Opinion
FSTCV136016775S
08-09-2017
JP Morgan Chase, N.A. v. Marie Caman
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
A. WILLIAM MOTTOLESE, JUDGE TRIAL REFEREE.
The self-represented defendant, Marie Caman, contests this residential foreclosure action in several different ways. The first of these is by her motion to dismiss filed May 8, 2017 (#238) which, at trial, the parties agreed was the operative motion to dismiss. Because the defendant is untrained in the law, the motion does not conform to a conventional format, e.g. (i) it begins by citing Rule 12 of the Federal Rules of Civil Procedure; (ii) it combines a memorandum of law with the motion; (iii) it includes grounds which are clearly not appropriate for a motion to dismiss. Nevertheless, " [I]t is the established policy of the Connecticut courts to be solicitous of pro se litigants and when it does not interfere with the rights of other parties to construe the rules of practice liberally in favor of the pro se party." (Internal quotation marks omitted.) Macricostas v. Kovacs, 67 Conn.App. 130, 133, 787 A.2d 64 (2001). " The modern trend, which is followed in Connecticut, is to construe pleadings broadly and realistically, rather than narrowly and technically." (Internal quotation marks omitted.) Beaudoin v. Town Oil Co., 207 Conn. 575, 587-88, 542 A.2d 1124 (1988). (Alternate citations omitted.) Hill v. Williams, 74 Conn.App. 654, 813 A.2d 130 (2003). " Whenever [the] language [of the pleadings] fails to define clearly the issues in dispute, the court will put upon it such reasonable construction as will give effect to the pleadings in conformity with the general theory which it was intended to follow, and do substantial justice between the parties ." (Emphasis in original; internal quotation marks omitted.) Dietter v. Dietter, 54 Conn.App. 481, 489, 737 A.2d 926, cert. denied, 252 Conn. 906, 743 A.2d 617 (1999). (Alternate citations omitted.) Id. at 655.
On January 24, 2017 the court (Tierney, J.) denied a prior motion to dismiss (#93) but later vacated that order. The parties are in accord that the more recent motion supersedes the prior motion.
The motion begins with the following assertion
(a) Plaintiff JP Morgan Chase Bank has filed a wrongful foreclosure Lawsuit seeking to foreclose on the Defendant property located in Fairfield County, CT. JP Morgan Chase Bank foreclosure complaint, and Bayview Loan Servicing evidence should be dismissed for failure to state a cause of action, failure to comply with conditions precedent, backdated mortgage assignment, lack of standing, failure of the proper plaintiff to prosecute this action, insufficient evidence that the substitute plaintiff Bayview Loan Servicing was the owner of the debt obligation, the record and pleadings did reflect many attempts by the Defendant to dispute the substitute plaintiff's claim to holder status, the complaint does not allege transfer of the note to Bayview Loan Servicing.
(b) Plaintiff's complaint should further be dismissed for failure to comply with mandatory conditions precedent required before filing suit and/or accelerating the terms of the note, fraud, misrepresentation of facts, and other misconduct by the party who filed the case and their subsequent parties, self-authenticating document's genuineness in certain third-party documents authorized or required by an existing contract and subject to the Uniform Commercial Code; General Statutes § 42a-1-202; see also General Statutes § 42a-8-114(2) (signatures on certain negotiable instruments).
Attached to the motion are several documents which were submitted in support of the motion. However, in an effort to comply with P.B. § 10-31(a), instead of swearing to the truth of the documents as required, the defendant attached several duplicates of acknowledgments which were taken before a notary public. Nevertheless, virtually all of these documents were introduced into the record at trial without objection. Similarly, the parties agreed at trial that the evidence presented there could be used to support or negate the motion. As an initial matter, the court notes that not all of the grounds asserted implicate the subject matter jurisdiction of the court. Thus, at this stage, the court will address only those grounds which clearly implicate subject matter jurisdiction, leaving the remainder for subsequent consideration.
There is a vital distinction between an acknowledgement and an oath. State v. Grant, 176 Conn. 17, 23-24, 404 A.2d 873 (1978).
The court begins with the well recognized principle that the plaintiff bears the burden of proving subject matter jurisdiction whenever and however raised. Fink v. Golenbock, 238 Conn. 183, 199, n.13, 680 A.2d 1243. At trial it became apparent that the only evidentiary issues legitimately relating to subject matter jurisdiction were the claims that the substitute plaintiff Bayview Loan Servicing, LLC (" Bayview") was not the proper plaintiff to prosecute this action and that there was insufficient evidence that the substitute plaintiff owned the debt. The basic principles which govern standing in a foreclosure are well recognized. " Generally, in order to have standing to bring a foreclosure action the plaintiff must, at the time the action is commenced, be entitled to enforce the promissory note that is secured by the property . . . The plaintiff's possession of a note endorsed in blank is prima facie evidence that it is a holder and is entitled to enforce the note, thereby conferring standing to commence a foreclosure action . . . After the plaintiff has presented this prima facie evidence, the burden is on the defendant to impeach the validity of [the] evidence that [the plaintiff] possessed the note at the time that it commenced the . . . action or to rebut the presumption that [the plaintiff] owns the underlying debt . . . The defendant [must] set up and prove the facts [that] limit or change the plaintiff's rights . . ." (Citations omitted; emphasis in original; internal quotation marks omitted.) Deutsche Bank National Trust Co. v. Bliss, 159 Conn.App. 483, 488-89, 124 A.3d 890, cert. denied, 320 Conn. 903, 127 A.3d 186 (2015). (Alternate citations omitted.) Deutsche Bank National Trust Co. v. Cornelius, 170 Conn.App. 104, 111, 154 A.3d 79, (2017).
Bayview Loan Servicing, LLC was ordered substituted for the named plaintiff on March 30, 2015 over the defendant's objection.
Terrence Schonleber, litigation manager for Bayview testified that the plaintiff's attorney, Bendett, Bendett and McHugh, P.C. gained possession of the note on July 18, 2009, years before the commencement of this action and has held it ever since. The documentary evidence demonstrates that the note was executed and delivered to First Magnus Financial Corporation (" First Magnus") on October 16, 2006 but the mortgage deed was taken in the name of Mortgage Electronic Registration Systems, Inc. (" MERS"). Thereafter, on March 1, 2012 the mortgage was assigned by MERS as nominee for First Magnus to JP Morgan Chase Bank NA (" Chase"), the named plaintiff, but the note was endorsed on an unspecified date to Washington Mutual Bank (" Washington Mutual"). Chase acquired the note as successor in interest by purchase from the Federal Deposit Insurance Corporation who became receiver for Washington Mutual. On October 16, 2006 by allonge the note was endorsed by Chase to Bayview. On December 7, 2013 the mortgage was assigned by Chase to Bayview.
As one court has explained, " MERS does not originate, lend, service, or invest in home mortgage loans. Instead, MERS acts as the nominal mortgagee for the loans owned by its members. The MERS system is designed to allow its members, which include originators, lenders, servicers, and investors, to assign home mortgage loans without having to record each transfer in the local land recording offices where the real estate securing the mortgage is located. " The benefit of naming MERS as the nominal mortgagee of record is that when the member transfers an interest in a mortgage loan to another MERS member, MERS privately tracks the assignment within its system but remains the mortgagee of record. According to MERS, this system saves lenders time and money, and reduces paperwork, by eliminating the need to prepare and record assignments when trading loans . . ." If, on the other hand, a MERS member transfers an interest in a mortgage loan to a non-MERS member, MERS no longer acts as the mortgage of record and an assignment of the security instrument to the non-MERS member is drafted, executed, and typically recorded in the local land recording office." (Internal quotation marks omitted.) Jackson v. Mortgage Electronic Registration Systems, Inc., 770 N.W.2d 487, 490-91 (Minn. 2009).
G.S. § 49-17 codifies the well established common-law principle that the mortgage follows the note. RMS Residential Properties, LLC v. Miller, 303 Conn. 224, 32 A.3d 307, 313 (2011). " The plaintiff's presentation of the note in court created a presumption that it had standing to prosecute the foreclosure action. The plaintiff's presentation of the assignments of the note and mortgage further buttressed its assertion that it possessed the note prior to the commencement of the foreclosure action because the assignment of the note and mortgage to the plaintiff 770 N.W.2d 487, 490-91 (Minn. 2009). Chase Home Finance, LLC v. Fequiere, 119 Conn.App. 570, 572, n.2, 989 A.2d 606 (2010). was dated more than ten years before the foreclosure action was commenced. The defendant did not present any evidence that the note possessed by the plaintiff is invalid or that the plaintiff did not possess the note at the time the present action was commenced." Id.
To the extent that this claim is based on the fact that Bayview did not become a party until 2015 it does not change the result. " An amendment substituting a new plaintiff [will] relate back if the added plaintiff is the real party in interest." . . ." An amendment to pleadings will relate back to its filing, at the very least, and back to the beginning of the action under appropriate circumstances. Sharp v. Mitchell, 209 Conn. 59, 70-75, 546 A.2d 846 (1988); Giglio v. Connecticut Light & Power Co., 180 Conn. 230, 239-40, 429 A.2d 486 (1980); see also Consolidated Motor Lines, Inc. v. M& M Transportation Co., 128 Conn. 107, 109, 20 A.2d 621 (1941). We see no reason why our general policy with respect to pleadings should not also apply in the context of the substitution of a plaintiff." FDIC v. Retirement Management Group, Inc., 31 Conn.App. 80, 84-85, 623 A.2d 517 (1993). The plaintiff has amply sustained its burden of proof and therefore has standing to bring this foreclosure action. The defendant has failed to rebut the presumption.
The remaining claims contained in the motion were not properly raised in the context of a motion to dismiss but to the extent that they have found their way into the defendant's answer and special defenses they will be given proper consideration. In an effort to clarify the confusion created by the defendant's practice of filing pleadings and other documents when not entitled to do so, the court (Tierney, J.) entered the following order on February 21, 2017.
" For example, where the terms of the note and mortgage require notice of default, proper notice is a condition precedent to an action for foreclosure." (Citations omitted; internal quotation marks omitted.) New Haven Savings Bank v. LaPlace, 66 Conn.App. 1, 12, 783 A.2d 1174, cert. denied, 258 Conn. 942, 786 A.2d 426 (2001) (alternate citation omitted). Such a defect is not subject matter jurisdictional. It merely provides authority to the court to withhold foreclosure in such a case.
The court finds that the operative Answer is the defendant, Marie Caman's, Defendant's Answer, Affirmative Defenses and Counterclaim dated November 16, 2016 #177.00. The court finds that the pleadings have been closed, a certificate of closed pleadings has been filed and the lawsuit is ready for trial.
The court finds that the defendant, Marie Caman, has not properly filed pleading #178.00, Defendant's Revised Contesting Answer, Affirmative Defenses and Counterclaim dated November 30, 2016.
The court finds that the defendant, Marie Caman, has not properly filed pleading #182.00, Cross-Claim to Quiet Title to Real Property dated December 21, 2016.
Before considering the merits of her special defenses the court would observe that the form of the answer and " affirmative defenses" do not conform to P.B. § 10-46, 10-50 and 10-51 but the thrust of the answer is that the defendant leaves the plaintiff to its proof of all the allegations of the complaint based on the defendant's " insufficient information." The individual defenses which are labeled " answers" will be taken in order. As for the special defenses, " [H]istorically, defenses to a foreclosure action have been limited to payment, discharge, release or satisfaction . . . or, if there had never been a valid lien . . . The purpose of a special defense is to plead facts that are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action . . . A valid special defense at law to a foreclosure proceeding must be legally sufficient and address the making, validity or enforcement of the mortgage, the note or both . . . Where the plaintiff's conduct is inequitable, a court may withhold foreclosure on equitable considerations and principles . . . [O]ur courts have permitted several equitable defenses to a foreclosure action. [I]f the mortgagor is prevented by accident, mistake or fraud, from fulfilling a condition of the mortgage, foreclosure cannot be had . . . Other equitable defenses that our Supreme Court has recognized in foreclosure actions include unconscionability . . . abandonment of security . . . and usury." Fidelity Bank v. Krenisky, 72 Conn.App. 700, 705-06, 807 A.2d 968, cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002). (Alternate citation omitted). GMAC Mortgage, LLC v. Ford, 144 Conn.App. 165, 181, 73 A.3d 742 (2013).
Answer #1 --Essentially this is the argument in support of the claim of lack of standing which the court has already rejected in adjudicating the motion to dismiss.
Answer #2 --Same as Answer #1
Answer #3 --This defense relates totally to MERS which acted as nominee for the lender, Magnus. MERS has never held the note but only held the mortgage. MERS' only involvement in the chain, post-closing, was to assign the mortgage to Chase. Since the mortgage follows the note, it is immaterial that MERS did not have possession of the note. See Chase Home Finance, LLC v. Fequiere, Id. at 576.
Answer #4 --This defense asserts a failure of consideration because no exchange of money or goods occurred between the substituted plaintiff, Bayview and the defendant. This claim overlooks the principle of negotiability which in our commercial world enables a debt instrument to be transferred to third parties. See G.S. § 42a-2-302 (holder in due course). Moreover, " consideration does not necessarily have to move from mortgagee to mortgagor." Molk v. Micklewright, 151 Conn. 606, 609, 201 A.2d 183 (1964). In point of fact the defendant admits in her papers that she received the $255,000 reflected in the note.
Answer #5 --The fact that neither the endorsement of the note by First Magnus to Washington Mutual nor the allonge from Chase to Bayview is undated is irrelevant because the defendant offered no evidence that the documents were dated subsequent to commencement of the action. Additionally, as long as the plaintiff or its agent is in possession of the note prior to commencement of the action " any discrepancy in the language of the assignment is not legally pertinent to the plaintiff's right to bring the foreclosure action." Property Asset Management, Inc. v. Lazarte, 163 Conn.App. 737, 748, 138 A.3d 290 (2016).
There are two allonges to Bayview attached to the note. The first is undated and the second is dated September 11, 2015 which is obviously a date subsequent to the commencement of this action. However, the first allonge is undated. Nevertheless, Schonleber testified that while Bayview began servicing the loan in November 2013 Chase serviced the loan prior to that time. Thus, Bendett and McHugh, LLC had been in possession of the note as Chase's agent since July 18, 2009, long before commencement of this foreclosure.
Answer #6 --This defense is predominately one which makes generalized statements decrying mortgage loan practices which the defendant claims prevailed nationally between 2004 and 2010. No specific allegations that the plaintiff engaged in any such practices are made. The defense concludes with the following statement which clearly does not constitute a cognizable defense to a foreclosure.
Because affiants have no personal knowledge of the underlying transaction, any statement which references this underlying transaction (such as the fact that the Plaintiffs are allegedly owed sums of monies in excess of $420, 00) is, by its very nature, hearsay.Answer #7 --This defense appears to imply from the quotation which is made without attribution that the plaintiff engaged in some unspecified practices which the defendant considers predatory and/or unconscionable. In Bank of America, N.A. v. Aubut, 167 Conn.App. 347, 377-82, 143 A.3d 638 (2016), our Appellate Court for the first time addressed the viability of a predatory practices defense to a foreclosure. The court held that such a defense was viable because the particular allegations of the pleadings implicated the more traditional defenses of fraud, unconscionability unclean hands and equitable estoppel. The defendant has offered no proof of facts which qualify for any of these defenses. The court notes further that Answer #7 is entitled " Home Ownership and Equity Protection Act" but has offered no analysis of how the act is applicable to the present case. To the extent that these claims implicate the requirement of written notice of default and acceleration the evidence is that such notice was given on March 23, 2010.
Answer #8 --This narrative describes an " event" at which a representative of Washington Mutual is claimed to have made certain representations including that the participants would be allowed to retain their homes. Even if this were true the defendant has provided no context for the statement. Neither this defense nor the evidence at trial contains any facts which would constitute fraud unconscionability, unclean hands or equitable estoppel.
Answer #9 --In this defense the defendant seems to allege that in 2009 the named plaintiff reneged on a modification agreement. The evidence reveals that on April 4, 2009 the defendant signed a " Special Foreclosure Agreement" which reduced her monthly payments from $1,675.17 to $500 to be paid in April, May and June of 2009. The agreement contains the following provision: " If all payments are made as scheduled, we will reevaluate your application for assistance and determine if we are able to offer you a permanent workout solution to bring your loan current." On November 19, 2009 the defendant signed another special forbearance agreement which raised her monthly payments for December 2009, January and February 2010 to $600. As far as can be determined it is the defendant's claim that the named plaintiff promised to send her a permanent modification agreement sometime subsequent to the last special forbearance agreement but never did, thus reneging on its promise. The defendant has provided no specifics as to the context of such an oral representation. Nevertheless, the defendant signed a Home Affordable Modification Agreement (HAMP) on June 29, 2016 with Bayview which modified the principal balance of the loan to $420,185.98 but deferred $75,100 of that to a later date, set a new maturity date of January 1, 2056, reduced the interest rate from 6.875% to a sliding scale which increased the rate from 2% to 4% over the life of the loan. This is the only HAMP agreement that was introduced into evidence. However, on June 30, 2016 the day after she signed the HAMP agreement, she sent Bayview a letter advising it that " due to unforeseen circumstances I cannot afford this payment, " requested that Bayview " not process the document" and advised that she would not send any of the payments required by the HAMP agreement. There was no evidence that Chase breached an agreement.
Answer #10 --This defense seems to break down into three parts. First, the alleged " failure to process the workout package" is discussed above. (See Answer #9.) Second, there is a claim that the plaintiff kept its " estimated price value of her house hidden for four years." There was no proof of that claim. Finally, the defendant has alleged " modification fraud" based on the assertion that the plaintiff led her " down the primrose path" believing a modification would be forthcoming and then sued her for foreclosure without warning. As stated in Answer #9 the evidence shows that the defendant in fact was given a modification to which she agreed but immediately repudiated.
Answer #11 --No cognizable defense can be discerned and is therefore legally insufficient.
Answer #12 --Same as Answer 11.
Answer #13 --Same as Answer 11.
Answer #14 --Same as Answer 11.
Next the defendant sets up four factual scenarios which partake both of special defenses and counterclaims. The court will treat them as special defenses.
Facts 1, 2, 3, 4 Do not raise a cognizable defense and are therefore legally insufficient. Moreover, none of these " Answers" or " Facts" even if proved, rise to the level of the objectionable conduct identified in Bank of America N.A. v. Aubut, supra .
As for the counterclaim, the defendant has attached two estimates for repair and renovation work for conditions which she claims the plaintiff caused to her home as a result of its conduct in handling the loan. The defendant seeks compensatory and punitive damages from both the named plaintiff and Bayview. While the defendant has not couched the language of the counterclaim as a breach of the covenant of good faith and fair dealing, the allegation appears to be most closely akin to that cause of action. In Barasso v. Rear Still Hill Road, LLC, 81 Conn.App. 798, 807, n.5, 842 A.2d 1134 the court stated " We recently stated that special defenses and counterclaims alleging a breach of an implied covenant of good faith and fair dealing . . . are not equitable defenses to a mortgage foreclosure." The same court held in New Haven Savings Bank v. LaPlace, 66 Conn.App. 1, 8, 783 A.2d 1174 (2001) that allegations in a special defense and counterclaim that the plaintiff failed to negotiate with the defendant, miscalculated the amount due, reneged on its agreement to reinstate the note, refused tenders and insisted on foreclosure were not related to the making, validity or enforcement of the note. Additionally, in J.P. Morgan Chase Bank, Trustee v. Rodrigues, 109 Conn.App. 125, 131-35, 952 A.2d 56 (2008) the court concluded that allegations that the plaintiff engaged in conduct which was grossly unfair, in bad faith and recklessly wrongful did not arise out of the same transaction as enforcement of the note. The defendant's allegations found in " Factual Allegations/Counterclaims" bear close resemblance to the allegations made in LaPlace and Rodrigues which were declared improper counterclaim allegations to a foreclosure because they described events which not only occurred long after the mortgage closing as in the present case but contain no facts which if proved, would establish a causal connection.
Finally in her testimony the defendant claims that she was not given proper credit for payments that she made on account. As proof, she offered into evidence photocopies of her checking account ledger (Exhibit J) as proof of payment. She offered no explanation of how these documents prove that the payment history which is in evidence as " Chase Detailed Transaction History" (Ex. 8) is in any way erroneous or incorrect because she failed to prove that these payments were not reflected in the payment history.
A judgment of foreclosure may enter for the plaintiff. The appraisal report is sufficiently current to facilitate the form of judgment. However, the affidavit of debt must be updated. Counsel may also file a motion for attorneys fees. Compliance is ordered in two weeks. A final hearing will be held August 23 at 9:30 a.m.