U.S. Bank, National Association v. Kosciusko

Decision Date08 November 2016
Docket NumberLLICV136008646S
CourtConnecticut Superior Court
PartiesU.S. Bank, National Association v. Kim Anne Kosciusko et al



Hon John D. Moore, J.


The plaintiff, U.S. Bank, National Association, has moved to strike the substituted special defenses and counterclaims of the defendants, Kim Kosciusko and Loughrea, LLC. The plaintiff advanced a two-pronged argument in regard to both the special defenses and the counterclaims. The plaintiff argued that the allegations giving rise to the special defenses and the counterclaims do not pertain to the making validity or enforcement of the mortgage or note and that additionally, the special defenses and counterclaims are legally insufficient. The defendants have objected. The court heard argument on this motion on July 11, 2016. For the following reasons, the court grants the motion to strike in part and denies it in part.


The motion to strike is used " to contest . . . the legal sufficiency of the allegations of any [pleading] . . . to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188. Such pleadings may include counterclaims and special defenses. JP Morgan Chase Bank v. Rodrigues, 109 Conn.App. 125, 130, 952 A.2d 56 (2003). In determining whether or not a pleading's allegations are sufficient all well-pleaded facts and those facts necessarily implied from the allegations " are taken as admitted." (Internal quotation marks omitted.) Gazo v. Stamford, 255 Conn. 245, 260, 765 A.2d 505 (2001). Stated a different way, the court should view the facts " in a broad fashion, not strictly limited to the allegations, but also including the facts necessarily implied by and fairly provable under them." (Internal quotation marks omitted.) Dennison v. Klotz, 12 Conn.App. 570, 577, 532 A.2d 1311 (1987), cert. denied, 206 Conn. 803, 535 A.2d 1317 (1988). However, a " motion to strike . . . does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings." (Emphasis omitted; internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 588, 693 A.2d 293 (1997). As a result, " [a] motion to strike is properly granted if the [pleading] alleges mere conclusions of law that are unsupported by the facts alleged." (Internal quotations marks omitted). Fort Trumbull Conservancy, LLC v. Alves, supra, 498. The court, however, must " construe the [pleading] in the manner most favorable to sustaining its legal sufficiency . . . [and] [i]f facts provable in the [pleading] would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Sullivan v. Lake Compounce Theme Park, Inc., 277 Conn. 113, 117-18, 889 A.2d 810 (2006).


The court's analysis, therefore, begins with a review of the pleadings that are the target of this motion to strike: the defendants' substituted special defenses and counterclaims.

This is a foreclosure action. The defendants, on March 4, 2016, filed substituted special defenses and a substituted counterclaim. The substituted counterclaim contained the following factual allegations.[1] It is fair and reasonable to read the factual allegations as supporting the special defenses as well as the counterclaims.

The defendants owned two adjacent parcels of real property in Sharon, Connecticut, 119 Amenia Union Road (119) and 121 Amenia Union Road (121). Each parcel had a dwelling situated on it. The plaintiff had issued a note secured by a single mortgage on both properties.

On or about September 2009, the defendants informed the plaintiff bank that a third party had offered to purchase 119 for $710 000 in exchange for a reduction of the at-issue mortgage principal. The plaintiff informed the defendants that it would not allow the purchase of a single parcel or a partial release of the mortgage. The potential buyer withdrew its offer to buy 119. Approximately three months later, the plaintiff informed the defendants that the plaintiff would consider a partial release of the mortgage.

In 2011, the plaintiff told the defendants that it could not consider a mortgage modification or a partial release of the mortgage as long as the defendants were current on their monthly mortgage payments and that, as a prerequisite for the plaintiffs to consider these options, the defendants needed to be in arrears for a period of at least three months. In reasonable reliance on these representations, the defendants stopped making monthly mortgage payments. As a result of the cessation of payments, the plaintiff elected to (1) accelerate the balance due on the note, (2) declare the entire note to be due and owing, and (3) foreclose on the mortgage securing the note.

The plaintiff was not responsive to the defendants' attempts to engage in negotiations concerning loan modification, loan mitigation and even on the status of the mortgage payments. Additionally, the plaintiff provided contradictory information as to what options were available to the defendants and what the qualifying requirements were for such options. On or about October 2011, the defendants received a letter from the plaintiff stating that the defendants were not eligible for a foreclosure alternative because the property was not the defendants' primary residence, even though that statement was false and the plaintiff knew or should have known that it was not true. Through the next two years, the plaintiff repeatedly asked the defendants to supply and re-supply documentation in support of a request for loan modification and loss mitigation even though the defendants had already provided such information and documentation. The defendants continued to comply, even though they had already provided such information and documentation.

In or about January 2013, the defendants once again asked the plaintiff if it could sell one of the two parcels or split the parcels so that the defendants could try to sell off less than the entire two parcels to reduce the mortgage principal and related payments to manageable levels. The plaintiff did not respond for almost three months.

In or about April 2013, the defendants posed these same questions and also asked the plaintiff in writing whether it would honor any potential rental agreements that the defendants might enter into with third parties during the foreclosure process. The defendants did so in an attempt to make renting a more attractive option to prospective tenants. The plaintiff did not respond to the defendants' request for a written response.

In July through August 2013, an investor offered to purchase the note at issue for $815, 000. The Bank declined, stating that only a short sale or some other loss mitigation were options.

By means of a letter dated August 22, 2013, the plaintiff informed the defendants that the balance of the principal owed as of November 1, 2013 would be $799, 250.07.

Prior to that time, during 2012-2013, third parties made certain offers to buy the properties in question. These offers were neither encumbered by a mortgage nor contingent on an inspection. These offers were conveyed to the plaintiff. The plaintiff did not accept these offers. Specifically, a third party offered to buy the properties or a portion thereof during this time for $815, 000, an amount in excess of the amount that would have been due as of November 1, 2013. The parties began foreclosure mediation in or about July 2014. Information concerning the abovementioned offers was forwarded to the plaintiff, but no progress was made. Given the plaintiff's refusal of reasonable offers, realtors began to refuse to show the properties.

On or about January 24, 2014, the plaintiff told the defendants that their request for a deed in lieu of foreclosure for 119 was approved; however, the transaction never closed, in part because the plaintiff contended that tax liens existed upon the properties, even though the Sharon tax collector indicated to the contrary.

In or about September 2014, the plaintiff locked the defendants out of both houses, but did not make any arrangements to insure that the properties, inside or out, were maintained, protected or kept clean. The plaintiff did not, at that time, allow the defendants' property manager/handyman to access the properties. As a result of the plaintiff's failure to do so and the defendants' inability to access the properties, the dwellings located thereupon fell into substantial disrepair, suffering burst pipes, leaking fixtures, collapsing ceilings, structural defects and invasion by wild animals.

The defendants have raised eight special defenses. Some of them invoke the same legal theory, but are based upon different factual allegations. Special defense one pleads unconscionability, based upon allegations that the contract terms so unreasonably favored the plaintiff that the plaintiff could refuse to grant the defendants a partial release of the mortgage or deed in lieu as alternatives to foreclosure. Special defense two also sounds in unconscionability but alleges that the plaintiff refused the defendants the opportunity to sell the properties at or near fair market value to avoid foreclosure. Special defense three claims unclean hands, averring that the plaintiff purposefully prevented the defendants from attempting to negotiate and complete a loan modification and or loss mitigation settlement by means of a partial release of the mortgage and/or a deed in lieu of foreclosure. Special defense four alleges...

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