author: KATZ, J.

text:
    LINDEN CONDOMINIUM ASSOCIATION, INC. v. R. RICHARD MCKENNA
    (SC 15971)
    Callahan, C. J., and Borden, Katz, McDonald and Peters, Js.
    Argued November 6, 1998
    officially released February 2, 1999

      Patricia A. Ayars, for the appellant (plaintiff).

      Nathan A. Schatz, with whom was Richard P. Weinstein, for the appellee (defendant).
   Opinion

KATZ, J.

The two principal issues in this appeal are: (1) whether a condominium owners’ association may seek a deficiency judgment under General Statutes § 49-14 as part of an action to foreclose a common charges lien pursuant to General Statutes § 47-258, when the first mortgagee has redeemed the units being foreclosed by paying the statutory superpriority to the association; and (2) whether such an association may thereafter bring a separate action for breach of contract to recover the remaining unpaid common charges. The plaintiff, Linden Condominium Association, Inc., a condominium owners’ association, brought this action against the defendant, R. Richard McKenna, the owner of twelve condominium units, in order to collect unpaid condominium common charges, attorney’s fees, and costs based on the defendant’s personal liability. Following the judgment of the trial court limiting the plaintiffs right to damages, the plaintiff appealed to the Appellate Court. We transferred this appeal to this court pursuant to Practice Book § 65-1 and General Statutes § 51-199 (c).

The parties have stipulated to the following facts. Prior to bringing the present action, pursuant to the Common Interest Ownership Act (act), General Statutes § 47-200 et seq., specifically § 47-258, the plaintiff brought a foreclosure action against the defendant to foreclose its statutory lien for unpaid common charges. The trial court rendered a judgment of strict foreclosure, determined that the defendant’s total debt secured by the lien was $74,596.01, awarded $1500 in attorney’s fees and $1653.60 in costs, and set law days. On its law day, Shawmut Bank Connecticut, N.A. (Shawmut), the holder of the first mortgage on the condominiums in question, redeemed the units by paying the plaintiff the six month superpriority lien plus attorney’s fees and costs. Specifically, Shawmut paid the plaintiff $15,000 for six months of common charges, plus $1500 in attorney’s fees and $1653.60 in costs. Consequently, $59,596.01 remained as an unpaid debt for common charges. Seven days later, the plaintiff moved for a deficiency judgment pursuant to § 49-14, but the court denied the motion as untimely.

On November 16, 1995, the plaintiff filed the present action for breach of contract and failure to comply with General Statutes § 47-257, which sets forth the law regarding assessments for common charges. The plaintiff seeks: (1) the remaining common charges of $59,596.01 not recovered in the prior foreclosure action; (2) $11,556 plus 18 percent interest per annum for the common charges and late fees that had accrued in May and June of 1995, the months between the date of judgment and the date of redemption; and (3) costs and attorney’s fees incurred in connection with the collection of the debt.

The defendant responded by filing a motion for summary judgment, claiming that the present action was barred by res judicata because the plaintiff unsuccessfully had sought a deficiency judgment in the prior foreclosure action. The defendant claimed that, even if the plaintiff had not been required to seek a deficiency judgment pursuant to § 49-14, it chose to do so, and therefore, the trial court’s denial of the plaintiffs deficiency judgment motion precluded any further litigation to collect the same debt. The defendant further argued that the debt itself no longer existed because it had merged into the foreclosure judgment. In a pretrial memorandum of decision dated November 1,1996, Hon. Jerry Wagner, judge trial referee, denied the motion for summary judgment, concluding that the present action was not barred because the plaintiff could not have maintained a deficiency judgment claim pursuant to § 49-14. The trial court added that § 47-258 (f) does not prohibit a postforeclosure action on the debt against a unit owner. Therefore, the case was tried to the court, Freed, J.

In his posttrial memorandum of decision, however, Judge Freed concluded otherwise. Specifically, the court held that, in the foreclosure action, after the trial court had established the amount due the plaintiff, and after Shawmut had redeemed the condominium units, the plaintiff had a choice either to pursue a deficiency judgment pursuant to § 49-14 or to bring a separate action to collect the remaining debt. The court further reasoned, however, that because the plaintiff by motion had pursued a deficiency judgment, which was denied as untimely, the doctrine of res judicata barred the plaintiff from subsequently bringing an action to collect the unrecovered sum from the prior foreclosure action. Accordingly, the trial court rendered judgment for the plaintiff for only $19,070.06, which sum consisted of $11,556 that the parties had stipulated represented the common charges for May and June of 1995, plus $5026.66 in interest and $2487.40 in attorney’s fees incurred in the present action.

On appeal, the plaintiffs principal claim is that, pursuant to § 47-258, a condominium association can bring an action for unpaid common charges following a foreclosure action for whatever debt remained unsatisfied after judgment in the foreclosure action. Additionally, as part of this action, the plaintiff seeks common charges that accrued between the dates of judgment and redemption, and costs and attorney’s fees incurred in connection with the collection of the debt. In support of its claim, the plaintiff argues that § 49-14 does not permit a deficiency judgment when the foreclosing party does not obtain title to the property, and that neither General Statutes § 49-1 nor the doctrine of res judicata bars further action on a debt after a judgment of foreclosure has been rendered. Conversely, the defendant maintains that the plaintiff had the legal right to pursue a deficiency judgment in the foreclosure action and that § 49-1 is a bar against further actions on the debt, such as the present one. The defendant further asserts that even if § 49-1 were not a bar, the doctrine of res judicata bars the plaintiff from bringing this claim because the plaintiff unsuccessfully had pursued a deficiency judgment as a part of the prior foreclosure action. Finally, the defendant contends that collateral estoppel prevents the plaintiff from requesting the attorney’s fees and costs that had accrued in connection with the foreclosure action, and which had been requested, but denied, in that action.

We agree with the plaintiff that § 49-14 did not provide a remedy available to the plaintiff and we reverse the judgment of the trial court. We also conclude, however, that the doctrine of collateral estoppel precludes the plaintiff from recovering the attorney’s fees and costs that had been denied in the foreclosure action.

I

We first address the plaintiffs claim that the trial court improperly determined that the plaintiff could have obtained a deficiency judgment pursuant to § 49-14 in an action to foreclose a common charges lien created by § 47-258 in which a first mortgagee had redeemed by paying the plaintiffs statutory superpriority. We agree with the plaintiff.

Whether the plaintiff, under the circumstances of this case, could seek a deficiency judgment is a matter of statutory interpretation and is an issue of first impression for this court. Statutoiy interpretation is a matter of law, and, therefore, the trial court’s judgment is subject to plenary review. See Shawmut Mortgage Co. v. Wheat, 245 Conn. 744, 748, 717 A.2d 664 (1998). Well settled principles govern such a review. When we construe a statute, “ [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature. ... In seeking to discern that intent, we look to the words of the statute itself, to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter. . . . Furthermore, [w]e presume that laws are enacted in view of existing relevant statutes . . . because the legislature is presumed to have created a consistent body of law.” (Citations omitted; internal quotation marks omitted.) Conway v. Wilton, 238 Conn. 653, 663-64, 680 A.2d 242 (1996). We construe each sentence, clause or phrase to have a purpose behind it. State v. Ayala, 222 Conn. 331, 346, 610 A.2d 1162 (1992). In addition, we presume that the legislature intends sensible results from the statutes it enacts. State v. Parmalee, 197 Conn. 158, 165, 496 A.2d 186 (1985). Therefore, we read each statute “in a manner that will not thwart its intended purpose or lead to absurd results.” (Internal quotation marks omitted.) Coley v. Camden Associates, Inc., 243 Conn. 311, 319, 702 A.2d 1180 (1997).

Regarding the act specifically, we have stated that, “[i]n determining whether [the act] affords the relief that the [plaintiff] seeks, it is axiomatic that we strive to ascertain and give effect to the apparent intent of the legislature. . . . In addition, we consider the statute as a whole with a view toward reconciling its parts in order to obtain a sensible and rational overall interpretation.” (Citations omitted; internal quotation marks omitted.) Nicotra Wieler Investment Management, Inc. v. Grower, 207 Conn. 441, 451, 541 A.2d 1226 (1988).

The act, which is largely modeled after the Uniform Common Interest Ownership Act, was created in order to provide unit owners and their associations with consumer protection rights, as well as to afford developers, lenders and title insurers with flexibility and certainty in establishing common interest communities. Conn. Joint Standing Committee Hearings, Judiciary, Pt. 6, 1983 Sess., pp. 1821-24, remarks of William Breetz; see also Willow Springs Condominium Assn., Inc. v. Seventh BRT Development Corp., 245 Conn. 1, 30, 717 A.2d 77 (1998). Section 47-258, which is a part of the act, establishes a lien with a split priority. Additionally, it authorizes and describes appropriate foreclosure mechanisms. In derogation of the common-law rule that first in time is first in right, § 47-258 (b) establishes a priority for common charges and a superpriority for “ ‘the common expense assessments . . . which would have become due in the absence of acceleration during the six months immediately preceding institution of an action to enforce . . . the association’s lien ....’” Hudson House Condominium Assn., Inc. v. Brooks, 223 Conn. 610, 614, 611 A.2d 862 (1992), quoting General Statutes § 47-258 (b). The split priority establishes a superpriority for up to six months of common charges and attorney’s fees and costs prior to first and second mortgages and taxes, and establishes a recording lien for the remainder of the common charges that is prior to many other liens. Thus, the statute provides an owners’ association with a speedy mechanism by which it can secure up to six months of unpaid common charges, as well as attorney’s fees and costs incurred in such a pursuit. The creation of a lien with such a superpriority protects consumers, because unit owners depend on their association for vital maintenance services.

Section 47-258 also expressly permits actions based on personal liability for unpaid common charges. Section 47-258 (f) provides: “This section does not prohibit actions to recover sums for which subsection (a) of this section creates a lien or prohibit an association from taking a deed in lieu of foreclosure.” Hence, contrary to the defendant’s arguments, § 47-258 (f) allows an association to sue a unit owner based on the owner’s personal liability, in addition to the association’s statutory right to foreclose on its lien. The final phrase, “in lieu of foreclosure,” merely modifies “taking a deed,” thereby leaving intact the express statement that there is no bar to such a course of action. Furthermore, the defendant’s argument that subsections (f) and (j), read together, limit an association’s choices to either an action on the debt or a foreclosure action, is without merit. Section 47-258 (j) provides that “[t]he [condominium] association’s lien may be foreclosed in like manner as a mortgage on real property,” and merely relates to the procedures to be used in common charges lien foreclosures. There is no language in either subsection that indicates that the plaintiff must choose one action or the other.

We turn our attention next to § 49-14, which permits a party in a mortgage foreclosure to file a motion for a deficiency judgment to recover postredemption unpaid debt in certain situations. Although § 49-14 (a) explicitly applies only to mortgage foreclosures, we recently concluded in Fairfield Plumbing & Pleating Supply Corp. v. Kosa, 220 Conn. 643, 649, 600 A.2d 1 (1991), that the deficiency judgment provisions of § 49-14 (a) apply as well to judgment liens on real property. In that case, our reading of the language of the statute was based on General Statutes § 52-380a (c), a provision parallel to § 47-258 (j), and on our public policy to promote efficiency. Id., 649-50. We also noted in Fair-field Plumbing & Pleating Supply Corp. that other jurisdictions do not appear to distinguish between mortgages and liens with respect to deficiency judgments. Id., 651-52 n.12, citing Ringle v. Wallis Iron Works, 93 N.Y. Sup. Ct. (86 Hun.) 153, 155-56, 33 N.Y.S. 398 (1895) (“[t]here is nothing . . . which prevents one establishing a lien from obtaining his full relief, which includes his right to enforce it, not only out of the property against which the [mechanic’s] lien is filed, but for any deficiency against the person who for the amount thereof is indebted to the claimant”), aff'd, 155 N.Y. 674, 49 N.E. 1103 (1898).

The history of mortgage foreclosures and the development of deficiency judgments help to explain the scope and function of these laws today. “At common law, a mortgagee was required to elect between a foreclosure action or an action on the underlying debt. In Derby Bank v. Landon, 3 Conn. 62, 63 (1819), this court held that ‘a foreclosure and consequent possession . . . is in the nature of satisfaction of a debt secured by mortgage. It is deemed an appropriation of the thing pledged, in payment of the demand, for which it was security. ’ ” Fairfield Plumbing & Fieating Supply Corp. v. Kosa, supra, 220 Conn. 647. Thus, even if the value of the property that the mortgagee gained was less than the debt owed to her, the entry of judgment precluded any further common-law proceedings on the note. Id. Consequently, in 1833, the legislature created the remedy of the deficiency judgment in order to make the plaintiff whole when the value of the security did not cover the amount of the debt owed to the plaintiff. Id.; see also D. Caron, Connecticut Foreclosures (3d Ed. 1997) § 9.05A, p. 247.

Today deficiency judgments are calculated pursuant to § 49-14 (a), which provides in relevant part: “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. ... 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 plaintiffs claim. The plaintiff in any further action upon the debt, note or obligation, shall recover only the amount of such judgment.” (Emphasis added.)

As previously stated, we have read § 49-14 to apply to statutorily created judgment lien foreclosures pursuant to a provision similar to § 47-258 (j). Fairfield Plumbing & Heating Supply Corp. v. Kosa, supra, 220 Conn. 651. It follows, therefore, that § 49-14 should also apply to statutorily created liens for common charges. In Fairfield Plumbing & Heating Supply Corp., however, title vested in the party foreclosing the judgment hen. There is no analogous legal precedent for applying § 49-14 to the present situation, in which title did not vest in the foreclosing party who brought the claim for a deficiency judgment.

On its face, § 49-14 (a) applies only where there has been no redemption and title has vested in the foreclosing plaintiff. Although § 49-14 provides that “any party to a mortgage foreclosure may file a motion seeking a deficiency judgment”; (emphasis added); these words do not change our analysis, because the moving party must still have possession of the property in question in order for there to be a valuation and a corresponding calculation of a deficiency. In the present case, a deficiency cannot be calculated under § 49-14 (a) because the plaintiffs claimed deficiency is not created by inadequate value in the premises being foreclosed; rather, it arises as a result of the split priority. The plaintiff did not acquire possession of the property, and therefore, the trial court cannot possibly make a finding that the value of the property is insufficient to satisfy fully the plaintiffs debt. The necessary calculation, which entails the “difference, if any, between such valuation and the plaintiffs claim”; General Statutes § 49-14 (a); requires a valuation of the property by the court. Such a valuation necessitates that the foreclosure action resulted in title to the property having vested in the plaintiff. Consequently, while § 49-14 (a) does not require explicitly that title vest in the plaintiff, it is impossible to apply the statute if, as in the present case, title vests in a mortgagee who redeems on its law day. In such a case, the value of the property is irrelevant to the debt still due the association after the foreclosure action. D. Caron, supra, § 12.07, p. 338.

Our conclusion is further supported by the fact that, although this case creates an issue of first impression, our reading of § 49-14 (a) is consistent with our prior cases involving § 49-14 (a). For example, we have made it clear-that “strict compliance with [§ 49-14 (a)’s] provisions [is] a condition precedent to the entry of a deficiency judgment. . . . The necessity of a definite rule of general application and, as well, an unvarying adherence to it, is manifest. Departures from it, if permitted, might lead to grave abuse.” (Internal quotation marks omitted.) Simsbury Bank & Trust Co. v. Ray Carlson Lumber Co., 154 Conn. 216, 218, 224 A.2d 544 (1966).

More specifically, we have explained that it is a mandatory statutory requirement that a hearing be held at which 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. ’ ” First Bank v. Simpson, 199 Conn. 368, 371, 507 A.2d 997 (1986), quoting Practice Book § 528, now § 23-19. In our discussion of the proper method of calculating a deficiency in Fairfield Plumbing & Heating Supply Corp. v. Kosa, supra, 220 Conn. 647, we specified that “[b]efore rendering a deficiency judgment, the court must have a mechanism for establishing the value of the subject property to determine whether and to what extent a deficiency exists.” When analyzing another aspect of § 49-14 (a), we stated that it is a necessary element that a plaintiff prove that the property was worth less than the amount of the debt on the date of the vesting of title. Eichman v. J & J Building Co., 216 Conn. 443, 451, 582 A.2d 182 (1990). Lastly, in New England Savings Bank v. Lopez, 227 Conn. 270, 278-79 n.10, 630 A.2d 1010 (1993), we concluded that “without such a determination [of fair market value of property] there would be no way to determine whether the mortgagee was entitled to such a judgment and, if so, the amount thereof.” Thus, it is clear that § 49-14 (a) should not be read to allow a deficiency judgment when a deficiency cannot be calculated based on the value of the property in accordance with the statute.

The defendant asserts that the relevant language of § 49-14 — “establish a valuation for the mortgaged property” — refers to the amount of money Shawmut paid the plaintiff when it redeemed on its law day. This argument has no merit. Although such a reading creates a mathematical equation upon which the remaining debt could be calculated, there is no basis in the statutory language, its legislative history, or in any of our prior readings of § 49-14 for the defendant’s claim that “valuation” is not linked to the value of the property.

In summary, we conclude that the plaintiff was not able to bring a deficiency judgment claim in the former action pursuant to § 49-14 because the first mortgagee redeemed by paying the plaintiffs statutory superpriority.

II

We next address whether § 49-1 or the doctrine of res judicata bars the plaintiff from bringing the present action. We find no bar to the present action.

A

The defendant contends that, in the context of common charges liens, as well as mortgage foreclosures, § 49-1 mandates that the plaintiff must choose between bringing a foreclosure action or an action on the debt. Hence, according to the defendant, § 49-1 bars the present action because the plaintiff chose to bring the foreclosure action under § 47-258. We disagree.

The application of § 49-1 is also an issue of statutory interpretation to which we will give plenary review. Necessarily, it will be governed by the aforementioned principles of statutory construction.

We begin with the language of the relevant statutes. Section 49-1 provides in relevant part: “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 . . . .” Accordingly, on its face, § 49-1 applies only to mortgage foreclosures. Furthermore, there is no explicit statutory bar to further actions after the common charges lien foreclosure action. On the contrary, subsection (f) of § 47-258 specifically provides that the foreclosure provisions of the statute do not prohibit any action to recover debts upon which the statutory lien is based.

Our interpretation of § 49-1 is consistent with our reading of § 49-14, and the historical developments of the act and mortgage foreclosure law. Having rejected an interpretation of § 49-14 allowing for a deficiency judgment claim in a case like the present one, the application of § 49-1 to a common charges lien that creates a split priority would deny many owners’ associations full relief. Typically, at least part of the debt will be unsatisfied after a common charges lien foreclosure in which the first or second mortgagee redeems. If § 49-1 were to bar a separate, second action on the debt, condominium associations that did not gain possession of the unit(s) at issue would have no mechanism through which to satisfy any debt based on charges that accrued outside the six months preceding the foreclosure action. For example, in the present case, the plaintiff was incapable of obtaining satisfaction for the entire lien because it was unable to seek a deficiency judgment in the initial foreclosure action. To bar the plaintiff, and others like it, from bringing this type of action on a debt would create absurd results that would thwart the intended purpose of the act. See Coley v. Camden Associates, Inc., supra, 243 Conn. 319; State v. Parmalee, supra, 197 Conn. 165 (refusing to read statute in manner that would lead to bizarre results). The split priority was created in order to provide the owners’ associations with a quick, efficient mechanism through which to obtain payment for unremitted common charges, not to deprive them of complete satisfaction of unit owners’ debts. More generally, the remedy of deficiency judgment itself was created in order to provide the foreclosing party a mechanism through which to recover unsatisfied debt. Fairfield Plumbing & Heating Supply Corp. v. Kosa, supra, 220 Conn. 647; see also part I of this opinion. Consequently, because a deficiency judgment is not available to the plaintiff, it would contravene legislative intent to prevent the plaintiff from bringing a subsequent separate action to recover any unsatisfied debt.

Our conclusion is further supported by the act’s mandate of liberal construction. Generally, the act must be afforded liberal construction in favor of the intended beneficiaries because it is a remedial statute. See Concept Associates, Ltd. v. Board of Tax Review, 229 Conn. 618, 623, 642 A.2d 1186 (1994). More specifically, General Statutes § 47-212 (a) provides in relevant part: “The remedies provided by [the act] shall be liberally administered to the end that the aggrieved party is put in as good a position as if the other party had fully performed . . . .” Consequently, even though it requires no liberal construction in order to reach our conclusion, to reach any other resolution would violate § 47-212. As stated previously, to allow § 49-1 to bar the present action when the plaintiff was not able to pursue a deficiency judgment under § 49-14, would prevent the plaintiff from being put in as good a position as if the defendant had paid the requisite common charges.

Finally, our holding that § 49-1 does not apply to liens for common charges is also consistent with our analogous decision in Fairfield Plumbing & Heating Supply Corp. v. Kosa, supra, 220 Conn. 649. In that case, we explained that, unlike a mortgage foreclosure judgment, a judgment of foreclosure on a judgment lien does not extinguish the original judgment, which remains valid as to any uncollected portion. Id. It was implicit in our holding that § 49-1 did not apply to judgment lien foreclosures. Similarly, the original common charges debt is not extinguished by a foreclosure action based on a statutorily created lien, hence § 49-1 does not bar further actions on the debt.

In contrast, the defendant claims that the statement in § 47-258 (j) that an association lien “may be foreclosed in like manner as a mortgage on real property” invokes the bar contained in § 49-1. We are not persuaded. Subsection (j) of § 47-258 governs only the procedures for foreclosing mortgages on real property. Section 49-1, in contrast, does not relate to the manner in which a mortgage is foreclosed, but, rather, serves to bar any action on the debt after a foreclosure. In short, the language and legislative history of the relevant statutes, the public policies behind them, and our holding in Fairfield, Plumbing & Heating Supply Corp. contravene the defendant’s proposed reading.

B

The defendant also argues that the present action is barred by the doctrine of res judicata because of the plaintiffs previous unsuccessful pursuit of a deficiency judgment. Although the plaintiff moved for a deficiency judgment pursuant to § 49-14, which motion was denied as untimely, the plaintiff counters that res judicata does not apply to the present action because it was not legally able to seek a deficiency judgment in the prior foreclosure action. As we have previously stated, we agree with the plaintiff that a deficiency judgment was not available under the circumstances of this case and, therefore, the doctrine of res judicata does not apply.

The applicability of res judicata also raises a question of law, and is, therefore, subject to our plenary review. See Tirozzi v. Shelby Ins. Co., 50 Conn. App. 680, 684, 719 A.2d 62 (1998). “[U]nder the doctrine of res judicata, or claim preclusion, a former judgment on a claim, if rendered on the merits, is an absolute bar to a subsequent action on the same claim ... [or any claim based on the same operative facts that] might have been made. . . . [T]he appropriate inquiry with respect to [claim] preclusion is whether the party had an adequate opportunity to litigate the matter in the earlier proceeding . . . .” (Emphasis altered; internal quotation marks omitted.) Connecticut National Bank v. Rytman, 241 Conn. 24, 43-44, 694 A.2d 1246 (1997). We have further stated that “a decision whether to apply the doctrine of res judicata to claims that have not actually been litigated should be made based upon a consideration of the doctrine’s underlying policies, namely, the interests of the defendant and of the courts in bringing litigation to a close . . . .” Delahunty v. Massachusetts Mutual Life Ins. Co., 236 Conn. 582, 591, 674 A.2d 1290 (1996).

We conclude that the doctrine of res judicata does not bar- the present action for two reasons. First, its application would have to be predicated on the fact that the plaintiff already had brought a deficiency judgment action on the outstanding debt. We have determined, however, that the plaintiff was not able to bring such a claim in its foreclosure action. Thus, res judicata cannot bar the plaintiff because it brought an action it was not entitled to bring. See Swift v. McPherson, 232 U.S. 51, 56, 34 S. Ct. 239, 58 L. Ed. 499 (1914) (dismissal is not on merits if dismissed for want of jurisdiction); see also Trans World Airlines, Inc. v. Hughes, 317 A.2d 114, 119 (Del. 1974) (judgment based on defective pleadings or lack of jurisdiction in prior action will not serve as bar to second action), aff'd, 336 A.2d 572, cert. denied, 423 U.S. 841, 96 S. Ct. 72, 46 L. Ed. 2d 61 (1975). Although the doctrine of res judicata may bar an action that a party did bring or could have brought, Delahunty v. Massachusetts Mutual Life Ins. Co., supra, 236 Conn. 589; the fact that the plaintiff could not legally have obtained a deficiency judgment in the prior action, as we have concluded, precludes the application of that strand of the res judicata doctrine. Second, even if the plaintiffs deficiency judgment claim could be challenged under the doctrine of res judicata, the doctrine would not apply in the present action because the trial court’s dismissal was based on untimeliness and not on the merits of the claim. See Connecticut National Bank v. Rytman, supra, 241 Conn. 43. In summary, we conclude that the trial court improperly determined that the doctrine of res judicata bars the present action.

III

The final issue on appeal is whether collateral estoppel bars the plaintiff from requesting the attorney’s fees and costs that had accrued, had been requested, but had been denied by the trial court in the prior foreclosure action. The issue of collateral estoppel was raised in the trial court proceedings, but was never addressed by the trial court in light of its disposition of the case. Because this is an issue of law on which the record is complete, we resolve the claim in the interest of judicial economy, and conclude that the plaintiff cannot now seek those fees and costs.

Collateral estoppel, like its cousin res judicata, presents a question of law that we review de novo. See Tirozzi v. Shelby Ins. Co., supra, 50 Conn. App. 684. “Collateral estoppel, or issue preclusion, prohibits the relitigation of an issue when that issue was actually litigated and necessarily determined in a prior action. . . . For an issue to be subject to collateral estoppel, it must have been fully and fairly litigated in the first action. It also must have been actually decided and the decision must have been necessary to the judgment.” (Citations omitted; internal quotation marks omitted.) Aetna Casualty & Surety Co. v. Jones, 220 Conn. 285, 296, 596 A.2d 414 (1991).

In the prior foreclosure action, the trial court made a factual determination in the award of attorney’s fees and costs pursuant to § 47-258 (g). The plaintiff sought $8470.60 in attorney’s fees and costs, but was awarded only $3153.60. Pursuant to § 47-258 (g), the trial court necessarily and reasonably determined the amount of costs and attorney’s fees to be awarded. Accordingly, Shawmut paid the plaintiff $3153.60 when it redeemed on its law day. Consequently, the plaintiff is collaterally estopped from seeking the additional $5317 in the present action.

IV

In conclusion, we hold that the plaintiff did not have available the remedy of a deficiency judgment in the prior foreclosure action. In addition, we conclude that neither § 49-1 nor the doctrine of res judicata bars the present action. We do, however, limit the plaintiffs claim to: (1) the unrecovered common charges debt ($59,596.01); (2) the common charges that accrued between the dates of the foreclosure judgment and redemption ($11,556) plus 18 percent interest per annum; and (3) the costs and attorney’s fees incurred solely in connection with the present action.

The judgment is reversed and the case is remanded with direction to render judgment for the plaintiff for its debt, common charges, costs, and its reasonable attorney’s fees in this action.

In this opinion the other justices concurred.

       General Statutes § 49-14 provides: “(a) At any time within thirty days after tire 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 plaintiffs claim. The plaintiff in any further action upon the debt, note or obligation, shall recover only the amount of such judgment.
      “(b) Upon the motion of any party and for good cause shown, the court may refer such motion to a state referee, who shall have and exercise the powers of the court with respect to trial, judgment and appeal in such case.
      “(c) Any party to a mortgage foreclosure who has moved for an appraisal of property for the purpose of obtaining a deficiency judgment, but has not been granted a deficiency judgment, or has not received full satisfaction of any deficiency judgment obtained subsequent to the filing of such motion, may make a motion to the court for a deficiency judgment as set forth in subsection (a) of this section. If such motion is made on or before November 1, 1979, such moving party shall be deemed to have complied with all of the requirements of subsection (a) of this section and shall be entitled to the benefit of any deficiency judgment rendered pursuant to said subsection (a).
      “(d) Any appeal pending in the Supreme Court with regard to any deficiency judgment or proceedings relating thereto shall be stayed until a hearing is held pursuant to subsection (a) of this section. Any appellant in such an appeal shall have the right for a period of thirty days after the rendering of judgment pursuant to subsection (a) of this section to amend his appeal. There shall be no stay of such an appeal if no motion has been filed pursuant to this section on or before November 1, 1979.”

       General Statutes § 47-258 provides: “(a) The association lias a statutory lien on a unit for any assessment levied against that unit or fines imposed against its unit owner. Unless the declaration otherwise provides, fees, charges, late charges, fines and interest charged pursuant to subdivisions (10), (11) and (12) of subsection (a) of section 47-244 are enforceable as assessments under this section. If an assessment is payable in instalments, the full amount of the assessment is a lien from the time the first instalment thereof becomes due.
      “(b) A lien under this section is prior to all other liens and encumbrances on a unit except (1) liens and encumbrances recorded before the recordation of the declaration and, in a cooperative, liens and encumbrances which the association creates, assumes or takes subject to, (2) a first or second security interest on the unit recorded before the date on which the assessment sought to be enforced became delinquent, or, in a cooperative, a first or second security interest encumbering only 1he unit owner’s interest and perfected before the date on which the assessment sought to be enforced became delinquent, and (3) liens for real property taxes and other governmental assessments or charges against the unit or cooperative. The lien is also prior to all security interests described in subdivision (2) of this subseclion to the extent, of (A) an amount equal to the common expense assessments based on the periodic budget adopted by the association pursuant to subsection (a) of section 47-257 which would have become due in the absence of acceleration during the six months immediately preceding institution of an action to enforce either the association’s lien or a security interest described in subdivision (2) of this subsection and (B) the association’s costs and attorney's fees in enforcing its lien. A lien for any assessment or fine specified in subsection (a) of this section shall have the priority provided for in this subsection in an amount not to exceed the amount specified in subparagraph (A) of this subsection. This subsection does not affect the priority of mechanics’ or materialmen’s liens or the priority of liens for other assessments made by the association.
      “(c) Unless the declaration otherwise provides, if two or more associations have liens for assessments created at any time on the same property, those liens have equal priority.
      “(d) Recording of the declaration constitutes record notice and perfection of the lien. No further recordation of any claim of lien for assessment under this section is required.
      “(e) A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within two years after the full amount of the assessments becomes due; provided, that if an owner of a unit subject to a lien under this section files a petition for relief under the United States Bankruptcy Code, the period of time for instituting proceedings to enforce the association’s lien shall be tolled until thirty days after the automatic stay of proceedings under Section 362 of the Bankruptcy Code is lifted.
      “(f) This section does not prohibit actions to recover sums for which subsection (a) of this section creates a lien or prohibit an association from taking a deed in lieu of foreclosure.
      “(g) A judgment or decree in any action brought under this section shall include costs and reasonable attorney’s fees for the prevailing party.
      “(h) The association on written request shall furnish to a unit owner a statement in recordable form setting forth the amount of unpaid assessments against the unit. The statement shall be furnished within ten business days after receipt of the request and is binding on the association, the executive board and every unit owner.
      “(i) In a cooperative, on nonpayment of an assessment on a unit, the unit owner may be evicted in the same manner as provided by law in the case of an unlawful holdover by a tenant, and the lien may be foreclosed as provided by this section.
      “(J) The association’s lien may be foreclosed in like manner as a mortgage on real property.
      “(k) In any action by the association to collect assessments or to foreclose a lien for unpaid assessments, the court may appoint a receiver of the unit owner pursuant to section 52-504 to collect all sums alleged to be due from that unit owner prior to or during the pendency of the action. The court may order the receiver to pay any sums held by the receiver to the association during the pendency of the action to the extent of the association’s common expense assessments based on aperiodic budget adopted by the association pursuant to subsection (a) of section 47-257.
      “© If a holder of a first or second security interest on a unit forecloses that security interest, the purchaser at the foreclosure sale is not liable for any unpaid assessments against that unit which became due before the sale, other than the assessments which are prior to that security interest under subsection (b) of this section. Any unpaid assessments not satisfied from the proceeds of sale become common expenses collectible from all the unit owners, including the purchaser.”

       The plaintiff had requested $5000 in legal fees and $3470.60 in costs.

       See footnote 1 of this opinion for the text of § 49-14.

       General Statutes § 47-257 provides in relevant part: “(a) Until the association makes a common expense assessment, the declarant shall pay all common expenses. After an assessment has been made by the association, assessments shall be made at least annually, based on a budget adopted at least annually by the association.
      “(b) Except for assessments under subsections (c), (d) and (e) of this section, all common expenses shall be assessed against all the units in accordance with the allocations set forth in the declaration pursuant to subsections (a) and (b) of section 47-226. Any past due common expense assessment or instalment thereof bears interest at the rate established by the association not exceeding eighteen per cent per year. . . .”

       See footnote 2 of this opinion for the text of § 47-258 (f).

       Specifically, the plaintiff is seeking costs and attorney’s fees that had been requested but denied by the trial court in the prior foreclosure action, as well as costs and attorney’s fees incurred in the present action.

       General Statutes § 49-1 provides in relevant part: “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

       The plaintiff also argues that the doctrine of stare decisis bound Judge Freed and, therefore, required him to follow Judge Wagner’s decision regarding the defendant’s motion for summary judgment. We disagree. The applicable doctrine is not stare decisis, but the law of the case, which did not bind Judge Freed. See Breen v. Phelps, 186 Conn. 86, 98-99, 439 A.2d 1066 (1982) (“A judge is not bound to follow the decisions of another judge made at an earlier stage of the proceedings, and if the same point is again raised he has the same right to reconsider the question as if he had himself made the original decision. . . . [0]ne judge may, in a proper case, vacate, modify, or depart from an interlocutory order or ruling of another judge in the same case, upon a question of law.” [Citations omitted; internal quotation marks omitted.]).

       Since the act’s inception, 1995 amendments have transformed the act so that it substantially conforms with the 1994 version of the Uniform Common Interest Ownership Act See, e.g., Public Acts 1995, No. 95-187.

       See footnote 1 of this opinion for the text of § 49-14.

       General Statutes § 52-380a (c), which was at issue in Fairfield Plumbing & Heating Supply Corp. v. Kosa, supra, 220 Conn. 643, provides in relevant part: “A judgment lien on real property may be foreclosed or redeemed in the same manner as mortgages on the same property. . . .”

       General Statutes § 49-1 in part codifies this common-law rule. Section 49-1 provides in relevant part: “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 . . . .”

       Public Acts 1833, c. 18, §§ 1 and 2.

       The split priority, making six months of common charges and attorney’s fees and costs prior to first and second mortgage liens, and the remainder of the common charges hen prior to many other hens, creates a unique situation in which the superpriority held by condominium associations will often be paid by first mortgagees, but part of the debt is still owed to them. Therefore, the deficiency is created by the spht priority, not as a result of the value of the property being insufficient to satisfy the debt. See generally D. Caron, supra, § 12.07.

       See footnote 2 of this opinion for the text of § 47-258 (f).

       These attorney’s fees and costs are distinct from the $2487.40 in attorney’s fees that the trial court awarded the plaintiff for pursuing this action.

       See footnote 2 of this opinion for the text of § 47-258 (g).

       See footnote 3 of this opinion and its accompanying text.


source: Caselaw Access Project

author: PETERS, J.

license: Public Domain

text:
    FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF ROCHESTER v. CHARTER APPRAISAL COMPANY, INC.
    (SC 16001)
    Norcott, Katz, Palmer, McDonald and Peters, Js.

      Argued October 28, 1998
    officially released February 2, 1999

      Stuart D. Rosen, with whom was Ann M. Siczewicz, for the appellant-appellee (substitute plaintiff Marine Midland Bank).

      Michael F. Dowley, with whom, on the brief, was Frank C. White, Jr., for the appellee-appellant (defendant).
   Opinion

PETERS, J.

The principal issue in this case is the extent of the liability of a negligent appraiser of real property. Specifically, we must determine whether an appraiser whose negligence results in an excessive valuation of property to be mortgaged bears responsibility for a general decline in real estate values that further decreases the market value of the negligently appraised property.

The plaintiff, First Federal Savings and Loan Association of Rochester, now known as Marine Midland Bank (bank), filed a complaint alleging that the negligence of the defendant, Charter Appraisal Company, Inc. (appraiser), had caused the bank to sustain damages resulting from its reliance on the appraiser’s negligent overvaluation of certain residential property. Finding that the appraisal had been conducted negligently, the trial court excluded from the damages award any loss due to the diminution of the property value that had occurred because of changes in the real estate market. With this limitation, it rendered judgment for the bank.

Both parties appealed. The bank challenged the methodology that the trial court used to calculate the damages. The appraiser cross appealed, asserting the insufficiency of the evidence to support a finding of negligence and the allegedly improper dismissal of its claim that the bank had failed to mitigate its damages. Although the appeals properly were filed in the Appellate Court, we transferred them to this court pursuant to Practice Book § 65-1 and General Statutes § 51-199 (c). We affirm the judgment of the trial court.

The trial court’s memorandum of decision and the record as a whole disclose the following facts. Joseph Derby and Hope Sorenson (borrowers), sought a $380,000 mortgage loan from a local mortgage company, the Sanborn Corporation (Sanborn), to refinance an existing mortgage loan on their residence in Bloomfield (property). On the same day that Sanborn agreed to the refinancing, Sanborn negotiated the promissory note and assigned the mortgage to the bank, pursuant to a long-standing correspondent lending relationship.

Under the relationship between Sanborn and the bank, if Sanborn originated mortgage loans conforming with the bank’s standards, the bank would purchase such loans from Sanborn. It was Sanborn’s responsibility to provide the bank with an appraisal of the property to be mortgaged. The bank then would evaluate the prospective mortgage loan application. Only after the bank had agreed to underwrite the mortgage loan, would the transaction be finalized between Sanborn and the mortgagor.

Accordingly, in this case, Sanborn hired the appraiser to place a value on the borrowers’ property that was to serve as security for the mortgage loan. The appraiser estimated the property’s value to be $550,000. Sanborn provided the appraisal to the bank so that the bank could decide whether to underwrite the mortgage loan. The appraiser knew that the bank was the intended purchaser of the promissory note and the mortgage, and that the bank would rely on the appraisal in deciding whether to underwrite, and ultimately to purchase, the mortgage loan.

The bank evaluated the proposed mortgage loan under its guidelines directing that a loan amount not exceed 75 percent of the value of the property mortgaged as security. In accordance with those guidelines, the bank decided to underwrite and to purchase the mortgage loan in the amount of $380,000 in reliance on the appraised value of the property of $550,000. Once the bank had decided to underwrite the mortgage loan, Sanborn closed the mortgage loan with the borrowers.

A little more than one year later, the borrowers defaulted on the $380,000 mortgage loan. Thereafter, the bank brought an action for strict foreclosure. On September 19,1991, the foreclosure court ruled in favor of the bank and the bank obtained title to the property. The court subsequently held the borrowers liable for a deficiency judgment of $86,934.49. In calculating that figure, the court; determined that, at the time of foreclosure, the property was worth $350,000 and the borrowers’s debt was $423,219.90. The only evidence before the foreclosure court to assist its determination of the property’s value was the testimony of the bank’s witnesses, including its expert appraiser. The bank sold the property on February 19, 1992, for a net recovery of $189,650.90.

Before instituting the present proceedings, the bank had made no attempt to recover the deficiency judgment from the borrowers. It had not yet decided whether to seek recovery from the borrowers or to sell the deficiency judgment.

Instead, the bank sought to recover damages from the appraiser. Having determined that the appraiser’s negligence had caused the bank to purchase the promissory note and mortgage in the amount of $380,000, the trial court found that the bank was harmed by receiving a security for its mortgage loan that was of lesser value than that reported by the appraiser.

In determining the damages to be awarded to the bank, the court took into account evidence that real estate values in Bloomfield had declined by approximately 28 percent between the time the bank had purchased the mortgage loan and the time the property vested in the bank at foreclosure. The court estimated that, if the property had been worth $550,000 as the appraiser had represented, then at foreclosure the property’s value would have declined to $396,000, as compared to the actual value of $350,000 found by the foreclosure court. The court concluded that the difference between these two values, $46,000, represented the loss that the bank had incurred as a result of the appraiser’s negligence.

On appeal, the bank challenges the trial court’s determination of damages, arguing that the court deviated from traditional tort principles that permit recovery of all the losses proximately caused by negligent conduct. Specifically, the bank maintains that the trial court improperly: (1) excluded from the damages award the bank’s loss arising from the decline in the real estate market; (2) excluded the loss the bank incurred after the bank acquired title to the property; and (3) failed to award prejudgment interest on the damages for the period between the foreclosure judgment, when the bank’s damages were fixed, and the trial judgment.

In its cross appeal, the appraiser raises three issues. It contests: (1) the sufficiency of the evidence to support the trial court’s findings of negligence and reliance; (2) the court’s failure to find a breach of the bank’s duty to mitigate damages; and (3) the court’s inclusion of amounts representing interest and fees in its award of damages.

We are not persuaded by either party’s appeal. Accordingly, we affirm the judgment of the trial court.

I

DAMAGES FOR NEGLIGENT APPRAISAL

We turn first to the bank’s claim that the trial court, in its calculation of damages, improperly disregarded applicable principles of tort law. According to the bank, the court failed to compensate it for all the proximately caused losses that it sustained. We disagree.

Before we reach the merits of the bank’s claim, we must determine the applicable standard of review. The scope of our review depends upon the proper characterization of the rulings of the trial court. Morton Buildings, Inc. v. Bannon, 222 Conn. 49, 53, 607 A.2d 424 (1992). The appraiser argues that we must uphold the trial court’s damages award, which was based on findings of fact that are largely within the trial court’s discretionary authority, unless the award was clearly erroneous, unjust or unreasonable. See Westport Taxi Service, Inc. v. Westport Transit District, 235 Conn. 1, 28, 664 A.2d 719 (1995); Dunstan v. Round Hill Dairy, Inc., 128 Conn. 300, 302-303, 22 A.2d 631 (1941). In this case, although the bank frames its argument as a challenge to the damages calculation, the parties do not dispute the facts underlying the damages award, but rather, they dispute the extent of the bank’s loss for which the appraiser should be legally responsible. This is a question of law, subject to plenary review on appeal. See RK Constructors, Inc. v. Fusco Corp., 231 Conn. 381, 384, 650 A.2d 153 (1994).

The bank’s argument of law invokes the well established proposition that a tortfeasor is hable for all damages proximately caused by its negligence. See Neiditz v. Morton S. Fine & Associates, Inc., 199 Conn. 683, 689 n.3, 508 A.2d 438 (1986). The bank claims that, because the appraiser caused it to purchase the mortgage loan secured by the borrowers’ property, the appraiser should be hable for all of the bank’s loss arising from its relationship to the property, including loss resulting from the property’s devaluation as a result of a market decline.

Because actual causation, in theory, is virtually limitless, the legal construct of proximate cause serves to estabhsh how far down the causal continuum tortfeasors will be held liable for the consequences of then-actions. Stewart v. Federated Dept. Stores, Inc., 234 Conn. 597, 605-606, 662 A.2d 753 (1995). The fundamental inquiry of proximate cause is whether the harm that occurred was within the scope of foreseeable risk created by the defendant’s neghgent conduct. Doe v. Manheimer, 212 Conn. 748, 758, 563 A.2d 699 (1989). In neghgence cases such as the present one, in which a tortfeasor’s conduct is not the direct cause of the harm, the question of legal causation is practically indistinguishable from an analysis of the extent of the tortfeasor’s duty to the plaintiff. See Lodge v. Arett Sales Corp., 246 Conn. 563, 574, 717 A.2d 215 (1998). Because our analysis is clarified by examining the scope of the appraiser’s duty to the bank, *8 we begin there.

“The nature of the duty, and the specific persons to whom it is owed, are determined by the circumstances surrounding the conduct of the individual.” (Internal quotation marks omitted.) RK Constructors, Inc. v. Fusco Corp., supra, 231 Conn. 385. Essential to determining whether a legal duty exists is “the fundamental policy of the law” that a tortfeasor’s responsibility should not extend to the theoretically endless consequences of the wrong. Id., 386. Even where harm was foreseeable, this court has found no duty when the nexus between a defendant’s negligence and the particular consequences to the plaintiff was too attenuated. Waters v. Autuori, 236 Conn. 820, 836, 676 A.2d 357 (1996) (nexus between accounting standards promulgated by professional regulatory body and investor’s economic loss insufficient to create duty of care); RK Constructors, Inc. v. Fusco Corp., supra, 387-88 (connection between contractor’s negligence and economic loss to injured party’s employer owing to increased insurance premiums too attenuated to impose liability).

In the present case, we must determine whether the scope of the appraiser’s duty, in providing the valuation of the property, extended to protecting the bank from financial loss due to a general decline in property values. In making this determination, we take as our point of departure the purpose for which the appraisal was sought.

It is undisputed that the bank used the negligently conducted appraisal for the purpose of evaluating the borrowers’ mortgage loan application. The bank compared the property’s value, as determined by the appraisal, to the $380,000 amount of the requested mortgage loan, and decided to purchase the mortgage loan in large part in reliance on the fact that the value of the securing property met the bank’s 75 percent “loan-to-value” ratio guidelines. The trial court found that if the property’s value had been $506,660 or more, the bank would have approved the purchase of the mortgage loan in the requested amount of $380,000. The purpose of the appraisal, therefore, was to establish that the borrowers’ property provided adequate security for a mortgage loan in the requested amount of $380,000.

Throughout the trial, the bank characterized the purpose of the appraisal in that way. For example, in its posttrial brief, the bank stated: “[T]he risk that the Appraisal was designed to guard against was not the possibility of the Borrowers’ default, but that, in the event of such default, the Bank would be adequately secured.” (Emphasis in original.) It is no surprise that the trial court found that the harm caused by the negligent appraisal was that the bank received a security of a lesser value than that which the appraiser reported.

In assessing the damages that the bank could recover according to this principle of law, the trial court identified those costs that the bank would have avoided “but for” the negligent appraisal. See Stewart v. Federated Dept. Stores, Inc., supra, 234 Conn. 605. The court properly found that, but for the appraiser’s negligence, the bank would not have purchased the mortgage loan in the amount of $380,000.

The court declined to accept the bank’s argument that it was entitled to greater damages. We agree with the court’s ruling because the appraisal was intended to demonstrate that the property provided adequate security for the $380,000 mortgage loan, rather than to assure the bank that the borrowers were not likely to default. The appraiser’s duty to the bank in conducting the appraisal, in these circumstances, did not extend to protecting the bank from loss arising from a subsequent general decline in real estate values, even if such a decline had been foreseeable. The link between the negligent appraisal, the consequent impairment of the bank’s security, and a general fall in market values is too attenuated to have created a duty for the appraiser to protect the bank from a general market decline. See RK Constructors, Inc. v. Fusco Corp., supra, 231 Conn. 387-88. Put differently, a fall in market values was not within the scope of risk created by the negligently conducted appraisal. The court properly excluded, from the damages recoverable by the bank, losses attributable to the general decline in real estate values in Bloomfield between the time of the purchase of the loan and the time of the vesting of title in the bank as a consequence of the bank’s foreclosure action.

In its renewed argument to the contrary, the bank maintains that there is an inconsistency between the court’s finding of reliance and its limitation on the bank’s recoverable damages to exclude loss from the decline in real estate values. That perceived inconsistency arises because the bank construes the trial court’s finding to include more than that which it says, which is, that the bank would not have purchased a mortgage loan for $380,000 secured by property negligently alleged to have a market value of $550,000. The bank argues that it would not have had any relationship to the borrowers or to their property if the appraisal had not been performed negligently, thus inferring that the court found that the bank would not have purchased a mortgage loan in any amount, even a lower face amount, secured by property with a lower valuation.

Such an inference is not contained in the trial court’s finding. The trial court found only that the bank would not have purchased the mortgage loan “m that amount,” that is, $380,000. (Emphasis added.) The court explicitly left open the question of whether the parties would have agreed to a mortgage loan in a lesser amount. We do not have the authority to find or to supplement the facts found by a trial court. To the extent that the narrowness of the finding creates a gap in the record, the responsibility for the gap rests with the bank. As the plaintiff in the action, the bank bore the burden of proving that the appraiser’s actions were the proximate cause of its losses. Fleming v. Garnett, 231 Conn. 77, 85, 646 A.2d 1308 (1994); Wu v. Fairfield, 204 Conn. 435, 438, 528 A.2d 364 (1987).

The evidence presented by the bank at trial supports a narrow reading of the trial court’s finding. The bank’s officers and documents indicated that the bank had decided to purchase the $380,000 mortgage loan on the basis of guidelines that evaluated the borrowers’ equity through a 75 percent loan-to-value ratio. The guidelines that the bank used to evaluate the mortgage loan gave the most weight to two factors: the loan-to-value ratio, as applied to the appraised value of the property, and the borrowers’ credit history. The guidelines gave less weight to the borrowers’ income, an item that had to be reported but was not routinely verified. The bank’s chief underwriter testified that the borrowers had “excellent credit,” and that the borrowers’ credit report would have inclined the bank to purchase their mortgage loan. This evidence does not support a contention that, had the appraisal accurately reflected the value of the property, the bank would not have purchased a mortgage loan in a different amount secured by the borrowers’ property. To the contrary, it suggests that, with the proper loan-to-value ratio, a mortgage deal might have been struck at the lower loan amount that an accurate appraisal would have put on the table.

In sum, the basis for the bank’s objection to the trial court’s measurement of its damages is founded on a false premise of inconsistency. The appraiser’s duty to the bank did not extend to protecting it from a loss due to a decline in market values under the circumstances of this case. The court’s decision to exclude losses measured by the general decline in property values is not foreclosed by its finding that the bank would not have purchased the mortgage loan but for the negligent appraisal. In the absence of a finding that the bank would not have purchased any mortgage loan secured by the property valued at other than $550,000, we conclude that it was not improper for the trial court to exclude losses arising from a general market decline from the damages to which the bank was entitled.

II

TIME FOR EVALUATION OF REAL PROPERTY

We next consider the bank’s claim that the trial court improperly based its calculation of damages on the value of the property at the time that title vested in the bank, as determined in the foreclosure proceedings. We reject the bank’s contrary assertion, that the value of the property should have been measured at the time of its resale to a third party.

The bank contends that the proper measure of its losses due to the negligent appraisal is based not on $350,000, the value of the property as appraised at foreclosure, but on $189,650.90, the amount of the bank’s net recovery from the sale of the property to a third party. The bank argues that using the foreclosure judgment figure does not measure its loss fully, because its loss continued to grow after the date of foreclosure. The bank argues further that it had no choice but to seek strict foreclosure on the property in order to establish its injury and to mitigate its damages.

We are not persuaded. The bank’s foreclosure judgment converted the borrowers’ debt into real property worth $350,000 and a deficiency judgment of $86,934.49. By statute, the deficiency judgment fixed the borrowers’ obligation to the bank under the promissory note. General Statutes § 49-14 (a). The bank has offered no reason of policy why this statutory policy should not be applied in evaluating the common-law obligations of a negligent third party appraiser. See Fahy v. Fahy, 227 Conn. 505, 509, 514, 630 A.2d 1328 (1993).

It is telling, moreover, that neither the appraiser nor the foreclosure court had any control over what the bank did with the property subsequent to the strict foreclosure proceedings. The bank had unfettered and unsupervised discretion to choose both the time for the sale of its property and the terms and conditions of the contract of sale. The consequences of the bank’s exercise of this discretion cannot be visited upon the appraiser under the circumstances of this case.

Finally, the bank argues that the appraiser’s liability continues until the property’s sale because, as we have already discussed in part I of this opinion, the bank maintains that no purchase of any promissory note and mortgage would have taken place except for an accurate appraisal in the amount of $550,000. Having rejected that argument as unproven, we conclude that the trial court correctly determined that the bank’s damages were fixed at the time of strict foreclosure, when it gained title to the property.

Ill

PREJUDGMENT INTEREST

We next consider the bank’s claim that its damages award should have included prejudgment interest. The bank asserts that the appraiser should be responsible for compensating the bank for its loss of the use of its money from the date the damages were fixed at the foreclosure proceedings, September 19, 1991, through the date of the trial court’s judgment in the present action, July 17, 1997.

We know of no rule, and the bank has cited none, that requires that such interest be awarded. As the bank recognizes, “ ‘[t]he determination of whether or not interest is to be recognized as a proper element of damage is one to be made in view of the demands of justice rather than through the application of any arbitrary rule.’ ” Wells Laundry & Linen Supply Co. v. Acme Fast Freight, Inc., 138 Conn. 458, 463, 85 A.2d 907 (1952). Exercising its discretion, the trial court decided not to award interest on the damages award, because it found that, in light of the complexity of the issues, the case could not have been resolved without a full trial. See Westport Taxi Service, Inc. v. Westport Transit District, supra, 235 Conn. 28, 38. We conclude that the trial court did not abuse its discretion and, accordingly, that its decision should be upheld.

IV

CROSS APPEAL

We now turn to the appraiser’s arguments in its cross appeal. These arguments, in large part, challenge the factual underpinnings of the trial court’s judgment. We find none of the appraiser’s arguments to be persuasive.

A

The appraiser first maintains that the trial court did not have sufficient evidence to support its finding that the appraisal report was negligently prepared. The appraiser finds fault with the trial court’s finding, according to the expert testimony at trial, that the appraisal deviated from the professional standard of care in several specific ways.

The trial court found that the property had not been evaluated properly because the appraisal: (1) included lower-level bedrooms in calculating the total above grade (ground) living space; (2) failed to report on the sale of a comparable residence on the same street; and (3) failed to identify the sale of a comparable lot in assessing the property’s land value. In light of the ample record at trial, which need not be rehearsed further, the appraiser’s challenge to the sufficiency of this evidence to support the trial court’s findings cannot be sustained.

B

The appraiser also argues that, because the bank failed to produce witnesses who personally had been involved in approving the purchase of the promissory note and mortgage, the trial court had insufficient evidence to find that the bank had relied on the appraisal in entering into this transaction. The absence of direct evidence of such reliance is not crucial, however, because it readily may be established by circumstantial evidence. See State v. Sauris, 227 Conn. 389, 395-96, 631 A.2d 238 (1993). The court had substantial evidence of the bank’s reliance on the appraisal, including not only the guidelines used to evaluate the borrowers’ mortgage loan application, but also the testimony of the bank’s chief underwriter at the time the mortgage loan was approved.

The appraiser argues further that the trial court improperly failed to draw an adverse inference from the bank’s failure to call, as a witness, a particular underwriter who had direct knowledge of the bank’s alleged reliance. The bank explained the absence of that witness at trial. More fundamentally, the appraiser has not demonstrated that the trial court did not draw such an inference. Accordingly, we decline to consider this claim on appeal. See Matza v. Matza, 226 Conn. 166, 187, 627 A.2d 414 (1993) (“ ‘[w]e read an ambiguous trial court record so as to support, rather than contradict, its judgment’ ”). We find no reason to overturn the trial court’s finding that the bank relied on the negligently conducted appraisal.

C

We next consider the appraiser’s claim that the trial court improperly found that the bank adequately had fulfilled its duty to mitigate its damages. The appraiser claims that the bank should have been held in breach of this duty because it failed to pursue payment of the deficiency judgment from the borrowers. We disagree.

The appraiser argues, and the bank does not contest, that evidence at trial demonstrated that the bank had taken no action to pursue payment from the borrowers and that the bank had not yet decided whether to pursue the deficiency judgment or to sell it. The trial court further determined, however, that the bank was not required to pursue the borrowers in the circumstances of this case. One of the borrowers had gone into bankruptcy. The other, according to the court, had not been shown to have the ability to pay.

On the present state of the record, we agree with the trial court’s conclusion that the appraiser failed to satisfy its burden of proving that the bank had failed to take reasonable efforts to mitigate its damages. See Preston v. Keith, 217 Conn. 12, 16 and n.5, 584 A.2d 439 (1991). The only evidence with respect to the non-bankrupt borrower that was proffered by the appraiser was out of date. It described only income earned at the time the mortgage loan was granted, three years prior to the deficiency judgment and seven years before the trial in this case. The appraiser has cited no further evidence that the trial court should have considered.

D

Finally, we consider the appraiser’s claim that, in assessing damages, the trial court improperly included not only the bank’s loss of the principal amount of the promissory note, but also its loss of interest and late charges on the mortgage loan. The appraiser observes, as the evidence shows, that, in evaluating the mortgage loan application, the bank focused on the relationship between the value of the property and the principal amount of the mortgage loan. Accordingly, in the appraiser’s view, the appraiser’s negligence had no bearing on the bank’s loss beyond the principal amount of the promissory note.

The appraiser’s argument is insupportable. The appraiser cites no legal authority for its position, and cites no evidence that the bank’s considerations, in evaluating the mortgage loan application, excluded protection for loss of interest and late charges. In common understanding, loan transactions routinely contain provisions for such charges. The appraiser does not claim to have been unaware of this custom and usage. If a fundamental assumption about a loan transaction is incorrect, a resultant loss foreseeably may include the loss of interest and late charges. The appraiser does not contest that it was aware of these components of the mortgage loan here. We conclude that it was not improper for the trial court to include the bank’s loss of interest and late charges in the damages award.

V

We have examined carefully the claims raised by the bank and by the appraiser. None of them warrants correction of any of the findings or conclusions of the trial court.

The judgment is affirmed.

In this opinion the other justices concurred.

       First Federal Savings and Loan Association of Rochester merged into Marine Midland Bank on March 1, 1997. The bank then was substituted as 1he plaintiff.

       Prior to the trial, the court, Walsh, J., struck a second count alleging that the rendering of the overinflated appraisal constituted an unfair and deceptive act in violation of the Connecticut Unfair Trade Practices Act. General Statutes § 42-110a et seq. No appeal has been taken with regard to that decision.

       General Statutes § 51-199 (c) provides in relevant part: “The Supreme Court may transfer to itself a cause in the Appellate Court. . . .”

       The borrowers’ promissory note, endorsed by Sanborn to the order of the bank, provided for the payment of principal and interest and, upon default, for the borrowers’ liability to the holder of the note for all the outstanding principal, accrued interest and late charges.

       There is no claim, in this case, that the bank was not the proper party to initiate this litigation.

       The trial court also granted the bank postjudgment interest of 10 percent per year, in accordance with General Statutes §§ 52-350f and 37-3a.

       As Professors William L. Prosser and W. Page Keeton have stated: “It is quite possible to state every question which arises in connection with ‘proximate cause’ in the form of a single question: was the defendant under a duty to protect the plaintiff against the event which did in fact occur? . . . The question whether there is a duty has most often seemed helpful in cases where the only issue is in reality whether the defendant stands in any such relation to the plaintiff as to create any legally recognized obligation of conduct for the plaintiffs benefit. Or, reverting again to the starting point, whether the interests of the plaintiff are entitled to legal protection at the defendant’s hands against the invasion which has in fact occurred. Or, again reverting, whether the conduct is the ‘proximate cause’ of the result. The circumlocution is unavoidable, since all of these questions are, in reality, one and the same.” W. Prosser & W. Keeton, Torts (5th Ed. 1984) § 42, p. 274; see RK Constructors, Inc. v. Fusco Corp., supra, 231 Conn. 387-88 and n.4.

       Commentators believe that evaluating the scope of a defendant’s duty (as compared to proximate causation) allows greater clarity and more precise formulation of the issues in cases involving an intervening cause, such as the drop in market values here. 4 F. Harper, F. James & O. Gray, Torts (2d Ed. 1986) § 20.5, pp. 150-51 n.33. Evaluating a question of liability in terms of duty may serve to direct attention to policy issues underlying the extent of the original obligation, rather than to the mechanical sequence of events making up cause in fact. W. Prosser & W. Keeton, Torts (5th Ed. 1984) § 42, p. 274.

       Foreseeability that harm may result if care is not exercised is a necessary component of duty. Foreseeability alone, however, does not create a legal duty. RK Constructors, Inc. v. Fusco Corp., supra, 231 Conn. 385-86. “Many harms are quite literally ‘foreseeable,’ yet for pragmatic reasons, no recovery is allowed. ... A further inquiry must be made, for we recognize that ‘duty’ is not sacrosanct in itself, but is only an expression of the sum total of those considerations of policy which lead the law to say that the plaintiff is entitled to protection. . . . While it may seem that there should be a remedy for every wrong, this is an ideal limited perforce by the realities of this world. Every injury has ramifying consequences, like the ripplings of the waters, without end. The problem for the law is to limit the legal consequences of wrongs to a controllable degree. . . . The final step in the duty inquiry, then, is to make a determination of the fundamental policy of the law, as to whether the defendant’s responsibility should extend to such results.” (Citations omitted; internal quotation marks omitted.) Id., 386.

       In its trial briefs, the bank asserted that the risk created by the appraiser’s negligence, and the harm that in fact occurred, was the undercollateralization of the loan, and that the appraisal’s purpose was to minimize the risk of loss to the bank in the event of the borrowers’ default.
      The bank’s complaint does not illuminate this question because it alleged only generally that the bank had “sustained damages.”

       General Statutes § 49-14 (a) provides in relevant part: “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. ... 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 plaintiffs claim. The plaintiff in any further action upon the debt, note or obligation, shall recover only the amount of such judgment.”

        Lower-level bedrooms: The borrowers’ property consisted of a house located on a sloped lot. The appraisal deviated from professional appraisal guidelines by describing two bedrooms located on the lower level of the property as above grade rooms, by including these bedrooms in the calculation of gross living area, and by comparing this property with other houses that had aboveground bedrooms.
      We disagree with the appraiser’s contention that the experts’ testimony should have been disregarded because they relied on external viewing of the property and on photographs.
      We also disagree with its construction of the expert testimony as permitting deviations for the lower-level rooms without an express inclusion of a substantial explanation for such a deviation in the appraisal report.
      Finally, we note that the inadequate disclosure of the location of the lower-level bedrooms affected not only the overall evaluation of the property but also the properties upon which the appraiser relied by way of comparison. The trial court found that the appraiser, without special comment, compared the borrowers’ property to other residences with bedrooms above ground.

        Co mparable sales: The appraisal reported the sales of three comparable properties, located one-hall't o one mile from the property. The three reported comparables had 8317, 3469 and 3418 square feet of gross living area above ground. The borrowers’ property, as appraised, had only 2558 square feet of gross living area above ground; excluding the lower-level bedrooms would have lowered this figure to just over 1800 square feet. The bank had requested additional comparables from the appraiser. Even so, the appraiser failed to report a substantially similar residence, located on the same road as the borrowers’ property, with 1847 square feet of living area above ground. That property had sold for $252,500 two months before the appraisal. The bank’s expert testified that this was an excellent comparable, which the appraiser had a professional obligation to report.
      On the cross appeal the appraiser seems to argue that the evidence did not in fact show that this unreported residence was a good comparable. We are unpersuaded. The appraiser does not contest the qualifications of the bank's expert, and there is no reason why the trial court was not entitled to credit his testimony. The trial court, therefore, had ample evidence that the appraisal’s failure to include this comparable property violated the professional standard of care.

        Land value: The trial court also found that the appraiser’s appraisal improperly assessed the land value of the borrowers’ property. The court found that the appraiser’s failure to identify the sale of a lot of comparable size and location for $82,000, and its decision, instead, to state an unsupported figure of $200,000 for the property’s land value constituted a deviation from the professional standard of care. The appraiser does not contest that finding on appeal.