Hudson City Sav. Bank v. Hellman

Decision Date14 April 2020
Docket NumberAC 41472
Citation231 A.3d 182,196 Conn.App. 836
CourtConnecticut Court of Appeals

Charles D. Hellman, self-represented, for the appellants (named defendant et al.).

Zachary Grendi, for the appellee (substitute plaintiff).

Keller, Elgo and Bishop, Js.


The defendants Charles D. Hellman and Holly H. Hellman1 appeal from the judgment of foreclosure by sale rendered by the trial court in favor of the substitute plaintiff, Manufacturers and Traders Trust Company (M&T). On appeal, the defendants claim that the court improperly (1) granted the motion to substitute M&T for Hudson City Savings Bank (HCSB) as the plaintiff in the action,2 and (2) rendered summary judgment as to liability in favor of HCSB. We agree with the defendants’ second claim and reverse the judgment of the trial court.

The following facts and procedural history are relevant to the present appeal. On May 22, 2007, the defendants executed and delivered a note payable to Bank of America, N.A. (BANA), in the original principal amount of $532,000. The loan was secured by a mortgage deed on real property located in Westport, executed that same day, and recorded on the Westport land records.3 BANA endorsed the note in blank. The defendants have been in default on the note and mortgage since September, 2011.

On January 7, 2013, BANA assigned both the note and the mortgage to HCSB, with that assignment subsequently recorded on the Westport land records on January 14, 2013. On June 2, 2013, BANA, as the servicer for the note, sent a letter to the defendants notifying them of their rights under the mortgage relief program pursuant to the provisions of General Statutes §§ 8-265cc through 8-265kk. On June 21, 2013, BANA sent a letter to the defendants providing notice that the loan was in serious default and information with respect to the total amount required to cure the default. The notice of default also provided that, should the default not be cured on or before July 31, 2013, the mortgage payments would be accelerated.

When no payments followed, HCSB commenced the present foreclosure action against the defendants on December 4, 2013. HCSB filed the operative complaint, its third revised complaint, on June 29, 2016. On January 20, 2017, the defendants filed an answer that included thirteen special defenses, alleging, inter alia, that (1) HCSB lacked the right or capacity to maintain the action as a corporation, (2) HCSB lacked standing, (3) the assignment of the note and mortgage was not actual and bona fide, (4) BANA's conduct with respect to the mortgage constituted unclean hands, and (5) HCSB was estopped from enforcing the mortgage.

On August 4, 2017, HCSB moved for summary judgment as to liability, arguing that there was no genuine issue of material fact with respect to the defendants’ liability on the note and mortgage. Attached to that motion was the affidavit of Regina Rhodes. In the Rhodes affidavit, the affiant averred, in relevant part, that (1) she was authorized to sign the affidavit on behalf of HCSB as an assistant vice president for BANA, (2) BANA maintained records for the loan in question, and part of her responsibilities was to be familiar with the types of records maintained by BANA in connection with the loan, (3) she had personal knowledge of BANA's procedures for creating the records, (4) as of May 22, 2007, the defendants owed $532,000 as evidenced by the note payable to BANA, (5) on or before November 25, 2013, HCSB ‘‘became and at all times since then has been the party entitled to collect the debt evidenced by the [n]ote and is the party entitled to enforce the [m]ortgage securing the debt,’’ (6) the note and mortgage are in default for nonpayment as of September 1, 2011, (7) the defendants were given notice of default, ‘‘by certified mail, postage fully prepaid,’’ on June 21, 2013, and (8) HCSB ‘‘directly or through an agent, has possession of the promissory note. [HCSB] is the assignee of the security instrument for the referenced loan.’ Accompanying the Rhodes affidavit were copies of the note, a June 21, 2013 notice of default addressed to the defendants, a quitclaim deed of the property, the mortgage, the assignment of the note and mortgage from BANA to HCSB, and a June 2, 2013 notice addressed to the defendants that contained information pursuant to §§ 8-265cc through 8-265kk.

After being granted an extension of time to respond, the defendants filed their opposition to HCSB's motion for summary judgment on October 27, 2017. In support of their opposition, the defendants submitted the affidavit of the defendant Charles D. Hellman. In that affidavit, Charles D. Hellman averred that, during 2012, BANA repeatedly stated that it no longer owned the ‘‘loan’’ and mortgage, and refused to reveal the identity of the new owner. He further averred, in relevant part, that (1) HCSB failed to establish that notice of default was delivered to the defendants as a condition of the mortgage due to Rhodes averring that HCSB had sent notice by certified mail without proof of receipt and (2) he could no longer find any physical branches of HCSB in Connecticut which ‘‘raise[d] questions as to [HCSB's] existence and status as a real party in interest in this matter.’’

On October 30, 2017, the court, Randolph, J. , held a hearing on the motion for summary judgment and heard arguments from both parties. Three days later, the court granted HCSB's motion for summary judgment as to liability. In its order, the court found that no genuine issue of material fact existed as to the defendants’ liability and that the defendants’ special defenses and affidavit were insufficient to rebut HCSB's prima facie case.

On November 28, 2017, HCSB filed a motion to substitute M&T as the plaintiff, pursuant to Practice Book §§ 9-16 and 9-23.4 In support of its motion, HCSB attached a copy of a certificate of effectiveness that evidenced that, as of November 1, 2015—approximately twenty-one months before HCSB filed its motion for summary judgment as to liability—HCSB had merged into M&T5 Over the defendants’ opposition, the court, Lee, J. , granted that motion on December 11, 2017. On February 26, 2018, the court, Randolph, J. , rendered judgment of foreclosure by sale in favor of M&T, ordering that a sale of the property be held on June 23, 2018. On March 6, 2018, notice of judgment of foreclosure by sale was sent to the defendants. This appeal followed.6


We first address the defendants’ claim that the court improperly granted HCSB's motion to substitute M&T as the plaintiff. According to the defendants, substituting M&T as the plaintiff impeded their ability to properly oppose HCSB's motion for summary judgment and obtain proper discovery from M&T. In response, M&T asserts that the defendants were not prejudiced because the substitution had no substantive effect. We agree with M&T.

‘‘ Practice Book § 9-16 confers authority on a trial court judge to substitute a new plaintiff as the sole plaintiff in a pending action as long as the substitution does not prejudice the defense of the action. The decision whether to grant a motion for the [substitution] of a party to pending legal proceedings rests generally in the sound discretion of the trial court. ... Our review is limited to a determination of possible abuse of discretion.’(Citation omitted; internal quotation marks omitted.) Trevek Enterprises, Inc. v. Victory Contracting Corp. , 107 Conn. App. 574, 578–79, 945 A.2d 1056 (2008). ‘‘In reviewing the trial court's exercise of that discretion, every reasonable presumption should be indulged in favor of its correctness ... and only if its action discloses a clear abuse of discretion is our interference warranted.’’ (Internal quotation marks omitted.) Joblin v. LaBow , 33 Conn. App. 365, 367, 635 A.2d 874 (1993), cert. denied, 229 Conn. 912, 642 A.2d 1207 (1994).

‘‘Our rules of practice ... permit the substitution of parties as the interests of justice require.’’ Federal Deposit Ins. Corp. v. Retirement Management Group, Inc. , 31 Conn. App. 80, 84, 623 A.2d 517, cert. denied, 226 Conn. 908, 625 A.2d 1378 (1993). ‘‘As long as [the] defendant is fully apprised of a claim arising from specified conduct and has prepared to defend the action, his ability to protect himself will not be prejudicially affected if a new plaintiff is added ....’’ (Internal quotation marks omitted.) Rana v. Terdjanian , 136 Conn. App. 99, 110, 46 A.3d 175, cert. denied, 305 Conn. 926, 47 A.3d 886 (2012).

We begin by noting that the defendants’ claim appears to be centered on the merger of HCSB into M&T and how that merger eventually came to light. The defendants assert that they were prejudiced by the substitution due to the fact that the motion to substitute was filed more than two years after the merger took effect and more than three months after HCSB filed for summary judgment. According to the defendants, the timing of these events (1) misled both themselves and the court, (2) circumvented HCSB's obligation to show it was entitled to seek judgment, and (3) impeded their ability to oppose the motion for summary judgment because the merger contradicted the averments made in the Rhodes affidavit.

Guiding our resolution of the defendants’ claim are the statutory and legal principles governing the mergers of banking institutions. In Financial Freedom Acquisition, LLC v. Griffin , 176 Conn. App. 314, 170 A.3d 41, cert. denied, 327 Conn. 931, 171 A.3d 454 (2017), this court provided a comprehensive discussion of how a foreclosure action is affected when a plaintiff bank merges into another banking institution during the pendency of the action.7 In that case, this court explored federal and Connecticut banking law—as well as Connecticut corporate law—to resolve the consequences of the plaintiff's merger and name change during the pendency of the action in which the new entity was never...

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