LendingHome Marketplace, LLC v. Traditions Oil Group, LLC ( 2022 )


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    LENDINGHOME MARKETPLACE, LLC v.
    TRADITIONS OIL GROUP, LLC
    (AC 44450)
    Prescott, Cradle and DiPentima, Js.
    Syllabus
    The plaintiff sought to foreclose a mortgage on certain real property owned
    by the defendant, which was defaulted for failure to appear. Thereafter,
    the trial court granted the plaintiff’s motion for a judgment of strict
    foreclosure and rendered judgment thereon. The plaintiff sent notice of
    the judgment to the defendant, and certified to the court that notice
    had been mailed, pursuant to the applicable rule of practice (§ 17-22)
    and the court’s uniform foreclosure standing orders. The defendant
    failed to redeem the property on or before its law day and title to the
    property vested in the plaintiff. More than one year after the passage
    of the law day, the defendant filed a motion to open the judgment of
    strict foreclosure. The court denied the defendant’s motion to open
    and its subsequent motion to reargue/reconsider that ruling, and the
    defendant appealed to this court. Held that the trial court did not abuse
    its discretion in denying the defendant’s motion to open the judgment
    of strict foreclosure and its motion to reargue/reconsider that ruling:
    the particularized factual allegations in this case did not present the rare
    and extreme circumstances that would justify granting the defendant the
    extraordinary equitable relief it sought, namely, opening the judgment
    of strict foreclosure more than one year after title had vested absolutely
    in the plaintiff, in contravention of the applicable statute (§ 49-15), given
    that the defendant raised no argument that it improperly had been
    defaulted for failure to appear or that the court lacked personal jurisdic-
    tion over it due to improper service, the record disclosed no nefarious
    conduct on the part of the plaintiff, and title had already passed to a
    nonparty purchaser; moreover, although the defendant asserted that it
    never received the notices sent by the plaintiff, that failure was not
    fairly attributable to the plaintiff but, instead, to the defendant’s apparent
    failure to update its mailing address on file with the Secretary of the
    State; furthermore, because there was no error in the court’s denial of
    the defendant’s motion to open, the court did not abuse its discretion
    in denying the defendant’s motion to reargue/reconsider that ruling.
    Submitted on briefs September 13, 2021—officially released January 11, 2022
    Procedural History
    Action to foreclose a mortgage on certain real prop-
    erty owned by the defendant, and for other relief,
    brought to the Superior Court in the judicial district of
    New Britain, where the defendant was defaulted for
    failure to appear; thereafter, the court, Hon. Joseph
    M. Shortall, judge trial referee, granted the plaintiff’s
    motion for a judgment of strict foreclosure and ren-
    dered judgment thereon; subsequently, the court, Auri-
    gemma, J., denied the defendant’s motion to open the
    judgment, and the defendant appealed to this court.
    Affirmed.
    Elio Morgan submitted a brief for the appellant
    (defendant).
    Patricia M. Lattanzio submitted a brief for the appel-
    lee (plaintiff).
    Opinion
    PRESCOTT, J. In this mortgage foreclosure action,
    the defendant, Traditions Oil Group, LLC, which was
    defaulted for failure to appear, appeals from the trial
    court’s denial of its motion to open the judgment of
    strict foreclosure rendered in favor of the plaintiff,
    LendingHome Marketplace, LLC, and from the denial of
    its subsequent motion to reargue/reconsider that ruling.
    Although the defendant filed its motion to open more
    than one year after the passage of the law day set by
    the court, the defendant nonetheless claims that the
    court improperly denied its motions because (1) the
    passing of the law day did not vest absolute title to the
    subject property in the plaintiff due to the plaintiff’s
    alleged failure to comply with notice requirements in
    the court’s uniform foreclosure standing orders and
    Practice Book § 17-22;1 (2) the court’s finding that the
    plaintiff had complied with those notice requirements
    was clearly erroneous; (3) the court failed to hold a
    hearing on the motion to open in violation of the defen-
    dant’s right to due process; and (4) the court abused
    its discretion by summarily denying the defendant’s
    motion to reargue. We conclude that the court properly
    denied the defendant’s motions and, accordingly, affirm
    the judgment of the court.
    The record reveals the following relevant facts and
    procedural history. The plaintiff commenced the under-
    lying foreclosure action on June 28, 2019, with respect
    to certain property in Newington. According to the com-
    plaint, in 2018, the plaintiff had brought a prior action to
    foreclose a mortgage on the property, which mortgage
    secured a note executed by REI Holdings, LLC (REI),
    in the principal sum of $185,200.2 This prior foreclosure
    action, in which REI also was defaulted for failure to
    appear, ended in a November 5, 2018 judgment of strict
    foreclosure rendered in favor of the plaintiff, with the
    law day set to expire after December 5, 2018. Prior to
    that date, however, the defendant, who was not a party
    to the prior action, asserted an interest in the subject
    property by recording on the Newington land records
    a statutory form quitclaim deed dated May 18, 2017.
    The plaintiff commenced the present action to foreclose
    the defendant’s interest in accordance with General
    Statutes § 49-30.3
    Process was served on June 28, 2019, in accordance
    with General Statutes § 34-243r. According to the mar-
    shal’s return of service, the marshal effectuated service
    of process by leaving two copies at the Office of the
    Secretary of the State, which was the defendant’s regis-
    tered agent for service of process, and by sending addi-
    tional copies via certified mail to the defendant’s princi-
    pal office address in New York City as reflected on the
    company’s registration certificate filed with the Secre-
    tary of the State. By statute, all foreign limited liability
    companies are required to register with the Secretary
    of the State and the requisite foreign registration certifi-
    cate must include the street and mailing addresses of
    the company’s principal office. See General Statutes
    §§ 34-275a and 34-275b. Any changes to a company’s
    address must be provided to the Secretary of the State
    on the company’s annual report. General Statutes § 34-
    247k (a) (2) and (b). The marshal filed a supplemental
    return of service on August 2, 2019, showing that the
    postal service had returned to the marshal the process
    mailed to the New York address as ‘‘unclaimed’’ and
    ‘‘unable to forward.’’
    On August 8, 2019, the defendant was defaulted for
    failure to file an appearance. On September 9, 2019, the
    plaintiff filed a motion for a judgment of strict foreclo-
    sure, which the court subsequently granted on Septem-
    ber 23, 2019. A law day for the defendant was set for
    October 21, 2019.4
    On September 30, 2019, the plaintiff, in accordance
    with Practice Book § 17-22, filed with the court a copy of
    a notice of the entry of a judgment of strict foreclosure,
    which the plaintiff’s counsel certified he mailed to the
    defendant by first class mail to the defendant’s New
    York address. In addition, the plaintiff filed a copy of
    the letter that it had sent to the defendant at the same
    New York address via certified and regular mail pursu-
    ant to the court’s uniform foreclosure standing orders,
    which notified the defendant of the entry of the judg-
    ment of strict foreclosure and its terms, including the
    law day and that the defendant risked loss of any poten-
    tial equity in the property if it failed to take action before
    the law day passed. The defendant failed to redeem the
    property on or before its law day and, accordingly,
    title to the property vested in the plaintiff.5 See Ocwen
    Federal Bank, FSB v. Charles, 
    95 Conn. App. 315
    , 322–
    23, 
    898 A.2d 197
    , cert. denied, 
    279 Conn. 909
    , 
    902 A.2d 1069
     (2006); see also General Statutes § 49-15. The plain-
    tiff filed a certificate of foreclosure on the Newington
    land records on November 1, 2019.
    On November 2, 2020, more than one year after its
    law day had passed, the defendant filed an appearance
    with the court and a motion to open and vacate the
    judgment of strict foreclosure. A supporting affidavit
    signed by Jay Seinfeld, the managing member of the
    defendant, was attached to the motion to open.
    According to the motion and the affidavit, the defendant
    never received the notice of the entry of the judgment
    of strict foreclosure, and the plaintiff ‘‘intentionally mis-
    represented otherwise to the court by way of its false
    certification in violation of the trial court’s standing
    orders.’’ The plaintiff filed an objection to the motion
    to open. Attached to the objection as an exhibit were
    copies of the addressed envelopes and tracking results
    printed from the United States Postal Service website.
    The plaintiff also filed a supplemental objection that
    informed the court that the subject property had been
    sold to a third party for value on January 17, 2020. The
    plaintiff attached to the supplemental objection a copy
    of the recorded deed.
    The trial court, Aurigemma, J., denied the defen-
    dant’s motion to open. In its order, the court first noted
    the sale of the property to a third party. It then stated:
    ‘‘[T]he defendant has failed to file any affidavit indicat-
    ing that it did not receive notice or indicating the date
    on which it did receive notice.6 Also denied for the
    reasons set forth in the plaintiff’s objections . . . . The
    plaintiff complied with the service and notice require-
    ments.’’ (Footnote added.) The court subsequently
    denied without comment the defendant’s motion to
    reargue and reconsider the denial of the motion to open.
    This appeal followed.7
    The defendant claims that the court improperly
    denied its motions because (1) the plaintiff’s alleged
    failure to comply with notice requirements in the court’s
    uniform foreclosure standing orders and Practice Book
    § 17-22 meant title never passed to plaintiff following
    the running of the law day; (2) the court’s finding that
    the plaintiff complied with all notice requirements was
    clearly erroneous; (3) the court violated the defendant’s
    right to due process by failing to hold a hearing on the
    motion to open; and (4) the court abused its discretion
    by summarily denying the defendant’s motion to rear-
    gue/reconsider the denial of the motion to open. We
    conclude, for the reasons that follow, that the court
    properly denied the defendant’s motions in accordance
    with General Statutes § 49-15.
    ‘‘The relevant standard of review is well established.
    Whether proceeding under the common law or a statute,
    the action of a trial court in granting or refusing an
    application to open a judgment is, generally, within the
    judicial discretion of such court, and its action will not
    be disturbed on appeal unless it clearly appears that
    the trial court has abused its discretion. . . . The trial
    court’s findings of fact, by contrast, are subject to the
    clearly erroneous standard of review.’’ (Citations omit-
    ted; internal quotation marks omitted.) U.S. Bank
    National Assn. v. Rothermel, 
    339 Conn. 366
    , 381–82,
    
    260 A.3d 1187
     (2021).
    As our Supreme Court has stated, ‘‘[t]he law govern-
    ing strict foreclosure lies at the crossroads between the
    equitable remedies provided by the judiciary and the
    statutory remedies provided by the legislature.’’ New
    Milford Savings Bank v. Jajer, 
    244 Conn. 251
    , 256, 
    708 A.2d 1378
     (1998). Particularly relevant to the present
    appeal is § 49-15, which places express statutory limits
    on the discretionary power of the Superior Court to
    open a judgment of strict foreclosure once law days
    have passed.
    Section 49-15 (a) provides in relevant part: ‘‘(1) Any
    judgment foreclosing the title to real estate by strict
    foreclosure may, at the discretion of the court rendering
    the judgment, upon the written motion of any person
    having an interest in the judgment and for cause shown,
    be opened and modified, notwithstanding the limitation
    imposed by section 52-212a, upon such terms as to
    costs as the court deems reasonable, provided no such
    judgment shall be opened after the title has become
    absolute in any encumbrancer except as provided in
    subdivision (2) of this subsection.
    ‘‘(2) Any judgment foreclosing the title to real estate
    by strict foreclosure may be opened after title has
    become absolute in any encumbrancer upon agreement
    of each party to the foreclosure action who filed an
    appearance in the action and any person who acquired
    an interest in the real estate after title became absolute
    in any encumbrancer, provided (A) such judgment may
    not be opened more than four months after the date
    such judgment was entered or more than thirty days
    after title became absolute in any encumbrancer, which-
    ever is later, and (B) the rights and interests of each
    party, regardless of whether the party filed an appear-
    ance in the action, and any person who acquired an
    interest in the real estate after title became absolute in
    any encumbrancer, are restored to the status that
    existed on the date the judgment was entered.’’ (Empha-
    sis added.)
    The defendant’s motion to open in the present case
    primarily was predicated on its claim that the plaintiff
    falsely had certified its compliance with the terms of
    the court’s standing orders. The defendant also heavily
    relied on this court’s opinion in Wells Fargo Bank, N.A.
    v. Melahn, 
    148 Conn. App. 1
    , 
    85 A.3d 1
     (2014), as sup-
    porting its argument that the trial court should have
    exercised its equitable powers to open the judgment,
    in contravention of § 49-15, even though title had vested
    absolutely in the plaintiff.
    In Melahn, the plaintiff had failed to give proper
    notice to the nonappearing defendants by regular and
    certified mail in accordance with the court’s standing
    orders; see id., 4–5; which requires all foreclosure plain-
    tiffs to send a letter detailing the terms of the judgment
    rendered to any nonappearing defendant owners within
    ten days following the entry of a judgment of strict
    foreclosure. Those standing orders further provide that
    a plaintiff cannot file a certificate of foreclosure on the
    relevant land records until it has provided the court
    with proof that the aforementioned letter has been
    mailed. The plaintiff in Melahn did not mail its notice
    of the judgment until four days before the law days
    were set to run and notice was not actually received
    by the defendant until the actual law day. Id., 4. Further-
    more, although the plaintiff in Melahn certified its com-
    pliance with the court, the notice that it sent did not
    contain all of the information required under the stand-
    ing orders. Id., 4–5. This court reasoned that these defi-
    ciencies represented the type of ‘‘rare and extreme’’
    case in which equity will permit a court to provide relief
    in response to ‘‘an egregious mistake’’ on the basis of
    ‘‘the unusual specific facts and circumstances . . .
    including the omissions and falsification by the plaintiff
    constituting its noncompliance with the strict foreclo-
    sure judgment of the court . . . .’’ (Internal quotation
    marks omitted.) Id., 3, 11–12. Under those particular
    circumstances, and because no fault could be attributed
    to the defendant, this court concluded that the trial
    court had authority to open the judgment of strict fore-
    closure despite § 49-15’s prohibition against doing so
    after law days have passed and title has become abso-
    lute in any encumbrancer. See id., 12–13; see also Gen-
    eral Statutes § 49-15.
    More recently, in U.S. Bank National Assn. v. Rother-
    mel, supra, 
    339 Conn. 366
    , our Supreme Court reaf-
    firmed the basic principle that at least some equitable
    claims could be raised after title had passed in a foreclo-
    sure matter as a basis for opening the judgment, but
    only in ‘‘rare and exceptional cases.’’ 
    Id., 377
    . It stated
    that the exceptions that might justify equitable interfer-
    ence are limited and must be determined on a case-
    by-case basis.8 See 
    id., 376, 379 n.11
    . Specifically, our
    Supreme Court cautioned: ‘‘[T]he jurisdictional conclu-
    sion reached in the present appeal should not be taken
    as an invitation for parties in strict foreclosure proceed-
    ings to repackage motions to open the judgment filed
    after the passage of the law days in a manner that
    superficially invokes the inherent powers underlying
    [New Milford Savings Bank v. Jajer, supra, 
    244 Conn. 251
    ] or Melahn. Exceptions to the general rule against
    postvesting motions to open judgments of strict foreclo-
    sure are, in fact, rare and exceptional. A bare assertion
    that equity requires such relief is insufficient; as in the
    present case, the party seeking to invoke the trial court’s
    continuing jurisdiction must base their motion to open
    on particularized factual allegations that could support
    a claim cognizable in equity. Trial courts may, under
    existing case law, grant motions to dismiss pursuant to
    § 49-15 in cases in which a claim raised in a postvesting
    motion to open fails to present colorable grounds for
    equitable relief under these limited exceptions, and
    appellate courts may continue to summarily dismiss
    appeals taken from those rulings. We note that such a
    dismissal in the Appellate Court would occur only after
    the appellant has been given the opportunity to submit
    a response to an appellee’s motion to dismiss or to
    present argument giving reasons why the case should
    not be dismissed in response to the court’s own
    motion.’’ (Emphasis added.) U.S. Bank National Assn.
    v. Rothermel, supra, 379 n.11.
    The present case is readily distinguishable from Mel-
    ahn, and, like in Rothermel, we do not view the present
    case as raising the type of rare and extreme circum-
    stances that would justify departing from the statutory
    mandate set forth in § 49-15. See id., 384. On the basis
    of our review of the facts and procedural history of this
    case, we conclude that the trial court correctly denied
    the motion to open because the particularized factual
    allegations did not justify granting the defendant the
    extraordinary equitable relief it sought. The defendant
    raised no argument that it improperly had been
    defaulted for failure to appear or that the trial court’s
    judgment of strict foreclosure should be opened on the
    ground that the court lacked personal jurisdiction over
    it due to improper service of process. The record dis-
    closes no nefarious conduct on the part of the plaintiff
    that could warrant opening the judgment at such a late
    date, particularly when title to the subject property has
    already passed to a nonparty purchaser. The defendant
    raises an immaterial challenge to the content of the
    notice sent by the plaintiff, and it cannot claim that the
    notice was not timely mailed by the plaintiff. Accord-
    ingly, none of the defects identified by the court in
    Melahn as a basis for its decision to open the judgment
    in that case is present here.
    Although the defendant asserts that it never received
    the notices sent by the plaintiff, this failure is not fairly
    attributable to the plaintiff but to the defendant’s appar-
    ent failure to update its mailing address on file with
    the Secretary of the State. In short, we reject the defen-
    dant’s claim that the court abused its discretion by
    denying its postjudgment motion to open because the
    defendant has failed to overcome the significant hurdle
    of alleging factual allegations necessary to avoid the
    statutory prohibition set forth in § 49-15. Because there
    was no error in the court’s ruling, we also conclude
    that the court did not abuse its discretion in denying
    the defendant’s motion to reargue/reconsider.
    The judgment is affirmed.
    In this opinion the other judges concurred.
    1
    Practice Book § 17-22 provides: ‘‘A notice of every nonsuit for failure
    to enter an appearance or judgment after default for failure to enter an
    appearance, which notice includes the terms of the judgment, shall be sent
    by mail or electronic delivery within ten days of the entry of judgment by
    counsel of the prevailing party to the party against whom it is directed and
    a copy of such notice shall be filed with the clerk’s office. Proof of service
    shall be in accordance with [Practice Book §] 10-14.’’
    Section D of the Superior Court Standing Orders JD-CV-104 provides:
    ‘‘Within [ten] days following the entry of judgment of strict foreclosure, the
    plaintiff must send a letter by certified mail, return receipt requested, and
    by regular mail, to all non-appearing defendant owners of the equity and a
    copy of the notice must be sent to the clerk’s office. The letter must contain
    the following information: a.) the letter is being sent by order of the Superior
    Court; b.) the terms of the judgment of strict foreclosure; c.) non-appearing
    defendant owner(s) of equity risk the loss of the property if they fail to take
    steps to protect their interest in the property on or before the defendant
    owners’ law day; d.) non-appearing defendant owner(s) should either file
    an individual appearance or have counsel file an appearance in order to
    protect their interest in the equity. The plaintiff must file the return receipt
    with the Court. THE PLAINTIFF MUST NOT FILE A CERTIFICATE OF
    FORECLOSURE ON THE LAND RECORDS BEFORE PROOF OF MAILING
    HAS BEEN FILED WITH THE COURT.’’ (Emphasis in original.)
    2
    Although the complaint states that the mortgage at issue was executed
    by an Elberta McCormack, this appears to be a drafting error. McCormack’s
    name does not appear on the mortgage or any other relevant document. A
    copy of the mortgage was attached to the complaint in the prior action and
    shows that the mortgagor was REI.
    3
    General Statutes § 49-30 provides: ‘‘When a mortgage or lien on real
    estate has been foreclosed and one or more parties owning any interest in
    or holding an encumbrance on such real estate subsequent or subordinate
    to such mortgage or lien has been omitted or has not been foreclosed of
    such interest or encumbrance because of improper service of process or
    for any other reason, all other parties foreclosed by the foreclosure judgment
    shall be bound thereby as fully as if no such omission or defect had occurred
    and shall not retain any equity or right to redeem such foreclosed real estate.
    Such omission or failure to properly foreclose such party or parties may
    be completely cured and cleared by deed or foreclosure or other proper
    legal proceedings to which the only necessary parties shall be the party
    acquiring such foreclosure title, or his successor in title, and the party or
    parties thus not foreclosed, or their respective successors in title.’’
    4
    The court also found that the debt as of the judgment date was $244,478.09
    and that the fair market value of the property was $150,000.
    5
    ‘‘In Connecticut, a mortgagee has legal title to the mortgaged property
    and the mortgagor has equitable title, also called the equity of redemption.
    . . . The equity of redemption gives the mortgagor the right to redeem
    the legal title previously conveyed by performing whatever conditions are
    specified in the mortgage, the most important of which is usually the payment
    of money. . . . Under our law, an action for strict foreclosure is brought
    by a mortgagee who, holding legal title, seeks not to enforce a forfeiture
    but rather to foreclose an equity of redemption unless the mortgagor satisfies
    the debt on or before his law day. . . . Accordingly, [if] a foreclosure decree
    has become absolute by the passing of the law days, the outstanding rights
    of redemption have been cut off and the title has become unconditional in
    the plaintiff, with a consequent and accompanying right to possession. The
    qualified title which the plaintiff had previously held under his mortgage
    had become an absolute one.’’ (Citation omitted; internal quotation marks
    omitted.) Sovereign Bank v. Licata, 
    178 Conn. App. 82
    , 97, 
    172 A.3d 1263
    (2017).
    6
    It is not clear from the court’s statement whether the court meant that
    no affidavit was attached to the motion or only that the attached affidavit
    lacked the specific information identified by the court. In either instance,
    we agree with the defendant that the court’s statement is belied by the
    record. As previously indicated, the defendant attached a supporting affidavit
    to its motion to open. The defendant averred through its managing member
    that ‘‘[a]t no time subsequent to September 23, 2019 was [any correspon-
    dence] detailing the notice of judgment in the above captioned matter
    received by the [defendant] as certified or regular mail’’ and that ‘‘[t]he
    terms of the judgment . . . only became known after title had arguably
    passed to the [plaintiff].’’ Thus, the defendant both provided the court with
    an affidavit and indicated in that affidavit that it had not received notice of
    the judgment. Nevertheless, we are convinced that this error by the court
    was harmless because even if the court had acknowledged the affidavit and
    the defendant’s assertion that it did not receive notice, the facts averred in
    the affidavit do not establish that this is the type of ‘‘rare and exceptional’’
    case warranting the extraordinary relief sought by the defendant. See U.S.
    Bank National Assn. v. Rothermel, 
    339 Conn. 366
    , 377, 
    260 A.3d 1187
     (2021).
    7
    On September 7, 2021, this court ordered the parties to file supplemental
    briefs addressing the applicability to the present appeal of our Supreme
    Court’s decision in U.S. Bank National Assn. v. Rothermel, 
    339 Conn. 366
    ,
    
    260 A.3d 1187
     (2021), which was released on June 23, 2021, after the parties
    had filed their principal briefs.
    8
    Although the court in Rothermel cited to Cavallo v. Derby Savings Bank,
    
    188 Conn. 281
    , 
    449 A.2d 986
     (1982), for the proposition that ‘‘[f]raud, accident,
    mistake, and surprise are recognized grounds for equitable interference’’;
    (internal quotation marks omitted) 
    id., 285
    ; the court did not provide any
    additional guidance regarding what might qualify in the future as a rare and
    exceptional case. See U.S. Bank National Assn. v. Rothermel, supra, 
    339 Conn. 379
    .