Federal Deposit Ins. Corp. v. Mutual Communications Associates, Inc.
Decision Date | 23 October 2001 |
Docket Number | (AC 20525) |
Citation | 66 Conn. App. 397,784 A.2d 970 |
Court | Connecticut Court of Appeals |
Parties | FEDERAL DEPOSIT INSURANCE CORPORATION v. MUTUAL COMMUNICATIONS ASSOCIATES, INC., ET AL. |
Lavery, C. J., and Schaller and Spear, Js. Michael S. Lynch, for the appellants (defendant Guardian Systems, Inc., et al.).
Michael J. Mannion, for the appellee (substitute plaintiff Fairway Asset Management, Inc.).
The defendants Jerome G. Terracino and Guardian Systems, Inc. (Guardian), appeal from the deficiency judgment rendered against them and their codefendants, Mutual Communications Associates, Inc. (Mutual), Richard T. DeMarsico and Robert Rossman (Rossman), subsequent to a judgment of foreclosure. The defendants1 claim that the court improperly (1) concluded that there was insufficient evidence to find that Rossman's attorney was acting as Rossman's agent when he purchased a promissory note and assigned it to a company controlled by Rossman's wife, (2) failed to apply the equitable rule that the conduct of a wife may be presumed to be for the benefit of her husband, (3) failed to conclude that the note could not be enforced after Rossman acquired it, (4) rendered judgment in favor of Fairway for the full amount due and (5) rendered judgment against the defendants on their cross claim and counterclaim. We affirm the judgment of the trial court.
The following facts are relevant to this appeal. On July 19, 1991, Mutual entered into a loan agreement with Brookfield Bank (Brookfield) to borrow $270,000. Mutual, through two of its corporate officers, DeMarsico and Terracino, signed a promissory note for the loan amount. Mutual secured the debt by a mortgage on one of its properties. DeMarsico, Terracino and Rossman, another corporate officer, signed personal guarantees as well. Terracino and Rossman signed an additional guarantee as principals and officers of Guardian, an alarm company in which they were the only shareholders.
On May 8, 1992, the Federal Deposit Insurance Corporation (FDIC) took possession of Brookfield's assets, including the promissory note, mortgage and guarantees. At about the same time, Mutual defaulted on the loan. On or about November 30, 1994, the FDIC commenced a foreclosure action against Mutual and the other defendants. A judgment of foreclosure by sale was rendered on December 16, 1996.
Thereafter, the judgment was opened and a judgment of strict foreclosure was rendered with law days commencing March 25, 1997. Prior to the judgment of strict foreclosure, JLM Services Corporation (JLM) succeeded the FDIC as plaintiff, and title vested in JLM when Mutual failed to redeem its equity within the set law days.
JLM filed a motion for a deficiency judgment on April 1, 1997. While the motion was pending, JLM assigned the note, guarantees and deficiency claim to Rossman's attorney and friend, Andrew Buzzi, Jr., as trustee.2 Buzzi then assigned them to a limited liability company, Consolidated Asset Management, LLC (Consolidated), which he owned with Rossman's wife. Thereafter, Consolidated assigned the note, guarantees and deficiency claim to Fairway Asset Management, Inc. (Fairway), the substituted plaintiff and judgment creditor.
The defendants filed three special defenses, a cross complaint and a counterclaim in response to the motion for a deficiency judgment. The special defenses, as amended, alleged facts that occurred subsequent to the judgment of strict foreclosure. The defendants claimed that Rossman breached the fiduciary duty that he owed them because of his role in assigning the note to Consolidated and Fairway's failure to pursue a mortgage it held on Rossman's property to reduce the deficiency claim. In the third special defense, the defendants claimed that the note was not enforceable because it was assigned after the judgment had been rendered and the law days had passed. The counterclaim and cross complaint were based on the same facts as the special defenses and requested a judgment that Fairway and its predecessors could enforce the note only to claim a proportionate contribution toward funds actually paid on behalf of Rossman for the note, or a judgment declaring the note null and void.
The court granted the motion for a deficiency judgment. It rejected the third special defense and concluded that there was insufficient evidence to find that either Buzzi or Catherine Rossman acted as Rossman's agent, and, therefore, there was no need to address the defendants' other claims premised on a theory of agency. The court also concluded that the defendants had not met their burden of proof on the counterclaim and cross claim. This appeal followed. Additional facts will be provided as necessary.
The defendants claim that the court improperly concluded that there was insufficient evidence on which to base a finding that Buzzi acted as Rossman's agent when Buzzi purchased the promissory note as trustee for the Catherine Rossman Trust and assigned the note to Consolidated. The defendants claim that certain findings of fact made by the court are clearly erroneous and entirely inconsistent with the evidence produced at the hearing, specifically, the findings that (1) Rossman's efforts to purchase the note from JLM were unsuccessful, (2) Buzzi, as trustee, purchased the note from JLM and (3) Rossman never owned the note. We disagree.
The court found the following facts by a fair preponderance of the evidence. In June, 1997, Buzzi unsuccessfully attempted, on behalf of Rossman, to negotiate a purchase of the note, mortgages and deficiency from JLM. On July 7, 1997, Buzzi, as trustee, purchased the note, guarantees and deficiency claim from JLM. On July 23, 1997, Buzzi, as trustee, sold the same to Consolidated, of which he and Catherine Rossman were officers. Because Rossman was Buzzi's client in July, 1997, Buzzi disclosed the transaction to him in a letter dated July 23, 1997. Rossman signed the letter, which acknowledged the disclosure and sought to continue the attorney-client relationship with Buzzi. Catherine Rossman formed Consolidated to protect the joint assets that she held with her husband, intending to pursue a judgment against Guardian and Terracino. Consolidated sold the note, guarantees and deficiency to Fairway in October, 1998. Rossman never owned the note, and there was no evidence of an agreement with Fairway not to pursue the judgment against him.
(Citation omitted; internal quotation marks omitted.) Bugryn v. Bristol, 63 Conn. App. 98, 103, 774 A.2d 1042, cert. denied, 256 Conn. 927, 776 A.2d 1143 (2001).
Agency normally is a question of fact. Hallas v. Boehmke & Dobosz, Inc., 239 Conn. 658, 674, 686 A.2d 491 (1997). (Citations omitted; internal quotation marks omitted.) Id., 673.
Our careful review of the record reveals more than ample evidence to support the factual findings that Rossman's efforts to purchase the note were unsuccessful, that Buzzi, as trustee, purchased the note from JLM and that Rossman never owned the note. Although the court did not make a finding as to the individual or entity that Buzzi represented as trustee when he purchased the note, Rossman testified that he did not request or authorize Buzzi to acquire the note as his trustee, that he never had any direct or indirect ownership interest in the note, that he did not participate in the formation of Consolidated, that he did not have a legal ownership interest in Consolidated, that he did not authorize, encourage or in any way delegate to his wife or Buzzi the authority to act on his behalf in their ownership interest in Consolidated and that he never had an agreement with his wife or Buzzi that gave him any say in the purchase, holding or sale of the note by Consolidated. That testimony is consistent with the testimony of Buzzi and Catherine Rossman. Furthermore, the disclosure letter, which was admitted into evidence at the hearing, expressly stated that Buzzi purchased the note from JLM as trustee for the Catherine Rossman trust, and the defendants provided no documentary evidence indicating otherwise.
"The trial court, as the finder of fact, is in the best position to assess the credibility of the witnesses testifying before it." (Internal quotation marks omitted.) Rund v. Melillo, 63 Conn. App. 216, 222, 772 A.2d 774 (2001). Moreover, "[w]e do not examine the record to determine whether the trier of fact could have reached a conclusion other than the one reached." (Internal quotation marks omitted.) Granger v. A. Aiudi & Sons, 60 Conn. App. 36, 41, 758 A.2d 417, cert. denied, 255 Conn. 902, 762 A.2d 908 (2000). On the entire evidence, we are not left with the definite and firm conviction that a mistake has been committed. Accordingly, we conclude that the court's findings of fact were not clearly erroneous.3
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