U.S. Bank National Assn., Trustee v. Works

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U.S. BANK NATIONAL ASSOCIATION, TRUSTEE
v. LOUISE WORKS
(AC 36707)
DiPentima, C. J., Sheldon and Cohn, Js.
Argued April 9—officially released September 22, 2015

(Appeal from Superior Court, judicial district of
Stamford-Norwalk, Mintz, J.)
Christopher J. Picard, for the appellant (plaintiff).
Janine M. Becker, with whom, on the brief, was
Patricia Moore, for the appellee (defendant).
Opinion

COHN, J. The plaintiff, U.S. Bank National Associa-
tion, as trustee for Wachovia Loan Trust, Series 2006-
AMN1, appeals from the judgment of the trial court
granting the motion of the defendant, Louise Works, to
open the judgment of strict foreclosure and to set aside
the default entered against her for failure to plead. The
plaintiff claims that the court improperly (1) opened
the judgment of strict foreclosure pursuant to General
Statutes § 49-15 (b), and (2) set aside the default entered
against the defendant. We conclude that the court had
the authority to open the judgment of strict foreclosure
and we dismiss the remainder of the plaintiff’s appeal
for lack of a final judgment.
This appeal arises out of the plaintiff’s attempt to
foreclose on certain real property located at 54 Winding
Lane in Norwalk. On February 16, 2010, the plaintiff
instituted a foreclosure action with respect to the prop-
erty in the Superior Court for the judicial district of
Stamford-Norwalk. The plaintiff’s complaint alleged the
following facts.1 On February 27, 2006, the defendant,
the owner of the property, executed a note in favor of
American Mortgage Network, Inc., for a loan in the
amount of $462,000. On the same day, to secure the
note, the defendant also executed a mortgage on the
property in favor of Mortgage Electronic Registration
Systems, Inc., as nominee for American Mortgage Net-
work, Inc. The mortgage was recorded in the Norwalk
land records. It was then assigned to the plaintiff. When
the defendant failed to make timely payments of princi-
pal and interest under the note, the plaintiff, as the
holder of the note and the mortgage, elected to acceler-
ate the balance due on the note and to foreclose the
mortgage on the property. To that end, it commenced
the present action.
The day after the plaintiff filed its complaint, the
defendant filed a request for foreclosure mediation,
which the clerk of the court granted on March 8, 2010.
The parties engaged in the mediation process until
December 17, 2010, when the mediator filed a report
notifying the court that the mediation had been unsuc-
cessful. On May 25, 2011, the plaintiff filed a motion to
enter a default against the defendant for failure to plead.
The clerk of the court granted the plaintiff’s motion
on June 1, 2011. The plaintiff then filed a motion for
judgment of strict foreclosure, which the court granted
on November 28, 2011. The court thereupon entered a
judgment of strict foreclosure by setting the law day
for May 1, 2012.
On April 30, 2012, the defendant filed a chapter 13
bankruptcy petition in the United States Bankruptcy
Court for the District of Connecticut in Bridgeport. Pur-
suant to title 11 of the United States Code, § 362, the
filing of the bankruptcy petition operated as an auto-
matic stay of the plaintiff’s foreclosure action. The
bankruptcy court dismissed the defendant’s chapter 13
petition on December 21, 2012. On July 17, 2013, the
plaintiff filed a motion to reset the law days and reenter
judgment in this action pursuant to § 49-15 (b). Before
the court ruled on the motion, however, the defendant
filed a chapter 7 bankruptcy petition. The chapter 7
petition also operated as an automatic stay of this
action. 11 U.S.C. § 362 (2010). On August 28, 2013, the
bankruptcy court issued an order granting the plaintiff
relief from the automatic stay, thereby permitting the
plaintiff to further pursue this action.
On January 26, 2014, the day before the hearing sched-
uled for the plaintiff’s motion to reset the law days and
reenter judgment, the defendant filed a motion to open
the judgment of strict foreclosure and set aside the
default entered against her for failure to plead. In her
motion, the defendant raised the defenses of equitable
estoppel, unconscionability, and unclean hands. Specif-
ically, she alleged that American Mortgage Network,
Inc., the original lender, had engaged in misrepresenta-
tion and predatory lending practices. On that basis, she
requested that the court open the judgment of strict
foreclosure and set aside the default entered against
her.
On the day of the hearing, January 27, 2014, the defen-
dant’s counsel notified the court that the motion to
open the judgment and set aside the default had been
filed. The defendant’s counsel stated: ‘‘Upon receipt of
affidavit of debt in this case, I noticed there had been
no pay down of principal at all during this period of
time and really reviewed the note and found that this
was an interest only note and talked to [the defendant]
more about the circumstances how this mortgage came
about. Where she—and [the defendant] right now she’ll
be I think, I believe, seventy-nine [years old] at the end
of this month. She was about seventy-one when she
entered into this mortgage. At the time, upon informa-
tion and belief, she did have a mortgage, but there was,
we believe, equity in the property. A representative did
come to her home and sold her this mortgage product
which, in fact, has extinguish[ed] any equity in the
house, and has put her in a situation where she’s only
been paying interest. She was earning the same amount
of money she did at the time that she got the mortgage
as she’s doing now as a substitute teacher who wasn’t
even working full time then or she’s working now which
is why she can’t work into modification. So all the
indications of predatory lending are jumping out in this
case. . . . At this point we need the judgment—well,
the judgment, actually, has to be re-entered today if the
court wishes to go forward, but we need the default
set aside so that we can raise these defenses and
develop these defenses.’’
After hearing from the defendant’s counsel, the court
stated: ‘‘Well, you need to move to reopen the judgment
first, don’t you, and then move to set aside the default.’’
The court then considered § 49-15 (b) and decided that,
pursuant to that section, the judgment was already
open.2 The court concluded that ‘‘the defendant does
not have to under [General Statutes §] 52-212 file a
motion to open judgment because under [§] 49-15 (b) it’s
automatically [opened] upon the filing of the deficient
bankruptcy. But the provisions of the judgment, the
findings, remain. But the judgment was reopened.’’ The
hearing on the merits of the defendant’s motion to set
aside the default was scheduled for February 10, 2014.
On February 10, 2014, the court continued the hearing
to March 17, 2014.
On March 17, 2014, the court held the hearing on the
defendant’s motion to set aside the default. The court
made the following findings: ‘‘The court is going to find
that there is no prejudice to the plaintiff if I reopen the
default, because the mediation ended [o]n December
17, 2010. Nothing was filed. A default [for] failure to
plead was filed May 25, 2011. Judgment was filed Sep-
tember 9, 2011 by the plaintiff. It went to judgment on
November 28, 2011. And the bankruptcies occurred.
Then the motion to—that was dismissed on—dismissed
on December 21, 2012. A motion to reset law days after
the dismissal wasn’t filed until July 17, 2013. That
appeared on the short calendar on January 29, 2013;
was not marked ready. Then it appeared on the short
calendar on November 25, 2013, and was not marked
ready. It was also on December 16, 2013, short calendar;
was not marked ready. It was on the January 6, 2014
short calendar; was not marked ready. It appeared on
the January 27, 2014. It was marked ready. And that’s
when we started this discussion. The court’s going to
find that there are viable defenses, albeit—I’m not sure
they’re going to be—I’m not saying that they will be
successful, but they’re viable. And I’ll grant the motion
to open [the default], and overrule the objection.’’ Fol-
lowing the court’s decision to open the default, the
defendant filed an answer and special defenses. The
plaintiff filed a motion to reargue the court’s decision,
which the court denied. This appeal followed.
After the plaintiff filed this appeal, it filed a motion
for articulation with the trial court, requesting that the
court articulate its decision to open the judgment of
strict foreclosure and to set aside the default entered
against the defendant. On June 23, 2014, the court pro-
vided the following articulation: ‘‘The court, in response
to the motion for articulation . . . the court is going
to find . . . [§] 49-15 (b) states on its face that the—
any judgment against the mortgagor foreclosing any
title to real estate by a strict foreclosure shall be opened
automatically without any action by any party or the
court, provided, the provisions of such judgment, i.e.,
the debt, and other provisions of the judgment, other
than the establishment of law days, shall not be set aside
under this subsection . . . so the court articulation is
that the judgment was opened automatically by [§]
49-15.
‘‘A default was not—the default failure to plead was
not opened automatically. So a motion for default,
motion to open the default, needed to be filed, and
that’s what I ruled on. . . . The court found that there
were viable defenses, albeit the court did recognize that
if they were—went to trial, and a court did not believe
the defendant, that they—she would lose . . . . And
so the court found that the defenses that were alleged
were valid defenses to the action. The court . . . went
through a thorough analysis of why there was no preju-
dice, no—no negligence on the behalf of the defendant,
and will rely on what the court said, and [its] decision.’’
I
The plaintiff first claims that the court improperly
opened the judgment of strict foreclosure pursuant to
§ 49-15 (b). Before we address the merits of the plain-
tiff’s claim, we must first determine whether this court
has subject matter jurisdiction over that claim. Specifi-
cally, we must determine whether the decision appealed
from is a final judgment.
‘‘The lack of a final judgment implicates the subject
matter jurisdiction of an appellate court to hear an
appeal. A determination regarding . . . subject matter
jurisdiction is a question of law [over which we exercise
plenary review]. . . . As our Supreme Court has
explained: To consider the [plaintiff’s] claims, we must
apply the law governing our appellate jurisdiction,
which is statutory. . . . The legislature has enacted
General Statutes § 52-263, which limits the right of
appeal to those appeals filed by aggrieved parties on
issues of law from final judgments. Unless a specific
right to appeal otherwise has been provided by statute,
we must always determine the threshold question of
whether the appeal is taken from a final judgment
before considering the merits of the claim. . . . Fur-
ther, we have recognized that limiting appeals to final
judgments serves the important public policy of min-
imizing interference with and delay in the resolution of
trial court proceedings.’’ (Footnote omitted; internal
quotation marks omitted.) J & E Investment Co., LLC
v. Athan, 131 Conn. App. 471, 482–83, 27 A.3d 415 (2011).
‘‘[I]t is well established that an order opening a judg-
ment ordinarily is not a final judgment within § 52-263.
. . . [Our Supreme Court], however, has recognized an
exception to this rule where the appeal challenges the
power of the [trial] court to act to set aside the judg-
ment.’’ (Citations omitted; internal quotation marks
omitted.) Solomon v. Keiser, 212 Conn. 741, 746–47, 562
A.2d 524 (1989); see also Connecticut Light & Power Co.
v. Costle, 179 Conn. 415, 418, 426 A.2d 1324 (1980) (‘‘an
appeal which challenges the power of the court to act
to set aside the judgment may be reviewed’’). In the
present case, the plaintiff challenges the authority of
the court to open the judgment of strict foreclosure.
Accordingly, this court has jurisdiction over the plain-
tiff’s claim.
We now turn to the merits of the plaintiff’s claim
that the court improperly opened the judgment of strict
foreclosure pursuant to § 49-15 (b).3 The plaintiff argues
that § 49-15 (b) limits the court to setting new law days
and does not automatically open the judgment in its
entirety. The defendant, on the other hand, argues that
§ 49-15 (b) automatically opens the entire judgment.
We need not decide whether § 49-15 (b) opens the judg-
ment in its entirety because we conclude that the court
made the necessary findings for the judgment to be
properly opened under § 49-15 (a) (1).
Section 49-15 (a) (1) provides in relevant part: ‘‘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, notwithstanding the limitation
imposed by [General Statutes §] 52-212a . . . provided
no such judgment shall be opened after the title has
become absolute in any encumbrancer . . . .’’ This sec-
tion, then, permits the court, in its discretion, upon a
finding of cause shown, to open and modify a judgment
of strict foreclosure upon the motion of the mortgagor
at any time after judgment has been rendered, so long
as the law days have not passed. Once the law days
have passed, the mortgagee holds absolute title to the
property and the judgment of strict foreclosure cannot
be opened or modified. But see Highgate Condomin-
ium Assn., Inc., v. Miller, 129 Conn. App. 429, 434–35,
21 A.3d 853 (2011) (discussing exceptions).
The defendant filed her motion to open the judgment
of strict foreclosure on January 25, 2014, more than
one year after the initial law day scheduled on May 1,
2012. Following the dismissal of the defendant’s bank-
ruptcy petitions, which operated as an automatic stay
of the judgment of strict foreclosure, the trial court did
not set new law days. Thus, when the defendant filed
the motion to open the judgment of strict foreclosure
in January, 2014, the law days had not passed and the
plaintiff did not hold absolute title to the property.
Section 49-15 (a) (1) also requires the court to make a
finding of ‘‘cause shown’’ in order to open the judgment.
Because the court did not specifically consider § 49-15
(a) (1) when it deemed the foreclosure judgment to be
open, it did not make a specific finding of cause shown
for the purposes of that section. We nevertheless affirm
the court’s ruling opening the judgment of strict foreclo-
sure because we conclude that the court made the nec-
essary findings to open the judgment for cause shown
pursuant to § 49-15 (a) (1) when it found ‘‘good cause’’
to set aside the default entered against the defendant
pursuant to Practice Book § 17-42.
Practice Book § 17-42 states that ‘‘[a] motion to set
aside a default where no judgment has been rendered
may be granted by the judicial authority for good cause
shown upon such terms as it may impose.’’ The court
found good cause to set aside the default entered
against the defendant when it found that the defendant
had raised viable defenses and that there would be no
prejudice to the plaintiff if the default were opened.
The court also found that the defendant had not been
negligent in her defense of the foreclosure action. See
Percy v. Lamar Central Outdoor, LLC, 147 Conn. App.
815, 819, 83 A.3d 1212 (in exercising discretion to open
judgment rendered after default pursuant to Practice
Book § 17-42, ‘‘the trial court may consider not only the
presence of mistake, accident, inadvertence, misfor-
tune or other reasonable cause . . . factors such as
[t]he seriousness of the default, its duration, the reasons
for it and the degree of contumacy involved . . . but
also, the totality of the circumstances, including
whether the delay has caused prejudice to the nonde-
faulting party’’ [internal quotation marks omitted]), cert.
denied, 311 Conn. 932, 87 A.3d 580 (2014). We conclude
that these findings were sufficient for the court to have
also found ‘‘cause shown’’ for the purposes of § 49-15
(a) (1). See Hartford Federal Savings & Loan Assn. v.
Stage Harbor Corp., 181 Conn. 141, 143–44, 434 A.2d
341 (1980) (whether defendant was negligent in failing
to present defense to foreclosure action is relevant fac-
tor in trial court’s decision to open judgment under
§ 49-15 [a] [1]); Centerbank v. Connell, 29 Conn. App.
508, 511, 616 A.2d 282 (1992) (injury to mortgagee if
judgment is opened is relevant factor in trial court’s
decision to open judgment under § 49-15 [a] [1]).
Accordingly, the court’s ruling opening the judgment
of strict foreclosure was not improper.
II
The plaintiff next claims that the court improperly
set aside the default entered against the defendant for
failure to plead. Because the court’s ruling setting aside
the default was interlocutory, the plaintiff has not pre-
sented a final judgment for the purposes of appeal.
Accordingly, we dismiss this claim.
This court may only consider claims on appeal from
final judgments. J & E Investment Co., LLC v. Athan,
supra, 131 Conn. App. 482. As we have previously
explained, the court properly opened the judgment of
strict foreclosure rendered in favor of the plaintiff. Once
the judgment was opened, it was no longer final. The
court then had to decide whether to set aside the default
entered against the defendant. ‘‘A default is not a judg-
ment. It is an order of the court the effect of which
is to preclude the defendant from making any further
defense in the case so far as liability is concerned.’’
Automotive Twins, Inc. v. Klein, 138 Conn. 28, 33, 82
A.2d 146 (1951). In setting aside the default, the court
permitted the defendant to file an answer and any spe-
cial defenses and, in fact, instructed her to do so. The
court’s ruling setting aside the default was interlocu-
tory, as it did not result in a final judgment, and there-
fore we may not review it at this time.
The judgment is affirmed with respect to the court’s
ruling opening the judgment of strict foreclosure and
the case is remanded for further proceedings according
to law. The remainder of the plaintiff’s appeal is dis-
missed.
In this opinion the other judges concurred.
1
The plaintiff filed a corrected complaint, pursuant to court order, on
June 14, 2011. The court ordered the plaintiff to file the corrected complaint
when it granted the plaintiff’s motion to correct its party name. The only
changes in the corrected complaint were to the plaintiff’s party name. All
other factual allegations and requests for relief remained the same.
2
General Statutes § 49-15 (b) provides in relevant part: ‘‘Upon the filing
of a bankruptcy petition by a mortgagor . . . any judgment against the
mortgagor foreclosing the title to real estate by strict foreclosure shall be
opened automatically without action by any party or the court, provided,
the provisions of such judgment, other than the establishment of law days,
shall not be set aside under this subsection, provided no such judgment
shall be opened after the title has become absolute in any encumbrancer
or the mortgagee, or any person claiming under such encumbrancer or
mortgagee. . . .’’
3
The General Assembly enacted § 49-15 (b) in response to the decision
of the United States Court of Appeals for the Second Circuit in In re Canney,
284 F.3d 362, 366–67 (2002), which involved a bankruptcy stay. See 45
H.R. Proc., Pt. 13, 2002 Sess., p. 4158, remarks of Representative William
A. Hamzy.