Deutsche Bank Nat'l Trust Co. v. Bliss

• Decision Date: 01 September 2015
• Docket Number: No. 36219.,36219.
• Citation: 124 A.3d 890,159 Conn.App. 483
• Parties: DEUTSCHE BANK NATIONAL TRUST COMPANY, Trustee v. Heather M. BLISS et al.
• Court: Connecticut Court of Appeals

159 Conn.App. 483

124 A.3d 890

DEUTSCHE BANK NATIONAL TRUST COMPANY, Trustee

v.Heather M. BLISS et al.

No. 36219.

Appellate Court of Connecticut.

Argued Feb. 17, 2015.

Decided Sept. 1, 2015.

John R. Hall, for the appellant (named defendant).

Laura Pascale Zaino, with whom, on the brief, was Brian D. Rich, Hartford, for the appellee (plaintiff).

Opinion

KELLER, J.

The plaintiff, Deutsche Bank National Trust Company, as trustee for Long Beach Mortgage Loan Trust 2006–5 (Long Beach Mortgage Loan Trust), brought this residential real estate foreclosure action against several defendants, including the named defendant, Heather M. Bliss.¹The defendant appeals from the judgment of the trial court ordering a foreclosure by sale of the subject property. She claims that: (1) the plaintiff lacked standing to bring the present action; (2) the plaintiff failed to prove its prima facie case; and (3) the court improperly concluded that the mortgage was enforceable. We affirm the judgment of the trial court.

Following an evidentiary hearing, the court issued a written decision that set forth the following findings of fact:

“1. On or about April 27, 2006, [the] defendant ... executed and delivered to Long Beach Mortgage Company (the initial lender) a promissory note in the amount of $1,300,000.00.

“2. To secure the note, [the] defendant also executed a Mortgage, including a Fixed/Adjustable Rate Rider, on a parcel of land, together with the improvements thereon, known as 6 Sylvan Road, Westport, Connecticut.

“3. At the time that the note and mortgage were executed (on or about April 27, 2006), Long Beach Mortgage Company was a subsidiary of Washington Mutual Bank, which at the time of the loan was subject to federal banking regulations.

“4. The Mortgage subsequently was assigned to [the] plaintiff by virtue of an Assignment of Mortgage dated October 20, 2009, and recorded on November 10, 2009 ... in the Westport land records.

“5. In addition to being the recorded assignee of the mortgage, [the] plaintiff is the holder of the underlying note.

“6. Since approximately January 1, 2009, [the] defendant has been in default of her payment obligations under the note.

“7. Despite demand, [the] defendant has failed to bring her obligations current.

“8. The value of the subject property, as of June 26, 2013, was $1,400,000.

“9. [The] defendant's indebtedness to [the] plaintiff, as of June 26, 2013, was $1,850,089,92.

“10. [The] plaintiff's reasonable attorney's fees, through the time of trial, totaled $25,000.00.”

The court went on to make the following determinations:

“1. [The] defendant's default of her obligations under the note is an adequate basis for [the] plaintiff's efforts to foreclose the mortgage.

“2. [The] defendant has not proven her special defense that the note is unenforceable.

“3. Although there does not appear to be any equity in the property, the presence of the United States of America as a defendant requires any foreclosure to be a foreclosure by sale.” (Footnote omitted.)

In its decision, the court rejected the defendant's argument that the mortgage at issue was unenforceable because the initial lender, Long Beach Mortgage Company, had surrendered its Connecticut license as a mortgage lender before it processed her mortgage loan application. The court ordered a judgment of foreclosure by sale with a sale date of December 14, 2013. This appeal followed.

I

For the first time on appeal, the defendant claims that the plaintiff lacked standing to bring the present action because, despite the fact that the plaintiff alleged in its complaint that it was the holder of the note, the plaintiff failed to demonstrate that it had this status at the time it commenced the present action. The plaintiff argues that it had the status of a holder and, thus, had standing to bring the present action, by virtue of its possession of the note and a blank endorsement. Consistent with the fact that the defendant did not raise the issue of standing before the trial court, the court did not address the issue of standing or make any factual findings concerning the issue of standing in its opinion. Nonetheless, on the basis of our assessment of the evidence presented by the plaintiff, we conclude that the defendant's claim is not persuasive.²

“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.... [T]he plaintiff ultimately bears the burden of establishing standing.” (Citations omitted; 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 person 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. If an endorsement makes a note payable to an identifiable person, it is a ‘special endorsement,’ and only the identified person in possession of the instrument is entitled to enforce the instrument.General Statutes §§ 42a–1–201(b)(21)(A), 42a–3–205(a)and 42a–3–301.” (Citations omitted; emphasis added.) U.S. Bank v. Ugrin,150 Conn.App. 393, 401–402, 91 A.3d 924 (2014).

“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 plaintiff] owns the underlying debt.... The defendant [must] set up and prove the facts which limit or change the plaintiff's rights.” (Citation omitted; internal quotation marks omitted.) Id., at 402, 91 A.3d 924. “The possession by the bearer of a note [e]ndorsed in blank imports prima facie [evidence] that he acquired the note in good faith for value and in the course of business, before maturity and without notice of any circumstances impeaching its validity. The production of the note establishes his case prima facie against the makers and he may rest there.... It [is] for the defendant to set up and prove the facts which limit or change the plaintiff's rights.” (Citations omitted.) Garris v. Calechman,118 Conn. 112, 115, 170 A. 789 (1934).

Turning to the facts of the present case, we observe that the plaintiff, as trustee for the Long Beach Mortgage Loan Trust, alleged in relevant part that, on April 27, 2006, the defendant executed and delivered to Long Beach Mortgage Company a note for a loan in the original principal amount of $1,300,000. The plaintiff alleged: “On said date to secure said Note the [defendant] ... did execute and deliver to Long Beach Mortgage Company ... a Mortgage on the [subject property]. Said Mortgage was dated ... and recorded ... in ... the Westport Land Records. Said Mortgage was assigned to [the plaintiff] ... by virtue of an Assignment of Mortgage to be recorded on the Westport Land Records. The plaintiff ... is the holder of said Note and Mortgage.”³In her amended answer, the defendant denied that the plaintiff was the holder of the note and mortgage at issue.

At the evidentiary hearing in the present case, the plaintiff presented testimony from Wilkin Rodriguez, a home lending research officer employed by JP Morgan Chase Bank N.A. (JP Morgan), the servicer for the Long Beach Mortgage Loan Trust, of which the plaintiff is the trustee. Rodriguez testified that JP Morgan, as the servicer for the Long Beach Mortgage Loan Trust, documented and kept records for the trust, and also serviced its loans.

Rodriguez testified that JP Morgan maintained an electronic database containing loan records, and that original collateral files associated with a loan, which contain copies of the original mortgage, original note and title policy, are stored in Monroe, Louisiana. Rodriguez testified, as well, that JP Morgan's online records are updated on a daily basis, at or near the time of the events to which they are related, and that he reviews such records almost daily. He testified that the electronic records included image copies of documents on file.

Through Rodriguez, the plaintiff introduced into evidence a four page document that consistently was referred to at trial as “the note.” The first three pages consisted of a redacted copy of the original promissory note that was executed by the defendant in favor of Long Beach Mortgage Company on April 27, 2006. Rodriguez testified that “the fourth page of [the] document” was a copy of “an...