Defendant Denied Attorney’s Fees in Withdrawn Foreclosure

In this Connecticut appeal (Connecticut Housing Finance Authority v. Alfaro), the Appellate Court denied defendant’s motion for attorney’s fees pursuant to CGS § 42-150bb after plaintiff withdrew its foreclosure action.

Defendant raised a special defense that “plaintiff lacked standing … because it was not a person or entity entitled to enforce the note and mortgage.” Plaintiff moved for summary judgment.  “In his objection, the defendant argued that the plaintiff lacked standing to bring this action because the plaintiff cannot prove that it is the holder of the note as it does not have possession of the original note; it only has possession of a copy of the original note, which does not contain any assignment to the plaintiff from [the original lender].”

Plaintiff withdrew its summary judgment motion. Then, “before any hearing on the merits was held, the plaintiff withdrew its foreclosure action as a matter of right pursuant to General Statutes § 52-80.”

Defendant moved for an award of attorney’s fees pursuant to CGS § 42-150bb. The statute provides that a contract provision requiring a consumer to pay a commercial party’s attorney’s fees is, as a matter of law, reciprocal. In other words, if the commercial party can get its attorney’s fees from the consumer, the consumer can get her attorney’s fees from the commercial party, provided the consumer “successfully prosecutes or defends an action or a counterclaim based upon the contract ….”

The trial court denied defendant’s motion. The Appellate Court affirmed.

Defendant’s Argument on Appeal

“The defendant argue[d] that ‘[i]t is only logical to surmise that the [p]laintiff realized that if the court determined that issues raised by [the defendant] went to the merits of the case, it could lose the right to foreclose on the mortgage,’ and, thus, the plaintiff withdrew its case on
the basis of the defendant’s special defense that the plaintiff lacked standing to bring the action.”

Appellate Court Concludes Defendant Failed to Establish a Successful Defense

“In raising his claim on appeal, the defendant has assumed that the plaintiff withdrew its action in response to his special defense. On the basis of this assumption, the defendant argues that he successfully defended the action and, thus, is entitled to attorney’s fees under § 42-150bb. The record, however, does not indicate the reason that the plaintiff withdrew its action; it may have been because of the defendant’s defense, but it may have been for a myriad of other reasons. There was no hearing on the merits, and the defendant offered no evidence at the hearing on the motion for attorney’s fees to prove that the plaintiff withdrew the action in response to his defense. The defendant’s argument is founded on speculation alone. This court will not speculate on what is not in the record.”