U.S. BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS TRUSTEE OF OWS REMIC TRUST 2015-1 v. JAMIE CARVALHO, ANGELA COBB A/K/A

This matter was before the Court on December 3, 2019 with respect to a Motion for Partial Summary Judgment (the "Partial SJ Motion") filed by the plaintiff, U.S. Bank National Association, not it its Individual Capacity but solely as Trustee of OWS REMIC Trust 2015-1 (the "Plaintiff"). As grounds for its Partial SJ Motion, Plaintiff contends that there are no genuine issues of material fact in dispute and that it is entitled to summary judgment in its favor on its claim for possession of the subject property as a matter of law. The defendants, Jamie Carvalho, Angela Cobb a/k/a Angela Carvalho, John Doe and Jane Doe (the "Defendants"), moved for the entry of summary judgment in their favor as a matter of law on Plaintiff's complaint.

In support of its Partial SJ Motion, Plaintiff filed a Memorandum of Law incorporating certified copies of certain foreclosure documents recorded with the Bristol County North District Registry of Deeds (the "Registry"), together with the Affidavit of Mesha Rivers (the "Rivers Affidavit") and the Affidavit of David Yunghans (the "Yunghans Affidavit"). Defendants filed a written opposition to Plaintiff's Partial SJ Motion (the "Opposition"), several exhibits and the Affidavit of Defendants Jamie Carvalho and Angela Carvalho (the "Carvalho Affidavit") in opposition to Plaintiff's Partial SJ Motion and in support of their Cross-Motion for Summary Judgment (the "Cross-Motion"). The parties appeared at the hearing, each through counsel, and argued the foregoing Partial SJ Motion, Opposition and Cross-Motion.

This is a post-foreclosure summary process (eviction) action in which the Plaintiff is seeking possession of the property located at 75 Blake Street in Taunton, Massachusetts (the "Property"), together with use and occupancy since the date of the foreclosure. Defendants Jamie Carvalho and Angela Carvalho (the "Carvalhos") are the former owners of the Property. Defendants continue to reside in the Property after their receipt of a 72-hour notice to vacate. Defendants requested transfer of this case from the Taunton District Court. Contemporaneous with such transfer, Defendants timely filed an answer, counterclaims and demand for jury trial.

STANDARD FOR SUMMARY JUDGMENT

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).

In weighing the merits of a motion for summary judgment, the court must determine whether the factual disputes are genuine, and whether a fact genuinely in dispute is material. Town of Norwood v Adams-Russell Co., Inc., 401 Mass. 677 , 683 (1988) citing Anderson v Liberty Lobby, Inc., 477 U.S. 242, 247-248 (1986). The substantive law will identify which facts are material and only disputes over facts that might affect the outcome of the suit under the governing law will preclude the entry of summary judgment. Anderson v Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Carey v New England Organ Bank, 446 Mass. 270 , 278 (2006); Molly A. v. Comm'r of the Dep't of Mental Retardation, 69 Mass. App. Ct. 267 , 268 n.5 (2007). In order to determine if a dispute about a material fact is genuine, the court must decide whether "the evidence is such that a reasonable [fact finder] could return a verdict for the nonmoving party." Anderson v Liberty Lobby, Inc., 477 U.S. at 248.

The party opposing summary judgment "cannot rest on his or her pleadings and mere assertions of disputed facts to defeat the motion for summary judgment." LaLonde v. Eissner, 405 Mass. 207 , 209 (1976). To defeat summary judgment the non-moving party must "go beyond the pleadings and by [its] own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." Korouvacilis v. General Motors Corp., 410 Mass. 706 , 714 (1991). "Conclusory statements, general denials, and factual allegations not based on personal knowledge [are] insufficient to avoid summary judgment." Madsen v. Erwin, 395 Mass. 715 , 721 (1985), quoting Olympic Junior, Inc. v. David Crystal, Inc., 463 F.2d 1141, 1146 (3d Cir. 1972).

When the court considers the materials accompanying a motion for summary judgment, the inferences to be drawn from the underlying facts in such materials must be viewed in the light most favorable to the party opposing the motion. Attorney General v. Bailey, 386 Mass. 367 , 371 (1982); see Simplex Techs, Inc. v. Liberty Mut. Ins. Co., 429 Mass. 196 , 197 (1999). The court does not "pass upon the credibility of witnesses or the weight of the evidence or make its own decision of facts." Id. at 370. However, the court may only consider evidence which meets the requirements of Mass. R. Civ. P. 56(e). That evidence must come from "pleadings, depositions, answers to interrogatories, and responses to requests for admission under Rule 36, together with . . . affidavits, if any." Mass.R.Civ.P. 56(c). Affidavits "shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Mass.R.Civ.P. 56(e). "The requirements of rule 56(e) are mandatory." Madsen v. Erwin, 395 Mass. 715 , 719 (1985).

LEGAL STANDARD APPLICABLE TO POST-FORECLOSURE SUMMARY PROCESS ACTION FOR POSSESSION

"Legal title is established in summary process by proof that the title was acquired strictly according to the power of sale provided in the mortgage; and that alone is subject to challenge." Gold Star Homes, LLC v. Darbouze, 89 Mass. App. Ct. 374 , 379 (2016), quoting Wayne Inv. Corp. v. Abbott, 350 Mass. 775 , 775 (1966). See Reem Property, LLC v. Bigelow, No. 18-P-389, 2019 WL 692713, 94 Mass.App.Ct. 1122 (Rule 1:28 unpublished decision February 20, 2019). To prevail in a summary process action involving foreclosed property where the validity of the foreclosure is challenged, "the plaintiff is required to make a prima facie showing that it obtained a deed to the property at issue and that the deed and affidavit of sale, showing compliance with statutory foreclosure requirements, were recorded." Bank of New York v. Bailey, 460 Mass. 327 , 334 (2011). A foreclosure deed and affidavit that meets the requirements of G.L. c. 244, §15 is evidence that the power of sale was duly executed and constitutes prima facie evidence of the plaintiff's case in chief. Federal Nat'l Mortgage Ass'n v. Hendricks, 463 Mass. 635 , 641-642 (2012).

Where these documents meet the requirements of G.L. c. 244, §15, it is "incumbent on a defendant to counter with his own affidavit or acceptable alternative demonstrating at least the existence of a genuine issue of material fact." Id. at 642. Once a plaintiff makes a prima facie case, the burden shifts to the opposing party to demonstrate, through the use of evidence that would be admissible at trial, specific facts showing that there exists a genuine issue for trial with regard to plaintiff's compliance with G.L. c. 244, §14. "If a defendant fails to show the existence of a genuine issue of material fact in response to a motion for summary judgment by contesting factually a prima facie case of compliance with G.L. c. 244, §14, such failure generally should result in judgment for the plaintiff." Id.

UNDISPUTED MATERIAL FACTS

The following facts necessary to resolve the legal issues raised in the Plaintiff's Partial SJ Motion, Defendants' Opposition and Defendants' Cross-Motion are based on facts set forth in the record that the Court concludes are not in dispute.

1. On May 25, 2006, Defendants Jamie A. Carvalho and Angela Cobb (the "Mortgagors" or "Borrowers") acquired the Property by quitclaim deed recorded with the Registry on the same date in Book 15893, Page 10. (Exhibit A to Plaintiff's Memorandum of Law in Support of Partial SJ Motion; Yunghans Affidavit).

2. On March 30, 2007, the Borrowers obtained a mortgage loan from Washington Mutual Bank, FA ("WaMu") in the principal amount of $352,000.00, the repayment of which was secured by a mortgage on the Property in favor of WaMu (the "Loan").

3. Pursuant to the Loan transaction, the Borrowers executed a promissory note dated March 30, 2007 in favor of WaMu in the amount of $352,000.00 (the "Note"). (Exhibit B to Plaintiff's Memorandum of Law in Support of Partial SJ Motion; Yunghans Affidavit).

4. As security for their obligations under the Note, the Mortgagors granted a mortgage on the Property in favor of WaMu. The mortgage is dated March 30, 2007 and was recorded with the Registry on April 4, 2007 in Book 16700, Page 152 (the "Mortgage"). (Certified copy of Mortgage, Exhibit C to Plaintiff's Memorandum of Law in Support of Partial SJ Motion; Yunghans Affidavit).

5. There were a series of assignments of the Mortgage. There is no dispute as to these assignments. Except for the Corrective Assignment described in the following paragraph, the assignments are set forth in the Plaintiff's notice of sale provided to the Mortgagors prior to the foreclosure sale (the "Notice of Sale") and in the foreclosure deed and affidavit of sale. (Certified copy of foreclosure deed and affidavit of sale incorporating Notice of Sale, Exhibit G to Plaintiff's Memorandum of Law in Support of Partial SJ Motion; Yunghans Affidavit).

6. Missing from the Notice of Sale was a reference to and recording information for a document captioned "Massachusetts Corrective Assignment of Mortgage" recorded with the Registry on November 21, 2014 in Book 21995, Page 105 (the "Corrective Assignment"). (Certified copy of Corrective Assignment, Exhibit 1 to Defendants' Opposition and Cross-Motion). It is undisputed that the recording information for the Corrective Assignment was not included in the Plaintiff's Notice of Sale.

7. The Corrective Assignment states that it "is made to correct that certain Assignment recorded on February 19, 2013 in Book No. 20847 at Page No. 296 . . . wherein, by error or mistake, the assignor was incorrect. This Corrective Assignment is intended to confirm the Assignment in all other respects and shall relate back to the effective date of the Assignment." The Corrective Assignment identifies the assignor of the Mortgage as "JPMorgan Chase Bank, National Association".

8. The assignment that is the subject of the Corrective Assignment was recorded on February 19, 2013 in Book No. 20847 at Page No. 296 (the "Original Assignment"), and identifies the assignor of the Mortgage as "JPMorgan Chase Bank, National Association, successor in interest by purchase from the FDIC as Receiver of Washington Mutual Bank F/K/A Washington Mutual Bank, FA." (Certified copy of Original Assignment, Exhibit 2 to Defendants' Opposition and Cross-Motion).

9. By assignment dated February 4, 2016 and recorded with the Registry on March 14, 2016 in Book 22848, Page 187, OSAT Sponsor II, LLC assigned the Mortgage to Plaintiff U.S. Bank National Association, not in its individual capacity but solely as Trustee of OWS REMIC Trust 2015-1 (the "Final Assignment"). (Certified copy of Final Assignment, Exhibit D to Plaintiff's Memorandum of Law in Support of Partial SJ Motion; Yunghans Affidavit).

10. The Carvalhos defaulted on the Loan by failing to make the May 1, 2012 payment and each payment thereafter. (Exhibit E to Plaintiff's Memorandum of Law in Support of Partial SJ Motion; Yunghans Affidavit).

11. On or about June 24, 2014, Ocwen Loan Servicing, LLC, as servicer of the Loan, sent the Carvalhos a Notice of Right to Cure pursuant to G.L. c. 244, §35A (the "35A Notice"), and a Notice of Right to Request a Modified Loan pursuant to G.L. c. 244, §35B (the "35B Notice"), by both First Class and Certified United States Mail to the Property. (Exhibit E to Plaintiff's Memorandum of Law in Support of Partial SJ Motion; Yunghans Affidavit).

12. On October 25, 2016, Defendants were approved and offered a trial loan modification pursuant to the Home Affordable Modification Program ("HAMP"). (Exhibit L to Plaintiff's Memorandum of Law in Support of Partial SJ Motion; Rivers Affidavit; Opposition; Carvalho Affidavit).

13. On January 6, 2017, Defendants were denied a permanent loan modification pursuant to HAMP because they failed to make the trial period payments required of the trial loan modification. (Exhibit M to Plaintiff's Memorandum of Law in Support of Partial SJ Motion; Rivers Affidavit; Opposition; Carvalho Affidavit).

14. On March 7, 2017, Hugh Zhao, Document Execution Specialist for Nationstar Mortgage, LLC, as servicer for Plaintiff, executed an affidavit certifying compliance with G.L. c. 244, §§35B-35C (the "Compliance Affidavit"), which affidavit was recorded with the Registry on March 17, 2017 in Book 23639, Page 17. (Certified copy of Compliance Affidavit, Exhibit F to Plaintiff's Memorandum of Law in Support of Partial SJ Motion; Yunghans Affidavit).

15. Immediately prior to the foreclosure sale, the Carvalhos requested a new loan modification. Plaintiff approved a modification and issued a written offer, which offer set forth specific terms. Among those terms was a required a down payment of $21,000.00 due from the Carvalhos by January 2, 2018 for Plaintiff to postpone the foreclosure sale. (Carvalho Affidavit and attachment thereto).

16. Defendants engaged a representative from the Office of the Attorney General (the "AG") to communicate with the Carvalhos' Loan servicer concerning a new loan modification and a postponement of the foreclosure sale. According to an e-mail communication between the AG and the Carvalhos quoting a response from the Loan servicer, the $21,000.00 down payment was required because the Mortgagors were then 68 payments past due and Plaintiff had advanced over $31,000.00 in escrows. (Carvalho Affidavit and attachment thereto).

17. Defendants did not make the $21,000.00 down payment by January 2, 2018 and the AG took no further action on behalf of Defendants. (Carvalho Affidavit and attachment thereto).

18. On January 5, 2018, Plaintiff conducted a foreclosure auction of the Property pursuant to the power of sale in the Mortgage. Plaintiff was the highest bidder. (Certified copy of Foreclosure Deed and Affidavit of Sale, Exhibit G to Plaintiff's Memorandum of Law in Support of Partial SJ Motion; Yunghans Affidavit).

19. A foreclosure deed (the "Foreclosure Deed") dated January 24, 2018 was recorded with the Registry on March 19, 2018 in Book 24336, Page 70. (Certified copy of Foreclosure Deed, Exhibit G to Plaintiff's Memorandum of Law in Support of Partial SJ Motion; Yunghans Affidavit).

20. On February 23, 2018, Cedric Small, Contested Foreclosure Manager of Selene Finance, LP ("Small"), as attorney-in-fact for Plaintiff, executed an affidavit of sale (the "Affidavit of Sale") which attests to Plaintiff's compliance with all statutory foreclosure requirements pursuant to G.L. c. 244, §14. The Affidavit of Sale was subsequently recorded with the Foreclosure Deed in the Registry on March 19, 2018 in Book 24336, Page 73. (Certified copy of Affidavit of Sale, Exhibit G to Plaintiff's Memorandum of Law in Support of Partial SJ Motion; Yunghans Affidavit).

21. On February 23, 2018, Small executed a Post Sale Affidavit Regarding Note (the "Eaton/Pinti Affidavit") which attests that Plaintiff was the authorized agent of the holder of the Note secured by the Mortgage as of the date when the Notice of Sale was first mailed and published up to and including the date of the foreclosure sale. The Eaton/Pinti Affidavit was subsequently recorded with the Registry on March 19, 2018 in Book 24336, Page 75. (Certified copy of Eaton/Pinti Affidavit, Exhibit I to Plaintiff's Memorandum of Law in Support of Partial SJ Motion; Yunghans Affidavit).

22. Plaintiff served 72-hour notices to quit (the "NTQs") on each of the Defendants by deputy sheriff on April 26, 2018, which NTQs were filed with the Taunton District Court (the "District Court"). (NTQs, District Court Docket Entry No. 3 dated May 28, 2018; Housing Court Docket Entry No. 1 dated June 6, 2018). 23. After service of the summary process summons and complaint on Defendants by deputy sheriff on May 15, 2018 (the "Summons and Complaint"), the Summons and Complaint was filed with the District Court on May 28, 2018 pursuant to G.L. c. 239, §1. (Summons and Complaint, District Court Docket Entry No. 2 dated May 28, 2018; Housing Court Docket Entry No. 1 dated June 6, 2018).

24. On June 4, 2018, Defendants filed their answer and counterclaim, demand for jury trial and requests for discovery in the District Court. (See District Court Docket Entry Nos. 6-7 dated June 4, 2018). On June 5, 2018, Defendants filed their request to transfer the case to the Housing Court. (See District Court Docket entry dated June 5, 2018; Housing Court Docket Entry No. 1 dated June 6, 2018).

25. Defendants continue to occupy the Property.

DISCUSSION, FINDINGS AND RULING

I. Plaintiff's Claim for Possession.

Plaintiff contends that it is entitled to judgment for possession of the Property as a matter of law because it obtained title to the Property through a valid foreclosure sale and the Defendants are tenants at sufferance without a valid claim to possession. Defendants argue that summary judgment must be denied because Plaintiff failed to strictly comply with governing foreclosure laws. Specifically, Defendants contend that Plaintiff did not strictly comply with the requirements of G.L. c. 244, §14 because it failed to include the recording information for the Corrective Assignment in its Notice of Sale. Defendants also argue that a genuine issue of fact exists with respect to Defendants' equitable counterclaims, which counterclaims, if successful, could justify rescission of the foreclosure sale.

In support of their arguments, Defendants rely on the express language of G.L. c. 244, §14, which states in relevant part as follows:

"For purposes of this section ..., in the event a mortgagee holds a mortgage pursuant to an assignment, no notice under this section shall be valid unless (i) at the time such notice is mailed, an assignment, or a chain of assignments, evidencing the assignment of the mortgage to the foreclosing mortgagee has been duly recorded in the registry of deeds for the county or district where the land lies and (ii) the recording information for all recorded assignments is referenced in the notice of sale required in this section."

Mass. Gen. Laws Ann. c. 244, § 14.

Here, it is undisputed that Plaintiff's Notice of Sale referenced the Original Assignment but omitted the recording information for the Corrective Assignment. Defendants argue that such omission is a failure to strictly comply with the requirement of G.L. c. 244, §14 that "recording information for all recorded assignments [be] referenced in the notice of sale." Defendants further argue that the discrepancy between the names of the assignors as set forth in the Original Assignment and the Corrective Assignment resulted in a "break" in the chain of assignments, which break was not adequately explained through reference to the Corrective Assignment in the Notice of Sale or some other reference. The Court finds the Defendants' arguments miss the mark for several reasons.

First, the stated purpose of the Corrective Assignment was to correct the name of the assignor from "JPMorgan Chase Bank, National Association, successor in interest by purchase from the FDIC as Receiver of Washington Mutual Bank F/K/A Washington Mutual Bank, FA." to "JPMorgan Chase Bank, National Association". [Note 1] The Corrective Assignment was in the nature of a confirmatory assignment intended to clarify the assignor named in the Original Assignment; it created no new assignment. [Note 2]

An "assignment of a mortgage is a conveyance of an interest in land that requires a writing signed by the grantor." U.S. Bank Nat. Ass'n v. Ibanez, 458 Mass. 637 , 649 (2011). Unlike an assignment, a confirmatory assignment conveys nothing at all. Instead, a confirmatory assignment evidences the making of a prior, valid assignment and replaces the former assignment to which it relates as of the effective date of the original assignment. See Scaplen v. Blanchard, 187 Mass. 73 , 76 (1904) (confirmatory deed "creates no title" but "takes the place of the original deed and is evidence of the making of the former conveyance as of the time when it was made").

G.L. c. 244, §14 requires that the notice of sale reference the recording information "for all recorded assignments." Since the Corrective Assignment here is nothing more than a corrective instrument which undisputedly conveyed nothing, it is not an "assignment" within the meaning of G.L. c. 244, §14. It follows that since the Corrective Assignment does not operate as an assignment, its recording information need not be referenced in the Notice of Sale as a matter of law. Accordingly, the Defendants' argument that Plaintiff failed to strictly comply with G.L. c. 244, §14 because it omitted recording information for the Corrective Assignment in the Notice of Sale is without merit.

Second, there is no break in the chain of title. Here, even without the Corrective Assignment, each link in the chain of title is documented by a separate, valid assignment linking the Plaintiff to the record holder of the Mortgage, WaMu. See Simmons v. Deutsche Bank Nat'l Tr. Co. for Morgan Stanley ABS Capital I Inc. Tr. 2004-HE8, No. 18-CV-10136-ADB, 2018 WL 1924453, at *3 (D. Mass. Apr. 24, 2018). The Original Assignment identifies JPMC as the assignor, there is no other entity named JPMorgan Chase Bank, National Association in the chain of assignments, and any doubts raised by the Original Assignment as to the proper identity of the assignor could have been easily resolved by a review of the land records. While it would have been preferable for Plaintiff to refer to the Corrective Assignment in the Notice of Sale, the Court rules that Plaintiff's failure to do so did not result in a break in the chain of assignments.

Finally, Defendants argue that the Plaintiff failed to reference the proper assignment of the Mortgage from the FDIC to JPMC in the Notice of Sale, and that such error constitutes a separate failure to strictly comply with G.L. c. 244, §14. There is no merit to this claim. There is only one assignment from the FDIC to JPMC, and the Notice of Sale clearly referenced it. The relevant portion of Plaintiff's Notice of Sale states "said mortgage was then assigned to JPMorgan Chase Bank, National Association by virtue of an assignment dated September 5, 2012, and recorded in Book 20465, Page 176." The Notice of Sale does not identify the assignor by name. The referenced assignment, however, establishes that the Mortgage was assigned by the Federal Deposit Insurance Corporation, as Receiver of Washington Mutual Bank F/K/A Washington Mutual Bank, FA to JPMorgan Chase Bank, National Association by operation of law on September 25, 2008 as authorized by Section 11(d)(2)(G)(i)(II) of the Federal Deposit Insurance Act, 12 U.S.C. §1821(d)(2)(G)(i)(II). (Certified copy of assignment Exhibit 3 to Defendants' Opposition and Cross-Motion).

To the extent Defendants contend that the Notice of Sale erroneously represents that the Mortgage was assigned by WaMu to JPMC, this is simply untrue as evidenced by the plain text of the Notice of Sale and the assignment referenced therein. Moreover, no assignment is needed to effectuate the transfer of WaMu's assets to the FDIC because the FDIC succeeded to the assets of WaMu as a matter of law. [Note 3]

For the foregoing reasons, the Court finds that the Notice of Sale is not defective, and that the foreclosure is not void for Plaintiff's failure to strictly comply with the provisions of G.L. c. 244, §14.

Based upon the undisputed facts set forth in the summary judgment record the Court rules as a matter of law that: 1) the Carvalhos were in default on their mortgage Loan obligations continuously since May 1, 2012; 2) at the time of the foreclosure sale Plaintiff was duly acting on behalf of the holder of the subject Note and Mortgage; 3) on January 5, 2018, Plaintiff foreclosed on the Carvalhos interest in the Property in strict compliance with the provisions of G.L. c. 244, §14; 4) Plaintiff was the high bidder at the foreclosure sale; 5) the foreclosure sale extinguished the Carvalhos' equity of redemption and thus extinguished their fee simple interest in the Property; 6) the Affidavit of Sale executed by Cedric Small, Contested Foreclosure Manager of Selene Finance, LP, as attorney-in-fact for Plaintiff on February 23, 2018 complies with the provisions of G.L. c. 244, §15; 7) on March 19, 2018 Plaintiff conveyed the Property to itself by recording a foreclosure deed; 8) Plaintiff has been the lawful owner of the Property continuously since March 19, 2018; 9) Defendants never occupied the Property as a residential tenant at the time of the foreclosure and never entered into a residential tenancy with Plaintiff after the foreclosure; 10) on April 26, 2018, Plaintiff served each of the Defendants with a legally sufficient notice to quit and vacate the Property by deputy sheriff; 11) Defendants have remained in possession of the Property as tenants at sufferance and have failed and refused to vacate the Property after Plaintiff demanded that they do so upon service of a legally sufficient written notice; and 12) Plaintiff's right to possession of the Property is superior to any possessory interest that Defendants currently have.

The Court finds Plaintiff has demonstrated that there are no issues of material fact in dispute with respect to the issue of possession. Accordingly, the Court rules as a matter of law that Plaintiff is entitled to summary judgment in its favor on its complaint for possession of the Property as a matter of law. Accordingly, Plaintiff's Partial SJ Motion is ALLOWED and summary judgment shall enter in favor of Plaintiff on its claim for possession against Defendants.

II. Plaintiff's Claim for Damages

While Plaintiff's complaint seeks damages in an amount to be determined at trial, Plaintiff's SJ Motion does not seek use and occupancy from Defendants from the date of the foreclosure and no evidence was presented as to the fair rental value of the Property. Accordingly, a hearing shall be held on the issue of use and occupancy and a separate judgment for damages resulting from Defendants' use and occupancy of the Property shall enter thereafter.

III. Defendants' Counterclaims

Defendants contend that there are genuine issues of material fact in dispute with respect to their counterclaims, which counterclaims arise from Plaintiff's review of the Carvalhos for a loan modification. These counterclaims assert violations of G.L. c. 93A, breach of contract, breach of the covenant of good faith and fair dealing, promissory estoppel, and breach of the covenant of good faith and reasonable diligence. Defendants also claim that Plaintiff's actions rendered the foreclosure so fundamentally unfair that they are entitled to affirmative equitable relief, specifically rescission of the foreclosure sale.

A. Violations of G.L. c. 93A

The undisputed evidence in the summary judgment record establishes that the Carvalhos were approved and offered a trial loan modification by letter dated October 25, 2016. Defendants admit that they failed to make the payments required under the trial modification offer, resulting in denial of a permanent modification by letter dated January 6, 2017. According to their statements in the Carvalho Affidavit, the Carvalhos contacted Plaintiff about another loan modification "[i]mmediately prior to the January 2018 foreclosure sale. . .. Plaintiff approved us for a loan modification, with an interest rate and monthly payment that was affordable. Plaintiff, however, insisted that we make a $21,000 down payment for this modification. We were able to comply with these terms, including the down payment. However, we needed additional time to obtain the down payment, as Plaintiff left us with very little time to obtain these funds. We requested a minor postponement of the foreclosure sale for the purpose of obtaining this down payment. Plaintiff, however, denied this request, resulting in the alleged foreclosure sale. Had Plaintiff postponed the foreclosure sale, we would have been able to accept the loan modification and avoid foreclosure." (Carvalho Affidavit, ¶¶5-8).

Accepting the statements contained in the Carvalho Affidavit as true, Defendants have not presented any evidence in the summary judgment record to suggest that Plaintiff engaged in any unfair or deceptive practices with respect to the administration of the Carvalhos' Mortgage loan, any loan modification applications or the foreclosure process. The Carvalhos had the opportunity to modify their Mortgage loan in 2016-2017 but they failed to make the required payments. They requested a new modification on the eve of the foreclosure sale, which request was granted subject to their payment of a $21,000.00 down payment. At the time of their request, the undisputed evidence showed their loan was past due 68 payments and the Plaintiff had advanced over $31,000.00 in taxes and escrows. Under the circumstances, Defendants have failed to assert any facts which establish that Plaintiff's insistence upon the payment of a $21,000.00 down payment was unfair or deceptive, or that Plaintiff had a legal obligation to postpone the foreclosure sale so that the Carvalhos could obtain the down payment. Defendants admit that they requested the modification "[i]mmediately prior to the foreclosure sale," yet they claim Plaintiff's offer of a modification only several days prior to such sale was an "unfair business practice." Defendants' pleaded facts do not possess enough heft to plausibly show they are entitled to relief. The same undisputed facts fail to suggest that Plaintiff's conduct was so fundamentally unfair that the Carvalhos are entitled to affirmative equitable relief setting aside the foreclosure sale. For the foregoing reasons, the Court rules as a matter of law that Defendants have failed to establish the existence of a disputed material issue of fact that would support their counterclaim that Plaintiff engaged in any unfair or deceptive acts or practices in violation of G.L. c. 93A. Plaintiff is entitled to summary judgment on Defendants' G.L. c. 93A counterclaim. Further, there is no evidence that Plaintiff engaged in any conduct with respect to the Carvalhos' loan or Mortgage that rendered the foreclosure so fundamentally unfair that Defendants are entitled to affirmative equitable relief, specifically the setting aside of the foreclosure sale.

B. Breach of Contract

Defendants failed to prove a valid and binding contract existed to modify the Mortgage, or that any provision in the Mortgage created a duty upon Plaintiff to modify the Mortgage. The undisputed evidence in the summary judgment record shows Defendants failed to establish any fact that would support a claim for breach of contract. Accordingly, Plaintiff is entitled to summary judgment on Defendants' breach of contract counterclaim.

C. Breach of Covenant of Good Faith and Fair Dealing

In Massachusetts, there exists an implied covenant of good faith and fair dealing in every contract, including mortgage contracts. Paulding v. New Penn Fin., LLC, No. CV 17-11340-FDS, 2018 WL 379019, at *5 (D. Mass. Jan. 11, 2018), quoting T.W. Nickerson, Inc. v. Fleet Nat'l Bank, 456 Mass. 562 , 569-70 (2010). As a threshold matter, Defendants fail to identify any contract between the parties which forms the basis for their counterclaim for breach of the covenant of good faith and fair dealing. If the Mortgage is the operative contract, Defendants failed to identify any provision therein that gives rise to a duty on the part of Plaintiff to modify Defendants' Mortgage following a default. See Peterson v. GMAC Mortg., LLC, CIV.A. No. 11-11115-RWZ, 2011 WL 5075613, at *6 (D. Mass. Oct. 25, 2011) ("Under Massachusetts case law, absent an explicit provision in the mortgage contract, there is no duty to negotiate for loan modification once a mortgagor defaults.").

In Count III of their counterclaim, Defendants allege that Plaintiff breached the duty of good faith and fair dealing to Defendants "by failing to postpone the foreclosure of Defendants' home, after Defendants expressed an interest and ability to accept the offered loan modification." (Defendants' Answer and Counterclaims, ¶26). If Defendants are alleging that the loan modification offer itself is the contract giving rise to the duty of good faith and fair dealing, the claim is meritless. See Wolsh v. Ditech Fin. LLC, No. 17-CV-11230-ADB, 2018 WL 2709206, at *5 (D. Mass. June 5, 2018) ("The rejection of a loan modification offer and the denial of a deed in lieu application, however, do not trigger the duty of good faith and fair dealing, because neither resulted in the formation of a contract."). The undisputed evidence shows there was no contract.

As Defendants failed to demonstrate with admissible evidence that a contract existed between the parties that triggered a duty of good faith and fair dealing on the part of Plaintiff to postpone the foreclosure, the Defendants failed to establish any set of facts that would support a claim. Accordingly, Plaintiff is entitled to summary judgment on Defendants' counterclaim for breach of the covenant of good faith and fair dealing.

D. Promissory Estoppel

The theory of promissory estoppel "permits recovery if (1) a promisor makes a promise which he should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee, (2) the promise does induce such action or forbearance, and (3) injustice can be avoided only by enforcement of the promise." Loranger Const. Corp. v. E. F. Hauserman Co., 6 Mass. App. Ct. 152 , 154, 374 N.E.2d 306, 308, aff'd, 376 Mass. 757 , 384 N.E.2d 176 (1978). To succeed on such a claim, a party "must have reasonably relied to his detriment on an alleged promise. Because any reliance must be detrimental, damage must be shown." Culley v. Bank of Am., N.A., No. 18-CV-40099-DHH, 2019 WL 1430124, at *12 (D. Mass. Mar. 29, 2019) (citation omitted).

Here, Count IV of Defendants' counterclaim states "Plaintiffs (sic) made a promise that it would properly review Defendants for a loan modification, and a subsequent promise that they would obtain a permanent loan modification after completing the required trial plan payments. Based on this promise, Defendants expressly committed to the process of applying for a loan modification, in lieu of other options they had available to avoid foreclosure. Defendants' reliance of these statements was to their detriment, through the subsequent foreclosure of their home." (Defendants' Answer and Counterclaims, ¶¶30-32). The undisputed evidence in the summary judgment record shows Plaintiff offered Defendants a trial loan modification, and the Carvalhos failed to make the required payments. There is no merit to Defendants' claim for promissory estoppel based on the facts established by summary judgment record.

To the extent Defendants argue that promissory estoppel is warranted based on the loan modification offered by Plaintiff on the eve of foreclosure, such claim is also without merit. Defendants have not established that a loan modification offer amounts to a sufficiently definite promise to refrain from foreclosing, which promise Defendants relied upon to their detriment. In short, Plaintiff's offer, conveyed in prompt response to Defendants' last-minute request for modification, was simply an offer to modify the Carvalhos' mortgage loan subject to Defendants' meeting certain conditions, which conditions they failed to comply with. Defendants failed to show any facts sufficient to demonstrate that their reliance on Plaintiff's final modification offer produced any actionable damages as a result of some detrimental reliance.

The Court finds Defendants' allegations of reliance are conclusory and fail to state a plausible claim under contract or quasi-contract principles. For these reasons, the Court rules as a matter of law that Defendants have failed to establish the existence of a disputed material issue of fact that would support their counterclaim for promissory estoppel. Plaintiff is entitled to summary judgment on Defendants' promissory estoppel counterclaim.

E. Breach of Duty of Good Faith and Reasonable Diligence

In Massachusetts, a party exercising a power of sale pursuant to a mortgage "is bound to exercise good faith and put forth reasonable diligence." Sher v. S. Shore Nat. Bank, 360 Mass. 400 , 401 (1971). Defendants contend that Plaintiff breached this duty "by failing to postpone the foreclosure of Defendants' home, after Defendants expressed an interest and ability to accept the offered loan modification." (Defendants' Answer and Counterclaims, ¶35).

The undisputed facts evidence reasonable care on the part of Plaintiff in responding to Defendants' eleventh-hour request for a modification. The summary judgment record shows a written offer of modification was provided to Defendants, who had requested the assistance of the office of the Attorney General. Upon review of the modification offer, the Attorney General confirmed to Defendants the Plaintiff's unwillingness to postpone the foreclosure sale based on the Defendants' significant past due balance and escrows advanced by Plaintiff, and Defendants' prior failure to respond to a previous modification approval. (Carvalho Affidavit and Exhibits thereto). These facts, combined with the fact that the Attorney General refused to intervene, knowing that Plaintiff intended to go forward with the foreclosure, undermines Defendants' allegations that Plaintiff failed to use good faith and reasonable diligence in refusing to postpone the foreclosure sale.

The undisputed evidence in the summary judgment record shows Defendants failed to establish any fact that would support a claim for breach of the duty to exercise good faith and reasonable diligence in foreclosing the Mortgage or refusing to postpone the foreclosure sale. Accordingly, Plaintiff is entitled to summary judgment on Defendants' counterclaim for breach of such duty.

F. Equitable Rescission

For the reasons stated above, the undisputed facts in the summary judgment record fail to plausibly suggest that Plaintiff's conduct was so fundamentally unfair that the Carvalhos are entitled to affirmative equitable relief setting aside the foreclosure sale. Accordingly, the Court rules Plaintiff is entitled to summary judgment on Defendants' equitable counterclaim for affirmative relief rescinding the foreclosure sale.

IV. Rulings

For the foregoing reasons, Plaintiff's Partial SJ Motion is ALLOWED for Plaintiff on its claim for possession and on each of Defendants' counterclaims. Defendants' Cross-Motion for Summary Judgment is DENIED.

This matter shall be set down for hearing on the issue of use and occupancy on March 24, 2020 at 11:00 a.m. in the Taunton session; and since there is no reason for delay, a separate judgment shall thereafter enter for damages resulting from Defendants' use and occupancy of the Property.

ORDER FOR JUDGMENT

Based upon all the credible evidence submitted as part of the summary judgment record in light of the governing law, the Court finds there are no genuine issues of material fact and Plaintiff is entitled to summary judgment as a matter of law. It is ORDERED that:

1. Plaintiff's Motion for Summary Judgment on its complaint for possession and all counterclaims of Defendants is ALLOWED, plus costs.

2. Execution for possession and costs only shall issue ten (10) days after the date on which judgment enters.

3. This matter shall be set down for hearing on the issue of use and occupancy on March 24, 2020 at 11:00 a.m. in the Taunton session; and since there is no reason for delay, a separate judgment shall thereafter enter for damages resulting from Defendants' use and occupancy of the Property.

4. A separate execution for damages resulting from Defendants' use and occupancy of the Property shall issue in the usual course after the date on which judgment for damages enters.

SO ORDERED.