Fairfield Plumbing and Heating Supply Corp. v. Kosa, No. 14294

• Court: Supreme Court of Connecticut
• Writing for the Court: Before PETERS; PETERS
• Citation: 220 Conn. 643,600 A.2d 1
• Parties: FAIRFIELD PLUMBING AND HEATING SUPPLY CORPORATION v. William J. KOSA.
• Decision Date: 17 December 1991
• Docket Number: No. 14294

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600 A.2d 1 220 Conn. 643 FAIRFIELD PLUMBING AND HEATING SUPPLY CORPORATION
v.
William J. KOSA. No. 14294. Supreme Court of Connecticut. Argued Oct. 31, 1991.
Decided Dec. 17, 1991.

Joel Z. Green, Bridgeport, for appellant (plaintiff).

David G. Volman, Shelton, for appellee (defendant).

Before PETERS, C.J., and SHEA, CALLAHAN, GLASS and COVELLO, JJ.

[220 Conn. 644] PETERS, Chief Justice.

The principal issue in this appeal is whether a judgment creditor who has foreclosed upon a judgment lien pursuant to General Statutes § 52-380a(c) ¹ is entitled to a deficiency judgment pursuant to General Statutes § 49-14(a). ² After concluding that the provisions of § 49-14(a) concerning deficiency judgments do not apply to judgment lien foreclosure proceedings, the trial court, Jones, J., ruled that the plaintiff, Fairfield Plumbing and Heating Supply Corporation, was not entitled to a deficiency judgment against the defendant, William Kosa. The plaintiff appealed the denial of its motion for a deficiency judgment to the Appellate Court and we transferred the appeal to this court pursuant to Practice Book § 4023. We reverse.

On November 22, 1988, the plaintiff obtained a judgment against the defendant in connection with an action on an account for plumbing hardware and supplies sold and delivered by the plaintiff to the defendant. Pursuant to § 52-380a(a), ³ the plaintiff recorded

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a judgment lien on the land records of the towns of Fairfield and Easton on December 15, 1988. At that time, the defendant owned a one-half interest in properties [220 Conn. 645] located in each town. On June 12, 1989, because the judgment debt had not been satisfied, the plaintiff commenced a foreclosure action on both properties in the Superior Court for the judicial district of Fairfield. ⁴ The plaintiff sought relief in the form of strict foreclosure and a deficiency judgment. ⁵ On March 5, 1990, the trial court rendered a judgment of strict foreclosure on the Fairfield property. In that proceeding, the trial court, Thim, J., determined that the debt owed to the plaintiff was $152,210.12 ⁶ and set May 1, 1990, as the law day. When the defendant did not redeem on May 1, the title to the one-half interest in the Fairfield property vested in the plaintiff. The plaintiff took title to the property subject to prior encumbrances.

Alleging that the value of the one-half interest in the property minus the encumbrances that were superior in right was less than the value of the judgment, the plaintiff filed a motion for a deficiency judgment pursuant to § 49-14(a) within thirty days of the vesting of title in the plaintiff. See Practice Book § 528. At the hearing held in conjunction with the motion, the trial [220 Conn. 646] court, Jones, J., heard extensive testimony from both parties about the value of the subject property ⁷ and the amount of the encumbrances that were superior to the plaintiff's interest in the property. The court thereafter denied the plaintiff's motion, not on evidentiary grounds, but because of its conclusion that, as a matter of law, the provisions with respect to deficiency judgments contained in § 49-14(a) did not apply to the foreclosure of a judgment lien. The court made no findings concerning the amount of the deficiency claimed by the plaintiff.

Section 49-14(a) provides that any party to a mortgage foreclosure may, within thirty days after the time limited for redemption, file a motion seeking a deficiency judgment. The court must then hold a hearing, hear evidence, establish a value for the mortgaged property, and render judgment for the mortgagee for any difference between such value and the mortgagee's monetary claim. ⁸ In any further action upon the debt, note or obligation, the mortgagee can recover only the amount of such deficiency judgment. The question before us is whether § 52-380a(c), which provides that "[a] judgment lien on real property may be foreclosed or redeemed in the same manner as mortgages on the same property," incorporates by implied reference the deficiency judgment provisions of § 49-14(a). We agree with the plaintiff that the two statutes must be read [220 Conn. 647] together to afford the plaintiff access to a proceeding to determine the deficiency

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remaining after strict foreclosure of a judgment lien. I

At common law, a mortgagee was required to elect between a foreclosure action or an action on the underlying debt. In Derby Bank v. Landon, 3 Conn. 62, 63 (1819), this court held that "a foreclosure and consequent possession, is in the nature of satisfaction of a debt secured by mortgage. It is deemed an appropriation of the thing pledged, in payment of the demand, for which it was security." ⁹ See also Swift v. Edson, 5 Conn. 532, 534-35 (1825). Because the entry of judgment of foreclosure precluded any further common law proceedings upon the note, the legislature, in Public Acts 1833, c. 18, §§ 1, 2, created the remedy of the deficiency judgment as the only available means of satisfying a mortgage debt when the security is inadequate to make the plaintiff whole. D. Caron, Connecticut Foreclosures (2d Ed.1989) § 9.05A, p. 158. "[A] statute forbidding suit upon the ... original indebtedness to recover the deficiency, does not operate to prevent suit upon a judgment for deficiency actually obtained in a foreclosure action." C. Wiltsie, 2 Mortgage Foreclosure (4th Ed. Eager 1927) § 949, p. 1206.

Before rendering a deficiency judgment, the court must have a mechanism for establishing the value of the subject property to determine whether and to what extent a deficiency exists. While a foreclosure by sale automatically establishes the value of the property, a strict foreclosure does not have this secondary consequence. [220 Conn. 648] Only a proceeding for a deficiency judgment following a strict foreclosure establishes the amount of remaining indebtedness. In 1878, the predecessor to § 49-14(a) "provide[d] for an appraisal which [was] conclusive as to the value of the property where a deficiency [was] sought by the plaintiff upon a strict foreclosure...." Cronin v. Gager-Crawford Co., 128 Conn. 688, 694, 25 A.2d 652 (1942). Prior to 1979, the...