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Connecticut Housing Finance Authority v. Alfaro

Supreme Court of Connecticut

January 26, 2018

CONNECTICUT HOUSING FINANCE AUTHORITY
v.
ASDRUBAL ALFARO ET AL.

          Argued September 14, 2017

          James Mandilk and Nathan Nash, certified legal interns, with whom were Jeffrey Gentes, Peter V. Lathouris, and, on the brief, Richard M. Breen, and Wesleigh Anderson, Rebecca Cao, and Vinita Singh, certified legal interns, for the appellant (named defendant).

          Michael G. Tansley, with whom, on the brief, was Mary Barile Pierce, for the appellee (plaintiff).

          Cecil J. Thomas, David A. Pels, and Giovanna Shay filed a brief for the Connecticut Fair Housing Center et al. as amici curiae.

          Rogers, C. J., and Palmer, Eveleigh, McDonald, Robinson, D'Auria and Espinosa, Js. [*]

          OPINION

          EVELEIGH, J.

         In this certified appeal, we are tasked with determining whether, pursuant to General Statutes § 42-150bb, [1] a defendant may be awarded attorney's fees when the plaintiff withdraws an action as a matter of right pursuant to General Statutes § 52-80.[2] The plaintiff, the Connecticut Housing Finance Authority, had obtained a promissory note guaranteeing the payment of $216, 500 by the named defendant, Asdrubal Alfaro.[3]After the defendant failed to make the required payments on the note, the plaintiff filed a foreclosure action. When the action had been pending for almost one year, the plaintiff withdrew its action as a matter of right under § 52-80 prior to any hearing on the merits. The defendant thereafter sought an award of attorney's fees pursuant to § 42-150bb. The trial court denied the defendant's motion for attorney's fees, and the Appellate Court affirmed the judgment of the trial court. See Connecticut Housing Finance Authority v. Alfaro, 163 Conn.App. 587, 589, 135 A.3d 1256 (2016). We conclude that, in certain circumstances, § 42-150bb permits an award of attorney's fees to a defendant when a plaintiff withdraws an action as of right prior to a hearing on the merits and, accordingly, reverse the judgment of the Appellate Court.

         The following undisputed facts and procedural history are relevant to this appeal. On May 24, 2004, the defendant executed a mortgage, which was secured by a parcel of residential property located at 465 Greenwood Street in the city of Bridgeport, and a promissory note in the amount of $216, 500, which was made payable to Guaranty Residential Lending, Inc. On June 27, 2012, the plaintiff commenced the present foreclosure action alleging, inter alia, that the mortgage had been assigned to it and that the defendant had failed to make payments on the note. The plaintiff further alleged that, pursuant to an acceleration clause, it had demanded full payment of the note's balance.[4]

         The defendant filed an answer to the plaintiff's complaint, admitting only that he was in possession of the property. The defendant also asserted two special defenses, each contending that the plaintiff lacked standing to bring the action. The plaintiff filed a motion for summary judgment, arguing that there was no genuine issue of material fact and that it was entitled to foreclose on the mortgage as a matter of law. The defendant objected to the plaintiff's motion for summary judgment, contending that there were several unresolved genuine issues of material fact, including whether the plaintiff owned the note and was entitled to enforce it.

         Before the trial court ruled, however, the plaintiff withdrew its motion for summary judgment. Shortly thereafter, the plaintiff withdrew the present action as a matter of right pursuant to § 52-80. The plaintiff did not provide any reason for these withdrawals. The defendant subsequently filed a motion for an award of attorney's fees pursuant to § 42-150bb, claiming that he had ‘‘successfully defended'' the present action as a result of the plaintiff's withdrawal of the underlying complaint. The plaintiff objected to the defendant's motion, asserting, among other things, that it had an absolute right to withdraw the action pursuant to § 52-80, and that such a withdrawal, prior to any hearing on the merits of a case or the rendering of a judgment, does not constitute the successful defense of an action.

         The trial court denied the defendant's motion for an award of attorney's fees. The trial court agreed that the plaintiff's withdrawal of the action as a matter of right pursuant to § 52-80, prior to any hearing on the merits, did not mean that the defendant had ‘‘successfully defended'' the action. According to the court, there were ‘‘a myriad of reasons that the plaintiff withdrew the action, including but not limited to the plaintiff deciding that it did not want to redeem the property.''[5] The trial court reasoned further that, ‘‘[i]f the defendant's claim were accepted, lenders would be unreasonably exposed to claims for attorney's fees every time a lender withdrew a foreclosure action.''

         The defendant appealed from the trial court's judgment to the Appellate Court, which affirmed. Connecticut Housing Finance Authority v. Alfaro, supra, 163 Conn.App. 594. The Appellate Court reviewed the trial court's decision for clear error only, reasoning that the question of whether the defendant had ‘‘successfully defend[ed]'' the action was a factual one to which deference should be afforded. Id., 592. The Appellate Court concluded that, because the plaintiff's withdrawal of the action could have been for any reason, and there was no evidence offered to prove that withdrawal resulted from the special defenses, the defendant had failed to meet his evidentiary burden of establishing an entitlement to attorney's fees. Id., 593-94. The Appellate Court did not engage in any statutory construction of § 42-150bb, although it observed that, ‘‘to successfully defend an action, a consumer party must prevail on the merits of [an] answer or special [defense].'' (Internal quotation marks omitted.) Id., 593. Specifically, the Appellate Court declined to reach the question of whether a plaintiff's withdrawal of an action, as of right, in response to a special defense could ever constitute a successful defense as contemplated by § 42-150bb, because the defendant had not established the factual predicate for such a claim in the present case. Id., 591.[6]This appeal followed.[7]

         The defendant argues that, given the language used in § 42-150bb and the provision's legislative history, he was not required to prevail on the merits of his special defense, or to defeat the underlying obligation, in order to show that he had successfully defended the present foreclosure action. According to the defendant, a plaintiff's withdrawal of its action, as of right, can qualify as a successful defense. Specifically, the defendant contends that the withdrawal of the present action followed, and was prompted by, his contesting of the plaintiff's standing. Moreover, the defendant claims the Appellate Court improperly required him to provide further evidence of the reason for the plaintiff's withdrawal of the action, because this information was uniquely in control of the plaintiff and provides an unworkable standard that is inconsistent with the statute's remedial purpose.[8] We agree that, in certain circumstances, a plaintiff's withdrawal of an action as of right under § 52-80 prior to a hearing on the merits may constitute a successful defense, entitling the defendant to attorney's fees pursuant to § 42-150bb. Consequently, we conclude that the Appellate Court improperly affirmed the judgment of the trial court on the ground that the defendant had failed to meet his burden of establishing his right to attorney's fees.

         We begin with the standard of review. Because the defendant's claim requires us to construe the meaning and scope of the phrase ‘‘successfully . . . defends, '' as used in § 42-150bb, our review is de novo.[9] See James v. Commissioner of Correction, 327 Conn. 24, 29, 173 A.3d 662 (2017) (questions of statutory construction present issues of law subject to plenary review). ‘‘When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature. . . . In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply. . . . In seeking to determine that meaning, General Statutes § 1-2z directs us first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered. . . . When a statute is not plain and unambiguous, we also look for interpretive guidance to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter . . . . Importantly, ambiguity exists only if the statutory language at issue is susceptible to more than one plausible interpretation. . . . In other words, statutory language does not become ambiguous merely because the parties contend for different meanings.'' (Citations omitted; internal quotation marks omitted.) In re Elianah T.-T., 326 Conn. 614, 620-21, 165 A.3d 1236 (2017).

         The term ‘‘successfully . . . defends'' is not defined within § 42-150bb or else wherein the General Statutes.[10]It is well established that ‘‘[w]here a statute does not define a term it is appropriate to look to the common understanding expressed in the law and in dictionaries.'' Caldor, Inc. v. Heffernan, 183 Conn. 566, 570-71, 440 A.2d 767 (1981). The word ‘‘successful'' is defined with substantial similarity in a number of dictionaries. The American Heritage College Dictionary (4th Ed. 2002) defines ‘‘successful'' as ‘‘[h]aving a favorable outcome, '' and ‘‘[h]aving obtained something desired or intended . . . .'' Similarly, Webster's Third New International Dictionary (2002) defines ‘‘successful'' as ‘‘resulting or terminating in success, '' ‘‘gaining or having gained success, '' and ‘‘having the desired effect . . . .'' The word ‘‘defend'' is also defined with substantial similarity in a number of dictionaries. The American Heritage College Dictionary, supra, defines ‘‘defend'' as ‘‘[t]o make or keep safe from danger, attack, or harm.'' Webster's New Third International Dictionary, supra, defines ‘‘defend'' as ‘‘to deny or oppose the right of the plaintiff [in regard to] a suit or a wrong charged, '' ‘‘to oppose or resist [a] claim at law, '' and ‘‘to contest [a] suit.'' Black's Law Dictionary (4th Ed. 1968) similarly defines ‘‘defend'' as follows: ‘‘To prohibit or forbid. To deny. To contest and endeavor to defeat a claim or demand made against one in a court of justice.'' Likewise, Black's Law Dictionary (10th Ed. 2014) defines ‘‘defend'' as follows: ‘‘To do something to protect someone or something from attack. . . . To use arguments to protect someone or something from criticism or to prove that something is right. . . . To do something, to stop something from being taken away or to make it possible for something to continue.'' These definitions suggest that the legislature intended ‘‘successfully . . . defends'' to include any resolution of the matter in which the party obtains the desired result of warding off an attack made by the action, regardless of whether there was a resolution on the merits.

         We next examine § 42-150bb in relation to other statutes. First, we examine § 52-80, which allowed the plaintiff in the present case to withdraw the action prior to a hearing on the merits. The language codified in § 52-80 was in existence long before the legislature enacted § 42-150bb in 1979, yet the legislature did not seek to exclude actions that were withdrawn as a matter of right from the attorney's fees provisions in § 42-150bb. See General Statutes (1949 Rev.) § 7801; Public Acts 1979, No. 79-453. In construing statutes, we presume that the legislature has created ‘‘a harmonious and consistent body of law . . . .'' (Internal quotation marks omitted.) Hartford/Windsor Healthcare Properties, LLC v. Hartford, 298 Conn. 191, 198, 3 A.3d 56 (2010). ‘‘We are entitled to presume that, in passing a statute, the legislature not only did so with knowledge of the existing statutes but also that it did not intend to enact a conflicting statute.'' Perille v. Raybestos-Manhattan-Europe, Inc., 196 Conn. 529, 541, 494 A.2d 555 (1985). With this principle in mind, the legislature's decision not to exclude matters that are withdrawn pursuant to § 52-80 from the provisions of § 42-150bb lends further support to interpreting § 42-150bb in a manner that allows for attorney's fees when an action is withdrawn, as of right, prior to a hearing on the merits.

         Furthermore, General Statutes § 52-81 is also relevant to understanding how a defendant in a civil action that is withdrawn under § 52-80 is treated. Section 52-81 provides in relevant part: ‘‘Upon the withdrawal of any civil action after it has been returned to court and entered upon the docket, and after an appearance has been entered for the defendant, a judgment for costs, if claimed by him, shall be rendered in his favor, but not otherwise. . . .'' Therefore, § 52-81 entitles a defendant in an action voluntarily withdrawn by a plaintiff to recover costs in the same manner as a defendant in an action in which there has been a determination on the merits in the defendant's favor. See General Statutes § 52-257. Section 52-81 was in existence at the time the legislature adopted § 42-150bb in 1979. Therefore, we presume that the legislature was aware of it. See General Statutes (1949 Rev.) § 7802; Public Acts 1979, No. 79-453. Accordingly, the presence of § 52-81 further supports the idea that the legislature intended for a defendant in an action that has been withdrawn to be treated similarly to when there has been a determination on the merits in the defendant's favor.

         The plaintiff asserts, however that the term ‘‘successfully . . . defends'' in § 42-150bb may be read interchangeably with ‘‘prevailing party.'' Indeed, the plaintiff cites to cases that have interpreted § 42-150bb in a manner requiring consumers to ‘‘prevail'' in order to obtain attorney's fees. See Wilkes v. Thomson, 155 Conn.App. 278, 283, 109 A.3d 543 (2015); see also Retained Reality, Inc. v. Spitzer, 643 F.Supp.2d 228, 239 n.6 (D. Conn. 2009). Relying on language from those cases, the plaintiff contends that a prevailing party includes only those defendants that have succeeded ‘‘on the merits of their answer or special defenses.'' Wilkes v. Thomson, supra, 283. In further support of its position, the plaintiff cites various definitions of the term ‘‘prevailing party.'' See Black's Law Dictionary (4th Ed. 1968) (defining ‘‘prevailing party'' as ‘‘[t]hat one of the parties to a suit who successfully prosecutes the action or successfully defends against it, prevailing on the main issue, even though not to the extent of its original contention''); see also Black's Law Dictionary (10th Ed. 2014) (defining ‘‘prevailing party'' as ‘‘[a] party in whose favor a judgment is rendered, regardless of the amount of damages awarded''). Although not controlling, these prior interpretations of § 42-150bb, together with the definitions on which they are based, demonstrate that the plaintiff's proposed interpretation of § 42-150bb is plausible.

         On the basis of our review of the plain language of § 42-150bb and other related statutes, we conclude that both parties' proffered interpretations are reasonable and that § 42-150bb is, therefore, ambiguous. Specifically, we deem plausible the defendant's reading of § 42-150bb, which reads the term ‘‘successfully . . . defends'' in a manner permitting an award of attorney's fees following a withdrawal of an action before a hearing on the merits. We also find reasonable, however, the plaintiffs' understanding of § 42-150bb, which requires a party to demonstrate that it has prevailed on the merits of an action in order to be awarded attorney's fees. Accordingly, pursuant to § 1-2z, we turn to extra-textual sources.

         The legislative history surrounding the enactment of 42-150bb was discussed by this court in Rizzo Pool Co. v. Del Grosso, 240 Conn. 58, 74, 689 A.2d 1097 (1997). ‘‘In 1979, [the legislature] enacted No. 79-453 of the 1979 Public Acts, entitled ‘An Act Concerning Attorney's Fee Clauses in Consumer Contracts.' . . . [S]peaking on behalf of the original bill, Senator Alfred Santaniello, Jr., remarked: ‘This bill makes attorney's fee clauses reciprocal. For example, a clause for the benefit of the creditor will automatically allow the attorney's fees to the prevailing debtor who successfully prosecutes or defends an action or counterclaim based upon the contract or lease.' 22 S. Proc., Pt. 8, 1979 Sess., p. 2542. . . .

         ‘‘Representative [Richard D.] Tulisano expressly stated that the statute was now ‘self-enforcing' in that contractual attorney's fee provisions would be reciprocal. He stated: ‘[T]he legislation before us today provides [for] the first time the ability for consumers in this state to obtain attorney's fees, of [a] reasonable amount, as a result of defending or prosecuting any action in which the commercial party has provided for attorney's fees for their own behalf. What this does is give some equity to the situation. At the present time, many form contracts include attorney's fees provisions for the commercial party, and even though . . . that party may be wrong and a consumer successfully defends an action against him, or her, they would not be entitled to receive attorney's fees in defending that action. This will put some equity in the situation to the same extent that any commercial party will receive.' [22 H.R. Proc., Pt. 22, 1979 Sess., pp. 7487-90].

         ‘‘Furthermore, during . . . subsequent consideration of [an amendment proposed Representative Tulisano] in the Senate, Senator Salvatore C. DePiano stated: ‘[That amendment] would, in effect, eliminate a provision of the bill which would have made it an unfair or deceptive trade practice for a commercial party to have included a clause in a contract or lease which provides for the recovery of attorney's fees by a consumer on terms less favorable than those for the commercial party. . . . This bill would require that in a specified situation attorney's fees be awarded to a consumer who successfully brings or defends an action based upon a contract or lease whenever such contract or lease provides for the attorney's fees of a commercial party . . . .' '' Rizzo Pool Co. v. Del Grosso, supra, 240 Conn. 74-76.

         As we explained in Aaron Manor, Inc. v. Irving, 307 Conn. 608, 617-18, 57 A.3d 342 (2013), ‘‘[t]his court has previously discussed the legislative history of § 42-150bb and recognized that it was designed to provide equitable results for a consumer who successfully defended an action under a commercial contract and the commercial party who was entitled to attorney's fees. . . . The purpose of § 42-150bb is to bring parity between a commercial party and a consumer who defends successfully an action on a contract prepared by the commercial party.'' (Citation omitted; internal quotation marks omitted.) It would be wholly incongruous with the design of § 42-150bb to allow a commercial party to avoid paying attorney's fees simply by withdrawing the action pursuant to § 52-80. Indeed, if we were to interpret ‘‘successfully . . . defends'' in the manner the plaintiff proposes, a commercial party that becomes aware, either through the consumer's defense or through its own discovery, of problems in successfully prosecuting its action, could simply withdraw the action to avoid paying the attorney's fees that it has required the consumer to incur. We conclude that allowing for such a result when a consumer has been required to defend an action would be wholly inconsistent with the recognized legislative purpose behind§ 42-150bb. Instead, we conclude that, when a consumer moves for attorney's fees under § 42-150bb and is able to show that a commercial party has withdrawn an action, the burden then shifts to the commercial party to demonstrate that the withdrawal was unrelated to the defense mounted by the consumer.[11]

         Furthermore, interpreting § 42-150bb in a manner that allows for attorney's fees in the event of a voluntary withdrawal pursuant to § 52-80 is consistent with the approach taken by other states. ‘‘In applying a statute providing for an award of costs to the ‘prevailing party' or the ‘successful party' to cases in which the plaintiff had voluntarily dismissed his action, the courts have generally held that the defendant in such a case is entitled to recover his costs as the ‘prevailing party' . . . .'' (Footnote omitted.) Annot., 66 A.L.R.3d 1087, § 2, p. 1090 (1975); see also id., § 3 (a), pp. 1091-95 (compiling cases in which plaintiff has voluntarily withdrawn action and attorney's fees have been awarded to defendant as ‘‘prevailing party''). For example, the Florida Supreme Court has explained that, ‘‘[i]n general, when a plaintiff voluntarily dismisses an action, the defendant is the prevailing party. . . . A determination on the merits is not a prerequisite to an award of attorney's fees where the statute provides that they will inure to the prevailing party.'' (Citation omitted.) Thornber v. Fort Walton Beach, 568 So.2d 914, 919 (Fla. 1990). Likewise, the Florida District Court of Appeal has held that the fact that an action is voluntarily dismissed without prejudice does not affect whether the defendant is entitled to an award of attorney's fees under a statute that awards fees to a prevailing party. See State ex rel. Marsh v. Doran, 958 So.2d 1082, 1082 (Fla. App. 2007) (‘‘We hold that a defendant is entitled to recover attorney's fees under [the state statute awarding] fees to the prevailing party, after the plaintiff takes a voluntary dismissal without prejudice. The refiling of the same suit after the voluntary dismissal does not alter the appellees' right to recover prevailing party attorney's fees incurred in defense of the first suit.''); see also Dean Vincent, Inc. v. Krishell Laboratories, Inc., 271 Or. 356, 358, 532 P.2d 237 (1975) (‘‘The trial court denied attorney's fees because it did not believe [the] defendant qualified as the ‘prevailing party.' However, [the] defendant was the prevailing party because a voluntary nonsuit terminates the case in a defendant's favor. Even though the termination was without prejudice and [the] plaintiff could file another case upon the same cause of action, these facts did not prevent [the] defendant from being the party in whose favor the judgment was rendered in that particular case.'').

         A review of the cases from other jurisdictions also demonstrates that, even if we were to conclude that the term ‘‘successfully . . . defends'' in § 42-150bb is the functional equivalent of ‘‘prevailing party, '' as the plaintiff asserts, our resolution of this appeal need not change. Many of the jurisdictions that conclude a defendant is entitled to attorney's fees when an action is voluntarily withdrawn have statutes that provide for an award of attorney's fees to a ‘‘prevailing party.'' See Fla. Stat. Ann. § 57.105 (5) (West 2016) (providing, in certain administrative proceedings, that ‘‘administrative law judge shall award a reasonable attorney's fee and damages to be paid to the prevailing party in equal amounts by the losing party and a losing party's attorney or qualified representative''); Or. Rev. Stat. § 20.096 (1) (2015) (‘‘[i]n any action or suit in which a claim is made based on a contract that specifically provides that [attorney's] fees and costs incurred to enforce the provisions of the contract shall be awarded to one of the ...


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