Bank of America, N.A. v. Aubut , 167 Conn. App. 347 ( 2016 )

******************************************************
The ‘‘officially released’’ date that appears near the
beginning of each opinion is the date the opinion will
be published in the Connecticut Law Journal or the
date it was released as a slip opinion. The operative
date for the beginning of all time periods for filing
postopinion motions and petitions for certification is
the ‘‘officially released’’ date appearing in the opinion.
In no event will any such motions be accepted before
the ‘‘officially released’’ date.
All opinions are subject to modification and technical
correction prior to official publication in the Connecti-
cut Reports and Connecticut Appellate Reports. In the
event of discrepancies between the electronic version
of an opinion and the print version appearing in the
Connecticut Law Journal and subsequently in the Con-
necticut Reports or Connecticut Appellate Reports, the
latest print version is to be considered authoritative.
The syllabus and procedural history accompanying
the opinion as it appears on the Commission on Official
Legal Publications Electronic Bulletin Board Service
and in the Connecticut Law Journal and bound volumes
of official reports are copyrighted by the Secretary of
the State, State of Connecticut, and may not be repro-
duced and distributed without the express written per-
mission of the Commission on Official Legal
Publications, Judicial Branch, State of Connecticut.
******************************************************
BANK OF AMERICA, N.A. v. DAVID
AUBUT ET AL.
(AC 37896)
Alvord, Keller and Harper, Js.
Argued March 8—officially released August 2, 2016
(Appeal from Superior Court, judicial district of
Middlesex, Aurigemma, J. [motion for summary
judgment]; Domnarski, J. [judgment].)
Gary L. Seymour, for the appellants (defendants).
Elizabeth T. Timkovich, with whom, on the brief,
was Pierre-Yves Kolakowski, for the appellee (substi-
tute plaintiff).
Opinion
KELLER, J. In this residential foreclosure action, the
defendants, David Aubut and Karen Aubut,1 appeal fol-
lowing the trial court’s judgment of strict foreclosure
rendered in favor of the substitute plaintiff, Nationstar
Mortgage, LLC. On appeal, the defendants claim that
the court erred in rendering summary judgment as to
liability only in favor of the substitute plaintiff because:
(1) the court improperly concluded that there was no
genuine issue of material fact as to whether Karen
Aubut was provided with preacceleration notice of
default in the manner required by the terms of the
mortgage; (2) the court improperly accepted an affidavit
submitted in support of the substitute plaintiff’s motion
for summary judgment; and (3) the court improperly
concluded as a matter of law that the defendants could
not prevail with respect to their special defenses. We
agree, in part, with the defendants’ third claim. Accord-
ingly, we reverse the judgment of the trial court.
The following undisputed facts and procedural his-
tory are relevant to this appeal. On September 29, 2009,
the defendants executed and delivered a note and mort-
gage deed to the original, named plaintiff in this action,
Bank of America, N.A., in order to obtain a loan to
purchase a home in Middletown. The defendants subse-
quently defaulted on their payments beginning with the
payment due on August 1, 2011. On September 16, 2011,
the original plaintiff mailed a preacceleration notice of
default that was addressed to David Aubut, indicating
that the defendants were in default and that it would
accelerate the balance on the loan if they did not cure
the default on or before October 16, 2011. The defen-
dants failed to cure the default and the debt was accel-
erated.
On May 20, 2012, the original plaintiff commenced a
foreclosure action against the defendants. In its com-
plaint, the original plaintiff alleged, inter alia, that the
defendants had defaulted on their mortgage payments
and that they had failed to cure the default. The original
plaintiff alleged that, as a result, it had elected to accel-
erate the balance due on the note and to foreclose the
mortgage on the defendants’ home. On June 5, 2012,
the defendants requested to participate in a foreclosure
mediation program. Although the defendants did partic-
ipate in the mediation program from June 9, 2012, to
May 30, 2013, they were unsuccessful in reaching an
amicable resolution. The defendants filed for bank-
ruptcy in June, 2013. On or about November 13, 2013,
the original plaintiff filed a notice of relief from the
bankruptcy stay due to the fact that the bankruptcy
case had been closed.
On March 28, 2014, the original plaintiff executed an
assignment of the mortgage, whereby the substitute
plaintiff, as the original plaintiff’s attorney in fact,
assigned the mortgage to itself. The substitute plaintiff’s
involvement in the foreclosure action began after the
court granted the original plaintiff’s June 18, 2014
motion to substitute on June 30, 2014. On July 18, 2014,
the defendants filed their disclosure of defense, as well
as their answer, which contained special defenses and
a three count counterclaim.
On October 30, 2014, the substitute plaintiff filed a
motion for summary judgment. The substitute plaintiff,
in its memorandum of law in support of the motion,
argued that there were no genuine issues of material
fact regarding the defendants’ liability under the note
and the mortgage, and that summary judgment was
proper because the defendants’ special defenses and
counterclaim were legally insufficient. In support of
its motion, the substitute plaintiff submitted copies of
several documents, including, in relevant part: the note
and the mortgage deed that the defendants had exe-
cuted and delivered to the original plaintiff; the Septem-
ber 16, 2011 preacceleration notice of default mailed
by the original plaintiff; the March 28, 2014 assignment
of mortgage wherein the substitute plaintiff had
assigned itself the mortgage; records documenting the
defendants’ mortgage payment history; and an affidavit
of Fay Janati, an employee of the substitute plaintiff,
in which she averred that the defendants were in default
and that they were liable to the substitute plaintiff for
the balance of the mortgage loan that they had failed
to pay pursuant to their mortgage agreement.
On January 13, 2015, the defendants filed their opposi-
tion to summary judgment and an accompanying memo-
randum of law. In support of their opposition, the
defendants also submitted copies of several documents,
including: paragraph twenty-two of the mortgage deed;
a January 13, 2015 notice sent by the defendants’ coun-
sel notifying the original plaintiff and the substitute
plaintiff that Karen Aubut was rescinding the mortgage
pursuant to § 1635 of the federal Truth in Lending Act,
15 U.S.C. § 1601 et seq.; a printed copy of Janati’s
LinkedIn profile; a job description of the ‘‘Litigation
Research Analyst’’ position posted by the substitute
plaintiff; the March 28, 2014 assignment of mortgage;
Janati’s affidavit; and an affidavit of David Aubut.
On January 26, 2015, the court issued a memorandum
of decision wherein it rendered summary judgment as
to liability only in favor of the substitute plaintiff. There-
after, the court rendered judgment of strict foreclosure
in favor of the substitute plaintiff. This appeal followed.
Additional procedural history and facts shall be set forth
as necessary.
I
The defendants first claim that the court erred in
rendering summary judgment in the substitute plain-
tiff’s favor because it improperly concluded that there
was no genuine issue with respect to whether Karen
Aubut, as a ‘‘Borrower’’ listed under the mortgage deed,
was provided with preacceleration notice of default
in the manner required by the terms of the mortgage.
We disagree.
The following additional procedural history and facts
are relevant to this claim. In their opposition to the
substitute plaintiff’s motion for summary judgment, the
defendants argued that the preacceleration notice of
default that the substitute plaintiff sent to David Aubut
created a genuine issue of material fact as to whether
the substitute plaintiff had established a prima facie
case to institute the foreclosure action. Specifically, in
their opposition memorandum of law, the defendants
argued the following with respect to this issue: ‘‘In its
complaint and affidavit in support of its motion [for]
summary judgment, [the substitute plaintiff] alleges that
it gave proper notice of intent to accelerate to [the
defendants] as borrowers as required by paragraph
[twenty-two] of the subject mortgage. . . . A review
of the notice reveals that it is deficient as follows . . .
It is only addressed to David Aubut and not Karen Aubut
(consistent with [the Truth in Lending Act] failure to
provide notice of [the] right to rescind). . . . Based on
the foregoing, [the substitute plaintiff] cannot make its
prima facie case, as it did not, as [a] condition precedent
to the institution of foreclosure, properly provide [the
defendants] with a notice of default in compliance with
the terms of the mortgage.’’
In its memorandum of decision, the court, relying on
Janati’s affidavit, stated that ‘‘[b]y letter dated Septem-
ber 16, 2011, and sent by certified mail to the property
address [for the home subject to the mortgage], [the
original plaintiff] notified the defendants of the default.
The defendants have failed to cure the default.’’ At the
conclusion of its memorandum of decision, the court
stated that the substitute plaintiff had ‘‘presented evi-
dence that it sent a [preacceleration notice of default]
which complied with the terms of the loan documents.’’
The court set forth in its legal analysis of the substitute
plaintiff’s prima facie case for its foreclosure action,
and the court also discussed the evidence submitted in
support of summary judgment with respect to this issue:
‘‘As evidenced by the mortgage deed, the defendants
gave the [substitute] plaintiff’s predecessor in interest
a mortgage to secure the payment of the note. The
terms of the mortgage determine the [substitute] plain-
tiff’s right to foreclosure [of] the mortgage. . . . In the
present case, the note and mortgage deed provide that
upon a default under the promissory note, the [substi-
tute] plaintiff is entitled to foreclosure on the mortgage,
to demand immediate payment of all sums due and
owing, and to collect all expenses incurred in pursuing
its remedy. When the [substitute] plaintiff establishes
its ownership of the note and satisfies the court of a
defendant’s failure to make payments according to the
note, the [substitute] plaintiff establishes its right to
avail itself of such security as the mortgage affords.
. . . In other words, in order to make out a prima facie
case in [a] foreclosure action, the [substitute] plaintiff
must prove by a preponderance of the evidence that it
[is] the owner of the note and mortgage and that [the
defendant has] defaulted on the note. . . . In this case,
it is alleged that the defendant, David Aubut, executed
the note in the original principal amount of $189,957.
The [substitute] plaintiff has presented evidence that
the [substitute] plaintiff is the holder of the note and
mortgage, which mortgage was executed by the defen-
dants; the note and mortgage are in default; the [substi-
tute] plaintiff has elected to accelerate the
indebtedness; and the defendants were duly notified
in writing of the default. Again, the party opposing a
summary judgment motion must provide an evidentiary
foundation to demonstrate the existence of a genuine
issue of material fact. It is not enough for the opposing
party merely to assert the existence of a disputed issue.
The defendants have not provided such foundation.’’
(Citations omitted; internal quotation marks omitted.)
The court also noted that in addition to their properly
pleaded special defenses, the defendants had attempted
to raise additional defenses to the foreclosure in their
opposition to the substitute plaintiff’s motion for sum-
mary judgment: a defense asserting a violation of the
Truth in Lending Act, 15 U.S.C. § 1601 et seq., as well
as a defense alleging ‘‘failure to give proper notice of
the acceleration of the note.’’ The court then stated that
‘‘[t]he defendants have not pleaded these defenses in
their special defenses,’’ and that the substitute plaintiff
had ‘‘presented evidence that it sent a notice of accelera-
tion which complied with the terms of the loan doc-
uments.’’
On appeal, the defendants argue that a genuine issue
of material fact exists with respect to whether they
were sent proper preacceleration notice of default.
They assert, correctly, that in order to establish its
prima facie case to commence a foreclosure action,
the substitute plaintiff must prove that all conditions
precedent to foreclosure have been satisfied. The defen-
dants argue that, pursuant to the terms of the mortgage,
the proper delivery to both defendants of the preaccel-
eration notice of default was a condition precedent to
foreclosure. The defendants allege that no evidence was
submitted to demonstrate that Karen Aubut received
the preacceleration notice of default. The defendants
argue that a genuine issue of material fact exists with
respect to the propriety of the preacceleration notice
of default because although the evidence submitted by
the parties in support of or in opposition to summary
judgment shows that the preacceleration notice of
default was addressed to one defendant, David Aubut,
and that only he had signed the note, paragraph twenty-
two of the mortgage deed provides that ‘‘Borrower’’
shall be given preacceleration notice, and the first page
of the deed defines ‘‘Borrower’’ as ‘‘David J. Aubut and
Karen Z. Aubut.’’
The substitute plaintiff argues that the court properly
concluded that there was no genuine issue of material
fact with respect to the preacceleration notice of
default. The substitute plaintiff argues that the defen-
dants’ argument that notice to both David Aubut and
Karen Aubut was a condition precedent to the foreclo-
sure action is flawed because, despite the fact that the
mortgage deed defines both David Aubut and Karen
Aubut as ‘‘Borrower,’’ the note identifies only David
Aubut as the borrower and also provides, in paragraph
6 (C), that ‘‘If I am in default, the Note Holder may
send me a written notice telling me that if I do not pay
the overdue amount by a certain date, the Note Holder
may require me to pay immediately the full amount of
Principal which has not been paid and all the interest I
owe on that amount.’’2 (Emphasis added.) Alternatively,
the substitute plaintiff asserts that even if notice to
David Aubut and Karen Aubut was a condition prece-
dent to the foreclosure action, the defendants never
submitted any evidence to the court to contradict
Janati’s affidavit wherein she averred that, on Septem-
ber 16, 2011, both defendants were given preaccelera-
tion notice of default on their mortgage payments. We
agree with the substitute plaintiff that the court did not
err in concluding that there was no genuine issue of
material fact with respect to the preacceleration notice
of default that was sent to the defendants.
We begin our analysis with the appropriate standard
of review. ‘‘On appeal, [w]e must decide whether the
trial court erred in determining that there was no genu-
ine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law. . . .
[O]ur review is plenary and we must decide whether
the [trial court’s] conclusions are legally and logically
correct and find support in the facts that appear on the
record. . . .
‘‘Practice Book [§ 17-49] provides that summary judg-
ment shall be rendered forthwith if the pleadings, affida-
vits, and any other proof submitted show that there is
no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law.
. . . In deciding a motion for summary judgment, the
trial court must view the evidence in the light most
favorable to the nonmoving party. . . .
‘‘A material fact is a fact that will make a difference
in the outcome of the case. . . . Once the moving party
has presented evidence in support of the motion for
summary judgment, the opposing party must present
evidence that demonstrates the existence of some dis-
puted factual issue . . . . It is not enough, however,
for the opposing party merely to assert the existence
of such a disputed issue. Mere assertions of fact . . .
are insufficient to establish the existence of a material
fact and, therefore, cannot refute evidence properly
presented to the court under Practice Book [§ 17-45].
. . . The movant has the burden of showing the
nonexistence of such issues but the evidence thus pre-
sented, if otherwise sufficient, is not rebutted by the
bald statement that an issue of fact does exist. . . . To
oppose a motion for summary judgment successfully,
the nonmovant must recite specific facts . . . which
contradict those stated in the movant’s affidavits and
documents. . . .
‘‘[B]ecause the [substitute] plaintiff sought summary
judgment in a foreclosure action, which is an equitable
proceeding, we note that the trial court may examine
all relevant factors to ensure that complete justice is
done. . . . 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. . . .
‘‘In order to establish a prima facie case in a mortgage
foreclosure action, the plaintiff must prove by a prepon-
derance of the evidence that it is the owner of the
note and mortgage, that the defendant mortgagor has
defaulted on the note and that any conditions precedent
to foreclosure, as established by the note and mortgage,
have been satisfied. . . . Thus, a court may properly
grant summary judgment as to liability in a foreclosure
action if the complaint and supporting affidavits estab-
lish an undisputed prima facie case and the defendant
fails to assert any legally sufficient special defense.’’
(Citation omitted; internal quotation marks omitted.)
Wells Fargo Bank, N.A. v. Strong, 149 Conn. App. 384,
390–92, 89 A.3d 392, cert. denied, 312 Conn. 923, 94
A.3d 1202 (2014); accord GMAC Mortgage, LLC v. Ford,
144 Conn. App. 165, 176, 73 A.3d 742 (2013); see also
Franklin Credit Management Corp. v. Nicholas, 73
Conn. App. 830, 838, 812 A.2d 51 (2002), cert. denied,
262 Conn. 937, 815 A.2d 136 (2003). ‘‘A promissory note
and a mortgage deed are deemed parts of one transac-
tion and must be construed together as such. . . .
Where the terms of the note and mortgage require notice
of default, proper notice is a condition precedent to
an action for foreclosure.’’ (Internal quotation marks
omitted.) Fidelity Bank v. Krenisky, 72 Conn. App. 700,
707, 807 A.2d 968, cert. denied, 262 Conn. 915, 811 A.2d
1291 (2002).
In the present case, although on appeal the parties
disagree with respect to whether notice to both David
Aubut and Karen Aubut was a condition precedent to
the foreclosure action, we need not resolve that issue.
Assuming, as the defendants argue, that such notice to
both defendants was required, we conclude that the
defendants failed to demonstrate that a genuine issue
of material fact exists with respect to whether such
notice had been given. On the basis of our review of
the documentary proof submitted by the substitute
plaintiff in support of its motion for summary judgment,
as well as the documentary proof submitted by the
defendants in support of their opposition, we conclude
that the court did not err in its determination that there
was no genuine issue of material fact with respect to
the propriety of the preacceleration notice of default.
The definitions section of the mortgage deed defines
‘‘Borrower’’ as ‘‘David J. Aubut and Karen Z. Aubut,’’
and paragraph twenty-two of the mortgage deed sets
forth the following with respect to acceleration:
‘‘Lender shall give notice to Borrower prior to accelera-
tion following Borrower’s breach of any covenant or
agreement in this Security Instrument . . . .’’ The Sep-
tember 16, 2011 preacceleration notice of default was
addressed only to David Aubut. We note, however, that
only David Aubut signed the note and that the note
provides that he is entitled to receive preacceleration
notice of default. Furthermore, Janati, a representative
of the substitute plaintiff, averred in her affidavit that
‘‘[b]y letter dated September 16, 2011 and sent by certi-
fied mail to the subject property address on that date,
the Defendants were duly notified of the default.’’
(Emphasis added.)
In support of their opposition to the substitute plain-
tiff’s motion for summary judgment, the defendants sub-
mitted, inter alia, paragraph twenty-two of the mortgage
deed, a January 13, 2015 notice sent by the defendants’
counsel notifying the original plaintiff and the substitute
plaintiff that Karen Aubut was rescinding the mortgage
pursuant to § 1635 of the federal Truth in Lending Act,
15 U.S.C. § 1601 et seq., Janati’s affidavit, and an affida-
vit of David Aubut. Potentially, an affidavit submitted
by Karen Aubut would have been significant with
respect to the issue of whether she had received notice,
but the defendants did not submit proof of such nature
to the court. Furthermore, David Aubut did not make
any averments, from personal knowledge, that Karen
Aubut had not received proper preacceleration notice
of default as required by the terms of the mortgage
deed and the note. We iterate that the defendants were
required to ‘‘recite specific facts . . . which contradict
those stated in the movant’s affidavits and documents’’
in order to defeat the substitute plaintiff’s motion for
summary judgment. (Internal quotation marks omitted.)
Wells Fargo Bank, N.A. v. Strong, supra, 149 Conn. App.
391. The substitute plaintiff, through the documentary
proof submitted in support of its motion for summary
judgment, met its burden of establishing the nonexis-
tence of a genuine issue of material fact with respect
to the preacceleration notice of default. Given that the
defendants, in their opposition to the substitute plain-
tiff’s motion, did not state specific facts to contradict
the proof submitted by the substitute plaintiff showing
that both defendants were sent preacceleration notice
of default, we conclude that the defendants failed to
establish the existence of a genuine issue of material
fact with respect to the preacceleration notice of
default. Thus, we conclude that the court did not err in
determining that there was no genuine issue concerning
whether the original plaintiff—and the substitute plain-
tiff, through assignment of the mortgage—thereby satis-
fied all of the conditions precedent to institute the
foreclosure action against the defendants.
II
Next, the defendants claim that the court erred in
rendering summary judgment because it accepted
Janati’s affidavit, which had been submitted to the court
in support of the substitute plaintiff’s motion for sum-
mary judgment. We disagree.
The following additional procedural history and facts
are relevant to this claim. In her affidavit, Janati averred
that she was employed by the substitute plaintiff as a
‘‘Litigation Resolution Analyst.’’ Janati averred that, in
this capacity, she had reviewed the records of the defen-
dants’ mortgage payments and that she was personally
familiar with these records. Janati averred that the
defendants were in default under the terms of the mort-
gage and that they were sent preacceleration notice of
default on September 16, 2011. Janati also averred that
the substitute plaintiff was the mortgagee, that it was
the holder of the note, that it was in possession of the
note, and that it had satisfied ‘‘any and all conditions
precedent to enforcing this [mortgage] instrument.’’ The
acknowledgement portion of the affidavit, which
appears at the very end of the affidavit, states in relevant
part: ‘‘Subscribed and sworn to before me on this 29 day
of October, 2014, before me, the undersigned officer,
personally appeared, Fay Janati, who acknowledged
himself/herself to be the Assistant Secretary of
Nationstar Mortgage, LLC, and that s/he, as such offi-
cer, being authorized to do, executed the foregoing
instrument for the purposes therein contained and sub-
scribed, swore and acknowledged the same to be his/
her free act and deed and the free act and deed on
behalf of Nationstar Mortgage, LLC.’’ (Emphasis
added.) Below the acknowledgement appears the signa-
ture of the notary public before whom Janati appeared.
The defendants, in support of their opposition to sum-
mary judgment, submitted, inter alia, Janati’s affidavit,
a printed copy of Janati’s LinkedIn profile, a job descrip-
tion of the ‘‘Litigation Research Analyst’’ position
posted by the substitute plaintiff, and an affidavit of
David Aubut. The court, in its memorandum of decision,
discussed and indicated its reliance upon Janati’s affida-
vit in rendering its decision, wherein it concluded that
there was no genuine issue of material fact and that the
substitute plaintiff was entitled to summary judgment as
a matter of law.
On appeal, the defendants claim that the court
improperly accepted Janati’s affidavit in support of the
substitute plaintiff’s motion for summary judgment
because it reflects that Janati held two different posi-
tions for the substitute plaintiff. The defendants claim
that this fact somehow casts doubt on her ability to
testify competently about the subject matter of her affi-
davit. In opposition, the substitute plaintiff argues that,
in terms of whether the affidavit was properly accepted
by the court, it is inconsequential that Janati averred
that she occupied two different positions for the substi-
tute plaintiff, a private entity, because that fact does not
suggest anything improper. Furthermore, the substitute
plaintiff argues that the court properly accepted the
affidavit because the defendants did not submit a legally
sufficient affidavit or other documentation to contradict
the averments in Janati’s affidavit or to challenge her
ability to testify competently with respect to the matters
in the affidavit. We agree with the substitute plaintiff
that the court did not err in accepting Janati’s affidavit.
We begin our analysis of this claim with the appro-
priate standard of review. ‘‘In reviewing the legal basis
for summary judgment, this court properly may con-
sider facts contained in the affidavits submitted in sup-
port of, or in opposition to, the motion.’’ Cogswell v.
American Transit Ins. Co., 282 Conn. 505, 533, 923
A.2d 638 (2007). ‘‘Whether the court should have consid-
ered . . . [an] affidavit submitted by [the movant for
summary judgment] presents an evidentiary issue to
which we apply an abuse of discretion standard of
review.’’ Bruno v. Geller, 136 Conn. App. 707, 716, 46
A.3d 974, cert. denied, 306 Conn. 905, 52 A.3d 732 (2012);
accord Wilderman v. Powers, 110 Conn. App. 819, 828,
956 A.2d 613 (2008); Barlow v. Palmer, 96 Conn. App.
88, 91, 898 A.2d 835 (2006).
Practice Book § 17-45 provides in relevant part that
‘‘[a] motion for summary judgment shall be supported
by such documents as may be appropriate, including
but not limited to affidavits, certified transcripts of testi-
mony under oath, disclosures, written admissions and
the like. . . .’’ Importantly, Practice Book § 17-46 also
requires that ‘‘[s]upporting and opposing affidavits shall
be made on personal knowledge, shall set forth such
facts as would be admissible in evidence, and shall show
affirmatively that the affiant is competent to testify to
the matters stated therein. . . .’’ ‘‘[I]n considering a
motion for summary judgment, [i]t is within the court’s
discretion whether to accept or decline [to accept] . . .
supplemental evidence.’’ (Internal quotation marks
omitted.) Bruno v. Geller, supra, 136 Conn. App. 715.
‘‘[T]he touchstone of competence is personal knowl-
edge . . . [which] is variously described as knowledge
acquired firsthand or from observation. . . .
Determining whether an affiant has personal knowledge
requires close examination of the averments set forth
in the affidavit, and the character of such averments will
depend significantly upon the nature of the underlying
action.’’ (Citations omitted; internal quotation marks
omitted.) State v. Sunrise Herbal Remedies, Inc., 296
Conn. 556, 573, 2 A.3d 843 (2010). Pursuant to our
Supreme Court’s holding in Evans Products Co. v. Clin-
ton Building Supply, Inc., 174 Conn. 512, 391 A.2d 157
(1978), we do not presume that a corporate officer is
necessarily competent to testify on behalf of a corpora-
tion. Accordingly, an affiant making averments on
behalf of a corporate entity in the context of summary
judgment proceedings ‘‘must aver or affirmatively show
personal knowledge of the matters stated therein.’’
Id., 515.
In the present case, Janati affirmatively demonstrated
that she had personal knowledge of the matters stated
within her affidavit. Janati averred that she was
employed by the substitute plaintiff as a litigation reso-
lution analyst and that, in that capacity, she had
reviewed and had acquired personal knowledge of the
defendants’ obligations under their mortgage. Janati
averred that she had personal knowledge of ‘‘payment
histories, loan histories, servicing records, and default
notices’’ as they applied to the defendants. Janati
averred that these records were maintained in the ordi-
nary course of the substitute plaintiff’s business, that
she had personal knowledge of the process by which
the records were created and maintained, and that she
knew that the records were accurate. Janati then
averred, inter alia, that the defendants were in default
with respect to their payments under the terms of the
mortgage, that they had failed to cure the default, and
that they were liable to the substitute plaintiff.
In the affidavit, Janati averred that she was a ‘‘Litiga-
tion Resolution Analyst’’ for the substitute plaintiff. The
affidavit describes Janati as having acknowledged her-
self also to be the ‘‘Assistant Secretary’’ of the substitute
plaintiff. The mere fact that the affidavit reflects that
Janati held two different positions with the substitute
plaintiff does not call into question her competence to
testify about the records concerning the defendants’
mortgage with the substitute plaintiff. The defendants
did not submit any proof that cast doubt on Janati’s
competence to testify with respect to the matters set
forth in the affidavit, and her averments concerning the
defendants’ mortgage records were adequate to estab-
lish her personal knowledge concerning the matters set
forth in the affidavit. Therefore, we conclude that the
court did not abuse its discretion in accepting the affida-
vit in support of the substitute plaintiff’s motion for
summary judgment.
III
Finally, the defendants claim that the court improp-
erly concluded as a matter of law that they could not
prevail with respect to their special defenses. Because
we conclude that the defendants’ predatory lending spe-
cial defense was legally valid and that they demon-
strated that a genuine issue of material fact existed
with respect to that special defense, we agree, in part,
with the defendants’ claim.
The following additional procedural history and facts
are relevant to this claim. In the defendants’ answer,
they set forth two special defenses.3 The first special
defense was entitled, ‘‘Predatory Lending,’’ and the sec-
ond special defense alleged a violation of the Connecti-
cut Unfair Trade Practices Act (CUTPA), General
Statutes § 42-110a et seq.4 In its memorandum of law
in support of its motion for summary judgment, the
substitute plaintiff argued that it could not be subject
to the defendants’ special defenses because they were
not recognized defenses, they were legally insufficient,
and they could not be raised against the substitute plain-
tiff because of its status as an assignee of the mortgage.
The court rejected the defendants’ CUTPA defense,
concluding in its memorandum of decision that the
defendants had failed to assert a traditional equitable
defense challenging the making, validity, or enforce-
ment of the note or the mortgage. The court also
rejected the defendants’ ‘‘predatory lending’’ defense,
stating: ‘‘As [pleaded] by the defendants in the instant
action, the . . . special defense of ‘predatory lending’
is neither a legally recognized special defense which can
stand on its own, nor could the allegations contained
therein be construed to constitute a valid, legally suffi-
cient, or traditionally recognized special defense to a
foreclosure action. The defendants do not allege that
there were any elements of fraud, misrepresentation,
or any other form of inducement on the part of any
party, and certainly do not allege any such conduct on
the part of the [substitute plaintiff]. Since the defense
or claim of predatory lending is nonexistent, no amount
of repleading could cure such a defect and, as a result,
the special defense and counterclaim is properly chal-
lenged by a motion for summary judgment.
‘‘Even assuming that a special defense of ‘predatory
lending’ exists, the defendants have failed to plead suffi-
cient facts which would satisfy the definition contained
in [Monetary Funding Group, Inc. v. Pluchino, Supe-
rior Court, judicial district of Fairfield, Docket No. CV-
010382851-S, LEXIS 2442 (September 3, 2003), aff’d, 87
Conn. App. 401, 867 A.2d 841 (2005)]. They assert merely
that the loan which was originated by [the original plain-
tiff] was unaffordable. The court notes that notwith-
standing this allegation, the defendants made payments
under the note for some two years prior to going
into default.’’
Furthermore, with respect to both of the defendants’
special defenses, the court agreed with the substitute
plaintiff that it could not properly be subject to the
special defenses, given that it was an assignee of the
mortgage, it had not expressly assumed any liabilities
of the original plaintiff, and the allegations contained
within the defendants’ special defenses focused on the
conduct of the original plaintiff, the assignor.
On appeal, the defendants argue that the trial court
erred in its conclusion that the substitute plaintiff, due
to its status as an assignee, could not be subject to
the defendants’ special defenses. Also, the defendants
argue that the court erred in its conclusion that the
special defenses were not legally viable. The substitute
plaintiff argues that the court properly concluded that it
could not be subject to the defendants’ special defenses
because it was an assignee of the mortgage and did not
expressly assume any of the original plaintiff’s liabili-
ties. Alternatively, the substitute plaintiff argues that
even if it was subject to the defendants’ special
defenses, the court properly rendered summary judg-
ment in its favor because the defendants’ special
defenses were legally insufficient.
We begin our analysis of this claim by noting the
appropriate standard of review. Given that the issues
involved in this claim are legal in nature, as opposed to
factual or discretionary in nature, we exercise plenary
review. Hartford v. McKeever, 139 Conn. App. 277, 283,
55 A.3d 787 (2012), aff’d, 314 Conn. 255, 101 A.3d 229
(2014).
Next, we address the propriety of the court’s conclu-
sion that the substitute plaintiff could not be subject
to special defenses because of its status as an assignee.
In Hartford v. McKeever, supra, 139 Conn. App. 277,
this court stated: ‘‘ ‘[A]n assignee of a contract takes it
subject to all defenses which might have been asserted
against the assignor’ . . . Fairfield Credit Corp. v.
Donnelly, 158 Conn. 543, 548, 264 A.2d 547 (1969); but
does not take it subject to affirmative claims against
the assignor arising from the assignor’s prior conduct
without [the assignee’s] express assumption of such
liability. . . . If, then, in defense of a foreclosure action
brought against him by an assignee of his note and
mortgage, the mortgagor defends on the basis that the
value of the note at the time of the assignment was less
than that claimed by the assignee, the mortgagor may
be entitled to a setoff on the ground that the assignee
took the note subject to the state of accounts between
the assignor and the mortgagor at the time of the assign-
ment. If, on the other hand, the mortgagor responds to
the foreclosure action by filing a counterclaim based
upon his alleged overpayment of the loan prior to the
assignment, the mortgagor must bring a separate claim
against the assignor to recover the alleged overpayment
unless the assignee has assumed liability for the assign-
or’s preassignment conduct.’’ (Emphasis in original.)
Hartford v. McKeever, supra, 286. Thus, a mortgagor
is precluded from bringing counterclaims against an
assignee of a note and mortgage if such assignee has
not expressly assumed the liabilities of the original
assignor, but it does not prohibit mortgagors from
asserting, against an assignee, special defenses that go
to the making, enforcement, or validity of the note
and mortgage.
In the present case, the corporate assignment of the
defendants’ mortgage provided that the original plaintiff
assigned to the substitute plaintiff the mortgage along
with ‘‘the full benefit of all the powers and of all the
covenants and provisos therein contained . . . .’’ It did
not expressly provide that the substitute plaintiff
assumed the liabilities of the original plaintiff. There-
fore, pursuant to the rule set forth in Hartford v.
McKeever, supra, supra, 139 Conn. App. 286, the substi-
tute plaintiff did not take the note secured by the defen-
dants’ mortgage subject to any affirmative claims that
could be brought by the defendants. Pursuant to this
same rule, however, the substitute plaintiff did take the
note subject to all defenses that could be asserted by
the defendants, including equitable defenses. Thus, the
court erred in its conclusion that the defendants could
not raise special defenses against the substitute plaintiff
solely because of its status as an assignee.
Having concluded that the defendants were not pre-
cluded as a matter of law from raising special defenses
against the substitute plaintiff, we next consider
whether the court, in rendering summary judgment,
properly concluded that the defendants’ purported spe-
cial defenses were not legally viable. We shall discuss
these defenses separately.
A
CUTPA Violation
The defendants argue that the court erred by conclud-
ing that their CUTPA special defense was not legally
viable. Specifically, the defendants contend that they
pleaded sufficient facts to raise a genuine issue of mate-
rial fact as to whether the substitute plaintiff engaged
in behavior prohibited by General Statutes § 42-110b
(a), which provides that ‘‘[n]o person shall engage in
unfair methods of competition and unfair or deceptive
acts or practices in the conduct of any trade or com-
merce.’’ The substitute plaintiff argues that the defen-
dants’ CUTPA defense is legally insufficient because
they failed to provide adequate evidence to the court to
demonstrate that a violation of § 42-110b (a) occurred.
Because we conclude that the defendants in this fore-
closure action could not properly assert a CUTPA viola-
tion as a special defense, we conclude that the court
properly rendered summary judgment in the substitute
plaintiff’s favor with respect to this issue.
‘‘A foreclosure action is an equitable proceeding.’’
(Internal quotation marks omitted.) Wells Fargo Bank,
N.A. v. Khatun, 146 Conn. App. 618, 620, 78 A.3d 222
(2013). ‘‘A valid special defense at law to a foreclosure
proceeding must be legally sufficient and address the
making, validity or enforcement of the mortgage, the
note or both.’’ (Internal quotation marks omitted.)
Fidelity Bank v. Krenisky, supra, 72 Conn. App. 705.
‘‘Historically, defenses to a foreclosure action have
been limited to payment, discharge, release or satisfac-
tion . . . or [lien invalidity] . . . . [Connecticut
courts, however] have permitted several equitable
defenses to a foreclosure action.’’ (Internal quotation
marks omitted.) Chase Manhattan Mortgage Corp. v.
Machado, 83 Conn. App. 183, 188, 850 A.2d 260 (2004).
The parties have not drawn our attention to any appel-
late authority with respect to the issue of whether,
in a foreclosure action, a party may assert a CUTPA
violation as a special defense, and we are unaware
of any such authority. Although it appears from our
research that some trial courts in this state have permit-
ted a CUTPA violation to be pleaded as a special defense
in foreclosure actions, other trial courts have concluded
to the contrary. See R. Langer et al., 12 Connecticut
Practice Series: Unfair Trade Practices (2015) § 6.13.
In resolving the issue, we must carefully distinguish
between a cause of action and a special defense. At
issue in the present claim is not the legal validity of a
claim or a counterclaim, but the legal validity of pur-
ported special defense. A cause of action, brought by
means of a complaint or a counterclaim, is a means
of seeking redress for having suffered harm. See, e.g.,
Black’s Law Dictionary (6th Ed. 1990) (defining ‘‘cause
of action’’ in part as ‘‘[t]he fact or facts which give a
person a right to judicial redress or relief against
another. . . . A situation or state of facts which would
entitle party to sustain action and give him right to seek
a judicial remedy in his behalf.’’). In contrast, ‘‘[t]he
purpose of a special defense is to plead facts that are
consistent with the allegations of the complaint but
demonstrate, nonetheless, that [a] plaintiff has no cause
of action.’’ (Internal quotation marks omitted.) TD
Bank, N.A. v. M.J. Holdings, LLC, 143 Conn. App. 322,
326, 71 A.3d 541 (2013).
‘‘CUTPA provides a private cause of action to [a]ny
person who suffers any ascertainable loss of money
. . . as a result of the use or employment of a [prohib-
ited] method, act or practice . . . .’’ (Internal quotation
marks omitted.) Ulbrich v. Groth, 310 Conn. 375, 409–
10, 78 A.3d 76 (2013). This court previously has stated
that ‘‘[t]he public policy underlying CUTPA is to encour-
age litigants to act as private attorneys general and to
engage in bringing actions that have as their basis unfair
or deceptive trade practices.’’ (Internal quotation marks
omitted.) Thames River Recycling, Inc. v. Gallo, 50
Conn. App. 767, 794–95, 720 A.2d 242 (1998). A CUTPA
claim is an affirmative cause of action that may be
asserted as a means of recovery for having suffered
actual harm. See General Statutes § 42-110g (a) (‘‘[a]ny
person who suffers an ascertainable loss of money or
property, real or personal, as a result of the use or
employment of a method, act or practice prohibited by
section 42-110b, may bring an action . . . to recover
actual damages’’).
As we have stated previously in this opinion, ‘‘[a]
valid special defense at law to a foreclosure proceeding
must be legally sufficient and address the making, valid-
ity or enforcement of the mortgage, the note or both.’’
(Internal quotation marks omitted.) Fidelity Bank v.
Krenisky, supra, 72 Conn. App. 705. ‘‘Practically speak-
ing . . . neither this court nor our Supreme Court has
ever expressed a finite list of equitable defenses avail-
able in a foreclosure action. Typically, [t]he assertion
of equitable defenses to a mortgage foreclosure requires
that the defenses . . . challenge the making, validity
and enforcement of the loan note and mortgage. This
principle was . . . considered to include events lead-
ing up to the execution of the loan documents, exclusive
of issues involving administration of the loan, such as
misapplication of payments. . . . Nevertheless, given
the equitable nature of a foreclosure action, events sub-
sequent to the execution of the loan documents also
have been considered.’’ (Citation omitted; internal quo-
tation marks omitted.) TD Bank, N.A. v. M.J. Holdings,
LLC, supra, 143 Conn. App. 328.
It is clear from our case law that, generally, a legally
valid special defense in a foreclosure action, insofar as
it relates to the making, validity, or enforcement of the
loan, note and mortgage, is a means of asserting that
a party who has commenced a foreclosure action may
not prevail. Thus, a special defense operates as a shield,
to defeat a cause of action, and not as a sword, to seek
a judicial remedy for a wrong. Against this backdrop,
we readily conclude that a CUTPA violation may not
be asserted as a special defense. In reaching this conclu-
sion, we are mindful that, by its express terms, CUTPA
provides a cause of action for its violation, but it does
not expressly provide a defense by invalidating, or oth-
erwise rendering unenforceable, agreements that are
the product of unfair trade practices. See General Stat-
utes § 42-110a et seq.; see also 12 R. Langer et al.,
supra, § 6.13.
Some trial courts have expressed the view that a
CUTPA violation may be raised as a special defense in
a foreclosure action, against an assignee, in cases in
which the assignee ‘‘was somehow involved in the
unfair trade practice or had an agency relationship with
the loan originator . . . .’’ PHH Mortgage Corp. v.
Traylor, Superior Court, judicial district of New Lon-
don, Docket No. CV-07-5004315, LEXIS 2868, *12
(November 13, 2008) (Martin, J.); see also JP Morgan
Chase National Bank v. McPhaden, Superior Court,
judicial district of Stamford-Norwalk, Docket No. CV-
XX-XXXXXXX, LEXIS 2307 (September 14, 2010) (Mintz,
J.). Even if we were to adopt this type of broader view
of CUTPA, it would not benefit the defendants in the
present case. In their special defense alleging a CUTPA
violation, the defendants failed to allege that the substi-
tute plaintiff engaged in any conduct that ran afoul
of CUTPA, but alleged that the original plaintiff had
originated the loan at issue. The defendants failed to
allege that an agency relationship existed between the
original plaintiff and the substitute plaintiff, but alleged
in conclusory fashion that the substitute plaintiff was
liable for all of the actions of the original plaintiff.5 See
footnote 3 of this opinion.
For all of the foregoing reasons, we conclude that
the court properly concluded that the alleged CUTPA
violation was not a valid special defense, and that it
therefore did not preclude the rendering of summary
judgment in the substitute plaintiff’s favor.
B
Predatory Lending
The defendants also argue that the court erred by
concluding that its predatory lending special defense
did not preclude the rendering of summary judgment
in the substitute plaintiff’s favor. The defendants argue
that predatory lending is properly pleaded as an inde-
pendent special defense, and they urge this court to
deem predatory lending to be a recognized equitable
defense with respect to the making, enforcement, and
validity of the note and mortgage. The defendants also
argue, alternatively, that their predatory lending allega-
tions should be recognized as falling within the legal
ambit of other recognized special defenses, such as
fraud, unclean hands, unconscionability, and equitable
estoppel. The substitute plaintiff argues that the court
properly rendered summary judgment because the
defendants’ reliance on a special defense of predatory
lending was legally unsound, as predatory lending is
not a recognized special defense and the defendants’
allegations were legally insufficient to withstand sum-
mary judgment.
As we have set forth previously, the court concluded
that the defendants’ predatory lending special defense
was not legally viable. Our research reveals that some
Connecticut trial courts have considered allegations of
‘‘predatory lending’’ to constitute special defenses, but
there is no legal authority that coherently defines such
a defense. Similarly, there is a dearth of Connecticut
case law analyzing predatory lending allegations. The
defendants, however, argue that their predatory lending
allegations should be considered within the context
of the recognized equitable defenses of fraud, unclean
hands, unconscionability, and equitable estoppel. In
their memorandum of law in opposition to the substi-
tute plaintiff’s motion for summary judgment, the defen-
dants raised a similar argument before the trial court.
The defendants argue on appeal that the court erred in
rendering summary judgment in the substitute plain-
tiff’s favor because it should have interpreted their pred-
atory lending allegations in the context of these other
recognized special defenses. Moreover, the defendants
argue that they demonstrated that a genuine issue of
material fact existed with respect to their allegation
that the substitute plaintiff—through its actions with
the defendants—had engaged in behavior that impli-
cated these recognized special defenses.
We first must focus our analysis on the precise nature
of the special defense at issue. ‘‘The interpretation of
pleadings is always a question of law for the court
. . . . Our review of the trial court’s interpretation of
the pleadings therefore is plenary. . . . Furthermore,
we long have eschewed the notion that pleadings should
be read in a hypertechnical manner. Rather, [t]he mod-
ern trend, which is followed in Connecticut, is to con-
strue pleadings broadly and realistically, rather than
narrowly and technically. . . . [T]he complaint must
be read in its entirety in such a way as to give effect
to the pleading with reference to the general theory
upon which it proceeded, and do substantial justice
between the parties. . . . Our reading of pleadings in
a manner that advances substantial justice means that
a pleading must be construed reasonably, to contain
all that it fairly means, but carries with it the related
proposition that it must not be contorted in such a way
so as to strain the bounds of rational comprehension.
. . . [T]he practice of reading pleadings broadly applies
to special defenses as well. . . . As long as the plead-
ings provide sufficient notice of the facts claimed and
the issues to be tried and do not surprise or prejudice
the opposing party, we will not conclude that the com-
plaint is insufficient to allow recovery.’’ (Citations omit-
ted; internal quotation marks omitted.) Flannery v.
Singer Asset Finance Co., LLC, 312 Conn. 286, 299–300,
94 A.3d 553 (2014).
Although the defendants entitled their special
defense ‘‘Predatory Lending,’’ they did not merely rely
on a bald assertion that the original plaintiff had
engaged in ‘‘predatory lending’’ practices. Instead, in
twenty-seven paragraphs, they set forth allegations in
support of that purported special defense. See footnote
3 of this opinion. Notably, the defendants set forth
detailed allegations concerning the financial circum-
stances of David Aubut at the time of the making of the
loan at issue. Among other allegations, the defendants
alleged that David Aubut’s income, the sole source of
income for the defendants’ household, was $36,000 per
year. His take-home pay was $1950 per month. He owed
$45,000 in credit card debt and $132,000 on an existing
mortgage. The defendants alleged, in relevant part, that
monthly payments on the new loan were approximately
$1400 per month, which comprised more than 70 per-
cent of David Aubut’s take-home pay, leaving him
approximately $550 per month to pay other expenses.
The defendants alleged that ‘‘[a]t the time of the subject
loan, [David Aubut] was insolvent within the definition
of the United States Bankruptcy Code.’’
Apart from these specific allegations concerning
David Aubut’s financial situation at the time of the loan,
the defendants alleged that the original plaintiff ‘‘had
offered [David Aubut] a mortgage on his principal resi-
dence that it knew or should have known [he] could
not afford’’ and ‘‘knew or should have known that at
the time this loan was made [David Aubut] was insol-
vent.’’ The defendants alleged that ‘‘[t]he subject loan
was predatory in nature and destined to fail from
[its] inception.’’
It is well settled ‘‘that a trial court in foreclosure
proceedings has discretion, on equitable considerations
and principles, to withhold foreclosure or to reduce the
amount of the stated indebtedness.’’ Hamm v. Taylor,
180 Conn. 491, 497, 429 A.2d 946 (1980). We briefly
define some of the equitable defenses that the defen-
dants alleged to have invoked by way of their predatory
lending special defense. ‘‘Fraud and unconscionability
are well recognized special defenses in foreclosure
actions. . . . Fraud involves deception practiced in
order to induce another to act to her detriment, and
which causes that detrimental action. . . . The four
essential elements of fraud are (1) that a false represen-
tation of fact was made; (2) that the party making the
representation knew it to be false; (3) that the represen-
tation was made to induce action by the other party;
and (4) that the other party did so act to her detriment.
. . . Because specific acts must be pleaded, the mere
allegation that a fraud has been perpetrated is insuffi-
cient. . . .
‘‘The purpose of the doctrine of unconscionability is
to prevent oppression and unfair surprise. . . . As
applied to real estate mortgages, the doctrine of uncon-
scionability draws heavily on its counterpart in the Uni-
form Commercial Code which, although formally
limited to transactions involving personal property, fur-
nishes a useful guide for real property transactions.
. . . As Official Comment 1 to § 2-302 of the Uniform
Commercial Code suggests, [t]he basic test is whether,
in the light of the general commercial background and
the commercial needs of the particular trade or case,
the clauses involved are so one-sided as to be uncon-
scionable under the circumstances existing at the time
of the making of the contract. . . . The determination
of unconscionability is to be made on a case-by-case
basis, taking into account all of the relevant facts and
circumstances.’’ (Citations omitted; internal quotation
marks omitted.) CitiMortgage, Inc. v. Coolbeth, 147
Conn. App. 183, 189, 81 A.3d 1189 (2013), cert. denied,
311 Conn. 925, 86 A.3d 469 (2014). ‘‘The classic defini-
tion of an unconscionable contract is one which no
man in his senses, not under delusion, would make, on
the one hand, and which no fair and honest man would
accept, on the other. . . . The doctrine of unconscio-
nability, as a defense to contract enforcement, generally
requires a showing that the contract was both procedur-
ally and substantively unconscionable when made—
i.e., some showing of an absence of meaningful choice
on the part of one of the parties together with contract
terms which are unreasonably favorable to the other
party . . . .’’ (Citations omitted; internal quotation
marks omitted.) Bender v. Bender, 292 Conn. 696, 731–
32, 975 A.2d 636 (2009).
‘‘Our jurisprudence has recognized that those seeking
equitable redress in our courts must come with clean
hands. The doctrine of unclean hands expresses the
principle that where a plaintiff seeks equitable relief,
he must show that his conduct has been fair, equitable
and honest as to the particular controversy in issue.
. . . For a complainant to show that he is entitled to
the benefit of equity he must establish that he comes
into court with clean hands. . . . The clean hands doc-
trine is applied not for the protection of the parties but
for the protection of the court. . . . It is applied . . .
for the advancement of right and justice. . . . The
party seeking to invoke the clean hands doctrine to bar
equitable relief must show that his opponent engaged
in wilful misconduct with regard to the matter in litiga-
tion. . . . The trial court enjoys broad discretion in
determining whether the promotion of public policy
and the preservation of the courts’ integrity dictate that
the clean hands doctrine be invoked.’’ (Citation omitted;
internal quotation marks omitted.) Ridgefield v. Eppol-
iti Realty Co., 71 Conn. App. 321, 334–35, 801 A.2d 902,
cert. denied, 261 Conn. 933, 806 A.2d 1070 (2002).
‘‘[T]raditional mortgage foreclosure standards . . .
permit the assertion of certain special defenses, includ-
ing that of equitable estoppel. . . . The doctrine of
equitable estoppel is well established. [W]here one, by
his words or actions, intentionally causes another to
believe in the existence of a certain state of things,
and thereby induces him to act on that belief, so as
injuriously to affect his previous position, he is [pre-
cluded] from averring a different state of things as
existing at the time. . . . Our Supreme Court . . .
stated, in the context of an equitable estoppel claim,
that [t]here are two essential elements to an estoppel:
the party must do or say something which is intended
or calculated to induce another to believe in the exis-
tence of certain facts and to act upon that belief; and
the other party, influenced thereby, must actually
change his position or do something to his injury which
he otherwise would not have done. Estoppel rests on
the misleading conduct of one party to the prejudice
of the other. . . . Broadly speaking, the essential ele-
ments of an equitable estoppel . . . as related to the
party to be estopped, are: (1) conduct which amounts
to a false representation or concealment of material
facts, or, at least, which is calculated to convey the
impression that the facts are otherwise than, and incon-
sistent with, those which the party subsequently
attempts to assert; (2) the intention, or at least the
expectation, that such conduct shall be acted upon by,
or influence, the other party or other persons; and (3)
knowledge, actual or constructive, of the real facts.’’
(Citation omitted; footnote omitted; internal quotation
marks omitted.) T.D. Bank, N.A. v. M.J. Holdings, LLC,
supra, 143 Conn. App. 337–38.
Viewed broadly and realistically, the allegations set
forth in the special defense at issue implicate the equita-
ble defenses on which the defendants rely. Although the
defendants did not explicitly characterize their special
defense in terms of fraud, unconscionability, unclean
hands, or equitable estoppel, their failure to do so is
not dispositive in our analysis. The allegations, read
broadly and realistically, set forth a general theory that
the facts known to the original plaintiff concerning the
financial situation of David Aubut were such that, at
the time that the parties entered into the subject loan,
the original plaintiff knew or should have known that
the loan would fail. Stated otherwise, the defendants
assert that because the facts were such that the original
plaintiff offered David Aubut a loan that it knew or
should have known was ‘‘destined to fail from [its]
inception,’’ the substitute plaintiff should not be permit-
ted to enforce the subject note and mortgage. Thus, the
allegations fairly put the substitute plaintiff on notice
that, on equitable grounds, the defendants intended to
challenge the making of the note, mortgage, or both.
As we have explained previously, a special defense of
such nature is legally valid.
Having concluded that the defendants set forth a
legally viable special defense, we also conclude that
the defendants, in opposing summary judgment, demon-
strated the existence of a genuine issue of material
fact with respect to the special defense. The court had
before it the note, the mortgage deed, and other records
concerning the defendants’ payment history. Among
the materials submitted in their opposition to summary
judgment, the defendants provided the court with an
affidavit of David Aubut, consisting of thirty-two num-
bered paragraphs, in which he made factual averments
concerning the making of the loan as well as his finan-
cial situation at the time of the making of the loan.
These averments supported the allegations made in his
special defense. Additionally, David Aubut averred: ‘‘We
struggled from the first payment until the last payment
we were able to make on this loan. Eventually we just
could not afford it any longer.’’ Also, he averred: ‘‘We
were told by the lender’s representative that the loan
was affordable based on our household income and
expenses. I believed the lender’s representative had
my best interest in mind but now know better.’’ The
substitute plaintiff did not make any attempt to counter
these allegations by way of affidavit or other documen-
tary evidence.
By means of David Aubut’s affidavit, as well as other
evidence concerning the loan, mortgage, and payment
history that was before the court, we conclude that the
defendants amply demonstrated that a genuine issue
of material fact existed with respect to their special
defense that, on equitable grounds, challenged the mak-
ing of the loan agreement at issue. The defendants pre-
sented proof of David Aubut’s financial situation at the
time of the origination of the loan, as well as proof that
a representative of the substitute plaintiff had made
statements with respect to the affordability of the loan,
statements on which David Aubut had relied to his
detriment. The proof presented concerning the loan and
the conduct of the substitute plaintiff with respect to
the loan was sufficient to give rise to a genuine issue
of material fact with respect to whether the equitable
defenses of fraud, unconscionability, unclean hands,
and equitable estoppel applied. Because we conclude
that the defendants’ special defense implicated valid,
equitable doctrines and that they demonstrated that
a genuine issue of material fact existed with respect
thereto, we conclude that the court erroneously ren-
dered summary judgment in the substitute plaintiff’s
favor.
The judgment is reversed and the case is remanded
with direction to deny the substitute plaintiff’s motion
for summary judgment only as to the defendants’ special
defense of predatory lending and for further proceed-
ings consistent with this opinion.
In this opinion the other judges concurred.
1
In this opinion, we shall refer to David Aubut and Karen Aubut collec-
tively as the defendants, but we also shall refer to each of them by their
respective names when it is necessary to refer to either of them individually.
2
The substitute plaintiff also argues that the defendants’ claim is improper
because it was never raised in the pleadings, but was raised for the first
time in their memorandum of law in opposition to summary judgment. The
court implicitly agreed with this conclusion in its memorandum of decision,
as it stated: ‘‘In their opposition to the [m]otion for [s]ummary [j]udgment,
the defendants raise additional defenses . . . [including the substitute plain-
tiff’s] failure to give proper notice of the acceleration of the note. The
defendants have not pleaded these defenses in their special defenses. . . .
[The substitute plaintiff] has presented evidence that it sent a notice of
acceleration which complied with the terms of the loan documents.’’
To the extent that the substitute plaintiff argues that the court was barred
from considering the defendants’ claim as to the preacceleration notice of
default because it was not raised in the pleadings and was raised for the
first time at the summary judgment stage, we disagree. In order for the
substitute plaintiff in the present case to establish its prima facie case for
foreclosure of the defendants’ mortgage, it had to prove ‘‘by a preponderance
of the evidence that it [was] the owner of the note and mortgage, that the
defendant mortgagor [had] defaulted on the note and that any conditions
precedent to foreclosure, as established by the note and mortgage, [had]
been satisfied.’’ (Internal quotation marks omitted.) Wells Fargo Bank, N.A.
v. Strong, 149 Conn. App. 384, 392, 89 A.3d 392, cert. denied, 312 Conn. 923,
94 A.3d 1202 (2014).
3
In the context of their special defense under CUTPA, the defendants
relied on the allegations set forth in their predatory lending special defense
and alleged, in relevant part: ‘‘Plaintiff’s actions, conduct and trade practices
alleged herein run afoul of General Statutes § 42-110a et seq., which makes
it illegal for any person, which includes Plaintiff as a legal entity, from
engaging in unfair methods of competition and unfair or deceptive acts or
practices in the conduct of any trade or commerce.
‘‘As a consequence, Plaintiff should not be allowed to enforce the subject
note and mortgage.’’
In their predatory lending special defense, the defendants alleged as
follows:
‘‘[1] On or about September 29, 2009, Defendant, David Aubut, without
the benefit of counsel, executed and delivered, in the presence of a notary
public, to Bank of America, N.A., the former plaintiff that commenced the
present action, a note and mortgage in the original principal amount of
$189,957.
‘‘[2] In April of 2009, Defendant, David Aubut, had suffered a major heart
attack and had lost his job.
‘‘[3] At that time of the subject loan, a refinance transaction, Defendant
had been working at his place of employment for three months.
‘‘[4] At the time of the subject loan, Defendant’s income in the amount
of $36,000 per annum was the sole source of income for the household.
‘‘[5] At the time of the subject loan, Defendant’s take-home pay was
approximately $1950 per month.
‘‘[6] At the time of the subject loan, Defendant owed approximately $45,000
in credit card debt.
‘‘[7] At the time of the subject loan, Defendant owed approximately
$132,000 on his existing mortgage.
‘‘[8] The new loan provided to Defendant increased his mortgage balance
from $132,000 to approximately $190,000.
‘‘[9] Monthly payments on the new loan were approximately $1400 which
represented more than 70 percent of Defendant’s take-home pay.
‘‘[10] The monthly mortgage payment of approximately $1400 left Defen-
dant with approximately $550 to pay for his monthly necessary household
and living expenses.
‘‘[11] Of the loan proceeds, approximately $45,000 was used to pay credit
card debt that could have been discharged in a Chapter 7 bankruptcy pro-
ceeding.
‘‘[12] The plaintiff charged a loan discount fee in excess of $3000 for this
loan and a lender closing fee of $750.
‘‘[13] Additional fees to a company designated as Service Link, which was
hired by Bank of America, totaled nearly $1500.
‘‘[14] At the time of the subject loan Defendant had equity in the subject
property that was protected by homestead exception and could have been
protected in a Chapter 7 bankruptcy proceeding.
‘‘[15] At the time of the subject loan, Defendant was insolvent within the
definition of the United States Bankruptcy Code.
‘‘[16] The loan is due for payment as of approximately September, 2011.
‘‘[17] On or about May 21, 2012, Plaintiff instituted foreclosure proceedings
against Defendant.
‘‘[18] On or about June 5, [2012], Defendant filed a request for mediation.
‘‘[19] Said request was granted by the Superior Court, Judicial District of
Middlesex at Middletown, and on June 19, 2012, Defendant and Plaintiff
entered into mediation.
‘‘[20] On or about May 30, 2013, the mediation period was terminated by
the Court without the Defendant being offered a loan modification.
‘‘[21] On or about June 26, 2013, the Defendant filed Chapter 7 Bankruptcy.
‘‘[22] On June 18, 2014, Nationstar Mortgage, LLC (Nationstar), was substi-
tuted as Plaintiff.
‘‘[23] Nationstar is liable for all of the aforementioned actions of Bank
of America, the original Plaintiff that commenced this action.
‘‘[24] The Plaintiff, at the time this action was commenced, had offered
Defendant a mortgage on his principal residence that it knew or should
have known Defendant could not afford.
‘‘[25] The Plaintiff at the time this action was commenced either knew
or should have known that at the time this loan was made Defendant
was insolvent.
‘‘[26] The subject loan was predatory in nature and destined to fail
from inception.
‘‘[27] As a consequence, Plaintiff should be barred from enforcing the
subject note and mortgage.’’
4
The defendants also set forth a three count counterclaim sounding in
‘‘predatory lending,’’ ‘‘violation of CUTPA,’’ and ‘‘breach of covenant of good
faith.’’ The defendants have not raised a claim of error related to the court’s
rendering of summary judgment in favor of the substitute plaintiff on
their counterclaim.
5
Although in their opposition to summary judgment the defendants argued
that ‘‘a high level, fiduciary relationship’’ existed between the substitute
plaintiff and the original plaintiff, this type of relationship is at odds with
an agency relationship. Moreover, the defendants did not present proof to
demonstrate that the substitute plaintiff was the original plaintiff’s agent,
or that it otherwise had assumed its liabilities.