GMAT Legal Title Trust 2014-1 v. Catale

• Decision Date: 12 July 2022
• Docket Number: AC 44132
• Parties: GMAT LEGAL TITLE TRUST 2014-1, U.S. Bank, National Association as Legal Title Trustee v. Vito CATALE et al.
• Court: Connecticut Court of Appeals

213 Conn.App. 674

278 A.3d 1057

GMAT LEGAL TITLE TRUST 2014-1, U.S. Bank, National Association as Legal Title Trustee

v.Vito CATALE et al.

AC 44132

Appellate Court of Connecticut.

Argued November 17, 2021

Officially released July 12, 2022

Douglas R. Steinmetz, with whom, on the brief, was Maximino Medina, Jr., Danbury, for the appellants (named defendant et al.).

Paul N. Gilmore, Hartford, for the appellee (substitute plaintiff).

Bright, C. J., and Alvord and Prescott, Js.

PRESCOTT, J.

In this residential mortgage foreclosure action, the defendants Vito Catale and Maria Catale¹ appeal from the trial court's granting of an amended "ex parte" application for a prejudgment remedy (ex parte application)² filed by the original plaintiff, GMAT Legal Title Trust 2014-1, U.S. Bank, National Association as Legal Title Trustee.³ The defendants claim that the court improperly granted the plaintiff's ex parte application because (1) certain statutorily required affidavits either were missing or insufficient and, therefore, the court lacked jurisdiction over the ex parte application, and (2) even if the court had jurisdiction over the ex parte application, the court deprived the defendants of due process by granting it without providing the defendants with a postattachment hearing at which they would have had an opportunity to challenge both whether probable cause existed to order a prejudgment remedy and in what amount.

As to the first claim, we conclude that the court properly exercised jurisdiction over the application for prejudgment remedy. As to the second claim, we conclude that, even if we agreed with the defendants that they were entitled to an opportunity to be heard at a postattachment hearing despite the challenges posed during the early stages of the COVID-19 pandemic,⁴ no practical relief can be afforded to them by ordering a hearing at this time because, during the pendency of this appeal, the court rendered a final judgment in the underlying foreclosure action in favor of the plaintiff that conclusively established both probable cause for the granting of a prejudgment remedy and that the plaintiff likely would be entitled to a deficiency judgment that would far exceed the amount of the prejudgment remedy ordered.

In other words, under the unique circumstances present here, the defendants have failed to demonstrate how they would benefit from a postattachment hearing and, therefore, the remainder of their arguments on appeal have been rendered moot. Accordingly, we affirm the judgment of the court.⁵

The record reveals the following undisputed facts and procedural history. In August, 2017, the plaintiff commenced the underlying action to foreclose a mortgage on residential property in Monroe owned by the defendants.⁶ In July, 2018, following the termination of foreclosure mediation proceedings, the defendants filed their answer and special defenses. The plaintiff thereafter filed a motion to strike the special defenses and, later, a motion for summary judgment as to liability on the note. In support of the motion for summary judgment, the plaintiff filed an affidavit of debt dated September 6, 2018, in which a loan servicing officer with knowledge of the account averred in relevant part that, as of that date, the outstanding balance due on the underlying note was $974,809.77. The plaintiff also filed an affidavit from a real estate appraiser averring that the fair market value of the property as of October 16, 2018, was $516,000. Finally, the plaintiff filed a third affidavit that averred to additional facts relevant to the summary judgment motion.

On February 14, 2019, shortly after the initial argument on its pending motions,⁷ the plaintiff filed an application for a prejudgment remedy along with a motion for disclosure of property and assets. The stated purpose of the application was to attach potential proceeds that Vito Catale might obtain as a result of the adjudication or settlement of an unrelated pending civil action in which he was the plaintiff (Catale action). See Catale v. DiGennaro , Superior Court, judicial district of Fair-field, Docket No. CV-17-6062268-S. The plaintiff's application for a prejudgment remedy incorporated by reference the affidavits that it previously had filed with the court in support of its motion for summary judgment and alleged that these affidavits established that probable cause existed that the plaintiff would be entitled to a deficiency judgment in the foreclosure matter in an amount equal to or greater than $458,000. The defendants filed a request for a hearing to contest the application, checking a box on the form response that they claimed "a defense, counterclaim, set-off, or exemption."

The parties subsequently reached a stipulated agreement regarding adjudication of the application for prejudgment remedy. The court approved the agreement and made it an order of the court on March 13, 2019. The agreement provided in relevant part that the plaintiff agreed to defer a hearing on its application for prejudgment remedy and the defendants’ objection thereto until after a resolution of the Catale action. In exchange, the defendants agreed not to dispose of any assets identified in the prejudgment remedy application, including any future settlement proceeds, and to promptly notify the plaintiff when a judgment or settlement was reached in the Catale action. The parties further agreed to cooperate with each other and to make best efforts to coordinate with the trial court to schedule a hearing on the application for prejudgment remedy as soon as possible after a resolution of the Catale action.

On June 1, 2020, the plaintiff filed the ex parte application that is the focus of the present appeal.⁸ The ex parte application again incorporated by reference the affidavits that the plaintiff had filed in support of its motion for summary judgment and that were referenced in its earlier application for a prejudgment remedy. The plaintiff also attached several exhibits, including an affidavit from an officer of its loan servicing company that averred facts in support of the plaintiff's new allegations that exigency necessitated the granting of an ex parte prejudgment remedy.

According to the plaintiff's ex parte application, the defendants intentionally violated the March 13, 2019 stipulated order by failing to notify it of a settlement that purportedly had been reached in the Catale action. One of the exhibits attached to the ex parte application was a transcript from a court-ordered mediation session in the Catale action in which the parties discuss the terms of an alleged settlement agreement with the court.⁹ The plaintiff asserted in its ex parte application that there was a reasonable likelihood that the defendants (1) were about to remove property from the state, (2) were about to fraudulently dispose of some of this property, and (3) had fraudulently hidden or withheld money, property or effects. The plaintiff noted in its memorandum of law in support of the ex parte application that "[t]he reason for the ex parte process in this matter is to dispense with the preattachment hearing requirement, as there are grounds for ex parte process. The stipulated order enjoins the defendant[s] from transferring, pledging, hypothecating or otherwise disposing of the target asset until after a hearing can be held, the [prejudgment remedy] application is decided and the plaintiff thereafter has ten days to effectuate the prejudgment remedy order. Therefore, the application is being e-filed in such a way that the defendant[s] actually will receive notice of the application. There still is need for prompt judicial action, though, as the defendant[s] already [are] in violation of the stipulated order."

With its ex parte application, the plaintiff also filed a caseflow request form that indicated that it had informed the defendants of the ex parte application and that they had not consented to it. Later that same day, the court issued an order granting the caseflow request and stating: "The court will consider the amended application ex parte."

The following day, June 2, 2020, the defendants filed a motion asking the court to vacate its order granting the plaintiff's caseflow request to consider the application "ex parte ...." They argued that "[t]he application raise[d] factual issues [that could not] be resolved on the papers" and that "[e]x parte consideration under the circumstances [was] unwarranted and inconsistent with the defendants’ due process rights." The court later denied that motion, stating: "The court gave consideration to due process concerns and limited its [prejudgment remedy] to real property and, essentially, a lien on settlements in other cases which were basically agreed to by counsel that the funds should be held in escrow previously in this case. The court will consider expanding or reducing upon the [prejudgment remedy] after a disclosure of assets is completed and further proceedings occur."

Also on June 2, 2020, and prior to any action by the court on the ex parte application , the defendants filed a response to the application itself. Specifically, the defendants objected to the application "being given ex parte consideration," disputed that any final agreement had been reached in the Catale action, and requested an evidentiary hearing "when the court may do so safely, given the COVID-19 procedures and limitations now in place." The defendants did not claim that the court lacked jurisdiction over the application due to the plaintiff's failure to attach copies of all supporting affidavits directly to the ex parte application rather than incorporating some by reference. The defendants, later that same day, filed a "supplemental objection" to which they attached an affidavit by Vito Catale's attorney in the Catale action.

On June 2, 2020, the court, Spader, J. , issued an order granting the ex parte application without conducting a hearing but on due consideration...