This case concerns the validity of plaintiff Jennifer Daukass title to the condominium unit at 57 Boxberry Lane in Rockland. Her deed came from defendant Federal Home Loan Mortgage Corporation (Freddie Mac), which was deeded its interest by IndyMac Federal Bank. That deed, in turn, depends upon the validity of IndyMacs [Note 1] foreclosure against the mortgagor and then-owner of the unit, defendant Mohamed Dadoun, which occurred by two methods (1) a foreclosure auction on February 11, 2009, and (2) an unopposed entry onto the property immediately thereafter with the certificate of entry, two witnesses attesting, filed at the registry on April 10, 2009 and over three years of possession since the filing of the certificate.
Ms. Daukas has now moved for summary judgment on the primary claims in her complaint (Counts I-III). If resolved in her favor, they are dispositive of the case and moot the need to address the others (Counts IV-VII), which were pled in the alternative. These potentially dispositive claims present three issues.
The first (Count I) is the validity of IndyMacs foreclosure by entry against Mr. Dadoun. [Note 2] IndyMac was not the holder of the mortgage at the time the G.L. c. 244, §14 foreclosure under power of sale (auction) process began, i.e., the date the first notice of the auction was published. [Note 3] Foreclosure by that method was thus invalid. U.S. Bank N.A. v. Ibanez, 458 Mass. 637 , 648 (2011). It was, however, the holder of the mortgage at the time the G.L. c. 244, §§1, 2 foreclosure by entry commenced, i.e. the date of entry. [Note 4] See Bank of New York v. Bailey, 460 Mass. 327 , 331 n. 10 (2011). Did the invalidity of the auction also make the entry invalid? As more fully discussed below, the answer is no. The two methods of foreclosure are independent of each other, each standing alone. Ibanez, 458 Mass. at 646, n. 15. The entry was peaceable, more than three years of possession from the time the certificate was recorded have since occurred, and the foreclosure by entry is thus now valid and fully effective. See Joyner v. Lenox Sav. Bank, 322 Mass. 46 , 52-53 (1947) (cited in Ibanez).
The second and third questions arise from mis-spellings. Ms. Daukas deed from Freddie Mac mistakenly spells her name Daukus rather than Daukas, which she alleges was a scriveners error. She thus seeks its reformation in Count II. The Dadoun mortgage mistakenly spells his first name Mohamad rather than Mohamed in the definition of borrower again alleged to be a scriveners error, evidenced by the proper spelling on the signature page of the mortgage, signed by Mr. Dadoun with that signature duly notarized. She thus seeks its reformation in Count III. For the reasons set forth below, I agree that the mis-spellings were minor scriveners errors, and reform them on the instruments nunc pro tunc.
Ms. Daukas seeks summary judgment on the claims referenced above. Such a judgment may be entered if there are no genuine issues of fact material to those claims and, on those facts, Ms. Daukas is entitled to judgment as a matter of law. Mass. R. Civ. P. 56(c); Ng Bros. Constr. v. Cranney, 436 Mass. 638 , 643-644 (2002).
Count I concerns the validity of the foreclosure by entry. The question raised is whether the admitted defect in the foreclosure under power of sale (G.L. c. 244, §14) the fact that the foreclosing party, IndyMac, was not the holder of the mortgage at the time of first notice makes the foreclosure by entry (G.L. c. 244, §§ 1, 2) defective as well. As noted above, the answer is no. Foreclosure through exercise of the mortgages power of sale, and foreclosure by entry followed by the recording of a certificate of entry and three years of possession, are separate and independent methods of foreclosure. Ibanez, 458 Mass. at 646, n. 15. Each stands or falls on its own. See Grabiel v. Michelson, 297 Mass. 227 , 228-229 (1937) (any defect in foreclosure by sale irrelevant after foreclosure by entry completed) (cited in Bailey, 460 Mass. at 331). Thus, the fact that the foreclosing party was not the holder of the mortgage at the time first notice of the auction was published does not affect the validity of the foreclosure by entry, so long as the foreclosing party was the holder at the time of entry and the certificate of entry properly notes that status. See id.
The undisputed facts on this claim are as follows. [Note 5] MERS was the original mortgagee and the mortgagee of record at the time it assigned the mortgage to IndyMac on January 19, 2009. The assignment was recorded on January 20. [Note 6] Mr. Dadoun was in breach of the mortgage and IndyMac was entitled to foreclose. [Note 7] IndyMacs entry onto the property took place approximately three weeks later on February 11, 2009, and the certificate of entry was recorded at the registry on April 10, 2009. IndyMac and its successors in interest thereafter remained in possession of the property for over three years. The right of redemption has thus been foreclosed, with title in IndyMac and its successors free and clear of any claims by Mr. Dadoun or those whose interests derive from his. See Levin v. Century Indemnity Co., 279 Mass. 256 , 259 (1932) (foreclosure of a mortgage means a termination of all rights of the mortgagor or his grantee in the property covered by the mortgage). IndyMac deeded its full interest in the property to Freddie Mac on March 24, 2009 [Note 8] and Freddie Mac subsequently deeded its full interest to Ms. Daukas on March 30, 2012. Under the doctrine of estoppel by deed, those deeds sufficed to grant their full fee title to Ms. Daukas as soon as that title accrued (three years after the recording of the certificate of entry). See Dalessio v. Baggia, 57 Mass. App. Ct. 468 , 469- 470 (2003). Summary judgment is thus ALLOWED on Count I.
Count II seeks reformation of the grantee name Jennifer Daukus in the Freddie Mac deed (Mar. 12, 2012) to its correct spelling Jennifer Daukas. (emphasis added). Reformation is appropriate when a mutual mistake has occurred, see Americas Wholesale Lender v. Gurinian, 18 LCR 522 , 524-525 (Piper, J.) (collecting cases), and reformation nunc pro tunc when the rights of innocent third parties will not adversely be affected, see Buk Lhu v. Dignoti, 431 Mass. 292 , 294 (2000). Such is the case here. On the facts of this case, there is no question, and no rational inference otherwise, that the grantor intended was Jennifer Daukas, the plaintiff in this case. No third party will adversely be affected. Summary judgment is thus ALLOWED on Count II and reformation granted nunc pro tunc.
The Dadoun mortgage spells his first name Mohamad rather than Mohamed in the definition of borrower, and Count III seeks its reformation to the correct spelling. This was clearly a mutual mistake, warranting reformation, as evidenced by the proper spelling of Mohamed on the signature page of the mortgage which was signed by Mr. Dadoun with that signature duly notarized. On the facts of this case, there is no question, and no rational inference otherwise, that the person intended was Mohamed Dadoun, the defendant in this case. No third party will adversely be affected. Summary judgment is thus ALLOWED on Count III and reformation granted nunc pro tunc.
For the foregoing reasons, the plaintiffs motion for summary judgment on Counts I, II and III is ALLOWED. The remaining claims in the complaint are DISMISSED AS MOOT, WITHOUT PREJUDICE. Judgment shall enter accordingly.
[Note 1] Various documents reference IndyMac as either IndyMac Bank FSB or IndyMac Federal Bank FSB. The two are the same, IndyMac Bank FSB having changed its name to IndyMac Federal Bank FSB on July 12, 2008. See Federal Reserve Board National Information Center (www.ffiec.gov), Institution History for IndyMac Federal Bank FSB (visited Jul. 22, 2014). I thus refer to them collectively as IndyMac.
The Assignment of Mortgage from defendant Mortgage Electronic Registration Systems Inc. (MERS) to IndyMac (Jan. 19, 2009) mistakenly calls IndyMac by a third name, IndyMac FSB, successor in interest to IndyMac Bank FSB, with an incorrect address in Mississippi rather than California for IndyMac Bank FSB, all later corrected in a Confirmatory Assignment of Mortgage (Mar. 31, 2009). There was, and is, no IndyMac FSB (see the National Information Center database referenced above), nor any different IndyMac Bank FSB in Mississippi (id.), and MERS clear and obvious intent was to name the correct IndyMac entity as the assignee. The minor name variation in the Assignment thus does not invalidate the foreclosure by entry. See Federal Deposit Corp. v. Kefelas, 62 Mass. App. Ct. 1121 , 2005 WL 277693 at *2 (2005) (unpublished Rule 1:28 Mem. & Order) (notice given in name of Bank of New England, but foreclosure conducted by New Bank of New England; theAppeals Court failed to see why the change in name was significant and, for that and other reasons, held that title derived from the foreclosure was valid).
IndyMac failed on March 20, 2009 and its remaining assets were acquired by OneWest Bank FSB, now OneWest Bank N.A. See the National Information Center database referenced above.
[Note 2] This affects Ms. Daukus title in two ways. First, if the foreclosure was invalid, Ms. Daukus would not have any title at all. See Bevilacqua v. Rodriguez, 460 Mass. 763 , 772 (2011). Second, an invalid foreclosure would not have eliminated the junior mortgage on the property, originally held by defendant MERS as nominee for IndyMac but now as nominee for another entity.
[Note 3] MERS was the holder at the time of first notice.
[Note 4] MERS assigned the mortgage to IndyMac on January 19, 2009. Entry occurred approximately three weeks later on February 11, 2009, and the certificate of entry was recorded at the registry on April 10, 2009. IndyMac and its successors in interest thereafter remained in possession of the property for over three years.
[Note 5] MERS (in two capacities: first, as assignor to IndyMac of the foreclosed-upon mortgage, and second, as the holder of the second mortgage eliminated by that foreclosure) and Freddie Mac (grantee by foreclosure deed from IndyMac, and then grantor of its interest to Ms. Daukas) were duly served with the complaint but never responded in the case. They are thus bound by the factual allegations in the complaint. See Eagle Fund Ltd. v. Sarkans, 63 Mass. App. Ct. 79 , 82 n. 8 (2005).
Mr. Dadoun did respond and attended two initial conferences, but did not participate thereafter. At the second of those conferences, after his answer was filed, he stated that he did not contest any of the factual assertions in the complaint, only the legal conclusions and relief sought. See Notice of Docket Entry (Mar. 6, 2014). He did not oppose the summary judgment motion or challenge any of Ms. Daukas Statement of Material Facts.
[Note 6] See n. 1 for an explanation why the identification of IndyMac FSB, successor in interest to IndyMac Bank FSB as the assignee rather than IndyMac Federal Bank FSB did not invalidate the assignment or the subsequent foreclosure by entry. As noted therein, the intent to name IndyMac Federal Bank FSB as the assignee was made plain in the confirmatory assignment recorded April 10, 2009, and there was neither evidence of confusion nor any realistic possibility of confusion.
[Note 7] IndyMac was the original noteholder and, so far as the record shows, still held the note at the time of entry. Since it also held the mortgage at the time of entry, it was entitled to foreclose. See Eaton v. Federal National Mtg. Assn, 462 Mass. 569 (2012). In any event, because it pre-dated Eaton and there was no case challenging the foreclosure on appeal at the time, the note was not required for foreclosure. See Galiastro v. Mortgage Electronic Registration Systems Inc., 467 Mass. 160 (2014).
[Note 8] As previously noted (n.1, supra), IndyMac failed on March 20, 2009 and its remaining assets were subsequently acquired by OneWest Bank. The property deed to Freddie Mac names IndyMac as grantor rather than OneWest, suggesting one of three things: (1) the deed was confirmatory of a prior, off-record conveyance or contract for conveyance (Freddie Mac was likely the investor in the loan), (2) OneWest had not yet acquired this asset from IndyMac at the time of the deed, meaning it was still in IndyMacs possession and being sold under wind-up authority, or (3) if OneWest had acquired IndyMacs interest in the property, it authorized the conveyance to go forward for the recited consideration. The deed would be valid in any of these circumstances and, in any event, G.L. c. 183, §54B confirms its validity, especially in the absence of any challenge by OneWest.