Article courtesy of Paige Forcier, Ann Bennett and Kevin Braun (Morgan Lewis)
Bankwell Properties II, Inc. v. Phoenix Press, Inc., Not Reported in Atl. Rptr. (2025)
On September 19, 2014, Bankwell Bank (the “Bank”) entered into a commercial loan agreement with Phoenix Press, Inc., Bridgeview Realty Associates, LLC, and Parkview Realty Associates, LLC (together, the “Obligors”), extending credit in the principal amount of $2,175,000, evidenced by a promissory note (the “Note”). Phoenix Press, Inc. executed a security agreement granting the Bank a security interest in personal property collateral, including equipment, fixtures, and proceeds, which the Bank properly perfected. Bridgeview Realty Associates, LLC and Parkview Realty Associates, LLC executed mortgage deeds and security agreements granting the Bank security interests in personal property collateral. Pursuant to the Note and the security agreements, the Obligors were required to make monthly loan payments to the Bank.
In July 2021, the Obligors defaulted under the agreement by failing to make monthly loan repayments. The Bank demanded payment of all amounts due under the Note and immediate possession of the collateral, but the Obligors refused. The Obligors did not make payment and did not surrender possession of the collateral. On January 9, 2025, the Bank assigned and transferred the loan documents, including the Note, mortgages, and liens, to Bankwell Properties II, Inc. (the “Secured Party”), which brought this action.
The Secured Party filed a replevin complaint against the Obligors and a motion for summary judgment. The Connecticut Superior Court (the “Court”) analyzed the four elements of a replevin claim: (1) that the relevant property is goods or chattel under Connecticut law, (2) the plaintiff has a property in interest in such goods or chattel, (3) the plaintiff has a right to immediate possession of the relevant property, and (4) the defendant wrongly detained the relevant property. The Court determined that all were met. The Court also rejected the Obligors’ argument that a Secured Party should not be able to gain possession of collateral via replevin if the amount of debt is in question due to a pending foreclosure, noting that once the elements of a replevin claim are met, a plaintiff is statutorily entitled to immediate possession of collateral. The Court noted that a replevin claim cannot be stayed or barred by a foreclosure action.
The Court therefore granted the Secured Party’s motion for summary judgment and ruled that the Obligors must surrender and deliver the collateral to the Secured Party and pay the Secured Party damages for the wrongful detention thereof.
