U.S. Bank Nat'l Ass'n v. Crawford

• Decision Date: 02 April 2018
• Docket Number: SC 19903
• Citation: 333 Conn. 731,219 A.3d 744
• Court: Connecticut Supreme Court
• Parties: U.S. BANK NATIONAL ASSOCIATION, as Trustee v. Jacquelyn N. CRAWFORD et al.

333 Conn. 731
219 A.3d 744

U.S. BANK NATIONAL ASSOCIATION, as Trustee
v.
Jacquelyn N. CRAWFORD et al.

SC 19903

Supreme Court of Connecticut.

Submitted on briefs April 2, 2018
Officially released November 26, 2019

219 A.3d 746

C. Donald Neville, West Hartford, and Gregory W. Piecuch filed a brief for the plaintiff in error (Douglas M. Evans ).

Robert A. White, Proloy K. Das, Hartford, Sarah Gruber, Irve Goldman, Bridgeport, Thomas J. Sansone, New Haven, and Charles A. Maglieri, Bloomfield, filed a brief for the Connecticut Bar Association as amicus curiae.

Palmer, McDonald, Robinson, D'Auria, Mullins, Kahn and Ecker, Js.^*

ROBINSON, J.

333 Conn. 733

The primary issue raised by this writ of error is whether the automatic stay provision of the federal bankruptcy code, 11 U.S.C. § 362 (a) (1),¹ precludes a committee for sale from recovering fees and expenses from a plaintiff in a foreclosure action that has been stayed because the defendant has filed for bankruptcy. The plaintiff, the U.S. Bank National Association, brought the underlying foreclosure action against the defendant Jacquelyn N. Crawford.² The trial

333 Conn. 734

court ultimately ordered a foreclosure by sale and appointed the plaintiff in error, Douglas M. Evans, as the committee for sale. Before the sale could be completed, however, Crawford declared bankruptcy, and the foreclosure action was stayed pursuant to

219 A.3d 747

11 U.S.C. § 362 (a) (1). Thereafter, the plaintiff in error filed a motion pursuant to General Statutes § 49-25,³ seeking to recover, from the bank, the fees and expenses that he had incurred in preparing for the sale. Relying on an Appellate Court decision; see Equity One, Inc. v. Shivers , 150 Conn. App. 745, 755, 93 A.3d 1167 (2014) (when defendant in foreclosure action has declared bankruptcy, automatic stay provision applies to motions for fees and expenses by committee for sale against nondebtor plaintiff); the trial court concluded that the plaintiff in error's motion for fees and expenses was stayed and issued an order denying the motion on that ground. This writ of error was then filed pursuant to General Statutes § 51-199 (b) (10)⁴ and Practice Book § 72-1.⁵ Specifically, the plaintiff in error contends that this court should overrule Shivers because the Appellate Court lacked subject matter jurisdiction to extend the automatic stay provision to motions to recover fees and expenses from nondebtor plaintiffs in foreclosure actions. In the alternative, the plaintiff in error contends that we should overrule Shivers on the merits because it is in conflict with the decisions of federal bankruptcy courts addressing this issue. We conclude that state courts lack jurisdiction to extend the automatic stay

333 Conn. 735

provision to proceedings against nondebtors and that Shivers must be overruled on that ground. Accordingly, we grant the writ of error and remand the case to the trial court with direction to vacate the order denying the plaintiff in error's motion for fees and expenses and to entertain the motion.

The record reveals the following undisputed facts and procedural history. Crawford executed a promissory note in favor of the bank that was secured by a mortgage on property located at 36-38 Baltic Street in the city of Hartford. After Crawford defaulted on the note, the bank commenced a foreclosure action against her. The trial court ultimately rendered a judgment of foreclosure by sale and appointed the plaintiff in error as the committee for sale. The sale was scheduled for February 4, 2017, and the bank was the successful bidder. Shortly thereafter, the plaintiff in error filed his report, in which he listed expenses totaling $2419.29. He also submitted an affidavit in which he averred that the legal fees incurred in connection with the sale were expected to be $3420.

Before the sale could be completed, however, Crawford filed for bankruptcy pursuant to chapter 13 of the United States Bankruptcy Code. Because the automatic stay provision applied to the foreclosure action, the sale of the property could not be completed. Accordingly, the plaintiff in error filed a motion to recover his fees and expenses from the bank pursuant to § 49-25. See footnote 3 of this opinion. The plaintiff in error contended in the motion that the trial court should not follow the Appellate Court's decision in

219 A.3d 748

Equity One, Inc. v. Shivers , supra, 150 Conn. App. at 755, 93 A.3d 1167, holding that the bankruptcy stay provision applies to such motions because it was in conflict with the decisions of several federal courts. The trial court concluded that it was bound by Shivers and denied the plaintiff in error's motion solely on that ground.

333 Conn. 736

In the present case, the plaintiff in error contends that this court should overrule Shivers on two alternative grounds. First, he contends that the Appellate Court in Shivers lacked jurisdiction to extend the automatic stay provision to motions by committees for sale to recover fees and expenses from nondebtors. Second, the plaintiff in error contends that, if we conclude that the Appellate Court had such jurisdiction in Shivers , that court incorrectly concluded that the automatic stay provision should be extended to such motions. After the writ of error was filed, this court, sua sponte, ordered the parties to address in their appellate briefs the following two issues: (1) whether the plaintiff in error is aggrieved by a final judgment of the Superior Court such that he has standing to bring the writ of error, and (2) whether the controversy will be rendered moot if the bankruptcy stay terminates during the pendency of the writ of error. We note that the automatic stay terminated on July 27, 2017. The bank has filed no appellate brief.⁶

We conclude that the plaintiff in error has standing to bring the writ of error. We further conclude that, although his claim is moot, it is nonetheless reviewable under the capable of repetition, yet evading review exception to the mootness doctrine. Addressing the merits of the plaintiff in error's claim, we conclude that state courts lack jurisdiction to extend the automatic stay provision to motions by committees for sale to recover fees and expenses from nondebtor foreclosure plaintiffs and, therefore, that Shivers must be overruled.

333 Conn. 737

I

Because it implicates this court's subject matter jurisdiction, we first address the issue of whether the plaintiff in error is aggrieved by a final judgment and, therefore, has standing to bring this writ of error. See State v. Curcio , 191 Conn. 27, 30, 463 A.2d 566 (1983) ("[b]ecause our jurisdiction over appeals ... is prescribed by statute, we must always determine the threshold question of whether the appeal is taken from a final judgment before considering the merits of the claim"). The plaintiff in error contends that, because his motion seeking payment by the bank of his fees and expenses was essentially a separate third-party claim, and because it was denied in full, the order denying the motion is not interlocutory in nature but, rather, constitutes an appealable final judgment. We disagree. Although the trial court denied the motion, it is clear that the denial was without prejudice to the plaintiff in error's right to renew the motion after the automatic stay terminated. See Equity One, Inc. v. Shivers , supra, 150 Conn. App. at 755 and n.6, 93 A.3d 1167

219 A.3d 749

(although order granting committee for sale's motion for fees was void because automatic stay was in place when order was issued, because stay had since terminated, parties could "revisit the question of payment for committee fees on remand"). Accordingly, we conclude that that order is interlocutory.

The plaintiff in error also claims, however, that, if the trial court's order denying his motion for fees and expenses is interlocutory, it is reviewable under State v. Curcio , supra, 191 Conn. at 31, 463 A.2d 566. In that case, we stated that, "[i]n both criminal and civil cases ... we have determined certain interlocutory orders and rulings of the Superior Court to be final judgments for purposes of appeal. An otherwise interlocutory order is appealable in two circumstances: (1) where the order or action terminates a separate and distinct proceeding, or (2) where the order or action so concludes the rights of the parties that further proceedings cannot affect them." Id.

333 Conn. 738

We acknowledge at the outset of our analysis that this court's Curcio jurisprudence is hardly a model of clarity or consistency. We further acknowledge that, as a result of this doctrinal confusion, it is possible to identify both cases that provide support for the conclusion that the trial court's denial of the plaintiff in error's motion for fees and expenses is immediately reviewable...