Opinion
No. CV 06-50006016 S
December 12, 2007
MEMORANDUM OF DECISION
This is an objection to the Committee's Motion for Approval of Sale.
Procedural History
1. On November 21, 2002, the defendant executed and delivered to 1-800-East-West Mortgage company, Inc. a note for a loan in the amount of $190,000.00. On that same date, the defendant, to secure the note, executed a mortgage. 1-800-East-West Mortgage Company, Inc. later assigned the note to the plaintiff.
2. On September 5, 2006, after the defendant had defaulted on the loan, the plaintiff brought a foreclosure action against him.
3. On September 22, 2006, the defendant filed an application for protection from foreclosure and on October 16, 2006, the Court (DeMayo, J.T.R.) denied the application.
4. On October 30, 2006, the court, (Crawford, J.) entered a judgment of strict foreclosure and set January 8, 2007 as the Law Day.
5. On December 20, 2006, the defendant filed a motion to open and modify judgment. In support of the motion, the defendant offered his own appraisal and requested foreclosure by sale. On January 8, 2007, the court (Crawford, J.) vacated the judgment of strict foreclosure and entered a new judgment of foreclosure by sale, with April 28, 2007 as the sale date.
6. On April 12, 2007, the defendant filed second motion to open and requested that the sale date be extended by sixty days. On April 16, 2007, the court (Crawford, J.) extended the sale date to June 23, 2007.
7. On June 18, 2007, the defendant filed a third motion to open and again requested an extension of the sale date. On June 19, 2007, the court (DeMayo, J.T.R.) extended the sale date to August 18, 2007.
8. On August 17, 2007, the defendant filed a fourth motion to open and requested another sixty-day extension of the sale date or a clarification. On August 17,2007, the court (Crawford, J.) denied the fourth motion to open.
9. On August 18, 2007, the Committee, Attorney Laurence P. Nadal, conducted the sale and Douglas Malloy was the successful bidder, with a bid in the amount of $161,500.00.
10. On August 20, 2007, the Committee moved for approval of the sale and acceptance of his report. On the same date, the defendant filed this objection to the sale.
Discussion
The trial court in a foreclosure matter acts as a court of equity and has full authority to refuse to confirm a sale on equitable grounds where an unfairness has taken place or where the price bid was inadequate. CitiCorp Mortgage, Inc. v. Burgos 227 Conn. 116 121-23, 629 A.2d 410 (1993). The appraisal procedure provided by C.P.B. § 49-25 performs the function of giving the trial court guidance on the question of whether to approve the sale. New England Savings Bank v. Lopez, 227 Conn. 270, 279, 630 A.2d 1010 (1993).
In this case, the open-end mortgage deed identified the property as 68 Hawthorne Street, West Haven (pg. 3 of 14). The legal description was attached, and included lot #108 and lot #109. The plaintiff, in its complaint, also identified the property as 68 Hawthorne Street and attached the legal description, which included lot # 108 and lot #109.
On September 1, 2006, the plaintiff's appraiser Laurence Rose, determined the fair market value to be $195,000.00, with $80,000.00 attributed to the value of the land and $115,000.00 to the value of the structure on the land. On October 30, 2006, the court found the debt to be $191,686.17 (excluding fees), and entered a judgment of strict foreclosure . . . In support of the first motion to open, the defendant had offered an appraisal by Robert Opotzner. Mr. Opotzner determined the fair market value to be $218,938.00. However, he reduced that estimate because of the condition of the property. With the reduction, he determined the fair market value to be $215,000.00, with $125,000.00 allocated to the value of the land and $90,000.00 to the structure on the land. The legal description he had attached to the appraisal included lot #108 and lot #109.
On January 8, 2007, the court found the fair market value to be $215,000.00 (defendant's appraisal) and entered judgment of foreclosure by sale.
In support of the second motion to open, the defendant represented to the court that he was negotiating a sale of the property, and that he also had a contract for the sale of lot #109. The contract he submitted was for 64 Hawthorne Street, lot #109 and his address was listed as 36 Center Street, West Haven. The buyer was listed as Manico Development Contractors, LLC and the purchase price was $100,000.00. However, the sale was subject to the following conditions:
1. The plaintiff (J.P. Morgan Chase Bank) had to approve separation of lot #109 from lot #108 or the court had to order the separation:
2. The buyer (Manco Development Contractors, LLC) had to secure a building permit on the separate lot within five days of the separation: and
3. The closing had to occur no later than May 8, 2007, unless both agreed, in writing, to extend the date. If there was no agreement in writing, then the contract would terminate.
In support of the third motion to open, the defendant again represented that he was in negotiations to sell the property. This information was substantially the same as that presented in support of the second motion to open. Additionally, the defendant had submitted a letter dated June 6, 2007, from the land title department of Homecoming Financial, LLC. The letter was in response to the defendant's request for a partial release on 68 Hawthorne Street. The defendant had to provide by July 5, 2007, or two weeks before the foreclosure sale date, an appraisal giving the current before and after value of the property to be retained on the Deed of Trust Mortgage, prepared by a licensed appraiser. He also needed a plat or survey by a licensed surveyor, the legal description of the property to be released, and the property to remain encumbered by the mortgage. The defendant was unable to secure either the plaintiff's approval or a court order separating the lots.
In support of the fourth motion to open and or clarification, the defendant again represented that he was in negotiation for the sale of the property. He further stated that 64 Hawthorne Street was adjacent to 68 Hawthorne Street and should be separated from 64 Hawthorne Street, treated as separate properties, and valued separately.
The defendant also attached a sale agreement dated August 15, 2007, for 68 Hawthorne Street. The buyer was Property Preservation Group, LLC. The property was identified as a single family house, to be sold "as is." The buyer offered to pay $190,000.00 in cash and planned to demolish the house. Schedule A with the legal description was attached which included lot #108 and lot #109. September 1, 2007 was set as the date for closing. The defendant had one day to accept the offer.
On August 17, 2007, the court denied the fourth motion to open, reiterated that judgment entered on 68 Hawthorne Street, that the appraisals were on 68 Hawthorne Street and that 68 Hawthorne Street was the property to be sold. The court further stated that nothing needed to be clarified.
There isn't any dispute that all the documents which had the legal description of the property attached referenced 68 Hawthorne Street and, included both lots #108 and #109. Mr. Rose stated at the hearing that he appraised the property identified as 68 Hawthorne Street and looked at both lots. Mr. Opotzner stated that although he had the legal description, which included both lots, he only looked at one. However, his appraisal was over twenty-five thousand dollars ($25,000.00) higher than the appraisal by Mr. Rose.
The court recognizes that an appraisal is an art and not a science. The court did adopt the FMV of 68 Hawthorne Street, which included lots #108 and #109 offered by the defendant. Furthermore, the legal description published in the New Haven Register included both lots. Additionally, the Notice to Bidders (bid sheet) provided by the committee at the auction included the Legal description identifying two lots. Finally, Mr. Malloy, the successful bidder stated that the structure on the land would cost at least $50,000.00 to repair and one could not tell where one lot ended and the other started. This testimony was not disputed.
The party who signed the contract on behalf of Manico Development Contractors, LLC and Property Preservation Group, LLC was the same person, Mr. Greenberg. Mr. Greenberg and Mr. Molloy, the successful bidder appear to have a business relationship.
However, that relationship has no effect on the legal description of the property which includes lots # 108 and #109.
The defendant had also submitted a letter from the city of West Haven Planning and Development Department. This letter was dated March 7, 2007 and had not previously been submitted to the court. This letter was in response to the defendant's request regarding a determination of the zoning status of 64 Hawthorne Street. The letter refers to lot #108 and the defendant identified lot #108 in his motion as 68 Hawthorne Street. The city planner does not state in his response that lot #109 is a building lot separate from 68 Hawthorne Street and lot #108.
The defendant for over a year has tried to change the legal description of the property and have lot #108 and lot #109 declared to be two separate and distinct building lots. However, to date, he has been unsuccessful.
Conclusion
The court has evaluated the evidence and assessed the credibility of the witnesses. The court finds that the objection to the sale is simply another attempt to get the court to order a separation of lots #108 and #109. However, the mortgage is on both lots, and the plaintiff sought to foreclose on the property which included both lots. Additionally, the notice of publication, attachments to the defendant's motions and the information on the Notice to Bidders (bid sheet) all had the legal description attached. The description was the same in each instance and included both lots.
Finally, the purchase price at the auction was in excess of seventy percent (70%) of the Fair Market Value. Therefore, the court concludes that the process to auction was fair and the price bid was adequate.
Accordingly, the objection to the Sale is overruled. The Sale is approved and the Committee should close as soon as possible but no later than within thirty days.