Court Opinion

ID: 3183355
Source: CourtListenerOpinion
Date Created: 2016-03-08 13:13:51.589377+00
Date Added: 2024-06-11T10:45:42.158164
License: Public Domain

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      PROPERTY ASSET MANAGEMENT, INC.
         v. CARMELA LAZARTE ET AL.
                 (AC 37729)
                  Keller, Prescott and Bear, Js.
    Argued December 9, 2015—officially released March 15, 2016

   (Appeal from Superior Court, judicial district of
            Stamford-Norwalk, Mintz, J.)
  Peter V. Lathouris, with whom, on the brief, was
Richard M. Breen, for the appellant (named defendant).
  Robert J. Wichowski, with whom, on the brief, was
David F. Borrino, for the appellee (substitute plaintiff).
                          Opinion

  PRESCOTT, J. The defendant1 Carmela Lazarte
appeals from the trial court’s denial of her postjudgment
motion to dismiss the underlying foreclosure action.
The defendant claims that the original plaintiff, Prop-
erty Asset Management, Inc., lacked standing to initiate
the action because it was not the owner of the debt or
vested with the rights of an owner at the time that the
action was initiated, and, therefore, the court lacked
subject matter jurisdiction to render a judgment of strict
foreclosure in favor of the substitute plaintiff, US Bank,
National Association, as Trustee for the RMAC Trust,
Series 2013-3T. The defendant claims on appeal that
the court improperly (1) determined that she failed to
produce evidence necessary to rebut the presumption
that the original plaintiff had standing by virtue of its
possession of the mortgage note, endorsed in blank, at
the time that the action was filed and (2) failed to
conduct an evidentiary hearing on the motion to dis-
miss. We affirm the judgment of the court.
  The record reveals the following pertinent facts and
procedural history. In January, 2007, the defendant exe-
cuted a note in favor of GE Money Bank. To secure the
note, she also executed a mortgage on real property
located at 21 Cold Spring Road in Stamford in favor of
Mortgage Electronic Registration Systems, Inc.
(MERS), as nominee for GE Money Bank.
  On October 14, 2008, the original plaintiff initiated
this action to foreclose the mortgage. It alleged that
the note was in default because the defendant had failed
to make any of the required monthly installment pay-
ments since July, 2007. According to the complaint,
MERS had assigned the mortgage to WMC Mortgage
Corporation on or before November 2, 2007, and WMC
Mortgage Corporation later transferred the mortgage
to the original plaintiff ‘‘by an assignment of mortgage
to be recorded on the Stamford Land Records.’’ The
original plaintiff also alleged that it presently was the
holder of the note and the mortgage.2
   The defendant filed an answer to the complaint,
admitting that she was the record owner and in posses-
sion of the subject property, but denying all other allega-
tions of the complaint. She also asserted by way of
special defenses that the original plaintiff (1) could
not obtain a judgment against her on the basis of an
unrecorded mortgage assignment, (2) had not properly
declared an event of default, and (3) had incorrectly
calculated the debt, which included a failure to properly
credit all payments.
  The original plaintiff filed a motion for a judgment
of strict foreclosure on May 24, 2010. On September 24,
2010, the original plaintiff filed a motion for summary
judgment as to liability only against the defendant. In
the motion for summary judgment, the original plaintiff
addressed each of the defendant’s special defenses,
arguing that they were legally insufficient and, thus,
should not bar the granting of the motion for summary
judgment. With respect to the defense that the original
plaintiff lacked standing to pursue foreclosure of the
mortgage because a mortgage assignment to the original
plaintiff had not been recorded at the time the foreclo-
sure action was initiated, the original plaintiff asserted
that it had standing to bring the foreclosure action irre-
spective of the mortgage assignment. According to the
original plaintiff, because it was in possession of the
original note, which was endorsed in blank, it was a
holder of the note in due course and, thus, was a party
with standing to foreclose the associated mortgage.3 See
General Statutes § 49-17;4 RMS Residential Properties,
LLC v. Miller, 303 Conn. 224, 232, 32 A.3d 307 (2011)
(holding that holder of note secured by mortgage has
standing to bring foreclosure action against maker of
note, even prior to assignment of mortgage to note
holder), overruled in part on other grounds by J.E.
Robert Co. v. Signature Properties, LLC, 309 Conn. 307,
325 n.18, 71 A.3d 492 (2013).
   The court initially denied the motion for summary
judgment, concluding that because the mortgage assign-
ment from MERS to WMC Mortgage Corporation was
undated, this created a genuine issue of material fact
that precluded the granting of the motion for summary
judgment. The original plaintiff filed a motion to reargue
in which it asserted that the undated assignment of the
mortgage had no bearing on the defendant’s liability on
the note and mortgage. The court granted the motion
and set a reargument date. No further action was taken
on the motion for summary judgment, however,
because the defendant was defaulted on December 17,
2012, after a hearing, for failing to comply with court-
ordered discovery.
  On January 4, 2013, the original plaintiff assigned the
mortgage to the substitute plaintiff, and, on June 25,
2013, the court granted the original plaintiff’s motion
to substitute party plaintiff.
  The court rendered judgment of strict foreclosure on
November 12, 2013, in favor of the substitute plaintiff,
setting law days to commence on January 7, 2014. The
defendant did not appeal from the foreclosure judg-
ment. On January 6, 2014, the defendant filed a chapter
13 bankruptcy petition, which stayed the running of the
law days. The Bankruptcy Court later dismissed the
defendant’s petition without prejudice, and the substi-
tute plaintiff moved to open the foreclosure judgment
in order to update the debt, to obtain an additional
award of attorney’s fees, and to set new law days. The
court granted the motion and set new law days to com-
mence on September 9, 2014. The defendant, on Sep-
tember 8, 2014, again filed a petition seeking bankruptcy
protection. That petition was dismissed on October
31, 2014.
  On February 10, 2015, the substitute plaintiff filed a
motion to open the foreclosure judgment, again asking
the court to update the debt, to award additional attor-
ney’s fees, and to set new law days. The motion to open
was scheduled for argument on February 23, 2015. On
the day of the hearing, the defendant filed a motion to
dismiss the foreclosure action for lack of subject matter
jurisdiction. The defendant argued that, at the time that
the action was initiated, the original plaintiff was not
the owner of the debt ‘‘nor was it vested with the status
that would allow it to foreclose.’’ The defendant also
indicated in her motion that the pleadings and the judi-
cial record provided an adequate basis on which the
court could decide the motion to dismiss and that an
evidentiary hearing, therefore, was unnecessary.
    At the hearing on the substitute plaintiff’s motion to
open the foreclosure judgment, the court also heard
argument on the motion to dismiss. The gravamen of
the defendant’s argument was that the assignment of
the mortgage from WMC Mortgage Corporation to the
original plaintiff was not executed until January 21,
2009, which was after the foreclosure action was initi-
ated. The defendant pointed out language in the assign-
ment indicating that the mortgage was assigned
‘‘[t]ogether with the mortgage note secured thereby.’’
According to the defendant, this language was proof
that the original plaintiff did not acquire any legal inter-
est in the note until 2009 and, thus, lacked standing to
initiate the foreclosure action in 2008.
   The substitute plaintiff responded that this same
issue had been litigated as part of the motion for sum-
mary judgment. It maintained that the exhibits and affi-
davits submitted in support of summary judgment
established that the original plaintiff had standing to
initiate the action because the original plaintiff was
in possession of the note at the time that the action
was filed.
   The court agreed with the substitute plaintiff and
reasoned that the defendant’s reliance on the mortgage
assignments was irrelevant in determining standing in
the present case. The court noted that there was a
rebuttable presumption that a party in possession of a
note endorsed in blank has standing to initiate foreclo-
sure proceedings on the mortgage securing that note.
The court rejected the defendant’s argument that the
2009 assignment cast sufficient doubt about whether
the original plaintiff was in possession of the note at
the time it initiated the action to warrant any further
opportunity to explore the issue. The court found, on
the basis of its review of the record, that the note at
issue was endorsed in blank, that the original plaintiff
had been ‘‘in possession of it since prior to the com-
mencement of the action,’’ and that the defendant had
not presented any evidence to rebut that fact. The court
denied the motion to dismiss, granted the substitute
plaintiff’s motion to open the foreclosure judgment, and
reset the law days. This appeal followed.
                             I
   The defendant first argues that the court improperly
denied her motion to dismiss on the basis of its finding
that she had failed to counter the rebuttable presump-
tion that the original plaintiff had standing to initiate
this action. We disagree.
   ‘‘Standing is the legal right to set judicial machinery
in motion. One cannot rightfully invoke the jurisdiction
of the court unless he [or she] 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. . . . [When] a
party is found to lack standing, the court is consequently
without subject matter jurisdiction to determine the
cause. . . . We have long held that because [a] determi-
nation regarding a trial court’s subject matter jurisdic-
tion is a question of law, our review is plenary. . . .
In addition, because standing implicates the court’s sub-
ject matter jurisdiction, the issue of standing is not
subject to waiver and may be raised at any time.’’ (Inter-
nal quotation marks omitted.) Wells Fargo Bank, N.A.
v. Strong, 149 Conn. App. 384, 397–98, 89 A.3d 392, cert.
denied, 312 Conn. 923, 94 A.3d 1202 (2014).5
   Because lack of standing implicates the trial court’s
subject matter jurisdiction, it is properly raised by way
of a motion to dismiss. See May v. Coffey, 291 Conn.
106, 113, 967 A.2d 495 (2009). ‘‘Our standard of review
of a trial court’s findings of fact and conclusions of law
in connection with a motion to dismiss is well settled.
A finding of fact will not be disturbed unless it is clearly
erroneous. . . . [If] the legal conclusions of the court
are challenged, we must determine whether they are
legally and logically correct and whether they find sup-
port in the facts . . . . Thus, our review of the trial
court’s ultimate legal conclusion and resulting [denial]
of the motion to dismiss will be de novo.’’ (Internal
quotation marks omitted.) JPMorgan Chase Bank
National Assn. v. Simoulidis, 161 Conn. App. 133, 135–
36, 126 A.3d 1098 (2015), cert. denied, 320 Conn. 913,
     A.3d      (2016).
  ‘‘Generally, in order to have standing to bring a fore-
closure action the plaintiff must, at the time the action
is commenced, be entitled to enforce the promissory
note that is secured by the property. . . . Whether a
party is entitled to enforce a promissory note is deter-
mined by the provisions of the Uniform Commercial
Code, as codified in General Statutes § 42a-1-101 et seq.
. . . Under [the Uniform Commercial Code], only a
holder of an instrument or someone who has the rights
of a holder is entitled to enforce the instrument. . . .
  ‘‘The plaintiff’s possession of a note endorsed in blank
is prima facie evidence that it is a holder and is entitled
to enforce the note, thereby conferring standing to com-
mence a foreclosure action. . . . After the plaintiff has
presented this prima facie evidence, the burden is on
the defendant to impeach the validity of [the] evidence
that [the plaintiff] possessed the note at the time that
it commenced the . . . action or to rebut the presump-
tion that [the plaintiff] owns the underlying debt . . . .
The defendant [must] . . . prove the facts which limit
or change the plaintiff’s rights.’’ (Citations omitted;
emphasis in original; internal quotation marks omitted.)
Deutsche Bank National Trust Co. v. Bliss, 159 Conn.
App. 483, 488–89, 124 A.3d 890, cert. denied, 320 Conn.
903, 127 A.3d 186 (2015).
   In the present case, the court denied the defendant’s
motion to dismiss, concluding that the original plaintiff,
as a holder of the note, had standing to initiate the
foreclosure action. The court’s decision was based on
its findings that the original plaintiff had been in posses-
sion of the note at the time that the action was com-
menced and that the note was endorsed in blank. The
fact that the note was endorsed in blank is not chal-
lenged by the defendant. Further, although the court
did not state the basis for its finding that the original
plaintiff was in possession of the note when it initiated
the foreclosure action, that finding is supported by the
record, namely, the affidavit submitted with the motion
for summary judgment indicating that the note was
delivered to the original plaintiff on or before October
6, 2008. The defendant presented no evidence that the
original plaintiff transferred or lost possession of the
note prior to commencing the foreclosure action on
October 14, 2008.
   The court also properly rejected the defendant’s argu-
ment that the 2009 mortgage assignment, which con-
tained language purporting to assign the mortgage
‘‘together with the mortgage note,’’ constituted evi-
dence that the note was not in the original plaintiff’s
possession at the time it initiated the action, thus impli-
cating standing. The mortgage assignment does not
directly speak to when the original plaintiff came to
have physical possession of the note. This court, in
Countrywide Home Loans Servicing, LP v. Creed, 145
Conn. App. 38, 50, 75 A.3d 38, cert. denied, 310 Conn.
936, 79 A.3d 889 (2013), rejected a nearly identical stand-
ing argument, holding that if a foreclosure plaintiff’s
standing rests upon its possession of a note endorsed
in blank, ‘‘any discrepancy in the language of the assign-
ment as to whether the assignment pertains to both the
mortgage and the note is not legally pertinent to the
plaintiff’s right to bring [the foreclosure] action . . . .’’
Because the defendant presented the court with nothing
to rebut the evidence in the record that the original
plaintiff possessed the mortgage note endorsed in blank
at the time that it commenced this action, and thus that
it had standing, we conclude that the court properly
denied the motion to dismiss.
                                     II
  The defendant also claims that the trial court improp-
erly failed to conduct an evidentiary hearing on the
motion to dismiss. We disagree.
   ‘‘Due process does not mandate full evidentiary hear-
ings on all matters, and not all situations calling for
procedural safeguards call for the same kind of proce-
dure. . . . So long as the procedure afforded ade-
quately protects the individual interests at stake, there
is no reason to impose substantially greater burdens
. . . under the guise of due process.’’ (Internal quota-
tion marks omitted.) Id. ‘‘[If] a jurisdictional determina-
tion is dependent on the resolution of a critical factual
dispute, it cannot be decided on a motion to dismiss
in the absence of an evidentiary hearing to establish
jurisdictional facts.’’ Conboy v. State, 292 Conn. 642,
652, 974 A.2d 669 (2009). Thus, our Supreme Court has
noted that in those instances in which standing is raised
in the context of a foreclosure action and ‘‘there is a
genuine dispute as to jurisdictional facts and an eviden-
tiary hearing is necessary to resolve that dispute, such
a hearing ordinarily will be required.’’ Equity One, Inc.
v. Shivers, 310 Conn. 119, 136 n.12, 74 A.3d 1225 (2013).
   We note at the outset that the defendant expressly
stated in her motion to dismiss that no evidentiary hear-
ing was necessary and that the court could decide the
motion to dismiss on the basis of its review of the
pleadings and the record. It was not until it became
clear during argument that the court was not going to
rule in her favor that the defendant suggested for the
first time that she had raised sufficient doubts to war-
rant an evidentiary hearing. Doubt, however, is not the
standard to be applied.
   A court is required to hold an evidentiary hearing
before adjudicating a motion to dismiss only if there is
a genuine dispute as to some pertinent jurisdictional
fact. Id. In the present case, there was no jurisdictional
fact in dispute necessary to determine whether the origi-
nal plaintiff had standing to bring the present action.
The record before the court revealed that the original
plaintiff was in possession of the note, endorsed in
blank, at the time it commenced the action, and, thus,
there was a rebuttable presumption of standing.
Because the defendant failed to demonstrate the exis-
tence of any relevant jurisdictional fact that was in
dispute, the court was not required to hold an eviden-
tiary hearing before ruling on the defendant’s motion
to dismiss.
  The judgment is affirmed and the case is remanded
for the purpose of setting new law days.
      In this opinion the other judges concurred.
  1
    Mortgage Electronic Registration Systems, Inc., was named in the com-
plaint as an additional party defendant by virtue of its interest in a second
mortgage, but it never filed an appearance in the trial court and is not a
participant in this appeal. Accordingly, we refer to Carmella Lazarte through-
out this opinion as the defendant.
   2
     We note that the assignment from MERS to WMC Mortgage Corporation
is undated, but was recorded on November 2, 2007, and the assignment
from WMC Mortgage Corporation to the original plaintiff was not executed
until January 21, 2009, several months after the original plaintiff initiated
this action.
   3
     The original plaintiff never expressly asserted in its motion for summary
judgment that it was in possession of the note at the time the action was
initiated. See J.E. Robert Co. v. Signature Properties, LLC, 309 Conn. 307,
325 n.18, 71 A.3d 492 (2013). In support of its motion for summary judgment,
however, the original plaintiff relied, inter alia, on a sworn affidavit from a
loan servicing officer, who averred that the original note, endorsed in blank,
was delivered to the original plaintiff on or before October 6, 2008, eight
days prior to the initiation of the present foreclosure action. We note that
the defendant submitted no evidence countering that affidavit.
   4
     ‘‘General Statutes § 49-17 . . . provides an avenue for the holder of the
note to foreclose on the property when the mortgage has not been assigned
to him.’’ (Internal quotation marks omitted.) Fleet National Bank v. Naza-
reth, 75 Conn. App. 791, 795, 818 A.2d 69 (2003). ‘‘When any mortgage is
foreclosed by the person entitled to receive the money secured thereby but
to whom the legal title to the mortgaged premises has never been conveyed,
the title to such premises shall, upon the expiration of the time limited for
redemption and on failure of redemption, vest in him in the same manner
and to the same extent as such title would have vested in the mortgagee if
he had foreclosed, provided the person so foreclosing shall forthwith cause
the decree of foreclosure to be recorded in the land records in the town in
which the land lies.’’ General Statutes § 49-17.
   5
     In its appellate brief, the substitute plaintiff argues that the defendant
waived her claim that the original plaintiff lacked standing by failing to
object to the motion to substitute and that ‘‘strong public policy considera-
tions’’ militate against this court entertaining the defendant’s claim because
she raised it at such a late stage in the proceedings. As we have indicated,
however, a party may raise a lack of subject matter jurisdiction at any time,
and subject matter jurisdiction cannot be conferred on the court by waiver
or consent of the parties. See Manning v. Feltman, 149 Conn. App. 224,
236, 91 A.3d 466 (2014). The defendant’s claim that the original plaintiff
lacked standing implicates subject matter jurisdiction and, therefore, is not
waivable and is properly before this court.
   In addition to raising the waiver argument, the substitute plaintiff also
contends that any defect regarding standing was ‘‘cured’’ by the court’s
granting of the motion to substitute, and, therefore, the defendant’s claim
is moot. An appellate issue is moot, however, only if this court cannot grant
any possible relief to the appealing party even if the court is persuaded that
the appellant’s arguments are correct. See Wallingford Center Associates v.
Board of Tax Review, 68 Conn. App. 803, 807, 793 A.2d 260 (2002). In the
present case, if we were persuaded that the original plaintiff lacked standing
to bring the action and disagreed that the later substitution cured that defect,
we could afford the defendant practical relief by reversing the trial court’s
decision denying the motion to dismiss and remanding the matter back to
the trial court with direction to render a judgment of dismissal. Further, if
we agree that the trial court improperly denied the motion to dismiss without
a hearing, we could grant relief by reversing and remanding for a full eviden-
tiary hearing on the motion. Because some practical relief may be afforded
to the defendant if she were to prevail, the defendant’s appeal is not moot.