365 CHERRY LLC ET AL v. 12 WILLARD LLC ET AL.

2010 Ct. Sup. 14991
No. FST CV 09 6001855 SConnecticut Superior Court Judicial District of Stamford-Norwalk at Stamford
July 20, 2010

[EDITOR’S NOTE: This case is unpublished as indicated by the issuing court.]

MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (164.00)
TAGGART D. ADAMS, Superior Court Judge.

I. Background
In this real estate mortgage foreclosure action the plaintiff 365 Cherry LLC (365 Cherry) has moved for summary judgment on the issue of liability under the note and mortgage only. The parties concede there is no genuine issue of material fact concerning the elements for a mortgage foreclosure, i.e. execution by defendant 12 Willard LLC (12 Willard) of the note, and the mortgage securing the note, the recording of the mortgage, and 12 Willard’s default under the note and mortgage.

12 Willard has pleaded a special defense to the complaint which alleges:

Prior to the note due date of June 1, 2008, the defendant 12 Willard, LLC notified the plaintiff that the project had gone over budget and that the defendant 12 Willard, LLC required additional funding in order to complete the project. After the plaintiff’s estimator provided a budget of $700,000, the plaintiff agreed to modify the underlying note and to fund an additional $700,000 to the defendant. The defendant in reliance upon these representations of modification and forthcoming funding did not seek to secure financing from another lender which was available to it at that time. After approximately five months of continuing to represent that the loan would be modified and funding would be forthcoming into October 2008, the plaintiff then refused to modify and issue additional funding at which time the impending financial crisis made it impossible for the defendant to secure proper funding from other lenders. In reliance upon the plaintiff’s representations, the defendant 12 Willard, LLC was also deprived of its CT Page 14992 ability to market and sell the properties. The defendant claims damages by way of setoff.

12 Willard contends that this special defense raises a legally viable defense to a foreclosure action, namely equitable estoppel. The doctrine of equitable estoppel contains two elements: (1) actions or words intended or calculated by a party to induce another party to believe in the existence of something, and (2) the other party, influenced thereby, must act upon that belief to his detriment. Conservation Commission v. Red 11, LLC, 119 Conn.App. 377 (2010).

II. Standard of Review
Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. “In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.” Appleton v. Board of Education, 254 Conn. 205, 209 (2000). Summary judgment “is appropriate only if a fair and reasonable person could conclude only one way.” Miller v. United Technologies Corp., 233 Conn. 732, 751 (1985). “The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to judgment as a matter of law.” Appleton v. Board of Education, supra, 254 Conn. 209. “A material fact has been defined adequately and simply as a fact which will make a difference in the result of the case.” (Internal quotation marks omitted). United Oil Co. v. Urban Development Commission, 158 Conn. 364, 379 (1969). The trial court, in the context of summary judgment motion, may not decide issues of material fact, but only determine whether such genuine issues exist Nolan v. Borkowski, 206 Conn. 495, 500 (1988).

“Although the party seeking summary judgment has the burden of showing the nonexistence of any material fact [question] . . . a party opposing summary judgment must substantiate its adverse claim by showing that there is a genuine issue of material fact together with the evidence disclosing the existence of such an issue. It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue.” Maffucci v. Royal Park Ltd. Partnership, 243 Conn. 552, 554
(1998). “[T]he party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact.” Appleton v. Board of Education, supra, 254 Conn. 209.

III. Discussion CT Page 14993
In opposition to the plaintiff’s summary judgment motion, and in an effort to supply an evidentiary foundation for the opposition, 12 Willard has submitted two affidavits. In one affidavit, William Trudeau, states he spoke to Herb Wolowitz and Ed Chernoff whom he identifies as members of 365 Cherry and 365 Cherry orally promised additional funding of $700,000 to the defendant to be secured by the existing open-end mortgage. Relying on this promise, Trudeau stated that, on behalf of 12 Willard, he declined a loan in the same amount from Titan Capital. As a result, when the plaintiff refused to advance the funds, 12 Willard was unable to complete its real estate project. Trudeau Affidavit, May 27, 2010, ¶¶ 3-10. The second affidavit by Ira Saferstein of Titan Capital Inc., states that in 2008 Titan Capital extended a commitment to loan 12 Willard $700,000 in construction funding, and 12 Willard subsequently declined the financing. Saferstein Affidavit., May 27, 2010, ¶¶ 3-4. Taken at face value, the two affidavits may provide the necessary factual underpinning for a defense of equitable estoppel.

In response, Michael Goldberg, the operating manager for 365 Cherry submitted an affidavit stating he is the only person authorized to negotiate any terms of additional financing from 365 Cherry, and he has never met or spoken with Trudeau. Goldberg Affidavit, May 28, 2010, ¶¶ 9-10. Goldberg states that Trudeau is not a member of 12 Willard, but is the husband of Heather Bliss who is a member and guarantor of the not Id. ¶¶ 5-6, 8. Goldberg states Wolowitz and Chernoff are not members of 365 Cherry; he casts serious aspersions on Trudeau’s credibility, points out that there are no details and no documentation of the supposed agreement with 365 Cherry to loan additional money and notes other purported weaknesses in the Trudeau affidavit. Id., ¶¶ 7, 8, 11, 13-22.

Reading the opposing affidavits, this court comes away with a strong feeling that the plaintiffs’ version of the facts are considerably more persuasive than the defendants’ version. Nevertheless, at the summary judgment stage it is not this court’s role to determine the facts, but rather, considering the evidence in the light most favorable to the non-moving party, to determine whether there are material facts at issue.

The conflicting affidavits illustrate that important fact questions must be resolved by a fact finding proceeding and not by summary judgment. These questions include whether the plaintiff intentionally induced the defendant to forego an offer of financing by Titan resulting in harm to the defendant.

The motion for summary judgment is denied. CT Page 14994

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