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WELLS FARGO BANK, N.A. v. OWEN—DISSENT
FLYNN, J., dissenting. Those who have sat in the
busy trial courts engaged in the challenging business
of what Whittier once described as the ‘‘doubtful bal-
ance of rights and wrongs,’’ know that some cases merit
a second look on appeal. In my view, this case requires
such a second look. In late 2005, the defendants Marlene
E. Owen and William S. Owen executed two mortgages
on their 22 Bayberry Hill Road property, including the
mortgage that is the subject of this foreclosure action,
in favor of Mortgage Electronic Registration Systems,
Inc., as nominee for WMC Mortgage Corporation
(WMC).1 The subject mortgage later was assigned to
the plaintiff, Wells Fargo Bank, N.A., as Trustee for the
Holders of the Merrill Lynch Mortgage Investors Trust,
Mortgage Loan Asset-Backed Certificates, Series 2006-
WMCI, in September, 2012. After the mortgage pay-
ments proved unsustainable for the defendants, the
plaintiff commenced this action and ultimately obtained
a judgment of strict foreclosure on May 18, 2015. A few
months later, after retaining a lawyer, the defendants
moved to open the judgment of strict foreclosure pursu-
ant to General Statutes § 49-152 in an attempt to save
their home. In support of their motion, the defendants
submitted a sworn affidavit—along with a federal tax
return and their original mortgage loan application—
averring that they were fraudulently induced into exe-
cuting the two mortgages; see footnote 1 of this dis-
senting opinion; by an agent of the plaintiff’s
predecessor in interest, WMC. After hearing arguments,
the trial court denied the defendants’ motion to open
on the papers. In my view, this was a mistake. The
affidavit, together with the attachments, set forth more
than mere unsupported allegations of fraud. Arguably,
these submissions were sufficient to warrant opening
the judgment. In any event, the defendants certainly
satisfied their threshold burden of presenting more than
unsubstantiated speculation. Therefore, the court rea-
sonably should have set the motion down for an eviden-
tiary hearing. Accordingly, I would reverse the court’s
judgment and remand the case for further proceedings.
I acknowledge that where, as in the present case, ‘‘a
party seeks to open and vacate a judgment based on
new evidence allegedly showing the judgment is tainted
by fraud, he must show, inter alia, that he was diligent
during trial in trying to discover and expose the fraud,
and that there is clear proof of that fraud.’’3 (Internal
quotation marks omitted.) Chapman Lumber, Inc. v.
Tager, 288 Conn. 69, 107, 952 A.2d 1 (2008). Our case
law recognizes, however, that parties seeking to open
a judgment on the basis of fraud need only make a
threshold showing substantiating their claim beyond
mere speculation or suspicion; upon making that show-
ing, they become entitled to an evidentiary hearing to
determine whether clear proof of the fraud exists. In
Tyler E. Lyman, Inc. v. Lodrini, 78 Conn. App. 684,
690, 828 A.2d 681, cert. denied, 266 Conn. 917, 833 A.2d
468 (2003), this court held that ‘‘[b]ecause the [trial]
court’s exercise of discretion in ruling on the motion
to open [the judgment] was dependent on the disputed
factual issue of fraud, due process required that the
[trial] court hold an evidentiary hearing on that issue.
. . . The [trial] court, therefore, abused its discretion
in ruling on the matter without affording the parties
the opportunity to present evidence with regard to the
defendant’s fraud claim.’’ (Citation omitted.) In Chap-
man Lumber, Inc. v. Tager, supra, 69, our Supreme
Court rejected the defendant’s claim that the trial court
abused its discretion by denying his motion to open
without first conducting an evidentiary hearing because
it was ‘‘obvious . . . that the defendant had no evi-
dence in support of his allegations [of fraud], but rather,
sought to go on a fishing expedition in the hope of
discovering some.’’ Id., 108. Significantly, however, the
court did not foreclose the proposition that a party
could be entitled to a hearing under other circum-
stances, observing that ‘‘[t]o be entitled to a hearing,
the defendant needed to make some threshold showing
that his claims had substance, which he failed to do.’’
(Emphasis added.) Id. Indeed, this court previously has
approved a trial court’s position that ‘‘[i]f the plaintiff
was able to substantiate her allegations of fraud beyond
mere suspicion, then the court would open the judg-
ment for the limited purpose of discovery, and would
later issue an ultimate decision on the motion to open
after discovery had been completed and another hear-
ing held.’’ Oneglia v. Oneglia, 14 Conn. App. 267, 270,
540 A.2d 713 (1988).4
This rule entitling parties to an evidentiary hearing
after making the requisite threshold showing makes
good sense—requiring parties to demonstrate ‘‘clear
proof’’ of the fraud based solely on affidavits and the
paper record, without an evidentiary hearing, will in
many cases be an insurmountable burden. This is
because fraud claims inevitably involve ‘‘questions of
motive, intent and subjective feelings and reactions’’;
(internal quotation marks omitted) Barasso v. Rear Still
Hill Road, LLC, 81 Conn. App. 798, 806, 842 A.2d 1134
(2004); and affidavits setting forth only one party’s ver-
sion of the facts can sometimes be deemed inadequate
to prove such issues. See id. Our Supreme Court has
observed that the ‘‘summary judgment procedure is par-
ticularly inappropriate’’ for resolving questions of fraud-
ulent intent. Town Bank & Trust Co. v. Benson, 176
Conn. 304, 309, 407 A.2d 971 (1978). Rather, ‘‘[i]t is only
when the witnesses are present and subject to cross-
examination that their credibility and the weight to be
given to their testimony can be appraised.’’ (Internal
quotation marks omitted.) Barasso v. Rear Still Hill
Road, LLC, supra, 806. In light of this practical reality,
in-court testimony is sometimes necessary to determine
whether ‘‘clear proof’’ of the fraud exists.
Applying these principles, even if the court concluded
that the affidavit and its supporting documents were
not enough, standing alone, to warrant opening the
judgment, I do not believe that the court reasonably
could have concluded that the defendants had not met
the threshold for entitlement to a further evidentiary
hearing on their motion to open. In his sworn affidavit,
William attested to the following facts concerning the
making of the mortgages: (1) that before executing the
two mortgages, he expressed concerns about his ability
to afford them, particularly because they represented
100 percent financing on the property, required greater
monthly payments than he was used to, and carried a
substantial $45,457.89 balloon payment;5 (2) that an
agent of WMC convinced him to ignore such concerns
by falsely claiming that similarly structured mortgages
‘‘were common and usual’’ and that, ‘‘based on the value
of the property,’’ he could ‘‘certainly’’ refinance the
mortgages to avoid the balloon payment; (3) that he
would not have agreed to the mortgage loans, given
their ‘‘substantial initial costs and unaffordable bur-
dens,’’ but for these misrepresentations; and (4) that
WMC falsely listed Marlene’s monthly income as $5000
in the loan application when in fact it was only $2100.
The defendants also submitted copies of their loan
application and Marlene’s 2004 tax returns, showing
that she earned just over $2100 per month that year,
and that her income was listed as $5000 on the applica-
tion. The plaintiff never filed a counteraffidavit rebut-
ting any of the defendants’ assertions, nor did it offer
any rebuttal testimony or documentary evidence. Argu-
ments by the plaintiff’s counsel in opposition are not
sworn, and are not evidence.
The defendants’ submissions raised a substantial
question about whether the defendants were fraudu-
lently induced into entering the two mortgages. Indeed,
this court recently has held that knowingly false state-
ments to a borrower about the affordability of a loan
can form the basis for a claim of fraud in the induce-
ment. See Bank of America, N.A. v. Aubut, 167 Conn.
App. 347, 382–83, 143 A.3d 638 (2016). That the defen-
dants presented documentary evidence suggesting that
Marlene’s income was improperly inflated—by almost
140 percent—bolsters their claim that the ultimate judg-
ment of strict foreclosure was tainted by fraud. I also
do not agree with the majority’s characterization of
William’s affidavit as mere ‘‘allegations’’ of fraud. Sworn
statements of fact set forth in an affidavit, concerning
matters about which the affiant has personal knowl-
edge, are not mere allegations entitled to no weight;
they are actual evidence of the truth of those facts.
That our judicial system accords affidavits the weight
of evidence in a variety of contexts bears that out.
Indeed, the plaintiff in the present case proved the
underlying mortgage debt by submitting an affidavit of
debt. In the marital dissolution context, this court held
that a defendant’s child support guidelines worksheet
was sufficiently ‘‘based on underlying evidence,’’ includ-
ing, inter alia, a financial affidavit. McKeon v. Lennon,
155 Conn. App. 423, 444, 109 A.3d 986 (2015), rev’d in
part on other grounds, 321 Conn. 323, 138 A.3d 242
(2016). Affidavits also suffice in prejudgment remedy
proceedings to establish probable cause that the moving
party will prevail on the merits. See General Statutes
§ 52-278c (a) (2).
Additionally, the transcript of the July 20, 2015 short
calendar hearing, at which the defendants’ motion was
heard, does not reflect that the trial court applied any
of the previously discussed principles.6 Instead,
although the precise basis for the court’s decision is
not entirely clear, the court expressed skepticism about
the merits of the defendants’ fraud claim because they
had an opportunity to review the allegedly inflated
income statement during the closing, and because they
executed the mortgage to consolidate their credit card
debt. There is no evidence in the record, however, to
suggest that the defendants had an opportunity to
review the loan application at the loan closing or that
the proceeds from the mortgage being foreclosed satis-
fied their credit card debt. Indeed, William Owen explic-
itly disputed the proposition that the mortgage, in any
manner, was related to their credit card debt. Thus, the
stated basis for the court’s decision only underscores
the need for an evidentiary hearing if the court was
not satisfied that the affidavit and attached documents
established clear proof of the fraud.
In sum, this is not a case in which the defendants
were ‘‘not able to substantiate [their] allegation of fraud
beyond the realm of speculation and mere suspicion.’’
Bank of America, N.A. v. Thomas, 151 Conn. App. 790,
805, 96 A.3d 624 (2014). Accordingly, if the court
deemed it needed more than the unrebutted affidavit
and attachments, an evidentiary hearing at which the
plaintiff and the defendants would present relevant evi-
dence was necessary for the court to reasonably and
properly exercise its discretion in ruling on the defen-
dants’ motion to open. See Tyler E. Lyman, Inc. v.
Lodrini, supra, 78 Conn. App. 690. A short calendar,
like the calendar proceeding on the defendants’ motion
to open, is generally not the time or place to take
extended witness testimony. The court nonetheless
could have scheduled the case for a hearing at a later
date.7 The court’s failure to do so despite the genuine
and critically important issues raised by the defendants’
motion to open and supporting evidence, in my judg-
ment, was a mistake, and its denial of the defendants’
motion an abuse of discretion.
Finally, I do not fault the defendants for their delay
in identifying and raising their claim of fraud in the
inducement until after the judgment of foreclosure was
rendered. The defendants, who generally were unso-
phisticated in financial transactions and thus in a poor
position to recognize the factual basis for a claim of
fraud, remained self-represented until April 13, 2015,
by which point the plaintiff already had moved for the
judgment of strict foreclosure. After the defendants
obtained the benefit of counsel, it then took time for
their lawyer to obtain and review the evidence and
formulate their fraud claim. Indeed, the defendants
obtained Marlene’s 2004 tax returns from a decade
before this foreclosure action was commenced to sub-
stantiate their claim before filing their motion.
Like claims of bias, claims of fraud are easily alleged.
However, because the mere making of such claims
against another carries a certain taint, they should not
be made unless there is some substance to them. The
defendants’ counsel properly waited to make the claim
of fraud until he had gathered and reviewed the evi-
dence, including Marlene’s tax returns, to make the
required threshold showing that the claim had sub-
stance. Attorneys each take an oath swearing to ‘‘not
knowingly maintain or assist in maintaining any cause
of action that is false or unlawful . . . .’’ General Stat-
utes § 1-25. Rule 3.1 of the Rules of Professional Con-
duct provides in relevant part that ‘‘[a] lawyer shall not
bring or defend a proceeding, or assert or controvert
an issue therein, unless there is a basis in law and fact
for doing so that is not frivolous . . . .’’ Maintaining
fidelity to these principles can take time. Penalizing the
defendants for taking the time to obtain evidentiary
support for their claims before moving to open the
judgment would serve no useful policy consideration
embodied in the attorneys’ oath or Rules of Profes-
sional Conduct.
Accordingly, I would reverse the court’s judgment
denying the motion to open and remand the case for
further proceedings.
1
William Owen’s affidavit, which he filed in support of his motion to open
the judgment of strict foreclosure, avers that he executed a mortgage in favor
of WMC for $215,920—the mortgage at issue in this foreclosure action—and
a second, back-to-back mortgage for $53,980. That the deal was structured
in this manner appears to be undisputed.
2
General Statutes § 49-15 provides in relevant part: ‘‘(a) (1) 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 section 52-212a, upon
such terms as to costs as the court deems reasonable, provided no such
judgment shall be opened after the title has become absolute in any encum-
brancer . . . .’’
3
As the majority correctly notes, the defendants brought this appeal more
than twenty days after the entry of the judgment of strict foreclosure. Thus,
our review is limited to whether the trial court abused its discretion in
denying the motion to open; we cannot entertain issues relating to the merits
of the underlying judgment. See Wells Fargo Bank, N.A. v. Ruggiri, 164
Conn. App. 479, 484, 137 A.3d 878 (2016).
4
This court’s decision in Bank of America, N.A. v. Thomas, 151 Conn.
App. 790, 96 A.3d 624 (2014), is not to the contrary. In that case, the defendant
moved to open the judgment of strict foreclosure asserting that newly discov-
ered evidence showed that the plaintiff obtained the judgment through fraud.
Id., 804. Although this court began by stating that the defendant failed to
present clear proof of the fraud at the initial hearing; id., 805; it later cited
Bruno v. Bruno, 146 Conn. App. 214, 76 A.3d 725 (2013), for the proposition
that the ‘‘the defendant was not able to substantiate her allegation of fraud
beyond the realm of speculation and mere suspicion.’’ Bank of America,
N.A. v. Thomas, supra, 805. In Bruno, this court observed that ‘‘the trial
court must first determine whether there is probable cause to open the
judgment for the limited purpose of proceeding with discovery related to
the fraud claim. . . . If the moving party demonstrates to the court that
there is probable cause to believe that the judgment was obtained by fraud,
the court may permit discovery.’’ (Citations omitted.) Bruno v. Bruno,
supra, 231.
5
The term ‘‘balloon payment’’ refers to an unamortized lump sum principal
payment due at the end of the term of the loan according to the payment
schedule set forth in the promissory note.
6
The court denied the defendants’ motion to open in an order dated July
20, 2015, without issuing a written decision. The court then granted the
defendants’ motion for articulation but, rather than issuing a written deci-
sion, attached a signed copy of the transcript from the short calendar hearing.
The defendants filed a second motion for articulation, which the court
denied.
7
The law days were set to run the day after the defendants’ motion to open
was heard at the July 20, 2015 short calendar, but that was no impediment to
the court’s ability to schedule a hearing at a later date. Indeed, the court’s
denial of the defendants’ motion to open without a hearing itself triggered
an automatic stay of the running of the law days until the expiration of the
twenty day period in which to appeal from that denial. See Citigroup Global
Markets Realty Corp. v. Christiansen, 163 Conn. App. 635, 639–40, 137 A.3d
76 (2016); Brooklyn Savings Bank v. Frimberger, 29 Conn. App. 628, 630–32,
617 A.2d 462 (1992). It follows that, if the court opened the judgment for
the limited purpose of holding an evidentiary hearing on the motion, then
the court could reset the law days to accommodate that hearing.