Opinion
No. CV-07-5002447
May 22, 2008
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT [#107]
FACTS
On December 18, 2006, the plaintiff, FV-1, Inc., filed the present foreclosure action against the defendants, Michael W. Forgey and Kay Forgey. Therein the plaintiff alleges the following facts. At all times relevant to the foreclosure action, the defendants owned real property situated at 201 Connecticut Avenue in New London. On May 15, 2006, defendant Michael W. Forgey executed and delivered to WMC Mortgage Corporation, a note for a loan in the original principal amount of $280,250.00, and in order to secure the note, the defendants executed and delivered to the nominee for WMC Mortgage Corporation, a mortgage on the property. The mortgage was subsequently assigned to the plaintiff, and the plaintiff is currently the holder of the note and mortgage. The plaintiff further alleges that the note is in default and that, as holder of the mortgage and note, it has elected to accelerate the balance due and to foreclose the mortgage securing the note.
On June 29, 2007, the defendants filed an amended answer and special defenses. Subsequent thereto, on July 27, 2007, the defendants filed amended special defenses and counterclaims. Therein, the defendants assert the following special defenses: (1) misrepresentation; (2) fraudulent inducement; (3) unconscionability; (4) equitable estoppel; (5) CUTPA violation; (6) breach of fiduciary duty; (7) denial of the allegation as to the debt and its calculation; (8) mistake; (9) unclean hands; and (10) TILA violation.
On June 14, 2007, the plaintiff filed a motion for summary judgment, as to liability on the complaint, on the ground that there are no genuine issues as to any material facts regarding the plaintiff's ownership of the note and mortgage, and the defendants' default on the payments.
DISCUSSION CT Page 8740
"Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party . . . The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled to judgment as a matter of law." (Internal quotation marks omitted.) Lopes v. Farmer, 286 Conn. 384, 388 (2008). "In ruling on a motion for summary judgment, the court's function is not to decide issues of material fact, but rather to determine whether any such issues exist." Nolan v. Borkowski, 206 Conn. 495, 500, 538 A.2d 1031 (1988).A. Prima Facie Case — Mortgage Foreclosure Action
"In a mortgage foreclosure action, [t]o make out its prima facie case, [the foreclosing party has] to prove by a preponderance of the evidence that it [is] the owner of the note and mortgage and that [the mortgagor has] defaulted on the note." Franklin Credit Management Corp. v. Nicholas, 73 Conn.App. 830, 838, 812 A.2d 51 (2002), cert. denied, 262 Conn. 937, 815 A.2d 136 (2003). "Furthermore, the foreclosing party must demonstrate that all conditions precedent to foreclosure, as mandated by the note and mortgage, have been satisfied." Washington Mutual Bank, F.A. v. Martins, Superior Court, judicial district of New London, Docket No. CV 03 0564550 (March 23, 2004, Martin, J.). See Bank of America, F.S.B. v. Hanlon, 65 Conn.App. 577, 581, 783 A.2d 88 (2001).
In support of its motion for summary judgment, the plaintiff has submitted properly authenticated copies of the mortgage deed signed by the defendants, the note signed by defendant Michael W. Forgey, and the mortgage assignment agreement. The plaintiff has also submitted documentary evidence establishing that the defendants are in default for failure to make payments, as required by the terms of the note and mortgage, and that proper notice of acceleration has been provided. In their memoranda of law in opposition to the motion for summary judgment, the defendants do not contest that they have defaulted, that the default has not been cured, or that the plaintiff owns both the note and mortgage. The plaintiff, therefore, has sufficiently demonstrated that there is no genuine issue of material fact as to the plaintiff's ownership of the note and mortgage or as to the defendants' status as defaulters. The court also finds that the plaintiff's documentary evidence satisfies the conditions precedent to foreclosure. Thus, the plaintiff has established a prima facie case for a mortgage foreclosure.
B. Legal Sufficiency of Special Defenses
"When a complaint and supporting affidavits establish an undisputed prima facie case for a foreclosure action, a court must only determine whether [a] special defense is legally sufficient before granting summary judgment." LaSalle National Bank v. Shook, Superior Court, judicial district of New London, Docket No. 549266 (July 13, 2000, Martin, J.), aff'd, 67 Conn.App. 93, 787 A.2d 32 (2001); see also Bank of New York Trust Co. v. GBEH, Superior Court, judicial district of Litchfield, Docket No. CV 07 5002495 (February 26, 2008, Marano, J). "[T]he purpose of a special defense is to plead facts that are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action . . . A valid special defense at law to a foreclosure proceeding must be legally sufficient and address the making, validity or enforcement of the mortgage, the note or both." (Internal quotation marks omitted.) Emigrant Mortgage Corp. v. D'Agostino, 94 Conn.App. 793, 802, 896 A.2d 814, cert. denied, 278 Conn. 919 (2006). "Summary judgment in favor of the defendant is properly granted if the defendant in its motion raises at least one legally sufficient defense that would bar the plaintiff's claim and involves no triable issue of fact." (Internal quotation marks omitted.) Serrano v. Burns, 248 Conn. 419, 424, 727 A.2d 1276 (1999). "Only one of [a defendant's] defenses needs to be valid in order to overcome [a] motion for summary judgment. [S]ince a single valid defense may defeat recovery, [a movant's] motion for summary judgment should be denied when any defense presents significant fact issues that should be tried." (Internal quotation marks omitted.) Union Trust Co. v. Jackson, 42 Conn.App. 413, 417, 679 A.2d 421 (1996). Furthermore, "[w]here the plaintiff's conduct is inequitable, a court may withhold foreclosure on equitable considerations and principles." (Internal quotation marks omitted.) Loricco Towers Condominium Ass'n. v. Pantani, 90 Conn.App. 43, 51, 876 A.2d 1211, cert. denied, 276 Conn. 925 (2005).
Since the plaintiff has established a prima facie case for the foreclosure action, this court must only determine whether the defendants have raised a legally sufficient special defense. The defendants have asserted ten special defenses. The first two special defenses allege misrepresentation, specifically fraudulent misrepresentation, and fraudulent inducement with regard to the actions of the mortgage broker/originator and the settlement agent. Due to their similarity, the court will address these special defenses together.
"Fraud is an equitable defense to a foreclosure action Fraud involves deception practiced in order to induce another to act to her detriment, and which causes that detrimental action . . . The four essential elements of fraud are (1) that a false representation of fact was made; (2) that the party making the representation knew it to be false; (3) that the representation was made to induce action by the other party; and (4) that the other party did so act to her detriment." (Citations omitted; internal quotation marks omitted.) Chase Manhattan Mortgage Corp. v. Machado, 83 Conn.App. 183, 188, 850 A.2d 260 (2004); see Petterson v. Weinstock, 106 Conn. 436, 183 A. 433 (1927); Heating Acceptance Co. v. Patterson, 152 Conn. 467, 208 A.2d 341 (1965). Actions of agents of a lender may also give rise to a defense of fraud. See Barasso v. Still Hill Road, LLC, 81 Conn.App. 798 (2004). However, a court, generally, will not invalidate a mortgage agreement against the lender "unless [it] in some way participated in or knew of the fraud." First Charter National Bank v. Ross, 29 Conn.App. 667, 672, 617 A.2d 909 (1992).
"Fraud and misrepresentation cannot be easily defined because they can be accomplished in so many different ways. They present, however, issues of fact . . . [S]ummary judgment procedure is particularly inappropriate where the inferences which the parties seek to have drawn deal with questions of motive, intent and subjective feelings and reactions." (Citations omitted; internal quotation marks omitted.) Barasso v. Still Hill Road, LLC, supra, 81 Conn.App. 806.
Based on the defendants' pleadings and the documentary evidence submitted, the court finds that the defendants have presented the necessary factual predicate for the special defenses of misrepresentation and fraud in the inducement. Furthermore, viewed in the light most favorable to the defendants, the facts alleged in the special defenses and the documentary evidence submitted by the defendants raise several areas in which factual determinations may control the outcome. For example, genuine issues of material fact exist as to whether the mortgage broker/originator and/or settlement agent's actions constituted fraud; whether the lender directed or exercised control over the mortgage broker/originator thereby creating an agency relationship sufficient to impose liability for the alleged fraud; and whether the plaintiff, as assignee of the mortgage, took it subject to all defenses which might have been asserted against the assignor by participating in the alleged fraud or having reason to know of its existence.
Since only one legally sufficient special defense is needed in order to defeat a motion for summary judgment, as to liability, in a foreclosure action, the court need not address the remaining eight special defenses asserted by the defendants.
CONCLUSION
Based on the foregoing, the court hereby denies the plaintiff's motion for summary judgment as to liability.