Appellate Stay Exemption Bites Foreclosure Defendant

In an advance release opinion issued February 29, 2016, the Connecticut Appellate Court concluded that the new anti perpetual motion machine rule concerning appellate stays in foreclosure cases required it to dismiss the borrower’s appeal.

The first law day in Citigroup Global Markets Realty Corporation v. Christiansen was April 7, 2009. “The judgment was opened and the law day extended five times over the six years that followed the initial judgment of strict foreclosure as a consequence of five bankruptcy petitions filed by [one of] the [mortgagors].” Plaintiff obtained relief from stay in the final bankruptcy. On plaintiff’s motion, the trial court reset the law date for August 25, 2015.

Defendant filed three consecutive motions to open the judgment and extend the law date. The trial court denied all three motions. But, as to the first two, the court sua sponte opened the judgment and extended the law date. The court didn’t do that in respect of the third motion and left the law date at December 1, 2015.

Defendant filed his appeal on November 30, 2015. The December 1 law date came and went without redemption. On December 9, defendant moved the Appellate Court to dismiss the appeal as moot. Defendant did not respond to the motion.

Plaintiff’s Main Argument on its Motion to Dismiss the Appeal

“The plaintiff argue[d] that the court’s denial of the defendant’s third motion to open did not stay the running of the law day, that title to the property accordingly has vested in the plaintiff, and that there is no relief that this court can afford the defendant.”

Appellate Court Concludes Anti Perpetual Motion Machine Rules Rendered Appeal Moot

Practice Book § 61-11(a) is the source of the automatic appellate stay. The section provides that “proceedings to enforce or carry out the judgment or order shall be automatically stayed until the time to file an appeal has expired. If an appeal is filed, such proceedings shall be stayed until the final determination of the cause.” Where the judgment is a judgment of strict foreclosure, this Practice Book rule means that the law date cannot be set sooner than the time to file an appeal — twenty days from entry — because a sooner law date would deprive defendant of his right to appeal.

Defendant also has a right to appeal, within twenty days of entry, a denial of a motion to open the judgment and extend the law date. So, even if the court was denying a mortgagor’s motion to open and extend, it had to sua sponte extend the law date at least twenty-one days so as to not deprive the borrower of the right to appeal the court’s denial of his motion to open and extend. In other words, defendant was more or less guaranteed an unlimited number of twenty-one day extensions of the law date. In First Connecticut Capital, LLC v. Homes of Westport, LLC, 112 Conn. App. 750, 762, 966 A.2d 239 (2009), the Appellate Court described this process as “almost the perfect perpetual motion machine.”

To address this problem, Pratice Book § 61-11 was amended effective October 1, 2013. “Practice Book § 61-11(g) applies in this appeal and provides in relevant part: ‘In any action for foreclosure in which the owner of the equity has filed, and the court has denied, at least two prior motions to open or other similar motion, no automatic stay shall arise upon the court’s denial of any subsequent contested motion by that party, unless the party certifies under oath, in an affidavit accompanying the motion, that the motion was filed for good cause arising after the court’s ruling on the party’s most recent motion. . . .’’’

“The defendant’s third motion to open, filed on November 16, 2015, did not have an accompanying affidavit, and, thus, the motion did not meet the requirement contained in § 61-11 (g) to set forth a good cause that arose after the court’s ruling on the defendant’s most recent motion. As was the case with the prior two motions, the defendant’s third motion to open sought an extension of the law day as [defendants] pursued alternatives to foreclosure. Under § 61-11 (g), the denial of that motion to open on November 30, 2015, did not create an automatic appellate stay. Because the defendant failed to exercise his right of redemption on his law day, title to the property vested in the plaintiff after the close of business on December 1, 2015.”