Sovereign Bank v. Licata

977 A.2d 228, 116 Conn. App. 483, 2009 Conn. App. LEXIS 369
CourtConnecticut Appellate Court
DecidedAugust 18, 2009
DocketAC 28286
StatusPublished
Cited by16 cases

This text of 977 A.2d 228 (Sovereign Bank v. Licata) is published on Counsel Stack Legal Research, covering Connecticut Appellate Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sovereign Bank v. Licata, 977 A.2d 228, 116 Conn. App. 483, 2009 Conn. App. LEXIS 369 (Colo. Ct. App. 2009).

Opinion

Opinion

BISHOP, J.

The substitute plaintiff, Seven Oaks Partners, LP (Seven Oaks), appeals from the judgment of the trial court, rendered after a jury verdict, in favor of the defendant Cynthia Licata 1 on her counterclaim alleging a violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et *486 seq., 2 and negligent misrepresentation. 3 Seven Oaks claims that the court improperly failed to grant its motions to set aside the verdict and for judgment notwithstanding the verdict with respect to the counts of the defendant’s counterclaim alleging a violation of CUTPA and negligent misrepresentation. Additionally, Seven Oaks claims that the court incorrectly failed to order a remittitur of the jury’s damage award on the misrepresentation claim, improperly failed to sustain its objection to the defendant’s claim for a jury trial on her counterclaim and improperly permitted the defendant’s expert to testify with respect to damages. 4 We reverse in part and affirm in part the judgment of the trial court.

The following procedural and factual history sets the context for our discussion of the issues on appeal. The defendant owned a parcel of property located at 23 Meeting House Road (parcel A) in Greenwich, and her husband, James Licata, 5 owned a vacant lot across the street (parcel B). 6 On March 16, 2001, James Licata executed a promissory note in conjunction with entering into a loan agreement to borrow $2.5 million from *487 the plaintiff, Sovereign Bank. The loan was secured by an open-ended mortgage deed and promissory note, by which the defendant and James Licata granted Sovereign Bank a first mortgage on the two parcels of land. As an additional assurance, First Connecticut Consulting Group, Inc. (First Connecticut), guaranteed payment of the loan by executing and delivering to Sovereign Bank a guaranty promising the due and punctual payment of the loan. James Licata failed to make timely monthly payments on the loan and eventually defaulted. In response, Sovereign Bank demanded payment in full of the sum due under the loan and, on March 19, 2002, commenced proceedings seeking a judgment of foreclosure and possession of both parcels, a deficiency judgment against James Licata and money damages against First Connecticut for its failure to pay the amount due under the guaranty.

On May 6, 2002, the defendant filed an answer and special defense, alleging that the open-ended mortgage and promissory note were invalid and not enforceable because she did not willingly and knowingly execute them, and that their execution was the result of Sovereign Bank’s breach of the implied covenant of good faith and fair dealing.

On June 27, 2003, Sovereign Bank moved for summary judgment against the defendant, alleging that (1) there were no genuine issues of material fact concerning the allegations raised in its complaint, (2) the conclusions contained in the defendant’s special defense were legally insufficient because they were not supported by factual allegations and (3) the allegation that Sovereign Bank violated the implied covenant of good faith and fair dealing was legally insufficient. The court granted Sovereign Bank’s summary judgment motion as to liability on the note and mortgage as to parcel A.

On July 24, 2003, Sovereign Bank assigned the note, mortgage, guaranty and all related loan documents to *488 Seven Oaks. James Licata had requested that Seven Oaks purchase the mortgage and note to avoid foreclosure and the attendant loss of the properties. That same day, the defendant and Seven Oaks entered into a forbearance agreement, which was memorialized in a letter of understanding. The agreement, which was signed by both parties, provided that the defendant would place a sum equal to twelve months of interest payments and closing costs into an escrow account and from that account she would pay interest on the outstanding principal of the mortgage to Seven Oaks. The defendant further agreed to pay the mortgage in full on or before July 24, 2004. For its part, Seven Oaks agreed to charge interest to the defendant at a rate equal to the default interest rate then being charged by Sovereign Bank or 6 percent, whichever was greater. The agreement further stated that by June 15, 2004, the defendant would make arrangements either to sell or refinance the property, and, if she failed to do so, Seven Oaks could foreclose immediately and the defendant would waive all objections, impediments or delays to foreclosure. On August 8, 2003, the defendant signed a letter of understanding indicating that she had deposited the sum of $185,773.67 into an escrow account for the purposes of funding the closing costs and it being drawn on for monthly interest payments in servicing the mortgage as contemplated by the July 24 agreement.

Notwithstanding the terms of the parties’ agreement, the defendant failed to pay the mortgage in full by July 24, 2004. Accordingly, on August 30, 2004, Seven Oaks moved to be substituted as the plaintiff in this action in place of Sovereign Bank, and, once this was accomplished, it then continued the foreclosure action.

On September 29, 2005, the defendant filed revised, amended special defenses and a counterclaim against Seven Oaks. The first special defense alleged that she and Seven Oaks had entered into a written and oral *489 forbearance agreement in which Seven Oaks had agreed to forbear a claim for default and to withdraw the foreclosure action, and, in consideration, the defendant agreed to place $187,000 into an escrow account from which she would make monthly interest payments of $13,400. The defendant further alleged that even though she had fulfilled her obligations under the agreement, Seven Oaks had not withdrawn the foreclosure action. The second special defense alleged that Raymond Chodos was the managing partner of Seven Oaks and that he had solicited the defendant to become her paid financial adviser. It alleged that Chodos had gained the defendant’s confidence and that she had come to rely on his advice. It further alleged that Chodos had advised the defendant not to pay off the loan under foreclosure as contemplated in the forbearance agreement and that he, instead, persuaded her to sign a sales contract to sell her home for a price insufficient to pay the encumbrances on her property. The defendant claimed that as a result of the advice she had received from Chodos and her reliance on it, she was unable to sell her home, to pay encumbrances, to clear an environmental lien and to refinance her mortgage as contemplated in the forbearance agreement. The defendant further claimed that Seven Oaks violated General Statutes §§ 36a-498a et seq. and 36a-749b 7 because its amended promissory note resulted in a high cost loan that exceeded 50 percent of the defendant’s income.

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Cite This Page — Counsel Stack

Bluebook (online)
977 A.2d 228, 116 Conn. App. 483, 2009 Conn. App. LEXIS 369, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sovereign-bank-v-licata-connappct-2009.