Wells Fargo Bank, N.A. v. Owen

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WELLS FARGO BANK, N.A. v. MARLENE E.
OWEN ET AL.
(AC 38239)
Lavine, Prescott and Flynn, Js.
Argued March 21—officially released June 20, 2017
(Appeal from Superior Court, judicial district of New
London, Cosgrove, J.)
Kenneth A. Leary, for the appellants (named defen-
dant et al.).
Jonathan A. Adamec, with whom, on the brief, was
Christopher S. Groleau, for the appellee (plaintiff).
Opinion
LAVINE, J. The defendants Marlene E. Owen and
William S. Owen1 appeal from the denial of their motion
to open the judgment of strict foreclosure rendered by
the trial court in favor of the plaintiff, Wells Fargo Bank,
N.A. The defendants claim that the court abused its
discretion in denying their motion because they showed
good cause to warrant opening the judgment pursuant
to General Statutes § 49-15. We affirm the judgment of
the trial court.
The following facts and procedural history are rele-
vant to our resolution of the defendants’ claim. On April
23, 2013, the plaintiff, as trustee for the holders of the
Merrill Lynch Mortgage Investors Trust, served a com-
plaint on the defendants, a married couple, seeking to
foreclose on their property at 22–24 Bayberry Hill Road
in Norwich.2 The defendants, self-represented, entered
their appearances but never filed an answer or any
special defenses to the plaintiff’s complaint. For more
than one year, from May 14, 2013, to June 3, 2014, the
parties engaged in at least six mediation sessions to
resolve the case but were ultimately unsuccessful. None
of the mediator reports stated that the defendants
claimed that the loan application contained inaccurate
information regarding Marlene Owen’s income or that
the plaintiff’s predecessor in interest, WMC Mortgage
Corporation, misled the defendants when they applied
for and executed the mortgage.3 Instead, the defendants
sought to modify the loan because ‘‘[t]he mortgagor
was laid off from his job.’’
On March 20, 2015, approximately nine months after
the mediation period ended, the plaintiff filed a motion
to default the defendants for failure to plead, which
was granted on April 1, 2015. On April 1, 2015, the
plaintiff filed a motion for a judgment of strict foreclo-
sure. On April 13, 2015, counsel for the defendants
entered his appearance but failed to file an answer or
any special defenses to the plaintiff’s complaint or to
contest the entry of the default in any way. See Practice
Book §§ 10-46 and 10-50. The defendants also failed to
file a motion for a continuance to obtain additional time
to collect evidence to support a claim of fraud. On May
18, 2015, the court heard the plaintiff’s motion for a
judgment of strict foreclosure, but neither the defen-
dants nor counsel for the defendants appeared at the
hearing to contest the motion or to ask for a continu-
ance. The court granted the plaintiff’s unopposed
motion for a judgment of strict foreclosure and set the
law days to begin July 21, 2015.
On July 8, 2015, the defendants filed a motion to open
the judgment of strict foreclosure pursuant to § 49-15.4
In the motion, they requested oral argument but specifi-
cally indicated that ‘‘testimony is not required.’’ The
court heard oral argument on the motion during a short
calendar hearing on July 20, 2015.5 The defendants
asserted that they had good cause to open the judgment
because they had proof that an agent of the plaintiff’s
predecessor in interest knowingly misled them into
applying for and executing the mortgage by assuring
them that they could afford the mortgage. They also
claimed that the plaintiff’s predecessor in interest
altered the income information on the loan application
without the defendants’ knowledge. The evidence the
defendants submitted in support of their argument
included a sworn affidavit from William Owen, who
attested that he had applied for and executed the mort-
gage ‘‘based on false representations . . . by [the]
[p]laintiff’s predecessor’s agent that [he] could afford
the mortgage in question’’ and that Marlene Owen’s
‘‘income was fraudulently put down by [the] [p]laintiff’s
predecessor’s said agent as $5000 per month without
[her] knowledge or [his], when it was in fact $2100 per
month.’’ They also provided a copy of Marlene Owen’s
2004 tax returns and the loan application, which showed
that the income listed in the tax returns did not match
the income listed in the loan application. Thus, they
argued that they should be given an opportunity to
assert the special defenses of unclean hands and fraud
in the inducement in the foreclosure action.
The plaintiff argued that the defendants failed to
show good cause to open the judgment of strict foreclo-
sure. Contrary to the defendants’ assertion, the plaintiff
contended that if any party was defrauded or misled,
it was the plaintiff because it unknowingly relied on the
loan application that contained incorrect information. It
also argued that the defendants could not claim that
their income was altered without their knowledge
because they had an opportunity to review the loan
application and correct any inaccurate information
before they had signed it.
The same day, the court denied the defendants’
motion to open the judgment of strict foreclosure.6 The
defendants filed a motion for articulation, and the court
granted the motion and referred the parties to the tran-
script of the July 20, 2015 hearing. The defendants filed
another motion for articulation, which the court denied.
The defendants appealed to this court on August 7,
2015. Thereafter, the defendants never sought an articu-
lation in accordance with Practice Book § 66-5.
On appeal, the defendants claim that the court abused
its discretion in denying their motion to open the judg-
ment of strict foreclosure. They argue that, pursuant
to § 49-15, they showed good cause to open the judg-
ment by providing proof that the plaintiff engaged in
fraud. They contend that they did not assert their
defenses prior to the court’s rendering its decision on
the plaintiff’s motion for a judgment of strict foreclosure
because they were not aware of any relevant defenses
to foreclosure until after they had hired an attorney,
and, thus, ‘‘[i]t would be unjust to bar their defenses
under these circumstances . . . .’’ We disagree.7
‘‘Generally, an appeal must be filed within twenty
days of the date notice of the judgment or decision is
given. . . . In the context of an appeal from the denial
of a motion to open judgment, [i]t is well established
in our jurisprudence that [w]here an appeal has been
taken from the denial of a motion to open, but the
appeal period has run with respect to the underlying
judgment, [this court] ha[s] refused to entertain issues
relating to the merits of the underlying case and ha[s]
limited our consideration to whether the denial of the
motion to open was proper. . . . When a motion to
open is filed more than twenty days after the judgment,
the appeal from the denial of that motion can test only
whether the trial court abused its discretion in failing
to open the judgment and not the propriety of the merits
of the underlying judgment.’’ (Citation omitted; internal
quotation marks omitted.) Wells Fargo Bank, N.A. v.
Ruggiri, 164 Conn. App. 479, 484, 137 A.3d 878 (2016).
In the present case, there is no dispute that the defen-
dants did not file their motion to open within twenty
days of the court’s rendering the judgment of strict
foreclosure. Therefore, we will review the defendants’
claim under an abuse of discretion standard and will not
address the merits of the judgment of strict foreclosure.
‘‘This court must make every reasonable presumption
in favor of the trial court’s decision when reviewing a
claim of abuse of discretion. . . . Our review of a trial
court’s exercise of the legal discretion vested in it is
limited to the questions of whether the trial court cor-
rectly applied the law and could reasonably have
reached the conclusion that it did.’’ (Internal quotation
marks omitted.) First Connecticut Capital, LLC v.
Homes of Westport, LLC, 112 Conn. App. 750, 761, 966
A.2d 239 (2009).
‘‘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, and that there is clear proof of that fraud.’’
(Emphasis added.) Chapman Lumber, Inc. v. Tager,
288 Conn. 69, 107, 952 A.2d 1 (2008). ‘‘Some evidence
suggesting actual wrongdoing . . . and not merely the
specter of such, is necessary in order to set aside a
final adjudication.’’ Bank of America, N.A. v. Thomas,
151 Conn. App. 790, 806 n.7, 96 A.3d 624, 634 (2014).
We conclude that the court did not abuse its discre-
tion in denying the defendants’ motion to open the
judgment of strict foreclosure because it reasonably
could have decided that the defendants did not meet
their burden of showing clear proof that the plaintiff
engaged in fraud. The affidavit submitted by the defen-
dants was made by William Owen himself, and con-
tained only bare allegations that the plaintiff’s
predecessor fraudulently induced the defendants into
applying for and executing the mortgage. The support-
ing documents gave no indication that the plaintiff
altered the loan application without the defendants’
knowledge or engaged in any other fraudulent activity.
The tax return and the loan application listed two differ-
ent incomes, but it was the responsibility of the defen-
dants to review the loan application to ensure its
accuracy before they signed it, and the court reasonably
could have found that the discrepancy was not the
product of fraudulent behavior. See Ocwen Federal
Bank, FSB v. Thacker, 73 Conn. App. 616, 618–19, 810
A.2d 279 (2002) (no abuse of discretion when only evi-
dence in support of opening judgment was defendant’s
unsubstantiated claim in affidavit).
Additionally, ‘‘[t]he denial of such relief to a party
who has suffered a default judgment by his failure to
defend properly should not be held an abuse of discre-
tion where the failure to assert a defense was the result
of the moving party’s own negligence.’’ (Internal quota-
tion marks omitted.) Hartford Federal Savings & Loan
Assn. v. Stage Harbor Corp., 181 Conn. 141, 143–44,
434 A.2d 341 (1980). The fact that the defendants sat on
their equitable rights and waited to assert their defenses
until after the court rendered the judgment of strict
foreclosure further supports our conclusion that the
court did not abuse its discretion. See Countrywide
Home Loans Servicing L.P. v. Peterson, 171 Conn. App.
842, 850, A.3d (2017) (no abuse of discretion
because ‘‘the defendant waited until after the judgment
of strict foreclosure had been rendered and the law
days were about to run to challenge the finding of debt
on the basis of the existence of private mortgage insur-
ance’’); Connecticut National Bank v. N. E. Owen II,
Inc., 22 Conn. App. 468, 475, 578 A.2d 655 (1990) (The
trial court did not abuse its discretion because ‘‘[t]he
defendants never asserted a defense with regard to the
debt prior to the rendering of the judgment of strict
foreclosure. Therefore, any claim that they had a good
defense to open that judgment and challenge the
amount of the debt is equally without merit.’’).
The defendants attempt to justify their delay in
asserting their defenses by arguing that they were
unaware of any defenses available to them until they
obtained counsel. ‘‘[A]lthough we allow [self-repre-
sented] litigants some latitude, the right of self-repre-
sentation provides no attendant license not to comply
with relevant rules of procedural and substantive law.’’
(Internal quotation marks omitted.) Lewis v. Bowden,
166 Conn. App. 400, 403, 141 A.3d 998 (2016). The defen-
dants’ failure to assert their defenses because they were
not represented by counsel is not a persuasive justifica-
tion for failing to timely plead as required by court rules.
In any event, the defendants were represented by
counsel on April 13, 2015, which was more than one
month before the court rendered the judgment of strict
foreclosure on May 18, 2015. Not only did the defen-
dants’ counsel fail to respond to the plaintiff’s complaint
or assert any defenses prior to May 18, 2015, neither the
defendants nor their counsel appeared at the hearing on
the motion for a judgment of strict foreclosure to
request a continuance in order to gather evidence to
support their defenses. It is also notable that in the
defendants’ motion to open the judgment of strict fore-
closure, the defendants’ counsel only requested oral
argument and specifically indicated that testimony was
not required. See USA Bank v. Schulz, 143 Conn. App.
412, 419, 70 A.3d 164 (2013) (‘‘the defendant has no
basis for claiming an abuse of discretion by the trial
court in denying him relief that he could readily have
sought, had he wished to, at a time when he was repre-
sented by competent counsel’’). Perhaps another judge
might have ordered an evidentiary hearing under the
circumstances; however, we are unwilling to conclude
that the failure to do so was an abuse of discretion.
The judgment is affirmed and the case is remanded
for the purpose of setting new law days.
In this opinion PRESCOTT, J., concurred.
1
Mortgage Electronic Registration Systems, Inc., also was named as a
defendant but is not a party to this appeal. We therefore refer in this opinion
to the Owens as the defendants.
2
According to the plaintiff’s complaint, the defendants, ‘‘to secure [the]
note, mortgaged to Mortgage Electronic Registration Systems, Inc., as nomi-
nee for WMC Mortgage Corp., the premises known as 22 Bayberry Hill
Road a/k/a 22–24 Bayberry Hill Road, Norwich,’’ and that WMC Mortgage
Corporation later assigned the mortgage to the plaintiff.
3
The mediator’s final report stated that the reason why the issue was not
resolved was because the ‘‘[d]efendants [do] not qualify for any retention
options due to insufficient income. The court granted one more mediation
session, which was held on [June 2, 2014]. [The] defendants recently submit-
ted an application [for assistance] to [the Connecticut Housing Finance
Authority pursuant to the Emergency Mortgage Assistance Program, General
Statutes § 8-265cc et seq.].’’
4
General Statutes § 49-15 (a) (1) provides: ‘‘Any judgment foreclosing the
title to real estate by strict foreclosure may, at the discretion of the court
rendering the judgment, upon the written motion of any person having an
interest in the judgment and for cause shown, be opened and modified,
nothwithstanding the limitation imposed by section 52-212a, upon such
terms as to costs as the court deems reasonable, provided no such judgment
shall be opened after the title has become absolute in any encumbrancer
except as provided in subsection (2) of this subsection.’’ (Emphasis added.)
5
Before the court heard the merits of the defendants’ claim, it ordered that
the motion be sealed because their counsel failed to redact the defendants’
personal and identifying information.
6
The court initially ruled that it would extend the law days and reserve
its decision on whether it was going to grant or deny the motion after
reviewing the evidence. The plaintiff pointed out, however, and the court
agreed, that the court was precluded from doing so because, procedurally,
it was required to grant the motion before it could extend the law days.
Thus, the court was forced to make a decision on the motion that day, as
the law day were set to begin the following day, July 21, 2015.
7
‘‘The denial of a motion to open a judgment of strict foreclosure is an
appealable final judgment itself and distinctly appealable from the underlying
judgment.’’ Connecticut National Mortgage Co. v. Knudsen, 323 Conn. 684,
687 n.8, 150 A.3d 675 (2016).