JOHN F. ZULLO v. HMC ASSETS, LLC as TRUSTEE for CAM III TRUST

John F. Zullo of Wayland, Massachusetts, seeks a determination that a mortgage he gave, and two subsequent assignments of it are void, or that the party claiming to be the current mortgagee, HMC Assets, LLC, as Trustee for CAM III Trust (HMC) does not hold the mortgage. HMC moves for summary judgment on the ground that Zullo has failed to plead specific facts supported by documentary evidence that raise a genuine issue of material fact. After consideration of Zullo’s claims supported in the pleadings, the Court finds that: (1) Zullo’s challenges to the mortgage and its first assignment are barred under the doctrine of res judicata; (2) Zullo has failed to plead the invalidity of the second assignment; (3) HMC holds the note secured by the mortgage or is acting on behalf of the note holder; and (4) the mortgagee need not file an action under the Servicemembers Civil Relief Act in order to exercise the statutory power of sale.

Procedural Background

Zullo filed his Petition to Amend Certificate of Title (complaint) on February 19, 2013. On April 17, 2013, HMC filed its Response and Answer to Petition to Amend Certification of Title Submitted by HMC as Trustee for CAM III Trust. The Case Management Conference was held on May 24, 2013.

On October 17, 2013, HMC filed HMC Assets, LLC Solely in its Capacity as Separate Trustee of CAM III Trust’s Motion for Summary Judgment, and Memorandum of Law in Support of HMC Assets, LLC Solely in its Capacity as Separate Trustee of CAM III Trust’s Motion for Summary Judgment (Summary Judgment Motion). On November 18, 2013, Zullo filed Petitioner’s Brief in Opposition to the Respondent’s Motion for Summary Judgment along with Petitioner’s Appendix for Opposition to Respondent’s Motion for Summary Judgment. HMC filed its Statement of Undisputed Material Facts in Support of Defendant’s Motion for Summary Judgment on November 19, 2013. On November 20, 2013, Zullo filed Petitioner’s Response to Respondent’s Statement of Material Facts, and Zullo’s attorney, Glen Russell filed Affidavit of Attorney Glenn F. Russell, Jr. On November 21, 2013, Zullo filed Petitioner’s Motion to Strike the Respondent’s Statement of Undisputed Material Facts With Memorandum of Law Incorporated Herein (Motion to Strike), and HMC filed HMC Assets, LLC Solely in its Capacity as Separate Trustee of CAM III Trust’s Opposition to Petitioner’s Motion to Strike. HMC Assets, LLC Solely in its Capacity as Separate Trustee of CAM III Trust’s Reply to Petitioner’s Opposition to its Motion for Summary Judgment was filed on November 22, 2013.

On November 27, 2013, the Summary Judgment Motion and the Motion to Strike were heard. The Motion to Strike was denied and the Summary Judgment Motion was taken under advisement.

Zullo filed Petitioner’s Response to the Respondent’s Statement of Undisputed Material Facts on December 9, 2013, and HMC filed Defendant’s Notice of Supplemental Authority on March 13, 2014. Zullo filed Petitioner’s Response to the Respondent’s Notice of Supplemental Authority on March 24, 2012. On June 20, 2014, Zullo filed Plaintiff’s Motion for Lis Pendens on Title to Registered Land, and Plaintiff’s Memorandum of Lis Pendens on Title to Registered Land. On June 27, 2014, Zullo filed his Prefatory Allegations, Plaintiff’s Notice of Hearing on Motion for Lis Pendens on Title to Registered Land, Plaintiff’s Notice of Hearing on Motion for Emergency Preliminary Injunction Regarding Registered Land, Plaintiff’s Emergency Motion for Preliminary Injunction, and Plaintiff’s Memorandum of Law in Support of His Emergency Motion for Preliminary Injunction. At a hearing on Zullo’s motion for Lis Pendens on June 30, 2014, HMC filed in court Respondent, HMC Assets, LLC Solely in its Capacity as Separate Trustee of CAM III Trust’s Opposition and Motion to Dismiss Petitioner’s Motion for Lis Pendens on Title to Registered Land and Opposition to Motion to Enjoin the Sale. The Court now decides the Summary Judgment Motion.

Standard and Factual Background

Summary judgment may be entered if the “pleadings, depositions, answers to interrogatories, and responses to requests for admission . . . together with affidavits . . . show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Mass. R. Civ. P. 56(c). In viewing the factual record presented as part of the motion, the Court is to draw “all logically permissible inferences” from the facts in favor of the non-moving party. Willitts v. Roman Catholic Archbishop of Boston, 411 Mass. 202 , 203 (1991). “Summary judgment is appropriate when, ‘viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law.’” Regis Coll. v. Town of Weston, 462 Mass. 280 , 284 (2012), quoting Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117 , 120 (1991). “The burden on the moving party may be discharged by showing that there is an absence of evidence to support the non-moving party’s case.” Kourouvacilis v. General Motors Corp., 410 Mass. 706 , 711 (1991).

The following material facts are not in dispute:

1. Zullo is the record owner of property located at 51 Claypit Hill Road, Wayland, MA (Property) pursuant to a deed executed on March 24, 2006, registered as Document No. 1406918, evidenced by certificate of title number 236444, book 1317, page 140, issued by the Middlesex (South) County Registry District (registry).

2. On February 20, 2007, Zullo executed and delivered a promissory note, in the amount of one million eight-eight thousand and 00/100 ($1,088,000) dollars (Note), to Lime Financial Services, LTD (Lime).

3. As security for the Note, Zullo gave a mortgage on the Property to Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for Lime, dated February 20, 2007, and noted as Document No. 1438078, on said certificate on February 28, 2007 (Mortgage).

4. An assignment of the Mortgage from MERS as nominee for Lime to DLJ Mortgage Capital, Inc. (DLJ), dated August 22, 2008, was noted as Document No. 1487689 on said certificate on December 4, 2008 (DLJ Assignment).

5. A second assignment of the Mortgage from DLJ to HMC Assets, LLC solely in its capacity as Separate Trustee of CAM III Trust (HMC), dated January 31, 2012, was noted as Document No. 1803914 on said certificate on August 14, 2012 (HMC Assignment).

6. The loan is serviced by BSI Financial Services, Inc. (BSI). [Note 1]

7. Prior to BSI, the loan was serviced by Selene Finance, LP.

8. Prior to Selene Finance, LP, the loan was serviced by Select Portfolio Services (SPS).

9. Zullo defaulted on his loan obligation in May of 2008.

10. In response to Zullo’s default, SPS, as servicing agent for DLJ, purportedly sent Zullo a ninety day demand letter, dated July 3, 2008.

11. On November 19, 2008, DLJ filed a Complaint to satisfy the Servicemembers Civil Relief Act (SCRA) with the Land Court.

12. On May 27, 2009, the Land Court issued judgment that Zullo was not entitled to the benefits of the SCRA.

13. On January 4, 2011, Zullo filed a Complaint and Motion for Temporary Restraining Order with the Middlesex Superior Court against DLJ and other defendants, docketed as Civil Action MICV2011-00022 (Superior Court Action).

14. On January 4, 2011, the Superior Court granted the Motion for Temporary Restraining Order, enjoining a foreclosure sale scheduled for January 6, 2011.

15. On March 18, 2011, the Superior Court vacated the Motion for Preliminary Injunction and the Temporary Restraining Order granted in January of 2011, and dismissed the Superior Court Action, entering judgment in favor of the defendants, including DLJ.

16. In the Order of March, 2011, the Superior Court (Smith, J.) stated that it found that

the plaintiff failed to show a likelihood of success on the merits where he admits to owing all the money due on the mortgage note, that he received actual notice of the foreclosure sale some 17 days before the scheduled sale and where his claims about his name and his ignorance of who holds his mortgage are both wholly without merit and frivolous and advanced in bad faith, all of which reasons the defendants have clearly articulated in their opposition and which this court adopts in its entirety.

17. On June 8, 2011, Zullo filed a Chapter 13 bankruptcy petition.

18. On June 21, 2011, the Bankruptcy Court issued an Order dismissing that case because Zullo had failed to file the Matrix by the due date of June 15, 2011.

19. On August 16, 2011, Zullo filed a second Chapter 13 bankruptcy petition (Bankruptcy Case).

20. On October 12, 2011, Zullo’s Bankruptcy Case was converted from a Chapter 13 to a Chapter 11 petition.

21. On January 20, 2012, SPS, as servicing agent for DLJ, executed a Lost Note Affidavit with respect to the Note and attached the affidavit to a copy of the Note. The original Lost Note Affidavit is in the custody of HMC’s attorneys and was produced at a hearing before the Land Court on June 30, 2014.

22. On August 29, 2012, HMC filed a Motion for Relief in the Bankruptcy Case.

23. On September 7, 2012, in connection with an evidentiary hearing scheduled for December 11, 2012 on HMC’s Motion for Relief, the Bankruptcy Court issued an order stating that Zullo was to make adequate protection payments in the amount of $4,000 commencing on September 17, 2012 and every 30 days thereafter until further order of the Court. These payments shall be delivered to the office of counsel for creditor HMC Assets LLC. As further adequate protection, the debtor shall provide to creditor HMC Assets LLC evidence that the property is insured, such notice to be delivered to counsel for creditor on or before September 17, 2012.

24. On October 30, 2012, HMC filed an Affidavit of Non-Compliance in response to the Petitioner’s failure to comply with the Bankruptcy Court’s September 7, 2012 Order.

25. On November 7, 2012, the Bankruptcy Court granted HMC’s Motion for Relief.

26. Upon obtaining relief from the automatic stay in November 2012, HMC resumed its collection activities with respect to Zullo’s mortgage loan.

27. Zullo filed his Petition to Amend Certificate of Title in the Land Court, commencing this case, on February 19, 2013.

28. On October 16, 2013, HMC, through its servicing agent, BSI, sent Zullo a 150 day Notice of Right to Cure and Right to Request Modified Mortgage Loan.

Discussion

1. Res Judicata

HMC argues that summary judgment should enter against Zullo under the doctrine of res judicata because Zullo’s claims were rejected in the Superior Court Action in January 2011. The doctrine of res judicata is based on the idea that “the party to be precluded has had the incentive and opportunity to litigate the matter fully in the first lawsuit.” O’Neill v. City Manager of Cambridge, 428 Mass. 257 , 259 (1998). Res judicata “is a rule of public policy founded on the established principle that it is in the interest of the parties and for the public welfare that litigation once decided on its merits should end.” Gleason v. Hardware Mut. Cas. Co., 324 Mass. 695 , 697-698 (1949).

“Res judicata” is the generic term for various doctrines by which a judgment in one action has a binding effect in another. It comprises “claim preclusion” and “issue preclusion.” “Claim preclusion” is the modern term for the doctrines traditionally known as “merger” and “bar,” and prohibits the maintenance of an action based on the same claim that was the subject of an earlier action between the same parties or their privies. “Issue preclusion” is the modern term for the doctrine traditionally known as “collateral estoppel,” and prevents relitigation of an issue determined in an earlier action where the same issue arises in a later action, based on a different claim, between the same parties or their privies.

Heacock v. Heacock, 402 Mass. 21 , 23 n.2 (1988).

HMC moves for summary judgment under the doctrine of claim preclusion. “[C]laim preclusion makes valid, final judgment conclusive on the parties and their privies, and bars further litigation of all matters that were or should have been adjudicated in that action.” Id., at 23; Gloucester Marine Rys. Corp. v. Charles Parisi, Inc., 36 Mass. App. Ct. 386 , 391 (1994). “Three elements are essential for invocation of claim preclusion: (1) the identity or privity of the parties to the present and prior actions, (2) identity of the cause of action, and (3) prior final judgment on the merits.” DaLuz v. Department of Correction, 434 Mass. 40 , 45 (2001). “A claim is the same for res judicata purposes if it is derived from the same transaction or series of connected transactions.” Saint Louis v. Baystate Med. Ctr., Inc., 30 Mass. App. Ct. 393 , 399 (1991).

The issue is whether the dismissal of Zullo’s complaint in the Superior Court Action precludes Zullo from making the claims set forth in his complaint now before the Land Court. Zullo’s 2011 complaint in the Superior Court Action contained a motion for a preliminary injunction of a foreclosure sale of the Property scheduled to be conducted on January 6, 2011. Among the defendants in the 2011 case were DLJ, MERS, and SPS. DLJ and MERS were both predecessors in interest to HMC, the defendant in this case.

Upon receipt of Zullo’s complaint on January 4, 2011, the Superior Court issued a temporary restraining order barring the defendants from conducting a foreclosure sale scheduled to be held on January 6, 2011. MERS filed its Answer on January 31, 2011, and Defendants’ Opposition to Plaintiff’s Motion for Preliminary Injunction, Affidavit of Diane Weinberger in Opposition to Plaintiff’s Motion, and Affidavit of Peter F. Carr, II, Esq. were filed on March 16, 2011. Zullo’s motion for preliminary injunction was heard on March 17, 2011. After the hearing, the Superior Court denied Zullo’s motion for preliminary injunction, vacated the temporary restraining order it had issued on January 4, 2011, and dismissed the Superior Court Action. The court issued the following final judgment on March 21, 2011:

This action came on for hearing before the Court, Herman J. Smith, Jr., Justice, presiding, on the Plaintiff, John F. Zullo’s Motion for a Preliminary Injunction, and the Court having denied said motion, it is hereby ORDERED: The plaintiff John F. Zullo has failed to show a likelihood of success [on the] merits where he admits to owing all the money due on the mortgage note, that he received actual notice of the foreclosure sale some 17 days before the scheduled sale and where his claims about his name and his ignorance of who holds his mortgage are both wholly without merit and frivolous and advanced in bad faith, all of which reasons the defendants have clearly articulated in their opposition and which this court adopts in its entirety. Because injunctive relief is the only prayer for relief in the plaintiff’s complaint, the denial of his request for such completely resolved this action and is dismissed against defendants [MERS], [DLJ], [SPS] and Credit Suisse First Boston LLC.

Zullo’s present claim is precluded by the 2011 judgment because, between the two actions there is (1) “identity or privity of the parties . . . ; (2) identity of the cause of action; and (3) prior final judgment on the merits.” DaLuz, 434 Mass. at 45. The plaintiff in this present action and in the Superior Court Action is identical and the defendants are in privity. MERS and DLJ were defendants in the 2011 action and HMC is the defendant in the present action. The Mortgage’s original mortgagee was MERS. MERS assigned the Mortgage to DLJ. DLJ assigned the Mortgage to HMC. “[A]n assignment of a contract is, itself, ‘a contract to be interpreted according to ordinary rules of contract interpretation.’” Abate v. Freemont Inv. & Loan, 20 LCR 630 , 633-634 (2012) (appeal pending, No. SJC-11638), citing Spellman v. Shawmut Woodworking & Supply, Inc., 445 Mass. 675 , 681 (2006). As assignors and assignees in the Mortgage’s chain of title, MERS, DLJ, and HMC are in privity. See Bui v. Ma, 62 Mass. App. Ct. 553 , 562-563 (2004) (finding privity of contract between prior and present commercial landlords in an summary process action). As successive holders of the same right in the Property, MERS, DLJ, and HMC are in privity of estate. Id. There is identity or privity of the parties.

Zullo’s claim with respect to the validity of the 2008 DLJ Assignment and sufficiency of notice are precluded because they derive from the same series of connected transactions as his 2011 action. “A claim is the same for [claim preclusion] purposes if it is derived from the same transaction or series of connected transactions.” TLT Const. Corp. v. Anthony Tappe & Assocs. Inc., 48 Mass. App. Ct. 1 , 8 (1999), quoting Saint Louis v. Baystate Med. Ctr., Inc., 30 Mass. App. Ct. 393 , 399 (1991), citing Boyd v. Jamaica Plain Co-op. Bank, 7 Mass. App. Ct. 153 , 163-164 (1979). “The prior adjudication on the merits operates as a bar to a later proceeding upon the same cause of action as to every issue that in fact was or in law might have been litigated.” Ratner v. Rockwood Sprinkler Co., 340 Mass. 773 , 775 (1960). “Varying the form of phrases of a declaration in an earlier action will not avoid the force of res judicata when it is apparent from comparison of the pleadings that they set forth in substance and in effect the same cause of action.” Willet v. Webster, 337 Mass. 98 , 102 (1958). Zullo’s present action arises from an attempt to foreclose on the same Mortgage as did his 2011 action.

In order for res judicata to apply, the prior action must be a final judgment on the merits. DaLuz, 434 Mass. at 45. In the Superior Court Action, the court denied Zullo’s motion for preliminary injunction, dismissing his case in its entirety and granting judgment in favor of the defendants, which entered on March 21, 2011. The judgment states that Zullo admitted to “owing all the money due on the mortgage note, that he received notice of the foreclosure sale some 17 days before the scheduled sale and . . . his claims about . . . his ignorance of who holds his mortgage are both wholly without merit and frivolous and advanced in bad faith.” An involuntary dismissal operates as an adjudication on the merits, with the exception of certain circumstances not present in this case. Mass R. Civ P. 41(b)(3), see also Isaac v. Schwartz, 706 F.2d 15, 17 (1983) (“Under Massachusetts law, as elsewhere, a dismissal for failure to state a claim, under Mass. R. Civ. P. 12(b)(6), operates as a dismissal on the merits, see Mass R. Civ P. 41(b)(3), with res judicata effect.”). The judgment of March 21, 2011, in the Superior Court Action, dismissing Zullo’s case in its entirety, operates as a final judgment on the merits.

For the foregoing reasons, all claims set forth in the complaint relating to the Mortgage and the DLJ Assignment are precluded under the doctrine of res judicata.

2. Validity of HMC Assignment

Zullo claims that the HMC Assignment is invalid on various grounds. HMC argues that there is no genuine issue as to any material fact regarding the validity of the HMC Assignment and that HMC is therefore entitled to judgment in its favour as a matter of law. The HMC Assignment was not a subject of the Superior Court Action, and Zullo’s challenges to that assignment are not precluded. None of those challenges, however, creates a genuine issue of material fact as to the HMC Assignment’s validity.

Paragraph 8(f) of the complaint alleges that the HMC Assignment is invalid because it fails to identify the name of the mortgage broker or loan originator as required by G.L. c. 183, § 6C and 6D. This claim raises no genuine issue of material fact and is decided as a matter of law. By the terms of the statutes themselves, mortgages and assignments are not invalidated by violations of G.L. c. 183, §§ 6C and 6D. See Abate, 20 LCR at 635; Mitchell v. U.S. Bank Nat’l Ass’n, 22 LCR 120 , 128 (2014). Zullo’s claim that the HMC Assignment fails to identify the name of the mortgage broker or loan originator creates no genuine issue of material fact concerning the assignment’s validity.

Paragraph 8(g) of the complaint alleges that the HMC Assignment fails for lack of consideration under G.L. c. 183, § 6. This claim creates no genuine issue of material fact and is dismissed as a matter of law for the same reasons discussed by this court in Abate, 20 LCR at 635, and Mitchell, 22 LCR at 128.

Paragraph 8(h) of the complaint alleges that the HMC Assignment violates G.L. c. 185, § 67 because it was not recorded when it was executed. Zullo misconstrues the meaning of statute. General Laws c. 185, § 67 states that assignments of mortgages on registered land “shall take effect upon the title only from the time of registration.” The delay between execution and registration of the HMC Assignment only means that the assignment did not take effect until it was registered, not that it was invalid. This claim is dismissed. Paragraph 8(i) of the complaint alleges that the HMC Assignment is invalid under G.L. c. 183, § 54B. This claim raises no genuine issue of material fact and is dismissed for the same reasons discussed in Abate, 20 LCR at 636, and Mitchell, 22 LCR at 127.

For the foregoing reasons HMC is entitled to partial summary judgment in its favor as to Zullo’s claims challenging the validity of the HMC Assignment.

3. Delaware Trust

In his opposition to HMC’s motion for summary judgment, Zullo argues that HMC does not hold the Mortgage because of how it was transferred into the CAM III Trust. Zullo points out that as a Delaware trust, the CAM III Trust (Trust) is governed by 12 Delaware Code § 3801. Zullo also points out that the Trust Agreement requires the Depositor, Corona Asset Management II, LLC, to deposit the Trust’s Transferred Assets into the Trust by the Transfer Date. Zullo complains that HMC has not produced documentation of a transfer of the Mortgage from the Depositor to the Trust. Zullo has directed the Court to no authority on why this is not an issue between the parties to the Trust, or how Zullo has standing to enforce an alleged breach of a trust to which he is neither party, trustee, nor beneficiary. That the Trust may be governed by 12 Delaware Code § 3801, or that the Mortgage may have been transferred into the Trust in violation of the Trust agreement does not change the fact that a presumptively valid assignment of the Mortgage from DLJ to HMC was noted on certificate of title number 236444. HMC is therefore entitled to partial summary judgment in its favour on the issue of whether the Mortgage was transferred into to the Trust in accordance with provisions of the Trust Agreement.

4. Lost Note Affidavit

The Note is lost. Under the holding of Eaton v. Federal Nat’l Mtg. Ass’n, the statutory power of sale can only be exercised by a “person or entity then holding the mortgage and also either holding the mortgage note or acting on behalf of the note holder.” Eaton v. Federal Nat’l Mtg. Ass’n, 462 Mass. 569 , 571 (2012). HMC seeks to foreclose on the Mortgage with the Lost Note Affidavit, executed by SPS as servicing agent for DLJ on January 20, 2012. Aff. of HMC Assets, LLC ¶ 19, Ex. I. The issue is whether possession of the Mortgage and the Lost Note Affidavit gives HMC authority to foreclose on Zullo’s equitable right of redemption by exercise of the statutory power of sale. Zullo argues that HMC cannot foreclose because the Lost Note Affidavit fails to meet the requirements of G.L. c. 106, § 3-309, and that “[o]ne could hardly rely upon such an enfeebled proffer to stand for anything more than fodder for material to make paper airplanes from.” Pet’r’s Br. In Opp’n to Resp’t’s Mot. For Summ. J. 14. Zullo does not identify in what way he believes the Lost Note Affidavit fails to comply with G.L. c. 106, § 3-309.

A threshold determination neither of the parties has addressed is whether G.L. c. 106, § 3-309 applies to the Lost Note Affidavit; that is, whether the Note was a negotiable instrument. If the Note was a negotiable instrument, then the Lost Note Affidavit is governed by chapter 106 of Massachusetts General Laws. G.L. c. 106, § 3-102 (“[t]his Article shall apply to negotiable instruments.”). [Note 2] If the Note was not a negotiable instrument, then G.L. c. 106, § 3-309 does not apply. YYY Corp. v. Gazda, 145 N.H. 53, 61 (2000) (holding that under common law principals of assignment, creditor could enforce non-negotiable reform agreement executed by debtors, though creditor never possessed the underlying promissory note).

If the Note was a negotiable instrument, then HMC can foreclose with only the Lost Note Affidavit and Mortgage if HMC was is possession of the Note and entitled to enforce it when it was lost. General Laws c. 106, § 3-301(iii), provides that a person may enforce an instrument if that person is “a person not in possession of the instrument who is entitled to enforce the instrument pursuant to section 3-309.” G.L. c. 106, § 3-301. Under G.L. c. 106, § 3-309(a), “[a] person not in possession of an instrument is entitled to enforce the instrument if . . . the person was in possession of the instrument and entitled to enforce it when loss of possession occurred.” G.L. c. 106, § 3-309. [Note 3] Section 3-309 has been interpreted to mean that a mortgage note that was lost or destroyed prior to its assignment by a person executing a lost note affidavit cannot be enforced by a downstream assignee in possession of the mortgage instrument, who was not in possession of the note and entitled to enforce it at the time the note was lost. See Desmond v. Raymond C. Green, Inc., 505 B.R. 365, 373 (Bankr. D. Mass. 2014); see also Marks v. Braunstein, 439 B.R. 248, 251 (Bankr. D. Mass. 2010), following Dennis Joslin Co., LLC v. Robinson Broad. Corp., 977 F. Supp. 491, 495 (D.D.C. 1997).

Whether DLJ or HMC held the Note when it was lost is not clear from the record. [Note 4] But whether DLJ or HMC held the Note when it was lost or whether the Note was a negotiable instrument or not, the result is the same: HMC may foreclose on the mortgage. If HMC lost the note, then as a “person [] in possession of the instrument and entitled to enforce it when loss of possession occurred,” G.L. c. 106, § 3-309, and as a “person or entity . . . holding the mortgage and also . . . holding the mortgage note,” Eaton, 462 Mass. at 571, HMC can foreclose with the Lost Note Affidavit and Mortgage, whether or not the Note was a negotiable instrument. If DLJ lost the Note, whether or not it was a negotiable instrument, then before the HMC Assignment, DLJ had the right to enforce the Note using the Lost Note Affidavit. At this point, for the purposes of Eaton, DLJ was a “note holder.” Id. Eaton provides that a mortgage holder can foreclose only if it holds the note or is acting on behalf of the note holder. Id. The HMC Assignment, even if not effective to assign the Note under the lost note affidavit, is effective to give HMC authority to act on behalf of DLJ, the note holder, as required by Eaton. Id. The Court acknowledges that this conclusion is contrary to that reached in Desmond, 505 B.R. 365, 373, a case with similar facts. The Desmond court, though, did not directly address the question addressed here, namely whether an assignment of a mortgage and lost note affidavit, from a party entitled to enforce the note, constitutes authority to act on behalf of the note holder under Eaton, 462 Mass. at 571. This court holds that it does.

5. Validity of the Prior Sevicemember’s Judgment

On November 19, 2008, DLJ filed a Complaint to satisfy the SCRA with the Land Court. On May 27, 2009, the Land Court issued judgment that Zullo was not entitled to the benefits of the SCRA. Zullo claims that HMC must file its own SCRA action before it can exercise the statutory power of sale. This is not correct. The SCRA was legislated to protect the civil rights of servicemembers during their military service. HSBC Bank USA v. Matt, 464 Mass. 193 , 194- 195 (2013), citing 50 U.S.C. app. § 502. The SCRA provides that a “‘sale, foreclosure, or seizure of property for a breach of an obligation’ conducted while a party is in the military ‘shall not be valid . . . except . . . (1) upon court order granted before such sale, foreclosure, or seizure; or (2) if made pursuant to an agreement [between the parties].’” Id. at 195, quoting 50 U.S.C. app. § 533(c). In Massachusetts, a mortgagee seeking to assure compliance with the SCRA prior to commencing foreclosure proceedings may bring an action in the Land Court to ensure that the “foreclosure will not be rendered invalid for failure to provide the protections of the SCRA to anyone so entitled.” Id. at 197. However, “[i]f a foreclosure were otherwise properly made, failure to comply with the SCRA would not render the foreclosure invalid as to anyone not entitled to the protection of the act.” Id. at 196, quoting Beaton v. Land Court, 367 Mass. 385 , 390 (1975). “[B]ecause a servicemember proceeding cannot affect the rights or interests of nonservicemembers, nonservicemembers have no interest in the proceeding.” Id. at 199.

Zullo does not claim that after the Land Court’s 2009 SCRA judgment he became an active member of the military. But even if he had, “[f]ailure [of HMC] to bring a servicemember proceeding [would merely] leave the title vulnerable to challenge that the foreclosure sale was defective due to the possibility that it violated a mortgagor’s rights under the SCRA,” Id. at 196- 197, not prevent HMC from foreclosing. Simply put, an SCRA action is not necessary to the foreclosure process, and Zullo’s contention that HMC must file an SCRA action before foreclosing in incorrect as a matter of law. [Note 5]

The pleadings and affidavits show that there is no genuine issue as to any material fact and that HMC is entitled to summary judgment as a matter of law. Res Judicata bars Zullo from challenging the validity of the Mortgage and DLJ Assignment. The HMC Assignment complies with G.L. c. 183, §§ 6, 6C, 6D, and 67, and is presumptively valid under § 54B. HMC either holds the Note or is acting on behalf of the note holder, as required under Eaton, 462 Mass. at 571. HMC is not required to file a new action in the Land Court seeking a determination as to whether Zullo is entitled the protections of the SCRA. The Summary Judgment Motion must be allowed.

Conclusion

For the foregoing reasons, the Summary Judgment Motion is ALLOWED. The Petition to Amend Certificate of Title is DISMISSED WITH PREJUDICE. It is hereby DECLARED that (a) the assignment of the Mortgage dated August 22, 2008 and noted as Document No. 01487689 on certificate of title number 236444, on December 4, 2008, was validly registered, (b) the assignment of the Mortgage dated January 31, 2012 and noted as Document No. 1803914 on said certificate on August 14, 2012, was validly registered, and (c) HMC is the holder of the Mortgage. [Note 6]

SO ORDERED