Wahba v. JPMorgan Chase Bank

316 A.3d 338

349 Conn. 483

Susanne P. WAHBA

v.JPMORGAN CHASE BANK, N.A.

(SC 20807)

Supreme Court of Connecticut.

Argued December 18, 2023

Officially Released June 25, 2024

Thomas P. Willcutts, Hartford, for the appellant (plaintiff).

Brian D. Rich, for the appellee (defendant).

Robinson, C. J., and McDonald, D’Auria, Mullins, Ecker, Alexander and Dannehy, Js.

D’AURIA, J.

₄₈₇The primary issue before us in this appeal is whether, after an appellate court has affirmed a trial court’s judgment of strict foreclosure and remanded the case to the trial court to set new law days, the trial court has authority to open that judgment and render instead a judgment of foreclosure by sale based on changed market conditions. The Appellate Court, in the second appeal taken in this case, answered this question in the negative and further concluded that, even if the trial court had such authority, the plaintiff, Susanne P. Wahba, did not provide an adequate evidentiary foundation for her request that the court consider ordering a foreclosure by sale. See Wahba v. JPMorgan Chase Bank, N.A., 216 Conn. App. 236, 239-40, 283 A.3d 1095 (2022) (Wahba II). We granted the plaintiff’s petition for certification to appeal to this court from these rulings. See Wahba, v. JPMorgan Chase Bank, N.A., 346 Conn. 912, 289 A.3d 597 (2023).¹ We conclude that, contrary to the contention of the defendant, JPMorgan Chase Bank, N.A., the doctrine of res judicata did not bar the trial court from entertaining the plaintiff’s request that the trial court consider ordering a foreclosure by sale instead of simply resetting the law days. We further conclude ₄₈₈that the Appellate Court incorrectly determined that (1) its remand order directing the trial court to set new law days deprived the trial court of authority to entertain the plaintiff’s request, and (2) even if the trial court had such authority, the plaintiff’s request was not supported by an adequate evidentiary foundation. We therefore reverse the judgment of the Appellate Court.

The record reveals the following undisputed facts and procedural history. In 2003, the plaintiff obtained a loan from Washington Mutual that was secured by a mortgage on property located at 111 Byram Shore Road in Greenwich (property). See Wahba. v. JPMorgan Chase Bank, N.A., 200 Conn. App. 852, 855, 241 A.3d 706 (2020) (Wahba, I), cert. denied, 336 Conn. 909, 244 A.3d 562 (2021). The defendant acquired the loan from Washington Mutual in 2008. Id., at 856, 241 A.3d 706.

The plaintiff later sought a loan modification. It was her failed efforts to obtain that modification that led to this action alleging that the defendant had engaged in deceptive and unfair trade practices in violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. Id. The defendant counterclaimed to foreclose the mortgage. Id., at 854 n.1, 241 A.3d 706. The parties tried the CUTPA claim to a jury, which returned a verdict in the defendant’s favor. Id., at 856–57, 241 A.3d 706. They tried the foreclosure counterclaim to the court on October 26, 2017. On June 28, 2018, the court issued a memorandum of decision, concluding that the defendant was entitled to a judgment of foreclosure and ordering a hearing on the issues of attorney’s fees and whether the court should order a strict foreclosure or a foreclosure by sale. That hearing was held on July 30, 2018. The court issued a supplemental memorandum of decision on November 28, 2018, rendering a judgment of strict foreclosure. The court determined that, as of the date of trial, October 26, 2017, the fair market value of the property was $6,700,000, that, as of November 27, ₄₈₉2018, the outstanding mortgage debt was $6,179,199.57, and that the defendant was entitled to fees and expenses in the amount of $121,305.80.

The plaintiff appealed to the Appellate Court, challenging the verdict on her CUTPA claim and the judgment of strict foreclosure. Id., at 854 n.1, 857, 241 A.3d 706. The Appellate Court upheld the verdict on the CUTPA claim, affirmed the judgment of strict foreclosure and remanded the case, to the trial court "solely for the purpose of setting new law days." Id., at 869, 241 A.3d 706. The plaintiff then moved for reconsideration, requesting that the Appellate Court reconsider its ruling that the trial court properly had barred her from presenting certain evidence at trial. The Appellate Court denied the motion.

On remand, the defendant moved the trial court to reset the law days. See Wahba v. JPMorgan Chase Bank, N.A., supra, 216 Conn. App. at 238, 283 A.3d 1095. The plaintiff objected, arguing that the original judgment of strict foreclosure did "not take into account the steep rise in Connecticut property values that has occurred since the court determined to enter a judgment of strict foreclosure, rather than a foreclosure by sale.² The steep rise in property values has been most dramatic for high-end shoreline properties, which describes the [plaintiff’s] property …. " (Footnote added; internal quotation marks omitted.) Id. The plaintiff requested that the court require the defendant to file a motion to open the judgment and to provide an updated appraisal and updated debt figures to allow the court to determine whether a foreclosure by sale would be appropriate. Id. The court concluded that, under Rizzo Pool Co. v. Del Grosso, 240 Conn. 58, 689 A.2d 1097 (1997), it was bound by the Appellate Court’s rescript order in Wahba I, requiring ₄₉₀it to set new law days. See Wahba. v. JPMorgan Chase Bank, N.A., supra, 216 Conn. App. at 238-29, 283 A.3d 1095; see also Rizzo Pool Co. v. Del Grosso, supra, at 65, 689 A.2d 1097 ("[i]t is the duty of the trial court on remand to comply strictly with the mandate of [an] appellate court according to its true intent and meaning" (internal quotation marks omitted)). Accordingly, the court denied the plaintiff’s request and granted the defendant’s request to reset the law days. See Wahba v. JPMorgan Chase Bank, N.A., supra, 216 Conn. App. at 240, 283 A.3d 1095.

The plaintiff moved the trial court for reargument and reconsideration, contending that Rizzo Pool Co. did not prohibit the court from exercising its discretion to render an equitable decision in a foreclosure proceeding. She also requested that the court take judicial notice that Zillow Group, Inc. (Zillow),³ estimated the current value of the property at $8,817,600, approximately $2 million more than the appraisal the court had relied on when it rendered the judgment of strict foreclosure. She also represented that, even after adding an additional three years of interest to the 2018 debt amount, the current estimated value of the property was approximately $2 million greater than the debt. The trial court denied the motion, again noting that it had no authority to revisit the merits of the strict foreclosure judgment in light of the Appellate Court’s rescript remanding the case solely for the purpose of setting new law days. The court also noted that the plaintiff had not sought to expand the scope of the remand order in her motion for reconsideration of the Appellate Court’s decision.

The plaintiff appealed again to the Appellate Court, claiming that the trial court had incorrectly determined ₄₉₁that it had no authority on remand to order a foreclosure by sale. See id., at 238, 283 A.3d 1095. The Appellate Court rejected the claim for two reasons. First, it concluded that the claim was barred by its decision in Connecticut National Bank v. Zuckerman, 31 Conn. App. 440, 441, 624 A.2d 1163 (1993), which held that, when an appellate court has affirmed a judgment of strict foreclosure and remanded the case for the setting of new law days, the "trial court cannot deviate from the directions given by the appellate court." (Internal quotation marks omitted.) Wahba v. JPMorgan Chase Bank, N.A., supra, 216 Conn. App. at 240, 283 A.3d 1095. Second, the Appellate Court concluded that, even if the trial court had authority to order a foreclosure by sale, the plaintiff neither moved to open the judgment for such a purpose nor preserved her claim by providing the trial court with evidence that a judgment of strict foreclosure would result in a windfall of more than $2 million to the defendant. See id. Accordingly, the Appellate Court affirmed the trial court’s judgment and again remanded the case to set new law days. See id.

The plaintiff then filed this certified appeal challenging the Appellate Court’s conclusions. The defendant claims as an alternative ground for affirmance that, even if the Appellate Court’s rescript in Wahba. I did not deprive the trial court of its authority to entertain a request for a judgment of foreclosure by sale on remand, the trial court was barred from doing so by the doctrine of res judicata.⁴ Belatedly, the defendant ₄₉₂contends that the plaintiff had to appeal from the original judgment of strict foreclosure before the Appellate Court could authorize the trial court to modify the judgment and order a foreclosure by sale. We conclude that the doctrine of res judicata did not bar the trial court from modifying the judgment, that the Appellate Court’s remand order did not deprive the trial court of its authority to do so, and that the plaintiff adequately raised and preserved her claim that the trial court had such authority. We therefore reverse the judgment of the Appellate Court.

I

Because the defendant’s claim that the doctrine of res judicata barred the trial court from modifying the judgment of strict foreclosure and ordering a foreclosure by sale is potentially dispositive and has some bearing on our analysis of the plaintiff’s claims on appeal, we address it first. We conclude that, under the circumstances of the present case, the doctrine of res judicata did not bar the trial court from entertaining the plaintiff’s request on remand that it order a foreclosure by sale.

[1–3] "[T]he doctrine of res judicata provides that [a] judgment...