Opinion
No. CV03 040 35 48 S
January 30, 2008
MEMORANDUM OF DECISION RE MOTION FOR ARTICULATION
This is an action to foreclose a mortgage by the plaintiff, Wells Fargo Bank Minnesota, N.A., as Trustee, securing a note in the original amount of $156,000.00, dated April 5, 1999 and granted by the now deceased Lillian Mezes Werner (Mrs. Werner) to the original lender and predecessor in interest. It encumbered property known as 109 Brooklawn Terrace, Fairfield, Connecticut. Mrs. Werner defaulted on the note and mortgage in February of 2003.
It is uncontested that the plaintiff established the initial prima facie elements required to claim a foreclosure and they are (1) ownership of the note and mortgage; (2) default under the note by the mortgagor; (3) proper notice of default of the mortgagor and (4) damages. In addition, the defendant William Sanford, the sole heir of Mrs. Werner and the current owner of the equity of redemption has been defaulted for failure to plead and is not asserting any defense of the foreclosure action.
It is the claim of the intervening defendants, John Mezes, Jr., Helen Lambing and Theodore F. Mezes, that an agreement dated August 31, 1971, superceded the right of Mrs. Werner to mortgage the Brooklawn property in 1999. The claim is that the intervening defendants had property rights in the property pursuant to the agreement which could not be diminished by execution of the mortgage.
In 1971 Mrs. Werner and her husband executed an agreement with her brother, John Mezes, Jr., to obtain title to the Brooklawn property. The agreement provided that John Mezes, Jr. in exchange for title wanted rights and privileges for himself and for Theodore E. Mezes and Helen Lambing. Title to the property was transferred to Mrs. Werner and her husband and Mrs. Werner. Her brother John, her sister Helen and her brother Theodore had additional rights and privileges as set forth in the agreement. The first right was that John Mezes, Jr., Theodore F. Mezes and Helen Lambing had the right of first refusal with regard to any sale of the property by Mr. and or Mrs. Werner. The second right is that if the property were sold that all the proceeds in excess of $30,000.00 was to be divided equally between John Mezes, Jr., Theodore E. Mezes, Helen Lambing and Mrs. Werner or in the event of their death, to their respective heirs. There were no other provisions.
In spite of all the legal opinions submitted by the intervening defendants, there is nothing in the agreement that prohibited Mrs. Werner from executing a mortgage or guaranteeing the intervening defendants any specific amount of money from the equity in the House. All of the rights and privileges of the intervening defendants are the same now as they were in 1971, unless they have been waived. They have the right of first refusal or a percentage of any of the proceeds of a sale of the property. The 1971 agreement simply does not say what the intervening defendants would like it to say.
If the intervening defendants had wished to preclude Mrs. Werner from encumbering the property or wished to quantify their interest in the equity of the property, they could have done so by negotiating those provisions in the 1971 agreement. There is no legal obligation on the part of the plaintiff to subsidize the intervening defendant's failure to do so by waiving their right to reimbursement of the funds they are entitled to receive as a result of the default of a mortgage executed legally and in good faith.
In August of 1988, Mr. Mrs. Werner converted the ownership of the property from tenants in common to a joint tenancy. As historically there was a question as to whether or not an individual could deed title to real property to themselves, it was common for law firms to arrange for a "strawman" transaction, which was done by the Werners in 1988. In the procedure, Mr. Mrs. Werner deeded their interest in property to a legal secretary and she, in turn, deeded it back to them as joint tenants. This practice was continued for a period of time although a single transfer was legitimized by C.G.S. § 47-14j.
The intervening defendants claim that it was a sale to the legal secretary requiring a right of first refusal under the 1971 agreement. In fact, it was not. As was stated by Judge Sullivan in Smith v. Trinity United Methodist Church, CV98 66324 S, March 3, 2000, judicial district of Tolland, [26 Conn. L. Rptr. 263] referencing Goldstein v. Ansel, 158 Conn. 225, 227 (1969), it is not a bonafide independent transaction or sale but a transfer to the strawman as an agent.
This court found the issues for the plaintiff and entered a judgment of foreclosure.