Webster Bank v. Oakley

• Decision Date: 02 September 2003
• Docket Number: (SC 16851).
• Citation: 265 Conn. 539,830 A.2d 139
• Court: Connecticut Supreme Court
• Parties: WEBSTER BANK v. LORNA T. OAKLEY ET AL.

265 Conn. 539

830 A.2d 139

WEBSTER BANK v. LORNA T. OAKLEY ET AL.

(SC 16851).

Supreme Court of Connecticut.

Argued January 9, 2003.

Officially released September 2, 2003.

Sullivan, C. J., and Borden, Norcott, Katz and Zarella, Js. Kirk D. Tavtigian, Jr., for the appellant (named defendant).

Felix J. Springer, with whom was Jennifer L. Sachs, for the appellee (plaintiff).

Thomas Behrendt filed a brief for Advocacy Unlimited, Inc., et al. as amici curiae.

Opinion

NORCOTT, J.

The named defendant, Lorna T. Oakley,¹ appeals² from a judgment of strict foreclosure rendered by the trial court in favor of the plaintiff, Webster Bank. In this appeal, the defendant claims that the trial court improperly concluded that: (1) the plaintiff clearly and unequivocally had exercised its option, under the mortgage, to accelerate the defendant's loan; and (2) the federal Americans with Disabilities Act (ADA), 42 U.S.C. § 12101 et seq., the federal Fair Housing Amendments Act of 1988 (FHAA), 42 U.S.C. § 3601 et seq.,³ and the state fair housing laws, General Statutes § 46a-64b et seq., do not require a bank, which is foreclosing on a mortgage loan that it has serviced, to accommodate a disabled mortgagor's inability to make her loan payments. We disagree with the defendant, and we affirm the judgment of the trial court.

The record reveals the following relevant facts and procedural history. In April, 1993, the defendant executed a thirty year mortgage deed and note on her condominium unit with a predecessor in interest of the plaintiff.⁴ The principal amount of the mortgage was $70,000, with a monthly payment of $495.46. The mortgage agreement contained an acceleration clause that delineated a procedure to be followed in the event of default by the borrower.⁵ It also contained a nonwaiver clause, which provided that "[a]ny forbearance by Lender in exercising any right or remedy shall not be a waiver of or preclude the exercise of any right or remedy."

The defendant had worked as a social worker for the Connecticut department of children and families until March, 1999. In March, 1999, she stopped working because she had suffered from significant psychiatric disabilities, including severe depression, which rendered her unable to perform her work duties. She then took unpaid medical leave from her employment. Consequently, in September, 1999, the defendant defaulted on her mortgage obligations. At that point in time, she owed the plaintiff $2885.32 for payments past due since June of that year.

In September, 1999, the plaintiff sent to the defendant a default and cure letter dated September 13, 1999. This letter informed her that she had until October 13, 1999, to pay the total past due amount. The letter warned the defendant that if she did not pay the total amount due by October 13, the entire mortgage balance would be accelerated.⁶ Subsequently, on October 14, 1999, the plaintiff sent another letter to the defendant advising her that, because it had not received the requested payment, the plaintiff considered the debt accelerated, and referred the matter to its attorney for collection.

Thereafter, the plaintiff's attorney sent to the defendant a letter dated October 19, 1999, informing her that she had until October 27, 1999, to cure the default by paying the amount owed, which at that time was $3501.09. The letter warned that failure to cure the default by that time potentially would result in foreclosure. That letter contained a clause stating that "[n]othing contained in this letter shall be deemed to be a waiver of any of the [plaintiff's] rights, remedies, or recourses available to it under the Note, the Mortgage, or any other documents executed with respect to this loan."

Subsequently, on November 17, 1999, the plaintiff filed this action against the defendant seeking foreclosure of the mortgage, immediate possession of the mortgaged premises, a deficiency judgment, and other equitable relief. As special defenses, the defendant asserted, inter alia, that the plaintiff was barred from foreclosure because: (1) the letters from the plaintiff and its attorney had failed to provide her with proper notice of the default and acceleration; and (2) the plaintiff, by not making a reasonable accommodation for the defendant's disabilities, had denied and interfered with her right to live in her dwelling under the FHAA, the ADA and § 46a-64b et seq. The defendant also sought recoupment and setoff, and she counterclaimed for damages on these, and other, grounds.

The plaintiff thereafter moved for summary judgment of strict foreclosure, which the trial court granted, over the defendant's objection, as to liability only.⁷ In its memorandum of decision, the trial court concluded that none of the subsequent communications to the plaintiff from the defendant constituted a waiver of the default and cure notice that had been communicated to her in the original September, 1999 letter.⁸ The trial court also concluded that the reasonable accommodations provisions of the FHAA and § 46a-64b et seq., as well as the ADA, were not applicable to the enforcement of a mortgage. The trial court based its conclusion on the language of the statutes, and what it determined was the absence of any case law indicating that the various antidiscrimination statutes apply to mortgage servicing and enforcement. The court concluded that "it does not appear that these statutes require any conduct on the part of the plaintiff." This appeal followed.

Before we address the defendant's specific claims on appeal, we first set forth the standard of review of a trial court's decision granting summary judgment, which is applicable to all of the defendant's claims on appeal. "Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.... The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled to judgment as a matter of law.... Our review of the trial court's decision to grant the defendant's motion for summary judgment is plenary." (Citations omitted; internal quotation marks omitted.) LaFlamme v. Dallessio, 261 Conn. 247, 250, 802 A.2d 63 (2002).

I THE PLAINTIFF'S CLEAR AND UNEQUIVOCAL EXERCISE OF ITS OPTION TO ACCELERATE THE MORTGAGE LOAN

The defendant's first claim presents a threshold issue in this appeal. The defendant contends that the trial court improperly concluded that the series of three letters sent by the plaintiff and its attorney constituted the requisite clear and unequivocal exercise of the mortgage's acceleration option. Specifically, the defendant claims that these letters do not constitute a clear and unequivocal exercise of the plaintiff's right to accelerate because, after she had received a letter from the plaintiff informing her that the loan had been accelerated, she then received a subsequent communication from the plaintiff's attorney that was phrased as a default and cure letter. The defendant, accordingly, contends that the loan was not accelerated properly because she never had received any communication of acceleration following her receipt of the default and cure letter from the plaintiff's attorney, which she claims the trial court improperly ignored.⁹

The plaintiff contends, in response, that the trial court concluded correctly that the plaintiff clearly and unequivocally had accelerated the loan because: (1) under the Appellate Court's decision in Northeast Savings, F.A. v. Scherban, 47 Conn. App. 225, 227-28, 702 A.2d 659 (1997), cert. denied, 244 Conn. 907, 714 A.2d 2 (1998), so long as the plaintiff satisfied its notice obligations under the mortgage when it initially had accelerated the loan, the subsequent communications from its attorney were irrelevant; and (2) under this court's decision in Christensen v. Cutaia, 211 Conn. 613, 619-21, 560 A.2d 456 (1989), the mortgage's nonwaiver clause precluded any subsequent inconsistent conduct by the plaintiff, or its attorney, from being construed as a waiver of its right to accelerate the loan. We conclude that the trial court properly determined that the communications from the plaintiff and its attorney to the defendant constituted a clear and unequivocal exercise of the plaintiff's right to accelerate the defendant's mortgage loan.

"Notices of default and acceleration are controlled by the mortgage documents. Construction of a mortgage deed is governed by the same rules of interpretation that apply to written instruments or contracts generally, and to deeds particularly. The primary rule of construction is to ascertain the intention of the parties. This is done not only from the face of the instrument, but also from the situation of the parties and the nature and object of their transactions.... A promissory note and a mortgage deed are deemed parts of one transaction and must be construed together as such." (Citation omitted; internal quotation marks omitted.) Citicorp Mortgage, Inc. v. Porto, 41 Conn. App. 598, 602, 677 A.2d 10 (1996).

We note that, under the terms of the mortgage in the present case, acceleration is an optional remedy in the event of default by the borrower. See footnote 5 of this opinion. Accordingly, the rule articulated by the Appellate Court in City Savings Bank of Bridgeport v. Dessoff, 3 Conn. App. 644, 649, 491 A.2d 424, cert. denied, 196 Conn. 811, 495 A.2d 279 (1985), is applicable. In City Savings Bank of Bridgeport, the court concluded that "[t]he general rule is that where the acceleration of the maturity of a mortgage debt on default is made optional with the mortgagee, some affirmative action...