Affirmative Defenses

• Author: Rebecca A. Taylor
• Pages: 159-228

Affirmative Defenses

Chapter 19

159

If a response to a complaint by a motion to dismiss is no longer

available or appropriate, a defendant may file an answer with affir-

mative defenses. By filing an answer to the complaint, “a defen-

dant concedes that the complaint states a claim, but contends that

other facts nonetheless defeat recovery.”1 The scope of successful

affirmative defenses to foreclosure has greatly increased propor-

tionately with current public policy. Traditionally, the only defenses

to foreclosure have been limited to payment, discharge, release or

satisfaction, or lack of a valid lien.2 According to one Connecticut

court:

The purpose of a special defense is to plead facts that are

consistent with the allegations of the complaint but demon-

strate, nonetheless, that the plaintiff has no cause of action.

A valid special defense at law to a foreclosure proceeding

must be legally sufficient and address the making, validity

or enforcement of the mortgage, the note or both. Where

1. Flasza v. TNT Holland Motor Express, 155 F.R.D. 612, 613 (N.D. Ill.

1994).

2. Household Realty Corp. v. Kujawski, No. CV-08-5004992S (Conn.

Super. Ct., Sept. 3, 2010).

160 CHAPTER 19

the plaintiff’s conduct is inequitable, a court may withhold

foreclosure on equitable considerations and principles.

Connecticut’s courts have permitted several equitable de-

fenses to a foreclosure action. If the mortgagor is prevented

by accident, mistake or fraud, from fulfilling a condition of

the mortgage, foreclosure cannot be had. Other equitable

defenses that have been recognized in foreclosure actions

include unconscionability, abandonment of security, and

usury.3

Affirmative defenses, or special defenses as referred to by Con-

necticut courts, can prevent a bank from obtaining summary judg-

ment if they are “legally sufficient and address the making, validity

or enforcement of the mortgage, the note or both,” not general and

boilerplate as demonstrated by so many current foreclosure defense

forms.4 One reason that affirmative defenses should be limited to

the making, validity, and/or enforcement of the mortgage and/or

note is that other issues may not have any connection “with the

subject matter of the foreclosure action and as such do not arise out

of the same transaction as the foreclosure action,” and similarly, an

affirmative defense “cannot attack some act or procedure of the

lienholder.”5

As a foreclosure case is an equitable proceeding, courts permit

defenses of unconscionability, abandonment of security, usury, eq-

uitable estoppel, violations of unfair and deceptive trade practice

statutes, laches, breach of implied covenants of good faith and fair

dealing, deed-in-lieu of foreclosure, inequitable bank refusal to al-

low sale of property to a third party, and lack of consideration.6

Affirmative defenses may also properly address matters other than

the origination or enforcement of the note and mortgage, such as

payment.7 In many cases, affirmative defenses must be made against

an assignee of the original lender, as many loans change hands in

3. Id., citing to CONN. GEN. PRAC. BOOK, R. Super. Ct. § 10-50.

4. See id.

5. Webster Bank v. Linsley, No. CV-97-0260406S (Conn. Super. Ct., Aug.

9, 2001).

6. Id.

7. Id.

Affirmative Defenses 161

ownership. An “assignee stands in the shoes of the assignor and

‘succeeds to no greater rights than those possessed by the assignor.’”8

Additionally, “it is a universal and uncontroversial tenet of contract

law that an assignee of a claim takes the same subject to all de-

fenses that could validly have been raised by the defendant against

the assignor at the time of the assignment.”9 Therefore, if a home-

owner could have asserted a defense against the original lender, he

should be able to assert it against the successor transferees of the

loan.

If a bank obtains a foreclosure summary judgment without re-

futing the borrower’s affirmative defenses, there is a strong chance

that the judgment may be reversed on appeal, as with one Florida

case where the court stated, “[t]his is a case in which bad lawyer-

ing, no lawyering and a lack of notice resulted in appellants losing

their property to foreclosure.”10 In that case, the borrowers retained

an attorney and filed an answer and affirmative defense asserting

that they had met all of their payment obligations “up to and fol-

lowing the filing of the foreclosure action.”11 The bank also admit-

ted that even after sending the borrowers a demand letter, it

“receiv[ed] (and retain[ed] in a ‘suspense’ account) payments sub-

sequent to that date without notifying [the borrowers] that their pay-

ments were being accepted for deposit but not applied to the debt.”12

Approximately at or near the time that the bank filed a motion

for summary judgment, the borrowers’ attorney changed law firms

and moved to another office, of which move the bank was aware.13

However, when the bank filed a notice of hearing on its motion for

summary judgment, it sent the notice to the attorney’s old office.14

The bank was advised to send the notice to the attorney at his new

8. Sovereign Bank v. Gawron, 13 Pa. D. & C. 5th 71, 81 (Pa. Ct. Comm. Pl.

2010).

9. Id., citing N. Chicago Rolling Mill Co. v. St. Louis Ore & Steel Co.,

152 U.S. 596 (1894).

10. Gulliver v. Texas Commerce Bank, 787 So. 2d 256, 257 (Fla. 5th DCA

2001).

11. Id.

12. Id.

13. Id.

14. Id.