Argued
January 15, 2019
Procedural
History
Action
to foreclose a mortgage on certain real property owned by the
named defendant et al., brought to the Superior Court in the
judicial district of Middlesex, where the defendant Gerri N.
Russo was defaulted for failure to appear; thereafter, the
defendant Webster Bank, National Association was defaulted
for failure to plead; subsequently, the named defendant et
al. filed an amended counterclaim; subsequently, the court,
Aurigemma, J., granted the plaintiff's motion to
strike the amended special defenses and counterclaim in part;
thereafter, the named defendant et al. filed a second amended
counterclaim; subsequently, the court granted the
plaintiff's motion to strike the second amended special
defenses and counterclaim; thereafter, the court,
Domnarski, J., concluded that the plaintiff was
entitled to enforce the note by foreclosing on the mortgage;
subsequently, the court, Aurigemma, J., granted the
plaintiff's motion for a judgment of strict foreclosure
and rendered judgment thereon, from which the named defendant
et al. appealed to this court; subsequently, this court
dismissed, for lack of a final judgment, the portion of the
appeal challenging the trial court's striking of the
counterclaim as amended; thereafter, the court,
Frechette, J., granted the plaintiff's motion
for judgment on the stricken counterclaim as amended and the
named defendant et al. filed an amended appeal; subsequently,
this court, sua sponte, issued an order staying the appeal
pending the final disposition by the Supreme Court in
U.S. Bank National Assn. v. Blowers, 332 Conn. 656,
212 A.3d 226 (2019); thereafter, following the release of the
opinion in Blowers, the Appellate Court lifted the
stay and, sua sponte, ordered the parties to submit
supplemental briefing, and the parties thereafter filed
supplemental briefs. Reversed; further proceedings.
Karen
L. Dowd, with whom was Scott Garosshen, for the appellants
(defendants).
David
M. Bizar, for the appellee (plaintiff).
Bright, Moll and Harper, Js.
OPINION
MOLL,
J.
The
defendants, Leslie I. Nathan, Lynne W. Nathan, and Lynne W.
Nathan, Trustee of the Lynne W. Nathan Trust Agreement dated
November 19, 2001, [1] appeal from the judgment of strict
foreclosure and the judgment on their counterclaim, as
amended, rendered by the trial court in favor of the
plaintiff, HSBC Bank USA, National Association,
Trustee.[2] On appeal, the defendants claim that the
court erred in striking two of their special defenses, as
amended, and their counterclaim, as amended.[3] We reverse the
judgments of the trial court.
The
following facts and procedural history are relevant to our
disposition of this appeal. In August, 2014, the plaintiff
commenced this foreclosure action. In its complaint, the
plaintiff alleged the following relevant facts. On or about
April 12, 2007, Leslie and Lynne executed a promissory note,
in the principal amount of $560, 000, in favor of Wells Fargo
Bank, N.A. (Wells Fargo). To secure the note, the Lynne
Trustee executed a mortgage on real property located at 115
Second Avenue in Westbrook. On April 17, 2007, the mortgage
deed was recorded on the Westbrook land records. The mortgage
was to be assigned to the plaintiff by virtue of an
assignment to be recorded on the Westbrook land records, and
the plaintiff was the holder of the note. Leslie and Lynne
thereafter defaulted on the note, [4] and they failed to cure the
default following receipt of written notice of the default
from the plaintiff. Thereafter, the plaintiff elected to
accelerate the balance due on the note, to declare the note
to be due in full, and to foreclose the mortgage.
On June
8, 2015, the defendants filed a first amended answer, special
defenses, and counterclaim.[5] The defendants asserted three
special defenses: (1) lack of standing; (2) laches; and (3)
unclean hands. In the counterclaim, the defendants asserted
the following twelve counts: (1) equitable reduction of
interest on the ground that the plaintiff failed to mitigate
its damages (count one); (2) the plaintiff was improperly
pursuing attorney's fees and costs accrued in relation to
a prior foreclosure action, with docket number
MMX-CV-10-6002743-S (prior foreclosure action), which the
plaintiff had commenced against the defendants in 2010 and
which was dismissed in 2013 (count two); (3) intentional
infliction of emotional distress (count three); (4) negligent
infliction of emotional distress (count four); (5) breach of
the covenant of good faith and fair dealing (count five); (6)
unjust enrichment (count six); (7) violation of the Fair Debt
Collection Practices Act, 15 U.S.C. § 1692 et seq.
(count seven); (8) violation of the Creditors'
Collections Practices Act, General Statutes § 36a-645 et
seq. (count eight); (9) vexatious litigation (count nine);
(10) fraud (count ten); (11) negligence (count eleven); and
(12) violation of the Connecticut Unfair Trade Practices Act
(CUTPA), General Statutes § 42-110a et seq. (count
twelve). As relief, the defendants sought, inter alia,
compensatory damages and an equitable reduction in principal
and interest.
On July
8, 2015, the plaintiff filed a motion to strike the
defendants' first amended special defenses and
counterclaim, claiming, inter alia, that the defendants'
claims and defenses did not relate to the making, validity,
or enforcement of the note or mortgage. The defendants
objected to the motion. On December 28, 2015, the trial
court, Aurigemma, J., issued a memorandum of
decision granting the motion to strike as to the first
amended laches defense, unclean hands defense, and
counterclaim in its entirety.[6]
On
January 12, 2016, the defendants filed a second amended
counterclaim and special defenses. In the counterclaim, the
defendants repleaded counts five, six, ten, and twelve of the
first amended counterclaim. They did not replead counts one,
two, three, four, seven, eight, nine, or eleven thereof. In
addition, the defendants reasserted their first amended
special defense asserting lack of standing, which had not
been stricken by the court, and repleaded laches as a special
defense, but they did not replead unclean hands as a special
defense.
On
February 9, 2016, the plaintiff filed a motion to strike the
defendants' second amended laches defense and
counterclaim, claiming, inter alia, that the defendants'
claims and second amended laches defense failed to satisfy
the making, validity, or enforcement test. The defendants
objected to the motion. On March 28, 2016, the court issued
an order granting the motion to strike the second amended
laches defense and counterclaim in its entirety.
On
August 25, 2016, following a one day court trial conducted on
May 19, 2016, the court, Domnarski, J., issued a
memorandum of decision concluding that the plaintiff was
entitled to enforce the note by foreclosing the mortgage. The
court also made findings regarding the debt and the value of
the subject property. Thereafter, the plaintiff filed a
motion for a judgment of strict foreclosure, which the court,
Aurigemma, J., granted on February 21, 2017. This
appeal followed.[7]
On
January 17, 2019, following oral argument held on January 15,
2019, this court, sua sponte, issued an order staying the
appeal pending the final disposition by our Supreme Court of
U.S. Bank National Assn. v. Blowers, 332 Conn. 656,
212 A.3d 226 (2019), in which the court resolved the
dispositive certified question of whether special defenses
and a counterclaim asserted in a foreclosure action must
‘‘directly attack'' the making, validity,
or enforcement of the note or mortgage. On August 27, 2019,
following the release of our Supreme Court's opinion in
Blowers, this court lifted the appellate stay and,
sua sponte, ordered the parties to submit supplemental briefs
to address the impact, if any, of Blowers on the
defendants' claims on appeal.[8] The parties thereafter filed
supplemental briefs in accordance with this court's
order.
I
Before
reaching the merits of the defendants' claims on appeal,
we first address the plaintiff's argument that the
defendants abandoned (1) counts one, two, three, four, seven,
eight, nine, and eleven of the first amended counterclaim
(nonrepleaded counts) and (2) their first amended unclean
hands defense, thereby forfeiting their appellate rights to
challenge the court's decision striking them. We conclude
that the defendants (1) preserved their appellate rights as
to the nonrepleaded ...