Opinion
No. 4007249
August 6, 2007
MEMORANDUM OF DECISION RE PLAINTIFF'S MOTION FOR A TEMPORARY INJUNCTION
FACTS
On March 8, 2006, plaintiff executed an Adjustable Rate Note in favor of America's Wholesale Lender in the original principal balance of $190,000.00. Thereafter, plaintiff executed a Mortgage Deed in favor of Mortgage Electronic Registration Systems, Inc., solely as nominee for America's Wholesale Lender in the original principal balance of $190,000.00 dated March 28, 2006 and recorded on May 30, 2006 in volume 2254 at Page 179 of the Norwich Land Records. Said mortgage was secured by the subject property known as 20 Wilmont Avenue, Norwich, Connecticut.
Mortgage Electronic Registration Systems, Inc. assigned the mortgage to Bank of New York as Trustee for the Certificateholders CWABS, Inc., Asset-Backed Certificates, Series 2006-12 by virtue of an Assignment of Mortgage dated January 29, 2007 and recorded February 7, 2007 in Volume 2351 at Page 328 of the Norwich Land Records.
A foreclosure action bearing docket number CV07-5002627-S was commenced by virtue of a Writ, Summons and Complaint dated January 2, 2007 with a return date of January 23, 2007. This court takes judicial notice of the pleadings contained within Docket Number CV-07-5002627-S. Plaintiff, as defendant in the foreclosure action, was served on January 10, 2007 via in hand service of process by the state marshal at the subject property address of 20 Wilmont Avenue, Norwich, Connecticut.
A motion for Default for Failure to Appear against plaintiff dated January 26, 2007 was certified to plaintiff at the subject property address of 20 Wilmont Avenue, Norwich, Connecticut. Plaintiff did not subsequently appear.
Plaintiff was sent reinstatement figures by virtue of a letter dated January 29, 2007. The figures were good through February 8, 2007. Plaintiff never reinstated his loan pursuant to the reinstatement letter. Additionally, plaintiff was evaluated for a repayment plan in January of 2007 and February of 2007. He was declined due to his failure to contact defendant's Loss Mitigation Department.
A Motion for Judgment of Strict Foreclosure (along with a copy of the appraisal) was filed on February 6, 2007. As plaintiff was non-appearing at the time this motion was filed, this motion was not certified to him. Judgment of Strict Foreclosure entered on February 26, 2007 with a Law Day set for March 26, 2007. Notice of Judgment of Strict Foreclosure was certified to plaintiff at the subject property address on March 19, 2007. Plaintiff did not file an appeal, a bankruptcy petition or a motion to open the judgment of strict foreclosure.
On March 26, 2007, plaintiff failed to redeem on his designated law day. On March 27, 2007, title absolutely vested in the name of Bank of New York as Trustee for the Certificateholders CWABS, Inc., Asset-Backed Certificates, Series 2006-12 by virtue of a Certificate of Foreclosure dated March 27, 2007 and recorded March 28, 2007 in Volume 2366 at Page 14 of the Norwich Land Records. Plaintiff, thereafter, attempted to open the Judgment of Strict Foreclosure two months post-vesting. This court, Devine, J., denied Plaintiff's Motion to Open the Judgment of Strict Foreclosure on June 15, 2007. On or about June 12, 2007, plaintiff filed the instant Prayer for Injunctive Relief and Vacating a Judgment of Strict Foreclosure.
ARGUMENT AND APPLICABLE LAW
The plaintiff, in the present controversy, on or about June 12, 2007, commenced this action in equity seeking a temporary and permanent injunction: (1) to prevent the defendant from ejecting the plaintiff from the subject property; (2) to vacate the judgment of strict foreclosure in the previously filed foreclosure action; and (3) to seek an order for a new foreclosure sale. The parties appeared before the court on June 2, 2007 where a hearing was held on plaintiff's application for a temporary injunction. The parties argued and submitted briefs with the last brief filed on July 9, 2007.
The plaintiff seeks relief from the court by way of temporary injunction prohibiting the defendant from ejecting the plaintiff from his residence. Title to said property is vested in the defendant by court judgments on March 27, 2007 by way of the certificate of foreclosure referenced above.
The law in our jurisdiction is clear that a judgment of foreclosure cannot be open after the title has become absolute. Meriden Savings Bank v. Sujdak, 124 Conn. 604, 611 (1938). Error in opening after law day may be waived. Ferguson v. Salo, 115 Conn. 619, 623 (1932). In the absence of waiver, however, reopening after law day constitutes error. Crane v. Lewis, 128 Conn. 697, 700 (1942).
The plaintiff bears the burden to prove the following in order for the court to issue a temporary injunction: (1) imminent substantial and irreparable injury; (2) lack of an adequate remedy at law; (3) likelihood of success on the merits; and (4) that a balancing of the equities favors granting of the injunction. Moore v. Ganim, 233 Conn. 551, 569 n. 25 (1995); Waterbury Lenders Ass'n. v. Freedom of Information Commission, 230 Conn. 441, 446 (1994).
The defendant argues that the court is barred from hearing temporary injunction applications based upon the doctrine of res adjudicata. The present action is brought in equity. Our courts have recognized instances where the effect of the judgment may be colaterally attacked. Courts of equity may grant relief from the operation of a judgment when to enforce it would be unconscionable. East Hartford v. Miller, 27 Conn.Sup. 503, 506 (1968); or where a party can establish facts tending to show fraud, accident or mistake in connection with the entry of the original judgment of foreclosure. Crane v. Lewis, supra, 700. If such grounds are established then the court may determine that grounds for independent equitable relief exist. Hoey v. Investor's Mortgage Guaranty Co., 118 Conn. 226, 230 (1934).
The court has the power to grant injunctive relief to the plaintiff if he prevails in his burden of proof. The parties concede that based upon case and statutory law, the plaintiff has proven the second prong of the common-law test: i.e. he has no adequate remedy at law. As to the first prong, imminent and substantial injury, if the court does not grant the relief requested, the plaintiff will lose possession of his residence and potentially be subject to the deficiency judgment when the court deals with the reopened foreclosure as a subsequent short calendar hearing. This court concludes, over the argument of the defendant (no deficiency judgment sought and order in the foreclosure case) that imminent and substantial injury has been proven. As to the remaining prongs of the test for temporary injunction, the court must analyze the record of the foreclosure case and evidence and testimony submitted by the parties in the present case.
The plaintiff submitted testimony from a licensed real estate appraiser concerning the value of the subject property. The appraiser testified from appraisal reports that the value of the subject property as of March 10, 2006 was $227,000.00 and as of May 29, 2007 was $215,000.00. The appraiser failed to testify as to the value of the subject property on the date of the judgment of foreclosure (February 26, 2007). The plaintiff also testified concerning alleged memory losses because of a vehicular accident in 1999. He further stated he was taking medication because of the brain injury. He further stated he had a "helper" who lived with him who assisted him in personal and business matters.
It is important to note that the helper was not called to testify before the court. No evidence was offered to verify a medical and/or psychological condition and its effects on his ability to file an appearance in the foreclosure matter. The plaintiff did not deny that he had received the writ, summons and complaint, motion for default for failure to appear, notice of entry of default and notice of entry of judgment. The plaintiff offered no evidence of his attempt to sell the property on his own, refinance or otherwise pay off or reinstate the mortgage loan should the judgment of strict foreclosure be vacated by extraordinary equitable relief.
The plaintiff argues that the foreclosure judgment should be vacated. It is clear by the evidence that the plaintiff has not proved fraud or accident. The plaintiff contends in essence that the judgment of foreclosure should be vacated because valuation of the property found by the court at the time of the judgment was in fact a mistake due to the alleged error of the bank's appraiser. The value found by the court in the foreclosure case was $145,000.00. The plaintiff's appraiser in the present case testified the property was worth $227,000.00 for refinance purposes as of March 2006 a precipitous drop in value as of the date of judgment.
Based upon these facts alone, the plaintiff's argument appears sound. However, the court must look to all of the equitable factors including all monetary issues in question. The plaintiff as of the date of the foreclosure judgment owed the defendant $196,268.70. If the court were to vacate the judgment, the plaintiff would also owe per diem interest of $41.58 per day together with additional fees and costs. The court adopts the following table below submitted by the defendant in its memorandum filed June 28, 2007:
$ 50.00 TOTAL $ 218,687.97
Judgment Debt through February 26, 2007 $ 196,268.70 Interest through Injunction Hearing dated July 2,1007 126 days @ $41.58 per day $ 5,239.08 Interest for an additional 180 days to complete a sale $ 7,484.40 Attorneys fees found on February 26, 2007 $ 1,350.00 Additional fees for the objection to motion to reopen and/or Injunction hearing $ 1,200.00 Estimated Committee Fees/Costs $ 5,000.00 Estimated July 2007 Taxes $ 1,067.04 Appraisal Fee $ 320.00 Title Search $ 225.00 Court Entry Fee $ 225.00 State Marshal Fee $ 146.75 Statutory Certified Copies $ 20.00 Writ Fee $ 17.00 Trial of an Issue of Fact $ 75.00 Fees Before TrialWith the court's experience with declining real estate values, for residential property values (with exception of waterfront and water view properties) and the amount paid by successful bidders at forced real estate sales, a new sale will subject the plaintiff to a potential deficiency judgment. Furthermore, the defendant will receive less than the plaintiff's debt considering the attorneys fees, costs, committee fees and expenses, etc.
The court concludes that the plaintiff has failed to prove the third and fourth prongs of the test for temporary injunction. He has failed to prove likeliness to prevail on the merits. Based upon the above analysis, the court orders in the foreclosure matter do not have an unconscionable result to the plaintiff, even if the court utilized inaccurate information in basing its valuation of the subject property by the appraisal submitted by the defendant.
Furthermore, in balancing the equities of the parties, the plaintiff has failed to make a mortgage payment since September 2006. He failed to present any plan to sell, reinstate and refinancing the subject property. The defendant should not be left with a monetary short fall resulting from another sale of the property in a declining market. It is unreasonable to conclude that a forced sale of the property will equal the appraisal price in present market conditions in New London County. The numbers and equities do not add up for the court to grant a temporary injunction. The amount of the plaintiff's debt, together with interest and cost of a new sale and the value of property, make it highly unlikely that the plaintiff will prevail on the merits.
ORDER
The plaintiff's motion for temporary injunction is hereby denied.