March 4, 2014
by Jennifer M. Jason
Hunt Leibert – USFN Member (Connecticut)
In Wells Fargo Bank, N.A., Trustee v. Melahn, (AC 34726), the defendant appealed the trial court’s denial of his motion to open the judgment of strict foreclosure, which had entered in favor of the plaintiff Wells Fargo. The appellate court concluded that in “rare and exceptional circumstances” the trial court has the jurisdiction and authority to open a judgment of strict foreclosure even though title has already vested with another party. The appellate court thereby reversed the trial court’s denial and remanded the case for further proceedings.
Case Summary — On September 9, 2010, the plaintiff commenced a foreclosure action against the defendant. A judgment of strict foreclosure entered against the defendant (who had not appeared in the matter) on November 22, 2010, with a law day of January 11, 2011. Pursuant to the uniform foreclosure standing orders (form JD-CV-104), a letter must be sent to all non-appearing defendants who have an ownership interest in the property. The letter must be sent within ten days of the judgment, state that a judgment of strict foreclosure has been entered, and advise the defendant that he may lose the property on the law day if he fails to take any steps to protect his interest. The letter must be sent by regular and by certified mail, and proof of such must be filed with the court. A certificate of foreclosure cannot be filed on the land records until proof of the mailing has been filed with the court.
The plaintiff did not send the notice of judgment until January 7, 2011, some 46 days after the entry of judgment and only four days before the law day. The certified copy of the notice was not received by the defendant until January 11, 2011, his actual law day. Even though the letter was sent late and failed to provide all of the information as outlined by the standing orders, the plaintiff certified to the court that the notice had been mailed in accordance with those orders.
The defendant retained legal counsel, who filed an appearance on February 22, 2011, and a motion to dismiss was filed on March 31, 2011. Both the appearance and motion were filed after the plaintiff had taken title to the property. The court opened the judgment of strict foreclosure and granted the defendant’s motion to dismiss on July 14, 2011, some six months after title passed, based on the plaintiff’s failure to comply with the notice requirement of the standing orders. However, the plaintiff filed a motion to reargue on August 24, 2011, citing Falls Mill of Vernon Condominium Assn., Inc. v. Sudsbury, 128 Conn. App. 314, 320-21, 15 A.3d 1210 (2011), and contended that the court did not have the authority to open the judgment or dismiss the action because the law day had passed and title had already vested with the plaintiff. The defendant argued that the opening and dismissal of the judgment were a proper sanction against the plaintiff for its false certification of compliance with a court order. The trial court vacated its prior order and then denied the defendant’s motion to dismiss.
Upon appellate review, the court reiterated that “a trial court has broad discretion to make whole any party who has suffered as a result of another party’s failure to comply with a court order.” AvalonBay Communities, Inc. v. Plan & Zoning Commission, 260 Conn. 243, citing Nelson v. Nelson, 13 Conn. App. 355, 367, 536 A.2d 985 (1988) and Clement v. Clement, 34 Conn. App. 641, 647, 643 A.2d 874 (1994). The court distinguished the facts of this case from Falls Mill of Vernon Condominium Assn., Inc. v. Sudsbury, because the defendant there was not a non-appearing owner and there were no allegations that the plaintiff falsely certified compliance with a court order. The appellate court was silent on whether dismissing an action is a proper sanction for non-compliance or for a false certification, stating that the “appropriate sanction, if any, is discretionary and may be reconsidered by the court on remand.” It also was not clear if the defendant in the present matter received notice from the court advising of the judgment and law day and what impact that may have had on the court’s decision (Melahn, fn. 5).
The appellate court further addressed Conn. General Statutes § 49-15, which states that a judgment of strict foreclosure cannot be opened “after the title has become absolute in any encumbrancer.” It concluded that foreclosure is an equitable action and the trial court has continuing jurisdiction over equitable matters, particularly when a party is denied the opportunity to present a defense because of fraud, accident, mistake, or surprise. In this case, the defendant was not provided with requisite notice prior to his law day and the plaintiff misrepresented to the court its compliance with the standing orders regarding that notice. These unusual circumstances are sufficient for the trial court to retain jurisdiction in order to provide an adequate remedy.
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