AS Peleus, LLC v. Success, Inc. ( 2016 )

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AS PELEUS, LLC v. SUCCESS, INC., ET AL.
(AC 37717)
Gruendel, Alvord and Prescott, Js.
Argued December 1, 2015—officially released February 2, 2016
(Appeal from Superior Court, judicial district of
Fairfield, Hon. George Thim, judge trial referee.)
Jonathan J. Klein, with whom, on the brief, were
John R. Bryk and Barry C. Knott, for the appellant
(named defendant).
Andrew P. Barsom, with whom, on the brief, was
Alena C. Gfeller, for the appellee (plaintiff).
Opinion
GRUENDEL, J. The defendant Success, Inc.,1 appeals
from the judgment of strict foreclosure rendered by the
trial court in favor of the plaintiff, AS Peleus, LLC. The
defendant claims that the court (1) erroneously found
that the plaintiff was the owner and holder of the prom-
issory note and mortgage deeds in question and (2)
improperly accepted the testimony of a representative
of the plaintiff’s mortgage servicing company. We affirm
the judgment of the trial court.
This appeal concerns real property owned by the
defendant and known as 520 Success Avenue (prop-
erty).2 That property is partially situated in Stratford
and partially situated in Bridgeport. On June 26, 2007,
the defendant executed a promissory note (note) in
favor of Greenpoint Mortgage Funding, Inc.
(Greenpoint), in the principal amount of $525,000. The
note was secured by two identical mortgage deeds on
the property that encumbered the Stratford and Bridge-
port portions, respectively. The defendant executed and
delivered to Greenpoint those mortgage deeds on June
26, 2007.
As the defendant concedes in its principal appellate
brief, it ‘‘has been in default of its payment obligations
under the terms of the note since April 1, 2009.’’ When
the defendant failed to make its mortgage payments,
the plaintiff provided the defendant with written notice
that it was in default of those obligations. The notice
further stated that the plaintiff was ‘‘exercising its right
under the [l]oan [d]ocuments to accelerate payment of
the note’’ and therefore demanded ‘‘immediate payment
and performance of all obligations under [those] docu-
ments . . . .’’ The defendant failed to comply with that
demand, and the plaintiff commenced the present fore-
closure action in May of 2013. Its complaint alleged in
relevant part that the plaintiff ‘‘has been the owner and
holder of the underlying note and [mortgages] since
December 14, 2012.’’
In answering the plaintiff’s complaint, the defendant
admitted that it had executed the note and mortgages.
As to the allegations that the plaintiff was the owner
and holder thereof, the defendant left the plaintiff to
its burden of proof. A one day court trial followed, at
which the plaintiff submitted documentary and testimo-
nial evidence. The defendant did not submit any evi-
dence at trial. After permitting the parties to file
posttrial briefs, the court ruled in favor of the plaintiff.
In its memorandum of decision, the court found that
that plaintiff had ‘‘proven all the elements of its claim
for foreclosure of the two mortgages.’’ The court specifi-
cally found that the plaintiff ‘‘has proven through docu-
ments and testimony that it is the owner and holder of
the note and mortgages.’’ The court found that the debt
due to the plaintiff at the time of trial was $828,174.06
and that the fair market value of the property was
$500,000. Accordingly, the court rendered a judgment
of strict foreclosure, and this appeal followed.
I
The defendant claims that the court erroneously
found that the plaintiff was the owner and holder of
the note and mortgages in question. We disagree.
A trial court’s determination that a party is the owner
and holder of a promissory note is reviewed pursuant
to the clearly erroneous standard of review. See Citi-
Mortgage, Inc. v. Gaudiano, 142 Conn. App. 440, 447,
68 A.3d 101, cert. denied, 310 Conn. 902, 75 A.3d 29
(2013); Connecticut National Bank v. Marland, 45
Conn. App. 352, 359, 696 A.2d 374, cert. denied, 243
Conn. 907, 701 A.2d 328 (1997). ‘‘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. . . . Because it is
the trial court’s function to weigh the evidence and
determine credibility, we give great deference to its
findings. . . . 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 pre-
sumption . . . in favor of the trial court’s ruling.’’
(Internal quotation marks omitted.) Murtha v. Hart-
ford, 303 Conn. 1, 12–13, 35 A.3d 177 (2011).
As this court recently noted, ‘‘[t]he holder of a note
seeking to enforce the note through foreclosure must
produce the note. The note must be endorsed so as to
demonstrate that the foreclosing party is a holder, either
by a specific endorsement to that party or by means of
a blank endorsement to bearer. . . . If the foreclosing
party produces a note demonstrating that it is a valid
holder of the note, the court is to presume that the
foreclosing party is the rightful owner of the debt. . . .
The defending party may rebut the presumption that
the holder is the rightful owner of the debt, but bears
the burden to prove that the holder of the note is not
the owner of the debt. . . . The defending party does
not carry its burden by merely identifying some docu-
mentary lacuna in the chain of title that might give rise
to the possibility that a party other than the foreclosing
party owns the debt. . . . To rebut the presumption
that the holder of a note endorsed specifically or to
bearer is the rightful owner of the debt, the defending
party must prove that another party is the owner of the
note and debt. . . . Without such proof, the foreclosing
party may rest its standing to foreclose the mortgage on
its status as the holder of the note.’’ (Citations omitted;
emphasis in original.) JPMorgan Chase Bank, National
Assn. v. Simoulidis, 161 Conn. App. 133, 145–46,
A.3d (2015); see also RMS Residential Properties,
LLC v. Miller, 303 Conn. 224, 232, 32 A.3d 307 (2011)
(production of note establishes holder’s prima facie
case against maker), overruled in part by J.E. Robert
Co. v. Signature Properties, LLC, 309 Conn. 307, 325
n.18, 71 A.3d 492 (2013).
In the present case, the plaintiff introduced the origi-
nal note into evidence at trial, as well as certified copies
of the mortgage deeds filed on the Stratford and Bridge-
port land records. The note contains a series of
allonges,3 under which ownership of the note was trans-
ferred by special endorsement to various entities. In
the first allonge appended thereto, Greenpoint assigned
the note to ‘‘Citigroup Global Markets Realty Corp.’’
In the second such allonge, the note was assigned to
‘‘Waterfall Victoria Master Fund, Ltd.’’ In the third
allonge, the note was assigned to ‘‘Waterfall Victoria
Depositor, LLC.’’ In the fourth allonge, the note was
assigned to ‘‘Waterfall Victoria Mortgage Trust 2011-
SBC1.’’ In the fifth allonge, the note was assigned to
‘‘Citibank, N.A., as Trustee for CMLTI Asset Trust.’’ In
the sixth and final allonge, the note was assigned to
the plaintiff.
The record thus demonstrates that the plaintiff pro-
duced the original note, which bore a special endorse-
ment to the plaintiff. In so doing, the plaintiff
established its prima facie case against the defendant.
RMS Residential Properties, LLC v. Miller, supra, 303
Conn. 232. The plaintiff also submitted into evidence
the April 18, 2013 default notice that it provided to the
defendant. Sent one month prior to the commencement
of this action, that notice apprised the defendant that
the mortgages on the property were ‘‘owned and held’’
by the plaintiff. The defendant introduced no evidence
in response. See Equity One, Inc. v. Shivers, 310 Conn.
119, 133, 74 A.3d 1225 (2013) (‘‘at no time . . . did the
defendant proffer any evidence to support his assertion
that the plaintiff . . . did not possess the note when
it commenced the action’’); Wells Fargo Bank, N.A. v.
Tarzia, 150 Conn. App. 660, 666, 92 A.3d 983 (‘‘the
defendant never attempted to rebut the presumption
that the plaintiff owned the debt and had the right to
foreclose the mortgage’’), cert. denied, 314 Conn. 905,
99 A.3d 635 (2014); HSBC Bank, N.A. v. Navin, 129
Conn. App. 707, 712, 22 A.3d 647 (upholding finding
that plaintiff was owner of note ‘‘because the defendant
offered no evidence to contest the plaintiff’s assertion
that it possessed the note at the time that it commenced
the present action’’), cert. denied, 302 Conn. 948, 31
A.3d 384 (2011); Chase Home Finance, LLC v. Fequiere,
119 Conn. App. 570, 578, 989 A.2d 606 (‘‘[t]he defendant
has failed to present even a scintilla of evidence demon-
strating that the plaintiff was not in possession of the
promissory note or contradicting its status as a bona
fide holder of the note’’), cert. denied, 295 Conn. 922,
991 A.2d 564 (2010).
Furthermore, the plaintiff offered the testimony of
Russell Schaub at trial. Schaub was the chief operating
officer of Gregory Funding, LLC, the plaintiff’s mortgage
servicing company. Schaub testified that Gregory Fund-
ing, LLC, ‘‘owns a percentage interest’’ in the plaintiff
company. Without any objection by the defendant,
Schaub testified that he was authorized to testify on
behalf of the plaintiff. Schaub indicated that he was
personally familiar with the books and records of the
plaintiff, which were maintained in the ordinary course
of business by Gregory Funding, LLC. Schaub also testi-
fied that the plaintiff purchased the note from ‘‘an affili-
ate of Citigroup’’ in December of 2012, approximately
six months prior to the commencement of this action.
See Deutsche Bank National Trust Co. v. Bliss, 159
Conn. App. 483, 490–95, 124 A.3d 890 (testimony by
employee of mortgage servicing company that plaintiff
was holder of note prior to commencement of action
sufficient to establish standing to maintain foreclosure
action), cert. denied, 320 Conn. 903, A.3d (2015).
On that basis, Schaub testified that the plaintiff was
the owner and holder of the note and mortgage deeds
at issue in this case. When asked whether anyone ‘‘[a]t
any time has . . . attempted to claim that [the plaintiff]
is not the owner of this loan,’’ Schaub answered in
the negative.
It is well established that ‘‘the evaluation of a witness’
testimony and credibility are wholly within the province
of the trier of fact. . . . Credibility must be assessed
. . . not by reading the cold printed record, but by
observing firsthand the witness’ conduct, demeanor and
attitude. . . . An appellate court must defer to the trier
of fact’s assessment of credibility because [i]t is the
[fact finder] . . . [who has] an opportunity to observe
the demeanor of the witnesses and the parties; thus
[the fact finder] is best able to judge the credibility of the
witnesses and to draw necessary inferences therefrom.’’
(Internal quotation marks omitted.) CHFA–Small Prop-
erties, Inc. v. Elazazy, 157 Conn. App. 1, 21, 116 A.3d
814 (2015); see also Montville v. Antonino, 77 Conn.
App. 862, 871, 825 A.2d 230 (2003) (‘‘[c]ourts of appeal
do not pass on the credibility of witnesses’’). ‘‘[I]n a
case tried before a court, the trial judge is the sole
arbiter of the credibility of the witnesses and the weight
to be given specific testimony.’’ (Internal quotation
marks omitted.) United Technologies Corp. v. East
Windsor, 262 Conn. 11, 26, 807 A.2d 955 (2002). As trier
of fact, the court in the present case was free to credit
Schaub’s testimony, as it did in its memorandum of
decision. We refuse to disturb that credibility determi-
nation.
The record before us contains documentary and testi-
monial evidence that substantiates the court’s finding
that the plaintiff was the owner and holder of the note
and mortgage deeds in question. That finding, therefore,
is not clearly erroneous.
II
The defendant also contends that the court improp-
erly accepted the testimony of Schaub because the
plaintiff failed to prove that Schaub was an agent of
the plaintiff. We conclude that the defendant did not
properly preserve that evidentiary claim, which pre-
cludes appellate review.
Schaub testified at trial that he was the chief
operating officer of the plaintiff’s mortgage servicing
company and that he was personally familiar with the
books and records that it maintained on the plaintiff’s
behalf. Such testimony from a mortgage servicer is com-
monplace in foreclosure proceedings in this state. See,
e.g., J.E. Robert Co. v. Signature Properties, LLC, 309
Conn. 307, 340–41, 71 A.3d 492 (2013); Deutsche Bank
National Trust Co. v. Bliss, supra, 159 Conn. App.
490–92; American Home Mortgage Servicing, Inc. v.
Reilly, 157 Conn. App. 127, 137, 117 A.3d 500, cert.
denied, 317 Conn. 915, 117 A.3d 854 (2015). When
Schaub stated that he was authorized to testify on behalf
of the plaintiff, the defendant did not object, nor did it
pursue any line of inquiry on that issue during its cross-
examination of Schaub. Significantly, the defendant did
not proffer any evidence at trial, and thus did not refute
Schaub’s testimony in any respect.
In short, the record reflects that the defendant did
not raise any claim at trial regarding Schaub’s agency
relationship with the plaintiff. ‘‘It is well settled that
[o]ur case law and rules of practice generally limit this
court’s review to issues that are distinctly raised at
trial.’’ (Internal quotation marks omitted.) State v.
Hampton, 293 Conn. 435, 442, 978 A.2d 1089 (2009). As
our Supreme Court has explained, ‘‘[t]he reason for the
rule is obvious: to permit a party to raise a claim on
appeal that has not been raised at trial—after it is too
late for the trial court or the opposing party to address
the claim—would encourage trial by ambuscade, which
is unfair to both the trial court and the opposing party.’’
(Emphasis added; internal quotation marks omitted.)
Travelers Casualty & Surety Co. of America v. Nether-
lands Ins. Co., 312 Conn. 714, 761–62, 95 A.3d 1031
(2014). With particular respect to matters of an eviden-
tiary nature, in order to preserve them for appellate
review, ‘‘trial counsel must object properly . . . .
Assigning error to a court’s evidentiary rulings on the
basis of objections never raised at trial unfairly subjects
. . . the opposing party to trial by ambush.’’ (Internal
quotation marks omitted.) State v. Johnson, 289 Conn.
437, 460–61, 958 A.2d 713 (2008); see also State v.
Lizotte, 200 Conn. 734, 742A, 517 A.2d 610 (1986) (‘‘we
will not consider evidentiary rulings where counsel did
not properly preserve a claim of error by objection’’).
When the plaintiff offered Schaub’s testimony as a rep-
resentative of its mortgage servicing company, the
defendant sat silent. After the close of evidence, the
defendant raised its agency argument for the first time
in a posttrial brief, effectively ambushing the plaintiff.
At oral argument, the defendant represented to this
court that it ‘‘made a strategic decision to address the
issue in its posttrial brief rather than during the presen-
tation of the evidence.’’ The defendant has provided no
authority, nor are we aware of any, indicating that such
strategy satisfies the preservation requirement with
respect to evidentiary claims. As our Supreme Court
has explained, ‘‘to permit the appellant first to raise
posttrial an issue that arose during the course of the
trial would circumvent the policy underlying the
requirement of timely preservation of issues.’’ Willow
Springs Condominium Assn., Inc. v. Seventh BRT
Development Corp., 245 Conn. 1, 49, 717 A.2d 77 (1998).
It therefore is not surprising that the trial court did not
address the defendant’s agency claim in any manner in
its memorandum of decision. To afford review to a
claim that the defendant did not raise during trial as a
matter of strategy would contravene the purpose of the
preservation requirement. We decline to do so here.
The judgment is affirmed and the case is remanded
for the purpose of setting new law days.
In this opinion the other judges concurred.
1
Also named as defendants in the plaintiff’s complaint were City Streets,
Inc., Dade Realty Company I, LLC, Jack Dempsey’s Inc., Regensburger Enter-
prise Inc., Cummings Enterprises Inc., Payphones Plus, LLC, Oronoque 15,
LLC, Bridgeport Redevelopment, Inc., Albina Pires, Gus Curcio, Jr., Robin
Cummings, Joseph Regensburger, Cell Phone Club, Inc., Millionair Club,
Inc., Out Law Boxing Kats, Inc., Julia Kish, Administrator of the Estate
of Faye Kish, Richard Urban, Dahill Donofrio, Dominique Worth, and the
Department of Revenue Services. Those defendants all were defaulted prior
to trial. The action was withdrawn as to the defendant Commissioner of
Environmental Protection. Only Success, Inc., has appealed from the judg-
ment of strict foreclosure. We therefore refer to Success, Inc., as the defen-
dant in this opinion.
2
The plaintiff’s complaint averred that the defendant owned 95 percent
of the property, and that City Streets, Inc., owned the remaining 5 percent.
In its answer, the defendant admitted the truth of that allegation. Following
the commencement of this foreclosure action, City Streets, Inc., was
defaulted for failure to appear.
3
An allonge is ‘‘[a] slip of paper sometimes attached to a negotiable
instrument for the purpose of receiving further indorsements when the
original paper is filled with indorsements.’’ (Internal quotation marks omit-
ted.) Chase Home Finance, LLC v. Fequiere, 119 Conn. App. 570, 577 n.7,
989 A.2d 606, cert. denied, 295 Conn. 922, 991 A.2d 564 (2010). Pursuant to
General Statutes § 42a-3-204 (a), ‘‘[f]or the purpose of determining whether
a signature is made on [a negotiable] instrument, [an allonge] is a part of
the instrument.’’