Rescia v. Freedom Mortg. Corp. (In re Hensel)
| Decision Date | 30 September 2021 |
| Docket Number | Adv. Pro. No. 20-3041 (AMN),Case No.: 20-30036 (AMN) |
| Citation | 636 B.R. 330 |
| Parties | IN RE: Arthur Chester HENSEL, Jr and Dolores Ann Hensel, Debtors. Kara S. Rescia, Chapter 7 Trustee, Plaintiff v. Freedom Mortgage Corporation, Defendant |
| Court | U.S. Bankruptcy Court — District of Connecticut |
Paige M. Vaillancourt, Esq., Rescia Law, P.C., 5104A Bigelow Commons, Enfield, CT 06082, Counsel for the plaintiff, Kara S. Rescia, Chapter 7 Trustee
Gerald L. Garlick, Esq., Seiger Gfeller Laurie LLP, 977 Farmington Avenue, West Hartford, CT 06107, Counsel for the Defendant, Freedom Mortgage Corporation
Re: AP-ECF Nos. 24, 251
Before the court are cross-motions for summary judgment filed by the plaintiff, Kara S. Rescia, the Chapter 7 Trustee (the "Trustee"), and the defendant, Freedom Mortgage Corporation (the "defendant"). See , AP-ECF Nos. 24, 25. These cross motions for summary judgment present a discrete issue of law: whether under Connecticut law the omission of a date in a notary's certificate of acknowledgment is a defect rendering the acknowledgment void. There is no material fact in dispute.
The Trustee seeks to avoid a transfer of an interest in property by the debtors (i.e., the mortgage granted to the defendant) for the benefit of the bankruptcy estate's unsecured creditors. The Trustee asserts the omission of a date renders an acknowledgment of a signature on the mortgage defective, rendering the mortgage invalid. The defendant argues Connecticut statutes do not require a date and the omission here is insubstantial, leaving the mortgage valid. Because the plain language of the Connecticut statutes supports the defendant's position and for the additional reasons below, the court concludes there is no express requirement that an acknowledgment be dated.
The United States District Court for the District of Connecticut has jurisdiction over this adversary proceeding by virtue of 28 U.S.C. § 1334(b). This court derives its authority to hear and determine this matter on reference from the District Court pursuant to 28 U.S.C. §§ 157(a), (b)(1), and the District Court's General Order of Reference dated September 21, 1984. This is a "core proceeding" pursuant to 28 U.S.C. §§ 157(b)(2)(A), (B), (E), (K), and (O). This adversary proceeding arises under the Debtors’ Chapter 7 case pending in this District. Therefore, venue is proper pursuant to 28 U.S.C. § 1409.
This memorandum constitutes the court's findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure, applicable here pursuant to Rules 7052 and 9014(c) of the Federal Rules of Bankruptcy Procedure.
On January 9, 2020, the debtors, Arthur Chester Hensel, Jr and Dolores Ann Hensel (the "Debtors"), filed a voluntary Chapter 7 petition (the "Petition Date"). ECF No. 1. The Plaintiff was appointed as the Trustee of the Debtors’ Chapter 7 bankruptcy estate. ECF No. 1. In Schedule A/B: Property, the Debtors listed their interest in real property located at 61 North Hoadley Street, Naugatuck, Connecticut (the "Property") as having a value of $175,000. ECF No. 1, p. 8. In Schedule D: Creditors Who Have Claims Secured by Property, the Debtors listed Freedom Mortgage as holding a claim of $128,140.86 secured by the Property. ECF No. 1, p. 24. On April 14, 2020, the Trustee filed a report of assets indicating she discovered an asset identified as a possible mortgage avoidance claim that may provide a dividend to creditors. ECF No. 22. The deadline for creditors to file proofs of claim was set for July 14, 2020 and a total of $60,769.24 in proofs of claims were then filed. On April 14, 2020, the Debtors each received a Chapter 7 discharge pursuant to 11 U.S.C. § 727. ECF No. 65.
On September 23, 2020, the Trustee commenced this adversary proceeding by filing a complaint (the "Complaint") against the defendant seeking to avoid a mortgage on the Debtors’ Property held by the defendant and recover its value for the benefit of the unsecured creditors of the Debtors’ bankruptcy estate pursuant to 11 U.S.C. §§ 544, 550, 551. AP-ECF No. 1. The defendant appeared, answered the complaint, and asserted two special defenses. AP-ECF No. 12. Thereafter, on March 22, 2021, the Trustee and the defendant filed the instant, cross-motions for summary judgment, including memoranda of law in support of their respective positions and D.Conn.L.Civ.R. 56(a)(1) statements. See , AP-ECF Nos. 24, 25, 26, 27, 28, 29. The Trustee and the defendant each objected to the other's summary judgment motion. See , AP-ECF Nos. 30, 32. On June 28, 2021, the court heard oral argument on the cross-motions.
Parties seeking summary judgment in this District must file a "concise statement of each material fact" showing there is no genuine issue to be tried. D.Conn.L.Civ.R. 56(a)(1). The opposing party must file a responding document stating whether each fact is admitted or denied. D.Conn.L.Civ.R. 56(a)(2). Each material fact in a 56(a)(1) statement supported by evidence will be admitted unless a fact is controverted or disputed by the 56(a)(2) statement. D.Conn.L.Civ.R. 56(a)(1).
Here, the parties filed timely Rule 56(a) statements and the defendant filed a 56(a)(2) statement indicating agreement on all material facts. These cross-summary judgment motions present the purely legal dispute about whether the omission of a date of acknowledgment in a notary certificate has the effect of rendering the mortgage unperfected and unenforceable against the Property.
"[A] court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a), as made applicable by Fed.R.Bankr.P. 7056. The movant bears the initial burden of showing there is no genuine dispute as to any material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "The substantive law governing the case will identify those facts that are material, and ‘[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.’ " Bouboulis v. Transp. Workers Union of Am. , 442 F.3d 55, 59 (2d Cir. 2006) (quoting , Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). The movant may satisfy its burden by "citing to particular parts of materials in the record" or by "showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed.R.Civ.P. 56(c)(1). Once the movant has satisfied its burden, the opposing party "must set forth ‘specific facts’ demonstrating that there is ‘a genuine issue for trial’ " Wright v. Goord , 554 F.3d 255, 266 (2d Cir. 2009) (citing Fed.R.Civ.P. 56(e) ). Should a party fail to establish the existence of an element essential to its case for which that party would bear the burden of proof at trial, summary judgment shall enter against said party. Celotex , 477 U.S. at 322, 106 S.Ct. 2548. When considering a motion for summary judgment, the Court may consider depositions, documents, affidavits, interrogatory answers, and other exhibits in the record. Fed. R. Civ. P. 56(c).
When, as here, the parties cross-move for summary judgment, the court is not required to grant judgment as a matter of law for either party. Connecticut Mun. Electric Energy Coop. v. Natl. Union Fire Ins. Co. of Pittsburgh, PA , 3:19CV839 (JBA), 2021 WL 4170757, at *7 (D. Conn. Sept. 14, 2021) (citing , Heublein, Inc. v. United States , 996 F.2d 1455, 1461 (2d Cir.1993). "Generally, in deciding cross-motions for summary judgment, each party's motion must be examined on its own merits, and in each case all reasonable inferences must be drawn against the party whose motion is under consideration." Kola v. Forster & Garbus LLP , 19-CV-10496 (CS), 2021 WL 4135153, at *3 (S.D.N.Y. Sept. 10, 2021) (citing, Morales v. Quintel Ent., Inc. , 249 F.3d 115, 121 (2d Cir. 2001) ). But...
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