HSBC Bank USA, Nat'l Ass'n v. Gilbert

200 Conn.App. 335

238 A.3d 784

HSBC BANK USA, National Association, Trustee

v.Howard I. GILBERT et al.

AC 42599

Appellate Court of Connecticut.

Argued March 11, 2020

Officially released September 22, 2020

James R. Winkel, Milford, for the appellants (defendants).

Marissa I. Delinks, for the appellee (plaintiff).

Alvord, Keller and Elgo, Js.

KELLER, J.

The defendants Howard I. Gilbert and Mary S. Gilbert¹ appeal from the judgment of foreclosure by sale rendered by the trial court in favor of the plaintiff, HSBC Bank USA, National Association, as Trustee for Fremont Home Loan Trust 2005-E, Mortgage-Backed Certificates, Series 2005-E. On appeal, the defendants claim that the court erred in granting the plaintiff's motion for summary judgment as to liability only (1) because the plaintiff failed to establish that there was no genuine issue of material fact as to whether it sent proper notice of default and acceleration to the defendants, (2) because the plaintiff's affidavits submitted to the court in support of the motion failed to satisfy the requirements of Practice Book § 17-46, and (3) despite the fact that the plaintiff's affiants failed to establish that they had personal knowledge of the facts that were the subject of the affidavits,² and that the court erred in rendering judgment of foreclosure by sale because the plaintiff's affidavit of debt was insufficient to demonstrate the amount of debt due on the subject note. We disagree and, thus, affirm the judgment of the trial court.

The following undisputed facts and procedural history are relevant to the resolution of this appeal. On November 7, 2005, Howard Gilbert executed a promissory note to Fremont Investment and Loan (Fremont) in the amount of $720,000. To secure his repayment of the loan, Howard Gilbert executed a mortgage to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Fremont, on the property located at 245 Pepper Ridge Road in Stamford (property). The mortgage was recorded on the Stamford land records on November 14, 2005. On December 13, 2016, MERS, as nominee for Fremont, assigned the mortgage to the plaintiff.

Thereafter, on February 6, 2017, the plaintiff commenced this foreclosure action by seeking to foreclose that mortgage. Following an unsuccessful mandatory mediation, the plaintiff filed an amended complaint on August 22, 2018, alleging, inter alia, that the note and mortgage were in default for nonpayment of the monthly installments of principal and interest due on June 1, 2016, and anytime thereafter. On September 13, 2018, the defendants filed an answer and special defenses in which they admitted their ownership of the property and denied that they were in default. The defendants also alleged the following special defenses:

(1) the plaintiff failed to provide proper notice of acceleration of the debt; (2) the plaintiff does not have standing to bring the action; (3) the plaintiff failed to plead properly the necessary elements for a foreclosure action; and (4) the plaintiff lacks the authority to prosecute the action.

On October 12, 2018, the plaintiff filed a motion for summary judgment as to liability, claiming that there was no genuine issue of material fact regarding the allegations in the complaint and, therefore, it was entitled to judgment as a matter of law. In support of its motion, the plaintiff argued that the defendants had admitted their ownership and possession of the premises, it is the party entitled to collect the debt to enforce the note and the mortgage, and the conditions precedent to foreclose the mortgage had been satisfied. Moreover, the plaintiff asserted that the defendants’ special defenses do not preclude the entry of summary judgment because the plaintiff's affidavit affirmed that notice was sent and that the plaintiff had standing to bring the present action. Attached as exhibits to its motion were a copy of the mortgage and assignment to the plaintiff, the note, the notice of default, and an affidavit from Flora V. Rashtchy, a contract management coordinator of Ocwen Loan Servicing (Ocwen). In her affidavit, Rashtchy attested that Ocwen is the plaintiff's mortgage loan servicer and that, in her position, she was authorized to make the affidavit and had personal knowledge of the facts and matters in the document. She further attested that the note and mortgage on the property were in default as of June 1, 2016, that the plaintiff was entitled to collect the debt, and that the notice of default, a copy of which was attached as an exhibit to her affidavit, had been given to the defendants on July 27, 2016. According to the plaintiff's counsel, when the exhibit was electronically filed with the court, a scanning error occurred that resulted in certain documents, necessary to demonstrate the plaintiff's compliance with the notice requirements of the mortgage, being excluded from the exhibit. Specifically, the exhibit failed to include a letter that identified the action required to cure the default and included only the amount due. Additionally, the exhibit failed to include a letter that (1) identified a date, not less than ten days from the date the notice was given to the defendants, by which the default must be cured, and (2) informed the defendants that failure to cure the default on or before the specified date in the notice may result in acceleration of the sums secured by the mortgage or the sale of the property. The exhibit also failed to include a letter that informed the defendants of their right to reinstate after acceleration and the right to assert in court the nonexistence of a default or any other defense against acceleration and foreclosure or sale.

Thereafter, the defendants filed an objection to the plaintiff's motion for summary judgment and argued that genuine issues of material fact existed because Rashtchy's affidavit did not comply with Practice Book § 17-46 and constituted inadmissible hearsay. Specifically, the defendants argued that the affidavit was insufficient because (1) it was not accompanied by other documentation to validate Rashtchy's claim that Ocwen is the plaintiff's loan servicer, (2) it failed to establish that she was competent to attest to the matters set forth in her affidavit, and (3) it did not identify which entity's particular business records she was familiar with and could testify to, pursuant to Jenzack Partners, LLC v. Stoneridge Associates, LLC , 183 Conn. App. 128, 192 A.3d 455 (2018), rev'd in part, 334 Conn. 374, 222 A.3d 950 (2020). Last, the defendants argued that the court should not render summary judgment in this matter because Rashtchy's affidavit failed to establish that the plaintiff sent notice of default that was compliant with the notice requirements of the mortgage, the plaintiff failed to provide instructions that explained the action that was required to cure the default, and the plaintiff failed to provide a date by which the default had to be cured.

On December 5, 2018, the plaintiff filed a supplemental affidavit in support of its motion for summary judgment signed by Anel Hernandez, a different contract management coordinator with Ocwen. Like Rashtchy, Hernandez attested that Ocwen is the plaintiff's mortgage loan servicer, that she was authorized to make the affidavit, and that she had personal knowledge of the facts and matters stated in the affidavit. Hernandez further attested that, in the regular performance of her job responsibilities, she "has access to and [is] familiar with the business records ... relating to the servicing of the mortgage loan at issue in this foreclosure action ...." Additionally, she attested that she had personal knowledge of the transactions at issue and the manner in which the business records were created. She also reiterated that the note and mortgage were in default as of June 1, 2016, that the plaintiff was entitled to collect the debt, and that notice of default, a copy of which was attached to the affidavit as exhibit A-2, had been given to the defendants on July 27, 2016.

On December 10, 2019, the court held a hearing on the plaintiff's motion for summary judgment. In support of its position, the plaintiff reiterated its argument that the two affidavits satisfied the business record exception to the hearsay rule. See General Statutes § 52-180 ; Conn. Code Evid. § 8-4 (a). The plaintiff's counsel, in arguing the motion, also explained that, when the plaintiff first submitted Rashtchy's affidavit, "there was some kind of scanning error" and that the plaintiff submitted the second affidavit in order to provide a more complete record of the notice sent to the defendants. In response, the defendants argued that the filing of the second affidavit raised an issue of fact because the second affidavit failed to explain why the first affidavit was not accurate.

In granting the plaintiff's motion for summary judgment, the court order stated that, "[t]he motion for summary judgment having been heard, it is hereby found that no genuine issue of material fact as to liability or damages exists. ... [Howard Gilbert] in his objection raises two important issues. The first relates to the admissibility of the plaintiff's affidavit under the business records rule. The defendant claims that the affidavit contains inadmissible hearsay, and the defendant may have a valid point based on the holding in Jenzack Partners, LLC v. Stoneridge Associates, LLC , [supra, 183 Conn. App. at 128, 192 A.3d 455 ]. However, parts of the affidavit, and particularly those parts necessary to establish the default, are admissible under the business records rule. The affidavit includes statements by the affiant that [Howard Gilbert] has failed to make payments each and every month in breach of his obligations under the note up until the present time. The affiant is an employee of the current servicer of the loan and familiar with those current records. The affidavit establishes her familiarity with the current business...