Am. Home Mortg. Servicing, Inc. v. Reilly

• Decision Date: 12 May 2015
• Docket Number: No. 35584.,35584.
• Court: Connecticut Court of Appeals
• Parties: AMERICAN HOME MORTGAGE SERVICING, INC. v. Peter A. REILLY et al.

157 Conn.App. 127

117 A.3d 500

AMERICAN HOME MORTGAGE SERVICING, INC.

v.Peter A. REILLY et al.

No. 35584.

Appellate Court of Connecticut.

Argued Jan. 9, 2015.

Decided May 12, 2015.

Thomas P. Willcutts, Hartford, for the appellant (defendant Geoffrey N. Madow).

Marissa I. Delinks, for the appellee (substitute plaintiff).

KELLER, MULLINS and BEAR, Js.

Opinion

MULLINS, J.

In this residential foreclosure action, the defendant Geoffrey N. Madow,¹ appeals from the judgment of foreclosure by sale rendered by the trial court in favor of the substitute plaintiff, Homeward Residential, Inc.² On appeal, the defendant claims that the court improperly granted the plaintiff's motion for summary judgment as to liability on the foreclosure complaint. We affirm the judgment of the trial court.

The following facts and procedural history are relevant to our resolution of the present appeal. The plaintiff initiated this foreclosure action on August 9, 2011, and made the following allegations in its complaint. On December 6, 1996, Arthur A. Madow, Marion Madow, and Meyer Madow (borrowers) executed a promissory note in the principal amount of $120,900 (note), payable to Columbia National, Inc. (Columbia). The note was secured by a mortgage deed on a parcel of land located at 7 Weigold Road in Tolland (property) that the borrowers and Peter A. Reilly executed to Columbia. After the note was executed, Columbia assigned the mortgage to the plaintiff. The plaintiff is the holder of the note and mortgage. The defendant became the property's owner through a warranty deed that was recorded in the Tolland land records on June 29, 2011.³ The note went into default, and the plaintiff, as the holder of the mortgage and note, elected to accelerate the balance due and to foreclose on the mortgage securing the note.

On August 13, 2012, the plaintiff moved for summary judgment as to liability only on the ground that it had established a prima facie case for foreclosure, and that there were no genuine issues of material fact. In support of its motion, the plaintiff filed a memorandum of law and an affidavit of its assistant secretary, Christine B. Coffron. In her affidavit, Coffron attested that “[p]rior to the commencement of this action, Columbia endorsed the [n]ote in blank and provided it to [the] [p]laintiff. [The] [p]laintiff was the holder of the [n]ote prior to the commencement of this action.” Attached to Coffron's affidavit were, inter alia, copies of the note endorsed in blank, the mortgage, the assignment of the mortgage to the plaintiff,⁴ and the notice of default.⁵

The defendant filed a memorandum of law in opposition to the motion for summary judgment on November 26, 2012, in which he argued that the plaintiff “does not have the legal right to ... foreclose upon the property” because the plaintiff merely was the holder of the note, but did not own the note. The defendant attached to his memorandum portions of Coffron's certified deposition transcript, in which she averred that the Federal National Mortgage Association (Fannie Mae) owned the note.

The plaintiff filed a reply memorandum of law on December 17, 2012, in which it acknowledged that the note was owned by Fannie Mae, but claimed that the plaintiff “was not only the holder of the note, but also obligated to prosecute the foreclosure on Fannie Mae's behalf.”⁶

Attached to the plaintiff's reply memorandum was the complete transcript of Coffron's deposition, an affidavit by an employee of the plaintiff, and an uncertified portion of Fannie Mae's 2012 Servicing Guide.

The court, Sferrazza, J., heard oral argument on the plaintiff's motion for summary judgment as to liability on January 22, 2013. After oral argument, the court stated the following: “I understand the question concerning who presently might be the owner of the note might be an issue, but I don't see that as ... depriving this plaintiff of the right to enforce the note, because either [the plaintiff has] ... that right ... from the original lender [Columbia] by virtue of the language of the note, or they have it from Fannie Mae. Whether Fannie Mae is the owner or is not the owner ... is really a red herring.” The court then, in an oral decision from the bench, granted the plaintiff's motion for summary judgment as to liability. Thereafter, the court rendered a judgment of foreclosure by sale. This appeal followed. Additional facts and procedural history will be set forth as necessary.

On appeal, the defendant claims that the court improperly granted the plaintiff's motion for summary judgment as to liability. He argues that disputed factual issues remain as to whether the plaintiff was authorized to foreclose on the mortgage given that the plaintiff was not the owner of the note. The defendant further claims that the plaintiff has not demonstrated that it had the authority from the note's owner to prosecute this foreclosure. Having failed to demonstrate such authority, the defendant contends, the trial court's decision granting summary judgment must be reversed. We are not persuaded.

“On appeal, [w]e must decide whether the trial court erred in determining that there was no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.... Because the trial court rendered judgment for the [plaintiff] as a matter of law, our review is plenary and we must decide whether the [trial court's] conclusions are legally and logically correct and find support in the facts that appear on the record.” (Internal quotation marks omitted.) Wells Fargo Bank, N.A. v. Strong, 149 Conn.App. 384, 390–91, 89 A.3d 392, cert. denied, 312 Conn. 923, 94 A.3d 1202 (2014).

“[General Statutes §] 49–17⁷ codifies the well established common-law principle that the mortgage follows the note, pursuant to which only the rightful owner of the note has the right to enforce the mortgage.” (Footnote added.) RMS Residential Properties, LLC v. Miller, 303 Conn. 224, 230, 32 A.3d 307 (2011). Therefore, “[a] mortgagee that seeks summary judgment in a foreclosure action has the evidentiary burden of showing that there is no genuine issue of material fact as to any of the prima facie elements, including that it is the owner of the debt. Appellate courts in this state have held that [the evidentiary burden of establishing ownership of the note] is satisfied when the mortgagee includes in its submissions to the court a sworn affidavit averring that the mortgagee is the holder of the promissory note in question at the time it commenced the action.”GMAC Mortgage, LLC v. Ford, 144 Conn.App. 165, 177, 73 A.3d 742 (2013).

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 rebutted, 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 circumstances impeaching its validity. The production of the note [endorsed in blank] 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.”⁸ (Internal quotation marks omitted.) RMS Residential Properties, LLC v. Miller, supra, 303 Conn. at 231–32, 32 A.3d 307. If the defendant rebuts the presumption that the plaintiff was the owner of the debt at the time that the action commenced, then “the burden would shift back to the plaintiff to demonstrate that the owner has vested it with the right to receive the money secured by the note.” J.E. Robert Co. v. Signature Properties, LLC, 309 Conn. 307, 325 n. 18, 71 A.3d 492 (2013).

Here, there is no dispute that the plaintiff possessed the note endorsed in blank before initiating this foreclosure action. Specifically, the plaintiff presented to the court the original note, which was endorsed in blank, and Coffron's affidavit wherein she attested that the plaintiff was the holder of the note endorsed in blank prior to the commencement of this action. This created a presumption that the plaintiff, as the note holder, was also the owner of the note and could enforce the debt. See RMS Residential Properties, LLC v. Miller, supra, 303 Conn. at 231–32, 32 A.3d 307. These documents also satisfied the plaintiff's prima facie case. Id., at 232, 32 A.3d 307.

In response, the defendant presented portions of Coffron's deposition transcript in which she testified that Fannie Mae owned the note, and not the plaintiff. The plaintiff acknowledged that it, in fact, was not the owner of the note. The defendant, thus, met its burden of rebutting the presumption that the plaintiff owned the note. Nonetheless, that does not end our inquiry. What remains is whether the plaintiff, despite not owning the note, demonstrated that it had the authority to foreclose on the mortgage securing the note. See J.E. Robert Co. v. Signature Properties, LLC, supra, 309 Conn. at 325 n. 18, 71 A.3d 492.

The plaintiff claims that it demonstrated that there is no genuine issue of material fact involving whether it had authorization from the note's owner to bring the present action by presenting to the court the complete transcript of Coffron's deposition, “wherein she testified that the plaintiff is the loan servicer for the subject loan and the plaintiff is authorized by Fannie Mae to enforce the debt.” The defendant contends that Coffron's deposition testimony was not sufficient to establish either that Fannie Mae had an ownership interest in the mortgage, or that the plaintiff was authorized to pursue the present foreclosure action on behalf of Fannie Mae. We conclude that the court properly granted the plaintiff's motion for summary judgment because, whether Fannie Mae or Columbia owned the note, there is no...