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New Haven Foreclosure

Discussion in 'North America' started by skydog, Aug 9, 2011.

  1. skydog

    skydog Patron Meritorious

    According to the judicial website, the church has been defaulted for failure to plead and the matter is scheduled for a pre-trial conference on September 30, 2011.

    I haven't checked the file and this default may apply to either their special defenses and/or counter-claim. It most likely pertains only to the counter-claim as there is usually no reason to file a responsive pleading to a special defense.

    The special defense and counter-claim are both based on the church's claim that they were not notified of the change in tax status. If the default applies to both, the court will hear no evidence on that issue; if the default applies only to the counter-claim, then the church may use the lack of notice as a defense to the foreclosure but the court cannot award them damages.

    In many cases, the judges will vacate a default so until a judgment is entered, while bad news for the church, it is not the end of the case. . .yet!

    The case may resolve tomorrow (9-30-11) at the pre-trial. There is a huge backlog of foreclosure cases and the judges are pressuring the attorneys and parties to resolve the matters without trial. I suspect that the church's ability to pay any judgment is really at the heart of the matter and wonder if and to what extent, the mother church will bail them out.

    One other question I have is whether the church is current on the mortgage payments. The failure to pay taxes is most certainly a violation of the terms of the note and mortgage. The church has to know there is little to no chance of success and continuing to make payments on the note for property that will be lost makes no business sense. There is no reason for the bank to initiate a separate foreclosure because, as junior lien holders, they have what is called a right of redemption to the property. If the property is ordered auctioned, the bank will generally bid the amount due for taxes plus the amount of their note. They will either own the property or any subsequent bid, which must be higher than their bid, will be enough to pay their debt. If the judgement is of strict foreclosure, the church will be given a "law day" with which to pay the taxes or lose the property. If they fail to redeem, the bank will simply pay the taxes and take title to the property.
  2. Rene Descartes

    Rene Descartes Gold Meritorious Patron

    A foreclosure is essntially a suit. That puts the City of New Haven into the category of "suppressive" as well as committing a "high crime" against humanity.

    Enough kidding aside, in my most humble opinion, the mother church, whether that be in California or CLO or Flag or Bulgravia should come up with the money that is owed.

    The citizens that are members of the Church in New Haven should not be bilked out of more "donations" to correct the mistake made by the Church itself.

    Yeah right, like that is going to happen...

  3. skydog

    skydog Patron Meritorious

    The DBs in the New Haven Org obviously pulled this in with all their overts and it serves them right. Why should the church have to pay anything? After all, the members buy the property, give it to the church and then pay rent for the privilege of using it. They are clearly CI if they don't understand these simple facts of life.
  4. Lohan2008

    Lohan2008 Gold Meritorious Patron

  5. Voltaire's Child

    Voltaire's Child Fool on the Hill

    Yep. Judicial foreclosures (roughly half the states in the US have provisions to do them non judicially unless there's a defect or another type of instrument is used) are done via a lawsuit.

    If the party being sued does not answer, then a default judgment is filed.

    Sounds like the cult didn't even bother to answer, thus making the foreclosure process happen a bit more quickly, although judicials tend to take longer at best.

    Depending on Connecticut statutes, there will be some sort of redemption period. They usually run 6 months to a year depending on things like whether or not deficiency rights are prayed for in the pleadings.
  6. skydog

    skydog Patron Meritorious

    In this case, the cult did file an answer and counter-claim. When they did, the city amended the complaint which then required the cult to file an amended answer and counter-claim. The city then filed an answer and special defenses to this new amended answer. The cult was then required to file a response to the special defenses filed by city which they failed to do. The court may allow the church to correct this defect by filing an answer.

    Due process requires this adherence to formalistic proceedings but it does waste time, kill trees, confuse litigants, and enrich lawyers.
  7. Voltaire's Child

    Voltaire's Child Fool on the Hill

    Then if judgement is to be rendered, I don't see how it can be a default judgment.

    In any event, if the cult does not cough up the dough, they will lose. There should be a redemption period, though, but I have no idea what it would be for this particular action and this state. I know out here in WA, there redemption period for judicials is there, but the length depends on what was in the original pleadings. What type they're going for.
  8. Auditor's Toad

    Auditor's Toad Clear as Mud

    One would think allowing a foreclosure on a realtively little amount of money for them, that would be avoidable not so good PR.

    I do hope they continue to let this slide and get a foreclosure on US soil.

    Won't THAT be a nice "done"!
  9. pollywog

    pollywog Patron with Honors

    No significant statutory redemption period in Connecticut:

    "Is there a right of redemption in Connecticut?
    Generally no. Connecticut has no specific post salestatutory right of redemption, which allows a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs. After the sale the court will generally provide a short window for there to be a redemption and in a strict foreclosure the cutoff period is called alaw day after which no redemption can be made. There is a time limit to undertake such redemption prior to the sale date."
  10. TG1

    TG1 Angelic Poster

    I don't expect that the New Haven "ideal org" is on Tom Cruise's radar. But if and when multiple ideal orgs start falling prey to foreclosure actions, and since this scheme was allegedly inspired by Cruise, there could be a rapid falling out between him and Miscavige.

    I'd seriously enjoy watching the ensuing catfight between those two jackasses.

  11. skydog

    skydog Patron Meritorious

    It's on-they litigate

    Well apparently the judicial pre-trial was not fruitful and the church has claimed the matter for the trial list. I am guessing that those involved are not impressed or amused by the church's antics.

    In answer to a few of the questions:

    I checked the court files today and there are some corrections to my earlier posts. The church was not defaulted; it was Webster Bank that was defaulted. The other lien holders, Greater New Haven Water Pollution Control Authority and South Central CT Regional Water Authority, were defaulted earlier this year. Webster Bank was defaulted in August for failing to file an answer the the complaint.

    The entry of a default is not a judgment. It just moves the case to the next phase of the proceeding. In this case, the defaulted parties are precluded from offering any defense to the city's foreclosure. As a practical matter, it is of no import. The only issue before the court is whether the tax liens are senior to the other liens (which they are), the amount owed, if any (this is where the church's special defense and counter-claim come in), and whether the debt has been paid. The junior lien holders (Bank, water and pollution authorities) have no defense and would have been defaulted on that ground (Failure to Disclose a Defense) if they had not already been defaulted. The junior lien holders have been made defendants because the statues require they be cited in.

    At the trial, the court will the city's evidence pertaining to the assessment of tax along with the city's failure to renew the tax exemption. The city will claim that notice of this was sent in January, 2009; the church will say they were not notified until January, 2010 (they are religious people, so we know they don't lie). The court, after hearing the evidence, will make a decision. The decision will enter judgment on for the city and church on the city's complaint and the church's counter-claim. If the city wins both (likely result) the property will be appraised to determine the amount of all debt that is secured by the property.

    If the value of the property is not sufficient to satisfy all the debts, it will order a strict foreclosure. In that case, the court will assign law days to the church and junior lien holders. These parties have what is known as an "equity of redemption". If the church pays the taxes, plus attorney fees and court costs, they will have redeemed the property. The interest of the junior lien holders will remain on the property. If the church fails to redeem, their interest is foreclosed and the next senior lien holder, on its law day, may redeem the property by paying the tax due. If they fail to do so, their interest in the property will be foreclosed and so on until the final law day when the last lien holder's equity of redemption has been foreclosed. If no party redeems, the city will take title to the property free free of any of the foreclosed encumbrances.

    If the appraisal of the property shows that there is sufficient equity to pay all the encumbrances, the court will order a foreclosure by sale. It will appoint a committee of sale to auction the property. At the auction, any of the junior lien holders may bid. The successful bidder, will generally have to bid more than the total debt securing the property as the junior lien holders usually enter a bids equalling the amount of the prior encumbrances, plus the amount of their debt. If the purchase price exceeds all the debt, the court will usually approve the sale. Any funds over those needed to pay the lien holders will be returned to the church. If the purchase price will not cover these obligations, the judgment may be converted to a strict foreclosure.
    Last edited: Oct 3, 2011
  12. Wants2Talk

    Wants2Talk Silver Meritorious Patron

    Does any one have update on this?
  13. skydog

    skydog Patron Meritorious

  14. skydog

    skydog Patron Meritorious

    I was in New Haven yesterday and took a drive by the org. The first floor was completely empty and it didn't look like anyone was on the second floor. There were tons of books waiting to be sold.
  15. Wants2Talk

    Wants2Talk Silver Meritorious Patron

    Is there any news on this?
  16. skydog

    skydog Patron Meritorious

    The trial has been continued until June 8, 2012.
  17. skydog

    skydog Patron Meritorious

    It appears that June 8, 2012 will be the trial date. The continuance request filed by the church was granted, but it was a final continuance. Although the word "final" doesn't always mean "final" when lawyers are talking, it appears that the matter will go forward that day.

    If anyone will be in New Haven that day, and can attend please send me a PM. I am trying to arrange my schedule to be there but it doesn't look good.
  18. skydog

    skydog Patron Meritorious

    Ok, the word "final" means nothing in the legal lexicon. The trial has been continued until August 8, 2012. :duh:
  19. Wants2Talk

    Wants2Talk Silver Meritorious Patron

    Anyone want to attend?
  20. Pooks


    I'll check my work schedule. If I don't have to work, I'll drive down to New Haven. My guess is it will either get postponed AGAIN or they will settle.

    Skydog, if you see this, please give me a head's up if they postpone it again. I don't want to drive to New Haven if I don't have to.