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

• Decision Date: 02 March 2021
• Docket Number: AC 43568
• Citation: 203 Conn.App. 28,247 A.3d 161
• Court: Connecticut Court of Appeals
• Parties: U.S. BANK, NATIONAL ASSOCIATION, Trustee v. Lee MONCHO et al.

203 Conn.App. 28

247 A.3d 161

U.S. BANK, NATIONAL ASSOCIATION, Trustee

v.Lee MONCHO et al.

AC 43568

Appellate Court of Connecticut.

Argued October 8, 2020

Officially released March 2, 2021

James M. Nugent, Milford, for the appellants (named defendant et al.).

Pierre-Yves Kolakowski, Greenwich, for the appellee (plaintiff).

Alvord, Elgo and Albis, Js.

ALBIS, J.

The defendants Lee Moncho and Karen Moncho¹ appeal from the judgment of strict foreclosure rendered by the trial court in favor of the plaintiff, U.S. Bank, National Association, Trustee, as successor in interest to Wachovia Bank, N.A., as Trustee for JPMorgan 2005-A7. On appeal, the defendants claim that the court erred by (1) refusing to deem all of the defendants’ special defenses as admitted when the plaintiff failed to reply to them prior to trial, (2) concluding that the plaintiff had standing and was entitled to enforce the note, (3) rejecting the defendants’ five special defenses, and (4) improperly admitting evidence concerning the payment history of the note as a business record. We affirm the judgment of the trial court.

The following facts and procedural history are relevant to our discussion of the claims on appeal. The plaintiff commenced this foreclosure action on July 3, 2017. The plaintiff later filed a revised complaint on May 15, 2018. In its one count revised complaint, the plaintiff sought to foreclose a mortgage on real property owned by the defendants, alleging that it was the holder of the promissory note secured by the mortgage and that it had been assigned the mortgage. The defendants filed their amended answer, special defenses, and a counterclaim on April 24, 2019. A court trial commenced on April 30, 2019, and concluded on May 1, 2019. Thereafter, the plaintiff filed its reply to the defendants’ special defenses on June 18, 2019.

In a memorandum of decision dated September 17, 2019, the court made the following factual findings and reached the following conclusions. On July 29, 2005, the defendants executed a note in which they promised to pay JPMorgan Chase Bank, N.A. (JPMorgan), the principal sum of $966,999 with all interest accrued thereon. On that same day, to secure the note, they executed a mortgage in favor of JPMorgan on their real property located at 245 High Meadow Road in Southport, which mortgage was delivered to JPMorgan. JPMorgan endorsed the note in blank, and the mortgage eventually was assigned to the plaintiff. The defendants later defaulted pursuant to the terms of both the note and the mortgage in that they failed to make the monthly payments of principal and interest due on November 1, 2008, and every month thereafter. Each defendant received a letter dated January 4, 2009, which notified them of their default and advised them that if the amount required to cure the default was not received within thirty-two days, immediate acceleration of all moneys due under the note and mortgage would be declared without further notice or demand. The defendants failed to cure the default, and the total amount of the indebtedness due and owing was accelerated. As of April 30, 2019, the first day of trial, the total amount due under the note was $1,680,018.38.

The court concluded that the plaintiff had established a prima facie claim for foreclosure. Specifically, the court found that the plaintiff had established that it was the holder of the note because the plaintiff was in physical possession of the note endorsed in blank, which endorsement was set forth on an original allonge executed by Alisha Young, an assistant vice president of JPMorgan, and stapled to the note (Young allonge). The court also found that, as required by the terms of the note, the plaintiff had satisfied the conditions precedent to the enforcement of the mortgage and the note by timely mailing notices of default and acceleration warnings to the defendants. Accordingly, the court rendered a judgment of strict foreclosure. This appeal followed. Additional facts will be set forth as necessary.

I

The defendants first claim that the court erred by refusing to deem all of their special defenses as admitted when the plaintiff failed to reply to them prior to trial. Specifically, the defendants argue that the plaintiff never replied to their five special defenses at any time and that, pursuant to Practice Book § 10-19, all of their special defenses must therefore be deemed admitted. The defendants further contend that the provisions of § 10-19 are mandatory. In response, the plaintiff argues that the court properly rejected the defendants’ claims of entitlement to implied admissions. In the plaintiff's view, the defendants are precluded from claiming implied admissions because the defendants failed to challenge the plaintiff's failure to plead at trial. We agree with the plaintiff.

The following additional facts are relevant to this claim. On April 24, 2019, the defendants filed their amended answer, special defenses, and a counterclaim. In their amended pleading, the defendants asserted five special defenses: (1) the Young allonge did not transform the note into bearer paper and the plaintiff was not a holder in due course with the right to prosecute the foreclosure action; (2) the plaintiff was precluded from bringing an action on the note due to the passing of the applicable statute of limitations; (3) the plaintiff failed to establish that it had complied with all of the requirements of the securitization document necessary for the note to be a part of the JPMorgan 2005 A-7 Securitized Trust; (4) the plaintiff failed to provide proper notice of default and acceleration as required under the mortgage; and (5) the plaintiff was barred from recovery due to unclean hands. The plaintiff failed to file a reply to the defendants’ special defenses. The plaintiff did, however, submit a twenty-six page memorandum of law prior to trial that addressed each of the defendants’ special defenses.

The defendants never advised the court or the plaintiff of the plaintiff's failure to plead prior to or during trial. Instead, the defendants raised this issue for the first time in their posttrial brief, which they filed on June 3, 2019, approximately one month after the trial concluded. Specifically, the defendants claimed that the court was required to deem all of their special defenses as admitted due to the plaintiff's failure to file a reply. Thereafter, the plaintiff filed its reply to the defendants’ special defenses on June 18, 2019, in which it denied each special defense. The plaintiff also filed a reply brief in which it argued that the defendants were not entitled to implied admissions.

In its memorandum of decision, the court, pursuant to Birchard v. New Britain , 103 Conn. App. 79, 927 A.2d 985, cert. denied, 284 Conn. 920, 933 A.2d 721 (2007), concluded that the defendants were not entitled to implied admissions. The court found that "it would be inequitable in the circumstances here to hold that the failure to file an answer to the special defenses should be considered an implied admission. Since the defendants failed to challenge the plaintiff's nonpleading or otherwise make a request for an implied admission at trial, the defendants’ claim of implied admissions must fail." The court then considered, and rejected, all of the defendants’ special defenses. Accordingly, the court found in favor of the plaintiff and rendered a judgment of strict foreclosure.

We are guided by the following relevant legal principles. "Pleadings are intended to limit the issues to be decided at the trial of a case and [are] calculated to prevent surprise." (Internal quotation marks omitted.) Birchard v. New Britain , supra, 103 Conn. App. at 83, 927 A.2d 985. Pursuant to Practice Book § 10-56, the "plaintiff's reply pleading to each of the defendant's special defenses may admit some and deny others of the allegations of that defense, or by a general denial of that defense put the defendant upon proof of all the material facts alleged therein." "According to the law of pleading, what is not denied is conceded." (Internal quotation marks omitted.) Birchard v. New Britain , supra, at 84, 927 A.2d 985. Consistent with that principle, Practice Book § 10-19 provides that "[e]very material allegation in any pleading which is not denied by the adverse party shall be deemed to be admitted, unless such party avers that he or she has not any knowledge or information thereof sufficient to form a belief." "[T]he interpretation of pleadings is always a question of law for the court .... Our review of the trial court's interpretation of the pleadings therefore is plenary." (Internal quotation marks omitted.) Birchard v. New Britain , supra, at 83, 927 A.2d 985.

In Birchard , this court determined that a trial court is not bound by an implied admission pursuant to Practice Book § 10-19 in certain circumstances. Id., at 85, 927 A.2d 985. We concluded that a trial court is not bound by an implied admission that is not brought to its attention at any stage of the trial court proceedings. Id. Because it is "unfair and unworkable to require the trial court, in each and every civil action before it, to scour the pleadings in search of implied admissions ... the burden rests with the parties to bring to the court's attention an allegedly implied admission pursuant to ... § 10-19." (Citations omitted.) Id., at 85–86, 927 A.2d 985.

We conclude that the trial court did not err in holding that the defendants were not entitled to implied admissions on their special defenses. First, contrary to the defendants’ contention, our decision in Birchard indicates that the provisions of Practice Book § 10-19 are not always mandatory. Specifically, a trial court is not bound by any implied admissions that are not brought to its attention at any stage of the trial proceedings. Id., at 85, 927 A.2d 985. Although the defendants eventually brought the plaintiff's nonpleading to the court's attention, they did so only...