Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

LLC v. Crystal, LLC

Supreme Court of Connecticut

February 28, 2017

ARS INVESTORS II 2012-1 HVB, LLC
v.
CRYSTAL, LLC, ET AL.

          Argued November 15, 2016

          James M. Nugent, with whom, on the brief, was James R. Winkel, for the appellant (named defendant).

          Gerald L. Garlick, for the appellee (substitute plaintiff).

          Rogers, C. J., and Palmer, Eveleigh, McDonald, Espinosa and Robinson, Js.

          OPINION

          McDONALD, J.

         In this appeal, we consider whether a trial court may render a judgment of foreclosure on mortgaged property that consists of parcels of land within a subdivision that has not been approved by municipal zoning authorities. We conclude that our law permitsa trial court to order foreclosure in such circumstances.

         I

         The parties stipulated to the facts relevant to this appeal, which we summarize as follows. The named defendant, Crystal, LLC, is the owner of real property located at 314 Wilson Avenue in Norwalk.[1] After acquiring ownership of the property, Crystal filed a site plan application with the city of Norwalk to consolidate numerous preexisting parcels within the property into two parcels. The city approved the site plan and Crystal filed a map reflecting the site plan on the city's land records.[2]

         Approximately twelve years later, Crystal filed a subdivision map on the land records that purported to subdivide the property into three new parcels, identified as tracts I, II, and III (revised subdivision map).[3] Crystal, however, did not obtain permission from city planning and zoning authorities before filing the revised subdivision map. Two months later, Crystal obtained a mortgage loan in the amount of $6 million from a predecessor-in-interest to the substitute plaintiff, HVB-CT SUB, LLC.[4] The mortgage loan was secured by a mortgage on tracts I and III, as depicted in the revised subdivision map, and the parties executed a mortgage deed that described the mortgaged property by reference to the revised subdivision map on file.[5]

         After the closing of the mortgage loan, however, the city notified Crystal that it had not approved the revised subdivision map and ordered Crystal to refile on the land records the earlier site plan map depicting the previous division of the property. Crystal refiled the earlier site plan map, although the revised subdivision map depicting tracts I, II, and III also remains filed on the city's land records.

         Several years later, Crystal defaulted on the mortgage loan, and the plaintiff's predecessor-in-interest commenced this action to foreclose on the mortgage. The promissory note and mortgage deed were later assigned to the plaintiff, who was substituted as the plaintiff in the foreclosure action.

         Crystal objected to the foreclosure by way of special defenses. In a pretrial memorandum, Crystal principally argued that the trial court, as a matter of law, could not foreclose a mortgage deed that mortgaged a parcel of real property in an unapproved subdivision. According to Crystal, a judgment of foreclosure would have the effect of ‘‘validating'' an illegal subdivision of property. Because, as Crystal asserted, the mortgage deed was invalid as executed, Crystal argued that the plaintiff could not foreclose on the mortgage without first asking the trial court to reform the mortgage deed, such that the boundaries of the mortgaged property conformed to the parcels in the original, approved site plan map.

         The plaintiff disagreed and in its pretrial memorandum argued that the tracts of land could properly be the subject of a foreclosure judgment because they existed in fact and were adequately described in the revised subdivision map, as incorporated into the mortgage deed. According to the plaintiff, whether the tracts were part of an approved subdivision was relevant only for zoning purposes, and did not affect whether those tracts could be mortgaged and subject to foreclosure. The plaintiff also argued that, because it was clear that the parties intended to mortgage tracts I and III, and that such a mortgage is valid, it had no need to seek reformation of the mortgage deed.

         After a trial to the court on stipulated facts and exhibits, the trial court rendered judgment in favor of the plaintiff and ordered a strict foreclosure of tracts I and III, as depicted in the revised subdivision map. In an articulation of the basis for its decision, the court explained that it had concluded that it could order foreclosure because the land consisting of tracts I and III existed in fact and was sufficiently described in the mortgage deed. The court further explained that ‘‘[t]he fact that the land described in the mortgage deed may not constitute a legal lot under local zoning regulations is not relevant to the plaintiff's right to foreclose. The court is unaware of any legal precedent [that] bars the holder of an otherwise valid mortgage from foreclosing on land [that] is not in compliance with local zoning regulations.'' Lastly, the court explained that it had rejected Crystal's argument that the plaintiff was required to seek reformation ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.