Date: 09-01-2010

Case Style: Lucille Nappo v. Merrill Lynch Credit Corporation

Case Number: AC 30494

Judge: Alvord

Court: Connecticut Court of Appeals

Plaintiff's Attorney: Richard Weinstein and Nathan Schatz, Weinstein & Wisser, P.C., West Hartford, Connecticut

Defendant's Attorney: Kathleen Morrison Grover and P. Jo Anne Burgh, Fitzhugh & Mariani, L.L.P., Hartford, Connecticut, for the appellee (defendant).

Description: The plaintiff, Lucille J. Nappo, appeals from the judgment of the trial court upholding the validity of a mortgage on her residential property in Avon held by the defendant, Merrill Lynch Credit Corporation.

The plaintiff claims that the mortgage should be discharged because the evidence presented at trial failed to establish that she owed the defendant a debt.

We disagree and affirm the judgment of the trial court. The plaintiff is the sole owner of a house located at 16 Hitchcock Lane in Avon. In April, 1999, she applied to the defendant for a $250,000 home equity credit line, to be secured by a mortgage on her property in Avon. Her application was approved, and on August 23, 1999, she executed an agreement and promissory note establishing the credit line and an open-end mortgage in favor of the defendant. The execution of the mortgage was witnessed by an attorney and by Patricia Nappo, the plaintiff’s daughter-in-law. On the same date, the plaintiff requested in writing that the defendant issue checks for the credit line and mail them to her at her house in Avon. She also received and signed a notice of right to cancel1 and a fair credit billing act disclosure.2

By the end of 2000, over $200,000 had been drawn against the credit line by check, and the plaintiff’s account was in default. The defendant commenced collection efforts, which included making frequent calls to the plaintiff and sending her letters indicating the account’s default status. In January, 2004, the account balance, then approximately $240,000, still remained unpaid. The plaintiff sent the defendant a letter, stating:

‘‘The home at 16 Hitchcock Lane, Avon, has been in my name since 1979. I have received a foreclosure notice, and I would like some time to bring the account current, which I will be able to do probably within the next six months. I am at the end of a divorce action that began almost two years ago. My husband, who had had a good income, was convicted of a crime and was incarcerated for about a year. He had moved out of the house and has not worked in over two years. What assets we had at that time, he spent on his legal fees or were frozen by the government to pay off an [Internal Revenue Service] debt. I expect that after the trial those funds awarded to me will be unfrozen. I also have a condominium in Florida in my name. While the divorce is pending, neither that condo nor the Avon home can be sold, but after the trial, these houses can be sold.

. . . I would like to have the foreclosure held off until after the judge’s decision is rendered. If I am awarded the Avon home, then I will either bring everything current or will put the house on the market. It is valued at around $400,000 (we do have current appraisals) and there is certainly enough money to pay off the mortgage and any penalties. The Florida home may also be put on the market and that home does not have a mortgage. If I am not awarded the home, the foreclosure can continue and again, there is certainly enough equity to cover any outstanding debt.’’

The plaintiff’s divorce was finalized in 2004.3 On January 12, 2005, the plaintiff’s son, Jeffrey Nappo, called the defendant and said that the plaintiff ‘‘never took a mortgage out’’ and that her ‘‘ex-husband took this loan out in her name.’’ The defendant advised Jeffrey Nappo that it needed written authorization from the plaintiff to speak with him regarding the plaintiff’s account. The next day, the plaintiff called the defendant and claimed that ‘‘her ex-husband forged her signature on this loan.’’

In February, 2005, the plaintiff submitted an affidavit of forgery to the defendant in which she claimed that her former husband had signed her name to all of the documents associated with the account. Upon reviewing the affidavit and the plaintiff’s account, however, the defendant declined to pursue her claim. It concluded that given the age of the loan, the numerous contacts the plaintiff had with the defendant throughout the life of the loan and the lack of a police report or other legal documentation to substantiate the plaintiff’s forgery allegations, her claim of forgery was the result of a marital dispute rather than fraudulent activity.4

In an amended complaint filed January 17, 2007, the plaintiff alleged that she never borrowed any moneys against the credit line and sought a release of the defendant’s mortgage and an order pursuant to General Statutes § 47-31 quieting title in her name.5 She claimed that her former husband had forged her signature6 on all of the documents associated with the account, including all of the checks drawn on the account,7 and that she did not know of or participate in the advancement of funds. She argued that the mortgage should be released because no funds were ever advanced to her, and, as a result, the mortgage secured no debt. Following a three day trial,8 the court rendered judgment in favor of the defendant. The court concluded that the plaintiff had executed a valid mortgage and found that she had knowledge of the advancements and allowed them to occur.9

On appeal, the plaintiff acknowledges that the mortgage was properly executed but claims that she did not participate in or have knowledge of the advancement of funds by check against the line of credit and argues that the court’s finding to the contrary is clearly erroneous.

We disagree.

The plaintiff’s claim presents a question of fact, and ‘‘[t]he trial court’s findings [of fact] are binding upon this court unless they are clearly erroneous . . . . A finding of fact is clearly erroneous when there is no evidence in the record to support it . . . or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.’’ (Internal quotation marks omitted.) Cifaldi v. Cifaldi, 118 Conn. App. 325, 330–31, 983 A.2d 293 (2009). ‘‘Because it is the trial court’s function to weigh the evidence and determine credibility, we give great deference to its findings. . . . In reviewing factual findings, [w]e do not examine the record to determine whether the [court] could have reached a conclusion other than the one reached. . . . Instead, we make every reasonable presumption . . . in favor of the trial court’s ruling.’’ (Internal quotation marks omitted.) Jay v. A & A Ventures, LLC, 118 Conn. App. 506, 511, 984 A.2d 784 (2009).

In this case, overwhelming evidence supports the court’s finding. The plaintiff admitted that she executed the documents necessary to secure the credit line and create the mortgage. She did so in the presence of a licensed attorney and her daughter-in-law, who served as witnesses. The record also reveals that the plaintiff (1) requested that the defendant issue checks on the account and mail them to her, (2) made numerous calls to the defendant to discuss the status of the credit line, to make payments on the account and to apply for payment mitigation, (3) made at least thirty payments on the account, (4) told a representative of the defendant that she obtained the mortgage for her husband, (5) acknowledged her responsibility to repay the debt in the 2004 letter to the defendant and (6) received statements from the defendant every month for over five years, from March, 2000, to July, 2005, which indicated the account balance, recent account activity and the amount due.10 The record further indicates that the plaintiff never reported the checks lost or stolen, never filed a criminal complaint against her former husband related to the alleged forgery and did not report any problems with the mortgage or credit line until 2005, years after the checks were drawn on the plaintiff’s account. Finally, the transcript discloses that the plaintiff’s testimony is fraught with contradiction.11 It is axiomatic that as the sole arbiter of credibility, the trial court is ‘‘free to accept or reject, in whole or in part, the testimony offered by either party.’’ (Internal quotation marks omitted.) Jay v. A & A Ventures, LLC, supra, 118 Conn. App. 514.

In light of the foregoing, the court’s finding, that the plaintiff knew of the advancements, allowed them to occur and accepted responsibility for the debt, is well supported by the record, and the court’s decision upholding the validity of the mortgage is proper.12

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See: http://www.jud.ct.gov/external/supapp/Cases/AROap/AP123/123AP483.pdf

Outcome: The judgment is affirmed.

Plaintiff's Experts:

Defendant's Experts:

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