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Wells Fargo Bank, N.A. v. Costello

Superior Court of Connecticut, Judicial District of Waterbury, Waterbury

August 16, 2016

Wells Fargo Bank, N.A.
James Costello et al


          MARK H. TAYLOR, J.

         The plaintiff, Wells Fargo Bank, N.A., filed this action to foreclose the defendant's mortgage on October 19, 2015. The defendant, James Costello, is a self-represented litigant. He filed this motion to dismiss on May 27, 2016, in which he asserts that the plaintiff does not possess or own the mortgage note and that it, therefore, lacks standing to foreclose his mortgage. In addition, Costello asserts that the plaintiff failed to provide prior notice of its intent to accelerate the mortgage note. For these reasons, Costello concludes that this court lacks jurisdiction. The court held an evidentiary hearing on the defendant's motion to dismiss on August 5, 2016.

         Based upon the evidence presented to the court, although the plaintiff has sufficiently shown that it has standing, the defendant has sufficiently rebutted the plaintiff's claim of proper notice of default, which is a condition precedent to this action. The motion to dismiss is therefore granted.



         The plaintiff presented the original mortgage note for inspection by the defendant and the court at the hearing. The face amount of mortgage note is $42, 213 with an annual interest rate of 6.75 percent. The original lender was Wells Fargo Home Mortgage, Inc. The court found that the note was signed by the defendant and endorsed in blank by the original lender. The mortgage deed was similarly presented and found to be signed and witnessed. The plaintiff additionally supplied evidence of a merger on May 4, 2004 between Wells Fargo Home Mortgage, the original lender, and Wells Fargo Bank, N.A., the plaintiff in this case. The plaintiff also provided evidence and sworn testimony that these original mortgage documents were in the possession of the plaintiff's law firm on March 9, 2015, prior to the initiation of this action to foreclose the defendant's mortgage.

         Possession of a mortgage note endorsed in blank, as established here, creates a presumption that the plaintiff has the right to enforce the mortgage. J.E. Robert Co., Inc. v. Signature Properties, LLC., 309 Conn. 307, 324-25, 71 A.3d 492 (2013). To this presumption, there has been no factual rebuttal by the defendant.[1] Based upon the evidence presented, the court concludes that the plaintiff has standing in this action to foreclose the defendant's mortgage.



         There is a substantial issue of fact between the parties regarding the proper delivery of a notice of default to the defendant together with the plaintiff's notice of intent to accelerate the mortgage note, as required by the mortgage deed. " It is well established that [n]otices of default and acceleration are controlled by the mortgage documents." Fidelity Bank v. Krenisky, 72 Conn.App. 700, 706, 807 A.2d 968, cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002). In reviewing the language of these documents, although paragraph 6c of the mortgage note appears to be permissive on the question of notice, paragraph 22 of the mortgage deed clearly requires notice of default prior to acceleration. Because " proper notice of acceleration is a necessary condition precedent to an action for foreclosure"; Citicorp Mortgage, Inc. v. Porto, 41 Conn.App. 598, 603, 677 A.2d 10 (1996); the resolution of this question is material to the dismissal of this action.

         There is no substantial dispute between the parties regarding the following facts: A notice of default and acceleration, along with other required notices (notice) was mailed by the plaintiff, using the U.S. Postal Service's (USPS) certified mail program, return receipt requested. The notice specifically states the arrearage owed and is accompanied by a demand for payment of the delinquency on or before May 14, 2015, consistent with the requirements of the mortgage deed. The evidence shows that the notice was dated April 9, 2015. Soon thereafter, on April 18, 2015, the USPS delivered the notice at the defendant's home address, located at 408 Bar Harbor Road, Stratford. Exhibit F, Plaintiff's Objection.

         The plaintiff offers no further evidence of delivery or actual notice to the defendant and rests, instead, upon the " mailbox rule, " through which there is a presumption of delivery. Pursuant to the mailbox rule, the burden shifts to the defendant to present evidence to rebut this presumption. Echavarria v. National Grange Mutual Ins. Co., 275 Conn. 408, 418, 880 A.2d 882 (2005).

         The defendant rebuts the mailbox rule presumption with two forms of evidence. First, in his sworn affidavit, the defendant denies receipt of the notice. Affidavit paragraph 17, Defendant's Reply. Although " [a] mere denial of receipt is insufficient to rebut the presumption that mail was received." Volikas v. Kmart, Superior Court, judicial district of Ansonia-Milford, Docket No. CV-01-0076466-S, (January 12, 2004, Robinson, J.), the defendant's affidavit and exhibits provide further evidence that an individual other than the defendant signed the certified mail receipt for the notice. The defendant attests to the fact that, upon conducting research at the Stratford USPS office, he obtained a copy of the return receipt with the same tracking number, which is signed by a person unknown to him, named Kevin Lavery. This evidence was supplied in the defendant's reply to the plaintiff's objection to the motion to dismiss. The reply was filed on July 11, 2016, the date originally set down for the hearing on this motion to dismiss. The plaintiff was granted a continuance to review the defendant's reply, and the court set a specially assigned date for an evidentiary hearing, approximately three weeks later on August 5, 2016.

         In response to the defendant's evidence, the plaintiff has produced no contradictory evidence showing that the defendant had legal notice of the default and acceleration of his mortgage. Although the defendant is certainly aware of the default now, and may very well have been aware of it on April 9, 2015, the contract between the parties requires notice and an opportunity to cure a mortgage delinquency prior to acceleration and, thereafter, foreclosure. The defendant was present at the hearing but was not called as a witness to be examined by the plaintiff and so that the court could assess his credibility. Although it is often said that common sense does not take flight at the courthouse door, it should not allow mere speculation to ...

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