Creditor Foreclosures with Acceleration Clause in Connecticut

Acceleration Clause used in Connecticut foreclosure

Rudra Tamm v. Carey Gangitano et al
CV990175640S

Case Law
SUPERIOR COURT OF CONNECTICUT, JUDICIAL DISTRICT OF STAMFORD - NORWALK, AT STAMFORD
2000 Conn. Super. LEXIS 2863

October 23, 2000, Decided

Facts: Plaintiff brought a foreclosure action against defendants, alleging defendant mortgagor executed a mortgage deed on property in plaintiff's favor. A second deed was also executed to plaintiff on the property. Defendant mortgagor failed to make payments and plaintiff notified defendants they were in default. Defendants failed to cure default. Plaintiff sought full payment and then sought foreclosure.

Issue: Whether creditor correctly applied acceleration clause

Ruling: Yes. Once creditor accelerated payment, the debtor could no longer bar foreclosure by payment of any amount less that required by the acceleration provision. Debtor s did not allege that he had paid all the installments on time under the agreement. Thus, acceleration under the mortgages was not inequitable.

Lesson Learned: At common law, the only defense to an action of foreclosure would have been payment, discharge, release, or satisfaction or, if there had never been a valid lien. In recognition that a foreclosure action is an equitable proceeding, courts have allowed mistake, accident, fraud, equitable estoppel, Connecticut Unfair Trade Practices Act, laches, breach of the implied covenant of good faith and fair dealing, tender of deed in lieu of foreclosure and a refusal to agree to a favorable sale to a third party to be pleaded as special defenses.

Written by Kevin Levonas and Jerry L.