Wells Fargo Bank, N.A. v. Caldrello

          Argued February 5, 2019

         Procedural History

         Action to foreclose a mortgage on certain real property owned by the defendant, and for other relief, brought to the Superior Court in the judicial district of New London, where the defendant filed a counterclaim; thereafter, the court, Cosgrove, J., granted the plaintiff's motion to strike the defendant's revised counterclaim; subsequently, the court granted the plaintiff's motion for summary judgment as to liability; thereafter, the court, Hon. Joseph Q. Koletsky, judge trial referee, denied the defendant's motion for summary judgment; subsequently, the court, Calmar, J., granted the plaintiff's motion for a judgment of strict foreclosure and rendered judgment thereon; thereafter, the court, Calmar, J., denied the defendant's motion to open the judgment, and the defendant appealed to this court. Affirmed.

          Sandra Caldrello, self-represented, the appellant (defendant).

          William J. Hanlon, with whom, on the brief, was David M. Bizar, for the appellee (plaintiff).

          Keller, Elgo and Harper, Js.

          OPINION

          KELLER, J.

         The self-represented defendant, ^[1] Sandra Caldrello, appeals from the judgment of strict foreclosure rendered in favor of the plaintiff, Wells Fargo Bank, N.A. The defendant claims that^[2] (1) the court erred in concluding that a genuine issue of material fact did not exist with respect to the plaintiff's standing to foreclose the mortgage and rendering summary judgment as to liability in favor of the plaintiff, (2) after the court granted the motion for summary judgment with respect to liability but prior to the time that it rendered judgment of strict foreclosure, the court deprived her of her right to conduct additional discovery and her right to a new trial related to the fact that, following the rendition of summary judgment, the plaintiff attached a blank endorsement to the note at issue in this action, and (3) the court erred in granting the plaintiff's motion to strike two counts of her counterclaim alleging violations of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., and the Truth in Lending Act (TILA), ^[3] 15 U.S.C. § 1601 et seq. We affirm the judgment of the trial court.

         The following undisputed facts and procedural history are relevant to this appeal. On September 12, 2012, the plaintiff commenced this foreclosure action. The complaint alleged that on February 9, 2007, the defendant signed a promissory note in the amount of $480, 000 in favor of the World Savings Bank, FSB (World Savings). The note was secured with a mortgage on property owned by the defendant known as 939 Pequot Avenue in New London. The plaintiff alleged that it was the party entitled to collect the debt evidenced by the note and the party entitled to enforce the mortgage, as it is the successor by merger to the original mortgagee, World Savings, that the defendant was in default on her obligations under the note, and that it had exercised its right to accelerate the debt and to commence this action.

         Prior to rendering summary judgment as to liability in favor of the plaintiff, the court, Cosgrove, J., ^[4] granted the plaintiff's motion to strike the defendant's revised counterclaim. The circuitous procedural journey to the striking of the defendant's counterclaim commenced on February 11, 2015, when the defendant filed her first of many sets of counterclaims and associated ‘‘supplements'' and ‘‘addenda.'' On May 20, 2015, after the plaintiff had previously filed a series of requests for the defendant to revise her counterclaim, the defendant filed a revised counterclaim containing thirty-two counts.

         On August 4, 2015, the plaintiff moved to strike all thirty-two counts of the revised counterclaim. On October 23, 2015, the defendant filed a ‘‘Defendant's Addendum to Counterclaims.'' The plaintiff moved to strike the addendum, arguing that the defendant had failed to satisfy the requirements of Practice Book § 10-60 and had improperly amended her revised counterclaim. Judge Cosgrove granted the plaintiff's motion to strike the addendum on December 4, 2015, simultaneously overruling the defendant's objection to the plaintiff's motion to strike her addendum.

         On January 5, 2016, Judge Cosgrove issued a memorandum of decision striking the defendant's revised counterclaim. On January 20, 2016, the defendant filed a counterclaim containing thirty-one repleaded counts. The plaintiff again moved to strike all of the counts of the counterclaim. On May 3, 2016, Judge Cosgrove granted in part the plaintiff's motion, striking all but one of the defendant's repleaded counts as legally insufficient or as asserting claims on which relief may not be granted in the form of a judgment on a counterclaim. The court did not strike count twenty-nine, however, which alleged breach of contract.^[5]

         In its January 5, 2016 memorandum of decision, the court agreed with the plaintiff's argument that in ruling on the motion to strike, it could address the plaintiff's argument that the statutes of limitations applicable to the CUTPA and TILA causes of action barred those claims. Although a claim that an action is barred by the lapse of the statute of limitations usually must be pleaded as a special defense, and not raised by a motion to strike; see Forbes v. Ballaro, 31 Conn.App. 235, 239, 624 A.2d 389 (1993); see also Practice Book § 10-50; the court determined that the issues in this case met one of the two limited situations where the use of a motion to strike to raise the defense of the statute of limitations is permissible. See Forbes v. Ballaro, supra, 239-40 (‘‘where a statute gives a right of action which did not exist at common law, and fixes the time within which the right must be enforced, the time fixed is a limitation or condition attached to the right-it is a limitation of the liability itself as created, and not of the remedy alone'' [internal quotation marks omitted]).

         Noting that the execution of the note and mortgage occurred on February 9, 2007, Judge Cosgrove, after reviewing the defendant's myriad allegations pertaining to violations of the two statutes, ^[6] determined that ‘‘[c]ounts eight through ten [of the counterclaim] allege inaccurate material disclosures, as opposed to a failure to provide material disclosures [and], therefore, the defendant's right to rescind expired three years from the date of consummation or delivery of all material disclosures. While counts eight through ten allege inaccurate material disclosures, count seven alleges that the closing agent failed to provide copies of the signed closing documents. Even taking this fact in the light most favorable to the defendant-that the closing agent is an agent of the plaintiff and the closing documents are material disclosures as defined by 12 C.F.R. § 1026.23 (a) (3) (ii)-the defendant's claim is still barred by 15 U.S.C. § 1635 (f)'s statute of limitation[s].^[7]The [defendant] fails to allege any facts in [counts] seven or thirty regarding the transfer of all of the defendant's interestin the property or the sale of the property, so the date of consummation remains the time measure. More than three years elapsed between February 9, 2007 and August 31, 2012. Further, while the defendant alleged that she has the right of rescission under recoupment pursuant to TILA, she has not alleged recoupment as a matter of defense, pursuant to 15 U.S.C. § 1640 (e), but rather, as a counterclaim. Finally, equitable tolling does not apply to [count] thirty because ‘[§] 1635 (f) completely extinguishes the right of rescission at the end of the [three] year period.' Beach v. Ocwen Federal Bank, [523 U.S. 410');">523 U.S. 410, 412, 118 S.Ct. 1408, 140 L.Ed.2d566 (1998)].'' (Footnote added.) Judge Cosgrove concluded that the statute of limitations pursuant to TILA expired on February 9, 2010. He applied the same expiration date in striking counts eight through ten alleging CUTPA violations, noting that CUTPA, a statutory cause of action that did not exist at common law, also has a limitation period of three years after the occurrence of a violation. See General Statutes § 42-110g (f). Judge Cosgrove further concluded that the defendant had failed to plead facts sufficient to demonstrate fraudulent concealment, which might otherwise toll the statute of limitations.

         On January 20, 2016, the defendant filed a thirty-one count amended counterclaim, which she corrected by changing a date, on January 25, 2016. The plaintiff again moved to strike the counterclaim. Judge Cosgrove struck all of the counts of the amended counterclaim except a single breach of contract claim, agreeing with the plaintiff that the legal insufficiencies in the defendant's prior counterclaim had not been cured and that the defendant improperly had used her opportunity of pleading over pursuant to Practice Book § 10-44 to add additional claims.^[8]

         On June 15, 2016, the plaintiff filed a motion for summary judgment as to liability on its complaint and as to the defendant's counterclaim for breach of contract. In its memorandum of law in support of the motion, the plaintiff argued that there were no genuine issues of material fact regarding the defendant's liability under the note and the mortgage, and that summary judgment was proper because the defendant's counterclaim was legally insufficient.

         During the course of this litigation, the plaintiff presented to the court and to the defendant the original promissory note and the recorded mortgage. The original note is an adjustable rate mortgage note, ‘‘pick-a-payment'' loan signed by the defendant and payable to World Savings. Prior to the rendering of summary judgment, the original note had not been endorsed in any manner and remained payable by its express terms to ‘‘[World Savings], a federal savings bank, its successor and/or assignees, or anyone to whom this Note is transferred.'' The recorded mortgage references this promissory note.

         In support of its motion for summary judgment as to liability, the plaintiff submitted an affidavit from Shae Smith, the vice president for loan documentation for the plaintiff. In her affidavit, Smith averred that she is familiar with the business records maintained by the plaintiff, which records were made at or near the time of the event recorded by the plaintiff, that it was a regular practice for the plaintiff to make those records and that her knowledge was acquired from the examination of these business records. Smith stated that the defendant executed and delivered an adjustable rate mortgage note dated February 9, 2007, in the amount of $480, 000 to World Savings. She further stated that the plaintiff is the successor by merger to the mortgagee. Specifically, Smith stated that on December 31, 2007, ten months after the making of the note and mortgage, World Savings merged and changed its name to Wachovia Mortgage, FSB (Wachovia). This transaction is documented by correspondence annexed to Smith's affidavit from the Office of Thrift Supervision within the United States Department of the Treasury. Smith further stated, on the basis of her examination of the plaintiff's business records, that, on November 1, 2009, Wachovia converted to a National Bank named Wells Fargo Bank, Southwest, N.A., and that on the same date Wells Fargo Bank Southwest, N.A., merged into Wells Fargo Bank, N.A., the plaintiff in this action. These conversions of corporate names and status were documented by correspondence from the Office of the Comptroller of the Currency annexed to the affidavit. Smith further averred that the plaintiff's attorney was in possession of the note at the time this litigation was commenced and that the note had been in default since December, 2011. Also annexed to Smith's affidavit was a copy of a ‘‘Notice to Cure and Intent to Accelerate'' document sent to the defendant. Finally, Smith stated that the plaintiff had not received funds sufficient to cure the default on the defendant's promissory note.

         Given that the plaintiff claimed to hold the note by virtue of a series of corporate mergers, name changes and conversions, the plaintiff provided an additional affidavit from Paul Hoff, the plaintiff's implementation consultant, to support its motion for summary judgment. Hoff averred that his affidavit was based on his examination of the business records maintained by the plaintiff and, specifically, his interpretation of the electronic records relating to the defendant's February 9, 2007 note and mortgage to World Savings. Hoff concluded that the plaintiff is properly identified on the loan transfer history as the investor entity that owned the defendant's note.

         In its memorandum of law in support of its motion for summary judgment, the plaintiff argued that it had established with competent evidence a prima facie case of liability in a mortgage foreclosure action through the affidavits of Smith and Hoff, and the documentation attached to them, which established that (1) there was a loan, evidenced by the note, payable to World Savings; (2) the plaintiff was and, since prior to the commencement of the foreclosure action, had been the party entitled to collect the debt evidenced by that note; (3) the defendant was in default; and (4) the indebtedness due under the note had been accelerated. The plaintiff asserted that it had standing to foreclose on the mortgage because, as evidenced by the Hoff affidavit and its supporting exhibits, the plaintiff not only was in possession of the original note, but had the rights of the original holder of the note, World Savings, by operation of the federal merger statute, 12 U.S.C. § 215a (e) 2006.^[9]

         In her objection to the plaintiff's motion for summary judgment, relevant to standing, the defendant argued that the plaintiff failed to provide any documents that proved it was the owner of the note and had not met its burden to prove standing. She claimed that the plaintiff was defrauding the court with false assertions of ownership of the note. She questioned whether the affiants, Smith and Hoff, actually had personal knowledge of the facts to which they had attested.^[10] Her primary argument concerned a transaction whereby World Savings transferred or sold the note to its subsidiary, World Loan Company (World Loan), on May 3, 2007. She asserted that Wachovia, which formerly was known as World Savings, could not have reacquired ownership of the note without World Loan having first endorsed the note, and that there was no endorsement attached to the note at the time the plaintiff commenced the foreclosure action. She also claimed that there was no evidence that World Savings or Wachovia had transferred the note. She further argued that the Federal Home Loan Bank of San Francisco took title to and owned the note by virtue of a Uniform Commercial Code financing statement, which was filed to establish a security interest in the assets of World Loan. The defendant argued, as well, that she had received a letter on May 2, 2012, from the plaintiff's counsel, stating in relevant part: ‘‘This office has been retained by Wachovia Mortgage, a Division of [the plaintiff], the mortgage servicer of the above-referenced mortgage loan, to commence a foreclosure.'' On the basis of this letter, the defendant claimed that the plaintiff did not own the note because ‘‘the foreclosure was requested by Wachovia . . . with [the plaintiff] named as the servicer.''

         The plaintiff argued that the transfers between World Savings and its subsidiary, World Loan, did not affect its standing to enforce the note because after World Loan converted from a corporation to a limited liability company, World Loan Company, LLC, it transferred the note back to World Savings, which was renamed Wachovia, in 2009. Thus, the plaintiff argued, Wachovia maintained World Savings' status as a holder upon reacquiring the note from World Loan under Connecticut law pursuant to General Statutes § 42a-3-207.^[11] The plaintiff also argued that when Wachovia, the renamed original payee of the note, converted and changed its name to Wells Fargo Bank Southwest, N.A., and on the same day, Wells Fargo Bank Southwest, N.A., merged into the plaintiff, the plaintiff, under the federal merger statute, obtained all of World Savings' rights in the note without need of an endorsement.

         After considering the defendant's objection to the plaintiff's motion for summary judgment as to liability, Judge Cosgrove granted the motion, concluding that ‘‘[i]n this case, the plaintiff has provided to the court . . . the original note executed by the defendant. It is not endorsed but it need not be endorsed if the plaintiff can demonstrate that [it] is the corporate successor to the original mortgage[e], [World Savings]. The plaintiff's affidavits and cited statutes and case law establish that it is the successor to [World Savings] and entitled to enforce the note. . . . There is no dispute that the note has not been paid in accordance with it terms and that the defendant was give[n] notice of the intent to accelerate the debt.'' The court observed that the defendant's submissions in opposition to the motion for summary judgment, despite lacking an adequate evidentiary foundation to be considered, nonetheless ‘‘would be consistent with the plaintiff's affidavits.''^[12] (Emphasis omitted.)

         Before the court rendered the judgment of strict foreclosure, the plaintiff filed a ‘‘Notice of Supplemental Document Production'' on June 22, 2017, that included a copy of the note with an allonge blank endorsement dated February 8, 2017. The defendant, asserting that this recent endorsement was an attempt by the plaintiff to circumvent what she considered to be a valid objection to its standing (based on her allegation that the note, as a matter of law, needed an endorsement because at one point it had been sold by World Savings to its subsidiary, World Loan), filed a motion for summary judgment. Therein, she renewed her claim that World Loan Company, LLC, could not have transferred the note back to Wachovia without an endorsement.^[13]In this motion, relative to standing, she referred to an affidavit of debt supplied by Diane F. Duckett, which was filed in court on April 20, 2017, and which indicated that the note was now endorsed in blank. She accused the plaintiff of fraud and deceit in order to fabricate a ground on which it had standing. The plaintiff filed an objection on June 22, 2017, noting that after Judge Cosgrove had rendered summary judgment in its favor, the plaintiff recalled the note from its foreclosure counsel, endorsed it in blank and returned it to foreclosure counsel. This sequence of events is described in an amended affidavit of debt by Kimberly A. Mueggenberg that was attached to the plaintiff's objection. The plaintiff also argued that all of the issues raised in the defendant's motion for summary judgment dated May 8, 2017, already had been adjudicated by Judge Cosgrove in that they had been raised in the defendant's objection to the plaintiff's motion for summary judgment as to liability or in a motion for reconsideration of his order filed by the defendant on December 22, 2016, which had been denied by Judge Cosgrove on January 9, 2017.

         On August 17, 2017, the court, Hon. Joseph Q. Koletsky, judge trial referee, denied the defendant's motion for summary judgment dated May 8, 2017, stating, ‘‘[t]he motion termed ‘Motion for Summary Judgment' is denied. A previously granted motion to reargue occasioned the hearing of August 17, 2017, at which it became apparent that the self-represented defendant's motion was in reality an attempt to reargue a summary judgment granted by Cosgrove, J., in favor of plaintiff . . . . Notwithstanding the procedural irregularities, the court heard extensive presentations from both parties. The court is of the opinion that the motion for summary judgment was correctly decided the first time.''

         Subsequent to Judge Koletsky's decision, the defendant filed a cross motion for summary judgment and a motion for a new trial, again demanding that the court address the reasons for the plaintiff's endorsement of the note in blank, which she considered to be newly discovered evidence that undermined the plaintiff's standing as the holder of the note at the time the foreclosure action was commenced.

         Prior to the hearing on the plaintiff's motion for a judgment of strict foreclosure, the defendant applied, pursuant to Practice Book § 7-19, for issuance of subpoenas directed at the plaintiff's lawyers. Before the plaintiff could file its objection to the defendant's subpoena request, the court granted it. The plaintiff sought reconsideration and moved to quash the subpoenas. The court, Nazzaro, J., conducted a hearing on April 24, 2017, and granted the plaintiff's motions to reconsider and to quash on May 8, 2017.

         After the plaintiff reclaimed its motion for a judgment of strict foreclosure, the court set a hearing date of August 14, 2017. The defendant filed another request to subpoena the plaintiff's lawyers. Judge Cosgrove denied her subpoena request but rescheduled the August 14 hearing for September 11, 2017. On September 6, 2017, the defendant filed a third application for the issuance of subpoenas directed at two out-of-state witnesses, Duckett and Mueggenberg, who both signed affidavits of debt on behalf of the plaintiff, and which were filed in support of its motion for a judgment of strict foreclosure. The defendant stated that she was seeking information on the ‘‘surprise'' blank endorsement that was first mentioned in Duckett's affidavit that had been filed in court on April 20, 2017.

         During the hearing on the plaintiff's motion for a judgment of strict foreclosure on September 11, 2017, counsel for the plaintiff represented to the court, Calmar, J., that the plaintiff had ‘‘[p]ulled back'' the note from counsel, endorsed it in blank, and returned it to counsel, and that counsel had informed Judge Koletsky about the endorsement before he denied the defendant's motion for summary judgment. Judge Koletsky determined that the defendant's motion for summary judgment was, inreality, anattempt to reargue the summary judgment that had been rendered in the plaintiff's favor by Judge Cosgrove. The defendant claimed she had not become aware of the endorsement until June 22, 2017.^[14] After determining that Judge Koletsky had been made aware of the issue concerning the newly attached endorsement to the note, Judge Calmar marked the defendant's cross motion for summary judgment and her motion for a new trial off, ruling, ‘‘[a]s to the cross motion for summary judgment and the motion for a new trial, no action is necessary because there is no issue. First of all, Judge Koletsky had denied essentially a motion to reargue, so [the issue of liability is] resolved. And there's, therefore, no basis to have a motion for summary judgment pending. And whereas [the motion for a new trial] also was a motion to reargue effectively as to the issue of liability, he essentially denied a motion to retry the issues.'' Judge Calmar also marked off as moot the defendant's application for subpoenas for Duckett and Mueggenberg because the application was part of an effort to explore the issue of the creation of the blank endorsement, which he believed Judge Koletsky had addressed.

         Judge Calmar then proceeded to conduct an evidentiary hearing on the plaintiff's motion for a judgment of strict foreclosure. He granted the ...