Saunders v. KDFBS, LLC ( 2020 )

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ROGER SAUNDERS, TRUSTEE v.
KDFBS, LLC, ET AL.
(SC 20182)
Robinson, C. J., and Palmer, McDonald, D’Auria,
Mullins, Kahn and Ecker, Js.
Syllabus
The plaintiff, as trustee, sought to foreclose a mortgage on certain real
property owned by the defendant L Co. In the first count of his complaint,
the plaintiff sought foreclosure of his mortgage, alleging, inter alia, that
there were encumbrances on the subject property that were subsequent
and subordinate to his mortgage, including the mortgage of the defen-
dants K and D. In the second count, the plaintiff sought a declaratory
judgment that the mortgage of K and D, which was purportedly recorded
before the plaintiff’s mortgage, was subordinate to the plaintiff’s mort-
gage on the ground that the plaintiff had no notice of K and D’s mortgage
because it had been incorrectly indexed by the town clerk’s office. K
and D denied the allegation in each count that their mortgage was
subordinate to the plaintiff’s mortgage and asserted a special defense
that L Co. had mortgaged the subject property to them and that their
mortgage was prior in right and title to the plaintiff’s mortgage. The
trial court rendered judgment for the plaintiff on both counts and ordered
a foreclosure by sale. Prior to the sale date set by the court, K and D
appealed from the judgment of foreclosure to the Appellate Court. The
plaintiff moved to dismiss the appeal on the ground that the Appellate
Court lacked subject matter jurisdiction because the priority of mort-
gages cannot be challenged until after the foreclosure sale has taken
place, and that court dismissed the appeal for lack of a final judgment.
On the granting of certification, K and D appealed to this court. Held
that the Appellate Court improperly dismissed the appeal of K and D
for lack of a final judgment, as the judgment of foreclosure by sale in
the present case was a final judgment: the trial court rendered judgment
for the plaintiff, and against K and D, on both counts of the complaint
and ordered the full measure of relief sought therein, and the determina-
tion of priorities as between the plaintiff and K and D was an integral
part of the judgment of foreclosure, as it was the joint status of K and
D as a subsequent encumbrancer that permitted the foreclosure action
to proceed against them because, if the mortgage of K and D had priority
over the plaintiff’s mortgage, K and D would not be proper parties to
the foreclosure action and would retain their full property interest,
rather than be left with only a claim to a portion of any proceeds from
the sale after the plaintiff is paid in full; moreover, the plaintiff could
not prevail on his claim that K and D were not appealing to the Appellate
Court from the judgment of foreclosure by sale because their appeal
challenged the trial court’s priority determination rather than the plain-
tiff’s right to foreclose on his mortgage, as the priority issue was in
dispute as to both counts of the complaint, and the mere fact that the
trial court resolved this dispute by first disposing of the declaratory
judgment count did not negate its legal effect on the foreclosure count;
furthermore, there was no merit to the plaintiff’s claim that an appeal
of a priority determination before the trial court’s approval of the sale
and the rendering of a supplemental judgment is premature, as the
priority of the foreclosing plaintiff is a proper and essential aspect of
the judgment of foreclosure by sale, a supplemental judgment is intended
to resolve disputes only as between parties holding interests subsequent
in priority, the trial court’s priority determination was ripe for adjudica-
tion before the sale was approved because K and D’s loss of priority
was neither hypothetical nor contingent on an event that could never
transpire, and practical and pragmatic considerations, including the
concern that the ability to calculate an appropriate bid on the property
would be impaired by the uncertainty of whether the foreclosing plaintiff
or a defendant encumbrancer has first priority, weighed strongly in favor
of permitting an appeal before the foreclosure sale has been ratified.
Argued October 24, 2019—officially released May 18, 2020*
Procedural History
Action to foreclose a mortgage on certain of the
named defendant’s real property, and for other relief,
brought to the Superior Court in the judicial district of
Danbury and tried to the court, Hon. William J. Lavery,
judge trial referee, who, exercising the powers of the
Superior Court, rendered judgment of foreclosure by
sale and determined the priority of the parties’ mort-
gages as to the subject property, and the defendant
Karen Davis et al. appealed to the Appellate Court,
which granted the plaintiff’s motion to dismiss the
appeal, and the defendant Karen Davis et al., on the
granting of certification, appealed to this court.
Reversed; further proceedings.
Alexander Copp, with whom were Neil R. Marcus
and, on the brief, Barbara M. Schellenberg, for the
appellants (defendant Karen Davis et al.).
Jessica M. Signor, with whom were Michael J. Jones
and John J. Ribas, for the appellee (plaintiff).
Opinion
McDONALD, J. The issue in this foreclosure action
is whether a determination of the priority of mortgages
can be challenged in an appeal from the judgment of
foreclosure by sale, before the foreclosure sale has
taken place, when the priority of the foreclosing plain-
tiff’s mortgage is in dispute. The trial court rendered
judgment in favor of the plaintiff, Roger Saunders,
Trustee of Roger Saunders Money Purchase Plan, on
his two count complaint seeking a judgment of foreclo-
sure on certain real property and a declaratory judg-
ment that his mortgage had priority over a purported
mortgage on the property held by the defendants Karen
Davis and Daniel Davis. The Appellate Court summarily
dismissed the Davis defendants’ appeal challenging the
priority of the plaintiff’s mortgage over their mortgage
for want of a final judgment. We distinguish the present
case from one in which there is a dispute among junior
encumbrancers and reverse the Appellate Court’s order
summarily dismissing the appeal.
The following undisputed facts were found by the
trial court or are otherwise reflected in the record. In
March, 2008, the defendant KDFBS, LLC, purchased the
subject property, a condominium in Ridgefield, by way
of a deed that was recorded under its name in April,
2008. KDFBS is managed by its sole member, the defen-
dant Brian Scanlon.1
In June, 2008, KDFBS executed a mortgage deed on
the property in favor of the Davis defendants in the
principal amount of $565,000. Although the signature
line and the acknowledgement clause of the deed
reflected that Scanlon was executing the deed in his
capacity as a member of KDFBS, his designation as a
member was erroneously omitted in the grantor clause
at the top of the mortgage deed. The Ridgefield town
clerk’s office indexed the deed under Scanlon’s per-
sonal name as the grantor.
In October, 2009, KDFBS executed a second mort-
gage deed on the Ridgefield property in favor of the
plaintiff as security for a joint loan in the amount of
$110,000 to KDFBS and to Scanlon individually. Scanlon
told the plaintiff that he would have a first mortgage
on the property. To ensure his security for the loan,
the plaintiff had a title search conducted. That search
revealed no mortgages of record in KDFBS’ chain of
title. The plaintiff’s mortgage deed was duly recorded
in October, 2009.
In December, 2009, the Ridgefield town clerk’s office
changed the official index for the Davis mortgage after
an unidentified person brought the indexing error to
the town clerk’s attention. A correction report was
issued, and the Davis mortgage was changed from the
grantor index for Scanlon to the index for KDFBS.2
KDFBS and Scanlon subsequently defaulted on their
obligation to the plaintiff, which gave rise to the present
action. In the first count of the complaint, the plaintiff
sought foreclosure of his mortgage. In addition to
asserting allegations regarding the default, this count
alleged that there were encumbrances on the subject
property that were subsequent and subordinate to the
plaintiff’s mortgage, among which was the purported
Davis mortgage, which was recorded in 2008. In the
second count, the plaintiff sought a declaratory judg-
ment that the 2008 Davis mortgage was subordinate to
the plaintiff’s 2009 mortgage because the plaintiff had
no notice of it due to it having been indexed under
Scanlon’s name.3
The Davis defendants filed an answer denying the
allegation in each count that their mortgage was subor-
dinate to the plaintiff’s mortgage. They also asserted a
special defense that KDFBS, acting through its duly
authorized member, Scanlon, had mortgaged the sub-
ject property to them and that this mortgage was prior
in right and title to the plaintiff’s mortgage.
KDFBS was defaulted for failure to appear and Scan-
lon was defaulted for failure to plead. The plaintiff then
filed a motion for a judgment of foreclosure by sale. The
motion was supported by an affidavit of debt totaling
$176,467.50, an affidavit of attorney’s fees in the amount
of $18,345, and an appraisal assessing the property’s
fair market value at $310,000.
Following a contested trial between the plaintiff and
the Davis defendants, the court rendered judgment in
favor of the plaintiff on both counts and ordered a
foreclosure by sale.
Prior to the sale date set by the court, the Davis
defendants appealed from the judgment. The plaintiff
moved to dismiss the appeal, contending that the Appel-
late Court lacked subject matter jurisdiction because
its case law established that priority of mortgages can-
not be challenged until after the foreclosure sale has
taken place. See, e.g., Moran v. Morneau, 129 Conn.
App. 349, 357, 19 A.3d 268 (2011). The Appellate Court
thereafter issued an order summarily dismissing the
appeal for lack of a final judgment. The Davis defen-
dants’ certified appeal to this court followed.
The certified question is framed as whether the Appel-
late Court properly dismissed the appeal ‘‘for lack of a
final judgment in accordance with State v. Curcio, 191
Conn. 27, 31, 463 A.2d 566 (1983).’’ Saunders v. KDFBS,
LLC, 330 Conn. 915, 193 A.3d 559 (2018). Curcio sets
forth two circumstances in which an interlocutory rul-
ing is deemed to have the attributes of a final judgment
so as to permit an immediate appeal.4 See State v. Cur-
cio, supra, 31. The Davis defendants contend that Cur-
cio is inapplicable to the present case, however,
because they are, in fact, appealing from a final judg-
ment. Alternatively, the Davis defendants rely on the
fact that a declaratory judgment is designated by statute
to ‘‘have the force of a final judgment.’’ General Statutes
§ 52-29 (a).
The plaintiff makes two arguments premised on the
fact that the trial court has not yet approved a sale of
the property or rendered the supplemental judgment
that determines the priority of encumbrancers in dis-
tributing proceeds from the sale. First, he contends that
these facts demonstrate that the underlying decision
was an interlocutory order that was not appealable
under either circumstance set forth in Curcio. Second,
he contends that Appellate Court precedent demon-
strates that the appeal is not ripe before these acts
occur. We agree with the Davis defendants’ principal
argument and, therefore, do not separately consider
the effect of the judgment rendered on the declaratory
judgment count.
‘‘It is axiomatic that, except insofar as the constitu-
tion bestows upon [an appellate court] jurisdiction to
hear certain cases; see Fonfara v. Reapportionment
Commission, 222 Conn. 166, 610 A.2d 153 (1992); the
subject matter jurisdiction of the Appellate Court and
of [the Supreme Court] is governed by statute. Grieco
v. Zoning Commission, 226 Conn. 230, 231, 627 A.2d
432 (1993). It is equally axiomatic that, except insofar
as the legislature has specifically provided for an inter-
locutory appeal or other form of interlocutory appellate
review; see, e.g., General Statutes § 52-278l (prejudg-
ment remedies); General Statutes § 54-63g (petition for
review of bail); General Statutes § 51-164x (court clo-
sure orders); State v. Ayala, 222 Conn. 331, 340, 610
A.2d 1162 (1992); appellate jurisdiction is limited to
final judgments of the trial court.’’ (Internal quotation
marks omitted.) Conetta v. Stamford, 246 Conn. 281,
289–90, 715 A.2d 756 (1998).
Both parties cite as controlling authority a line of
Appellate Court cases holding that, in a foreclosure by
sale, ‘‘there are typically three appealable determina-
tions: the judgment ordering a foreclosure by sale, the
approval of the sale by the court and the supplemental
judgment [in which the proceeds from the sale are dis-
tributed].’’5 Moran v. Morneau, supra, 129 Conn. App.
355; see also Glenfed Mortgage Corp. v. Crowley, 61
Conn. App. 84, 88–89, 763 A.2d 19 (2000) (citing cases).
The first determination is deemed final if the trial court
has determined the method of foreclosure and the
amount of the debt. Moran v. Morneau, supra, 356;
Danzig v. PDPA, Inc., 125 Conn. App. 254, 261, 11 A.3d
153 (2010), cert. denied, 300 Conn. 920, 14 A.3d 1005,
cert. denied sub nom. Dadi v. Danzig, 564 U.S. 1044,
131 S. Ct. 3077, 180 L. Ed. 2d 899 (2011); see, e.g.,
Benvenuto v. Mahajan, 245 Conn. 495, 501, 715 A.2d
743 (1998) (judgment of strict foreclosure was appeal-
able even though recoverability or amount of attorney’s
fees for litigation remains to be determined); Willow
Funding Co., L.P. v. Grencom Associates, 63 Conn.
App. 832, 836–38, 779 A.2d 174 (2001) (judgment of
foreclosure by sale is final judgment even if trial court
has not set sale date).
Although not cited as supporting authority in these
Appellate Court cases, their conclusion that a judgment
of foreclosure by sale is a final judgment is in accord
with the rule set forth in Practice Book § 61-2. That rule
recognizes that ‘‘[w]hen judgment has been rendered
on an entire complaint . . . such judgment shall con-
stitute a final judgment.’’ Practice Book § 61-2. When
this rule applies, there is no need to turn to the alterna-
tive, as set forth in Curcio, for establishing the finality
of the judgment, even though some aspects of the case
remain interlocutory. See Speckner v. Riebold, 86 N.M.
275, 277, 523 P.2d 10 (1974) (citing New York and New
Mexico case law for proposition that judgment of fore-
closure is ‘‘final in part and interlocutory in part’’ (inter-
nal quotation marks omitted)); see also Willow Funding
Co., L.P. v. Grencom Associates, supra, 63 Conn. App.
837 (‘‘foreclosure judgments are often appealable imme-
diately’’); 2 D. Caron & G. Milne, Connecticut Foreclo-
sures (8th Ed. 2018) § 20-4:1, pp. 56–57 (noting that
appeal from certain orders issued in connection with
judgment of foreclosure by sale that will impact certain
parties’ rights in subsequent proceedings, e.g., setting
terms and conditions of sale, probably would be prema-
ture from judgment of foreclosure by sale).6
The judgment of foreclosure by sale in the present
case manifestly meets the requirements of Practice
Book § 61-2. The trial court rendered judgment in favor
of the plaintiff, and thus against the Davis defendants,
on both counts of the complaint and ordered the full
measure of relief sought therein. See Rockstone Capital,
LLC v. Sanzo, 332 Conn. 306, 313, 210 A.3d 554 (2019)
(‘‘the complaint sets the parameters for determining a
final judgment’’); Morici v. Jarvie, 137 Conn. 97, 103,
75 A.2d 47 (1950) (‘‘[a final] judgment [in a foreclosure
action] must either find the issues for the defendant or
[find the issues for the plaintiff and] determine the
amount of the debt, direct a foreclosure and fix the
law days’’).
Our review of certain fundamental principles of Con-
necticut foreclosure law demonstrates that the determi-
nation of priorities as between the plaintiff and the
Davis defendants was an integral part of the judgment
of foreclosure. ‘‘A mortgage . . . is [a] conveyance of
title to property that is given as security for the payment
of a debt . . . .’’ (Internal quotation marks omitted.)
Ankerman v. Mancuso, 271 Conn. 772, 778, 860 A.2d 244(2004). ‘‘The purpose of the judicial sale in a foreclosure
action is to convert the property into money and, follow-
ing the sale, a determination of the rights of the parties
in the funds is made, and the money received from the
sale takes the place of the property.’’ (Internal quotation
marks omitted.) Mortgage Electronic Registration Sys-
tems, Inc. v. White, 278 Conn. 219, 229, 896 A.2d 797(2006); see also General Statutes § 49-27. ‘‘[T]he rights
of the mortgagor [or debtor] in the . . . property are
terminated by confirmation of the foreclosure sale, and
subsequent to such sale, any interest the mortgagor [or
debtor] may claim is in the proceeds of the sale solely
and not in the property.’’ (Internal quotation marks
omitted.) Mortgage Electronic Registration Systems,
Inc. v. White, supra, 230.
The interests of the foreclosing plaintiff and the
defendants holding subsequent encumbrances are simi-
larly impacted. See Farmers & Mechanics Savings
Bank v. Sullivan, 216 Conn. 341, 354, 579 A.2d 1054(1990) (‘‘[i]n a foreclosure proceeding the trial court
must exercise its discretion and equitable powers with
fairness not only to the foreclosing mortgagee, but also
to subsequent encumbrancers and the owner’’ (empha-
sis added; internal quotation marks omitted)); 1 D.
Caron & G. Milne, supra, § 4-2, p. 205 (‘‘all encum-
brancers subsequent in right to the interest being fore-
closed must be made parties to the action’’ (emphasis
added)); see also General Statutes § 49-30 (providing
procedure when mortgage or lien on real estate has
been foreclosed and party holding encumbrance subse-
quent or subordinate to such mortgage or lien has been
omitted or has not been foreclosed of such interest or
encumbrance).
Because ‘‘the foreclosure of a mortgage or lien can
be binding only on subsequent encumbrancers, a first
mortgagee cannot be affected by the foreclosure of a
subsequent interest. Thus, any sale ordered by a judg-
ment in such action must be subject to the prior encum-
brance.’’ 1 D. Caron & G. Milne, supra, § 7-17:2, p. 514;
see Voluntown v. Rytman, 27 Conn. App. 549, 556, 607
A.2d 896 (‘‘[a] foreclosure by sale furnishes conflicting
claimants an ideal forum for litigating their differences
without prejudicing prior encumbrancers’’ (internal
quotation marks omitted)), cert. denied, 223 Conn. 913,
614 A.2d 831 (1992); see also Mortgage Electronic Regis-
tration Systems, Inc. v. White, supra, 278 Conn. 230(‘‘[T]he estate that passes by committee deed to a pur-
chaser at a foreclosure sale is no more nor less than
the estate that had been held by the mortgagor or lien
holder, minus the interests of parties to the foreclosure
action that had been terminated during the sale. If that
estate is encumbered by a valid mortgage that was not
foreclosed, then the estate that passes to the purchaser
is subject to that mortgage.’’).
These principles demonstrate that, if the Davis defen-
dants’ mortgage had priority over the plaintiff’s mort-
gage, the Davis defendants would not be proper parties
to the foreclosure action and would retain their full
property interest, rather than be left with only a claim
to a portion of any proceeds from the sale after the
plaintiff is paid in full. It was their joint status as a
subsequent encumbrancer that permitted the foreclo-
sure action to proceed against them. Clearly, then, the
priority determination at issue was essential to the judg-
ment of foreclosure.
The plaintiff makes two principal arguments as to
why this rule of finality should not apply to the priority
dispute in the present case, neither of which we find
persuasive. The plaintiff first contends that, because
the Davis defendants’ appeal challenges the trial court’s
priority determination, not the plaintiff’s right to fore-
close on his mortgage, the Davis defendants are not
appealing from the judgment of foreclosure by sale.7
The plaintiff’s argument ignores the fact that the priority
issue was in dispute at trial as to both counts of the
complaint—the Davis defendants denied the allegation
in the foreclosure count that their mortgage was subor-
dinate to the plaintiff’s mortgage and asserted a special
defense to the declaratory judgment count. The mere
fact that the trial court resolved this dispute by first
disposing of the declaratory judgment count does not
negate its legal effect on the foreclosure count. If the
Davis defendants are successful on appeal to the Appel-
late Court, they will be entitled to judgment in their
favor, not only on the declaratory judgment count, but
also on the foreclosure count. The fact that the judg-
ment of foreclosure in favor of the plaintiff would stand
as against the mortgagor and the remaining defendant
encumbrancers, whose encumbrances are conceded to
be subordinate to that of the plaintiff, is immaterial.
The plaintiff’s second argument against allowing an
immediate appeal from the judgment of foreclosure by
sale, resting primarily on two Appellate Court cases, is
that an appeal of a priority determination before the
court’s approval of the sale and the rendering of the
supplemental judgment is premature. See J & E Invest-
ment Co., LLC v. Athan, 131 Conn. App. 471, 27 A.3d
415 (2011); Moran v. Morneau, supra, 129 Conn. App.
349. The plaintiff contends that, under Moran and
Athan, even when the trial court properly makes a prior-
ity determination in connection with the judgment of
foreclosure by sale, as in the present case, any appeal
must await the approval of the sale and the rendering
of the supplemental judgment. The plaintiff also points
to the implausible possibility that the property could
sell for an amount so far in excess of its fair market
value that the sale could yield sufficient funds to satisfy
the security interests of both the plaintiff and the Davis
defendants.8 We disagree.
We begin with an overview of the two Appellate Court
cases on which the plaintiff relies. Like the present
case, both cases involved a priority determination as
between the foreclosing plaintiff and a defendant
encumbrancer. Unlike the present case, however, the
issue of priorities was not put in dispute by way of a
responsive pleading; the defendants were defaulted and
raised the issue by way of a motion for a determination
of priorities after the judgment of foreclosure was ren-
dered. In each case, the appeal was dismissed for lack
of a final judgment under Curcio.
In Moran, after the trial court rendered judgment of
foreclosure by sale, the court granted the defaulting
defendant encumbrancer’s motion for a determination
of priorities of the parties’ interests in the subject prop-
erty, ruling that the defendant held first priority. Moran
v. Morneau, supra, 129 Conn. App. 351–52. The plaintiff
then appealed from that ruling. Id., 352. In dismissing
the appeal, the Appellate Court emphasized that the
plaintiff had not filed a timely appeal from the judgment
of foreclosure by sale, which was an appealable deci-
sion, and instead had appealed from a postjudgment
order, which was an interlocutory decision.9 Id., 356
and n.7. It noted that ‘‘[t]he fact that an appealable final
judgment has occurred in a case does not, by itself,
render a subsequent interlocutory order immediately
appealable.’’ Id., 356 n.7.
The court in Moran further observed that neither
of the other two decisions recognized as amenable to
immediate appeal—approval of the sale and the supple-
mental judgment—had yet occurred. Id., 356–57. The
Appellate Court concluded that, although it was not
per se improper for the trial court to have made the
determination of priorities before the sale; id., 358; it
was well established that such rights should be deter-
mined in the supplemental judgment: ‘‘Pursuant to . . .
§ 49-27, entitlement to proceeds of the sale, and the
amount of such entitlements, is to be determined by
the court in a supplemental proceeding after the sale
has been ratified by the court. Voluntown v. Rytman,
[supra, 27 Conn. App. 556]. Our Supreme Court has long
recognized that the decree of foreclosure by sale should
not adjudicate the rights of the parties to the fund or
funds realized; rather, such rights should be determined
by way of a supplemental judgment. Gault v. Bacon,
142 Conn. 200, 203, 113 A.2d 145 (1955); City National
Bank v. Stoeckel, 103 Conn. 732, 744, 132 A. 20 (1926).
. . . Clearly, a resolution of such issues provides the
very raison d’etre of supplemental judgment proceed-
ings. D. Caron & G. Milne, [Connecticut Foreclosures
(4th Ed. 2004) § 8.02B], p. 188.’’ (Footnote omitted;
internal quotation marks omitted.) Moran v. Morneau,
supra, 129 Conn. App. 356–57. Relying on this authority,
the Appellate Court concluded that the plaintiff’s claim
to first priority would be subject to vindication in an
appeal following the supplemental judgment. Id., 358.
In Athan, the trial court had resolved the priority
issue in favor of the defendant mortgagee, raised by
way of motion, after the court had opened the judgment
of strict foreclosure and ordered the certificate of fore-
closure dissolved. See J & E Investment Co., LLC v.
Athan, supra, 131 Conn. App. 478. The plaintiff filed
its appeal before the trial court rendered judgment of
foreclosure. Id., 478, 483. The Appellate Court dismissed
the plaintiff’s appeal for lack of a final judgment insofar
as it challenged the trial court’s determination of prior-
ity. See id., 482, 485. The court observed that ‘‘[a] judg-
ment of foreclosure constitutes an appealable final judg-
ment when the court has determined the method of
foreclosure and the amount of the debt’’; id., 483; neither
of which had been determined in that case. Id. Although
that holding would be dispositive of the appeal, the
Appellate Court went on to observe that, if the trial
court were to order a judgment of foreclosure by sale,
‘‘[that] court recently ha[d] concluded that the adjudica-
tion of priorities is not a final judgment for the purposes
of appeal until a sale is approved and the court renders
a supplemental judgment.’’ Id., 484, citing Moran v. Mor-
neau, supra, 129 Conn. App. 357.
The Davis defendants suggest that Moran and Athan
can be distinguished from the present case on proce-
dural grounds. We agree with respect to Athan. The fact
that an appeal was taken in Athan before a judgment
of foreclosure was rendered clearly resulted in an
impermissible interlocutory appeal under our final judg-
ment jurisprudence. In the present case, no such defect
exists because the appeal was taken after the judgment
of foreclosure by sale was rendered.
The Davis defendants’ view that Moran also can be
distinguished on procedural grounds finds support in
a treatise on Connecticut foreclosure law, which opines:
‘‘The dilemma that arose in Moran . . . comes about
because the parties failed to address the priorities issue
in the proper manner: within the context of the plead-
ings. Presumably, the Moran complaint alleged that the
. . . mortgage [of the defendant Chase Home Finance,
LLC] was subordinate to the plaintiff’s claim. Chase’s
proper course of action should have been to answer
that allegation by way of a simpl[e] denial. The issue
then would have been closed, and the matter would
have been determined at trial, or perhaps by summary
judgment. In either event, no judgment, and hence no
sale, would be ordered until the issue had been ruled
upon, including a determination of any appeal from the
judgment. Under this scenario, the priorities ruling
is not subject to the Moran defect that it is not a final
and thus appealable judgment, since the ruling being
appealed would be either a judgment of foreclosure in
favor of the plaintiff, or a judgment in favor of the
defendant.’’ (Emphasis added.) 1 D. Caron & G. Milne,
supra, § 9-2:2.1, pp. 542–43; see also 1 D. Caron & G.
Milne, supra, § 6-1:7, p. 357 (‘‘It is inappropriate for a
defendant to challenge the priority of the foreclosing
plaintiff’s interest by means of a motion filed under
Practice Book § 23-17 [allowing for a motion for deter-
mination of priorities in the context of assigning order
of law days]. Such a challenge is properly accomplished
by the filing of either an answer denying the allegation of
the plaintiff’s priority or, if warranted, a special defense.
The issues are then closed, and the matter is heard
upon a full trial . . . .’’). This scenario is in accord with
the Davis defendants’ actions in the present case.
The treatise ignores, however, the essential substan-
tive flaw in Moran, which Athan cited in dictum. Our
disagreement with these Appellate Court cases lies in
the fact that they do not recognize the important distinc-
tion between the nature of the interest held by a party
claiming priority over the foreclosing plaintiff’s mort-
gage and the interests held by encumbrancers holding
interests admittedly subordinate to the plaintiff’s inter-
est, although in dispute as to that subordinate order.10 As
we previously explained, the priority of the foreclosing
plaintiff is a proper and, indeed, essential aspect of the
judgment of foreclosure by sale. It determines whether
the defendant encumbrancer claiming priority retains
its property interest or merely holds a stake in any
surplus proceeds of the sale, after the plaintiff is fully
compensated for its debt. See General Statutes § 49-27.
The order of priority among subsequent encum-
brancers, by contrast, does not alter the nature of their
interest—an interest in the surplus proceeds, not the
property—and thus is not a proper subject for the judg-
ment of foreclosure. See New Milford Savings Bank v.
Lederer, 112 Conn. 447, 450, 152 A. 709 (1930) (‘‘[t]he
enforcement of . . . [the mortgagee’s] claim should
not be delayed by any controversy among parties whose
claims are subordinate to his’’ (internal quotation marks
omitted)); 1 D. Caron & G. Milne, supra, § 9-2:2.1, p.
541 (‘‘a determination of priorities between subsequent
encumbrancers is properly deferred until after the sale,
thus allowing the auction to proceed without delay
pending resolution of the dispute between those parties
at a later date’’). It is for this reason and in this context
that this court has recognized that ‘‘ ‘[t]he decree of
foreclosure by sale should not adjudicate the rights of
the parties to the funds realized; those rights should
be determined by way of a supplemental judgment.
City National Bank v. Stoeckel, [supra, 103 Conn. 744].’
Gault v. Bacon, [supra, 142 Conn. 203].’’ (Emphasis
added.) City National Bank v. Traffic Engineering
Associates, Inc., 166 Conn. 195, 201–202, 348 A.2d 637(1974); see also Citibank, N.A. v. Lindland, 310 Conn.
147, 163–64, 169, 172, 75 A.3d 651 (2013) (trial court had
jurisdiction to open supplemental judgments ‘‘[b]ecause
the relief [sought] relates to the proceeds from the sale,
rather than to the property itself, and, therefore, would
be addressed within the supplemental judgment pro-
cess without regard to the status of the property’’).
Each of the cases in which we recited this principle—
Stoeckel, Gault, and Traffic Engineering Associates,
Inc.—concerned a priority dispute among subsequent
encumbrancers.11
The fact that the supplemental judgment is intended
to resolve disputes only as between parties holding
interests subsequent in priority to the plaintiff’s mort-
gage is also plainly reflected in the statutory scheme.
Section 49-27 provides in relevant part: ‘‘The proceeds
of each such sale shall be brought into court, there to
be applied if the sale is ratified, in accordance with
the provisions of a supplemental judgment then to be
rendered in the cause, specifying the parties who are
entitled to the same and the amount to which each is
entitled. If any part of the debt or obligation secured
by the mortgage or lien foreclosed or by any subsequent
mortgage or lien was not payable at the date of the
judgment of foreclosure, it shall nevertheless be paid
as far as may be out of the proceeds of the sale as if
due and payable, with rebate of interest where the debt
was payable without interest, provided, if the plaintiff
is the purchaser at any such sale, he shall be required
to bring into court only so much of the proceeds as
exceed the amount due upon his judgment debt, inter-
est and costs. . . .’’ (Emphasis added.) This statute
plainly treats the plaintiff as having established priority
and the priorities among subsequent encumbrancers as
the proper subject of the supplemental judgment.
The plaintiff’s argument that the appeal is premature
until the sale has been approved has more support
in the law but also, ultimately, is unpersuasive. See
Esposito v. Specyalski, 268 Conn. 336, 345–46, 844 A.2d
211 (2004) (‘‘We acknowledge that, because the trial
court completely disposed of a counterclaim and a
[third-party] action, at first blush, this case appears to
be an appealable final judgment under [Practice Book]
§ 61-2. Our resolution of this appeal, however, rests
with the question of whether the decision of the trial
court is ripe for adjudication.’’). ‘‘[A] judicial sale
becomes complete and creates a legal right to obliga-
tions among parties when it is confirmed and ratified
by the court.’’ (Internal quotation marks omitted.) Mort-
gage Electronic Registration Systems, Inc. v. White,
supra, 278 Conn. 230. This means that the Davis defen-
dants’ property interest will not actually be terminated
until the sale has been ratified. Nonetheless, their lack
of priority right vis-à-vis the plaintiff has been conclu-
sively established. A case is not ripe if it presents a hypo-
thetical injury or a claim that is contingent on the hap-
pening of some event that has not yet and, indeed, may
never transpire. See Janulawicz v. Commissioner of
Correction, 310 Conn. 265, 271, 77 A.3d 113 (2013);
Esposito v. Specyalski, supra, 346. The Davis defen-
dants’ loss of priority is neither hypothetical nor contin-
gent on an event that may never transpire. If any outcome
is purely hypothetical, it is the plaintiff’s suggestion that
the sale could yield sufficient proceeds to cover both the
plaintiff’s and the Davis defendants’ mortgages, such
that the Davis defendants would not actually be harmed
by the priority determination. If that were a reasonable
possibility, it would raise a question of aggrievement,
not ripeness. The trial court’s priority determination,
however, plainly meets the standard for aggrievement.
‘‘Aggrievement is established if there is a possibility, as
distinguished from a certainty, that some legally pro-
tected interest . . . has been adversely affected.’’
(Internal quotation marks omitted.) Med-Trans of Con-
necticut, Inc. v. Dept. of Public Health & Addiction
Services, 242 Conn. 152, 159, 699 A.2d 142 (1997); see
also Pomazi v. Conservation Commission, 220 Conn.
476, 483, 600 A.2d 320 (1991).
Finally, to the extent that practical and pragmatic
considerations may be taken into account to bolster
our final judgment determination, they weigh strongly
in favor of permitting an appeal before the sale has
been ratified. As the authors of the foreclosure treatise
observe, the ability to calculate an appropriate bid on
the property is impaired by the uncertainty of whether
the foreclosing plaintiff or a defendant encumbrancer
has first priority. See 1 D. Caron & G. Milne, supra, § 9-
2:2.1, p. 542.12 This concern has been cited by another
jurisdiction as a compelling reason ‘‘for requiring an
appeal to be perfected in a foreclosure action from
a judgment entry decreeing sale and determining the
mortgage to be the first and best lien upon the land.’’
Queen City Savings & Loan Co. v. Foley, 170 Ohio St.
383, 388, 165 N.E.2d 633 (1960). Although the plaintiff
emphasizes the delay from allowing an immediate
appeal, his position also could result in a delay. If a
nonparty were to bid on the property without knowl-
edge of the prior encumbrance and a reviewing court
later were to restore that encumbrance, the nonparty
may seek to set aside the sale on the ground of mistake.
The order of the Appellate Court dismissing the
appeal is reversed and the case is remanded to that
court for further proceedings.
In this opinion the other justices concurred.
* May 18, 2020, the date that this decision was released as a slip opinion,
is the operative date for all substantive and procedural purposes.
1
The United States of America and The Village at Ridgefield Condominium
Association, Inc., who had encumbrances on the subject property that were
subsequent and subordinate to the plaintiff’s mortgage, were also named
as defendants but are not participating in the present appeal.
2
The Davis defendants submitted a copy of the Ridgefield index for
KDFBS, as it stood after the correction report was issued, as an exhibit.
That index lists the Davis mortgage according to the date on which it was
executed, such that it immediately follows the warranty deed by which
KDFBS received the property and retains the same page and volume number
as originally recorded. Although evidence was submitted to establish these
facts, the plaintiff’s complaint did not allege that the correction report had
been issued or that the Davis mortgage had been reindexed. Neither the
Davis defendants nor the trial court addressed the anomaly arising from
the fact that the declaratory judgment count alleged that the Davis mortgage
was outside KDFBS’ chain of title but the foreclosure judgment count did
not allege that the mortgage was brought back into that chain of title.
3
The plaintiff alternatively sought a declaration that the Davis mortgage
was invalid because it was granted by an entity other than the record owner.
The trial court did not expressly acknowledge this alternative theory, but
its findings that ‘‘a mortgage deed from KDFBS to the [Davis defendants]
was executed and recorded’’ and that this deed was subordinate to the
plaintiff’s mortgage implicitly rejects that alternative theory.
4
Under Curcio, an interlocutory order or action is treated as a final
judgment if either (1) ‘‘the order or action terminates a separate and distinct
proceeding,’’ or (2) ‘‘the order or action so concludes the rights of the parties
that further proceedings cannot affect them.’’ State v. Curcio, supra, 191
Conn. 31.
5
‘‘By way of contrast, the strict foreclosure process typically presents
only one judgment or ruling that is properly appealable, the judgment of
strict foreclosure, because the effect of strict foreclosure is to vest title to
the real property absolutely in the mortgagee, and to do so without any sale
of the property. . . . Any motion for the determination of priorities in a
strict foreclosure action must be filed prior to the rendering of judgment.’’
(Citations omitted.) Moran v. Morneau, supra, 129 Conn. App. 355 n.6.
6
Unless otherwise indicated, all citations in this opinion to this treatise
on Connecticut foreclosures are to the 2018 edition.
7
The plaintiff frames this issue as the Davis defendants abandoned their
right to appeal from the judgment of foreclosure by not raising that issue
on appeal.
8
The amount of debt owed to the Davis defendants is not in the record.
The face value of the Davis mortgage, executed less than eight years before
the present action was commenced, is $565,000. The total debt owed to the
plaintiff, including attorney’s fees, was approximately $195,000. Assuming
the full value of the Davis mortgage to roughly approximate the debt, the
combined debt would be $760,000. The plaintiff’s expert appraised the prop-
erty’s fair market value at $310,000.
9
It is unclear whether the Appellate Court in Moran was suggesting that
the plaintiff could have, and should have, appealed from the judgment of
foreclosure by sale, and the Appellate Court does not indicate on what basis
the plaintiff would have been aggrieved by such a judgment prior to the
determination of priorities. It is also unclear whether the Appellate Court
was suggesting that the plaintiff could have appealed if the determination
of priorities had been made before the judgment of foreclosure was rendered.
10
We suspect that overly general language in some of this court’s opinions,
in which we did not make clear that we were referring only to lien holders
with subordinate interests, contributed to this misperception. See, e.g., Citi-
bank, N.A. v. Lindland, 310 Conn. 147, 163–64, 75 A.3d 651 (2013) (‘‘[T]he
supplemental judgment performs a variety of functions. Not only does it
ratify and confirm the sale, but it also determines the priorities of the
encumbrancers and finds the debt due to each, as well as orders disburse-
ment of the expenses of the sale and possession to the successful bidder.
. . . This description of the purposes of the supplemental judgment proce-
dure suggests that it is the mechanism to adjudicate all claims on the
proceeds paid into the court and to determine their priorities. This would
include the claims of the mortgager and the purchaser, in addition to those
of lienors.’’ (Citations omitted; internal quotation marks omitted.)).
11
A convoluted procedural posture in City National Bank v. Traffic Engi-
neering Associates, Inc., supra, 166 Conn. 195, makes this context less clear.
In that case, after the judgment of foreclosure by sale was rendered, the
foreclosing plaintiff became the successor to a defendant encumbrancer
who claimed priority over another junior encumbrancer. A careful reading
shows that both defendants held interests subordinate to the plaintiff’s
interest. See id., 196 (‘‘[i]n this action, following a judgment ordering a
foreclosure by sale, the Superior Court, pursuant to a motion made, deter-
mined priorities among the defendants with respect to the payment of any
sums remaining from the sale in excess of the amount due the plaintiff’’
(emphasis added)).
12
The authors of the foreclosure treatise posit the following hypothetical
and its consequences in the absence of an appeal from the judgment of
foreclosure by sale: ‘‘[T]he plaintiff is a mechanic’s lienor with a debt of
$200,000. The property is appraised at $250,000. In addition to the owner,
the complaint names as a defendant a mortgagee with a debt of $150,000,
and alleges that the mechanic’s lien is prior in right to the mortgage. . . .
The trial court [resolves a priority dispute] in favor of the mortgagee.
‘‘[If no appeal is permitted before the sale] these circumstances place
both the lienor and the mortgagee in a difficult position, since neither one
can know whether it is bidding subject to, or free and clear of, the other’s
interest. If the lienor were to bid its debt (ignoring the costs of the sale)
and were to be the high bidder, it would realize only $50,000 from the sale,
since the balance of its bid ($150,000) would be paid to the mortgagee.
Similarly, the mortgagee bidding its debt would find, if the lienor were later
to be determined to be prior, that its entire bid would be paid to the lienor.
In either case, either party would suffer a loss in the event [that the reviewing]
court later ruled against it on the priority question.’’ 1 D. Caron & G. Milne,
supra, § 9-2:2.1, p. 542.