Court Opinion

ID: 2684698
Source: CourtListenerOpinion
Date Created: 2014-07-17 21:42:26.568655+00
Date Added: 2024-06-11T13:14:13.043447
License: Public Domain

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 NIKOLA NIKOLA v. 2938 FAIRFIELD, LLC, ET AL.
                 (AC 35076)
                      Beach, Alvord and Bear, Js.
Submitted on briefs October 11, 2013—officially released January 21, 2014

   (Appeal from Superior Court, judicial district of
 Fairfield, Hon. Richard P. Gilardi, judge trial referee
[judgment of foreclosure]; Hon. Howard T. Owens, Jr.,
judge trial referee [judgment of foreclosure by sale].)
  Daniel Shepro, filed a brief for the appellants (named
defendant et al.).
  Eugene D. Micci, filed a brief for the appellee
(plaintiff).
                          Opinion

   BEACH, J. The defendants, 2938 Fairfield, LLC (Fair-
field), and Naomi Drabkin,1 appeal from the judgment
of foreclosure by sale rendered by the trial court in
favor of the plaintiff, Nikola Nikola. The defendants
claim that the court erred in (1) concluding that the
plaintiff was the holder of the note and mortgage from
Fairfield, (2) finding that the mortgage exception to the
usury statute applied, and (3) finding the debt to be
in excess of $140,000. We affirm the judgment of the
trial court.
  The following facts, as found by the trial court and
revealed by the record,2 and procedural history are rele-
vant to this appeal. Fairfield was a limited liability com-
pany that owned real property located at 2936–2938
Fairfield Avenue in Bridgeport (Bridgeport property).
On July 1, 2000, Fairfield executed and delivered to
Drabkin a note in the amount of $135,000 (note). To
secure the note, Fairfield executed and delivered to
Drabkin a mortgage on the Bridgeport property. At the
time the present action was commenced, Fairfield had
defaulted on its note, and Drabkin had accelerated the
debt and had begun a foreclosure action against
Fairfield.
   In October, 2007, the plaintiff loaned $140,000 to
Drabkin for one year at 13 percent interest per annum;
that interest plus ‘‘points’’ were prepaid by Drabkin. As
security for the loan, Drabkin assigned to the plaintiff
‘‘the first $140,000 plus costs of all rights, title and
interest’’ in the July, 2000 mortgage note on the Bridge-
port property.3 After the due date, the plaintiff
demanded payment of the principal of $140,000, plus
13 percent interest accruing after the first year from
Drabkin, but Drabkin did not make any payment.
  The plaintiff commenced the present action, seeking,
inter alia, money damages as to the note and a judgment
of foreclosure as to Fairfield. The plaintiff alleged that
Drabkin may claim an interest in the property, but that
any right Drabkin had in the property was subsequent
to that of the plaintiff. The complaint also stated that
the plaintiff, as holder of the assigned mortgage and
note, accelerated the balance due on the note and
declared the note due in full, plus interest and costs.
  In May, 2012, the court, Hon. Richard P. Gilardi,
judge trial referee, found that Drabkin was in default
as to the assigned mortgage, and that the plaintiff, as
holder of the assigned mortgage note, justifiably
declared the note to be due. The court found that the
plaintiff had standing to pursue the foreclosure action
against Fairfield. The court further found that any inter-
est Drabkin may have in the property was subordinate
to the first $140,000, plus interest and costs, which is
the portion of her interests in the note and mortgage
that were assigned to the plaintiff. The court awarded
the plaintiff a judgment of foreclosure as to Fairfield
and money damages as to Drabkin. The court assigned
the matter to the mortgage foreclosure docket for estab-
lishing property values, costs, fees, expenses and sched-
ules, plus orders necessary to enforce the plaintiff’s
right to damages from Drabkin for any deficit. In its
articulation, the court reiterated that it had found that
the plaintiff had lent Drabkin $140,000, plus interest
and that Drabkin assigned all right, title and interest
in the mortgage note and deed from Fairfield to the
plaintiff.4 It stated that this assignment to the plaintiff
was valid.
   In September, 2012, Hon. Howard T. Owens, Jr.,
judge trial referee, rendered a judgment of foreclosure
by sale with a debt of $206,794, plus costs and fees, with
a sale date of November 17, 2012. This appeal followed.
                              I
  The defendants first claim that the court erred in
concluding that the plaintiff was the holder of the note
and mortgage from Fairfield. We disagree.
   ‘‘A finding of fact is clearly erroneous when there is
no evidence in the record to support it . . . or when
although there is evidence to support it, the reviewing
court on the entire evidence is left with the definite
and firm conviction that a mistake has been committed.
. . . In reviewing factual findings, [w]e do not examine
the record to determine whether the [court] could have
reached a conclusion other than the one reached. . . .
Instead, we make every reasonable presumption . . .
in favor of the trial court’s ruling.’’ (Internal quotation
marks omitted.) Barber v. Skip Barber Racing School,
LLC, 106 Conn. App. 59, 66, 940 A.2d 878 (2008).
   The joint stipulation of facts, signed by both parties,
states that Drabkin assigned the first $140,000, plus
costs, of her rights, title and interest in the mortgage
note on the Bridgeport property. Attached to the stipula-
tion was a copy of the ‘‘partial assignment of mortgage’’
that states that Drabkin assigned to the plaintiff ‘‘the
first $140,000.00 plus costs, if any, of her rights, title and
interest in a certain promissory note [on the Bridgeport
property] . . . with a mortgage balance of $185,000.00
as of [October, 1, 2007] . . . .’’5 The finding of the court,
Hon. Richard P. Gilardi, judge trial referee, that ‘‘as
holder of the assigned mortgage note, the plaintiff justi-
fiably accelerated the balance due,’’ was not clearly
erroneous.6
                              II
   The defendants’ next claim pertains to the court’s
finding regarding a defense of usury. The defendants
filed a motion for articulation regarding their defense
of usury, which the court granted. The court articulated
that Fairfield did not prove its special defense claiming
that the initial loan to Drabkin was usurious. The court
stated that although the interest rate of 13 percent on
the mortgage note exceeded the legal limit of 12 percent
set forth in General Statutes § 37-4, that section, pursu-
ant to General Statutes § 37-9 (3), does not apply to
mortgages on real property.7 The court further noted
that Fairfield was neither the borrower nor the lender
of the note and, therefore, lacked standing to question
whether it was usurious.
   The defendants claim that the court’s finding that the
mortgage exception in § 37-9 (3) applied was erroneous.
We need not address this claim. Fairfield’s defense of
usury pertains to the transaction between Drabkin and
the plaintiff, in which the plaintiff loaned Drabkin
$140,000, and Drabkin assigned the plaintiff her rights
in the note that was secured by the Bridgeport property.
Whether that transaction is usurious does not affect
the plaintiff’s ability to foreclose on his rights in the
mortgage note as against Fairfield.
   Similarly, the transaction between the plaintiff and
Drabkin was secured by a mortgage on real property,
and the amount involved exceeded $5000. The transac-
tion was exempted by § 37-9 (3). See Ferrigno v. Crom-
well Development Associates, 244 Conn. 189, 192, 708
A.2d 1371 (1998).
                                        III
  The defendants’ last claim is that the court, in its
September, 2012 decision, erred in finding the debt to
be in excess of $140,000 because Drabkin only assigned
to the plaintiff the first $140,000 of the mortgage, plus
costs.8 We disagree.
   ‘‘A finding of fact is clearly erroneous when there is
no evidence in the record to support it . . . or when
although there is evidence to support it, the reviewing
court on the entire evidence is left with the definite and
firm conviction that a mistake has been committed.’’
(Internal quotation marks omitted.) Barber v. Skip Bar-
ber Racing School, LLC, supra, 106 Conn. App. 66.
   The plaintiff submitted an affidavit of debt, which
stated the debt to be $206,794. The court accepted this
figure and found the debt to be $206,794. The court, as
the trier of fact, was free to accept this evidence. See
Lidman v. Nugent, 59 Conn. App. 43, 46, 755 A.2d 378
(2000). The debt was owed by Drabkin, even if the
assigned security interest may be insufficient to secure
the full amount of the debt. The court’s finding in this
regard was not clearly erroneous.
  The judgment is affirmed and the case is remanded
for the purpose of setting a new sale date.
      In this opinion the other judges concurred.
  1
     The U.S. Small Business Administration was also named as a defendant
but is not involved in this appeal. Therefore, the term ‘‘defendants’’ will
refer to Fairfield and Drabkin only.
   2
     The parties submitted to the trial court a stipulation of facts, with
attached exhibits, on which the court based its findings.
   3
     Schedule D, attached to the stipulation of facts, is entitled ‘‘Partial Assign-
ment of Mortgage.’’ By virtue of the assignment, Drabkin assigned to the
plaintiff the ‘‘first $140,000.00 plus costs, if any’’ in the Fairfield ‘‘mort-
gage note.’’
   4
     Although the note provided that Drabkin would pay principal, interest
and costs, the assignment of the security interest by Drabkin was of ‘‘the
first $140,000.00 plus costs’’ in the mortgage note. Thus, the plaintiff was
not secured for any interest that was unpaid.
   5
     By virtue of the assignment, the plaintiff became the holder of the note
and, as such, had standing to pursue the foreclosure action against Fairfield.
See RMS Residential Properties, LLC v. Miller, 303 Conn. 224, 228–32, 32
A.3d 307 (2011) (holder of negotiable promissory note secured by mortgage
is presumed owner of debt and unless presumption is rebutted has standing
to bring foreclosure action against maker of note).
   The assignment, as noted, was of the ‘‘mortgage note.’’ The term ‘‘mortgage
note’’ has been used to describe the note secured by the mortgage. See,
e.g., Bankers Trust Co. of California, N.A. v. Vaneck, 95 Conn. App. 390,
393–94, 899 A.2d 41, cert. denied, 279 Conn. 908, 901 A.2d 1225 (2006); see
also Black’s Law Dictionary (9th Ed. 2009) p. 1162 (defining ‘‘mortgage note’’
as ‘‘[a] note evidencing a loan for which real property has been offered as
security’’). The court’s apparent interpretation of the term to include the
note is not, then, clearly erroneous.
   6
     The defendants point out that the stipulation also states that both the
plaintiff and Drabkin were holders of the note. This is not inconsistent
with the court’s finding that the plaintiff, as holder of the note, justifiably
accelerated the balance due.
   7
     Section 37-4 provides: ‘‘No person and no firm or corporation or agent
thereof, other than a pawnbroker as provided in section 21-44, shall, as
guarantor or otherwise, directly or indirectly, loan money to any person
and, directly or indirectly, charge, demand, accept or make any agreement
to receive therefor interest at a rate greater than twelve per cent per annum.’’
Section 37-9 provides in relevant part: ‘‘The provisions of sections 37-4 . . .
shall not affect . . . (3) any bona fide mortgage of real property for a sum
in excess of five thousand dollars . . . .’’
   8
     The court found the debt to be $206,794, plus costs and fees.