BANK OF NEW YORK MELLON, as TRUSTEE FOR THE CERTIFICATE HOLDERS OF CWABS, INC. ASSET-BACKED CERTIFICATES, SERIES 2005-16 v. EDWARD HALFKENNEY, WAYNE BOUDREAU, and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.

This action was commenced on April 26, 2010. Plaintiff seeks reformation of a first mortgage granted by Defendant Edward Halfkenney to America’s Wholesale Lender, by adding Defendant Wayne Boudreau as a mortgagor. [Note 1] Plaintiff also seeks a declaration that a second mortgage, also granted by Defendant Edward Halfkenney to America’s Wholesale Lender, is subject to the first mortgage, as reformed. Defendant Wayne Boudreau filed a motion to dismiss on November 18, 2010, and Plaintiff filed its opposition on November 30, 2010. Plaintiff then filed a motion for summary judgment on December 13, 2010. Defendant Boudreau’s opposition to the motion for summary judgment was filed on December 29, 2010. Argument on both motions was heard on January 25, 2011. At the argument, Plaintiff was represented by Meredith Swisher, Esquire. Defendants Edward Halfkenney and Wayne Boudreau both appeared pro se. Defendant Mortgage Electronic Registration Systems, Inc. has not appeared in this action.

Statement of Facts

Defendants Edward Halfkenney (Halfkenney) and Wayne Boudreau (Boudreau) (collectively, Buyers) entered into a Standard Form Purchase and Sale Agreement (P&S) dated September 23, 2005, to purchase the property known as 23 Lenox Circle, Lawrence, Massachusetts (the Property) from Brian and Jennifer Howard. Both Boudreau and Halfkenney signed the P&S on October 6, 2005. Boudreau and Halfkenney acquired title to the Property from Brian and Jennifer Howard by deed dated October 21, 2005, for consideration of $286,000, [Note 2] Halfkenney acquiring a 25% interest in the Property and Boudreau acquiring a 75% interest in the Property.

To finance the purchase of the Property, Halfkenney obtained a loan to be secured by a first mortgage on the Property granted to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for America’s Wholesale Lender (AWL), dated October 21, 2005, in the original principal amount of $228,800 (First Mortgage). [Note 3] In addition, Halfkenney obtained a loan to be secured by a second mortgage on the Property granted to AWL, dated October 21, 2005, in the original principal amount of $57,200 (Second Mortgage). [Note 4] Only Halfkenney was listed as a mortgagor and only Halfkenney signed the First and Second Mortgages.

In connection with the purchase of the Property, Boudreau paid the initial deposit of $1,000 by check dated September 19, 2005, and by personal money order dated October 6, 2005. The deposit is reflected on the HUD-1 Settlement Statement for the First Mortgage (HUD). Boudreau also paid $502.52 by personal money order dated October 21, 2005, and brought it to the closing. That amount is also reflected on the HUD.

Both Halfkenney and Boudreau were present at the closing and signed and/or initialed numerous loan documents. Both Halfkenney and Boudreau signed the HUD and the Addendum to the HUD. Both also signed the HUD-1 Settlement Statement for the Second Mortgage. Both Halfkenney and Boudreau were listed as defined borrowers on the HUD-1 Settlement Statements for the First and Second Mortgages. Both also executed a “Compliance Agreement” whereby they both agreed to sign or re-sign any closing documents to correct errors. To date, Halfkenney and Boudreau have refused to execute a confirmatory mortgage that would add Boudreau as a mortgagor. Both Halfkenney and Boudreau executed additional closing documents, including the UREA Formaldehyde Insulations (UFFI) Certificate; Lead Paint Indemnification; Attorney’s Certificate of Title; and Agreement Re: Real Estate Taxes and Utilities. Boudreau also executed a Request for Taxpayer Identification Number and Certification and Signature Affidavit.

As of the date of the sale, the Property was encumbered by a mortgage dated July 18, 2003, from Brian Howard and Jennifer Howard to Citizens Mortgage Corporation (Howard Mortgage), recorded with the Registry in Book 8040, Page 229. Proceeds of the Plaintiff’s loan in the amount of $248,019.51 were advanced to pay off the Howard Mortgage and proceeds in the amount of $557.99 were advanced to pay off municipal taxes. The Howard Mortgage was subsequently discharged.

Plaintiff is the holder of the First Mortgage by assignment. [Note 5]

Defendant Wayne Boudreau’s Motion to Dismiss Plaintiff’s Complaint

Boudreau seeks to dismiss Plaintiff’s complaint on the grounds that Plaintiff’s requested relief is contrary to existing statutes governing declaratory judgments and that Plaintiff’s requested relief will cause him “immediate, substantial, and irreparable harm.” Although Boudreau does not expressly state so, the Court presumes he is requesting relief pursuant to Rule 12(b)(6) of the Massachusetts Rules of Civil Procedure, which provides for dismissal for failure to state a claim upon which relief may be granted.

To survive a motion to dismiss, a compliant must contain “factual ‘allegations plausibly suggesting (not merely consistent with)’ an entitlement to relief.” Iannacchino v. Ford Motor Co., 451 Mass. 623 , 636 (2008) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 557 (2007)).

The arguments advanced by Boudreau are not the proper subjects of a motion brought pursuant to Rule 12(b)(6). By his motion, he does not aim to show that the factual allegations of Plaintiff’s complaint fail to suggest an entitlement to relief. Instead, Boudreau points to statutory language that he perceives as helpful to his defense in the case and then attempts to show that Plaintiff would be unable to rebut such arguments. This is not the proper function of a motion to dismiss.

Accordingly, Defendant Boudreau’s Motion to Dismiss Plaintiff’s Complaint is DENIED.

Plaintiff’s Motion for Summary Judgment

Summary judgment is granted where there are no issues of material fact and when the moving party is entitled to judgment as a matter of law. Mass. R. Civ. P. 56(c); Cassesso v. Comm’r of Corr., 390 Mass. 419 , 422 (1983); Cmty. Nat’l Bank v. Dawes, 369 Mass. 550 , 553 (1976). The moving party bears the burden of demonstrating affirmatively the absence of a triable issue and its entitlement to judgment as a matter of law. Pederson v. Time, Inc., 404 Mass. 14 , 16-17 (1989). In viewing the record before it, the court reviews “the evidence in the light most favorable to the nonmoving party.” Donaldson v. Farrakhan, 436 Mass. 94 , 96 (2002).

In weighing the merits of a summary judgment motion, the court must address two questions: (1) whether the factual disputes are genuine, and (2) 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, 477 U.S. 242, 247-48 (1986)). “As to materiality, the substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law properly preclude the entry of summary judgment.” Anderson, 477 U.S. at 248, cited in Carey v. New England Organ Bank, 446 Mass. 270 , 278 (2006); Molly A. V. Comm’r of the Dept. 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 non-moving party.” Anderson, 477 U.S. at 248.

With respect to any claim on which the party moving for summary judgment does not have the burden of proof at trial, it may demonstrate the absence of a triable issue either by submitting affirmative evidence that negates an essential element of the opponent’s case, or “by demonstrating that proof of that element is unlikely to be forthcoming at trial.” Flesner v. Technical Comm’s Corp., 410 Mass. 805 , 809 (1991). 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). However, where appropriate, summary judgment may enter against the moving party. Mass. R. Civ. P. 56(c).

When the court considers the materials accompanying a motion for summary judgment, the inferences to be drawn from the underlying facts contained in such materials must be viewed in the light most favorable to the party opposing the motion. Attorney Gen. v. Bailey, 386 Mass. 367 , 371 (1982). 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 admissions under Rule 36, together with the affidavits, if any.” [Note 6] Mass. R. Civ. P. 56(c).

Plaintiff argues that it is entitled to a judgment reforming the mortgage on the basis of mutual mistake. “It is settled that a written instrument . . . will be reformed on the grounds of mistake upon ‘full, clear, and decisive proof’ of the mistake.” Simches v. Simches, 423 Mass. 683 , 687 (1996) (quoting Berman v. Sandler, 379 Mass. 506 , 509 (1980)). See Franz v. Franz, 308 Mass. 262 , 266-67 (1941) (ruling that reformation of deed is appropriate where necessary to give effect to the intent of the parties). See also Dime Sav. Bank of New York v. Sullivan, Land Court Miscellaneous Case No. 160590 (Nov. 10, 1992) (Kilborn, J.), aff’d, 37 Mass. App. Ct. 1107 (1994) (unpublished opinion issued pursuant to Appeals Court Rule 1:28). Wells Fargo Bank, N.A. v. Metcalf, 15 Mass. Land Court Rptr. 436 (2007), New Century Mortg. Corp. v. Vining, 17 Mass. Land Court Rptr. 155 (2009).

“It is well established that legal instruments, including deeds, may be reformed on the ground of mutual mistake.” Buk Lhu v. Dignoti, 431 Mass. 292 , 294 (2000). If the language of a written instrument does not reflect the true intent of both parties, the mutual mistake is reformable. Mickelson v. Barnet, 390 Mass. 786 , 791 (1984). When mistake is alleged, extrinsic evidence of intent may be considered. Id. at 792. The mistake permitting reformation may either be mutual, or be made by one party and known to the other party. See Century Plastic Corp. v. Tupper Corp., 333 Mass. 531 , 535 (1956); Torrao v. Cox, 26 Mass. App. Ct. 247 , 250 (1988). In this matter, there are no genuine issues of material fact, within the meaning of Mass. R. Civ. P. 56(c), and therefore, this case is proper for summary judgment.

The mistake at issue here is that AWL did not secure an interest in the entire Property (that is, an interest that would allow AWL to sell all of the owners’ title to the Property at a foreclosure sale) in exchange for lending the full purchase price of the Property to Halfkenney and Boudreau. Plaintiff has demonstrated this mistake through clear proof of the undisputed material facts.

The material facts that are not in dispute are as follows: Boudreau applied for, and was denied, a mortgage to purchase the Property; if Halfkenney had not qualified for the financing that was extended, Halfkenney and Boudreau would have been unable to purchase the Property; Boudreau provided the earnest money for the transaction; Boudreau signed the majority of the documents involved in the transaction; [Note 7] Boudreau appeared at the closing; Boudreau acquired a 75% interest in the Property; and Boudreau and Halfkenney agreed to contribute to the monthly payments on the mortgages in proportion to their ownership interests in the Property (i.e., Boudreau would contribute 75% of the monthly payment amount and Halfkenney would contribute 25% of the monthly payment amount); and Boudreau continues to reside at the Property, while Halfkenney has moved out.

I agree with Plaintiff’s characterization of this matter as one where Boudreau disputes the legal interpretation of the material facts, but not the facts themselves. See New Century Mortgage Co. v. Vining, 2009 WL 498386, at *3 (Mass. Land Court Feb. 27, 2009). Based upon the undisputed material facts recited above, Plaintiff has shown that the intent of the parties was not carried out by the First Mortgage. In his efforts to defeat Plaintiff’s motion for summary judgment, Boudreau has done nothing more than “rest on his . . . pleadings and mere assertions of disputed facts.” LaLonde, 405 Mass. at 209. The sole statement appearing in Boudreau’s affidavit in opposition to the motion for summary judgment makes it clear that he misapprehends the issue being examined (i.e., whether the mortgages reflected the true intent of the parties). Boudreau states: “I do not owe, and I have never owed, the plaintiff . . . any money for any reason; and the plaintiff has never alleged that I owe any money for any reason to plaintiff.” A response of this nature will not suffice to defeat Plaintiff’s affirmative demonstration that the mortgages do not reflect the true intent of the parties, nor does it even address the issue before the Court. With his statement Boudreau seems to contest the Plaintiff’s ability to foreclose on the Property. That is not the issue before the Court; the issue being considered is whether Plaintiff may reform the First Mortgage. Although the Plaintiff may have brought this action in anticipation of foreclosing on the mortgage, we have not been asked to, and we do not here consider, the validity of any foreclosure action.

Accordingly, Plaintiff’s Motion for Summary Judgment is GRANTED.

Plaintiff offers an alternative argument in favor of summary judgment on the basis of equitable subrogation. Given the finding of mutual mistake, I need not make any findings relative to equitable subrogation.

Conclusion

The judgment I will direct be entered in this case will reform the First Mortgage to make it, as of the time of its recording (but subject to any rights of bona fide third parties), a mortgage of the interests of both Edward Halfkenney and Wayne Boudreau in the Property. The Second Mortgage will be subject to the First Mortgage, as reformed.

Judgment to enter accordingly.

Charles W. Trombly, Jr.

Justice

Dated: February 14, 2011