Northeast Sav., F.A. v. Scherban, 16705

• Decision Date: 02 December 1997
• Docket Number: No. 16705,16705
• Citation: 702 A.2d 659,47 Conn.App. 225
• Court: Connecticut Court of Appeals
• Parties: NORTHEAST SAVINGS, F.A. v. Jack S. SCHERBAN et al.

Page 659

702 A.2d 659

47 Conn.App. 225

NORTHEAST SAVINGS, F.A. v. Jack S. SCHERBAN et al.

No. 16705.

Appellate Court of Connecticut.

Argued Sept. 18, 1997.

Decided Dec. 2, 1997.

M. Dean Montgomery, Greenwich, for appellants (named defendant et al.).

Elaine M. Scanlon, Shelton, for appellee (plaintiff).

Before FOTI, SCHALLER and FRANCIS X. HENNESSY, JJ.

FRANCIS X. HENNESSY, Judge.

The defendants Jack Scherban and Andrea Scherban ¹ appeal from the judgment of strict foreclosure rendered by the trial court for the plaintiff, Northeast Savings. The defendants raise the following issues on appeal: (1) the plaintiff failed to provide sufficient notice of the acceleration of the debt; (2) the trial court improperly held a supplemental hearing and issued a judgment more than 120 days after the original close of evidence; (3) the plaintiff violated General Statutes § 49-6d; and (4) the plaintiff violated the Truth in Lending Act, 15 U.S.C. § 1601. We affirm the judgment of the trial court.

The following facts are relevant to this appeal. On May 18, 1990, the defendants signed a $400,000 promissory note payable to the plaintiff secured with a mortgage deed executed by Andrea Scherban, owner of the couple's residence.

On June 1, 1993, the plaintiff sent the defendants a letter notifying them that the note was in default and that failure to cure the deficiency within thirty days might result in the acceleration of the debt. On July 2, 1993, the plaintiff sent the defendants a second letter stating that the note continued to be in default and giving them thirty days to cure the default. On July 22, 1993, the defendants were again notified that their account was in default and that, unless they remitted the full amount past due by August 2, 1993, foreclosure proceedings would commence. On September 27, 1993, the plaintiff began this foreclosure action.

I

The defendants' first claim on appeal is that the plaintiff failed to provide sufficient notice of the acceleration of the debt. The defendants claim that as a result of the plaintiff's failure to notify them properly, a condition precedent to a foreclosure action, the judgment of foreclosure is void. We disagree.

In essence, the defendants' first claim is a dispute over the meaning of the notice provisions contained in the note. The operative agreement between the parties provided that "the lender shall give notice to borrower prior to acceleration ... which shall specify the default, the action required to cure the default, a date not less than thirty days within which to cure the default and that failure to cure the default may result in acceleration...." The trial court found that, under that provision, the parties "agreed that ... the mortgagee was obliged to notify the defendants as borrowers that the lender was not providing more than thirty days from the date of its notice for the defendants to cure the default; or otherwise the lending bank might exercise its option to accelerate."

The use of "shall" in the note creates a condition precedent that must be satisfied prior to foreclosure. See Citicorp Mortgage, Inc. v. Porto, 41 Conn.App. 598, 602, 677 A.2d 10 (1996). The condition precedent under the note is the notice of the default, and it is clear that the defendants were timely notified of the default. Furthermore, the first notice of default stated that failure to cure might result in an acceleration of the debt, language similar to that contained within the note itself. We conclude that the note did not require that notice regarding the acceleration of the debt be a document separate from the notice of default.

We further conclude that the notice of default satisfied the notice requirement contained in the note because it notified the defendants of the default and the possibility of acceleration. The note provision required only that the plaintiff give notice of the default and notice that failure to cure the default "may result in acceleration." Therefore, the contract provisions regarding notice were properly satisfied and the judgment is proper.

II

The defendants' next two claims on appeal are interrelated. First, the defendants claim that the trial court abused its discretion in scheduling a supplemental hearing. Second, the defendants claim that the trial court's judgment was issued more than 120 days after the close of evidence and, therefore, the court lacked subject matter jurisdiction to determine the merits of the case. We disagree with both claims.

The following additional facts are necessary to our resolution of these issues. A hearing was held before the trial court on July 11, 1995, at which evidence of the debt and special defenses were presented by the plaintiff and defendants, respectively. Both parties were ordered by the court to file simultaneous posttrial briefs. The defendants' posttrial brief contained a new argument, not presented at trial, alleging that the plaintiff had failed to notify them properly of the original default. ² In order to respond, the plaintiff requested permission to introduce the letters as exhibits. The defendants objected, asserting that they had never received these documents, and requested that "the court reopen the trial of this matter so the Plaintiff can offer said document in proper form, subject to Defendants' right of cross-examination." The defendants' request for a hearing was granted.

A

A hearing was held on June 6, 1996, at which time the plaintiff introduced the letters into evidence through a bank manager. The defendants conducted extensive cross-examination of the witness. No additional evidence was presented by either side. The last briefs in this case were filed on June 26, 1996. On September 25, 1996, the trial court rendered judgment of strict foreclosure.

The first issue before us is whether the trial court abused its discretion when it reopened the evidentiary phase of the proceedings. " 'In any ordinary situation if a trial court feels that, by inadvertence or mistake, there has been a failure to introduce available evidence upon a material issue in the case of such a nature that in its absence there is a serious danger of a miscarriage of justice, it may properly permit that evidence to be introduced at any time before the case has been decided.' Hauser v. Fairfield, 126 Conn. 240, 242, 10 A.2d 689 (1940). 'Whether or not a trial court will permit further evidence to be offered after the close of testimony in a case is a matter resting in the sound discretion of the court.' Toffolon v. Avon, 173 Conn. 525, 537, 378 A.2d 580 (1977)." Wood v. Bridgeport, 216 Conn. 604, 606, 583 A.2d 124 (1990); see also State v. Holmquist, 173 Conn. 140, 152, 376 A.2d 1111, cert. denied, 434 U.S. 906, 98 S.Ct. 306, 54 L.Ed.2d 193 (1977); Poly-Pak Corp. of America v. Barrett, 1 Conn.App. 99, 104, 468 A.2d 1260 (1983). "The term discretion means a legal discretion to be exercised in conformity with the spirit of the law and in a manner to subserve and not to impede or defeat the ends of substantial justice." (Internal quotation marks omitted.) Buckley v. Warden, 181 Conn. 286, 290, 435 A.2d 348 (1980).

Here, the plaintiff's failure to include the correspondence in the bank file was a mistake. Further, the plaintiff could have been substantially prejudiced if it had been prevented from addressing the notice issue raised in the defendants' posttrial brief. We conclude that because the defendants raised this issue, the trial court properly exercised its discretion to allow the plaintiff to introduce the additional evidence. See Farmers & Mechanics Savings Bank v. Sullivan, 216 Conn. 341, 352-54, 579 A.2d 1054 (1990) (foreclosure proceedings equitable).

B

The defendants next claim that the judgment was rendered in violation of General Statutes § 51-183b. ³ The defendants contend that for purposes of § 51-183b, the operative completion date in this civil case was January 16, 1996, thereby making the September 25, 1996 ruling more than 120 days from the close of evidence. We disagree.

Section 51-183b ... "applies to all civil causes, and unless the parties waive its provisions, a trial court must render its decision within 120 days of the completion of the trial, which ends with the filing of the briefs when requested. Frank v. Streeter, [192 Conn. 601, 472 A.2d 1281 (1984) ]." Sanchez v. Prestia, 29 Conn.App. 157, 161, 612 A.2d 824, cert. denied, 224 Conn. 913, 617 A.2d 167 (1992). "In determining that 'the completion date' includes the filing of briefs, the trial court held that briefing of the legal issues was a component of the judicial gathering of the materials necessary to a well-reasoned decision. In related contexts, 'completion' has been held to encompass the availability of all the elements directly or indirectly to be considered in the rendering of a decision. See Bankamerica Corporation v. Board of Governors, 596 F.2d 1368, 1378 (9th Cir.1979); Lloyd v. Illinois Regional Transportation Authority, 548 F.Supp. 575, 590 (N.D.Ill.1982)." Frank v. Streeter, supra, at 604, 472 A.2d 1281.

The original trial was held on July 11, 1995. The posttrial briefs were submitted on or before September 26, 1995. The arguments presented within the defendants' brief necessitated the introduction of additional evidence. Accordingly, the trial court scheduled another hearing on June 6, 1996. Briefs regarding the supplemental hearing were filed on June 26, 1996, the completion date of this...