Opinion
CV136046246S
03-04-2016
Trustees for the Constance B. Talarski Residuary Trust B v. Madina Realty, LLC
UNPUBLISHED OPINION
Corrected April 25, 2016.
CORRECTED MEMORANDUM OF DECISION DATED MARCH 4, 2016 RE MOTION TO RESET LAW DAYS
Antonio C. Robaina, J.
FACTUAL & PROCEDURAL BACKGROUND
This is a foreclosure action brought by the plaintiff, Trustees for the Constance B. Talarski Residuary Trust B, against the defendants, Madina Realty, LLC (Madina Realty), Baleel Sulieman, Saliem Sulieman, and Fadda Sulieman. The complaint alleges that the plaintiff is a revocable trust established under the laws of the State of Connecticut. The plaintiff trust seeks to foreclose on certain properties located at 1601 and 1605 Poquonock Avenue in the Town of Windsor. By note and mortgage deed on the Poquonock properties dated February 7, 2007, the defendants agreed to pay the principal sum of $290,000 to the plaintiff trust in monthly installments with interest. In June 2007, and each and every month thereafter, the defendants have failed to make payment to the plaintiff as required under the note and mortgage deed and are, therefore, in default upon their payment obligations. The plaintiff subsequently exercised its option to accelerate the debt and declare the entire sum due.
This matter is a companion case with another related matter by the same name, Trustees for the Constance B. Talarski Residuary Trust B v. Madina Realty, LLC, Docket No. CV-13-6046237-S (second action), which is also a foreclosure action between the same parties, but involves another property. A motion to reset the law days in the second action has also been filed by the defendants. Although similarly situated, this memorandum only addresses the motion to reset the law days filed with the court and heard at short calendar in this particular action.
On May 27, 2015, the court entered judgment of strict foreclosure for the plaintiff with the law days set to expire on August 26, 2015. On August 26, 2015, Madina Realty filed for Chapter 7 bankruptcy in the Connecticut District Court. That action was subsequently dismissed without prejudice on October 14, 2015. The basis for the dismissal was the failure by Madina Realty to file missing documents pursuant to 11 U.S.C. § 521(i). On December 9, 2015, Saliem Sulieman filed the present motion to reset law days pursuant to the court's inherent authority and General Statutes § 49-15 which permit the court to open and vacate a judgment of strict foreclosure. Sulieman argues that the filing of the Chapter 7 bankruptcy proceeding stayed the running of the law days and, as a consequence, title to the properties did not vest in the plaintiff. The plaintiff in its objection argues that the bankruptcy proceeding applied only to Madina Realty and not Sulieman, and, therefore, the bankruptcy filing did not stay the running of the law day.
11 U.S.C. § 521(i)(1) provides in relevant part: " [I]f an individual debtor in a voluntary case under chapter 7 or 13 [11 USCS § § 701 et seq. or 1301 et seq.] fails to file all of the information required under subsection (a)(1) within 45 days after the date of the filing of the petition, the case shall be automatically dismissed effective on the 46th day after the date of the filing of the petition."
General Statutes § 49-15(b) provides: " Upon the filing of a bankruptcy petition by a mortgagor under Title 11 of the United States Code, any judgment against the mortgagor foreclosing the title to real estate by strict foreclosure shall be opened automatically without action by any party or the court, provided, the provisions of such judgment, other than the establishment of law days, shall not be set aside under this subsection, provided no such judgment shall be opened after the title has become absolute in any encumbrancer or the mortgagee, or any person claiming under such encumbrancer or mortgagee. The mortgagor shall file a copy of the bankruptcy petition, or an affidavit setting forth the date the bankruptcy petition was filed, with the clerk of the court in which the foreclosure matter is pending. Upon the termination of the automatic stay authorized pursuant to 11 U.S.C. 362, the mortgagor shall file with such clerk an affidavit setting forth the date the stay was terminated."
DISCUSSION
11 U.S.C. § 362(a) of the Bankruptcy Code provides that " a petition filed under section 301, 302, or 303 of this title . . . operates as a stay, applicable to all entities . . ." and lists circumstances in which certain actions may not be commenced or continued, particularly those involving the enforcement of liens and the taking possession of real property, until such time the bankruptcy action is completed, dismissed, or the bankruptcy court orders otherwise. " The automatic stay is one of the fundamental debtor protections provided by the bankruptcy laws . . . When a bankruptcy petition is filed, § 362(a) of the Bankruptcy Code provides an automatic stay of, among other things, actions taken to realize the value of collateral given by the debtor . . . The filing of a petition in bankruptcy operates as a stay of the commencement or continuation . . . of a judicial . . . action or proceeding against the debtor that was or could have been commenced before the commencement of the case." (Citations omitted; internal quotation marks omitted.) CitiCorp Mortgage, Inc. v. Mehta, 39 Conn.App. 822, 826-27, 668 A.2d 729 (1995); see also Krondes v. O'Boy, 69 Conn.App. 802, 808, 796 A.2d 625 (" The stay of section 362 is extremely broad in scope and . . . should apply to almost any type of formal or informal action against the debtor or the [debtor's] property").
However, federal courts have found that the automatic stay provisions under the Bankruptcy Code do not apply to nondebtors. See, e.g., Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196-97 (6th Cir. 1983), Wilford v. Armstrong World Industries, Inc., 715 F.2d 124, 126-27 (6th Cir. 1983). " A number of courts have issued blanket prohibitions on the application of the stay to any nondebtor regardless of its relationship to the debtor and the effect of the action sought to be stayed . . . There is, however, limited authority for extending the stay to a nondebtor in special circumstances." (Citations omitted.) Metro Bulletins Corp. v. Soboleski, 30 Conn.App. 493, 496, 620 A.2d 1314, cert. granted on other grounds, 225 Conn. 923, 625 A.2d 823 (1993). Those courts that have extended automatic stays to nondebtors have permitted it where the relationship is one where the " identity between the debtor and the third-party defendant [is such] that the debtor may be said to be the real party defendant and that a judgment against the third-party defendant will in effect be a judgment or finding against the debtor." A.H. Robins Co. v. Piccinin, 788 F.2d 994, 999 (4th Cir. 1986), cert. denied, 479 U.S. 876, 107 S.Ct. 251, 93 L.Ed.2d 177 (1986).
This court need not address the issue of whether there is such an identity of interest that the bankruptcy proceeding operated to stay the foreclosure action as to Sulieman. " Nondebtors seeking protection of an automatic stay must move for the extension of the stay in the Bankruptcy Court." Krondes v. O'Boy, supra, 69 Conn.App. 809. Our courts have strictly adhered to this proposition. Perry v. Walgreen Co., Superior Court, judicial district of New Haven, Docket No. CV-13-6040049-S, (October 4, 2013, Wilson, J.) (denying motion for stay finding " the non-debtor co-defendants have not provided the court with evidence that they have sought an extension of the stay in bankruptcy court"); Ottoshavett v. Plumtrees Plaza, LLC, Superior Court, judicial district of Danbury, Docket No. CV-10-6004028-S, (January 25, 2012, Ozalis, J.) (declining to reach identity of interest argument finding nondebtor defendant did not seek extension of stay in bankruptcy court).
Since Sulieman has failed to show that he obtained an extension of the stay in the bankruptcy proceeding, they are not entitled to stay in this action.
Accordingly, the motion to open judgment and reset law days is denied, as title has vested as per the court's prior order.