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Sikorsky Financial Credit Union, Inc. v. Pineda

Court of Appeals of Connecticut

June 19, 2018

SIKORSKY FINANCIAL CREDIT UNION, INC.
v.
BERNARDINO PINEDA

          Argued April 9, 2018

         Procedural History

         Action seeking to recover damages for, inter alia, breach of contract, and for other relief, brought to the Superior Court in the judicial district of Ansonia-Mil-ford, where the defendant was defaulted for failure to appear; thereafter, the court, Hon. John W. Moran, judge trial referee, granted the plaintiff's motion for judgment and rendered judgment for the plaintiff; subsequently, the court, Markle, J., denied the plaintiff's motion for an order of postjudgment interest, and the plaintiff appealed to this court. Reversed; judgment directed.

          William L. Marohn, for the appellant (plaintiff).

          DiPentima, C. J., and Alvord and Flynn, Js.

          OPINION

          FLYNN, J.

         The plaintiff, Sikorsky Financial Credit Union, Inc., appeals from the judgment of the trial court denying its motion for postmaturity postjudgment interest. On appeal, the plaintiff claims that the trial court improperly denied the motion in light of General Statutes § 37-1[1] and our Supreme Court's decision in Sikorsky Financial Credit Union, Inc. v. Butts, 315 Conn. 433, 108 A.3d 228 (2015). We agree and, accordingly, reverse the judgment of the trial court.[2]

         The following facts and procedural history are relevant to this appeal. The plaintiff is a credit union chartered under the laws of this state with its principal place of business in Stratford, Connecticut. On or about January 26, 2007, the plaintiff and the defendant, Bernardino Pineda, entered into a credit agreement for a personal loan, whereby the defendant agreed to repay the loan in monthly installments. Subsequently, the defendant defaulted on the agreement, and the plaintiff brought an action for recovery in the Superior Court, returnable to the judicial district of Ansonia-Milford on Tuesday, September 14, 2010. Among the plaintiff's prayers for relief was interest. After the defendant failed to file an appearance, the plaintiff by a motion dated and filed on September 20, 2010, sought a default for failure to appear, which the clerk granted on October 5, 2010. On November 17, 2010, the plaintiff filed a motion for judgment, seeking a sum of $11, 923.78, inclusive of $2521.08 in interest through the date of that motion. According to the plaintiff's affidavit of debt, the principal remaining at the time was $7851.22, accruing interest at the rate of 15.99 percent.[3] After a hearing in damages, taken on the papers, the court, Hon. John W. Moran, judge trial referee, on November 19, 2010, entered the following judgment: ‘‘[T]he defendant(s) owe the plaintiff(s) the following: Amount due on claims: $7851.22; interest: $2521.08; attorney fees: $1, 177.68; costs: $373.80; total amount of judgment: $11, 923.78.'' As part of the judgment, Judge Moran entered a nominal order of weekly payments for $35. The plaintiff subsequently filed two applications for financial institution execution respectively dated February 11, 2015, and March 18, 2016. Neither application noted that Judge Moran's judgment contained an award of postjudgment interest and both were issued by the clerk and returned partially satisfied by a state marshal in the amount of $475.87 and $2085.02, respectively.

         On May 8, 2017, the plaintiff filed a third application for financial institution execution, noting that postjudgment interest was awarded upon entry of judgment by Judge Moran. This application was rejected by the clerk on the ground that postjudgment interest had not been awarded. Thereafter, the plaintiff, on July 31, 2017, filed a motion for order of postmaturity postjudgment interest, claiming that Judge Moran had awarded such inter- est at the contractual rate of 15.99 percent and the clerk, therefore, improperly had rejected the application for financial institution execution. In his motion, the plaintiff also cited Sikorsky Financial Credit Union, Inc. v. Butts, supra, 315 Conn. 433, for the position that postmaturity interest continues to accrue after judgment, at the rate of 15.99 percent, which was the rate that the borrower had contracted to pay as long as any loan balance was due. In considering the plaintiff's motion, the trial court, Markle, J., made the following findings: ‘‘[T]he judgment was entered after a hearing in damages before the court (Moran, J.) on [November 19] 2010. . . . In the six years and eight months following the entry of said judgment the plaintiff never filed a motion to open judgment pursuant to [Practice Book §] 17-43. . . . The plaintiff never filed an appeal of the judgment pursuant to [Practice Book §] 61-2. . . . The plaintiff did not supply in its motion any evidence supporting contractual rights to postjudgment interest such as loan documents. . . . The plaintiff did not support its motion by submitting transcripts of the hearing in damages supporting that there had been in fact a claim for postjudgment interest (in fact there are many cases where debt collectors waive that claim). . . . The complaint does not mention a claim for postjudgment interest under the statutory provisions. . . . [T]he court is not able to make any findings that the plaintiff is entitled to the statutory postjudgment interest under [General Statutes §] 37-1a based on the record.''[4] The court then denied the plaintiff's motion. On September 1, 2017, the plaintiff filed a motion to reargue/reconsider, which also was denied by the court. This appeal followed.

         On appeal, the plaintiff claims that the trial court erred in concluding that postmaturity interest does not accrue after judgment. Specifically, the plaintiff argues that the trial court failed to recognize that pursuant to § 37-1, and our Supreme Court's decision in Sikorsky Financial Credit Union, Inc. v. Butts, supra, 315 Conn. 433, postmaturity contractual interest continues to accrue after entry of judgment.

         In support of this argument, the plaintiff relies on language from the contract that provides, ‘‘[i]f immediate payment is demanded, you will continue to pay interest until what you owe has been repaid at the applicable interest rates in effect, or if applicable, at the default rate disclosed on the Addendum.'' The addendum in turn lists an interest rate of 15.99 percent for loans payable over twenty-four months, which rate also appears on a transaction receipt supplied by the plaintiff and the affidavit of debt. Throughout its brief, the plaintiff asserts that Judge Moran, upon entry of judgment, on November 19, 2010, had granted postmaturity interest. Consequently, in the plaintiff's view, the trial court, in denying its motion for postjudgment interest, improperly considered the sufficiency of the record. Although the plaintiff frames its claim of error in definitive terms, suggesting that postjudgment interest was awarded upon entry of judgment by Judge Moran on November 19, 2010, the judgment itself contains no express mention of such an award. We, nevertheless, agree with the plaintiff that the November 19, 2010 judgment itself, § 37-1, and our Supreme Court's decision in Sikorsky Financial Credit Union, Inc., interpreting § 37-1, should have guided the trial court.

         We begin by setting forth the standard of review and applicable legal principles. ‘‘The interpretation and application of a statute . . . involves a question of law over which our review is plenary.'' (Internal quotation marks omitted.) Meadowbrook Center, Inc. v. Buch-man, 328 Conn. 586, 594, 181 A.3d 550 (2018). Additionally, because the plaintiff's claim ‘‘involves the interpretation of definitive contract language, our review is plenary.'' American First Federal, Inc., v. Gordon, 173 Conn.App. 573, 592, 164 A.3d 776, cert. denied, 327 Conn. 909, 170 A.3d 681 (2017).

         In Sikorsky Financial Credit Union, Inc. v. Butts, supra, 315 Conn. 438, our Supreme Court addressed, squarely, the issue of whether contractual postmaturity interest terminates upon entry of judgment. In resolving that inquiry, the court noted that both §§ 37-1 and 37-3a relate to interest, but that the former governs interest, usually by agreement, as compensation for a loan (interest eo nomine), while § 37-3a applies to interest as damages for the detention of money. See id., 439-40. Specifically with reference to § 37-1, the court noted that subsection (a) of that provision sets a default rate of 8 percent, but allows the parties to contract for a different rate. Id., 440. Subsection (b), on the other hand, allows the parties to forgo postmaturity interest altogether. Id., 441. The court explained, however, that ‘‘if the parties fail to specify whether interest will accrue after maturity, or fail to specify the rate of postmaturity interest, § 37-1 (b) mandates that interest eo nomine shall continue to accrue after maturity at the legal rate.'' Id. Accordingly, ‘‘an award of prejudgment and post-judgment interest on a loan that carries postmaturity interest is not discretionary; it is an integral part of enforcing the parties' bargain. . . . The trial court must, therefore, as part of any judgment enforcing a loan, allow prejudgment and postjudgment interest at the agreed rate, or the legal rate if no agreed rate is specified. The trial court is relieved of this obligation only if the parties disclaim any right to interest eo nomine after maturity.''[5] (Citations omitted; emphasis added.) Id., 441-42.

         More recently, this court, in American First Federal, Inc. v. Gordon, supra, 173 Conn.App. 592-93, applied and reaffirmed the principle from Sikorsky Financial Credit Union, Inc. In that case, the plaintiff argued on appeal that the trial court erroneously awarded interest on the unpaid principal rather than the total judgment amount. Id., 592. This court affirmed the judgment of the trial court, reiterating that, unless the parties disclaim postmaturity interest, the trial court has no discretion to apply it in terms other than those agreed by the parties. Id., 593. Consequently, we held that the trial court correctly awarded interest on the principal balance only, as had been agreed by the parties. Id.; see also Cadle Co. v. ...


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