to Washington Mutual Bank, FA dated December 11, 2006 and recorded in the Greenwich Land Records on December 20, 2006 in Book 5312 at Page 243 in the face amount of $780,000; and Exhibit 3, an Assignment of Mortgage from " JP Morgan Chase Bank, National Association successor in interest to Washington Mutual Bank f/k/a Washington Mutual Bank, FA" to " Bank of America National Association" dated December 1, 2011 and recorded in the Greenwich Land Records in Book 6280 at Page 206 on February 2, 2012.
The original five-page Fixed/Adjustable Rate Note was presented in court during trial to the undersigned and the defendant, Ludys Nino, for examination along with a five-page photocopy. Both were carefully examined by the court and Ludys Nino. This court determined that the photocopy was an exact copy of the original Fixed/Adjustable Rate Note. The court returned the original Fixed/Adjustable Rate Note to plaintiff's counsel for safe keeping and marked its photocopy as Exhibit 1. The same procedure was done with Exhibit 2, the Open-End Mortgage Deed, the original being returned to plaintiff's counsel and a photocopy being marked as Exhibit 2. Exhibit 3 was a copy of the Assignment of Mortgage certified by the Town Clerk of the Town of Greenwich on March 22, 2012.
The court reviewed the file and found that the original writ, summons and complaint issued by Bank of America, National Association as against the defendant, Ludys Nino, was returnable to the Superior Court on May 4, 2010. The Return of Service in the court file indicates service was made on Ludys Nino on April 21, 2010. The court finds that this foreclosure lawsuit commenced on April 21, 2010. Mr. Dean credibly testified that the plaintiff became the owner of the loan on February 22, 2007 and still is the owner of the loan. The court finds that the plaintiff came into possession of the original Fixed/Adjustable Rate Note and Open-End Mortgage Deed on July 20, 2009. Exhibit 4. The original documents were kept in the possession of JP Morgan Chase Bank as servicer for Bank of America National Association from and after July 20, 2009. The court further finds that the original Fixed/Adjustable Rate Note was endorsed by Washington Mutual Bank, FA, which endorsement appears on page 5 in Exhibit 1. The court finds that this is a blank endorsement. The blank endorsement is undated. U.S. Bank, N.A. v. Ugrin, 150 Conn.App. 393, 396, fn.6, 401-02, 91 A.3d 924 (2014). The court further finds that the plaintiff, Bank of America National Association, had possession of the original Fixed/Adjustable Rate Note and Open-End Mortgage Deed since July 20, 2009 to the date hereof. As of the commencement of the lawsuit on April 21, 2010, the plaintiff was the holder of said Fixed/Adjustable Rate Note and remained the holder of said Fixed/Adjustable Rate Note throughout this litigation. The court finds that the plaintiff has been the owner of this note since February 22, 2007.
Mr. Dean examined the payment records of this loan and determined that the loan service records of JP Morgan Chase indicate that the defendant made certain periodic payments of principal and interest on this loan that were credited to this mortgage loan between December 11, 2006, the date of the Fixed/Adjustable Rate Note, through February 1, 2010 and partially for the March 1, 2010 monthly payment due. At the reargument hearing each of these payments was presented to this court either by checks offered into evidence or by reference to the mortgage payment history. Ex. 41. The court finds Mr. Dean's testimony credible. The court finds that as of February 1, 2010 the defendant was in default of the payments by reason of nonpayment of principal and interest due on December 1, 2009 and thereafter. The court further finds that the plaintiff, acting by its duly authorized agent, Chase Home Finance, LLC, sent a notice of default to the defendant on February 1, 2010. Exhibit 5. This notice of default stated: " You have failed to make the required monthly payments under the terms of your Note ('Note') and related mortgage, ('Security Instrument') since 12/01/2009."
The court finds that the photocopy of the Fixed/Adjustable Rate Note, Exhibit 1, a copy of the Open-End Mortgage Deed, Exhibit 2, along with this court's examination of the originals of both documents satisfies the court's production and examination requirements in a foreclosure action. Countrywide Home Loans Servicing, LP v. Creed, 145 Conn.App. 38, 42-43, 48, 75 A.3d 38, cert. denied, 310 Conn. 936, 79 A.3d 889 (2013); Equity One, Inc. v. Shivers, 310 Conn. 119, 124, 74 A.3d 1225 (2013). All loan numbers on all exhibits in evidence were redacted on the record. P.B. § 4-7.
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 . . . The production of the note 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. (Internal quotation marks omitted.) Id., 231-32; see also Deutsche National Trust Co. v. Shivers, 136 Conn.App. 291, 297 n.4, 44 A.3d 879 (same) cert. denied, 307 Conn. 938, 56 A.3d 950 (2012).Countrywide Home Loans Servicing, LP v. Creed, supra, 145 Conn.App. 48, cert. denied, 310 Conn. 936, 79 A.3d 889 (2013).
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] a party is found to lack standing, the court is consequently without subject matter jurisdiction to determine the cause." (Citation omitted; internal quotation marks omitted.) Equity One, Inc. v. Shivers, 310 Conn. 119, 125, 74 A.3d 1225 (2013).
Several general principles concerning mortgage foreclosure procedure also guide our analysis. '[S]tanding to enforce [a] promissory note is [established] by the provisions of the Uniform Commercial Code . . . [See] General Statutes § 42a-1-101 et seq. Under [the Uniform Commercial Code], only a " holder" of an instrument or someone who has the rights of a holder is entitled to enforce the instrument. General Statutes § 42a-3-301. The " holder" is the person or entity in possession of the instrument if the instrument is payable to bearer. General Statutes § 42a-1-201(b)(21)(A). When an instrument is endorsed in blank, it " becomes payable to bearer and may be negotiated by transfer of possession alone . . ." General Statutes § 42a-3-205(b).' " (Footnotes omitted.) Equity One, Inc. v. Shivers, supra, 310 Conn. 126. " In addition, General Statutes § 49-17 allows the holder of a note to foreclose on real property even if the mortgage has not been assigned to him. See, e.g., RMS Residential Properties, LLC v. Miller, [303 Conn. 224, 230, 32 A.3d 307 (2011) ([o]ur legislature, by adopting § 49-17, created a statutory right for the rightful owner of a note to foreclose on real property regardless of whether the mortgage has been assigned to him); Chase Home Finance, LLC v. Fequiere, [119 Conn.App. 570, 576, 989 A.2d 606] (§ 49-17 codifies the common-law principle of long standing that the mortgage follows the note, pursuant to which only the rightful owner of the note has the right to enforce the mortgage . . .), [cert. denied, 295 Conn. 922, 991 A.2d 564 (2010)]. This court also has recently determined that a loan servicer for the owner of legal title to a note has standing in its own right to foreclose on the real property securing the note. J.E. Robert Co. v. Signature Properties, LLC, 309 Conn. 307, 311, 317, 71 A.3d 492 (2013)." (Footnote omitted; internal quotation marks omitted.) Equity One, Inc. v. Shivers, supra, 127. Furthermore, there is a rebuttable presumption that the holder of a note is the owner of the debt. RMS Residential Properties, LLC v. Miller, supra, 231-32.Deutsche Bank National Trust Co. v. Torres, 149 Conn.App. 25, 30-31, 88 A.3d 570 (2014).
The court finds that the plaintiff, Bank of America National Association, has standing to commence and to prosecute this residential foreclosure action, that it is the holder and owner of the $780,000 Fixed/Adjustable Rate Note executed by Ludys Nino dated December 11, 2006, that it has received the assignment of the mortgage deed, that the Note has been endorsed in blank, that the plaintiff has possession of the Note, that it is a first mortgage on the property located at 25 Alexander Street, Greenwich, Connecticut, that the Fixed/Adjustable Rate Note is in default, that the defendant has been in default since the December 1, 2009 payment, that interest has accrued at various rates on the principal amount due since October 1, 2009 to date, and that other payments have been made as advances by the plaintiff for real estate taxes, forced placed insurance on the real property and attorneys fees. The court therefore has found all the issues in the Revised Complaint (#124.00) for the plaintiff.
At the commencement of this trial, the court indicated that it would hear evidence at trial of the fair market value of the real property, make a determination at trial of the amount of the debt and disbursements, and if a foreclosure was going to enter, whether the court would enter a judgment of foreclosure by sale or strict foreclosure. All of the above would be decided by the court and set forth in the written memorandum of decision. The court required that all parties be prepared to litigate all of these issues at trial. No issues would be reserved to a separate hearing to be held after this trial concluded.
This court, having found the issues for the plaintiff on the Revised Complaint, now turns to the defendant, Ludys Nino's, answer and special defenses and to any evidence to be offered by the defendant as rebuttal to the presumption under RMS Residential Property, LLC v. Miller, 303 Conn. 224, 230, 32 A.3d 307 (2012). " . . . a holder of the note is presumed to be the owner of the debt and unless the defendant rebuts that presumption, a holder of the note is entitled to foreclose the mortgage." Id., 230. In the event that these issues are found for the plaintiff, then judgment will enter for the plaintiff. It is the defendant's burden of proof to prove the facts supporting each of her special defenses and to rebut the presumption under RMS Residential Properties, LLC. v. Miller, Id.; National Publishing Co. v. Hartford Fire Ins., Co., 287 Conn. 664, 673, 949 A.2d 1203 (2008); Wyatt Energy, Inc. v. Motiva Enterprises, LLC, 308 Conn. 719, 736, 66 A.3d 848 (2013).
The trial commenced with the taking of evidence on April 18, 2013. On that date, the defendant was self-represented although she had been represented by counsel of record prior thereto. The defendant filed a January 17, 2012 Answer to Revised Complaint (#133.00), which was addressed to the plaintiff's October 19, 2011 Revised Complaint (#124.00). This Answer filed by Ludys Nino as a self-represented defendant stated: " 1. Defendant is unable to answer the verified complaint because the plaintiff does not have a mortgage on my property and therefore I cannot form an opinion as to the truth of the allegations. 2. I hired three attorneys to represent me and none of them answered the original complaint and one of them represented to the Court he knew nothing about this matter. Therefore, the Defendant respectfully requests this matter be dismissed." Attached to that Answer were two letters. The first was from Ludys Nino to the plaintiff's attorney, Hunt Leibert Jacobsen, P.C. dated January 16, 2012. This two-page letter was also sent to Attorney John Hall, the Superior Court at Stamford, the Connecticut Bar Association, and David Fein, United States Attorney. The second letter was one page dated November 22, 2011 issued by the Customer Service Department of Bank of America referencing a Bank of America Home Loan with an account ending: 4500. This letter was addressed to the defendant and states: " This confirms that the loan was paid off on December 21, 2006." (#133.00, page 4.) The $780,000 loan at issue in this foreclosure did not have a loan number ending in 4500. The loan number now being foreclosed ends in . . . 4094. Exhibits 2, 4, 6 and 17.
On July 9, 2013, after the first day of evidence, Attorney John R. Williams filed an appearance for the defendant in lieu of her self-represented appearance. He appeared in court on the second day of trial on August 9, 2013. No evidence was taken that day. At the August 9, 2013 trial date the court reviewed on the record the evidence, exhibits, testimony, and proceedings that occurred on April 18, 2013, the first day of trial. Attorney Williams affirmed that he was familiar with that information and had the opportunity to review the exhibits, a transcript of the testimony, and the proceedings that occurred on April 18, 2013. He indicated he was ready to proceed with the trial on the next trial date and would file an amended answer. The next trial date was scheduled for August 28, 2013.
On August 14, 2013 Attorney Williams filed an Amended Answer and Special Defenses to Revised Complaint (#196.00). This Answer addressed all eleven paragraphs of the October 19, 2011 Revised Complaint (#124.00). Six Special Defenses were alleged. On September 1, 2013 Attorney Williams filed Revised Special Defenses to Revised Complaint (#200.00), which alleged three Special Defenses. These three were identical to the first three Special Defenses alleged in the August 14, 2013 pleading. Special Defenses Four, Five and Six in the August 14, 2013 pleading were no longer being prosecuted by the defendant. Those three Special Defenses Four, Five and Six that were withdrawn stated: " 4. This action was instituted without valid authorization by the plaintiff. 5. The plaintiff was not the holder of the note at the time this action was instituted. 6. This court has no jurisdiction of the subject matter of this litigation." Those three issues therefore are not before this court. Also not before this court are any and all of the issues raised by the defendant's self-represented January 17, 2012 Answer to Revised Complaint (#133.00).
The three Special Defenses that were being prosecuted by the defendant in this litigation are as follows: " 1. The defendant did not sign the alleged note. 2. The defendant did not sign the alleged mortgage deed. 3. The plaintiff did not serve a demand for payment and notice of intent to foreclose upon the defendant as required by C.G.S. § 8-265ee." On September 10, 2013 the plaintiff filed a Reply to Revised Special Defenses to Revised Complaint (#201.00), which denied each of those three Special Defenses. The pleadings were closed on September 10, 2013 during trial. The evidence concluded on March 25, 2014.
The defendant did not offer any evidence to rebut the presumption of RMS Residential Property v. Miller . The defendant only offered evidence as to her Special Defenses.
The court will now discuss each of the three Special Defenses reviewing the facts, legal claims and conclusions of law as to those Special Defenses.
1. The Defendant Did Not Sign the Alleged Note
Throughout this litigation the defendant claims that she did not sign the December 11, 2006 Fixed/Adjustable Rate Note. The original of that Note was examined by the court. A duly authenticated copy has been marked as Exhibit 1. It is the signature on page 5 of 5 in Exhibit 1 that reads " Ludys Nino" and the initials " LN" at the bottom of pages 1, 2, 3 and 4 that appears in blue ink on the original note that is at issue in this First Special Defense. At various times, somewhat inconsistently, the defendant blurted out at court hearings that in fact she executed a Note on December 21, 2006. She did so on the first day of trial on April 18, 2013 during the testimony of Frank Dean. That December 21, 2006 Note has never been produced in court. The defendant also claimed that she never had a lending arrangement with the Bank of America. To support that claim she referred to a copy of a letter which had a four-digit loan number: 4500, which letter indicated that loan had been paid off on December 21, 2006. See November 22, 2011 one-page letter attached to Answer to Revised Complaint (#133.00). See January 24, 2012 Letter from Bank of America (#135.00). See February 9, 2012 Letter from Bank of America (#136.00). At various times during this trial she stated that this foreclosure is a fraud upon the court and a fraud upon her since she did not sign the December 11, 2006 Note (#128.00). All of those claims have been synthesized into the First Special Defense.
Although the statute is not cited in the First Special Defense, this defense invokes Conn. Gen. § 42a-3-308: " In an action with respect to an instrument, the authenticity of, and authority to make, each signature on the instrument is admitted unless specifically denied in the pleadings. If the validity of a signature is denied in the pleadings, the burden of establishing validity is on the person claiming validity, but the signature is presumed to be authentic and authorized unless the action is to enforce the liability of the purported signer and the signer is dead or incompetent at the time of trial of the issue of validity of the signature. If an action to enforce the instrument is brought against a person as the undisclosed principal of a person who signed the instrument as a party to the instrument, the plaintiff has the burden of establishing that the defendant is liable on the instrument as a represented person under section 42a-3-402(a)." Gen. Stat. § 42a-3-308(a). The last sentence of the above quoted subsection has no bearing on this case as there is no claim that this lawsuit is being brought as against an undisclosed principal of the person who signed the instrument. There is no claim that the signer is dead or incompetent at the time of trial.
The court finds that the plaintiff, by alleging this First Special Defense, has " specifically denied in the pleadings" the validity of the signature and initials on the Fixed/Adjustable Rate Note dated December 11, 2006. Although this is a Special Defense and the defendant has the burden to prove special defenses, Gen. Stat. § 42a-3-308(a) places the burden of establishing the validity of the signature on the plaintiff who is claiming that the signature and initials are that of Ludys Nino's made on the December 11, 2006 Fixed/Adjustable Rate Note. Exhibit 1. That burden of proof is subject to the presumption that the signature is " authentic and authorized."
Those parameters having been established, the parties litigated extensively the validity of the signature and initials on the Fixed/Adjustable Rate Note. To support the defendant's claim, the first set of questions asked of the defendant by Attorney Williams related directly to the Fixed/Adjustable Rate Note. As to the last page above the top line, the signature on page 5 of 5 of Exhibit 1, she testified that it was not her signature. She was then directed to the initials that appeared on the bottom of each of the first four pages of Exhibit 1. She testified that those four initials are not hers nor did she place those initials on that page or any of the other pages of the Fixed/Adjustable Rate Note.
Further examination of Ludys Nino and as well as her cross examination revealed information that was inconsistent with the above answers. These inconsistencies seriously impacted her credibility. Yorgensen v. Chapdelaine, 150 Conn.App. 1, 19, 90 A.3d 305 (2014); Patterson v. Commissioner of Correction, 150 Conn.App. 30, 36, 89 A.3d 1018 (2014). " It is well established that [i]n a case tried before a court, the trial judge is the sole arbiter of the credibility of the witnesses and the weight to be given specific testimony . . . It is within the province of the trial court, as the fact finder, to weigh the evidence presented and determine the credibility and effect to be given the evidence." (Internal quotation marks omitted.) Sanders v. Commissioner of Correction, 83 Conn.App. 543, 553, 851 A.2d 313 cert. denied, 271 Conn. 914, 859 A.2d 569 (2004); Braun v. State Farm Fire & Casualty Co., 150 Conn.App. 405, 415, 90 A.3d 1054 (2014).
Although the defendant specifically denied that it was her signature on the Fixed/Adjustable Rate Note, when she got to one of the initials she testified: " They do not look like my initials." When asked whether the initials on the third page of the Fixed/Adjustable Rate Note were her initials, she testified; " To tell the truth, I'm not sure about that." The vagueness as to whether or not these were her initials that were placed on Exhibit 1 impacts her credibility.
She testified she had a loan with Washington Mutual Bank, FA for the real property at 25 Alexander Street but she signed that loan on December 21, 2006, not on December 11, 2006. When asked if she has any documentation of any sort whatsoever concerning that December 21, 2006 Washington Mutual Bank, FA loan, she said: " I used to but they were stolen." She further testified that an attorney gave her those papers in 2009. She also testified that she had those December 21, 2006 documents and she had gotten those copies from the Town Hall but she does not have them in court on the day she testified, which was the fourth day of trial. She did not produce any of those documents during the next two days of trial. When questioned further as to the terms of this purported December 21, 2006 mortgage, she testified that the amount of that December 21, 2006 mortgage issued by Washington Mutual Bank, FA was $780,000 and the interest rate was in the 5% range. She was then shown Exhibit 2, the Open-End Mortgage Deed, which indicated that the mortgage being foreclosed was $780,000 and the interest rate was 5.7%. While she had Exhibit 2 in her hand, she denied signing the document on December 11, 2006 but she admitted signing a similar document on December 21, 2006. When asked if she ever made any payments on the December 21, 2006 mortgage she testified: " I do not remember." She never produced in court any documents bearing a December 21, 2006 date.
On cross examination she was shown a copy of the Fixed Adjustable Rate Note and it was pointed out where her signature appeared and she answered: " I signed some mortgage documents but they were all false." The HUD statement shows that the Settlement Agent was The Office of Marjan Kasra, LLC. Exhibit 16. She admitted that she knew an Attorney Kasra, however, she does not recall being at Attorney Kasra's Stamford, Connecticut office on December 11, 2006. The court notes that a witness on the Open-End Mortgage Deed is Marjan Kasra, Commissioner of the Superior Court. Ludys Nino's acknowledgment on the Open-End Mortgage Deed was taken by Marjan Kasra, Commissioner of the Superior Court on December 11, 2006. Ex. 2. Neither party called any of the witnesses to the Open-End Mortgage Deed or any of the closing attorneys or the Settlement Agent for the December 11, 2006 closing as witnesses in this trial. The defendant did testify that she recalled being at Attorney Kasra's office on December 21, 2006 and she acknowledged that she had been to Attorney Kasra's office on more than one occasion. On further cross examination she testified that she was the victim of a swindle and the Bank of America had told her that they did not hold the mortgage and they had no right to foreclose. She testified she had a conversation with a person in the office of the CEO of the Bank of America in its Charlotte, North Carolina office who told her that the Bank of America does not hold her mortgage (#136.00). Yet that confirming letter from the Bank of America contains the loan number . . . 4500 that was paid off in December 2006. She was shown Exhibit 16, which is the HUD settlement statement for the December 11, 2006 closing. That document is dated December 11, 2006. It contains a signature of Ludys Nino. She was asked on cross examination if that was her signature. She testified: " I'm not really sure but I believe it is." The date next to that signature was December 11, 2006. Exhibit 16.
The court notes that in Exhibit 16 is a box entitled " Name & Address of Borrower" and typed in that box is " Ludys Nino, 25 Alexander Street, Glenville, Greenwich, CT 06831." In the box below that is entitled: " Property Location: (if different from above)." That box is blank. The court finds that Exhibit 16 is the HUD closing statement for the December 11, 2006 mortgage at issue for 25 Alexander Street, Greenwich, Connecticut. The defendant also admitted that she had a previous mortgage with Countrywide Home Loans on 25 Alexander Street at the time of the December 2006 mortgage and at that closing, the $589,000 Countrywide Home Loans mortgage was paid off. Line 1501 of the HUD-1 Settlement Statement shows a " Payoff of first mtg loan to Countrywide Home Loans" of $589,844.65 using the $780,000 December 11, 2006 loan proceeds.
The defendant offered the testimony of Robert Baier of Warwick, New York, a forensic document examiner. Mr. Baier was not asked any questions concerning any signatures other than the signature of Ludys Nino and the initials on Exhibit 1, the Fixed/Adjustable Rate Note. He prepared a seventy-six-page document marked as Exhibit 18. It contained exemplars of known writings of Ludys Nino. Item Q-1 on Exhibit 18 was the five-page Fixed/Adjustable Rate Note marked as Exhibit 1 in this trial. Item K-1 is a one-page W-9 form dated December 11, 2006. This is a federal form that verifies tax identification numbers or social security numbers of borrowers. It is a document commonly prepared and signed by borrowers at residential real estate mortgage closings. This was offered by the defendant as an exemplar of Ludys Nino's valid signature. One exemplar in Exhibit 18 is item K- 1 dated December 11, 2006. The latest exemplar was item K-9, a check dated November 6, 2006. Mr. Baier accepted each of those exemplars as valid signatures of Ludys Nino. He compared those to the signature and initials on Exhibit 1. In his opinion there were three different types of signatures that Ludys Nino uses as her normal signature. He rendered an opinion that the signature on the Fixed/Adjustable Rate Note was not that of Ludys Nino. He based that upon reasonable professional certainty. He was not able to offer an opinion that the initials on the Fixed/Adjustable Rate Note, Exhibit 1, were not Ludys Nino's.
Mr. Baier testified in detail as to the types of signature, the line quality, the tremor, the pen pressure, loops, and various differences in the signature that would be out of range variations. He supported his opinions with enlargements on poster boards of the various signatures. Exhibits 20, 21, 22 and 24. He prepared and executed a four-page report dated October 9, 2013. Exhibit 25. The plaintiff started cross examination of Mr. Baier on Thursday, January 2, 2014 just before 3:00 p.m. A snow emergency was issued by the Judicial Branch shortly after 3:00 p.m. on January 2, 2014. Court was immediately cancelled. The plaintiff was not able to commence its cross examination of Mr. Baier. The next trial date was March 25, 2014. Mr. Baier was not present in court. That day was the last day of the scheduled trial. The defendant had no further witnesses to offer. The plaintiff had a handwriting rebuttal expert present in the court. The plaintiff, on the record, waived further cross examination of Mr. Baier and did not ask to strike Mr. Baier's direct examination testimony or any of the Exhibits. Plaintiff elected to call his handwriting expert on the March 25, 2014 trial date. Neither party had any further objection to proceeding in that fashion. Therefore the testimony of Mr. Baier on direct and the Exhibits offered will remain evidence.
The plaintiff called John Rezaikoff of Westport, Connecticut, a questioning document examiner and a dealer in historical documents. He was present in court on January 2, 2014 when Robert Baier testified. He reviewed the documents prepared by Mr. Baier as well as Mr. Baier's expert report. Exhibit 25. Mr. Reznikoff was offered as an expert witness by the plaintiff. Mr. Reznikoff testified that the methodology and qualifications of Mr. Baier were unsound on a number of levels. He offered Exhibit 26 that demonstrated his conclusions that the authorship is shared with known and unknown documents. He reviewed each of the documents in Mr. Baier's Exhibit 18.
The defendant, while representing herself on April 27, 2013, filed " Defendant's Disclosure of Expert Witness" that stated: " Robert Baier is a forensic document examiner who will testify that Ludys Nino's signature on the Washington Mutual mortgage was forged." (#174.00.) Assuming that the self-represented defendant meant mortgage Note, that is a correct disclosure of expert. If in fact she meant all the mortgage documents including the mortgage deed, Mr. Baier testified only as to the Note. He was not asked any questions about the validity of the signature on the mortgage deed. It is of interest that Exhibit 18, item K-1, was one of the documents that was executed at the December 11, 2006 closing, the same date and the same time when the Exhibit 1, the December 11, 2006 Fixed/Adjustable Rate Note was signed. This K-1 document was offered by Mr. Baier as well as Ludys Nino as a confirmed valid signature of Ludys Nino. Item K-1 was the W-9 form that is dated " December 11, 2006."
The Open-End Mortgage Deed signature of Ludys Nino was not contested by her. There was no testimony by Mr. Baier that this was not her signature, although he had the mortgage deed for examination. That mortgage deed was acknowledged by a Commissioner of the Superior Court. Exhibit 2. The court finds that the acknowledgment before a notary public served to authenticate that the mortgage deed was signed by Ludys Nino. Webster Bank v. Flanagan, 51 Conn.App. 733, 738-39, 725 A.2d 975 (1999).
The court finds that the defendant's signature and initial evidence is wholly inconsistent. On December 11, 2006 she signed a W-9 closing document Exhibit 18, item K-1. On December 11, 2006 she signed an HUD-1 Settlement Statement that bears the December 11, 2006 mortgage closing information. The defendant is not contesting, nor offering Mr. Baier's testimony, as to the validity of the signatures or initials for any other documents executed in connection with the mortgage closing including most importantly the Open-End Mortgage Deed. Yet she insists on claiming she did not sign the December 11, 2006 Fixed/Adjustable Rate Note but she did sign another mortgage note on December 21, 2006, which documents were not produced nor offered at trial.
For a writing to be admitted into evidence, it must first be authenticated. A writing may be authenticated by identifying the signature contained in the document. Hamilton v. Smith, 74 Conn. 374, 379, 50 A. 884 (1902); Nichols v. Alsop, 10 Conn. 263, 267 (1834). " A signature can be authenticated by a signatory to the document by acknowledgment. A signature can additionally be proved by a witness to the execution of the document or by a witness who is familiar with the signature in question and attests that it is genuine." Webster Bank v. Flanagan, 51 Conn.App., supra, 737; Tyler v. Todd, 36 Conn. 218, 222 (1869). The general rule is that anyone familiar with the signature in question may testify as to authenticity. It is not necessary that an expert be hired for the purpose of testifying. Hamilton v. Smith, supra, 74 Conn. 379-80. An acknowledgment before a notary public serves to authenticate the instrument by furnishing formal proof through the action of the public official taking the acknowledgment that the instrument was actually executed by the person whose signature appears upon it. Commercial Credit Corp. v. Carlson, 114 Conn. 514, 517, 159 A. 352 (1932). The mortgage deed was acknowledged before a Commissioner of the Superior Court and witnessed. There is no similar acknowledgment for the Fixed/Adjustable Rate Note.
It is customary for signature examiners, both expert and trier of fact, to look at exemplars, that is handwriting samples which were prepared prior to the signature in question. These examplars are independently verified. KLM Industries v. Berkery, Superior Court judicial district of New Haven at New Haven, Docket No. CV 96-03 84533 S, (October 25, 1999, DeMayo, JTR). It has been held that a person testifying they could not recall the signing of a mortgage note and mortgage deed is insufficient evidence upon which a motion for summary judgment can be denied. OneWest Bank v. Breen, Superior Court judicial district of New Haven at New Haven, Docket No. CV 10-6009994 S, (September 28, 2012, Zemetis, J.). It would have been helpful to this court for some of the people who were present at the December 11, 2006 closing to testify that Ludys Nino actually signed the closing document. Genn v. Santella, Superior Court judicial district of Stamford/Norwalk at Stamford, Docket No. FST CV 04-0200008 S, (March 10, 2006, Jennings, J.). (See footnote 3.) The undersigned, as the trier of fact, has the right to make a determination as to the authenticity of a signature. " Authorship of handwriting can . . . be proved by a comparison of the disputed writing with a specimen of known authorship . . . Comparisons may be made by the trier of fact, be it judge or jury, with or without the aid of expert testimony." Chernick v. Johnston, 100 Conn.App. 276, 280, 917 A.2d 1042, cert. denied, 282 Conn. 919, 925 A.2d 1101 (2007). " It has long been the law . . . that the trier of fact, whether judge or jury, may compare a disputed writing with a specimen of known authorship to determine the identity of the person." Nash v. Stevens, 144 Conn.App. 1, 41, 71 A.3d 635 (2013); Connecticut Code of Evidence, section 7-1.
Although the defendant filed an April 27, 2013 Defendant's Disclosure of Expert Witness (#174.00), a later disclosure of expert dated August 10, 2013 was filed clarifying which of the documents that Mr. Robert Baier would testify to. " Mr. Baier is a Certified Forensic Document Examiner. He will testify concerning the purported signature of the defendant on Fixed Adjustable Rate Note which is Exhibit 1 in this litigation . . . Mr. Baier is expected to testify that the defendant did not sign Exhibit 1 and that she did not initial Exhibit 1." (#195.00.)
" A person is not liable on an instrument unless (1) the person signed the instrument." Gen. Stat. § 42a-3-401(a). Gen. Stat. § 42a-3-403 contains an exception for unauthorized signatures that are later ratified. " An unauthorized signature may be ratified for all purposes of this article." Gen. Stat. § 42a-3-403(a); Century Mortgage Company, Inc. v. George, Superior Court, judicial district of Waterbury at Waterbury, Docket No. 95538, (January 12, 1993, Blue, J.). (The statute " contains an exception for unauthorized signatures that are later ratified . . .") Century Mortgage Company v. George, 35 Conn.App. 326, 329, 646 A.2d 226 (1994).
The Uniform Commercial Code Comment to Gen. Stat. § 42a-3-403(a) at Paragraph 3 states, in relevant part: " The last sentence of subsection (a) allows an unauthorized signature to be ratified. Ratification is a retroactive adoption of the unauthorized signature by the person whose name is signed and may be found from conduct as well as from express statements. For example, it may be found from the retention of benefits received in the transaction with knowledge of the unauthorized signature --Ratification is effective for all purposes of this Article. The unauthorized signature becomes valid so far as its effect as a signature is concerned." Hudson United Bank v. MJCC Realty, LP. Id.
" As a general rule, ratification is defined as the affirmance by a person of a prior act which did not bind him but which was done or professedly done on his account . . . Ratification requires acceptance of the results of the act with an intent to ratify, and with full knowledge of all the material circumstances." (Citation omitted; internal quotation marks omitted.) Community Collaborative of Bridgeport, Inc. v. Ganim, 241 Conn. 546, 561, 698 A.2d 245 (1987). " Ratification means the adoption by a person, as binding upon himself, of an act done in such relations that he may claim it as done for his benefit, although done under such circumstances as would not bind him except for his subsequent assent: as where an act was done by a stranger having at the time no authority to act as his agent, or by an agent not having adequate authority. The acceptance of the results of the act with an intent to ratify, and with full knowledge of all the material circumstances, is a ratification." Hartford Accident & Indemnity Co. v. South Windsor Bank & Trust, Co., 171 Conn. 63, 72, 368 A.2d 76 (1976); Matulis v. Gans, 107 Conn. 562, 567, 141 A. 870 (1928); Ansonia v. Cooper, 64 Conn. 536, 544, 30 A. 760 (1894). Marcus v. DuPerry, 223 Conn. 484, 490 fn. 6, 611 A.2d 859 (1992); Sachs v. Zoning Board of Appeals, Superior Court, judicial district of New Haven, Docket No. CV 89-0292324 S, (November 5, 1990, DeMayo, J.). (An unsigned order of a zoning official was ratified by the official's later actions.) " The completed note was subsequently ratified and approved by defendants by virtue of their payments on account and acceptance of initial deliveries." Waterbury Savings Bank v. Jaroszewski, 4 Conn.Cir.Ct. 620, 626, 238 A.2d 446 (1967). Hudson United Bank v. MJCC Realty, LP, Superior Court, judicial district of New Haven at New Haven, Docket Number CV04-4002530 S, (October 4, 2007, DeMayo, J.T.R.). (" The court concludes that MJCC ratified the Cimino's signatures when it accepted the proceeds and allowed its property to be the subject of the mortgage lien.").
There was evidence that a mortgage closing took place in December 2006 that was secured by a mortgage on 25 Alexander Street, Greenwich, Connecticut, which is real property owned by the defendant, Ludys Nino. Neither party doubts those facts. The defendant raises a dispute as to whether the mortgage closing took place on December 11, 2006 or December 21, 2006. The defendant has been unable to produce any documents relating to a December 21, 2006 closing. The defendant herself did produce a document related to the December 11, 2006 closing, to wit, the W9 form that she used as an exemplar of her valid signature. Exhibit 18, Item K-1. She did not formally contest her valid signature on the Open-End Mortgage Deed nor any of the other closing documents. She admitted in cross examination that Exhibit 16, the HUD-1 Settlement Statement for the December 11, 2006 mortgage closing, bore her valid signature. In addition she acknowledged there was a previous mortgage on 25 Alexander Street that was paid off by the December 2006 closing. $589,844.63 was paid to release the prior Countrywide Homes Loans first mortgage. Exhibit 16. From December 11, 2006 through December 2009 she made payments on the mortgage being foreclosed. In addition to that, she offered Exhibits 8 through 15 which she testified were payments on this very December 11, 2006 mortgage. All of the above are actions ratifying the signature on the December 11, 2006 Fixed/Adjustable Rate Note. Exhibit 1. She offered no viable explanation why she would have made mortgage payments of principal and interest on a $780,000 promissory note that she did not sign. The evidence has proven ratification by the defendant of the Exhibit 1, the December 11, 2006 Fixed/Adjustable Rate Note. Marcus v. Duperry, supra, 223 Conn. 490, fn.6.
The court finds that Ludys Nino's testimony as to the fact that the initials and signature on the December 11, 2006 Fixed/Adjustable Rate Note are not hers is not credible. The court is being confronted with two dueling experts. Mr. Baier's testimony is substantially undermined by the fact that one of the documents that he used as an exemplar was one of the documents admittedly signed by Ludys Nino at the December 11, 2006 closing, a closing that the defendant has testified vigorously she did not attend.
The court finds that the defendant has specifically denied in the pleadings that the signature and initials on Exhibit 1, the Fixed/Adjustable Rate Note dated December 11, 2006, are those of Ludys Nino in accordance with Gen. Stat. § 42a-3-308(a). According to that statute, the burden of establishing the validity of the signature is on the plaintiff. The plaintiff has sustained that burden of proof by producing other documents that were signed by Ludys Nino at that same December 11, 2006 mortgage closing, by offering credible rebuttal evidence of a handwriting expert, by showing the defendant's payments made on the Fixed/Adjustable Rate Note from December 2006 through December 2009, by the inconsistent testimony of Ludys Nino concerning the existence of a December 21, 2006 mortgage transaction for the same piece of property with the same lender in the same amount of $780,000, by the defendant not contesting the signature on the December 11, 2006 Open-End Mortgage Deed, by not contesting the signature on the HUD-1 Statement, Exhibit 16, and the W-9, Exhibit 18, item K-1, both dated December 11, 2006, by paying off on or about December 2006 the prior mortgage on 25 Alexander Street, by the defendant accepting the proceeds of this $780,000 mortgage loan using those funds to pay off the previous mortgage on the real property, and by allowing this mortgage to be placed on 25 Alexander Street for three years. In addition the defendant has failed to rebut the presumption under Gen. Stat. § 42a-3-308(a); " the signature is presumed to be authentic and authorized."
The court finds the issues on the First Special Defense for the plaintiff.
2. The Defendant Did Not Sign the Alleged Mortgage Deed.
Robert Baier, the defendant's expert, was noticed as an expert concerning the Open-End Mortgage Deed. It is customary that mortgage deeds and mortgage notes are signed at the same closing transaction along with dozens of other documents signed by the borrower. Four closing documents, all dated December 11, 2006, were produced at trial; the Fixed/Rate Adjustable Note, Exhibit 1; the Open End Mortgage Deed, Exhibit 2, the W-9 Form, Exhibit 18, item K-1 and the HUD-1 Settlement Statement. Exhibit 16. The defendant has admitted that the signatures on Exhibit 18, item K-1 and Exhibit 16 were hers. The defendant offered no evidence disputing the authenticity of her signature as to the Open-End Mortgage Deed. Exhibit 2. The court has not found her credible as to her denial of the signature or initials on Exhibit 1. In addition by making the mortgage payments for three years, she has ratified any signature or initials that would appear on the Open-End Mortgage Deed. The other ratification facts previously found as to the Fixed Adjustable Rate Note are equally applicable to the mortgage deed.
The court finds the issues on the Second Special Defense for the plaintiff.
3. The Defendant Did Not Serve a Demand for Payment and Notice of Intent to Foreclose Upon the Defendant as Required by C.G.S. § 8-265ee.
Paragraph 7. (C). " Notice of Default" provision of the Fixed/Adjustable Rate Note, states: " If I am in default, the Note Holder may send me a written notice telling me that if I do not pay the overdue amount by a certain date, the Note Holder may require me to pay immediately the full amount of Principal that has not been paid and all the interest that I owe on that amount. That date must be of at least 30 days after the date on which the notice is mailed to me or delivered by other means." Paragraph 7. (B) " Default" states: " If I do not pay the full amount of each monthly payment on the date it is due, I will be in default." The note does not require a notice of acceleration.
The Fixed/Adjustable Rate Note requires notices to be sent " by delivering it or by mailing it by first class mail to the Property Address." Exhibit 1, paragraph 8. The Open-End Mortgage Deed requires notices to be " mailed by first class mail." Exhibit 2, paragraph 15. The February 1, 2010 Letter, Exhibit 5, satisfied the notice requirements of the Fixed/Adjustable Rate Note and the Open-End Mortgage Deed.
The Open-End Mortgage Deed contains no default clause although certain other provisions state that a default can occur if certain provisions are violated. Paragraph 18 requires a notice of acceleration if the secured property is sold or transferred " without Lender's prior written consent." Paragraph 22 is entitled Acceleration and states:
22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise). The notice shall 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 shall further inform 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 Borrower to acceleration and foreclosure or sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke any of the remedies permitted by Applicable Law. 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.
The court finds that the February 1, 2010 letter satisfies the above conditions. Exhibit 5. This letter was authenticated as it came from the servicer's computer. State v. John L., 85 Conn.App. 291, 298-302, 856 A.2d 1032, cert. denied, 272 Conn. 903, 863 A.2d 695 (2004). It specifies: (a) the default and lists the amount of non-payments that caused the default. It states the amount due that would be required to (b) cure the default. The date of cure, April 2, 2010, is " not less than 30 days from the date the notice is given to Borrower." as requested by Paragraph 22(c). The letter states in satisfaction of requirement (d): " If the amount required to cure the default is not received by the close of business on 04/02/10 then, we may declare an immediate acceleration of all monies due under your Note and Security Instrument without further notice or demand."
The February 1, 2010 three-page letter was entitled " Emergency Mortgage Assistance Program Notice (EMAP)" and noted the provisions of Gen. Stat. § § 8-265cc through 8-265kk. The letter stated: " Your mortgage qualifies for consideration under EMAP." Exhibit 5, paragraph number 1. The February 1, 2010 letter served to comply with the Emergency Mortgage Assistance Program (EMAP). Gen. Stat. § 8-265ee. Exhibit 5 was sent to the defendant at the address of the property, 25 Alexander Street, Greenwich, CT 06830, by first class mail postage prepaid. Frank Dean credibly so testified. This foreclosure lawsuit was commenced on April 21, 2010, which was after the two dates set forth in the letter February 1, 2010 and April 2, 2010. The letter advised the defendant of her delinquency and gave the defendant sixty days from February 1, 2010 in which to have a face to face meeting, telephone or other conference and furnished the name, address and telephone number of a contact. This satisfied Gen. Stat. § 8-265ee(a)(1) and (2).
The court finds that this three-page February 1, 2010 letter satisfies the demand for payment and notice of intent to foreclose provisions of Gen. Stat. § 8-265ee.
There is no specific number of days of advance notice that must be given to the borrower before a lender can commence a foreclosure lawsuit according to Gen. Stat. § 8-265ee. The statute 8-265ee establishes that giving of such notice is a condition precedent to the commencement of a foreclosure lawsuit. " No such mortgagee may commence a foreclosure of a mortgage prior to mailing such notice." Gen. Stat. § 8-265ee(a).
There is a specific time requirement for the mortgagor to have a face to face meeting, etc. The statute establishes this advance notice provision as: " Such notice . . . shall state that the mortgagor has sixty days from the date of such notice in which to (1) . . . and (2) . . . default." Exhibit 5, paragraph 4 states: " Within sixty (60) days of the date of this letter, you have the right to (a) . . . and (b) . . . default." Section (a) and (b) of this paragraph 4 track the language of the above sections (1) and (2) of Gen. Stat. § 8-265ee. Paragraph 4 does not state when that 60-day period ends. " Within sixty (60) days" is determined by counting one terminal day and not counting the other terminal day. A terminal day is either the beginning day and the ending day of a period of time. Austin, Nichols & Co., Inc. v. Gilman, 100 Conn. 81, 84, 123 A. 32 (1923); Midland Funding, LLC v. Garrett, Superior Court, judicial district of Stamford/Norwalk at Stamford Docket Number FST CV 11-6011332 S (December 23, 2011, Tierney, J.T.R.) .
The first terminal day would be the date of the Exhibit 5 letter, February 1, 2010. The only other future date in Exhibit 5 states: " You are required to pay this amount no later than the close of business on 04/02/10 to cure the default." Exhibit 5, top of page 2. This court finds that April 2, 2010 is " within sixty (60) days" from February 1, 2010, the date of the letter. Exhibit 5. Not counting the first day of February 2010, exactly 60 days has elapsed since the month of February 2010 has only 28 days. These 60 days are: 27 days in February 2010, 31 days in March 2010, and 2 days in April 2010. The court therefore finds that the notice provision of Exhibit 1 meets the time requirements of Gen. Stat. § 8-265ee.
There remains four issues to discuss concerning whether Exhibit 1 complies with the notice requirements of Gen. Stat. § 8-265ee: (1) whether using the United States Postal Service First Class mail postage prepaid to send the notice complies with the statutory method of furnishing notice " by registered, or certified mail, postage prepaid; " 2) whether mailing to " the address of the property which is secured by the mortgage" is sufficient to give notice to the defendant when the secured property is a two-family house occupied in part by persons other than the defendant, 3) whether the use of First Class mail postage-prepaid to send notice is a material noncompliance with the statutory form of notice, and 4) whether the method of mailing in the statute is mandatory or directory.
1) The EMAP statute requires notice to be sent by " mail." Years ago this meant the United States Postal Service. Today there are many alternative forms of " mail; " Such as its electronic version, email, Federal Express, parcel post delivered by United Parcel as well as other alternative mail services. Each of these delivery systems has its own service and product definitions. The statute's use of " registered, or certified mail, postage prepaid" is not a model of clarity in today's business climate. Mail or the alternative forms of mailing are not defined terms in the statute. Gen. Stat. § 8-265cc.
In 1994 subsection (a) of Gen. Stat. § 8-265ee was amended to provide that the notice may be by registered mail. P.A. 94-185. The language of the current statute states that " a mortgagee who desires to foreclose upon a mortgage . . . shall give notice to the mortgagor by registered, or certified mail, postage prepaid at the address of the property which is served by the mortgage. No such mortgagee may commence a foreclosure of a mortgage prior to mailing such notice." Gen. Stat. § 8-265ee was last amended by P.A. 12-1. The current statute appears to set forth three different types of mailings: " registered, " " certified mail, " and " postage prepaid." The statute does not define these postal terms. These terms have been in the statute consistently since 1994. P.A. 94-185; P.A. 08-176 S.7; P.A. 09-209 S 29; P.A. 09-219 S 1; P.A. 12-1, S 126. According to Frank Dean's testimony, the February 1, 2010 letter was sent First-Class mail, postage prepaid. The plaintiff has contended that Exhibit 1 was not sent by mail that was either " registered" or " certified."
Assuming that the statute meant that the notice must be mailed by the United States Postal Service (USPS), even then the terms are not a model of clarity.
" Registered mail" requires that the sender complete PS Form 3806. The sender then pays First Class postage for the letter plus the additional fee for Registered mail. The Post Office then affixes a Label 200 with a bar code to the letter. Registered mail is the maximum security provided by the USPS and provides premium handling from the point of acceptance to delivery. The PS Form 3806 together with the Label 200 bar code provides the sender with a receipt issued by the USPS that the letter was mailed and the date of the mailing. The sender can track the mailing process on line at www.usps.com by clicking on Track & Confirm. A toll free telephone number is also provided. The letter may be insured for up to $25,000 by the payment of yet an additional fee. A record of delivery that includes the recipient's signature is maintained by the Postal Service.
The recipient's signature is not returned to the sender. For this service an additional fee plus green postcard forms must be prepared. This additional service is called " Return Receipt Requested" (RRR). http://about.usps.com/publications/pub370/pub370012.htm .
" Certified mail" requires that the sender complete PS Form 3800. The sender then pays First Class postage for the letter plus the additional fee for the Certified Mail. PS Form 3800 contains two perforated sections, one with a bar code and the other with a receipt. The bar code portion is affixed by the Post Office to the letter and the sender is given the Receipt portion. This Receipt is proof issued by the USPS that the letter was mailed and the date of the mailing. The sender can track the mailing process on line at www.usps.com by clicking on Track & Confirm. A toll free telephone number is also provided. A record of delivery that includes the recipient's signature is maintained by the Postal Service. The recipient's signature is not returned to the sender. For this service an additional fee plus green postcard forms must be prepaid. This additional service is called " Return Receipt Requested" (RRR). http://about.usps.com/publications/pub370/pub370_tech_003.htm .
" Return receipt" requires that the sender complete PS Form 3811. The sender then pays First Class postage for the letter plus the additional fee for either Registered Mail or Certified Mail plus a further fee for Return Receipt. Both sides of PS Form 3811 must be completed by the sender. The sender is furnished a bar code, a copy of which is affixed by USPS to the letter. This form provides the sender with proof issued by USPS that the letter was sent and the date of the meeting. The sender can track the mailing process on line at www.usps.com by clicking on Track & Confirm. A toll free telephone number is also provided.
The USPS requires the person to whom the letter is delivered to sign the green postcard sized receipt. The USPS then returns that recipient's signed receipt to the sender. The Return Receipt provides evidence of delivery (to whom it was delivered and the date of delivery.) http://about.usps.com/publications/pub370/pub370_tech_005.htm .
" First Class mail" requires that the sender pay for in advance and affix the proper amount of postage to the letter. The correct postal charge for a letter is $0.49 for the first ounce and $0.21 for each additional ounce. First Class mail provides for 1-3-day delivery to the address on the letter. If the First Class letter is not delivered to the address, the letter will be returned to the sender by the USPS for no additional fee to the address of the sender on the letter's envelope. There is no requirement that the recipient sign a receipt for First Class mail. http://www.usps.com/business/first-class-package-service.htm .
There is no service provided by the United States Postal Service (USPS) entitled " certified mail, postage prepaid, " " First Class Mail, postage prepaid, " or Registered mail, postage prepaid." Each of the above categories of mail, Certified Mail, Registered Mail and First-Class mail require that the sender pay the postage in advance of the mailing. Therefore those three methods of mailing already have the required postage paid in advance by the sender. " Collect on Delivery (COD)" is the only non-prepaid services provided by the USPS. It is a limited parcel post service and requires the recipient to pay for the merchandise and shipping when they receive the package. There are usually additional requirements such as contents needing extra care. http://www.usps.com/ship/first-class.htm ?
None of the two statutory forms of mail, require the recipient to sign and return to the sender proof of delivery of the letter. These forms of mail only requires that the plaintiff have proof of delivery. First Class mail works in the United States. The court finds Mr. Dean's testimony credible. There is no evidence that the letter was returned to the plaintiff's return address undelivered. The court finds that the mailing by the plaintiff of Exhibit 5 by First Class mail, postage prepaid satisfies the purposes of the mailing requirements of Gen. Stat. § 8-265ee.
The use of the conjunctive " or" and the use thereafter of a comma, means that the statute provided two types of mail notice: " registered, " meaning registered mail or " certified mail, postage prepaid." The USPS website contains no definition of the term " certified mail, postage prepaid." Postage prepaid by itself means that the sender pays for all postage due to transmit the document by mail. The statute, Gen. Stat. § 8-265ee, contains no definition of " certified mail, postage prepaid." The court cannot locate a USPS definition of " certified mail, postage prepaid." The statute does not contain the oft used requirement that the recipient sign for the mailed document such as in " certified mail, return receipt registered." If the legislature wanted to include a requirement in Gen. Stat. § 8-265ee that the recipient sign for the EMAP letter, it knew how to do so. In re Jusstice W., 308 Conn. 652, 673, 65 A.3d 487 (2012); State v. Rupar, 293 Conn. 489, 509, 978 A.2d 502 (2009); Gen. Stat. § 4-183(c) (" Service of the appeal shall be made by United States mail, certified or registered, postage prepaid return receipt requested"). Connecticut Judicial Branch, Form JD-CV-104, Uniform Foreclosure Standing Orders. " The plaintiff must send a letter by certified mail return receipt requested . . ." Gen. Stat. § 12-157(a) " One shall be sent by certified mail, return receipt requested."
(2) The defendant, Ludys Nino, is the owner of 25 Alexander Street, Greenwich, Connecticut 06830. When sworn in at the commencement of her direct testimony at trial, she stated that her address is 25 Alexander Street, Greenwich, Connecticut. Her address in the summons is 25 Alexander Street. She was served by abode service at 25 Alexander Street. No claim has been made that this abode service was improper. Charlene Lerman, a licensed real estate appraiser, inspected the exterior of 25 Alexander Street and examined various municipal records for the property. She prepared a twenty-two-page detailed real estate appraisal. Exhibit 7. She noted that 25 Alexander Street is a two-family house located in the R-6 zone, which zone permits multi-family use. The lot is 7, 449 square feet. The building is 3, 250 square feet consisting of 13 rooms with 7 bedrooms and 3 1/2 bathrooms. Of the comparable properties in the real estate appraisal, seven were two-family houses and one was a three-family house. The photographs in Exhibit 7, page 15 indicate that 25 Alexander Street is a two-family house with each apartment two floors. Each apartment has a separate front door entrance with each front door located at the opposite far ends of the building. The Rental Listing, Exhibit 7, page 27, states: " Owner Nino, Ludys Address 25 Alexander St. #2." The building is described as having two units. The rental listing price is $3,000 per month. The unit for rent is described as " Spacious Twnhse in Duplex 2 Family House, 4 Lrg Bdrms, 3 full baths, yard, off street parking, Nice condition." The home phone and email contact of the listing real estate broker is on the listing. The 4 bedrooms are on the second floor. The basement has a family room, bath and laundry. This unit was rented unfurnished in January 2013 for $2,900 per month.
The EMAP statute requires that the notice be sent to the property address, not to the borrower's address. When the property is a multi-family house, the notice sent to the property address has a greater certainty of not reaching the borrower. The court finds that the notice complies with the statute since it was sent to the address of the property, 25 Alexander Street, Greenwich, CT 06810, not the address of the defendant, 25 Alexander Street, Apartment 2, Greenwich, CT 06830.
(3) The next issue is whether the use of First Class mail postage prepaid was a material noncompliance within the statutory form of notice. The courts do not read statutes in a hypertechnical manner. " Our Supreme Court repeatedly has enjoined us to eschew applying the law in such a hypertechnical manner that we would elevate form over substance." Thurlow v. Hulten, 130 Conn.App. 1, 10, 21 A.3d 535, cert. denied, 302 Conn. 925, 28 A.3d 337 (2011).
In the summary process context the failure to confirm a Notice to Quit to the statutory requirements of Gen. Stat. § 47a-23 deprives the court of subject matter jurisdiction. But even then there are limits. " When good cause for termination of a lease has clearly been shown, and when notices of termination have been sent in strict compliance with the statutory timetables, a landlord should not be precluded from pursuing summary eviction proceedings because of hypertechnical dissection of the wording of the notices that he has sent." Jefferson Garden Associates v. Greene, 202 Conn. 128, 145, 520 A.2d 173 (1987).
So too, statutory notice contains a certain amount of flexibility. Gen. Stat. § 13a-149, municipal liability for defective highways, contains a savings clause for inaccuracy in the statutory notice of claim: " if it appears that there was no intention to mislead or that such town, city, corporation or borough was not in fact misled thereby." An action to recover a real estate broker's commission must meet specific statutory requirements. Gen. Stat. § 20-325a(a). Yet there is a savings clause that permits a recovery " if it would be inequitable to deny such recovery and the licensee (1) has substantially complied with subdivisions (2) to (7), inclusive, of subsection (b) of this section . . ." Gen. Stat. § 20-325a(d). Home improvement contractors may be entitled to recover even if their contract violates Gen. Stat. § 20-429(a) based on: " the reasonable value of services which were requested by the owner, provided the court determines that it would be inequitable to deny such recovery." Gen. Stat. § 20-429(f).
In summation the law permits recovery for substantial compliance with statutory provisions. Some statutes must be strictly construed. Daimler Chrysler Corp. v. Law, 284 Conn. 701, 711, 937 A.2d 675 (2007); Morneau v. State, 150 Conn.App. 237, 252, 90 A.3d 1003 (2014).
The relationship between a lender and borrower is based on contract law. Wells Fargo Bank v. Strong, 149 Conn.App. 384, 393, 89 A.3d 392 (2014): " A promissory note is nothing more than a written contract for the payment of money, and, as such, contract law applies." Fidelity Bank v. Krenisky, 72 Conn.App. 700, 707, 807 A.2d 968, cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002). The third special defense alleges that the plaintiff breached the contract by commencing a foreclosure lawsuit without complying with the condition precedent contained in Gen. Stat. § 8-265ee. " The general rule with respect to compliance with contract terms . . . is not one of strict compliance, but of substantial compliance." Pack 2000, Inc. v. Cushman, 311 Conn. 662, 675, 89 A.3d 869 (2014).
" The doctrine of substantial compliance is closely intertwined with the doctrine of substantial performance." Pack 2000, Inc. v. Cushman, supra, 349. " 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." (Internal quotation marks omitted.) Id. ; accord Clem Martone Construction, LLC v. DePino, 145 Conn.App. 316, 336, 77 A.3d 760, cert. denied, 310 Conn. 947, 80 A.3d 906 (2013); 15 R. Lord, supra, § 44:52, pp. 221-22.Pack 2000, Inc. v. Cushman, supra, 311 Conn. 675.
Courts interpreting the rule of substantial compliance have uniformly concluded that a nonmaterial breach does not extinguish the other party's rights to enforce the contract. Pack 2000, Inc. v. Cushman, supra, 311 Conn. 679. Gen. Stat. 8-265ee does not mandate the form of mailing by using the mandatory word " shall" before the substantive verb " mail." The statute contains no provision that failure to mail in the statutory format, voids or terminates the notice. The statute is silent on the public policy behind the selection of the form of mailing. The statute does not define the form of mailing as the essence of the performance required. Mihalyak v. Mihalyak, 11 Conn.App. 610, 616, 529 A.2d 213 (1987).
Substantial compliance has been the rule in the interpretation of many statutes in Connecticut that rely on mailing as a component of the statutory procedure. Dombkowski v. Messier, 164 Conn. 204, 210, 319 A.2d 373 (1972) (Substantial compliance with the statute in administering absentee voter law.) Practice Book § 10-3 requires that " when any claim is made in a complaint . . . is grounded on a statute, the statute shall be specifically identified by its number." That process has been held to be directory and substantial compliance with P.B. 10-3 is all that is required " . . . as long as the defendant is sufficiently apprised of the nature of the action . . ." Yorgensen v. Chapdelaine, supra, 150 Conn. 15. The validity of a notice of a polling date must be determined by the substantial compliance test as to that election statute. Parker v. Brooks, Superior Court, judicial district of New Haven at New Haven, Docket Number CV 92-0338661 (October 20, 1992, Vertefeuille, J.) .
On the other hand service of process statutes have been held to be mandatory and the substantial compliance rule is not applied to those statutes. This is because service of process is key to establishing the jurisdiction of the court over the person. The court has no jurisdiction over persons who have not been made parties to the action before it. Security Insurance Company of Hartford v. Lumbermens Mutual Casualty Company, 264 Conn. 688, 722, 826 A.2d 107 (2003); Wade v. Hubbard, Superior Court, judicial district of Fairfield at Bridgeport, Docket Number CV 11-6017665 S (April 12, 2012, Richards, S., J.) .
The judgment lien statutes have been analyzed under the substantial compliance test. Gen. Stat. § 52-380a(a) sets forth detailed information that must be included within a valid judgment lien. The judgment lien in question did not contain the judgment creditor's last known address as required by subsection (1) of the statute. The trial court applied the substantial compliance test to both Gen. Stat. § 52-380a(a) and the notice statute for judgment liens which required notice " to the judgment debtor . . . by first class mail, postage prepaid." Gen. Stat. § 52-351a; Daley v. Constantini, Superior Court, judicial district of Ansonia-Milford at Milford, Docket Number CV 89-028419 S (April 30, 1991, Curran, J.).
The plaintiff's complaint was dated April 22, 2010. The appropriate mediation notices were provided to the defendant. She began the court sponsored mediation process on May 18, 2010 (#104.00). The mediation process lasted for many months. During that period there were court ordered mediation sessions, reports filed by the mediator as a pleading and motions addressed to the mediation by both parties. A final mediation report was filed by the mediator on January 7, 2011 (#106.00). That report did not halt the mediation efforts of the defendant who had filed mediation motions as late as July 2011. From this bare outline the court could conclude that the parties engaged in mediation for over one year, during which this lawsuit was still pending.
The court finds that under the circumstances of this case; 1) the detailed notice that complied with all requirements of Gen. Stat. § 8-265ee in the February 1, 2010 letter, the terms of the Note, and the terms of the Open-End Mortgage Deed, 2) the testimony of the defendant already found to not be credible, that she did not receive, Exhibit 5, 3) the fact that this letter, Exhibit 5, was found in the computer system of the loan servicer, 4) that the letter met the timeliness requirements of the statute, note and mortgage deed, 5) the requirement that the mailing be sent to a two-family house with one apartment not being occupied by the defendant, 6) the vagueness of the statutory forms of mailing, and 7) the fact that none of the statutory forms of mailing required the defendant to sign a green card or other form of proof of receipt to be returned to the sender, the court finds that the method of mailing is not a material requirement of Gen. Stat. § 8-265ee. In addition the court finds that the parties engaged in substantial court sponsored mediation. The court finds 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 deed 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.
(4) Is the method of mailing in Gen. Stat. § 8-265ee mandatory or discretionary? Gen. Stat. § 8-265ee is entitled " Notice to mortgagee of foreclosure. Meeting or conference with mortgagee or consumer credit counseling agency. The statute immediately preceding contains the following: " No judgment of strict foreclosure nor any judgment ordering foreclosure sale shall be entered in any action instituted by the mortgagee to foreclose a mortgage commenced on or after said date, for the foreclosure of an eligible mortgage unless (1) notice to the mortgagor has been given by the mortgagee in accordance with section 8-265ee and the time for response has expired . . ." Gen. Stat. § 8-265dd(b). The underlying statute, Gen. Stat. § 8-265ee(c), uses the word " shall" three times: " shall give notice to the mortgagor by registered, or certified mail, postage prepaid at the address of the property which is secured by the mortgage, " and " Such notice shall advise the mortgagor of his delinquency or other default under the mortgage and shall state that the mortgagor has sixty days from the date of such notice in which to (1) . . . and (2) . . ." This court has already found that the plaintiff has complied with the second two " shalls, " both as to the content and timeliness by the February 1, 2010 letter. Exhibit 5. The court has already found that the first " shall" has also been complied with since the February 1, 2010 letter satisfied all of the notice requirements under Gen. Stat. § 8-265ee. The only question remaining is whether the method of mailing is a mandatory requirement or just directory.
The test to be applied in determining whether a statute is mandatory or directory is whether the prescribed mode of action is the essence of the thing to be accomplished, or in other words, whether it relates to a matter of substance or a matter of convenience . . . If it is a matter of substance, the statutory provision is mandatory . . . If, however, the . . . provision is designed to secure order, system and dispatch in the proceedings, it is generally held to be directory . . . Definitive words, such as must or shall, ordinarily express legislative mandates of a nondirectory nature . . . As we recently noted, the word shall creates a mandatory duty when it is juxtaposed with [a] substantive action verb.Lagueux v. Leonardi, 148 Conn.App. 234, 261, 85 A.3d 13 (2014).
Applying that test, the word " shall" is followed by three substantive action verbs: " shall give notice, " " shall advise the mortgagor" and " shall state that the mortgagor has sixty days." State v. Jones, 140 Conn.App. 455, 464, 59 A.3d 320 (2013); Wiseman v. Armstrong, 295 Conn. 94, 101, 989 A.2d 1027 (2010). The court has already found that the plaintiff's February 5, 2010 letter has complied with " gave notice" " advise the mortgagor" and " state that the mortgagor has sixty days." These three substantive duties, made mandatory by Gen. Stat. 8-265ee, have been complied with.
The statute does not use the word " shall" in relation to the method of mailing. The court finds that the method of mailing is designed to secure order, system and dispatch in the proceedings. The court finds that the method of mailing, neither of which require that the postal service return a delivery receipt signed by the defendant after the mailing of the February 2010 letter, is discretionary. The court further finds that First Class mail has its own proof of delivery in that there is no evidence that the USPS returned the envelope that confirmed the February 1, 2010 to the sender. The court further finds that the two forms of mailing set forth in Gen. Stat. § 8-265ee do not require the recipient's signature being returned to the sender and are only a convenience to the sender to be able to prove that the plaintiff did what it said it did, mailing the February 1, 2010 letter to the defendant at her current address with sufficient postage. The court finds Frank Dean's testimony credible that the plaintiff sent the February 1, 2010 letter to the defendant at her current address of 25 Alexander Street, Greenwich, Connecticut 06830 by First Class mail, postage prepaid by the plaintiff.
The court finds the issues on the Third Special Defense for the plaintiff.
The court, having found the plaintiff has standing, finds that the plaintiff has proven the elements of foreclosure. The court, having found for the plaintiff on each of three enumerated Special Defenses and having further found that the defendant has offered no evidence rebutting the presumption of RMS Residential Properties, LLC v. Miller, the court finds the issues in this foreclosure lawsuit for the plaintiff.
The court heard testimony from Charlene Lerman, a Connecticut licensed real estate appraiser. She has performed between eight and ten thousand real estate appraisals in Connecticut. She conducted a real estate appraisal for the real property at 25 Alexander Street, Greenwich, Connecticut. A written twenty-seven-page real estate appraisal report of the fair market value was offered as Exhibit 7. The court carefully examined the report and reviewed the comparable sales. She used similar age, location, and styled two-family houses for comparable sales. She noted that the sale of two-family houses in Greenwich had decreased over the last year. She had performed an earlier appraisal placing a fair market value of $785,000. Her opinion for the current fair market value was $775,000. Charlene Lerman was cross examined by the defendant. The defendant did not offer the testimony of a real estate appraiser. As the owner she was permitted to testify as to the real property's fair market value but she did not offer any such testimony. Watson v. Watson, 20 Conn.App. 551, 560, 568 A.2d 1044 (1990); Misisco v. LaMaita, 150 Conn. 680, 684, 192 A.2d 891 (1963).
The court finds the fair market value of 25 Alexander Street, Greenwich, Connecticut to be $775,000 based upon the credible testimony of Charlene Lerman. The court awards real estate appraisal fees of $600 for the two appraisals that she performed.
On October 25, 2013, the fourth assigned trial date, the plaintiff offered the continued testimony of Frank Dean. Through Mr. Dean an October 21, 2013 Payoff Letter was submitted as a full exhibit. Exhibit 6. The Payoff Letter was prepared by JP Morgan Chase Bank as servicer of the loan. It was done in the ordinary course of business based upon their business records. Mr. Dean further testified that Exhibit 1 is the Fixed/Adjustable Rate Note dated December 11, 2006. The original face amount of the loan was $780,000 for a 30-year period with equal amortized payments of principal and interest over these 30 years. A 5.7% fixed rate of interest was established at the beginning of the loan. The first adjustment of the interest rate occurred on January 1, 2014, a date that had not yet occurred as of Mr. Dean's October 25, 2013 testimony. Mr. Dean testified that the loan was due in full on January 1, 2037.
" Where a defendant fails to raise a defense as to the amount of the debt, the plaintiff may prove the debt by way of an affidavit pursuant to Practice Book X23-18." Wells Fargo Bank, NA v. Strong, supra, 149 Conn.App. 404; Bank of America, FSB v. Franco, 57 Conn.App. 688, 694, 751 A.2d 394 (2000). The defendant offered no testimony concerning the principal amount due. She offered no amortization schedule. The defendant offered Exhibits 29 through 36 as to payments made on this loan after December 1, 2009 at the reargument hearing. The court finds that these eight checks cleared and were applied by the plaintiff to the defendant's mortgage loan.
On November 1, 2013, the fourth day of trial, the defendant's counsel offered into evidence eight exhibits, each a one-page copy of a check. Ex. 8-15. Previously the court had received in evidence on February 1, 2010, a three-page notice letter that stated that . . ." you have failed to make the required monthly payments under the terms of your Note ('Note') and related mortgage, ('Security Instrument') since 12/01/09." Ex. 5. Frank Dean, a home loan research officer for JP Morgan Chase Bank, NA, the servicer of this loan, testified for the plaintiff that according to the bank's business records the loan was in default since December 1, 2009 due to a default in payments. The court found Mr. Dean to be credible (#220.00, page 3). Included within the eight checks offered by the defendant was a December 22, 2009 check in the amount of $5,175.72 payable to " WAMU Chase Loan." Ex. 8. The defendant, at trial, claimed that this check was cashed by the lender and should be applied to the loan. She argued that the sum of $5,175.72 should have been credited toward the monthly payment due on December 1, 2009. She argued that this December 22, 2009 check covered any claimed default and should be credited in payment of the monthly mortgage payment due on December 1, 2009.
At trial the court examined carefully Exhibits 8-15. The court found: " The defendant offered Exhibits 8 through 15 as to payments made on this loan after December 1, 2009. The court has no verification that any of these checks were related to payments of the principal or interest due on this mortgage. There is no verification that any of these checks were cashed and applied to the mortgage. One of the checks was returned by a letter from the loan servicer. Exhibit 15. The back of the checks are illegible and the court cannot determine if these checks were cashed. Exhibit 6." (#220.00, page 40.)
The fact that the court could not determine check clearance from its examination of the eight checks marked as Exhibits 8-15 was verified at the evidentiary hearing on the Motion to Reargue. A Chase Bank employee reviewed the eight checks, Ex. 8-15, on the witness stand and stated that no one could determine from these documents that the checks cleared or were credited toward the mortgage loan.
When the Motion to Reargue was filed, this court suggested to the defendant, who was now self-represented and assisted by an interpreter in court, that she subpoena a Chase Bank officer requesting that appropriate complete copies of the checks, front and back in legible fashion, be provided in court. See Order #224.87, dated September 3, 2014. That was done. Two bank officers testified under subpoena and the defendant successfully offered eight checks, Exhibits 29-36, into evidence. Each newly offered check contained the front, back as well as posting information. The Chase Bank employees who testified were able to confirm that each of the eight checks, Ex. 29-36, were cashed.
At the reargument hearing, the plaintiff recalled Frank Dean to the witness stand. He verified the eight checks, Ex. 29-36, and confirmed that each of these checks were cashed and applied to the defendant's mortgage loan. This was confirmed by Chase's payment history, a detailed 17-page document offered into evidence at the reargument hearing. Ex. 41. Included within these eight cashed checks was the $5,175.72 December 22, 2009 check, marked as Ex. 8 at trial and Ex. 29 at the reargument hearing. Eight checks were offered at trial and eight checks were offered at the reargument hearing. The first seven checks, Ex. 8-14 are Ex. 29 35, with the exception that Ex. 29-35 contain the backs of each check with legible endorsement information and the posting information. The court will discuss separately Ex. 15 and Ex. 36.
Once that December 22, 2009 check was received in evidence at the reargument hearing supported by the bank officer's testimony that the check was cashed, the defendant moved to dismiss the foreclosure lawsuit. In seeking dismissal the defendant claimed that the December 29, 2009 check, Ex. 29, was proof that the February 1, 2010 default letter was in error since the 12/01/09 payment had been made and accepted by the bank prior to the issuance of the February 1, 2010 default letter. The court had not yet concluded the reargument hearing and the plaintiff had not been given an opportunity to offer any evidence. For that reason the court denied the defendant's motion to dismiss and continued with the reargument hearing. The plaintiff later offered the entire payment history of this mortgage loan as to all payments made and credited since the inception of the loan. Ex. 41.
In this discussion of the payment history, Ex. 41, the court is referencing the first two columns identified as: " DUE DATE" and " PROC DATE." The line numbers contained in this Memorandum of Decision are obtained by using Exhibit 41, the 17 page payment history, and counting the lines of print that appear to the far left of each page. The print to the middle of the page and to far right has printing that is between those far left-hand lines. Only the far left-hand side of each page is being used to count the line numbers. Each line is not labeled with a number. The line number is based on the court's manually counting of each far left-hand line.
This was a December 11, 2006 mortgage for $780,000. Ex. 1, Ex. 2. The payment history showed that the first payment on this December 11, 2006 mortgage loan was due on February 1, 2007. Ex. 41, page 54485, line 3 " DUE DATE 02-01-07." This is consistent with the December 11, 2006 Fixed/Adjustable Rate Note for $780,000 at issue in this contested foreclosure action. " I will make my monthly payments on the first day of each month beginning on FEBRUARY 01, 2007" Ex. 1, paragraph 3. (A). The February 1, 2007 monthly mortgage payment was timely made and duly credited on the second page of Exhibit 41, page 85144, line 11 " DUE DATE 02-07" " PROC DATE 02-02." All of the remaining ten monthly payments for the 2007 calendar year were made and credited toward the mortgage loan. Ex. 41, pages 85144-45. All payments in the year 2008 were made and credited toward the mortgage loan in 2008 but were made later in each calendar month. Ex. 41, page 37175. For example: the payments due on the first day of the calendar month were made on 08-15, 09-15, 10 15, 11-17 and 12-15. Ex. 41, page 37176, lines 8, 9, 10, 11, and 12. " PROC DATE" column for each entry.
In the year 2009 the monthly mortgage payments were made and accepted on 01-13, 02-17 and 03-16. Ex. 41, page 987, lines 11, 12 and 13. The April 2009 payment due in the amount of $5,175.72 was paid in two installments: $4,000.00 on 05-21 and $1,175.72 on 05-26. Ex. 41, page 987, lines 17 and 18. The plaintiff did not declare a default for these 2009 payments or any prior late payments. The plaintiff accepted these two payments for the monthly payment due on April 1, 2009. The Fixed/Adjustable Rate Note does not contain a grace period. " If I do not pay the full amount of each monthly payment on the date it is due, I will be in default." Ex. 1, paragraph 7. (B). The May 2009 payment in the amount of $5,175.72 was paid in two installments: $4,200.00 on 05-26 and $975.72 on 05-26. Ex. 41, page 988, lines 5 and 6. Again no default was issued. The next four 2009 payments were made on 06-15, 07-15, 08-25 and 09-22, each in the required amount of $5,175.72. Ex. 41, page 989, lines 8, 11, 15 and 21. All of these payments for 2009 were credited toward the mortgage loan. No default notices were issued by the plaintiff through September 2009 despite the continued lateness.
There were no payments made after September 22, 2009 in the month of September 2009, no payments made in the month of October 2009, no payments made in the month of November 2009 and no payments made in the first 21 days of December 2009. Ex. 41, page 989, lines 5 through 14. As of December 21, 2009 the defendant owed three monthly mortgage loan payments, each in the amount of $5,175.72, for the mortgage loan payments due on October 1, 2009, November 1, 2009 and December 1, 2009. As of December 21, 2009 the defendant was in arrears 82 days for non-payment of monthly mortgage payments due. (October 1, 2009 through and including December 21, 2009 is 82 days.) The plaintiff did not then issue a default notice.
On December 22, 2009 the defendant paid $5,175.72 by check and that sum was credited to the mortgage loan. Ex. 8, Ex. 29, Ex. 41, page 989, line 15. That $5,175.72 paid the monthly payment in full due on October 1, 2009. Ex. 41, page 989, line 15 verified the application of the December 22, 2009 payment to the earliest unpaid month of October 1, 2009; " DUE DATE 10-09." See Ex. 41, page 989, line 15 in the column " DUE DATE." Therefore, with the crediting of the December 22, 2009 payment of $5,175.72 to the October 2009 payment, as of the following day, December 23, 2009, the defendant owed the full monthly payment of $5,175.72 each due on November 1, 2009 and December 1, 2009. The mortgage was not declared in default as of December 23, 2009 despite the fact that the defendant was in violation of the payment terms of the note: " I will make my monthly payments on the first day of each month beginning on FEBRUARY 01, 2007." Ex. 1, page 1, paragraph 3. (A). As of December 23, 2009 the defendant was in arrears 53 days for non-payment of monthly mortgage payments due. (November 1, 2009 through and including December 23, 2009 is 53 days.) The plaintiff did not then issue a default notice.
The defendant appears to be claiming that since the plaintiff cashed the December 22, 2009 check, Ex. 8 and Ex. 29, and applied that payment of $5,175.72 toward the mortgage loan on December 22, 2009, Ex. 41, page 989, line 15, that check must be applied to the monthly payment due on December 1, 2009 all the while leaving the October 1, 2009 and November 1, 2009 payments due unpaid. According to the defendant's argument the February 1, 2010 default letter, Ex. 5, is incorrect when it states that the December 1, 2009 mortgage payment had not been made and the note was therefore not in default. The plaintiff counters by stating that as of December 21, 2009 the defendant owed three monthly payments, for October 1, 2009, November 1, 2009 and December 1, 2009. The note contains no grace period. All payments are due on the first day of each calendar month. The plaintiff applied the December 22, 2009 payment to the earliest of these unpaid monthly payments, the payment due October 1, 2009, leaving the November 1, 2009, and December 1, 2009 payments not made as of the day following the payment on December 22, 2009. The bank did not then declare the mortgage note in default either in December 2009 or January 2010.
The plaintiff argues that there is no provision in the Fixed/Adjustable Rate Note, Ex. 1, that permits the application of a monthly payment to the calendar month in which the payment is made when prior months have not been paid. " Each monthly payment will be applied as of its scheduled due date and will be applied to interest before Principal." Ex. 1, page 1, paragraph 3. (A). The Fixed/Adjustable Rate Note requires that each and every monthly payment must be paid. " I will pay principal and interest by making a payment every month." Ex. 1, page 1, paragraph 3. (A). Late charges accrue for months not paid. Ex. 3, paragraph 7. (A). " Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than JANUARY 01, 2037." Ex. 2, page 2, paragraph (D) of Open End Mortgage Deed. " Such payments shall be applied to each Periodic Payment in the order in which it became due." Ex. 2, page 4, paragraph 2. The defendant has not cited any provision in the mortgage documents that supports her legal and factual claims permitting her to skip two monthly payments. Ex. 37.
The next monthly payment due after December 22, 2009 was on January 1, 2010. On January 29, 2010 the defendant paid $5,175.72 to the plaintiff. Ex. 9, Ex. 30. That check was cashed and the $5,175.72 was credited toward the mortgage. Ex. 9, Ex. 30, Ex. 41, page 36804, line 17. The plaintiff credited the January 29, 2010 payment of $5,175.22 to the earliest monthly payment not yet paid, the November 1, 2009 payment, " DUE DATE 11-09." This paid in full the November 1, 2009 mortgage payment due. As of the following day, January 30, 2010, the defendant had not paid the monthly payments due on December 1, 2009 and January 1, 2010 and was in arrears 61 days for non-payment of monthly mortgage payments due. (December 1, 2009 through and including January 30, 2009 is 61 days.) The plaintiff then chose to issue its default notice letter on February 1, 2010. Ex. 5.
The February 1, 2010 letter, Ex. 5, contained payment terms necessary to cure the default. " You are required to pay this amount no later than the close of business on 04/02/10 to cure the default." Due to the fact that additional payments of principal, interest, escrow, and late charges may be due between February 1, 2010 and April 2, 2010, the February 1, 2010 letter further stated in bold print: " Therefore, you may not rely on the amount shown above to be sufficient to cure your loan delinquency after today." Ex. 5, second page, first paragraph. The Total Amount Due in the February 1, 2010 letter was $12,153.91, which this court calculates to be two full monthly payments of principal, interest and escrow, seven monthly late charges of $226.36 (See #220.00, page 41) plus $32.55 for Outstanding Fees and $21.70 for Corporate Advance. There was no evidence submitted at trial or at the reargument hearing that the defendant paid or partially paid or attempted to pay the sum of $12,153.91 in order to cure the February 1, 2010 declared default.
The next monthly payment due after January 29, 2010 was on February 1, 2010. That payment was not made before the issuance of the default letter of February 1, 2010. Ex. 5. Due to the adjustable interest rate provisions, the monthly mortgage payment due on February 1, 2010 and thereafter changed to $5,257.57. The defendant did not make a monthly payment when due on February 1, 2010. The defendant issued personal check #1124 to the plaintiff on February 15, 2010 in the amount of $3,000. Ex. 36. This $3,000 check #1124 was not offered at trial and was not contained within Ex. 8 15. The plaintiff credited that $3,000 payment to the mortgage loan. This February 15, 2010 check was posted on February 23, 2010. That February 15, 2010 $3,000 check did not pay the December 1, 2009 payment of $5,175.72 in full, leaving an unpaid balance of $2,175.72 for the December 1, 2009 payment. Ex. 41, page 36805, line 6 " DUE DATE 12-09." As of the day following that $3,000 payment, on February 16, 2010, the defendant had not paid the full monthly payments due on December 1, 2009, January 1, 2010 and February 1, 2010 and was in arrears 78 days for non-payment of monthly mortgage payments due. (December 1, 2009 through and including February 16, 2010 is 78 days.) The plaintiff had declared a default on February 1, 2010. Ex. 5.
The defendant paid $5,257.57 by a check dated April 22, 2010. Ex. 10, Ex. 31. The plaintiff credited this check toward the mortgage loan. Ex. 41, page 36805, line 27. For some reason this check was not posted until May 27, 2009 even though the check was dated April 22, 2009 " POSTING DATE: 05/27/2010." Ex. 31. This April 22, 2010 check paid in full the remainder of the December 1, 2009 payment due and the balance was applied to a portion of the January 1, 2010 payment. As of April 23, 2010, the day following the April 22, 2010 payment of $5,257.57, the defendant had not made the monthly payments due as of January 1, 2010, February 1, 2010, March 1, 2010 and April 1, 2010 and was in arrears 113 days for non-payment of monthly mortgage payments due. (January 1, 2010 through and including April 23, 2010 is 113 days.) The plaintiff had declared a default on February 1, 2010. Ex. 5.
The defendant paid $3,000 by a check dated April 29, 2010 and the plaintiff credited this check toward the mortgage loan. Ex. 11, Ex. 32, Ex. 41, page 36805, line 23. For some reason this check was not posted until May 24, 2009, even though the check was dated April 29, 2010 " POSTING DATE: 05/24/2010." Ex. 32. This $3,000 April 29, 2010 check did pay the remainder of the January 1, 2010 payment in full and the balance was applied toward the February 1, 2010 payment. As of April 30, 2010, the day following the April 29, 2010 payment of $3,000, the defendant had not paid the monthly payments due on February 1, 2010, March 1, 2010 and April 1, 2010 and was in arrears 89 days for non-payment of monthly mortgage payments due. (February 1, 2010 through and including April 30, 2010 is 89 days.) The plaintiff had declared a default on February 1, 2010. Ex. 5.
On May 24, 2010 the defendant paid the plaintiff $3,000 by check. Ex. 12, Ex. 33. That $3,000 check cleared and was credited toward the mortgage loan. Ex. 41, page 36806, line 5. That May 24, 2010 check did not pay in full the remainder of the February 1, 2010 monthly mortgage payment due of $5,257.57. Ex. 41, page 36806, line 5. As of the day following that $3,000 payment, on May 25, 2010, the defendant had not paid the monthly payments due on February 1, 2010, March 1, 2010, April 1, 2010 and May 1, 2010 and was in arrears 114 days for non-payment of monthly mortgage payments due. (February 1, 2010 through and including May 25, 2010 is 114 days.) The plaintiff declared a default on February 1, 2010. Ex. 5.
The defendant paid $3,000.00 on June 11, 2010 by check. Ex. 13, Ex. 34. That $3,000 check cleared and was credited toward the mortgage loan. Ex. 41, page 36806, line 7. That $3,000 payment was credited to the remaining balance due for the February 1, 2010 monthly payment and did pay the February 1, 2010 in full. The remainder was credited toward the March 1, 2010 payment leaving a balance due for March 2010. As of June 12, 2010, the day following the June 11, 2010 $3,000 payment, the defendant had not paid the payments due March 1, 2010, April 1, 2010, May 1, 2010 and June 1, 2010 and was in arrears 104 days for non-payment of monthly mortgage payments due. (March 1, 2010 through and including June 12, 2010 is 104 days.) The plaintiff declared a default on February 1, 2010. Ex. 5.
On July 2, 2010 the defendant paid the plaintiff $3,000 by check. Ex. 14, Ex. 35. The plaintiff credited this $3,000 toward the mortgage loan as of July 16, 2010. Ex. 41, page 36806, line 9. This $3,000 was applied to the March 1, 2010 monthly payment still leaving a balance due for the March 2010 monthly mortgage loan payment. As of the next day, July 3, 2010, the defendant had not paid the payments due March 1, 2010, April 1, 2010, May 1, 2010, June 1, 2010 and July 1, 2010 and was in arrears 155 days for non-payment of monthly mortgage payments due. (March 1, 2010 through and including July 3, 2010 is 155 days.) The plaintiff declared a default on February 1, 2010. Ex. 5.
The July 2, 2010 payment was the last payment made by the defendant. Ex. 14, Ex. 35. Although the defendant made mortgage payments after the February 1, 2010 notice of default letter, Ex. 5, none of these payments brought her current. She was falling further and further in arrears since her September 22, 2009 payment and remained in arrears consistently since September 22, 2009. An August 13, 2010 check payable by the defendant to the plaintiff in the amount of $3,000 was returned to the defendant. It was not cashed or credited to the mortgage loan. Ex. 15. This $3,000 check was returned to the plaintiff on August 19, 2010 with the following comments " Funds insufficient to cover default." Ex. 17.
In summation, the six monthly mortgage payments due on October 1, 2009, November 1, 2009, December 1, 2009, January 1, 2010, February 1, 2010 and March 1, 2010 totaled $31,254.02. These six monthly mortgage payments due from October 1, 2009 through March 1, 2010 were four at $5,175.72 and two at $5,275.57. They total $31,254.02. The defendant made eight payments during the 11 months from September 2009 through July 2010 that were credited by the plaintiff toward those six monthly mortgage payments due from October 1, 2009 through and including March 1, 2010. Ex. 29-36. Ex. 15 was returned uncashed. These eight payments over an 11-month period total $30,627.01. These eight payments made by the defendant were two at $5,175.72, one at $5,257.57 and five at $3,000. These eight payments total $30,609.01. Although the plaintiff was owed $31,254.02, the defendant only paid $30,609.01, a short fall of $645.01 plus no payments for the months of April, May, June and July 2010. That $645.01 short fall occurred in the March 1, 2010 payment that was not paid in full. No payments have been made nor credited after July 2, 2010. Atlantic National Trust, LLC v. Van Eck, 89 Conn.App. 200, 203, 873 A.2d 179 (2005); Homecomings Financial Network, Inc. v. Starbala, 85 Conn.App. 284, 289, 857 A.2d 366 (2004).
The mortgage terms required interest to be paid in arrears. The loan closed on December 11, 2006. At the December 11, 2006 closing the plaintiff collected the interest on the $780,000 loan for the period of December 15, 2006 through and including December 31, 2006. Ex. 16. The court assumes no interest was charged for the refinance recission period. No monthly payment was required by the Fixed/Adjustable Rate Note in the month of January 2007. The first monthly mortgage payment that was required was on February 1, 2007. The February 1, 2007 payment was made. That monthly mortgage payment paid a portion of the principal due as well as the interest on the $780,000 loan from January 1, 2007 through and including January 31, 2007. Thus interest is paid in arrears. See HUD closing statement Ex. 16. " Interest from 12/15/2006 to 12/31/2006."
Therefore the monthly mortgage payment due on March 1, 2010 would pay interest from February 1, 2010 through and including February 28, 2010. Since that March 1, 2010 payment had not been paid in full, interest was due on the then outstanding principal balance as of February 1, 2010. This is precisely what the plaintiff is claiming in its two Payoff Letters, October 31, 2013, Ex. 6, and February 13, 2015, Ex. 42, on the line " Interest Due From 2/1/10." This is consistent with the payment history. Ex. 41. Deutsche Bank v. Lichtenfels, Superior Court judicial district of New Haven, Docket Number NHH CV 04-4003402 S (June 17, 2009, Corradino, J.) [48 Conn. L. Rptr. 133, ]; North Water, LLC v. North Water Street Tarragon, LLC, Superior Court, judicial district of Stamford/Norwalk, Docket Number FST CV 07-5004758 S, (October 13, 2009, Tierney, J.T.R.), Adams v. Way, 33 Conn. 419, 421 (1866).
In lieu of an affidavit of debt, the plaintiff offered the testimony of Frank Dean and the submission of an October 21, 2013 Payoff Letter, Exhibit 6, and a February 13, 2015 Payoff Letter, Exhibit 42. According to both Payoff Letters, the " Unpaid Principal Balance" is $744,497.50. Neither the rates of interest used to calculate the " Interest Per Diem" nor the rates of interest used to calculate the " Interest Due From 2/1/10" is stated in either Payoff Letter. The Fixed/Adjustable Rate Note contains a 5.7% interest rate up until the first interest adjustment in January 2014. This court has determined that the per diem interest of $116.26 due on the $744,497.50 Unpaid Principal Balance calculated at 5.7% annual interest is based on a 365-day year by the court's doing the necessary manual calculations. Ex. 6. Both the Fixed/Adjustable Rate Note and Open-End Mortgage Deed are silent on whether per diem interest will be calculated on a 360-day year or on a 365-day year. The only statute on the subject is not couched in mandatory language: " and, in computing interest, three hundred and sixty days may be considered to be a year." Gen. Stat. § 37-1(a). The use of a 360-day year in calculating the per diem interest amount as of the October 21, 2013 Payoff Letter would result in the " Interest Per Diem" being higher, at $117.88. The use of the 365-day year benefits the defendant. The court will use a 365-day year in calculating interest in its Corrected Memorandum of Decision.
At reargument the plaintiff provided documentary verification of a previously disallowed item: Escrow Advance Balance Ex. 6, Ex. 42. On July 1, 2014 this item of $25,292.90 was disallowed (#220.00, pages 41-48). At reargument Frank Dean testified as to the amount advanced for real estate taxes and insurance on the mortgaged premises. An Escrow Transaction History from December 15, 2006 through and including July 18, 2014 was accepted in evidence at reargument. Ex. 45.
The Escrow Transaction History showed the first negative Balance on July 13, 2009 for the real estate taxes due the Greenwich Tax Collector (identified in Ex. 45 as " City Tax"). The escrow Balance was not sufficient to pay in full the real estate taxes as of 12/17/09, the Homeowners Insurance payment on 05/24/10 or these two types of escrow, insurance and taxes, for the remainder of 2010, 2011, 2012, 2013 and up to the last entry in the Escrow Transaction History on 07/18/14. The five escrow payments credited to the Escrow Transaction History after 09/22/09 occurred on 12/23/09, 01/30/10, 05/27/10, 05/29/10 and 07/16/10, dates that are consistent with the Posting Information dates on five of the checks offered at the reargument hearing. Ex. 29 Ex. 30, Ex. 31, Ex. 32, and Ex. 35. Thereafter no further payments were made by the defendant to the Escrow account for the payment of homeowners insurance premiums and real estate taxes due the Town of Greenwich. The plaintiff paid these sums from and after December 12, 2009 until July 18, 2014 and incurred an expense of $34,212.98 in doing so. Frank Dean's testimony at the reargument hearing as well as the Escrow Transaction History, Ex. 45, provides independent verification of the sum due the plaintiff of $34,212.98 as Escrow Advance Balance. The court will allow the plaintiff $34,212.98, increasing the debt by this amount.
The total of the homeowner's insurance premiums and real estate taxes paid by the plaintiff is $34,212.98, which the court finds is the Escrow Advance Balance. Exhibit 42. The February 13, 2015 Payoff Letter, labels the " Escrow Advance Balance" as of February 13, 2015 as being $37,089.76. The court allows $34,212.98 for the " Ending Escrow Balance" as stated in Ex. 45. In addition to the principal and interest, such payments for insurance premiums and real estate taxes are required to be paid by defendant pursuant to the Mortgage Deed. Ex. 2, page 4, Section 3.
" Late Charges" in the amount of $2,037.24 were imposed in both Payoff Letters. Paragraph 7 of the Fixed/Adjustable Rate Note permits a 5.00% charge of each overdue payment of principal and interest, when that payment was made " by the end of FIFTEEN calendar days after the date it is due." The Fixed/Adjustable Rate Note provides for 360 equal monthly payments of principal and interest, each in the amount of $4,527.12 per month. These monthly payments of principal and interest were to remain at $4,527.12 until the first interest adjustment in January 2014. 5.00% of $4,527.12 is $226.36. The Late Charges in the both Payoff Letters of $2,037.24 amounts to nine Late Charges, each $226.36, ($226.36 x 9 = $2,037.24). The dates each Late Charge was imposed does not appear in the Payoff letter. The amount of the Late Charges equals the formula in Paragraph 7 of the Fixed/Adjustable Rate Notes.
The October 21, 2013 Payoff Letter Ex. 6, contains five entries that do not appear to be supported by the language of either the Fixed/Adjustable Rate Note and/or the Open End Mortgage Deed: " Other Fees *** $59.25"; " Recording Fee $53.00"; Corporate Advances *** $2,134.50"; " Incurred Attorney Fees $2,875.00"; and " Estimated Attorney Costs $53.00." The triple asterisk defines " Other Fees" and " Corporate Advances" by stating that they are " assessed in accordance with your loan documents, and/or permitted by applicable law, or that were authorized for services rendered." No independent verification of any of these five entries was contained in the October 21, 2013 Payoff Letter, Ex. 6, or the February 13, 2015 Payoff Letter, Ex. 42, Frank Dean's testimony or other documentary evidence at trial or at the reargument hearing. The above charges are disallowed.
Both Payoff Letters contain an entry; " Suspense ($4,484.86)." No definition of " Suspense" was provided at trial or at the reargument hearing. That term is not contained in any of the mortgage documents before the undersigned. The fact that the number $4,484.86 is contained within parentheses suggests that the plaintiff is crediting the defendant with $4,484.86, thereby reducing the total mortgage debt. That assumption cannot be confirmed by any evidence. " Suspense ($4,484.86)" is disallowed.
The October 21, 2013 Payoff Letter contains the numbers mentioned above all in column form with the Total Payoff Amount of $931,769.99 forming the resulting addition of all of the above numbers. The court attempted that calculation at trial and was not able to obtain the result of $931,769.99 despite performing the calculation at least half a dozen times. The court at trial was able to perform a calculation that resulted in the sum of $931,769.99. That calculation required a number of steps: (1) the per diem of $116.26, although stated clearly in the addition column, was removed from the calculation; (2) the two figures of $53.00, the one before the subtotal and the one after the subtotal but before the Total Payoff Amount, had to each be added to the total; (3) each of the above mentioned entities and figures had to be added, and (4) from the resulting total addition, the " Suspense ($4,484.86)" is subtracted. The resulting calculation yields the result, $931,769.99.
The court concludes that it cannot rely on the accuracy and completeness of the October 21, 2013 Payoff Letter Ex. 6, in order to determine all of the elements of the debt, even if the defendant did not contest any of the items, calculations, figures, nor methodology that lead to the admissibility of the payoff figure being $931,769.99 as of November 1, 2013. For the same reasons the court cannot rely on the accuracy and completion of the February 13, 2015 Payoff Letter, Ex. 42. The court will perform its own calculations based on the documents in evidence and standard mathematical theories. Deutsche Bank National Trust Company v. Araujo, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket Number FST CV 09-5012084 S, (January 7, 2013, Tierney, J.T.R.); North Water, LLC v. North Water Street Tarragon, LLC, Superior Court, judicial district of Stamford/Norwalk of Stamford, Docket Number FST CV 07-5004758 S, (October 13, 2009, Tierney, J.T.R.).
The first task is to determine the amount of principal due. The face amount of the Fixed/Adjustable Rate Note is $780,000. This Note is to be paid over 30 years in monthly installments commencing at 5.7% annual interest with the first seven years of monthly payments being $4,527.12. The court accessed two internet sites to determine if $780,000 can be amortized to zero after 360 equal monthly payments of $4,527.12, which utilizes a 5.7% annual interest rate. Both web sites verified the accuracy of these figures and they both provided the court with an identical amortization schedule listing each of the 360 monthly payments of $4,527.12 breaking down each payment for interest and ever increasing principal. www.myamortizationchart.com, and www.amortization-calc.com. Each of these two amortization schedules provides the same numbers and the same resulting mortgage balances at the end of each monthly payment. The court takes judicial notice of these two amortization schedules.
The Fixed/Adjustable Rate Note is dated December 11, 2006. According to the note the first payment of $4,527.12 is due on February 1, 2007. " I will make my monthly payments on the first day of each month beginning on FEBRUARY 01, 2007." Exhibit 1, paragraph 3(A) PAYMENTS. The payments are due every month after February 1, 2007. " I will make these payments every month until I have paid all of the principal and interest . . ." Exhibit 1, paragraph 3(A). Interest from the December 11, 2006 closing until December 31, 2006 was charged and paid by the borrower at the December 11, 2006 mortgage closing in the amount of $2,070.27. Exhibit 16, line 901. There was no payment due on the mortgage for January 1, 2007. Therefore interest is due in arrears. The payment made on February 1, 2007 of $4,527.12 paid 5.7% interest for the entire $780,000 principal for the month of January 2014 plus a small portion of the principal. Interest remained payable in arrears throughout the term of the Fixed/Adjustable Rate Note.
According to the two amortization schedules the court examined from the internet, the principal balance due after the 37th monthly payment is $746,830.52. The defendant claims that she made 37 monthly payments. Both amortization schedules allocate the 37th monthly mortgage payment of $4,527.12 to $3,552.08 interest for the previous month of January 2010 and $975.05 reduction of principal, leaving the principal balance after that payment at $746,830.52.
Despite this determination using internet based amortization schedules, the court now has before it documentary proof of the principal balance due. The court has now given the defendant credit for the eight checks offered at the reargument hearing, Exhibits 29-36. That credit is also found in the plaintiff's payment history. Ex. 41. Three documents verify the principal balance due of $744,497.50: Exhibit 6, the October 13, 2013 Payoff Letter, Exhibit 42, the February 13, 2015 Payoff Letter and Exhibit 41, page 86043, line 16, the plaintiff's payment history. The court now finds that the principal amount due of $746,830.52 in its July 1, 2014 Memorandum of Decision was in error and failed to take into account the reduction in principal caused by eight payments made by the defendant. The court now finds after giving the defendant credit for the eight checks offered at the reargument hearing, Ex. 29-36, the principal balance due on the mortgage loan is found to be $744,497.50 as of February 1, 2010.
The 5.7% interest rate remained in effect until January 1, 2014. On January 1, 2014 the interest rate could change and then could change every year thereafter. Exhibit 1, paragraph 4. (A) " Change Dates." The new interest rate as of January 1, 2014 would be based on index. Exhibit 1, paragraph 4. (B) " The Index." Neither party offered any evidence of " The Index" being in effect as of the first change date either at trial or at the reargument hearing. The court assumes that the new changed interest rate would be in effect on January 1, 2014. Since interest is in arrears, that new interest rate could form the basis of a new monthly payment due on February 1, 2014. Since the index and its calculation were not discussed at trial, nor at the reargument hearing there was no evidence of whether this court's assumption is correct. This Index is also found in the Open-End Mortgage Deed, Fixed/Adjustable Rate Rider. Exhibit 2, Rider paragraph 4. (B) " The Index." The terms of the note and mortgage deed are identical as to " The Index." The calculation of the new interest rate is in paragraph 4. (C), " Calculation of Changes." Both paragraph 4. (C)s in the Fixed/Adjustable Rate Note and Open-End Mortgage Deed are identical.
The court accessed two internet sites to determine the " Index." The historical data of the Wall Street Journal published on the internet at http://online.wsj.com and Mortgage (ARM) Indexes--WSJ LIBOR Historical Data: 2013 published on the internet at http://mortgage-x.com/general/indexes/wsj-_libor_history_asp?y=2013 . Both contained the same numbers. One number was rounded off. The Fixed/Adjustable Rate Note requires the use of " the most recent Index figure available as of the date 45 days before each Change Date is called the 'Current Index.'" Exhibit 1, paragraph 4. (B). The mortgage deed rider contains the same terms. The Wall Street Journal does not publish on Saturday or Sunday. 45 days before the January 1, 2014 Change Date is either Friday, November 15, 2013 or Monday, November 18, 2013. The first web site, wsj.com, reports these two rates as 0.58410 for November 15, 2013 and 0.58510 for November 18, 2013. These two numbers are the " Current Index." To these Current Index numbers must be added 2.200%. Exhibit 1, paragraph 4. (C). The resulting numbers are 2.78410 and 2.785.10. The Index requires these numbers to be rounded to the nearest 0.125%. In both cases, that rounded off interest rate is the same; 2.750%. The second website, mortgage-x.com, also published the data only for November 15, 2013 and November 18, 2013. On this website the numbers are first rounded off to respectfully, 0.584xx and 0.585xx. Adding 2.200% to these two numbers yields 2.784xx and 2.785xx. Both of these numbers further rounded off to the nearest 0.125%, result in the same interest rate, 2.750%.
The court finds that the interest on the remaining principal of $744,497.50 is 5.7% from and after February 1, 2010 and 2.750% from and after January 1, 2014. The 2.75% as the current interest rate is confirmed by doing the mathematical calculations using the February 13, 2015 Payoff Letter. Ex. 42. $744,497.50 Unpaid Principal Balance multiplied by 2.75%, divided by a 365-day year yields $56.09, the identical sum found on the line " Interest Per Diem." Ex. 42.
The court finds the principal due as of February 1, 2010 is $744,497.50. Interest at 5.7% on $744,497.50 from February 1, 2010 through and including December 31, 2013 is $166,139.92. Interest at 2.750% on $744,497.50 from January 1, 2014 through and including December 31, 2015 is $40,947.36. The total debt as of December 31, 2015 is $951,584.78 ($744,497.92 principal plus $166,139.92 interest plus $40,947.36 interest equals $951,584.78 as the debt as of December 31, 2015). The court finds that per diem interest from and after December 31, 2015 is $56.09 based on the principal sum due of $744,497.50 at 2.750% annual interest. Ex. 42.
The court is not allowing the following item contained in the October 21, 2013 Payoff Letter, and the February 13, 2015 Payoff Letter as an increase in the debt: Exhibit 6 and Exhibit 42; Late Charges $2,037.24, Other Fees **** $59.25, Recording Fee $53.00, Corporate Advance **** $2,134.50, Incurred Attorney Fees $2,875.00 and Estimated Attorney Costs $53.00. No independent verification of the amounts of these items has been provided to this court either at trial or at the reargument hearing. No evidence has been offered as to the legal authority for most of these items. The court equally is not allowing any credit to the defendant for " Suspense ($4,484.86)" for the same above reasons. Exhibit 6 and Exhibit 42.
On August 8, 2013, after the first trial date, the plaintiff filed an Affidavit of Attorneys Fees (#192.00) and a Foreclosure Worksheet (#193.00). No further Foreclosure Worksheets and Affidavits of Attorney Fees have been filed to date. Both of these documents claimed counsel fees in the amount of $36,516.10. The attorneys fees incurred through August 8, 2013 were based upon $180 per hour. The court finds this hourly rate reasonable. The affidavit of attorneys fees complies with Smith v. Snyder, 267 Conn. 456, 477, 479, 839 A.2d 589 (2004). There were four additional trial dates that were not included in the affidavit of attorneys fees. The court has the right to consider the amount of attorney's efforts expended in proceedings held before the court as one of many factors but no longer is that an exclusive factor. Smith v. Snyder, supra, 267 Conn. 477.
Four of those days of trial were full trial days and two of them were shorter days because witnesses were not available. The court finds that a trial day without any trial preparation time or consideration of a working lunch consists of 6.0 hours. The court will allocate an additional 2 hours for each of the two days on which evidence was not taken but counsel was in court and court was in session. The court finds that the plaintiff is entitled to the stated attorneys fees of $36,516.10 plus an additional 28 hours at $180 per hour for the trial days through and including the last trial date of March 25, 2014. The parties waived the filing of briefs and oral argument. The Court awards the plaintiff attorneys fees pursuant to the terms of the Fixed/Adjustable Rate Note and Open-End Mortgage Deed in the amount of $41,556 ($36,516 + [28x180 $5,010] $41,556). No further attorney fees will be awarded to the plaintiff for the five days of the reargument hearing.
The defendant hired three separate attorneys to represent her in the pretrial proceedings. She instructed all three attorneys to search the Greenwich Land Records for evidence that her real property at 25 Alexander Street, Greenwich, Connecticut was encumbered by a mortgage to the Bank of America. None of these title searches revealed that the Bank of America was the mortgagor on 25 Alexander Street. She corresponded numerous times directly with Bank of America to find out why it was foreclosing on her property when the land records did not disclose a mortgage in favor of Bank of America. The Bank of America responded that no such mortgage existed. See January 24, 2012 letter, #135.00 and February 9, 2012 letter, #136.00. The defendant wrote directly to the Presiding Civil Judge at the Stamford/Norwalk JD on November 8, 2011 claiming: " Based on previous investigations recently completed on Bank of America it was discovered that I don't have any loans pending with this bank." #128.00. She had that November 8, 2011 letter notarized and requested " Please honorable Judge, put an end to this case."
This lawsuit was commenced by the plaintiff, Bank of America National Association, returnable to the Superior Court, judicial district of Stamford/Norwalk on May 4, 2010. The defendant was served on April 21, 2010. The complaint in paragraph 4 alleged that the mortgage " is to be assigned to Bank of America National Association." As of April 21, 2010 the Bank of America National Association had not recorded its assignment of mortgage on the Greenwich Land Records. The Greenwich Land Records as of April 21, 2010 did not contain this $780,000 mortgage to Bank of America, National Association in its chain of title. The first time the Bank of America, National Association claim to this $780,000 mortgage appeared in the defendant's chain of title was on February 2, 2012 when the December 1, 2011 Assignment of Mortgage was recorded in the Greenwich Land Records in Book 6280 at Page 206. Ex. 3.
The plaintiff, Bank of America, commenced this lawsuit when it was not in the chain of title and prosecuted this lawsuit for almost two years before it joined the chain of title. The plaintiff had possession of the note before it commenced this lawsuit. The court has already found that the plaintiff has standing to commence and to prosecute this foreclosure lawsuit. This is so despite the fact that the Assignment of Mortgage was dated December 1, 2011 and recorded on February 2, 2012, both well after this lawsuit commenced. CitiMortgage, Inc. v. Gaudiano, 142 Conn.App. 440, 449, 68 A.3d 101 (2013). " Our legislature, by adopting [General Statutes] § 49-17, created a statutory right for the rightful owner of a note to foreclose on real property regardless of whether the mortgage has been assigned to him." RMS Residential Properties, LLC v. Miller, 303 Conn. 224, 230, 32 A.3d 307 (2011). " Section 49-17 codifies the well established common-law principle that the mortgage follows the note . . ." Id. U.S. Bank v. Ugrin, 150 Conn.App. 393, 395 fn. 2, 91 A.3d 924 (2014).
The concurring opinion by Judge Flynn, in CitiMortgage, Inc. v. Gaudiano, states an important public policy on the sanctity of our land recording system. The concurring opinion bears citing.
The 'chain of title' concept is a principle of case law, developed to protect subsequent parties from being charged with constructive notice of the existence and contents of those recorded instruments which a title searcher would not be expected to discover by the customary search of land records . . . Connecticut Bar Association, Connecticut Standards of Title (1999), standard 2.2; see also Ginsberg & Ginsberg, LLC v. Alexandria Estates, LLC, 136 Conn.App. 511, 516, 48 A.3d 101 (2012).
While as judges we do not set legislative policy, I see some obligation to point out that no title search could find that CitiMortgage, Inc., ever received any assignment of mortgage from the mortgage holder of record at the time CitiMortgage, Inc., commenced this foreclosure action. This raises the obvious questions of what interest remains in the mortgage holder of record and why did not the record mortgage holder, rather than CitiMortgage, Inc., commence the foreclosure. The more basic question is what continued reliance can be placed on public land records to determine title to real property due to the effect of the application of § 49-17.CitiMortgage, Inc. v. Gaudiano, supra, 142 Conn. 450-51 (Flynn, J. concurring).
A foreclosure of a mortgage is an equitable proceeding. Franklin Credit Management Corporation v. Nicholas, 73 Conn.App. 830, 838, 812 A.2d 51, cert. denied, 262 Conn. 937, 815 A.2d 136 (2003). Utilizing equitable principles the Superior Court has the power to withhold foreclosure, reduce the principal amount of the debt and/or reduce the interest due on the debt. GMAC Mortgage, LLC v. Ford, 144 Conn.App. 165, 181, 73 A.3d 742 (2013); Fidelity Bank v. Krenisky, supra, 72 Conn.App. 705-06, cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002); Johnnycake Mt. Assocs. v. Ochs, 104 Conn.App. 194, 199, 932 A.2d 472 (2007).
" An action of foreclosure is particularly equitable and the court may entertain all questions which are necessary to be determined in order that complete justice may be done between the parties." Glotzer v. Keyes, 125 Conn. 227, 231, 5 A.2d 1 (1939); Morgera v. Chiappardi, 74 Conn.App. 442, 456, 813 A.2d 89 (2003); Hartford v. McKeever, 139 Conn.App. 277, 295, 55 A.3d 787 (2012). Reducing the amount of the stated indebtedness is within the equitable power of the Superior Court. Hamm v. Taylor, 180 Conn. 491, 497, 429 A.2d 946 (1980); Willow Funding Co., LP v. Grencom Associates, 63 Conn.App. 832, 849, 779 A.2d 174 (2001).
The failure of the plaintiff to timely prepare and record an Assignment of Mortgage on the Greenwich Land Records has caused the defendant to hire a number of attorneys, conduct multiple unnecessary title searches, and engage in multiple correspondence with interested parties including the court, plaintiff's counsel, and different officers of the Bank of America. It has prompted the defendant to claim that this foreclosure is a fraud and a sham and relay that claim to various elected and appointed public officials, all because the Assignment of Mortgage was not timely recorded. The plaintiff has earned the sanction of forfeiture of interest from the due date of February 1, 2010 until the recordation of the Assignment of Mortgage, two years and one day later on February 2, 2012.
The court has found the principal due in the amount of $744,497.50. Interest ran during the period of 2010, 2011 and 2012 on that sum at 5.7% annual interest. The per diem rate of interest for that period is $116.26. Two years and one day of interest at the rate of $116.26 per diem interest is $84,988.98. The court hereby reduces the debt that it has already found by $84,988.98. The court finds that the plaintiff had the ability to prepare and record the Assignment of Mortgage at any time after it become the owner of the Fixed/Adjustable Rate Note on July 22, 2009 and it failed to do so. That failure prevented the borrower, her attorneys, her title searchers, and possible future lenders from determining who owned the $780,000 mortgage. It is only fair and equitable that the plaintiff, Bank of America National Association, not be permitted to charge or collect interest from the defendant until the recordation of the Assignment of Mortgage.
The court having found the principal and interest due as of December 31, 2015 to be $951,584.78 plus the Escrow Advance Balance of $34,212.98 less the two-year-and-one-day sanction of $84,988.98, the resulting debt is found to be $900,808.78. ($951,584.78 + $34,212.98 -$84,988.98 = $900,808.78) as of December 31, 2015. To this debt of $900,808.78 the court adds the following sums: title search fee $225; real estate appraisal fee $600; and attorneys fees $41,556. The court finds this total debt exceeds the $775,000 fair market value of the real property. The court enters a judgment of Strict Foreclosure.
The Clerk of the Court will tax costs in accordance with the plaintiff's Bill of Costs to be filed.
The court orders that if there is no prior redemption of the real property at 25 Alexander Street, Greenwich, Connecticut 06830, title shall vest in the plaintiff, Bank of America National Association.
In its July 1, 2014 Memorandum of Decision (#224.00, page 54) the court entered a judgment of Strict Foreclosure and set the first Law Day as Tuesday, August 26, 2014. On July 21, 2014 the defendant filed a Motion to Reargue and for an Evidentiary Hearing (#224.00). This court granted the Motion to Reargue and assigned a hearing on August 11, 2014 (#224.86). The effect of the July 21, 2014 Motion to Reargue was to terminate the August 26, 2014 Law Day nunc pro tunc. P.B. 11-11, P.B. 63-1. RAL Management, Inc. v. Valley View Associates, 278 Conn. 672, 676, 682-85, 899 A.2d 586 (2006); Farmers & Mechanics Savings Bank v. Sullivan, 216 Conn. 341, 347-48, 579 A.2d 1054 (1990).
The court sets the first Law Day as Tuesday, February 16, 2016 and orders the following Law Days for all parties; (1) Ludys Nino (2) Bank of America National Association.
The court orders the plaintiff to notify all non-appearing defendants that a Judgment of Strict Foreclosure was ordered by the Superior Court, Judicial District of Stamford/Norwalk on December 31, 2015 in the above captioned matter pursuant to P.B. § 17-22 and the Superior Court Standing Orders JD-CV-104 Rev. 4-11.