JEAN AGID, MAXINE BURTMAN and ALLEN BURTMAN vs. GUARANTY-FIRST TRUST COMPANY. [Note 1]

By complaint filed September 7, 1990, Jean Agid, Maxine Burtman and Allen Burtman ("Plaintiffs"), seek to set aside the foreclosure sale ("the Sale") of certain property located at 28 Rutledge Road in Natick ("Locus"), which was conducted by Guaranty-First Trust Company ("Defendant") and request that the Court reconvey Locus to Plaintiffs. In the alternative, Plaintiffs seek damages for Defendant's conduct prior to and at the Sale and for Plaintiffs' losses resulting therefrom. Further, Plaintiffs seek actual damages, treble damages, attorneys' fees, interest and costs for unfair and deceptive business practices pursuant to G.L. c. 93A, §§2 and 11. [Note 2]

On September 7, 1990, Plaintiffs filed a Motion for Lis Pendens on Locus which was allowed and a Lis Pendens was filed on that date. On October 19, 1990, Defendant filed a Motion for Dissolution of Lis Pendens which was denied on October 24, 1990.

On November 16, 1990, Defendant filed a Motion for Summary Judgment, pursuant to Rule 56, Mass. R. Civ. P., which was denied on January 30, 1991. On January 30, 1991, Defendant filed a Motion to Dismiss Count II of the Complaint, which was subsequently allowed on January 30, 1991.

This case was tried on February 11, 1991, at which time the proceedings were transcribed by a court-appointed reporter. Five witnesses testified and one exhibit was introduced into evidence. The exhibit is incorporated herein by reference for the purpose of an appeal. After considering the evidence, testimony and pertinent documents, I make the following findings of fact:

1. On May 12, 1989, Plaintiffs executed a note ("the Note") in the amount of $469,000 payable to Defendant secured by a mortgage ("the Mortgage") on Locus. The Mortgage is recorded at the Middlesex South Registry of Deeds in Book 19815, Page 205.

2. As further security for the Note, Plaintiffs executed mortgages to Defendant on 446 Dudley Road in Newton and on 539 Verna Hill Road, in Fairfield, Connecticut to Defendant.

3. In November of 1989, Plaintiffs defaulted on the Note and Mortgage.

4. On August 24, 1990, pursuant to the terms of the Mortgage, said Mortgage was foreclosed by duly advertised auction sale. Six parties were registered and qualified as bidders at the sale. Locus was sold to the Intervenors for $240,000.

5. Several proposals to purchase Locus were submitted to Defendant prior to foreclosure, all of such proposals, however, were subject to various conditions which apparently could not be met by Plaintiffs. At no time was Defendant presented with or shown a purchase and sales agreement on Locus.

6. In November of 1988, Locus was appraised in the amount of $680,000. On August 15, 1990, Locus was appraised in the amount of $275,000. On October 14, 1990, Locus was appraised in the amount of $300,000. No evidence was presented as to the origin or accuracy of those appraisals and accordingly they were admitted only to show appraisals were done but not as to the value of Locus.

Under Massachusetts law, a mortgagee, in exercising a power of sale contained in a mortgage, has duties of good faith and reasonable diligence in selling the property. Seppala & Aho Construction Aho Construction Co., Inc. v. Petersen, 373 Mass. 316 , 320 (1977); Chartrand v. Newton Trust Co., 296 Mass. 317 , 320 (1936). Mere inadequacy of selling price obtained will not invalidate a sale unless it is so gross as to indicate bad faith or lack of reasonable diligence. Chartrand at 320.

In the present case, there is no credible evidence that the actions of Defendant amounted to bad faith or lack or reasonable diligence. And accordingly, Plaintiffs have also failed to prove any damages.

Plaintiffs submitted a Post-Trial Memorandum and Defendant submitted a Trial Memorandum and Requested Findings of Fact and Rulings of Law. I have not attempted to rule on each of Plaintiffs' Requests as I have made my own findings on the questions of fact which I deem material and on the law which I believe is applicable.

Accordingly, I rule that the Sale was valid and Defendant fulfilled its duties of good faith and reasonable diligence.

Judgment accordingly.