Premier Capital, Inc. v. Grossman

• Decision Date: 05 February 2002
• Docket Number: (AC 21469)
• Citation: 789 A.2d 565,68 Conn. App. 51
• Court: Connecticut Court of Appeals
• Parties: PREMIER CAPITAL, INC. v. DAVID S. GROSSMAN ET AL.

68 Conn. App. 51

789 A.2d 565

PREMIER CAPITAL, INC. v. DAVID S. GROSSMAN ET AL.

(AC 21469)

Appellate Court of Connecticut.

Argued October 30, 2001.

Officially released February 5, 2002.

Dranginis, Flynn and Healey, Js.

David S. Grossman, the appellants (defendants).

Neal L. Moskow, with whom, on the brief, were Frederic S. Ury and Deborah M. Garskof, for the appellee (plaintiff).

Opinion

FLYNN, J.

The defendants, David S. Grossman and Myrna S. Grossman, appeal from the judgment of the trial court rendered in favor of the plaintiff, Premier Capital, Inc., on its complaint and on the defendants' counterclaim following the court's adoption of the findings and recommendations contained in the report of an attorney fact finder (fact finder). On appeal, the defendants, who are husband and wife, claim that the court improperly accepted the fact finder's report because (1) the fact finder inappropriately allowed a computer generated record to be admitted as evidence of the defendants' debt and (2) the findings of fact of the fact finder relating to whether the defendants were entitled to prevail on their counterclaim for recoupment were inconsistent.¹ We reverse in part the judgment of the trial court on the basis of the last issue only.

The plaintiff commenced this action against the defendants for nonpayment of a debt. The plaintiffs amended complaint set out eight numbered paragraphs in which it alleged that, as assignee of a note executed by the defendants, it was entitled to the principal and interest due under the note along with attorney's fees and costs incurred in bringing this action to enforce the note. In response to the plaintiffs complaint, the defendants filed an answer and two special defenses. They also filed counterclaims for setoff and recoupment. In their counterclaim for setoff, the defendants adopted, in their entirety, the eight paragraphs of the plaintiffs complaint and alleged those eight paragraphs as the first eight paragraphs of their own claim for setoff.

Pursuant to Practice Book § 23-53, the matter was referred to an fact finder, who conducted a hearing and submitted a written report containing factual findings and recommendations as to judgment in accordance with Practice Book § 23-56. The relevant facts contained in that report are as follows. On April 14, 1992, the defendants executed a $10,000 note made payable to Brookfield Bank (bank), which note was payable on demand.² As collateral for the note, the defendants gave the bank a security interest in certain shares of General Electric stock, which shares were held solely in the name of Myrna Grossman. Pursuant to the terms of the note, the defendants promised to pay interest on the $10,000 principal amount borrowed at an initial rate of 9 percent per annum until May 1, 1992, at which time interest was payable at a variable rate. They also promised to pay any attorney's fees and costs that the bank might incur in enforcing the note in the event of a default.

On or about May 8, 1992, the bank failed and the Federal Deposit Insurance Corporation (FDIC) took possession of the assets of the bank, including the defendants' note and the collateral that secured it. The defendants failed to make any principal or interest payments on the note. Consequently, on April 21, 1994, an account officer of the FDIC wrote a letter to the defendants, informing them that, as of that date, the total amount due and owing under the note was $11,673.42, of which $10,000 represented principal and $1673.42 represented interest. The letter also requested that Myrna Grossman sign and that the defendants forward blank stock powers to the FDIC, thereby enabling the FDIC to sell the stock and apply the proceeds of that sale to the defendants' outstanding debt. In response to that letter, David Grossman requested that the FDIC provide a detailed account of the certificate numbers and the number of shares represented by each certificate securing the note. On June 24, 1994, the FDIC provided the defendants with the applicable stock certificate numbers as well as the number of shares that each certificate represented, which totaled 123 shares, together with photocopies of the certificates. The FDIC again requested that Myrna Grossman sign the corresponding stock powers and that the defendants forward those documents to the FDIC. The defendants did not do so.

On June 26, 1996, the FDIC assigned the note, together with the collateral, to the plaintiff. On August 1, 1996, the plaintiff sent a certified letter to the defendants, demanding payment of the outstanding balance due on the note, which as of that date amounted to $14,409.33 in principal and interest. The defendants have never made any payments on the debt.

The fact finder found that as of March 20, 2000, the total amount owing to the plaintiff on the note was $18,100.20 and that the plaintiff was entitled to $6375 in reasonable attorney's fees, plus costs associated with the litigation. The fact finder further found that the defendants failed to meet the burden of proving their special defenses and failed to present evidence that was sufficient to prove their counterclaims for setoff and recoupment. Accordingly, the fact finder recommended that the court render judgment for the plaintiff in the amount of $18,100.20 plus attorney's fees and costs. The fact finder also recommended that the court render judgment in favor of the plaintiff on the defendants' claims for setoff and recoupment.

Pursuant to Practice Book § 23-57, the defendants filed an objection to the court's acceptance of the fact finder's report, claiming, inter alia, that (1) the computer generated record that the plaintiff produced at trial was inadmissible hearsay and it was, therefore, improperly admitted as evidence of the debt, and (2) the fact finder improperly failed to find that the defendants had proved their claim for recoupment.

After reviewing the fact finder's findings of fact, the court concluded that the computer record adduced by the plaintiff as evidence of the defendants' debt was properly admitted under General Statutes § 52-180³ as an exception to the rule against admitting hearsay evidence. Further, with regard to the defendants' recoupment claim, the court concluded that the defendants provided no authority that supported their claim that they were entitled to a credit for the value of the stock that secured the note. The court also noted that it was the defendants' failure to sign and return the stock powers that hampered the FDIC's efforts to sell the stock and to apply the proceeds to the outstanding debt. Accordingly, it concluded that nothing in the record required findings or conclusions contrary to those made by the fact finder. The court, therefore, accepted the fact finder's findings and recommendations, and rendered judgment in favor of the plaintiff in the amount of $18,100.20, plus attorney's fees of $6375, plus costs. It also rendered judgment in favor of the plaintiff on the defendants' claim for recoupment. This appeal followed.

The defendants first claim that the court failed to find that the fact finder improperly allowed the plaintiff to introduce a computer printout record that had been created by the FDIC, rather than by the plaintiff itself, as evidence of the debt. We find it unnecessary to address that claim because the defendants made a binding judicial admission in their pleadings, namely, in their claim for setoff: "The principal sum of $10,000, plus accrued interest as of November 19, 1999 in the amount of $7,728.56, which interest continues to accrue, plus costs and attorneys' fees remains due and owing to Premier by the Grossmans." "Factual allegations contained in pleadings upon which the case is tried are considered judicial admissions and hence irrefutable as long as they remain in the case.... An admission in pleading dispenses with proof, and is equivalent to proof." (Citations omitted; internal quotation marks omitted.) Ferreira v. Pringle, 255 Conn. 330, 345, 766 A.2d 400 (2001).

Furthermore, during the proceeding before the fact finder, David Grossman admitted that he and his wife had executed the note and that neither of them had ever made any payments on the note. Although those evidential admissions were not binding judicial admissions as to Myrna Grossman, she did not offer any testimony or other evidence to contradict David Grossman's evidential admissions. Accordingly, the fact finder was entitled to rely on the binding admission that the defendants made in their pleadings, along with the admissions of David Grossman, as proof of the debt, and it is, therefore, unnecessary for us to determine whether any other evidence of the debt that was...