Chase Home Fin., LLC v. Scroggin

• Decision Date: 19 December 2017
• Docket Number: AC 39191
• Citation: 176 A.3d 1210,178 Conn.App. 727
• Court: Connecticut Court of Appeals
• Parties: CHASE HOME FINANCE, LLC v. Daniel SCROGGIN

178 Conn.App. 727

176 A.3d 1210

CHASE HOME FINANCE, LLC

v.Daniel SCROGGIN

AC 39191

Appellate Court of Connecticut.

Argued September 12, 2017

Officially released December 19, 2017

Michael J. Habib, with whom, on the brief, was Thomas P. Willcutts, Hartford, for the appellant (named defendant).

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

Keller, Prescott and Bear, Js.

KELLER, J.

The defendant, Daniel J. Scroggin also known as Daniel F. Scroggin also known as Daniel Scroggin, appeals from the judgment of strict foreclosure rendered by the trial court in favor of the substitute plaintiff, AJX Mortgage Trust 1, a Delaware Trust, Wilmington Savings Fund Society, F.S.B., Trustee.¹ The defendant claims that the court improperly granted the plaintiff's motion for judgment of strict foreclosure because (1) the judgment was based upon a default for failure to plead in response to the original complaint, but the plaintiff's predecessor in this action, thereafter, had significantly amended the pleadings and added additional parties to the action, and (2) by operation of General Statutes § 52–121 (a),² he was entitled to, and did, file an answer prior to the hearing on the plaintiff's motion for judgment.³ We agree with the defendant's first claim. Accordingly, we reverse the judgment of the trial court and remand the case to that court for further proceedings.

The relevant procedural history is as follows. In December, 2009, Chase commenced the present foreclosure action against the defendant. In its original one count complaint, Chase alleged, in relevant part, that on July 20, 2007, the defendant executed a promissory note in the amount of $217,500 in favor of Chase Bank USA, N.A., and that the loan was secured by a mortgage of the premises located at 25 Church Street in Portland, which was owned by and in the possession of the defendant. Chase alleged that the mortgage was recorded on the Portland land records, that the mortgage was assigned to it, and that it was the holder of the note and mortgage. Chase alleged that beginning on July 1, 2009, the defendant failed to make installment payments of principal and interest required by the note and that it had exercised its option to declare the entire unpaid balance of the note (in the amount of $214,939.97) due and payable to it. Chase further alleged that several encumbrances of record were prior in right to its mortgage interest, but that no interests were claimed which were subsequent to its mortgage interest. By way of relief, Chase sought, among other things, a foreclosure of the mortgage and the immediate possession of the subject premises.⁴

On June 7, 2010, Chase filed a motion for default for failure to plead. On that same day, Chase filed a motion for judgment of strict foreclosure and a finding that it was entitled to possession of the subject premises. On June 16, 2010, the clerk of the court granted the motion for default but, at that time, the court did not rule on the motion seeking a judgment of strict foreclosure.

On September 8, 2010, Chase filed a request for leave to amend its complaint and attached a proposed amended complaint. The defendant did not object.⁵ The amended complaint consisted of six counts. The first count brought against the defendant sought a foreclosure and generally was consistent with the allegations brought against the defendant in the original one count complaint, except that in the amended complaint, Chase alleged in relevant part: "On the aforementioned piece of property, the following interests are claimed which are subsequent to plaintiff's said mortgage: A mortgage in favor of ... [Bank of America] in the original amount of $100,000, dated 18, 2007, and recorded February 7, 2007 in ... the Portland land records."

The second, third, and fourth counts of the amended complaint were brought against Bank of America.⁶ In these counts, Chase, among other things, raised a claim of equitable subrogation with respect to Bank of America's mortgage interest in the subject property, which, Chase alleged, was recorded prior to its own interest in the property.⁷ In count two, Chase alleged in part that "[the] plaintiff paid off, as proceeds of its mortgage set forth herein, a mortgage prior in right to that of [Bank of America] ... intending to then obtain a first mortgage on the property herein being foreclosed, and, therefore, should be equitably subrogated to the position of that prior mortgage."

In count three, Chase alleged in part: "The plaintiff, by its agent or attorney, received a payoff letter on or about July 23, 2007, and [the defendant] ... executed ... Bank of America's authorization to terminate the line of credit and authorized the payment in full along with the closing of a line of credit under ... Bank of America's mortgage. ... Subsequent thereto ... Bank of America ... made further advances to [the defendant] ... after issuing this payoff letter and, as a result, its mortgage should be equitably subrogated to the interest of the plaintiff's mortgage herein."

In count four, Chase alleged in part: "Bank of America, through its actions in accepting funds after the credit line was ordered closed, has unjustly enriched itself."

Counts five and six of the amended complaint, both of which were directed at the defendant, also are related to Chase's allegations with respect to Bank of America's mortgage interest in the subject property. In count five, Chase alleged in part: "Authorizing the payoff of the mortgage of ... Bank of America, [the defendant] ... continued to obtain further borrowings against said mortgage and, further [un]justly enriched himself, all to [the] plaintiff's loss and damage." In count six, Chase alleged in part: "After authorizing the plaintiff, its agents, and/or attorneys to close the credit line contained in ... [Bank of America's] mortgage, the [defendant] ... continued to obtain further funds pursuant to said credit line, either by fraud or mistake, all to [the] plaintiff's loss and damage."

At no time did the defendant move to set aside the default for failure to plead entered on June 16, 2010. On November 2, 2015, however, the defendant disclosed a defense, stating that he "intend[ed] to challenge the plaintiff's alleged right and standing to foreclose upon the subject mortgage." On the same day, the defendant filed an answer to Chase's original complaint.

The plaintiff did not file a motion for default for failure to plead against the defendant with respect to the amended complaint. On November 24, 2015, however, the plaintiff filed a motion for judgment against the defendant with respect to counts two, three, four, five, and six of the amended complaint. On the same day, the plaintiff moved that the court enter a judgment of strict foreclosure and asked that separate law days be assigned to the defendant, Middconn Federal Credit Union, and Bank of America. Before the court considered the plaintiff's motions, the plaintiff filed an appraisal of the subject property, a foreclosure worksheet, an affidavit of debt, and an affidavit of attorney's fees.

On April 4, 2016, the defendant filed an answer to the plaintiff's amended complaint. In his answer to the amended complaint, the defendant, among other things, admitted portions of the allegations made in the first count and, with respect to other portions of the first count, left the plaintiff to its proof. Also, on April 4, 2016, the defendant filed an objection to the plaintiff's motion for judgment as to count six of the amended complaint and an objection to the plaintiff's motion for judgment of strict foreclosure. On that date, the court held a hearing on the plaintiff's motion for judgment. By order dated April 4, 2016, the court granted the plaintiff's motion for judgment with respect to counts two, three, four, and five of the amended complaint, but did not rule with respect to counts one or six of the amended complaint.

Following the hearing, the plaintiff replied to the defendant's objection to its motion for judgment of strict foreclosure, and the defendant filed a memorandum of law in which he further articulated the reasons underlying his objection to the motion for judgment of strict foreclosure. At a hearing on April 18, 2016, the parties appeared and presented additional arguments. In support of his objection, the defendant argued that (1) after Chase filed its motion for judgment of strict foreclosure in 2010, it filed an amended complaint that substantially changed the nature of the claims and cited in Bank of America so that the plaintiff would be recognized as a first mortgagee; (2) he answered the amended complaint and was not defaulted with respect to the amended complaint; and (3) any delays in the litigation following the default entered in 2010 were occasioned by the plaintiff and its predecessors, who did not act in a timely manner. Essentially, the defendant argued that the plaintiff had not sought or obtained a default against him with respect to the amended complaint. Additionally, the defendant relied on the fact that, pursuant to § 52–121 (a), he had filed a responsive pleading with respect to the amended complaint prior to the hearing on the plaintiff's motion for judgment, and the court should consider it as the operative answer.

The plaintiff argued that because the court did not set aside the default entered in 2010, the defendant's answer and disclosed defense were inoperative. The plaintiff emphasized that at no time did the defendant ask the court to set aside the default and that nearly six years had passed since it had been entered against the defendant. Moreover, the plaintiff argued, any claim that Chase's request to amend its complaint somehow extinguished the default was not persuasive because the defendant did not object to the amended complaint and did not timely replead after it had been filed. Additionally, the plaintiff argued, the amended complaint did not substantially change the...