JP Morgan Chase Bank, N.A. v. Winthrop Properties, LLC
The plain and unambiguous language of Connecticut General Statutes §49-1 provides that once a plaintiff mortgagee obtains the subject property by strict foreclosure, it is barred from taking further action to collect on the debt, not only against the borrower but against any persons who may be liable for the debt, including a guarantor. JP Morgan Chase Bank, N.A., successor in interest to Washington Mutual Bank, filed this two count action to foreclose a certain mortgage and to enforce the personal guarantees executed by Zeev Zuckerman and Leon Szusterman. The trial court granted summary judgment to the substituted plaintiff, 1533 Chapel, LLC, as to liability on both counts and rendered a judgment of strict foreclosure setting the fair market value of the subject property at $325,000 and debt at $1,159,014.55 plus attorneys' fees. More than 30 days after title vested in the plaintiff, the plaintiff filed, but did not pursue, an untimely motion for a deficiency judgment. Instead, the plaintiff requested a hearing in damages on the second count. The guarantors objected and filed a notice of defense that the plaintiff was barred by C.G.S. §49-1 from taking further action to collect money damages from them. The court granted the plaintiff's motion to strike the notice of defense and entered a deficiency judgment of $1,295,888.45 against the guarantors. The guarantors appealed. The Appellate Court reversed the judgment. The guarantors' notice of defense was legally sufficient and was improperly stricken. In its complaint, the plaintiff pursued alternate theories for recovering the debt owed under the promissory note. The plaintiff properly joined the separate causes of action in a single complaint but was not entitled to collect twice upon the same debt. Once the judgment of strict foreclosure entered and the plaintiff obtained title to the foreclosed property, C.G.S. §49-1 barred "any further action upon the mortgage debt, note or obligation" against anyone who was "liable for the payment thereof" and a party to the action. The plaintiff failed to timely file a motion for a deficiency judgment under C.G.S. §49-14, and a deficiency judgment was never established. C.G.S. §49-1 barred the plaintiff from obtaining any additional remedy from the guarantors based on their obligation to repay the mortgage debt under the guaranty.