Death of Defendant During Pendency of Connecticut Foreclosure Action ? Appellate Case Update
June 14, 2016
The Connecticut Appellate Court has weighed in on the topic of whether or not a lender foreclosing a mortgage in Connecticut must comply with the statutory process to make the administrator of the decedent a party to the action to ensure a proper judgment of foreclosure enter…sort of.
In the matter of HSBC Bank USA, N.A. v. Lahr, the defendant challenged the Superior Court’s denial of a motion to open and vacate a judgment of strict foreclosure entered by the Superior Court some seven months after the filing of a suggestion of death of another defendant-mortgagor and obligor of the promissory note. The surviving defendant claimed that the Plaintiff could not proceed with the foreclosure until such time as a motion to substitute the administrator of the estate of the decedent was filed and granted pursuant to Conn. Gen. Stat. § 52-599.
The Plaintiff, in turn, responded that since a notice of lis pendens was recorded at the commencement of the action, it was not required to proceed under section 52-599 nor take any other action since any interest acquired in the property after the recording of the lis pendens would be bound by the proceedings in accordance with General Statutes section 52-325.
Unfortunately, the Appellate Court did not reach the merits of either contention by the parties (i.e. in favor of defendant that a motion to substitute the administrator is required or in favor of plaintiff that the lis pendens statute applies). Instead, the Court found an alternate ground for affirming the denial of the defendant’s motion. The Court opined that Conn. Gen. Stat. § 52-600 permits an action with more than one defendant to proceed unabated despite the death of a co-defendant once the death is noted in the record of the proceedings.
It is extremely important to note that one of the major factors relevant to the Appellate Court’s decision in Lahr was the procedural posture which limited its scope of review.
Since the appeal period from the entry of the judgment of strict foreclosure had already elapsed at the time of the filing of the Defendant’s motion to vacate the judgment, the Appellate Court was limited to the standard of review inherent to a motion to open a judgment of foreclosure known as the “abuse of discretion” standard.
So… what do we learn from this case?
Well, it is still a difficult area to navigate when a party to a foreclosure dies after the commencement of the action and at any time before vesting of title. It would appear that a foreclosing lender, so long as there is more than one party defendant named to the action, can proceed with the underlying action under General Statutes section 52-600 so long as a suggestion of death or other procedural filing is made at the time of or upon discovery of the death. Conversely, if the decedent is the sole party defendant in the action the question of whether or not the mortgagee must comply with section 52-599; cite the heirs of the decedent as parties in interest; or simply proceed with the action in reliance on the lis pendens statute remains unresolved.
Source: The National Law Review