Moran v. Morneau

Citations: 140 Conn. App. 219; 57 A.3d 872; 2013 Conn. App. LEXIS 17Docket: AC 34139

Court: Connecticut Appellate Court; January 15, 2013; Connecticut; State Appellate Court

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The court affirmed the trial court's judgment in a foreclosure action involving plaintiff Michel Moran and defendant Chase Home Finance, LLC (Chase). The central issue was whether a default judgment against Chase established the lien priority claimed by Moran in her amended complaint. The court determined that the factual allegations in Moran's complaint did not legally establish her as holding the first priority lien, which meant Chase's default did not validate Moran's incorrect legal assertions about lien priority.

Moran sought to foreclose on a judgment lien against property owned by Ricky A. Momeau, asserting that her attachment and judgment lien were superior to Chase's mortgage lien due to a notice of constructive trust recorded in July 2003. Chase, having a mortgage recorded in August 2003, contended that its lien took precedence and that the notice of constructive trust had no legal effect on lien priority.

Chase was defaulted for failing to appear, leading to a judgment of strict foreclosure for Moran, but Chase later moved to open the default, arguing improper service and asserting its first priority lien status. The court, however, upheld the priority of Chase’s lien, stating that Moran's notice of constructive trust was not a valid lien and did not retroactively establish priority for her subsequent liens. Moran's appeal of this priority ruling was dismissed due to the absence of a final judgment.

The plaintiff sought a judgment of strict foreclosure in the trial court to clarify priority issues, which was granted on December 12, 2011, leading to this appeal. The central dispute involves the impact of Chase’s default on priority determinations. The plaintiff argues that Chase's default established the priority order claimed in the complaint, contending that the court lacked discretion to reassess the legal implications of the notice of constructive trust after the default. The court disagrees, noting that while a default admits material facts and can determine liability, it does not eliminate the possibility of judicial review of legal conclusions. A default does not automatically lead to judgment in favor of the plaintiff unless the complaint's allegations are legally sufficient to support the requested relief. The sufficiency of the pleadings is paramount in determining whether a default warrants judgment. The plaintiff’s assertion of priority over Chase requires a review of the complaint to verify a valid claim. The complaint states that the plaintiff secured a prejudgment attachment against the property on May 28, 2004, which relates back to the notice of constructive trust filed earlier. It also claims a judgment against Momeau for $63,061 on February 6, 2006, leading to a judgment lien recorded on February 16, 2006, asserting that this lien precedes Chase’s interest, which is based on a mortgage recorded on August 22, 2003.

Factual allegations do not support the plaintiff's claim that the judgment lien or prejudgment attachment should relate back to the filing of the notice of constructive trust. Under General Statutes 52-380a (b), a judgment lien becomes effective upon the recording of the judgment lien certificate and can relate back to the date of attachment if recorded within four months. In this case, the plaintiff's judgment lien related back to May 28, 2004, the date of the prejudgment attachment, granting it priority over subsequent claims. However, the plaintiff incorrectly argued for a second relation back to an earlier filing, which lacks legal support. Courts cannot expand the attachment remedy, as attachment statutes are strictly construed due to their potential harsh impact on debtors. The Supreme Court has previously rejected attempts to extend the four-month period for obtaining a judgment lien, emphasizing that strict adherence to this timeline is necessary as it serves to protect both creditor and debtor interests. Additionally, the plaintiff's position would allow her to benefit from prejudgment attachment without the required court finding of probable cause. Consequently, the court rightfully dismissed the plaintiff's assertion regarding the relation back of her judgment lien. The judgment was affirmed, with concurrence from other judges, and neither Ricky A. Momeau nor JPMorgan Chase Bank, N.A. are parties to this appeal.

Michel Moran is now known as Michel Gonzalez, and the amended complaint is the operative document for this appeal. The previous appeal did not resolve the priority order concerning the subject property due to the absence of a final judgment. The notice of constructive trust claims that Gonzalez, residing in Middletown, Connecticut, holds a half ownership interest in 399 Main Street, Portland, CT, having contributed at least fifty percent to all related expenses, with Ricky A. Momeau holding the property in constructive trust for her. Momeau did not sign the notice, but a letter from him acknowledged Gonzalez's contributions and pledged a formal agreement to recognize her vested interest by June 3, 2003.

In a separate breach of contract action, the court found that there was a breached agreement between Gonzalez and Momeau regarding the equity of the property, awarding her $38,200 in damages and an additional $10,000 for an unpaid loan. On appeal, Gonzalez contends that service of process was properly executed on Chase, arguing that the court lacked discretion to set aside a default judgment. The appeal asserts that even if the default judgment stood, it would not prevent the trial court from reviewing the lien priority order alleged in the complaint. 

Chase sought a pre-sale determination of priorities due to insufficient equity in the property and ongoing parallel foreclosure cases. It argued that clarity on encumbrances was necessary for potential buyers. Following a default judgment, the appellate court can examine the complaint's allegations to determine if they establish a valid claim. 

During the priority determination hearing, Gonzalez claimed the trial court had previously established an agreement between her and Momeau to share equity, linking the judgment lien to the notice of constructive trust and justifying its retroactive effect to July 17, 2003. However, the court found that the notice of constructive trust did not constitute an attachment of real estate to secure a future judgment, thus the trial court's findings did not support retroactive application.