Opinion
CV156058427S
03-08-2018
U.S. BANK NATIONAL ASSOCIATION, as Trustee FOR CITIGROUP MORTGAGE LOAN TRUST, INC., MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-WF1 v. Juan VALENCIA
UNPUBLISHED OPINION
OPINION
Corradino, Judge
The matter before the court is a motion for summary judgment as to liability in an action on a note secured by a mortgage. The foreclosure action was brought against the defendant by a complaint dated October 28, 2015. The plaintiff alleges that the defendant executed a note on or about December 13, 2005, whereby he was obliged to repay Wells Fargo Bank the original principal amount of $256,500 with interest. To secure the note, the defendant executed and delivered a mortgage to Wells Fargo. The note required monthly payments in the amount of $1,815.50. The defendant stopped making payments on February 1, 2015, according to an affidavit accompanying the motion prepared by Corderro Marcel Jones and dated February 14, 2017. Mr. Jones signed the affidavit as follows: " Vice President Loan Documentation Wells Fargo Bank," the servicing agent for the plaintiff for the mortgage loan which is the subject of this case. In the opposition to the motion by way of memorandum and oral argument on the present motion none of the foregoing factual assertions are contested.
The affidavit goes on to claim that the plaintiff U.S. Bank National Association as Trustee for Citigroup Mortgage Loan Trust, Inc., is in possession of the note which is endorsed in blank and further avers that the plaintiff was in possession of the note prior to October 28, 2015, when suit was brought. The note also required that any notice under the note must be given to the defendant signer of the note, " by delivering it or by mailing it by first class mail to me ..." this same first class notice provision is found in Section 15 of the Mortgage Agreement. It is not contested by either party that notice of default was sent by certified mail.
The answer to the complaint admits some of the allegations but leaves the plaintiff to its proof on other allegations. The defendant also filed seven special defenses. In his opposition to the motion for summary judgment filed on April 13, 2017, however, the defendant has raised only two claims (1) the plaintiff failed to comply with the notice requirements in the loan documents and (2) the plaintiff U.S. Bank National Association lacks standing.
STANDARDS FOR MOTION FOR SUMMARY JUDGMENT
" The fundamental purpose of summary judgment is preventing unnecessary trials," Stuart v. Freiberg, 316 Conn. 809, 822 (2015). The standards to be applied in deciding such motions have been set forth in many cases. In Marinos v. Poirot, 308 Conn. 706, 712 (2013), the court quoted from earlier cases to the effect that the burden is on the moving party and once the moving party has met its burden, the burden shifts to the opposing party to present evidence that shows the existence of a disputed factual issue. But mere assertions of fact are not sufficient to establish the existence of a material fact. It is also true that unsworn and conclusory assertions are not enough to defeat a motion for summary judgment. RAB Performance Recoveries, LLC v. James, 151 Conn.App. 360, 367 (2014). Also mere speculation or conjecture will not defeat a motion for summary judgment, Escourse v. 100 Taylor Avenue, 150 Conn.App. 819, 829 (2014). A court on hearing such a motion is limited to considering documents which would be admissible at trial, City of New Haven v. Pantani, 89 Conn.App. 675, 680 (2005). As said in Gianetti v. Anthem Blue Cross, 111 Conn.App. 68, 73 (2008) " Documents in support of or in opposition to a motion for summary judgment may be authenticated in a variety of ways, including, but not limited to, a certified copy or a document or the addition of an affidavit by a personal knowledge that the offered evidence is a true and accurate representation of what its proponents claim it to be." In Schulte Corporation v. New England Doors and Hardware, Inc., 9 Conn.L.Rptr. 543 (1993) Judge Goldberg said, Evans Products Co. v. Clinton Building Supply, Inc., 174 Conn. 512, 514-15 (1978), " appears to acknowledge that a statement that any individual ‘is familiar with or controls the plaintiff’s business records’ shows the personal knowledge of the affiant, id., at 515." As does the statement by an asset manager that he reviewed the records of the loan at issue, 2006-C8 Asylum Street, LLC. v. Northland City Place, LLC., 2011 WL 2150690. The Northland case, however, went on to hold that the documents attached to the affidavit could not be admitted because the affiant failed to establish the three requirements of Section 52-180 of the general statutes regarding business records.
1.
In his opposition to the motion for summary judgment, the plaintiff claims the plaintiff lacks standing to bring the foreclosure because " it failed to demonstrate at the commencement of the action it was the owner and holder of the Note and Mortgage Deed."
In these types of foreclosure cases there is a commonly used definition of standing. In U.S. Bank v. Christopherson, 179 Conn.App. 378, 383 (2018) the court said, quoting from an earlier case, " Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he (or she) has, in an individual or representative capacity, some real interest in the cause of action or a legal or equitable right, title or interest in the subject matter of the controversy," also see Property Asset Management, Inc. v. Lazarte, 163 Conn.App. 737, 745 (2016); Deutsche Bank v. Bliss, 159 Conn.App. 483, 488 (2015); BAC Home Loans Servicing, LP v. Fairing, 154 Conn.App. 265, 268 (2014). Moving from the general to the specific, the courts have said: " generally, in order to have standing to bring a foreclosure the plaintiff must, at the time the action is commenced, be entitled to enforce the promissory note that it secured by the property," (emphasis in opinion), Deutsche Bank v. Bliss, supra 159 Conn.App. at page 488. Although the language of some of the cases is quite broad, it is not the possession of a note endorsed in blank standing alone as a concept that constitutes prima facie evidence of standing to bring suit. Possession and the time at which possession materializes are two different analytical concepts. In other words, if you do not have possession of a note when you file suit asking for judgment of liability on the note as spelled out on the mortgage to which it is attached how can you bring an action on the note? To ask the question seems to provide the answer. In other words, the abstract of possession standing alone does not establish possession at the critical time for subject matter jurisdiction. The plaintiff must do more than claim possession per se establishes possession at the relevant time. Thus, in U.S. Bank v. Christopherson, supra, it says: " The plaintiff’s possession of a note endorsed in blank is a prima facie evidence that it is a holder and is entitled to enforce the note, thereby conferring standing to commence a foreclosure action " (emphasis by this court), 179 Conn. at page 384 (court quotes from Deutsche Bank v. Bliss, at page 159 Conn.App. page 488. Thus, the standing requirement is met if some evidence is presented to indicate that the plaintiff had possession of the note at the time suit was commenced.
The question then becomes what evidence do the cases say established the prima facie requirement necessary to commence and go forward with litigation and perhaps more importantly why they reach the conclusions they do.
For the court at least the case of HSBC v. Navin, 129 Conn.App. 707 (2011) is instructive. In that case the plaintiff’s standing to bring the foreclosure action was contested. The defendant said that, " the plaintiff did not have standing to bring the foreclosure action because it did not rightfully own the promissory note and mortgage until after it commenced the action," id., p. 710. The court concluded the plaintiff did have standing at pages 711-12, the court said that " The plaintiff submitted of a sworn affidavit in support of its motion for summary judgment in which it alleged that ‘the note was endorsed in blank and was delivered to the plaintiff prior to the commencement of this foreclosure action.’ " The defendant offered no evidence to counter plaintiff’s sworn statement that it was in possession of the note at the time it commenced the present action ... Accordingly, because the defendant offered no evidence to contest the plaintiff’s assertion that it possessed the note at the time it commenced the present action, we conclude that the plaintiff had standing to commence the foreclosure action." That is, a prima facie case was established by submission of affidavit swearing to the effect that plaintiff had possession of the note when suit was commenced; see also U.S. Bank v. Christopherson, 179 Conn.App. 378 (2018) wherein the court found a presumption of ownership established by an affidavit by an employee of the loan servicer stating the amount owed by the defendant and stated the note was acquired by the plaintiff before the foreclosure action was commenced. The court cited Navin, 179 Conn.App. p. 385; also see Wells Fargo Bank, N.A. v. Strong, 149 Conn.App. 384, 397-98 (2014).
This court has examined the motion for summary judgment in the Navin case which at the trial level had a docket number in New Haven of CV07-6001088. The trial court relied on the affidavit of an employee of the servicing agent for the plaintiff. At paragraph 13 of the affidavit it simply says 13. The plaintiff is the owner and holder of the Note and Mortgage. The note was endorsed in blank and was delivered to the plaintiff prior to the commencement of the foreclosure action- nothing more, such as the note was endorsed with the date of its delivery to the plaintiff noted, " or" Mr. or Mrs. Doe, an employee of the prior note holder, submitted a document to the effect that the note was delivered to the plaintiff prior to commencement of suit, etc. But this was sufficient for the trial court and later the Appellate Court to find a prima facie case was made out.
How is this case any different? Attached to the motion for summary judgment is an affidavit prepared by a Mr. Jones who is Vice President Loan Documentation of Wells Fargo " servicing agent for the plaintiff for the mortgage loan that is the subject of the above styled action (the action presently before the court). At paragraph 5 Mr. Jones states, " 5. Plaintiff is in possession of the Note. The Note is endorsed in blank. I conform that the plaintiff was in possession of the note prior to October 28, 2015." (The latter is the date this action was commenced by way of complaint.)
Interestingly enough, in paragraph 6 of the affidavit notes that the defendant delivered a mortgage to Wells Fargo which was recorded on December 19, 2005. It then says the mortgage " was assigned to the plaintiff by virtue of an Assignment of Mortgage dated March 24, 2015 and recorded on April 9, 2015- several months before suit was filed. The mortgage itself refers to the note and payment obligations thereunder. The note itself says that it was made in return for a loan from Wells Fargo. If the mortgage was transferred from the Wells Fargo to the plaintiff, which is security for the loan as represented by the note, how would or why would the party commencing litigation be any entity other than the entity holding the note? Fidelity Bank v. Krenisky, 72 Conn.App. 700, 707 (2002), although it used the concept for purposes of the construction of a mortgage deed, did say in a general way " a promissory note and a mortgage deed are deemed parts of one transaction ..."
In any event, from a real world financial perspective who but the holder of the note would have any incentive to commence this type of litigation. That is why in cases like Navin and this one, the requirements of a prima facie case can be considered de minimus e.g.- a sworn statement to the effect that the plaintiff was the holder of the note at the time litigation was commenced by a party such as a loan servicer who would be aware of the loan transaction and documents which establish the financial obligations upon receipt of the loan.
The arguments advanced by the defendant in his objection to the motion for summary judgment, to the court at least, are not convincing. The case of Ramirez v. Health Net of Northeast, Inc., 285 Conn. 1 (2008) is cited which was not a foreclosure action but an action for breach of contract and for a violation of the Connecticut Unfair Trade Practices Act. It was an action by a physician against a healthcare network that terminated the plaintiff doctor from its network, page 10-11 of the opinion are referred to in defendant’s brief. The Ramirez court said: " 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." For this case, in the foreclosure area of law, reliance on the Ramirez case misses the whole point of the cases previously discussed. What is before the court is whether in a foreclosure case a prima facie showing of standing has been made and the presumptions that can be drawn from sworn statements submitted by a plaintiff. The defendant points out that the Jones affidavit merely makes an unsupported generalization on the issue of the possession of the note by the plaintiff when litigation was commenced, no signed note was submitted verifying on what date the note was transferred to the plaintiff, etc. But Navin indicates that a sworn statement to the effect that a plaintiff possessed a note before suit was commenced is sufficient to establish a prima facie case in the context of these cases. The unlikelihood of a party initiating litigation in a case like this without possession of a note has been relied upon as sufficient reason to shift the burden to the defendant, the burden of showing, despite a sworn statement to the effect that the plaintiff had possession of a note when litigation commenced, that substantive facts exist to disprove the presumption. The court is not aware that the discovery mechanisms available to civil litigants are not available to defendants in foreclosure actions. The defendant has introduced nothing by way of affidavits or other evidence to rebut the presumption that the plaintiff was not in possession of the note at the time litigation commenced.
It is also the case that in addition to the Jones affidavit’s statement that the plaintiff was in possession of the note when suit was commenced perhaps even more persuasive was a statement at page 2 of the October 10, 2017 argument by plaintiff’s counsel that his office was in possession of the note before commencement of litigation. Equity One, Inc. v. Shivers, 310 Conn. 119, 133-34 (2013) said it was proper for the trial court in that action to rely on counsel’s representation as an officer of the court, that the note produced in court was the one held by his client, the plaintiff at the time litigation began. Such reliance was also proper because the note introduced at a hearing was concededly assigned to plaintiff before commencement of litigation. The court noted that, as here, the defendant offered nothing by way of evidence to rebut the claim that the note was in plaintiff’s possession prior to litigation. It is also true that the law firm representing the plaintiff in this case handles these foreclosure matters on a regular bases. The court ran the foreclosure docket every week for several months in the fall of 2017 and the law firm regularly appeared on this and numerous other cases. Common sense appears to dictate that the presumption is well established that an experienced firm such as the plaintiff’s firm would not have filed the suit without verifying the client had possession of the note prior to litigation’s commencement- a presumption, which the defendant offers nothing by way of refutation.
Lasalle Bank v. Bialobrzeski, 123 Conn.App. 781 (2010) is not helpful to the defendant. In that case an affidavit was submitted by the plaintiff which stated the plaintiff was the holder of the note but no explicit statement was made in the affidavit as to when the plaintiff acquired the note. Perhaps more to the point, in the motion to dismiss the motion for summary judgment, the defendant claimed the plaintiff did not have possession of the note when litigation commenced but the Appellate Court noted the motion to dismiss " was inspired by the exhibits the plaintiff attached to its motion for summary judgment," id., page 790, see footnotes 5 and 6 where dated documents referenced in the motion to dismiss explicitly seem to indicate the plaintiff did not have possession of the note prior to the commencement of litigation, see also Deutsche Bank v. Bialobrzeski, 123 Conn.App. 791, 799, 800. In another Bialobrzeski case at 123 Conn.App. 791 (2010) the court dismissed the foreclosure action for lack of standing and noted that the record is devoid of a factual finding as to when the plaintiff came into possession of the note, id., p. 792. An affidavit was prepared by a Mr. Read, an assistant vice president of a bank in the chain of custody of the note. In footnote 3 at page 793, commentary on the affidavit said: " Significantly Read does not attest in the affidavit to the date the plaintiff acquired the note." Here the affiant swore to the effect that the plaintiff was in possession of the note when suit was commenced.
2.
In the original objection to the plaintiff’s motion for summary judgment, the defendant also claimed that the plaintiff failed to demonstrate compliance with the notice requirements of the mortgage prior to acceleration of the debt for failure to make required payments.
It is clear that the right of a mortgagee or note holder on the mortgage to initiate a foreclosure action against a defaulting debtor and make a claim for the full debt depends on compliance with the notice provisions contained in the mortgage, Mortgage Electronic Registration Systems, Inc., v. Goduto, 110 Conn.App. 367, 308 (2008); Fidelity Bank v. Krenisky, 72 Conn.App. 700, 707 (2002); Northeast Savings, F.A. v. Scherban, 47 Conn.App. 225, 227-28 (1997); Saunders v. Stigers, 62 Conn.App. 138, 144-45 (2001).
At the October 30, 2017 argument, the defendant appears to have dropped the claim of failure to provide the proper notice but out of perhaps an excess of caution the court will address this issue. It will first address the provisions in the mortgage related to notice. Section 22 of the mortgage deed reads as follows:
Section 22: Lender shall give notice to Borrower prior to acceleration. The notice shall specify (a) the default; (b) the action required to cure the default; (c) a date not less than 30 days from the date notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration.
As to notice requirements in the mortgage deed they are spelled out in Section 15, which in relevant part states:
Section 15: All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to the Borrower when mailed by first class mail or when actually delivered to the Borrower’s notice address if sent by other means ... The notice address shall be the property address unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower’s change of address ...
Regarding the issue of notice in this case, the plaintiff submitted an affidavit by Mr. Jones, Vice President Loan Documentation of Wells Fargo Bank, N.A. In paragraph 2 of the affidavit it states:
2. Affiant is Vice President Loan Documentation of Wells Fargo Bank, N.A. (hereinafter " Wells Fargo" ), servicing agent for the Plaintiff for the mortgage loan that is the subject of the above-styled action. In the regular performance of my job functions, I am familiar with business records maintained by Wells Fargo for the purpose of servicing mortgage loans. These records (which include data compilations, electronically imaged documents, and others) are made at or near the time by, or from information provided by, persons with knowledge of the activity and transactions reflected in such records, and are made and kept in the course of business activity conducted regularly by Wells Fargo. It is the regular practice of Wells Fargo’s mortgage servicing business to make these records. In connection with making this affidavit, I have acquired knowledge of the matters stated herein by examining these business records.
Paragraph 9 of the affidavit reads as follows:
9. A combined Notice of Default and EMAP notice (" Notice" ) dated April 3, 2015 was sent by certified mail and was addressed to the property address and the mailing address for the borrowers, as set forth on the letters along with mailing and delivery information is attached hereto as Exhibit D and were thereafter deposited with the United States Postal Service for certified delivery. As set forth in Exhibit D, among other things, the Notice specified the default, the action required to cure the default and a date by which the default had to be cured.
The question presented is whether notice of default and EMAP notice were sent in this case and in compliance with section 8-265ee of our statutes whether the notices sent complied with mortgage provisions. There seems to have been no claim that the notice letters sent on April 15, 2015 did not comply substantively with the mortgage deed or that the contents of the April 3 letters did not comport with EMAP requirements as to notice. The only issue raised by the objection to Plaintiff’s Motion for Summary Judgment filed April 13, 2017 is that appropriate notice was not sent to the defendant pursuant to Section 8-265ee of the general statutes which is entitled in relevant part: " Notice to mortgagee of foreclosure." The first sentence of subsection (a) of the statute reads " (a) On or after July 1, 2008, a mortgagee who desires to foreclose upon a mortgage ... shall give notice to the mortgagor by registered, or certified mail, postage prepaid at the address of the property which is secured by the mortgage."
The statute does not define the terms used- i.e. registered mail, certified mail postage prepaid.
Attached to the Jones affidavit are the letters sent by the required certified mail method and in Exhibit D the record of the mailing and the result of the attempts to mail the letters recorded in the business records of Wells Fargo. A cursory reading of the last four pages of Exhibit D indicates the information verifying attempts at delivery to the defendant could only have come from the United States Postal Service via the unidentified " Waltz Facility" which apparently had the obligation of sending out notices for Wells Fargo and conveying information of delivery attempts.
Pursuant to Section 52-180 of the general statutes and section 8-4 of the Code of Evidence, which incorporates it, the foregoing documents are business records and may be considered as evidence by the court. The discussion in Tait’s Handbook of Connecticut Evidence, Tait & LaPlante in Sections 8.28.1-.9 is also instructive.
As said in Bell Food Services, Inc. v. Sherbacow, 217 Conn. 476, 485-86 (1991) " In applying the business records exception, ‘the statute (§ 52-180) should be liberally interpreted ... In part, this is due to the fact that the statute recognizes that the trustworthiness of such documents comes from their being used for business not litigation’ ... thus, the fact that the business relies on such records tends to establish their trustworthiness," also see Emhart Industries, Inc., v. Amalgamated Local Union, 346 UAW, 190 Conn. 371, 388-89 (1983). And as Tait & Prescott note: " A business record that has been prepared with litigation in mind is not per se inadmissible," Section 8.25.5, page 602. Also as noted in the same section at pp. 602-03: " The trustworthiness of a business record devolves from being prepared ‘in the ordinary course of business’ but litigation is common enough for most firms so that they must keep or prepare records in connection with present or future litigation as a matter of course. Although such records should be reviewed with particular case for indicia of trustworthiness, they should not be excluded solely for the reason of their nexus to litigation" citing State v. Jeffrey, 220 Conn. 698, 710 (1991). There is no apparent indicia of lack of trustworthiness in the documents sent or the process of sending them. In fact the nature of the notices sent in certain respects offer the possibility of the plaintiff avoiding the necessity of litigation if the debtor begins the process of starting to pay on the debt owed or takes advantage of EMAP proposals.
In fact where does the danger of untrustworthiness or a false claim lie in these cases- on the side of the mortgagor or note holder or on the debtor or mortgagee. If the latter has read the mortgage deed- which is presumed under the law- he or she would know of the obligation to give notice is a prerequisite if litigation is to be instituted and proceed to a successful conclusion,- a concern certainly to someone in default on loan repayment who has no intent or desire to pay for obligations owed. It should also be noted that no affidavit or other evidence from the defendant was introduced to show, that the letters in question were sent to incorrect addresses or where not in fact delivered or remained unclaimed.
One other factor, previously referred to must be discussed. The documents in Exhibit D which Mr. Jones refers to in his affidavit appear to be information received from the postal service or from the postal service via Waltz Facility. As noted in the Emhart Industries case supra, at 190 Conn. at page 384 " information contained in a report sought to be introduced as a business record must and can be based on ‘the entrusts’ own observation or on information of others whose business duty it was to transmit it to the entrust,’ " see also Mucci v. LeMonte, 157 Conn. 566, 569 (1969); also see Crest Plumbing Heating Co. v. DiLoreto, 12 Conn.App. 468, 475-76 (1987) where it says: " There is no requirement in § 52-180, however, that the documents must be prepared by the organization itself to be admissible as that organization’s business records. All that is required is that it be in the regular course of business to make the ‘writing or record.’ " The plaintiff has established the notices sent complied with the statute.
As to the mortgage deed requirement that notices be sent by first class mail, the mortgage deed’s language, after mentioning first class mail says notice is acceptable if it is " actually delivered to the Borrower’s notice address if sent by other means." Even if an attempt is made to distinguish between first class mail and certified mail, given the controlling aim of trying to ensure notice, the statement of Mr. Jones and more particularly the tracking records in Exhibit D, attached to the Jones affidavit, establish compliance with notice concerns and underline the steps made to meet those concerns. The case of Pack 2000, Inc. v. Cushman, 662, 675 (2014) has instructive observations on this issue, quoting from an earlier case it says " ‘the doctrine of substantial performance shields contracting parties from the harsh effects of being held to the letter of their agreements. Pursuant to the doctrine of substantial performance, a technical breach of the terms of a contract is excused, not because compliance and with the terms is objectively impossible, but because actual performance is so similar to the required performance, that any breach that may have been committed is immaterial.’ "
In any event, for the foregoing reasons, the court grants the plaintiff’s motion for summary judgment.