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Connecticut: Allegations Involving Conduct in Mediation

Posted By USFN, Thursday, July 23, 2015
Updated: Friday, September 25, 2015

July 23, 2015


by Jeffrey M. Knickerbocker
Bendett & McHugh, P.C. – USFN Member (Connecticut, Maine, Vermont)

The Connecticut Court of Appeals recently rendered a decision in U.S. Bank v. Sorrentino, upholding a lower court’s dismissal of claims made by a borrower regarding the plaintiff’s conduct in mediation. The appellate court examined a motion for summary judgment decided in favor of the plaintiff bank in the trial court. [U.S. Bank v. Sorrentino, 2015 Conn. App. LEXIS 235 (June 1, 2015)].

Connecticut has a mandatory mediation program. The statute authorizing mediation has a provision mandating that the parties act in “good faith” during the mediation. In Sorrentino, among the allegations presented as affirmative defenses and a counterclaim were the following: “The plaintiff conducted the mediation process in a manner calculated effectively to ensure that the subject loan would not qualify for modification. During this process, plaintiff continually requested documents which had already been provided; regularly claimed to have lost or misplaced documents; professed to not understand the sources and amounts of income despite repeated, good faith, efforts on the part of defendants to provide this information to plaintiff. Plaintiff, on a regular basis, assured defendants that ... they would qualify for a modification, and that ‘we want you to stay in your home and keep your home’ when, in fact, plaintiff knew that the chances for a modification were negligible.”

In Sorrentino, the appellate court considered the defenses and counterclaims that are proper in a foreclosure matter, and stated: “This court previously has held that, ‘[i]n a foreclosure action, a counterclaim must relate to the making, validity or enforcement of the mortgage note in order properly to be joined with the complaint.’” JP Morgan Chase Bank, Trustee v. Rodrigues, 109 Conn. App. 125, 133, 952 A.2d 56 (2008); see also New Haven Savings Bank v. LaPlace, 66 Conn. App. 1, 9-11, 783 A.2d 1174 (affirming summary judgment for plaintiff on counterclaims not related to making, validity or enforcement of mortgage note), cert. denied, 258 Conn. 942, 786 A.2d 426 (2001). Thus, “[c]onduct on the part of the [foreclosing party] that occurred after the loan documents were executed and not necessarily directly related solely to enforcement of the note ... properly has been found not to arise out of the same transaction as the complaint.” JP Morgan Chase Bank, Trustee v. Rodrigues, supra, 134-35, citing Southbridge Associates, LLC v. Garofalo, 53 Conn. App. 11, 16-21, 728 A.2d 1114, cert. denied, 249 Conn. 919, 733 A.2d 229 (1999). [U.S. Bank v. Sorrentino, supra, 2015 Conn. App. LEXIS 235, *20-21 (June 1, 2015)].

Accordingly, actions that occur after the commencement of the action are not properly brought before the court in a foreclosure action as a counterclaim.

This judicial holding seemed to be in conflict with an earlier decision with similar facts. The Sorrentino court explained that in CitiMortgage, Inc. v. Rey, 150 Conn. App. 595, 605-606, 92 A.3d 278, cert. denied, 314 Conn. 905, 99 A.3d 635 (2014), there was a reasonable nexus between the interposed counterclaims and the making, validity, or enforcement of the note or mortgage — and ruled that such a nexus was not presented in the Sorrentino case. It concluded that the plaintiff was not required to produce evidence of its conduct during the mediation because the defendants’ claims failed, as a matter of law. Further, the appellate court held that the counterclaim could not be cured by re-pleading because the counterclaim did not attack the making, validity, or enforcement of the note.

Based on Sorrentino, claims relating to Connecticut mediation — at least in most cases — cannot be used as counterclaims against lenders in the foreclosure action.

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