source: Caselaw Access Project

license: Public Domain

text:
    STATE OF CONNECTICUT v. LAMAR DUPREE
    (AC 17583)
    Foti, Mihalakos and Healey, Js.
    Argued October 25, 1999
    officially released February 15, 2000

      Louis S. Avitabile, special public defender, for the appellant (defendant).

      Toni Smith-Rosario, deputy assistant state’s attorney, with whom, on the brief, were John A. Connelly, state’s attorney, and Terence Mariani, assistant state’s attorney, for the appellee (state).
   Opinion

HEALEY, J.

The defendant, Lamar Dupree, was charged in a two count information with the crimes of assault in the first degree in violation of General Statutes § 53a-59 (a) (4) in the first count and assault in the first degree in violation of § 53a-59 (a) (l) in the second count. After a jury trial, the defendant was found not guilty under the first count, but guilty under the second count of the lesser included offense of assault in the second degree in violation of General Statutes § 53a-60 (a) (2). On appeal, the defendant claims that the trial court improperly refused his request to charge the jury on the lesser included offense of criminally negligent assault in the third degree in violation of General Statutes § 53a-61 (a) (3). We affirm the judgment of the trial court.

The following facts and procedural history are relevant to our disposition of this appeal. The defendant filed his brief in this court on January 13, 1998. Thereafter, on December 11, 1998, the state filed a motion for permission to file a motion for rectification with respect to three issues. See Practice Book § 66-5, formerly § 4051. Subsequent to briefs being filed, this court denied the state’s motion as to the first issue, but granted it as to the second and third issues. On March 5,1999, the state filed a revised motion for rectification on the two issues granted by this court.

Subsequently, the trial court filed its decision granting the state rectification on the two issues involved. Of the two issues on which the trial court granted rectification, only the first issue is relevant to the disposition of this appeal. See footnote 5. In its rectification on this issue, the trial court stated, inter alia, that “[t]he basis of the court’s denial of the defendant’s request to charge on assault in the third degree under General Statutes § 53a-61 (a) (3) was the defendant’s failure to disclose, in advance of closing arguments, that he would be filing a written request to charge on that subject. He was ordered by the court to do so.”

Before proceeding further, it is necessary to set out additional circumstances that are germane to our discussion and analysis of the defendant’s appeal. On the morning of May 14, 1997, the state rested its case-in-chief prior to the lunch break. The defendant then made his motion for judgment of acquittal on both counts of the substitute information. The trial court denied the motion. Thereafter, the defendant presented Kevin Wilson as a witness. After Wilson had completed his testimony, the jury was excused for lunch and left the courtroom. Immediately thereafter, the following colloquy took place:

“The Court: Are we having evidence at 2 o’clock, or are we having argument at 2 o’clock?
“[Defense Counsel]: Well, I think we have to discuss the charge first, you know. Are we going to—
“The Court: Pardon me?
“[Defense Counsel]: You’re going to have to discuss the charge first.
“The Court: Well, if you—I’ll say it again. If you have any charges you want, you have to give them to me. Or if you want any charges for me not to give, you’ve got to tell me that. I’m not going to have a charging conference on this case that’s going to—
“[Prosecutor]: I’m asking for a charge on assault in the second degree.
“The Court: Well, you get it to me; you give me what you want.
“[Prosecutor]: You want me to give it to you?
“The Court: Yep.
“[Prosecutor]: Okay.
“The Court: You’ve got time now over the lunch hour.
“[Defense Counsel]: I would probably be presenting [Thomas] Nalband at 2 o’clock if he’s available, Your Honor.
“The Court: At 2 o’clock?
“[Defense Counsel]: Two o’clock, yeah.
“The Court: He’s the public defender?
“[Defense Counsel]: Yes, across the street.
“The Court: All right, we’ll continue with evidence at 2:10 p.m. I’m going to request both of you to give me for tomorrow morning full charges, full requests to charge tomorrow morning.”

After the recess and in the absence of the jury, the defendant renewed his motion for acquittal and the court again denied it. The following colloquy then took place:

“The Court: All right. We note that you’ve rested, and same ruling on the motions for judgment of acquittal. The state have anything?
“[Prosecutor]: No, Judge. I just wanted to put on the record . . . what we discussed in chambers, that I am going to be arguing in accordance with State v. Woods [25 Conn. App. 275, 280-81, 594 A.2d 481, cert. denied, 220 Conn. 923, 598 A.2d 365 (1991)], just so the defense can’t claim surprise, that you’ve agreed to give a charge in accordance with that case, which says that the skin on a human being constitutes a bodily organ in terms of proving assault in the first degree. And also that we discussed self-defense, and there is going to be a self-defense charge.
“The Court: Are you going to argue self-defense, [defense counsel]?
“[Defense Counsel]: It’s going to be one of my many arguments, yes, Your Honor.
“The Court: Okay. I just want to make sure you’re arguing it so we don’t—
“[Defense Counsel]: Yes.
“The Court:—we don’t bring that in if we’re not going to—you are?
“[Defense Counsel]: Yes. ifc
“[Prosecutor]: Are you entertaining the thought of giving the charge today?
“The Court: No. No.”

The jury then returned to the courtroom and the defense rested. Both the state and the defense presented their final arguments. The court then excused the jury, telling them to report at 10 a.m. the following day.

After the jury left, the following colloquy occurred:

“ [Defense Counsel]: What time are we meeting tomorrow, Your Honor, for the charge?
“The Court: Nine o’clock.
“[Defense Counsel]: Nine o’clock?
“The Court: Nine o’clock, ten after, five after nine?
“[Prosecutor]: Yeah, I thought it was pretty much settled. I mean there’s nothing to go over, right? We’re going to get the assault under the one subsection.
“[Defense Counsel]: Well, if we have any requests to charge they should be submitted by tomorrow morning.
“The Court: Yeah, they should be there by 9 o’clock so that I can get a chance to look at them and evaluate them, all right?
“[Prosecutor]: Sure. But I mean there’s nothing new that’s coming up that I know of, right?
“[Defense Counsel]: I don’t know.
“The Court: Okay. But I just want—I don’t want to charge the jury and then come out and say, oh, really what I wanted you to say was this, too.
“[Prosecutor]: I understand.
“The Court: So if there’s anything special, get [it] to me. Anything you don’t want said, get it to me. You’ve had a peek at—you know what I’m going to say. Okay. We’ll adjourn court, then, until 10 o’clock tomorrow morning. Thank you.”

On the next day, May 15,1997, the state filed a request to charge on assault in the second degree, § 53a-60 (a) (1), as a lesser included offense of assault in the first degree, § 53a-59 (a) (1). The defendant filed several requests to charge, including one on assault in the third degree, § 53a-61. The court’s instructions included one on assault in the second degree but did not include one on assault in the third degree.

After the court’s instructions, the defendant took exception to the failure of the court to instruct on assault in the third degree. At that time, the following colloquy occurred:

“[Defense Counsel]: . . . Finally, number ten, I requested the court charge on criminally negligent assault in the third degree ... as a lesser offense, which the court did not give. I take exception to the court’s failure to charge on criminally negligent assault in the third degree as a lesser offense under the circumstances of this case as indicated in the request to charge. And by the law under State v. Smith [185 Conn. 63, 76-79, 441 A.2d 84 (1981)].
“The Court: All right. The exceptions are noted. I’ll just comment on one of them, and that was the request regarding the prior incarceration of the defendant. . . . Okay. You want to take a look—
“[Prosecutor]: Can I respond to that, or is that inappropriate?
“The Court: If you’d like to.
“[Prosecutor]: . . . And as to the lesser included offenses, the court made it clear to myself and to defense counsel on a number of occasions that if we wanted charges on lesser included offenses, we should have requested those yesterday. At least that was my understanding.
“[Defense Counsel]: Your Honor gave us till this morning to file official requests to charge. I would not agree to going to argument yesterday if the court had not given us that position. I note that [the prosecutor] got a charge on assault in the second degree wherein ... he did not make an offer under the proper form of the Practice Book. He did not cite facts, and he did not lay out the charge for the court. I laid out the charge for the court, and I recited what facts distinguished the mental state between intent to cause serious physical injury and criminally negligent mental state, if the court pleases, for the record.
“The Court: Did you argue assault [in the second degree] to the juiy?
“[Defense Counsel]: No, I didn’t argue assault [in the second degree],
“[Prosecutor]: Well, I made the decision and got the court’s approval on getting the charge on assault in the second degree prior to my argument.
“The Court: To argument, right.
“ [Prosecutor]: And one of the problems the state feels it would have been prejudiced by allowing the charge on assault in the third degree because I never even had an opportunity to address that in my closing argument; and I don’t recall specifically whether or not I even brought up the assault [in the second degree]. But at least I knew and defense counsel knew prior to the closing argument and prior to us having a chance to talk to the jury that that charge was at least going to them.
“ [Defense Counsel]: But there’s no harm to the [state]. He didn’t—he didn’t argue assault [in the second degree], Your Honor. If he’s entitled to [an] assault [in the second degree] charge on an improper form, I’m entitled to an assault [in the third degree] charge, and I would take serious exception to that, Your Honor.
“The Court: Okay. All right, thank you.
“[Defense Counsel]: And I’ll never again allow arguments before filing written requests.
“The Court: Okay. Take a look at the exhibits, please, gentlemen, and see if we can agree upon them going in.”

Ultimately, the jury found the defendant not guilty under the first count but guilty under the second count of the lesser included offense of assault in the second degree in violation of § 53a-60. Thereafter, the defendant filed a motion for a new trial, which alleged the trial court’s failure to comply with the rules of practice, the failure to charge on assault in the third degree and the result of these failures. In denying this motion the court said in part: “Subsection D, the court—I don’t know what that means—counsel for the state and the defense provide final arguments. Prior to the filing, official, written requests for jury instructions, that would be on assault [in the] second [degree], the crime for which the defendant had been convicted, that it’s true that final—that written requests were not placed in the file before that event, but these matter[s] were discussed in chambers. There is no objection. The court considered this to be waived. As a matter of fact, this was argued to the jury by counsel. No prejudice is found to the defendant.

“The court I think properly refused to charge on assault in the third degree although I don’t recall if I had a request on that, but even if I did, assault in the third degree is not a lesser offense in this particular charge. The claim here is that he was cut by a razor and the fact is, was he or wasn’t he.” Thereafter, as already noted, the court filed its rectification of the record, which sets out its reasoning for denying the defendant’s request to charge on assault in the third degree.

The defendant argues that the trial court acted improperly in failing to instruct the jury on assault in the third degree in violation of § 53a-61 (a) (3) as a lesser included offense of assault in the first degree in violation of § 53a-59 (a) (1). In doing so, he claims that he acted not only timely but also consistent with the trial court’s order to provide the court with “full requests to charge tomorrow morning [May 15, 1997]” after closing arguments. He argues also that in doing so, the trial court “authorized the violation of § 853 of the Practice Book by both the state and the defendant. ” He maintains that any violation of Practice Book § 853, now § 42-17, was, in effect, induced by the court. He contends, therefore, that his request to charge on the lesser included offense should have been given because it satisfied all four prongs of State v. Whistnant, 179 Conn. 576, 588, 427 A.2d 414 (1980). We do not agree.

“There is no fundamental constitutional right to a jury instruction on every lesser included offense”; id., 583; rather, the right to such an instruction is purely a matter of our common law. “A defendant is entitled to an instruction on a lesser [included] offense if, and only if, the following conditions are met: (1) an appropriate instruction is requested by either the state or the defendant; (2) it is not possible to commit the greater offense, in the manner described in the information or bill of particulars, without having first committed the lesser; (3) there is some evidence, introduced by either the state or the defendant, or by a combination of their proofs, which justifies conviction of the lesser offense; and (4) the proof on the element or elements which differentiate the lesser offense from the offense charged is sufficiently in dispute to permit the jury consistently to find the defendant innocent of the greater offense but guilty of the lesser.” Id., 588.

Under the first prong of Whistnant we must determine whether the request to charge constituted an appropriate instruction. “A proposed instruction on a lesser included offense constitutes an appropriate instruction for purposes of the first prong of Whistnant if it complies with Practice Book § 854. State v. Hall, 213 Conn. 579, 591, 569 A.2d 534 (1990); State v. Ostroski, [201 Conn. 534, 556-58, 518 A.2d 915 (1986)]; State v. McIntosh, [199 Conn. 155, 158-61, 506 A.2d 104 (1986)]. Section 854 provides in relevant part: ‘When there are several requests, they shall be in separate and numbered paragraphs, each containing a single proposition of law clearly and concisely stated with the citation of authority upon which it is based, and the evidence to which the proposition would apply ....’” State v. Arena, 235 Conn. 67, 75, 663 A.2d 972 (1995). “We have held that, in the context of a written request to charge on a lesser included offense, this requirement of § 854 is met only if the proposed request contains such a complete statement of the essential facts as would have justified the court in charging in the form requested.” (Internal quotation marks omitted.) State v. Hall, supra, 591; State v. Tomasko, 238 Conn. 253, 261-62, 681 A.2d 922 (1996); State v. Vega, 48 Conn. App. 178, 183, 709 A.2d 28 (1998).

The defendant’s arguments gloss over the circumstance that his request to charge on § 53a-61 (a) (3) was filed in violation of the trial court’s order that directed both the state and the defendant to disclose, in advance of closing arguments, any lesser included offense on which they would be filing a written request to charge. The defendant’s failure to obey that order was the trial court’s basis for its refusal to give the defendant’s requested charge. As the court noted in its rectification, its preargument discussions with both counsel made it “abundantly clear” to the court that the only requested lesser included offense was that of the state. The record before us bears that out. That record fairly makes evident that on the morning of May 14,1997, after the sole defense witness testified, a recess was taken during which counsel met with the court in chambers and that possible requests to charge were discussed. To underscore that, the record indicates that after the recess, counsel for the state said that he “just wanted to put on the record that what we discussed in chambers, that I am going to be arguing in accordance with State v. Woods, [supra, 25 Conn. App. 275], just so the defense can’t claim surprise, that you’ve agreed to give a charge in accordance with that case .... And also that we discussed self-defense, and there is going to be a self-defense charge.” Other than to state that he intended to argue self-defense, defense counsel said nothing in response, or in addition to, what the prosecutor said of what occurred in chambers.

The trial court, in ordering the disclosure of the subject areas of the requests to be disclosed before the final arguments, while at the same time permitting the formal filing of the written requests on the following morning, in effect, sua sponte, ordered a partial waiver of Practice Book § 853. Neither party objected to the arrangement. In fact, it advantaged the defendant in that he knew prior to the final arguments that the state, which had followed the court’s disclosure order, would be filing a formal request to charge on the lesser included offense of assault in the second degree the following morning. That gave the defendant an opportunity, had he decided to do so, to respond to that during final arguments.

On the other hand, the defense posture disadvantaged both the court and the state. First, in keeping with the substance and the spirit of the court’s disclosure order, it deprived both the court and the state of adequate time to consider the subject area disclosed and to investigate the relevant case law. Second, it disadvantaged the state by foreclosing it from responding to it during the final arguments as well as to question its applicability in the first instance. We agree, therefore, with the state that the timing of the defendant’s disclosure violated the implicit notice requirement of Practice Book § 854 and went beyond the limits of the court’s waiver of Practice Book § 853.

Nevertheless, the defendant argues that his failure to comply with the requirement of Practice Book § 853 that requests to charge should be filed before final arguments should be excused here because that violation was induced by the trial court. We do not agree. There was no “violation” as claimed because the trial court exercised properly its discretion in ordering the partial waiver of Practice Book § 853. See McKesson & Rob bins, Inc. v. Shushkiewich, 10 Conn. Sup. 237, 239-40 (1941). In any event, the defendant’s claim here is wide of the mark. The court’s refusal of his request was not because of any violation by him of Practice Book § 853, but rather was clearly based on his failure to disclose, as ordered on the previous day, the subject areas of his requests prior to final arguments.

While the court was taking the exceptions to its jury instructions and after the defendant had excepted to the court’s failure to give its request on third degree assault, the state said that, as to the lesser included offenses, the court had made it “clear to myself and to defense counsel . . . that if we wanted charges on lesser included offenses, we should have requested those yesterday. At least that was my understanding.” Defense counsel replied that the court “gave us [until] this morning to file official requests to charge. I would not agree to going to argument yesterday if the court had not given us that position.” (Emphasis added.) He continued, noting that the state had received an instruction on second degree assault where its request was not “under the proper form of the Practice Book,” that it did not cite facts and “did not lay out the charge for the court” whereas his request did lay out the charge for the court and recited the required facts. Disputing the-state’s claim that it had been harmed by the manner in which the defense had proceeded in this regard, defense counsel maintains that “if [the state was] entitled to [an] assault [in the second degree] charge on an improper form, [the defendant is] entitled to an assault [in the third degree] charge . . . .”

As to what defense counsel indicated the court had said on the previous day, the short answer to that claim is what the court’s rectification had stated as well as the trial transcript itself. Both indicate that defense counsel was silent when the prosecutor reiterated on the record what he understood after the chambers conference on May 14, 1997. While it is correct that the court gave both the state and the defendant until the morning of May 15, 1997, to file “official requests,” any fair assessment of the context of the proceedings demonstrates that “official requests” means the formal written requests as to those subject areas the court ordered both counsel to disclose on the previous day. Any other interpretation wholly overlooks the court-ordered waiver of Practice Book § 853 on May 14,1997. It is apparent, from what we have stated previously, that the defendant’s request to charge was not “an appropriate instruction” under that first prong of State v. Whistnant, supra, 179 Conn. 588. The defendant’s decision to file his request in violation of the disclosure order of the trial court, which included that court’s partial waiver of the time filing requirements of Practice Book § 853, also involved a violation of the notice requirements implicit in Practice Book § 854, thereby rendering it “inappropriate” under the first prong of Whistnant.

We should point out that the defendant, in seeking to support his claim of induced error, refers to two Supreme Court cases both of which are clearly distinguishable from the circumstances of this case, State v. Herring, 210 Conn. 78, 105 n.25, 554 A.2d 686, cert. denied, 492 U.S. 912, 109 S. Ct. 3230, 106 L. Ed. 2d 579 (1989), and State v. Ray, 228 Conn. 147, 153 n. 7, 635 A.2d 777 (1993). In both Herring and Ray, the defendant’s dilemma involved conduct induced by the trial court. In Herring, the Supreme Court excused the defendant’s failure to file a written request where “defense counsel, upon inquiry to the trial court, had been reassured that he need not file a formal, written request to charge and that his oral request sufficed.” State v. Herring, supra, 105 n.25. The Herring court did not, therefore, find the defendant’s proposed instruction “inappropriate” under the first prong of Whistnant. Id. In Ray, the trial court required the defendant’s request for a lesser offense that did not contain any supporting evidence to be filed prior to the conclusion of the evidence. The court, in Ray, therefore, excused the defendant’s failure to comply with the first prong of Whistnant. The case before us, unlike both Herring and Ray, is not one of court-induced error.

Turning to the defendant’s argument concerning the state’s written request to charge, we determine that while not as artful as possible, it did not mislead or prejudice the court or the defendant. The state’s intention to request a charge on the lesser included offense of assault in the second degree in accordance with State v. Woods, supra, 25 Conn. App. 275, had been timely disclosed. The request disclosed the proposition of law for which Woods, properly cited, was being requested. The request also disclosed that the state claimed that assault in the second degree was claimed as a lesser included offense of the crime charged in count two of the substitute information. Insofar as the defendant attacks the state’s request as to its factual content when he suggests that it violated Practice Book § 854, we point out that Practice Book § 854, as it existed at the time of this trial, required a recitation of the evidence to which the proposition of law applied only “if requested by the judicial authority.” See L. Orland & D. Borden, 4 Connecticut Practice Series: Practice Book Annotated, Criminal Procedure (3d Ed. 1999) § 42-18, p. 427; see also State v. Vega, supra, 48 Conn. 183 n.5. Neither the court nor the defendant was misled by the state’s request.

The judgment is affirmed.

In this opinion the other judges concurred.

       General Statutes § 53a-59 (a) provides in relevant part: “A person is guilty of assault in the first degree when: (1) With intent to cause serious physical injury to another person, he causes such injury to such person or to a third person by means of a deadly weapon or a dangerous instrument . . .

       General Statutes § 53a-60 (a) provides in relevant part: “A person is guilty of assault in the second degree when ... (2) with intent to cause physical injury to another person, he causes such injury to such person or to a third person by means of a deadly weapon or a dangerous instrument other than by means of the discharge of a firearm . . . .”

       General Statutes § 53a-61 (a) provides in relevant part: “A person is guilty of assault in the third degree when ... (3) with criminal negligence, he causes physical injury to another person by means of a deadly weapon, a dangerous instrument or an electronic defense weapon.”

       In the view that we take of the matter, it is not necessary for us to set out the evidence of the underlying crimes charged in the substitute information that involved a street fight in Waterbury between the defendant and another combatant in which both were apparently “armed” with razors that were wielded at each other. Bather, we will set out in this opinion those factual circumstances relevant to the sole issue of the trial court’s rectification, which issue is dispositive of this appeal.
      Moreover, the state claims that the defendant’s request to charge did not satisfy the first, third and fourth prongs of State v. Whistnant, 179 Conn. 576, 588, 427 A.2d 414 (1980). In view of our resolution of this appeal under the first prong, there is no need for us to reach the third and fourth prongs of Whistnant.

       The three issues for which the state originally asked rectification were:
      “1. Whether, according to [the trial court’s] recollection or any notes it may have taken, it held a preliminary charge conference on May 14, 1997, during a recess reflected in the transcript, at which it ordered the parties to disclose, prior to closing arguments, the subject areas to be covered by the written requests to charge that the trial court ordered to be filed by the following morning;
      “2. Whether the basis of its denial of the defendant’s request to charge on assault in the third degree under General Statutes § 53a-61 (a) (3) was the defendant’s failure to disclose, in advance of closing arguments, that he would be filing a written request to charge on that subject; and
      “3. Whether the jury received a charge on assault in the second degree under General Statutes § 53a-60 (a) (2) as a lesser included offense as requested by the state, was reinstructed on that charge after giving the trial court a note, and convicted the defendant under § 53a-60 (a) (2), despite the fact that the clerk’s docket entry and the judgment mittimus refer to General Statutes § 53a-60 (a) (3) and the transcription of the trial court’s request for the jury verdict further confuses the issue by referring to General Statutes § 53a-60 (a) (3).”

       The trial court’s entire statement in the rectification of the record on the first issue states: “The basis of the court’s denial of the defendant’s request to charge on assault in the third degree under General Statutes § 53a-61 (a) (3) was the defendant’s failure to disclose, in advance of closing arguments, that he would be filing a written request to charge on that subject. He was ordered by the court to do so. Having had a prior experience with defendant’s counsel handing this court a request to charge while seated on the bench and about to begin its charge, this court was particularly concerned about a repeat occurrence. The preargument discussions with both counsel made it abundantly clear to me that the only requested lesser included offense would be the state’s.
      “The court also gratuitously added its belief that the facts also did not warrant such an instruction. However, the basis for the denial was the defendant’s counsel’s failure to follow the court’s direction to apprise it of any requests that would be in addition to the boilerplate instruction, specifically, lesser included offenses. The defendant’s counsel was mute on the subject. He thereafter tried his ‘surprise’ which he knew full well was in derogation of our charge discussions in fact and in spirit. The colloquy on the record after the closing argument had nothing to do with the subject of lesser included offenses. It only had to do with any variations on the boilerplate charge or matters that they might not want charged.”

       Nalband never testified.

       In his motion for a new trial, the defendant made the following claims, inter alia: “(d) [T]he Court [ordered] counsel for the State and the defendant to present final arguments to the jury prior to filing official requests for jury instructions in violation of Sections 853 and 854 [now §§ 42-17 and 42-18] of the Connecticut Practice Book.
      “(e) [T]he Court gave the State’s request on the lesser included offense of assault in the second degree even though the request was not in proper form and was not timely.

        “(f) [T]he Court compounded the unfairness of paragraph (e) above by refusing to charge on assault in the third degree as a lesser offense even though the defendant’s request was in proper form but late because of the action in paragraph (d) above.”

       Practice Book § 853 provides: “Written requests to charge the jury must be filed in triplicate with the clerk before the beginning of the arguments or at such earlier time during the trial as the court directs, and the clerk shall file them and forthwith hand one copy to the judicial authority and one to opposing counsel. A party’s requests to charge may be amended in writing as a matter of right at ány time prior to the beginning of the charge conference.”

       As stated previously, in footnote 4, our resolution of this appeal requires that we discuss only the first prong of Whistnant, which is dispositive.

       At the time of the trial, in the case before us, Practice Book § 854 provided: “When there are several requests, they shall be in separate and numbered paragraphs, each containing a single proposition of law clearly and concisely stated with the citation of authority upon which it is based and, if requested by the judicial authority, the evidence to which the proposition would apply. Requests to charge should not exceed fifteen in number unless, for good cause shown, the court permits the filing of an additional number. If the request is granted, the judicial authority shall apply the proposition of law to the facts of the case.
      “A principle of law should be stated in but one request and in but one way.”

       The trial court did instruct the jury on self-defense.

       This arrangement apparently came about, at least in part, because of a prior experience of the trial court with defense counsel, to which the court referred in the rectification filed in this matter.

       The trial court’s rectification pointed out that it was “its belief that the facts also did not warrant such an instruction [as ultimately requested in writing by the defendant on the morning of May 15, 1997].” We, however, need not decide that issue.

       The defendant claimed that the trial court “authorized the violation of § 853 of the Practice Book by both the state and the defendant.” There was, however, no “violation” of Practice Book § 853. Practice Book § 1-8, formerly § 6, provides for a liberal interpretation of our rules of practice. “Procedural rules are not ends in themselves but only the means of administering justice, and exceptions to them in specific cases may be allowed where no violation of constitutional rights is involved.” State v. Anonymous (1976-2), 32 Conn. Sup. 306, 312, 353 A.2d 789 (1976). “There is no fundamental constitutional right to a jury instruction on every lesser included offense; State v. Whistnant, [supra, 179 Conn. 583]; rather, the right to such an instruction is purely a matter of our common law.” (Internal quotation marks omitted.) State v. Tomasko, supra, 238 Conn. 260.

       The quality and content of the defendant’s request to charge are not relevant in this appeal.

       The statement of this “tit for tat” argument of the defendant lacks merit because it does not factor in the real focus of the matter—the failure of defense counsel to follow the disclosure order of the trial court. In any event, it is not adequately briefed and can be considered abandoned. State v. Rodriguez, 44 Conn. App. 818, 823, 692 A.2d 846, cert. denied, 242 Conn. 902, 697 A.2d 363 (1997).

       This language was deleted from Practice Book § 854, now § 42-18, effective October 1, 1997.


author: LANDAU, J.

text:
    STATE OF CONNECTICUT v. JAROSLAW NANOWSKI
    (AC 17647)
    O’Connell, C. J., and Landau and Stoughton, Js.
    Argued December 6, 1999
    officially released February 15, 2000

      John T. Walkley, special public defender, for the appellant (defendant).

      Denise B. Smoker, assistant state’s attorney, with whom, on the brief, were Scott J. Murphy, state’s attorney, and Paul Rotiroti, assistant state’s attorney, for the appellee (state).
   Opinion

LANDAU, J.

The defendant, Jaroslaw Nanowski, appeals from the judgment of conviction, rendered after a jury trial, of failure to pay wages in violation of General Statutes § 31-71c (a) and (b). On appeal, the defendant claims that (1) General Statutes § 31-71a et seq. is unconstitutional as applied to him, (2) if the statute is constitutional on its face, the trial court improperly (a) struck the defendant’s mistake of law defense and (b) failed to instruct the jury that the state was required to prove criminal intent beyond a reasonable doubt, and (3) there was insufficient evidence to prove that the defendant, not the corporation, was legally responsible under § 31-71c. We affirm the judgment of the trial court.

The jury reasonably could have found the following facts. In late 1992, the defendant and two other individuals founded American Investment Company, Inc. (corporation), pursuant to the laws of the state of Connecticut. The defendant, in addition to being the majority shareholder, was the president of the corporation and was responsible for its day-to-day operation. He also was responsible for the hiring and firing of personnel, and for signing and distributing paychecks. He told the corporation’s employees that he owned the business and was the person in charge. The corporation’s business was to help eastern European businesses obtain financing.

Between May and the end of September, 1995, six individuals employed to perform services for the corporation failed to receive compensation. In some instances, the defendant gave the employees paychecks that were returned for insufficient funds. In other instances, the defendant gave employees paychecks but asked them not to present the checks for payment until he advised them to do so. In yet other instances, the defendant did not give employees paychecks. The defendant made representations to the employees that they would be paid when funds were received from clients. Eventually, the employees left the corporation and never were paid for some or all of the services they rendered during the relevant period. They were owed $18,150. The employees, therefore, filed complaints with the department of labor. The defendant subsequently was arrested and charged with failure to pay wages in violation of § 31-71 c. Following his conviction, he was given a total effective sentence of ten years imprisonment, suspended after three years, and five years probation.

I

The defendant’s first claim is that § 31-71a et seq. is unconstitutional as applied to him because the increased penalty for conviction imposed by the legislature in its 1993 amendments to General Statutes § 31-71g; see Public Acts 1993, No. 93-392, § 4; requires that an inference of intent be read into § 31-71c, specifically, that one cannot be convicted of a crime without an element of mens rea. We do not agree.

“Before we begin our analysis, we note that [a] party who challenges the constitutionality of a statute bears the heavy burden of proving its unconstitutionality beyond a reasonable doubt and we indulge in every presumption in favor of the statute’s constitutionality. . . . Federal Deposit Ins. Corp. v. Voll, 38 Conn. App. 198, 203, 660 A.2d 358 (1995); State v. Merdinger, 37 Conn. App. 379, 382, 655 A.2d 1167 [cert. denied, 233 Conn. 914, 659 A.2d 187] (1995). In addition to showing that [the statute] is unconstitutional beyond a reasonable doubt, the defendant must show that its effect or impact on him adversely affects a constitutionally protected right which he has. Society for Savings v. Chestnut Estates, Inc., 176 Conn. 563, 569, 409 A.2d 1020 (1979). Finally, [w]hile the courts may declare a statute to be unconstitutional, our power to do this should be exercised with caution, and in no doubtful case. Fair Cadillac-Oldsmobile Isuzu Partnership v. Bailey, 229 Conn. 312, 316, 640 A.2d 101 (1994).” (Internal quotation marks omitted.) Giordano v. Giordano, 39 Conn. App. 183, 188-89, 664 A.2d 1136 (1995).

The constitutionality of § 31-71 c was first challenged in State v. Merdinger, supra, 37 Conn. App. 382, in which the defendant claimed that the statute was unconstitutional because it did “not prescribe a requisite mens rea, specifically, intent not to pay wages is not an element of the crime.” This court upheld the constitutionality of the statute, citing the seminal United States Supreme Court case on the issue, Morissette v. United States, 342 U.S. 246, 72 S. Ct. 240, 96 L. Ed. 288 (1952). In both Merdinger and this case, the defendants rely on the common-law rule that the commission of a crime always encompasses the notion of an evil will or intention to do wrong. The defendant in the case before us acknowledges that there is a different class of laws that came into existence during the nineteenth century, primarily due to the Industrial Revolution, to protect the public health, welfare and safety. Violation of these regulatory laws became known as “public welfare offenses.” Id., 255.

“While many of these duties axe sanctioned by a more strict civil liability, lawmakers . . . have sought to make such regulations more effective by invoking criminal sanctions to be applied by the familiar technique of criminal prosecutions and convictions. This has confronted the courts with a multitude of prosecutions, based on statutes or administrative regulations .... These cases do not fit neatly into any of such accepted classifications of common-law offenses, such as those against the state, the person, property, or public morals. Many of these offenses are not in the nature of positive aggressions or invasions, with which the common law so often dealt, but are in the nature of neglect where the law requires care, or inaction where it imposes a duty. Many violations of such regulations result in no direct or immediate injury to person or property but merely create the danger or probability of it which the law seeks to minimize. While such offenses do not threaten the security of the state in the manner of treason, they may be regarded as offenses against its authority, for their occurrence impairs the efficiency of controls deemed essential to the social order as presently constituted. In this respect, whatever the intent of the violator, the injury is the same, and the consequences are injurious or not according to fortuity. Hence, legislation applicable to such offenses, as a matter of policy, does not specify intent as a necessary element.” Id., 254-56.

“It is well established that a criminal statute is not necessarily unconstitutional because it imposes strict liability. [P]ublic policy may require that in the prohibition or punishment of particular acts it may be provided that he who shall do them shall do them at his peril and will not be heard to plead in defense good faith or ignorance. Shevlin-Carpenter Co. v. Minnesota, 218 U.S. 57, 70, 30 S. Ct. 663, 54 L. Ed. 930 (1910). The constitutional requirement of due process is not violated merely because mens rea is not a required element of a prescribed crime. United States v. Greenbaum, 138 F.2d 437, 438 (3d Cir. 1943).” (Internal quotation marks omitted.) State v. Merdinger, supra, 37 Conn. App. 382-83.

Although the defendant notes the legal philosophy and tenets explained in Morissette and Merdinger, he argues that his case is somehow different because the penalty imposed on him is more severe. “While the general rule at common law was that the scienter was a necessary element in the indictment and proof of every crime, and this was followed in regard to statutory cilmes, even where the statutory definition did not in terms include it . . . [t]he legislature may, if it so chooses, ignore the common-law concept that criminal acts require the coupling of the evil-meaning mind with the evil-doing hand and may define crimes which depend on no mental element, but consist only of forbidden acts or omissions. . . . Whether or not a statutory crime requires mens rea or scienter as an element of the offense is largely a question of legislative intent to be determined from the general scope of the act and from the nature of the evils to be avoided.” (Citation omitted; internal quotation marks omitted.) State v. Swain, 245 Conn. 442, 454, 718 A.2d 1 (1998).

The defendant acknowledges the public policy purpose of § 31-71a et seq. The “statute is one of strict criminal liability designed to eradicate the evil of nonpayment of wages even though those without an evil purpose might end up ensnared in its net.” State v. Merdinger, supra, 37 Conn. App. 385. The defendant’s position, however, is that the 1993 amendments to § 31-71g are unconstitutional because the legislation changed the character of the penalties prescribed for failure to pay wages from misdemeanor to felony. This change, the defendant argues, is contrary to dicta in Morissette. The defendant believes, therefore, that the greater penalty now imposed by § 31-71g requires the inference of a mens rea in § 31-71c.

Neither the United States Supreme Court nor our Supreme Court has held that the magnitude of the penalty determines the constitutionality of strict liability statutes. “There is a suggestion in some of the early cases dealing with police regulatory legislation not requiring any criminal intent that the penalties must be petty and not involve imprisonment. . . . The question left undecided in those cases, whether a provision for imprisonment necessarily implied a requirement of mens rea, has long been resolved in favor of the view that the abandonment of the element of intent depends upon the peculiar nature and quality of the offense and whether the penalty serves as an effective means of regulation. . . . [State v. Kreminski, 178 Conn. 145, 152, 422 A.2d 294 (1979)].” (Internal quotation marks omitted.) State v. Swain, supra, 245 Conn. 456; see also United States v. Freed, 401 U.S. 601, 607-10, 91 S. Ct. 1112, 28 L. Ed. 2d 356 (1971) (possession of unregistered firearm, crime punishable by ten years in prison, fine or both, strict liability offense).

Section 31-71g provides a regimen of increasingly severe fines and imprisonment, depending on the magnitude of the defendant’s violation of § 31-71c. Here, the defendant was charged with six counts of failing to pay his employees. He owed six individuals compensation in amounts ranging from $1200 to $6500. The total owed was in excess of $18,000. The jury convicted the defendant on all six counts. The severity of his sentence was determined by the number and magnitude of the crimes he committed, not by the amendment to the statute. In its wisdom, our legislature enacted laws that regulate the payment of an employee’s wages and prescribe the penalties for failing to do so. The defendant has failed to prove beyond a reasonable doubt that § 31-71a et seq. is unconstitutional.

II

The defendant’s second claim is that if §§ 31-71c (a) and 31-71g are constitutional on their face, the court improperly (1) struck his mistake of law defense and (2) failed to instruct the jury that the state was required to prove criminal intent beyond a reasonable doubt. We disagree.

A

The defendant first claims that the court improperly struck his mistake of law defense. The substance of the defendant’s mistake of law defense is that he thought he personally was protected from prosecution under § 31-71c by the corporate structure of his business. The court struck the defense, reasoning that the defense was flawed because the defendant knew that it was illegal not to pay his employees. We agree with the trial court.

The defendant’s brief on this issue consists of one paragraph in which he simply restates his position that § 31-71 c requires a mens rea element and that the court improperly relied on State v. Merdinger, supra, 37 Conn. App. 379. There is no additional analysis of his claim. The defendant’s claim is “not amenable to appellate review. In order for this court judiciously and efficiently to consider claims of error raised on appeal; Karanian v. Maulucci, 185 Conn. 320, 321, 440 A.2d 959 (1981); the parties must clearly and fully set forth their arguments in their briefs. We do not reverse the judgment of a trial court on the basis of challenges to its rulings that have not been adequately briefed. . . . Krondes v. O’Boy, 37 Conn. App. 430, 436, 656 A.2d 692 (1995).” (Internal quotation marks omitted.) New London Federal Savings Bank v. Tucciarone, 48 Conn. App. 89, 100, 709 A.2d 14 (1998).

B

With respect to the defendant’s claim that the court failed to instruct the jury that the state was required to prove criminal intent beyond a reasonable doubt, we note that the defendant submitted to the court a request. The defendant did not object to the court’s instruction and now seeks review pursuant to State v. Golding, 213 Conn. 233, 567 A.2d 823 (1989). On the basis of our review of the record, we conclude that the charge of which the defendant now complains was in almost all respects exactly what he himself requested. The court’s charge was not inconsistent with the law and was not, therefore, improper.

Ill

The defendant’s final claim is that there was insufficient evidence to prove that he, not the corporation, was responsible under § 31-71c. We do not agree.

“The two part test for evaluating the sufficiency of the evidence in a jury trial is well established. First, the reviewing court construes the evidence presented at trial in a light most favorable to sustaining the verdict. . . . The reviewing court then determines whether the jury could have reasonably found, on the basis of the facts established and the inferences reasonably drawn from them, that the cumulative effect of the evidence established guilt beyond a reasonable doubt. ... In conducting this review, the probative force of the evidence is not diminished where the evidence, in whole or in part, is circumstantial rather than direct.” (Internal quotation marks omitted.) State v. Clark, 56 Conn. App. 108, 111, 741 A.2d 331 (1999).

The substance of the defendant’s claim is that the state charged him as an individual, not as a director or officer of the corporation. He claims that the evidence was insufficient because the state failed to pierce the corporate veil; see Saphir v. Neusladt, 177 Conn. 191, 210, 413 A.2d 843 (1979); to find him liable individually. The defendant does not claim that there was no evidence presented at trial that he was the majority shareholder, director and president of the corporation. The defendant also acknowledges that he oversaw the day-to-day management of the corporation, including the signing and issuing of paychecks. The essence of his claim is that there was evidence that the six individuals who were not paid were employed by the corporation, not by him individually.

The defendant’s argument overlooks the plain language of the statutes. Section 31-71a (1) provides in relevant part: “ ‘Employer’ includes any individual, partnership, association, joint stock company, trust, corporation . . . employing any person, including the state and any political subdivision thereof . . . .” Section 31-71g provides in relevant part: “Any employer or any officer or agent of an employer or any other person authorized by an employer to pay wages who violates any provision of this part may be: (1) Fined ... or imprisoned . . . .” The defendant does not deny that the six individuals who filed complaints were employed by the corporation or that he is an officer of the corporation who signed and distributed the corporate paychecks. Thus, pursuant to the statute, the defendant individually may be found liable for failing to pay the wages owed.

Furthermore, the corporate veil theory protects officers, directors and shareholders from civil, not criminal, liability. “[Wjhen the corporation is the mere alter ego, or business conduit of a person, it may be disregarded. 1W. Fletcher, Cyclopedia of the Law of Private Corporations (1990) § 41.10, [p. 614] citing, inter alia, DeSantis v. Piccadilly Land Corp., 3 Conn. App. 310, 487 A.2d 1110 (1985). . . . The alter ego theory is applicable in contract actions as well as in tort actions. [1W. Fletcher, supra], § 41.85.” (Citation omitted; internal quotation marks omitted.) De Leonardis v. Subway Sandwich Shops, Inc., 35 Conn. App. 353, 358, 646 A.2d 230, cert. denied, 231 Conn. 925, 648 A.2d 162 (1994). The state, therefore, did not have to pierce the corporate veil to prove that the defendant failed to pay wages. Thus, there was sufficient evidence for the jury to convict the defendant.

The judgment is affirmed.

In this opinion the other judges concurred.

       General Statutes § 31-71c provides in relevant part: “(a) Whenever an employee voluntarily terminates his employment, the employer shall pay the employee’s wages in full not later than the next regular pay day, as designated under section 31-71b, either through the regular payment channels or by mail.
      “(b) Whenever an employer discharges an employee, the employer shall pay the employee’s wages in full not later than the business day next succeeding the date of such discharge. . . .”

       General Statutes § 31-71a et seq. concerns the general provisions regarding the payment of wages.

       When the defendant failed to respond to requests from a labor department investigator, the investigator prepared a warrant for the defendant’s arrest, which was presented to the state’s attorney’s office.

       The defendant makes reference to the fourteenth amendment to the United States constitution. He has failed to present any analysis of his claim that § 31-71a violates the constitution of Connecticut. “Without a separately briefed and analyzed state constitutional claim, we deem abandoned the defendant’s claim . . . .” (Internal quotation marks omitted.) State v. Eady, 249 Conn. 431, 435 n.6, 733 A.2d 112, cert. denied, 528 U.S. 1030, 120 S. Ct. 551, 145 L. Ed. 2d 428 (1999).

       General Statutes § 31-71g provides: “Any employer or any officer or agent of an employer or any other person authorized by an employer to pay wages who violates any provision of this part may be: (1) Eined not less than two thousand nor more than five thousand dollars or imprisoned not more than five years or both for each offense if the total amount of all unpaid wages owed to an employee is more than two thousand dollars; (2) fined not less than one thousand nor more than two thousand dollars or imprisoned not more than one year or both for each offense if the total amount of all unpaid wages owed to an employee is more than one thousand dollars but not more than two thousand dollars; (3) fined not less than five hundred nor more than one thousand dollars or imprisoned not more than six months or both for each offense if the total amount of all unpaid wages owed to an employee is more than five hundred but not more than one thousand dollars; or (4) fined not less than two hundred nor more than five hundred dollars or imprisoned not more than three months or both for each offense if the total amount of all unpaid wages owed to an employee is five hundred dollars or less.”

       “There is a presumption of mens rea in those crimes having their origin in the common law. United States v. United States Gypsum Co., 438 U.S. 422, 437, 98 S. Ct. 2864, 57 L. Ed. 2d 854 (1978). . . . Because the crime [here] does not have its origins in the common law, the defendant is not entitled to this presumption.” (Citation omitted.) State v. Swain, 245 Conn. 442, 454 n.16, 718 A.2d 1 (1998).

       “Also, penalties commonly are relatively small, and conviction does no grave damage to an offender’s reputation.” Morissette v. United States, supra, 342 U.S. 256.

       The defendant filed a notice of intent to rely on a mistake of law defense, to wit: “The defendant, Jaroslaw Nanowski, by and through his attorney . . . does hereby give notice to the State that, in his defense, the defendant intends to rely on a mistake of law defense pursuant to [General Statutes § 53a-6] (b) (2).”

       The relevant portion of the defendant’s request to charge stated, “I should point out to you that this statute is silent as to any intent the defendant may have in not paying wages as alleged by the State. Where a statute is silent as to defendant’s intent, there is no requirement that the State prove that the defendant intended not to pay the wages. The State need only prove the elements of the statute, that is that the defendant failed to pay wages.”

       “[W]e hold that a defendant can prevail on a claim of constitutional error not preserved at trial only if all of the following conditions are met: (1) the record is adequate to review the alleged claim of error; (2) the claim is of constitutional magnitude alleging the violation of a fundamental right; (3) the alleged constitutional violation clearly exists and clearly deprived the defendant of a fair trial; and (4) if subject to harmless error analysis, the state has failed to demonstrate harmlessness of the alleged constitutional violation beyond a reasonable doubt.” (Emphasis in original.) State v. Golding, supra, 213 Conn. 239-40.

       Because the charge was given pursuant to the defendant’s request, he cannot now claim that the trial court improperly granted the request. State v. Prioleau, 235 Conn. 274, 294, 664 A.2d 743 (1995); State v. Zollo, 36 Conn. App. 718, 736, 654 A.2d 359, cert. denied, 234 Conn. 906, 660 A.2d 859 (1995). To make such a claim on appeal “can at best be described as disingenuous.' State v. Prioleau, supra, 294.

       General Statutes § 1-1 (a) provides in relevant part: “In the construction of the statutes, words and phrases shall be construed according to the commonly approved usage of the language . . .


author: MIHALAKOS, J.

text:
    JAMES C. BERNET ET AL. v. JOHN R. BERNET ET AL.
    (AC 18408)
    Spear, Hennessy and Mihalakos, Js.
    Argued December 3, 1999
    officially released February 15, 2000

      William F. Gallagher, with whom, on the brief, was Thomas J. Airone, for the appellants (defendants).

      William M. Bloss, for the appellees (plaintiffs).
   Opinion

MIHALAKOS, J.

The defendants appeal from the trial court’s postjudgment ruling incorporating a settlement agreement between the defendants and the plaintiffs, James C. Bemet and Lisa Bemet. On appeal, the defendants claim that the court improperly (1) refused to grant them an extension of time as to the date of the second payment for $200,000 in a stipulated judgment totaling $500,000 in payments and (2) granted summary enforcement of the stipulated judgment. The plaintiffs, in turn, contend that this appeal should be dismissed because the defendants failed to file a motion to vacate the judgment pursuant to General Statutes § 52-212a and Practice Book § 17-4, formerly § 326. We affirm the judgment of the trial court.

The jury reasonably could have found the following facts. A trial originally was commenced concerning a dispute over ownership of stock in a closely held corporation, New Haven 95 East Truck Stop, Inc. During the trial, the parties entered into a stipulation, dated May 22, 1997. The stipulation, which was approved by the court and entered as a judgment, provided, inter alia, for payments by the defendants to the plaintiffs in the total amount of $500,000. The first payment in the amount of $200,000 was due on June 23, 1997. This amount was paid on June 27, 1997, pursuant to an agreement of the parties. Additional payments were to be made on March 2, 1998, in the amount of $200,000 and on March 1, 1999, in the amount of $100,000.

The stipulation further provided that the defendants were entitled to continue to operate the business until the completion of payment, at which time the defendants were to deliver to the plaintiffs all of the stock certificates representing ownership interest. Finally, the stipulation provided that in the event of default, the defendant John R. Bernet shall transfer all of his shares to the plaintiffs.

On February 27, 1998, the defendants filed a motion for extension of time concerning the second payment in the amount $200,000, which was due on March 2, 1998. The motion requested that the court extend the time for payment to March 17,1998. On March 16,1998, before a hearing on the motion, a second motion requesting an additional extension to April 6,1998, was filed by the defendants. On March 17,1998, the plaintiffs filed a motion for summary enforcement of the stipulated judgment. On April 3, 1998, the defendants filed a third motion, requesting an additional extension to May 4, 1998, although neither of their first two motions had been heard.

On April 6,1998, the court held an evidentiary hearing on the defendants’ three motions for extension of time. On April 15,1998, in a written memorandum of decision, the court denied all of the defendants’ motions for extension of time, concluding, as a matter of law, that the court did not have the power to alter the terms of a stipulated judgment. The court did not expressly rule on the plaintiffs’ motion for summary enforcement of the judgment.

On April 17, 1998, the defendants filed a motion for reargument. The court, on May 6,1998, heard the motion to reargue and the plaintiffs’ motion for summary enforcement of the judgment. The defendants contended that the failure to grant the extension would result in a “forfeiture” by the defendant John R. Bemet. The court denied the defendants’ motion in an oral ruling and granted the plaintiffs’ motion for summary enforcement of the stipulated judgment. The defendants never filed a motion to vacate or amend the judgment. This appeal followed. Additional facts and procedural history will be discussed where relevant.

Before proceeding to the merits of this appeal, we must first address the plaintiffs’ claim that we should dismiss this appeal without review because the defendants failed to file a motion to open the stipulated judgment pursuant to General Statutes § 52-212a and Practice Book § 17-4, formerly § 326. We disagree.

The granting of the motion for summary enforcement of a judgment, even a stipulated judgment, is so conclusive of the rights of the parties that further proceedings cannot affect them, and the ruling, thus, constitutes a final judgment. See State v. Curcio, 191 Conn. 27, 31, 463 A.2d 566 (1983). Though an appeal from the underlying judgment would be barred for lack of aggrievement, an appeal from the granting of a motion to enforce a stipulated judgment is not so barred. See Carpenter v. Montanaro, 52 Conn. App. 55, 57-58, 725 A.2d 390 (1999).

The absence of a motion to open does not affect our jurisdiction over this appeal because the appeal is not only from the denial of the motions for extension of time, but also from the granting of the plaintiffs’ motion for summary enforcement of the judgment. As a result, this is an appeal from a final judgment, which is a legal proceeding, separate and distinct from the opening of a judgment. We conclude, therefore, that the absence of a motion to open does not affect our jurisdiction over this appeal.

I

The defendants’ first claim is that the court improperly refused to grant the defendants an extension of time as to the date of payment in the stipulated judgment. We disagree.

“A stipulated judgment has been defined by our Supreme Court as a contract of the parties acknowledged in open court and ordered to be recorded by a court of competent jurisdiction. . . . The essence of the judgment is that the parties to the litigation have voluntarily entered into an agreement setting their dispute at rest and that, upon this agreement, the court has entered judgment conforming to the terms of the agreement.” (Citations omitted; internal quotation marks omitted.) State v. .2 Acres Known as 319 Jackson Street, 39 Conn. App. 40, 43, 663 A.2d 1115 (1995).

The stipulated judgment “cannot be altered or set aside without the consent of all of the parties, unless it is shown that the stipulation was obtained by fraud, accident or mistake.” (Internal quotation marks omitted.) Mulligan v. Hall, 32 Conn. App. 203, 204, 628 A.2d 621 (1993), rev’d on other grounds, 229 Conn. 224, 640 A.2d 108 (1994). It is not within the court’s power to “enlarge or lessen the scope of the [stipulated] judgment . . . .” (Internal quotation marks omitted.) State v. .2 Acres Known as 319 Jackson Street, supra, 39 Conn. App. 43. However, “[t]he court has the power to issue orders necessary to protect the integrity of the stipulated judgment . . . .” Bank of Boston Connecticut v. DeGroff, 31 Conn. App. 253, 256, 624 A.2d 904 (1993).

The defendants claim that the court can alter the mode of payment and, in doing so, would not be altering the terms of the stipulated agreement. We disagree. Alteration of the mode of payment, extending the times at which the payments are due, does, in fact, alter the dates and amounts to a significant extent. In effect, this enlarges the scope of the judgment. In this case, the defendants agreed to make a $200,000 payment on March 2, 1998. By filing a motion to extend the time to make the payment, the defendants sought to alter the terms of the stipulated judgment. The court does not have the authority to alter the terms of the stipulated judgment unless the parties agree to do so or it is shown that the judgment was obtained by fraud, accident or mistake. Mulligan v. Hall, supra, 32 Conn. App. 204.

The only other way the court can intervene is to issue orders necessary to protect the integrity of the stipulated judgment. Bank of Boston Connecticut v. DeGroff, supra, 31 Conn. App. 256. In other words, the court has the power to protect the judgment against the actions of a party who has failed to comply with the judgment. This did not occur in this case. Here, it is the defendants who failed to comply with the judgment and they, the parties in default, now are seeking to change, not to protect, the stipulated judgment. The court, therefore, had no authority to alter the terms of the stipulated agreement and correctly denied the defendants’ motions for extension of time.

II

The defendants’ final claim is that the court improperly granted the plaintiffs’ motion for summary enforcement of the stipulated judgment. We disagree.

“Generally, [a] trial court has the inherent power to enforce summarily a settlement agreement as a matter of law [only] when the terms of the agreement are clear and unambiguous . . . .” (Citation omitted; internal quotation marks omitted.) Thomsen v. Aqua Massage International, Inc., 51 Conn. App. 201, 204, 721 A.2d 137 (1998), cert. denied, 248 Conn. 902, 732 A.2d 178 (1999).

The stipulated agreement in this case specifically provided for the plaintiffs to pay the defendants $500,000 in three payments of $200,000 on June 23,1997, $200,000 on March 2, 1998, and $100,000 on March 1, 1999. The defendants were to continue to operate the business until the completion of those payments, at which time the defendants were to deliver to the plaintiffs all of the stock certificates representing ownership interest in the coiporation. The stipulation also provided that, in the event of default, the defendant John R. Bernet shall transfer all of his shares to the plaintiffs. The terms of the stipulated agreement clearly set forth specific dates, payments and responsibilities for each of the parties to abide by and are, thus, clear and unambiguous. The court, therefore, had the power to enforce the settlement agreement as a matter of law.

The defendants contend that by granting the motion for summary enforcement of the stipulated judgment, the court brought about a forfeiture of $200,000 by the defendant John R. Bernet. Forfeitures of contracts and rights thereunder are generally not favored in law. State v. .2 Acres Known as 319 Jackson Street, supra, 39 Conn. App. 44. In this case, the loss of $200,000 by the defendant John R. Bemet is a natural consequence of the defendants’ failure to comply with the terms of the agreement they had agreed to and does not amount to a forfeiture. Thus, there is no issue of forfeiture.

Furthermore, the defendants’ contention that the plaintiffs unfairly profited by the alleged court-imposed forfeiture also is without merit because the plaintiffs had no opportunity to profit during the one year period in which the defendants were in control of the corporation. While the defendants remained in control of the corporation, it was they who either profited or had the potential to profit from that operation. We conclude, therefore, that the trial court properly granted the plaintiffs’ motion for summary enforcement of the stipulated judgment.

The judgment is affirmed.

In this opinion the other judges concurred.

       John R. Bemet, Helen O. Bemet, Maurice J. Bemet III, Maurice J. Bemet, Jr., and New Haven 95 East Tmck Stop, Inc., are hereafter referred to as the defendants.

       General Statutes § 52-212a provides in relevant part: “Unless otherwise provided by law and except in such cases in which the court has continuing jurisdiction, a civil judgment or decree rendered in the Superior Court may not be opened or set aside unless a motion to open or set aside is filed within four months following the date on which it was rendered or passed. . . .”

       Practice Book § 17-4 (a), formerly § 326, provides: “Unless otherwise provided by law and except in such cases in which the court has continuing jurisdiction, any civil judgment or decree rendered in the superior court may not be opened or set aside unless a motion to open or set aside is filed within four months succeeding the date on which notice was sent. The parties may waive the provisions of this subsection or otherwise submit to the jurisdiction of the court.”

       The opening of a judgment pursuant to Practice Book § 17-4 is a procedure directed to the trial court’s power to reexamine the validity of its own decision. See Clapper v. Clapper, 3 Conn. App. 637, 638, 490 A.2d 1030 (1985). An appeal from a final judgment, on the other hand, is designed to invoke the review of a higher court in an attempt to persuade the higher court to correct the judgment of the trial court. See W. Horton & S. Cormier, Rules of Appellate Procedure (1999), authors’ comments, § 61-1, formerly § 4000, pp. 57-73.


author: LAVERY, J.

text:
    OCI MORTGAGE CORPORATION v. CAROLE N. MARCHESE ET AL.
    (AC 18909)
    Lavery, Schaller and Hennessy, Js.

      Argued October 19, 1999
    officially released February 15, 2000

      Matthew J. Broder, for the appellants (named defendant et al.).

      Matthew B. Woods, for the appellee (plaintiff).
   Opinion

LAVERY, J.

The defendants Carole N. Márchese and Anthony Márchese (defendants) appeal from a judgment of foreclosure rendered in favor of the plaintiff on the basis of the trial court’s sustaining of the plaintiffs objections to an attorney trial referee’s report. The defendants claim that the trial court improperly based its conclusion on the rationale that the D’Oench, Duhme doctrine and 12 U.S.C. § 1823 (e) bar the defendants’ claims of setoff and payment of their mortgage. We agree with the defendants and reverse the judgment of the trial court.

The following facts and procedural history are set forth in OCI Mortgage Corp. v. Marchese, 48 Conn. App. 750, 751-52, 712 A.2d 449 (1998): “The defendants . . . executed a promissory note in the amount of $220,000, payable to Community Federal Savings and Loan Association (CFSLA), and secured by a mortgage on property that the defendants owned in Southport. While the note was still outstanding, the defendant Carole N. Márchese lent CFSLA $900,000 pursuant to a subordinated debenture agreement. Thereafter, Carole N. Márchese and CFSLA agreed that the defendants’ mortgage note would be paid by applying CFSLA’s interest payments on the debenture to the defendants’ monthly mortgage payments.

“In October, 1989, CFSLA defaulted on its interest payments. Subsequently, the defendants formally demanded full payment on the debenture and informed CFSLA of their intention to exercise their right to set off the mortgage. By December, 1989, however, CFSLA was declared insolvent and the Resolution Trust Corporation (RTC) was appointed as its receiver in bankruptcy. The RTC assigned the defendants’ mortgage and loan documents to Fairfield Affiliates, the original plaintiff here. Fairfield Affiliates then assigned the defendants’ note and mortgage to OCI Mortgage Corporation (OCI) and OCI was substituted as the plaintiff.

“The trial court referred the case to an attorney trial referee. After the trial concluded, the attorney trial referee filed her report, in which she recommended that judgment enter in favor of the defendants. Specifically, the attorney trial referee found that the RTC knew about the agreements between CFSLA and the defendants, and that ‘[a]ll subsequent assignees of the [defendants’] mortgage note . . . including the plaintiff, OCI, accepted assignment of the note with notice of the $900,000 debt owed to the defendants, as well as the defendants’ claim of set-off and payment.’

“The plaintiff moved to correct various portions of the attorney trial referee’s report. The attorney trial referee, however, denied the majority of the plaintiff’s requests. The plaintiff then filed exceptions to the attorney trial referee’s report, as well as an objection to the acceptance of the report.

“The trial court sustained the plaintiffs objection to the acceptance of the attorney trial referee’s report. The court ruled that, pursuant to 12 U.S.C. § 1823 (e), the RTC is entitled to the same protection as the Federal Deposit Insurance Corporation (FDIC). According to 12 U.S.C. § 1823 (e), ‘[n]o agreement which tends to diminish or defeat the interest of the [FDIC] in any asset acquired by it . . .as receiver of any depository institution, shall be valid against the [FDIC] unless such agreement . . . [is] executed by the depository institution and any person claiming an adverse interest thereunder, including the obligor, contemporaneously with acquisition of the asset by the depository institution.’ The court concluded that because the execution of the defendants’ mortgage and the execution of the subordinated debenture agreement were not contemporaneous, the subordinated debenture agreement was not valid against the RTC, and, therefore, it was not valid against the RTC’s assignees. The trial court remanded the case to the attorney trial referee, directing the referee to ‘proceed in a manner not inconsistent with’ the trial court’s memorandum of decision.”

The decision was appealed to this court. We dismissed the appeal, concluding that the trial court’s remanding of the case to the trial referee for further proceedings did not constitute an appealable final judgment. OCI Mortgage Corp. v. Marchese, supra, 48 Conn. App. 755. On October 5, 1998, the parties entered into a stipulation, the purpose of which was to allow a final judgment to enter from which a valid appeal would be taken. On October 7, 1998, the trial court rendered a judgment of strict foreclosure in accordance with the stipulation. The defendants appealed a second time to this court with the appeal now properly before us.

I

The defendants’ contentions focus on the application of a principle first stated in the seminal case of D’Oench, Duhme & Co. v. Federal Deposit Ins. Corp., 315 U.S. 447, 62 S. Ct. 676, 86 L. Ed. 956 (1942), then codified and expanded at 12 U.S.C. § 1823 (e). We refer to the D’Oench, Duhme & Co. decision and § 1823 (e) throughout this opinion collectively as the D’Oench, Duhme doctrine. Specifically, the defendants argue that the D’Oench, Duhme doctrine does not bar their defenses of setoff and payment of their mortgage.

The D’Oench, Duhme doctrine arises when a bank fails through imprudent loans, rapid withdrawals of funds by depositors or other means. Subsequently, the FDIC becomes a receiver of the bank and assumes all the legal responsibilities of the failed institution, including the right to pursue and defend claims and liabilities of the failed bank. Bank examiners rely on the written records of the bank to value outstanding loans. This process must be conducted very quickly, often within days or even hours, to manage the bank’s assets as quickly and efficiently as possible. One of the FDIC’s key responsibilities arising from these time-pressured efforts is to collect on unpaid loan obligations in an effort to meet the bank’s liabilities. See F. Galves, “Might Does Not Make Right: The Call for Reform of the Federal Government’s D’Oench, Duhme and 12 U.S.C. § 1823 (e) Superpowers in Failed Bank Litigation,” 80 Minn. L. Rev. 1323, 1339-40 (1996).

It is against a background similar to the present case that the D’Oench, Duhme & Co. decision came to pass. D’Oench, Duhme and Company sold bonds to Belleville Bank and Trust Company, upon which D’Oench, Duhme and Company ultimately defaulted. D’Oench, Duhme & Co. v. Federal Deposit Ins. Corp., supra, 315 U.S. 454. To protect its image and to hide the past due bonds, D’Oench, Duhme and Company issued promissory notes to the bank to cover the value of the defaulted bonds. Id. The parties understood in a side agreement that the notes would never be collected. Id. The FDIC later obtained the notes from the failing Belleville Bank and Trust Company and attempted to collect, and D’Oench, Duhme and Company claimed that the note was unenforceable due to lack of consideration. Id., 456. The Supreme Court barred the defense reasoning that secret agreements should be banned where “the maker lent himself to a scheme or arrangement whereby the banking authority on which [the FDIC] relied in insuring the bank was or was likely to be misled.” Id., 460. Subsequent to the D’Oench, Duhme & Co. decision, Congress passed the Federal Deposit Insurance Act, § 2 (13) (e) of which was codified at 12 U.S.C. § 1823 (e). Section 1823 (e), which codified and partially expanded the D’Oench, Duhme & Co. decision, now stands as its statutory counterpart.

The legislative history shows that § 1823 (e) was enacted with humble aspirations. While seeking to change “simultaneously” in § 1823 (e) to “contemporaneously” as the statute now reads, one Representative noted: “[T]his whole [§ 1823 (e)] as amended applies only to future agreements. ... It was never the intention of Congress to give to the Corporation a stronger position than that of the bank, and the adoption of the amendment, my amendment is offered to prove that heretofore it was the intent of Congress that any agreement in the absence of fraud, was binding on the Corporation.” 96 Cong. Rec. 10,731-32 (1950), remarks of Representative Francis Walter.

This doctrine remained a modest one until the early 1980s, when, occasioned by the rise of bank failures, the application of the D’Oench, Duhme doctrine mushroomed. Today, the doctrine has assumed draconian proportions and virtually assures that the FDIC can recover note payments from debtors regardless of otherwise valid defenses that would have existed before the bank’s failure. The D’Oench, Duhme doctrine now prohibits claims and defenses such as: accord and satisfaction, breach of condition precedent, breach of fiduciary duty, conspiracy, constitutional challenge, deceptive trade practice, failure of consideration, fraudulent inducement, laches, mitigation of damages, mutual mistake, negligence and unjust enrichment, to name a few. See 11 Am. Jur. 2d, Banks and Financial Institutions § 1095 (1997); F. Galves, supra, 80 Minn. L. Rev. 1375-78 (listing these and other claims and defenses).

As a result, the doctrine has received significant criticism amongst the judiciary for its harshness against unwitting debtors. See, e.g., Federal Deposit Ins. Corp. v. Bathgate, 27 F.3d 850, 877 (3d Cir. 1994) (D’Oench, Duhme doctrine and § 1823 [e] can lead to what might be considered harsh result); Federal Deposit Ins. Corp. v. Kasal, 913 F.2d 487, 492 (8th Cir. 1990), cert. denied, 498 U.S. 1119, 111 S. Ct. 1072, 112 L. Ed. 2d 1178 (1991) (similar); In re NBW Commercial Paper Litigation, 826 F. Sup. 1448, 1476 (D.D.C. 1992) (court not ignorant of unusual results that D’Oench, Duhme doctrine generates, nor is court enamored of them); L & R Prebuilt Homes, Inc. v. New England Allbank for Savings, 783 F. Sup. 11, 14 (D.N.H. 1992) (court has empathy with plaintiff’s position and dilemma but is powerless under law to grant remedial relief and is appalled by manner in which FDIC reacts to these situations). In spite of the significant criticism and calls for reform of the D ’Oench, Duhme doctrine, it remains the law applicable to cases such as this one.

II

With the previous discussion in mind, we now turn to tíre merits of this case. The resolution of this appeal turns on whether the D’Oench, Duhme doctrine applies to the defendants such that it bars their defenses of setoff and payment of the mortgage note. With questions of law such as this, our review is plenary. Morton Buildings, Inc. v. Bannon, 222 Conn. 49, 53-54, 607 A.2d 424 (1992). For reasons we will discuss, we reverse the judgment of the trial court.

A

The defendants contend that the debenture to CFSLA constituted a valid setoff and that such setoff removes them from the application of the D’Oench, Duhme doctrine and the corresponding statute. The plaintiff responds that because the defendants did not formally follow the contractual steps prescribed in the debenture agreement regarding notice and default, no setoff was established. We disagree with the plaintiff.

The concept of setoff allows entities that owe each other money to apply their mutual debts against each other, thus avoiding the absurdity of making “A” pay “B” when “B” in fact owes “A.” Citizens Bank of Maryland v. Stumpf, 516 U.S. 16, 18, 116 S. Ct. 286, 133 L. Ed. 2d 258 (1995). The right of setoff does not require a written document. Rather, “[t]he right of setoff, although it may arise out of a written instrument, is a common law equitable right that is not itself a written instrument.” Normand Josef Enterprises, Inc. v. Connecticut National Bank, Inc., 230 Conn. 486, 494, 646 A.2d 1289 (1994). “Set-off was unknown to the common law. ... It was, however, early recognized in equity, which exercised its broad powers to prevent circuity of action ... to enforce the maxim that he who seeks equity must himself do equity . . . and, in general, to do equity between the parties where such legal right of set-off as existed was not adequate to accomplish this result and the case fell within the limits of recognized equitable principles.” (Citations omitted.) Savings Bank of New London v. Santaniello, 130 Conn. 206, 210-11, 33 A.2d 126 (1943). “Because a mortgage foreclosure action is an equitable proceeding, the trial court may consider all relevant circumstances to ensure that complete justice is done.” Reynolds v. Ramos, 188 Conn. 316, 320, 449 A.2d 182 (1982).

The en banc decision of Murphy v. Federal Deposit Ins. Corp., 38 F.3d 1490 (9th Cir. 1994), is on point. Simply put, the defendant in Murphy contended that his $100,000 debt should have been treated as a setoff against the FDIC’s much larger debt owed to him. Id., 1504. The Murphy court concluded: “The reason that the set-off is not barred by 12 U.S.C. § 1823(e), is that the statute invalidates only an ‘agreement’ which diminishes the FDIC’s right in its corporate capacity to collect on a note. Set-offs arising by operation of law, ‘are not “agreements” within the meaning of § 1823(e).’ [Federal Deposit Ins. Corp.] v. State Bank of Virden, 893 F.2d 139, 143 (7th Cir. 1990). We follow Virden in holding that set-offs arising by operation of law are not automatically barred by § 1823(e), although a particular set-off, if it amounts to a claim based on breach of an agreement, may be barred. Id. In this case, the set-off is the ‘common’ kind, described in [Federal Deposit Ins. Corp. v. Mademoiselle of California, 379 F.2d 660 (9th Cir. 1967)]. Murphy owed the Bank $100,000 on a note, and following presentment, dishonor, and assignment by United Grocers of the letters of credit to Murphy, the Bank owed Murphy $585,000 on its letters of credit. The letters of credit were not an undisclosed agreement. They were in the Bank’s files and reflected in the footnote. Murphy was entitled to a judgment that the FDIC should take nothing in its action against him on his note, so that he would be the prevailing party for purposes of attorneys’ fees and costs, and to have interest computed on the basis that his debt stopped running, and the Bank’s debt to him was reduced by the amount of the note.” Murphy v. Federal Deposit Ins. Corp., supra, 1504-1505.

Federal Deposit Ins. Corp. v. State Bank of Virden, supra, 893 F.2d 143, cited by Murphy, notes: “As a lexical matter, it is hard to think of setoff as an ‘agreement’ of any kind. . . . Setoffs are honored by virtue of trade custom and common law; rules of law recognizing particular ways to satisfy a debt are not ‘agreements’ within the meaning of § 1823(e). We therefore agree with the two cases that have held that setoffs accomplished before the assignment of a debt to FDIC-Corporate are not automatically barred by § 1823(e). Olney Savings & Loan Ass’n v. Trinity Banc Savings Ass’n, 885 F.2d 266, 274-75 (5th Cir. 1989); Interfirst Bank Abilene v. [Federal Deposit Ins. Corp.], 777 F.2d 1092, 1094 (5th Cir. 1985). So far as our research reveals, no court of appeals has accepted the FDIC’s argument [that every setoff is an unrecorded agreement not to collect and therefore is unenforceable].”

Indeed, our own Supreme Court has reflected on such a proposition, although admittedly well before the rise of modem banking law. In Osborn v. Byrne, 43 Conn. 155, 160 (1875), an individual made a deposit to a bank, “not for the ordinary purposes of a deposit, but for the purpose, and with the intention, of applying the same in payment of her indebtedness to the bank to that amount.” Articulating reasoning that resembles today’s doctrine, the corut stated: “If the officers of the bank knew for what purpose the deposit was made, although the amount has never been in fact applied in cancellation of so much of her indebtedness to the bank, we think she should be allowed to set off the amount.” Id.

Although a debt supposedly setoff against the FDIC’s asset may be governed by the D’Oench, Duhme doctrine because it is the result of an agreement not found in the bank’s official documents; see, e.g., Federal Deposit Ins. Corp. v. Texarkana National Bank, 874 F.2d 264, 268 (5th Cir. 1989), cert. denied, 493 U.S. 1043, 110 S. Ct. 837, 107 L. Ed. 2d 833 (1990); no such problem exists here as the note, the debenture and the payments of the mortgage note by the application of the debenture interest to the mortgage note are all in the bank’s records. As in Murphy, the defendant owed the bank $220,000 and the bank was in default on $900,000, which is the “common” kind of setoff noted previously. The defendants’ setoff arises by operation of law. Accordingly, no “agreement” exists pursuant to 12 U.S.C. § 1823 (e) such that the D’Oeneh, Duhme doctrine would apply to bar the defenses of the defendants.

B

As a further result of the setoff by operation of law, the mortgage note does not constitute an “asset” falling within lire bounds of the D’Oench, Duhme doctrine. Section 1823 (e) provides that “[n]o agreement which tends to diminish or defeat the interest of the Corporation in any asset acquired by it .. . shall be valid against the Corporation . . . .” (Emphasis added.) Accordingly, “the statute ‘does not apply when . . . the parties contend that no asset exists . . . and that such invalidity is caused by acts independent of any understanding or side agreement.’ ” Commerce Federal Savings Bank v. Federal Deposit Ins. Corp., 872 F.2d 1240, 1245 (6th Cir. 1989); see also Grubb v. Federal Deposit Ins. Corp., 868 F.2d 1151, 1158-59 (10th Cir. 1989) (§ 1823 inapplicable when notes are voided before FDIC acquires them). When such an asset simply does not exist, it would leave “no ‘right, title or interest’ that could be ‘diminish[ed] or defeat[ed].’ ” Langley v. Federal Deposit Ins. Corp., 484 U.S. 86, 93-94, 108 S. Ct. 396, 98 L. Ed. 2d 340 (1987).

For example, in Federal Deposit Ins. Corp. v. Bracero & Rivera, Inc., 895 F.2d 824, 825-26 (1st Cir. 1990), the FDIC sought to enforce against the defendant a promissory note that it possessed, even though a third party had paid the note and the bank sent a letter of credit to the defendant. The court concluded that the defendant’s obligations were extinguished upon payment of the underlying debt regardless of whether the explicit cancellation of the promissory note had been accomplished. Id., 830.

In this case, the default on the payment of the debenture agreement of $900,000 operated to extinguish the defendants’ debt by reason of setoff, and as such the asset did not exist at the time the RTC took over CFSLA. The debenture agreement was in writing and recorded in the formal records of the bank. No part of the debenture consisted of a side agreement or oral understanding that could possibly mislead the banking authorities in valuing the loan. Accordingly, a fundamental policy behind the D’Oench, Duhme doctrine, protecting the FDIC from misvaluing bank assets such that it impedes the management of the bank’s insolvency, is not thwarted. See D’Oench, Duhme & Co. v. Federal Deposit Ins. Corp., supra, 315 U.S. 460; Twin Construction, Inc. v. Boca Raton, Inc., 925 F.2d 378, 382 (11th Cir. 1991); Federal Deposit Ins. Corp. v. Meo, 505 F.2d 790, 792 (9th Cir. 1974). In Federal Deposit Ins. Corp. v. Castle, 781 F.2d 1101, 1107 (5th Cir. 1986), the court stated that “[t]he purpose [of § 1823 (e)] is to protect the FDIC from hidden agreements that would defeat its interest in what is otherwise a facially valid note. Such hidden agreements would prevent the FDIC from accurately valuing assets and from making informed decisions on how best to handle the bank’s insolvency. The concern is thus with agreements that are not made part of the note.” (Internal quotation marks omitted.) In Murphy v. Federal Deposit Ins. Corp., supra, 38 F.3d 1499-1500, the court held that “[w]here a person does not lend himself to a scheme which might cause bank examiners to overvalue a bank, by giving the bank a writing which meant less than what is said or otherwise, then D’Oench, Duhme has no application.”

The debenture was due and payable upon default. The defendants and CFSLA agreed that the monthly payment of the mortgage would be paid by CFSLA’s interest payments of the debenture. Accordingly, the note was not a bank asset at the time of the takeover by the RTC because the debenture was in default that was not cured after notice. The setoff took place and, thus, falls outside the application of the D’Oench, Duhme doctrine.

C

In addition, the D’Oench, Duhme doctrine and § 1823 (e) also do not apply to bilateral agreements where, as here, the very document that the plaintiff seeks to enforce imposes obligations on the lender that have been breached. “Where a note or written agreement imposes bilateral obligations on the parties in addition to the obligation by the maker to pay a sum certain, the borrower may assert such claims or defenses against the FDIC or [Federal Savings and Loan Insurance Corporation]. . . . Such claims or defenses arising out of the written agreement between the borrower and the failed bank will not be precluded under the D’Oench Duhme doctrine.” (Citations omitted.) In re Hunter, 100 B.R. 321, 325-26 (Bankr. S.D. Tex. 1989).

Additionally, “[w]hen the enforcement of a separate collateral or secret agreement would alter the terms of an asset acquired by the FDIC so that the FDIC’s right, title, or interest in the asset would be defeated or diminished, § 1823(e) comes into play. . . . When, however, the asset upon which the FDIC is attempting to recover is the very same agreement that the makers allege has been breached by the FDIC’s assignors, § 1823(e) does not apply. None of the policies that favor the invocation of this statute are present in such cases because the terms of the agreement that tend to diminish the rights of the FDIC appear in writing on the face of the agreement that the FDIC seeks to enforce.” (Citations omitted; internal quotation marks omitted.) Howell v. Continental Credit Corp., 655 F.2d 743, 747 (7th Cir. 1981); see also Resolution Trust Corp. v. Oaks Apartments Joint Venture, 966 F.2d 995 (5th Cir. 1992); Riverside Park Realty Co. v. Federal Deposit Ins. Corp., 465 F. Sup. 305, 312-13 (M.D. Tenn. 1978).

The facts reveal a $220,000 mortgage note payable to CFSLA and a $900,000 subordinated debenture agreement sufficiently bound together to constitute a bilateral agreement for purposes of avoiding the D’Oench, Duhme doctrine. The attorney trial referee’s report dated July 11, 1997, found, “the defendants and CFSLA further agreed that the $220,000 mortgage of September 13,1983, would be paid by applying CFSLA’s interest payments due to the [defendants] to the monthly mortgage payments due. . . . The above agreements between the defendants and CFSLA effectively modified the original promissory note contemporaneously with setting forth the payment terms on the debenture.” Accordingly, the defendants are not subject to the D’Oench, Duhme doctrine because of the presence of a sufficiently bilateral obligation that more than compensates for their indebtedness.

D

“It is an abiding principle of jurisprudence that common sense does not take flight when one enters a courtroom.” State v. Zayas, 195 Conn. 611, 620, 490 A.2d 68 (1985). Put simply, CFSLA loaned the defendants $220,000. Carole Marchese loaned $900,000 to CFSLA pursuant to the terms of a subordinated debenture agreement. Allowing a subsequent purchaser of the bank’s note to recover the $220,000 from the “debtor,” when the “debtor” in fact is owed far more money than she owes the bank, shocks the judicial conscience. See Atwood v. Vincent, 17 Conn. 575, 582 (1846) (equity demands that parties should be placed in situations where they agreed to be placed).

As the attorney trial referee noted in her decision, “[ujnder the circumstances of the case, to hold that an extinguished debt suddenly reverts to its original state simply because the RTC is involved would be so inequitable as to shock the conscience of the court.”

The judgment is reversed and the case is remanded with direction to render judgment for the defendants.

In this opinion the other judges concurred.

       The FDIC exclusively manages the RTC. 12 U.S.C. § 1441a (b) (1) (C); see also Colorado State Banking Board v. Resolution Trust Corp., 926 F.2d 931, 935 (10th Cir. 1991). “ ‘Congress gave the RTC all of the receivership and conservatorship powers it granted the FDIC.’ ” Umlic-Nine Corp. v. Lipan Springs Development Corp., 168 F.3d 1173, 1177 n.2 (10th Cir.), cert. denied, 528 U.S. 1005, 120 S. Ct. 499, 145 L. Ed. 2d 386 (1999).

       For a more in-depth explanation of these activities see Federal Deposit Ins. Corp. v. Bank of Boulder, 865 F.2d 1134, 1136-38 (10th Cir. 1988) (describing functions required after closure of insolvent financial institution).

       Section 10.01 of the debenture addresses the contingency of default and § 10.02 provides for acceleration of the debt in the event of default. The debenture agreement, dated June 5, 1986, states in relevant part: “Section 10.01. Any one or more of the following shall constitute an event of default as the term is used herein:
      “(a) Default for a period of 15 business days in the payment of interest on any Debenture after written notice thereof by certified mail to the [Community Federal Savings and Loan] Association by the debenture holder;
      “Section 10.02. When any event of default described in Section 10.01 above has occurred and is continuing any holder of any Debenture may, by notice in writing sent by certified mail to the [Community Federal Savings and Loan] Association, declare the principal of and any accrued interest on such Debenture to be immediately due and payable without further demand, presentment, protest or notice of any kind . . . .”
      The defendants mailed a letter to CFSLA on November 14, 1989, giving written notice pursuant to § 10.01 of the agreement. The letter stated that if the default was not cured, the defendants “will exercise all rights available to them not only under Section 10.02 of the foregoing Subordinated Debenture Agreement, but also under statutory and common law.” No further letter or notification followed before CFSLA’s demise. Ultimately, because of the nature of setoff as an operation of law, whether sufficient notice was given by the defendants is ultimately irrelevant.