Citibank, N.A. v. Stein

• Citation: 186 Conn.App. 224,199 A.3d 57
• Decision Date: 27 November 2018
• Docket Number: AC 40199
• Court: Appellate Court of Connecticut
• Parties: CITIBANK, N.A., Trustee v. Laura A. STEIN, et al.

186 Conn.App. 224

199 A.3d 57

CITIBANK, N.A., Trustee

v.Laura A. STEIN, et al.

AC 40199

Appellate Court of Connecticut.

Argued September 7, 2018

Officially released November 27, 2018

Brian Stein, self-represented appellant (defendant Brian Stein).

Crystal L. Cooke, for the appellee (substitute plaintiff).

Lavine, Sheldon and Bright, Js.

LAVINE, J.

The present appeal concerns the foreclosure of real property located at 983 New Norwalk Road in New Canaan (property). The self-represented defendant, Brian Stein,¹ appeals from the judgment of strict foreclosure rendered in favor of the substitute plaintiff, Wilmington Trust, N.A. (Wilmington Trust), as successor trustee to the plaintiff, Citibank, N.A. (Citibank), as trustee of the holders of Bear Stearns Alt-A Trust 2006-6, Mortgage Pass-Through Certificates, Series 2006-6. On appeal, the defendant claims that the trial court, Heller, J. , (1) erred by denying his motion to dismiss, (2) abused its discretion by denying his motion to reargue and for reconsideration, (3) abused its discretion by refusing to consider, after the June 2015 trial, documents the defendant considered newly discovered evidence, (4) erred in finding that the mortgagor had defaulted on the note and default notice, and (5) erred under J.E. Robert Co. v. Signature Properties, LLC , 309 Conn. 307, 71 A.3d 492 (2013), in concluding that Citibank had proven its right as a nonholder in possession to bring the foreclosure action.² We affirm the judgment of the trial court.

In its memoranda of decision issued on January 7, 2016, and on February 21, 2017, the trial court set forth the following relevant facts and procedural history. On July 7, 2006, Laura A. Stein, the defendant's then wife,³ executed and delivered an interest only adjustable rate note to Countrywide Bank, N.A. (Countrywide Bank), in the principal amount of $1,650,000. Countrywide Bank endorsed the note to Countrywide Home Loans, Inc. (Home Loans). Home Loans, thereafter, endorsed the note in blank and provided it to Citibank. To secure the note, the defendant and Laura Stein executed in duplicate a mortgage⁴ on the property and delivered it to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Countrywide Bank. MERS assigned the mortgage to Citibank on November 25, 2009.

The court also found, pursuant to paragraph 3 (A) of the note, that Laura Stein was to make monthly payments of interest only on the first day of each month, commencing on September 1, 2006. She and the defendant last made a monthly payment on the note on July 16, 2008. On September 16, 2008, Home Loans, which was the servicer of the loan on behalf of the holder of the note at that time, sent a letter to Laura Stein advising her that the loan was in default and of the amount required to cure the default and reinstate the loan.⁵ Laura Stein and the defendant failed to cure the default. Citibank elected to accelerate the balance due on the note, declare the note due in full, and foreclose the mortgage securing the note.⁶ Citibank commenced the present foreclosure action by service of process on July 13, 2009.⁷ The complaint alleges, in relevant part, that Citibank, as trustee, is the holder of the note and mortgage.

The defendant and Laura Stein filed an answer and special defenses on March 19, 2010. Their special defenses alleged that Citibank lacked standing as a trustee under General Statutes § 52-106, but that if Citibank had standing, it was required to modify the mortgage pursuant to an agreement between the Connecticut Attorney General and Countrywide Bank. They also alleged that Citibank did not provide the original note, and, therefore, could not commence the action, and that the complaint failed to establish that Citibank was the current holder and owner of the note and mortgage. Citibank pleaded a general denial in response to the special defenses.

On September 27, 2010, Citibank filed a motion for summary judgment as to liability only. The defendant and Laura Stein objected to the motion for summary judgment on the ground that there were genuine issues of material fact as to whether Citibank was the holder of the note and mortgage. The court, Mintz, J. , sustained the defendant's objection to the motion by granting additional time for discovery on the issue of Citibank's standing and ordering that the motion for summary judgment be set down for argument on November 17, 2014. Judge Heller found that Citibank's motion for summary judgment was never argued.

On September 10, 2014, Laura Stein filed a motion to dismiss in which she contended, among other things, that Citibank lacked standing to pursue the present action under General Statutes §§ 42a-3-301 and 52-106. She withdrew her motion to dismiss, however, on the first day of trial, stipulated to certain facts, and consented to the entry of summary judgment against her as to liability only.⁸

On June 19, 2015, five days before trial, the defendant filed a motion to dismiss on the ground that Citibank lacked standing to pursue the action against him. After hearing from counsel for the parties, Judge Heller determined that she would hear and decide the defendant's motion to dismiss at the same time and, in connection with, the merits of Citibank's foreclosure case. The parties, all represented by counsel, appeared before the court for trial on June 24, 25 and 26, 2015.⁹ On January 7, 2016, after the parties had submitted posttrial briefs, the court issued a memorandum of decision in which it denied the defendant's motion to dismiss and rendered a judgment of strict foreclosure in favor of Citibank.

On January 19, 2016, the defendant filed a motion for a new trial and on January 27, 2016, filed a motion for reargument and reconsideration of the court's ruling on his motion to dismiss. Citibank objected to both motions. The court granted the motion for reargument, and counsel for Citibank and the defendant appeared for argument before the court on February 16, 2016.¹⁰ The court reserved reconsideration of its ruling on the motion to dismiss and determined to open the record and take additional testimony from Citibank's witness, Johnny Nguyen of Nationstar Mortgage LLC (Nationstar), the servicer of the subject mortgage.¹¹

On August 29, 2016, Citibank filed a motion to substitute Wilmington Trust as the plaintiff because the mortgage had been assigned to Wilmington Trust after the present action was commenced. On August 30, 2016, the court heard additional testimony from Nguyen. Before commencing the hearing, the court granted Citibank's motion to substitute Wilmington Trust as the plaintiff. On September 19, 2016, the defendant filed a motion for reargument and reconsideration of Citibank's motion to substitute Wilmington Trust as the plaintiff. The court heard argument from counsel on the defendant's motion for reargument and reconsideration on November 28, 2016.¹² On February 1, 2017, counsel for the defendant filed a memorandum in further support of his motion to reargue the motion to substitute, and the defendant submitted a statement and memorandum of his own. Wilmington Trust filed an objection to the motion to reargue on February 15, 2017.

On February 21, 2017, the court issued a memorandum of decision on the defendant's three pending motions before it, to wit, his motion for a new trial, filed on January 19, 2016; his motion for reargument on his motion to dismiss, filed on January 27, 2016; and his motion for reargument on Citibank's motion to substitute Wilmington Trust as the plaintiff, filed on September 19, 2016. The court denied all three of the defendant's reargument motions and opened the judgment of strict foreclosure previously entered for the purpose of setting the law days. The defendant timely appealed to this court.

I

The defendant first claims that the court erred in finding that Citibank had standing to bring this foreclosure action against him and, thus, that it had subject matter jurisdiction over the action. Specifically, he claims that the court (1) erred by denying his motion to dismiss because Citibank lacked standing to commence the action and (2) abused its discretion by failing to grant his motion to reargue and for reconsideration of his motion to dismiss.¹³ We reject the defendant's claims.

The defendant's claims require us to examine the court's memoranda of decision in detail. The court's decisions set forth the following facts and legal analyses.

Prior to the start of trial in June, 2015, the defendant filed a motion to dismiss claiming that he had a good faith belief that Citibank lacked standing to pursue the action. In its January 7, 2016 memorandum of decision, the trial court found that the defendant had argued that Citibank lacked standing because (i) it was not the owner of the note and the debt at issue and/or it was not the holder of the note and (ii) it was not authorized by the owner of the note and the debt to prosecute the action on behalf of the owner. The defendant also argued that Citibank lacked standing under General Statutes § 52-106. Citibank contended that it had standing as both the holder of the note and as trustee.

The court credited the uncontroverted testimony of Nguyen that Citibank was the holder of the note that had been endorsed in blank. The court cited the statutory and common-law definitions of "holder." General Statutes § 42a-3-104 (a) provides, in relevant part, that a holder is "[t]he person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession." "The holder is the person or entity in possession of the instrument if the instrument is payable to bearer.... When an instrument is endorsed in blank, it becomes payable to bearer and may be negotiated by transfer of possession alone ...." (Citations omitted; footnote omitted; internal quotation marks omitted.) Equity One, Inc. v. Shivers , 310 Conn. 119, 126, 74 A.3d 1225 (2013). The court concluded, therefore,...