Opinion
No. CV-10-6001829-S
August 3, 2010
MEMORANDUM OF DECISION RE DEFENDANT'S MOTION TO STRIKE (#105)
The defendant, River Glen Condominium Association, Inc. (River Glen), moves to strike the complaint filed by the plaintiff, U.S. Bank National Association (U.S. Bank National), claiming that the plaintiff is seeking relief barred by General Statutes § 49-15(a). The plaintiff objects to the motion, asserting that its claim is based on the equitable doctrine of unjust enrichment and not on § 49-15(a). For the following reasons, the defendant's motion to motion to strike is denied.
FACTS
The facts of this case are based, in part, on facts that arise in two underlying cases, U.S. Bank National Association v. Murta, Docket No. 08 5004926, and River Glen Condominium Association, Inc. v. Murta, Docket No. 09 5005602. On October 17, 2008, the plaintiff in the former case, U.S. Bank National, filed a foreclosure action in connection with a condominium unit within River Glen Condominiums in New Milford, Connecticut. U.S. Bank National calculated that Geraldo F. Murta, the owner of the condominium, was indebted to it in the amount of $154,535.79. River Glen was named as a defendant because Murta was also indebted to it as a result of unpaid common charges. On March 9, 2009, the court ordered a foreclosure by sale, with a sale date of June 27, 2009. A motion for acceptance of the committee report was filed and granted by the court on July 9, 2009. Despite this series of events and, due to actions that took place in a parallel action, River Glen Condominium Association, Inc. v. Murta, Docket No. 09 5005602, title never passed to U.S. Bank National.
In River Glen Condominium Association, Inc. v. Murta, River Glen named U.S. Bank National as a defendant. On March 3, 2009, a motion for default for failure to appear entered as to defendants Murta, Mortgage Electronic Registration Systems, Inc., and U.S. Bank National. River Glen then moved for strict foreclosure, which the court granted on June 9, 2009. According to the notice of judgment of strict foreclosure, filed on June 9, 2009, River Glen had a six-month priority in the amount of $1,158. The court set a law day of July 20, 2009. The property acquired by River Glen in that strict foreclosure, and thereafter sold to another buyer, was found to have a fair market value of $155,000.
After the decision in River Glen Condominium Association, Inc. v. Murta, U.S. Bank National brought the instant case, which is now the third case filed relative to the condominium unit that once belonged to Murta. This complaint asserts that, by virtue of the strict foreclosure, River Glen received a property valued at $155,000 in exchange for a total debt, plus costs and attorneys fees, in the amount of $4,489. In paragraph 19 of its complaint, the plaintiff claims that it was not served with the summons and complaint in River Glen Condominium Association, Inc. v. Murta, the strict foreclosure case. The plaintiff pleads, in the alternative, that it failed to timely appear or redeem title in the strict foreclosure case "through inadvertence." The plaintiff claims that the defendant's receipt of the premises in the strict foreclosure proceeding is "unjust, unconscionable and inequitable enrichment to the detriment of the plaintiff." On April 29, 2010, the defendant filed a motion to strike the plaintiff's complaint, and on May 14, 2010, the plaintiff filed an objection. This matter was heard at the short calendar on June 15, 2010. The plaintiff filed a supplemental memorandum on June 22, 2010, to which the defendant filed a reply on July 11, 2010.
DISCUSSION
"The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint . . . to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). "[A] motion to strike . . . requires no factual findings by the trial court." (Internal quotation marks omitted.) American Progressive Life Health Ins. Co. of New York v. Better Benefits, LLC, 292 Conn. 111, 120, 971 A.2d 17 (2009). "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Id.
In its motion to strike, the defendant argues that the plaintiff's complaint is legally insufficient, asserting that the plaintiff is attempting to "circumvent" the provisions of General Statutes § 49-15(a). The plaintiff denies that its complaint is based on § 49-15(a), and claims that it is seeking equitable relief based upon the theory of unjust enrichment. At the short calendar hearing on June 15, 2010, the court inquired of the plaintiff with regard to the allegations of paragraph 19 of the complaint, in which the plaintiff asserts that it was not served with the summons and complaint in River Glen's strict foreclosure action. In its supplemental brief filed on June 22, 2010, the plaintiff indicated that it no longer wishes to pursue the allegations that appear in paragraph 19 of its complaint.
General Statutes § 49-15(a) permits a judgment by strict foreclosure to be reopened under certain circumstances, but provides in relevant part that "no such judgment shall be opened after the title has become absolute in any encumbrancer . . ." The defendant points to the court's ruling on the plaintiff's November 23, 2009 motion for supplemental judgment, filed in U.S. Bank National Association v. Murta. In denying the plaintiff's motion for supplemental judgment, the court stated that "it . . . appears that River Glen Condominium Association, Inc. is the owner of the real property." The defendant asserts that the latter conclusion was based on the judgment of strict foreclosure entered in River Glen Condominium Association, Inc. v. Murta, Docket No. CV 09 5005602. Thus, the defendant concludes, title in the property has become absolute, the court has so found, and therefore § 49-15(a) precludes what the defendant characterizes as an attempt to reopen the judgment of strict foreclosure.
The plaintiff responds by asserting that it is not seeking to invoke § 49-15(a). Rather, it is relying on the doctrine of unjust enrichment, a remedy available when "it is contrary to equity and good conscience for [a party] to retain a benefit which has come to him at the expense of [another party]." (Internal quotation marks omitted.) Polverari v. Peatt, 29 Conn.App. 191, 200, 614 A.2d 484, 489, cert. denied, 224 Conn. 913, 617 A.2d 166 (1992). To succeed with such a claim, the plaintiff must prove that "(1) the defendant was benefitted, (2) that the defendant unjustly failed to pay the plaintiff for the benefits, and (3) that the failure of the payment was to the plaintiff's detriment." Gagne v. Vaccaro, 255 Conn. 390, 409, 766 A.2d 416 (2001). The plaintiff claims that the defendant obtained title to the premises, the value of which far exceeds the debt owed to the defendant, "due to the inadvertent errors of the Plaintiff."
When the motion to strike was heard, the court invited the plaintiff to file any supplemental claims it wished addressing the court's question as to "why the profit to the defendant is unjust." On June 22, 2010, the plaintiff filed a supplemental brief in which it relies on People's Bank v. Balance Rock Condominium Association, Inc., Superior Court, judicial district of Ansonia-Milford at Derby, Docket No. CV 97 058329 (August 17, 1998, Ripley, J.) ( 22 Conn. L. Rptr. 587) to illustrate its response to the court's question. In People's Bank, the plaintiff sought recovery based on the doctrine of unjust enrichment, based upon facts very similar to those alleged in this case. The bank's counsel filed an appearance in that case, but due to inattention, allowed title to vest in the condominium association. Id. The condominium association was owed approximately $1,800, and received, in the foreclosure proceeding, property worth approximately $50,000. Id., 588. In its memorandum of decision, the court emphasized that People's Bank was not seeking to reopen the judgment of foreclosure but was, rather, seeking recovery of the windfall profits based on the theory of unjust enrichment. Id. The court then analyzed the elements of unjust enrichment and concluded that allowing the condo association to retain the windfall that had come its way would be inequitable and unjust. Ultimately, People's Bank was allowed "to recover the amount of the proceeds obtained by the defendant . . . less expenses incurred by the defendant." Id., 588.
In the present matter, the plaintiff, U.S. Bank National, argues that the defendant, River Glen, after satisfying its own debt, did not pay the plaintiff anything for its debt, which was superior to any remaining, non-priority debt of the defendant. The facts in the two underlying cases make clear that the defendant was aware of the magnitude of the debt owed to the plaintiff as compared to the level of debt owed to it. In addition, since the defendant had an appearance in the foreclosure action brought by the plaintiff, the defendant was aware that the court had ordered a foreclosure by sale in that case on March 9, 2009. Despite that apparent knowledge, the defendant pursued a judgment of foreclosure, in the separate action it brought on its own behalf, through a motion filed April 20, 2009.
The defendant argues that People's Bank was wrongly decided and should not be followed. The defendant continues to view the plaintiff's claim as one seeking to reopen the judgment of foreclosure. The defendant relies principally on authority that would not support a motion to reopen under the circumstances now before the court. The defendant contends that if this court places any reliance on People's Bank, "the finality of judgments and certainty and insurability of title will be destroyed statewide." As in People's Bank, however, the plaintiff is not seeking to reopen the judgment of foreclosure. Rather, the plaintiff seeks recovery of alleged windfall profits under a theory of unjust enrichment. People's Bank stands for the proposition that the plaintiff is pursuing a viable theory of recovery, based on facts that are remarkably similar to those that led to the result in that case.
The court notes that People's Bank was decided in 1998 and that the ruling has not, to date, produced the disastrous effects now predicted by the defendant.
On the foregoing basis, and for the reasons articulated in People's Bank, the motion to strike is denied.
This ruling is not intended to suggest that the result in People's Bank necessarily controls this case. The question of whether the alleged windfall payments to the defendant were "unjust," as that term is understood within the doctrine of unjust enrichment, is an issue of fact that cannot be decided in the context of a motion to strike. Polverari v. Peatt, supra, 29 Conn.App. 191, 201.