Jackson v. Pennymac Loan Servs., LLC

• Decision Date: 08 June 2021
• Docket Number: AC 43042
• Parties: Mary JACKSON et al. v. PENNYMAC LOAN SERVICES, LLC
• Court: Connecticut Court of Appeals

205 Conn.App. 189

257 A.3d 314

Mary JACKSON et al.

v.PENNYMAC LOAN SERVICES, LLC

AC 43042

Appellate Court of Connecticut.

Argued November 12, 2020

Officially released June 8, 2021

Sabato P. Fiano, with whom, on the brief, was Lori A. DaSilva-Fiano, Fairfield, for the appellants (plaintiffs).

Jeffrey C. Ankrom, with whom, on the brief, was Donald E. Frechette, Hartford, for the appellee (defendant).

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

FLYNN, J.

The plaintiffs, Mary Jackson and Johnnie Jackson, appeal from the judgment of the trial court granting the motion of the defendant, Pennymac Loan Services, LLC, to dismiss the action of the plaintiffs in which they alleged that the defendant violated General Statutes § 49-8 (c) by failing to provide a timely release of their mortgage. The defendant did not argue in its motion that the action should be dismissed for lack of subject matter jurisdiction due to the plaintiffs’ alleged failure to satisfy the requirements of § 49-8 (c) regarding a statutory demand notice for release of the mortgage. Nevertheless, the court dismissed the action on that ground. On appeal, the plaintiffs claim that the court deprived them of due process by dismissing their action on a ground that the court had raised sua sponte without affording them notice or an opportunity to be heard. We agree with the plaintiffs that neither the defendant's motion to dismiss nor the court alerted them that their alleged noncompliance with the statutory demand notice requirements in § 49-8 (c) was at issue and, accordingly, we reverse the judgment of the trial court.

At the outset, we note that at the center of the plaintiffs’ appeal is § 49-8, which concerns, inter alia, the release of a satisfied mortgage, and provides in relevant part: "(a) The mortgagee or a person authorized by law to release the mortgage shall execute and deliver a release to the extent of the satisfaction tendered before or against receipt of the release: (1) Upon the satisfaction of the mortgage .... (c) The mortgagee or plaintiff or the plaintiff's attorney, as the case may be, shall execute and deliver a release within sixty days from the date a written request for a release of such encumbrance (1) was sent to such mortgagee, plaintiff or plaintiff's attorney at the person's last-known address by registered or certified mail, postage prepaid, return receipt requested, or (2) was received by such mortgagee, plaintiff or plaintiff's attorney from a private messenger or courier service or through any means of communication, including electronic communication, reasonably calculated to give the person the written request or a copy of it. The mortgagee or plaintiff shall be liable for damages to any person aggrieved at the rate of two hundred dollars for each week after the expiration of such sixty days up to a maximum of five thousand dollars or in an amount equal to the loss sustained by such aggrieved person as a result of the failure of the mortgagee or plaintiff or the plaintiff's attorney to execute and deliver a release, whichever is greater, plus costs and reasonable attorney's fees."

The following facts and procedural history, as stated by the trial court, are relevant to the resolution of the plaintiffs’ claims on appeal. "On May 7, 2018, the plaintiffs ... filed a two count complaint against the defendant ... alleging the following facts. The plaintiffs owned property known as 261 Winthrop Avenue in New Haven, Connecticut (property). [The] property was encumbered by a mortgage given by the plaintiffs, dated October 13, 2010, and recorded on October 15, 2010, in the New Haven land records (land records) that, after several assignments, was assigned to the defendant by assignment dated January 2, 2014, and recorded on January 14, 2014, in the land records. On or about January 20, 2016, the plaintiffs paid off the mortgage to the defendant by wire transfer in accordance with the defendant's payoff statement, which the plaintiffs and the defendant had negotiated. The defendant was notified of the statutorily mandated sixty day period to issue a valid release of the mortgage pursuant to ... § 49-8, but the defendant failed to timely provide a proper and valid executed release of mortgage within that time period. The defendant violated § 49-8 and is liable for statutory damages in the amount of $5000, plus reasonable attorney's fees and costs." (Footnotes omitted.) The court further stated that the defendant filed an answer and special defenses in which it alleged that it was assigned the subject mortgage on the property and received sufficient funds to pay off the mortgage, however, the defendant denied that it had failed to provide a proper and valid release. The defendant moved to dismiss the action for lack of subject matter jurisdiction on the grounds that the plaintiffs were neither classically nor statutorily aggrieved. Alternatively, the defendant sought summary judgment.

In a decision filed May 21, 2019, the court granted the defendant's motion to dismiss. The court determined that " § 49-8 is a penalty statute, and the plaintiffs can be, potentially, statutorily aggrieved simply by not having received a timely valid release from the defendant within sixty days of the requisite notice/request for release of mortgage having been sent and/or received .... The plaintiffs can only be aggrieved pursuant to § 49-8 if they have strictly complied with the statutory notice provisions." Although the court never notified the plaintiffs that it was considering granting the motion to dismiss on grounds that it had raised sua sponte concerning the plaintiffs’ compliance with the statutory demand notice requirements in § 49-8 (c), it, nonetheless, did so. It concluded that the plaintiffs had not complied with these requirements: "First, the plaintiffs fail to indicate on the notice itself, and fail to present other evidence in support, that the notice was ‘sent’ to the defendant by registered or certified mail, return receipt requested, as required by the statute. Second, the plaintiffs fail to indicate on the notice itself, and fail to present other evidence in support, that the notice was ‘received’ by the defendant or the defendant's attorney from a private messenger or courier service or through any means of communication, including electronic communication, as required by statute. ... The court has further reason to doubt that the plaintiffs have sufficiently complied with the requirements in the statute; specifically, that the plaintiffs sent such notice to the defendant's last known address. In the assignment of the mortgage to the defendant, the address for the defendant is listed as: 6101 Condor Drive, Moorpark, CA 93021-2603.... The notice, however, lists a different zip code than the one provided on the assignment. The notice is addressed with the zip code 93201." (Internal quotation marks omitted.) The court concluded that, because "the plaintiffs have not met their burden of establishing that they complied with statutory demand notice in § 49-8, the court lacks subject matter jurisdiction. Therefore, the defendant's motion to dismiss is granted. In light of the court's ruling on the motion to dismiss, it need not address the alternate motion for summary judgment." This appeal followed.

I

The plaintiffs claim that the court violated their right to due process when it granted the defendant's motion to dismiss on grounds that the court had raised sua sponte. The plaintiffs specifically contend that the defendant did not raise in its motion to dismiss the issue of their alleged failure to satisfy the statutory demand notice requirements in § 49-8 (c), and that the court did not give them notice or an opportunity to be heard and present evidence of their compliance on that issue before it determined that their failure to satisfy those statutory requirements caused them to lack standing. We agree.

The following principles guide our analysis. Our review of the court's decision on a motion to dismiss is plenary. See Izzo v. Quinn , 170 Conn. App. 631, 636, 155 A.3d 315 (2017). Additionally, our review of whether a party has been deprived of due process is a question of law over which our review is plenary. See Mikucka v. St. Lucian's Residence, Inc ., 183 Conn. App. 147, 160–61, 191 A.3d 1083 (2018).

The language of § 49-8 (c) indicates that the defendant is required to provide a release of mortgage, to the extent of the satisfaction, within sixty days from the date that the plaintiffs properly sent a written demand for release of such mortgage or from the date that it was properly received. General Statutes § 49-8 (c). The issue of the plaintiffs’ alleged failure to comply with the statutory demand notice requirements in § 49-8 (c), however, was not raised by the defendant in its motion to dismiss, in its accompanying memorandum of law, or during argument on the motion to dismiss. Rather, in its motion to dismiss, the defendant claimed that the plaintiffs lacked standing because "they never suffered any harm and thus are neither classically nor statutorily aggrieved." In its memorandum of law in support of its motion to dismiss, the defendant argued that the plaintiffs did not suffer an injury because the defendant had provided a release of mortgage that was effective to discharge the mortgage, despite a "typographical error," and that the plaintiffs were not aggrieved because they were not the owners of the property.

Although the plaintiffs, in their complaint, alleged an injury to an interest protected by § 49-8, the court determined that the plaintiffs were not aggrieved because they had failed to demonstrate , by the notice itself or by other evidence, that they had complied strictly with the requirements regarding a statutory demand notice for release of mortgage in § 49-8 (c). "A fundamental premise of due process is that a court cannot adjudicate any matter unless the parties have been given a reasonable opportunity to be...