Home JPMORGAN CHASE BANK, N.A., Successor in Interest by purchase from the FDIC as Receiver of Washington Mutual Bank F/K/A Washington Mutual Bank, F.A. v. JOHN S. NIAKAROS and JOHN S. NIAKAROS as Trustee of the 8-10 Seafoam Avenue Trust.

MISC 13-479399

December 13, 2016

Suffolk, ss.



John S. Niakaros, as Trustee of the 8-10 Seafoam Avenue Trust, owns a three-unit rental property in Winthrop. In 2007, Niakaros, individually, sought a personal loan from Washington Mutual Bank, f/k/a Washington Mutual Bank, F.A. (WaMu). He wanted to use the proceeds of the loan to pay off the mortgage on the Winthrop property, but did not want to grant a new mortgage on the property. WaMu agreed to the personal loan. At the closing, a mail-away witness closing, the closing attorney presented Niakaros with multiple documents, all directed to him individually as the borrower. These included a note and mortgage. Niakaros executed all these documents while stating to the closing attorney that he did not intend to grant a mortgage. The closing attorney said he would take care of it.

WaMu was taken over by the FDIC a year later, and its assets, including the loan to Niakaros, were sold to plaintiff JPMorgan Chase Bank, N.A. (JPMorgan). JPMorgan has realized that both the note and mortgage on the Winthrop property are given by Niakaros individually, not by the trust that owns the property. Moreover, the property is registered land and the mortgage was never registered, and JPMorgan does not have the original mortgage. JPMorgan has brought this action to reform the mortgage to name the trust as mortgagor and for an order that a copy of the reformed mortgage be registered. After trial, I find that the mortgage cannot be reformed because the evidence is that Niakaros asked for a personal loan, and WaMu gave it to him. JPMorgan's complaint will be dismissed with prejudice.

Procedural History

JPMorgan filed its Complaint to Remove Cloud on Title and Reform Mortgage (Compl.) on September 5, 2013, naming as defendants John S. Niakaros (Niakaros) and John S. Niakaros as Trustee of the 8-10 Seafoam Avenue Trust (Trust). The Complaint has four counts: Count I is for mistake and seeks a declaration allowing JPMorgan to register the subject mortgage, Count II is for unjust enrichment, Count III is for the reformation of the subject mortgage based on mutual mistake, and Count IV is for declaratory relief. Niakaros and the Trust filed their Answer on October 15, 2013 (Answer). On September 15, 2014, JPMorgan filed its Motion for Summary Judgment, Memorandum in Support of its Motion for Summary Judgment, Undisputed Material Facts, and Joint Appendix. Niakaros and the Trust filed their Opposition to the Plaintiff's Motion for Summary Judgment and Cross-Motion for Summary Judgment, Concise Statement of Facts, Motion to Strike, and Affidavit of James S. Heggie on October 14, 2014. On October 23, 2014, JPMorgan filed its Opposition to Defendant's Motion to Strike. On November 14, 2014, JPMorgan filed its Reply Brief in Support of its Motion for Summary Judgment and Opposition to Defendant's Cross-Motion for Summary Judgment. The Cross-Motions for Summary Judgment were heard on November 25, 2014. The court issued its Memorandum and Order Denying Cross-Motions for Summary Judgment on July 9, 2015 on the grounds that material facts were in dispute and ordered the case set down for trial. The pretrial conference was held on September 24, 2015. Niakaros and the Trust filed their Motion in Limine Regarding Introduction of Evidence of Contents of Mortgage and Other Loan Documents on December 21, 2015, and JPMorgan filed its Opposition on January 7, 2016. The Motion in Limine was heard and denied without prejudice on January 12, 2016.

The trial was held on January 20, 2016. The court heard testimony from John Ruggieri- Lam, Jeremy Summerford, and John Niakaros. Exhibits 1 through 22 were marked. Defendants' Motion for Mandatory dismissal was denied. JPMorgan filed its Proposed Rulings of Law, Request for Impoundment of Certain Exhibits, and Motion to Reconsider Evidentiary Ruling on March 14, 2016, and filed its Proposed Findings of Facts on March 15, 2016. Niakaros and the Trust filed their Trial Memorandum on March 14, 2016. Closing arguments were heard on March 18, 2016. The Request for Impoundment of Certain Exhibits was allowed, and Exhibits 5, 8, 16, and 22 were impounded. Niakaros and the Trust filed their Opposition to Motion for Reconsideration on March 29, 2016. This decision follows.

Plaintiff's Motion to Reconsider Evidentiary Ruling

Plaintiff's Motion to Reconsider Evidentiary Ruling asks me to reconsider the limited admission of Exhibits 14 (WaMu Document Header), 15 (Collateral Valuation Report), and 16 (WaMu Credit Investigation of Niakaros). The basis for the limited admission was that no one from WaMu, the bank originating the subject loan and mortgage, testified as to these records. Only a person from JPMorgan, who took these records from WaMu when it acquired WaMu's assets from the FDIC, testified about these records as they appeared in JPMorgan's files.

JPMorgan correctly points out that business records of a predecessor bank are admissible as business records of a succeeding bank, and therefore, as successor, it "need not provide testimony from a witness with personal knowledge regarding the maintenance of a predecessor's business records." Beal Bank, SSB v. Eurich, 444 Mass. 813 , 818-819 (2005). Plaintiff's Motion to Reconsider Evidentiary Ruling is ALLOWED, and Exhibits 14, 15, and 16 are admitted under G.L. c. 233, § 78, without limitation or restriction.

Findings of Fact

Based on the facts stipulated by the parties, the exhibits and testimony at trial, and my assessment as the trier of fact of the witnesses' credibility, I find the following facts:

1. JPMorgan is a corporation with a mailing address of 3415 Vision Drive, Columbus, Ohio. Exh. 9; Compl. ¶ 1; Answer ¶ 1.

2. Niakaros lives at 8 Cliff Street, Arlington, Massachusetts. The Trust has a last known mailing address of the same. Exh. 1; Tr. 101.

3. On December 30, 2004, Niakaros gave a mortgage on the Property to Option One Mortgage Company, which was filed for registration in the Suffolk County Registry District of the Land Court (registry) as Document No. 694282 and noted on Certificate of Title No. 122274 (Option One Mortgage). Exh. 7; Tr. 103-104.

4. On July 6, 2005, Niakaros, as an individual, conveyed the property located at 8-10 Seafoam Avenue in Winthrop (Property) to Niakaros, as Trustee of the Trust, by a quitclaim deed filed for registration in the registry on July 8, 2005 at Book 607, Page 74 as Document No. 704063, as noted on Certificate of Title No. 122274. The Property, which is the Trust's only asset, is a three-unit residential rental building. Niakaros' children are the beneficiaries of the Trust. Exhs. 1, 6; Tr. 101-103.

5. In 2007, Niakaros applied for a loan from WaMu in order to pay off the Option One Mortgage. Niakaros asked WaMu for a personal loan. He did not want the loan to be secured by a new mortgage. Tr. 105-106, 113-114, 136.

6. Niakaros testified that when he first sought the personal loan from WaMu, he spoke with a WaMu loan officer, and the loan officer told him to "give me everything you've got" to see if he could qualify for a personal loan. Niakaros disclosed the rental income he received from the Trust on his application. Niakaros knew what a mortgage entailed and did not want a mortgage on the Property. Niakaros used the WaMu loan to pay off his Option One Mortgage. Tr. 105-106, 113-114, 136-137; Exh. 10.

7. WaMu prepared a "Collateral Valuation Report" denoting the Property as owner occupied with an appraised value of $550,000.00. The valuation report was dated August 9, 2007. Exh. 15; Tr. 82-83.

8. Sometime before the closing, Niakaros called a WaMu representative to confirm he was receiving a personal loan. The representative assured Niakaros that the loan would not have anything to do with the Trust and that he could still obtain a loan based on his income. Exh. 10, ¶ 2.

9. Niakaros went to an office to sign documents regarding the WaMu loan on September 4, 2007, and did not go to the office again thereafter. The closing was conducted as a mail-away witness closing. WaMu conducted most of the transactional aspects of the closing, prepared all the closing documents, and sent the closing documents to the closing attorney, John Ruggieri-Lam. Mr. Ruggieri-Lam conducted many such closings on behalf of WaMu in the 2007 time period. Typically, he simply received the documents from WaMu and, at the closing, explained the documents to the borrower, had them executed, sent them back to WaMu. He was not responsible for performing a title search. Exhs. 10, 12; Tr. 24-29, 38, 43-44, 47-48, 112-113, 139-144.

10. Niakaros executed a note from "John S. Niakaros," individually and not as trustee, in favor of WaMu in the amount of $440,000.00. The note is titled "WaMu Mortgage Plus (TM) Agreement and Disclosure" (Note), includes a "Property Address" of 8-10 Seafoam Ave., Winthrop, MA, has a handwritten number on the top of the first page and a printed account number, the WaMu loan number. The Note has a maturity date of September 5, 2037, and is dated August 31, 2007. Niakaros does not remember if he saw and signed the Note. Exh. 13; Tr. 32, 34-38, 109-110.

11. Niakaros signed a mortgage from "John S. Niakaros", individually and not as trustee, in the amount of $440,000.00 in favor of WaMu, titled "Open-End Mortgage Deed" (Mortgage), and dated September 4, 2007. The mortgage has the WaMu loan number and purports to attach property described by Exhibit A of the Mortgage "[REGISTERED LAND] . . . THAT CERTAIN PARCEL OF LAND . . . SITUATED ON SEA FOAM AVENUE . . . FILED IN THE LAND REGISTRATION OFFICE AS PLAN NO. 5274-a, . . . TITLE NO. 10632." Exh. 3.

12. Niakaros testified more than once that when he saw the Mortgage form, he asked Mr. Ruggieri-Lam, the closing attorney, why the document read "mortgage." The attorney said it was a mistake and that he would take care of it, so Niakaros proceeded with the closing. Mr. Ruggieri-Lam testified he does not remember the particular closing at hand, but remembers the property name. He testified that he would have stopped and asked the bank for instructions if a borrower asked the attorney to rip up or destroy notarized documents, but he has never encountered such at a mortgage closing. In his review of the documents prior to trial, Mr. Ruggieri-Lam testified that "they were prepared for an individual to sign and an individual signed them." I credit Mr. Niakaros' testimony at trial. I find that the Mortgage reflects Niakaros' agreement with WaMu that Niakaros would receive a personal loan. Tr. 30-31, 40, 42, 106-109, 141-144; Exh. 10.

13. Niakaros signed or initialed a variety of other documents at the closing. He signed an "Owner's Affidavit" dated August 31, 2007, notarized "9/ /07 [sic]", which recites that "[s]igners are the only owners of the real property" and that "[t]here are no matters pending against the Owner that would . . . impair the title between the last abstract continuation and the recording of the Bank's new loan and Owner has not and will not execute any instrument that would adversely affect the title or interest of the Bank." Niakaros does not remember seeing or signing the document. Exh. 17; Tr. 44-46, 110-111.

14. Niakaros signed a "Borrower(s) Certificate – Net Tangible Benefit", pre-dated August 31, 2007, which refers to refinancing a mortgage. Niakaros signed an "Authorization for Release of Information", pre-dated August 31, 2007, which mentions WaMu will make arrangements for an appraisal to be done. Niakaros signed a "Disbursement Instruments" document, pre-dated August 31, 2007, that inconspicuously includes lender fees such as flood determination and property verification fees. Exhs. 11, 18, 20; Tr. 111-119.

15. Niakaros signed a "Loan Payoff Letter" dated August 31, 2007, allowing WaMu to payoff Niakaros' Option One Mortgage Number 15044217 in the amount of $436,488.24. Exh. 8.

16. Niakaros signed a "Lead Paint Certification and Indemnification Agreement" dated September 4, 2007, which refers to the loan being secured by the Property. Niakaros signed a "Notice of Right to Cancel Secured Line of Credit Account", dated September 4, 2007, which includes a collateral address of the Property. Niakaros signed an "Automatic Loan Payment Authorization (Consumer Loans)," dated September 4, 2007. See Exhs. 19, 21-22; Tr. 111-119.

17. Niakaros testified that he did not read all of the documents before signing them. I credit his testimony. Tr. 111, 118-119.

18. There are discrepancies in the dates of these instruments. The Note is dated August 31, 2007, the Mortgage was dated September 4, 2007, and that the Owner's Affidavit was pre-printed with "9/_/07" and was missing the day of the month. I find the closing did take place on September 4, 2007. September 4, 2007 was the next business day following August 31, 2007. The discrepancies in dates show that the closing was originally intended for August 31, 2007 but was changed at the last minute to September 4, 2007 with WaMu not bothering to change the dates of all the instruments. Exhs. 3, 13, 17.

19. On October 23, 2007, a discharge of the Option One Mortgage, dated September 14, 2007, was filed for registration in the registry at Book 607, Page 74 as Document No. 744292, as noted on Certificate of Title No. 122274. Exh. 7.

20. The Mortgage was never filed for registration in the registry. Compl. ¶ 5; Answer ¶ 5.

21. By a Purchase and Assumption Agreement dated September 25, 2008, the FDIC sold, assigned, transferred, and conveyed to JPMorgan "all right, title, and interest of [the FDIC] in and to all of the assets . . . of the Failed Bank [WaMu] whether or not reflected on the books of [WaMu] as of Bank Closing" as well as all of WaMu's liabilities. The only assets not purchased by JPMorgan were assets unrelated to the loan at hand, such as surety bonds, professional liability insurance, and leased bank premises and furniture. The Purchase and Assumption Agreement further notes that "[JPMorgan] specifically purchases all mortgage servicing rights and obligations of [WaMu]." Tr. 64-70; Exh. 2, § 2.1, § 3.1, Schedule 3.5.

22. The electronic business records of WaMu loans that JPMorgan assumed are kept in the same document imaging system as JPMorgan's own loans. Assumed loans can be looked up using the old WaMu loan number or the new JPMorgan loan number. Tr. 70-71.

23. JPMorgan has in its business records a WaMu cover sheet for loan documents for the loan number associated with borrower Niakaros. JPMorgan also has in its records WaMu's Credit Investigation report of borrower Niakaros, with the WaMu loan number. Exhs. 14, 16; Tr. 72-76, 83-84.

24. JPMorgan does not currently possess the original Mortgage nor the Note. JPMorgan has image copies of the Note and Mortgage in its business records, but does not have the originals of the Note and Mortgage in its physical file. Tr. 79-82.

25. In 2010, Niakaros signed a Loan Modification Agreement extending the maturity date on the original promissory note "dated September 8, 2007, in the original principal amount of $440,000.00, and secured by a lien (the "Mortgage") on . . . 8-10 SEAFOAM AVE. WINTHROP MA 02152 . . ." to April 1, 2040. The Loan Modification Agreement was issued by JPMorgan, dated March 29, 2010, and notarized April 1, 2010. Niakaros testified that he did not read the document to notice it included language on mortgages and security. I credit his testimony. Exh. 4; Tr. 122-123.

26. In 2012, Niakaros filled out a request for loan modification titled "Request for Mortgage Assistance" associated with the loan number for his loan. Niakaros testified that he called JPMorgan for a modification and the bank personnel instructed that he download the modification form he filled out. Niakaros also testified that he mentioned the Property in the application because the loss of rental income from the Property contributed to his inability to make loan payments. I credit his testimony. Niakaros filled out the forms to the best of his ability, interpreting which information should be placed in which category on the form as best he could. He did not intend to state that his loan was secured by the Mortgage. Exh. 5; Tr. 126–132.

27. I credit Niakaros' testimony. I find that in 2007, Niakaros asked WaMu for a personal loan which he intended to use to pay off the Option One Mortgage, and that he did not want a loan secured by a mortgage on the Property. I find that WaMu agreed to give Niakaros a personal loan in the amount of $440,000.00. I find that the loan documents prepared by WaMu and executed at closing reflect WaMu's agreement to give Niakaros a personal loan, in that all the documents, including the Note and the Mortgage, are from Niakaros individually and not from the Trust which holds title to the Property.


JPMorgan seeks a judgment reforming the Mortgage to name the Trust rather than Niakaros individually as mortgagor and ordering the registry to accept a copy of the reformed Mortgage for filing for registration. At trial, three questions were raised. The first is whether JPMorgan has an interest in the Note and Mortgage sufficient to give it standing to bring suit. The second is whether there is a mutual mistake in the naming of Niakaros as mortgagor in the Mortgage justifying reformation of the Mortgage and registration of a copy. The third issue is whether Niakaros is so unjustly enriched by non-reformation of the Mortgage that it should be reformed.

Standing. Niakaros argues that JPMorgan does not have standing to bring suit because it does not have enough evidence to prove it is the holder of the Note, the Mortgage, or the underlying loan. Niakaros obtained the loan from WaMu, and executed the Note and Mortgage to WaMu in September 2007. WaMu failed and was placed in receivership by the FDIC on September 25, 2008. See Washington Mut. Bank v. Berson Ltd. Partnership, 20 LCR 90 , 91 (2012). Under federal law, the FDIC succeeded to "all rights, titles, power, and privileges . . . title to the books, records, and assets of any previous conservator or other legal custodian" of WaMu, the failed bank, as receiver. 12 U.S.C. § 1821(d)(2)(A). The FDIC may "transfer any asset or liability of [the failed bank] . . . without any approval, assignment, or consent with respect to such transfer." Id. at § 1821(d)(2)(G)(i)(II). In other words, federal law "specifically authorizes the FDIC to transfer assets of a failed financial institution ‘without . . . assignment.'" Demelo v. U.S. Bank Nat'l Ass'n, 727 F.3d 117, 125 (1st Cir. 2013), quoting 12 U.S.C. § 1821(d)(2)(G)(i)(II). This is precisely what the FDIC did with WaMu's assets. The FDIC assigned all of the assets and liabilities it received as receiver of WaMu to JPMorgan by a Purchase and Assumption Agreement dated September 25, 2008. Exh. 2. The Purchase and Assumption Agreement recites that JPMorgan received "all right, title, and interest of the [FDIC] in and to all of the assets . . . of [WaMu] whether or not reflect on the books of [WaMu]." Id. at § 3.1 (emphasis added). Since loans and mortgages were not assets excluded from the Purchase and Assumption Agreement, such as professional liability insurance or leased furniture, JPMorgan received WaMu's interests in loans and mortgages, including the interest in the note and loan at issue. Id. at Schedule 3.5. JPMorgan's records establish that it received Niakaros' WaMu loan. Not only can bank personnel look up Niakaros' WaMu loan information from JPMorgan's own computer system, JPMorgan has in its records a WaMu cover sheet for the loan documents, Owner's Affidavit, Borrower Certificate, Lead Paint Certification, and Automatic Loan Payment Authorization, among others, and image copies of the Note and Mortgage. In short, JPMorgan holds the Niakaros' loan, and Niakaros' argument that JPMorgan lacks standing due to a lack of assignment is unfounded. See Washington Mut. Bank, 20 LCR at 91-92.

Niakaros also argues that under the holdings in Eaton v. Federal Nat'l Mtge. Ass'n, 462 Mass. 569 (2012), and JPMorgan Chase & Co. v. Casarano, 81 Mass. App. Ct. 353 (2012), an entity must possess the actual promissory note in order to record the accompanying security interest, and that JPMorgan is therefore unable to record the mortgage even if it is proper because the note is lost. This is an incorrect reading of Eaton and Casarano. The holding in Eaton applies "only to mortgage foreclosure sales for which the mandatory notice of sale has been given after the date of this opinion, " requiring that the holder of a mortgage also hold the note at the time of foreclosure in order to effectuate a statutory power of sale. Eaton, 462 Mass. at 589. Here, JPMorgan is not looking to foreclose on the Property, but only to reform the Mortgage and register a copy. Eaton therefore does not apply at this time. In Casarano, the Appeals Court affirmed the Land Court judge's decision to refuse the recording of a mortgage because the mortgage was lacking material terms imputable to the lost note, of which there is no copy, thus making it impossible to determine whether the statute of limitations has run. See Casarano, 81 Mass. App. Ct. at 356-357. In this case, JPMorgan has copies of the Note and Mortgage in its possession and their terms are ascertainable. Accordingly, JPMorgan has standing to bring suit against Niakaros because the FDIC conveyed the Note, Mortgage, and loan to it by the Purchase and Assumption Agreement. It is entitled to seek reformation of the Mortgage.

Mutual Mistake and Reformation. JPMorgan argues that the Mortgage should be reformed because WaMu and Niakaros made a mutual mistake in not having the Mortgage be given by the Trust, which holds the Property, or that WaMu made a mistake in not naming the Trust and Niakaros should have reasonably known of such mistake. "[A] court acting under general principles of equity jurisprudence has broad power to reform, rescind, or cancel written instruments, including mortgages, on grounds such as fraud, mistake, accident, or illegality." Beaton v. Land Court, 367 Mass. 385 , 392 (1975); see G.L. c. 185, § 1(k) ("[The Land Court] shall also have original jurisdiction . . . of . . . [a]ll cases and matters cognizable under the general principles of equity jurisprudence"). Reformation based on mistake will only be allowed if there is "full, clear, and decisive proof that the instrument failed to express the intent which both parties had in making it." New York, New Haven, and Hartford R.R. Co. v. Plimpton, 238 Mass. 337 , 340 (1921); Polaroid Corp. v. Travelers Indem. Co., 414 Mass. 747 , 756 (1993).

I find that JPMorgan has not established by full, clear, and decisive proof that WaMu and Niakaros made a mutual mistake in executing the Mortgage from Niakaros individually. At trial, the only witness who had memory of and could attest to the intent of the parties was Niakaros. I credit Niakaros' testimony, and so find, that his intent from the beginning was to acquire a personal loan and not to encumber his rental property. Niakaros approached WaMu asking for a personal loan in 2007. He disclosed his interest in the Trust because he needed to report his personal income, which included income from the Trust, to qualify for a personal loan. Before closing, he again spoke to a WaMu representative who confirmed that this would be a personal loan and not a mortgage. The bank representative assured him that the loan would have nothing to the do with the Trust and that he could still obtain a loan based solely on his income. When Niakaros saw the Mortgage form at closing, he told the closing attorney he wanted a personal loan, not a mortgage, and the attorney told Niakaros he would handle the issue. Niakaros admits that when handed the large stack of papers to sign, he did not carefully read each document to notice that many of the documents referred to the Property as collateral or that there will be fees associated with the handling of property. When Niakaros called JPMorgan in 2012 asking for a loan modification, the bank personnel directed him to download a request for mortgage modification form, which he downloaded and filled out as directed. Thus, on three or four different occasions, Niakaros told both WaMu and JPMorgan that he wanted or had a personal loan, and the banks led him to use forms related to mortgages, which he dutifully signed.

The closing attorney does not remember the closing and cannot attest to the intent of WaMu nor Niakaros. This was a mail-away witness closing, one of many done by the attorney on behalf of WaMu. The closing attorney did not prepare the closing documents; indeed, he barely reviewed them. He had no knowledge of the terms of the agreement between WaMu and Niakaros. While the closing attorney testified that he would have stopped a closing and asked WaMu for further instructions if a borrower asked him to rip up the documents he already notarized, I credit Niakaros' testimony that he questioned why he was being asked to sign the Mortgage and that the closing attorney said he would take care of it. Niakaros, a borrower who had little bargaining power with the bank, trusted that the attorney would take care of the loan- mortgage discrepancy.

As no one from WaMu with knowledge or memory of the loan testified, WaMu's intent can only be inferred from its actions and the words of its contracts with Niakaros. In general, "[t]o ascertain intent, a court considers the words used by the parties, the agreement taken as a whole, and surrounding facts and circumstances." Massachusetts Municipal Wholesale Electric Co. v. Danvers, 411 Mass. 39 , 45-46 (1991). Even though mortgages, as contracts, should be construed liberally using "[j]ustice, common sense and the probable intention of the parties . . . ‘words themselves remain the most important evidence of intention.'" Shane v. Winter Hill Federal Sav. & Loan Ass'n, 397 Mass. 479 , 483-484 (1986), quoting Stop & Shop, Inc. v. Ganem, 347 Mass. 697 , 701 (1964) and Robert Indus., Inc. v. Spence, 362 Mass. 751 , 755 (1973). The plain words of the Note and Mortgage are consistent with Niakaros' description of the loan—that it was a loan to him individually and was not intended to be secured by a mortgage on the Property owned by the Trust. This suggests that the Note was only meant as evidence of a loan to Niakaros individually and not Niakaros as a trustee.

WaMu may have ultimately intended to obtain a mortgage on the Property in connection with this loan. But that is only speculation. What the evidence shows is that Niakaros asked for a personal loan, WaMu agreed to give him a personal loan, and WaMu prepared closing documents showing a personal loan. There is no "full, clear, and decisive proof" that both parties intended the loan to encumber the Property and that the Mortgage given by Niakaros individually was meant to have been given by the Trust. To the contrary, the evidence tends to show that Niakaros meant to encumber himself individually, and if the granting of a personal loan instead of a loan secured by the Property was a mistake, it was a unilateral mistake on the part of WaMu that I cannot and will not correct.

Unjust enrichment. JPMorgan argues that the court may reform a mortgage when it is necessary to prevent unjust enrichment. Bank of New York Mellon v. Robinson, 19 LCR 74 , 75 (2011). "Unjust enrichment is defined as ‘retention of money or property of another against the fundamental principles of justice or equity and good conscience.'" Santagate v. Tower, 64 Mass. App. Ct. 324 , 328 (2005), quoting Taylor Woodrow Blitman Constr. Corp. v. Southfield Gardens Co., 534 F.Supp. 340, 347 (D. Mass. 1982). To determine whether a benefit is just, courts look at "the reasonable expectations of the parties." Community Bldrs., Inc. v. Indian Motorcycle Assocs., 44 Mass. App. Ct. 537 , 560 (1998). JPMorgan argues that Niakaros would be unjustly enriched if the Mortgage was not reformed to encumber the Property. This is based on the premise that the parties intended to secure the loan by a mortgage on the Property owned by the Trust. As I have found, Niakaros' intention from the beginning was to obtain a personal loan, and WaMu agreed. Where the reasonable expectation of the parties was to give and receive a personal loan unrelated to the Property, reforming the Mortgage to encumber the Property would instead unjustly enrich JPMorgan. Moreover, Niakaros does not dispute he owes JPMorgan money in the form a loan. Therefore, he is not unjustly enriched as he is still bound by the debt obligation he sought.

Ultimately, WaMu and JPMorgan, on three or four separate occasions, expressly reassured Niakaros that he was receiving or had obtained a personal loan, and there is no clear and convincing evidence he or they intended otherwise. The Note and Mortgage addressed to Niakaros, individually, reflect that. Whether WaMu secretly intended the loan to be secured by a mortgage on the Property is irrelevant, because Niakaros relied on WaMu's statements to him and went forward with signing the documents showing he was receiving a personal loan with the intention and expectation he was receiving a personal loan. Based on the foregoing, Niakaros received a personal loan and is not unjustly enriched.


There are no grounds for reforming the Mortgage, either on the basis of mutual mistake or unjust enrichment. Judgment shall enter dismissing Plaintiff's Complaint with prejudice.

Judgment accordingly.