Ral Management, Inc. v. Valley View Associates

899 A.2d 586, 278 Conn. 672, 2006 Conn. LEXIS 218
CourtSupreme Court of Connecticut
DecidedJune 27, 2006
DocketSC 17438
StatusPublished
Cited by52 cases

This text of 899 A.2d 586 (Ral Management, Inc. v. Valley View Associates) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ral Management, Inc. v. Valley View Associates, 899 A.2d 586, 278 Conn. 672, 2006 Conn. LEXIS 218 (Colo. 2006).

Opinion

*674 Opinion

KATZ, J.

The sole issue in this certified appeal is whether the Appellate Court properly dismissed as moot the appeal of the defendants, Valley View Associates and Kings Highway Associates, 1 from the trial court’s judgment of strict foreclosure in favor of the plaintiff, RAL Management, Inc. More specifically, the issue is whether the opening and reentry of a judgment of strict foreclosure to set new law days and to revise the amount of the debt, while an appeal from that judgment is pending and a stay of the judgment is in effect, rendered the appeal moot. The defendants contend that the Appellate Court improperly concluded that, under Milford Trust Co. v. Greenberg, 137 Conn. 277, 77 A.2d 80 (1950), the trial court’s actions had rendered void the original judgment from which the plaintiff appealed and thus mooted the appeal. RAL Management, Inc. v. Valley View Associates, 88 Conn. App. 430, 432, 872 A.2d 462 (2005). We conclude that the defendant’s appeal is not moot and, accordingly, we reverse the Appellate Court’s judgment.

The record reflects the following facts and procedural history. On July 23, 1998, the defendants entered into a $250,000 loan transaction with the plaintiffs assignor, Timothy McDonald. Pursuant to that transaction, the defendants executed a* promissory note payable to McDonald in the principal sum of $87,000, with payment due on or before July 20, 1999. The $87,000 note provided for an annual interest rate of 6 percent, but upon default, the interest rate would increase to 30 percent per month. Also pursuant to the loan transaction, the *675 defendants guaranteed a $163,000 promissory note payable to McDonald that had been executed by a related party, Kersten Rigi (Rigi note). See footnote 1 of this opinion. The Rigi note did not provide for a default rate of interest. To secure both the note and guarantee, the defendants mortgaged to McDonald real property located at 320-322 Kings Highway in North Haven.

On July 28, 2000, McDonald assigned his interest in the notes and mortgage to the plaintiff. On April 3,2001, claiming that the principal and interest due on July 20, 1999, under both notes had not been paid, the plaintiff exercised its right under the mortgage and notes to declare the entire balance due, and sought to foreclose on the mortgage and to obtain a deficiency judgment against the defendants. On July 9, 2001, the defendants were defaulted for failure to plead. On February 27, 2003, the plaintiff filed a motion for a judgment of strict foreclosure. 2 On March 19, 2003, the defendants filed an answer and three special defenses, essentially premised on the 30 percent per month default rate in the $87,000 note, contending that: (1) the terms of the note, guarantee and mortgage were unconscionable and usurious; (2) the note, guarantee and mortgage were invalid and unenforceable because of mutual mistake; and (3) the plaintiff was not entitled to a judgment of strict foreclosure because of unclean hands, breach of the duty of good faith and fair dealing and unfair trade practices.

On May 5, 2003, the trial court heard and granted the plaintiffs motion for judgment of strict foreclosure. The court determined the amount of the debt to be $191,167.50 on the basis of the affidavit of debt filed *676 by the plaintiff. That affidavit pertained only to the $87,000 note and reflected a 30 percent per annum default interest rate, not a 30 percent per month default rate. The defendants were not present at the hearing on the motion, thereafter claiming that they had not received notice of the hearing.

On May 23, 2003, the defendants filed a motion to reargue the judgment of strict foreclosure, which was heard on July 3, 2003. 3 At a hearing on the motion, the defendants argued that the note was unconscionable and usurious because it contained the default interest rate of 30 percent per month. In response, the plaintiff explained that, despite an earlier demand for payment based on the 30 percent per month default rate of interest; see footnote 2 of this opinion; the law firm that drafted the note had informed the plaintiff that the 30 percent per month reflected in the note was a scrivener’s error that should have read 30 percent per year. Before the court rendered its decision on the defendants’ motion to reargue, the defendants filed a motion to open the judgment of strict foreclosure, alleging that there was no evidentiary basis for the court’s judgment as to the amount of the debt, specifically, as to the reformed interest rate. On August 4, 2003, after a hearing, the court granted the defendants’ motion to open, but ordered reentry of a judgment of strict foreclosure, set a law day of September 22, 2003, and again set the debt at $191,167.50.

On August 20, 2003, the defendants appealed from the August 4, 2003 judgment of strict foreclosure to the Appellate Court, which initiated an automatic stay of the foreclosure. See Practice Book § 61-11 (a). On September 30, 2003, the plaintiff filed a motion to terminate the automatic stay pursuant to Practice Book § 61-11 *677 (c) and (d). On October 30, 2003, the trial court granted the motion to terminate the stay.

On November 10, 2003, the defendants timely filed in the Appellate Court a motion for review of the trial court’s order terminating the automatic stay. On December 1, 2003, the plaintiff filed a new motion for a judgment of strict foreclosure with the trial court. 4 On December 9, 2003, the Appellate Court denied the motion for review. On December 19, 2003, the defendants timely filed a motion for reconsideration of the denial of their motion for review, claiming that they would be deprived of their right to appeal if the judgment were executed. On December 22, 2003, the trial court granted the plaintiffs motion for judgment of strict foreclosure and set a new law day of February 23, 2004. The court also revised the debt to $423,735.98, based on the plaintiffs amended affidavit of debt that then also included the $163,000 Rigi note.

On January 14, 2004, however, the Appellate Court granted the defendants’ December 19, 2003 motion for reconsideration of its denial of their motion for review of the trial court’s termination of the automatic stay. Thereafter, the Appellate Court ordered the trial court to articulate the basis of its decision to terminate the automatic stay and its factual and legal basis for reforming the $87,000 note. After the court issued its articulation, on July 8, 2004, almost seven months after the trial court had opened the judgment and set new law days, the Appellate Court granted the defendants’ motion for review and vacated the order of the trial court terminating the automatic stay.

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Bluebook (online)
899 A.2d 586, 278 Conn. 672, 2006 Conn. LEXIS 218, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ral-management-inc-v-valley-view-associates-conn-2006.