IP Media Products, LLC v. Success, Inc. ( 2019 )

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IP MEDIA PRODUCTS, LLC v.
SUCCESS, INC., ET AL.
(AC 41242)
DiPentima, C. J., and Prescott and Elgo, Js.
Syllabus
The plaintiff brought an action against the defendant I Co. seeking to fore-
close a mortgage on certain real property. Although service was made
on I Co., the allegations in the plaintiff’s complaint were asserted against
a different entity, L Co., and not I Co. The note and mortgage had been
signed by C, as the president of L Co. The trial court rendered judgment
in favor of I Co. on the grounds that there were no allegations in the
complaint against I Co., and that the mortgage and note were unenforce-
able against I Co. because it was not the entity that conveyed the
mortgage and signed the note, and because C did not have the authority
to execute those documents on behalf of I Co. On appeal to this court,
the plaintiff claimed that it was a holder in due course entitled to enforce
the mortgage and note, irrespective of whether those documents were
executed with the requisite corporate authority. Held that the plaintiff
having failed to raise its holder in due course claim in the trial court,
the claim was not properly preserved for appellate review; the plaintiff
did not challenge the trial court’s factual finding that C did not have
the authority to act on behalf of I Co. when he executed the mortgage
and note and, instead, rested its entire argument on the position that
it was a holder in due course, but its complaint made no allegation that
it was seeking to foreclose the mortgage as a holder in due course, nor
did it plead such a claim as a matter in avoidance of the defendant’s
special defense that the mortgage and note were executed without
corporate authority, and the plaintiff failed to introduce any evidence
at trial seeking to establish the elements required by the statute (§ 42a-
3-302) that defines a holder in due course, and did not claim in either
its posttrial brief or motion to reargue that it was a holder in due course
entitled to enforce the mortgage and note despite the court’s finding
that C lacked the corporate authority to encumber the property on
behalf of I Co.
Argued February 8—officially released July 30, 2019
Procedural History
Action to foreclose a mortgage on certain real prop-
erty owned by the named defendant et al., and for other
relief, brought to the Superior Court in the judicial dis-
trict of Fairfield, where the court, Hon. Michael Hart-
mere, judge trial referee, rendered judgment in favor
of the defendant JD’s Café I, Inc.; thereafter, the court
denied the plaintiff’s motion to reargue, and the plaintiff
appealed to this court. Affirmed.
Stephen R. Bellis, for the appellant (plaintiff).
Barbara M. Schellenberg, with whom, on the brief,
was Vincent M. Marino, for the appellee (defendant
JD’s Café I, Inc.).
Opinion
DiPENTIMA, C. J. In this appeal, the plaintiff, IP
Media Products, LLC, brought a foreclosure action
against the defendant, JD’s Café I, Inc.,1 seeking to
enforce a mortgage and note that were conveyed and
signed, respectively, by a purportedly different entity,
namely, JD’s Café I, LLC. On appeal, the plaintiff claims
that the trial court improperly concluded that it could
not recover against the defendant because (1) the com-
plaint contained no allegations against the defendant;
(2) the entity that conveyed the mortgage and signed
the note was not the named defendant; and (3) the
mortgage and note were executed without the requisite
corporate authority. As to the third claim, the plaintiff
does not challenge the court’s finding of lack of corpo-
rate authority, but argues for the first time on appeal
that, because it is a holder in due course, this defense
does not apply to it. We conclude that because this
argument was not preserved, the plaintiff’s third claim
fails. Moreover, because we affirm the judgment of the
trial court on this basis, we need not address the remain-
der of the plaintiff’s claims.2
The following undisputed facts and procedural his-
tory are relevant to this appeal. On August 25, 2004,
Gus Curcio, Jr., acquired all of the corporate stock in
the defendant and, at a shareholder meeting on Novem-
ber 11, 2005, became the defendant’s president and
director. On July 19, 2007, the defendant acquired 3010
Huntington Road, in Stratford (Stratford property),
from Curcio Jr.’s mother. The next day, July 20, 2007,
Curcio, Jr., as president of Curcio Carting, Inc., exe-
cuted a promissory note with Dade Realty Company I,
LLC (Dade Realty), in the amount of $110,000. The note
indicated that it was secured by a lien on trucks owned
by Curcio Carting, Inc., and a mortgage on the Stratford
property. The note and mortgage were signed by Curcio,
Jr., as president of Curcio Carting, Inc., and Robin Cum-
mings as the president of JD’s Café I, LLC.
On August 26, 2014, Dade Realty assigned the note
to the plaintiff and shortly thereafter, on October 14,
2014, the plaintiff commenced a foreclosure action
against the defendant and several other parties.
Although service was made on the defendant, the allega-
tions in the complaint are asserted against JD’s Café I,
LLC, and not the defendant. Nonetheless, in its answer,
the defendant admitted the plaintiff’s allegation that
JD’s Café I, LLC, was the record owner of the Stratford
property at the time the mortgage was conveyed. The
defendant denied that it had conveyed a mortgage to
Dade Realty, or that it was indebted to the plaintiff.
In the same responsive pleading, the defendant also
asserted several special defenses, alleging, inter alia,
that the mortgage and note were unenforceable because
they were conveyed and signed, respectively, without
the requisite corporate authority and, alternatively, that
JD’s Café I, LLC, could not convey a mortgage because
it was not the record owner of the Stratford property.3
At trial, the parties stipulated that the note and mort-
gage were assigned to the plaintiff and that the debt
remained unpaid. Additionally, the parties agreed that
Curcio, Jr., was the defendant’s sole shareholder on
the date the note and mortgage were executed.4 The
plaintiff called Curcio, Jr., and Attorney Donal Colli-
more to testify. Through the testimony of Curcio, Jr.,
the plaintiff introduced into evidence several exhibits,
including copies of the mortgage and note. Curcio, Jr.,
testified that he signed both of these documents on
behalf of Curcio Carting, Inc., and was under the belief
that the loan security was limited to three vehicles
owned by Curcio Carting, Inc. It was his recollection
that when he signed both documents, neither contained
any indication that JD’s Café I, LLC, was involved in
the transaction.5 Further, Curcio, Jr., testified that he
was unfamiliar with an entity known as JD’s Café I, LLC,
but assuming that the mortgage and note contained a
misnomer, he was familiar with the defendant. Curcio,
Jr., stated that, at the time of the transaction, he was
the sole shareholder and president of the defendant,
and would not have consented to a mortgage being
placed on the Stratford property. When asked whether
Cummings had any authority to convey a mortgage on
the Stratford property, or affiliation with the defendant
corporation, Curcio, Jr., responded that Cummings had
no authority and any affiliation he purportedly had was
the result of ‘‘shenanigans’’ involving Gus Curcio, Sr.6
Following the testimony of Curcio, Jr., the plaintiff
called Collimore, who had represented both Curcio
Carting, Inc., and the defendant with respect to the
transaction with Dade Realty. Collimore testified that
the note and mortgage documents were prepared by
the lender and that he did not notice the misnomer with
respect to the defendant’s corporate designation on
both documents. Through Collimore’s testimony, the
plaintiff introduced the title insurance policy that was
procured for the benefit of Dade Realty. The policy
provides that title to the Stratford property is held by
the defendant, and not JD’s Café I, LLC. With respect
to the logistics of the loan transaction, Collimore testi-
fied that he obtained signatures from Curcio, Jr., and
Cummings separately. He first met with Curcio, Jr., and
then met with Cummings on his boat to have him sign
on behalf of the defendant. He also testified that Curcio,
Jr., was aware that the defendant, through Cummings,
was involved in the transaction.
At the close of evidence, the defendant moved for
dismissal pursuant to Practice Book § 15-8.7 The defen-
dant’s counsel argued that the evidence revealed that
the mortgage and note had been executed without the
requisite corporate authority and, therefore, were unen-
forceable. Counsel also contended that, in the absence
of reformation, the mortgage and note could not be
enforced against the defendant because they were
signed in the name of JD’s Café I, LLC. The court
reserved judgment on both issues and requested that
the parties file posttrial briefs.
Thereafter, on June 14, 2017, the trial court rendered
judgment in favor of the defendant on the basis, inter
alia, that there were no allegations in the complaint
against the defendant; rather the allegations were
asserted against JD’s Café I, LLC. Additionally, the court
concluded that the mortgage and note were unenforce-
able against the defendant because it was not the entity
that conveyed the mortgage and signed the note, and
the plaintiff had failed to plead reformation to correct
this discrepancy. Finally, the court determined that the
mortgage and note were void and unenforceable against
the defendant because Cummings did not have the
authority to execute those documents on behalf of the
defendant. The court made no determinations of credi-
bility with respect to either the testimony of Curcio,
Jr., or Collimore. After the court’s decision, the plaintiff
filed a motion to reargue that was summarily denied
on December 26, 2017. This appeal followed.
In its challenge to the court’s conclusion that Cum-
mings was not authorized to convey the mortgage or
sign the note on behalf of the defendant, the plaintiff
argues only that it is a holder in due course entitled to
enforce the mortgage and note irrespective of whether
those documents were executed with the requisite cor-
porate authority. Our review of the record reveals that
this argument was not raised before the trial court and,
therefore, is not properly preserved for appellate
review.8
Although we do not address the merits of the plain-
tiff’s claim, we briefly set forth the legal principles that
support the trial court’s conclusion that the mortgage
and note were unenforceable against the defendant due
to a lack of corporate authorization. It is a well-estab-
lished principle of our law that a ‘‘corporation is only
liable for the acts of its president if it is shown that his
acts are so related to his duties as president that they
may reasonably be held to have been done in the prose-
cution of the business of the corporation and while
he was acting within the scope of his employment.’’
(Internal quotation marks omitted.) Cohen v. Hol-
loways’, Inc., 158 Conn. 395, 406–407, 260 A.2d 573
(1969). Where the action is outside the scope of the
president’s employment, the plaintiff must ‘‘demon-
strate that (1) [the] action was expressly authorized by
resolution of the board of directors; or (2) [the] action
was impliedly authorized by the board of directors; or
(3) [the] action, although not authorized, was subse-
quently ratified by the board of directors. . . . Whether
a corporate officer is authorized to act on behalf of a
corporation is a question of fact to be resolved by the
trier.’’ (Citations omitted.) Czarnecki v. Plastics Liqui-
dating Co., 179 Conn. 261, 268, 425 A.2d 1289 (1979).
Here, the trial court found that Cummings did not
have the authority to act on behalf of the corporation
when he executed the mortgage and note. The plaintiff
makes no challenge to this factual finding and instead
rests its entire argument on the position that it is a
holder in due course. The plaintiff’s complaint makes
no allegation, however, that it is seeking to foreclose
the mortgage as a holder in due course, nor did the
plaintiff plead such a claim as a matter in avoidance of
the defendant’s special defense that the mortgage and
note were executed without corporate authority. Fur-
ther, the plaintiff failed to introduce any evidence at trial
seeking to establish the elements required by General
Statutes § 42a-3-302,9 and did not claim in either its
posttrial brief or motion to reargue that it is a holder
in due course entitled to enforce the mortgage and note
despite the court’s finding that Cummings lacked the
corporate authority to encumber the Stratford property
on behalf of the defendant. See footnote 2 of this opin-
ion. ‘‘[T]he party claiming the rights of a holder in due
course bears the burden of proving all elements of that
classification.’’ Connecticut National Bank v. Giacomi,
242 Conn. 17, 73, 699 A.2d 101 (1997).
‘‘Our appellate courts, as a general practice, will not
review claims made for the first time on appeal. We
repeatedly have held that [a] party cannot present a
case to the trial court on one theory and then seek
appellate relief on a different one. . . . [A]n appellate
court is under no obligation to consider a claim that is
not distinctly raised at the trial level. . . . [B]ecause
our review is limited to matters in the record, we [also]
will not address issues not decided by the trial court.
. . . The requirement that [a] claim be raised distinctly
means that it must be so stated as to bring to the atten-
tion of the court the precise matter on which its decision
is being asked.’’ (Internal quotation marks omitted.)
Williams v. State, 189 Conn. App. 172, 185, 206 A.3d
779, cert. denied, 332 Conn. 902, 208 A.3d 281 (2019).
Accordingly, in light of the plaintiff’s failure to challenge
the court’s finding that the mortgage and note were
unenforceable because they were conveyed and exe-
cuted, respectively, without the requisite corporate
authority, we affirm the judgment for the defendant on
this ground.
The judgment is affirmed.
In this opinion the other judges concurred.
1
Success, Inc., Curcio Carting, Inc., Oronoque Road, LLC, Theresa Symers,
Gus Curcio, Jr., and the Department of the Treasury, Internal Revenue
Service, also were named as defendants in the underlying action. Success,
Inc., and Curcio, Jr., appeared and the claims against them subsequently
were withdrawn. Curcio Carting, Inc., Oronoque Road, LLC, Symers, and
the Department of the Treasury, Internal Revenue Service, did not appear
and have not participated in this appeal. Our references to the defendant
are to JD’s Café I, Inc.
2
Although the plaintiff raises three claims, its failure to challenge properly
the court’s independent basis for rendering judgment in favor of the defen-
dant is dispositive of this appeal. See Nationstar Mortgage, LLC v. Mollo,
180 Conn. App. 782, 784 n.1, 185 A.3d 643 (2018). We, therefore, do not
review the first and second claims as to the allegations in the complaint
and whether reformation was required to enforce the mortgage and note
against the defendant, respectively.
3
We note that this latter special defense is contrary to the defendant’s
admission that JD’s Café I, LLC, was the record owner of the parcel at the
time the mortgage was conveyed.
4
With the consent of both parties, the court also took judicial notice of
a prior decision from this court, Success, Inc. v. Curcio, 160 Conn. App.
153, 124 A.3d 563, cert. denied, 319 Conn. 952, 125 A.3d 531 (2015), which
involved several of the same parties and events in this case.
5
Later in his testimony, Curcio, Jr., intimated that all references to JD’s
Café I, LLC, and the mortgage on the Stratford property were added to the
documents after he had signed them.
6
An ‘‘Interim Notice of Change of Officer/Director’’ filed with the secretary
of state on July 20, 2007, the same day the loan and mortgage documents
were signed, indicated that Cummings had been appointed as president of
the defendant corporation. In Success, Inc. v. Curcio, 160 Conn. App. 153,
177, 124 A.3d 563, cert. denied, 319 Conn. 952, 125 A.3d 531 (2015), this
court found that the appointment was not valid, however, because the
evidence established that Cummings was appointed by Curcio, Sr., who
lacked the authority, or apparent authority, to make such an appointment. Id.
7
Practice Book § 15-8 provides: ‘‘If, on the trial of any issue of fact in a
civil matter tried to the court, the plaintiff has produced evidence and rested,
a defendant may move for judgment of dismissal, and the judicial authority
may grant such motion if the plaintiff has failed to make out a prima facie
case. The defendant may offer evidence in the event the motion is not
granted, without having reserved the right to do so and to the same extent
as if the motion had not been made.’’
8
See footnote 2 of this opinion.
9
General Statutes § 42a-3-302 provides in relevant part: ‘‘ ‘[H]older in due
course’ means the holder of an instrument if . . . (2) The holder took the
instrument (i) for value, (ii) in good faith, (iii) without notice that the
instrument is overdue or has been dishonored or that there is an uncured
default with respect to payment of another instrument issued as part of the
same series, (iv) without notice that the instrument contains an unauthorized
signature or has been altered, (v) without notice of any claim to the instru-
ment described in section 42a-3-306, and (vi) without notice that any party
has a defense or claim in recoupment in section 42a-3-305 (a).’’