CITY OF HARTFORD v. BRIAN MCKEEVER et al., SC 19099

Judicial District of Hartford

 

      Promissory Notes; Whether the Plaintiff, as the Most Recent Assignee and Current Holder of the Defendant's Note, Liable for Sums Overpaid to Prior Holders of the Note.  The defendant executed two promissory notes in favor of a corporation, which assigned its interest in the notes to a bank.  The bank then assigned one of the notes to the plaintiff.  The plaintiff brought this action seeking to foreclose the mortgage securing the note, claiming that the defendant had defaulted on his payment obligations.  The defendant counterclaimed, alleging that he had overpaid on the note and that the plaintiff was liable for the overpayment.  The plaintiff conceded that the defendant overpaid on the note and withdrew its foreclosure action, but claimed that it was only liable for the amount that the defendant overpaid after it took assignment of the note and not the amount overpaid to prior holders of the note.  The trial court found for the defendant on his counterclaim, concluding that the plaintiff was liable for the entire amount of the overpayment.  It reasoned that the plaintiff was not a detached third party assignee because it had been involved in the loan transactions from the beginning.  On appeal, the Appellate Court (139 Conn. App. 277) reversed, concluding that the plaintiff could not be found liable for any overpayment that occurred before it took assignment of the note.  The Appellate Court stated that neither the assignment nor the original note expressly encumbered the plaintiff, as assignee of the note, with liability for any prior note holder's preassignment conduct.  It also noted that the trial court made no findings as to a supposed unity of interest between the plaintiff and its predecessors in title to the note.  The Supreme Court granted the defendant certification to appeal from the Appellate Court and will consider whether that court properly determined that the plaintiff, as the most recent assignee and current holder of the note, could not be liable to the defendant for sums he overpaid on the note.