First Niagara Bank, N.A. v. Pouncey

204 Conn.App. 433

253 A.3d 524

FIRST NIAGARA BANK, N.A.

v.Raymond C. POUNCEY et al.

AC 43459

Appellate Court of Connecticut.

Argued February 16, 2021

officially released May 4, 2021

John R. Williams, for the appellants (named defendant et al.).

Christopher J. Picard, for the appellee (substitute plaintiff).

Bright, C. J. and Alvord and Elgo, Js.

BRIGHT, C. J.

The defendants Raymond C. Pouncey, also known as Raymond C. Pouncey, Sr., and Melissa Pouncey,¹ appeal from the judgment of strict foreclosure rendered by the trial court in favor of the substitute plaintiff, KeyBank, N.A. On appeal, the defendants claim that, in light of our Supreme Court's holding in U.S. Bank National Assn . v. Blowers , 332 Conn. 656, 212 A.3d 226 (2019), the court erred in denying the defendants’ motion to reargue and reconsider the court's order denying the defendants’ motion to open summary judgment.² We affirm the judgment of the trial court.

The record reveals the following facts and procedural history. On July 10, 2007, the defendant Raymond C. Pouncey executed an adjustable rate note in the original principal amount of $455,000 to NewAlliance Bank. The note is secured by a mortgage on real property located at 11 Sherwood Forest Lane, Lot 5, in Killingworth. In 2011, NewAlliance Bank merged with and into First Niagara Bank, N.A. (First Niagara). On May 1, 2013, the note and mortgage were modified by a loan modification agreement entered into between the defendants and First Niagara.

In a letter dated March 24, 2015, First Niagara notified the defendants in accordance with the terms of the note and the mortgage that they were in default and that the failure to cure the default could result in the acceleration of the debt. The defendants failed to cure the default following the issuance of the March 24, 2015 letter. Thereafter, First Niagara accelerated the debt and commenced the present action. In 2016, First Niagara merged into KeyBank, N.A. Thereafter, KeyBank, N.A., was substituted as the plaintiff in this action.

On March 16, 2017, the plaintiff filed a motion for a judgment of strict foreclosure. On March 29, 2017, the defendants filed an amended answer and special defenses. The defendants pleaded seven special defenses alleging estoppel, promissory estoppel, equitable estoppel, unclean hands, violation of the covenant of good faith and fair dealing, unconscionability, and gross negligence.

On July 5, 2018, the plaintiff filed a motion for summary judgment as to liability on the allegations of the complaint. In support of the motion for summary judgment, the plaintiff attached an affidavit attested to by Irena Karovski, a banking officer for the plaintiff, averring that the defendants were in default under the loan documents for failure to make payments as required by the terms of the note and the mortgage and confirming the plaintiff's possession of the note at issue. The plaintiff attached a copy of the note and the mortgage, the loan modification agreement, the March 24, 2015 demand letter, and an emergency mortgage assistance payment letter. The defendants did not file any opposition to the plaintiff's motion for summary judgment. On October 15, 2018, the trial court granted the plaintiff's motion for summary judgment as to liability.

On October 16, 2018, the defendants filed a motion for permission to file a late affidavit in opposition to the plaintiff's motion for summary judgment. Attached to that motion were affidavits of both defendants. On October 22, 2018, the defendants filed a motion to reargue and reconsider the court's granting of the plaintiff's motion for summary judgment on the ground that their special defenses established genuine issues of material facts. The defendants submitted no affidavits or other documents in support of their motion.³ On October 29, 2018, the trial court deferred action on the defendants’ motion for permission to file a late affidavit in opposition to the plaintiff's motion for summary judgment pending the outcome of the October 22, 2018 motion to reargue. On November 16, 2018, the court granted the defendants’ motion to reargue and reconsider, but denied the requested relief. In its November 16, 2018 order, the court first noted that "[the defendants acknowledge] that there was no objection to the motion for summary judgment before the court when the motion was decided; however, [the defendants maintain] that, on its face, the plaintiff's motion was insufficient to establish the absence of a genuine issue of fact as to the plaintiff's right to foreclose the subject mortgage." The court then stated: "The court has reviewed the allegations of the complaint, the affidavit in support of summary judgment, and [the defendants’] special defenses. The plaintiff's memorandum and supporting documents establish that there is no genuine issue of material fact regarding the plaintiff's right to foreclose the subject mortgage. The allegations of the [special defenses] are not legally sufficient. [The defendants allege] that there was a mortgage modification agreement entered into in February and April of 2013, however, the plaintiff's affidavit states that payments have not been made on the mortgage since June 1, 2014. [The defendants have] failed to sufficiently allege deceitful or unfair practices on the plaintiff that led to the filing of a foreclosure action that could have been avoided. See U.S. Bank , N.A. v. Eichten , 184 Conn. App. 727, 196 A.3d 328 (2018)."

Subsequent to the defendants’ filing of their October 22, 2018 motion to reargue and reconsider, but prior to the court's ruling on the October 22, 2018 motion, the defendants, on November 5, 2018, filed a motion to open the summary judgment as to liability. On November 6, 2018, the defendants filed a revised motion to open the summary judgment and an affidavit in support of their motion.⁴ On November 14, 2018, the defendants filed a second revised motion to open the summary judgment as to liability (motion to open). In their memorandum in support of the motion to open, the defendants argued that their amended answer and special defenses, request for admission, and a discovery dispute with the plaintiff raised genuine issues of material facts. In particular, the defendants claimed that there was evidence that the plaintiff misapplied their payments after the 2013 modification, that they had not defaulted on the note, and that they did not receive the notice of default. After conducting a hearing on the defendants’ revised motion on July 8, 2019, the court issued an order on July 16, 2019, requesting further arguments and/or submissions regarding the defendants’ motion to open and informed the parties that the matter would be scheduled for the August 12, 2019 foreclosure short calendar. After receiving additional evidentiary submissions from the parties, the court denied the defendants’ motion to open on August 20, 2019. In its ruling, the court stated that it had considered the submissions of the parties, the procedural history of the case, the determinations made when summary judgment as to liability was rendered as well as those made in the ruling on the defendants’ October 22, 2018 motion to reargue. The court concluded that the defendants did not show reasonable cause to open the summary judgment as to liability. Furthermore, the court noted that the plaintiff's supplemental affidavit in support of its motion for summary judgment satisfactorily explained the purported issues that were the basis for the defendants’ motion to open.⁵

On September 9, 2019, the defendants filed a motion to reargue and reconsider the court's denial of their motion to open the summary judgment on the ground that the court had failed to consider our Supreme Court's holding in Blowers . The defendants argued that Blowers reversed the doctrine that the trial court had applied in "ignoring" the defendants’ special defenses and granting the plaintiff's motion for summary judgment as to liability. The defendants contended that the court should have considered the defendants’ allegations of, "[postorigination] of the loan, actions by the plaintiff in their special defenses as sufficient facts to deny summary judgment and at the very least to open after the [ Blowers opinion]."⁶ On September 10, 2019, the court denied the defendants’ motion to reargue and reconsider. On September 16, 2019, the court rendered a judgment of strict foreclosure. This appeal followed.

On appeal, the defendants claim that the court erred in denying their September 9, 2019 motion to reargue and reconsider because our Supreme Court's holding in Blowers "dramatically reshaped the law" regarding the legal sufficiency of special defenses in a foreclosure action. According to the defendants, the court's conclusion that the defendants’ allegations in their special defenses were not legally sufficient is no longer correct in light of Blowers . The defendants argue that there is no meaningful difference between the present case and Blowers . The defendants contend that their special defenses, like those in Blowers , are legally sufficient because the special defenses were directed to the enforcement of the note or mortgage.

We first address our standard of review. The defendants argue that our review of the court's denial of their motion to reargue and reconsider the court's denial of their motion to open is de novo because they are challenging on appeal the court's erroneous application of our Supreme Court's decision in Blowers to the legal sufficiency of their special defenses. The plaintiff argues that our review is limited to determining whether the court abused its discretion. We agree with the plaintiff.

"[I]n reviewing a court's ruling on a motion to open, reargue, vacate or reconsider, we ask only whether the court acted unreasonably or in clear abuse of its discretion. ... When reviewing a decision for an abuse of discretion, every reasonable presumption should be given in favor of...