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Bank of America, N.A. v. Aubut

Court of Appeals of Connecticut

August 2, 2016

BANK OF AMERICA, N.A.
v.
DAVID AUBUT ET AL.

          Argued March 8, 2016

         Appeal from Superior Court, judicial district of Middlesex, Aurigemma, J. [motion for summary judgment]; Domnarski, J. [judgment].)

          Gary L. Seymour, for the appellants (defendants).

          Elizabeth T. Timkovich, with whom, on the brief, was Pierre-Yves Kolakowski, for the appellee (substitute plaintiff).

          Alvord, Keller and Harper, Js.

          OPINION

          KELLER, J.

         In this residential foreclosure action, the defendants, David Aubut and Karen Aubut, [1] appeal following the trial court’s judgment of strict foreclosure rendered in favor of the substitute plaintiff, Nationstar Mortgage, LLC. On appeal, the defendants claim that the court erred in rendering summary judgment as to liability only in favor of the substitute plaintiff because: (1) the court improperly concluded that there was no genuine issue of material fact as to whether Karen Aubut was provided with preacceleration notice of default in the manner required by the terms of the mortgage; (2) the court improperly acceptedan affidavit submitted in support of the substitute plaintiff’s motion for summary judgment; and (3) the court improperly concluded as a matter of law that the defendants could not prevail with respect to their special defenses. We agree, in part, with the defendants’ third claim. Accordingly, we reverse the judgment of the trial court.

         The following undisputed facts and procedural history are relevant to this appeal. On September 29, 2009, the defendants executed and delivered a note and mortgage deed to the original, named plaintiff in this action, Bank of America, N.A., in order to obtain a loan to purchase a home in Middletown. The defendants subsequently defaulted on their payments beginning with the payment due on August 1, 2011. On September 16, 2011, the original plaintiff mailed a preacceleration notice of default that was addressed to David Aubut, indicating that the defendants were in default and that it would accelerate the balance on the loan if they did not cure the default on or before October 16, 2011. The defendants failed to cure the default and the debt was accelerated.

         On May 20, 2012, the original plaintiff commenced a foreclosure action against the defendants. In its complaint, the original plaintiff alleged, inter alia, that the defendants had defaulted on their mortgage payments and that they had failed to cure the default. The original plaintiff alleged that, as a result, it had elected to accelerate the balance due on the note and to foreclose the mortgage on the defendants’ home. On June 5, 2012, the defendants requested to participate in a foreclosure mediation program. Although the defendants did participate in the mediation program from June 9, 2012, to May 30, 2013, they were unsuccessful in reaching an amicable resolution. The defendants filed for bankruptcy in June, 2013. On or about November 13, 2013, the original plaintiff filed a notice of relief from the bankruptcy stay due to the fact that the bankruptcy case had been closed.

         On March 28, 2014, the original plaintiff executed an assignment of the mortgage, whereby the substitute plaintiff, as the original plaintiff’s attorney in fact, assigned the mortgage to itself. The substitute plaintiff’s involvement in the foreclosure action began after the court granted the original plaintiff’s June 18, 2014 motion to substitute on June 30, 2014. On July 18, 2014, the defendants filed their disclosure of defense, as well as their answer, which contained special defenses and a three count counterclaim.

         On October 30, 2014, the substitute plaintiff filed a motion for summary judgment. The substitute plaintiff, in its memorandum of law in support of the motion, argued that there were no genuine issues of material fact regarding the defendants’ liability under the note and the mortgage, and that summary judgment was proper because the defendants’ special defenses and counterclaim were legally insufficient. In support of its motion, the substitute plaintiff submitted copies of several documents, including, in relevant part: the note and the mortgage deed that the defendants had executed and delivered to the original plaintiff; the September 16, 2011 preacceleration notice of default mailed by the original plaintiff; the March 28, 2014 assignment of mortgage wherein the substitute plaintiff had assigned itself the mortgage; records documenting the defendants’ mortgage payment history; and an affidavit of Fay Janati, an employee of the substitute plaintiff, in which she averred that the defendants were in default and that they were liable to the substitute plaintiff for the balance of the mortgage loan that they had failed to pay pursuant to their mortgage agreement.

         On January 13, 2015, the defendants filed their opposition to summary judgment and an accompanying memorandum of law. In support of their opposition, the defendants also submitted copies of several documents, including: paragraph twenty-two of the mortgage deed; a January 13, 2015 notice sent by the defendants’ counsel notifying the original plaintiff and the substitute plaintiff that Karen Aubut was rescinding the mortgage pursuant to § 1635 of the federal Truth in Lending Act, 15 U.S.C. § 1601 et seq.; a printed copy of Janati’s Linked In profile; a job description of the ‘‘Litigation Research Analyst’’ position posted by the substitute plaintiff; the March 28, 2014 assignment of mortgage; Janati’s affidavit; and an affidavit of David Aubut.

         On January 26, 2015, the court issued a memorandum of decision wherein it rendered summary judgment as to liability only in favor of the substitute plaintiff. Thereafter, the court rendered judgment of strict foreclosure in favor of the substitute plaintiff. This appeal followed. Additional procedural history and facts shall be set forth as necessary.

         I

         The defendants first claim that the court erred in rendering summary judgment in the substitute plaintiff’s favor because it improperly concluded that there was no genuine issue with respect to whether Karen Aubut, as a ‘‘Borrower’’ listed under the mortgage deed, was provided with preacceleration notice of default in the manner required by the terms of the mortgage. We disagree.

         The following additional procedural history and facts are relevant to this claim. In their opposition to the substitute plaintiff’s motion for summary judgment, the defendants argued that the preacceleration notice of default that the substitute plaintiff sent to David Aubut created a genuine issue of material fact as to whether the substitute plaintiff had established a prima facie case to institute the foreclosure action. Specifically, in their opposition memorandum of law, the defendants argued the following with respect to this issue: ‘‘In its complaint and affidavit in support of its motion [for] summary judgment, [the substitute plaintiff] alleges that it gave proper notice of intent to accelerate to [the defendants] as borrowers as required by paragraph [twenty-two] of the subject mortgage. . . . A review of the notice reveals that it is deficient as follows . . . It is only addressed to David Aubut and not Karen Aubut (consistent with [the Truth in Lending Act] failure to provide notice of [the] right to rescind). . . . Based on the foregoing, [the substitute plaintiff] cannot make its prima facie case, as it did not, as [a] condition precedent to the institution of foreclosure, properly provide [the defendants] with a notice of default in compliance with the terms of the mortgage.’’

         In its memorandum of decision, the court, relying on Janati’s affidavit, stated that ‘‘[b]y letter dated September 16, 2011, and sent by certified mail to the property address [for the home subject to the mortgage], [the original plaintiff] notified the defendants of the default. The defendants have failed to cure the default.’’ At the conclusion of its memorandum of decision, the court stated that the substitute plaintiff had ‘‘presented evidence that it sent a [preacceleration notice of default] which complied with the terms of the loan documents.’’ The court set forth in its legal analysis of the substitute plaintiff’s prima facie case for its foreclosure action, and the court also discussed the evidence submitted in support of summary judgment with respect to this issue: ‘‘As evidenced by the mortgage deed, the defendants gave the [substitute] plaintiff’s predecessor in interest a mortgage to secure the payment of the note. The terms of the mortgage determine the [substitute] plaintiff’s right to foreclosure [of] the mortgage. . . . In the present case, the note and mortgage deed provide that upon a default under the promissory note, the [substitute] plaintiff is entitled to foreclosure on the mortgage, to demand immediate payment of all sums due and owing, and to collect all expenses incurred in pursuing its remedy. When the [substitute] plaintiff establishes its ownership of the note and satisfies the court of a defendant’s failure to make payments according to the note, the [substitute] plaintiff establishes its right to avail itself of such security as the mortgage affords. . . . In other words, in order to make out a prima facie case in [a] foreclosure action, the [substitute] plaintiff must prove by a preponderance of the evidence that it [is] the owner of the note and mortgage and that [the defendant has] defaulted on the note. . . . In this case, it is alleged that the defendant, David Aubut, executed the note in the original principal amount of $189, 957. The [substitute] plaintiff has presented evidence that the [substitute] plaintiff is the holder of the note and mortgage, which mortgage was executed by the defendants; the note and mortgage are in default; the [substitute] plaintiff has elected to accelerate the indebtedness; and the defendants were duly notified in writing of the default. Again, the party opposing a summary judgment motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact. It is not enough for the opposing party merely to assert the existence of a disputed issue. The defendants have not provided such foundation.’’ (Citations omitted; internal quotation marks omitted.)

         The court also noted that in addition to their properly pleaded special defenses, the defendants had attempted to raise additional defenses to the foreclosure in their opposition to the substitute plaintiff’s motion for summary judgment: a defense asserting a violation of the Truth in Lending Act, 15 U.S.C. § 1601 et seq., as well as a defense alleging ‘‘failure to give proper notice of the acceleration of the note.’’ The court then stated that ‘‘[t]he defendants have not pleaded these defenses in their special defenses, ’’ and that the substitute plaintiff had ‘‘presented evidence that it sent a notice of acceleration which complied with the terms of the loan documents.’’

         On appeal, the defendants argue that a genuine issue of material fact exists with respect to whether they were sent proper preacceleration notice of default. They assert, correctly, that in order to establish its prima facie case to commence a foreclosure action, the substitute plaintiff must prove that all conditions precedent to foreclosure have been satisfied. The defendants argue that, pursuant to the terms of the mortgage, the proper delivery to both defendants of the preacceleration notice of default was a condition precedent to foreclosure. The defendants allege that no evidence was submitted to demonstrate that Karen Aubut received the preacceleration notice of default. The defendants argue that a genuine issue of material fact exists with respect to the propriety of the preacceleration notice of default because although the evidence submitted by the parties in support of or in opposition to summary judgment shows that the preacceleration notice of default was addressed to one defendant, David Aubut, and that only he had signed the note, paragraph twenty-two of the mortgage deed provides that ‘‘Borrower’’ shall be given preacceleration notice, and the first page of the deed defines ‘‘Borrower’’ as ‘‘David J. Aubut and Karen Z. Aubut.’’

         The substitute plaintiff argues that the court properly concluded that there was no genuine issue of material fact with respect to the preacceleration notice of default. The substitute plaintiff argues that the defendants’ argument that notice to both David Aubut and Karen Aubut was a condition precedent to the foreclosure action is flawed because, despite the fact that the mortgage deed defines both David Aubut and Karen Aubut as ‘‘Borrower, ’’ the note identifies only David Aubut as the borrower and also provides, in paragraph 6 (C), that ‘‘If I am in default, the Note Holder may send me a written notice telling me that if I do not pay the overdue amount by a certain date, the Note Holder may require me to pay immediately the full amount of Principal which has not been paid and all the interest I owe on that amount.’’[2] (Emphasis added.) Alternatively, the substitute plaintiff asserts that even if notice to David Aubut and Karen Aubut was a condition precedent to the foreclosure action, the defendants never submitted any evidence to the court to contradict Janati’s affidavit wherein she averred that, on September 16, 2011, both defendants were given preacceleration notice of default on their mortgage payments. We agree with the substitute plaintiff that the court did not err in concluding that there was no genuine issue of material fact with respect to the preacceleration notice of default that was sent to the defendants.

         We begin our analysis with the appropriate standard of review. ‘‘On appeal, [w]e must decide whether the trial court erred in determining that there was no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. . . . [O]ur review is plenary and we must decide whether the [trial court’s] conclusions are legally and logically correct and find support in the facts that appear on the record. . . .

         ‘‘Practice Book [§ 17-49] provides that summary judgment shall be rendered forthwith if the 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. . . . In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party. . . .

         ‘‘A material fact is a fact that will make a difference in the outcome of the case. . . . Once the moving party has presented evidence in support of the motion for summary judgment, the opposing party must present evidence that demonstrates the existence of some disputed factual issue . . . . It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact . . . are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book [§ 17-45]. . . . The movant has the burden of showing the nonexistence of such issues but the evidence thus presented, if otherwise sufficient, is not rebutted by the bald statement that an issue of fact does exist. . . . To oppose a motion for summary judgment successfully, the nonmovant must recite specific facts . . . which contradict those stated in the movant’s affidavits and documents. . . .

         ‘‘[B]ecause the [substitute] plaintiff sought summary judgment in a foreclosure action, which is an equitable proceeding, we note that the trial court may examine all relevant factors to ensure that complete justice is done. . . . The determination of what equity requires in a particular case, the balancing of the equities, is a matter for the discretion of the trial court. . . .

         ‘‘In order to establish a prima facie case in a mortgage foreclosure action, the plaintiff must prove by a preponderance of the evidence that it is the owner of the note and mortgage, that the defendant mortgagor has defaulted on the note and that any conditions precedent to foreclosure, as established by the note and mortgage, have been satisfied. . . . Thus, a court may properly grant summary judgment as to liability in a foreclosure action if the complaint and supporting affidavits establish an undisputed prima facie case and the defendant fails to assert any legally sufficient special defense.’’ (Citation omitted; internal quotation marks omitted.) Wells Fargo Bank, N.A. v. Strong, 149 Conn.App. 384, 390-92, 89 A.3d 392, cert. denied, 312 Conn. 923, 94 A.3d 1202 (2014); accord GMAC Mortgage, LLC v. Ford, 144 Conn.App. 165, 176, 73 A.3d 742 (2013); see also Franklin Credit Management Corp. v. Nicholas, 73 Conn.App. 830, 838, 812 A.2d 51 (2002), cert. denied, 262 Conn. 937, 815 A.2d 136 (2003). ‘‘A promissory note and a mortgage deed are deemed parts of one transaction and must be construed together as such. . . . Where the terms of the note and mortgage require notice of default, proper notice is a condition precedent to an action for foreclosure.’’ (Internal quotation marks omitted.) Fidelity Bank v. Krenisky, 72 Conn.App. 700, 707, 807 A.2d 968, cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002).

         In the present case, although on appeal the parties disagree with respect to whether notice to both David Aubut and Karen Aubut was a condition precedent to the foreclosure action, we need not resolve that issue. Assuming, as the defendants argue, that such notice to both defendants was required, we conclude that the defendants failed to demonstrate that a genuine issue of material fact exists with respect to whether such notice had been given. On the basis of our review of the documentary proof submitted by the substitute plaintiff in support of its motion for summary judgment, as well as the documentary proof submitted by the defendants in support of their opposition, we conclude that the court did not err in its determination that there was no genuine issue of material fact with respect to the propriety of the preacceleration notice of default. The definitions section of the mortgage deed defines ‘‘Borrower’’ as ‘‘David J. Aubut and Karen Z. Aubut, ’’ and paragraph twenty-two of the mortgage deed sets forth the following with respect to acceleration: ‘‘Lender shall give notice to Borrower prior to acceleration following Borrower’s breach of any covenant or agreement in this Security Instrument . . . .’’ The September 16, 2011 preacceleration notice of default was addressed only to David Aubut. We note, however, that only David Aubut signed the note and that the note provides that he is entitled to receive preacceleration notice of default. Furthermore, Janati, a representative of the substitute plaintiff, averred in her affidavit that ‘‘[b]y letter dated September 16, 2011 and sent by certified mail to the subject property address on that date, the Defendants were duly notified of the default.’’ (Emphasis added.)

         In support of their opposition to the substitute plaintiff’s motion for summary judgment, the defendants submitted, inter alia, paragraph twenty-two of the mortgage deed, a January 13, 2015 notice sent by the defendants’ counsel notifying the original plaintiff and the substitute plaintiff that Karen Aubut was rescinding the mortgage pursuant to § 1635 of the federal Truth in Lending Act, 15 U.S.C. § 1601 et seq., Janati’s affidavit, and an affidavit of David Aubut. Potentially, an affidavit submitted by Karen Aubut would have been significant with respect to the issue of whether she had received notice, but the defendants did not submit proof of such nature to the court. Furthermore, David Aubut did not make any averments, from personal knowledge, that Karen Aubut had not received proper preacceleration notice of default as required by the terms of the mortgage deed and the note. We iterate that the defendants were required to ‘‘recite specific facts . . . which contradict those stated in the movant’s affidavits and documents’’ in order to defeat the substitute plaintiff’s motion for summary judgment. (Internal quotation marks omitted.) Wells Fargo Bank, N.A. v. Strong, supra, 149 Conn.App. 391. The substitute plaintiff, through the documentary proof submitted in support of its motion for summary judgment, met its burden of establishing the nonexistence of a genuine issue of material fact with respect to the preacceleration notice of default. Given that the defendants, in their opposition to the substitute plaintiff’s motion, did not state specific facts to contradict the proof submitted by the substitute plaintiff showing that both defendants were sent preacceleration notice of default, we conclude that the defendants failed to establish the existence of a genuine issue of material fact with respect to the preacceleration notice of default. Thus, we conclude that the court did not err in determining that there was no genuine issue concerning whether the original plaintiff-and the substitute plaintiff, through assignment of the mortgage-thereby satisfied all of the conditions precedent to institute the foreclosure action against the defendants.

         II

         Next, the defendants claim that the court erred in rendering summary judgment because it accepted Janati’s affidavit, which had been submitted to the court in support of the substitute plaintiff’s motion for summary judgment. We disagree.

         The following additional procedural history and facts are relevant to this claim. In her affidavit, Janati averred that she was employed by the substitute plaintiff as a ‘‘Litigation Resolution Analyst.’’ Janati averred that, in this capacity, she had reviewed the records of the defendants’ mortgage payments and that she was personally familiar with these records. Janati averred that the defendants were in default under the terms of the mortgage and that they were sent preacceleration notice of default on September 16, 2011. Janati also averred that the substitute plaintiff was the mortgagee, that it was the holder of the note, that it was in possession of the note, and that it had satisfied ‘‘any and all conditions precedent to enforcing this [mortgage] instrument.’’ The acknowledgement portion of the affidavit, which appears at the very end of the affidavit, states in relevant part: ‘‘Subscribed and sworn to before me on this 29 day of October, 2014, before me, the undersigned officer, personally appeared, Fay Janati, who acknowledged himself/herself to be the Assistant Secretary of Nationstar Mortgage, LLC, and that s/he, as such officer, being authorized to do, executed the foregoing instrument for the purposes therein contained and subscribed, swore and acknowledged the same to be his/ her free act and deed and the free act and deed on behalf of Nationstar Mortgage, LLC.’’ (Emphasis added.) Below the acknowledgement appears the signature of the notary public before whom Janati appeared.

         The defendants, in support of their opposition to summary judgment, submitted, inter alia, Janati’s affidavit, a printed copy of Janati’s Linked In profile, a job description of the ‘‘Litigation Research Analyst’’ position posted by the substitute plaintiff, and an affidavit of David Aubut. The court, in its memorandum of decision, discussed and indicated its reliance upon Janati’s affidavit in rendering its decision, wherein it concluded that there was no genuine issue of material fact and that the substitute plaintiff was entitled to summary judgment as a matter of law.

         On appeal, the defendants claim that the court improperly accepted Janati’s affidavit in support of the substitute plaintiff’s motion for summary judgment because it reflects that Janati held two different positions for the substitute plaintiff. The defendants claim that this fact somehow casts doubt on her ability to testify competently about the subject matter of her affidavit. In opposition, the substitute plaintiff argues that, in terms of whether the affidavit was properly accepted by the court, it is inconsequential that Janati averred that she occupied two different positions for the substitute plaintiff, a private entity, because that fact does not suggest anything improper. Furthermore, the substitute plaintiff argues that the court properly accepted the affidavit because the defendants did not submit a legally sufficient affidavit or other documentation to contradict the averments in Janati’s affidavit or to challenge her ability to testify competently with respect to the matters in the affidavit. We agree with the substitute plaintiff that the court did not err in accepting Janati’s affidavit.

         We begin our analysis of this claim with the appropriate standard of review. ‘‘In reviewing the legal basis for summary judgment, this court properly may consider facts contained in the affidavits submitted in support of, or in opposition to, the motion.’’ Cogswell v.American Transit Ins. Co., 282 Conn. 505, 533, 923 A.2d 638 (2007). ‘‘Whether the court should have considered . . . [an] affidavit submitted by [the movant for summary judgment] presents an evidentiary issue to which we apply an abuse of discretion standard of review.’’ Bruno v.Geller, 136 Conn.App. 707, 716, 46 A.3d 974, cert. denied, 30 ...


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