South End Plaza v. Cote, Sr.

• Decision Date: 23 March 1999
• Citation: South End Plaza v. Cote, Sr., 727 A.2d 231, 52 Conn. App. 374 (Conn. App. 1999)
• Court: Connecticut Court of Appeals
• Parties: (Conn.App. 1999) SOUTH END PLAZA ASSOCIATION, INC. v. JOHN C. COTE, SR., ET AL. 18148

727 A.2d 231 (Conn.App. 1999)

SOUTH END PLAZA ASSOCIATION, INC. v. JOHN C. COTE, SR., ET AL.

18148

Connecticut Court of Appeals

Argued November 2, 1998

March 23, 1999

Thomas J. Morrissey, pro hac vice, with whom were James N. Tallberg and, on the brief, R. Alisha Verdone and Jennifer A. Osowiecki, for the appellant (defendant Premier Capital, Inc.). Darcy Kochiss Ellis, with whom, on the brief, were Tanis Reid and Robert A. Maniscalco, for the appellee (defendant Wilshire Credit Corporation).

O'connell, C. J.

O'Connell, C. J., and Lavery and Spear, Js.

OPINION

Premier Capital, Inc. (Premier), a defendant in this foreclosure action, appeals from the judgment of the trial court on a motion for determination of priorities and supplemental judgment. The trial court ruled in favor of Wilshire Credit Corporation (Wilshire), another defendant in the foreclosure action, and found that Wilshire had priority over Premier to the proceeds of the foreclosure sale. We affirm the judgment of the trial court.

The following facts are relevant to this appeal. In July, 1987, John C. Cote, Sr., the owner of the equity of redemption and a defendant in the foreclosure action, acquired units 59 and 60 of the South End Plaza common interest community by means of a single warranty deed. To finance the purchase, Cote executed two promissory notes to Brookfield Bank, each in the original principal amount of $112,000. Both notes originated as preprinted forms and both contained a section entitled "Security Interests and Other Rights." Under this section, the forms had the words "I am giving you a mortgage on real estate of mine located at (give street address)," followed by a blank line. On one note, Cote filled in the blank with typewritten words so that the sentence read, "I am giving you a mortgage on real estate of mine located at Unit #59, South End Plaza, New Milford, Conn." The other note read, "I am giving you a mortgage on real estate of mine located at Unit #60, South End Plaza, New Milford, Conn."

The notes were secured by two mortgage deeds, one for unit 59 and the other for unit 60. Each mortgage stated that the mortgagor was indebted to the mortgagee pursuant to the terms of a commercial promissory note that was attached as schedule D. The schedule D that was recorded following the unit 59 mortgage consists of a copy of the note on which is typewritten, "I am giving you a mortgage on . . . Unit #60." The schedule D attached to the mortgage deed to unit 60 was a copy of the note that read, "I am giving you a mortgage on . . . Unit #59."

Brookfield Bank retained ownership of the loan documents until its closure in 1992. The original notes and mortgages subsequently came into the possession of the Federal Deposit Insurance Corporation (FDIC) as receiver of Brookfield Bank. The FDIC foreclosed its mortgage on unit 59 in July, 1994. In December, 1995, the FDIC endorsed to Premier the unit 59 promissory note with the intention that Premier would have the right to collect any deficiency that remained under the unit 59 note. In January, 1996, the FDIC endorsed to Wilshire the note containing the statement that Cote was giving a mortgage on unit 60. In April, 1997, South End Plaza Association (South End), the plaintiff, initiated the foreclosure action underlying this appeal. South End sought to foreclose its lien on unit 60 for the nonpayment of condominium fees. Both Wilshire and Premier were named as defendants in the action, each alleging an interest in unit 60.

Following a judgment of foreclosure by sale and the subsequent sale of unit 60, the trial court held a separate hearing to determine whether Premier or Wilshire owned the mortgage to unit 60 and was entitled to the proceeds of the sale in excess of the amount due South End. The trial court found that Wilshire's note was secured by the mortgage on unit 60 and, therefore, it had priority to the sale proceeds. Premier appeals from that ruling.¹

Premier argues that its note referencing unit 59...