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Jenzack Partners, LLC v. Stoneridge Associates, LLC

Supreme Court of Connecticut

January 14, 2020

JENZACK PARTNERS, LLC
v.
STONERIDGE ASSOCIATES, LLC et al.

         Argued September 24, 2019

Page 951

         The Superior Court, Judicial District of Middlesex, Edward S. Domnarski, J.

Page 952

          Richard P. Weinstein, West Hartford, with whom, on the brief, was Sarah Black Lingenheld, Farmington, for the appellant in Docket No. SC 20188 and the appellee in Docket No. SC 20189 (defendant Jennifer Tine).

         Houston Putnam Lowry, Meriden, for the appellee in Docket No. SC 20188 and the appellant in Docket No. SC 20189 (plaintiff).

         Robinson, C. J., and Palmer, McDonald, D’Auria, Mullins, Kahn and Ecker, Js. [*]

          Opinion

         KAHN, J.

         [334 Conn. 377] The plaintiff, Jenzack Partners, LLC (Jenzack), and the defendant[1] Jennifer Tine (Tine) separately appeal from the judgment of the Appellate Court, which reversed the judgment of the trial court ordering strict foreclosure.[2] See

Page 953

Jenzack Partners, LLC v. Stoneridge Associates, LLC, 183 Conn.App. 128, 143, 192 A.3d 455 (2018). These appeals require us to consider (1) whether an entity that was assigned a promissory note as well as a mortgage granted as collateral to secure a personal guarantee of that promissory note has standing to foreclose on the mortgage despite the fact that the guarantee was not explicitly assigned to the foreclosing party, and (2) whether an initial entry into a record of debt is admissible under the business records exception to the hearsay rule when that entry was provided by a [334 Conn. 378] third party in the course of the sale of the debt. As to the issue of standing, Tine claims that the Appellate Court incorrectly concluded that Jenzack had standing to foreclose a mortgage executed in support of a personal guarantee of a promissory note given by a third party because Jenzack did not receive a written assignment of the personal guarantee. As to the issue of hearsay, Jenzack claims that an adequate foundation was laid for the entirety of the record of debt to be admitted into evidence (exhibit 22) pursuant to the business records exception even though the initial entry was provided by a third party. Although we agree with the Appellate Court’s conclusion that Jenzack had standing to foreclose the mortgage, we conclude that the Appellate Court incorrectly determined that the business records exception did not apply to Jenzack’s calculation of the debt owed on the promissory note. Accordingly, we reverse in part the judgment of the Appellate Court.

         The Appellate Court set forth the following facts and procedural history. "On July 13, 2006 ... Stoneridge Associates, LLC (Stoneridge), obtained a construction loan in the amount of $1,650,000 from a nonparty, Sovereign Bank (Sovereign). At that time, Stoneridge executed a promissory note (Stoneridge note) evidencing its promise to repay the loan. The note was secured by various personal guarantees; Premier [Building & Development, Inc.], [Ronald] Gattinella, [Patrick T.] Snow and Joseph Tine each executed guarantees in favor of Sovereign guaranteeing repayment of the sums due under the note." Jenzack Partners, LLC v. Stoneridge Associates, LLC, supra, 183 Conn.App. at 131, 192 A.3d 455; see footnote 1 of this opinion. "On December 23, 2008, the Stoneridge note was modified via a modification agreement. On the same date, [Tine] executed a limited guarantee in favor of Sovereign guaranteeing repayment of the sum due under the Stoneridge note as modified [ (Tine guarantee) ]. In order to secure their respective [334 Conn. 379] guarantees, [Tine] and Joseph Tine executed a mortgage (Tine mortgage) in favor of Sovereign on their residential property ... in Cromwell.[3] [Tine’s] nonrecourse guarantee limited her liability solely to her interest in the Cromwell property. On August 27, 2009, and May 6, 2010, [Tine] executed reaffirmations of her guarantee in connection with subsequent modifications of the Stoneridge note.

         "On March 22, 2012, Sovereign assigned [the Tine] mortgage and interests in the Stoneridge note to [Jenzack]." (Footnote in

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original.) Jenzack Partners, LLC v. Stoneridge Associates, LLC, supra, 183 Conn.App. at 131-32, 192 A.3d 455. "Specifically, Sovereign and [Jenzack] executed an allonge endorsing the Stoneridge note to [Jenzack] as the obligee of the note. The Tine mortgage was assigned to [Jenzack] through an ‘Assignment of Open-End Mortgage Deed.’ " Id., at 132 n.3, 192 A.3d 455. "In August, 2012, [Jenzack] commenced this action, seeking, inter alia, to foreclose the Tine mortgage. In the operative revised complaint dated April 2, 2013, [Jenzack] alleged that, because Stoneridge had defaulted on the underlying Stoneridge note, [Jenzack] was entitled to declare the entire balance of the note due and payable. [Jenzack] alleged that Sovereign had assigned all of its interests in the Stoneridge note, including continuing guarantees executed by Premier, Gattinella, Snow, and Joseph Tine, the limited guarantee executed by [Tine], and the Tine mortgage. Because [Jenzack] was the current holder of the Stoneridge note, [Jenzack] claimed it was entitled to collect on all underlying guarantees and [to] foreclose the [Tine] mortgage. On April 26, 2013, [Tine] [334 Conn. 380] filed an answer that denied the substance of the complaint ...."[4] (Footnote omitted.) Id., at 132-33, 192 A.3d 455.

         "A bench trial was held on August 16, 2016. At trial, [Jenzack] claimed that the assignment of the Stoneridge note necessarily carried with it an assignment of all underlying guarantees, including [Tine’s] limited guarantee secured by the Tine mortgage. [Jenzack] also introduced into evidence exhibit 22, a computation of the current amount due on the [Stoneridge] note. In response, [Tine] claimed that the court lacked subject matter jurisdiction to render a judgment of foreclosure against her because her guarantee was not specifically assigned to [Jenzack] in the allonge. [Tine] also claimed that [Jenzack] failed to establish the amount of debt due on the [Stoneridge] note because evidence of the computation of debt, which included a starting balance provided to [Jenzack] by Sovereign, was inadmissible hearsay."[5] Id., at 133, 192 A.3d 455. "On December 1, 2016, the trial court issued a memorandum of decision [and entered] an order of strict foreclosure on the Tine mortgage. The court held that [Jenzack] had standing to foreclose the [Tine] mortgage that secured the [Tine] guarantee and that [Jenzack] had established the amount of debt due on the [Stoneridge] note through the testimony of William Buland, [Jenzack’s] authorized representative, and the computation of debt in exhibit 22." Id.

         Before the Appellate Court, Tine argued that "the trial court improperly (1) held that [Jenzack] had standing to foreclose the Tine mortgage [and] (2) determined that [Jenzack’s] exhibit 22 was sufficient to establish [334 Conn. 381] the amount due on the [Stoneridge] note ...."[6]Id. Although the Appellate Court agreed with the trial court that Jenzack had standing to ...


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