CITIBANK, N.A., TRUSTEE (SACO 2007-2) v. DEBRA LINDLAND, EXECUTRIX (ESTATE OF MADLYN LANDIN), et al., SC 18885
Judicial District of Middlesex
Foreclosure; Whether the Trial Court had the Equitable Authority to Grant a Successful Bidder's Motion to Open a Judgment of Foreclosure by Sale After Title to the Subject Property had Vested in the Successful Bidder. The plaintiff initiated this mortgage foreclosure action in 2008. The trial court found that there was substantial equity in the subject property, and, consequently, it rendered a judgment of foreclosure by sale rather than a judgment of strict foreclosure. Robert Olsen was the successful bidder at the auction sale, and title to the property was subsequently transferred to him. Thereafter, Olsen was unable to gain access to the property because IndyMac Federal Bank, FSB (IndyMac), had taken possession of the property as a result of a separate foreclosure judgment that IndyMac had obtained in connection with a mortgage that it held on the property that was prior in right to the plaintiff's mortgage. Olsen subsequently filed a motion to open the judgment of foreclosure by sale in the present action, requesting that he be reimbursed for the money that he had paid to purchase the property. The trial court granted the motion, finding that Olsen was not made aware of IndyMac's mortgage prior to his purchase of the property due to a "series of cascading mistakes," which included the failure to notify bidders of the IndyMac mortgage and the failure to identify the mortgage in the bond for deed. On appeal, the plaintiff argued that the trial court lacked jurisdiction to open the judgment of foreclosure by sale. The Appellate Court (131 Conn. App. 653) concluded that the trial court lacked the authority to open the judgment because title had already vested in Olsen. It reasoned that, once title to a property vests in the purchaser, the property itself is placed beyond the power of the court, and the proceeds from the sale take the place of the property. While acknowledging that a trial court has broad equitable powers in foreclosure actions, the court determined that such powers do not permit a court to undo a foreclosure sale after title to the property has vested in the purchaser even where, as here, the purchaser buys the property without full knowledge of the status of the title. It is the purchaser's obligation, the court opined, to conduct an independent investigation to determine the true status of the title to the property. The court added that, although the judgment of foreclosure by sale had been rendered on the basis of the trial court's mistaken belief that there was sufficient equity in the property, a judicial error is not an appropriate basis to open a judgment where title has already vested in the purchaser. In this appeal, the Supreme Court will decide whether the trial court lacked the equitable authority to open the judgment of foreclosure by sale.