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PEOPLE’S UNITED BANK v. GREGORY J.

SARNO ET AL.

(AC 36962)

Keller, Prescott and West, Js.

Argued May 19—officially released October 27, 2015

(Appeal from Superior Court, judicial district of

Fairfield, Hartmere, J. [foreclosure judgment]; Hon.

Richard P. Gilardi, judge trial referee [motion for

approval of committee sale].)
Joseph J. Cessario, with whom, on the brief, was

Gregory J. Bennici, for the appellant (named

defendant).

Robert J. Piscitelli, for the appellee (plaintiff).
Opinion

WEST, J. The defendant Gregory J. Sarno1 appeals

from the judgment of the trial court approving a foreclosure by sale in favor of the plaintiff, People’s United

Bank, of property composed of two separate parcels

owned by the defendant. On appeal, the defendant

claims that the court abused its discretion in approving

the foreclosure sale.2 We affirm the judgment of the

trial court.

The following facts and procedural history are relevant. This appeal arises out of the plaintiff’s action to

foreclose on real property located at 2131 and 2136

Fairfield Beach Road in Fairfield. In February, 2012, the

plaintiff instituted a foreclosure action on the Fairfield

property, and its complaint alleged the following facts.

In January, 2005, the defendant, as the owner of the

Fairfield property, executed a note in favor of the plaintiff for a loan with an original principal sum of $900,000,

payable with interest thereon as provided in the note.

To secure the note, the defendant also executed a mortgage on the Fairfield property in favor of Mortgage

Electronic Registration, Inc., as nominee for the plaintiff. The mortgage was recorded in the Fairfield land

records and was then assigned to the plaintiff. When

the note was in default, the plaintiff elected to accelerate the balance due on the note and to foreclose the

mortgage on the Fairfield property.

In May, 2012, the plaintiff filed a motion for judgment

by strict foreclosure. The plaintiff filed an appraisal

identifying the property as 2131 Fairfield Beach Road,

and listing the fair market value as $955,000. This

appraisal noted that the subject property consisted of

two lots: 2131 Fairfield Beach Road, a 0.13 acre parcel

with improvements, and 2136 Fairfield Beach Road,

a 0.02 acre vacant parcel. An accompanying oath of

appraiser denoted the appraised property as 2131 Fairfield Beach Road, with a total value of $955,000. The

plaintiff filed another oath of appraiser which represented the property as 2131 and 2136 Fairfield Beach

Road, with a total value of $900,000. The attached

appraisal referenced the property as 2131 Fairfield

Beach Road. The appraisal report indicated the site to

be 0.15 acres. On July 16, 2012, the court rendered

a judgment of foreclosure by sale that described the

property as 2131 Fairfield Beach Road, and the sale

date was set. At that time, the court found the fair

market value of the property to be $900,000, and the

plaintiff’s debt to be $828,728.34.

In October, 2012, the residence on the main parcel

was severely damaged in tropical storm Sandy. The

residence was subsequently razed by the town of Fairfield and a demolition lien in the amount of $12,000

was recorded on the land records. The defendant filed

a motion to open the judgment and extend the sale
date, which was later granted.

In March, 2013, the plaintiff filed a motion to reopen,

seeking to convert the foreclosure judgment to a judgment of strict foreclosure and to set law days. The

motion stated that the committee had obtained an

updated appraisal indicating that the present value of

the property was $605,000, thus concluding that there

was no longer any equity in the property. The court

denied the motion to convert the foreclosure judgment

to a judgment of strict foreclosure, reopened the judgment of foreclosure by sale, and set a new sale date.

In July, 2013, and again in October, 2013, the defendant

filed a motion to open and extend the sale date, both

of which were granted. In November, 2013, a return of

appraiser, oath of appraiser and appraisal were filed

by the committee, referencing the property appraised

as 2131 Fairfield Beach Road.

In January, 2014, the committee filed a return of

appraiser, oath of appraiser and appraisal, all of which

referred to the property as 2131 Fairfield Beach Road.

The appraisal indicated the property to be 0.13 acres

and estimated the market value of the property to be

$705,000. In February, 2014, the defendant filed another

motion to open and extend the sale date, which was

later granted.

The auction was posted on the judicial branch website and the property was identified as 2131 and 2136

Fairfield Beach Road. The notice to bidders also identified the property as 2131 and 2136 Fairfield Beach Road,

and the property description attached to the notice

identified both of the parcels. The court appointed the

appraiser and the committee then filed the return of

appraiser and oath of appraiser relevant to this appeal

in April, 2014. The return of appraiser referred to the

property as 2131 and 2136 Fairfield Beach Road. The

oath of appraisal referenced the property as 2131 Fairfield Beach Road, and represented the appraised value

to be $705,000. The appraisal itself listed the property

as 2131 Fairfield Beach Road and indicated that the

property was 0.13 acres, but also referred to page 30

of volume 2890 of the Fairfield land records, which

contained descriptions of both parcels. The appraisal

also included a ‘‘Subject Photo Page’’ which contained

three photographs: a photograph of 2131 Fairfield

Beach Road, labeled ‘‘Subject Front’’ and captioned

‘‘2131 Fairfield Beach Road’’; a photograph of 2136 Fairfield Beach Road, labeled ‘‘Subject’’ and captioned

‘‘NORTH SIDE ACROSS THE STREET PARKING

ONLY’’; and a photograph of the street labeled ‘‘Subject Street.’’

The sale took place on April 12, 2014, after it was

duly advertised and a sign was posted on the property.

The plaintiff was the only bidder present at the sale,

and the plaintiff’s bid was $396,000. The plaintiff took

title subject to the demolition lien of approximately
$12,000 and taxes of approximately $22,786.48.

The committee filed a motion for approval of the

committee sale, referencing the property as 2131 and

2136 Fairfield Beach Road. The plaintiff filed a memorandum in support of the motion, indicating that the

plaintiff had its own appraisal done for both properties,

and that the appraised value was $460,000. The attached

appraisal identified the property as 2131 Fairfield Beach

Road and concluded that, as of October, 2013, the market value of the property was $460,000. The defendant

later filed an objection to the plaintiff’s motion for

approval of the committee sale. In his objection, the

defendant argued that the court should deny the motion

for approval of the committee sale because the committee’s appraisal provided the value for only one of the

two properties and, therefore, did not accurately reflect

the full fair market value of the premises. The motion

for approval of the committee sale was later granted

in May, 2014. This appeal followed.

On appeal, the defendant claims that the court abused

its discretion in approving the foreclosure sale. The

defendant argues that the sale was commercially unreasonable and inequitable because the appraisal was

defective in that it considered only one of the two properties. He argues that the omission of any reference

to 2136 Fairfield Beach Road or the 0.02 acres in the

appraisal discouraged parties from submitting bids, and

that the value of 2131 Fairfield Beach Road is markedly

decreased when it is not paired with 2136 Fairfield

Beach Road, which would allow for off-street parking

and/or the construction of an accessory structure. He

argues that this was fatal to the marketing and integrity

of the sale, and thus, the court should have ordered a

new sale or converted the sale to a strict foreclosure.

We first set forth the relevant standard of review and

legal principles that govern our analysis of the defendant’s claim. The applicable standard of review in analyzing a court’s approval of a committee sale is the abuse

of discretion standard. First Connecticut Capital, LLC

v. Homes of Westport, LLC, 112 Conn. App. 750, 760,

966 A.2d 239 (2009). ‘‘[A] foreclosure action constitutes

an equitable proceeding. . . . In an equitable proceeding, the trial court may examine all relevant factors to

ensure that complete justice is done. . . . The determination of what equity requires in a particular case, the

balancing of the equities, is a matter for the discretion

of the trial court. . . . This court must make every

reasonable presumption in favor of the trial court’s

decision when reviewing a claim of abuse of discretion.

. . . Our review of a trial court’s exercise of the legal

discretion vested in it is limited to the questions of

whether the trial court correctly applied the law and

could reasonably have reached the conclusion that it

did.’’ (Internal quotation marks omitted.) Id., 761.

‘‘[General Statutes §] 49-25 provides in relevant part
that in a foreclosure by sale ‘the court shall appoint

one disinterested appraiser who shall, under oath,

appraise the property to be sold . . . . Upon motion

of the owner of the equity of redemption, the court

shall appoint a second appraiser in its decree. . . .’

While an appraisal under the statute is not conclusive

as to the value of the property for purposes of fixing

the amount of a deficiency . . . it serves to assist the

court in determining whether to approve the sale as

one that fairly realized the value of the property. . . .

While the trial court is not bound to accept the

appraised value . . . it may assist the trial court in the

exercise of its discretion, in accepting or rejecting a

proposed sale. . . .

‘‘The trial court in a foreclosure matter acts as a court

of equity and has full authority to refuse to confirm a

sale on equitable grounds where an unfairness has taken

place or where the price bid was inadequate. . . . The

court must exercise its discretion and equitable powers

with fairness not only to the foreclosing mortgagee, but

also to subsequent encumbrancers and the owners.

. . . The appraisal procedure provided by § 49-25 performs the function of giving the trial court guidance on

the question of whether to approve the sale.’’ (Citations

omitted; emphasis added.) Dime Savings Bank of New

York v. Grisel, 36 Conn. App. 313, 318–19, 650 A.2d

1246 (1994).

‘‘[I]n Connecticut, the law is well settled that whether

a mortgage is to be foreclosed by sale or by strict foreclosure is a matter within the sound discretion of the

trial court. . . . The foreclosure of a mortgage by sale

is not a matter of right, but rests in the discretion of

the court before which the foreclosure proceedings are

pending.’’ (Citations omitted; internal quotation marks

omitted.) Fidelity Trust Co. v. Irick, 206 Conn. 484,

488, 538 A.2d 1027 (1988).

In the present case, the appraisal stated the address

of the property as 2131 Fairfield Beach Road, and indicated that the property was 0.13 acres. The appraisal,

however, also referred to page 30 of volume 2890 of

the Fairfield land records, which contained descriptions

of both parcels, and included a ‘‘Subject Photo Page,’’

which contained photographs of both 2131 and 2136

Fairfield Beach Road. Furthermore, it is not clear from

an examination of the value of the committee’s

appraisal that only one parcel was considered in the

appraisal. When the court ordered the foreclosure, the

value of the property was found to be $900,000. The

committee’s appraisal valued the property at $705,000.

Given the surrounding circumstances, most notably

that the structure on the beachfront parcel was demolished as a result of the damage done by the storm, it

is not unreasonable that the value of the property would

have decreased from the value it was appraised at when

the structure was on the property.Additionally, a review
of the record reveals that otherrelevant documents that

potential bidders would have looked to for information

regarding the sale, including the judicial branch website, the notice to bidders, and the property description

attached to the notice, referenced both parcels as being

foreclosed. The defendant takes issue with the fact that

the plaintiff’s sole bid was for an amount less than the

fair market value of the property at the time of the sale,

however, ‘‘[i]t is not unusual for a foreclosure sale to

yield considerably less than the property’s appraised

fair market value.’’ National City Real Estate Services,

LLC v. Tuttle, 155 Conn App. 290, 295, 109 A.3d 932

(2015).3 We conclude, on the basis of our thorough

review of the record, that although the appraisal may

not have been a model of clarity, the court did not

abuse its discretion in approving the sale.

The judgment is affirmed.

In this opinion the other judges concurred.

1 The complaint named JPMorgan Chase Bank, N.A. (JPMorgan), as an

additional defendant by virtue of a second mortgage that it held on the

subject property that was subsequent in right to the plaintiff’s mortgage.

The plaintiff filed a motion for default against JPMorgan forfailure to appear,

which was granted by the court. Because JPMorgan has not taken an active

role in the proceedings before the trial court or this court, all references

to the defendant in this opinion refer solely to Sarno.

2 Although the defendant argues that the court committed plain error by

approving the sale of the properties, we review this claim under the abuse

of discretion standard as the issue was preserved when the defendant raised

this argument in his objection to the motion for approval of the committee

sale, dated April 21, 2014.

3

‘‘No appellate case has established whether there is a certain percentage

of fair market value below which a sale would trigger a trial court’s obligation

to reject a foreclosure sale on the ground that the price was inadequate or

unfair as a matter of law.’’ National City Real Estate Services, LLC v. Tuttle,

supra, 155 Conn. App. 296. This court, however, has upheld the approval

of a foreclosure sale producing less than 43 percent of the property’s fair

market value. See id., 293. In the present case, the plaintiff’s $396,000 bid

constituted 56 percent of the fair market value of $705,000 reflected in the

committee’s appraisal. Additionally, we note that the plaintiff’s $396,000 bid

constituted 86 percent of the fair market value of $460,000 reflected in the

plaintiff’s appraisal.