Summary
In Provident Bank v. Lewitt, 84 Conn. App. 204, 208, 852 A.2d 852, cert. denied, 271 Conn. 924, 859 A.2d 580 (2004), however, this court held that the filing of the defendant's bankruptcy petition did not invoke the automatic stay provision of 11 U.S.C. § 362 (a) (2012) but, rather, extended the time for her to redeem only by sixty days from the day the defendant filed her petition, pursuant to 11 U.S.C. § 108 (b) (2012).
Summary of this case from U.S. Bank v. MamudiOpinion
No. (AC 24285).
The plaintiff bank sought to foreclose a mortgage on certain property of the defendant. The trial court rendered a judgment of strict foreclosure. Before the passing of the law day, the defendant filed a bankruptcy petition and sought an extension of the law day, which was granted, thereby extending the law day sixty days. After the defendant failed to redeem by the extended law day, title vested in the plaintiff, and, thereafter, the plaintiff appealed to this court. Held:
1. The defendant's claim to the contrary notwithstanding, the period of equitable redemption was not stayed indefinitely under the automatic stay provision of the United States Bankruptcy Code ( 11 U.S.C. § 362 [a]) as a result of the filing of her bankruptcy petition, but rather was extended by sixty days from the day the petition was filed under the applicable bankruptcy provision ( 11 U.S.C. § 108 [b]), and because she failed to redeem by the time the sixty day extended period had lapsed, she no longer had any right or interest in the property and title vested absolutely in the plaintiff.
2. The law of bankruptcy having afforded the defendant notice that her law day was extended only sixty days past the date of the filing of her bankruptcy petition and the defendant having filed her appeal after the running of that day and the vesting of absolute title in the plaintiff, there was no practical relief that this court could grant her and the appeal, therefore, was moot; accordingly, the defendant's claim that the trial court improperly failed to provide her with adequate notice of the vesting of title and with proper certification of the pleadings was not reviewable.
Argued May 3, 2004.
Officially released July 27, 2004.
Action to foreclose a mortgage on certain of the defendant's real property, and for other relief, brought to the Superior Court in the judicial district of New Britain, where the court, Wiese, J., granted the plaintiffs motion for a judgment of strict foreclosure; thereafter, the court, Bryant, J., granted the defendant's motion to open the judgment and to set a new law day; subsequently, the court, Quinn, J., granted the defendant's motion to open the judgment and to set a new law day; thereafter, the defendant filed a motion for articulation and appealed to this court; subsequently, the court, Dunnell, J., issued an articulation of the court's decision. Appeal dismissed.
Ellen Lewitt, pro se, the appellant (defendant).
David F. Borrino, for the appellee (plaintiff).
Opinion
The defendant, Ellen Lewitt, appeals from the trial court's judgment of strict foreclosure rendered in connection with a foreclosure action brought by the plaintiff, Provident Bank. On appeal, the defendant claims that the court improperly (1) allowed title in the property to vest in the plaintiff and (2) failed to provide the defendant with adequate notice of the vesting of title and proper certification of the pleadings. The foreclosure decree became absolute on March 13, 2003, and title vested in the plaintiff. Therefore, we dismiss the defendant's appeal.
In light of our decision that the appeal is moot, it is unnecessary to address the plaintiffs claim that the defendant's appeal is from the trial court's inaction on her motion for articulation and is therefore not from a final judgment.
The plaintiff instituted a mortgage foreclosure action against the defendant's property in New Britain on February 19, 2002, and a judgment of strict foreclosure entered on April 15, 2002. After the judgment was opened several times, the law day was set for January 13, 2003. On January 9, 2003, the defendant filed a chapter 7 bankruptcy petition. Although not required to do so by any rule, the plaintiff filed a notice of the extension of the law day until March 10, 2003, with the clerk of the Superior Court in response to the defendant's filing of her bankruptcy petition. Title vested in the plaintiff after the defendant failed to redeem by the extended law day. The plaintiff recorded a certificate of foreclosure on the land records in New Britain on March 13, 2003.
I
The defendant argues that the filing of her chapter 7 bankruptcy petition prior to her law day indefinitely stayed her redemption period by invoking the automatic stay provision of 11 U.S.C. § 362 (a). We are unpersuaded. The filing of the defendant's bankruptcy petition extended the time for her to redeem only by sixty days from the day she filed her petition, pursuant to 11 U.S.C. § 108 (b).
Section 362 (a) of title 11 of the United States Code provides in relevant part: "[A] petition filed under section 301, 302, or 303 of this title . . . operates as a stay, applicable to all entities, of . . . (2) the enforcement, against the debtor or against the property of the estate, of a judgment obtained before the commencement of the case under this title; (3) any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate. . . ."
Section 108 (b) of title 11 of the United States Code provides in relevant part: "[I]f . . . an order entered in a nonbankruptcy proceeding, or an agreement fixes a period within which the debtor . . . may file any pleading, demand, notice, or proof of claim or loss, cure a default, or perform any other similar act, and such period has not expired before the date of the filing of the petition, the trustee may only file, cure, or perform, as the case may be, before the later of — (1) the end of such period . . . or (2) 60 days after the order for relief."
We recognize that Connecticut courts consistently have held that the indefinite automatic stay provisions of § 362 (a) apply in strict foreclosure cases where a chapter 7 bankruptcy petition was filed after the judgment but prior to the passing of the final law day. See, e.g., Citicorp Mortgage, Inc. v. Mehta, 39 Conn. App. 822, 824, 668 A.2d 729 (1995). We conclude that we no longer can follow such authority in light of the holding of the United States Court of Appeals for the Second Circuit in In re Canney, 284 F.3d 362 (2d Cir. 2002). "In general, we look to the federal courts for guidance in resolving issues of federal law. . . . [T]he decisions of the federal circuit in which a state court is located are entitled to great weight in the interpretation of a federal statute." (Citation omitted; internal quotation marks omitted.) Krondes v. O'Boy, 69 Conn. App. 802, 808, 796 A.2d 625 (2002).
In re Canney involved a mortgage foreclosure brought in Vermont under the Vermont statutes. See 12 Vt. Stat. Ann., c. 163, subchapter 6. In In re Canney, the Second Circuit determined that the sixty day stay period set forth in § 108 (b) applied to the passing of the law day rather than the indefinite stay period prescribed in § 362 (a) when a petitioner filed a bankruptcy petition after judgment had entered but prior to the passing of the law day in a strict foreclosure action. In re Canney, supra, 284 F.3d 370-73. Agreeing with the United States Courts of Appeal in the Sixth, Seventh and Eighth Circuits, the court held that § 108 (b), which provides for only a sixty day delay in the running of the law day, is the applicable provision because the automatic stay provision of § 362 (a) "prevents only certain affirmative acts taken by a creditor, and the running of time is not one of those acts." Id., 372.
Section 108 (b) is contained in chapter 1 of the United States Bankruptcy Code and "[e]xcept as provided in section 1161 [railroad reorganization] of this title, chapters 1, 3, and 5 of this title apply in a case under chapter 7, 11, 12, or 13 of this title." 11 U.S.C. § 103 (a). Therefore, although the bankruptcy petition in In re Canney was filed under chapter 13, the logic of the decision applies to the chapter 7 bankruptcy petition in this case.
Although In re Canney concerned strict foreclosure under Vermont's statutes, our statutory procedures are similar. "Strict foreclosure is the normal method of foreclosure only in Connecticut and Vermont." (Internal quotation marks omitted.) Id., 369. When a strict foreclosure rather than a sale is ordered, it entails a foreclosure judgment in favor of the mortgagee that results from a proceeding against the debtor and leaves the mortgagor with a right to redeem within a specified time frame, ending with the law day. See Citicorp Mortgage, Inc. v. Weinstein, 52 Conn. App. 348, 350, 727 A.2d 720 (1999). Because Connecticut and Vermont both allow redemption during a specified time period after which title automatically passes to the mortgagee, the reasoning in In re Canney, arising out of the Vermont foreclosure, applies to this Connecticut foreclosure with equal force.
"Strict foreclosure does not involve a foreclosure sale. Upon the borrower's default, the court will normally set a time period in which the borrower may pay off or redeem the mortgage debt. If the borrower fails to do so in the allotted time, the lender is given an immediate right to possession of the property." (Internal quotation marks omitted.) In re Canney, supra, 284 F.3d 368-69 n. 6.
We conclude that the defendant's period of equitable redemption was not stayed when she filed a chapter 7 bankruptcy petition, although it was extended by sixty days after the filing of the petition. The defendant's bankruptcy petition was filed on January 9, 2003. The practical effect of § 108 (b) is that the time in which a trustee (or if the bankruptcy petition is dismissed, the mortgagor) may cure a default or perform any other similar act expires at the end of the period settled for redemption or sixty days after the order for relief. The commencement of a voluntary bankruptcy case through the filing of a petition constitutes an order for relief. 11 U.S.C. § 301. In this case, the equity of redemption was foreclosed on March 10, 2003, when the sixty day extended period lapsed without redemption by the defendant. Title became absolute in the plaintiff on March 13, 2003, the date the certificate of foreclosure was recorded on the land records. Thus, because the defendant failed to redeem during this period, she no longer had any right or interest in the property and title passed to the plaintiff.