Deutsche Bank National Trust Co. v. Bliss ( 2015 )

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DEUTSCHE BANK NATIONAL TRUST COMPANY,
TRUSTEE v. HEATHER M. BLISS ET AL.
(AC 36219)
Gruendel, Keller and Borden, Js.
Argued February 17—officially released September 1, 2015
(Appeal from Superior Court, judicial district of
Stamford-Norwalk, Povodator, J.)
John R. Hall, for the appellant (named defendant).
Laura Pascale Zaino, with whom, on the brief, was
Brian D. Rich, for the appellee (plaintiff).
Opinion
KELLER, J. The plaintiff, Deutsche Bank National
Trust Company, as trustee for Long Beach Mortgage
Loan Trust 2006-5 (Long Beach Mortgage Loan Trust),
brought this residential real estate foreclosure action
against several defendants, including the named defen-
dant, Heather M. Bliss.1 The defendant appeals from
the judgment of the trial court ordering a foreclosure
by sale of the subject property. She claims that: (1) the
plaintiff lacked standing to bring the present action; (2)
the plaintiff failed to prove its prima facie case; and (3)
the court improperly concluded that the mortgage was
enforceable. We affirm the judgment of the trial court.
Following an evidentiary hearing, the court issued a
written decision that set forth the following findings
of fact:
‘‘1. On or about April 27, 2006, [the] defendant . . .
executed and delivered to Long Beach Mortgage Com-
pany (the initial lender) a promissory note in the amount
of $1,300,000.00.
‘‘2. To secure the note, [the] defendant also executed
a Mortgage, including a Fixed/Adjustable Rate Rider,
on a parcel of land, together with the improvements
thereon, known as 6 Sylvan Road, Westport, Con-
necticut.
‘‘3. At the time that the note and mortgage were exe-
cuted (on or about April 27, 2006), Long Beach Mortgage
Company was a subsidiary of Washington Mutual Bank,
which at the time of the loan was subject to federal
banking regulations.
‘‘4. The Mortgage subsequently was assigned to [the]
plaintiff by virtue of an Assignment of Mortgage dated
October 20, 2009, and recorded on November 10, 2009
. . . in the Westport land records.
‘‘5. In addition to being the recorded assignee of the
mortgage, [the] plaintiff is the holder of the underly-
ing note.
‘‘6. Since approximately January 1, 2009, [the] defen-
dant has been in default of her payment obligations
under the note.
‘‘7. Despite demand, [the] defendant has failed to
bring her obligations current.
‘‘8. The value of the subject property, as of June 26,
2013, was $1,400,000.
‘‘9. [The] defendant’s indebtedness to [the] plaintiff,
as of June 26, 2013, was $1,850,089,92.
‘‘10. [The] plaintiff’s reasonable attorney’s fees,
through the time of trial, totaled $25,000.00.’’
The court went on to make the following determi-
nations:
‘‘1. [The] defendant’s default of her obligations under
the note is an adequate basis for [the] plaintiff’s efforts
to foreclose the mortgage.
‘‘2. [The] defendant has not proven her special
defense that the note is unenforceable.
‘‘3. Although there does not appear to be any equity
in the property, the presence of the United States of
America as a defendant requires any foreclosure to be
a foreclosure by sale.’’ (Footnote omitted.)
In its decision, the court rejected the defendant’s
argument that the mortgage at issue was unenforceable
because the initial lender, Long Beach Mortgage Com-
pany, had surrendered its Connecticut license as a mort-
gage lender before it processed her mortgage loan
application. The court ordered a judgment of foreclo-
sure by sale with a sale date of December 14, 2013.
This appeal followed.
I
For the first time on appeal, the defendant claims
that the plaintiff lacked standing to bring the present
action because, despite the fact that the plaintiff alleged
in its complaint that it was the holder of the note, the
plaintiff failed to demonstrate that it had this status at
the time it commenced the present action. The plaintiff
argues that it had the status of a holder and, thus, had
standing to bring the present action, by virtue of its
possession of the note and a blank endorsement. Con-
sistent with the fact that the defendant did not raise
the issue of standing before the trial court, the court
did not address the issue of standing or make any factual
findings concerning the issue of standing in its opinion.
Nonetheless, on the basis of our assessment of the
evidence presented by the plaintiff, we conclude that
the defendant’s claim is not persuasive.2
‘‘The issue of standing implicates the trial court’s
subject matter jurisdiction and therefore presents a
threshold issue for our determination. . . . Standing is
the legal right to set judicial machinery in motion. One
cannot rightfully invoke the jurisdiction of the court
unless he [or she] has, in an individual or representative
capacity, some real interest in the cause of action, or
a legal or equitable right, title or interest in the subject
matter of the controversy. . . . [When] a party is found
to lack standing, the court is consequently without sub-
ject matter jurisdiction to determine the cause. . . .
We have long held that because [a] determination
regarding a trial court’s subject matter jurisdiction is a
question of law, our review is plenary. . . . In addition,
because standing implicates the court’s subject matter
jurisdiction, the issue of standing is not subject to
waiver and may be raised at any time. . . . [T]he plain-
tiff ultimately bears the burden of establishing stand-
ing.’’ (Citations omitted; internal quotation marks
App. 384, 397–98, 89 A.3d 392, cert. denied, 312 Conn.
923, 94 A.3d 1202 (2014).
‘‘Generally, in order to have standing to bring a fore-
closure action the plaintiff must, at the time the action
is commenced, be entitled to enforce the promissory
note that is secured by the property. . . . Whether a
party is entitled to enforce a promissory note is deter-
mined by the provisions of the Uniform Commercial
Code, as codified in General Statutes § 42a-1-101 et seq.
. . . ‘Under [the Uniform Commercial Code], only a
‘‘holder’’ of an instrument or someone who has the
rights of a holder is entitled to enforce the instrument.’
. . . When a note is endorsed in blank, any person in
possession of the note is a holder and is entitled to
enforce the instrument. General Statutes §§ 42a-1-201
(b) (21) (A), 42a-3-205 (b) and 42a-3-301. If an endorse-
ment makes a note payable to an identifiable person,
it is a ‘special endorsement,’ and only the identified
person in possession of the instrument is entitled to
enforce the instrument. General Statutes §§ 42a-1-201
(b) (21) (A), 42a-3-205 (a) and 42a-3-301.’’ (Citations
omitted; emphasis added.) U.S. Bank v. Ugrin, 150
Conn. App. 393, 401–402, 91 A.3d 924 (2014).
‘‘The plaintiff’s possession of a note endorsed in blank
is prima facie evidence that it is a holder and is entitled
to enforce the note, thereby conferring standing to com-
mence a foreclosure action. . . . After the plaintiff has
presented this prima facie evidence, the burden is on
the defendant to impeach the validity of [the] evidence
that [the plaintiff] possessed the note at the time that
it commenced the . . . action or to rebut the presump-
tion that [the plaintiff] owns the underlying debt . . . .
The defendant [must] set up and prove the facts which
limit or change the plaintiff’s rights.’’ (Citation omitted;
internal quotation marks omitted.) Id., 402. ‘‘The pos-
session by the bearer of a note [e]ndorsed in blank
imports prima facie [evidence] that he acquired the note
in good faith for value and in the course of business,
before maturity and without notice of any circum-
stances impeaching its validity. The production of the
note establishes his case prima facie against the makers
and he may rest there. . . . It [is] for the defendant to
set up and prove the facts which limit or change the
plaintiff’s rights.’’ (Citations omitted.) Garris v. Calech-
man, 118 Conn. 112, 115, 170 A. 789 (1934).
Turning to the facts of the present case, we observe
that the plaintiff, as trustee for the Long Beach Mortgage
Loan Trust, alleged in relevant part that, on April 27,
2006, the defendant executed and delivered to Long
Beach Mortgage Company a note for a loan in the origi-
nal principal amount of $1,300,000. The plaintiff alleged:
‘‘On said date to secure said Note the [defendant] . . .
did execute and deliver to Long Beach Mortgage Com-
pany . . . a Mortgage on the [subject property]. Said
Mortgage was dated . . . and recorded . . . in . . .
the Westport Land Records. Said Mortgage was
assigned to [the plaintiff] . . . by virtue of an Assign-
ment of Mortgage to be recorded on the Westport Land
Records. The plaintiff . . . is the holder of said Note
and Mortgage.’’3 In her amended answer, the defendant
denied that the plaintiff was the holder of the note and
mortgage at issue.
At the evidentiary hearing in the present case, the
plaintiff presented testimony from Wilkin Rodriguez, a
home lending research officer employed by JP Morgan
Chase Bank N.A. (JP Morgan), the servicer for the Long
Beach Mortgage Loan Trust, of which the plaintiff is
the trustee. Rodriguez testified that JP Morgan, as the
servicer for the Long Beach Mortgage Loan Trust, docu-
mented and kept records for the trust, and also serviced
its loans.
Rodriguez testified that JP Morgan maintained an
electronic database containing loan records, and that
original collateral files associated with a loan, which
contain copies of the original mortgage, original note
and title policy, are stored in Monroe, Louisiana. Rodri-
guez testified, as well, that JP Morgan’s online records
are updated on a daily basis, at or near the time of the
events to which they are related, and that he reviews
such records almost daily. He testified that the elec-
tronic records included image copies of documents
on file.
Through Rodriguez, the plaintiff introduced into evi-
dence a four page document that consistently was
referred to at trial as ‘‘the note.’’ The first three pages
consisted of a redacted copy of the original promissory
note that was executed by the defendant in favor of
Long Beach Mortgage Company on April 27, 2006. Rodri-
guez testified that ‘‘the fourth page of [the] document’’
was a copy of ‘‘an endorsement in blank signed by Long
Beach Mortgage Company.’’ The undated endorsement
by Long Beach Mortgage Company bears the signatures
of ‘‘Jess Almanza, Vice President’’ and ‘‘Kimberly Smith,
Assistant Vice President.’’ Rodriguez testified that he
had reviewed the four page document, which included
the endorsement, in JP Morgan’s electronic records in
preparation for his trial testimony. He testified, as well,
that the original note, a part of JP Morgan’s collateral
file, came into his possession a day earlier from the
counsel who had brought the foreclosure action. Before
the court admitted into evidence the document con-
sisting of the note with the attached endorsement,
Rodriguez testified that he had compared the document
to the original imaged copy of it that was maintained
in JP Morgan’s electronic records. Rodriguez verified
that the document was ‘‘[the] [s]ame thing’’ and that
‘‘[t]he bank owns this note.’’
The defendant also presented a document that Rodri-
guez identified as ‘‘the doc-line report.’’ According to
Rodriguez, this document, generated and maintained in
the normal course of business by JP Morgan, ‘‘keeps
track of the collateral file as it comes in and gets
released as needed.’’ As stated previously in this opin-
ion, Rodriguez described the ‘‘collateral file’’ as con-
sisting of ‘‘[c]opies of the original mortgage, the original
note, [and the] title policy.’’ Consistent with the informa-
tion set forth in the report that had been generated and
maintained in connection with the defendant’s loan,
Rodriguez testified that JP Morgan, as servicer for the
Long Beach Mortgage Loan Trust, possessed the note
and the attached endorsement that the plaintiff pre-
sented in evidence, as well as the mortgage and title
insurance policy at issue, as of July 18, 2009, and that
these materials had been ‘‘imaged into [JP Morgan’s
electronic] system accordingly.’’4 He testified, as well,
that the loan was in default status and that the defendant
had been notified of this fact. Rodriguez testified that
the amount currently due on the loan was $1,850,089.92.
The defendant does not dispute that the plaintiff pos-
sessed the note at the time the action was commenced.
The defendant argues, instead, that the plaintiff failed
to demonstrate that it possessed the blank endorsement
at the time that it commenced the present action by
service on August 25, 2009. In so arguing, the defendant
relies heavily on the following colloquy that occurred
during the defendant’s cross-examination of Rodriguez:
‘‘Q. I show you [the note] . . . marked as a full
exhibit. Inviting your attention to [the endorsement]
. . . please. Would you agree that that is a page that
was stapled on to the original document at some point?
‘‘A. The page with the endorsement was added on
after the fact.
‘‘Q. And you don’t know when it was added on, do
you?
‘‘A. No.
‘‘Q. You don’t know any of the individuals identified
on the stamp of the endorsement, do you?
‘‘A. No.
‘‘Q. The endorsement is in blank?
‘‘A. That’s correct.
‘‘Q. The endorsement purports to be by Long Beach
Mortgage Company. Do you have any documents indi-
cating what position these people held with Long Beach
Mortgage other than what we see here?
‘‘A. No.’’
Later during Rodriguez’ cross-examination, the
defendant’s attorney revisited the issue of when the
endorsement was attached to the note. The following
colloquy occurred:
‘‘Q. And again, at the risk of repetition, you don’t
know when the page was stapled on, the endorsement
papers stapled onto [the note marked as a] full
exhibit? . . .
‘‘A. No. I do not know what date that was added. . . .
‘‘Q. You don’t know when that endorsement occurred,
do you?
‘‘A. I do not know the date of the endorsement.’’
As an initial matter, we observe that this line of
inquiry was not related to an attempt by the defendant
at trial to demonstrate that the plaintiff lacked standing
because the endorsement had not been made prior to
the time that the plaintiff commenced this action. As
stated previously in our discussion of this claim, the
defendant did not raise such a claim at trial. Turning
to Rodriguez’ testimony, we note that although it
reflects that Rodriguez did not know in specific terms
when the undated endorsement had been made or
added to the note, it does not contradict the evidence,
including Rodriguez’ earlier testimony, that demon-
strated that JP Morgan, as servicer of the loan for the
Long Beach Mortgage Loan Trust, had the note with
the endorsement in its possession on July 18, 2009.
Although Rodriguez testified that the endorsement had
been added on ‘‘after the fact,’’ it is reasonable to inter-
pret this testimony to reflect Rodriguez’ belief that the
endorsement had been attached to the original note, in
JP Morgan’s possession on July 18, 2009, at some point
after the note had been executed in April, 2006. There is
no reasonable basis on which to interpret this testimony
such that the endorsement had occurred or that it had
been added to the note after the commencement of
the present action. In this regard, we observe that, as
relevant, the electronic records of JP Morgan—on
which Rodriguez based his testimony—merely reflected
the date on which JP Morgan, as servicer, came to
possess the note. Nothing in those records, which per-
tained to the note, the blank endorsement, and all of
the documentary evidence in JP Morgan’s possession,
suggests that JP Morgan did not come into possession
of the note and the endorsement at different times, let
alone at any time after the commencement of the pre-
sent action. Additionally, the fact that Rodriguez was
unfamiliar with the persons who signed the endorse-
ment does not bear on the issue of when the endorse-
ment occurred or when JP Morgan came to possess
the endorsement.
Accordingly, we conclude that, by means of Rodri-
guez’ testimony and the doc-line report generated and
maintained by JP Morgan, and the reasonable infer-
ences necessarily drawn therefrom, the plaintiff demon-
strated that the copies of the note and blank
endorsement that it presented in evidence reflected the
original documents that were in JP Morgan’s possession
as of July 18, 2009, which had been imaged into its
system in the normal course of business. Further, the
plaintiff demonstrated that its servicer, JP Morgan, was
in possession of the note endorsed in blank when it
commenced the action. The defendant failed to set up
and prove facts which limited or changed the plaintiff’s
rights, as holder of the note, to commence the present
action on August 25, 2009.
II
Next, the defendant claims that the plaintiff failed to
prove its prima facie case. Specifically, the defendant
claims that the plaintiff failed to present (1) ‘‘evidence
that it had received both the note and the endorsements
thereto prior to the commencement of the lawsuit’’ and
(2) ‘‘evidence of authority or scope of authority under
the power of attorney used to assign the mortgage to
the plaintiff.’’ We disagree.
A plaintiff establishes its prima facie case in a mort-
gage foreclosure action by demonstrating by a prepon-
derance of the evidence that it is the owner of the note,
that the defendant mortgagor has defaulted on the note,
and that conditions precedent to foreclosure have been
satisfied.5 ‘‘Our legislature, by adopting [General Stat-
utes] § 49-17,6 created a statutory right for the rightful
owner of a note to foreclose on real property regardless
of whether the mortgage has been assigned to him.’’
(Footnote added.) RMS Residential Properties, LLC v.
Miller, 303 Conn. 224, 230, 32 A.3d 307 (2011), overruled
in part by J.E. Robert Co. v. Signature Properties, LLC,
309 Conn. 307, 325 n.18, 71 A.3d 492 (2013). ‘‘Section
49-17 codifies the well established common-law princi-
ple that the mortgage follows the note . . . .’’ Id. ‘‘Being
the holder of a note satisfies the plaintiff’s burden of
demonstrating that it is the owner of the note because
under our law, the note holder is presumed to be the
owner of the debt, and unless the presumption is rebut-
ted, may foreclose the mortgage under § 49-17. The
possession by the bearer of a note [e]ndorsed in blank
imports prima facie [evidence] that he acquired the note
in good faith for value and in the course of business,
before maturity and without notice of any circum-
stances impeaching its validity. The production of the
note [endorsed in blank] establishes [the posessor’s]
case prima facie against the makers and he may rest
there. . . . It [is] for the defendant to set up and prove
the facts which limit or change the plaintiff’s rights.’’
(Internal quotation marks omitted.) American Home
Mortgage Servicing, Inc. v. Reilly, 157 Conn. App. 127,
133, A.3d (2015).
‘‘In order to establish a prima facie case, the propo-
nent must submit evidence which, if credited, is suffi-
cient to establish the fact or facts which it is adduced to
prove.’’ (Emphasis in original; internal quotation marks
omitted.) New England Savings Bank v. Bedford Realty
Corp., 246 Conn. 594, 608, 717 A.2d 713 (1998).
‘‘[W]hether the plaintiff has established a prima facie
case is a question of law, over which our review is
plenary.’’ (Internal quotation marks omitted.) John H.
Kolb & Sons, Inc. v. G & L Excavating, Inc., 76 Conn.
App. 599, 605, 821 A.2d 774, cert. denied, 264 Conn. 919,
828 A.2d 617 (2003).
On the basis of our resolution of the claim discussed
in part I of this opinion, we reject the defendant’s claim
that the plaintiff did not demonstrate that it was the
owner of the note because it failed to present evidence
that it had received the note and blank endorsement
prior to August 25, 2009, the time at which it com-
menced the present action.
As we observed in footnote 3 of this opinion, there
was undisputed evidence that the mortgage at issue in
this case was assigned to the plaintiff on October 20,
2009. The defendant also claims that the plaintiff failed
to present ‘‘evidence of authority or scope of authority
under the power of attorney used to assign the mortgage
to the plaintiff.’’ This aspect of the defendant’s claim
is unpersuasive because, in light of the authority pre-
viously set forth in this section of our opinion, even
were we to agree with the defendant that the assignment
of the mortgage to the plaintiff was invalid, it would
not affect the plaintiff’s ability to demonstrate that it
is the owner of the note and, thus, prove its prima
facie case.
For the foregoing reasons, we reject the defendant’s
assertion that the plaintiff failed to present evidence to
support its prima facie case.
III
Finally, the defendant claims that the court improp-
erly concluded that the mortgage was enforceable.
We disagree.
At trial, the defendant alleged as a special defense
and attempted to demonstrate that the note and mort-
gage were unenforceable because prior to engaging in
the mortgage loan transaction with the defendant, and
before the note and mortgage were executed on April
27, 2006, the initial lender, Long Beach Mortgage Com-
pany, had surrendered its Connecticut license as a mort-
gage lender. Also, the defendant alleged that ‘‘[w]hen
Long Beach Mortgage Company engaged in the business
of making [a] mortgage . . . loan to [her] . . . without
a license, that conduct was a violation of public policy
and, consequently, the debt and note along with the
mortgage being foreclosed in this action that putatively
secures the debt and note are all unenforceable.’’ The
plaintiff, in reply, argued that the loan was enforceable
because, at times relevant, Long Beach Mortgage Com-
pany was a subsidiary of a bank operating under federal
banking laws and, because federal banking regulations
preempt state licensing laws, it was of no consequence
to the present case that Long Beach Mortgage Company
was not licensed under state law.
In its memorandum of decision, the court stated as
an initial matter that it was not in dispute that, at the
time of the origination of the loan, Long Beach Mortgage
Company ‘‘was not licensed to make loans under Con-
necticut banking statutes and indeed had surrendered
its license to do so a few months earlier.’’ The court
stated that the issue raised by the defendant could be
narrowed ‘‘to the determination of whether federal
banking regulations preempt state banking laws and
especially those relating to licenses for organizations
in the mortgage loan business.’’
In rejecting the defense, the court relied on the pre-
emption analysis set forth in a decision of the United
States Court of Appeals for the Second Circuit,
Wachovia Bank, N.A. v. Burke, 414 F.3d 305 (2d Cir.
2005), cert. denied, 550 U.S. 913, 127 S. Ct. 2093, 167
L. Ed. 2d 830 (2007) (Wachovia). The court in Wachovia
concluded that regulations promulgated under the
National Bank Act, 12 U.S.C. § 38 et seq., by the federal
Office of the Comptroller of the Currency preempted
state banking laws intended to apply to operating sub-
sidiaries of nationally chartered banks, including the
plaintiff in that case. Id., 309. Thus, the Court of Appeals
upheld the determination of the United States District
Court for the District of Connecticut that federal law
preempted state regulation of operating subsidiaries of
nationally chartered banks. Id., 321.7 With regard to the
issue of federal preemption of state banking laws, the
court in the present case also relied on State Farm
Bank, FSB v. Burke, 445 F. Supp. 2d 207 (D. Conn.
2006), in which the United States District Court for the
District of Connecticut, consistent with the analysis in
Wachovia, concluded that federal regulations promul-
gated under the Home Owners’ Loan Act, 12 U.S.C.
§ 1461 et seq., by the federal Office of Thrift Supervision
preempted Connecticut banking laws intended to gov-
ern lending and deposit-related activities of a federal
savings association and its agents. Id., 221.
The court in the present case observed that the defen-
dant failed to demonstrate that the analysis in Wachovia
did not support its resolution of the preemption issue
in the present case, which involved an operating subsid-
iary of a federally chartered bank that was subject to
regulations promulgated by the Office of Thrift Supervi-
sion pursuant to the Home Owners’ Loan Act. The court
observed that the defendant was unable to refer the
court to any contrary authority. Furthermore, the court
noted that because Wachovia was a decision of the
Court of Appeals for the Second Circuit, it was entitled
to ‘‘special consideration’’ by Connecticut courts. As
the court explained, ‘‘[w]hether couched in terms of
comity or something stronger, the court has not been
presented with an acceptable—much less convincing—
reason not to follow Wachovia (and State Farm
[Bank, FSB]).’’
Having concluded that the defendant had failed to
undermine the precedential value of Wachovia, the
court also rejected what it deemed to be a purely equita-
ble argument advanced by the defendant, namely, ‘‘that
issuance of the loan by an unlicensed lender violated
public policy and on that basis the mortgage and note
should not be enforced.’’ The court stated that because
the loan was legally valid as a matter of law, it declined
the defendant’s invitation ‘‘to elevate equity above the
law. . . . Equity cannot be invoked to circumvent pre-
emption.’’
‘‘When . . . the trial court draws conclusions of law,
our review is plenary and we must decide whether its
conclusions are legally and logically correct and find
support in the facts that appear in the record.’’ (Internal
quotation marks omitted.) D’Urso v. Lyons, 97 Conn.
App. 253, 255–56, 903 A.2d 697, cert. denied, 280 Conn.
928, 909 A.2d 523 (2006). Here, the defendant does not
challenge the court’s finding that, at the time of the
origination of the loan and mortgage at issue, Long
Beach Mortgage Company was a subsidiary of Washing-
ton Mutual Bank, a federally chartered bank that was
subject to applicable federal regulations. Nor does the
defendant persuade us that, with regard to the issue of
federal preemption, the court improperly relied on and
applied preemption law, as set forth in Wachovia, in
the present case.
In an attempt to undermine the propriety of the
court’s decision, the defendant, for the first time on
appeal, argues that Wachovia ‘‘has been legislatively
overruled’’ when, in 2010, Congress enacted the Dodd-
Frank Wall Street Reform and Consumer Protection
Act (Dodd-Frank Act), Pub. L. No. 111-201, 124 Stat.
1376 (2010). Although this argument contradicts the
defendant’s view of the law at trial, at which time she
suggested that changes to the law arising from the
Dodd-Frank Act were not relevant to a proper analysis
of the issue of preemption, we readily reject the defen-
dant’s recourse to the Dodd-Frank Act because, as sev-
eral courts have concluded, the Dodd-Frank Act does
not have retroactive application and that in an evalua-
tion of the issue of preemption, a court must consider
the federal regulations in effect when the parties
entered into the transaction. See, e.g., Molosky v. Wash-
ington Mutual, Inc., 664 F.3d 109 113 n.1 (6th Cir. 2011);
Henning v. Wachovia Mortgage, FSB, 969 F. Supp. 2d
135, 146 (D. Mass. 2013); Brown v. Wells Fargo Bank,
N.A., 869 F. Supp. 2d 51, 56 n.5 (D.D.C. 2012); Davis v.
World Savings Bank, FSB, 806 F. Supp. 2d 159, 166 n.5
(D.D.C. 2011).
The defendant, relying on the applicability of state
licensing laws that did not apply to Long Beach Mort-
gage Company, has not demonstrated that the loan and
mortgage were unenforceable. In light of the foregoing,
we reject the defendant’s arguments that the loan and
mortgage were ‘‘illegal and unenforceable’’ under Solo-
mon v. Gilmore, 248 Conn. 769, 731 A.2d 280 (1999)8—
which is factually and legally distinguishable from the
case at hand—or that the ‘‘illegality’’ of the transaction
(under Connecticut licensing laws) negated any
defenses available to the plaintiff under the Uniform
Commercial Code.
The judgment is affirmed and the case is remanded
for the purpose of setting a new sale date.
In this opinion the other judges concurred.
1
In addition to the named defendant, the plaintiff also named Chase Bank
USA N.A.; Christopher M. Coyle; Scott Garrett; Janal, LLC; Baum Capital
Investments, Inc.; State of Connecticut Department of Revenue Services
and United States of America Internal Revenue Service as defendants. None
of these entities, all of whom were defaulted by the trial court for failure
to appear and/or plead, are parties to the present appeal. In this opinion,
we will refer to Bliss as the defendant.
2
If the issue of standing was dependent on an assessment of conflicting
evidence, it would be appropriate for this court to remand the matter to
the trial court to make relevant findings. See, e.g., LaSalle Bank, N.A. v.
Bialobrzeski, 123 Conn. App. 781, 790–91, 3 A.3d 176 (2010). We conclude,
however, that we may resolve the standing issue in the present case because
there is no rational assessment of the relevant evidence that supports the
defendant’s argument.
3
Although the plaintiff alleged in its complaint, dated August 24, 2009,
that the subject mortgage had been assigned to it, the undisputed evidence
in the record is that such assignment did not occur until October 20, 2009.
4
Among other things, the report states that the ‘‘mortgage,’’ ‘‘note instru-
ment,’’ and ‘‘title policy,’’ were deposited into the collateral file on July 18,
2009, and were released to the plaintiff’s counsel on October 13, 2009. It
appears, then, that JP Morgan had possession of the mortgage prior to its
assignment to the plaintiff. See footnote 3 of this opinion.
5
We note, as well, that a loan servicer for the owner of legal title to a
note has standing in its own right to foreclose on the real property securing
the note. See, e.g., Wells Fargo Bank, N.A. v. Strong, supra, 149 Conn.
App. 398.
6
General Statutes § 49-17 provides: ‘‘When any mortgage is foreclosed by
the person entitled to receive the money secured thereby but to whom the
legal title to the mortgaged premises has never been conveyed, the title to
such premises shall, upon the expiration of the time limited for redemption
and on failure of redemption, vest in him in the same manner and to the
same extent as such title would have vested in the mortgagee if he had
foreclosed, provided the person so foreclosing shall forthwith cause the
decree of foreclosure to be recorded in the land records in the town in
which the land lies.’’
7
The analysis set forth by the Second Circuit Court of Appeals subse-
quently was upheld by the United States Supreme Court in Watters v.
Wachovia Bank, N.A., 550 U.S. 1, 127 S. Ct. 1559, 167 L. Ed. 2d 389 (2007),
in which the United States Supreme Court held that the mortgage lending
activities of Wachovia Bank (bank) remained outside the governance of
state licensing and auditing agencies when those activities are conducted
by the bank’s operating subsidiary. Id., 7. The court concluded that the
bank’s mortgage business, ‘‘whether conducted by the bank itself or through
the bank’s operating subsidiary,’’ was not subject to ‘‘the licensing, reporting,
and visitorial regimes of the several States in which the subsidiary oper-
ates.’’ Id.
8
In Solomon, our Supreme Court held that a secondary mortgage that
was issued by a lender in violation of the licensing requirements of General
Statutes § 36a-511 was not enforceable in a foreclosure action. Solomon
v. Gilmore, supra, 248 Conn. 771. Unlike the present case, the mortgage
transaction in Solomon was governed by state law, and did not present a
question of federal preemption.