First Ct. Capital v. Homes of Westport

• Decision Date: 24 February 2009
• Docket Number: No. 28991.,28991.
• Citation: 966 A.2d 239,112 Conn. App. 750
• Court: Connecticut Court of Appeals
• Parties: FIRST CONNECTICUT CAPITAL, LLC, et al. v. HOMES OF WESTPORT, LLC, et al.

966 A.2d 239

112 Conn.App. 750

FIRST CONNECTICUT CAPITAL, LLC, et al. v.HOMES OF WESTPORT, LLC, et al.

No. 28991.

Appellate Court of Connecticut.

Argued September 24, 2008.

Decided February 24, 2009.

Edward Kanowitz, New York, NY, for the appellant(named defendant).

Matthew B. Woods, Norwalk, for the appellees(named plaintiff et al.).

GRUENDEL, BEACH and HENNESSY, Js.

GRUENDEL, J.

This is a foreclosure appeal about a committee sale conducted during the pendency of an appellate stay.The defendantHomes of Westport, LLC, challenges the propriety of the judgment of the trial court approving the committee sale of certain real property in Westport.¹We conclude that the court abused its discretion in approving a committee sale conducted during the pendency of an appellate stay and, accordingly, reverse the judgment of the trial court.

The facts are not disputed.In December, 2006, the plaintiffs, First Connecticut Capital, LLC, Hedy Kanarick, First CT Capital Mortgage PoolNo. 1, Harold Silver, Pearl Silver, Ronald Simonelli, David Snow and First Connecticut Capital Mortgage Fund A, Limited Partnership, commenced a foreclosure action against the defendant with respect to real property known as 3 Grays Farm Road in Westport (property).²The defendant thereafter filed a disclosure of no defense, and the plaintiffs, in turn, moved for a judgment of strict foreclosure.On May 7, 2007, the court rendered judgment of foreclosure by sale, finding the value of the property to be $3.2 million and a debt owing of $1,847,934.The defendant did not appeal from that judgment.The court set a sale date of July 7, 2007.

On July 5, 2007, the defendant filed a motion to open the judgment of foreclosure by sale and extend the sale date.³On July 6, 2007, the court held a hearing thereon, at which the defendant alleged that it was in negotiations with Angelo Labbruzzo, a potential buyer of the property, as evidenced by a purchase agreement and a personal check signed by Labbruzzo.The defendant thus requested that the sale date be delayed more than seven months.The plaintiffs expressed skepticism at the alleged potential sale of the property, stating that they had informed the defendant that "if the alleged buyer was willing to put up a 10 percent, nonrefundable deposit, we wouldn't object to an extension of time, because we'd love to have the property sold. . . ."That offer was not accepted.The plaintiffs further stated: "[R]ight now, Your Honor, this potential buyer . . . we have no idea as to his financial solvency; [he] could be some guy who just happened to be walking by on the sidewalk and was brought in to sign this document.We don't know whether he has the money to close.We don't know whether he'll qualify for a multimillion dollar mortgage to buy the property.So far, all we've seen is this purchase agreement with a . . . personal check attached.We don't even know whether that check is good."The plaintiffs further noted that the purchase agreement before the court provided that "[t]his sale is contingent upon the buyer's ability to obtain financing thirty days from completion of home, building inspection, radon test and well test."As a result, the plaintiffs maintained that the sole basis of the defendant's motion was to delay the foreclosure sale, stating that "[d]elaying this until February will be prejudicial to the plaintiff[s], and I don't believe that this alleged agreement is sufficient.It's not a real agreement, Your Honor."In response, counsel for the defendant candidly stated: "Your Honor, as you know, has to weigh the equities of the possibility of this deal being a real deal.It was just presented to me yesterday.I was just retained yesterday.I don't know who the buyer is, of course.I don't know about the bona fide [nature] of that check, but in doing real estate conveyancing, the way it starts is with a binder and with a personal check. . . .

There [are] times when you find out that the check is good, sometimes you find out the check is no good."

After hearing from all concerned parties, the court denied the motion to open the judgment of foreclosure by sale.At that time, the plaintiffs moved to terminate prospectively the stay of execution, pursuant to Practice Book§ 61-11(d).The plaintiffs stated: "[W]hat counsel[for the defendant] is attempting to do is buy time.That means that any appeal would be solely for purposes of delay.And I'm willing to bet that he has the appeal papers in his briefcase all . . . ready to file."The court granted the motion to terminate prospectively the stay of execution.

At the conclusion of the July 6, 2007 hearing, the committee for the sale of the property inquired as to whether the sale was to proceed as scheduled.The following colloquy occurred:

"[The Committee's Counsel]: Your Honor, if I may, I have a question, since my marching orders come from the court.You're granting the motion to terminate[the] stay means that even if the defendant files an appeal, I am to go forward with the auction tomorrow?

"The Court: I think that's right, but I'm not in the business of giving legal advice.In other words, there would be no stay, as far as I know.All right?

"[The Defendant's Counsel]: Subject to the potential filing of a motion for review with the Appellate Court.

"The Court: I mean we're in the area where I'm not sure I can give you—and I apologize, because you're certainly entitled to what I can give you, but . . . it's not going to be much."

Later that day, the defendant filed an appeal from the court's denial of its motion to open the judgment of foreclosure by sale.The sale proceeded as scheduled on July 7, 2007.

On July 13, 2007, the defendant filed with this court, pursuant to Practice Book§§ 66-6 and 61-14, a motion for review of the order terminating the stay of execution.This court denied that motion on September 26, 2007.The trial court subsequently granted the committee's motion for approval of the committee sale and deed on October 29, 2007.From that judgment, the defendant appeals.⁴

I

Before addressing the defendant's claim, we first consider whether the denial of a motion to open a judgment of foreclosure by sale is an appealable final judgment.⁵Two commentators have noted this muddled aspect of our foreclosure law.SeeD. Caron & G. Milne, Connecticut Foreclosures(4th Ed.2004) § 17.06, p. 394("the denial of a motion to reopen a judgment is generally not a final judgment from which an appeal lies");but seeid., at p. 395(observing that Connecticut case law"invariably [has] depended on a recognition that the denial of a motion to reopen rests in the sound discretion of the trial court, and that, barring a finding of an abuse of that discretion, the decision must remain undisturbed").Because that question implicates this court's subject matter jurisdiction;seeMazurek v Great American Ins. Co.,284 Conn. 16, 33, 930 A.2d 682(2007);we first address this threshold issue.⁶

Preliminarily, we note that the denial of a motion to open generally is appealable.As this court recently observed, "It is well established in our jurisprudence that [w]here an appeal has been taken from the denial of a motion to open, but the appeal period has run with respect to the underlying judgment, we have refused to entertain issues relating to the merits of the underlying case and have limited our consideration to whether the denial of the motion to open was proper."(Internal quotation marks omitted.)Misata v. Con-Way Transportation Services, Inc.,106 Conn.App. 736, 742, 943 A.2d 537(2008).Thus, "[w]hen a motion to open is filed more than twenty days after the judgment, the appeal from the denial of that motion can test only whether the trial court abused its discretion in failing to open the judgment and not the propriety of the merits of the underlying judgment."Altberg v. Paul Kovacs Tire Shop, Inc.,31 Conn.App. 634, 640, 626 A.2d 804(1993).

There is no Connecticut precedent that holds that the denial of a motion to open a judgment of foreclosure by sale is not an appealable final judgment.To the contrary, our appellate courts routinely afford review to appeals from the denial of a motion to open a judgment of foreclosure by sale.See, e.g., Northeast Savings, F.A. v. Hintlian,241 Conn. 269, 271, 696 A.2d 315(1997)(granting review of trial court's denial of motion to open judgment of foreclosure by sale and concluding no due process violation);Connecticut Savings Bank v. Heghmann,193 Conn. 157, 160, 474 A.2d 790(granting review of trial court's denial of motion to open judgment of foreclosure by sale and concluding no abuse of discretion), cert. denied, 469 U.S. 883, 105 S.Ct. 252, 83 L.Ed.2d 189(1984);McCord v. Fredette,92 Conn.App. 131, 133, 883 A.2d 1258(2005)(holding that court did not abuse discretion in denying defendant's motion to open judgment of foreclosure by sale and remanding case for setting of new sale date);Tax Collector v. Stettinger,79 Conn.App. 823, 827, 832 A.2d 75(2003)(holding that court"properly denied"defendant's motion to open judgment of foreclosure by sale);Union Trust Co. v. Roth,58 Conn. App. 481, 755 A.2d 239(2000)(noting that "[w]hether to grant a motion to open rests in the discretion of the trial court" and holding that court did not abuse discretion in denying motion to open judgment of foreclosure by sale);First Union National Bank v. Bonito,52 Conn. App. 52, 55, 725 A.2d 393(holding that court did not abuse discretion in denying motion to open judgment of foreclosure by sale), cert. denied, 249 Conn. 901, 732 A.2d 775(1999);Connecticut Mortgage Co. v. Knudsen,39 Conn.App. 936, 667 A.2d 1307(1995)(memorandum decision affirming trial court's denial of motion to open judgment of foreclosure by sale);Weston v. Reade,36 Conn.App. 961, 962, 653 A.2d 228(1995)(memorandum decision affirming trial court's denial of motion to open judgment of foreclosure by...