Citibank, N.A. v. Lindland
| Decision Date | 27 September 2011 |
| Docket Number | AC 32723 |
| Court | Connecticut Court of Appeals |
| Parties | CITIBANK, N.A., TRUSTEE (SACO 2007-2) v. DEBRA LINDLAND, EXECUTRIX (ESTATE OF MADYLYN LANDIN) ET AL. |
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All opinions are subject to modification and technical correction prior to official publication in the Connecticut Reports and Connecticut Appellate Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the Connecticut Law Journal and subsequently in the Connecticut Reports or Connecticut Appellate Reports, the latest print version is to be considered authoritative.
The syllabus and procedural history accompanying the opinion as it appears on the Commission on Official Legal Publications Electronic Bulletin Board Service and in the Connecticut Law Journal and bound volumes of official reports are copyrighted by the Secretary of the State, State of Connecticut, and may not be reproduced and distributed without the express written permission of the Commission on Official Legal Publications, Judicial Branch, State of Connecticut.DiPentima, C. J., and Lavine and Schaller, Js.
Argued May 18—officially released September 27, 2011
(Appeal from Superior Court, judicial district of
Middlesex, M. Taylor, J. [motions to join]; Holzberg, J.
[motion to open].)
Peter A. Ventre, for the appellant (plaintiff).
Barbara M. Schellenberg, with whom were David A. Ball and, on the brief, Philip C. Pires, for the appellee (defendant Robert Olsen et al.).
This appeal requires us to determine whether the trial court had the authority to open a judgment of foreclosure by sale after title to the real property had been conveyed to the successful bidder, despite irregularities in the process. The plaintiff, Citibank, N.A., as trustee of SACO 2007-2, appeals from the judgment of the trial court granting a motion to open the judgment of foreclosure by sale filed by Robert Olsen,1 the successful bidder in whom title to the foreclosed property had vested. On appeal, the plaintiff claims that the court improperly (1) opened the judgment of foreclosure because it lacked authority to do so and (2) granted the motions to intervene as party defendants filed by Olsen and 17 Ridge Road, LLC.2 We reverse the judgment of the trial court.
The court, Holzberg, J., conducted an evidentiary hearing on Olsen's motion to open over the course of two days and issued a memorandum of decision dated August 5, 2009. The following facts and procedural history are undisputed and are relevant to the issues in the present appeal. On May 1, 2008, the plaintiff initiated a foreclosure action against Debra Lindland, executrix of the estate of Madlyn Landin (estate); see footnote 1 of this opinion; alleging that the estate had defaulted on a mortgage loan owed to the plaintiff, which was secured by property located at 17 Ridge Road in Cromwell. Importantly, the foreclosure complaint alleged that there was a mortgage prior in right to the plaintiff's mortgage. On July 10, 2008, in support of its motion for a judgment of strict foreclosure, the plaintiff filed with the court a foreclosure worksheet reflecting the absence of any equity in the property. Specifically, the worksheet disclosed: a fair market value of $305,000; the existence of a first mortgage in the amount of $295,200; and a debt arising out of the plaintiff's second mortgage in the amount of $82,615.46.3 The first mortgage was held by IndyMac Federal Bank, FSB (IndyMac), which had initiated a separate foreclosure action on its priority mortgage.
On August 4, 2008, the plaintiff's motion for judgment of strict foreclosure appeared on the short calendar. Judge Holzberg found incorrectly that there was substantial equity in the property justifying a sale4 pursuant to General Statutes § 49-245 et seq. rather than strict foreclosure. Specifically, the court, in its foreclosure orders, found an updated debt of $82,615.46 and a fair market value of $305,000, but did not reference IndyMac's priority debt of $295,200. The court appointed a committee for sale, which proceeded with a sale on October 8, 2008. The committee prepared a notice to bidders that set forth the liens that were prior in right to the plaintiff's lien. The notice referred only to certain municipal taxes and did not mention the IndyMac mortgage or that the purchaser would take the propertysubject to any mortgage. The committee read the notice aloud prior to the commencement of the sale. On the basis of expert testimony presented at the hearing, the court concluded that the cumulative effect of these omissions resulted in a sale that was misleading to potential buyers.6
Olsen was the successful bidder at the sale with a high bid of $216,000. Following the sale, the committee prepared a bond for deed that was executed by Olsen, who delivered a deposit in the amount of $30,500. The deed disclosed only that certain municipal taxes were prior in right to the plaintiff's mortgage. It did not mention the IndyMac mortgage. The court, Jones, J., approved the sale on December 10, 2008.
At the closing on January 21, 2009, Olsen tendered the balance of the purchase price. The committee delivered the committee deed to Olsen. Relying on the title assurances provided by his attorney; see footnote 6 of this opinion; Olsen transferred his interest in the property to 17 Ridge Road, LLC (LLC), of which Olsen is a one-half owner, by way of a quitclaim deed that was recorded on the land records moments after the committee deed was recorded. Following the closing, Olsen and his partner in LLC cleaned the property, plowed the snow, restored the electricity and paid the outstanding municipal taxes. On Sunday, April 12, 2009, Olsen discovered a lock box on the property preventing his access to it. IndyMac had taken title to and possession of the property as a result of its foreclosure action on its priority mortgage. LLC's interest in the property had been foreclosed.
On April 23, 2009, Olsen filed a motion to be joined as a party to the present action and, on April 24, 2009, LLC filed a similar motion. Olsen also filed a motion to open and vacate the judgment of foreclosure by sale and all supplemental judgments, seeking as relief an order of restitution directing that the $216,000 that he paid for the purchase of the property, less the costs of the sale, be returned to him. The plaintiff objected, raising various grounds, including arguments that the court lacked jurisdiction to open the judgment once title had passed and that Olsen and LLC lacked standing to intervene as party defendants. The court, finding that Olsen's predicament arose from a ''series of cascading mistakes . . .'' in the foreclosure process, resolved the jurisdictional challenges in Olsen's favor and granted his motion to open the judgment. This appeal followed.
The plaintiff claims that the court lacked jurisdiction to open the judgment of foreclosure by sale once both the confirmation of the sale and transfer of title had occurred.7 Olsen raises a number of arguments in response, which we will address in turn. Although the plaintiff frames the issue as one of subject matter juris-diction, we conclude, more precisely, that the court lacked the authority to open the judgment of foreclosure by sale because title had vested in the purchaser.
We begin by setting forth our standard of review. This court has recognized that "[w]hether to grant a motion to open [a judgment of foreclosure by sale] rests in the discretion of the trial court.'' Union Trust Co. v. Roth, 58 Conn. App. 481, 481, 755 A.2d 239 (2000). The issue in this appeal, however, is whether the court properly determined that it had the authority to grant a motion to open the judgment of foreclosure by sale after the court had confirmed the sale and title had vested in the purchaser, which presents a question of law over which our review is plenary. See Falls Mill of Vernon Condominium Assn., Inc. v. Sudsbury, 128 Conn. App. 314, 318, 15 A.3d 1210 (2011) ().
' (Citations omitted; internal quotation marks omitted.) In re Matthew F., 297 Conn. 673, 688-89, 4 A.3d 248 (2010).
A motion to open a judgment of foreclosure by sale is typically subject to two restrictions. First Connecticut Capital, LLC v. Homes ofWestport, LLC, 112 Conn. App. 750, 752 n.3, 966 A.2d 239 (2009). First, a motion to open a judgment of foreclosure by sale must be filed within the four month restriction of General Statutes § 52-212a.8 Id. It is more appropriate to term this restriction as one affecting the court's substantive authority rather than as one affecting its jurisdiction. Kim v. Magnotta, 249 Conn. 94, 104, 733 A.2d 809 (1999); Falls Mill ofVernon Condominium Assn., Inc....
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