Deutsche Bank National Trust Co. v. Pototschnig, 100620 CTCA, AC 41229
| Opinion Judge | DiPENTIMA, C.J. |
| Party Name | DEUTSCHE BANK NATIONAL TRUST COMPANY, TRUSTEE v. HUBERT POTOTSCHNIG ET AL. |
| Attorney | Randolph E. White, pro hac vice, with whom was Patrick Zailckas, for the appellant (named defendant). Brian D. Rich, with whom, on the brief, was Logan A. Carducci, for the appellee (plaintiff). |
| Judge Panel | DiPentima, C. J., and Lavine and Keller, Js. |
| Case Date | October 06, 2020 |
| Court | Connecticut Court of Appeals |
Argued January 21, 2020.
Procedural History
Action to foreclose a mortgage on certain real property of the named defendant, and for other relief, brought to the Superior Court in the judicial district of Waterbury, where the named defendant filed a counter- claim; thereafter, the matter was tried to the court, Roraback, J.; judgment of strict foreclosure, from which the named defendant appealed to this court. Affirmed.
Randolph E. White, pro hac vice, with whom was Patrick Zailckas, for the appellant (named defendant).
Brian D. Rich, with whom, on the brief, was Logan A. Carducci, for the appellee (plaintiff).
DiPentima, C. J., and Lavine and Keller, Js. [*]
OPINION
DiPENTIMA, C.J.
The defendant Hubert Pototschnig1appeals from the judgment of foreclosure rendered by the trial court in favor of the plaintiff, Deutsche Bank National Trust Company, as Trustee, for HSI Asset Securitization Corporation 2005-NC2 Mortgage Pass-Through Certificates, Series 2005-NC2 (HSI). On appeal, the defendant claims that the court (1) improperly determined that the plaintiff had standing to bring the foreclosure action, (2) failed to follow the decision of an out of state court, (3) failed to consider whether the securitized trust, HSI, ever received the note and mortgage, and (4) abused its discretion in several of its evidentiary rulings. We affirm the judgment of the trial court.
At the center of this appeal is the issue of whether the plaintiff had standing to commence this action. The trial court twice addressed this issue. First, in ruling on the plaintiff's motion to strike the defendant's special defenses, the court concluded, following an evidentiary hearing, that the plaintiff had standing. Later, in its memorandum of decision on the foreclosure complaint, the court addressed the issue of standing after noting that the defendant in his post trial brief ‘‘largely attempts to relitigate the question of whether the plaintiff has standing to bring this action. It is within this court's discretion to treat its 2015 hearing decision as the law of the case with regard to the issue of standing. . . . Even if this court were to reconsider the question, the evidence offered at trial was sufficient to establish the plaintiff's standing to enforce the note.'' (Citation omitted.) We agree with the court that the plaintiff had standing because the facts, as found by the trial court, establish that an employee of the original lender, New Century Mortgage Corporation (New Century), endorsed the note in blank sometime prior to the end of August, 2005, which preceded both New Century's 2007 bankruptcy and the transfer of New Century's assets to a liquating trust in 2008. There was evidence, which the trial court credited, that the plaintiff possessed the note endorsed in blank at the time the foreclosure action was commenced in 2012.
In its decision on the foreclosure complaint, the court found the following facts and reached the following conclusions. ‘‘The plaintiff . . . seeks to foreclose a mortgage on a Woodbury . . . property owned by the defendant . . . . In its amended complaint, filed January 28, 2013, the plaintiff alleges that it is the holder of the promissory note and owner of the mortgage which are the subject of this lawsuit. The loan documents are alleged to have been prepared by the original lender, New Century . . . and executed by the defendant in connection with a $750, 000 loan he received on June 10, 2005. The undisputed evidence at trial was that no payment has been made on this loan since January 23, 2012.
‘‘On September 24, 2014, the defendant filed his fourth amended answer, asserting ten special defenses and three counterclaims. On November 10, 2014, the plaintiff moved to strike all of the special defenses and counterclaims. Several of the special defenses challenged the plaintiff's standing, thereby implicating the court's subject matter jurisdiction. In the fourth special defense, the defendant alleged that the plaintiff is an improper party, and in the sixth and seventh special defenses, the defendant alleged that the assignments of the mortgage by [New Century] to the plaintiff, made after July 15, 2008, are invalid. The fourth, sixth and seventh special defenses were all grounded in the allegation that [New Century] filed for chapter 11 bankruptcy in 2007 and that all of its assets were transferred, by order of the Bankruptcy Court, to a liquidating trust on July 15, 2008. It was the defendant's position that, based on the bankruptcy and transfer of assets, [New Century] either ceased to exist as an entity competent to endorse the note in blank and assign the mortgage to the plaintiff, or lacked the authority to unilaterally transfer assets after the bankruptcy was filed. In contrast, it was the plaintiff's position that the note was endorsed in blank by [New Century] prior to its bankruptcy, the plaintiff was the holder of the note when the present action was initiated and the defendant's challenges to [New Century's] assignment to the plaintiff were insufficient to deprive the plaintiff of standing to pursue this foreclosure action.
‘‘An evidentiary hearing was held on October 2, 2015, to determine whether the plaintiff had standing to bring the foreclosure action. At that hearing, it was established that the endorsement on the note, bearing the name Magda Villanueva, was placed there by a stamp, not by an original signature. In her deposition, which was introduced at the hearing . . . Villanueva testified that she sometimes used a stamp to endorse notes on behalf of her employer, [New Century], and at least one of the stamps she used was missing a part of the letter ‘G' in her first name. . . . Villanueva was employed by New Century until August of 2005, and, when she left, she destroyed all the stamps she had used for endorsing notes. It was also established at this hearing that the note had been endorsed in blank by . . . Villanueva sometime prior to June 24, 2009.
‘‘Based on the evidence produced at the hearing, this court concluded that the plaintiff was the valid holder of the note and entitled to enforce it based on its possession of the note, endorsed in blank by [New Century]. . . . The plaintiff's production of the note established a presumption in its favor that it is the owner of the underlying debt. . . . The production of the note established the plaintiff's prima facie case against the defendant, and it was for the defendant to prove facts limiting or changing the plaintiff's rights. . . . The defendant did not, however, meet his burden of proving that the debt belonged to a person or entity other than the plaintiff, and as such, this court concluded that the plaintiff had standing to pursue this foreclosure action. . . .
‘‘At trial, the defendant stipulated to the authenticity of his signature on the original note and mortgage, both of which the plaintiff entered into evidence. Also introduced as an exhibit was a loan modification agreement entered into by the parties to resolve a prior foreclosure action. Jeremy Summerford, an employee of JP Morgan Chase Bank, N.A. (Chase), the loan servicer, testified credibly that, based upon his examination of Chase's business records, the plaintiff was the holder of the note and mortgage at the time it initiated the present foreclosure. Summerford further testified that the defendant has been in default of his payment obligations under the note since February of 2012. This fact was later confirmed by the defendant's own testimony. The plaintiff also introduced into evidence, as an exhibit, the requisite notice of default, which was sent to the defendant in advance of this action being commenced. Based on the foregoing, this court finds that the plaintiff has established its prima facie case and, as such, will be entitled to judgment unless the defendant proves any of his special defenses. . . . [T]he defendant has not met its burden in proving that the plaintiff is not the owner of the debt.'' (Citations omitted; footnotes omitted.)
Following the filing of the present appeal, the defendant filed a motion for articulation. In its memorandum of decision on the defendant's motion for articulation the court clarified: ‘‘Evidence regarding the note was presented both at the hearing conducted by the court on October 2, 2015, in response to issues raised by the defendant challenging the standing of the plaintiff to bring this action and at trial. On the basis of that evidence, the court found that the plaintiff was the holder of the original note endorsed in blank at the time the foreclosure action now on appeal was commenced. The court further found that the defendant had not met its burden of rebutting the presumption that the plaintiff was the rightful owner of the underlying debt at the time it instituted this action. In addition, the court also expressly finds that the original note was endorsed in blank by . . . Villanueva while she was employed by [New Century]. She left [New Century] in August of 2005. The defendant contends that [New Century] filed for bankruptcy in 2007. On the basis of these findings, the court concludes that the subject note was endorsed in blank by [New Century] before it filed for bankruptcy. . . .
‘‘This court expressly finds on the basis of the testimony and exhibits offered by Albert Smith [a home lending research officer for Chase] at the October 2, 2015 hearing and on the basis of the testimony and exhibits offered by . . . Summerford at trial that the plaintiff was in possession of the original note endorsed in blank no later than May of 2009 and that the...
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