Connecticut Appellate Court Holds That Alleged Oral Modification of Loan Agreement Violated Statute of Frauds

In Deutsche Bank Trust Company Americas, Trustee v. DeGennaro (April 29, 2014), the Connecticut Appellate Court rejected a borrower’s claim that a purported oral modification of a loan agreement should have precluded summary judgment, instead finding that the Statute of Frauds precluded such a claim and that the payment of a preexisting obligation (i.e., a mortgage) does not constitute adequate consideration.  Moreover, the fact that there was evidence of a written repayment agreement did not modify the terms of the original loan agreement. 

On its face, the decision would appear to be a blow to borrowers who frequently claim the existence of oral modifications resulting from conversations with lenders.  Of course, it remains to be seen how the decision will affect the treatment of trial courts struggling with these issues in contested foreclosures, particularly in how it relates to various potential exceptions to the Statute of Frauds analysis such as the doctrine of part performance.

More by | Brian Rich Brian Rich , Law.com Contributor
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