WAYNE E. MITCHELL and SHARON MITCHELL v. U.S. BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR RASC 2006-EMX4; U.S. BANK, NATIONAL ASSOCIATION, AS TRUSTEE; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; WELLS FARGO BANK, N.A. D/B/A AMERICA'S SERVICING COMPANY; MORTGAGE LENDERS NETWORK USA, INC.; RESIDENTIAL ASSET SECURITIES CORP.; and RESIDENTIAL FUNDING CORP.

Introduction

After their house in Winchester was foreclosed upon in October 2012, Wayne E. Mitchell and Sharon Mitchell (Mitchells) brought this action under the Try Title statute, G.L. c. 240, §§ 1- 5 seeking to undo the foreclosure. The court dismissed their petition for failure to state a claim, see Mitchell v. U.S. Bank Nat. Ass’n, 22 LCR 120 (2014), but gave them leave file an amended petition. They did so, and the court found that the amended petition raised sufficient grounds to call into question whether U.S. Bank held the mortgage and note that the burden shifted to the respondents to appear and try their claim to superior title arising from the foreclosure. They did so by counterclaim, and, after discovery, have filed this motion for summary judgment, which the Mitchells oppose. After consideration, the court finds that none of the Mitchells’ challenges to the foreclosure can be maintained except for one: there is dispute of material fact as to whether U.S. Bank held the note or was acting on behalf of the noteholder at the time of foreclosure, as required by the decision in Eaton v. Federal Nat’l Mtge. Ass’n, 462 Mass. 569 (2012). Holding the note is a prerequisite to foreclosure, and the respondents bear the burden of establishing that they hold the note in order to prevail on their counterclaim. This issue must be tried and, therefore, the respondents’ summary judgment motion must be denied.

Procedural History

The Mitchells filed their Petition to Try Title Pursuant to G.L. c. 240, §§ 1-5 on November 5, 2012, and their First Amended Petition to Try Title Pursuant to G.L. c. 240, §§ 1-5 on December 12, 2012. On January 4, 2013, Respondents U.S. Bank, National Association, as Trustee for RASC 2006-EMX4 (U.S. Bank), Mortgage Electronic Registration Systems, Inc. (MERS), and Wells Fargo Bank, N.A. d/b/a America’s Servicing Company (Wells Fargo) (collectively, the Respondents) filed Respondents’ Motion to Dismiss and Respondents’ Memorandum in Support of their Motion to Dismiss Plaintiffs’ Complaint Pursuant to Mass. R. Civ. P. 12(b)(6). A case management conference was held on January 8, 2013. On February 11, 2013, the Mitchells filed Petitioner’s Opposition to Motion to Dismiss of U.S. Bank, National Association, as Trustee for RASC 2006-EMX4, Wells Fargo Bank, N.A. d/b/a America’s Servicing Company, and Mortgage Electronic Registration Systems, Inc. On February 19, 2013, Respondents filed their Reply Brief in Support of its Motion to Dismiss. The court heard arguments on the Motion to Dismiss on February 26, 2013, and on March 21, 2014, entered an Order Allowing Respondents’ Motion to Dismiss and Granting Leave to Amend Complaint.

On April 3, 2014, the Mitchells filed their Second Amended Petition to Try Title Pursuant to G.L. c. 240, §§ 1-5 (amended petition) (Am. Pet.). On May 7, 2014, the Respondents filed their Answer and Counterclaims to Second Amended Petition to Try Title Pursuant to G.L. c. 240, §§ 1-5 (counterclaim). On May 13, 2014, the Mitchells filed their Answer and Affirmative Defenses to Respondents’ Counterclaims (answer to counterclaim). On May 27, 2014, the Respondents filed their Motion for Judgment on the Pleadings and Respondents’ Memorandum in Support of their Motion for Judgment on the Pleadings. On August 1, 2014, Respondents filed their Motion for Reconsideration. On August 19, 2014, the Mitchells filed Petitioners’ Motion to Strike Affidavit(s) of Andrew P. Osofsky and Asahia Brooks at Exhibit D to Respondents’ Motion for Judgment on the Pleadings. The Mitchells filed their Opposition to Respondents’ Motion for Reconsideration on August 20, 2014, and their Opposition to Respondents’ Motion for Judgment on the Pleadings on August 26, 2014. The Respondents filed their Reply Brief in Support of their Motion for Judgment on the Pleadings on August 26, 2014, and their Opposition to the Motion to Strike on August 27, 2014.

On August 27, 2014, Respondents’ Motion for Judgment on the Pleadings, Respondents’ Motion for Reconsideration, and Petitioners’ Motion to Strike were heard, and on September 15, 2014, the court entered an Order Denying Respondents’ Motion for Judgment on the Pleadings, Respondents’ Motion for Reconsideration, and Petitioners’ Motion to Strike Affidavits. In the September 15, 2014 order, the court determined that the Mitchells stated a claim under the Try Title Statute, G.L. c. 240, § 1. On March 6, 2015, Wayne E. Mitchell filed the Petitioner’s Suggestion of Bankruptcy. Respondents U.S. Bank and Wells Fargo filed a Notice of Relief from the Automatic Stay and Request for Status Conference on July 10, 2015.

On October 30, 2015, the Respondents filed their Motion for Summary Judgment, Memorandum in Support of their Motion for Summary Judgment (Resp’t Mem.), and the Land Court Rule 4 Statement of Undisputed Material Facts (Resp’t Facts). On December 4, 2015, the Mitchells filed Petitioners’ Opposition to Respondents’ Motion for Summary Judgment (Pet. Opp.), Petitioners’ Responses to Respondents’ Statement of Undisputed Material Facts and Statement of Additional Facts (Pet. Facts), and Petitioners’ Appendix to Opposition to Respondents’ Motion for Summary Judgment (Pet. App.). On December 31, 2015, the Respondents filed their Reply Brief in Support of their Motion for Summary Judgment and Respondents’ Response to Petitioners’ Statement of Additional Facts. The Respondents’ Motion for Summary Judgment was heard on January 22, 2016, and the motion was taken under advisement. This Memorandum and Order follows.

Summary Judgment Standard

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

Undisputed Facts

Based on the pleadings and the documents submitted with the motion for summary judgment and opposition, the following facts are undisputed or deemed admitted:

1. On May 18, 2004, the Mitchells took title to the property located at 547 Washington Street, Winchester, Massachusetts (Property) by a deed recorded on May 19, 2004 in the Southern Middlesex District Registry of Deeds (registry) in Book 42835, Page 230. Am. Pet., ¶ 2; Pet. Opp. at p. 2.

2. On March 15, 2006, the Mitchells obtained a mortgage loan from Mortgage Lenders Network USA, Inc. (MLN) in the original principal amount of Six Hundred Ninety- Eight Thousand Four Hundred and 00/100 Dollars ($698,400) to finance their purchase of the Property. Resp’t Facts, ¶ 1, Exh. C; Pet. Facts, ¶ 1.

3. To secure the loan, the Mitchells granted a first priority mortgage (Mortgage) on the Property to MERS as nominee for MLN and its successors and assigns in the original principal amount of Six Hundred Ninety-Eight Thousand Four Hundred and 00/100 Dollars ($698,400). The Mortgage was recorded in the registry in Book 47137, Page 406 on March 21, 2006. Resp’t Facts, ¶ 2, Exh. C; Pet. Facts, ¶ 2

4. The Mortgage incorporates the power of sale. Resp’t Facts, ¶ 3, Exh. C; Pet. Facts, ¶ 3.

5. On March 15, 2006, the Mitchells executed a promissory note (Note) in favor of MLN in the original principal amount of Six Hundred Ninety-Eight Thousand Four Hundred and 00/100 Dollars ($698,400). Resp’t Facts, ¶ 1, Exh. B; Pet. Facts, ¶ 1.

6. In or around 2007 or 2008, the Mitchells defaulted on the Note and the Mortgage. Resp’t Facts, ¶ 7; Pet. Facts, ¶ 7; DeCaro Dep., at pp. 56, 83-84, 86-87.

7. Wells Fargo sent a notice to cure letter dated September 2, 2008 to the Mitchells at the Property (Notice to Cure). The Notice to Cure lists $46,843.40 as the total delinquency and lists GMAC-RFC, Burbank, CA 91504-3120 (GMAC-RFC) as the mortgagee. Resp’t Facts, ¶¶ 8-11, Exh. F., Pet. Facts, ¶¶ 8-11.

8. Mr. Mitchell does not recall receiving the Notice to Cure. Resp’t Facts, ¶ 12; Pet. Facts, ¶ 12.

9. Mr. Mitchell does not claim that he disputed the arrearage amount in the September 2, 2008 Notice to Cure letter. Resp’t Facts, ¶ 13, Exh. A; Pet. Facts, ¶13; Mitchell Dep., at pp.46-49.

10. Mr. Mitchell did not attempt to contact Wells Fargo regarding the Notice to Cure and did not attempt to cure any default by paying $46,843.40 to Wells Fargo. Mr. Mitchell did not rely upon the Notice to Cure letter in any way. Resp’t Facts, ¶¶ 14-17, Exh. A; Pet. Facts, ¶¶ 14-17; Deposition of Wayne E. Mitchell (Mitchell Dep.), at pp. 47-53.

11. On December 23, 2008, MERS executed a mortgage assignment that assigned the Mortgage from MERS to U.S. Bank National Association, as Trustee (MERS Assignment). The MERS Assignment was recorded in the registry in Book 54094, Page 303 on January 4, 2010. Resp’t Facts, ¶ 18, Exh. G; Pet. Facts, ¶ 18.

12. The MERS Assignment bears Andrew Harmon’s genuine signature as Assistant Secretary and Vice President for MERS. The MERS Assignment was notarized by Adam Faria, a notary public. Resp’t Facts, ¶¶ 19-21, Exhs. G, H at pp. 16-20, 25-27, 30-31, I at pp. 14-15; Pet. Facts, ¶¶ 19-21.

13. On May 11, 2012, Leah Brown, Vice President of Loan Documentation for Wells Fargo, acting as attorney-in-fact for U.S. Bank, National Association, as Trustee executed a corporate assignment of mortgage that assigned the Mortgage from U.S. Bank, National Association, as Trustee to U.S. Bank National Association, as Trustee for RASC 2006-EMX4 (U.S. Bank Assignment). The U.S. Bank Assignment was recorded in the registry on May 15, 2012 at Book 59090, Page 542. Resp’t Facts, ¶ 23, Exh. J; Pet. Facts, ¶ 23.

14. The U.S. Bank Assignment was notarized by Sarah Bryan, an Iowa notary public. Resp’t Facts, ¶ 24, Exh. J; Pet. Facts, ¶ 24.

15. On July 26, 2012, U.S. Bank provided the Mitchells with notice of the foreclosure sale. Mr. Mitchell could not recall receiving such notice that the Property would be sold at a foreclosure sale. Resp’t Facts, ¶ 25, Exh. A; Pet. Facts, ¶ 25; Mitchell Dep., at pp. 56-57.

16. U.S. Bank published notice of the foreclosure sale in the Winchester Star, a newspaper with a general circulation in Winchester, on August 2, 2012, August 9, 2012, and August 16, 2012. Resp’t Facts, ¶ 26, Exh. K; Pet. Facts, ¶ 26.

17. On October 2, 2012, the Property was sold at a public foreclosure auction where U.S. Bank was the highest bidder. Resp’t Facts, ¶¶ 27-28; Pet. Facts, ¶¶ 27-28.

18. On November 20, 2012, U.S. Bank executed a Massachusetts Foreclosure Deed by Corporation and mortgagee affidavit, which was recorded in the registry on May 6, 2014 in Book 63581, Page 8. Resp’t Facts, ¶ 29, Exh. K; Pet. Facts, ¶ 29.

19. On May 20, 2013, Asahia Brooks, Vice President of Loan Documentation at Wells Fargo, executed an Affidavit Regarding Note Secured by Foreclosed Mortgage, which was recorded on May 6, 2014 in the registry in Book 63581, Page 13 (Note Affidavit). The Note Affidavit states that U.S. Bank, as Trustee for RASC 2006-EMX4 was the holder of the Note at the time of foreclosure. Resp’t Facts, ¶¶ 30-31, Exh. L; Pet. Facts, ¶¶ 30-31.

20. The Note Affidavit was notarized by Shelli Stout, a South Carolina notary public. Resp’t Facts, ¶ 32, Exh. L; Pet. Facts, ¶ 32.

Discussion

The Try Title statute, G.L. c. 240, §§ 1-5, was first enacted in 1851 and amended to roughly its current form in 1893. St. 1851, c. 233, § 66; St. 1893, c. 240; see Bevilacqua v. Rodriguez, 460 Mass. 762 , 767-769 (2011); Abate v. Fremont Inv. & Loan, 20 LCR 630 , 632 (2012), aff’d, 470 Mass. 821 (2015) (Abate I). The statute provides that a plaintiff may bring a try title action if the plaintiff is in possession of property to which it holds record title that is clouded by an actual or possible adverse claim. G.L. c. 240, § 1; Abate v. Fremont Inv. & Loan, 470 Mass. 821 , 827 (2015) (Abate II); Bevilacqua, 460 Mass. at 766, 767 n.5. Under the statutory scheme, the plaintiff in possession with record title files a complaint naming as defendant the person or entity claiming superior title. The complaint demands that the adverse claimant appear and show cause why it should not bring an action to establish its superior title. G.L. c. 240, § 1. If the defendant fails to appear or fails to bring a claim, a judgment may enter that the defendant “be forever barred from having or enforcing any such claim adversely to the petitioners.” G.L. c. 240, § 2. If the defendant does appear, it may either disclaim any interest or bring an action to try its claim to superior title. G.L. c. 240, § 3; see Bevilacqua, 460 Mass. at 766.

Try title actions are brought exclusively in the Land Court. G.L. c. 185, § 1(d). Actions in this court, including try title actions, are governed by the Massachusetts Rules of Civil Procedure. Abate II, 470 Mass. at 828 n.17; Mass. R. Civ. P. 1. Thus, a defendant in a try title action may exercise its right, when appropriate, to bring a motion to dismiss for lack of subject matter jurisdiction or for failure to state a claim. Mass. R. Civ. P. 12(b)(1), 12(b)(6). In particular, a defendant may move to dismiss for lack of standing on the grounds that the plaintiff has not met the jurisdictional requirements of possession or holding record title. Abate II, 470 Mass. at 827-828, 830. If the defendant does not move to dismiss or if the plaintiff’s complaint survives a motion to dismiss, the defendant must then bring an action to try its title. This action may be brought as a counterclaim. G.L. c. 240, § 3; Mass. R. Civ. P. 13; Abate I, 20 LCR at 632 n. 5. The counterclaim serves as the action to try title. The plaintiff can then file a reply to the counterclaim that denies the allegations that the defendant holds superior title and raise any affirmative defenses that are appropriate.

This is a post-foreclosure try title action in which the Mitchells allege that they have record title and possession and that U.S. Bank, the foreclosing mortgagee, is claiming superior title by virtue of its foreclosure. The foreclosure establishes that U.S. Bank is making such an adverse claim. Abate II, 470 Mass. at 834-835. The Respondents moved to dismiss the First Amended Petition. See id. at 828-831. The motion was allowed and the Mitchells were given leave to amend their petition, leading to the filing of the amended petition. In its September 15, 2014 Order Denying Respondents’ Motion for Judgment on the Pleadings, Respondents’ Motion for Reconsideration, and Petitioners’ Motion to Strike Affidavits, this court determined that the Mitchells’ amended petition stated a claim under the try title statute, G.L. c. 240, § 1. By their counterclaim, the Respondents have brought their action to try their claim to superior title to the Property under G.L. c. 240, § 3. It is the Respondents’ counterclaim to establish title to the Property that is the subject of this Motion for Summary Judgment. Because the foreclosure was advertised in August 2012 and took place on October 2, 2012, the burden is on the Respondents to establish U.S. Bank’s superior title by showing that, based on the undisputed evidence and as a matter of law, U.S. Bank held the Mortgage by a recorded assignment, held the Note or was acting on behalf of the noteholder, and the foreclosure was performed in accordance with G.L. c. 244, § 14. Eaton, 462 Mass. at 583-585, 588-589 (2012). The Respondents have presented prima facie evidence that U.S. Bank held the Mortgage and Note at the time of the notice of sale, and properly foreclosed.

The Respondents having presented evidence supporting those prerequisites, the merits of the Mitchells’ specific claims in the amended petition that the foreclosure was not valid are then addressed. In their Opposition to the Motion for Summary Judgment, the Mitchells allege: (1) that the MERS Assignment was fraudulently executed by Andrew Harmon and/or fraudulently notarized by Adam Faria; (2) that Wells Fargo’s noncompliance with G.L. c. 244, § 35A renders the foreclosure fundamentally unfair and void; (3) that there was an off-record assignment of the Mortgage from MERS to GMAC-RFC that caused a break in U.S. Bank’s chain of title to the Property; and (4) that U.S. Bank did not hold the Note at the time of foreclosure. Each allegation is addressed in turn.

I. Whether the MERS Assignment was fraudulently executed by Andrew Harmon and/or fraudulently notarized by Adam Faria.

The Mitchells allege that the MERS Assignment is invalid because Andrew Harmon’s signature is fraudulent and he did not personally appear before the notary public as required under G.L. c. 183, § 30. The Mitchells have failed to present any evidence that creates a dispute of material fact about the validity of Harmon’s signature. The notarial acknowledgment on the MERS Assignment states that Andrew Harmon personally appeared before Adam Faria, a notary public, and signed as Assistant Secretary and Vice President of MERS. Resp’t Facts, Exh. G. The notarization satisfies the criteria for an acknowledgment of a mortgage assignment and is presumptively valid under G.L. c. 183, § 54B. Abate I, 20 LCR at 636; see also Bank of N.Y. Mellon Corp. v. Wain, 85 Mass. App. Ct. 498 , 503 (2014) (holding that a mortgage assignment that “included an attestation that the signatory personally appeared and executed the document before a notary public . . . satisfied the dictates of G.L. c. 183, § 54B, the statute that governs the assignment of mortgages”).

Additionally, the Mitchells lack standing to claim that the MERS Assignment was fraudulently notarized because it is an allegation that the mortgage assignment is voidable, not void. Abate II, 470 Mass. at 832-833. A “mortgagor’s standing [is] limited to claims that a defect in the assignment rendered it void, not merely voidable.” Wain, 85 Mass. App. Ct. at 502, citing Sullivan v. Kondaur Capital Corp., 85 Mass. App. Ct. 202 , 206 n. 7 (2014). “Robo-signing” would render a mortgage assignment voidable. Wells Fargo Bank, N.A. v. Anderson, 89 Mass. App. Ct. 369 , 372 (2016) (holding that homeowner lacked standing to allege that bank “robo- signed” a mortgage assignment); ClearVue Opportunity XV, LLC v. Sheehan, No. 14-ADMS- 40015, 2015 WL 5098658, at *10 (Mass. App. Div. Aug. 24, 2015) (“While any failings in the notarization of the assignment … could render the assignment voidable, those failings would not make the assignment void. [The defendant] has no standing to challenge the assignment on this ground.”). In short, the Mitchells have not presented specific evidence that gives rise to a dispute about the validity of Harmon’s signature, the notary acknowledgment satisfies the dictates of G.L. c. 183, § 54B, and the Mitchells lack standing to allege the practice of “robo-signing” on a mortgage assignment.

II. Whether Wells Fargo’s noncompliance with G.L. c. 244, § 35A renders the foreclosure fundamentally unfair and void.

The Mitchells allege that the Notice to Cure dated September 2, 2008 violated the spirit and language of G.L. c. 244, § 35A and was so fundamentally flawed that any foreclosure based thereon is unfair and void. Am. Pet., ¶ 28. Mitchells allege numerous deficiencies in the Notice to Cure, including: (1) improper identification of the mortgagee; (2) failure to identify the loan originator; (3) failure to inform the Mitchells that they could sell the Property prior to foreclosure and use the proceeds to cure the default; (4) failure to identify the precise sum of money required to cure the default and avoid acceleration; and (5) failure to indicate the importance of the letter on the front page. Pet. Opp., at pp. 2-3.

Respondents argue that G.L. c. 244, § 35A does not apply because the Mitchells defaulted prior to the effective date of § 35A, May 1, 2008. Resp’t Mem., p. 11. Alternatively, the Respondents argue that even if § 35A is applicable, the Mitchells have failed to establish that any violation of the statute rendered the foreclosure fundamentally unfair. Resp’t Mem., p. 12.

The protections of G.L. c. 244, § 35A are only afforded to mortgagors who default on their mortgage payments after May 1, 2008. See Randle v. GMAC Mortgage, LLC, 18 LCR 546 , 550 (2010), citing G.L. c. 244, § 35A (holding that mortgagor who defaulted on payments in April of 2005 “was not entitled to the ninety-day right to cure, or the notice required by G.L. c. 244, § 35A, because that section does not apply to ‘such mortgages . . . whose statutory condition has been voided . . . prior to’ May 1, 2008”).

There is a dispute of material fact about the date of the Mitchells’ default. The Respondents allege that the Mitchells defaulted on their mortgage payments “in early 2007” and that Wells Fargo provided the Mitchells with the Notice to Cure on September 2, 2008. Res. Mem., p. 11; DeCaro Dep., at pp. 56:5-8, 68:11-19. Wayne Mitchell neither recalls receiving a letter that informed him of a mortgage default in 2007, nor does he recall receiving the Notice of Cure dated September 2, 2008. Mitchell Dep., at pp. 42-47. Further, Wells Fargo had a “foreclosure checklist” on file that listed November 1, 2007 as the due date for mortgage payments, but the checklist did not specify “exactly when” the Mitchells failed to make their required payments. DeCaro Dep., at pp. 83-84. The foreclosure checklist referenced a default letter dated September 8, 2008, but the Notice to Cure that was sent to the Mitchells was dated September 2, 2008. DeCaro Dep., at pp. 86-87. Drawing all inferences in the Mitchells’ favor, the court proceeds under the assumption that the Mitchells defaulted after May 1, 2008 and the Respondents must comply with the notice provisions of § 35A.

Section 35A requires, in pertinent part, that the mortgagee give notice to the mortgagor before commencing foreclosure proceedings and that such notice:

inform the mortgagor of … the sum of money required to cure the default … the name and address of the mortgagee, or anyone holding thereunder … [and] the name of any current or former mortgage broker or mortgage originator for such mortgage or note securing the residential property.

G.L. c. 244, § 35A(c). The Notice to Cure fails to satisfy these requirements. It states: “The name of the person that originated your loan is N/A. The current mortgagee is GMAC-RFC, Burbank, CA 91504-3120.” Resp’t Facts, Exh. F. The identified mortgagee, GMAC-RFC, does not appear as a mortgagee anywhere in the publicly recorded chain of title to the Mortgage. The Notice to Cure makes no mention of MERS, U.S. Bank, as Trustee, or any other entity appearing in the recorded chain of title to the Mortgage. The Notice to Cure does not list the total sum of money required to cure the default. The “total delinquency” is listed as $46,843.40, but this sum does not include inspection fees that the Mitchells would be required to pay in order to fully cure their default. DeCaro Dep., at p. 80:12-21.

Mere non-compliance with § 35A alone, however, is not grounds to void a foreclosure. U.S. Bank Nat’l Ass’n v. Schumacher, 467 Mass. 421 , 431 (2014), citing G.L. c. 183, § 21 (§ 35A “is not one of the statutes ‘relating to the foreclosure of mortgages,’” and a mortgagee’s failure to strictly comply with § 35A is not grounds to void a foreclosure). A party seeking to void a foreclosure “must prove that the violation of § 35A rendered the foreclosure so fundamentally unfair that she is entitled to affirmative equitable relief, specifically the setting aside of the foreclosure sale ‘for reasons other than failure to comply strictly with the power of sale provided in the mortgage.’” Id. at 433 (Gants, J. concurring), citing Bank of Am., N.A. v. Rosa, 466 Mass. 613 , 624 (2013); see, e.g., Santos v. U.S. Bank Nat. Ass’n, 89 Mass. App. Ct. 687 , 54 N.E. 3d 548, 556-558 (2016).

Schumacher does not explicitly set out what constitutes fundamental unfairness. The claim of fundamental unfairness is a fact intensive inquiry. At a minimum, to establish fundamental unfairness the Mitchells would need to present facts indicating that deficiencies in the Notice to Cure thwarted, in some manner, their effort to cure their default. See id. at 431 (stating that the purpose of § 35A is to give the mortgagor a “fair opportunity” to cure the default before acceleration). The undisputed evidence is that the Mitchells did not rely on the Notice to Cure in any way. Mr. Mitchell had “no recollection one way or the other” about which entity was listed as the mortgagee. Mitchell Dep., at pp. 47:4, 53:1-10. The Mitchells argue that the foreclosure was fundamentally unfair because Mr. Mitchell would have remained in default even if he had paid the total delinquency amount listed on the Notice to Cure. Pet. Opp., at p. 22. However, the evidence demonstrates that Mr. Mitchell made no attempt to cure the default by making a payment to Wells Fargo and he was therefore not affected by the allegedly inaccurate amount listed on the Notice to Cure. Mitchell Dep., at pp. 49-50; Resp’t Facts, ¶¶ 12-16; Pet. Facts, ¶¶ 12-16. The undisputed evidence shows that Wells Fargo’s non-compliance with G.L. c. 244, § 35A did not render the foreclosure “fundamentally unfair” to the Mitchells.

III. Whether there was an off-record assignment of the Mortgage from MERS to GMAC- RFC, Burbank, CA 91504-3120 that caused a break in the chain of title to U.S. Bank.

The Mitchells argue that there is a break in the chain of recorded title to the Mortgage caused by an unrecorded Mortgage assignment from MERS to GMAC-RFC. The Mitchells rely on the Notice to Cure, which lists GMAC-RFC as the mortgagee, to establish the existence of such an assignment. The Mitchells argue that an unrecorded assignment of the Mortgage to GMAC-RFC invalidates the MERS Assignment and the subsequent U.S. Bank Assignment. Respondents argue that the Mortgage was never assigned to GMAC-RFC and the reference to GMAC-RFC as mortgagee in the Notice to Cure was simply a mistake. Resp’t Facts, ¶¶ 9-11, Exh. F; Pet. Facts, ¶¶ 9-11.

The Mitchells’ argument is identical to an argument presented by the homeowners in Wain, who argued that the summary judgment record raised a question about whether MERS— by the date of the assignment—had already assigned their mortgage to another entity and, therefore, had no interest to transfer when it assigned their mortgage to the plaintiff bank. Wain, 85 Mass. App. Ct. at 504 n.13. They similarly relied on the fact that the notice to cure letter (which predated the assignment at issue) identified an entity other than the plaintiff bank as the mortgagee. Id. The Wain court held, “the key consideration is whether the assignor of the mortgage held the record legal interest in the mortgage at the time of the assignment; it is immaterial that another entity might hold an unrecorded equitable or beneficial interest in the mortgage.” Id.

It is undisputed that the Mitchells granted a first priority mortgage to MERS as nominee for MLN and its successors and assigns. Although the Notice to Cure lists GMAC–RFC as the mortgagee, the Wain court held that an improper identification of the mortgagee on a § 35A letter is not sufficient to raise a claim that there is a break in the chain of title. See id. Where the Mitchells have failed to present any evidence of a written assignment from MERS to GMAC- RFC or that the parties intended to execute such an assignment, the reference to GMAC-RFC on the Notice to Cure does not create a break in the chain of title.

In Mitchell v. U.S. Bank Nat. Ass’n, 22 LCR 120 , 132 (2014), this court granted the Mitchells leave to amend their petition to claim that U.S. Bank had notice of a prior unrecorded transfer of the Mortgage from MERS to GMAC–RFC, as such notice. This court noted that G.L. c. 183, § 4 makes Massachusetts a “race-notice jurisdiction,” meaning that the subsequent purchaser of property, who records a deed, will prevail over a prior buyer, who did not record, unless the subsequent purchaser had actual notice of the unrecorded transfer. Id. at 130-131; Richardson v. Lee Realty Corp., 364 Mass. 632 , 634–635 (1974). The Mitchells have failed to present any evidence to establish that U.S. Bank had notice of a prior unrecorded transfer of the Mortgage from MERS to GMAC-RFC. MERS had the authority to execute the MERS Assignment and assign the Mortgage to U.S. Bank, and the Assignment was properly made and recorded.

IV. Whether U.S. Bank was the lawful holder of the Note at the time of foreclosure.

Because the Property was advertised for foreclosure in August 2012, Eaton applies and requires that U.S. Bank – the foreclosing entity – have held both the Mortgage and the Note at the time of foreclosure. Eaton, 462 Mass. at 571. This is an element of the Respondents’ prima facie case of superior title. The Mitchells have presented sufficient evidence to create a genuine issue of material fact about whether U.S. Bank held the Note at the time of foreclosure. The Mitchells have established that there are two different versions of the Note relied upon by the Respondents in this case. There is a dispute about which version, if any, granted interests in the Note to U.S. Bank. The Mitchells challenge the validity of both versions of the Note.

The first version of the Note was sent in a letter dated September 5, 2012 from Wells Fargo to counsel for the Mitchells (2012 Note). DeCaro Dep., at p. 131. The 2012 Note has two holes punched in the top which do not appear on the second version of the Note. Id. at p. 132. The endorsement page on this Note is endorsed in blank by MLN. Id. at p. 133. There is no allonge attached to (or associated in any way with) this version of the Note. Id. at p. 134. The Respondents argue that this version of the Note was sent to the Mitchells by mistake and should not be relied on.

The second version of the Note was located in a collateral file maintained by Wells Fargo, as document custodian for U.S. Bank. This version of the Note was sent to Respondents’ counsel on January 13, 2015, and thereafter to the Mitchells during the discovery phase of this case (2015 Note). Unlike the 2012 Note, which had a blank endorsement, attached to this version of the Note is an endorsement paid to the order of EMAX Financial Group, LLC (EMAX). Id. at pp. 126-127. The collateral file contains an allonge endorsed in blank by EMAX that allegedly relates to the 2015 Note, but the allonge is not physically attached to the Note. Id. at p. 130. The allonge in the collateral file is not dated and the parties dispute when the allonge was placed in the collateral file. Id. at pp. 131, 135-136. U.S. Bank alleges that this is the genuine version of the Note, including the allonge endorsed in blank, and the means by which it became holder of the Note in 2007.

While no reported appellate decision in Massachusetts has addressed the issue of inconsistent notes, [Note 1] courts in other jurisdictions have held that the mere fact that there were two different copies of the note in the record does not necessarily mandate a finding that one of the notes was “unauthentic” or otherwise preclude summary judgment. In such cases, courts have analyzed whether the inconsistencies are material or if the evidence offered to explain the inconsistencies is sufficient to resolve the genuine issue of material fact that the inconsistent notes created. See U.S. Bank, Nat’l Ass’n v. Zimmer, 649 Fed. Appx. 250, 254 (3rd Cir. 2016) (mortgagee presented two different notes one with endorsement and one without, which court found immaterial considering mortgagors had opportunity to inspect original note and received copy prior to filing motion for summary judgment); Donaldson v. BAC Home Loans Serv., L.P., 813 F. Supp. 2d 885, 894 (D. Tenn. 2011) (finding differences between two copies of notes to be insignificant to create a genuine dispute of material fact); In re Tyrell, 528 B.R. 790, 794 (Bankr. D. Haw. 2015) (finding logical explanation supported by uncontroverted evidence that bank customarily make copies of the note at various times during the life of the loan and that one of the two copies was made before some of the endorsements were affixed); Deutsche Bank Nat’l Trust Co. v. Najar, No. 98502, 2013 WL 1791372, at *13-14 (Ohio Ct. App. Apr. 25, 2013) (finding credible and logical explanation from mortgagee that note lacked endorsements because it was copy from mortgage loan closing file created on day mortgagors closed loan, and the original note is subsequently endorsed); cf. In re Baroni, No. 12-10986, 2015 WL 6956664, at*1, 4 (9th Cir. Nov. 10, 2015) (finding genuine issue of material fact as to whether Nationstar was the holder of the note since one copy of note differed in several respects from another copy where endorsements were listed in different orders).

Here, the Respondents attempt to explain the discrepancies between the two notes through the deposition of Beverly DeCaro, a loan verification analyst for Wells Fargo, who was acting as the document custodian for U.S. Bank. DeCaro was designated by U.S. Bank as the person with knowledge of the matters relevant to this case pursuant to Mass. R. Civ. P. 30(b)(6). In particular, U.S. Bank was asked to identify person(s) with knowledge of U.S. Bank’s history and relationship with any Respondent, knowledge of contracts between U.S. Bank and other parties, and knowledge of current and former owners of the Mitchells’ Note along with date(s) the Note was transferred to each owner and the maintenance of such information by and through U.S. Bank, or any of its employees, agents, or attorneys, but not limited to the document custodian. See Pet. App., Exh. A, Exh. 14.

The Federal Rules of Civil Procedure were amended in 1970 to include Rule 30(b)(6), and thereafter substantially adopted by the Commonwealth, as a method to prevent corporations from using their size and complexity to their advantage by “bandying” their opponents with deponents who all disclaimed knowledge on the topics the adversary desired to investigate. Committee Note to 1970 amendment to Rule 30(b)(6), citing Haney v. Woodward & Lothrop, Inc., 330 F. 2d 940, 944 (4th Cir. 1964) (three different employees of insurer identified as capable of responding to inquiries about file but did not have knowledge). [Note 2] The amendment aimed to provide a solution to this “bandying” problem by implementing Rule 30(b)(6) as a discovery device for parties that faced corporations or other organizational parties.

Pursuant to Rule 30(b)(6), when a corporation designates an individual to testify, that person agrees to testify on the organization’s behalf and, in effect, testifies as though being the organization itself. Gleason v. Source Perrier, S.A., 28 Mass. App. Ct. 561 , 569 (1990). The designated person is to testify on matters not only known to the corporation or other entity, but also as to matters reasonably available to it. Baker v. St. Paul Travelers Ins. Co., 670 F.3d 119, 124 (1st Cir. 2012), citing Fed. R. Civ. P. 30(b)(6). Unlike other depositions, the subject matter of the inquiry identified in the notice of deposition, not the knowledge of any given individual, controls the designation. The notice must state with reasonable particularity the matters for the examination. Pina v. Children’s Place, 740 F.3d 785, 791 n. 6 (1st Cir. 2014). The burden is then on the corporate entity to identify a knowledgeable witness and to take reasonable steps to educate that designee. Foster-Miller, Inc. v. Babcock & Wilcox Canada, 210 F.3d 1, 17 (1st Cir. 2000). The designated witness has a duty of inquiry as well. See Short v. Hogan, No. 06-563-C, 2008 WL 2875561, at *1 (Mass. Super. Ct. May 30, 2008); Network Systems Architects Corp. v. Dimitruk, No. 06-4717-BLS2, 2010 WL 4057150, at *4 (Mass. Super. Ct. Sept. 22, 2010) (sanctioning defendant for its “cavalier approach to its duties under Rule 30(b)(6)” to prepare its designated witness for testimony). Attorneys representing entities which have received a 30(b)(6) notice must use care to select and prepare the designated witness and, if the designee lacks an ability to testify as to some of the topics even after preparation, they are obligated to notify the party taking the deposition in advance. See Calzaturficio S.C.A.R.P.A. s.p.a. v. Fabiano Shoe Co., 201 F.R.D. 33, 36-38 (D. Mass. 2001) (“Producing an unprepared witness is tantamount to a failure to appear at a deposition.”), quoting Starlight Int’l v. Herlihy, 186 F.R.D. 626, 639 (D. Kan. 1999).

Fourteen topics were identified in the deposition notice, including knowledge regarding the location of the note (and any allonges) at all times, along with the dates. Pet. App., Exh. A., Exh. 14. The original collateral file was produced at DeCaro’s deposition and was provided in photocopies to Respondents’ counsel in advance of the deposition for DeCaro to review. DeCaro testified that she saw the original Note in counsel’s office for the first time the night prior to her deposition. DeCaro Dep., at p. 21. Though DeCaro attested that she was the person most familiar with the deposition topics and had been deposed over one hundred times, her deposition testimony shows that she lacked knowledge regarding several of the topics disclosed in the deposition notice pertaining to the Mitchells’ loan. She primarily offered testimony about Wells Fargo’s general record keeping practices. Id. at pp. 7-8.

DeCaro testified that it was her belief that the entire collateral file with respect to the loan given to the Mitchells, including the original note, was received and uploaded to Wells Fargo’s files in July 2007. Id. at pp. 29-30. She testified she believed it was the original note based on the blue ink signatures on the document and based on the typical practice of depositing originals into the collateral file. DeCaro admitted she was not a document expert and could not conclusively state whether it was an original. Id. at pp. 26-27. DeCaro stated that the allonge found in the collateral file was not affixed to the original note, but it appeared as if it had been stapled together at one time. Id. at p. 130. When asked about the other inconsistencies between the purported original 2015 Note in the collateral file and the note sent in 2012 prior to the foreclosure, DeCaro did not have any specific knowledge as to why the 2012 Note contained a blank endorsement page and no allonge. Id. at pp. 132-135. She was also unable to describe several other documents generated by or coming from other entities sent to Wells Fargo that were part of the collateral file. Id. at pp. 31, 34-35. Because DeCaro was designated as a witness under Rule 30(b) (6) for U.S. Bank, this testimony is the testimony of U.S. Bank.

While there may be a logical explanation for the absence of the allonge and endorsement on the 2012 Note, none was provided through any other affidavits or depositions of U.S. Bank or MLN. In its deposition, U.S. Bank, through its witness DeCaro, was unable to provide a suitable explanation for why the 2012 Note differed from the purported original note produced in 2015, and failed to resolve material issues of fact regarding the validity of the note in this case. This dispute of fact precludes the court from issuing a decision at the summary judgment stage.

Respondents also rely on the G.L. c. 183 § 54B Affidavit of Asahia Brooks, Vice President of Loan Documentation at Wells Fargo, to establish that U.S. Bank was the lawful holder of the Note at foreclosure. Resp’t Facts, Exh. L. However, a § 54B affidavit does not serve as conclusive evidence that U.S. Bank was the lawful holder of the Note at the time of foreclosure. Such conclusive evidence may be established by a G.L. c. 244 § 35C affidavit, but § 35C does not apply to the case at hand, as it became effective in November 1, 2012 and notice of foreclosure in this case was published in the Winchester Star in August 2012.

Even in light of the unexplained discrepancies between the two notes, Respondents still maintain that U.S. Bank had the ability to foreclose as a nonholder in possession entitled to enforce the note. Under Massachusetts law, Article 3 of the Uniform Commercial Code is used to determine questions of title to negotiable instruments. Here, the instrument is a promissory note which contains the Mitchells’ unconditional promise to pay a certain amount to MLN. As such, the promissory note is a negotiable instrument. See G.L. c. 106, § 3–104. Article 3 provides that where a negotiable instrument is payable to an identified person, transfer of ownership of the instrument requires endorsement by the holder and transfer of possession of the instrument. G.L. c. 106, § 3–201. Article 3 also provides that an instrument is “transferred” when it is delivered by the holder for the purpose of giving the recipient the right to enforce the instrument. G.L. c. 106 § 3–203(a). Proper transfer of the instrument vests in the recipient any right of the transferor to enforce the instrument. G.L. c. 106 § 3–203(b). Even though a lender is not yet a “holder” under Article 3 because an allonge or endorsement is not attached, possession of the note and the related loan documents could cause the lender to be a “nonholder in possession of the instrument who has the rights of a holder,” that is one who can enforce the instrument as such under G.L. c. 106 § 3–301 and compel endorsement under G.L. c. 106 § 3- 203.

Respondents contend that their mere possession of the 2012 Note that was presented prior to the foreclosure, endorsed in blank, made U.S. Bank the holder of bearer paper with the right to enforce its terms. If the 2012 Note were the only version in existence, the Respondents might be correct in their argument that U.S. Bank was a nonholder in possession entitled to enforce the note. This is not the case. The 2015 Note, produced after the foreclosure, shows an endorsement to EMAX by MLN, and an allonge with an endorsement in blank by EMAX. The endorsement to EMAX specifically contradicts MLN’s endorsement in blank on the 2012 Note. Moreover, since the allonge of the 2015 Note is undated and unaffixed (and there has been no testimony regarding whether it was ever affixed), it is unclear at what time EMAX made the endorsement in blank that purportedly gave U.S. Bank its ability to enforce the Note and initiate foreclosure proceedings. The existence of the 2015 Note, produced subsequent to the foreclosure, creates a material issue of fact as to who actually held the Note at the time of foreclosure.

In short, there is a dispute of material fact as to whether U.S. Bank held the Note or was acting on behalf of the noteholder at the time of the foreclosure. This question must be tried, where the Respondents will bear the burden of production and proof. [Note 3]

Conclusion

For the foregoing reasons, the Respondents’ Motion for Summary Judgment is DENIED. A telephone status conference is set down for November 1, 2016 at 10:15 am.

SO ORDERED