Plaintiff, Bank of New York Mellon, brought this action to recover possession of property located at 643 Summer Street, Marshfield, Massachusetts ("Premises") following a foreclosure sale on July 20, 2016. Defendant is the former owner of the property who has held over and remain in possession of the property. Defendant has filed an answer asserting 11 Counterclaims and 59 Affirmative Defenses.
Plaintiff has moved for summary judgment seeking possession and on the Defendant's counterclaims. In their motion, Plaintiff states that they complied with all aspects of the foreclosure sale and resulting summary process action and that there remain no genuine issues as to any material fact in this matter and that they are entitled to judgment as a matter of law for possession and on the Defendant's counterclaims.
The Defendant has filed his own Cross-Motion for Summary Judgment and written opposition to the Plaintiff's motion claiming inter alia that there were deficiencies in the pre-foreclosure notices; the Plaintiff's predecessor in interest, America's Wholesale Mortgage, did not exist as a legal entity at the time of the mortgage thus voiding the mortgage; that acceleration of the Note has resulted in the maturity date of the mortgage being changed; that the requisite foreclosure notices were invalid; that the Plaintiff failed to use good faith efforts to avoid foreclosure; that the Plaintiff lacked standing to bring the foreclosure action; that the actual foreclosure sale never took place and finally that the 72 Hour Notice is procedurally defective. Both parties presented oral argument to the Court along with memoranda of law together with affidavits and documents in support of their respective position.
Undisputed Facts
The following facts necessary to resolve the legal issues raised in the motion for summary judgment are based on facts set forth in the record that the Court concludes are not in dispute.
1. Defendant, Christopher Kyricos, is the former owner of the residential property located at 643 Summer Street, Marshfield, Massachusetts ("Property"). The Defendant continues to occupy the property after the foreclosure by the Plaintiff.
2. On April 28, 2006, the Defendant executed a promissory note to America's Wholesale Lender secured by a mortgage on the premises granted to Mortgage Electronic Registrations Systems, Inc. ("MERS") as nominee for America's Wholesale Lender. ("Mortgage") [Note 1] Plaintiffs Exhibits A and B.
3. The mortgage and all rights thereto was assigned by MERS to Plaintiff by assignment dated November 12, 2009 which was recorded in the Plymouth County Registry of Deeds in Book 37932 at Page 240. Plaintiffs Exhibit C.
4. On January 19, 2010 Defendant executed a loan modification with Plaintiff. Plaintiffs Exhibit D.
5. On November 1, 2011, the Defendant ceased making the requisite payments on the underlying note and mortgage. Plaintiffs SPS Affidavit 8.
6. The Defendant was in default of the repayment terms of his mortgage and Note and that default continues to this day. Plaintiffs SPS Affidavit 8.
7. The Defendant failed to dispute or cure the default or act otherwise reinstate the mortgage.
8. A foreclosure sale was conducted on July 20, 2016 at which Plaintiff purchased the property. This was witnessed by Nikki Breedlove and Robert Lopez. Plaintiffs Exhibits R and S.
9. The certificate of entry, foreclosure deed and supporting documentation was recorded in the Plymouth County Registry of Deeds starting at book 47579 page 179. Plaintiffs Exhibits R, S and T.
10. On or about October 17, 2016 the Plaintiff commenced the eviction of the Defendant by serving 72 Hour Notice to vacate upon the named Defendant. Plaintiffs Exhibit U.
11. On or about February 17, 2017 the Plaintiff served a Summary Process Summons and Complaint upon each of the named Defendants. Plaintiffs Exhibit V.
12. The Defendant filed an answer with 59 affirmative defenses and 11 counterclaims and a request for a jury trial.
13. On December 30, 2019, the Court heard oral argument on Plaintiff's Motion for Summary Judgment and took the matter under advisement.
Discussion
The standard of review on summary judgment "is whether, viewing the evidence in the light most favorable to the non-moving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law." Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117 , 120 (1991). See Mass. R. Civ. P. 56 (c). The moving party must demonstrate with admissible documents, based upon the pleadings, depositions, answers to interrogatories, admissions, documents, and affidavits, that there are no genuine issues as to any material facts, and that the moving party is entitled to a judgment as a matter of law. Community National Bank v. Dawes, 369 Mass. 550 , 553-56 (1976). All evidentiary inferences must be resolved in favor of the non-moving party. See Simplex Techs, Inc. v. Liberty Mut. Ins. Co., 429 Mass. 196 , 197 (1999). Once the moving party meets its initial burden of proof, the burden shifts to the non-moving party "to show with admissible evidence the existence of a dispute as to material facts." Godbout v. Cousens, 396 Mass. 254 , 261 (1985). The non-moving party cannot meet this burden solely with "vague and general allegations of expected proof." Community National Bank, 369 Mass. at 554; Ng Brothers Construction, Inc. v Cranney, 436 Mass. 638 , 648 (2002) ("[a]n adverse party may not manufacture disputes by conclusory factual assertions; such attempts to establish issues of fact are not sufficient to defeat summary judgment").
To prevail in a summary process action involving foreclosed property (where the validity of the foreclosure is challenged) the plaintiff claiming to be the post-foreclosure owner of the property must prove that it has a superior right of possession to that property over the claimed ownership right asserted by the defendants who were the pre-foreclosure owner/occupants. To prove this element of its claim for possession, the post-foreclosure plaintiff must show "that the title was acquired strictly according to the power of sale provided in the mortgage." Wayne Inv. Corp. v. Abbott, 350 Mass. 775 , 775 (1966). See Pinti v. Emigrant Mortg. Co., Inc., 472 Mass. 226 (2012); Bank of New York v. Bailey, 460 Mass. 327 (2011).
First, Defendant raises deficiencies in the pre-foreclosure notices alleging that he did not receive the notice of default sent on February 18, 2015. Plaintiff in reply states that it is undisputed that they mailed the notice in question to the Defendant by certified mail return receipt requested and by first class mail on February 18, 2015 (See Statement of Material Facts # 11). While the Defendant may not have received the notice of default his receipt of the notice is immaterial. Under the terms of paragraph 15 of the mortgage, said notice is deemed delivered to borrower when "mailed by first class mail or when actually delivered to notice address if sent by other means." In this matter based upon the evidence provided I find the Plaintiff has complied with the requirements of the mortgage.
Additionally, I find the notice of default complies with the substantial compliance standard governing paragraph 22 mortgage notices as it was sent to the Defendant prior to the July 17, 2015 cutoff date imposed by the Court in Pinti. Finally, Defendant's challenge to the notice of default under G.L. c. 244 s 35A also fails because this notice is not considered part of the mortgage foreclosure process. (See U.S. Bank National Association v. Schumacher, 467 Mass. 421 (2014)) As such, I find that the Plaintiff has complied with the notice provisions of the mortgage, by statute and case law.
Defendant next avers that the Plaintiff failed make a good faith efforts to avoid foreclosure by not granting Defendant a second loan modification. A review of the facts involved in this matter however indicates otherwise. To begin with, the Defendant had already been granted one loan modification on the underlying mortgage and failed to meet the terms of that modification. It is well established that a lender has no legal obligation to either offer or confirm a loan modification. The Appeals Court clarified this point in Santos v U.S. Bank Nat. Association, 89 Mass.App.Ct. Ct. 687 (2016) "no private right of action under HAMP. The obligations of the Plaintiff is defined G.L. c. 244 s. 35B which requires a lender to "take reasonable steps and make a good faith effort to avoid foreclosure." In the present case, the Plaintiff had granted a prior loan modification to the Defendant in 2010. When the Defendant failed to meet the terms of the initial modification the Plaintiff again evaluated a modification for Defendant in 2015. This request was denied after a net present value analysis of the premises did not support the modification request. In March of 2016 Defendant made yet another request for a modification which was again denied when the Defendant failed to provide necessary financial documentation. Finally, in May of 2016 Defendant made one final attempt to modify his loan with Plaintiff which was denied when Defendant failed to meet the gross monthly income requirements of the program in question. I find that there is no question that Plaintiff considered and took reasonable steps to avoid foreclosing on the Defendant's home.
The Defendant next asserts that under G.L. c. 260 s. 33 the underlying mortgage has been rendered obsolete. Defendant bases this assertion on the theory that when the note was accelerated that the maturity date of the mortgage was accelerated as well. Under G.L. c. 260 s. 33 (the Obsolete Mortgage Statute) mortgages that have not been discharged within five years after their maturity are rendered void and unenforceable by operation of statute. This theory fails on two counts, first while no Court in Massachusetts has yet directly addressed this issue, the First Circuit Court of Appeals and the Federal District Court for the District Court of Massachusetts have both held affirmatively that acceleration under the terms of the note offers no support for the contention that acceleration has any effect on the maturity date of a mortgage. See Perreira v Bank of New York Mellon, No. 16- 11467-LTS, 2016 WL 6963032 at 3 (D. Mass. November 28, 2016) See also Hayden v. HSBC Bank USE, N. A. 867 F.3d 222, 224 (1st Cir.2017). "Plaintiffs cite no authority for the proposition that an acceleration of mortgage payments operates to change the expiration date of the mortgage obligations for the purpose of G.L. c. 260 § 33. The only case they do cite, Deutsche Bank, says nothing about this legal question." See Perreira v Bank of New York Mellon, No. 16-11467-LTS, 2016 WL 6963032 at 3. "Nothing in the text of the statute supports [mortgagors'] assertion that the acceleration of the maturity date of the note affects the five-year limitations period for the related mortgage." See Hayden v. HSBC Bank USE, N. A. 867 F.3d 222, 224 (1st Cir.2017).
Additionally, even if there was case law support for the Defendant's contention, the date of foreclosure was well within 5 years from the date of the last payment and acceleration. As a result, if the statute is applied in accordance with the interpretation of Defendant, the Plaintiff was in compliance.
Based on the above, the Court finds that the statute of limitations period under G.L. c. 260 § 33 is not triggered by an acceleration of the underlying note and Plaintiff was within its right to bring the foreclosure action in 2016 and thus finds for the Plaintiff on this point.
Defendant's next argument hinges on the alleged non-existent status of the lender at the time of the execution of the mortgage. In short, Defendant alleges that because the lender (Americas Wholesale Lender) was a non-existent entity at the time the mortgage was executed that as a result the underlying mortgage is invalidated and thus unenforceable. The Defendant has provided no statutory or case law evidence supporting this contention. In fact, the subsequent actions by the Defendant in initially paying on and then modifying the terms of the note and mortgage would seem to indicate ratification, confirmation and acceptance of the mortgage and note in question. Additionally, there is no existing case law in Massachusetts that supports the proposition of Defendant. One authority directly addressing this particular issue is the federal case Paulding v. New Penn Fin. LLC, 2018 U.S. Dist. LEXIS 5233 (D. Mass 2018) in which the US District Court for Massachusetts held "borrowers provide no argument for why such an extraordinary remedy should be available and the Court cannot fathom one. The money borrowed by (borrowers) was surely not fictitious; they used it the buy the property." On this point, I find the opinion of the District Court to be persuasive. I find for the Plaintiff as a matter of law on the issue of the lenders status at the time of the execution of the note and mortgage.
The next point raised by Defendant is the standing of the Plaintiff to bring the foreclosure action. After examining the record, I find that the Plaintiff has clearly shown and the record indicates that it was the valid assignee of the underlying note and mortgage at issue and thus had standing to foreclose upon the mortgage. A review of the foreclosure deed and supporting affidavit indicate and finds compliance with the underlying statutes and case law standards. The Certificate of Entry was properly witnessed and notarized indicating that John McCarthy the attorney-in-fact made an open, peaceable and unopposed entry onto the premises for purposes of foreclosing on the property and I find it to be credible evidence that the entry and sale were conducted on July 20, 2016. The Affidavit pursuant to M.G.L. c. 244 s. 35B and 35C is in order and I find it to be in compliance with the statutory requirements. A review of the Pinti affidavit outlines the conditions precedent to acceleration and sale under the terms of the mortgage. I find it to be in compliance with the statutory standards set by the Eaton and Pinti decisions. Finally, I find the affidavit of Continuing Noteholder Status to be in order and in compliance with the requisite statutes.
Finally Defendant asserts that he had been told the scheduled foreclosure sale had been cancelled and the foreclosure sale was never actually conducted. Specifically, the Defendant claims that he was at the premises on the date and time in question, that no parties appeared and the sale was never conducted. The parties do not dispute that the foreclosure was postponed by public proclamation of the Plaintiff's agent and continued from June 29, 2016 to July 20, 2016. (See Plaintiff's statement of material fact number 27) Other than what could be characterized as self-serving statements, the Defendant provides no written evidence that the sale had been cancelled by the Plaintiff on July 20, 2016. The pattern of behavior of the parties leading up to the eventual sale date indicates that the Plaintiff exercised due care to postpone the sale while the Defendant attempted a loan modification. When the appeal of the last modification denial was denied the Plaintiff went ahead and conducted the scheduled foreclosure sale. As a result I find that the sale was continued from June 29, 2016 to July 20, 2016 and I also find that the sale was not further continued beyond July 20, 2016 and was conducted on that date at the appointed time.
Defendant's argument concerning whether the sale was actually conducted also fail. In response to this point, the Plaintiff provided the affidavit of John McCarthy a sales agent for Harmon Law Offices, P.C., who attested that he was present at the foreclosure of 643 Summer Street, Marshfield Massachusetts on July 20, 2016 at 2:00 p.m. Plaintiff also supplied the affidavit of Robert Lopez, the licensed auctioneer assigned to this sale. In his affidavit, Lopez states that he conducted a foreclosure auction at 643 Summer Street, Marshfield Massachusetts on July 20, 2016 at 2:00 p.m. Attached to the affidavit of Lopez is a Memorandum of Terms and Conditions of Sale which while listing "No bidders" also listed a Nikki Breedlove as a witness in addition to Lopez and McCarthy as the winning bidder.
While it may be true that Defendant may not have observed the conduct of the actual sale, and I find the affidavit testimony of McCarthy and Lopez to be more credible than that of the Defendant this presents as an issue of fact to be determined by the finder of fact.
Finally we arrive at Defendants final argument that the 72 Hour Notice to Quit is procedurally defective. Defendant argues that as a tenant at sufferance he should have been provided with "reasonable" notice which he defines as 90 days. It has been established that Defendant is the former owner of the premises. On July 20, 2016 the Plaintiff conducted a foreclosure auction where it was the high bidder. On August 25, 2016, the Plaintiff executed and delivered a foreclosure deed to itself. The Defendant continued to occupy the dwelling. The Defendant was never a tenant and the Plaintiff never entered into a tenancy with the Defendant. The Plaintiff has never demanded or accepted any payments from the Defendant for his use and occupancy of the dwelling. As such it is well established in Massachusetts that tenants at sufferance are only entitled to "reasonable "notice. Defendant as a tenant at sufferance was only entitled to the notice provided by the Plaintiff. In fact, an examination of the calendar indicates that 123 days passed between the service of the Notice to Quit and the subsequent service of the Summary Process Summons and Complaint. Well beyond even the Defendants expectations. As such I find the notice served by the Plaintiff on October 17, 2016, to be legally sufficient in compliance with the statutory requirements relating to same.
Finally with respect to the numerous affirmative defenses and counterclaims asserted by the Defendant because the Defendant is the former owner who never occupied the property as a tenant, he cannot assert an affirmative defense to possession or counterclaims in this summary process action pursuant to G.L. c. 239, s. 8A, p.1. The Appeals Court, in Deutsche Bank National Trust Company, trustee, v. Gabriel, 81 Mass. App. Ct. 564 , 572-573, ruled that a post foreclosure former owner who never rented or leased the premises is not entitled to assert counterclaims or defenses in a summary process action pursuant to G.L. c. 239, s. 8A. Accordingly, the Defendant's counterclaims related to the above shall be dismissed with prejudice.
I rule that Plaintiff's right to possession of the property, based upon its status as the post-foreclosure owner of the property, is superior to any possessory interest the defendant currently has as a holdover (former owner) occupant of the property. Accordingly, Plaintiff has established its claim for possession of the premises.
In sum, based upon the information provided by the Plaintiff which was supplemented by affidavits and documentation and finally oral argument, the Court finds that the Plaintiff has established a prima facie case in support its claim of a superior right to possession. Defendant has failed to raise any issues of material fact remaining in dispute and as such have failed to meet the standard necessary to defeat Plaintiff's Motion for Summary Judgment.
ORDER FOR JUDGMENT
Based upon all the credible evidence submitted as part of the summary judgment record in light of the governing law, it is ORDERED that:
1. JUDGMENT enters for the Plaintiff on the Plaintiff's motion for summary judgment with the exception of Defendant's claim that the sale did not occur on the date and time in question which matter shall be scheduled for final pre-trial conference on Monday, March 30, 2020 at 2:00 p.m.
2. Having been presented with no evidence concerning Plaintiff's claim for use and occupancy damages, that claim is deemed waived without prejudice and may be brought at the final pretrial conference;
3. The Plaintiff's Motion for Summary Judgment as to the Defendant's counterclaims is ALLOWED as to claims brought under G.L. c. 239, s. 8A and these counterclaims are DISMISSED with prejudice.
4. Defendant's Cross-Motion for Summary Judgment is DENIED.
5. The remaining counterclaims (if any) of the Defendant not addressed by this order shall be transferred to the civil docket by motion of the Defendant made no later than March 15, 2020.
SO ORDERED.
The Bank of New York Mellon f/k/a/ The Bank of New York, as Trustee for the Certificate Holders of the CWABS, Inc. Asset-Backed Certificates Series 2006-8 v. Christopher Kyricos