Opinion
No. CV-08-5022527
July 30, 2009
MEMORANDUM OF DECISION RE MOTION TO STRIKE
This is an action seeking foreclosure of a mortgage in which defendants have raised numerous special defenses. By revised Motion dated March 27, 2009, plaintiff seeks to strike defendants' Third through Fourteenth Special Defenses. Defendants filed an Objection dated April 8, 2009 and the parties presented oral argument before the court on May 4, 2009.
I Motion to Strike Standards in Foreclosure Actions
"A motion to strike challenges the legal sufficiency of a pleading, and, consequently, requires no factual findings by the trial court." Bernhard-Thomas Building Systems, LLC v. Dunican, 286 Conn. 548, 552-53 (2008). "The allegations of the pleading involved are entitled to the same favorable construction a trier would be required to give in admitting evidence under them and if the facts provable under its allegations would support a defense or a cause of action, the motion to strike must fail." Mingachos v. CBS, Inc., 196 Conn. 91, 108-09 (1985).
"[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 determination of what equity requires in a particular case, the balancing of the equities, is a matter for the discretion of the trial court . . . Historically, defenses to a foreclosure action have been limited to payment, discharge, release or satisfaction . . . or, if there had never been a valid lien . . . The purpose of a special defense is to plead facts that are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action . . . A valid special defense at law to a foreclosure proceeding must be legally sufficient and address the making, validity or enforcement of the mortgage, the note or both . . . Where the plaintiff's conduct is inequitable, a court may withhold foreclosure on equitable considerations and principles . . . Furthermore, if the mortgagor is prevented by accident, mistake or fraud, from fulfilling a condition of the mortgage, foreclosure cannot be had . . ." (Citations omitted; internal quotation marks omitted.) LaSalle National Bank v. Shook, 67 Conn.App. 93, 96-97 (2001).
Based on the foregoing, the court finds that all of defendants' Special Defenses relate to alleged inequitable behavior surrounding the mortgage transaction and, as a result, are not susceptible to a motion to strike solely on the basis that they do not concern the payment, discharge, release, satisfaction or invalidity of the mortgage at issue.
II Special Defenses That Set Forth Legal Conclusions
Plaintiff argues that because the many of defendant's special defenses, specifically the Third, Fourth, Fifth, Sixth and Seventh Special Defenses, state legal conclusions unaccompanied by any facts specific to the dispute at issue, they are legally insufficient and should be stricken. Unfortunately, there is no clear appellate authority on the issue of whether a bald legal conclusion constitutes a legally sufficient special defense. To complicate matters further, there has long been a split of authority on this issue at the Superior Court level. See, Cluney v. Regional School District No. 13, Judicial District of Middlesex at Middletown, Docket No. 99-0089468 (Gordon, J., June 19, 2000) [ 27 Conn. L. Rptr. 415].
The court concludes, however, that the better reasoned Superior Court cases support the argument that the relevant Practice Book language requires, at a minimum, at least some recital of facts specific to the case at issue: "`Each pleading shall contain a plain and concise statement of the material facts on which the pleader relies.' Practice Book § 10-1. `Facts that are consistent with such statements but show, notwithstanding, that the plaintiff has no cause of action, must be specifically alleged.' Practice Book § 10-50. `The fundamental purpose of a special defense, like other pleadings, is to apprise the court and opposing counsel of the issues to be tried, so that the basic issues are not concealed until the trial is underway.' Bennett v. Automobile Insurance Co. of Hartford, 230 Conn. 795, 802 (1994)." Id. See, also, SNET Information Services, Inc. v. A Premier Limousine Service, Inc., Judicial District of New Haven at New Haven, Docket No. CV 07-5015163 (Cosgrove, J., August 13, 2008): "The brief review of the Practice Book sections directed toward the filing of answers or special defenses leads the court to the conclusion that when a party files a special defense it must identify `the material facts on which the pleader relies.' Practice Book § 10-1."
Based on the foregoing, the court finds that the total absence of any factual allegations specific to this dispute in defendants' Third Special Defense renders it legally insufficient and plaintiff's Motion to Strike the Third Special Defense is hereby granted. As relates to defendants' Fourth, Fifth, Sixth and Seventh Special Defenses, the court finds that each contains a sufficient recitation of facts specific to this dispute and plaintiff's Motion to Strike defendants' Fourth, Fifth, Sixth and Seventh Special Defenses is hereby denied.
III CUTPA Special Defenses
Plaintiff also argues that the Eighth, Ninth, Tenth and Fourteenth Special Defenses, which assert violations of the Connecticut Unfair Trade Practices Act ("CUTPA"), Connecticut General Statutes § 42-110a et seq., are legally insufficient because they are more properly brought as counterclaims. The court acknowledges a split of authority on this issue at the Superior Court level, but agrees that since CUTPA claims by their very nature constitute claims for damages, they are properly brought as counterclaims rather than special defenses. As plaintiff's counsel eloquently stated at oral argument, "CUTPA is a sword rather than a shield." See, GE Capital Mortgage v. Klett, Judicial District of Hartford-New Britain at Hartford, Docket No. CV 95-0552540 (February 21, 1996, Satter, J.T.R.) [ 16 Conn. L. Rptr. 186]. As a result, plaintiff's Motion to Strike defendants' Eighth, Ninth, Tenth and Fourteenth Special Defenses is hereby granted.
IV Special Defense Alleging Breach of Implied Covenant of Good Faith and Fair Dealing
Defendants' Eleventh Special Defense alleges that the mortgage transaction breached an implied covenant of good faith and fair dealing. While it is practically axiomatic that such a defense is not available in a foreclosure action, defendants point to the recent Superior Court case of Robinson v. Robinson, Judicial District of Tolland, Docket No. CV 08-5003041 (January 23, 2009, Sferrazza, J.), which raises the strong possibility that the underlying precedent for this venerable legal maxim may have been cited in an overly expansive manner by succeeding appellate opinions. As a result, absent further appellate authority on the issue, the court is unwilling to strike defendants' Eleventh Special Defense.
V Special Defenses Alleging Unconscionability
Plaintiff claims that defendants' Twelfth and Thirteenth Special Defenses are redundant of their Sixth Special Defense, all of which contain allegations of unconscionability. Upon review of the three Special Defenses at issue, the court finds them to be virtually indistinguishable in all relevant respects and, as a result, plaintiff's Motion to Strike defendant's Twelfth and Thirteenth Special Defenses are hereby granted.
VI Special Defenses Directed at the Actions of Plaintiff's Assignor
Plaintiff argues that since all of the Special Defenses at issue are directed at the behavior of plaintiff's assignor in relation to the mortgage transaction, the Special Defenses cannot be asserted against plaintiff in this action. While there is certainly authority supporting plaintiff's argument, in view of recent examples of irresolute behavior in the mortgage market, the court finds that there are significant public policy considerations that militate against allowing assignees of mortgages to foreclose without having to answer for the alleged sins of their assignors. See, Aames Capital Corp. v. Stinson, Judicial District of New Britain at New Britain, Docket No. CV 98-0490011 (September 1, 2000, Kocay, J.).
VII Conclusion
Plaintiff's Motion to Strike defendants' Third, Eighth, Ninth, Tenth and Fourteenth Special Defenses are hereby granted. Plaintiff's Motion to Strike defendants' Fourth, Fifth, Sixth, Seventh, Eleventh Twelfth and Thirteenth Special Defenses are hereby denied.