Foreclosure Property Valuation Challenge Fails

The appeal in Salisbury Bank & Trust Co. v. Christophersen involved two adjacent undeveloped parcels of waterfront property in Westport. Defendant borrowed money from plaintiff against the properties, planning to repay the debt when he sold them. Defendant defaulted and plaintiff started a foreclosure action.

The Appellate Court provided a detailed factual background but ultimately there isn’t really much to this advance release opinion.  One of the main issues was whether to value the properties as one two-acre parcel or two one-acre parcels. The record contained a lot of competing evidence. The court chose to treat the properties as one two-acre parcel for three reasons: (i) one of the parcels arguably was subject to a restrictive covenant which “represented a significant cloud on title that adversely affected the ability of the parcel to be marketed as a single building lot”; (ii) “plaintiff’s appraiser credibly testified that the fair market value should be determined as one two-acre lot on the basis of the information he had obtained about the … parcel and the restrictive covenant”; and (iii) “defendant often marketed the property as a single building lot.”

The trial court found that the debt exceeded the value of the property and entered a judgment of strict foreclosure. Defendant appealed. The Appellate Court affirmed.

Defendant’s Argument on Appeal

“On appeal, the defendant claim[ed] that the court abused its discretion by rendering a judgment of strict foreclosure rather than a foreclosure by sale ‘because there is monumental uncertainty as to the value of the property and as a result there is also monumental uncertainty as to whether the debt owed to [the] plaintiff is greater than the value of the property.’ The defendant argue[d], on the basis of his appraiser’s opinion, that the … parcels should be valued as two separate building lots, which would result in a value in excess of the debt owed the plaintiff.”

Appellate Court Concludes that Superior Court Properly Valued the Properties as One Parcel

“On the basis of our review of the record and the [trial] court’s detailed and well reasoned memorandum of decision, we conclude that it did not abuse its discretion by ordering a judgment of strict foreclosure.”