author: Shea, J.

text:
    Michael Steiner et al. v. Bran Park Associates et al.
    (14056)
    Peters, C. J., Shea, Callahan, Glass and Covello, Js.
    Argued September 25—
    decision released November 13, 1990

      F. Herbert Gruendel, with whom were Jonathan Katz and Steven D. Ecker, for the appellants (plaintiffs).

      William F. Gallagher, with whom, on the brief, were Mark S. Shipman and Gwen B. Weltman, for the appellees (defendants).
   Shea, J.

The plaintiffs brought an action on a real estate contract for the purchase of a parcel of land owned by the defendants. The plaintiffs sought specific performance of the contract, damages, and restitution of sums paid in advance that allegedly were to have been credited toward the purchase price. The trial court bifurcated the claim for specific performance and the claims for monetary relief and, after a trial to the court on the issue of specific performance, denied the plaintiffs’ claim for specific performance. The principal basis for the denial was the trial court’s finding that the plaintiffs had failed to sustain their burden of proving that they were ready, willing and able to purchase the property within a reasonable time after the date specified in the contract. From this judgment the plaintiffs appealed. We affirm the judgment of the trial court.

On appeal, the principal issue is whether the evidence supports the trial court’s finding that the plaintiffs were unable to perform within a reasonable time after the performance date.

I

The trial court found the following facts, which are not challenged on appeal. In February, 1984, the plaintiff Michael Steiner and the defendants executed a sales agreement for a parcel of property in Branford. The agreement provided that the closing would take place on August 14,1986, but that Steiner’s failure to make certain payments required prior to that date would terminate the agreement. The advance payments would be credited toward the purchase price.

The parties amended the agreement in February, 1986. The amendment increased the purchase price, required additional advance payments, which would not be credited toward the purchase price, and set the closing date for “no later than August 27, 1986.”

Steiner initially planned to obtain financing by forming an association with Carl Marks Realty Services, Inc. (Carl Marks), a New York development corporation. The defendants were aware of this plan and consented to Steiner’s assignment of the sales contract to Carl Marks as collateral for loans used for the advance payments. In July, 1986, Steiner’s negotiations with Carl Marks broke down when Carl Marks expressed concern that Steiner could not or would not answer calls for capital needed to develop the property. Steiner then proposed to add Harry Skydell and Allen Kaplan, two successful developers, as joint venturers. Carl Marks was satisfied with this plan, and the proposed investors began negotiations on a formal joint venture agreement.

Starting with a letter to Carl Marks on August 13, 1986, the defendants began to insist that the closing take place as scheduled on August 27,1986. When the plaintiffs asked for more time, the defendants demanded additional payments to extend the closing date, and when that demand was ignored, insisted that if a closing did not take place on August 27, the plaintiffs’ “option” would expire. No closing took place. After August 27, there was at least one meeting between the defendants’ and the plaintiffs’ counsel to attempt to renegotiate the contract, but no agreement was reached.

From August, 1986, through October 15, 1986, Steiner and his associates endeavored to complete the planned joint venture agreement. On September 4, Steiner obtained a letter of intent from Skydell, Kaplan, and his own partners, but that letter contained a termination clause of September 11 if no closing was held by that date. On September 19, Steiner, Skydell and Kaplan signed a letter of agreement with Carl Marks, contingent upon execution and delivery of a formal joint venture agreement. A draft of the joint venture agreement was still being worked on as late as October 15.

The trial court concluded, first, that time was not of the essence of the sales contract. It held, therefore, that

the contract required performance within a “reasonable time” after the August 27,1986 closing date. After considering the parties’ prior conduct, the trial court next concluded that the contract would permit only a “short delay” in the transaction without additional premium payments. Second, the trial court held that the plaintiffs’ inability to reach a final accord on a formal joint venture agreement meant that they were “unable” to close within the time a “short delay” would afford and hence were not entitled to the equitable remedy of specific performance. The court held that while the defendants’ repudiation of the contract did, as a matter of law, excuse the plaintiffs from demonstrating their “readiness” to close, it did not, as a matter of fact, interfere with their ability to close, so that the defendants’ conduct did not excuse the plaintiffs from demonstrating their “ability” to close. The court did not reach the issue of the plaintiffs’ “willingness” to close.

II

A buyer seeking specific performance must prove that he was “ready, willing and able” to purchase the property. DiBella v. Widlitz, 207 Conn. 194, 200, 541 A.2d 91 (1988); Allen v. Nissley, 184 Conn. 539, 542, 440 A.2d 231 (1981). “A buyer must prove his financial ability to go forward even when a seller entirely refuses to participate in a closing.” DiBella v. Widlitz, supra; Frumento v. Mezzanotte, 192 Conn. 606, 616, 473 A.2d 1193 (1984). Whether a buyer has the requisite financial ability is a question of fact. Parkway Trailer Sales, Inc. v. Wooldridge Bros., Inc., 148 Conn. 21, 26, 166 A.2d 710 (1960); Romaniello v. Pensiero, 21 Conn. App. 57, 60, 571 A.2d 145 (1990).

In Frumento, supra, this court approved the principle that “when a purchaser of land is left to depend upon a purchase price loan from a third party who is in no way bound to furnish such funds, the purchaser cannot be considered to be able to perform so as to be entitled to specific performance”; (emphasis added) Frumento v. Mezzanotte, supra, 617; but made clear that the determination of what constitutes “ability” is a question of fact to be determined in light of the circumstances of the particular case. DiBella v. Widlitz, supra, 200; Frumento v. Mezzanotte, supra. A trial court’s finding of “inability,” which involves a factual issue, will not be reversed unless it is clearly erroneous. See Practice Book § 4061.

A

The plaintiffs contend that the trial court applied the wrong standard of “ability” when making its factual finding. The plaintiffs read the trial court’s decision to say that as a matter of law, a buyer seeking specific performance must prove his backer was contractually bound to provide the funds. The plaintiffs point to language in the decision reciting that “the buyers herein never obtained signed agreements” and “a plaintiff must demonstrate that this source [of funds] was unequivocally committed to furnish these sums at closing.”

We disagree with the plaintiffs’ reading of the decision. First, while the trial court did use the language quoted, it also specifically stated: “It does not appear to this court that Frumento requires an express written commitment.” Second, the sentence in the trial court’s decision using the words “unequivocally committed” is immediately followed by this sentence: “In terms specific to the present factual situation, plaintiffs must prove that their financial backers were bound in some way to provide the necessary funds within a reasonable time after August 27,1986.” (Emphasis added.) Thus, the trial court construed Frumento correctly, and simply made a factual finding different from the one the plaintiffs proffered. The trial court did not hold that in every case a buyer must have a written commitment from a financial backer. What it did find was that in this case, in the absence of an executed joint venture agreement, the equity investors were not “bound in some way” to provide the funds. An executed joint venture agreement was a condition precedent, not only to the backers’ actual advancement of the funds at the closing (the buyer’s “readiness”), but also to the backers’ commitment to produce those funds (the buyer’s “ability” to pay).

B

We agree with the trial court that in this case, a final joint venture agreement was essential. We do not hold that, as a matter of law, a buyer who plans to finance his purchase by enlisting coinvestors who will participate as joint venturers must always have an executed joint venture agreement to demonstrate his ability to pay. Rather, it was the expressed intent of these particular investors that the executed joint venture agreement be a condition precedent to their association and thus to their commitment to provide the needed funds.

The evidence supports the trial court’s finding. First, there was evidence that the principals intended that execution of the agreement would take place before the closing, not simultaneously with the closing. Martin Schiffman, the president of Carl Marks, testified that in order to obtain the letters of credit needed to obtain some of the financing for the project, the joint venture would have had to incur fees of $30,000 to $60,000 prior to the closing.

Second, because Carl Marks would not participate without the other investors’ participation, nailing down the terms of the parties’ relationship was essential before Carl Marks would commit to provide funds. Schiffman testified that Carl Marks’ relationship with Steiner was revived only when Steiner brought in Kaplan and Skydell, and that, had they left the deal, Carl Marks would have abandoned it also. The letter of agreement signed by Steiner, Skydell, Kaplan and Carl Marks on September 19, 1986, specifically provided that Carl Marks would not be obligated until “a formal joint venture agreement acceptable to our respective counsel has been executed and delivered by all parties.” Skydell testified that Carl Marks consistently had told him that “anything could happen,” and that they would not be committed “until the final documents [were] executed on a satisfactory basis to their attorney and to them.”

The same condition precedent applied to Skydell. The letter of intent signed by Skydell, Kaplan, Steiner and his partners on September 4, 1986, expressly stated that Skydell’s obligation would not arise until a formal agreement between those investors was executed; it was not. Skydell signed the letter of agreement dated September 19, 1986, stating that no obligation would arise until the joint venture agreement was executed and delivered. Skydell testified that he preferred to be the “silent partner” with Carl Marks holding a 50 percent interest because he did not want to commit the time to “the headaches” of developing the property. He had had prior dealings with Carl Marks and considered it “providential” that they were in on the deal. Although Skydell testified that he would have been ready to pay for the entire project himself, he also testified that he had never discussed release of Carl Marks’ collateral assignment of the contract, which would have been required for him to proceed without Carl Marks, and had taken no direct action despite the fact that he knew things were moving much too slowly for the multimillion dollar transaction involved. The defendants demonstrated numerous inconsistencies between Skydell’s testimony at his deposition and his testimony at the trial. The trial court was entitled to evaluate the conflicting testimony and to conclude that Skydell’s protestations of willingness to finance the purchase did not accurately reflect the degree of his commitment within a “short time” after August 27, 1986. Gaynor-Stafford Industries, Inc. v. Water Pollution Control Authority, 192 Conn. 638, 647, 474 A.2d 752, cert. denied, 469 U.S. 932, 105 S. Ct. 328, 83 L. Ed. 2d 265 (1984) (“[t]he resolution of conflicting testimony is within the exclusive province of the trial court”).

C

The plaintiffs contend that the trial court’s finding of inability was incorrect because the joint venture agreement could not have been completed once the defendants had repudiated the sales agreement. The plaintiffs assert that the court’s reasoning places buyers whose sellers have repudiated in a “Catch-22” situation. In this case, the plaintiffs could not sign the agreement after the defendants had repudiated the contract of sale, because the joint venture agreement required a statement from Steiner warranting that the subject property was still available for purchase. Similarly, they argue, a buyer who cannot obtain financing without providing his bank with a mortgage deed warranting title to the property would be foreclosed from obtaining specific performance if the seller repudiated before the closing. They contend further that this judgment requires a buyer whose seller has repudiated a contract to engage in an exercise in futility by completing financing preparations when there is no prospect of purchase. In essence, the plaintiffs’ claim is that the defendants’ repudiation of the agreement should excuse them from having to prove their ability to perform.

The trial court correctly ruled that while a seller’s repudiation excuses a buyer seeking specific performance from demonstrating readiness, it does not excuse a buyer from demonstrating ability. DiBella v. Widlitz, supra, 200; Romaniello v. Pensiero, supra, 60. The court did not, however, ignore the plaintiffs’ claimed dilemma. Because “[i]t is .axiomatic that the delay of one party may be excused where it is caused, at least in part, by the acts of the other party”; Bertozzi v. McCarthy, 164 Conn. 463, 470, 323 A.2d 553 (1973); the trial court did consider the plaintiffs’ claim that the defendants’ repudiation of the contract prevented them from becoming “able” to perform. It rejected that claim, stating: “[T]he court finds no evidence that [the plaintiffs] were hindered by the sellers’ conduct from executing their own joint venture agreement within a reasonable time.” As a finding of fact, the court’s rejection of the claim will not be disturbed unless it is clearly erroneous. DiBella v. Widlitz, supra, 198.

There was conflicting evidence concerning whether the defendants’ repudiation of the contract actually stood in the way of formation of the joint venture agreement. The plaintiffs made much of a clause in the draft agreement requiring them to assert that the property was still “available,” a clause they could no longer truthfully sign. The court could have found that inserting a contingency clause in the agreement would have eliminated this problem. The court accepted the testimony of Martin Schiffman, the president of Carl Marks, that nothing the sellers had done prior to the September 19 letter of intent prevented them from reaching agreement with Steiner. Skydell himself testified that, in his view, Carl Marks was being very “picayune” and “bureaucratic” in preparing the joint venture agreement and that this was the reason the joint venture agreement was not completed. There was ample testimony that as late as September 23, the defendants spoke with the plaintiffs’ attorney in an attempt to resuscitate the sale and were informed that it would take thirty to sixty days longer for the plaintiffs to be ready to close. The plaintiffs never called that attorney as a witness, suggesting that his testimony on this point might have been unfavorable to them. Finally, the court viewed the circulation of draft joint venture agreements through October as negating any inference that the defendants’ repudiation in August blocked the completion of the joint venture agreement. The court’s analysis is plausible, logical, and supported by the evidence.

D

The plaintiffs’ second claim is that the trial court improperly excluded evidence concerning the defendants’ alleged breaches of the sales agreement except when relevant to the issue of what would constitute a “reasonable time” for the closing. A party challenging a trial court’s exclusion of evidence has the burden of showing that the ruling was probably harmful. Shelnitz v. Greenberg, 200 Conn. 58, 79, 509 A.2d 1023 (1986). We conclude that any error in excluding the evidence was harmless, because the trial court was correct in holding that the plaintiffs (1) did not meet their burden of proving their ability to close within a reasonable time, and (2) were therefore not entitled to the remedy of specific performance.

Our decision in DiBella v. Widlitz, supra, places the initial burden in an action for specific performance on the plaintiff buyer to demonstrate that he was ready, willing and able to perform. If the buyer cannot prove these conditions precedent to the seller’s obligation, the subject of specific performance is closed. Only when the buyer shows that he was ready, willing and able does the seller’s breach become relevant. In order to obtain specific performance, it goes without saying that the plaintiff buyer must also prove that the defendant seller did not himself perform. Whether the issue of the defendants’ alleged nonperformance, or the issue of the plaintiffs’ alleged readiness, willingness and ability, is considered first, is up to the trial court. The order in which evidence is received is within the discretion of the trial court. State v. Gaston, 198 Conn. 490, 495 n.2, 503 A.2d 1157 (1986); Shulman v. Shulman, 150 Conn. 651, 659, 193 A.2d 525 (1963); see Practice Book § 283.

The plaintiffs also claim that evidence concerning the defendants’ supposed bad faith in failing to live up to other terms of the contract was relevant to the trial court’s consideration of the equities involved. Once the trial court had found that the plaintiffs were not able to perform the contract and had also ruled that the defendants’ conduct had not itself caused that inability, however, any additional equitable considerations would have made no difference.

The judgment is affirmed and the case is remanded for further proceedings on the remaining issues.

In this opinion the other justices concurred.

       The defendants initially requested an expedited trial hoping to remove a lis pendens placed on the property so that they could then prepare to lease or sell the building, which was becoming vacant. The judge who heard the request, Celotto, J., bifurcated the equitable and legal issues and ordered the court trial on the issue of specific performance to be expedited, leaving a jury trial on the legal issues for a later date. Subsequently, the plaintiffs, without objection, waived a jury trial and requested that the entire case be tried to the court. Because little time remained in the court calendar, the trial court, Dunnell, J., decided not to revise Judge Celotto’s order and limited the trial before her to the issue of specific performance. During the proceedings, the defendants withdrew their countersuit against the plaintiffs, a quiet title action that had been consolidated with the present action, so that the only issue tried was the issue of specific performance.

       The other plaintiff in this case, MIF Associates Limited Partnership, is the successor in interest to the plaintiff Steiner’s rights in the contract at issue. Steiner is the sole shareholder and president of MIF Enterprises, Inc., the general partner of MIF Associates Limited Partnership.

       The proposed joint venture agreement would have involved 50 percent ownership by Carl Marks, the other 50 percent to be owned by a group consisting of Skydell, Kaplan, Steiner and his partnership, MIF Associates Limited Partnership. Under one version, 50 percent would have been owned by Carl Marks and 50 percent by MIF Associates. MIF Associates would have previously admitted Kaplan as a limited partner and Steiner would have made Skydell a shareholder in MIF Enterprises, Inc., the general partner of MIF Associates Limited Partnership. The project was expected to cost roughly eight million dollars: four million dollars in purchase price and four million dollars in development. This figure was expected to include four million dollars in cash and four million dollars in seller financing secured by Carl Marks’ letters of credit. Each 50 percent owner would have contributed 50 percent of the cash and been responsible for 50 percent of the financing. Thus, all of the participants in the purchase were to be equity investors, not mortgage lenders.

       Because the trial court found the plaintiffs were not “able” to close within “a reasonable tíme” after August 27,1986, the court did not explicitly decide whether the defendants had breached the contract at any time and in particular whether the defendants had repudiated the contract. At trial, counsel stipulated that after August 27, the defendants would not close on the same terms and conditions as specified in the contract. In view of the trial court’s ruling that time was not of the essence of the contract, the defendants’ action would constitute a breach absent some legal excuse.

       At oral argument, the plaintiffs emphasized the futility of completing preparations for financing when the sellers had already refused to convey. If the plaintiffs had sought only damages, there might have been merit to the argument. Where the remedy sought is specific performance, however, the financing preparations are not futile, because they will, if the plaintiff prevails, produce the desired result: conveyance of the property to the plaintiffs. There is always a risk that efforts to obtain financing for a purchase may prove fruitless. The seller may breach; the property may be destroyed; at the eleventh hour, there may be a defect in title. Despite these risks, buyers must make the necessary financial arrangements. Similarly, the ready, willing and able buyer who sues for specific performance takes the risk that the court in its equitable discretion •will refuse the order. Such uncertainty does not render financing preparations futile.

       There is no reasonable basis for the plaintiffs’ contention that the excluded evidence of the defendants’ wrongful conduct would have shown that the defendants actually hindered the plaintiffs from becoming “ready, willing and able” to perform within a reasonable time after August 27,1986. The court did admit evidence concerning whether the defendants possessed marketable title as of August 27,1986, because under one construction of Paragraph 9 of the sales contract, the defendants’ lack of marketable title would have extended' the closing date thirty days. The admitted evidence included testimony concerning potential hazardous waste contamination of the property that might have subjected it to a “superlien” under General Statutes § 22a-452a and thus might have rendered it unmarketable.


source: Caselaw Access Project

author: Covello, J.

license: Public Domain

text:
    Edward Larson v. Paul S. Fazzino et al.
    (14058)
    Peters, C. J., Callahan, Covello, Hull and Borden, Js.
    Argued September 26—
    decision released November 13, 1990

      Michael F. Dowley, with whom, on the brief, was Gregory Harris, for the appellant (plaintiff).

      Kenneth H. Antin, for the appellees (defendants).
   Covello, J.

This is an action to quiet title to real property and to enjoin the defendants’ interference with certain easements claimed by the plaintiff over the defendants’ land. The dispositive issue is whether the defendants’ failure to answer the plaintiff’s request for admissions within the thirty days required by Practice Book § 239 caused the requests to be conclusively established against the defendants. We conclude that the plaintiff waived the thirty day limit under Practice Book § 239 by failing to inform the attorney state trial referee that he intended to rely on its effect and by allowing the defendants to testify, without objection, in a manner contrary to the requested admissions.

On August 7, 1986, the plaintiff began this action alleging that the defendants had interfered with the plaintiff’s use of an easement of record over the defendants’ land, and that his use and that of his predecessors in title had established an easement by prescription over the defendants’ land. On October 31, 1986, the plaintiff served a request for admissions on the defendants pursuant to Practice Book § 239. In his request for admissions, the plaintiff had asked that the defendants admit, inter alia, that they had prevented the plaintiff from enjoying the use of the easement and that the plaintiff had established a prescriptive easement by fifteen years of uninterrupted use. On October 16,1987, over eleven months later, the defendants filed late answers, denying these allegations.

On March 29 through April 5, 1989, the case was tried to an attorney state trial referee. The gravamen of the plaintiff’s claim was that the defendants had interfered with the plaintiff’s record easement by placing boulders and erecting a curbed island within the easement as well as by harassing the delivery trucks serving the plaintiff’s store. In support of his claim, the plaintiff sought and was granted permission to enter into evidence the requested admissions and the defendants’ answers. The plaintiff did not state at that time that he intended to rely not on the content of the defendants’ responses, but on the negative legal effect of Practice Book § 239 which would have conclusively established the contents of the plaintiffs admissions against the defendants.

On April 21,1989, the plaintiff filed a posttrial memorandum asking, for the first time, that the attorney state trial referee find the requested admissions to be conclusively established against the defendants. On May 11,1989, the attorney state trial referee filed his findings in which he recommended that all the factual issues be resolved in favor of the defendants. On September 14, 1989, the state trial referee accepted the attorney state trial referee’s findings and rendered judgment for the defendants, rejecting the plaintiff’s argument that the court had to render judgment in favor of the plaintiff based on the preclusive effect of Practice Book § 239. The plaintiff appealed to the Appellate Court. We thereafter transferred the appeal to this court pursuant to Practice Book § 4023.

Practice Book § 239 states in relevant part that “[ejach matter of which an admission is requested is admitted unless, within thirty days ... or within such shorter or longer time as the court may allow, the party to whom the request is directed files and serves . . . a written answer or objection.” We have uniformly held that time limits in the Rules of Practice are procedural in nature and not jurisdictional, and, therefore, “any defect caused by noncompliance with the rule may be waived by the opposing party . . . .” Lo Sacco v. Young, 210 Conn. 503, 507-509, 555 A.2d 986 (1989); (Practice Book defect waived by failure specially to plead); Pepe v. New Britain, 203 Conn. 281, 286-88, 524 A.2d 629 (1987) (failure to raise noncompliance with Practice Book section waived time limit); Windham Community Memorial Hospital v. Willimantic, 166 Conn. 113, 115, 348 A.2d 651 (1974); Avis Rent-A-Car System, Inc. v. Crown High Corporation, 165 Conn. 608, 614, 345 A.2d 1 (1973). “Waiver is a question of fact for the trier” and “ ‘ “may be inferred from the circumstances if it is reasonable so to do. . . .” ’ ” (Citations omitted.) Loda v. H. K. Sargeant & Associates, Inc., 188 Conn. 69, 76, 448 A.2d 812 (1982).

At the beginning of trial, the plaintiff offered into evidence both the request for admissions and the defendants’ late filed responses without alluding to the alleged legal consequences of the defendants’ unexcused delay. By offering the defendants’ answers, the plaintiff led the attorney state trial referee and the defendants’ counsel to believe that he was relying on the content of the answers and not on the negative implication of the requested admissions. By failing to inform the attorney state trial referee of his intended reliance on Practice Book § 239, the plaintiff waived his right to have the requested admissions conclusively established against the defendants.

The plaintiff further waived his right to rely on the preclusive effect of Practice Book § 239 by failing to object when the defendants introduced evidence at trial that directly contradicted the content of the plaintiffs requested admissions. Specifically, the plaintiff did not object when the defendants introduced evidence that the plaintiff had not used the easement continuously for fifteen years and that boulders were not placed within the boundaries of the record easement. This testimony was directly opposite to the preclusive effect of the admissions that the plaintiff subsequently sought to have held against the defendants. See Royal Homes, Inc. v. Dalene Hardwood Flooring Co., 151 Conn. 463, 466, 199 A.2d 698 (1964) (defect in pleading waived because the opposing party allowed evidence in without objection). “A party waives his right to rely on the conclusive effect of responses to requests for admissions when he permits the party who made the responses to testify at trial, without objection, contrary to his responses.” TransiLift Equipment, Ltd. v. Cun ningham, 234 Va. 84, 91, 360 S.E.2d 183 (1987); Foellmi v. Smith, 15 Wis. 2d 274, 289-90, 112 N.W.2d 712 (1962).

The judgment is affirmed.

In this opinion the other justices concurred.

       Practice Book § 239 provides in pertinent part: “Each matter of which an admission in requested is admitted unless, within thirty days after the filing of the notice required by Sec. 238 (b), or within such shorter or longer time as the court may allow, the party to whom the request is directed files and serves upon the party requesting the admission a written answer or objection addressed to the matter, signed by the party or his attorney.”

       The plaintiff further claimed (1) that the state trial referee should have ordered a new trial after the defendants were allowed to withdraw their admissions after trial, (2) that the state trial referee improperly overruled the plaintiffs exceptions to the attorney state trial referee’s report, (3) that the state trial referee improperly overruled the plaintiffs objections to the attorney state trial referee’s report, and (4) that the state trial referee improperly rendered judgment on the attorney state trial referee’s report. The plaintiff’s objections and exceptions to the attorney state trial referee’s report, however articulated, were based largely on the trial court’s refusal to accept, as conclusively established, the plaintiffs requested admissions. In view of our disposition of the principal issue we do not reach these additional claims.

       See Practice Book §§ 428 through 443.

       To take advantage of admissions, the requests and the answers thereto should be introduced into evidence. See 8 C. Wright & A. Miller, Federal Practice and Procedure (1970) § 2264. Otherwise, there would be no opportunity to test their evidentiary competence. S. Kembel Fischer Realty Trust v. Board of Appeals, 9 Mass. App. 477, 479, 402 N.E.2d 100, cert. denied sub nom. Costello v. Board of Appeals, 449 U.S. 1011, 101 S. Ct. 566, 66 L. Ed. 2d 468 (1980); Falcone v. Night Watchman, Inc., 11 Conn. App. 218, 219 n.1, 526 A.2d 550 (1987).


author: Hull, J.

text:
    Reed J. Cyr et al. v. Town of Coventry et al.
    (13929)
    Shea, Callahan, Glass, Hull and Borden, Js.
    Argued September 28—
    decision released November 13, 1990

      Walter A. Twachtman, Jr., for the appellants (plaintiffs).

      Abbot B. Schwebel, town attorney, for the appellees (defendants).
   Hull, J.

This appeal involves an assessment of benefits levied by the Coventry water pollution control authority (WPCA) against various residents owning property in the town, in order to comply with a court order to construct sewer facilities. The plaintiffs, the residents of Coventry against whom assessments were levied, brought a declaratory judgment action against the defendants, the town of Coventry and the WPCA, seeking a declaration (1) that the operation of General Statutes § 22a-458 in this case was in violation of the home rule provision, article tenth, § l, and the due process clause, article first, § 8, of the Connecticut constitution, and (2) that the WPCA imposed an invalid assessment of benefits pursuant to General Statutes § 7-249. The trial court concluded that § 22a-458 is constitutional and that the assessments were valid. The plaintiffs appealed to the Appellate Court; we subsequently transferred the appeal to ourselves pursuant to Practice Book § 4023. We affirm the judgment of the trial court.

The following facts are either stipulated or undisputed. Prior to 1983, the commissioner of the department of environmental protection (DEP) issued an order directing the town to undertake, design, construct and complete a sewer project within the town. The underlying purpose of the order was to abate pollution in Lake Wangumbaug, commonly known as Coventry Lake. Subsequently, the WPCA held public hearings pursuant to General Statutes § 7-247a regarding the proposed construction. In addition, on three separate occasions the town submitted a sewer funding resolution to a town referendum in accordance with § 9-3 (e) of the Coventry town charter. Each resolution was defeated.

Thereafter, the commissioner of the DEP, pursuant to General Statutes §§ 22a-435 and 22a-458, instituted an action against the defendants to enforce the sewer construction order. On September 30, 1983, the trial court, Barall, J., ordered the defendants to authorize the necessary funds to undertake and complete the sewer project.

Following the court order, the town authorized a bond issue in order to undertake design and construction of the sewer project without submitting a resolution to a town referendum. After construction of the sewer was completed and a public hearing was held in accordance with General Statutes § 7-250, the WPCA levied an assessment of benefits against the plaintiffs pursuant to General Statutes § 7-249. The plaintiffs brought a declaratory judgment action in the Superior Court. The trial court, Klaczdk, J., denied the declaratory relief requested. It is from this judgment that the plaintiffs appeal.

The plaintiffs claim that since § 22a-458 empowered the trial court to direct the defendants to authorize the necessary funds for the sewer project, it required the defendants to disregard § 9-3 (e) of the Coventry town charter, and thereby violated the home rule provision, article tenth, § 1, of the Connecticut constitution. The defendants claim that § 22a-458 supersedes § 9-3 (e) of the town charter. We agree with the defendants.

“[I]t has been held that a general law, in order to prevail over a conflicting charter provision of a city having a home rule charter, must pertain to those things of general concern to the people of the state . . . Caulfield v. Noble, 178 Conn. 81, 87, 420 A.2d 1160 (1979). The proposition that water pollution is of statewide concern is indisputable, for “[i]t [has been] found and declared that the pollution of the waters of the state is inimical to the public health, safety and welfare of the inhabitants of the state, is a public nuisance and is harmful to wildlife, fish and aquatic life and impairs domestic, agricultural, industrial, recreational and other legitimate beneficial uses of the water. . . .” General Statutes § 22a-422. Thus, in this instance, § 22a-458 prevails over § 9-3 (e) of the Coventry town charter and does not violate the home rule provision of article tenth, § 1, of the Connecticut constitution.

The plaintiffs assert that the court order constituted a taking of their property without an opportunity to be heard in violation of the due process clause, article first, § 8, of the Connecticut constitution. The plaintiffs conceded at oral argument in this court that prior to making the assessments a public hearing was held pursuant to § 7-250 at which they were afforded an opportunity to be heard. They claim, however, that the hearing was not meaningful, because the court order undermined the WPCA’s exercise of discretion in its decision whether to levy an assessment of benefits. We do not agree.

Although the court ordered the defendants to authorize the necessary funds for the sewer project, it did not require that the defendants do so by levying an assessment of benefits. Because numerous means of funding the sewer project were available to the defendants; see, e.g., General Statutes § 7-255 (a) (connection and use charges), § 7-264 (borrow upon credit of municipality), and § 7-273a (service charges); an assessment of benefits was not required in order to comply with the order. Thus, the WPCA’s authority to exercise discretion under § 7-249 was not eviscerated by the court order, and the hearing pursuant to § 7-250 was meaningful within the concept of due process of law.

The plaintiffs also claim that the public hearings held pursuant to § 7-247a regarding whether to undertake sewer construction were meaningless and therefore deprived them of their rights to due process of law. This claim is without merit.

At oral argument, the plaintiffs conceded that following the DEP order, but prior to the court order, pub-lie hearings were held according to § 7-247a. Further, the plaintiffs do not claim that additional hearings pursuant to § 7-247a were required following the court order. Thus, the plaintiffs do not challenge the occurrence or timing of the hearings. Also, to whatever extent the defendants’ decision to undertake construction of the sewer may have indirectly affected the plaintiffs’ property rights, as previously stated, due process of law was satisfied as to each individual owner by virtue of the assessment hearing held pursuant to § 7-250.

The plaintiffs’ final claim is that the assessment of benefits levied pursuant to § 7-249 was invalid, because individual property owners were assessed for an improvement from which the general public derives a benefit. As support for this assertion, the plaintiffs rely upon the statement in Windham Heights Associates v. Windham, 179 Conn. 229, 231-32, 425 A.2d 1267 (1979), that in order for local assessments for public improvements to be sustained “the benefits assessed must be special to the individual property owner as distinguished from the benefits accruing to the general public as the result of the improvement.” Their reliance is misplaced. The requirement that the benefits assessed be “special to the individual property owner” does not require that the property owner be the sole beneficiary of the public improvement. Rather, the improvement must confer a benefit upon the property owner that is distinct from the benefit which accrues to the general public, namely, it must increase the market value of the individual’s property. See Tower Business Park Associates No. 1 Ltd. Partnership v. Water Pollution Control Authority, 213 Conn. 112, 117, 566 A.2d 696 (1989); Katz v. West Hartford, 191 Conn. 594, 603, 469 A.2d 410 (1983).

“[TJhere is a presumption as to the ‘regularity, validity and correctness’ of a special benefit assessment that imposes on one challenging the assessment the burden of proof. Katz v. West Hartford, [supra, 602]; see Anderson v. Litchfield, 4 Conn. App. 24, 28, 492 A.2d 210 (1985). ‘An appellant may overcome this presumption by introducing competent evidence that the assessment is greater than the increase in the market value of the property due to the improvement.' Katz v. West Hartford, supra, 602-603.” Tower Business Park Associates No. 1 Ltd. Partnership v. Water Pollution Control Authority, supra. The plaintiffs do not claim that the assessments levied exceed the benefits to their property. Therefore, their claim that the assessments were invalid is without merit.

We conclude that General Statutes § 22a-458 is constitutional and that the benefit assessments levied against the plaintiffs were valid.

The judgment is affirmed.

In this opinion the other justices concurred.

       General Statutes § 22a-458 provides: “Notwithstanding any provision of the general statutes, any special act or municipal charter provision to the contrary, including but not limited to any referendum provision, the legislative body of any municipality ordered by the commissioner of environmental protection, under the provisions of chapter 474 and this chapter, to abate or control water pollution shall establish a water pollution control authority and authorize the necessary funds to undertake and complete any action necessary to comply with such order.”

       The constitution of Connecticut, article tenth, § 1, provides: “The general assembly shall by general law delegate such legislative authority as from time to time it deems appropriate to towns, cities and boroughs relative to the powers, organization, and form of government of such political subdivisions. The general assembly shall from time to time by general law determine the maximum terms of office of the various town, city and borough elective offices. After July 1,1969, the general assembly shall enact no special legislation relative to the powers, organization, terms of elective offices or form of government of any single town, city or borough, except as to (a) borrowing power, (b) validating acts, and (c) formation, consolidation or dissolution of any town, city or borough, unless in the delegation of legislative authority by general law the general assembly shall have failed to prescribe the powers necessary to effect the purpose of such special legislation.”

       The constitution of Connecticut, article first, § 8, provides in pertinent part: “No person shall ... be deprived of life, liberty or property without due process of law . . .

       General Statutes § 7-249 provides in pertinent part: “At any time after a municipality, by its water pollution control authority, has acquired or constructed, a sewerage system or portion thereof, the water pollution control authority may levy benefit assessments upon the lands and buildings in the municipality which, in its judgment, are especially benefited thereby, whether they abut on such sewerage system or not, and upon the owners of such land and buildings, according to such rules as the water pollution control authority adopts, subject to the right of appeal as hereinafter provided.”

       General Statutes (Rev. to 1983) § 7-247a provides: “No municipal water pollution control authority shall acquire or construct all or any part of a sewerage system until after a public hearing at which the affected property owners of the municipality shall have an opportunity to be heard concerning the proposed acquisition or construction. Notice of the time, place and purpose of such hearing shall be published at least ten days before the date thereof in a newspaper having a circulation in the municipality.”

       Section 9-3 (e) of the Coventry town charter provides in pertinent part: “After the same has been approved by the [town] council, any appropriation of one hundred thousand dollars ($100,000) or more, with the exception of the annual budget, and any resolution authorizing the issuance of bonds or notes of one hundred thousand dollars ($100,000) or more shall be placed on the call of a town meeting . . . and such appropriation or resolution shall become effective only after it has been submitted to the persons qualified to vote in such meeting for a ‘yes’ or ‘no’ .... [A]ny such appropriation or resolution . . . shall, if approved by a majority of those voting thereon, be deemed to be a vote of the town meeting.”

       General Statutes § 22a-435 provides: “If any person or municipality fails to comply with any order to abate pollution, or any part thereof, issued pursuant to the provisions of section 22a-428, 22a-431 or 22a-433, and no request for a hearing on such order or appeal therefrom is pending and the time for making such request or taking such appeal has expired, the commissioner may request the attorney general to bring an action in the superior court for the judicial district of Hartford-New Britain to enjoin such person or municipality from maintaining such pollution and to comply fully with such order or any part thereof. All actions brought by the attorney general pursuant to the provisions of this section shall have precedence in the order of trial as provided in section 52-191.”

       General Statutes § 7-250 provides in pertinent part: “No assessment shall be made until after a public hearing before the water pollution control authority at which the owner of the property to be assessed shall have an opportunity to be heard concerning the proposed assessment. . . . Any person aggrieved by any assessment may appeal to the superior court for the judicial district wherein the property is located . . . .”

       It is not clear from the record whether one or several hearings were held pursuant to General Statutes § 7-250. In view of the plaintiffs’ concession that at least one such hearing occurred, however, this discrepancy is irrelevant to disposition of the issues presented.


author: Borden, J.

text:
    Gladys Barbara Eichman v. J & J Building Company, Inc., et al.
    (14022)
    Peters, C. J., Callahan, Covello, Hxjll and Borden, Js.

      Argued September 26—
    decision released November 13, 1990

      William C. Franklin, for the appellant (plaintiff).

      Eugene A. Marconi, for the appellees (named defendant et al.).
   Borden, J.

The principal issue in this appeal is whether General Statutes § 49-14 places an affirmative duty on the trial court to determine the fair market value of real property in a deficiency judgment proceeding, when the court determines that the parties presented no credible evidence to establish that value. The plaintiff moved for a deficiency judgment following the strict foreclosure of a mortgage that secured a promissory note of the defendants. The court denied the motion for a deficiency judgment because it found none of the evidence regarding the value of the mortgaged property to be credible. Based on that finding, the court concluded that the plaintiff had not met her burden of proof. From that ruling, the plaintiff appealed to the Appellate Court, and, pursuant to Practice Book § 4023, we transferred the appeal to this court. We hold that implicit in General Statutes § 49-14 is the requirement that the party seeking a deficiency judgment satisfy her burden of proof regarding the fair market value of the property as of the date title vests in her. We therefore affirm the judgment of the trial court.

The following facts are undisputed. On May 25,1982, the defendants executed a promissory note in favor of the plaintiff in the principal amount of $30,000, with interest payable at the rate of 16 percent per annum. As security, two of the defendants mortgaged to the plaintiff an undeveloped lot located in Litchfield.

In September, 1988, the plaintiff instituted mortgage foreclosure proceedings against the defendants. On August 14,1989, the court, Pickett, J., rendered a judgment of strict foreclosure and established the amount of the debt at $47,802.93, including attorney’s fees and costs. The law days for the defendants and the subsequent lienor; General Statutes § 49-19; were set as September 25 and 26,1989, respectively. Since no one redeemed, title to the property vested in the plaintiff on September 27, 1989.

On October 2, 1989, the plaintiff moved for a deficiency judgment pursuant to § 49-14 and Practice Book § 528. On January 22,1990, after several continuances requested by the parties, the trial court, Moraghan, J., heard the motion for a deficiency judgment.

At the beginning of the hearing, the parties stipulated that the only issue before the court was the value of the property that was the subject of the mortgage. Additionally, the parties stipulated that $51,297.60, representing the original amount of the debt plus accrued interest, was the appropriate figure to be used to determine if a deficiency judgment was warranted.

The plaintiff and the defendants presented the testimony of two appraisers to establish the fair market value of the property. Both the plaintiff’s expert witness, Arthur Oles, and the defendants’ expert witness, Fletcher Waldron, used the comparable sales approach to determine the fair market value of the property. Oles valued the property at $31,000, while Waldron valued it at $60,000. Both experts were cross-examined as to the appropriateness of their valuations of the subject property. During the cross-examination of Oles, he testified that the assessed value of the property for tax purposes was $42,480, representing 70 percent of a purported fair market value of $61,200.

The court, in an oral ruling from the bench, found that neither the experts’ testimony nor the evidence regarding the assessed value was credible. It ruled, therefore, that the plaintiff had not satisfied her burden of proof to establish the value of the property, and denied the motion for a deficiency judgment. This appeal followed. In a subsequent, written supplemental memorandum of decision, the court reiterated its inability to find a fair market value of the property from the evidence presented and its conclusion that, accordingly, the plaintiff had failed to meet her burden of proof.

The plaintiff claims that: (1) the court was required by General Statutes § 49-14 to determine the fair market value of the property involved in the deficiency judgment hearing; (2) the court improperly considered matters outside the record, which directly caused the court’s determination that the expert testimony was not credible; and (3) the court’s refusal to determine the value of the property in question was arbitrary, capricious and unsupported by the facts of the case. The plaintiffs third claim is simply a variation on the theme elaborated under her first claim. We therefore consider them together. We disagree with the plaintiffs first claim as restated, but agree with her second claim. We conclude, however, that the court’s improper consideration of matters outside the record was harmless.

I

The plaintiff first claims that General Statutes § 49-14 imposed a duty on the trial court to determine a value for the property that was the subject of a deficiency judgment hearing. The plaintiff does not claim that the court’s factual finding, determining that the testimony of the expert witnesses was not credible, was clearly erroneous. Instead, the plaintiff argues that the court had an affirmative duty, as a matter of law under the language of § 49-14, to set a value for the property, regardless of whether credible evidence upon which to base this determination was presented at the hearing. This claim is without merit.

“[A] judgment of strict foreclosure extinguishes all rights of the foreclosing mortgagee on the underlying note, except those enforceable through the use of the deficiency judgment procedure delineated in General Statutes § 49-14.” First Bank v. Simpson, 199 Conn. 368, 370, 507 A.2d 997 (1986); General Statutes § 49-1. Section 49-14 (a) provides in pertinent part that “any party to a mortgage foreclosure may file a motion seeking a deficiency judgment.” At the hearing on the motion, “the court shall hear the evidence, establish a valuation for the mortgaged property and shall render judgment for the plaintiff for the difference, if any, between such valuation and the plaintiffs claim.” General Statutes § 49-14 (a). “Such a deficiency judgment, in light of § 49-1, is, therefore, the only available means of satisfying a mortgage debt when the security is inadequate to make the foreclosing plaintiff whole.” First Bank v. Simpson, supra, 371; Simsbury Bank & Trust Co. v. Ray Carlson Lumber Co., 154 Conn. 216, 219, 224 A.2d 544 (1966). “The value of the premises on the date that title becomes vested in the mortgagee determines whether the mortgagee is entitled to a deficiency judgment.” Di Diego v. Zarro, 19 Conn. App. 291, 294, 562 A.2d 555 (1989).

The language at issue in this appeal provides that the trial court “shall hear evidence, establish a valuation for the mortgaged property and shall render judgment for the plaintiff for the difference, if any, between such valuation and the plaintiffs claim.” (Emphasis added.) General Statutes § 49-14. The plaintiff contends that, because the legislature used the word “shall,” the statute is mandatory in nature, and the court improperly declined to establish the value of the property. Contrary to the plaintiffs argument, however, although “shall” has often been held to be mandatory; see Far-ricielli v. Personnel Appeals Board, 186 Conn. 198, 202-203, 440 A.2d 286 (1982); its use in this section does not mandate that the court must determine a value for a piece of property when the plaintiff has not satisfied her burden of proof by providing credible evidence.

In determining whether the use of the word “shall” is mandatory or directory, the test is “whether the prescribed mode of action is of the essence of the thing to be accomplished.” Vartuli v. Sotire, 192 Conn. 353, 360, 472 A.2d 336 (1984); see also LeConche v. Elligers, 215 Conn. 701, 710, 579 A.2d 1 (1990). “That test must be applied with reference to the purpose of the statute.” LeConche v. Elligers, supra. The plaintiff contends that the “essence” of § 49-14 is the requirement that the court determine the actual value of the real property involved, and that if this requirement is within the court’s discretion, the plaintiff’s right to a deficiency judgment would be subject to the whim of the court. We disagree.

“ ‘[T]he plain object [of the deficiency judgment statute] is to require a mortgage creditor, who appropriates the property in part payment only of his debt, to apply the actual value of the security to the debt before collecting any claimed deficiency’ . . . .” People’s Holding Co. v. Bray, 118 Conn. 568, 571, 173 A. 233 (1934), quoting Staples v. Hendrick, 89 Conn. 100, 103, 93 A. 5 (1915); Maresca v. DeMatteo, 6 Conn. App. 691, 694, 506 A.2d 1096 (1986). Implicit in the purpose of the statute is the initial prerequisite that the plaintiff provide the court with sufficient evidence to demonstrate that she is entitled to a deficiency judgment. Indeed, this court has held, in a deficiency judgment proceeding, that “the trier may not decide an issue which is wholly unsupported by the evidence.” New Haven Savings Bank v. West Haven Sound Development, 190 Conn. 60, 71-72, 459 A.2d 999 (1983).

The plaintiffs claim, at its roots, is that the trial court had a mandatory duty to arrive at some determination of value of the property despite the lack of any credible evidence upon which to determine that value. Relying on the authority of the court to arrive at a compromise figure between those offered by expert witnesses; see New Haven Savings Bank v. West Haven Sound Development, supra, 70; Whitney Center, Inc. v. Hamden, 4 Conn. App. 426, 429, 494 A.2d 624 (1985) (tax appeal); and on the fact that § 49-14 provides the sole procedure for securing a deficiency judgment, the plaintiff argues that the court was required to do so in this case. This argument founders on the “ ‘elementary rule that whenever the existence of any fact is necessary in order that a party may make out his case . . . the burden is on such party to show the existence of such fact.’ ” Nikitiuk v. Pishtey, 153 Conn. 545, 552, 219 A.2d 225 (1966); see also C. McCormick, Evidence (3d Ed. 1984) § 337. This rule is derived from the traditional principle that in a civil case “[t]he general burden of proof rests upon the plaintiff . . . .” Silva v. Hartford, 141 Conn. 126, 129, 104 A.2d 210 (1954).

As a necessary element of her claim for a deficiency judgment, the plaintiff was required to prove that the property was worth less than the amount of the debt on the date of the vesting of title. She therefore had the burden of presenting sufficient evidence for the trial court to determine the value of the property on that date. Silva v. Hartford, supra. She failed to do so.

“ ‘The determination of [a property’s] value by a court is the expression of the court’s opinion aided ordinarily by the opinions of expert witnesses, and reached by weighing those opinions in light of all the circumstances in evidence bearing upon value and its own general knowledge of the elements going to establish it. Appeal of Cohen, 117 Conn. 75, 85, 166 Atl. 747 [1933].’ Lomas & Nettleton Co. v. Waterbury, 122 Conn. 228, 233, 188 A. 433 (1936).” Hartford Federal Savings & Loan Assn. v. Tucker, 196 Conn. 172, 183, 491 A.2d 1084, cert. denied, 474 U.S. 920, 106 S. Ct. 250, 88 L. Ed. 2d 258 (1985). “[T]he determination of the credibility of expert witnesses and the weight to be accorded their testimony is within the province of the trier of facts, who is privileged to adopt whatever testimony he reasonably believes to be credible. ” (Emphasis added.) Id. “When confronted with conflicting evidence as to valuation the trier may properly conclude that under all the circumstances a compromise figure most accurately reflects fair market value.” New Haven Savings Bank, v. West Haven Sound Development, supra, 70; Bennett v. New Haven Redevelopment Agency, 148 Conn. 513, 515-16, 172 A.2d 612 (1961); see also Whitney Center, Inc. v. Hamden, supra.

While we have held that the trial court may set the property value at a compromise figure when confronted with conflicting expert testimony as to valuation; New Haven Savings Bank v. West Haven Sound Development, supra; Whitney Center, Inc. v. Hamden, supra; we have never held that the court must do so in the absence of any credible evidence. Indeed, in New Haven Savings Bank v. West Haven Sound Development, supra, we upheld the compromise value set by the trial court where the court, “in determining valuation . . . accepted and rejected portions of each appraiser’s testimony . . . .” Thus, in that case the trial court found segments of the presented evidence credible. See also Whitney Center, Inc. v. Hamden, supra, 430 (trial court “ ‘accepted and rejected portions of each appraiser’s testimony’ ” [quoting New Haven Savings Bank v. West Haven Sound Development, supra]).

Finally, the plaintiff attempts to analogize the affirmative duty of determining the value of real property applicable to a state referee in a condemnation proceeding to the fact-finding function of the trial court in a deficiency judgment proceeding. The analogy fails. The important public interest found in condemnation hearings is not present in deficiency judgment hearings. In condemnation cases, “[t]he property owner is required to yield involuntarily to the sovereign’s demand. The only question in issue is the fair value of the property seized. The single objective . . . is to ensure that the property owner shall receive, and that the state shall only be required to pay, the just compensation which the fundamental law promises the owner for the property which the state has seen fit to take for public use.” Thomaston v. Ives, 156 Conn. 166, 174, 239 A.2d 515 (1968).

In condemnation hearings, the “state referee sitting as a court on appeals ... is more than just a trier of fact or an arbitrator of differing opinions of witnesses. He is charged by the General Statutes and the decisions of this court with the duty of making an independent determination of value and fair compensation in the light of all the circumstances, the evidence, his general knowledge and his viewing of the premises.” Birnbaum v. Ives, 163 Conn. 12, 21, 301 A.2d 262 (1972); see also Minicucci v. Commissioner of Transportation, 211 Conn. 382, 388, 559 A.2d 216 (1989). The duty imposed upon the court to set a value for the property stems from the nature of the action, namely, an involuntary taking by the state. No such important public interest inheres in a deficiency judgment proceeding, where the parties voluntarily entered into the arrangement, and where the plaintiff already possesses the property that secured the debt.

Indeed, deficiency judgment hearings more closely resemble suits for collection than condemnation hearings. Maresca v. DeMatteo, supra, 696 (“the deficiency judgment procedure is the functional equivalent of a suit upon the note”); City Savings Bank of Bridgeport v. Miko, 1 Conn. App. 30, 36-37, 467 A.2d 929 (1983) (award of attorney’s fees appropriate in deficiency judgment hearing, which acts as part of the “collection process”). In light of the different purposes underlying the two causes of action, we conclude that the trier of fact in a deficiency judgment proceeding has no analogous duty to determine value in the absence of some credible evidence as a basis therefor.

The plaintiff also argues that the trial court’s refusal to set a value for the real property in the deficiency judgment hearing was arbitrary, capricious, unsupported by the underlying facts, and created a windfall in favor of the defendants. We disagree.

The plaintiff argues that, because § 49-14 is the only remedy available to a creditor after strict foreclosure, allowing the trial court to refuse to set a value to the property deprives the plaintiff of a meaningful judicial determination of her claim and, therefore, is arbitrary and capricious. The plaintiff also argues that, by affirming the trial court’s decision, this court will open a “Pandora’s box” where every tax appeal, condemnation appeal, and deficiency judgment hearing will result in a claim of insufficient evidence to determine a property value, and that this decision will result in appeals in all such cases.

We determine, however, that this decision does not change the present status of the law in these areas. A litigant is presently entitled to raise on appeal the issue of whether the valuation was properly supported by sufficient evidence. New Haven Savings Bank v. West Haven Sound Development, supra (claim that there was no evidence to support deficiency judgment); Whitney Center, Inc. v. Hamden, supra (claimant alleged insufficient evidence to support tax assessor’s valuation). Additionally, the plaintiff incorrectly concludes that because this court has previously held that the trial court may use a compromise figure in setting property value; New Haven Savings Bank v. West Haven Sound Development, supra; Whitney Center, Inc. v. Hamden, supra; it was arbitrary and capricious for the court not to do so in this instance.

“We are aware . . . that the deference given to the trial court’s exercise of discretion should not be interpreted as meaning that its exercise is insulated from meaningful review.” State v. S&R Sanitation Services, Inc., 202 Conn. 300, 312, 521 A.2d 1017 (1987). “ ‘Arbitrary’ means ‘[wjithout adequate determining principle . . . not governed by any fixed rules or standard.’ ” Id., quoting Black’s Law Dictionary (5th Ed.). “Capricious” is defined as “[cjhangeable in purpose or view; freakish; whimsical.” Ballantine’s Law Dictionary (3d Ed.). “ ‘Where there is room for two opinions, an action taken after due consideration is not arbitrary or capricious even though a reviewing court may believe it to be erroneous.’ ” State v. S & R Sanitation Services, Inc., supra.

Although we might have decided the issue differently, a review of the trial court’s memorandum of decision, as well as the evidence presented at trial, indicates that the finding that the plaintiff provided insufficient credible evidence at trial with which to determine property value was properly based upon the underlying facts and, therefore, was not arbitrary or capricious. Furthermore, because the plaintiff has already obtained the mortgaged property by way of strict foreclosure, the defendants did not receive a windfall as a result of the trial court’s decision. Any benefit the defendants might have received was simply the result of the plaintiff’s failure to carry her burden of persuading the court that she was entitled to a deficiency judgment.

II

The plaintiff next claims that the trial court improperly considered matters outside the record, and that the court’s consideration of those matters directly resulted in its finding that the plaintiff’s expert witness was not credible. We agree that the court should not have considered certain matters because they were outside the scope of the deficiency judgment hearing. We conclude, however, that any such error was harmless.

This claim stems from the fact that, when the court, Moraghan, J., rendered its oral decision at the conclusion of the hearing on January 22,1990, it referred to two facts: (1) the original amount of the mortgage note, in May, 1982, was $30,000; and (2) when the court, Pickett, J., on August 14,1989, rendered judgment of strict foreclosure and found the amount of the debt, Judge Pickett set what Judge Moraghan regarded as “a short law day which would suggest little equity . . . in the property.” Judge Moraghan also referred, however, in addition to the testimony of the plaintiff’s appraiser, to that of the defendants’ appraiser and the evidence of the assessed value of the property. He then concluded that he did not find either expert credible and that he was “not comfortable with the assessed value . . . .”

The plaintiff reads the court’s reference to the original amount of the mortgage debt in 1982 as an inference that the property must have been worth more than $30,000 in 1982 and, therefore, a further inference that in 1989 it must have been worth more than the $31,000 attributed to it by the plaintiff’s expert. Although these inferences are not required by the court’s language, they do represent a reasonable reading of the transcript. These inferences, the plaintiff suggests, were impermissible because they were based on speculation and not on any evidence produced at the hearing. The plaintiff also argues that these inferences, and any inference drawn from the length of the redemption period as compared to the amount of the mortgage debt found in August, 1989, were irrelevant because the sole question for the court at the deficiency judgment hearing was the value of the property on September 27, 1989.

We agree with the plaintiff that the court should not have drawn these inferences. Although, in deciding a claim for a deficiency judgment, the court may properly consider certain uncontested matters that were previously adjudicated in the case; see New Haven Savings Bank v. West Haven Sound Development, supra, 72 n.13 (court may rely on previous foreclosure judgment in determining debt due); that discretion does not extend to the circumstances of this case.

No inference regarding the value of the property in 1989 could logically be drawn from the amount of the 1982 mortgage debt; any such inference would be speculative. Furthermore, the value placed on the property by the court for the purposes of rendering judgment of strict foreclosure and setting law days was irrelevant to a subsequent deficiency judgment proceeding. “It is irrelevant to the determination of a deficiency under § 49-14 that the court had placed a prior value on the premises for purposes of the earlier foreclosure proceeding.” Di Diego v. Zarro, supra, 295.

We are not persuaded, however, that this was harmful error. The court subsequently filed a supplemental memorandum of decision because “upon reading the transcript of its order in the . . . case, [the court] recognizes the need and urgency of filing a supplemental memorandum in view of the condition of that transcript.” In this memorandum of decision, the court reiterated its opinion that it did not find credible the evidence presented to it. The supplemental decision contains no suggestion that the court’s ultimate lack of confidence in the experts’ credibility was affected in any way by either the original amount of the note or the length of the redemption period. Indeed, in the supplemental decision the court did not even refer to the original amount of the note and did not repeat its characterization of the length of the redemption period. Although a trial court may not alter its initial findings by way of a further articulation; see Koper v. Koper, 17 Conn. App. 480, 484, 553 A.2d 1162 (1989); we do not regard the court’s supplemental memorandum of decision as having done so. In view of that supplemental decision, we conclude that the plaintiff has not carried her appellate burden of establishing that the error of the trial court was harmful.

The judgment is affirmed.

In this opinion the other justices concurred.

       General Statutes § 49-14 provides in pertinent part: “deficiency judgment. (a) At any time within thirty days after the time limited for redemption has expired, any party to a mortgage foreclosure may file a motion seeking a deficiency judgment. Such motion shall be placed on the short calendar for an evidentiary hearing. Such hearing shall be held not less than fifteen days following the filing of the motion, except as the court may otherwise order. At such hearing the court shall hear the evidence, establish a valuation for the mortgaged property and shall render judgment for the plaintiff for the difference, if any, between such valuation and the plaintiff’s claim. The plaintiff in any further action upon the debt, note or obligation, shall recover only the amount of such judgment.”

       The defendants are the named corporate defendant, James K. Crowell, Theresa Crowell, Jay Jarmosik and Christine Jarmosik, who are the obligors on the mortgage note, and Harrison Warren, trustee, a lienor subsequent to the mortgage. Warren is not involved in this appeal. We refer herein to the named defendant, to the Crowells and to the Jarmosiks as the defendants.

       The property mortgaged to secure the note was owned by the defendants James K. Crowell and Jay Jarmosik.

       General Statutes § 49-19 provides: “title to vest in encumbrancer paying debt and costs. In actions of foreclosure, when a judgment of strict foreclosure is rendered and there are subsequent encumbrances, the judgment may provide that, upon the payment of the debt and costs by any encumbrancer, after all subsequent parties in interest have been foreclosed, the title to the property shall vest absolutely in such encumbrancer making such payment, subject to such unpaid encumbrances, if any, as precede him.”

       “[Practice Book] Sec. 528. motion for deficiency judgment
      “Whenever a deficiency judgment is claimed in a foreclosure action, the party claiming such judgment shall file with the clerk of the court within the time limited by statute a written motion setting forth the facts relied on as the basis for the judgment, which motion shall be placed on the short calendar for an evidentiary hearing. Such hearing shall be held not less than fifteen days following the filing of the motion, except as the court may otherwise order. At such hearing the court shall hear the evidence, establish a valuation for the mortgaged property and shall render judgment for the plaintiff for the difference, if any, between such valuation and the plaintiff’s claim. The plaintiff in any further action upon the debt, note or obligation, shall recover only the amount of such judgment.
      “Upon the motion of any party and for good cause shown, the court may refer such motion to a state referee for hearing and judgment.”

       The defendants stipulated to the qualifications of the plaintiff’s expert, Arthur Oles.

         The defendants qualified Fletcher Waldron as an expert witness.

       General Statutes § 49-1 provides: “when foreclosure a bar to further action ON debt. The foreclosure of a mortgage is a bar to any further action upon the mortgage debt, note or obligation against the person or persons who are liable for the payment thereof who are made parties to the foreclosure and also against any person or persons upon whom service of process to constitute an action in personam could have been made within this state at the commencement of the foreclosure; but the foreclosure is not a bar to any further action upon the mortgage debt, note or obligation as to any person liable for the payment thereof upon whom service of process to constitute an action is personam could not have been made within this state at the commencement of the foreclosure. The judgment in each such case shall state the names of all persons upon whom service of process has been made as herein provided.”

       We note, however, that any inference the court may have drawn from the short redemption period would inure to the plaintiffs benefit, because it would mean that little or no equity existed in the property and, therefore, would have tended to support the plaintiffs claim for a deficiency.