World Bus. Lenders, LLC v. 526-528 N. Main St., LLC

• Decision Date: 05 May 2020
• Docket Number: AC 42010
• Citation: 231 A.3d 386,197 Conn.App. 269
• Court: Connecticut Court of Appeals
• Parties: WORLD BUSINESS LENDERS, LLC v. 526-528 NORTH MAIN STREET, LLC, et al.

197 Conn.App. 269

231 A.3d 386

WORLD BUSINESS LENDERS, LLC

v.526-528 NORTH MAIN STREET, LLC, et al.

AC 42010

Appellate Court of Connecticut.

Argued February 4, 2020

Officially released May 5, 2020

Elissa E. Speer, self-represented, the appellant (defendant) filed a brief.

Adam D. Lewis, for the appellee (substitute plaintiff).

Prescott, Moll and Eveleigh, Js.

EVELEIGH, J.

The defendant Elissa E. Speer appeals from the judgment of strict foreclosure rendered by the trial court in favor of the substitute plaintiff, WBL SPE II, LLC (substitute plaintiff).¹ On appeal, Speer claims that the court improperly rendered the judgment of strict foreclosure because (1) the note and mortgage charged more than 120 percent interest and were unconscionable, (2) the amended complaint did not describe the property being foreclosed, and (3) the substitute plaintiff lacked standing as of the date of the amended complaint. For the reasons that follow, we dismiss the appeal.

We first set forth the following relevant facts and procedural history. The original plaintiff, World Business Lenders, LLC (World Business), commenced this action by way of a two count complaint against two defendants, 526-528 North Main Street, LLC (North Main, LLC), and Speer. The amended complaint alleged that JEM Contracting Co., LLC (JEM Contracting), had executed a note in the amount of $20,000 in favor of Bank of Lake Mills. As security for the note, North Main, LLC, executed a mortgage in favor of Bank of Lake Mills encumbering certain real property located at 526-528 North Main Street in Norwich. To further secure the obligations of JEM Contracting under the note, Speer executed a continuing guarantee in favor of Bank of Lake Mills. Thereafter, the note, mortgage, and guarantee were assigned to World Business, which, in turn, assigned them to the substitute plaintiff.

In count one of the amended complaint, the substitute plaintiff, as the holder of the mortgage and note, sought to foreclose the mortgage, and in count two, it sought to enforce the guarantee against Speer. Specifically, count two of the amended complaint alleged that ‘‘Speer ... is liable to the substitute plaintiff for payment of the debt due under the note, pursuant to the guarant[ee]’’ and that ‘‘Speer has refused to pay the debt due to the substitute plaintiff.’’

After the defendants were defaulted for failure to plead, the court, on March 12, 2018, rendered a judgment of strict foreclosure. Speer filed an untimely appeal from that judgment, which was dismissed. Thereafter, the substitute plaintiff filed a motion to open the judgment to reset the law days, which the court granted, resetting the law days to commence on July 3, 2018. Speer filed a second appeal, which, again, was dismissed by this court. Following that dismissal, the substitute plaintiff again requested that the trial court render an updated judgment. On August 6, 2018, the court rendered an updated judgment of strict foreclosure with law days to commence on September 4, 2018.²

Speer has timely appealed from the August 6, 2018 judgment.³

I

Speer first claims that ‘‘[i]t was plain error for the trial court to order foreclosure on a note and mortgage charging over 120 [percent] interest and with an affidavit of debt asserting prepayment.’’ In connection with that claim, she raises a number of claims relating to the note and mortgage, and to the foreclosure. Specifically, she claims that the note and mortgage are unconscionable and violate public policy, that the court improperly rendered the judgment of foreclosure on an amended complaint that does not describe the property being foreclosed, and that the substitute plaintiff had no standing as of the date of the amended complaint. Because these claims relate to the judgment of strict foreclosure rendered by the court with respect to count one, which sought to foreclose the mortgage executed by North Main, LLC, Speer, as a guarantor who was not a party to the note or mortgage, lacks standing to raise them on appeal. Therefore, the appeal as to count one is dismissed for lack of subject matter jurisdiction.

We begin our analysis by setting forth the standard of review and applicable legal principles. ‘‘Subject matter jurisdiction involves the authority of the court to adjudicate the type of controversy presented by the action before it. ... [A] court lacks discretion to consider the merits of a case over which it is without jurisdiction .... [T]his court has often stated that the question of subject matter jurisdiction, because it addresses the basic competency of the court, can be raised by any of the parties, or by the court sua sponte, at any time. ... A court does not have subject matter jurisdiction to hear a matter unless the plaintiff has standing to bring the action.’’ (Citation omitted; internal quotation marks omitted.) Deutsche Bank National Trust Co . v. Thompson , 163 Conn. App. 827, 831, 136 A.3d 1277 (2016). Because the issue of standing implicates a court's subject matter jurisdiction, it ‘‘presents a threshold issue for our determination.’’ (Internal quotation marks omitted.) Jenzack Partners , LLC v. Stoneridge Associates , LLC , 183 Conn. App. 128, 134, 192 A.3d 455 (2018), rev'd in part on other grounds, 334 Conn. 374, 222 A.3d 950 (2020) ; see also U .S . Bank , National Assn . v. Fitzpatrick , 190 Conn. App. 773, 783, 212 A.3d 732, cert. denied, 333 Conn. 916, 217 A.3d 1 (2019). ‘‘[I]n determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged.’’ (Internal quotation marks omitted.) Wilcox v. Webster Ins ., Inc ., 294 Conn. 206, 214, 982 A.2d 1053 (2009). A determination regarding standing concerns a question of law over which we exercise plenary review. See, e.g., One Country , LLC v. Johnson , 314 Conn. 288, 298, 101 A.3d 933 (2014) ; In re Probate Appeal of Christopher Kusmit , 188 Conn. App. 196, 200–201, 204 A.3d 776 (2019) ; Deutsche Bank National Trust Co . v. Thompson , supra, at 832, 136 A.3d 1277.

‘‘Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy. ... [T]he court has a duty to dismiss, even on its own initiative, any appeal that it lacks jurisdiction to hear. ... Moreover, [t]he parties cannot confer subject matter jurisdiction on the court, either by waiver or by consent. ... Standing ... is not a technical rule intended to keep aggrieved parties out of court; nor is it a test of substantive rights. Rather, it is a practical concept designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticiable interests and that judicial decisions which may affect the rights of others are forged in hot controversy, with each view fairly and vigorously represented.’’ (Citations omitted; internal quotation marks omitted.) Webster Bank v. Zak , 259 Conn. 766, 774, 792 A.2d 66 (2002). ‘‘When standing is put in issue, the question is whether the person whose standing is challenged is a proper party to request an adjudication of the issue .... Standing requires no more than a colorable claim of injury; a [party] ordinarily establishes ... standing by allegations of injury. Similarly, standing exists to attempt to vindicate arguably protected interests. ... Standing is established by showing that the party claiming it is authorized ... to bring an action ....’’ (Internal quotation marks omitted.) Handsome , Inc . v. Planning & Zoning Commission , 317 Conn. 515, 525, 119 A.3d 541 (2015) ; see also Dow & Condon , Inc . v. Brookfield Development Corp ., 266 Conn. 572, 579, 833 A.2d 908 (2003) (in determining standing, ‘‘[i]t is well settled that one who [is] neither a party to a contract nor a contemplated beneficiary thereof cannot sue to enforce the promises of the contract’’ (internal quotation marks omitted)); Ganim v. Smith & Wesson Corp ., 258 Conn. 313, 347, 780 A.2d 98 (2001) (‘‘for a plaintiff to have standing, it must be a proper party to request adjudication of the issues’’ (internal quotation marks omitted)).

In the present case, Speer is a guarantor of the note. ‘‘A guarantee, similar to a suretyship, is a contract, in which a party, sometimes referred to as a secondary obligor, contracts to fulfill an obligation upon the default of the principal obligor. ... Our Supreme Court has recognized the general principle that a guarantee agreement is a separate and distinct obligation from that of the note or other obligation. ... [A] guarantor's liability does not arise from the debt or other obligation secured by the mortgage; rather, it flows from the separate and distinct obligation incurred under the guarantee contract. ... [The] guarantor [is not] liable for the debt secured by the mortgage; rather, the guarantor is liable for what he or she agreed to in the [guarantee].’’ (Citations omitted; internal quotation marks omitted.) Jenzack Partners , LLC v. Stoneridge Associates , LLC , supra, 183 Conn. App. at 135, 192 A.3d 455 ; see also JSA Financial Corp . v. Quality Kitchen Corp. of Delaware , 113 Conn. App. 52, 57, 964 A.2d 584 (2009) (‘‘[t]he contract of guarantee is no doubt an agreement separate and distinct from the contract between the lender and the borrower’’ (internal quotation marks omitted)). ‘‘[Guarantees] are ... distinct and essentially different contracts; they are between different parties, they may be executed at different times and by separate instruments, and the nature of the promises and the liability of the promisors differ substantially .... The contract of the guarantor is his own separate undertaking in which the principal does not join.’’ (Internal quotation marks omitted.) 1916 Post Road Associates , LLC v. Mrs. Green's of Fairfield , Inc ., 191 Conn. App. 16, 23, ...