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Sovereign Bank v. Licata

Court of Appeals of Connecticut

November 14, 2017

SOVEREIGN BANK
v.
JAMES LICATA ET AL.

          Considered September 7, 2017

          Howard R. Wolfe in support of the motion.

          John F. Carberry in opposition to the motion.

          Lavine, Prescott and Kahn, Js. [*]

         Syllabus

         The plaintiff bank sought to foreclose a mortgage on certain real property owned by the defendant L, who filed counterclaims alleging breach of contract, negligent misrepresentation, and a violation of the Connecticut Unfair Trade Practices Act (CUTPA) (§ 42-110a et seq.). Thereafter, S Co. was substituted as the plaintiff. The counterclaims were tried to a jury, which returned averdict inpart for L, and the foreclosure complaint was tried to the court, which rendered judgment in part for L in accordance with the jury's verdict, and a judgment of strict foreclosure and set the law days. Following the trial court's decision awarding attorney's fees and, inter alia, granting in part S Co.'s motion to set aside the verdict and for judgment notwithstanding the verdict, S Co. appealed to this court, challenging the judgment rendered against it on the counterclaims for negligent misrepresentation and for CUTPA violations. L also filed a cross appeal challenging the court's decision to set aside the verdict as to the breach of contract counterclaim, which was dismissed. This court reversed in part the judgment of the trial court as to the counterclaims. Several years later, L filed a motion to determine the status of the strict foreclosure judgment, in which she claimed that her equity of redemption was never extinguished because the passage of the law days had been stayed by the prior appeal. S Co. filed a motion to correct the record to reflect that a judgment of strict foreclosure had been rendered, that the law days had commenced thereafter and that the commencement of the law days had never been stayed or modified. The trial court denied the motions, and L appealed to this court. Thereafter, S Co. filed a motion to dismiss the appeal for lack of subject matter jurisdiction, claiming that L's interest in the property had been extinguished after the law days passed. Held that the appeal was dismissed as moot, as there was no practical relief that could be afforded to L due to the fact that title to the property at issue had long since passed unconditionally to S Co.: because the record demonstrated that the trial court rendered judgment of strict foreclosure with respect to the subject property and that no appeal was ever filed from the judgment rendered on the foreclosure complaint, any initial appellate stay of execution that arose when the judgment was rendered expired after the appeal period for that judgment had run, which was long before the law days set by the court had passed, and, therefore, because there was no appellate stay in effect with respect to the foreclosure judgment when the law days began to run, absolute title to the property transferred to the plaintiff as a matter of law after all the law days expired; moreover, because the rules of practice (§§ 61-2 through 61-4) establish that a final judgment disposing of a counterclaim is separate and distinct from a judgment on the associated complaint, the foreclosure judgment gave rise to a distinct appeal period and appellate stay that automatically terminated upon the expiration of the period to appeal from that judgment, and was not affected by the stay that resulted due to the appeal from judgment on the counterclaim.

         Procedural History

         Action to foreclose a mortgage on certain real property owned by the named defendant et al., and for other relief, brought to the Superior Court in the judicial district of Stamford-Norwalk, where the court, Tobin, J., granted in part the plaintiff's motion for summary judgment as to liability with respect to the defendant Cynthia Licata; thereafter, the court, Tyma, J., granted the motion filed by Seven Oaks Partners, LP, to be substituted as the plaintiff; subsequently, the defendant Cynthia Licata field a counterclaim as against the substitute plaintiff; thereafter, the counterclaim was tried to the jury and the foreclosure complaint was tried to the court, Nadeau, J.; verdict for the defendant Cynthia Licata on the counterclaim; subsequently, the court, Nadeau, J., denied the substitute plaintiff's motion for remittitur, granted in part the substitute plaintiff's motions for judgment notwithstanding the verdict and to set aside the verdict, and rendered judgment of strict foreclosure and in part for the defendant Cynthia Licata on the counterclaim, from which the substitute plaintiff appealed and the defendant Cynthia Licata cross appealed to this court, which dismissed the cross appeal, reversed in part the judgment of the trial court as to the counterclaim and remanded the case to the trial court with direction to vacate in part the damages and attorney's fees awards; thereafter, the court, Mintz, J., denied the motion to determine the status of the foreclosure judgment filed by the defendant Cynthia Licata and denied the substitute plaintiff's motion to correct the record, and the defendant Cynthia Licata appealed to this court; subsequently, the substitute plaintiff filed a motion to dismiss the appeal.

Appeal dismissed.

          OPINION

          PRESCOTT, J.

         In this protracted foreclosure matter, the defendant Cynthia Licata[1] appeals following the trial court's denial of her motion asking the court to clarify the ‘‘status'' of a judgment of strict foreclosure that was rendered orally in open court, more than ten years earlier, and from the trial court's order making copies of the transcripts of the relevant underlying proceedings a part of the court file. The plaintiff Seven Oaks Partners, LP, [2] filed a motion to dismiss the appeal on the ground that this court lacks subject matter jurisdiction because the appeal is moot and the decisions from which the defendant appealed do not constitute appealable final judgments. The defendant opposes the motion to dismiss. Because we agree that there is no practical relief that can be afforded to the defendant in this matter due to the fact that title to the property at issue has long since passed unconditionally to the plaintiff, we grant the plaintiff's motion and dismiss the appeal as moot.[3]

         The record reveals the following relevant facts and procedural history. In 2001, James Licata entered into a loan agreement with Sovereign Bank and executed a note in the amount of $2.5 million. As security for that loan, he and the defendant executed a mortgage on two parcels of property in Greenwich. The first parcel was owned by the defendant, and the second, a vacant lot located across the street from the first parcel, was owned by James Licata.[4] As additional security, a guaranty for the loan was executed by First Connecticut Consulting Group, Inc.[5]

         James Licata failed to make timely monthly payments on the loan and eventually was held in default. Sovereign Bank chose to accelerate the loan, demanded payment in full, and, in February, 2002, commenced this action seeking a judgment of foreclosure, a deficiency judgment against James Licata, and enforcement of the loan guaranty.

         The defendant filed an answer and special defenses in which she alleged that she had executed the mortgage under duress and that Sovereign Bank had breached an implied covenant of good faith and fair dealing. James Licata never filed a responsive pleading and was later defaulted for failure to disclose a defense.[6] In September, 2003, the court rendered summary judgment as to liability only on the foreclosure complaint with respect to the defendant.

         In September, 2004, the plaintiff, which previously had purchased and been assigned the subject note and mortgage, was substituted into the foreclosure action in place of Sovereign Bank. The defendant, in February, 2005, filed a pleading that asserted a new special defense and three counterclaims, each premised upon the plaintiff allegedly having entered into a forbearance agreement with her. The counterclaims sounded in breach of contract, negligent misrepresentation, and a violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. The plaintiff objected to the filing of the special defense and counterclaims, arguing that the defendant needed permission from the court to amend her previous answer. The plaintiff also filed a motion asking the court to render a judgment of strict foreclosure.

         In March, 2005, the court overruled the plaintiff's objection to the special defense and counterclaims. The plaintiff also unsuccessfully moved to sever the counterclaims from the foreclosure action. The defendant's counterclaims were tried to a jury. The plaintiff's claim on the foreclosure complaint was tried to the court, Nadeau, J. On September 27, 2006, the jury returned a verdict in favor of the defendant on all three counterclaims and awarded combined damages of $500, 000 on the negligent misrepresentation and breach of contract counts.

         On October 5, 2006, the court held a hearing at which it heard arguments as to whether it could proceed to rule on the foreclosure complaint in light of the jury's verdict on the counterclaims and its responses to related interrogatories. After hearing arguments from the parties, the court concluded that it would proceed to judgment on the foreclosure complaint. After reviewing the evidence presented, including the appraisals submitted at trial, the court made a number of findings, including that the amount of the debt owed was $2, 947, 595.84 and that the fair market value of the property was $2.5 million. In light of there being insufficient equity to cover the debt, the court determined, and the parties agreed, that a judgment of strict foreclosure, rather than a foreclosure sale, was the appropriate remedy. The court ordered that the law days would commence on February 6, 2007. The court indicated that it would hold an additional hearing regarding the issue of attorney's fees, both as a component of the foreclosure judgment and as part of the defendant's damages on the CUTPA counterclaim.[7] The court then proceeded to hear argument on whether to award punitive damages with respect to the CUTPA violation. Ultimately, the court concluded that the defendant was entitled to an additional $300, 000 in punitive damages.

         On October 10, 2006, the plaintiff filed postjudgment motions to reconsider the punitive damages award, to set aside the jury's verdict on the counterclaims, for judgment notwithstanding the jury's verdict, and for remittitur. The plaintiff also submitted various memoranda of law in support of its motions.

         The court heard argument on the postjudgment motions at a hearing on November 14, 2006, following which it heard arguments regarding the outstanding issue of attorney's fees. Judge Nadeau denied the motions for reconsideration and for remittitur, but granted in part the plaintiff's motion to set aside the verdict and for judgment notwithstanding the verdict with respect to the breach of contract count. The court otherwise denied the postjudgment motions. With respect to attorney's fees, the court awarded attorney's fees to the plaintiff on the foreclosure complaint and to the defendant on her CUTPA counterclaim. The court ended the hearing by confirming with the parties that it had made all findings necessary for the entry of a judgment of strict foreclosure, referring to its findings and the law days set forth at the October 5, 2006 hearing.[8] The court took no additional action to memorialize the judgment, nor was such action expressly requested by the parties under our rules of practice.[9]

         The plaintiff filed a timely appeal on November 28, 2006, challenging the judgment rendered against it on the CUTPA and negligent misrepresentation counterclaims. The defendant filed a cross appeal, which was later dismissed, that purported to challenge only the court's decision to set aside the jury's verdict with respect to the breach of contract counterclaim. Sovereign Bank v. Licata, 116 Conn.App. 483, 485-86, 977 A.2d 228 (2009), appeal dismissed, 303 Conn. 721, 36 A.3d 662 (2012) ...


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