DocketNumber: No. 054078
Citation Numbers: 1995 Conn. Super. Ct. 8763
Judges: RITTENBAND, J.
Filed Date: 8/16/1995
Status: Non-Precedential
Modified Date: 4/18/2021
On or about November 9, 1993, the plaintiff moved for an appointment of receiver of rents for the subject property. On November 22, 1993, the court granted the plaintiff's motion. On or about August 18, 1994, the defendant filed four amended special defenses to the foreclosure action as are hereinafter described. On or about April 3, 1995, the plaintiff filed a motion to strike the four special defenses. The motion was accompanied by a supporting memorandum. On or about July 17, 1995, the defendant filed a memorandum in opposition to the motion to strike. On or about July 26, 1995, the plaintiff filed a reply memorandum to the defendant's objection to the motion to strike. On August 7, 1995, the court heard oral argument on the matter.
The purpose of a motion to strike "is to test the legal sufficiency of the pleadings." Ferryman v. City of Groton,
A. Defenses Available in a Foreclosure Action
In a foreclosure action, available defenses are generally limited to payment, discharge, release, satisfaction or invalidity of a lien. Petterson v. Weinstock,
B. Defenses Available in a Foreclosure Action When FDICInvolved
As a threshold issue, the court notes that when the FDIC takes possession of a note in its capacity as a receiver of a bank it is a holder in due course. Campbell Leasing Inc. v. FDIC,
C. The Defendant's Special Defenses in the Present Action
The defendant sets forth four special defenses to the present foreclosure action. First, the defendant argues that the FDIC prevented the defendant from exercising dominion and control over the subject property. This resulted in a decrease in the property's value and ultimately an increase in the defendant's debt. Second, the defendant asserts that the FDIC "improperly managed and controlled the property", which led to a decrease in the property's value and ultimately an increase the defendant's debt. Third, the defendant contends that the FDIC breached its implied covenant of good faith and fair dealing "by exercising dominion and control over the property, fail[ing] to maintain the value of the property, fail[ing] to maintain insurance on the property, and thereby, inequitably and unenforceably increased the debt claimed by the FDIC." Lastly the defendant argues that the FDIC violated the Connecticut Unfair Trade Practice Act ("CUTPA") "by actively seeking control of the defendant's property being foreclosed and after gaining control of said property failing to properly manage the property, thereby inequitably and unenforceably increasing the debt claimed by the FDIC." In short, the four special defenses are all on the basis of the plaintiff's rights under the mortgage deed to take possession of the property and then obtain a court appointed receiver of rents.
Special Defense #1 and 2
The defendant's first and second special defenses focus on the FDIC's conduct when it exercised its rights under the mortgage to collect the rents for the mortgaged premises. More specifically, in his memorandum in opposition to the motion to strike, the defendant contends that "[p]ursuant to a Motion for Appointment of Rents dated November 7, 1993, which was granted by the court on November 22, 19931, the plaintiff took control of the property. Thereafter, the plaintiff through its receiver, allowed the insurance to lapse on the property. Other fees and cost arising from the property went unpaid. Furthermore, the plaintiff failed to collect rent from existing tenants and/or secure new tenants in violation of the Order Appointing Receiver dated November 22, 1993." (Emphasis added.) The defendant, however, does not cite to any authority for his claim that the actions of a court appointed rent receiver can form the basis of CT Page 8767 a valid defense to a foreclosure action. "The object of appointing receivers is to secure the property in dispute from waste of loss." Hartford Federal Savings Loan Assn. v. Tucker,
In addition, the first and second special defenses are based on FDIC's actions after the defendant defaulted on the mortgage note, but before the appointment of a receiver of rents. Thus, the actions of the FDIC are separate and distinct from the transaction that is subject to this foreclosure action. Therefore, because they do not attack the validity or enforcement of the note they should be stricken. See FDIC v. 272 Post RoadAssociates, NO. 5:91:CV433, slip op. at 5-6 (D. Conn. March 11, 1994) (Recommended Ruling)2. Moreover, several federal courts have held that a defense based on FDIC's post-receivership conduct concerning a failed bank's assets are improper because the FDIC owes no duty to a debtor for its post-receivership conduct.3 See e.g., FDIC v. Kelepecz, No. 93CV542, slip. op. at 12 (D.Conn. March 12, 1994) and cases cited within; FDIC v.Lowe,
Special Defense #3 — Breach of Implied Duty of Good Faith andFair Dealing
"Although a breach of implied duty of good faith and fair dealing has been recognized as a valid special defense under the guise of equitable principles . . . a defendant must plead sufficient facts to justify its application." Shawmut Bank v.Carriage Hill Estates, Inc., Superior Court, judicial district of Waterbury, Docket No. 116593 (June 10, 1994, West, J.). While the equitable special defense of breach of the covenant of good faith and fair dealing has been recognized in foreclosure actions, allegations of failing to exercise good faith and fair dealing after default on the note does not address the making, validity and enforcement of the note and is legally insufficient.Provident Financial Service v. Berkman, 135310, judicial district CT Page 8768 of Stamford/Norwalk at Stamford (February 17. 1995, D'Andrea, J.); see also Citibank v. McCure, Docket No. 137933, judicial district of Stamford/Norwalk at Stamford (March 28, 1995, Lewis, J.) Bank of Calabrese, supra, Centerbank v. Motor Inc.Associates,
Special Defense #4
CUTPA specifically exempts "[t]ransactions or actions otherwise permitted under law as administered by any regulatory board or officer acting under statutory authority of the state or of the United States." Thus, under the plain language of the statute, the FDIC is exempted. The Connecticut Supreme Court has interpreted this provision as exempting a municipal housing authority from CUTPA. Connelly v. Housing Authority of the Cityof New Haven,
Finally, to claim a violation of CUTPA, the defendant must allege and prove that the plaintiff's acts were immoral, malicious, wanton, etc., an allegation of mere negligence is not sufficient. Williams Ford v. Hartford Courant,
Rittenband, J.