Bank of N.Y. Mellon v. Mazzeo

• Decision Date: 21 January 2020
• Docket Number: AC 42180
• Citation: 225 A.3d 290,195 Conn. App. 357
• Parties: The BANK OF NEW YORK MELLON, Trustee v. John MAZZEO et al.
• Court: Connecticut Court of Appeals

195 Conn.App. 357

225 A.3d 290

The BANK OF NEW YORK MELLON, Trustee

v.John MAZZEO et al.

AC 42180

Appellate Court of Connecticut.

Argued October 15, 2019

Officially released January 21, 2020

Janine M. Becker, Bridgeport, with whom, on the brief, was Patricia Moore, for the appellants (named defendant et al.).

Benjamin Staskiewicz, Hartford, for the appellee (plaintiff).

Keller, Prescott and Harper, Js.

KELLER, J.

The defendants, John Mazzeo and Linda Mazzeo,¹ appeal from the judgment of foreclosure by sale rendered by the trial court in favor of the plaintiff, The Bank of New York Mellon, formerly known as The Bank of New York, as Trustee for the Certificateholders of CWALT, Inc., Alternative Loan Trust 2005-56, Mortgage Pass-Through Certificates, Series 2005-56. The defendants claim that the plaintiff (1) lacked standing to bring the present action and (2) failed to prove its prima facie case.² We disagree with the defendants' first claim but agree with the defendants' second claim and, accordingly, reverse the judgment of the court.

Following a two day bench trial, the court issued a memorandum of decision setting forth the following findings of fact and procedural history: "On August 17, 2012, the plaintiff ... filed this foreclosure complaint against the defendants .... On November 3, 2014, the defendants filed an answer and special defenses and setoffs.³ ... The matter was tried to the court on April 24 and April 25, 2018, subsequent to which the parties submitted posttrial briefs. Based on the submissions of the parties and the evidence presented at trial, the court makes the following findings.

"The defendant, John Mazzeo, executed an adjustable rate note⁴ dated July 25, 2005, in the amount of $532,000, originally in favor of Countrywide Bank, a division of Treasury Bank, N.A. As of August 10, 2012, the date of the underlying [c]omplaint, the plaintiff was the owner and holder of the underlying note .... The court examined the original underlying documents during the trial. The note was secured by an open end mortgage deed concerning 36 Shady Lane, Monroe, Connecticut which was recorded on the Monroe land records. Bayview Loan Servicing, LLC (Bayview) is the current loan servicer for the plaintiff. Lauren Haberlan, a litigation manager for Bayview, testified extensively concerning Bayview's business records and how those records are made, maintained and verified for accuracy in the ordinary and usual course of business. She testified as to how historical loan servicing records for this loan were obtained, reviewed and audited for accuracy before they were incorporated by Bayview as their own business records.

"Haberlan testified that the note was signed by defendant John Mazzeo and that the note was endorsed in blank. The plaintiff received the original note on September 23, 2005, and sent the note to [the] plaintiff's counsel, on September 19, 2011. The mortgage deed, dated July 25, 2005, was signed by the defendants, John and Linda Mazzeo, and recorded in the Monroe land records. The mortgage deed secured property located at 36 Shady Lane, Monroe, Connecticut. An assignment of mortgage dated August 18, 2011, to the plaintiff also was recorded on the Monroe land records.

"There were a number of prior loan servicers for this loan prior to Bayview.⁵ Bayview was given a limited power of attorney to act on behalf of the plaintiff.

"The defendants were issued written notices of default by one of the prior loan servicers, which were sent to the defendants at the property address. Written notices of default were sent to the defendants on January 27 and February 16, 2010. Under the terms of the mortgage deed, notice to one borrower is considered notice to all borrowers.

"The plaintiff presented a complete loan history, evidence and backup of the debt, and a demonstrative exhibit detailing the overall debt calculation. All loan charges, fees and calculations constituting the total debt were documented. The parties have stipulated that the fair market value of 36 Shady Lane, Monroe, [Connecticut] is $414,000. The testimony and exhibits presented at trial established a total debt of $892,770.14. The addition of a per diem interest charge of $82.56 from April 24, 2018, to August 27, 2018, will bring the total debt to $903,090.14. The court will allow appraisal fees (three appraisals) in the total amount of $1005 and a statutory title search fee of $225.

"Thus, the plaintiff established a prima facie case for foreclosure. The plaintiff established that it is the owner and holder of the underlying note; that the note is endorsed in blank; that the plaintiff and or its agents have been in possession of the original note since prior to the commencement of this foreclosure action; that the plaintiff is the current mortgagee of record; that the plaintiff issued written notices of default to the defendants; that the defendants failed to cure the underlying default; that the plaintiff issued proper [Emergency Mortgage Assistance Program] notices to the defendants, and that the loan is in default and currently due for the January 1, 2010 mortgage payment. When the defendants failed to cure the default, the plaintiff accelerated the note and began these foreclosure proceedings." (Footnotes added.)

In its decision, the court found no merit in the defendants' special defenses and setoffs. The court rendered a judgment of foreclosure by sale with a sale date to be set by the court upon resolution of the attorney's fees.⁶ This appeal followed. Additional facts and procedural history will be set forth as necessary.

I

The defendants first claim that the plaintiff lacked standing to bring the present action. In particular, the defendants claim that the plaintiff failed to establish that it was the holder of the note at the time it commenced the present action. The plaintiff argues that it had proved its status as holder and, thus, had standing to bring the present action, by virtue of its possession of the note and blank endorsement. We disagree with the defendants and conclude that the plaintiff had standing to bring this action.

The following additional facts are relevant to the disposition of this claim. At trial, the plaintiff's counsel produced the original note for review by opposing counsel and the court.⁷ After the court stated that it had reviewed the original note, the plaintiff's counsel offered for admission into evidence exhibit 7, a copy of the original note, through its witness Lauren Haberlan,⁸ a litigation manager for Bayview, the subservicer for the loan securing the plaintiff's mortgage to the defendants' property. After the court admitted into evidence the copy of the note, Haberlan testified that the signature page of the note contained two endorsements, one of which was an endorsement in blank. Haberlan further testified that the plaintiff was the holder of the note at the commencement of the action, which was August 14, 2012. The plaintiff's counsel also offered for admission into evidence exhibit 8, a document that detailed the routing history for the loan in question. Once the court admitted into evidence exhibit 8, Haberlan testified, consistent with the information set forth in the routing history, that "on [September 23, 2005], the [loan's] collateral documents were with [the plaintiff]."

"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 subject 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.⁹ ... [T]he plaintiff ultimately bears the burden of establishing standing." (Citations omitted; footnote added; internal quotation marks omitted.) Wells Fargo Bank, N.A. v. Strong , 149 Conn. 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 foreclosure 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 determined 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 person¹⁰ 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." (Emphasis omitted; footnote added; internal quotation marks omitted.) Deutsche Bank National Trust Co. v. Bliss , 159 Conn. App. 483, 488–89, 124 A.3d 890, cert. denied, 320 Conn. 903, 127 A.3d 186 (2015), cert. denied, ––– U.S. ––––, 136 S. Ct. 2466, 195 L. Ed. 2d 801 (2016).

"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 commence 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 presumption that [the plainti...