Chelsea Groton Bank v. Gates Realty Holdings, LLC

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Chelsea Groton Bank v. Gates Realty Holdings, LLC

CHELSEA GROTON BANK v. GATES REALTY
HOLDINGS, LLC, ET AL.
(AC 46032)
(AC 46034)
Alvord, Moll and Suarez, Js.

Syllabus

The plaintiff in error, W, the initial successful bidder and a nonparty in the
underlying foreclosure action brought by the defendant in error, C Co.,
filed two writs of error with this court challenging the trial court’s orders
granting C Co.’s motion to forfeit his deposit and denying his motion
to intervene as of right. W failed to close on the sale of the property
within thirty days from the notice of the court’s approval of the sale,
and C Co. filed the motion to forfeit, a motion to reset the sale date,
and a caseflow request seeking expedited adjudication of the motions,
but did not serve any of the filings on W. The court granted the motions
and, the property was sold to another entity. Held:
1. The trial court improperly granted C Co.’s motion to forfeit W’s deposit:
in determining whether to order the forfeiture or the return of a deposit,
the court, sitting in equity, may consider a variety of factors, and, because
forfeiture is not automatic and is subject to the balancing of the equities,
a defaulting, nonparty purchaser is entitled to notice of a motion to
enforce the forfeiture of a deposit; moreover, the proper procedural
mechanism and the manner of service of the notice of a motion to forfeit
a deposit to which a defaulting purchaser is entitled necessarily depend
on whether the defaulting purchaser already has a party appearance in
the case, and, here, W, a nonparty, was entitled to assume that the
proper legal procedure would be followed and that an order to show
cause would be issued, citing him to appear and to be heard, such that
the lack of service of the motion on W was legally insufficient to render
W subject to the jurisdiction of the court; accordingly, on remand, it
will be for the trial court, applying equitable principles, to consider
whether W’s deposit should in fact be forfeited, this court holding only
that W was entitled to notice and an opportunity to be heard on the
motion to forfeit.
2. The second writ of error, challenging the trial court’s denial of W’s motion
to intervene as of right was dismissed as moot; in light of this court’s
granting of the first writ of error, this court could not afford W any
additional practical relief with respect thereto.

Argued October 2, 2023—officially released August 20, 2024
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Chelsea Groton Bank v. Gates Realty Holdings, LLC

Procedural History

Writ of error from the order of the Superior Court in
the judicial district of New London, Young, J., granting
a motion by the defendant in error to forfeit the deposit
in a foreclosure action, and writ of error from the order
of the Superior Court in the judicial district of New
London, S. Jacobs, J., denying a motion by the plaintiff
in error to intervene as of right, filed by the plaintiff in
error in this court. Writ of error granted in AC 46032;
further proceedings; writ of error dismissed in AC
46034.

Frank J. Liberty, for the plaintiff in error (Ross Wein-
garten).

Brian D. Rich, for the defendant in error (Chelsea
Groton Bank).

Opinion

MOLL, J. These writs of error were commenced by
the plaintiff in error, Ross Weingarten, who was, with
respect to property located at 15 Elm Street in Groton,
the initial successful bidder in the underlying foreclo-
sure action in which the trial court rendered a judgment
of foreclosure by sale. In Docket No. AC 46032, the
plaintiff in error challenges the court’s order granting
the motion, filed by the defendant in error, Chelsea
Groton Bank, to forfeit his deposit; in Docket No. AC
46034, the plaintiff in error challenges the court’s order
denying his motion to intervene as of right. In Docket
No. AC 46032, we grant the writ of error; in Docket No.
AC 46034, we dismiss the writ of error on the ground
of mootness.1
1
The plaintiff in error’s respective writs of error, although not consoli-
dated, were heard together at oral argument before this court pursuant to
an order issued by this court on September 28, 2023.
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Chelsea Groton Bank v. Gates Realty Holdings, LLC

The following facts and procedural history are rele-
vant to our resolution of these writs of error. On Octo-
ber 16, 2019, the defendant in error commenced this
action seeking, among other things, the foreclosure of
mortgages on several properties. In count one of its
complaint, the defendant in error sought the foreclosure
of a mortgage on property located at 15 Elm Street in
Groton. On November 23, 2021, the trial court, Young,
J., rendered a judgment of foreclosure by sale with
respect to count one ‘‘as per [the] stipulation of the
parties . . . .’’ The judgment set (1) the amount of the
debt, costs, and attorney’s fees at $1,795,098.98; (2) the
fair market value at $3,670,000; (3) the sale date as
January 29, 2022; and (4) a required deposit amount of
$367,000. The sale date was continued to March 12,
2022.
Following the plaintiff in error’s successful bid of
$3,520,000, the foreclosure committee submitted the
plaintiff in error’s $367,000 deposit to the clerk of the
Superior Court in New London. On March 31, 2022, the
court, Hon. Emmet L. Cosgrove, judge trial referee,
approved the sale and the committee deed. Pursuant
to paragraph 20 of the Uniform Standing Orders for
Foreclosure by Sale (standing orders), the plaintiff in
error was required to close on the sale no later than
thirty days from the notice of the court’s approval of
the sale.2 The plaintiff in error failed to do so. Conse-
quently, on May 3, 2022, the defendant in error filed a
motion to forfeit the deposit (motion to forfeit) and a
motion to reset the sale date, and on May 4, 2022, it
filed a caseflow request seeking expedited adjudication
of the motions. The defendant in error did not serve
2
Paragraph 20 of the standing orders provides in relevant part: ‘‘The high
bidder/purchaser must close no sooner than 21 days but no later than 30
days from the date of notice of the [c]ourt’s approval of the committee sale.
The deposit may be forfeited if the purchaser does not close within 30 days
of the notice of approval. . . .’’
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any of these filings on the plaintiff in error. On May 10,
2022, the court, Young, J., granted the two motions and
the caseflow request (May 10 orders).
On May 11, 2022, the plaintiff in error filed an appear-
ance through counsel as ‘‘other.’’3 On May 13, 2022, the
plaintiff in error filed a motion to vacate the May 10
orders, which the court denied on August 18, 2022. On
May 25, 2022, the plaintiff in error filed a motion to
reargue the May 10 orders, which the court denied on
June 9, 2022. A new sale date was set for October 22,
2022. On October 24, 2022, the plaintiff in error filed a
motion to intervene as a party defendant as a matter
of right, which the court, S. Jacobs, J., denied. There-
after, as approved by the court, the property was sold
to Captain’s Mansion LLC for the sum of $3,050,000,
with the closing on the property held on December 29,
2022. Meanwhile, the plaintiff in error filed these writs
of error.4
AC 46032
In the first writ of error, the plaintiff in error claims
that the trial court improperly granted the motion to
forfeit without affording him notice thereof and an
opportunity to be heard. We agree.
Whether the plaintiff in error was entitled to notice
and an opportunity to be heard with respect to the
motion to forfeit presents a question of law over which
we exercise plenary review. See Commissioner of
Environmental Protection v. Farricielli, 307 Conn. 787,
819, 59 A.3d 789 (2013) (applying plenary review to
nonparty’s due process claim predicated on lack of
notice and opportunity to be heard).
3
The trial court’s electronic case detail reflects the plaintiff in error’s
status as ‘‘successful bidder.’’
4
Although significant motions practice relating to the property subse-
quently has occurred in the trial court, it is unnecessary to recite it for
purposes of this appeal.
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Our analysis of the plaintiff in error’s claim proceeds
in two parts. We first address the threshold question
of whether notice to a defaulting purchaser of a motion
to enforce forfeiture is required beyond the notice set
forth in paragraph 20 of the standing orders and the
notice contained in the Judicial Branch Form ‘‘Foreclo-
sure by Sale Fact Sheet—Notice to Bidders’’ (notice to
bidders).5 We answer that question in the affirmative.
Paragraph 20 of the standing orders provides in rele-
vant part: ‘‘The high bidder/purchaser must close no
sooner than 21 days but no later than 30 days from the
date of notice of the Court’s approval of the committee
sale. The deposit may be forfeited if the purchaser does
not close within 30 days of the notice of approval. . . .’’
(Emphasis added.) Relatedly, the notice to bidders pro-
vides in relevant part: ‘‘The successful bidder must be
prepared to pay the balance of the purchase price within
thirty (30) days after the approval of the sale. The
deposit may be ordered forfeited if the successful bid-
der fails to complete the transaction within the thirty-
day period.’’ (Emphasis added.) It is undisputed, and
we agree, that the use of the term ‘‘may’’ in the foregoing
clauses means that ‘‘[s]uch forfeiture provision is not
self-executing . . . but must be enforced by court
order to that effect . . . .’’ 1 D. Caron & G. Milne, Con-
necticut Foreclosures (12th Ed. 2022) § 8-3:2, p. 629.
In determining whether to order the forfeiture or the
return of a deposit (in full, in part, or not at all), the
court, sitting in equity,6 may consider, inter alia, the
5
The record reflects that a notice to bidders was posted to the Judicial
Branch Pending Foreclosure Sales webpage in connection with, and prior
to, the March 12, 2022 foreclosure sale.
6
‘‘It is well established that a foreclosure action constitutes an equitable
proceeding. . . . In an equitable proceeding, the trial court may examine
all relevant factors to ensure that complete justice is done. . . . The deter-
mination of what equity requires in a particular case, the balancing of the
equities, is a matter for the discretion of the trial court.’’ (Citation omitted;
internal quotation marks omitted.) Citicorp Mortgage, Inc. v. Burgos, 227
Conn. 116, 120, 629 A.2d 410 (1993).
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circumstances surrounding the defaulting purchaser’s
failure to close within the requisite time period, any
notice provisions relating to forfeiture and/or other con-
sequences in the event of a default, whether the second
sale brought a higher sale price than the first, whether
the second sale brought a lower sale price than the first
(and, if so, whether the deposit exceeds the amount of
any deficiency from the second sale), and whether a
particular result would yield a windfall on a creditor
or owner. See id., pp. 629–31; see also Citicorp Mort-
gage, Inc. v. Burgos, 227 Conn. 116, 121, 629 A.2d 410
(1993) (‘‘In the event of default by the purchaser, several
alternatives are open to the trial court. . . . [These
include] holding the purchaser liable for any deficiency
arising out of the resale.’’); Wilcox v. Willard Shopping
Center Associates, 23 Conn. App. 129, 135–36, 579 A.2d
130 (1990) (in equitable action for partition by sale,
affirming trial court’s exercise of equitable powers in
ordering forfeiture of deposit and limiting defaulting
purchasers’ liability to that amount). Thus, because for-
feiture is not automatic and is subject to the balancing
of the equities, we conclude that a defaulting, nonparty
purchaser is entitled to notice of a motion to enforce
the forfeiture of a deposit.
We next address the nature of the notice to which
the plaintiff in error was entitled. In considering this
question, we are not left to write on a blank slate.
We begin with our Supreme Court’s decision in Banca
Commerciale Italiana Trust Co. v. Westchester Artistic
Works, Inc., 109 Conn. 23, 145 A. 20 (1929) (Banca
Commerciale). In Banca Commerciale, a foreclosure
by sale action, the first purchaser, the G. F. Beach Realty
Company (company), paid a deposit at the time of the
sale but defaulted in making payment to complete the
sale. Id., 25. The foreclosure committee (committee)
thereafter filed a motion requesting that its report be
accepted, the sale be confirmed, the company be
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adjudged in default, a resale be ordered, and the com-
pany be held liable for the difference between the origi-
nal foreclosure sale price and the price realized upon
a second foreclosure sale, less the amount of the com-
pany’s deposit (motion for resale and deficiency order).
Id. The committee personally served a notice of the
motion on the treasurer of the company, who delivered
the notice to the company’s president, an attorney. Id.
Upon the court’s granting of the motion and its entry
of judgment, the committee sold the property at a price
less than the original foreclosure sale price. Id. The
committee reported the second sale and the deficiency,
and the court rendered judgment confirming the second
sale and finding the company liable for the deficiency.
Id. Thereafter, the company moved to open the judg-
ments, and the motion was granted ‘‘because before
the order of resale was made no rule was served upon
the [company] to show cause why it should not be held
in default and an order of resale be made charging it
with any deficiency in the price realized.’’ Id., 25–26.
The plaintiff claimed on appeal therefrom that the
personal service of a notice of the committee’s motion
for resale and deficiency order on the company’s trea-
surer, which was subsequently delivered to the com-
pany’s president, was sufficient to subject the company
to the judgments of the court. Id., 26. Our Supreme
Court disagreed and, in affirming the setting aside of
the judgments, reaffirmed the principle set forth in Mar-
iners Savings Bank v. Duca, 98 Conn. 147, 158, 118 A.
820 (1922), that requiring a ‘‘procedure by a rule to
show cause was the orderly and fair method’’ to bring
a defaulting purchaser within the jurisdiction of the
court such that it would be bound by the court’s judg-
ment. See Banca Commerciale Italiana Trust Co. v.
Westchester Artistic Works, Inc., supra, 109 Conn. 26.
The court in Banca Commerciale explained: ‘‘By his
purchase, the purchaser does become so far a party to
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the action that he submits himself to the jurisdiction
of the court. But before any order may be made for a
resale of the premises at his charge, he is entitled to
present any facts which may lead the court, acting upon
equitable principles, to hold him not to be in default of
his obligation under his purchase. . . . He is not so far
a party that by statute or practice he is called upon to
enter an appearance and his failure to do so does not
place him in a position where he may be treated as one
in default of appearance. Before he may be adversely
affected by a judgment of the court he is entitled to
legal notice and hearing. . . . The necessity of a pro-
ceeding by a rule to show cause issuing from the court,
or a like process, with proper service and return, is
apparent. . . . [U]nless a procedure is followed such
that the giving of notice to the purchaser definitely
appears in the record of the court, any judgment ren-
dered ordering a resale and charging the deficiency
to him would on the face of the record appear to be
erroneous, and subject to reversal by writ of error.’’
(Citations omitted.) Id., 26–27. In sum, the court held
that the company, as a defaulting, nonparty purchaser,
was entitled to notice by way of service of a rule or
order to show cause, giving it an opportunity to appear
and be heard. Id., 28.
In contrast, in Mariners Savings Bank v. Duca, supra,
98 Conn. 147, because a defaulting purchaser was also
an appearing fourth mortgagee on the foreclosed prop-
erty, customary service of a motion concerning the
resale was deemed sufficient. Id., 158. Our Supreme
Court stated: ‘‘Under our practice, with the purchaser
in court, as was the fact in the instant case, a motion
placed on the short calendar would properly serve the
function of an order to show cause.’’ Id.
In sum, the proper procedural mechanism and the
manner of service of the notice of a motion to forfeit
a deposit to which a defaulting purchaser is entitled
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necessarily depend on whether the defaulting purchaser
already has a party appearance in the case. See Banca
Commerciale Italiana Trust Co. v. Westchester Artistic
Works, Inc., supra, 109 Conn. 26 (recognizing this
dichotomy in distinguishing Mariners Savings Bank on
ground that, in that case, notice afforded to defaulting
purchaser by placing of motion on short calendar was
deemed sufficient because defaulting purchaser was
party to that action). Here, as in Banca Commerciale,
the plaintiff in error, a nonparty, ‘‘was entitled to assume
that the proper legal procedure would be followed’’;
id., 28; and that an order to show cause would be issued,
citing him to appear and be heard. The lack of service
of the motion on the plaintiff in error was, ergo, legally
insufficient to render the plaintiff in error subject to
the jurisdiction of the court.
The defendant in error argues that ‘‘the central flaw’’
in the plaintiff in error’s claim on appeal is that he did
not ‘‘do anything to protect his interest in the first
place.’’ This argument fails. ‘‘One is not guilty of laches
who lacks knowledge of the facts which makes action
on his part of concern to him . . . nor does it lie in
the mouth of the [defendant in error], which failed to
take the proper steps to bring the [plaintiff in error]
before the court, now to complain that the latter is
guilty of laches in failing to do something which [he]
was concerned to do only if [he] knew the nature of
the order of the court.’’ (Citation omitted.) Banca Com-
merciale Italiana Trust Co. v. Westchester Artistic
Works, Inc., supra, 109 Conn. 28–29.
On remand, it will be for the trial court, applying
equitable principles, to consider whether the plaintiff
in error’s deposit should in fact be forfeited. See id.,
29. We hold only that the plaintiff in error was entitled
to notice as discussed in this opinion and an opportunity
to be heard on the motion to forfeit, which this decision
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leaves pending by virtue of the vacatur of the May 10,
2022 order granting the motion.
AC 46034
In this writ of error, the plaintiff in error challenges
the trial court’s denial of his motion to intervene as of
right. In light of our granting of the writ of error in
Docket No. AC 46032, we dismiss this writ of error
as moot.
‘‘Mootness is a question of justiciability that must be
determined as a threshold matter because it implicates
[this] court’s subject matter jurisdiction . . . . The
fundamental principles underpinning the mootness doc-
trine are well settled. We begin with the four part test
for justiciability . . . . Because courts are established
to resolve actual controversies, before a claimed con-
troversy is entitled to a resolution on the merits it must
be justiciable. Justiciability requires (1) that there be
an actual controversy between or among the parties to
the dispute . . . (2) that the interests of the parties be
adverse . . . (3) that the matter in controversy be
capable of being adjudicated by the judicial power . . .
and (4) that the determination of the controversy will
result in practical relief to the complainant. . . .
‘‘[I]t is not the province of appellate courts to decide
moot questions, disconnected from the granting of
actual relief or from the determination of which no
practical relief can follow. . . . In determining moot-
ness, the dispositive question is whether a successful
appeal would benefit the plaintiff or defendant in any
way.’’ (Internal quotation marks omitted.) State v. Mar-
sala, 204 Conn. App. 571, 575–76, 254 A.3d 358, cert.
denied, 336 Conn. 951, 251 A.3d 617 (2021).
In light of our granting of the writ of error in Docket
No. AC 46032, we dismiss the writ of error in Docket
No. AC 46034 as moot, as we cannot afford the plaintiff
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Chelsea Groton Bank v. Gates Realty Holdings, LLC

in error any additional practical relief with respect
thereto.
In Docket No. AC 46032, the writ of error is granted
and the case is remanded with direction to vacate the
May 10, 2022 order granting the defendant in error’s
motion to forfeit the deposit, to vacate the August 18,
2022 order denying the plaintiff in error’s motion to
vacate, and to conduct further proceedings consistent
with this opinion; in Docket No. AC 46034, the writ of
error is dismissed.
In this opinion the other judges concurred.