Opinion
HHDCV186087070S
01-29-2020
Joyce M. Keating v. Krzysztof Matusik
UNPUBLISHED OPINION
Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Shapiro, Robert B., J.T.R.
MEMORANDUM OF DECISION
ROBERT B. SHAPIRO JUDGE TRIAL REFEREE.
On January 21, 2020, the plaintiff’s motion for partial summary judgment (#119) as to liability and as to the defendant’s special defenses appeared as a take papers matter on the Short Calendar. The defendant filed an objection (#121). After consideration, the court issues this memorandum of decision.
I
Background
The plaintiff seeks to recover a claimed balance due on a promissory note executed by the defendant in October 2011 for the principal sum of $330, 000.00 (Plff. Exh. A) (note). The note provides, in relevant part, that the defendant promised to pay the principal sum with interest "together with all taxes levied or assessed on said sum or this note against the payee or holder hereof and together with all costs and attorneys fees incurred ..."
The note further provides, "Upon default in the payment of principal when due and/or interest under this note or the aforesaid taxes, or any other monies due hereunder, for a period of ten (10) days after the same shall be due and payable, or upon default in the performance of any further covenants and agreements of the Maker contained in the mortgage securing this note or in related documents for a period of thirty (30) days after written notice of any such default has been given ... then and in every such event, the unpaid balance of this note shall at the option of the Holder hereof, become due and payable on demand." (Emphasis added.)
The note was secured by a mortgage on real property located in Enfield, Connecticut (Premises). See Plaintiff’s Exh. B (mortgage). Paragraph 3 of the mortgage states that the defendant, referred to therein as Borrower, "shall pay all taxes, assessments, charges, fines and impositions attributed to the Premises which could obtain a priority over this Mortgage Deed."
In her amended complaint (#103) (complaint), paragraph 4, the plaintiff alleges that the defendant failed to pay real estate taxes to the Town of Enfield (Town), which constitutes a default of the defendant’s obligations under the note and mortgage. The plaintiff alleges that, as a result, she paid the sum of $25, 970.80 to the Town for the real estate taxes which should have been paid by the defendant.
The plaintiff also alleges that, in an effort to mitigate her damages, the premises were sold in October 2017 and the buyers executed a Note and Mortgage in the amount of $254, 000.00 in favor of the plaintiff. She alleges that the defendant owes her $78, 366.49, for which she has made demand, plus attorneys fees and costs pursuant to the terms of the note.
The plaintiff seeks summary judgment as to liability only and as to the defendant’s six special defenses. In opposition, citing the terms of the note, the defendant argues that the plaintiff has failed to demonstrate that he breached the note. He also argues that the plaintiff’s presentation in support of the motion has done nothing to overcome his Third, Fourth or Fifth Special Defenses. See Amended Answer and Special Defenses (#115). Respectively, these are based on allegations concerning failure to mitigate damages, payment, and accord and satisfaction. He claims that the plaintiff caused and/or allowed the Premises to be sold for less than fair market value and accepted the sale in full satisfaction of the defendant’s debt.
II
Standard of Review
"In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact. The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle[s] him to a judgment as a matter of law. The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ... As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent ... When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ... Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue ... It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact ... are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § 380 [now § 17-45]." (Internal quotation marks omitted.) Fiano v. Old Saybrook Fire Co. No. 1, Inc., 332 Conn. 93, 101, 209 A.3d 629 (2019).
Since "any valid special defense raised by the defendant ultimately would prevent the court from rendering judgment for the plaintiff, a motion for summary judgment should be denied when any [special] defense presents significant fact issues that should be tried." (Internal quotation marks omitted.) Cadle Co. v. Ogalin, 175 Conn.App. 1, 10, 167 A.3d 402, cert. denied, 327 Conn. 930, 171 A.3d 454 (2017).
III
Discussion
A
Liability
As noted above, the plaintiff alleges that the defendant’s default stems from his failure to pay real estate taxes to the Town. In his deposition testimony (Exhibit H), page 38, the defendant admitted that the plaintiff made demands that he pay the real estate taxes and that he did not pay them.
The defendant presents argument concerning the terms of the note, referring to the term "aforesaid taxes," quoted above and arguing that the note does not include a provision for payment of real estate taxes. He asserts that reliance on nonpayment of real estate taxes for alleging a breach of the note is misplaced and that this is the premise of his first and second special defenses, which allege, respectively, that the damages the plaintiff seeks to recover are not allowed under the terms of the note and that the plaintiff failed to make demand.
The defendant’s argument concerning the note’s terms ignore those quoted above, which also define an event of default as including "default in the performance of any further covenants and agreements of the Maker contained in the mortgage." (Emphasis added.) The terms of the mortgage obligated the defendant to "pay all taxes, assessments, charges, fines and impositions attributed to the Premises which could obtain a priority over this Mortgage Deed." See mortgage. Thus, the defendant’s acknowledged failure to pay real estate taxes was a default under the note.
As to the second special defense, which alleges that the plaintiff failed to make demand, demand was expressly waived in the note, page 2, and, as set forth above it is undisputed that the plaintiff made demand. See Plaintiff’s Exhibit D.
B
Mitigation of Damages
In the complaint, paragraph 8, the plaintiff alleges that she agreed to the October 2017 note and mortgage signed by the buyers of the Premises "in an effort to mitigate her damages." In the third special defense, the defendant alleges that the Premises were not sold for fair market value, that he is entitled to a credit of the actual market value as of said date, and the plaintiff’s claim is barred, in whole or in part, by her failure to mitigate her damages.
In his deposition testimony, page 35, the defendant stated that, other than the fact that no appraisal was conducted, he had no other reason to believe that the property was not sold for fair value. He also stated that he had no idea what the fair market value was in October 2017. He acknowledged also that he is not aware of any documentation which would support the third special defense.
"To claim successfully that the plaintiff failed to mitigate damages, the defendant must show that the injured party failed to take reasonable action to lessen the damages; that the damages were in fact enhanced by such failure; and that the damages which could have been avoided can be measured with reasonable certainty." (Internal quotation marks omitted.) Sun Val, LLC v. Comm’r of Transportation, 330 Conn. 316, 334, 193 A.3d 1192 (2018). "What constitutes a reasonable effort under the circumstances of a particular case is a question of fact for the trier ... [T]he breaching party bears the burden of proving that the nonbreaching party has failed to mitigate damages ... The defendant thus bears the burden of proving that the plaintiff failed to make reasonable efforts to mitigate the amount of damages." (Internal quotation marks omitted.) Webster Bank, N.A. v. GFI Groton, LLC, 157 Conn.App. 409, 424, 116 A.3d 376 (2015).
Here, the plaintiff has pleaded that she agreed to the sale of the Premises in an effort to mitigate damages. She argues that the defendant agreed to the sale price, and if it was for less than fair market value, that was his choice; and he has no idea what the fair market value was in 2017. As stated above, the defendant testified that there was no appraisal when the Premises were sold.
Superior Court decisions differ on whether mitigation of damages is a valid special defense. "Some courts have held that ... [m]itigation of damages is not a valid special defense because it does not allege that a plaintiff has no cause of action ... but only that the damages, if any, should be decreased." (Internal quotation marks omitted.) THCI Co., LLC v. Dickstein, Superior Court, judicial district of Tolland, Docket No. CV 13 5005827 (June 9, 2014, Bright, J.). These courts note that "the intended purpose of a special defense is to make the argument that, even if proven, the facts in the plaintiff’s complaint do not support a cause of action. It is not the purpose of a special defense to determine the size or amount of the award or whether there should be even one. The defendant has every right to elicit evidence and testimony which challenges the plaintiff’s claim of damages. Doing it by use of a special defense is unnecessary and unauthorized by [Practice Book] § 10-50." Medico v. Fitzburgh, Superior Court, judicial district of Fairfield, Docket No. CV 03 0403104 (April, 1, 2004, Doherty, J.) (36 Conn.L.Rptr. 743). Conversely, "[o]ther courts have held that failure to mitigate damages should he pled as a special defense to provide the plaintiff with notice of a claim to which it will have to respond." THCI Co., LLC v. Dickstein, supra, Superior Court, Docket No. CV 13 5005827.
Obviously, the plaintiff here is on notice concerning mitigation of damages, since she pleaded it herself. The plaintiff’s motion expressly seeks a judgment on liability only, not as to damages. The defendant’s special defense concerning mitigation of damages relates to damages, not liability. As discussed above, what constitutes a reasonable effort to mitigate under the circumstances of a particular case is a question of fact for the trier. Accordingly, for the reasons stated above, as to the third special defense, concerning mitigation of damages, the court treats the plaintiff’s motion as a motion to strike and strikes the third special defense as unnecessary and unauthorized by Practice Book § 10-50.
C
Payment
In his fourth special defense of payment, the defendant alleges that the plaintiff accepted the sale of the property as settlement in full of the debt due under the note. "The burden of pleading and proving the special defense of payment rests on the defendant." Atl. Nat. Tr., LLC v. Van Eck, 89 Conn.App. 200, 209, 873 A.2d 179 (2005).
The plaintiff argues that there is no evidence that she agreed to accept some amount less than the full amount of the debt in satisfaction thereof and that lesser amount has been paid. The agreement concerning the sale, see plaintiff’s Exhibit F, does not so provide. At his deposition, the defendant testified that he never entered into such an agreement with the plaintiff and that he has no documentation to support this special defense. See plaintiff’s Exhibit H, pp. 38-39, 42. The defendant has not presented evidence to demonstrate the existence of a genuine issue of material fact concerning this special defense. Accordingly, since there is no evidence to support this special defense, the plaintiff is entitled to judgment as a matter of law concerning it.
D
Accord and Satisfaction
Similarly to his allegations in the fourth special defense, in his fifth special defense, the defendant alleges that the plaintiff accepted the sale of the property as settlement in full of the debt under the note; he alleges that the plaintiff s claims are barred, in whole or in part, by the doctrine of accord and satisfaction. The plaintiff argues that she is entitled to judgment as a matter of law as to the fourth special defense since the defendant cannot demonstrate the existence of any settlement agreement between the parties.
"When there is a good faith dispute about the existence of a debt or about the amount that is owed, the common law authorizes the debtor and the creditor to negotiate a contract of accord to settle the outstanding claim ... An accord is a contract under which an obligee promises to accept a stated performance in satisfaction of the obligor’s existing duty ... Upon acceptance of the offer of accord, the creditor’s receipt of the promised payment discharges the underlying debt and bars any further claim relating thereto, if the contract is supported by consideration ... Although the case law presents the more usual use of accord and satisfaction as a defense by the debtor against the creditor, it is evident that accord and satisfaction equally applies to both parties. Accord and satisfaction is a method of discharging a claim whereby the parties agree to give and accept something other than that which is due in settlement of the claim and to perform the agreement ... Indeed, a validly executed accord and satisfaction precludes a party from pursuing any action involving the original, underlying claim ... The defendant bears the burden of proving accord and satisfaction when it is pleaded as a special defense ...
’A trial court’s determination with respect to whether a claim has been discharged by accord and satisfaction is a question of fact ... [W]hether a meeting of the minds has occurred is a factual determination[.]" (Citations omitted; internal quotation marks omitted.) Assn. Resources, Inc. v. Wall, 298 Conn. 145, 187-88, 2 A.3d 873 (2010).
"To prove an accord and satisfaction, the defendant must show that at the time of the agreement there was a good faith dispute over the existence of a debt or over an amount owed, and that the debtor and the creditor negotiated a contract of accord to settle the claim ... The accord must be a new agreement based on new consideration ... The proponent must be able to show that there was a meeting of the minds, and that the offer by the debtor was clearly tendered as full satisfaction of the debt and that the payment was knowingly accepted." (Citations omitted.) Munroe v. Emhart Corp., 46 Conn.App. 37, 42-43, 699 A.2d 213, cert. denied, 243 Conn. 926, 701 A.2d 658 (1997).
As discussed above, the defendant testified at his deposition that he never entered into a settlement agreement with the plaintiff and that he has no documentation to support this special defense. See plaintiff’s Exhibit H, pp. 38-39, 42. The defendant has not presented evidence to demonstrate the existence of a genuine issue of material fact concerning this special defense. Accordingly, since there is no evidence to support this special defense, the plaintiff is entitled to judgment as a matter of law concerning it.
E
Equitable Estoppel
The defendant presents no argument in response to the plaintiff’s argument as to the sixth special defense, in which the defendant alleges that the plaintiff’s claim is barred, in whole or in part, by the doctrine of equitable estoppel. Since no argument was presented the defense is deemed to be abandoned. See Hilario’s Truck Cir., LLC v. Rinaldi, 183 Conn.App. 597, 599 n.3, 193 A.3d 683, cert. denied, 330 Conn. 925, 194 A.3d 776 (2018).
As to estoppel, the recognized elements are as follows: "the party must do or say something which is intended or calculated to induce another to believe in the existence of certain facts and to act upon that belief; and the other party, influenced thereby, must actually change his position or do something to his injury which he otherwise would not have done. Estoppel rests on the misleading conduct of one party to the prejudice of the other. In the absence of prejudice, estoppel does not exist." (Internal quotations marks omitted.) SKW Real Estate Ltd. P’ship v. Mitsubishi Motor Sales of Am., Inc., 56 Conn.App. 1, 8, 741 A.2d 4 (1999), cert denied, 252 Conn. 931, 746 A.2d 793 (2000).
It is the defendant’s burden to present evidence to support his special defense of estoppel. Since no argument or evidence was presented as to either element, summary judgment is properly granted as to the sixth special defense. See Southbridge Assocs., LLC v. Garofalo, 5 Conn.App. 11, 20, 728 A.2d 1114, cert. denied, 249 Conn. 919, 733 A.2d 229 (1999).
CONCLUSION
For the foregoing reasons, the plaintiff’s motion for summary judgment as to liability only is granted in part and, as to the third special defense, is treated as a motion to strike, which is granted. Judgment may enter for the plaintiff and against the defendant as to liability and as to the defendant’s first, second, fourth, fifth, and sixth special defenses. The third special defense is stricken.