ROBERT R. GAMBEE vs. WELLS FARGO BANK, N.A. and HSBC BANK, USA, N.A., as Trustee for MLMI 2006-AF2.

Plaintiff Robert R. Gambee ("Gambee") commenced this action by filing an unverified Complaint (the "Complaint") on December 29, 2016, seeking declaratory relief, pursuant to G.L. c. 185, §1(k), with respect to a January 21, 2010 foreclosure sale (the "Foreclosure Sale") of property formerly owned by Gambee, located at 7 Wingspread Lane in Nantucket ("Locus"). Specifically, Gambee sought the following judicial declarations:

1. That in relation to the [Foreclosure Sale] of [Locus], [Defendant HSBC Bank USA, N.A., as Trustee for MLMI 2006-AF2 ("HSBC")] improperly gave notice of the sale.

2. That the Notice of Sale utilized by [HSBC] in relation to the [Foreclosure Sale] of [Locus] was invalid.

3. That in relation to the [Foreclosure Sale] of [Locus], [HSBC] utilized an invalid affidavit regarding the sale and compliance with MGL Chapter 244.

4. That in relation to the [Foreclosure Sale] of [Locus], [HSBC] conducted an invalid foreclosure sale.

5. That the current owners of [Locus] do not hold valid title to the property. [Note 1]

Gambee also sought various other forms of related relief with respect to the Foreclosure Sale. [Note 2]

On January 31, 2017, Defendants Wells Fargo Bank, N.A. ("Wells Fargo") and HSBC (together, the "Banks") filed, in lieu of a responsive pleading, a motion seeking the dismissal of this action pursuant to Mass. R. Civ. P. 12(b)(6) for failure to state a claim. The basis of this motion was the Banks' claim that Gambee's causes of action asserted herein were barred as res judicata. [Note 3] The Banks' motion was supported by a memorandum of law and five documentary exhibits. On March 3, 2017, Gambee filed his opposition to the Banks' motion to dismiss, which consisted of a legal memorandum and two exhibits. The Banks filed a reply brief (with one additional exhibit) on March 10, 2017. A motion hearing was held on March 23, 2017, and this court took the Banks' motion to dismiss under advisement at that time.

Based upon the pleadings and exhibits annexed to the parties' motion papers, the following facts are undisputed for the purpose of the Banks' motion to dismiss:

1. Gambee acquired title to Locus (which is registered land) by deed dated December 6, 2004, which was registered in the Nantucket County Registry District (the "Registry") as Document 109982 on Certificate of Title No. 21558.

2. On August 14, 2006, Gambee granted two mortgages to Wells Fargo. The first such mortgage was a purchase money mortgage that was collateralized by Locus, and which secured a promissory note in the sum of $5,000,000.00 (the "Mortgage"). It was registered in the Registry as Document No. 117265 on Certificate of Title 21558. The second mortgage of the same date from Gambee to Wells Fargo is not at issue in this case. [Note 4]

3. By assignment of mortgage dated January 14, 2009 ("the Assignment"), Wells Fargo, through its attorney in fact, assigned the Mortgage to HSBC. The Assignment was registered in the Registry as Document No. 216196 on Certificate of Title 21558. [Note 5]

4. At or around the time of the Assignment, Gambee defaulted on the promissory note secured by the Mortgage. Thus, on January 25, 2009, HSBC filed an action against Gambee under the Servicemember's Civil Relief Act entitled HSBC Bank USA, N.A. v. Gambee, Land Court Case No. 09 MISC 392380 (KFS). Gambee was duly served in that action, did not challenge HSBC's standing, and later was defaulted. Judgment entered against him on July 14, 2009.

5. Thereafter, HSBC, through its attorney in fact, caused notice of a foreclosure sale of Locus (the "Notice of Sale") to be published in The Nantucket Inquirer and Mirror on June 18, 2009, June 25, 2009, and July 2, 2009 and mailed to Gambee, as required by G.L. c. 244, §§ 14-15. Thereafter, HSBC conducted a foreclosure auction sale of Locus on January 21, 2010 (the "Foreclosure Sale"). [Note 6]

6. The winning bid at the Foreclosure Sale was $5,968,000.00, submitted by Rhoda Weinman. She in turn assigned that bid to Seven Wingspread Lane LLC, which thus took title to Locus by foreclosure deed dated January 28, 2010 (the "Foreclosure Deed"). The Foreclosure Deed—which included copies of an affidavit of sale (the "Affidavit of Sale") and proof of the assignment of bid—was registered as Document No. 129861 on Transfer Certificate of Title No. 23497, upon which Certificate of Title 21558 was cancelled.

7. Three years later, Gambee brought an action challenging the validity of the Foreclosure Sale in Gambee v. Wells Fargo Bank, N.A., Land Court Case No. 13 MISC 477140 (KCL) ("Gambee I"). Gambee's primary argument in this case was that the Assignment was invalid, and thus that the Mortgage had not properly been assigned to HSBC. [Note 7] By Memorandum and Order dated November 5, 2013, the court (Long, J.) denied this claim, found that the Assignment had been "valid and binding", and thus entered Judgment of the same date dismissing the Complaint in Gambee I in its entirety, with prejudice. [Note 8]

8. Also in 2013, Gambee filed a separate lawsuit in Suffolk County Superior Court (later removed to federal court by the Banks) ("Gambee II"), asserting claims against the Banks sounding in fraud, negligent misrepresentation, breach of the implied covenant of good faith and fair dealing, and unjust enrichment with respect to the origination of the Mortgage and the Banks' alleged refusal to negotiate a loan modification thereof. By Decision dated January 9, 2014, the Gambee II court granted the Banks' motion to dismiss, finding, among other things, that Gambee had failed to allege actionable claims. Gambee v. Wells Fargo Bank, N.A. Civ. Action No. 13-10753-GAO (D. Mass. Jan. 9, 2014); aff'd, Case No. 14-1164 (1st Cir. Aug. 5, 2014). [Note 9]

9. Gambee filed this action on December 29, 2016, once again challenging the validity of the Assignment and subsequent Foreclosure Sale. [Note 10]

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The Banks have now moved to dismiss Gambee's Complaint, arguing that Gambee's claims are barred as res judicata. Gambee disputes this claim. [Note 11] In deciding this Mass. R. Civ. P. 12(b)(6) motion to dismiss, I am required to accept as true all well-pleaded allegations in the Complaint, and to draw all reasonable inferences that may be drawn from those allegations. Curtis v. Herb Chambers 1-95 Inc., 458 Mass. 674 , 676 (2011). Legal conclusions couched as factual allegations, however, are not accepted as true. Schaer v. Brandeis Univ., 432 Mass. 474 , 477 (2000). The court will then examine the Complaint to determine if there are "factual 'allegations plausibly suggesting (not merely consistent with)' an entitlement to relief." Iannacchino v. Ford Motor Co., 451 Mass. 623 , 636 (2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007) (abrogating Conley v. Gibson, 355 U.S. 41 (1957))). [Note 12] Whether dismissal under Rule 12(b)(6) is warranted is left to the discretion of the court. Mmoe v. Commonwealth, 393 Mass. 617 , 618 (1985).

As noted, the Banks' primary argument is that Gambee's claims are barred by the doctrine of res judicata—also referred to as claim preclusion. This doctrine "makes a valid, final judgment conclusive on the parties and their privies, and bars further litigation of all matters that were or should have been adjudicated in the action." Heacock v. Heacock, 402 Mass. 21 , 23 (1988). It is based upon "policy considerations that underlie the rule against splitting a cause of action, and is based on the idea that the party to be precluded has had the incentive and opportunity to litigate the matter fully in the first lawsuit." Massaro v. Walsh, 71 Mass. App. Ct. 562 , 565 (2008) (quotation omitted); see also Bagley v. Moxley, 407 Mass. 633 , 638 (1990) ("The plaintiffs were not entitled to pursue their claim of ownership through piecemeal litigation, offering one legal theory to the court while holding others in reserve for future litigation should the first theory prove unsuccessful.").

To validly assert the defense of claim preclusion, a party must establish three elements: "(1) the identity or privity of the parties to the present and prior actions, (2) identity of the cause of action, and (3) prior final judgment on the merits." Kobrin v. Bd. of Registration in Med., 444 Mass. 837 , 843 (2005) (quotation omitted). Where these elements are present, claim preclusion "will be applied to extinguish a claim even though the plaintiff is prepared in the second action to present evidence, grounds, or theories of the case not presented in the first action or to seek remedies or forms of relief not demanded in the first action." Massaro, 71 Mass. App. Ct. at 565.

In the present case, the first and third of these elements are clearly satisfied, since the parties in the present case are identical to those in Gambee I and Gambee II, which both were resolved by final judgments dismissing Gambee's claims on their merits. This leaves only the second element: identity of claims.

As to the question of identity of claims, Massachusetts courts "have adopted a broad transactional approach to the application of res judicata." Korn v. Paul Revere Life Ins. Co., 83 Mass. App. Ct. 432 , 436 n.2 (2013). Under this broad approach, courts look to whether the claims asserted in both actions "pertain to a common nucleus of operative facts." Boyd, 7 Mass. App. Ct. at 164. So long as such common facts are in play, res judicata can be applied to claims that derive from the "same transaction or series of connected transactions." St. Louis v. Baystate Med. Center, Inc., 30 Mass. App. Ct. 393 , 399 (1991); see also Massaro, 71 Mass. App. Ct. at 565 ("[A] valid and final judgment [in the prior action] extinguishes . . . all rights of a plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transaction, out of which the action arose." (quotation omitted)); Bendetson v. Bldg. Inspector of Revere, 36 Mass. App. Ct. 615 , 619 (1994).

Where claims raised in subsequent litigation are found to pertain to the same transaction or series of transactions as were litigated in a prior case, the general rule cited above still applies: "[w]ith respect to the second element, claim preclusion will apply even though a party is prepared in a second action to present different evidence or legal theories to support his claim or seeks different remedies." Charlette v. Charlette Bros. Foundry, Inc., 59 Mass. App. Ct. 34 , 44 (2003); see also Booth v. Augis, 72 Mass. App. Ct. 164 , 169 (2008) ("[A]ll legal theories supporting a claim [must] be presented when the opportunity [is] available". (quotation omitted)). Thus, "to bring claim preclusion into play, a cause of action need not be a clone of the earlier action." Korn, 83 Mass. App. Ct. at 437, n.3 (quotation omitted). Rather, a party is "precluded from litigating not only those claims that were actually decided in the [prior] case but also those that could have been brought in that action." Bui v. Ma, 62 Mass. App. Ct. 553 , 562 (2004).

In his Complaint, Gambee contends that the Foreclosure Sale was improper because, he claims, the Assignment and Affidavit of Sale were invalid, and because the Notice of Sale was allegedly insufficient (in violation of G.L. c. 244, §§ 14 & 15). [Note 13] As an explanation for why he failed to raise these claims in either Gambee I or Gambee II (to the extent they are not outright duplications of his claims raised in those prior cases), Gambee asserts that he did not learn of the alleged deficiencies with respect to the Assignment and Foreclosure Sale until late 2014, and thus that he "could not have brought this claim in either of the two prior actions". At oral argument, Gambee further explained that he was led to believe that he might have the claims he has now raised in this action as a result of a conversation with an attorney he had at some point prior to filing this action.

Under the case law cited above, this explanation is clearly inadequate because there is no indication that the supposedly "new" information obtained by Gambee did not exist at the time of both Gambee I and Gambee II. As was the case in Massaro, 71 Mass. App. Ct. at 567, "[n]othing stood in [the plaintiff's] way to prevent him from pursuing, through discovery, a factual basis to support his fraud-based claims." It was thus Gambee's responsibility (irrespective of whether he was self-represented) to discover the information and present any evidence with regard to his present claims. As such—and because none of the exceptions to the rule against claim-splitting are applicable here— Gambee's claims are properly described as matters that "should have been adjudicated in the [prior] actions." Heacock, 402 Mass. at 23.

Gambee's claims here thus present the exact circumstances that the doctrine of res judicata was designed to prevent. Whether the Assignment was valid (and whether it occurred at all), whether the Notice of Sale was adequate, and whether the Affidavit of Sale was proper were all specifically adjudicated in Gambee I. [Note 14] Gambee's attacks regarding these issues may have been articulated slightly differently here, but they still nonetheless arise out of the "same transaction or series of connected transactions", Saint Louis, 30 Mass. App. Ct. at 399, surrounding the Banks' foreclosure upon the Mortgage and the subsequent Foreclosure Sale. Underlying this sequence of events is the corollary fact that the Mortgage was validly assigned from Wells Fargo to HSBC by the Assignment, that the Notice of Sale was proper, and that the Affidavit of Sale was valid. See Bui, 62 Mass. App. Ct. at 562 (all facts necessary to reach the conclusion of law in a prior action subject to claim preclusion). Thus, all facts relating to the underlying validity of the Assignment and propriety of the notices of the Foreclosure Sale were at issue and adjudicated (whether explicitly or impliedly) in the prior actions.

In sum, this action is clearly an attempt by Gambee—well-intentioned as he may be—to again seek relief by "present[ing] evidence, grounds, or theories of the case not presented in the [prior] action[s] or to seek remedies or forms of relief not demanded in the [prior] action[s] . . . ." Massaro, 71 Mass. App. Ct. at 565. Res judicata bars such an attempt.

Based upon the foregoing discussion, I FIND that Gambee's claims in his Complaint are BARRED by the doctrine of res judicata. I thus ALLOW the Banks' motion to dismiss Gambee's Complaint, which is thus DISMISSED in its entirety, WITH PREJUDICE.

Judgment to enter accordingly.