MISC 13-477963

May 28, 2015

Middlesex, ss.



This is a post-foreclosure action in which the plaintiff seeks to invalidate the foreclosure sale by her mortgagee on the grounds that the ownership of the mortgage by the foreclosing entity was not sufficiently established at the time of the foreclosure sale. [Note 1] The bank defendants argue that the foreclosing entity’s title--and therefore the validity of the foreclosure deed to the buyer after the foreclosure deed--were already litigated in a summary process action, and that the plaintiff is not entitled to relitigate the issue of title here. The plaintiff counters that the defendants are barred by the principle of judicial estoppel from claiming that the foreclosing entity had good title at the time of the foreclosure sale. The defendants have now moved for summary judgment. For the reasons stated below, the plaintiff is barred by principles of res judicata from relitigating the issue of title, and, in any event, the entity that conducted the foreclosure auction had good title to the mortgage at the time of the auction.


The material undisputed facts pertinent to this motion for summary judgment are as follows:

1. On January 20, 2006, plaintiff Marie R. Darbouze purchased the property at 7 Plenty Street in Billerica (the “Property”) for consideration of $345,000.00.

2. The plaintiff financed one hundred percent of the purchase price with two mortgages. Darbouze granted a first mortgage to Mortgage Electronic Registration Systems, Inc. (“MERS”), as mortgagee, and as nominee for Fremont Investment & Loan (“Fremont”), identified in the mortgage as the “Lender,” to secure a loan in the amount of $276,000.00. The first mortgage was recorded with the Middlesex North District Registry of Deeds (“Registry”) in Book 19755, Page 116, on January 24, 2006. Darbouze granted a second mortgage to Fremont, also on January 20, 2006, to secure a loan of $69,000.00.

3. The $276,000.00 loan secured by the first mortgage was transferred by Fremont in April, 2006 into the Fremont Home Loan Trust 2006-1. Deutsche Bank eventually became trustee of this trust.

4. In 2007, Darbouze defaulted on both mortgage loans.

5. On or about September 10, 2009, MERS, as mortgagee under the first mortgage, filed an action in this court under the Servicemembers Relief Act (Misc. Case No. 09 MISC 411273), and obtained a judgment, dated February 2, 2010, that Darbouze was not subject to protection under the Act.

6. On February 8, 2010, a foreclosure sale was conducted at the Property.

7. According to a foreclosure affidavit executed by counsel for MERS, the foreclosure sale was conducted on behalf of MERS after statutorily compliant advertising and mailing of notices of the impending foreclosure sale.

8. Also according to the foreclosure affidavit executed by counsel for MERS, the successful bidder at the foreclosure sale was Gary J. Litchfield, whose bid was subsequently assigned to Gold Star Homes, LLC (“Gold Star”).

9. Following the foreclosure sale, MERS issued a foreclosure deed to Gold Star. The foreclosure deed is dated September 19, 2011 and was recorded with the Registry in Book 27290, Page 210, on May 20, 2013.

10. By an assignment dated October 28, 2011, MERS, “as nominee for Fremont Investment & Loan, its successors and assigns,” assigned the first mortgage to Deutsche Bank National Trust Company, as Trustee for Fremont Home Loan Trust 2006-1 (“Deutsche Bank”). The assignment was recorded with the Registry in Book 25392, Page 27, on November 2, 2011. There is no earlier recorded assignment of the first mortgage.

11. In other proceedings, both prior to and after the February 8, 2010 foreclosure sale by MERS, Deutsche Bank made statements inconsistent with the status of MERS as mortgagee. These included the following:

a. Deutsche Bank was the plaintiff in an earlier Servicemembers Civil Relief Act case filed in this court (Misc. Case No. 08 MISC 368684) also seeking a determination of Marie R. Darbouze’s entitlements under the Act (no judgment ever issued in this case);

b. Deutsche Bank identified itself as the holder of the first mortgage in a motion for relief from the automatic stay in bankruptcy in Darbouze’s Chapter 7 Bankruptcy case (No. 08-40199), dated February 8, 2008;

c. Deutsche Bank was a defendant in a case filed in Superior Court by Darbouze (Middlesex Superior Court No. 10-00949), in which Darbouze alleged unsuccessfully that the first mortgage loan was a predatory loan in violation of G. L. c. 183C. In its motion for summary judgment, Deutsche Bank stated as an undisputed material fact, that “Deutsche Bank held a duly noticed foreclosure auction where Gold Star Homes was the winning bidder.”

12. As the successful purchaser of the Property at the foreclosure auction, Gold Star filed a summary process action against Darbouze on September 16, 2013 in the Northeast Housing Court, Lawrence Division (No. 14-SP-3544).

13. In the Housing Court summary process action, counsel for Darbouze explicitly raised and argued as a defense the issue of title to the Property. As stated by the judge, “what counsel is trying to establish, which is that it’s really an issue of whether Deutsche Bank or MERS had the authority to foreclose…You’re just trying to establish who the foreclosing mortgagee should have been, essentially.” (Transcript, p.47) This issue was argued by Darbouze’s counsel in a motion to dismiss argued just prior to trial, and at the trial on April 7, 2014.

14. Following the summary process trial on April 7, 2014, the Housing Court issued a judgment of possession for Gold Star. The court found that, “plaintiff took title to the premises by foreclosure deed…Plaintiff established a prima facie case for possession. No credible defenses to this eviction action were presented.”

15. Darbouze appealed the Housing Court judgment of possession. At the time of this writing, the appeal is pending before the Appeals Court (No. 2014-P-1177).


“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 maybe 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).

Deutsche Bank and MERS have moved for summary judgment on the sole basis of the claimed preclusive effect of the judgment for possession in favor of Gold Star in the Housing Court. [Note 2] They argue that Darbouze is barred by principles of res judicata from relitigating the issue of title, because the title issues she raises in this case are identical to the issues she raised unsuccessfully in the summary process action. Darbouze counters that the defendants have not sufficiently made out a case for application of the doctrine of issue preclusion, and further argues that Deutsche Bank should be judicially estopped from denying that it, not MERS, was the mortgagee at the time of the foreclosure sale.


“Res judicata is the generic term for various doctrines by which a judgment in one action has a binding effect in another.” Heacock v. Heacock, 402 Mass. 21 , 23 n.2 (1988). The doctrines of “issue preclusion” and “claim preclusion” are encompassed within the term “res judicata.” Kobrin v. Board of Registration in Medicine, 444 Mass. 837 , 843 (2005). The defendants contend that Darbouze is barred from relitigating the issue of title by the doctrine of issue preclusion. Issue preclusion “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, supra, at 23 n.2. “In order to preclude a party from relitigating an issue the court must conclude that (1) there was a final judgment on the merits in the prior action, (2) the party against whom preclusion is asserted was a party to that final judgment, (3) the issue in the prior litigation was identical to the current issue, and (4) the issue in the prior litigation was essential to the judgment and actually litigated.” Hauer v. Casper, 20 LCR 125 , 129 (2012) (Misc. Case No. 07 MISC 338201) (Grossman, J.), quoting Kobrin, supra, at 843-844. See also Petrillo v. Zoning Board of Appeals of Cohasset, 65 Mass. App. Ct. 453 , 457 (2006).

The summary process case was filed in Housing Court after the present Land Court action, but was resolved by the court’s final order prior to the resolution of the present case. “It is the general rule that when two different actions involving the same parties and the same claim are pending at the same time, the final judgment first rendered is entitled to res judicata effect in the second action, regardless of which was commenced first.” Wright Machine Corp. v. Seaman- Andwall Corp., 364 Mass. 683 , 690 (1974). It remains then to assess whether the judgment issued in the summary process action meets the requirements for issue preclusion.

Identity of parties. Darbouze was the defendant in the summary judgment case and thus, as the party against whom issue preclusion is asserted, is subject to the preclusive effect of any final judgment entered in that case. Gold Star, the plaintiff in the summary process case, is a defendant in the present action, and in any case, as the assignee of the purchaser at the foreclosure sale, is in privity with the other defendants in this action.

Identity of issues. The issue in the summary process action, Gold Star’s title, is identical to the issue raised by Darbouze in the present action. In the summary process action, Darbouze raised as a defense an attack on Gold Star’s title, asserting that Deutsche Bank, and not MERS, had been the mortgagee at the time of the foreclosure sale, thereby questioning the title that Gold Star derived from the foreclosure deed in which MERS was the grantor. This issue was essentially the only substantive issue raised by Darbouze in the summary process action. It was raised in a pretrial motion to dismiss, which was denied by the Housing Court judge, and it was actively and extensively argued by counsel for Darbouze during the trial. [Note 3] This is identical to the issue raised by Darbouze in the present action, in which Darbouze claims there is a cloud on her title as a result of a foreclosure by MERS when, she argues, based on statements made by Deutsche Bank in other legal actions, Deutsche Bank should be determined to be the actual mortgagee.

Whether issue was essential and was actually litigated. As is evident from the extent of the discussion of the issue in the summary process action, the issue of whether MERS or Deutsche Bank was the mortgagee at the time of the foreclosure sale, was essential to the eventual judgment of possession issued by the Housing Court judge because that issue determined whether MERS, and its grantee, Gold Star, had good title sufficient to entitle Gold Star to possession. It is now well-established that a plaintiff in a summary process action must establish its title, and where a foreclosure was involved, it must establish its legal title, “by proof that the title was acquired strictly according to the power of sale provided in the mortgage; and that alone is subject to challenge.” Bank of New York v. Bailey, 460 Mass. 327 , 335-336 (2011), quoting Wayne Inv. Corp. v. Abbott, 350 Mass. 775 (1966). It is appropriate and within the jurisdiction of the Housing Court for that court to determine the issue of the propriety of a foreclosure in the context of a summary process action. Bank of New York v. Bailey, supra, at 336.

Based on the extensive discussion of the issue in the summary process action, I conclude that the issue of whether MERS or Deutsche Bank was the mortgagee at the time of the foreclosure sale was not only essential to the summary process action, but was actually litigated. The Housing Court judge heard extensive argument by counsel for Darbouze and counsel for Gold Star on the issue of whether MERS had a right to foreclose or whether, as argued by counsel for Darbouze, Deutsche Bank should have been the entity conducting the foreclosure sale. The judge also admitted exhibits related to the issue of title. In his written decision, the Housing Court judge credited the arguments of counsel for Gold Star relating to Gold Star’s title to the property, specifically finding that Gold Star took title by a foreclosure deed and established a prima facie right to possession, and that, “No credible defenses to this eviction action were presented.” Cf. Farmer v. Federal National Mortgage Association, 21 Mass. L. Rptr. 204 (Superior Court, 2013), in which issue preclusion did not apply with respect to establishment of a foreclosing mortgagee’s title in a Superior Court case, where the mortgagor had been precluded from presenting a defense attacking the mortgagee’s title in an earlier summary process action.

Finality of Housing Court judgment. The remaining question in determining whether Darbouze is precluded by the doctrine of issue preclusion from raising in the present action the propriety of title in MERS, and ultimately in Gold Star, is whether the Housing Court judgment is final for res judicata purposes. Darbouze appealed the Housing Court judgment for possession, and the appeal is presently pending before the Appeals Court. [Note 4]

Under both Massachusetts law and federal law, “a trial court judgment is final and has preclusive effect regardless of the fact that it is on appeal.” Depianti v. Jan-Pro Franchising International, Inc., 39 F. Supp. 3d 112, 125 (D. Mass., 2014), quoting, O’Brien v. Hanover Ins. Co., 427 Mass. 194 , 201 (1998). See also Noone v. Town of Palmer, 2 F. Supp. 3d 1, 11 (D. Mass., 2014). This is the rule as well in a majority of states. O’Brien, supra, at 201. Darbouze’s argument that in O’Brien, the Supreme Judicial Court did not actually “adopt” the federal rule that a judgment on appeal may be considered final for issue preclusion purposes, is incorrect. In O’Brien, “the court proceeded to adopt the Federal rule, which it noted is followed by a majority of the States, ‘that a trial court judgment is final and has preclusive effect regardless of the fact that it is on appeal.’” Campos v. Van Houtum, 45 Mass. App. Ct. 918 (1998), quoting, O’Brien, supra, at 201. I conclude therefore, that the judgment in the Housing Court, notwithstanding the pending appeal, is final for purposes of application of the doctrine of issue preclusion.

Darbouze also attacks the prior judgment as being insufficiently “firm” and “reasoned” to be considered a final judgment on the issue of title. Pointing to the one-page decision of the Housing Court judge, Darbouze argues that the issue of title was not sufficiently considered. I conclude that, when read in conjunction with the transcript of the trial, the decision and resulting judgment on the issue of title were “not tentative,…the hearing was adequate, there was adequate deliberation, the parties were fully heard, and there was reasoned judicial opinion,…” Better Boating Association, Inc. v. BMG Chart Products, Inc., 61 Mass. App. Ct. 542 , 551-552 (2004).

MERS and Deutsche Bank have established that the four-part test for application of the doctrine of issue preclusion has been met. Accordingly, Darbouze is precluded from challenging in this action MERS’s title and the validity of MERS’s foreclosure deed to Gold Star.


Even if MERS and Deutsche Bank had not established that Darbouze is barred from challenging the validity of the foreclosure by application of the doctrine of issue preclusion, the undisputed material facts establish that MERS had the right to foreclose, did foreclose, and validly deeded the Property to Gold Star. On the undisputed facts, MERS was the original mortgagee, and remained the mortgagee as a matter of record at the time of the foreclosure sale. Following the foreclosure sale, MERS was the grantor on the foreclosure deed granting the Property to Gold Star.

Although Deutsche Bank appears to have held the note secured by Darbouze’s mortgage as early as 2006, nearly four years before the foreclosure sale, this fact is immaterial. As a pre- Eaton foreclosure, MERS was not required to show that it held the promissory note secured by the mortgage at the time of the foreclosure sale. See Eaton v. Federal National Mortgage Association, 462 Mass. 569 (2012). The case of Galiastro v. Mortgage Electronic Systems, Inc., 467 Mass. 160 (2014), which had not been issued when the present case was filed, and which Darbouze relied on in earlier submissions to this court, did not change this result.

The assignment of the mortgage as a matter of record from MERS to Deutsche Bank in 2011, more than a year after the foreclosure sale, was a nullity that does not affect the validity of the earlier foreclosure. “The assignment of a mortgage is a conveyance of an interest in land that requires a writing signed by the grantor.” U.S. Bank National Association v. Ibanez, 458, Mass. 637, 649 (2011). Where no assignment had taken place as a matter of record prior to the foreclosure sale, MERS remained the mortgagee with the right to foreclose. See Federal National Mortgage Association v. Carvalho, Appeals Court No. 14-P-628 (2015) (Rule 1:28). By the time MERS purported to assign the mortgage to Deutsche Bank in October, 2011, it no longer had anything to assign.


Darbouze does not argue any defect in the foreclosure process that would make the foreclosure sale void or voidable. See Bank of New York Mellon Corp. v. Wain, 85 Mass. App. Ct. 498 (2014). Instead, Darbouze points to statements by Deutsche Bank, not made as a matter of record title, but made in other legal actions. Darbouze argues that the defendants should be barred by the doctrine of judicial estoppel from relying on MERS’s title, because of inconsistent statements made by Deutsche Bank in other proceedings.

“‘Judicial estoppel is an equitable doctrine that precludes a party from asserting a position in one legal proceeding that is contrary to a position it had previously asserted in another proceeding.’ Blanchette v. School Comm. of Westwood, 427 Mass. 176 , 184 (1998). See East Cambridge Sav. Bank v. Wheeler, 422 Mass. 621 , 623–624 (1996); Fay v. Federal Nat'l Mtge. Ass'n, 419 Mass. 782 , 787–788 (1995). ‘The purpose of the doctrine is to prevent the manipulation of the judicial process by litigants.’ Canavan's Case, 432 Mass. 304 , 308 (2000). As an equitable doctrine, judicial estoppel is not to be defined with reference to ‘inflexible prerequisites or an exhaustive formula for determining [its] applicability.’ New Hampshire v. Maine, 532 U.S. 742, 751, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001). Rather, the doctrine is properly invoked whenever a ‘party is seeking to use the judicial process in an inconsistent way that courts should not tolerate.’ East Cambridge Sav. Bank v. Wheeler, supra, at 623… Application of the equitable principle of judicial estoppel to a particular case is a matter of discretion.” Otis v. Arbella Insurance Co., 443 Mass. 634 , 639-640 (2005).

While Deutsche Bank, as a result of Fremont’s transfer of the promissory note into a securitized trust, held the note, and therefore was the “lender,” it did not hold the mortgage at any time prior to the foreclosure sale, and therefore was not the mortgagee. Yet, in at least three other proceedings, Deutsche Bank made incorrect statements inconsistent with its position in this action that MERS was at all relevant times the mortgagee. It filed, as plaintiff and mortgagee, [Note 5] at least one Servicemembers Act case in this court, although it did not pursue a judgment in that case, and later MERS filed and obtained a proper judgment in a separate Servicemembers Act case. It filed, as mortgagee, a motion for relief from the automatic stay in bankruptcy in Darbouze’s bankruptcy case; and, in a case in which Darbouze sued Deutsche Bank, herself identifying it as the mortgagee, Deutsche Bank agreed that it was the mortgagee and successfully defended against a predatory lending claim while identifying itself as the mortgagee.

Whether these misrepresentations were innocent mistakes or were made for some other reason is not clear from the record, and I draw no conclusion as to Deutsche Bank’s motive or reason for making these incorrect representations. However, what is clear from the record is that, mistake or not, there was nothing to be gained in any of these cases from representing that Deutsche Bank was the mortgagee instead of MERS, and there was no harm to Darbouze. In the Servicemembers Act case, no judgment was entered, and MERS subsequently filed a case in its own name as plaintiff and mortgagee and obtained a judgment allowing it to go forward with the foreclosure. In the bankruptcy case, if Deutsche Bank had not filed for relief from the automatic stay, there is no reason MERS could not have done so. The fact that the wrong entity filed did not prejudice Darbouze. In the Superior Court case, it was Darbouze who named Deutsche Bank as the mortgagee when she filed her predatory lending claim. The successful result for the defendant in that case was dependent entirely on the particulars of the note, including interest rate, adjustment dates, rate caps, and other terms, and not on the identity of the mortgagee. I conclude that although Deutsche Bank’s representations in these situations were incorrect, they did not have an unfair effect on Darbouze; she does not offer any argument as to how she was harmed by the incorrect representations or how she would have acted differently had they not been made.

In a similar situation, a bank was found not to have acted deceptively under G. L. c. 93A, when it filed a mortgagee’s affidavit in Land Court identifying itself as the mortgagee, when in fact it had not yet been assigned the mortgage. Rousseau v. Citimortgage, Inc., Appeals Court No. 14-P-385 (2015) (Rule 1:28). Where the mortgagor offered no evidence that she would have acted differently or that the execution of the affidavit prior to the assignment was unfair, there was no violation. Id. Similarly, Darbouze has not offered any facts, evidence or argument as to how she would have acted, or been able to act, differently had MERS been properly identified as the mortgagee in the bankruptcy case, or had Deutsche Bank, when sued by Darbouze as a predatory lender, identified MERS, and not itself, as the mortgagee. Nor is there any evidence of any harm to Darbouze from Deutsche Bank filing, prior to the filing by MERS, under the Servicemembers Act. Accordingly, as a matter of discretion, I decline to invoke the doctrine of judicial estoppel as sought by Darbouze.


For the reasons stated above, the defendants’ motion for summary judgment is ALLOWED.

Judgment will enter in accordance with this Decision in favor of all of the defendants.


[Note 1] The plaintiff’s complaint raises claims for declaratory judgment, a “try title” count pursuant to G. L. c. 240, §1, a count for “unlawful foreclosure” pursuant to G. L. c. 244, §14, and a count styled as a request for permanent injunctive relief. Following denial of the defendants’ motion to dismiss, the defendants answered, and defendants Deutsche Bank and MERS counterclaimed for declaratory judgment. A motion to dismiss the counterclaims was withdrawn by plaintiff, and plaintiff answered the declaratory judgment count of the counterclaim. The motion to dismiss a second count of the counterclaim, seeking “alternative/judicial foreclosure” remains pending.

[Note 2] Gold Star and Litchfield, its manager, have not moved for summary judgment, but as the assignee of MERS, Gold Star’s case rises or falls with that of MERS.

[Note 3] See Transcript, pp. 4-5, 6-8, 17-18, 20-21 (“I’m saying that…Deutsche Bank …that is the mortgagee of record.”), 23, 42-43, 43-44 (“That it was Deutsche Bank that foreclosed on the property at 7 Plenty Street…”), 45 (purpose of submitting copy of motion for relief from automatic stay from bankruptcy proceeding is “[t]o further establish that it was Deutsche Bank that was staking out the position – the position as the foreclosing mortgagee,…”), 46 (“This is offered only in support of the notion that what we’re trying to establish as fact, that it was Deutsche Bank that was acting as the foreclosing entity, and the one who was the mortgagee, who had the right to exercise the statutory powers.”), (Judge: “with respect to what counsel is trying to establish, which is that it’s really an issue of whether Deutsche Bank or MERS had the authority to foreclose.”).

[Note 4] As of this writing, the appeal has been fully briefed, but has not been argued or decided.

[Note 5] Deutsche Bank’s Servicemembers case was filed before the SJC decision in HSBC Bank v. Matt, 464 Mass. 193 , 203 (2013), which held that “only mortgagees or those acting on behalf of mortgagees have standing to bring servicemember proceedings.”