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LB-RPR REO Holdings, LLC v. Nimage Enterprises, LLC

Superior Court of Connecticut, Judicial District of New Haven, Meriden

September 14, 2015

LB-RPR REO Holdings, LLC
v.
Nimage Enterprises, LLC

MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT #255

Jack W. Fischer, J.

FACTS

The plaintiff filed this revised two-count complaint on July 30, 2012, against the defendants Nimage Enterprises, LLC (Nimage) and Patricia Spanos, [1] requesting judgment on a note and strict foreclosure on the associated mortgage. The plaintiff alleges the following facts.

Nimage is a limited liability company formed under the laws of the State of Connecticut. On April 22, 2005, Nimage executed a mortgage note (the note) in favor of NCB FSB (the lender), a Federal Savings bank, in the amount of $1, 700, 000. The note by its terms provided for the payment by Nimage of all amounts thereunder, including principal, interest late charges, collection costs and attorneys fees. As security for the loan, Nimage delivered to the lender a certain mortgage, assignment of leases and rent and security agreement dated April 20, 2005, and recorded in the Hamden and New Haven land records. As further security, Spanos executed a guaranty, dated April 21, 2005, guaranteeing certain recourse obligations of Spanos to the lender relating to any expenses incurred by the lender in connection with the loan. The guarantee also provides that Spanos is fully and personally liable to the lender for the full amount due under the documents evidencing the loan. As further security for the loan, Nimage granted the lender and its successor and assignees a security interest in certain personal property, which was perfected by a financing statement filed with the Connecticut Secretary of the State on April 26, 2005.

The lender subsequently assigned its right, title, and interest in the loan documents to Wells Fargo Bank, which assignment was dated June 20, 2005 and recorded on February 21, 2006 on the Hamden land records and March 23, 2011 on the New Haven land records. Wells Fargo subsequently assigned its right, title, and interest in and to the loan documents to German American Capital Corporation (GACC), as recorded on the Hamden land records on July 16, 2010 and March 23, 2011 on the New Haven land records. GACC subsequently assigned its right, title and interest in and to the loan documents to LB-RPR Notes Holdings, LLC (LB-RPR), as recorded January 31, 2011 in the Hamden land records and January 31, 2011 in the New Haven land records. LB-RPR subsequently assigned all of its right, title and interest in and to the loan documents to LB-RPR REO Holdings, LLC (the plaintiff), as recorded on April 6, 2011 on the Hamden and New Haven land records.

The plaintiff alleges Nimage is in default of its obligations under the loan documents for failure to pay monthly amounts due since January 2010, and that Nimage has continued to collect rents from the property after that date, but has failed to remit any such amounts to the plaintiff. Plaintiff's predecessor in interest notified Nimage and Spanos that the loan was in default by a letter dated January 21, 2010. By correspondence dated April 6, 2011, plaintiff notified Nimage that the loan had been accelerated as a result of the defaults. Neither Nimage nor Spanos has cured the default and the loan remains in default.

The plaintiff asserts that all amounts due under the note are immediately due and payable and requests foreclosure of the mortgage in the first count. The plaintiff also asserts that it is entitled to immediate payment of any and all amount due under the guarantee for any and all recourse events including misapplication or conversion by Nimage of any rents received following the default, and requests judgment on the guarantee in the second count. Altogether, the plaintiff requests judgment on the note, strict foreclosure of the mortgage, immediate possession on the real and personal property, an order allowing the plaintiff to exercise its rights under the assignment, a deficiency judgment, a judgment on the guarantee, money damages and other such legal and equitable relief as maybe appropriate. Attached as exhibits to the complaint are the mortgage note, the mortgage, the promissory note, the assignment of leases and rents, the guaranty, the UCC financing statement, each alleged assignment of the loan documents, the default letter, and the acceleration letter. The allonges are not a part of the exhibits attached to the complaint.

The plaintiff filed a motion for summary judgment and memorandum in support on May 13, 2015, attaching as exhibits an affidavit of Sam Kasparek, the asset manager for loans by the plaintiff, along with the loan documents. Exhibits 5-8 are attached as allonges to the assignments. The defendant filed a memorandum in opposition to the motion on June 17, 2015, attaching as exhibits the servicing and administration agreement and various depositions. The plaintiff filed a reply to the objection on June 19, 2015. This matter was heard on short calendar on June 22, 2015.

DISCUSSION

RE MOTION SUMMARY JUDGMENT #255

" Summary judgment is a method of resolving litigation when pleadings, affidavits, and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law . . . The motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried . . . However, since litigants ordinarily have a constitutional right to have issues of fact decided by a jury . . . the moving party for summary judgment is held to a strict standard . . . of demonstrating his entitlement to summary judgment." (Citation omitted; footnote omitted; internal quotation marks omitted.) Grenier v. Commissioner of Transportation, 306 Conn. 523, 534-35, 51 A.3d 367 (2012). " After October 1, 1992, the pleadings do not have to be closed as between the parties in order for a party to move for summary judgment." Girard v. Weiss, 43 Conn.App. 397, 407 n.12, 682 A.2d 1078, cert. denied, 239 Conn. 946, 686 A.2d 121 (1996).

The plaintiff argues in its motion that there is no genuine issue of material fact that the plaintiff is entitled to enforce the note, that Nimage has defaulted, and that the plaintiff is entitled to judgment on the note. The defendant makes numerous arguments in response: namely, that a motion for summary judgment is not proper in a foreclosure action, and that allonges containing the endorsements of the assignments were not attached to the subject loans, and therefore the notes were not endorsed and cannot be enforced by the plaintiff.

As concerns the question of whether a motion for summary judgment is proper in a foreclosure action, this court notes that the case law cited in the defendant's brief in Homecomings Financial Network, Inc. v. Starbala, 85 Conn.App. 284, 290 n.2, 857 A.2d 366 (2004), is merely dicta and not binding upon this court. Motions for summary judgment have been used and continue to be used, frequently, in foreclosure actions. The court will therefore consider the motion.

The defendant argues that there is no evidence that the allonges were ever attached to the loan documents, and therefore the notes were never endorsed. The plaintiff argues that it is not required that the allonges be attached to the note, citing Kohler v. United States Bank National Ass'n, No. 11-C-0893, (E.D.Wis. June 21, 2013), in support of this argument. The plaintiff alternatively argues that even if the court finds that the ...


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