Aurora Loan Services, LLC v. Hirsch , 170 Conn. App. 439 ( 2017 )

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AURORA LOAN SERVICES, LLC v. HARRY
HIRSCH ET AL.
(AC 37828)
Beach, Keller and Norcott, Js.*
Argued September 20, 2016—officially released January 31, 2017
(Appeal from Superior Court, judicial district of
Waterbury, Complex Litigation Docket, Dooley, J.)
Peter A. Ventre, with whom, on the brief, was Kimball
Haines Hunt, for the appellant (substitute plaintiff).
Michael D. O’Connell, with whom, on the brief, was
Erin Arcesi Mutty, for the appellee (defendant Con-
necticut Attorneys Title Insurance Company).
Opinion
BEACH, J. The substitute plaintiff, Nationstar Mort-
gage, LLC,1 appeals from the judgment of the trial court
rendered, in part, in favor of the defendant, Connecticut
Attorneys Title Insurance Company.2 The plaintiff
claims that the court erred in: (1) its calculation of
damages; (2) declining to award attorney’s fees; and (3)
calculating prejudgment interest pursuant to General
Statutes § 37-3a from the return date on the summons.3
We disagree and affirm the judgment of the trial court.
The following facts, as found by the trial court, and
procedural history are relevant. Harry Hirsch, a Con-
necticut attorney and an approved title agent for the
defendant, was authorized to issue title insurance poli-
cies and letters of protection on behalf of the defendant.
John Eoanou was a real estate developer and a client
of Hirsch since 1999. In approximately 1998, Eoanou
began the process of acquiring and developing a tract
of land in Groton that was approved for resubdivision
and development by Mardie Lane Homes, LLC (Mardie),
a company owned by Eoanou. As part of the subdivision
approval, Mardie was required to build a road and other
infrastructure and ‘‘to obtain a bond in the event of its
failure to do so.’’ Mardie obtained construction loans
from Liberty Savings Bank for which a mortgage was
given on two lots within the subdivision, lots 14 and
19. Mardie did not build the necessary infrastructure
and defaulted on its construction loans; subsequently,
subdivision approval expired in 2003. Liberty Savings
Bank took title to lots 14 and 19.
In 2004, Eoanou filed a bankruptcy petition in federal
court. While in bankruptcy, Eoanou, with Hirsch’s
knowledge and assistance, formed a new company,
Thames River, LLC, that listed Eoanou’s son as the sole
member and manager, but in reality Eoanou was the
controlling entity. Thames River, LLC, continued devel-
opment of the Groton property. At Eoanou’s direction,
Hirsch purchased lots 14 and 19 from Liberty Savings
Bank, and took title to the properties as trustee. The
town of Groton issued building permits to Eoanou for
lots 14 and 19, despite the expiration of the subdivision
approval. Eoanou converted each lot into a condomin-
ium containing two units each. Lot 14 became 52A and
52B Mardie Lane and lot 19 became 47A and 47B Mar-
die Lane.
Before the condominiums or the road were com-
pleted, and before any certificates of occupancy were
issued, Eoanou arranged for the sale of 47B and 52B.
The transaction was not an arm’s length transaction.
Xenia Kamberos, who lived in Chicago and met Eoanou
while on vacation in Aruba, agreed to invest in Eoanou’s
real estate projects in Westport and Preston because
she liked and trusted him. When Kamberos decided to
withdraw from the Westport investment, Eoanou, using
a power of attorney from Kamberos, subsequently
arranged a sham sale of the Westport property. The
power of attorney was prepared by Hirsch. Eoanou did
not return any of Kamberos’ investment upon selling
the property for more than twice the amount which
Kamberos had invested.
Without Kamberos’ knowledge, Eoanou used the
money that Kamberos had invested in the Westport
project toward the purchase of 47B and 52B Mardie
Lane. Eoanou informed Hirsch that Kamberos would
be purchasing 47B and 52B Mardie Lane for $385,000
each. Kamberos did not fill out the loan applications
that were submitted for financing the transaction; the
applications falsely stated her income and address.
Financing was obtained through Sterling Lending
Group, with which Eoanou had a preexisting rela-
tionship.
The closings on 47B and 52B Mardie Lane occurred
on April 24, 2007, and May 9, 2007, respectively. The
closings were attended only by Hirsch and Eoanou, and
at the closings, Hirsch purportedly represented Kamb-
eros, the purchaser; Thames River, LLC, the seller; and
First Magnus Financial Corporation (First Magnus),4
the purchaser’s lender. He also acted as the defendant’s
approved agent for the issuance of title insurance and
letters of protection. Hirsch never spoke to Kamberos
about the transactions and never sent the sales con-
tracts to her. Eoanou signed Kamberos’ name to the
sales contracts, and Hirsch was aware of this fact. At
the closing, Bryan Johnson purportedly acted pursuant
to Kamberos’ power of attorney. Kamberos did not sign
any power of attorney nor was Johnson present at the
closing; rather, Johnson’s signature was forged and the
document purporting to give him power of attorney
also was forged. Hirsch knew that the attestation pur-
portedly made on behalf of Kamberos was false.
Prior to the closings, First Magnus sent Hirsch docu-
ments to be completed in accordance with certain
instructions. One such document was the ‘‘Owner Occu-
pancy Agreement,’’ which required that the borrower
represent that the property would be used as the bor-
rower’s principal residence within sixty days after
recordation of the security instrument. At the time of
the closing, work on both properties was incomplete
and both lacked certificates of occupancy. Hirsch had
no information as to whether certificates of occupancy
would be issued within sixty days. Hirsch knew that
Kamberos lived in Chicago and had no intention to
move to Connecticut. Hirsch nonetheless submitted the
owner occupancy agreement to First Magnus.
Another document essential to the closing was an
‘‘Address Certification’’ which required Hirsch to certify
the correct mailing address of the mortgagor. Hirsch
falsely certified Kamberos’ mailing address, an address
that was actually an uninhabited lot in Westport next
to Eoanou’s home. Hirsch also sent the HUD-1 forms
to First Magnus, knowing that the documents bore the
signature of Johnson as attorney in fact for Kamberos,
despite the fact that Johnson did not sign the forms.
In connection with the closing, Hirsh, on behalf of the
defendant, issued identical title insurance policies in
favor of First Magnus and the purchaser relating to 47B
and 52B Mardie Lane. The policies provided in relevant
part that the defendant provided coverage against loss
or damage sustained by an insured, by reason of, inter
alia, unmarketability of title and lack of right of access
to and from the land. At the closing, Hirsch also issued
letters of protection on behalf of the defendant as to
both properties. The letters provided that the defendant
would reimburse ‘‘for actual loss’’ incurred in connec-
tion with such closing when conducted by an issuing
agent or approved attorney ‘‘when such loss arises out
of: 1. Failure of the Issuing Agent or Approved Attorney
to comply with your written closing instructions to the
extent that they relate to . . . the status of the title
to said interest in land or the validity, enforceability
and priority of the lien of said mortgage on said interest
in land, including the obtaining of documents and the
disbursement of funds necessary to establish such sta-
tus of title or lien . . . or 2. Fraud or dishonesty of the
Issuing Agent or Approved Attorney in handling your
funds or documents in connection with such closings.’’
When Eoanou stopped making mortgage payments, the
loans went into default and the properties were fore-
closed upon. Aurora, the plaintiff’s predecessor in inter-
est; see footnote 1 of this opinion; took title to the
properties by strict foreclosure.
In August, 2013, the plaintiff filed a consolidated
amended complaint against the defendant only,5 relat-
ing to the sale of 47B and 52B Mardie Lane.6 Counts
one and three allege that the titles to both properties
were unmarketable and therefore the title insurance
policies provide coverage for its losses. In counts two
and four, the plaintiff sought contractual indemnifica-
tion under the letters of protection and claimed that
the defendant, through its agent Hirsch, (1) failed to
comply with the lender’s written closing instructions,
and (2) acted fraudulently and dishonestly in handling
the lender’s funds or documents in connection with
the closing.
In its memorandum of decision, the court found in
favor of the defendant as to the title insurance policy
claims, concluding that title was marketable. The court
found in favor of the plaintiff as to counts two and four.
The court found that First Magnus’ lien was valid and
title was marketable; therefore, the plaintiff could not
prevail under the first clause at issue in the letters
of protection because the misconduct upon which the
plaintiff relied did not relate to the status of the title
or the validity, enforceability or priority of the lien. As
to counts two and four, the court found in favor of the
plaintiff under the ‘‘fraud or dishonesty’’ clause in the
letters of protection because ‘‘several of First Magnus’
closing documents contained false representations or
were known forgeries,’’ such as the false representation
regarding owner occupancy, the false certifications of
Kamberos’ mailing address and the fact that Johnson
did not sign as Kamberos’ attorney on the HUD-1 forms.
The court awarded damages on counts two and four
in the total amount of $426,362.98 and prejudgment
interest in the amount of $61,361.23. The court declined
to award attorney’s fees. This appeal followed.
I
The plaintiff claims that the court erred in the amount
of its award of damages. We disagree.
‘‘Our standard of review of an award of damages . . .
is well settled. [T]he trial court has broad discretion in
determining whether damages are appropriate. . . . Its
decision will not be disturbed on appeal absent a clear
abuse of discretion.’’ (Internal quotation marks omit-
ted.) Lyons v. Nichols, 63 Conn. App. 761, 767, 778 A.2d
246, cert. denied, 258 Conn. 906, 782 A.2d 1244 (2001).
The court found in favor of the plaintiff on counts
two and four due to Hirsch’s breach of the letters of
protection as to the two properties. The plaintiff sought
damages in the amount of the debt, the cost of the
foreclosure actions, loan servicer carrying costs for the
properties, prejudgment interest and attorney’s fees.
The court awarded some but not all of the damages
sought. As to 47B Mardie Lane, the court stated the
following: ‘‘[T]he loan amount was $308,000. At the time
of the foreclosure, the outstanding debt was $333,482.59
and the value of the property was $151,000, resulting in
a negative equity of $182,482.59. The foreclosure court
recognized costs, to include attorney’s fees, totaling
$1,625, which will be awarded. Prior to the sale of 47B
Mardie Lane, the plaintiff incurred various carrying
costs, i.e., taxes and maintenance. The court does not
award these postforeclosure costs.’’ The court noted
that ‘‘[e]ventually, 47B [Mardie Lane] was sold for
$11,500. The court uses market value at the time of
foreclosure as the offset to the amount of the debt on
the loans. This figure was supported by an appraisal
and approved by the foreclosure court. This court has
little to no information as to the circumstances which
led to the sale several months later for such a drastically
reduced price and so does not factor this number into
the damages claim.’’ The court awarded damages with
respect to 47B Mardie Lane in the amount of
$184,107.59.
Regarding 52B Mardie Lane, the court concluded that
‘‘the loan amount was $365,750. At the time of the fore-
closure, the outstanding debt was $393,630.39 and the
value of the property was $153,000, resulting in a nega-
tive equity of $240,630.39. The foreclosure court recog-
nized costs, to include attorneys’ fees, in the amount of
$1625 which will be awarded. 52B Mardie Lane remains
unsold and the plaintiff continues to incur carrying
costs. Damages awarded as to [52B Mardie Lane] are
$242,255.39.’’
In calculating the damage award for 47B and 52B
Mardie Lane, the court subtracted the fair market value
of the property at the time of the foreclosure, as found
by the foreclosure court, from the amount of outstand-
ing debt at the time of foreclosure and added foreclo-
sure costs to that total. The plaintiff claims that this
amount was insufficient, as it was not equal to the
amount of ‘‘actual losses’’ incurred as a result of
Hirsch’s fraud, in contradistinction to the letters of pro-
tection that provided that ‘‘actual losses’’ would be
awarded in the event of fraud. It argues that there were
no restrictions in the letters of protection as to what
constituted ‘‘actual losses’’ that arose from dishonesty
or fraud and that the court erred in reducing the damage
award only by the amount of the appraised valuation
of each property at the time of foreclosure, which was
$151,000 and $153,000, respectively. The plaintiff also
argues that the court erred by failing to award the costs
incurred not only by having to foreclose on the proper-
ties but also by having to carry and to maintain the
properties until sold. The plaintiff specifically argues
that the court’s footnote stating that it did not award
postforeclosure costs because there was no testimony
from the plaintiff’s predecessor in interest as to the
efforts made and costs incurred to secure, maintain or
sell the properties improperly placed on the plaintiff
the burden to prove the absence of an exception to
otherwise awardable damages.
The plaintiff also argues that the court erred in using
the fair market value of the properties found by the
foreclosure court in its calculations of damages and
that damages should have instead been measured
according to the properties’ values at the time of clos-
ing. It argues that the fair market value at the time
of foreclosure was irrelevant because, due to Hirsch’s
fraudulent behavior, marketable title never was con-
veyed and the resulting mortgage transactions were
void ab initio. In further support of its approach, the
plaintiff notes that, although 52B and 47B Mardie Lane
were valued at $153,000 and $151,000, respectively, at
the time of foreclosure, the plaintiff sold 47B Mardie
Lane for $11,500 and was unable to sell 52B Mardie
Lane at all. The plaintiff argues that the values assigned
by the foreclosure court had no realistic application in
the calculation of damages because the evidence at trial
demonstrated that there were serious problems with
the properties, including no access to the road, no con-
nection to a water source or sewage line, no occupancy
permit, and code deficiencies. The plaintiff further con-
tends that the court erred in failing to include its car-
rying costs in the damage award.
The court found in favor of the plaintiff under the
provision in the letters of protection providing for the
recovery of ‘‘actual losses’’ in the event of fraud or
dishonesty by the defendant’s agent, Hirsch. There is
nothing further in this provision that prescribes the
method of calculating the amount of actual loss. The
plaintiff did not seek rescission of the contracts related
to the closing. Rather, it sought damages for breach of
the letters of protection issued in connection with the
closing and the court awarded damages thereunder.
The court did not have before it any question whether
the loan and mortgage transactions were void ab initio.
The court did find, however, that the titles to both
properties were marketable and that title was trans-
ferrable after the closings.
The court explained that it used ‘‘the market value
at the time of foreclosure as the offset to the amount
of debt on the loans. This figure was supported by an
appraisal and approved by the foreclosure court.’’ The
plaintiff introduced into evidence, as full exhibits, the
judgments of strict foreclosure as to 52B and 47B Mar-
die Lane. In those judgments, the foreclosure court
found that the fair market values of the properties were
$153,000 and $151,000, respectively. The trial court did
not abuse its discretion in giving weight to this evidence;
Statewide Grievance Committee v. Dixon, 62 Conn.
App. 507, 511, 772 A.2d 160 (2001) (weight to be given
to evidence solely within determination of trier of fact);
or in relying on it as credible evidence as to the mar-
ket value.
The court did not err in declining to weigh heavily
the $11,500 sale price of 47B Mardie Lane in its decision
as to the amount of damages. The court explained that
it had ‘‘little to no information’’ as to the ‘‘circumstances
which led to the sale several months later for such a
drastically reduced price’’ and thus did not use this
number in its calculation of damages. ‘‘Damages are
recoverable only to the extent that the evidence affords
a sufficient basis for estimating their amount in money
with reasonable certainty.’’ (Internal quotation marks
omitted.) Ulbrich v. Groth, 310 Conn. 375, 441, 78 A.3d
76 (2013). The court did not abuse its discretion in
concluding that the fair market value as of the foreclo-
sure was proved with reasonable certainty, but that
the circumstances of the later sale price of $11,500
were not.
The evidence submitted at trial by the plaintiff regard-
ing the unfinished nature of the properties does not
necessarily cause the values assigned during the fore-
closure to have ‘‘no realistic application,’’ as argued by
the plaintiff. The court did not abuse its discretion in
crediting the fair market value of the properties as found
by the foreclosure court, rather than relying on the
plaintiff’s evidence as to the value and condition of
the properties. Moreover, there is no evidence that the
appraisals upon which the foreclosure court relied
failed to take the unfinished nature of the properties
into account.7
The plaintiff also argues that the defendant should
be precluded from benefiting from the court’s use of
the value of the properties as of the time of foreclosure
in its calculation of damages because the defendant
did not present evidence as to the actual value of the
properties. The plaintiff, however, had the burden to
prove damages, and the evidence as to the fair market
value that the court found credible was introduced into
evidence by the plaintiff.8 The burden of proof properly
remained with the plaintiff.
The court did not include postforeclosure carrying
costs, such as maintenance and taxes, in its award of
damages. The plaintiff argues that this omission was
erroneous because such costs are recoverable. The
court’s reasoning for not awarding such costs was as
follows: ‘‘[w]hether to sell or maintain the properties,
the mechanism for maintenance, and other decisions
regarding these properties were, in the first instance,
decisions made by Aurora, the predecessor loan ser-
vicer. While the court received many of Aurora’s
records, it did not hear testimony from Aurora as to
the efforts made to secure, maintain, sell or liquidate
these properties. [The plaintiff] did not become the
servicer on these loans until 2012 and had no competent
evidence as to these efforts, decisions or circumstances.
The court can envision a myriad [of] reasons, from
mismanagement to a flailing real estate market, that
these costs may have been incurred. [The plaintiff has]
failed to prove the defendant’s liability for these costs
other than as a ‘but for’ result of Hirsch’s misconduct.
This is not sufficient.’’ The court was not required to
accept the conclusions advanced by the plaintiff, who
had the burden of proof as to damages, and did not
abuse its discretion in declining to award postforeclo-
sure carrying costs.
In sum, the method used by the court to calculate
‘‘actual losses’’ under the letters of protection was based
on the evidence before it. The court did not abuse its
discretion in calculating the damage award.
II
The plaintiff next claims that the court erred in declin-
ing to award attorney’s fees. We disagree.
The decision whether to award attorney’s fees is
reviewed under an abuse of discretion standard. See,
e.g., Sorrentino v. All Seasons Services, Inc., 245 Conn.
756, 777, 717 A.2d 150 (1998).
In declining to award attorney’s fees, the court rea-
soned that under the American rule,9 the plaintiff ordi-
narily cannot recover attorney’s fees for breach of
contract in the absence of an express provision allowing
recovery, and there is no contractual provision in the
letters of protection providing for the recovery of attor-
ney’s fees. The court rejected the plaintiff’s claim for
punitive damages in the form of attorney’s fees due to
the wanton, reckless and/or fraudulent behavior of the
defendant’s agent, Hirsch. The court reasoned that,
‘‘Here, the contract provision found to have been
breached was a contractual commitment not to be dis-
honest or commit fraud in the handling of the lender’s
documents. The contract itself contemplates that any
breach of the provision would necessarily be by way
of tortious conduct. Allowing an award of attorney’s
fees, as punitive damages, for a breach of this provision,
would be, in essence, a reformation of the letters of
protection to include an attorney’s fees provision. The
court therefore, in the exercise of its discretion,
declines to award attorney’s fees as punitive damages
based upon the tortious conduct of Hirsch.’’ The court
further concluded that the defendant was innocent of
wrongdoing and declined to award attorney’s fees as
punitive damages on the basis of vicarious liability.
Although the plaintiff recognizes the general bar to
recovery of attorney’s fees imposed by the American
rule, it argues that punitive damages are appropriately
recoverable in this case by the application of several
theories. The plaintiff suggests that its attorney’s fees
in this action are part of its ‘‘actual costs,’’ which are
specifically recoverable under the terms of the letters
of protection.10 The ‘‘actual costs’’ referenced in the
letters of protection are only those ‘‘incurred by you in
connection with such closings’’ when they arise out of
specific categories of malfeasance. Although it could
be argued that attorney’s fees incurred in an action for
breach of contract arise out of the malfeasance, they
more specifically are incurred in an effort to recover
those costs. The plaintiff’s position analytically would
support the award of attorney’s fees in any action for
breach of contract, in that the fees are, broadly, incurred
because of the breach. The American rule, however,
may not be stretched so far. Total Recycling Services
of Connecticut, Inc. v. Connecticut Oil Recycling Ser-
vices, LLC, 308 Conn. 312, 326, 63 A.3d 896 (2013) (in
absence of contractual provision to contrary, successful
party not entitled to recover attorney’s fees).
More specifically, the plaintiff contends that attorney
fees are recoverable under the ‘‘tort exception’’11 to the
rule barring the recovery of attorney’s fees in contract
actions; it urges that because the letters of protection
contemplate the recovery of costs caused by tortious
conduct and Hirsch’s conduct was fraudulent, then
punitive damages were recoverable under the contract,
because punitive damages can be recovered in fraud
actions.12
The plaintiff cannot prevail on this argument. The
plaintiff’s claim is not for damages based on fraud;
rather, it is for damages based on breach of contract.
The court found that the plaintiff was entitled to recov-
ery of costs incurred in the two foreclosure actions
because Hirsch had acted fraudulently and dishonestly,
and thus the ‘‘fraud or dishonesty’’ clause in the letters
of protection had been satisfied. But it was not the
defendant who had acted fraudulently; rather, another
party’s conduct, that of Hirsch, only triggered the con-
tractual duty on the part of the defendant to reimburse
the plaintiff. The court awarded as damages the ‘‘actual
cost’’ of the fraud, but not the fees incurred in recov-
ering the costs. The American rule, then, bars the plain-
tiff from recovering attorney’s fees, even though the
possibility of fraud on the part of third parties is contem-
plated. The letters of protection do not provide for
the recovery of attorney’s fees and do not create an
exception to the rule. See, e.g., ACMAT Corp. v. Greater
New York Mutual Ins. Co., 282 Conn. 576, 582–83, 923
A.2d 697 (2007).
The plaintiff further argues that even if the defendant
itself did not act fraudulently or in such a manner as
to trigger the award of attorney’s fees by its own behav-
ior, the defendant is vicariously liable for damages
caused by Hirsch’s conduct, because the defendant
selected Hirsch and gave him unbridled discretion to
act on the defendant’s behalf. The court, however, did
not abuse its discretion in concluding that the plaintiff
could not recover attorney’s fees as punitive damages
on a theory of vicarious liability.
‘‘[A]t common law, there is no vicarious liability for
punitive damages . . . .’’ Matthiessen v. Vanech, 266
Conn. 822, 837, 836 A.2d 394 (2003). However, ‘‘[p]uni-
tive damages can properly be awarded against a master
or other principal because of an act by an agent if, but
only if, (a) the principal or a managerial agent author-
ized the doing and the manner of the act, or (b) the
agent was unfit and the principal or a managerial agent
was reckless in employing or retaining him, or (c) the
agent was employed in a managerial capacity and was
acting in the scope of employment, or (d) the principal
or a managerial agent of the principal ratified or
approved the act.’’ (Internal quotation marks omitted.)
Stohlts v. Gilkinson, 87 Conn. App. 634, 654–55, 867
A.2d 860, cert. denied, 273 Conn. 930, 873 A.2d 1000
(2005), quoting 4 Restatement (Second) Torts, § 909
(1979).
The court found that there was ‘‘no basis . . . upon
which to conclude that [the defendant] knew about,
ratified, or directed Hirsch with respect to his complic-
ity in Eoanou’s machinations. There is no basis upon
which to conclude that [the defendant] was negligent
in its use of Hirsch as [an] agent.’’ The court also found
that, ‘‘quite to the contrary, Hirsch had been [the defen-
dant’s] agent for years without incident’’ and that ‘‘[the
defendant] is innocent in this matter.’’ The plaintiff has
provided us with no basis on which to conclude that
these findings are in error. There is nothing in the record
to suggest that fraudulent behavior was within Hirsch’s
scope of authority. These findings support the court’s
decision not to award attorney’s fees as punitive dam-
ages in light of the defendant’s innocence regarding
Hirsch’s actions. For the foregoing reasons, we con-
clude that the court did not abuse its discretion in
declining to award attorney’s fees.
III
The plaintiff claims that the court erred in calculating
prejudgment interest pursuant to § 37-3a only from the
return date of the first action filed. See footnote 6 of
this opinion. It claims that interest should have been
awarded as well for the period of time running from
the closings in 2007, when the fraud occurred. We
disagree.13
Section 37-3a (a) provides in relevant part: ‘‘interest
at the rate of ten per cent a year, and no more, may be
recovered and allowed in civil actions . . . as damages
for the detention of money after it becomes payable.
. . .’’
‘‘The decision of whether to grant interest under § 37-
3a is primarily an equitable determination and a matter
lying within the discretion of the trial court. . . . Under
the abuse of discretion standard of review, [w]e will
make every reasonable presumption in favor of uphold-
ing the trial court’s ruling, and only upset it for a mani-
fest abuse of discretion. . . . The purpose of § 37-3a
is to compensate plaintiffs who have been deprived of
the use of money wrongfully withheld by defendants.
. . . Whether interest may be awarded depends on
whether the money involved is payable . . . and
whether the detention of the money is or is not wrongful
under the circumstances.’’ (Citations omitted; internal
quotation marks omitted.) Hartford Steam Boiler
Inspection & Ins. Co. v. Underwriters at Lloyd’s & Cos.
Collective, 121 Conn. App. 31, 61, 994 A.2d 262, cert.
denied, 297 Conn. 918, 996 A.2d 277 (2010).
In deciding not to award prejudgment interest for the
period of ‘‘detention’’ prior to the return date of this
action, the court focused on our Supreme Court’s deci-
sion in Sosin v. Sosin, 300 Conn. 205, 228, 14 A.3d 307
(2011), in which it held that: ‘‘Because § 37-3a provides
that interest ‘may be recovered’ . . . it is clear that the
statute does not require an award of interest in every
case in which money has been detained after it has
become payable. Rather, an award of interest is discre-
tionary.’’ (Emphasis in original.) The trial court also
highlighted that the primary purpose of § 37-3a is to
compensate parties that have been deprived of the use
of their money, not to punish. The court awarded pre-
judgment interest in the amount of 3 percent, running
from the return date of ‘‘the first filed of the plaintiff’s
actions,’’ April 13, 2010.
The plaintiff claims that the court should have calcu-
lated the prejudgment interest from the closing dates
of April 24, 2007, for 47B Mardie Lane and May 9, 2007,
for 52B Mardie Lane. Citing Suarez-Negrete v. Trotta,
47 Conn. App. 517, 518–19, 705 A.2d 215 (1998), the
plaintiff argues that ‘‘[w]here interest is awarded pursu-
ant to . . . § 37-3a, interest is to accrue from the date
of the defendants’ conversion through the date of the
close of evidence at trial.’’ The plaintiff, however, did
not offer evidence that required the finding of unjustifi-
able detention by the defendant prior to the return
date.The Suarez-Negrete case, which concerns an
action for conversion, is not determinative of the pre-
sent breach of contract action. In the present action,
the defendant did not convert funds. The court did
award interest from the time that the action was brought
against the defendant. The court has wide discretion
in matters regarding the award of prejudgment interest
and, on the basis of the record before us, we cannot
conclude that the court abused this discretion.
The judgment is affirmed.
In this opinion the other judges concurred.
* The listing of judges reflects their seniority status on this court as of
the date of oral argument.
1
Nationstar Mortgage, LLC, was substituted as plaintiff shortly before
trial began. The named plaintiff, Aurora Loan Services, LLC (Aurora), was
the predecessor loan servicer. For ease of reference, Nationstar Mortgage,
LLC, will be referred to as the plaintiff.
2
Harry Hirsch was also named as a defendant in the original complaint.
The claims against him were dismissed for lack of standing. The action was
withdrawn as to other defendants named in the plaintiff’s initial complaint,
including Geoffrey C. Williams, Xenia Kamberos, Thomas E. Gallagher, and
Autumn Appraisals, LLC. The remaining defendant, Connecticut Attorney’s
Title Insurance Company, will be referred to as the defendant.
3
The plaintiff lists twenty-two issues in its statement of issues, and groups
claims into three sections, with multiple subsections, in the main body of
its appellate brief. We review those claims that are adequately addressed
in the main brief.
4
First Magnus provided the mortgage loans for 47A and 47B Mardie Lane,
and later sold the loans. While Deutsche Bank held the loans, Aurora brought
the present action on behalf of Deutsche Bank. Subsequent to the commence-
ment of the action, Aurora assigned its right to enforce the note as loan
servicer to the plaintiff.
5
The plaintiff conformed the amended complaint to the trial court’s judg-
ment dismissing the action against Hirsch for lack of standing.
6
Originally, separate actions were commenced as to 47B and 52B Mardie
Lane. The claims were similar and therefore consolidated for trial under
one docket number, and the plaintiff filed a consolidated complaint.
7
Appraisals of the properties performed in 2007, years before the foreclo-
sure proceeding in 2014, were prepared under the assumption that the
properties would be finished and certificates of occupancy would be issued
for the properties. These appraisals valued 52B and 47B Mardie Lane at
$380,000 and $385,000, respectively.
8
The plaintiff conceded in oral argument before this court that the fore-
closing institution offered the appraisals at the foreclosure hearing, and the
appraisals necessarily were prepared at the request of Aurora, the plaintiff’s
predecessor in interest.
9
‘‘The general rule of law known as the American rule is that attorney’s
fees and ordinary expenses and burdens of litigation are not allowed to the
successful party absent a contractual or statutory exception. . . . Connecti-
cut adheres to the American rule. . . . There are few exceptions. For exam-
ple, a specific contractual term may provide for the recovery of attorney’s
fees and costs . . . or a statute may confer such rights. . . . This court
also has recognized a bad faith exception to the American rule, which
permits a court to award attorney’s fees to the prevailing party on the basis
of bad faith conduct of the other party or the other party’s attorney.’’ (Internal
quotation marks omitted.) ACMAT Corp. v. Greater New York Mutual Ins.
Co., 282 Conn. 576, 582–83, 923 A.2d 697 (2007).
10
The plaintiff also argues that the court erred in relying on the presence
of marketable title as a basis for declining to award attorney’s fees. The
court’s finding that title was marketable formed a basis for its conclusions
that the defendant was not liable under the title insurance policy claims
and that the defendant was not liable under the first provision at issue in
the letters of protection regarding the validity, enforceability or priority of
the lien. Marketability of title did not factor into its conclusion that the
defendant had breached the ‘‘fraud or dishonesty’’ provision of the letters
of protection. The court did not rely on the marketability of title in deciding
not to award attorney’s fees.
11
The plaintiff correctly asserts that, in some instances, attorney’s fees
may be recovered in contractual actions where fraud has been proved.
‘‘Breach of contract founded on tortious conduct may allow the award of
punitive damages. Such tortious conduct must be alleged in terms of wanton
and malicious injury, evil motive and violence, for punitive damages may
be awarded only for outrageous conduct, that is, for acts done with a bad
motive or with a reckless indifference to the interests of others.’’ (Internal
quotation marks omitted.) L.F. Pace & Sons v. Travelers Indemnity Co., 9
Conn. App. 30, 48, 514 A.2d 766, cert. denied, 201 Conn. 811, 516 A.2d 886
(1986); see also Triangle Sheet Metal Works, Inc. v. Silver, 154 Conn. 116,
127, 222 A.2d 220 (1966).
12
‘‘In an action for fraud, the plaintiffs are entitled to punitive damages,
in addition to general and special damages. . . . The purpose of awarding
punitive damages is not to punish the defendant for his offense, but to
compensate the plaintiff for his injuries. . . . The rule in this state as to
torts is that punitive damages are awarded when the evidence shows a
reckless indifference to the rights of others or an intentional and wanton
violation of those rights.’’ (Citations omitted.) DeSantis v. Piccadilly Land
Corp., 3 Conn. App. 310, 315, 487 A.2d 1110 (1985).
13
Because prejudgment interest may be awarded only for ‘‘the detention
of money after it becomes payable,’’ there may be some question as to
whether, in the circumstances of this case, the defendant wrongfully
detained money at all after it became due and payable. This issue, however,
was not presented by either party and, therefore, we do not reach it.