Bank of America, N.A. v. Barrera

BANK OF AMERICA, N.A. v. William A. BARRERA

No. FSTCV176030667S

Superior Court of Connecticut, Judicial District of Stamford-Norwalk, Stamford

February 8, 2018

UNPUBLISHED OPINION

OPINION

GENUARIO, J.

I. Introduction

The plaintiff alleges the following. On August 20, 2007, the defendant borrowed $186,000.00 and executed and delivered a note in that principal amount and executed a mortgage on specific property located in Norwalk, Connecticut. The purpose of the subject mortgage was to secure the principal amount of the note. The mortgage was intended to be a second lien on the property behind a first mortgage to a third party in the amount of $306,600.00 (the first mortgage). The plaintiff further alleges that through inadvertence or mistake the mortgage was never recorded, and a duplicate original of the document cannot be located. Plaintiff alleges that it is the owner and holder of the note and mortgage and it is entitled to enforce the note and mortgage. The subject property is not subject to any liens or encumbrances of record subsequent to the right of the subject mortgage. The plaintiff alleges that the defendant made monthly payments consistent with his obligations under the note until September 2010 and he has failed to make payments since.

The plaintiff brings this action in three counts.

The first count seeks a declaratory judgment that its mortgage is valid and the mortgage lien should be recorded on the land records nunc pro tunc and be a valid and enforceable lien on the property as of the day of its execution. The second count alleges that it was the parties’ intent that the mortgage would secure the amounts due under the note by creating a lien on the property and the plaintiff seeks an " equitable mortgage" on the property to protect the full value of all amounts due and owing under the note. The third count sounds in unjust enrichment alleging that it is contrary to equity for the borrower to retain the benefit of not having the lien recorded on the property at the expense of the plaintiff.

The Defendant has filed three special defenses. In his first special defense the defendant alleges that this action is barred by the Statute of Limitations, C.G.S. § 52-576 because the defendant’s last payment to the plaintiff was in August 2010 and the plaintiff did not commence this action until December 2016.

In his second special defense the defendant pleads laches. He alleges that in July 2011 he filed a chapter 7 bankruptcy petition with the United States Bankruptcy court. He identified the mortgage as a liability in the bankruptcy petition; the plaintiff received notice of the bankruptcy and had an opportunity to be heard regarding approval of the bankruptcy and discharge of any of the defendant’s debts but the plaintiff elected not to appear. The plaintiff did not make any claims related to the mortgage or the plaintiff’s right to seek reformation or correction of the mortgage or an equitable mortgage in its place. Subsequent to the bankruptcy the plaintiff further waited five and half years before commencing this action. The plaintiff alleges that this inexcusable delay has resulted in significant prejudice to the defendant.

In his third special defense the defendant asserts that a recording of the mortgage at this time would result in a violation of a discharge order issued by the United States Bankruptcy Court as it would effectively result in an attempt to collect a debt that has been discharged.

II. The Motion to Strike and Motion for Summary Judgment

The plaintiff has moved to strike all three special defenses arguing that each is insufficient as a matter of law. The plaintiff also moves for summary judgment arguing that there is no genuine issue of material fact that the plaintiff is entitled to the relief sought.

" A motion to strike challenges the legal sufficiency of a pleading ... and, consequently, requires no factual finding by the trial court." Batte Holmgren v. Commissioner of Public Health, 281 Conn. 277, 294 (2007). " [A] plaintiff can [move to strike] as special defense ..." Nowak v. Nowak, 175 Conn. 112, 116 (1978). " In ... ruling on the ... motion to strike, the trial court [must recognize] its obligation to take the facts to be those alleged in the special defenses and to construe the defenses in the manner most favorable to sustaining their legal sufficiency." Connecticut National Bank v Douglas, 221 Conn. 530, 536 (1992). And of course it is fundamental that in determining the sufficiency of a pleading challenged by a motion to strike, " all well pleaded facts and those facts necessarily implied from the allegations are taken as admitted." Violano v. Fernandez, 280 Conn. 310, 318 (2006) (internal quotation marks omitted.). " A motion to strike admits all facts well pleaded; it does not admit legal conclusions or the truth or accuracy of the opinions stated in the pleadings." Faulkner v. United Technologies Corp., 240 Conn. 576, 588 (1997) Emphasis in original).

The plaintiff has combined his motion to strike with a motion for summary judgment essentially arguing that because the special defenses are legally insufficient there is no genuine issue of material fact that the plaintiff is entitled to the relief claimed.

" Summary judgment is a method of resolving litigation when pleadings, affidavits, and any other proofs submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law ... A motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no issue to be tried." Wilson v. New Haven, 213 Conn. 279 (1989) (Internal citations omitted). " However since litigants ordinarily have a constitutional right to have issues of fact decided by jury ... the moving party for summary judgment is held to the strictest standard ... in demonstrating his entitlement to summary judgment." Kakadelis v. DeFabritis, 191 Conn. 276, 282 (1983) (Citations omitted; internal quotation marks omitted.) With these principles in mind we begin by reviewing the legal sufficiency of the special defenses.

III. Discussion

In its first special defense the plaintiff relies on C.G.S. § 52-576 dealing with actions on an account or on a simple or implied contract. Section 52-576 bars such actions that are not brought within six years after the right of action accrues. The defendant asserts that since the plaintiff alleges that the defendant failed to make the required payments pursuant to the note in September 2010 and the action was not instituted until December 2016 the plaintiff is simply outside the allowed time frame. In Federal Deposit Insurance Corp. v. Owen, 88 Conn.App. 806 (2005) the Appellate Court wrote " the rule in Connecticut, as far back as the early 19th century, is that a statute of limitations does not bar a mortgage foreclosure. Markham v. Smith, 119 Conn. 355, 358 (1935)." Id. at 815. The court continued to write " the rule is in harmony with the accepted principle that the statute of limitations does not destroy the debt but merely bars the remedy. Because the statute does not speak to the continued existence of the mortgage debt, it does not supercede the bank’s continuing access to equitable foreclosure precedings." Id. (Internal citations and quotations omitted.)

Of course the instant action is not a mortgage foreclosure action; rather it is an action premised on the equitable remedies that a mortgagee who is the holder and owner of an unrecorded mortgage would be entitled to if the alleged mortgage had been recorded. The fact that this action is not in of it itself, a mortgage foreclosure does not render the foregoing principles inapplicable. Simply put, the plaintiff...