Wells Fargo Bank, N.A. v. Strong

• Decision Date: 15 April 2014
• Docket Number: No. 35253.,35253.
• Citation: 149 Conn.App. 384,89 A.3d 392
• Court: Connecticut Court of Appeals
• Parties: WELLS FARGO BANK, N.A., Trustee v. Robert S. STRONG et al.

149 Conn.App. 384

89 A.3d 392

WELLS FARGO BANK, N.A., Trustee

v.Robert S. STRONG et al.

No. 35253.

Appellate Court of Connecticut.

Argued Nov. 15, 2013.

Decided April 15, 2014.

Jeffrey Gentes, with whom was Pamela A. Heller, for the appellant (defendant Diane Strong).

Marissa I. Delinks, for the appellee (plaintiff).

LAVINE, BEACH and BEAR, Js.

BEAR, J.

The defendant Diane Strong ¹ appeals from the summary judgment as to liability and the subsequent judgment of strict foreclosure rendered by the trial court in favor of the plaintiff, Wells Fargo Bank, N.A., as trustee. On appeal, the defendant claims that the court erred because (1) it granted summary judgment even though there were genuine issues of material fact about the plaintiff's status as owner of the note and mortgage, which implicated the plaintiff's standing, and (2) it denied her request for an evidentiary hearing regarding the plaintiff's affidavit of debt, upon which it relied in granting the plaintiff's motion for judgment of strict foreclosure. We affirm the judgment of the trial court.

The following undisputed facts and procedural history are relevant to our resolution of the present appeal. The plaintiff commenced the present action by service of process on November 3, 2009. It made the following allegations in its complaint. The Strongs promised to pay $177,100 to the order of H & R Block Mortgage Corporation (H & R Block) by an adjustable rate note dated December 12, 2003. To secure the note, the Strongs mortgaged a parcel of land located at 111 Heather Glen Lane in Mystic to H & R Block. H & R Block later assigned the note and mortgage to Sand Canyon Corporation, formerly known as Option One Mortgage Corporation (Option One), by an instrument dated March 5, 2004. Option One in turn assigned its interest in the note and mortgage to the plaintiff, as trustee for SABR–2004OP1 Mortgage Pass–Through Certificates, Series 2004–OP1 (mortgage pool),² through the plaintiff's servicer and attorney-in-fact, American Home Mortgage Servicing, Inc., by an instrument dated May 26, 2006. The plaintiff owns the indebtedness evidenced by the note and secured by the mortgage, and it was the holder of the note and owner of the debt when it commenced the present action. The Strongs failed to make payments in accordance with the note, and the defendant therefore is in default under the note and the first paragraph of the mortgage. As a result of the default, the plaintiff accelerated the note and declared the principal balance of the note due and payable.

The Strongs filed an answer and special defense on February 9, 2011. They alleged in their special defense that the plaintiff lacked standing to foreclose on their property because ownership of their indebtedness was not transferred to the plaintiff in accordance with the terms of the pooling and servicing agreement (agreement) that governs the mortgage pool, and, consequently, the plaintiff was not the valid owner of the note and mortgage at the time that it commenced the present action. The plaintiff filed a reply to the Strongs' answer and special defense on October 28, 2011, in which it denied their special defense.

The plaintiff moved for summary judgment as to liability only on March 9, 2012, on the ground that it had established a prima facie case for foreclosure, and the defendant's special defense failed to raise a genuine issue of material fact. In support of its motion, the plaintiff submitted copies of the note with an attached allonge indorsed in blank, the mortgage, the two assignments of mortgage, and the notice of default sent to the Strongs, as well as an affidavit given by a vice president of American Home Mortgage Servicing, Inc., who attested that the plaintiff held the defendant's note and owned her debt before it filed the present action. The defendant filed her objection on March 21, 2012, in which she repeated and elaborated upon her special defense of lack of standing. The court, Devine, J., granted the plaintiff's motion for summary judgment in a memorandum of decision dated June 20, 2012.

The plaintiff filed an affidavit of debt on July 20, 2012, in support its motion for judgment of strict foreclosure, filed on November 27, 2009. The affiant, Gerhard Heckermann, averred that he was a vice president of the plaintiff's successor servicer and attorney-in-fact, Homeward Residential, Inc. (Homeward). The defendant filed an objection to the motion for judgment of strict foreclosure on July 20, 2012, arguing, inter alia, that “a simple Internet search” established that Heckermann is a Jacksonville, Florida-based notary, not a vice president of Homeward, and that his signature on his personal website is different from the signature on the affidavit. On the basis of this argument, the defendant requested that the court hold an evidentiary hearing in order to determine whether Heckermann is a vice president at Homeward, whether he is competent to testify to the matters contained in the affidavit, and whether he actually executed the affidavit.

The court, Cosgrove, J., heard oral argument on the motion for judgment of strict foreclosure on September 17, 2012. It subsequently “rejected the defendant's challenge to the affidavit of debt as being without an evidentiary basis” and granted the motion for judgment of strict foreclosure, in an order dated November 21, 2012. This appeal followed. Additional facts and procedural history will be set forth as necessary.

I

A

The defendant claims that the court erred in granting summary judgment because there was a genuine issue of material fact about whether the plaintiff validly held the note and owned the mortgage when it commenced the present foreclosure action. The defendant more specifically argues that she demonstrated the plaintiff's failure to meet its burden as movant and overcame her own burden as nonmovant by submitting a copy of the agreement, which provides that (1) all transfers to the trustee under the agreement are to be made by the depositor; (2) any mortgage note in the mortgage pool that is transferred and delivered to the plaintiff must contain a complete chain of endorsement from the originator to the last endorsee; (3) all of the mortgage loans to be conveyed to the plaintiff under the agreement must be transferred concurrently with the execution and delivery of the agreement; and (4) the plaintiff's rights and responsibilities as trustee are strictly limited by New York trust law and the “policy and intention of the Trust to acquire only Mortgage Loans meeting the requirements set forth in th[e] [a]greement....”

The copy of the note submitted by the plaintiff in support of its motion for summary judgment did not contain a complete chain of endorsement. Furthermore, the assignment of mortgage upon which the plaintiff relies to establish its receipt of the mortgage is dated May 26, 2006, more than two years after the March 1, 2004 date of the agreement. The assignment also indicates that the assignor was the mortgage pool's servicer, Option One, and not its depositor, Securitized Asset Backed Receivables, LLC. The defendant consequently argues that these deviations demonstrate that there are genuine issues of material fact about whether the plaintiff validly held the note and owned the mortgage under the agreement when it commenced the present action, such that the plaintiff was not entitled to a judgment as a matter of law. According to the defendant, this is because the agreement wholly governs the plaintiff's ability to hold the note and own the mortgage, and New York trust law, which governs the agreement, limits a trustee's powers to a trust agreement's express terms.

We are not persuaded. The issue of whether a mortgagor may challenge a foreclosing party's standing on the basis of its noncompliance with a pooling and servicing agreement, to which the mortgagor is not a party and in which such mortgagor has no legal interest, is one of first impression for our appellate courts. Nonetheless, our law with respect to foreclosure actions and third party beneficiaries provides us with a sufficient basis to conclude that the court did not err in granting summary judgment in the present action. We therefore need not address the ever expanding panoply of decisions from courts in other jurisdictions, ranging from state trial courts to federal appellate courts, that have considered the issue under the separate laws and statutes of those jurisdictions.

B

“On appeal, [w]e must decide whether the trial court erred in determining that there was no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.... Because the trial court rendered judgment for the [plaintiff] as a matter of law, our review is plenary and we must decide whether the [trial court's] conclusions are legally and logically correct and find support in the facts that appear on the record....

“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....

“A material fact is a fact that will make a difference in the outcome of the case.... Once the moving party has presented evidence in support of the motion for summary judgment, the opposing party must present evidence that demonstrates the existence of some disputed factual issue.... It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact ... are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book [§ 17–45].... The movant has the burden of...