Bank of Boston Connecticut v. Moniz

• Decision Date: 02 December 1997
• Docket Number: No. 16792,16792
• Citation: 702 A.2d 655,47 Conn. App. 234
• Court: Connecticut Court of Appeals
• Parties: BANK OF BOSTON CONNECTICUT v. Joseph A. MONIZ et al.

Page 655

702 A.2d 655

47 Conn.App. 234

BANK OF BOSTON CONNECTICUT v.Joseph A. MONIZ et al.

No. 16792.

Appellate Court of Connecticut.

Argued Sept. 25, 1997.

Decided Dec. 2, 1997.

Richard P. Weinstein, West Hartford, with whom, on the brief, was Nathan Shatz, for appellants(named defendant et al.).

Patrick Crook, Meriden, for appellee(plaintiff).

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

FRANCIS X. HENNESSY, Judge.

The defendantsJoseph A. Moniz and Julie A. Moniz¹ appeal from a judgment of strict foreclosure rendered, after a trial to the court, for the plaintiff, Bank of Boston Connecticut (bank).The defendants claim that (1)the trial court improperly relied solely on an affidavit of debt without conducting an evidentiary hearing when the defendants had filed a disclosure of defense challenging the amount and calculation of the debt, (2) the affidavit relied on by the trial court was insufficient to support the judgment, and (3) the appraisal based solely on an exterior inspection was insufficient to determine fair market value of the subject property.We affirm the trial court's judgment.

The following facts are relevant to this appeal.On January 23, 1996, the bank commenced an action to foreclose a mortgage granted by the defendants on certain real property to secure a $550,000 fixed rate promissory note.On June 10, 1996, the bank filed a demand for disclosure of defense.On June 17, 1996, the defendants filed a disclosure of defense.²Pursuant to Practice Book§ 236, ³ on June 27, 1996, the plaintiff filed a timely motion for default for failure to disclose a defense, which was granted by the trial court on August 12, 1996.

On August 26, 1996, the bank filed a motion for summary judgment solely as to liability.The trial court granted the bank's motion on September 16, 1996.Subsequently, the bank filed a motion for judgment of strict foreclosure on December 12, 1996, which was heard on December 23, 1996.At the hearing, the bank submitted an affidavit of debt to the court stating that the amount of the debt was $647,539.34.That amount represented the face value of the note, payments made, accrued interest, late charges, property taxes, hazard insurance and a property inspection fee.The affidavit of debt listed accrued interest in the amount of $92,681.82 and late charges in the amount of $3820.80.

I

The defendants first claim that the trial court improperly relied solely on the plaintiff's affidavit of debt, without conducting an evidentiary hearing, to determine the amount of the debt.The defendants assert that, because they filed a disclosure of defense indicating that they intended to challenge the amount of the debt, the trial court was required to conduct an evidentiary hearing.Due to a procedural default, we decline to review the challenged actions of the trial court.

On June 17, 1996, the defendants filed an untimely disclosure of defense.Pursuant to Practice Book§ 236, the plaintiff filed a motion for default for failure to disclose a defense within the required time, which was granted by the trial court on August 12, 1996.⁴We note that nothing in the record indicates that the default has been removed.The plaintiff's motion for summary judgment on the issue of liability alone was granted shortly thereafter.

"In order for foreclosure cases to move as swiftly as possible through our court system, it is imperative that a defendant disclose any defenses to the mortgage debt prior to the hearing."Suffield Bank v. Berman, 25 Conn.App. 369, 373, 594 A.2d 493, cert. denied, 220 Conn. 913, 914, 597 A.2d 339, 340(1991)."A default admits the material facts that constitute a cause of action ... and entry of default, when appropriately made, conclusively determines the liability of a defendant.Ratner v. Willametz, 9 Conn.App. 565, 579, 520 A.2d 621(1987).(Citations omitted.)Skyler Limited Partnership v. S.P. Douthett & Co., 18 Conn.App. 245, 253, 557 A.2d 927(1989)."(Internal quotation marks omitted.)Voluntown v. Rytman, 27 Conn.App. 549, 557, 607 A.2d 896, cert. denied, 223 Conn. 913, 614 A.2d 831(1992).

"Where no defense as to the amount of the mortgage debt is interposed in a foreclosure case, the amount due the plaintiff may be proved by an affidavit of debt.Practice Book§ 527;Connecticut National Bank v. N.E. Owen II, Inc., 22 Conn.App. 468, 472, 578 A.2d 655(1990)."(Emphasis added.)Suffield Bank v. Berman, supra, 25 Conn.App. at 373, 594 A.2d 493.The trial court ruled that the filing of the disclosure of defense was untimely.The defendant never challenged that conclusion nor attempted to remove the default through a motion to open default pursuant to Practice Book§ 376.We are bound by the trial court's determination.Therefore, the defendant is precluded from challenging on appeal the plaintiff's use of an affidavit of debt to the amount due.This court is not raising a new issue, but merely recognizing that a fact relied on the by defendants, a valid disclosure of defense, is not supported by the record.

II

The defendants next claim that the affidavit of debt was insufficient as a matter of law to support a judgment of strict foreclosure.Specifically, the affidavit could not support a judgment of strict foreclosure because (1) there was insufficient evidence to establish the agency relationship between the bank and the affiant and (2) the affidavit was inadmissible hearsay.We disagree.

Pursuant to Practice Book§ 527, the bank filed an affidavit of debt.⁵"In any action to foreclose a mortgage where no defense as to the amount of the mortgage debt is interposed, such debt may be proved by presenting to the court the original note and mortgage, together with the affidavit of the plaintiff or other person familiar with the indebtedness, stating what amount, including interest to the date of the hearing, is due, and that there is no setoff or counterclaim thereto."Practice Book§ 527.The defendants claim that the bank was required to prove the agency relationship between itself and Homeside Lending, Inc.(Homeside), by evidence independent from the affiant's statement.We have frequently emphasized that the words of a statute"are to be given their commonly approved meaning, unless a contrary intent is clearly expressed."(Internal quotation marks omitted.)State v. Smith, 194 Conn. 213, 221, 479 A.2d 814(1984);Harlow v. Planning & Zoning Commission, 194 Conn. 187, 193, 479 A.2d 808(1984).It is clear from the language of the rule that an affidavit of debt may be submitted by "the plaintiff or other person familiar with the indebtedness...."Practice Book§ 527.The existence of an agency relationship is not a prerequisite for a proper affidavit of debt.In the present case, it is clear that the affidavit presented by the plaintiff contained all the information required under the rule.

The defendants also claim that the affidavit of debt was insufficient because the information regarding the amount of debt was hearsay.Although the defendants attempt to garner support for their position in Connecticut case law, the cases cited involve testimony by witnesses at a hearing rather than the use of an affidavit of debt.See generallyNew England Savings Bank v. Bedford Realty Corp., 238 Conn. 745, 680 A.2d 301(1996);Federal Deposit Ins. Corp. v. Keating, 44 Conn.App. 556, 690 A.2d 429(1997);Central Bank v. Colonial Romanelli Associates, 38 Conn.App. 575, 662 A.2d 157(1995).

When a defendant raises a defense concerning the amount of the mortgage debt before the trial court, Practice Book§ 527 is "inapplicable and the general prohibition against hearsay evidence preclude[s] the use of an affidavit."Burritt Mutual Savings Bank of New Britain v. Tucker, 183 Conn. 369, 375, 439 A.2d 396(1981).That is not the situation here."Where no defense as to the amount of the mortgage debt is interposed in a foreclosure case, the amount due the plaintiff may be proved by an affidavit of debt.Practice Book§ 527;Connecticut National Bank v. N.E. Owen II, Inc., [supra, 22 Conn.App. at 472, 578 A.2d 655]."Suffield Bank v. Berman, supra, 25 Conn.App. at 373, 594 A.2d 493.The trial court properly relied on the plaintiff's affidavit of debt.

III

Finally, the defendants claim that an appraisal of the mortgaged property, based solely on an exterior inspection, cannot provide a sufficient basis for a determination of fair market value in a strict foreclosure action.We disagree.

Certain additional facts are necessary for our resolution of this claim.At the hearing to determine the fair market value of the property, the bank presented an appraisal of the subject property, based on an exterior inspection only, which estimated the fair market value of the property to be $551,000.The bank waived its right to rely on an interior inspection to increase the amount of any deficiency judgment.The defendants objected, claiming that, without an interior inspection, the court did not have a reasonable basis on which to determine the fair market value of the property.

"In a case such as this, the determination of value is a major factor in the decision whether to allow a foreclosure by sale rather than a strict foreclosure.If the appraised value of the property exceeds the debt, a foreclosure by sale might offer some relief to subsequent encumbrancers.In a foreclosure proceeding the trial court must exercise its discretion and equitable powers with fairness not only to the foreclosing mortgagee, but also to subsequent encumbrancers and the owner.Fidelity Trust Co. v. Irick, 206 Conn. 484, 538 A.2d 1027(1988);see alsoConnecticut Savings Bank v. Burger, 23 Conn.App. 192, 579 A.2d 1097(1990)."Farmers & Mechanics Bank v. Arbucci, 24 Conn.App. 486, 487-88, 589 A.2d 14, cert. denied, 219 Conn. 907, 593 A.2d 133(1991).

In the present case, the bank presented an appraisal of the property based solely on an exterior inspection.Furthermore, the...