Opinion
FSTCV176032425S
11-30-2018
RETAINED REALTY, INC. v. Denise E.A. LECOMTE et al.
UNPUBLISHED OPINION
GENUARIO, J.
I. INTRODUCTION
The plaintiff in this foreclosure action has moved for summary judgment claiming that there is no genuine issue of material fact that it is entitled to judgment as to liability as a matter of law. The defendant Denise E. A. Lecomte (the defendant) has filed an answer and five special defenses. The five special defenses are entitled: First Special Defense-challenge to the making, validity and/or enforcement a the note, mortgage or both; Second Special Defense-fraud (predatory lending); Third Special Defense-unconscionability (predatory lending); Fourth Special Defense-unclean hands; Fifth Special Defense-equitable estoppel.
The co-defendant Jonathan B. Lecomte has filed a "Disclosure of No Defense" and nothing in opposition to the Motion for Summary Judgment. The co-defendant Old World Ceramics, Inc. has been defaulted for failure to appear.
The plaintiff also pleads a second count for reformation of the mortgage which seeks to correct two typographical or clerical errors in the property description included in the subject mortgage. There does not appear to be a defense or dispute as to the second count seeking reformation of the mortgage.
II. THE MOTION FOR SUMMARY JUDGMENT
"Summary judgment is a method of resolving litigation when the pleadings, affidavits and other proofs 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 ... The motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried." Wilson v. New Haven, 213 Conn. 277, 279 (1989) (Citations omitted.) "Mere assertions of fact ... are insufficient to establish the existence of material fact and, therefore, cannot refute evidence properly present to the court under Practice Book § [17-45]." Zielinski v. Kotsoris, 279 Conn. 312, 319 (2006) (Internal quotation marks omitted.) "Only evidence that would be admissible at trial may be used to support or oppose a motion for summary judgment." Great County Bank v. Pastore, 241 Conn. 423, 436 (1996) (internal quotation marks omitted). The court may consider not only the facts presented by the parties’ affidavits and exhibits but also the "inferences which could be reasonably and logically drawn from them ..." United Oil Co. v. Urban Redevelopment Commission, 158 Conn. 364, 381 (1969).
Of course "[i]n deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." Provencher v. Enfield, 284 Conn. 772, 790-91 (2007). "Summary judgment is appropriate only if a fair and reasonable person could conclude only one way ... [A] summary disposition ... should be on evidence which a jury would not be at liberty to disbelieve and which would require a directed verdict before the moving party ... "The ‘genuine issue’ aspect of summary judgment requires the parties to bring forward before trial evidentiary facts, or substantial evidence outside the pleadings, from which the material facts alleged in the pleadings can warrantably be inferred ... A material fact has been defined adequately and simply as a fact which will make a difference in the result of the case." Buell Industries, Inc. v. Greater New York Mutual Insurance Co., 259 Conn. 527, 556 (2002). (Citations omitted; internal quotation marks omitted.) (Emphasis added.)
"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 issue as to all the material facts, which, under the applicable principles of substantive law, entitle 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 of existence of a material fact and, therefore cannot refute evidence properly presented to the court under Practice Book § [17-45]." Zielenski, supra at 318-19 (internal quotation marks omitted.)
III. DISCUSSION
A. The Plaintiff’s Prima Facie Case
"To make out its prima facie case, [a foreclosing bank must prove] that it was the owner of the note and mortgage and that [the defendant] had defaulted on the note." The plaintiff must also prove that it has complied with any statutory conditions precedent to the bringing of a foreclosure action as well as any conditions precedent contained within the loan documents. The affidavits and exhibits provided by the plaintiff establish that it is the holder of the note and the assignee of the mortgage. They further establish that the defendant received the money loaned to her. The documents also establish that the plaintiff provided the defendant with notice of default and acceleration. The plaintiff has also established that it has complied with certain statutory notice requirements. The defendant has not suggested in her memorandum in opposition, her answer or any of the affidavits and exhibits filed in opposition to the motion for summary judgment that the plaintiff has not established its prima facie case. Rather the defendant relies on her special defenses and argues that her affidavits and exhibits raise a genuine issue of material fact as to those defenses.
In the case of Bank of America, N.A. v. Aubut, 167 Conn.App. 347 (2016) the Appellate Court recognized that under certain circumstances a defense of predatory lending could provide a cognizable special defense in a foreclosure action. The Aubut court noted "that a trial court in foreclosure proceedings has discretion, on equitable considerations and principles, to withhold foreclosure or to reduce the amount of the stated indebtedness." Aubut at 378 quoting Hamm v. Taylor, 180 Conn. 491, 497 (1980). The court then noted that fraud and unconscionability were well recognized special defenses in foreclosure actions. Moreover, the Appellate Court also recognized in Aubut that the doctrine of unclean hands, because it is applied "not for the protection of the parties but for the protection of the court ... Id. at 380, could provide a special defense to a foreclosure action. Similarly the Aubut court recognized equitable estoppel as a cognizable defense to a foreclosure action. See also T.D. Bank, N.A. v. M.J. Holdings, LLC, 143 Conn.App. 326 (2013).
The issue before the court is not whether or not predatory lending, fraud, unconscionability, equitable estoppel, or unclean hands, can be cognizable special defenses; they can. The issue before the court is whether or not the defendant through her affidavit and exhibits has raised a genuine issue of material fact regarding her ability to establish the requisite elements of those special defenses. In Aubut the court noted that the defendant’s affidavit recited the defendant’s financial situation at the time of the origination of the loan "as well as proof that a representative of the [lender] had made statements with respect to the affordability of the loan, statements on which [the Aubut defendant] had relied to his detriment." The defendant’s affidavit included a statement that "we were told by the lender’s representative that the loan was affordable based on our household income and expenses. I believed the lender’s representatives had my best interest in mind but now know better." Aubut at 382. The plaintiff did nothing to counter the statements in the Aubut affidavit.
In the case at bar it is difficult to draw the same conclusion when reading the affidavits and exhibits submitted by the defendant herein. The commitment letter issued by the plaintiff’s predecessor, which the defendant has provided in support of her special defense, states in its first sentence "you have been approved for a $950,000 loan under a program to repay your loan which does not enable us to independently verify your ability to make your scheduled loan payments to repay your loan." The commitment letter then sets forth that the loan payments will be $6,784 plus an amount required for escrows for homeowner’s insurance and real estate taxes for a total monthly payment in the approximate amount of $8,311. The commitment letter goes on to state "it is important that you confirm the ability to make the above described monthly payments. To assist you in making such determination, we are advising you that had you applied for a loan under our standard loan program (a program where we verify your income and assets), your annual regular and dependable income would need to be $471,931." (Emphasis added.) The documentation submitted by the defendant additionally demonstrates that prior to completing the refinance transaction with the plaintiff’s predecessor she had a first mortgage encumbering her property in the approximate amount of $783,000 with an interest rate of 7.5% which required an approximate monthly payment of $5,600 (exclusive of escrows for taxes and insurance). The documentation also indicates that the defendant, prior to the refinance, had accumulated significant other debts (which appear to be credit card debts) in the total amount of approximately $93,670. Moreover, though the defendant applied for a mortgage loan in the principal amount of $1,250,000 the plaintiff’s predecessor determined that it would only loan the defendant $950,000 citing the value of the collateral (i.e., the defendant’s home) as the reason.
The defendant’s affidavit raises a genuine issue of fact as to whether or not she could afford this loan either on her own or with the assistance of her husband (apparently the defendant and the co-defendant Jonathan B. Lecomte are currently in the process of a divorce). But that fact is not a material fact because in order to support a special defense of fraud or equitable estoppel it would need to be accompanied by some misrepresentation of fact on the part of the plaintiff. There is no indication in the affidavits or exhibits that the defendant made any such misrepresentation of fact. The affidavit does not reference any misrepresentation made by the plaintiff and the exhibits attached to the affidavit do not indicate any misrepresentation of fact. Indeed, reading the affidavits and the exhibits taken together, the plaintiff’s predecessor told the defendant in clear unambiguous terms that it had not verified her income and told her that accordingly it was important that she confirm her ability to make the payments. The plaintiff’s predecessor also told the defendant the amount of income they would require if she had applied for an income verification loan. All this was disclosed to the defendant well before the closing of the transaction.
The elements of fraud are (1) that a false representation of fact was made; (2) that the party making the representation knew to it 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 ..." CitiMortgage, Inc. v. Coolbeth, 147 Conn.App. 183, 189 (2013), cert. denied, 311 Conn. 925 (2014). The defendant has not raised any genuine issue of material fact (unlike the defendant in Aubut) that the plaintiff’s predecessor made a misrepresentation of fact. Similarly in order to assert a defense of equitable estoppel a defendant must demonstrate that "(1) conduct which amounts to a false representation or concealment of material facts, or, at least, which is calculated to convey the impression that the facts are otherwise then, and inconsistent with, those which the parties subsequently attempts to assert; (2) the intention, or at least the expectation, that such conduct shall be acted upon by, or influence, the other party or other persons; and (3) knowledge, actual or constructive, of the real facts." T.D. Bank, N.A. v. M.J., Holdings, LLC, at 337-38. Once again the affidavit and exhibits do not raise a genuine issue that the plaintiff’s predecessor made such a false representation or concealed material facts. Indeed the documentation submitted by the defendant lead inescapably to the opposite conclusion. Nor has the defendant raised any genuine issue of material fact as to the unconscionability of the transaction. The transaction involved the loaning of $950,000 which the defendant readily accepted and used, in large part, for repayment of preexisting debts. The transaction also required that the defendant repay the loan with interest and mortgage her property to secure repayment. The defendant has not identified any of these terms that she claims are or were unconscionable. Nor is there any indication in the affidavits and exhibits submitted by the defendant that she was in any way forced or pressured to engage in the transaction.
According to the defendant’s affidavit she knew that her payments under her prior mortgage with a different lender were onerous, yet she decided to proceed with the refinance with the plaintiff’s predecessor knowing that the payments would be even higher. In her affidavit she says that she "decided to proceed with the refinance with [the plaintiff’s predecessor] because I was informed that if I could not ultimately make these payments, then I would be able to get out of the deal in a few months. However, I was never able to exit the deal after determining that the monthly payments were onerous." Notably, the defendant does not attribute these statements to the plaintiff’s predecessor. Nor does she indicate that she did try to get out of the deal "in a few months." More importantly a review of the exhibits attached to the affidavit including the note, mortgage and ancillary documentation such a statement would be contradictory to the express terms of the transaction documents.
In summary the defendant has been unable to identify any misrepresentation of fact or oppressive conduct engaged in by the plaintiff’s predecessor. She was informed by the plaintiff’s predecessor as to the amount of income it would take for the plaintiff to be approved for this loan if it were an income verification loan and was advised that she should confirm for herself whether or not she would be able to service the debt. In fact the plaintiff did service the debt for six years prior to the default and the defendant has raised no genuine issue of material fact in her affidavits and documentation that would support the special defenses that she asserts.
IV. CONCLUSION
Because the court finds that there is no genuine issue of a material fact, the court grants the plaintiff’s motion for summary judgment as to liability only.