Court Opinion

ID: 7856119
Source: CourtListenerOpinion
Date Created: 2022-09-08 17:44:36.010158+00
Date Added: 2024-06-11T16:29:49.018973
License: Public Domain

Dupont, C. J.,
dissenting. I respectfully dissent.
General Statutes § 49-30 provides that the “omission ... to properly foreclose . . . may be completely cured and cleared by deed or foreclosure or other proper legal proceedings to which the only necessary parties shall be the party acquiring such foreclosure title, or his successor in title, and the party . . . thus not foreclosed . . . .” (Emphasis added.) The intent of the statute, to cure and to provide a remedy for the omission of a party from foreclosure proceedings, is apparent from its language. The type of cure is also apparent. The cure can consist of foreclosure, conveyance or other legal proceedings.
The majority agrees that the remedy for the omission in this case is a legal proceeding other than foreclosure or conveyance and implies that money damages would have been appropriate if the defendant’s lien had value. In deciding that the defendant’s lien had no value in this case, the majority concludes that the defendant would not have redeemed the property had he been named in the foreclosure proceeding, nor would he have redeemed if the foreclosure action had taken place at the time he executed the stipulation with the plaintiff.
I disagree with the majority’s conclusion because the majority considers only redemption in determining the value of the defendant’s lien and, having assumed that redemption is the remedy, then considers the amount of the encumbrances senior to the defendant in determining whether the defendant would have redeemed the property. The remedy of redemption is no longer possible in this case, and, even if it were, § 49-30 does not allow other lienholders whose interests were previously foreclosed to participate in the statutory action. In my opinion, the question to be resolved to determine the value of the defendant’s lien is not whether the defendant would have redeemed the property, either *775at the time of the foreclosure or at the time of the stipulation, but whether the lien had any value as of the date the parties stipulated that cash could be substituted for it in exchange for the defendant’s release of the lien.
Either an omitted party or a party who foreclosed, or their successors, may bring a § 49-30 action to cure a situation created solely by the foreclosing party. The purpose of a § 49-30 action is to extinguish the interest that was not foreclosed. Its language does not put omitted parties in the position they would have been in had they been part of the foreclosure proceedings. Because all of the interests of the mortgagees other than that the first mortgagee were extinguished by the time of this § 49-30 proceeding, no holder of those mortgages can play a part in the statutory action. D. Caron, Connecticut Foreclosures (Sup. 1993) § 24.03A. When title vests upon the failure of other encumbrancers to redeem the property, title is free of all the foreclosed interests. First Bank v. Simpson, 199 Conn. 368, 373-74, 507 A.2d 997 (1986). Essentially, the interest of the omitted lienholder survives foreclosure. See R. Bowmar, “Mortgage Foreclosure in New York: Omitted Lienors,” 22 Real Property, Probate and Trust Journal 509, 516 (1987); see also Loomis v. Knox, 60 Conn. 343, 350, 22 A. 771 (1891). Because the presence in a § 49-30 action of the other parties whose interests were foreclosed by the foreclosure judgment is not required by the statute, the original foreclosure proceeding cannot be reconstructed. Also, a § 49-30 action is brought after a judgment of foreclosure has been rendered, when the fair market value of the property might be very different. The purpose of the statute is to cure the omission and to provide a remedy to the lienholder who was omitted from a proceeding in which he had a right to participate. It does not attempt to reconstruct the past.
*776The right to redeem in a foreclosure action is not the only right lost by omitted lienholders. Such lienholders have also lost the right to move for foreclosure by sale pursuant to General Statutes § 49-24, if they determine that a sale may provide funds out of which payment of their liens may come. First Bank v. Simpson, supra, 199 Conn. 374. Also, in the event a sale takes place, a junior encumbrancer may be entitled to costs.
One authority has stated that an omitted lienholder acquires, pursuant to § 49-30, “the potential for reaping a substantial windfall,” since the omitted lienholder would need only to pay off the debt of the first mortgage to acquire title to property that may have been valued in excess of the first mortgage. See D. Caron, Connecticut Foreclosures, supra, § 27.03A. For example, in this case, the principal of the first mortgage debt was $500,000 and the property was valued at $707,000 as of the date of the foreclosure action, and was sold nearly one year later for $525,000. Caron’s conclusion assumes that the remedy being provided to the omitted lienholder is redemption. The statute, however, provides three different remedies in most instances, namely deed, foreclosure or other proper legal proceedings. The trial court would probably exercise its discretion to choose a remedy other than foreclosure in the event that redemption would provide the omitted lienholder a substantial windfall.
In this case, the title to the real estate is no longer in the plaintiff and the lien no longer exists. The defendant, after having released his lien, could no longer be given the remedy of redemption, nor could the cure for the omission any longer be redemption. The remedy of “by deed” also no longer existed, and, therefore, the defendant’s remaining recourse for his omission, for which he could also have instituted suit pursuant to § 49-30, is money damages.
*777Section 49-30 gives the trial court broad equitable jurisdiction to entertain such questions as are necessary to do complete justice. Hartford Federal Savings & Loan Assn. v. Lenczyk, 153 Conn. 457, 463, 217 A.2d 694 (1966). The determination of the amount of damages due the defendant should be based on considerations such as (1) the length of time between the original foreclosure action and the § 49-30 action, (2) whether the omitted lienholder relied on or changed his position in reliance on the existence of the lien, (3) whether the foreclosing party received proceeds from a title insurance policy because of the omission, (4) whether the omitted lienholder expended funds for legal fees, and (5) whether the real estate depreciated or appreciated in value due to improvements or a fluctuation in the market.1
I would reverse the judgment and remand the case for a hearing to determine the value of the defendant’s lien as of the time he agreed to release it, taking into account the factors previously discussed.

 A factor such as the degree of sophistication of the lienholder would be irrelevant because the statute concerns the omission not the identity of the lienholder. Nor would it matter why the lienholder was omitted. Milici v. Ferrara, 133 Conn. 141, 144, 48 A.2d 562 (1946).