CHARLES J. HOUSMAN, Trustee of the PINE BANKS NOMINEE TRUST v. LBM FINANCIAL, LLC

This case, filed in this court January 8, 2009 by the plaintiff, Charles Housman, Trustee of the Pine Banks Nominee Trust ("Pine Banks"), concerns a mortgage (see note 1) affecting title to a unit of a condominium located in Braintree. On that day, the court (Piper, J.) granted plaintiff's ex parte request for a temporary restraining order and for issuance of a short order of notice for hearing on plaintiff's request for preliminary injunction, scheduling hearing for January 16, 2009.

On January 15, 2009, the defendant, LBM Financial, LLC ("LBM"), filed papers opposing the requested injunction, and also moving for dismissal pursuant to Mass. R. Civ. P. 12(b)(9), and for sanctions pursuant to Rule 11.

This case came on to be heard by the court (Piper, J.) on January 16, 2009. After hearing, at which counsel for both parties appeared and argued, and review of the moving and opposing papers, the court denied Pine Banks' application for preliminary injunction and vacated the temporary restraining order. Although the court heard argument concerning LBM's motion to dismiss, the court took no action at that time on that motion, nor on LBM's motion for sanctions under Mass. R. Civ. P. 11, instead allowing Pine Banks time to file and serve opposition. Having received Pine Banks' opposition to the pending motions on January 22, 2009, and after review of the record before it, the court is able to decide the motions without further hearing.

On July 8, 2008, Pine Banks filed an action ("prior Norfolk action") in the Norfolk Superior Court, namely Charles J. Housman, Trustee of the Pine Banks Nominee Trust v. LBM Financial, LLC, Norfolk Superior Court Civil Action No. 08-1288, seeking inter alia, a declaration pursuant to G. L. c. 231A that the subject mortgage [Note 1] was invalid or unenforceable, because of insufficient consideration, or because it has been satisfied in full.

Pine Banks, on January 8, 2009, filed a complaint in the Land Court in this action in which Pine Banks alleges that the same mortgage that is the subject of the previously filed Superior Court action, is unenforceable under the provisions of G. L. c. 260, § 33, which provides, in substance, that a mortgage cannot be foreclosed more than five years after the date of the maturity of the secured obligation, absent a timely recorded extension, or a recorded affidavit or acknowledgment stating the mortgage has not been satisfied. The parties appear to agree that the LBM Mortgage had a maturity date of September 9, 2003, and that a complaint seeking a determination under the Servicemembers Civil Relief Act, preliminary to foreclosure of the LBM Mortgage, was filed by LBM in the Norfolk Superior Court on April 17, 2008 as LBM Financial, LLC v. Charles J. Housman, Trustee of the Pine Banks Nominee Trust, Norfolk Superior Court Civil Action No. 08-0742. The order of notice issued by the Superior Court in the Servicemembers case was served upon plaintiff, published May 14, 2008 in the Braintree Forum, and recorded with the Norfolk Registry of Deeds on May 16, 2008. Judgment in the Servicemembers case issued August 1, 2008, and LBM conducted an auction sale September 16, 2008, at which LBM was high bidder. It was while the Servicemembers proceeding was underway that Pine Banks filed the prior Norfolk action.

A case is properly dismissed under Mass. R. Civ. P. 12(b)(9) when a prior action is pending between the same parties, and "all the operative facts relied on to support the present action had transpired prior to the commencement of the first action." Zora Enterprises, Inc. v. Burnett, 61 Mass. App. Ct. 41 , 346 (2004) (citing Keen v. Western New England College, 23 Mass. App. Ct. 84 , 85-87 (1986). LBM argues that the case now before the court in this Land Court case is nothing more than a recasting of the prior Norfolk action, in that, at bottom, that case, like the one now pending here, seeks judicial determination that the LBM Mortgage is unenforceable, and thus that the foreclosure of it was ineffective and incapable of passing a good title to LBM as high bidder. LBM characterizes the pending Land Court case as an impermissible effort by Pine Banks to split off, from the prior Norfolk action, a closely-related theory or ground for relief which should, by rule and principles of judicial efficiency and integrated decision-making, be heard only in the Norfolk action.

In opposition, Pine Banks argues that all of the operative facts had not yet transpired prior to the commencement of the prior Norfolk action, because the provisions of G. L. c. 260, § 33 did not, at the time the Norfolk case began, yet operate so as to run out the enforceability of the LBM Mortgage. That occurred, plaintiff says, only on September 9, 2008. Pine Banks contends that a count for relief under G. L. c. 260, § 33 was not ripe until after plaintiff had commenced the Superior Court case. None of what plaintiff says on this point, however, is any bar to dismissal under Rule 12(b)(9).

The relevant relief sought in the Superior Court case is judgment declaring the subject mortgage unenforceable, null and void; undoing the steps that LBM has taken to foreclose under its challenged mortgage; and entry of a permanent injunction against all foreclosure proceedings with respect to the LBM Mortgage. Distilled to its essence, this is the same relief sought in the Land Court. The operative facts at the center of this action are those surrounding the grant, terms, meaning, and alleged satisfaction or invalidity, of a mortgage between LBM Financial and Pine Banks' predecessor. The Land Court case merely presents a different legal theory, based on the interpretation of the curative mortgage expiration statute for which plaintiff advocates, applied to the same facts.

Pine Banks argues that the absence of a count under G. L. c. 260, § 33 in the Superior Court is enough to defeat the motion to dismiss. The issue is not whether Pine Banks actually advanced that theory, but whether it should have, or in fact still should, in the ongoing prior Norfolk action. It may well be that, as a matter of strict chronology, there was no opportunity to have pleaded in the Norfolk case a count under G.L. c. 260, § 33 at the time that case was filed, and that the opportunity to do so only arose a few months later when the five-year milestone was achieved without, in plaintiff's view, the appropriate steps having been taken in time to keep the mortgage viable.

Nevertheless, the fact remains that the Norfolk action remains pending in the Superior Court, and the opportunity is wide open to plaintiff to file a motion there for leave to amend his pleadings, to add this additional legal basis by which the LBM Mortgage ought to be adjudicated to be no longer enforceable. The record does not show that there was any motion filed in the Superior Court for leave to amend to add this new legal theory, much less that any such request had been turned away by the Superior Court. The plaintiff should make that request promptly; the Superior Court has fully engaged on the collective issues surrounding the LBM Mortgage's continuing vitality; the introduction of a single new legal argument, based on the mortgage expiration statute, would be but a small expansion of the many intertwined issues the Superior Court must address on the case there as currently pleaded. Indeed, it appears likely that, if the Superior Court action were to go forward to judgment in favor of the defendant, no argument under G.L. c. 260, § 33 having been advanced in that court or this one, the plaintiff's opportunity to raise that argument would be cut off. And nothing indicates that the Superior Court lacks in any way the subject matter jurisdiction to address plaintiff's argument under the statute; the title to the land involved is not one registered under G.L. c. 185.

The procedural history in the Superior Court suggests that plaintiff came to the Land Court because plaintiff was disappointed with the Superior Court's action in the case there thus far. The Superior Court has denied both injunctive relief and a requested endorsement of a memorandum of lis pendens. The underlying rationale of Rule 12(b)(9) is to unify, in a single court, the proceedings and decision making concerning a single dispute among the same set of parties, with the court where litigation is first filed being responsible for adjudication. Plaintiff himself chose to start the prior case in the Superior Court. The purpose of Rule 12(b)(9) is served by an order dismissing this action, without prejudice to the plaintiff's argument being made, by order of the Superior Court, part of the issues to be decided in the pending litigation there. Only if the plaintiff later shows that, despite taking all reasonable steps to do so, he has been unable to have the mortgage expiration statute argument considered in the Superior Court, may he then file an action in this court that seeks adjudication of that issue.

It is

ORDERED that this action be DISMISSED as to all parties and claims, without prejudice to advancing the same legal argument in the Norfolk Superior Court.

Judgment of dismissal to enter accordingly.

By the Court. (Piper, J.)

Attest:

Deborah J. Patterson

Recorder

Dated: February 5, 2009.