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21st Mortgage Corp. v. Schumacher

Court of Appeals of Connecticut

March 14, 2017

21ST MORTGAGE CORPORATION
v.
CHRISTOPHER N. SCHUMACHER

          Argued November 28, 2016

         Appeal from Superior Court, judicial district of Litchfield, Danaher, J. [summary judgment as to liability]; J. Moore, J. [judgment of strict foreclosure].

          Richard Lewis, for the appellant (defendant).

          S. Bruce Fair, for the appellee (plaintiff).

          Keller, Mullins and Sullivan, Js.

          OPINION

          MULLINS, J.

         The defendant, Christopher N. Schumacher, appeals from the judgment of strict foreclosure rendered by the trial court in favor of the plaintiff, 21st Mortgage Corporation. On appeal, the defendant claims that the court improperly rendered summary judgment as to liability after finding that there was no genuine issue of material fact as to whether the plaintiff is the holder of the note and the party entitled to foreclose. We affirm the judgment of the trial court.

         The following facts inform our review. In its complaint, the plaintiff alleged that the defendant and Patriot Lending Group, Inc. (Patriot), executed a promissory note in the amount of $877, 500 on February 28, 2006. The note was secured by a mortgage on the defendant's Bridgewater property in favor of Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Patriot.[1] The mortgage was executed on February 28, 2006, and recorded on the Bridgewater land records on March 7, 2006.

         The complaint further alleged: (1) the mortgage then was assigned to GMAC Mortgage, LLC, on October 27, 2009, and the assignment was recorded on the land records on November 20, 2009; (2) the mortgage ‘‘is to be assigned'' to the plaintiff by virtue of an assignment of mortgage ‘‘to be recorded'' on the land records;[2] and (3) the plaintiff is the holder of the note, the note is in default, and the plaintiff has elected to accelerate the balance due on the note, declare the note to be due in full, and to foreclose the mortgage securing the note.

         In response, the defendant filed an answer, which, in relevant part, left the plaintiff to its proof. The defendant also filed three special defenses, namely, (1) the plaintiff is not the owner of the debt or the holder of the mortgage, (2) the plaintiff's claim is based on the fraudulent dealings of the plaintiff or its assignors, and (3) the plaintiff's actions are a continuing course of dealing in violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110b et seq.

         On November 26, 2014, before filing a responsive pleading to the defendant's special defenses; see Practice Book § 10-56;[3] the plaintiff filed a motion for summary judgment as to liability, with a supporting affidavit and a memorandum of law. In that memorandum, the plaintiff also attacked each of the defendant's special defenses. After granting a continuance to the defendant, the court continued the plaintiff's motion for summary judgment to a short calendar hearing on May 4, 2015.

         On April 30, 2015, the defendant filed a motion entitled ‘‘Notice of waiver of oral argument and/or motion for continuance to hire local counsel.'' In that motion, the defendant asked for at least a thirty day continuance, and he requested that the court take the motion for summary judgment on the papers. It is not clear from the record whether the court took any action on this motion.

         On May 4, 2015, with the defendant not present, the court heard argument from the plaintiff on the merits of its motion for summary judgment. On May 26, 2015, the court, in a memorandum of decision, granted the plaintiff's motion for summary judgment as to liability, and, on July 20, 2015, it rendered a judgment of strict foreclosure. This appeal followed. Additional facts will be set forth as necessary.

         The defendant claims that the court improperly rendered summary judgment as to liability in the instant foreclosure action when there were genuine issues of material fact concerning the ownership of the note in question. The defendant argues that the court improperly relied on American Home Mortgage Servicing Inc., v. Reilly, 157 Conn.App. 127, 132-34, 117 A.3d 500 (2015), because ‘‘[i]n this case, the note was not endorsed in blank, and, thus, the note was not bearer paper. As such, the plaintiff was not a holder as that term is defined in [General Statutes] § 42a-1-201 (b) (21) (A) . . . . The issue here is not whether the party in possession of a note endorsed in blank is entitled to enforce the note, the issue is whether the plaintiff, or some unknown third party, owns the note.'' (Emphasis in original.)

         Furthermore, the defendant argues that, in support of his opposition to the plaintiff's motion for summary judgment, he submitted a deposition from a prior foreclosure case between him and the most recent prior holder of the note, GMAC Mortgage, LLC. In that deposition, a spokesperson for GMAC Mortgage, LLC, admitted that there were additional endorsements to this note and that the note had broken off into two separate branches, with two different sets of allonges, thereby calling into question the plaintiff's statusas the holder of the note and the party entitled to foreclose. He contends that the missing endorsements raised a genuine issue of material fact that must be answered and that summary judgment, therefore, is inappropriate. Although we agree that the defendant has demonstrated that there may be some discrepancies in the allonges to the note, we, nevertheless, conclude that the court properly granted summary judgment.

         The following additional facts, although somewhat cumbersome, are necessary to a full understanding of the plaintiff's claim and our analysis. The plaintiff, in support of its motion for summary judgment, submitted the November 13, 2014 affidavit of Tiffany Moyer, the legal coordinator for the plaintiff, attesting that the information contained in her affidavit was taken from the plaintiff's business records. She attested that the defendant and Patriot executed a note in the original amount of $877, 500 and that the plaintiff, or its agent, has possession of the original note, the note has been duly endorsed, and a copy is attached to the affidavit as exhibit A.

         Moyer also attested that the defendant, on February 28, 2006, conveyed by mortgage deed his interest in his Bridgewater property to MERS, as nominee for Patriot, and that this mortgage deed was recorded on March 7, 2006 in volume 68 at page 933 in the Bridgewater land records. She attested that the mortgage deed is attached to her affidavit as exhibit B.

         Additionally, Moyer attested that the mortgage thereafter was assigned to GMAC Mortgage, LLC, on October 27, 2009, and then to the plaintiff on May 7, 2010.[4] Copies of those assignments are attached to her affidavit as exhibit C. She further attested that the defendant was in default on the note, the plaintiff had accelerated the note, and the plaintiff was foreclosing on the mortgage. Interestingly, Moyer made no representations in her affidavit about the chain of title of the note.

         Exhibit A to Moyer's affidavit is the adjustable rate note between the defendant and Patriot in the amount of $877, 500, executed on February 28, 2006, purportedly signed by the defendant, with several attached allonges. The allonges are as follows: (1) The first allonge to the note is from Patriot to the Ohio Savings Bank; it is not dated; (2) on that same allonge is an endorsement from Ohio Savings Bank to GMAC Bank; it also is not dated; (3) the next allonge is from Ally Bank formerly known as GMAC Bank to GMAC Mortgage, LLC, signed by Brenda Staehle, ‘‘Limited Signing Officer''; it also is not dated; and (4) the final allonge is from GMAC Mortgage, LLC, to 21st Mortgage Corporation ‘‘By: 21st Mortgage Corporation, it's attorney-in-fact, '' signed by Troy Fus-sell, vice president and authorized signatory, and notarized by Michelle A. Wilson on February 14, 2014.

         Exhibit B to Moyer's affidavit is an open-end mortgage deed. The document provides that the borrower is the defendant and that MERS is acting as nominee for Patriot. At the very top of the document are the volume and page numbers for the Bridgewater land records; page one provides that the document is filed in volume 068, at page 0933. Approximately one third of the way down page one, there is a line across the page with a notation in the middle that provides: ‘‘Space Above This Line For Recording Data.'' Above that line the document provides in relevant part: ‘‘After recording please return to: OHIO SAVINGS BANK ATTN: DOCUMENT CONTROL'' along with an address.

         Exhibit C to Moyer's affidavit consists of two mortgage assignments. The first is recorded at volume 075, page 0907 of the Bridgewater land records, and provides that Patriot is assigning the defendant's mortgage to GMAC Mortgage, LLC. The assignment is dated October 27, 2009, and is from MERS, as nominee for Patriot, to GMAC Mortgage, LLC. The assignment is signed by

         Brenda Staehle, vice president of MERS.[5] The second assignment is from GMAC Mortgage, LLC, to 21st Mortgage Corporation. The assignment is dated May 7, 2014, and is signed by Troy Fussell, vice president of GMAC Mortgage, LLC.[6]

         In its memorandum of law in support of its motion for summary judgment, the plaintiff argued that there were no genuine issues of material fact concerning whether it was the holder of the note or whether it was entitled to foreclose on the mortgage due to the defendant's default on the note. The plaintiff, not having filed a responsive pleading, also addressed each of the defendant's special defenses, arguing that they ‘‘are not legally sufficient and/or they fail to give rise to any genuine issues of material fact.''

         Specifically, as to the defendant's first special defense, namely, that the plaintiff is not the owner of the debt or the holder of the mortgage, the plaintiff contended that it had ‘‘duly demonstrated that there are no genuine issues of material fact concerning its holdership of the subject promissory note, which is endorsed in blank.''[7]

         As to the defendant's remaining special defenses, the plaintiff asserted that they failed as a matter of law because they did not set forth any supporting factual allegations, but, instead, relied on mere legal conclusions.

         On February 24, 2015, the defendant filed an objection to the plaintiff's motion for summary judgment, along with a memorandum of law and supporting affidavit, with exhibits. In his memorandum, the defendant argued that there were important issues of fact concerning the allonges to the note that were attached to the Moyer affidavit. He contended that the plaintiff's evidence called into question its ownership of the debt, the note, and the mortgage, in that the Moyer affidavit contained discrepancies from the allonges that were attached to her affidavit, some known allonges were omitted, many allonges contained no dates, and the allonge from GMAC Mortgage, LLC, to 21st Mortgage Corporation was not signed by anyone from GMAC Mortgage, LLC. The defendant also alleged that the Moyer affidavit raised questions as to the transfers of the title of the note.

         In support of his opposition, the defendant also provided his own affidavit. One of the documents attached to his affidavit was a January 11, 2012 deposition of Albert Augustine, a member of the document execution team of GMAC Mortgage, LLC, taken in a previous foreclosure action instituted by GMAC Mortgage, LLC, against the defendant.[8] During his deposition, Augustine reviewed the endorsements to the defendant's note with Patriot, and he stated that they demonstrated that the note was assigned to Ohio Savings Bank from Patriot, and then from Ohio Savings Bank to GMAC Bank, and then from GMAC Bank to GMAC Mortgage. Heacknowl-edged that the endorsements were not dated and that he had no idea when ...


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