This is a pre-Eaton, [Note 1] pre-Pinti, [Note 2] post-foreclosure action by a mortgagee seeking a determination that it properly foreclosed on the subject property and holds title free of any claim of the defendant mortgagors, and seeking a writ of seisin giving it possession of the subject property. The defendant mortgagors, notwithstanding the explicitly prospective nature of the holdings in Eaton and Pinti¸ seek to impose a requirement that the mortgagee prove that it held the applicable promissory note at the time of the foreclosure in order to demonstrate that it had the right to foreclose, and seek a determination that foreclosure was void because the mortgagee did not strictly comply with the requirements of G. L. c. 244, §35A and paragraph 22 of the mortgage. Bound as this court is by the applicable appellate precedents, the defendants cannot succeed in these arguments.
This case was commenced on August 16, 2012 with the complaint of Citibank, N.A., as Trustee for American Home mortgage Assets Trust 2006-3, Mortgage-Backed Securities, Series 2006-3 (Citibank) seeking declaratory relief, a judgment pursuant to G. L. c. 240, §6, quieting its title to the property at 35 Pine Crest Drive, Nantucket (the Property), and a writ of seisin and damages for rents and profits pursuant to G. L. c. 237, all following a March 7, 2012 foreclosure sale. In its count for a writ of entry, Citibank also seeks an award of rents and profits pursuant to G. L. c. 237, §12.
Prior to the filing of the present action, the defendants, David Glowacki and Ellen Glowacki (the Glowackis) filed an S-Petition case regarding the Property, which is registered land. [Note 3] The Glowackis moved, pursuant to Mass. R. Civ. P. 12(b)(1), 12(b)(6) and 12(b)(9) to dismiss the present case on the grounds that the S-Petition case was a prior pending action relating to the same parties and issues. Citibank moved to consolidate the two cases. The court (Grossman, J.) denied the motion to dismiss, and denied the motion to consolidate, (on the basis of a lack of identity of the issues and the parties) but did consolidate the two cases for administrative purposes only.
Subsequently, Citibank filed a motion for summary judgment. In an Order dated June 2, 2014, the court (Grossman, J.), denied the motion for summary judgment, but did resolve several of the issues in the case. In ruling that Citibank properly possessed the mortgage at the time of the foreclosure and therefore had standing to foreclose, the court disposed of arguments by the Glowackis that Citibank had failed to show that MERS had authority to assign the mortgage to Citibank and that Citibank failed to show that it had possession of the underlying promissory note so as to give it standing to foreclose. The court noted that recent cases, including Eaton v. Federal National Mortgage Association, 462 Mass. 569 (2012), Galiastro v Mortgage Electronic Registration Systems, Inc., 467 Mass. 160 (2014), and Sullivan v. Kondaur Capital Corp., 85 Mass. App. Ct. 202 (2014), had disposed of these arguments. The court also ruled that the Glowackis were without standing to challenge compliance of the assignment of the mortgage from MERS to Citibank with the New York laws governing the securitization trust into which the mortgage had been transferred.
The courts decision denying Citibanks motion for summary judgment left open and unresolved only two issues: (1) the court left open for further argument whether the Glowackis defense was barred by the holding in U. S. Bank N.A. v. Schumacher, 467 Mass. 421 (2014); and (2) whether the manner in which the foreclosure sale was postponed violated the requirements in G. L. c. 244, §14 relating to notice of the foreclosure sale. These two issues are the subjects of Citibanks Renewed Motion for Summary Judgment now before the court.
The undisputed facts established in the record and pertinent to the Renewed Motion for Summary Judgment are as follows:
1. David Glowacki and Ellen Glowacki granted a mortgage naming MERS as the Mortgagee and American Brokers Conduit as the Lender. The mortgage was executed on June 2, 2006, was recorded as Document No. 116529 with the Land Court District of the Nantucket County Registry of Deeds (Registry) on June 7, 2006, and was noted on Certificate of Title No. 22259.
2. The mortgage secured a promissory note to Lender, signed by the Glowackis, dated June 2, 2006, in the amount of $1,540,000.
3. MERS assigned the mortgage to Citibank by a written assignment dated May 12, 2010, and recorded with the Registry as Document No. 130854 on July 12, 2010, and noted on Certificate of Title No. 22259.
4. Citibank filed a Servicemembers Act Complaint to Foreclose Mortgage against the Glowackis on July 7, 2010. [Note 4] Judgment entered in favor of Citibank on January 12, 2011. A copy of the complaint with a notation that judgment had entered was filed with the Registry on April 17, 2012 as Document No. 136769 and was noted on Certificate of Title No. 22259.
5. Citibank filed in the Servicemembers Act case an affidavit pursuant to G. L. c. 244, §35A(e), dated May 26, 2010, certifying that it had sent a so-called right-to-cure notice as required by G. L. c. 244, §35A, to the Glowackis. The right-to-cure notice attached to the affidavit was dated February 10, 2009, was addressed to the Glowackis at the Property, and was signed by American Home Mortgage Servicing, Inc.
6. On November 15, 2011, Citibank executed a Limited Power of Attorney appointing American Home Mortgage Servicing, Inc. as Servicer of the Glowackis mortgage (among others) and to take actions with respect to the mortgage including the foreclosure of the mortgage and the sale of the foreclosed property.
7. On March 7, 2012, American Home Mortgage Servicing, Inc., acting under the Limited Power of Attorney, conducted a foreclosure sale at the Property, at which Citibank purchased the Property for $1,062,500.00.
8. A foreclosure deed dated March 15, 2012, conveying the Property to Citibank, was recorded at the Registry on April 17, 2015 as Document No. 136773, and was noted on Certificate of Title No. 24217.
9. Recorded at the Registry with the foreclosure deed was an affidavit of sale pursuant to G. L. c. 244, §15 certifying compliance with G. L. c. 244, §14 and with the requirements of the power of sale as contained in the mortgage, including the dates of publication of notice of the sale, the newspaper in which the sale was advertised, and the sending of notices by certified mail.
10. The affidavit of sale includes a representation that the sale was postponed by public proclamation to March 7, 2012
11. The foreclosure sale was originally advertised and noticed to be conducted at 1:00 P.M. on March 1, 2012 at the Property. At the time originally scheduled for the sale, a representative of the auctioneer told each of several people who drove up to the Property, including an attorney representing the Glowackis, that the sale had been postponed to March 7, 2012 at noon. She told each person separately as they drove up to the Property. None of them got out of their cars.
12. As of the date of the hearing on this renewed motion for summary judgment, the Glowackis continued to reside at the Property and had not made any payments to the plaintiff in connection with their continued occupancy.
Summary judgment is appropriate where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Boazova v. Safety Ins. Co., 462 Mass. 346 (2012); Mass. R. Civ. P. 56(c). The party moving for summary judgment bears the burden of proving that there are no material issues of fact and that there is a right to judgment as a matter of law. Highlands Ins. Co. v. Aerovox Inc., 424 Mass. 226 (1997); Foley v. Matulewicz, 17 Mass. App. 1004 (1984). The facts should be viewed in the light most favorable to the party facing summary judgment in determining whether any disputes of fact exist. Catlin v. Board of Registration of Architects, 414 Mass. 1 (1992). The substantive law at issue in the case determines whether a fact is material. Carey v. New England Organ Bank, 446 Mass. 270 (2006). Material facts bear on the outcome of the case. Jupin v. Kass, 447 Mass. 41 (2006). Bare assertions and conclusions regarding a partys understandings, beliefs and assumptions are not sufficient to withstand a well-pleaded motion for summary judgment. Key Capital Corp. v. M & S Liquidating Corp., 27 Mass. App. Ct. 721 (1989), review denied, 406 Mass. 1101 (1989). 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. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); See Ng Brothers Construction, Inc. v. Cranney, 436 Mass. 638 , 648 (2002). When appropriate, summary judgment may be entered against the moving party and may be limited to certain issues. Community Natl Bank v. Dawes, 369 Mass. 550 , 553 (1976); Mass R. Civ. P. 56(c).
As is noted above, following the courts decision denying Citibanks first motion for summary judgment, the only issues left open for consideration in Citibanks renewed motion for summary judgment are the effect to be given to the holding in U. S. Bank N.A. v. Schumacher, 467 Mass. 421 (2014), and whether the manner in which the foreclosure sale was postponed violated the requirements in G. L. c. 244, §14 relating to notice of the foreclosure sale. Additionally, the court will consider the effect, if any, of the holdings in Pinti v. Emigrant Mortgage Company, Inc., 472 Mass. 226 (2015), and Aurora Loan Services, LLC v. Murphy, No. 13-P-874 (Mass. App. Ct. Dec. 11, 2015) (Murphy). [Note 5]
1. The Right-To-Cure Notice Did Not Violate G. L. c. 244, §35A, and Did Not Render the Foreclosure Void If It Did.
The Glowackis argue that the right-to-cure notice sent to them in 2009 did not comply with the requirements of G. L. c. 244, §35A, and therefore the subsequent foreclosure was void. The Glowackis argue that the right-to-cure notice was sent by American Home Mortgage Servicing, Inc., (AHMSI) acting as loan servicer, and not by the mortgagee itself as required by G. L. c. 244, §35A. They further argue that there is an insufficient showing that AHMSI was in fact Citibanks authorized servicer.
a. The Defendants Offered No Evidence to Counter the Evidence that AHMSI Was the Servicer of the Loan.
The Glowackis acknowledge that Haskins v. Deutsche Bank National Trust Company, 86 Mass. App. Ct. 632 (2014) holds that the sending of a notice pursuant to G. L. c. 244, §35A by the loan servicer instead of by the mortgagee does not violate Section 35A. However, they argue that the Haskins holding is inapplicable because Citibank has not sufficiently documented AHMSIs status as the loan servicer at the time the notice was sent.
Citibank produced deposition testimony to the effect that AHMSI was at all relevant times either the servicer or the sub-servicer of the Glowackis loan. (Deposition of Crystal Kearse) The Glowackis counter that Citibank has not produced a written agreement documenting the servicing agreement. However, Citibank points out that the Glowackis never requested such documentation in discovery. The Glowackis have produced no evidence tending to counter the evidence that AHMSI was the servicer, and merely rely on Citibanks failure to produce further documentation of the relationship, which they do not dispute they never asked for in discovery. Citibank is not obligated to produce documents not requested, and without more, the evidence adduced in the deposition is sufficient to establish that AHMSI was the servicer. No evidence has been produced to dispute that evidence. Conclusory allegations and bare assertions that Citibank has failed adequately to document a relationship with its servicer are insufficient to counter the facts set forth by Citibank in this regard in its summary judgment materials. Ng Brothers Construction, Inc. v. Cranney, supra, at 648 (bare assertion to the contrary of a fact stated in other parties materials raises no genuine issue of material fact). [C]onclusory statements, general denials, and factual allegations not based on personal knowledge [are] insufficient to avoid summary judgment. Davidson v. General Motors Corp., 57 Mass. Ap. Ct. 637, 639 (2003).
Since there is undisputed evidence that AHMSI was the servicer at the time it sent the Section 35A notice, Haskins is controlling. Accordingly, there is no basis for finding the Section 35A notice to be deficient by reason of being sent by the servicer.
b. Any Defect in the Section 35A Notice Did Not Render the Foreclosure Void.
As to the Glowackis other arguments, these have been resolved by recent case law. To the extent they can argue that the right-to-cure notice does not strictly comply with the requirements of G. L. c. 244, §35A (and the court finds that they have not made such a showing), the Glowackis urge this court to conclude that such noncompliance renders the foreclosure void, notwithstanding the holding of U. S. Bank N.A. v. Schumacher, 467 Mass. 421 (2014) to the contrary.
In Schumacher, the Supreme Judicial Court held that a foreclosing mortgagees deficient Section 35A notice was a pre-foreclosure undertaking, was not part of the exercise of the statutory power of sale, and consequently the sending of a deficient notice did not void a subsequent foreclosure. The Glowackis acknowledge this, but argue that since Schumacher was decided as an appeal of a summary process case, its holding is limited to summary process actions. This conclusion is not supported by Schumacher, as this court has recently held. In Schumacher, the court was reviewing a summary process action where the only legal issue for the court is whether the mortgagee obtained title to the property in strict accordance with the power of sale, but the court also stated that Schumachers challenge should have been raised in an independent equity action in the Superior Court. Id., at 429. The courts holding was that G. L. c. 244, § 35A, is not one of the statutes relating to the foreclosure of mortgages by the exercise of a power of sale. G.L. c. 183, § 21. Id., at 431. There is no logical basis for limiting the holding of Schumacher to summary process actions just because it was made in the context of an appeal of a summary process action. Section 35A could not be found to be unrelated to the statutory power of sale only when it is litigated in a particular court. The Schumacher court did not indicate that it would have reached any different decision on the merits if the case had been adjudicated, as the court said it should have been, in Superior Court. This court has already reached the same conclusion. See Campbell v. Federal Natl Mortgage Assn, 23 LCR 641 , 648 (2015) (Sands, J.) (alleged defects in Section 35A notice cannot render a foreclosure sale invalid and therefore cannot render void a foreclosure deed, and rejecting argument that Schumacher holding is limited to summary process actions).
Accordingly, I rule that any defect in the Section 35A notice did not render void the foreclosure or the deed resulting from the foreclosure sale.
2. The Glowackis Have Not Demonstrated A Right to Relief Based on Allegations of Violation of the Terms of the Mortgage.
The Glowackis argue in opposition to Citibanks renewed motion for summary judgment that Citibank violated the Glowackis contractual right under paragraph 22 of their mortgage to be notified of their default by the Lender, instead of by the lenders servicer, AHMSI. The Glowackis made this argument without the benefit of the Supreme Judicial Courts decision in Pinti v. Emigrant Mortgage Company, Inc., 472 Mass. 226 (2015), which was issued after the Glowackis submitted their opposition to the renewed motion for summary judgment. However, the matter was argued by the parties at the hearing on this motion and is addressed here.
The Glowackis argue that paragraph 22 of the mortgage requires that the Lender give any notice of default. The mortgage identifies the Lender as American Mortgage Conduit, and the mortgagee as MERS. The default notice under both paragraph 22 and pursuant to G. L. c. 244, §35A was sent by AHMSI. In contrast with its ruling in Schumacher that a violation of Section 35A will be enough to void a foreclosures only where it rendered the foreclosure so fundamentally unfair that (the homeowner) is entitled to affirmative equitable relief, specifically the setting aside of the foreclosure sale, U.S. Bank Natl Assn v Schumacher, supra, at 433, the court in Pinti held, with respect to the notice as required by paragraph 22 of the mortgage, strict adherence to the notice of default provisions in the paragraph was required. Pinti, supra, at 232.
I need not reach the merits of whether the sending of the notice by the servicer instead of the Lender (or mortgagee) complies with paragraph 22, as it does with Section 35A (see Haskins v. Deutsche Bank Natl Trust Co., supra), as the Pinti court explicitly made its ruling in that case prospective only. [Note 6] In requiring strict adherence to the notice of default provisions in paragraph 22, because of the possible impact that our decision may have on the validity of titles, it is appropriate to give our decision prospective effect only: it will apply to mortgage foreclosure sales of properties that are the subject of a mortgage containing paragraph 22 or its equivalent and for which the notice of default required by paragraph 22 is sent after the date (July 15, 2015) of this opinion. Id. at 243. [Note 7]
Accordingly, I find that the giving of the notice of default by AHMSI, the loan servicer, in February, 2009, may not serve as a basis for determining the foreclosure sale or the deed issued after the foreclosure sale to be void.
3. The Glowackis Have Failed to Rebut Evidence of Compliance with the Requirements of the Statutory Power of Sale as Demonstrated by the Affidavit of Sale.
An affidavit by a person conducting a foreclosure sale stating his acts, or the acts of his principal or ward, showing that the requirements of the power of sale and the statute have in all respects been complied with, if recorded in the registry of deeds, shall be admitted as evidence that the power of sale was duly executed. G. L. c. 244, §15. Such an affidavit, if uncontroverted, is sufficient to show compliance with the power of sale Federal Natl Mortgage Assn v. Hendricks, 463 Mass. 635 , 635-636 (2012). As permitted by the statute, Citibank submitted a copy of the affidavit of Emmitt Wilson, IV, a vice president of AHMSI, recorded at the Registry with the foreclosure deed, attesting to compliance with the advertising and other requirements of the statutory power of sale.
The Glowackis claim that the Wilson affidavit should not be credited, because it is defective on its face in that, they argue, it reveals that the affiant did not personally conduct the required foreclosure activities or have personal knowledge of them. Further, the Glowackis attempt to counter the facts as set forth in the affidavit in only one substantive respect. They contest the attestation that the sale, originally scheduled and advertised for March 1, 2012, was postponed by public proclamation to March 7, 2012 at 12:00 PM
a. The Glowackis Have Failed to Offer Evidence to Contradict the Representations in the Affidavit of Sale.
The argument that the affidavit is defective on its face is based on the contention that the affiant, Wilson, did not have personal knowledge of all of the facts stated in the affidavit. This argument fails because, first, such lack of personal knowledge of the facts stated in the affidavit is not apparent on the face of the affidavit, and so it is not defective on its face. Second, the Glowackis argue that the deposition of a representative of AHMSI demonstrates that Wilson did not personally do all the things attested to in the affidavit. This argument is premised on a misreading of the statute, which does not require the affiant to have personally conducted each of the activities required to comply with the statutory power of sale. The statute requires that in the affidavit, the affiant must set forth his acts, or the acts of his principal or ward, Wilson was not required by the statute to personally conduct each of these activities. The statute requires that the affidavit be an attestation of acts done by him, or by his principal (AHMSI) or ward. The affidavit complies with this requirement.
The Glowackis further argue that the deposition of Crystal Kearse, an employee of AHMSI, demonstrates that Wilson, in addition to not performing the required acts himself, did not have personal knowledge of them. The deposition transcript supports no such inference. Ms. Kearse testified that Wilson did not perform any of the required activities himself, but she professed no knowledge of the extent of Wilsons own personal knowledge that these activities had been carried out as required, other than to testify, [H]e would have to make sure that these things were done before he could sign (the affidavit). [Note 8] Nothing in the deposition contradicts Wilsons attestation in the affidavit that the required acts were performed.
b. The Glowackis Have Failed to Offer Evidence Contradicting the Representation in the Affidavit of Sale that the Sale Was Postponed by Public Proclamation.
The Affidavit of Sale attests that the foreclosure sale, originally noticed and advertised for March 1, 2012, was postponed by public proclamation to March 7, 2012 at 12:00. The Glowackis, relying on the affidavit of Dirk Rogoveen, Esq., contest this attestation. Mr. Rogoveen, in his affidavit, states that on the original date of the sale, he drove to the sale location and spoke to Kathy Sullivan. He goes on to state that three other vehicles drove up and that Ms. Sullivan spoke to each of the drivers, and then she drove away at 1:10 P.M. He states that Ms. Sullivan never made an announcement or addressed the public on that day. However, at his deposition, Mr. Rogoveen acknowledged that when he spoke to Ms. Sullivan, she informed him that the auction was postponed to March 7, 2012 at noon. He further acknowledged that Ms. Sullivan spoke to the drivers of the only other vehicles to approach the Property, but that he did not hear what was said. [Note 9] Ms. Sullivan testified as well that she informed every person who drove up to the property, including Mr. Rogoveen, that the foreclosure sale had been postponed. [Note 10] Mr. Rogoveens affidavit is controverted by his own deposition, wherein he acknowledges that Ms. Sullivan informed him that the sale was postponed, and that he observed her speaking to every other person who drove up to the Property at the scheduled time of the sale.
There is no particular procedure required for the public proclamation of the postponement of a foreclosure sale, only that everyone present at the location of the scheduled sale must be notified. The only requirement is that a postponement of the sale may be announced by public proclamation to those present at the auction site Fitzgerald v. First National Bank of Boston, 46 Mass. App. Ct. 98 , 1000 (1999). There is nothing in the record to contradict Ms. Sullivans testimony that she informed everyone who appeared at the property at the appointed day and time of the sale of the postponement. Nothing in Mr. Rogoveens affidavit, taken together with his deposition, contradicts this testimony or the attestation in the Affidavit of Sale that the required public proclamation was made.
I find that the attestation in the Affidavit of Sale that a public proclamation of the postponement was made is uncontroverted, and therefore is conclusive evidence that this aspect of the statutory power of sale was duly executed. G. L. c. 244, §15.
For the reasons stated above, the plaintiffs renewed motion for summary judgment is hereby ALLOWED. Judgment is to enter on Count I quieting Citibanks title to the Property, on Count II, declaring that it complied with the requirements of the statutory power of sale in conducting the foreclosure, and on Count III for writ of entry, issuing relief in the nature of a writ of seisin entitling Citibank to immediate possession of the Property and requiring the Glowackis to immediately vacate the Property. However, prior to the entry of judgment, the court will hold an evidentiary hearing on Citibanks prayer for an award of damages for rents and profits pursuant to G. L. c. 237, §12, at which the parties will be entitled to present evidence of the clear annual value of the Property from March 7, 2012 forward, after deducting any taxes or other expenses of the Property paid by the Glowackis during that period in accordance with G. L. c. 237, §13. As to damages, see generally, Brady v. Zimmerman, 8 LCR 292 (2000).
The parties are further ORDERED to attend a status conference on Wednesday, January 6, 2016, at 10:15 A.M. with respect to the scheduling and conduct of the evidentiary hearing to be held on the subject of the award of damages for rents and profits.
[Note 1] Eaton v. Federal National Mortgage Association, 462 Mass. 569 (2012).
[Note 2] Pinti v. Emigrant Mortgage Company, Inc., 472 Mass. 226 (2015).
[Note 3] Petition to Amend Certificate of Title, filed February 24, 2012, docket no. 12 SBQ 16514 02 001.
[Note 4] Land Court Case No. 10 Misc. 433578.
[Note 5] Pinti was decided after the submission of the renewed motion, but was argued by the parties at the September 29, 2015 hearing. The parties did not address Murphy, which issued while this case was under advisement.
[Note 6] See note 7, infra.
[Note 7] The Glowackis, citing Paiva v. The Bank of New York Mellon, Memorandum and Order, (Burroughs, J.), Case No. 14-CV-14531 (D. Mass. Aug. 11, 2015), in which the U. S. District Court declined to honor the prospective application limitation in Pinti, argue that the prospective application limitation in Pinti, should not be applied in the present action. This court is bound by all aspects of the Supreme Judicial Courts decision in Pinti, and declines to apply only part of its holding. Moreover, the December 11, 2015 decision of the Appeals Court in Murphy specifically declined to extend the Pinti rules to cases pending in the trial court[.] Murphy, supra, at 11.
[Note 8] Transcript of Deposition of Crystal Kearse, p. 47.
[Note 9] Transcript of Deposition of Dirk Rogoveen, pp. 43-48.
[Note 10] Transcript of Deposition of Kathleen E. Sullivan, p. 22.