JP MORGAN CHASE BANK, NA v. WINTHROP PROPERTIES et al., SC 19048

Judicial District of New Haven

 Foreclosure; Whether General Statutes § 49-1 Barred any Recovery From Guarantors of Mortgage Note due to the Plaintiff’s Failure to Obtain a Deficiency Judgment. The plaintiff brought this action seeking, in count one, foreclosure of a mortgage securing a note executed by the named defendant and, in count two, enforcement of a guaranty of that note executed by two defendant guarantors. After summary judgment as to liability was rendered on both counts in favor of the plaintiff, the court rendered a judgment of strict foreclosure.  General Statutes § 49-14 provides that a foreclosing mortgagee may “within thirty days after the time limited for redemption has expired . . . file a motion seeking a deficiency judgment.”  Following the vesting of title in the plaintiff, the plaintiff filed an untimely motion for a deficiency judgment.  The plaintiff never sought adjudication of that motion, but instead requested a hearing in damages on count two.  The guarantors objected to the request and filed a notice of defense, arguing that because the requirements of § 49-14 were not complied with, the plaintiff was barred by General Statutes § 49-1 from taking any further action to collect money damages from them.  Section 49-1 provides in relevant part that “[t]he foreclosure of a mortgage is a bar to any further action upon the mortgage debt, note or obligation against the person or persons who are liable for the payment thereof who are made parties to the foreclosure. . . .”  The trial court struck the guarantors’ notice of defense and rendered a deficiency judgment against them, reasoning that the guaranty count stated a separate cause of action from that stated in the foreclosure count and that the plaintiff’s failure timely to seek a deficiency judgment on count one did not affect the cause of action stated in count two.  The guarantors appealed, and the Appellate Court (137 Conn. App. 680) reversed the deficiency judgment, finding that the guarantors raised a proper defense that barred any deficiency judgment against them as a matter of law.  The court interpreted the term “obligation” in § 49-1 to refer not only to the obligation directly incurred under a note and mortgage but also to the obligation to repay a mortgage debt incurred under a guaranty.  The court reasoned that here, where the plaintiff had obtained a judgment of strict foreclosure and had been made partially whole, the only measure of damages available to it on the second count of the complaint would be an amount equal to any deficiency judgment.  The Appellate Court held that, as the plaintiff failed to file a timely motion for a deficiency judgment and abandoned its attempt to seek adjudication of its untimely motion, no deficiency judgment was established.  The court concluded that § 49-1 therefore barred the plaintiff from obtaining any additional remedy from the guarantors.  The Supreme Court will now decide whether the Appellate Court properly determined that § 49-1 barred any remedy against the guarantors based upon the plaintiff’s failure to obtain a deficiency judgment.