Nationstar Mortgage, LLC v. Casacola

Nationstar Mortgage, LLC v. Marlon Casacola aka Marlon Casasola

No. NNHCV186078051

Superior Court of Connecticut, Judicial District of New Haven, New Haven

December 3, 2019

UNPUBLISHED OPINION

Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Baio, Claudia A., J.

MEMORANDUM OF DECISION RE PLAINTIFF’S MOTION TO STRIKE DEFENDANT’S COUNTERCLAIMS AND SPECIAL DEFENSES (#117) AND DEFENDANT’S OBJECTION (#119)

C Baio, J.

I. RELEVANT PROCEDURAL HISTORY

By motion dated July 23, 2019, the plaintiff, Nationstar Mortgage, LLC, moves to strike the defendant’s six special defenses and ten counterclaims. The defendant, Marlon Casacola, filed an objection on August 26, 2019. The matter was marked by the parties for adjudication. The plaintiff also filed a motion for summary judgment as to liability on July 23, 2019, the same date as, its motion to strike, and well after the defendant’s answer and special defenses filed on January 11, 2019. The motion for summary judgment was marked ready for argument for the September 23, 2019 short calendar and oral argument was presented. The defendant filed no memorandum in opposition, nor did the defendant appear for argument on the motion for summary judgment. The motion for summary judgment was granted as to liability.

In its motion to strike, the plaintiff moves to strike the defendant’s six special defenses and ten counterclaims. The defendant objects. Upon careful review and consideration of the briefs, arguments, and case law cited by the parties, the motion to strike is granted in part and denied in part in accordance with the decision set forth herein. The court will first address the motion to strike each of the ten counterclaims.

II. FACTS ALLEGED AS TO EACH COUNTERCLAIM

The defendant incorporates the following facts as the factual basis for each of the counterclaims. The defendant alleges that on January 30, 2009, the defendant executed and delivered to 1-800-East-West Mortgage Co. a promissory note for the original principal amount of $132,000 and a mortgage deed as security for the note. On January 31, 2009, the mortgage deed was recorded on the land records for the town of Hamden.

Thereafter, on January 10, 2017, the mortgage was assigned to the plaintiff and the assignment was recorded on the town of Hamden land records on January 18, 2017. The defendant further alleges that on March 23, 2017, the plaintiff offered, and the defendant accepted, a permanent loan modification, which was recorded on the land records. In August 2017, the plaintiff began using the registered tradename "Mr. Cooper." New monthly payments of principal and interest on the note per the loan modification are alleged to be $455.07. The defendant claims to have made all payments due under the loan modification as required starting May 1, 2017. The defendant asserts that "Mr. Cooper" thereafter unilaterally decided to no longer accept defendant’s payments on the loan modification and on September 1, 2017, declared the defendant in default. In February 2018, the plaintiff instituted this foreclosure action.

III. STANDARD OF REVIEW

"A motion to strike challenges the legal sufficiency of a pleading, and, consequently, requires no factual findings by the trial court." Bernhard-Thomas Building Systems, LLC v. Dunican, 286 Conn. 548, 552, 944 A.2d 329 (2008). "Pursuant to Practice Book § 10-39(a)(5), when a party seeks to contest the legal sufficiency of any answer to any complaint, counterclaim or cross complaint, or any part of that answer including any special defense contained therein, the party may do so by filing a motion to strike the contested pleading or part thereof. The purpose of a motion to strike is to contest ... the legal sufficiency of the allegations of any [complaint] to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Peter-Michael, Inc. v. Sea Shell Associates, 244 Conn. 269, 270, 709 A.2d 558 (1998). "[A] counterclaim is a cause of action existing in favor of the defendant against the plaintiff and on which the defendant might have secured affirmative relief had he sued the plaintiff in a separate action ... A motion to strike tests the legal sufficiency of a cause of action and may properly be used to challenge the sufficiency of a counterclaim." (Internal quotation marks omitted.) JP Morgan Chase Bank, Trustee v. Rodrigues, 109 Conn.App. 125, 130-31, 952 A.2d 56 (2008); see also Connecticut Practice Book § 10-39.

"[B]ecause a mortgage foreclosure action is an equitable proceeding, the trial court may consider all relevant circumstances to ensure that complete justice is done." TD Bank, N.A. v. M.J. Holdings, LLC, 143 Conn.App. 322, 326, 71 A.3d 541 (2013); see Northeast Savings, F.A. v. Hintlian, 241 Conn. 269, 275, 696 A.2d 315 (1997); see also Moasser v. Becker, 78 Conn.App. 305, 324, 828 A.2d 116, cert. denied, 266 Conn. 910, 832 A.2d 70 (2003); Morgera v. Chiappardi, 74 Conn.App. 442, 456-57, 813 A.2d 89 (2003). Foreclosure may be withheld by the court on the grounds of equitable considerations and principles. LaSalle National Bank v. Freshfield Meadows, LLC, 69 Conn.App. 824, 833, 798 A.2d 445 (2002). "The determination of what equity requires in a particular case, the balancing of the equities, is a matter for the discretion of the trial court." TD Bank, N.A. v. M.J. Holdings, LLC, supra, 326.

At the heart of the contention between the plaintiff and the defendant, and at the central issue of the counterclaims, is the claim of the existence of a loan modification. The plaintiff takes issue with this alleged loan modification, challenging the claim that the allegation of the existence of the loan modification provides a sufficient basis for the defendant’s counterclaims, including asserting that there are insufficient allegations of consideration. As such, before addressing the motion to strike each of the counterclaims individually, the court first addresses that underlying issue and finds that the existence of a loan modification may properly be asserted as a defense or counterclaim in a foreclosure action.

In 2013, our Connecticut Appellate court stated: "It appears that neither this court nor our Supreme Court has addressed whether breach of a loan modification agreement constitutes a valid defense to a foreclosure action. A number of decisions of the [s]uperior [courts], however, have asserted that ‘[a]llegations of modification directly attack the validity or enforcement of the original note or [mortgage such that] a special defense alleging modification is properly raised in a foreclosure proceeding.’ (Internal quotation marks omitted.) ALI, Inc. v. Veronneau, Superior Court, judicial district of Waterbury, Docket No. CV 126431 (October 11, 1996, [Kulawiz, J.] ) (17 Conn.L.Rptr. 677); see also BAC Home Loans Servicing, L.P. v. Presutti, Superior Court, judicial district of Hartford, Docket No. CV-09-5029746 (April 8, 2010, [Scholl, J.] ) (49 Conn.L.Rptr. 609). Although we find this rationale persuasive, we recognize that in order to raise this defense, the defendants must allege a valid loan modification agreement that attacks the making, validity or enforcement of the original note and/or mortgage."TD Bank, N.A. v. M.J. Holdings, LLC, supra, 143 Conn.App. 330-31 (holding the loan modification asserted by defendant in foreclosure action validly raised as defense to foreclosure action).

Particularly relevant to these issues is the recent Connecticut Supreme Court decision of U.S. National Bank Assn. v. Blowers, 332 Conn. 656, 212 A.3d 226 (2019). The Blowers court addressed a similar issue. Id. In Blowers, the trial court granted a motion to strike counterclaims and special defenses in a foreclosure action, and the Appellate Court affirmed. Id. The Supreme Court reversed the Appellate Court ruling and held: "In reaching our decision, we presume that the Appellate Court did not intend for the making, validity, or enforcement test to require mortgagors to meet a more stringent test than that required for special defenses and counterclaims in nonforeclosure actions. We therefore interpret the test as nothing more than a practical application of the standard rules of practice that apply to all civil actions to the specific context of foreclosure actions. See Citimortgage, Inc. v. Rey, 150 Conn.App. 595, 605, 92 A.3d 278 (’a counterclaim must simply have a sufficient relationship to the making, validity or enforcement of the subject note or mortgage in order to meet the transaction test as set forth in Practice Book § 10-10 and the policy considerations it reflects’), cert. denied, 314 Conn. 905, 99 A.3d 635 (2014). We agree with the defendant and the dissenting Appellate Court judge that a proper construction of ‘enforcement’ includes allegations of harm resulting from a mortgagee’s wrongful postorigination conduct in negotiating loan modifications, when such conduct is alleged to have materially added to the debt and substantially prevented the mortgagor from curing the default." Id., 667.^[1]

IV. MOTION TO STRIKE COUNTERCLAIMS

With U.S. Bank National Assn. v. Blowers, supra, 332 Conn. 656, the following is still relevant in considering a motion to strike counterclaims. A counterclaim to a foreclosure complaint must relate to the making, validity and enforcement of the mortgage. See JP Morgan Chase Bank, Trustee v. Rodrigues, supra, 109 Conn.App. 133. In assessing the viability of a counterclaim, Practice Book § 10-10 requires consideration of whether the counterclaim at issue "arises out of the transaction or one of the transactions which is the subject of the plaintiff’s complaint ..." This is referred to as the "transaction test." See CitiMortgage, Inc. v. Rey, 150 Conn.App. 595, 602, 92 A.3d 278 (2014). In the context...