June 8, 2015
by Adam L. Avallone
Bendett & McHugh, P.C. – USFN Member (Connecticut, Maine, Vermont)
A discretionary statement in a note secured by a mortgage that the note holder “may” send notice before accelerating payment, accompanied by a statement in the mortgage that notice of default “shall” be given, imposes an obligation to provide notice of a default in payment of the note as a condition precedent to acceleration of the debt. Provident Funding Associates, L.P. v. Sohn, 2015 Conn. Super. LEXIS 54 (Conn. Super. Ct. Jan. 12, 2015). The trial court’s opinion further holds that a failure to comply with giving proper notice of default is a valid affirmative defense to foreclosure, even though the defense does not meet the traditional requirements of defenses to foreclosure in Connecticut, in that it does not implicate the making, validity, or enforcement of the note or mortgage. A simple denial of receipt of the notice of default is sufficient to defeat a plaintiff’s summary judgment motion by creating a genuine issue of material fact. As a result, in order to obtain judgment, the plaintiff must present its evidence in a full court trial.
While the general holding in the case is fairly well-settled in Connecticut, the court’s analysis of the plaintiff’s evidence in support of summary judgment concludes that a mere statement that a notice was sent in compliance with the mortgage is insufficient in the face of a general denial. In other words, the court ruled that the pleadings alone created a genuine issue of material fact that is sufficient to defeat summary judgment.
The court noted that Section 15 of the Mortgage (which was a Uniform FNMA/FHLMC Instrument) provides in relevant part: “Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower’s notice address if sent by other means.” (Emphasis added.) In this case, the plaintiff relied on an affidavit stating that the defendant “was duly notified in writing by the Plaintiff in accordance with the terms of the Note and Mortgage of the default and that failure to cure the default may result in acceleration of the debt.” A copy of the December 15, 2011 letter was attached as “a true and accurate copy of the default letter.”
The court concluded, “For all that the affidavit says, the letter could have been mailed or it could have been faxed or emailed or hand delivered or sent by courier. There is simply no evidence supportive of a finding that it was posted with the U.S. Postal Service. The purported default letter bears no legend or marking of any kind indicative of the manner of its transmission, nor is any such documentation separately provided.”
The decision in Sohn makes clear that in the face of a denial of receipt, affirmative evidence of the actual sending of the notice is required, demonstrating compliance under the note and mortgage. A plain reading of the mortgage reveals that mailing is sufficient, so long as sent by first-class mail. If sent by other means, proof of delivery is required. The court’s decision leaves open the question of what constitutes sufficient evidence of mailing or receipt.
This case illustrates the importance of maintaining and providing to counsel business records and documents evidencing policies and procedures of the mailing of notices. As the mailing of these notices is often a condition precedent to the institution of a foreclosure action, a foreclosing plaintiff can easily find themselves with a dismissed action, requiring restart.
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