City of Stamford v. Rahman , 188 Conn. App. 1 ( 2019 )

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CITY OF STAMFORD v. ISMAT RAHMAN ET AL.
(AC 40883)
Alvord, Elgo and Bright, Js.
Syllabus
The plaintiff city sought to foreclose a blight lien on certain real property
owned by the defendant R. In October, 2007, R executed a promissory
note in the amount of $624,000 in favor of the predecessor of the defen-
dant W Co., which was secured by a mortgage on the subject property
that was recorded in the city land records. Approximately six months
later, R executed a promissory note in the amount of $417,000 in favor
of the predecessor of the defendant B Co., which was secured by a
second mortgage on the subject property that was recorded in the city
land records. Less than one month later, R executed a promissory note
in the amount of $500,000 in favor of the defendant J Co., which was
secured by a third mortgage on the subject property that was recorded
in the city land records. At the closings of the two subsequent mortgages,
R presented a fraudulent satisfaction of mortgage document that he had
forged, which purported to release W Co.’s mortgage on the property.
The satisfaction was not recorded in the city land records. Following the
commencement of the foreclose action, all of the defendants, including
R and W Co., were defaulted for failure to either appear or plead.
Thereafter, the trial court rendered a judgment of foreclosure by sale, the
property was sold and the remaining proceeds of the sale, approximately
$348,097, were paid to the court clerk. B Co. subsequently filed a motion
for a supplemental judgment requesting that the trial court disperse the
remaining proceeds to it, arguing that W Co. had been defaulted and
had not filed an affidavit of debt by which the court could determine
what, if any, amount remained owed to it. B Co. further argued that W
Co. had commenced and later withdrew a prior foreclosure proceeding
related to the subject property, in which B Co.’s predecessor appeared
and asserted a special defense that W Co. had received payment in full
and that the W Co. mortgage had been released by the satisfaction. The
trial court rejected the motion for a supplemental judgment, stating that
it needed verification of the release of the W Co. mortgage. Thereafter,
B Co. filed a motion for reconsideration, in which it acknowledged that
the satisfaction was never recorded in the land records but that, if the
court denied its motion, the proceeds from the sale would be held
indefinitely by the court, without any indication that any moneys were
owed under the W Co. mortgage. The trial court reconsidered its decision
and granted B Co.’s motion for a supplemental judgment, ordering the
court clerk to disburse the remaining sale proceeds to B Co. More than
three years later, counsel for W Co. filed an appearance, a motion
to open the supplemental judgment and a motion for a supplemental
judgment, arguing that the supplemental judgment had been procured
by R’s fraud in forging the satisfaction and that such fraud provided the
court with authority to open the judgment after the four month limitation
period set forth in the statute (§ 52-212a) that governs the opening of
civil judgments. The trial court, applying the factors set forth in Varley
v. Varley (180 Conn. 1), granted the motion to open the supplemental
judgment, concluding that W Co. had sufficiently established fraud to
invoke the fraud exception to the four month limitation in § 52-212a.
The court then granted W Co.’s motion for a supplemental judgment
and ordered B Co. to pay the subject proceeds to the court clerk and
ordered the clerk to pay the proceeds to W Co. On B Co.’s appeal to
this court, held:
1. The trial court erred in opening the supplemental judgment beyond the
four month limitation period on the basis of fraud because its finding
that W Co. satisfied the second Varley factor requiring diligence in trying
to discover and expose the fraud was clearly erroneous: that court’s
finding that W Co. had proven diligence was improperly supported by
its finding that W Co., as the holder of the first mortgage on the property,
had no reason to be aware of the recordation of any subsequent mort-
gages, W Co. having been in the best position to discover R’s fraud in
forging and presenting the fraudulent satisfaction, which occurred in
2008, but having failed to exercise any diligence in attempting to do so
for more than nine years, as the trial court took judicial notice of two
foreclosure actions instituted by W Co. or its predecessor with respect
to the subject property, during the second action, which was commenced
in 2009, B Co.’s predecessor had filed a special defense alleging that
the W Co.’s note had been paid off and attached the satisfaction in
support thereof, and, therefore, as of 2009, W Co. was aware of the
existence of the satisfaction purporting to release its mortgage on the
property, yet it did nothing to investigate the validity of the satisfaction
for eight years; moreover, the trial court erred in determining, in support
of its finding of diligence, that W Co. was entitled to notice of the
proceedings on B Co.’s motion for a supplemental judgment, despite its
default for failure to appear, as the relevant rule of practice (§ 10-12
[a]) does not require service of motions on nonappearing, defaulted
parties; furthermore, W Co. failed to demonstrate how its access to
information regarding the satisfaction was limited in any way during
the present action, it would have received notice of B Co.’s motion for
a supplemental judgment, to which the satisfaction was attached, and
its subsequent motion for reconsideration, which informed the court
that the satisfaction had not been recorded in the land records, if it had
filed an appearance, and W Co.’s counsel conceded during oral argument
before this court that W Co. discovered the fraud in 2017 upon a review
of its own files, and, thus, its apparent failure to conduct such a review
sooner repudiated any diligence in trying to uncover fraud.
2. The trial court lacked the authority to open the supplemental judgment
more than four years after it was rendered, as the judgment was not
obtained by any fraud on the part of B Co.: the only claimed fraudulent
conduct was committed by R years prior to the present litigation during
which he was defaulted and did not participate, and W Co. failed to
provide any authority to support the conclusion that fraud committed
by a defaulted party years prior to litigation can support the opening
of a judgment following the expiration of the four month period; more-
over, W Co. stipulated that both it and B Co. were unaware of any
evidence that B Co. had acted fraudulently with regard to the supplemen-
tal judgment, and the circumstances surrounding the supplemental judg-
ment belied the conclusion that it was obtained by fraud, as a review
of the relevant procedural history indicated that the trial court apparently
was persuaded by B Co.’s argument that the court should not hold the
remaining sale proceeds indefinitely, given W Co.’s default and failure
to file any claim to the remaining sale proceeds.
Argued October 23, 2018—officially released February 26, 2019
Procedural History
Action to foreclose a blight lien on certain of the
named defendant’s real property, and for other relief,
brought to the Superior Court in the judicial district of
Stamford-Norwalk, where the named defendant et al.
were defaulted for failure to appear and the defendant
Countrywide Home Loans, Inc., et al. were defaulted
for failure to plead; thereafter, the court, Mintz, J.,
granted the plaintiff’s motion for a judgment of foreclo-
sure by sale and rendered judgment thereon; subse-
quently, Bank of America, N.A., was substituted as a
defendant; thereafter, the court, Truglia, J., rejected
the motion for a supplemental judgment filed by the
defendant Bank of America, N.A.; subsequently, the
court, Truglia, J., granted the motion for reconsidera-
tion filed by the defendant Bank of America, N.A.,
granted the motion for a supplemental judgment and
rendered a supplemental judgment for the defendant
Bank of America, N.A.; thereafter, the court, Tierney, J.,
granted the motions to open the supplemental judgment
and for a supplemental judgment filed by the defendant
Wells Fargo Bank, National Association, and rendered
a supplemental judgment for the defendant Wells Fargo
Bank, National Association, from which the defendant
Bank of America, N.A., appealed to this court. Reversed;
judgment directed.
Gerald L. Garlick, for the appellant (defendant Bank
of America, N.A.).
Patrick T. Uiterwyk, for the appellee (defendant
Wells Fargo Bank, National Association).
Opinion
ALVORD, J. The defendant Bank of America, N.A.
(Bank of America), appeals from the judgment of the
trial court opening the supplemental judgment that had
been rendered in its favor and, thereafter, rendering a
supplemental judgment in favor of the defendant Wells
Fargo Bank, National Association (Wells Fargo), in the
amount of $348,097.16.1 On appeal, Bank of America
claims that the court erred in granting Wells Fargo’s
motion to open the supplemental judgment more than
four months after it was rendered on the basis of fraud
committed by a homeowner in securing multiple mort-
gages years before this action to foreclose a blight lien
commenced. We agree that the court erred and reverse
the judgment of the trial court.2
The following facts, as found by the trial court or as
stipulated to by the parties,3 and procedural history
are relevant to this appeal. On October 29, 2007, the
defendant Ismat Rahman acquired title to property
located at 150 Doolittle Road in Stamford for a purchase
price of $780,000. He executed a promissory note in
favor of World Savings Bank, in the principal amount
of $624,000. To secure the note, Rahman executed a
mortgage in favor of World Savings Bank (Wells Fargo
mortgage),4 which was recorded in the Stamford land
records in volume 9187 at page 347.
Approximately six months later, on April 8, 2008,
Rahman executed a promissory note in favor of Coun-
trywide Home Loans Servicing, LP, in the principal
amount of $417,000, which note was secured with a
mortgage on the property (Bank of America mortgage).5
The Bank of America mortgage was recorded in volume
9318 at page 259 of the Stamford land records. Less
than one month later, on May 2, 2008, Rahman executed
a promissory note in favor of Washington Mutual Bank
in the principal amount of $500,000, which note was
secured with a mortgage on the property (JPMorgan
Chase mortgage).6 The JPMorgan Chase mortgage was
recorded in volume 9346 at page 260 of the Stamford
land records.
At the closing of the Bank of America mortgage, Rah-
man presented a document titled ‘‘Satisfaction of Mort-
gage’’ purportedly executed by Mortgage Electronic
Registrations System, Inc., as nominee for World Sav-
ings Bank (satisfaction). The satisfaction was fraudu-
lent and was never recorded on the Stamford land
records. Rahman also presented the satisfaction at the
closing of the JPMorgan Chase mortgage.
The defendant JPMorgan Chase Bank, National Asso-
ciation, filed a claim against its title insurance policy
issued by the defendant Chicago Title Insurance Com-
pany, now known as Fidelity National Title Group, aris-
ing out of Rahman’s presentation of the fraudulent
satisfaction at the time of acquiring the JPMorgan Chase
mortgage. Chicago Title Insurance Company, in turn,
instituted a fraud action against Rahman and, on March
17, 2011, obtained judgment in its favor in the amount
of $627,730.67 plus 6 percent per annum postjudgment
interest. See Chicago Title Ins. Co. v. Rahman, Superior
Court, judicial district of Stamford-Norwalk, Docket
No. CV-XX-XXXXXXX-S (March 17, 2011). A judgment lien
was recorded in the Stamford land records at volume
10193 at page 257 as to the property. Bank of America
was neither a party to, nor had any knowledge of, the
fraud action against Rahman.
Prior to this foreclosure action, three other foreclo-
sure actions were commenced with respect to the prop-
erty. The first was commenced on November 4, 2008,
by Wells Fargo’s predecessor, which withdrew the
action on March 4, 2010. See Wachovia Mortgage, FSB v.
Rahman, Superior Court, judicial district of Stamford-
Norwalk, Docket No. CV-XX-XXXXXXX-S. The second was
commenced on January 13, 2009, by JPMorgan Chase
Bank, National Association, and was dismissed by the
court on October 8, 2010, pursuant to Practice Book
§ 14-3, governing dismissal for lack of diligence. See
JPMorgan Chase Bank, National Assn. v. Rahman,
Superior Court, judicial district of Stamford-Norwalk,
Docket No. CV-XX-XXXXXXX-S (October 8, 2010). Wells
Fargo’s predecessor also commenced a third foreclo-
sure action in 2009. Bank of America appeared in that
action and filed an answer and special defense, dated
May 5, 2010, based on the satisfaction, which it attached
to its pleading.7
On August 14, 2012, the plaintiff commenced the pre-
sent action by way of a one count complaint seeking
foreclosure of a blight lien held by the plaintiff and
recorded in the Stamford land records. The complaint
also named other defendants, including Wells Fargo,
and alleged that these defendants may claim an interest
in the property. See footnote 1 of this opinion. On Octo-
ber 23, 2012, the plaintiff filed a motion for default
against Wells Fargo for failure to appear, which was
granted by the clerk of the court on November 7, 2012.
On February 19, 2013, the court rendered judgment of
foreclosure by sale. The court found the total debt and
attorney’s fees due the plaintiff to be $28,618.75 and
the fair market value of the property to be $410,000.
The court set a sale date for May 4, 2013, and the
property was sold for $400,000. On July 29, 2013, the
plaintiff filed a motion for determination of priorities
and supplemental judgment and subsequently filed a
revised motion, which the court granted.8 The remaining
proceeds from the sale, in the amount of $348,097.16,
were paid to the clerk of the court.
On February 6, 2014, Bank of America filed a motion
for a supplemental judgment in which it claimed that
the amount owed to it exceeded the remaining sale
proceeds. It therefore requested a supplemental judg-
ment disbursing the remaining sale proceeds to it. Bank
of America argued that Wells Fargo had been defaulted
for failure to appear and had not filed an affidavit of
debt by which the court could determine what, if any,
amount remained owed to Wells Fargo. It further argued
that Wells Fargo had commenced a prior foreclosure
proceeding, in which Bank of America appeared and
asserted a special defense, that Wells Fargo had
received payment in full and that the Wells Fargo mort-
gage had been released by the satisfaction. Bank of
America argued that after it filed a request for produc-
tion seeking documents related to payment and release
of the Wells Fargo mortgage, Wells Fargo withdrew its
prior foreclosure complaint without having produced
any such documents.
The court rejected Bank of America’s motion for a
supplemental judgment, stating that it needed ‘‘verifica-
tion of release of the Wells Fargo mortgage that was
filed on the land records prior to [the Bank of America
mortgage].’’ On April 1, 2014, Bank of America filed a
motion for reconsideration, in which it acknowledged
that the satisfaction was never recorded on the land
records. It argued, however, that in the event the court
were to deny Bank of America’s motion, ‘‘the net pro-
ceeds from the sale of this property will be held indefi-
nitely by the court, without any indication that any
money is still owed under the Wells Fargo mortgage.’’
On April 17, 2014, the court reconsidered its decision
and granted Bank of America’s motion for a supplemen-
tal judgment, ordering the clerk of the court, following
the expiration of the twenty day appeal period, to dis-
burse to Bank of America $348,097.16, the amount of
the sale proceeds remaining with the clerk.
More than three years later, on June 2, 2017, counsel
for Wells Fargo filed an appearance and a motion to
open the supplemental judgment, arguing that the judg-
ment had been procured by fraud or mutual mistake.
Wells Fargo contended that Rahman’s fraud in forging
the satisfaction provided the court with authority to
open the judgment after the four month period set forth
in General Statutes § 52-212a. Wells Fargo did not con-
tend that Bank of America, itself, had engaged in fraud
but, rather, claimed that Bank of America had ‘‘unknow-
ingly perpetuated [Rahman’s] conduct when seeking
the supplemental judgment.’’ Wells Fargo requested
that the supplemental judgment be opened and the
remaining proceeds from the foreclosure sale be paid
to Wells Fargo. Bank of America filed an objection,
in which it argued, inter alia, that the supplemental
judgment had not been procured by fraud because the
court had been made aware that the satisfaction was
never recorded and, thus, that Wells Fargo’s mortgage
had not been released from the land records.
On August 30, 2017, Bank of America and Wells Fargo
appeared before the court for a hearing on the motion
to open.9 The parties subsequently submitted supple-
mental briefing concerning the legal standard applica-
ble to a motion to open a judgment on the basis of
fraud.10 On September 22, 2017, the court issued a mem-
orandum of decision in which it granted Wells Fargo’s
motion to open the supplemental judgment and its
motion for a supplemental judgment.
The court first found that Wells Fargo sufficiently
had established fraud to invoke the exception to the
four month limitation on opening or setting aside a
judgment pursuant to § 52-212a. Applying the factors
set forth in Varley v. Varley, 180 Conn. 1, 3–4, 428 A.2d
317 (1980); see footnote 10 of this opinion; the court
found that there was no laches or unreasonable delay
on the part of Wells Fargo. The court stated: ‘‘Due to
the massive and continuing fraud perpetrated on three
separate banks, that had the banks scrambling to pro-
tect their own interests, it is understandable to this
court that considerable delay and confusion presented
itself before [Wells Fargo] had a full understanding of
all the facts.’’ It further concluded that there was no
indication of prejudice to Bank of America as a result
of the delay.
Turning to the second Varley factor of diligence in
trying to discover the fraud, the court found that Wells
Fargo, as the holder of the first mortgage on the prop-
erty, had no reason to be aware of the recordation
of any mortgages executed and recorded thereafter. It
further concluded that Wells Fargo, having been
defaulted for failure to appear, had not received notice
of the motion for a supplemental judgment or the
motion for reconsideration. Concluding that ‘‘[t]he sup-
plemental judgment is a separate statutory proceeding
and equity requires notice to all encumbrancers even
if defaulted in the first part of the foreclosure action,’’
the court determined that the ‘‘failure of notice itself
should open the judgment.’’
The court then found that Wells Fargo had estab-
lished the third and fourth Varley factors. As to the
third factor of clear proof of the fraud, the court found
that Rahman’s presentation of the forged satisfaction
at the time of the closing of the Bank of America and
JPMorgan Chase mortgages, which was confirmed by
the civil judgment obtained by Chicago Title Insurance
Company, satisfied this factor. Lastly, as to the fourth
factor, the court determined that the Wells Fargo mort-
gage was first in time and, therefore, had priority over
the Bank of America mortgage, such that there was a
substantial likelihood that the result of a new trial would
be different. Having concluded that Wells Fargo estab-
lished all four Varley factors, the court granted its
motion to open the supplement judgment. The court
then granted Wells Fargo’s motion for a supplemental
judgment and ordered Bank of America to pay
$348,097.16 to the clerk of the court and further ordered
the clerk of the court to pay that sum to Wells Fargo.
This appeal followed.
We first set forth the applicable legal principles. Sec-
tion 52-212a provides in relevant part: ‘‘Unless other-
wise provided by law and except in such cases in which
the court has continuing jurisdiction, a civil judgment
or decree rendered in the Superior Court may not be
opened or set aside unless a motion to open or set aside
is filed within four months following the date on which
it was rendered or passed. . . .’’ ‘‘Courts have interpre-
ted the phrase, [u]nless otherwise provided by law, as
preserving the common-law authority of a court to open
a judgment after the four month period. . . . It is well
established that [c]ourts have intrinsic powers, inde-
pendent of statutory provisions authorizing the opening
of judgments, to vacate [or open] any judgment
obtained by fraud, duress or mutual mistake.’’ (Citation
omitted; internal quotation marks omitted.) Simmons
v. Weiss, 176 Conn. App. 94, 99, 168 A.3d 617 (2017).
‘‘The party claiming fraud has the burden of proof.’’
Terry v. Terry, 102 Conn. App. 215, 223, 925 A.2d 375,
cert. denied, 284 Conn. 911, 931 A.2d 934 (2007). ‘‘Fraud
consists in deception practiced in order to induce
another to part with property or surrender some legal
right, and which accomplishes the end designed . . . .
The elements of a fraud action are: (1) a false represen-
tation was made as a statement of fact; (2) the statement
was untrue and known to be so by its maker; (3) the
statement was made with the intent of inducing reliance
thereon; and (4) the other party relied on the statement
to his detriment.’’ (Internal quotation marks omitted.)
Sousa v. Sousa, 173 Conn. App. 755, 765, 164 A.3d 702,
cert. denied, 327 Conn. 906, 170 A.3d 2 (2017).
‘‘For claims of fraud brought in a civil action, our
Supreme Court has established the criteria necessary
for a party to overcome the statutory time limitation
governing a motion to open and set aside judgment.
. . . To have a judgment set aside on the basis of fraud
which occurred during the course of the trial upon a
subject on which both parties presented evidence is
especially difficult. . . . The question presented by a
charge of fraud is whether a judgment that is fair on
its face should be examined in its underpinnings con-
cerning the very matters it purports to resolve. Such
relief will only be granted if the unsuccessful party is
not barred by any of the following restrictions: (1) There
must have been no laches or unreasonable delay by the
injured party after the fraud was discovered . . . (2)
There must have been diligence in the original action,
that is, diligence in trying to discover and expose the
fraud11 . . . (3) There must be clear proof of the per-
jury or fraud . . . [and] (4) There must be a substantial
likelihood that the result of the new trial will be differ-
ent.’’12 (Footnote added; internal quotation marks omit-
ted.) Turner v. Commissioner of Correction, 163 Conn.
App. 556, 564, 134 A.3d 1253, cert. denied, 323 Conn.
909, 149 A.3d 980 (2016). A party seeking to overcome
the statutory limitation on opening a judgment must
satisfy all four Varley factors. See id., 565 (‘‘[b]ecause
the petitioner cannot succeed on the first Varley factor,
we need not consider the remaining factors’’).
I
We begin by addressing Bank of America’s alternative
claim that the court erred in opening the supplemental
judgment because Wells Fargo failed to satisfy the Var-
ley factors. Specifically, it argues that Wells Fargo failed
to satisfy the second factor requiring diligence in trying
to discover and expose the fraud. We agree.
We first note the general standard of review applica-
ble to a motion to open a judgment.13 ‘‘Whether proceed-
ing under the common law or a statute, the action of
a trial court in granting or refusing [a motion] to open
a judgment is, generally, within the judicial discretion
of such court, and its action will not be disturbed on
appeal unless it clearly appears that the trial court has
abused its discretion.’’ (Internal quotation marks omit-
ted.) Dougherty v. Dougherty, 109 Conn. App. 33, 38–39,
950 A.2d 592 (2008).
In the context of a motion to open a judgment beyond
the four month time limitation on the basis of fraud, a
court’s ‘‘determinations as to the elements of fraud are
findings of fact that we will not disturb unless they are
clearly erroneous.’’ (Internal quotation marks omitted.)
Sousa v. Sousa, supra, 173 Conn. App. 766; see also
Cromwell Commons Associates v. Koziura, 17 Conn.
App. 13, 16–17, 549 A.2d 677 (1988) (‘‘[t]he existence
of fraud for purposes of opening and vacating a judg-
ment is a question of fact’’). The determination as to
whether the moving party used diligence in seeking to
discover the fraud is also a factual determination, which
may be rejected only upon a determination that it is
clearly erroneous. See Jucker v. Jucker, 190 Conn. 674,
679, 461 A.2d 1384 (1983) (‘‘A factual finding may be
rejected by this court only if it is clearly erroneous.
. . . The evidence bearing on the factual [matter] of
. . . the plaintiff’s exercise of due diligence adequately
support[s] the conclusions drawn by the court. It cannot
be said, therefore, that the finding was as a matter of
law unsupported by the record, incorrect, or otherwise
mistaken. . . . This court may not substitute its own
opinion . . . for the factual finding of the trial court.’’
[Citations omitted; internal quotation marks omitted.]).
‘‘When a party seeks to open and vacate a judgment
based on new evidence allegedly showing the judgment
is tainted by fraud, he must show, inter alia, that he
was diligent during trial in trying to discover and expose
the fraud . . . .’’ Chapman Lumber, Inc. v. Tager, 288
Conn. 69, 107, 952 A.2d 1 (2008). In Chapman Lumber,
Inc., our Supreme Court considered an appeal challeng-
ing the trial court’s refusal to conduct an evidentiary
hearing in connection with the defendant attorney’s
motion to open the judgment rendered against him in
an action arising out of allegedly improper conduct
in connection with his representation of a remodeling
contractor. Id., 72. In affirming the trial court’s denial
of the motion to open, our Supreme Court stated that
the issues the defendant wanted to explore at the hear-
ing ‘‘had occurred years before trial and were related
to proceedings to which the defendant had complete
access.’’ Id., 108. Citing Varley, the court held that ‘‘the
defendant clearly had not exercised the requisite dili-
gence in uncovering the purported malfeasance.’’ Id.
In the present case, we are convinced that the trial
court’s finding that Wells Fargo had proven diligence
is clearly erroneous. The court’s determination improp-
erly was supported by its finding that Wells Fargo, as
the holder of the first mortgage on the property, had no
reason to be aware of the recordation of any mortgages
executed and recorded thereafter. The fraud of which
Wells Fargo complained occurred in April and May,
2008, when Rahman, in what the trial court described
as ‘‘blatant acts of forgery,’’ presented the fraudulent
satisfaction to two lenders in an effort to obtain multiple
mortgages on the property. More than nine years later,
on June 2, 2017, Wells Fargo filed a motion to open the
supplemental judgment in this action. During that nine
year period, Wells Fargo itself was in the best position
to discover Rahman’s fraud but failed to exercise any
diligence in attempting to do so.
In fact, the trial court took judicial notice of not one,
but two foreclosure actions instituted by Wells Fargo
or its predecessor with respect to the property. In the
second foreclosure action, commenced in October,
2009, Bank of America’s predecessor had filed a special
defense alleging that the Wells Fargo note had been
paid off and attached the satisfaction. After the filing
of the special defense and satisfaction, Wells Fargo
withdrew its complaint.14 Accordingly, as of 2009, Wells
Fargo was aware of the existence of the satisfaction
purporting to release its mortgage on the property, yet
it did nothing to investigate the validity of the satisfac-
tion for eight years.
We also reject the determination underlying the
court’s finding of diligence that Wells Fargo was entitled
to notice of the supplemental judgment proceedings
despite its default for failure to appear ‘‘in the first part
of the foreclosure action.’’ Our rules of practice do not
require service of motions on nonappearing, defaulted
parties. See Practice Book § 10-12 (a) (‘‘[i]t is the
responsibility of counsel or a self-represented party
filing the same to serve on each other party who has
appeared one copy of every pleading subsequent to the
original complaint, every written motion other than one
in which an order is sought ex parte and every paper
relating to discovery, request, demand, claim, notice or
similar paper’’ [emphasis added]).15
Moreover, Wells Fargo did not demonstrate how its
access to information regarding the satisfaction was
limited in any way during the present action. In fact,
during the hearing on the motion to open, Wells Fargo
declined to offer any evidence at all beyond the stipula-
tion.16 Had it appeared in the present action, it would
have received notice of the supplemental judgment pro-
ceedings, including Bank of America’s motion for a
supplemental judgment, to which it attached the satis-
faction, and its subsequent motion for reconsideration,
which informed the court that the satisfaction had not
been recorded on the land records.
Lastly, we note that counsel for Wells Fargo conceded
during oral argument before this court that Wells Fargo
discovered the fraud in 2017 upon a review of its own
files. Wells Fargo’s apparent failure to conduct such
a review sooner, either by its predecessor during the
pendency of the two foreclosure actions it initiated or
during the course of the present action, repudiates any
diligence in trying to uncover fraud. Accordingly, we
conclude that the trial court’s finding that Wells Fargo
had satisfied Varley’s second factor of ‘‘diligence in the
original action, that is, diligence in trying to discover
and expose the fraud,’’ is clearly erroneous.17 Because
Wells Fargo failed to satisfy the second Varley factor,18
the court erred in opening the supplemental judgment
on the basis of fraud beyond the four month time limi-
tation.
II
Bank of America also claims that the court erred in
opening the supplemental judgment because the judg-
ment was not procured by any fraud on its part. We
agree.
The conclusion underlying the trial court’s opening
of the supplemental judgment, that the fraudulent
action of a defaulted party prior to the litigation at issue
satisfies the exception to the four month limitation for
judgments obtained by fraud, is a question of law.
‘‘When . . . the trial court draws conclusions of law,
our review is plenary and we must decide whether its
conclusions are legally and logically correct and find
support in the facts as they appear in the record.’’ (Inter-
nal quotation marks omitted.) Saggese v. Beazley Co.
Realtors, 155 Conn. App. 734, 751, 109 A.3d 1043 (2015);
see also Rome v. Album, 73 Conn. App. 103, 108, 807
A.2d 1017 (2002) (plaintiff’s challenge to court’s general
authority under § 52-212a to grant defendant’s motion
presents question of statutory construction over which
review is plenary).
In response to Bank of America’s claim of error, Wells
Fargo has not provided this court with any authority
to support the conclusion that fraud committed by a
defaulted party years prior to litigation can support the
opening of a judgment following the expiration of the
four month period. Cf. Grayson v. Grayson, 4 Conn.
App. 275, 296, 494 A.2d 576 (1985) (‘‘[w]here . . . a
clear case is made under applicable law that a fraudu-
lent and material misrepresentation by one party
resulted in a substantial injustice to the other party,
we must not hesitate to act’’ [emphasis added; internal
quotation marks omitted]), appeal dismissed, 202 Conn.
221, 520 A.2d 225 (1987). Although not binding on this
court, we find instructive rule 60 (b) of the Federal
Rules of Civil Procedure, which provides in relevant
part that ‘‘the court may relieve a party or its legal
representative from a final judgment . . . for the fol-
lowing reasons . . . fraud . . . misrepresentation, or
misconduct by an opposing party . . . .’’ (Emphasis
added.) Under rule 60 (b) (3) of the Federal Rules of
Civil Procedure, ‘‘the movant must show that such fraud
prevented him or her from fully and fairly presenting
his or her case, and that the fraud is attributable to the
party or, at least, to counsel.’’ (Internal quotation marks
omitted.) L.I. Head Start Child Development Services,
Inc. v. Economic Opportunity Commission of Nassau
County, Inc., 956 F. Supp. 2d 402, 410 (E.D.N.Y. 2013).
Although Rahman was named as a defendant in this
action, he never appeared before the trial court and
was defaulted for failure to appear on November 7,
2012. He did not oppose, nor did he participate in, the
supplemental judgment proceedings. His fraudulent
actions did not occur during the course of this action.
Cf. Turner v. Commissioner of Correction, supra, 163
Conn. App. 564 (‘‘[t]o have a judgment set aside on the
basis of fraud which occurred during the course of the
trial upon a subject on which both parties presented
evidence is especially difficult’’ [emphasis added; inter-
nal quotation marks omitted]). Moreover, Wells Fargo
stipulated that both it and Bank of America ‘‘are
unaware of any evidence that Bank of America acted
fraudulently with regard to the entry of the supplemen-
tal judgment in this action.’’ See Sousa v. Sousa, supra,
173 Conn. App. 772 (recognizing that ‘‘the defendant’s
failure to establish the plaintiff’s knowledge of the
alleged misrepresentation is dispositive of the defen-
dant’s fraud claim’’).
In fact, we note that the circumstances surrounding
the supplemental judgment belie the conclusion that
the supplemental judgment was ‘‘obtained by fraud.’’
After initially rejecting Bank of America’s motion for a
supplemental judgment on the basis of its failure to
provide verification of the release of the Wells Fargo
mortgage, the court ultimately granted that motion after
being informed by Bank of America in its motion for
reconsideration that the satisfaction had never been
recorded on the land records. The court apparently
was persuaded by Bank of America’s argument that
the court should not hold the remaining sale proceeds
indefinitely, given Wells Fargo’s default and failure to
file any claim to the sale proceeds.
Accordingly, we agree with Bank of America that the
supplemental judgment was not ‘‘obtained by fraud,’’
where the only claimed fraudulent conduct was com-
mitted by Rahman years prior to the present litigation
during which he was defaulted and did not participate.
Thus, the court lacked authority to open the supplemen-
tal judgment more than four months after it was
rendered.
The judgment is reversed and the case is remanded
with direction to deny the motion to open the supple-
mental judgment.
In this opinion the other judges concurred.
1
The plaintiff, the city of Stamford, also named as defendants in this
action Ismat Rahman; JPMorgan Chase Bank, National Association; Fidelity
National Title Group, Successor in Interest to Chicago Title Insurance Com-
pany; Countrywide Home Loans Servicing, LP; and Countrywide Home
Loans, Inc., but they were defaulted for failure to appear or plead.
2
Because we reverse the judgment of the court on the basis that it abused
its discretion in opening the supplemental judgment, we need not address
Bank of America’s claim that the trial court committed plain error.
3
On August 28, 2017, the parties filed a stipulation of facts, which was
accepted by the court.
4
World Savings Bank was acquired by, and changed its name to, Wachovia
Mortgage, FSB, which, later in 2009, merged with and became Wells Fargo.
5
In July, 2008, Countrywide Home Loans Servicing, LP, was acquired by
Bank of America.
6
In 2008, Washington Mutual Bank was acquired by the defendant JPMor-
gan Chase Bank, National Association.
7
The trial court also noted that Bank of America’s predecessor had com-
menced a foreclosure action, which was dismissed in 2009. The court stated
that Bank of America admitted in its complaint in that action that the Wells
Fargo mortgage had priority over the Bank of America mortgage.
8
Bank of America filed a memorandum of law in support of the plaintiff’s
motion and attached to it the satisfaction. The court, in its order granting
the plaintiff’s motion for a supplemental judgment, directed Bank of America
to file a separate motion for a supplemental judgment, which it filed on
February 6, 2014.
9
Both parties declined the opportunity to offer evidence during the hearing
and presented oral argument only.
10
Specifically, the parties were directed to address the following cases,
Varley v. Varley, 180 Conn. 1, 3–4, 428 A.2d 317 (1980), and Turner v.
Commissioner of Correction, 163 Conn. App. 556, 564, 134 A.3d 1253, cert.
denied, 323 Conn. 909, 149 A.3d 980 (2016). Turner, quoting Varley, provides:
‘‘The question presented by a charge of fraud is whether a judgment that
is fair on its face should be examined in its underpinnings concerning the
very matters it purports to resolve. Such relief will only be granted if the
unsuccessful party is not barred by any of the following restrictions: (1)
There must have been no laches or unreasonable delay by the injured party
after the fraud was discovered . . . (2) There must have been diligence in
the original action, that is, diligence in trying to discover and expose the
fraud . . . (3) There must be clear proof of the perjury or fraud . . . [and]
(4) There must be a substantial likelihood that the result of the new trial
will be different.’’ (Internal quotation marks omitted.) Turner v. Commis-
sioner of Correction, supra, 564.
11
Our Supreme Court subsequently abandoned the diligence factor
imposed by Varley in the marital litigation context. See Billington v. Bill-
ington, 220 Conn. 212, 222, 595 A.2d 1377 (1991).
12
Our Supreme Court later modified the fourth factor: ‘‘[W]e disavow the
phrasing employed in Varley and rephrase the fourth prong to require a
movant to demonstrate a reasonable probability, rather than a substantial
likelihood, that the result of a new trial will be different.’’ Duart v. Dept.
of Correction, 303 Conn. 479, 491, 34 A.3d 343 (2012).
13
The parties dispute the applicable standard of review. Bank of America
argues that the proper standard of review is plenary because the ‘‘court’s
decision was based solely on a stipulation of facts and the oral and written
arguments of counsel.’’ Wells Fargo maintains that the decision to grant a
motion to open a judgment is within the trial court’s discretion and that
appellate review requires every reasonable presumption in favor of the
court’s action.
14
In the 2009 action, Bank of America’s predecessor filed a motion for
nonsuit on the basis of Wells Fargo’s failure to respond to its requests for
production. Although that motion was granted, a later motion for an exten-
sion of time to respond to the requests for production was also granted. In
its motion for a supplemental judgment, Bank of America maintained that
Wells Fargo never produced any documents in response to its requests for
production, which it represented sought documentation regarding the Wells
Fargo mortgage and payment and release of that mortgage. It is not clear
from the file what documents were sought by the requests for production
and whether Wells Fargo ever responded to the requests. It is clear, however,
that Wells Fargo ultimately withdrew its complaint in that action.
15
In its motion for default for failure to appear, the plaintiff’s counsel
certified that a copy of the motion was delivered to Wells Fargo, and the
notice granting the motion for default indicates that Wells Fargo was pro-
vided notice of that order. See Practice Book § 10-12 (b) (‘‘[i]t shall be the
responsibility of counsel or a self-represented party at the time of filing a
motion for default for failure to appear to serve the party sought to be
defaulted with a copy of the motion’’).
Practice Book § 10-12 (c) requires that ‘‘[a]ny pleading asserting new or
additional claims for relief against parties who have not appeared or who
have been defaulted shall be served on such parties.’’ Wells Fargo has not
provided us with any authority, and we are aware of no such authority,
that such a rule requires service on a defaulted party of a motion for a
supplemental judgment.
16
With respect to why Wells Fargo failed to respond to the complaint in
this action, its counsel stated during the hearing on the motion to open that
‘‘I know that we’ve tried to figure out with Wells Fargo to determine why—
who did—why didn’t they respond to the original complaint. And this hap-
pened so long ago that we’ve—they simply say we have no idea why we
weren’t involved earlier.’’
17
In one paragraph of its appellate brief, Wells Fargo claims that the
supplemental judgment was procured by mutual mistake, arguing that ‘‘at
the very least, both Wells Fargo and Bank of America were deceived by
. . . Rahman’s fraudulent satisfaction . . . which Bank of America ulti-
mately submitted to the court.’’ Bank of America responds that there is no
evidence to support the claim that the supplemental judgment was based
on a mutual mistake and argues that Wells Fargo failed to raise its claim
of mutual mistake in the trial court. Although the trial court recognized
Wells Fargo’s claim as one of both fraud and mutual mistake, it did not
make any finding as to mutual mistake.
‘‘A mutual mistake is one that is common to both parties and effects a
result that neither intended.’’ (Internal quotation marks omitted.) Davis v.
Hebert, 105 Conn. App. 736, 741, 939 A.2d 625 (2008). ‘‘[A] unilateral mistake
will not be sufficient to open the judgment.’’ (Internal quotation marks
omitted.) Richards v. Richards, 78 Conn. App. 734, 740, 829 A.2d 60, cert.
denied, 266 Conn. 922, 835 A.2d 473 (2003). We agree with Bank of America
that there was no evidence before the court to support a finding that the
supplemental judgment was procured by mutual mistake. Wells Fargo, hav-
ing been defaulted, did not participate in the supplemental judgment pro-
ceedings, during which it now claims mutual mistake. Moreover, Bank of
America acknowledged in its motion for reconsideration that the satisfaction
had never been recorded on the land records. Because there was no finding
of mutual mistake and, indeed, no evidence in the record to support any
such finding, we reject Wells Fargo’s claim.
18
Because we conclude that Wells Fargo failed to satisfy the second
Varley factor, we need not consider the remaining factors. See Turner v.
Commissioner of Correction, supra, 163 Conn. App. 565.