Farmers and Mechanics Bank v. Kneller

Page 324

670 A.2d 324

40 Conn.App. 115

FARMERS AND MECHANICS BANK v. Phillip B. KNELLER et al.

No. 14071.

Appellate Court of Connecticut.

Argued Sept. 12, 1995

Decided Jan. 16, 1996.

Richard B. Polivy, with whom, on the brief, were Cheryl Gabes DeGregorio and Mei-Wa Cheng, Hartford, for appellant (defendant Edward J. Przybysz).

Theodore V. Raczka, with whom, on the brief, were Nancy Conaway-Raczka and John F. Shaw, Middletown, for appellee (plaintiff).

Before EDWARD Y. O'CONNELL, FOTI and SPEAR, JJ.

FOTI, Judge.

This is an appeal taken by the defendant Edward J. Przybysz from a judgment of strict foreclosure, the granting of a motion for deficiency judgment and the attendant valuation of the subject real property. The defendant alleges that the trial court improperly (1) retracted its order to reset the law day, (2) denied the defendant's motion to dismiss the plaintiff's motion for deficiency judgment, and (3) admitted the testimony of the plaintiff's appraiser. We affirm the judgment of the trial court.

The following facts are relevant to the resolution of this appeal. On or about December 29, 1989, the defendants Phillip B. Kneller and Przybysz executed a promissory note in the amount of $205,000 in favor of the plaintiff. The note was secured by an open-end mortgage on premises at 222-224 Pearl Street, Middletown. Kneller and Przybysz defaulted on the note, and, as a result, the plaintiff instituted this foreclosure action. ¹

On October 5, 1992, the trial court rendered judgment of strict foreclosure in the plaintiff's favor and set a law day of October 28, 1992. On October 27, 1992, the defendant filed motions to open the judgment, ² to enjoin the passing of the October 28, 1992 law day and to present evidence. The October 28, 1992, law day passed without the trial court's hearing or acting on the defendant's motions and, without the defendant's redeeming his interest in the subject property. Thereafter, on November 2, 1992, the plaintiff filed a motion for deficiency judgment dated October 30, 1992, pursuant to General Statutes § 49-14(a). ³

On November 9, 1992, the trial court, Higgins, J., conducted a hearing regarding the defendant's motions. The plaintiff objected to both the defendant's motion to open the judgment and his motion to enjoin the law day. The trial court denied the defendant's motion to open the judgment of strict foreclosure and his motion to enjoin the October 28, 1992 law date. ⁴ Judge Higgins then reset the law day to December 9, 1992, by ordering, "December 9th, owners of the equity, subsequent days, junior encumbrancers, inverse order of priority." The defendant did not redeem on or before the December 9, 1992 law day.

On January 11, 1993, the plaintiff filed a certificate of foreclosure in the Middletown land records certifying that title to the subject property had vested in the plaintiff on December 10, 1992. On that same day, the plaintiff attempted to file a motion for deficiency judgment dated January 6, 1993. The clerk's office date stamped the motion January 11, 1993, but later crossed out the date stamp and returned the motion to the plaintiff for the lack of an order and certification sheet. The plaintiff subsequently refiled the motion with the required order and certification sheet. The clerk's office date stamped the plaintiff's motion for deficiency judgment as being filed on January 14, 1993.

On or about March 5, 1993, the defendant filed a motion to dismiss, ⁵ a motion to impose fees and costs and an objection to the January 14, 1993 motion for deficiency judgment alleging untimely filing, pursuant to the thirty day limitation stated in General Statutes § 49-14. On March 10, 1993, the plaintiff sought to reclaim its motion for deficiency judgment dated October 30, 1992, for the short calendar.

The plaintiff filed a memorandum of law in opposition to the defendant's motion to dismiss on March 22, 1993. On that same day, the defendant filed an objection to the plaintiff's reclaim of its motion for deficiency judgment dated October 30, 1992.

In a memorandum of decision on objections to motions for deficiency judgment dated July 9, 1993, the trial court, Higgins, J., overruled the defendant's objection to the plaintiff's motion to reclaim its motion for deficiency judgment. ⁶ The trial court's memorandum of decision held that it had "erred in hearing the defendant's motion to reopen judgment on November 9, 1992, and in resetting the law day for December 9, 1992." The trial court also concluded that "it had no authority to reset the law day to December 9, 1992, the operative law day for the purposes of this foreclosure action was October 28, 1992." The trial court concluded that the plaintiff's October 30, 1992 motion for deficiency judgment was timely filed and could be reclaimed. On October 29, 1993, the plaintiff filed an amended certificate of foreclosure on the Middletown land records to correct the date on which title vested in the plaintiff to correspond to Judge Higgins' decision.

Subsequently, on May 10, 1994, the trial court, R. O'Connell, J., conducted a full evidentiary hearing on the plaintiff's October 30, 1992 motion for deficiency judgment. The trial court issued a written memorandum of decision, dated September 16, 1994, granting a deficiency judgment in favor of the plaintiff. The trial court determined that title had vested in the plaintiff on October 29, 1992, that the value of the subject property on that date was $180,000, and that the mortgage debt on that date was $235,990.13. The trial court then rendered a deficiency judgment against the defendant in the amount of $60,990.13, plus interest from October 29, 1993. Further, the trial court awarded the plaintiff additional attorney's fees of $5000. The defendant appealed from that judgment.

I

The defendant first claims that the trial court improperly retracted its order to reset the law day. The defendant argues that the trial court extended and reset the law day in accordance with the consent and agreement of the parties. ⁷

The defendant maintains that the transcript from the November 9, 1992 hearing clearly demonstrates that both parties knew that the original law day had passed and mutually agreed to extend and reset the law day. The defendant stresses that despite the trial court's denial of his motion to open the judgment and to enjoin the law day, that court left all aspects of the judgment of strict foreclosure intact, and merely extended and reset the law day in accordance with the express consent of the parties.

The defendant acknowledges that because the trial court did not disturb any aspect of its judgment of strict foreclosure, any question of error is limited to the extension and resetting of the law day. Moreover, the defendant concedes that if General Statutes § 49-15 ⁸ is strictly construed, an opening of the judgment under these circumstances would be deemed improper. The defendant correctly argues, however, that the courts of this state have long held that the otherwise erroneous opening of a judgment of strict foreclosure, after the time fixed by statute, is an error that may be waived. See Ferguson v. Sabo, 115 Conn. 619, 622-23, 162 A. 844 (1932). Consequently, the defendant reasons, the consent of the parties to the resetting of the law day, constituted a waiver by the parties of any error the court may have committed in resetting the law day, thereby giving legal effect to the trial court's action.

The defendant insists that the plaintiff's acceptance of the trial court's order, as well as the plaintiff's subsequent conduct, are convincing proof that the parties acquiesced in the resetting of the law day, thereby effecting a waiver by the parties of the provisions of § 49-15. The specific behavior exhibited by the plaintiff on which the defendant relies to substantiate his claim that the plaintiff waived the provisions of § 49-15, is the plaintiff's lack of subsequent objection to the resetting of the law day, the plaintiff's filing of the certificate of foreclosure, which certified the vesting of title as of December 10, 1992, and the plaintiff's second filing of a motion for deficiency judgment on January 14, 1993. The defendant argues that all of these facts demonstrate that the plaintiff placed no reliance on the October 28, 1992 law day, accepted the December 9, 1992 law day as the only true law day for purposes of this suit and conducted itself accordingly, fully embracing the court's action in resetting the law day and waiving the provisions of § 49-15. We find the defendant's reliance on the theory of consent and waiver by the parties to the provisions of § 49-15 unpersuasive and without basis in Connecticut law.

The dispositive controversy in this case is whether the defendant's motion to open precipitated an automatic stay that tolled the running of the law days. It is a well settled principle of law in this state "that the mere filing of a motion to reopen the judgment does not result in an automatic stay." Brooklyn Savings Bank v. Frimberger, 29 Conn.App. 628, 631, 617 A.2d 462 (1992); Farmers & Mechanics Savings Bank v. Sullivan, 216 Conn. 341, 349, 579 A.2d 1054 (1990); see Practice Book § 4046.

Our Supreme Court examined the effect of timely filing a motion to open after a judgment of strict foreclosure has been rendered in Farmers & Mechanics Savings Bank v. Sullivan, supra, 216 Conn. 341, 579 A.2d 1054. The court noted that the trial court in that case had relied on a legal principle from a leading Connecticut treatise, D. Caron, Connecticut Foreclosures (2d Ed.1989) § 9.01C, which stated, "[a] critical factor to be recognized in connection with a motion to reopen a judgment of strict foreclosure is that the motion must be heard, and not merely filed, prior to the vesting of title." The Supreme Court qualified this legal proposition by adding that "[t]his observation would be correct if limited to a motion made after the...