January 9, 2015
by Sonja J. Bowser
Bendett & McHugh, P.C. – USFN Member (Connecticut, Maine, Vermont)
Prior to the recent Connecticut Supreme Court decision of Hartford v. McKeever, 314 Conn. 255, 101 A.3d 229 (2014), Superior Court judges were split on the issue of liability of mortgage assignees for defendants’ counterclaims, when based on allegations of assignor misconduct before assignment.
The McKeever decision affirmed the appellate court’s ruling that, while a mortgagor-defendant could aver special defenses that arose during the life of the mortgage, he could not assert affirmative claims against the assignee-plaintiff for alleged overpayments made to the assignor prior to the assignment, absent an express assumption in the assignment.
The undisputed facts reveal that the assignee, and holder of a promissory note and mortgage, commenced a foreclosure action against the defendant, Brian McKeever, alleging failure to pay. The mortgagor subsequently filed a five-count counterclaim, sounding in breach of contract and unjust enrichment, seeking compensation for monies he allegedly overpaid to the assignee and prior holders of his mortgage. The plaintiff withdrew its foreclosure complaint, but the defendant pursued his counterclaims against the assignee-plaintiff. The defendant was ultimately awarded the total amount of his overpayments by the trial court.
On appeal, the plaintiff alleged that it was inequitable for the assignee to be liable for any overpayment made to its assignor. The appellate court reversed the trial court’s decision, and concluded that the assignee could only be held liable for monies overpaid by the mortgagor after the assignment of the mortgage (the position of many Superior Court judges; see, e.g., OneWest Bank, FSB v. Reinoso, Superior Court, judicial district of Fairfield, Docket No. CV-10-6006307-S (May 10, 2012)).
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