U.S. Bank, Nat'l Ass'n v. Schaeffer

• Decision Date: 29 September 2015
• Docket Number: No. 36910.,36910.
• Citation: 160 Conn.App. 138,125 A.3d 262
• Parties: U.S. BANK, NATIONAL ASSOCIATION, Trustee v. Anne K. SCHAEFFER et al.
• Court: Connecticut Court of Appeals

160 Conn.App. 138

125 A.3d 262

U.S. BANK, NATIONAL ASSOCIATION, Trustee

v.Anne K. SCHAEFFER et al.

No. 36910.

Appellate Court of Connecticut.

Argued May 21, 2015.

Decided Sept. 29, 2015.

William J. Hanlon, with whom, on the brief, was David M. Bizar, for the appellant(substitute plaintiff).

Eileen McGann, for the appellee(named defendant).

GRUENDEL, SHELDON, and BORDEN, Js.

BORDEN, J.

The plaintiff, U.S. Bank, National Association, as trustee for Wells Fargo Asset Securities Corporation Mortgage Pass–Through Certificates, Series 2005–AR6 Pooling and Servicing Agreement (U.S. Bank),¹ appeals from the judgment of the trial court dismissing this residential real estate foreclosure action against several defendants, including the named defendant, Anne Schaeffer, for lack of standing.²U.S. Bank claims that the trial court applied the incorrect legal standard in determining that it lacked standing to enforce the note.U.S. Bank further claims that, pursuant to the correct standard, it has standing to pursue the underlying foreclosure action.We agree, and therefore reverse the judgment of the trial court.

U.S. Bank brought this foreclosure action.The defendant moved to dismiss the action for lack of standing.Following a series of evidentiary hearings, the trial court granted the motion to dismiss.This appeal followed.

The following facts and procedural history are relevant to the present case.The defendant owns a piece of property located at 308State Route 39, New Fairfield.On January 5, 2005, the defendant executed a note for a loan in the principal amount of $225,000 in favor of Wells Fargo Bank, National Association(Wells Fargo).At the same time, the defendant also executed and delivered to Wells Fargo a mortgage on the property.The Wells Fargo Asset Securities Corporation(asset corporation), a subdivision of Wells Fargo responsible for its mortgage transactions, was the owner of the debt and Wells Fargo, as the master servicer, maintained possession of the defendant's note and mortgage agreement.

On March 17, 2005, the defendant's note and debt were moved into a trust as part of the Wells Fargo Asset Securities Corporation Mortgage Pass–Through Certificates, Series 2005–AR6, Pooling and Servicing Agreement, a pooling and servicing agreement among Wells Fargo, the asset corporation and Wachovia Bank (Wachovia).Wachovia was named trustee of the pooling and servicing agreement.In accordance with the terms of the pooling and servicing agreement, the defendant's note was endorsed in blank by Wells Fargo.Shortly thereafter, Wells Fargo entered into a custodial agreement with Wachovia, as part of which Wells Fargo agreed to act as an "agent for [Wachovia Bank]" and to maintain possession of the documents associated with the pooling and servicing agreement.

On November 29, 2005, Wachovia's corporate trust business was acquired by U.S. Bank.As part of the purchase, U.S. Bank acquired the interest in all of Wachovia's mortgage-backed transactions, including Wachovia's trusteeship in the pooling and servicing agreement with Wells Fargo and the asset corporation.Wells Fargo continued to act as custodian of those notes and mortgage agreements.On February 18, 2009, U.S. Bank commenced the present foreclosure action, alleging that the defendant had defaulted on the note, and that U.S. Bank was the holder of the note.

The defendant filed a motion to dismiss the foreclosure action on March 27, 2009.On August 5, 2011, the trial court, Pavia, J., denied the defendant's motion to dismiss.Shortly thereafter, the trial court reconsidered its decision and vacated its order denying the motion to dismiss.The trial court then held an evidentiary hearing on December 12, 2011.At the hearing, legal counsel for U.S. Bank presented the original note to the court.The original note was signed by the defendant and was made payable to the lender, Wells Fargo.On its last page, the note was endorsed by stamp in blank.The note was identified by Erin Hirzel Roesch, a vice president of Wells Fargo in charge of loan documentation, and a copy of the note was marked and entered into evidence.Judge Pavia, after examining the original note, entered a copy of the note and endorsement into evidence.Hirzel Roesch further testified that the note had remained with Wells Fargo, as custodian of the trust's documents, until the point at which U.S. Bank began legal preparations to initiate foreclosure proceedings.Following the evidentiary hearing, Judge Pavia granted the defendant a continuance to obtain and review those documents related to U.S. Bank's acquisition of the debt and note.

Following almost two years of inaction on the motion to dismiss, on October 15, 2013, the trial court, Roraback, J., held a status conference in which the court indicated that an additional evidentiary hearing was needed to resolve the motion to dismiss, and ordered the production of numerous documents from U.S. Bank regarding the note's chain of title.On November 18, 2013, Judge Roraback held an additional evidentiary hearing regarding the documents ordered from U.S. Bank.At the hearing, U.S. Bank provided to the trial court a copy of the pooling and servicing agreement among Wells Fargo, the asset corporation and Wachovia, as well as a copy of the custodial agreement between Wells Fargo and Wachovia.U.S. Bank additionally provided an assignment and assumption agreement in which all interest in Wachovia's corporate trust business was conveyed to U.S. Bank.Judge Roraback asked U.S. Bank to provide to the trial court the original purchase agreement between U.S. Bank and Wachovia.At a subsequent hearing on January 13, 2014, U.S. Bank indicated that it was having difficulty locating the document.In lieu of the purchase agreement, U.S. Bank entered into evidence, over the defendant's objection, a joint affidavit by Charles Pedersen, a vice president of U.S. Bank, and Kevin Shire, a vice president of Wachovia, attesting, on the basis of their personal knowledge, that U.S. Bank had purchased all of Wachovia's trust assets on November 29, 2005, including the trust containing the defendant's note and debt.

Specifically, this joint affidavit referred to a certain "Purchase Agreement" between Wachovia and U.S. Bank, pursuant to which U.S. Bank acquired all of Wachovia's corporate trust business described in a fourteen-page appendix as "Mortgage–Backed Transactions."The first item on the fourteenth page identified as part of the acquired assets the same Wells Fargo entity that had acquired the note earlier, namely, the Wells Fargo Asset Securities Corporation Mortgage Pass–Through Certificates, Series 2005–AR6, Pooling and Servicing Agreement.This affidavit had been recorded on the land records, and U.S. Bank offered a certified copy of it pursuant to §§ 10–1and10–4 of the Code of Evidence, which concern the best evidence rule.³The court stated that, although the document was admissible "because I do think it satisfies the rules of evidence,"the court would nonetheless "give it whatever weight ... this document might be due...."

On January 13, 2014, the trial court closed the evidence, and subsequently received briefs on the motion to dismiss.The trial court then issued a memorandum of decision on April 3, 2014, granting the motion to dismiss.The trial court specifically noted that, although the evidence presented demonstrated "plausible scenarios under which [U.S. Bank] might have standing," U.S. Bank had failed to prove definitively that it had standing to foreclose, largely because it was unable to provide the original purchase agreement between itself and Wachovia.

More specifically, the court reasoned in its memorandum of decision that U.S. Bank's "inability to locate and enter into evidence a copy of the Purchase Agreement [between U.S. Bank and Wachovia] is fatal to its efforts to prove that it has standing to pursue this matter."One of the other "plausible scenarios" posited by the court was that "ownership of the note in question had been transferred from Wachovia Corporation to another party on or before it entered into the Purchase Agreement with" U.S. Bank.With regard to the joint affidavit, the court gave it what it described as "limited weight," principally because of the best evidence rule.⁴The court stated: "Without having the benefit of the Purchase Agreement itself, the court is unable to know if that agreement transferred ownership of the note."

The court then noted that, despite its having ruled that the affidavit was admissible under the best evidence rule, none of the applicable exceptions to the rule applied.U.S. Bank claims that the trial court improperly granted the motion to dismiss, and that the evidence submitted demonstrates that it has standing to foreclose.We agree.

"The issue of standing implicates the trial courts subject matter jurisdiction and therefore presents a threshold issue for our determination....Standing is the legal right to set judicial machinery in motion.One cannot rightfully invoke the jurisdiction of the court unless he[or she] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy....[When]a party is found to lack standing, the court is consequently without subject matter jurisdiction to determine the cause....We have long held that because [a] determination regarding a trial court's subject matter jurisdiction is a question of law, our review is plenary....In addition, because standing implicates the court's subject matter jurisdiction, the issue of standing is not subject to waiver and may be raised at any time."(Citation omitted; internal quotation marks omitted.)Wells Fargo Bank, N.A. v. Strong,149 Conn.App. 384, 397–98, 89 A.3d 392, cert. denied, 312 Conn. 923, 94 A.3d 1202(2014).

"[B]ecause the issue of standing implicates subject matter jurisdiction, it may be a proper...