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

• Decision Date: 25 October 2022
• Docket Number: AC 43761
• Citation: 216 Conn.App. 200,284 A.3d 629
• Parties: U.S. BANK NATIONAL ASSOCIATION, Trustee v. Frank V. RAGO et al.
• Court: Connecticut Court of Appeals

216 Conn.App. 200

284 A.3d 629

U.S. BANK NATIONAL ASSOCIATION, Trustee

v.Frank V. RAGO et al.

AC 43761

Appellate Court of Connecticut.

Argued October 4, 2021

Officially Released October 25, 2022

Brian E. Lambeck, for the appellant (named defendant).

Kevin C. Sandberg, Ellington, for the appellee (plaintiff).

Prescott, Moll and Flynn, Js.

MOLL, J.

This matter returns to us following our decision in U.S. Bank National Assn. v. Rago , 189 Conn. App. 902, 203 A.3d 718 (2019), in which this court, by memorandum decision, affirmed a judgment of strict foreclosure rendered in favor of the plaintiff, U.S. Bank National Association, as trustee for the C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-MX1, and remanded the case "for the purpose of setting new law days." Id. The defendant Frank V. Rago¹ now appeals from the trial court's subsequent judgment of strict foreclosure rendered, on remand, in favor of the plaintiff. On appeal, the defendant claims, inter alia, that the court, in rendering the subsequent judgment of strict foreclosure, improperly exceeded the scope of the remand order in opening the judgment and making updated findings, sua sponte and without providing to the parties adequate notice and an opportunity to be heard, with respect to the fair market value of the property and the amount of the debt at issue.² We agree, and, accordingly, we reverse the judgment of the trial court.

The record reveals the following facts. On June 23, 2006, the defendant and Louis A. Rondinello promised to pay the principal sum of $380,000 payable with interest to Chase Bank USA, N.A., as provided in a promissory note. To secure the note, the defendant and Rondinello executed a mortgage on real property located at 1392–1398 South Avenue in Stratford (property), of which they are the owners of record. The mortgage deed, which is conditioned on the payment of the note and the performance of certain covenants and other conditions, was recorded on July 25, 2006, in the Stratford land records. Following certain assignments, the plaintiff became, and remains, the current holder of the note and mortgage. The payments of principal and interest due on December 1, 2011, and each and every month thereafter, have not been made. Accordingly, the plaintiff exercised its option to declare the entire balance on the note due and payable.

On November 2, 2015, the plaintiff commenced this foreclosure action. On March 3, 2016, the defendant filed his answer, in which he acknowledged that he and Rondinello were the current owners of the property and were in possession thereof. On August 15, 2016, the plaintiff filed a motion for summary judgment as to liability only, with an accompanying memorandum of law and exhibits, against the defendant and Rondinello. On September 11, 2017, the trial court, Hon. Alfred J. Jennings, Jr. , judge trial referee, granted the plaintiff's motion for summary judgment against both the defendant and Rondinello.³ On October 27, 2017, the plaintiff filed a motion for judgment of strict foreclosure, which the court granted on December 11, 2017. In rendering the original judgment of strict foreclosure, the court found, inter alia, the fair market value of the property to be $280,000 and the amount of the debt to be $627,647.93.⁴

On January 3, 2018, Rondinello appealed from the original judgment of strict foreclosure. On April 2, 2019, this court affirmed the judgment and, in a memorandum decision, remanded the case "for the purpose of setting new law days." Id.

On October 2, 2019, the plaintiff filed, pursuant to Practice Book § 17-10,⁵ a motion titled "Motion to Reset Law Days." In that motion, the plaintiff did not request that the court update the findings as to the fair market value of the property or the amount of the debt, as set forth in the original judgment of strict foreclosure. Nevertheless, on October 17, 2019, the plaintiff filed, without any accompanying motion, inter alia, (1) an affidavit of debt, which included an updated calculation of the defendant's debt,⁶ (2) a new appraisal of the property, which included an updated fair market value of the property, and (3) an affidavit of the appraiser.

The plaintiff's motion to reset the law days appeared on the October 21, 2019 short calendar; the plaintiff marked it "ready" and appeared accordingly before the court, Spader, J. , on October 21, 2019. The defendant did not attend the short calendar proceeding. See footnote 2 of this opinion. That same day, the court issued an order stating in relevant part that the "[j]udgment of strict foreclosure is hereby reopened, modified and reentered as follows: Debt: $727,162.61 ... Fair Market Value: $320,000." The result of this modified judgment was to increase the amount of the debt from $627,647.93, as found by Judge Jennings, to $727,162.61 and to increase the fair market value from $280,000, as found by Judge Jennings, to $320,000. The court also set new law days to commence on November 26, 2019. On November 12, 2019, the defendant filed a motion to reargue the October 21, 2019 order, claiming not to have received notice of the plaintiff's short calendar "ready" marking. On December 10, 2019, the court denied the defendant's motion to reargue.⁷ This appeal followed.⁸

The defendant claims on appeal that the court improperly exceeded the scope of this court's remand order in Rago by making updated findings, sua sponte, regarding the fair market value of the property and the amount of the debt at issue. The plaintiff responds that the court properly performed its equitable function in making updated findings regarding the debt and fair market value of the property to confirm that strict foreclosure, as opposed to foreclosure by sale, was still appropriate. We agree with the defendant that the court erred in making updated findings sua sponte and without providing to the parties adequate notice and an opportunity to be heard.

We begin by setting forth the applicable standard of review and relevant legal principles. Determining the scope of a remand is a question of law over which our review is plenary. State v. Tabone , 301 Conn. 708, 713–14, 23 A.3d 689 (2011). "Well established principles govern further proceedings after a remand by this court. In carrying out a mandate of this court, the trial court is limited to the specific direction of the mandate as interpreted in light of the opinion. ... This is the guiding principle that the trial court must observe. ... It is the duty of the trial court on remand to comply strictly with the mandate of the appellate court according to its true intent and meaning. ... The trial court should examine the mandate and the opinion of the reviewing court and proceed in conformity with the views expressed therein. ... We have rejected efforts to construe our remand orders so narrowly as to prohibit a trial court from considering matters relevant to the issues upon which further proceedings are ordered that may not have been envisioned at the time of the remand. ... So long as these matters are not extraneous to the issues and purposes of the remand, they may be brought into the remand hearing. " (Emphasis altered; internal quotation marks omitted.) TDS Painting & Restoration, Inc. v. Copper Beech Farm, Inc. , 73 Conn. App. 492, 506–507, 808 A.2d 726, cert. denied, 262 Conn. 925, 814 A.2d 379 (2002).

Mindful of the foregoing principles, we recognize that updating prior findings concerning fair market value and the amount of debt at issue can serve important policy reasons that are not extraneous to the purposes of a remand in the foreclosure context. Depending on the circumstances, such updated findings may inure to the benefit of the lender, the borrower, or both. Most notably, changes in such findings based on a sufficient evidentiary showing may inform the court that a judgment of strict foreclosure should be opened and substituted with a judgment of foreclosure by sale.⁹ See Toro Credit Co. v. Zeytoonjian , 341 Conn. 316, 330, 267 A.3d 71 (2021) ("foreclosure by sale is the preferred ‘decree’ in situations in which the property's fair market value exceeds the debt"); US Bank National Assn . v. Christophersen , 179 Conn. App. 378, 394, 180 A.3d 611 ("when the value of the property substantially exceeds the value of the lien being foreclosed, the trial court abuses its discretion when it refuses to order a foreclosure by sale" (internal quotation marks omitted)), cert. denied, 328 Conn. 928, 182 A.3d 1192 (2018). In addition, an updated judicial finding concerning the amount of the debt owed to the plaintiff affects the right to redeem. See Ocwen Federal Bank, FSB v. Charles , 95 Conn. App. 315, 323, 898 A.2d 197 ("[a] decree of strict foreclosure finds the amount due under the mortgage, orders its payment within a designated time and provides that should such payment not be made, the debtor's right and equity of redemption will be forever barred and foreclosed" (emphasis omitted; internal quotation marks omitted)), cert. denied, 279 Conn. 909, 902 A.2d 1069 (2006) ; see also Practice Book § 23-17 (b) (1). Therefore, especially because "foreclosure is peculiarly an equitable action"; (internal quotation marks omitted) U.S. Bank National Assn. v. Rothermel , 339 Conn. 366, 374, 260 A.3d 1187 (2021) ; it is not difficult to conceive of a post-remand posture in which, on a proper motion with an evidentiary showing and due notice and an opportunity to be heard, such findings could be made and deemed "not extraneous to the issues and purposes of the remand"; (internal quotation marks omitted) TDS Painting & Restoration, Inc. v. Copper Beech Farm, Inc. , supra, 73 Conn. App. at 507, 808 A.2d 726 ; notwithstanding a prior affirmance of a judgment of strict foreclosure and an attendant remand for the purpose of setting new law days.

In the present case, the question remains, therefore, whether the trial court erred in making such updated findings sua sponte and without...