By Joseph R. Dunaj, Esq.

Bendett & McHugh PC *

USFN Member (CT, ME, MA, NH, RI, VT)

On December 22, 2022, the Connecticut Supreme Court issued its opinion in the case of Bank of New York Mellon v. Tope, SC 20592, 2022 WL 17825337 (2022), reversing the 2021 opinion of the Connecticut Appellate Court. In the decision, the Supreme Court clarifies some of the limitations on a borrower’s ability to challenge subject matter jurisdiction after a final judgment has been entered in a foreclosure case.

According to the record, the plaintiff had obtained a judgment of foreclosure by sale in 2016[1]. The borrower filed a number of motions to open the judgment, some of which were predicated on the grounds that the plaintiff lacked standing. In a number of instances, the trial court opened the judgment to modify it and extend the sale date. In 2017, more than four months after the initial judgment was entered, the defendant filed another motion to open and vacate the judgment. The defendant contended that the plaintiff was not the holder of the note, did not have standing, and therefore the trial court lacked subject matter jurisdiction. Specifically, the note was endorsed to JPMorgan Chase Bank, NA, as Trustee, but the named plaintiff and assignee of the mortgage was the Bank of New York Mellon, as Successor Trustee to JPMorgan Chase Bank, NA. After argument, the trial court denied the motion to open, reasoning that the issues had already been decided in the plaintiff’s favor and was not subject to further argument. That denial formed the basis of the defendant’s appeal.

On February 9, 2021, the Appellate Court issued its opinion in Bank of New York Mellon v. Tope, 202 Conn. App. 540, 246 A.3d 4 (2021). In a split decision, the Appellate Court affirmed the decision of the trial court and held that the defendant failed to establish the trial court lacked obvious jurisdiction.  The court held the motion to open was an impermissible, collateral attack upon the judgment. The Appellate Court based its decision on prior Connecticut Supreme Court and Appellate Court case law which held that final judgments are presumptively valid, and collateral attacks are disfavored. The lone dissenting judge questioned whether the motion to open was a direct attack on the judgment rather than a collateral attack, and questioned whether there was enough evidence to determine whether the plaintiff had standing.

On October 12, 2021, the Supreme Court granted certification to answer two questions: 1) Did the Appellate Court correctly conclude that the motion to open was a collateral attack or a direct attack on the judgment; and 2) If the motion to open judgment was not a collateral attack, could the Appellate Court’s decision be affirmed on the alternative ground that the trial court properly denied the motion to open. As to the first question, the Supreme Court determined that the motion to open was a direct attack, rather than a collateral attack. The Supreme Court relied upon Connecticut General Statutes § 52-212a, which governs the opening of judgment in civil cases. The statute mandates that any motion to open judgment must be filed within four months of the judgment in order for the motion to be adjudicated. The Supreme Court held that although the motion to open judgment at issue was filed more than four months after the initial judgment, the motion was filed within four months after the trial court had opened and modified the judgment. The most recent modification of the judgment was the operative judgment, and, because the defendant’s motion to open was filed within four months thereto, the motion to open was a direct attack on the judgment rather than a collateral attack.

The Supreme Court then addressed the second question, whether the trial court properly denied the motion to open.  The Court held that although the Plaintiff established that it had possession of the original note and was the assignee of the mortgage, it was not a holder of the note because of the specific endorsement, and there was not enough evidence in the record to establish that the plaintiff had the right to enforce the note as a transferee in possession of the instrument under Connecticut General Statute § 42a-3-301 and relevant case law. The Supreme Court remanded the case back to the trial court to conduct an evidentiary hearing to resolve the standing issue.

The result of the Supreme Court’s opinion is clarification as to how to address a defendant’s persistent, continual jurisdictional challenges. Although the Supreme Court reversed the Appellate Court’s decision, it did not expressly overturn the Appellate Court’s holding regarding post-judgment challenges to jurisdiction. The Appellate Court’s central holding, and the case law upon which it relies, remains valid. Attacks on subject matter jurisdiction are still disfavored once a final judgment has entered. Although a direct attack upon the judgment may be more favorable than a collateral attack, the Supreme Court did not explicitly hold that a direct attack upon the judgment is always favored. Therefore, in opposing a defendant’s post-judgment motion, a plaintiff would do well to argue the validity of the final judgment as a bulwark against the jurisdictional attack, in addition to addressing the merits of the jurisdictional attack.

The Supreme Court’s opinion also provides guidance as to what constitutes a direct attack versus a collateral attack in a foreclosure context. In addition to its analysis as to Conn. Gen. Stat. § 52-212a, in dicta, the Supreme Court mentioned that a trial court loses jurisdiction to adjudicate a motion to open judgment once the borrower has been divested of title in the case of a strict foreclosure or upon confirmation of a sale in the case of a foreclosure by sale. Presumably, any motion challenging jurisdiction after a transfer of title is a collateral attack rather than a direct attack. Therefore, the Supreme Court’s opinion provides additional ammunition in opposing a defendant’s post-vesting motion.

In summary, the decision provides both clarification and guidance useful to mortgage servicers as they face repeated attacks related to standing and jurisdiction in the Connecticut foreclosure arena.

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