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Danbury Sav. and Loan Ass'n, Inc. v. Hovi

Court of Appeals of Connecticut

February 6, 1990

DANBURY SAVINGS AND LOAN ASSOCIATION, INC.
v.
Jorman M. HOVI et al.

Argued Nov. 7, 1989.

Jorman M. Hovi, pro se.

Scott D. Rosen, Hartford, for appellee (defendant Federal Deposit Ins. Corp.).

Robert N. Talarico, Danbury, filed a brief for appellee (plaintiff).

Before BORDEN, DALY and NORCOTT, JJ.

[20 Conn.App. 639] DALY, Judge.

This is an appeal by the named defendant, Jorman M. Hovi, from the judgment of the trial court approving a foreclosure by sale of property owned by the defendant. The defendant claims that the court erred in approving the sale because the sale price of $98,000 was substantially below the appraised value of $225,000, and because such approval deprived him of his property without due process of law. We find no error.

The plaintiff, Danbury Savings and Loan Association, Inc., instituted this foreclosure

Page 1144

action against the defendant, [1] seeking to foreclose its mortgage on the defendant's property in Danbury. The trial court found [20 Conn.App. 640] that the debt secured by the mortgage was $13,997.80, and ordered a foreclosure by sale. The court appointed a committee to conduct the sale of the property, and appointed three appraisers pursuant to General Statutes § 49-25. The appraisers arrived at a value of $225,000 for the entire property. That value was based on the assumption that the building was a legal non-conforming use as a four-family structure.

The committee's "notice to bidders" pointed out that there was a question concerning whether the premises could legally be used as a four-family, as opposed to a two-family, dwelling. It further stated that the defendant had filed what purported to be a declaration of condominium and by-laws for the premises.

On the sale date, six registered bidders and fourteen additional persons attended the auction. The plaintiff made the opening bid and bidding then proceeded through sixteen mesne bids to a high bid of $98,000, and the bidding was declared closed. The sale was made subject to prior tax liens.

A hearing was held on the committee's motion to approve the sale. The plaintiff and the defendant Federal Deposit Insurance Corporation (FDIC), which held a subordinate mortgage on the property, presented evidence that the legal use of the building was limited to two families, and that any previous nonconforming use of the building as a four-family dwelling had been abandoned. One of the court-appointed appraisers testified that he had assumed that the building was a legal four-family dwelling. He also testified that if the building was only a two-family dwelling, the value of the property would be $165,000. The defendant presented evidence that the four-family use of the premises had not been abandoned. In addition, he had the opportunity to cross-examine the opposing witnesses. The trial court approved the sale.

[20 Conn.App. 641] I

The defendant first claims that the court abused its discretion when it approved the sale because the highest bid of $98,000 was inadequate compared to the original appraised value of $225,000. We do not agree.

First, the defendant cites to an outdated version of General Statutes § 49-14 and argues that the original appraisal of $225,000 was conclusive as to the value of the property. The version of General Statutes § 49-14 on which the defendant relies was revised in 1979. See Public Acts 1979, No. 79-110. The revised version of § 49-14 does not apply to the present proceeding because it concerns appraisals made following the filing of a motion for a deficiency judgment.

The court properly applied General Statutes § 49-25, the applicable provision for foreclosure by sale proceedings, in appointing the three appraisers. Our Supreme Court has determined that an appraisal made pursuant to a foreclosure by sale is not conclusive as to the value of the property. See Bryson v. Newtown Real Estate & Development Corporation, 153 Conn. 267, 274, 216 A.2d 176 (1965); Cronin v. Gager-Crawford Co., 128 Conn. 688, 694-95, 25 A.2d 652 (1942). Thus, the trial court was not bound to accept the original appraised value of $225,000 in determining whether to approve the sale.

The defendant next asserts that the original appraised value should have been the "medium of comparison for the trial court to use to determine the fairness of the bids brought in by the ...


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