The plaintiff, William T. Barrasso, Jr., commenced this action in this court on March 30, 2012, Mr. Barrasso claims that no entity can show that it is the rightful holder of the two mortgages that encumber his property, and that this uncertainty creates a cloud on his title, which he asks the court to remove. Defendants, all banking entities that either claim to hold or to have held, or to be the servicer of the mortgages, seek a determination that the chain of title of the mortgages is clear and determinable, and seek a declaration that the mortgages do not constitute an improper cloud on the plaintiffs title.
Plaintiff William T. Barrasso (Barrasso or plaintiff) filed his initial complaint against defendant New Century Mortgage Corporation (New Century), seeking declaratory relief, [Note 1] to quiet title, and to remove a cloud on title, [Note 2] all relating to two mortgages he granted in 2005, which encumber of record his property in Peabody, Essex County, Massachusetts. Barrassos allegations, in essence, are that New Century, the original mortgagee for both the first and second mortgages, no longer holds the mortgages, that the actual owner or holder of the mortgages cannot be ascertained, and that the plaintiff is entitled to a judgment freeing his property from the cloud created by the two mortgages. The plaintiff filed his first amended complaint on July 23, 2012, adding Ocwen Loan Servicing, LLC (Ocwen) as a defendant. On August 29, 2013, Barrasso filed a motion for leave to file a second amended complaint, which sought to add counts for fraud and under G. L. c. 93A. Following hearing, the court denied the motion, and did not accept the second amended complaint. [Note 3] On January 7, 2014, the court (Grossman, J.) allowed the filing of a further amended complaint styled as a (Third) Amended Complaint for Quiet Title. The third amended complaint added defendants: Bank of America, NA as successor by merger to LaSalle Bank, N.A., as Trustee for the C-Bass Mortgage Loan Asset-Backed Certificates Series 2007-SP2 (Bank of America); Deutsche Bank National Trust Company, as Trustee for New Century Home Equity Loan Trust Series 2005-C, Asset Backed Pass-Through Certificates (Deutsche Bank); and U.S. Bank, N.A., as Trustee for C-Bass Mortgage Loan Asset-Backed Certificates, Series 2007-SP2 (U.S. Bank), and reiterates the three counts in the original complaint. U.S. Bank, in answering the third amended complaint, counterclaimed against the plaintiff for breach of contract, for unjust enrichment, and for declaratory relief under G. L. c. 231A, but filed an amended answer superseding its answer and deleting and thereby waiving its counterclaim.
All of the defendants except for New Century have now filed a motion for partial summary judgment on all of the plaintiffs claims, claiming that a ruling in their favor on all of plaintiffs claims will be dispositive of the entire action. [Note 4] The court (Speicher, J.) heard arguments on the motion for summary judgment on March 10, 2015. At the hearing, the court informed the parties that there were documents not present in the summary judgment record that left gaps in the factual presentation of both sides, and afforded both sides until March 31, 2015 to supplement the summary judgment record. Both the plaintiff and the defendants availed themselves of this opportunity, the plaintiff filing supplemental material regarding New Centurys bankruptcy proceedings, and the defendants filing supplemental material regarding the claimed transfer of the mortgages into so-called securitized asset-backed certificates.
The following facts, listed chronologically, are found in the Rule 56 record and are not in dispute for the purposes of deciding the motion for summary judgment:
1. On March 2, 2005, New Century appointed Ocwen Loan Servicing, LLC, (Ocwen) as its attorney-in-fact with respect to execution of, among other things, mortgage assignments, on New Centurys behalf.
2. On or about September 16, 2005, Barrasso purchased Unit 315 of the Walnut Place Condominium, located at 8 Walnut Street, Peabody, Massachusetts (the Property).
3. To facilitate the purchase of the Property, on September 16, 2005, Barrasso signed a promissory note to New Century in the amount $211,200.00, and granted New Century a first mortgage (first mortgage) to secure the promissory note. The promissory note was an adjustable rate note, with fixed, interest-only payments for the first two years, and payments to be adjusted by an index every six months thereafter. The first mortgage was recorded with the Essex South District Registry of Deeds (Registry) in Book 24996, at Page 521, on October 26, 2005.
4. Also on September 16, 2005, Barrasso signed a separate promissory note to New Century, in the amount of $52,800.00, and granted New Century a second mortgage (second mortgage) to secure the $52,800.00 promissory note. The second mortgage was recorded with the Registry in Book 24996, at Page 543, on October 26, 2005.
5. New Century transferred the second mortgage to Deutsche Bank, in its trustee capacity, by way of a Pooling and Servicing Agreement dated November 1, 2005, which had, according to its terms, a date of transfer of December 6, 2005.
6. On April 2, 2007, New Century and its affiliates filed a series of sixteen related bankruptcy petitions in U.S. Bankruptcy Court in Delaware, including Petitions Nos. 07-10416 and 07-10419, in both of which New Century Mortgage Corporation is listed as a debtor. The sixteen petitions were jointly administered under No. 07-10416.
7. The $211,200.00 promissory note secured by the first mortgage was endorsed by New Century to LaSalle Bank, N.A., as Trustee for the C-Bass Mortgage Loan Asset-Backed Certificates Series 2007-SP2 (LaSalle), without a date being noted.
8. New Century transferred the first mortgage to LaSalle, in its trustee capacity, by way of a Pooling and Servicing Agreement dated June 1, 2007, which had, according to its terms, a date of transfer of June 29, 2007.
9. On June 22, 2007, New Century appointed Litton Loan Servicing LP as its attorney- in-fact with respect to execution of, among other things, mortgage assignments for mortgages included in the Pooling and Servicing Agreement in which the first mortgage was included, the C-Bass Mortgage Loan Asset-Backed Certificates Series 2007-SP2 trust. Litton is further identified as the servicer in the Pooling and Servicing Agreement.
10. By a document dated December 1, 2007, signed by Barrasso on January 17, 2008, and signed by LaSalle on May 2, 2008, Barrasso entered into a Loan Modification Agreement with LaSalle, in its capacity as Trustee of the C-Bass Mortgage Loan Asset-Backed Certificates Series 2007-SP2. The Loan Modification Agreement changed Barrassos payments on the first mortgage loan indexed, adjustable payments from a six-month adjustable rate to a fixed rate for twenty-two months before reverting back to an adjustable rate as otherwise provided by the original adjustable note.
11. On July 14, 2008, the Bankruptcy Court issued an order, in case no. 07-10416, lifting the automatic stay in bankruptcy, so as to permit the commencement or continuation of any action to foreclose or similarly proceed to foreclose upon or extinguish an interest in real property listed in the title records as being held by a Debtor.
12. On July 15, 2008, the Bankruptcy Court approved New Centurys chapter 11 plan, requiring the transfer of all of New Centurys assets to a liquidating trust.
13. On April 14, 2009, New Century, by Litton Loan Servicing LP as attorney-in-fact, assigned the first mortgage to Bank of America, N.A. as successor by merger to LaSalle Bank N.A. as Trustee for the C-Bass Mortgage Loan Asset-Backed Certificates Series 2007-SP2. The assignment was recorded with the Registry in Book 29378, Page 396 on April 6, 2010.
14. On April 29, 2011, Bank of America N.A. appointed Litton Loan Servicing LP as its attorney-in-fact with respect to execution of, among other things, mortgage assignments for mortgages included in the Pooling and Servicing Agreement in which the first mortgage was included.
15. On August 10, 2012, New Century, by Ocwen Loan Servicing, LLC, as attorney-in- fact, assigned the second mortgage to Deutsche Bank National Trust Company, as Trustee for New Century Home Equity Loan Trust, Series 2005-C, Asset Backed Pass-Through Certificates. The assignment was recorded with the Registry in Book 31638, Page 236 on August 20, 2012.
16. On June 5, 2013, Bank of America, N.A., by Litton Loan Servicing LP as attorney- in-fact, assigned the first mortgage to U.S. Bank, N.A., as Trustee for the C-Bass Mortgage Loan Asset-Backed Certificates Series 2007-SP2. The assignment was recorded with the Registry in Book 32572, Page 199 on June 18, 2013.
17. Ocwen has begun the process of foreclosing on the first mortgage.
Summary judgment is granted where there are no issues of genuine material fact, and the moving party is entitled to judgment as a matter of law. Ng Bros. Constr. v. Cranney, 436 Mass. 638 , 643-44 (2002); Mass. R. Civ. P. 56(c). The moving party bears the burden of affirmatively showing that there is no triable issue of fact. Ng Bros., 436 Mass. at 644. In determining whether genuine issues of fact exist, the court must draw all inferences from the underlying facts in the light most favorable to the party opposing the motion. See Attorney Gen. v. Bailey, 386 Mass. 367 , 371, cert. denied, 459 U.S. 970 (1982). Whether a fact is material or not is determined by the substantive law, and an adverse party may not manufacture disputes by conclusory factual assertions. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Ng Bros., 436 Mass. at 648. When appropriate, summary judgment may be entered against the moving party and may be limited to certain issues. Community Nat'l Bank v. Dawes, 369 Mass. 550 , 553 (1976); Mass. R. Civ. P. 56 (c).
Barrassos claim is essentially that New Centurys bankruptcy had the effect of breaking the chain of title to the two mortgages on his property, and as a result, the mortgages are either not owned by anyone, or their ownership is now so uncertain that the court should declare them to be void, so as not to constitute a cloud on the title to his property. The defendants claim that U.S. Bank holds good title to the first mortgage and that Deutsche Bank holds good title to the second mortgage, either by reason of the pre-bankruptcy or during-bankruptcy transfer of the mortgages into securitized instruments, by the post-bankruptcy assignments of the mortgages, or both. Additionally, the defendants argue that Barrasso should be estopped from denying the defendants ownership of the first mortgage by his having executed a loan modification agreement acknowledging LaSalle Bank, N.A., as trustee, as the holder of the first mortgage. For the reasons that follow, I hold that the defendants hold valid title to both the first and second mortgages, and that there is no basis for granting the relief sought by Barrasso.
A. Jurisdiction and Standing
This is a pre-foreclosure action brought to quiet title under G. L. c. 240, §§ 6-10. Unlike the try title statute, G. L. c. 240, §§ 1-5, as recently interpreted by our Supreme Judicial Court in Abate v. Fremont Investment & Loan, 470 Mass. 821 (2015), there is no jurisdictional requirement to plead record title and an adverse claim under section 6 of chapter 240. Instead, it shall be sufficient that [defendants] claim or may claim by purchase, descent or otherwise, some right, title, interest or estate in the land which is the subject of the action and that their claim depends upon the construction of a written instrument or cannot be met by the plaintiffs without the production of evidence. G. L. c. 240, § 6. The jurisdictional requirements of the quiet title statute are satisfied where there is uncertainty as to who holds a mortgage but no dispute as to the existence of that mortgage, because all that is required is that a defendant claim or may claim. . . some right, title, interest or estate in the land. . . Id. Here, that requirement is satisfied because U.S. Bank claims to hold a first mortgage on the property, and Deutsche Bank claims to hold a second mortgage on the property. This result is entirely consistent with Abate, supra, at 835, which notes, a property owner has other, and perhaps more suitable, remedies available to him or her. See, e.g., G. L. c. 231A, §§ 1-9 (declaratory judgment); G. L. c. 240, §§ 6-10 (action to quiet title)[.]
In a pre-foreclosure quiet title action, a mortgagor has standing to challenge a foreclosing entitys status qua mortgagee. This may, in certain instances, require challenging the validity of an assignment that purports to transfer the mortgage to a successor mortgagee. Culhane v. Aurora Loan Servs., 708 F.3d 282, 292 (1st Cir. 2013). This right, however, extends only to a mortgagors challenge to an assignment asserting that it is void. Sullivan v. Kondaur Capital, 85 Mass. App. Ct. 202 , 206 n. 7 (2014) (Kondaur Capital). This is because [a] deficiency in an assignment that makes it merely voidable at the election of one party or the other would not automatically invalidate the title of a foreclosing mortgagee, and accordingly would not render void a foreclosure sale conducted by the assignee or its successors in interest. Id. In contrast, where the foreclosing entity has established that it validly holds the mortgage, a mortgagor in default has no legally cognizable stake in whether there otherwise might be latent defects in the assignment process. Bank of New York Mellon Corp. v. Wain, 85 Mass. App. Ct. 498 , 503 (2014) (Wain).
The assignment in Kondaur Capital was void because, on its face, it failed to meet the relaxed requirements of G.L. c. 183, § 54B. 85 Mass. App. Ct. at 212-13. [Note 5] In contrast, in Wain, the challenged assignment on its face complied with G.L. c. 183, § 54B; the issue raised by the mortgagor was whether the signatory in fact had the authority he claimed to have, which if true, would render the assignment voidable, but not void. Wain, supra, at 503-04. Because the record title holder of the mortgage satisfied the dictates of the statute governing the assignment of mortgages, the homeowners have no basis for arguing that the assignment is void. Regardless of whether any hidden problems they seek to raise might provide a basis for a third party to claim that the assignment was potentially voidable, the homeowners themselves have no right to raise such issues. Id. at 504. See also Wilson v. HSBC Mortgage Srvcs., Inc., 744 F.3d 1, 10 (1st Cir. 2014) (concluding a challenge to the authority of an officer to execute an assignment is in the voidable rather than void category).
B. The First Mortgage
The first question in the case at bar is whether, on the undisputed facts, the defendants title is void or is merely voidable. The plaintiff argues that the eventual assignment, in 2009, of the first mortgage from New Century to the successor trustee of the securitized trust, was void because New Century no longer had any interest in the mortgage to assign. Plaintiffs argument is that the first mortgage (and the second mortgage) was transferred to a liquidating trust as part of the approval of New Centurys bankruptcy plan, and that it could not have subsequently been assigned by New Century to the defendants. If borne out by the facts, this argument would be one that could void the right of New Centurys assignee to foreclose. Barrasso would have standing to contest the title to the two mortgages held by U.S. Bank and by Deutsche Bank because, under these facts, as a result of breaks in the chain of title, their title would not merely be voidable, but would be void. See Shea v. Federal National Mortgage Association, No. A.C. 13-P-1630, slip op. at 3 n. 9 (Feb. 18, 2015); Sullivan v. Kondaur Capital Corp., 85 Mass. App. Ct. 202 , 205-206 (2014).
The defendants, on the other hand, argue that the first mortgage was transferred in June, 2007 from New Century to LaSalle as trustee of the securitized trust, and was never transferred to the liquidating trust as part of the bankruptcy. If borne out by the facts, this argument would leave plaintiff only with an argument that New Century lacked authority to assign the mortgage, because, although it had title, once in bankruptcy it lacked authority to assign the mortgage to the defendants. This is an argument that the transfer of the mortgage was voidable, not that it was void. This is an argument the plaintiff lacks the standing to make. [Note 6]
An assignment is voidable if, despite some defect, it is still otherwise effective to pass legal title. Wain, supra, at 503 (quoting Culhane, 708 F.3d at 291). Here, the transfer into the securitized pool was an effective transfer of the first mortgage. See Ibanez, supra, at 651 (Where a pool of mortgages is assigned to a securitized trust, the executed agreement that assigns the pool of mortgages, with a schedule of the pooled mortgage loans that clearly and specifically identifies the mortgage at issue as among those assigned, may suffice to establish the trustee as the mortgage holder.). [Note 7] The Pooling & Servicing Agreement provides that [t]he Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey to the Trustee, on behalf of the Trust, without recourse for the benefit of the Certificateholders all the right, title and interest of the Depositor, including any security interest therein for the benefit of the Depositor, in and to (i) each Mortgage identified on the Mortgage Loan Schedule... Section 2.01, Def.s ex. M. The Mortgage Loan Schedule identifies a loan with the Sellers Loan Number of 1003458859, an original balance of $211,200.00, an original sale price of $264,000.00, an origination date of September 16, 2007, in the city of Peabody in Massachusetts. Each of these identifiers matches Barrassos first mortgage. Unlike the assignment in Kondaur Capital, there are no facial deficiencies with the 2007 transfer, 85 Mass. App. Ct. at 212-13 and unlike Culhane, there is no question that New Century had title to the mortgage at the time of transfer, 708 F.3d at 292. [Note 8] On the contrary, the challenged assignment here is much more like the assignments in Wain and in Wilson, in which there is no patent defect in the instrument, or defect in the assignors title, but instead plaintiff relies on a theory of lack of authority.
Here, Barrassos challenge is, at essence, a challenge to the authority of New Century to transfer the first mortgage into the securitized pool. Barrassos argument is that, despite the clear intent of the parties to the pooling agreement, the first mortgage could not have been assigned into the pool because the securitized pool was only open between June 1, 2007 and June 29, 2007, and at that time, New Century was in bankruptcy, and would not obtain a relief from stay until July, 2008. This is the type of challenge that a mortgagor lacks standing to make, because even if shown, it would render the assignment voidable but not void. See Wain, supra, at 503-04, Wilson, supra, at 10. In Wilson, the mortgagor alleged a lack of authority of the assignor based on doubt whether the person executing an instrument of assignment was a vice president of MERS, which was the assignor, or of HSBC, which was the assignee. Wilson, supra, at 13. Here, the alleged lack of authority flows from the fact that New Century was in bankruptcy at the time of the transfer. In neither situation does the nonparty mortgagor have standing to challenge the authority of an assignor who plainly has title. The transfer of the first mortgage from New Century to LaSalle is voidable rather than void because it was effective to pass title, but to the extent it ran afoul of the bankruptcy, New Century had the ability to avoid the transfer, but may choose instead to ratify the agreement and hold the other party to it. Wilson, supra, at 10.
And that is, in fact, what happened here. The Bankruptcy Court subsequently, on July 14, 2008, entered an order for relief from the automatic stay, to permit the commencement or continuation of any action to foreclose or similarly proceed to foreclose upon or extinguish an interest in real property listed in the title records as being held by [New Century]. To the extent the transfer of the first mortgage into the securitization trust in June 2007 may have violated the automatic stay in bankruptcy, the transfer appears to have been ratified by the July 14, 2008 order granting relief from the automatic stay, lending credence to the conclusion that any defect in the 2007 transfer was voidable, not void, and therefore something Barrasso has no right to contest.
Even assuming, however, that Barrasso has the standing to challenge the 2007 transfer into the securitized pool, he has failed as a matter of fact to produce anything that would demonstrate that the first mortgage appears in any of the schedules of assets transferred to the liquidating trust upon the approval of New Centurys bankruptcy plan on July 15, 2008. Barrasso argues that the first mortgage loan is de facto included on Schedule B, Item 35 of the approved bankruptcy plan, which lists mortgage loans held for sale as among the property included in the bankruptcy estate. Barrasso does not, however, provide any evidence that would permit the inference that his loan is actually among those mortgages listed on the schedule. On the contrary, the only reasonable inference is that the first mortgage loan had already been transferred into the securitization trust at the time the bankruptcy plan was approved, and because the lifting of the stay authorized its transfer, the first mortgage loan was not among those assets remaining to be transferred to the liquidating trust when the bankruptcy plan was approved on July 15, 2008.
As to the April 14, 2009 assignment of the first mortgage from New Century, by Litton Loan Servicing LP as attorney-in-fact, to Bank of America, N.A. as successor by merger to LaSalle, Barrasso lacks standing to challenge Littons authority. Like the 2007 transfer to the securitized trust, this assignment is valid on its face, and Barrasso, not having provided any evidence that the mortgage was in fact transferred to the liquidating trust as part of the bankruptcy, is left with an argument based on a lack authority of the assignor, not on a lack of title. Likewise for the argument that the transfer of the first mortgage by Litton Loan Servicing LP, as servicer for New Century is invalid because Litton is not listed as a servicer in the bankruptcy plan, but only as a trade vendor, which was unauthorized to complete the initial transfer of the first mortgage on New Centurys behalf. Again, this attack on the assignment would make it voidable, not void. And in any event, Litton was appointed as attorney-in-fact by New Century and listed as the servicer in the Pooling & Servicing Agreement, and the lifting of the automatic stay and the failure to list the first mortgage in the bankruptcy plan as among New Centurys assets to be transferred to the liquidating trust, all compel the inference that the Bankruptcy Court (or any other party with standing) did not consider this to be an invalidating factor in the transfer of the mortgage.
Moreover, there is no dispute that defendants possess the original $211,200.00 adjustable rate note. Because this is a pre-foreclosure case, even if there were any doubt as to who holds the mortgage, the note-holder could simply compel a transfer of the mortgage. See Eaton v. Federal Natl Mtge. Assoc., 462 Mass. 569 , 577-78 (2012) (Under our common law, where a mortgage and note are separated, the holder of the mortgage holds the mortgage in trust for the purchaser of the note, who has an equitable right to obtain an assignment of the mortgage, which may be accomplished by filing an action in court and obtaining an equitable order of assignment.). Not even the dissolution of New Century in bankruptcy--or a ruling from this court that one of the challenged assignments was wholly void--could prevent an assignment of the first mortgage to the entity that currently has the right to enforce the note secured by the mortgage. Cf. Cavanaugh v. GMAC Mortgage, Land Court Misc. Case No. 11 MISC 447901 (Dec. 21, 2012), affd 85 Mass. App. Ct. 1117 (2014) (Rule 1:28) (ordering assignment of note to mortgagee where defective foreclosure deed operated as assignment of mortgage).
C. The Loan Modification Agreement.
Barrasso claims in this action that there was no valid transfer of the first mortgage to LaSalle, as trustee of the securitization trust, and that the first mortgage remained an asset of New Century that was transferred into a liquidating trust as part of New Centurys bankruptcy. Notwithstanding his present position, in January 2008, Barrasso entered into a Loan Modification Agreement whereby he negotiated a twenty-two month period in which he lowered and fixed his payments on the first mortgage. The Loan Modification Agreement identified Barrasso as the Borrower/Grantor and identified LaSalle Bank National Association, as Trustee for the C-BASS Mortgage Loan Asset-Backed Certificates Series 2007-SP2 as the Lender/Grantee. The Agreement provided that it amends and supplements the first mortgage, which is identified by its date and Registry recording information, and the Agreement further states that the mortgage encumbers Barrassos property at 8 Walnut Street, Unit 315, Peabody, Massachusetts. The Agreement fixes the otherwise adjustable rate of the first mortgage note for twenty-two months.
Under these circumstances, Barrasso is estopped from denying the validity of the assignment to LaSalle. To establish estoppel, a party must show (1) a representation intended to induce reliance on the part of a person to whom the representation is made; (2) an act or omission by that person in reasonable reliance on the representation; and (3) detriment as a consequence of the act or omission. Reading Co-Operative Bank v. Suffolk Construction Co., Inc., 464 Mass. 543 , 556 (2013), quoting Bongaards v. Millen, 440 Mass. 10 , 15 (2003). Silence indicating consent may satisfy the first element. Id., citing Tracy v. Lincoln, 145 Mass. 357 , 359- 360 (1887) (wifes silence as she watched husband mortgage her property estopped her from later denying validity of mortgage). Barrassos failure to object to LaSalle as the lender on the Loan Modification Agreement constitutes such consent. In reliance on Barrassos representation of consent by failure to object, LaSalle entered into the Loan Modification Agreement, thereby meeting the second element, and it accepted lower, fixed payments than it may otherwise have been entitled to receive, foregoing rate adjustments every six months for a period of twenty-two months, thereby incurring a detriment in reliance on the representation, meeting the third element. Having accepted the benefit of the fixed monthly payments, Barrasso cannot now be heard to challenge the authority of LaSalle to have granted him that benefit in the first place. Accordingly, he is estopped from challenging the 2007 transfer of the first mortgage to LaSalle. Notwithstanding the courts analysis of Barrassos other claims, estoppel alone is independently sufficient to support the courts award of summary judgment in favor of the defendants.
D. The Second Mortgage
The defendants have not moved for summary judgment on their title to the second mortgage, and it is not necessary for the court to engage in any kind of detailed analysis regarding the second mortgage. Barrasso borrowed an additional sum of $52,800 at the time of the purchase of his home, also from New Century. This loan was secured by a second mortgage under a home equity line of credit. The second mortgage was transferred into a different securitization trust, with Deutsche Bank as trustee, in December, 2005, well before New Centurys bankruptcy. The second mortgage loan is specifically identified in the mortgage loan schedule for this Pooling and Servicing Agreement. Accordingly, the deposit of the mortgage into the securitization trust constitutes a valid transfer of the mortgage, prior to New Centurys bankruptcy. See U. S. Bank National Assoc. v. Ibanez, supra, at 651. Since no foreclosure has yet taken place, it is immaterial that the assignment as a matter of record, by New Centurys servicer, Ocwen (which had been appointed in 2005) did not take place until 2012. The assignment served as an acknowledgment as a matter of record of a transfer that took place seven years earlier.
For the reasons stated above, the defendants motion for summary judgment is ALLOWED. The Judgment that I direct enter in this case will declare the validity of the assignment of the first mortgage to LaSalle and the second mortgage to Deutsche Bank, as well as subsequent assignments on Count I (Declaratory Judgment) of the Third Amended Complaint; and Judgment will enter denying plaintiffs claims for relief on Count II (Quiet Title) and Count III (Cloud on Title).
[Note 1] Plaintiffs declaratory relief count is not brought under G. L. c. 231A, but rather under G. L. c. 240, §15, and G. L. c. 183, §55, both of which relate to discharging mortgages that have been satisfied. Section 15 of G.L. c. 240, for example, provides a cause of action when the record title of land. . . is encumbered by an undischarged mortgage or a mortgage not properly or legally discharged of record, and a mortgagor. . . claim[s] that the mortgage has been fully paid or the conditions or obligations secured thereby have been fully satisfied and that the holder of the mortgage has neglected or refused to provide a discharge. . . . The plaintiff has made no allegation that he has paid off or fully satisfied either of the subject mortgages in this action.
[Note 2] Presumably, these are both counts under G. L. c. 240, §§ 6-10. The pleadings are not explicit.
[Note 3] See Order Denying Plaintiffs Motion to Amend Complaint, issued November 1, 2013 (Grossman, J.).
[Note 4] The amended answer to the (Third) Amended Complaint, having not included the counterclaim asserted in the original answer to the (Third) Amended Complaint, renders the motion for summary judgment a motion with respect to all remaining claims, and thus is misnamed as a Partial Motion For Summary Judgment.
[Note 5] Specifically, the signatory on the challenged assignment did not allege she was an agent or officer of any relevant entity. Kondaur Capital, supra, at 213.
[Note 6] Nothing in Sullivan v. Kondaur Capital, which was a post-foreclosure action, compels the conclusion that, in a pre- foreclosure case, a mortgagor has standing to contest the validity of an assignment as either void or voidable. The Appeals Court in Kondaur Capital is quick to point out that mortgagors are neither parties to nor intended beneficiaries of mortgage assignments, and that a nonparty who does not benefit from a contract generally is without standing to enforce rights under it. Id. at 206. The reasoning behind allowing a mortgagor to challenge an assignment at all is that the mortgagors seek to challenge Kondaurs claim of title to the property the Sullivans formerly owned, which derives from foreclosure of the mortgage Kondaur claims to have acquired by virtue of the first and second assignments. Id. at 206. In other words, the Appeals Court hung the plaintiffs standing on the fact that, if their mortgagee did not have title (because of the void assignment) at the time it gave the notice of foreclosure required under G. L. c. 244, § 14, and at the time it exercised the power of sale[,] then, under U.S. Bank Natl. Assn v. Ibanez, 458 Mass. 637 , 647-648 (2011), the foreclosure itself was void. Kondaur Capital, supra, at 206-07. While Abate certainly contemplates, as a matter of jurisdiction, the filing of pre-foreclosure complaints to quiet title, nothing in the Abate decision holds, or requires a holding, that a mortgagor in such a case is privileged to challenge an instrument of assignment to which the mortgagor is neither a party nor an intended beneficiary. Here, where the servicer has identified itself as acting on behalf of a particular mortgagee, and has taken steps to foreclose on the mortgage, there seems to be great utility in testing that mortgagees title in a pre-foreclosure proceeding.
[Note 7] It is immaterial that New Century did not execute a separate recordable instrument assigning the first mortgage to the trustee of the securitization trust until 2009 (and Bank of America, as successor trustee to LaSalle Bank, did not further assign the first mortgage to U.S. Bank, as successor trustee).
[Note 8] In Culhane, the plaintiff's challenge to the assignment from MERS to Aurora is premised on the notion that MERS never properly held the mortgage and, thus, had no interest to assign. If this were so, the assignment would be void (not merely voidable). 708 F.3d at 292.