VICTOR MARRETT and CAROL FALCONER v. RESIDENTIAL CREDIT SOLUTIONS, INC., and ASSET ACQUISITION & RESOLUTION ENTITY, LLC.

In Pinti v. Emigrant Mtge. Co., Inc., 472 Mass. 226 (2015), the SJC held that the failure to strictly comply with the notice of default requirements of paragraph 22 of the standard mortgage would void a foreclosure. The SJC made its holding in Pinti prospective from the date of the decision, July 17, 2015. Following Pinti, the Appeals Court, in its December 11, 2015, decision in Aurora Loan Services, LLC v. Murphy, 88 Mass. App. Ct. 726 (2015), extended the application of the requirement of strict compliance with paragraph 22 of the standard mortgage to those cases which were pending on appeal at the time the Pinti decision was issued. Aurora, 88 Mass. App. Ct. at 731-32. In Aurora, although the issue was not before it, the Appeals Court declared that "[w]e do not extend the Pinti rule to cases pending in the trial court." Id. at 732. Based on the prospective nature of Pinti as elaborated in Aurora, this court declined to address the argument of Victor Marrett and Carol Falconer (Petitioners) that the foreclosure of their property was void because the notice of default failed to comply with the notice requirements of paragraph 22 of their mortgage, and entered summary judgment against them in October 2016. In Federal Nat'l Mtge. Ass'n v. Marroquin, 477 Mass. 82 (2017) (Marroquin), the SJC expanded the reach of Pinti, holding "that the Pinti decision applies in any case where the issue was timely and fairly asserted in the trial court or on appeal before July 17, 2015." Id. at 83. The plaintiffs have now returned to this court, in the form of a motion under Mass. R. Civ. P. 60(b), to argue that the judgment should be vacated because they did, in fact, timely assert that the default notice did not strictly comply with paragraph 22 of their mortgage before July 17, 2015, the date of the Pinti decision. After review of their motion and the pleadings in this case, the court agrees. As set forth below, the judgment in this action will be vacated and the case reinstated, and the parties will file a motion for reconsideration and renewed summary judgment motions on the Pinti issue.

Discussion

First filed in 2012, this action progressed through the Land Court as Pinti and its progeny came before the SJC and the Appeals Court. Respondent Asset Acquisition and Resolution Entity, LLC's (AARE) motion for summary judgment was filed in August 2015 and the Petitioners' opposition was filed in January 2016; the motion was heard on January 12, 2016. In its October 7, 2016, Memorandum and Order Granting Respondent Asset Acquisition & Resolution Entity, LLC's Motion for Summary Judgment (Order), this court granted summary judgment against the Petitioners, "declaring that Petitioners no longer have a legal interest in [3 Bailey Road, Nantucket (Property)] and that AARE holds clear and superior record title." Order at 26. The Petitioners raised the issue of strict compliance with paragraph 22 of the standard mortgage in their cross-motion for summary judgment, but, with the benefit of Pinti and Aurora, but before Marroquin, the court ruled that "[b]ecause the Notice need not be in strict compliance with the pre-foreclosure notice language of paragraph 22, the foreclosure deed is not void." Order at 25. The Petitioners filed a timely notice of appeal but never entered their appeal after notice of assembly of the record was entered in April 2017. Marroquin was decided on May 11, 2017, four days before Notice of Failure to Enter Timely Appeal Pursuant to Mass. R. App. P. 19(a) was filed with the court on May 15, 2017.

On November 8, 2017, the Petitioners filed their Motion to Vacate Judgment Pursuant to Mass. R. Civ. P. Rule 60(b)(4), (5), & (6); and for Reconsideration of the Court's October 7, 2016 Memorandum and Order (Motion to Vacate Judgment). In the Motion to Vacate Judgment the Petitioners seek, pursuant to Mass. R. Civ. P. 60(b), to vacate the Judgment of this court entered on October 7, 2016 (Judgment), and also seek reconsideration of the Order on the grounds that the Petitioners are entitled to relief under Marroquin. AARE's Opposition to Petitioners' Motion to Vacate Judgment was filed on January 11, 2018. The court heard the Petitioners' motion on January 26, 2018, and took the matter under advisement. This Memorandum and Order Follows.

The core of the Petitioners' argument for reconsideration of the Order and vacating the Judgment is that Marroquin gives them the right to raise again the SJC's holding in Pinti "that a foreclosure by statutory power of sale pursuant to G.L. c. 183, § 21, and G.L. c. 244, §§ 11-17C, is invalid unless the notice of default strictly complies with paragraph 22 of the standard mortgage, which informs the mortgagor of, among other things, the action required to cure the default, and the right of the mortgagor to bring a court action to challenge the existence of a default or to present any defense to acceleration and foreclosure." Marroquin, 477 Mass. at 82-83, citing Pinti, 472 Mass at 227, 232. They argue that they properly raised the Pinti issue in this action prior to July 17, 2015. Resolution of the Petitioners' Motion to Vacate motion requires answering three questions: (1) whether a motion brought pursuant to Mass. R. Civ. P. 60(b)(4)-(6) is the proper vehicle to obtain the relief sought by the Petitioners; (2) whether the Petitioners timely raised the Pinti issue prior to July 17, 2015; and (3) whether the Petitioners waived their right to seek further relief in this action by filing a notice of appeal but never docketing the appeal.

I. Availability of Relief Under Rule 60(b)

As a preliminary matter, AARE argues that the relief sought by the Petitioners may not be obtained through a Mass. R. Civ. P. 60(b) motion but rather through a motion under Mass. R. Civ. P. 59, which is unavailable as the time for filing expired on October 17, 2016, ten days after the entry of Judgment. See Mass. R. Civ. P. 59, 60(b) (under rule 59(e) a motion to alter or amend the judgment shall be served not later than 10 days after the entry of the judgment). Rule 60(b) provides in relevant part:

On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b), (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment. The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment, order or proceeding was entered or taken.

Mass. R. Civ. P. 60(b). The Petitioners moved for relief under Rules 60(b)(4), (5), and (6). Considering the unique posture of the Petitioners' motion, subparts 4 and 5 of Rule 60(b) are inapplicable because the Marroquin decision would not render the Judgement in this action retroactively void and it cannot be said that the Judgment was based on a prior judgment which has been subsequently reversed or vacated. The relief sought by the Petitioners is available, if at all, through a motion brought under Rule 60(b)(6).

"Rule 60(b) authorizes relief from a final judgment in various circumstances. [citation omitted] However, relief under rule 60(b)(6) is limited to instances 'when the vacating of judgment is justified by some reason other than those stated in subdivisions (1) through (5).'" Parrell v. Keenan, 389 Mass. 809 , 814 (1983), quoting Chavoor v. Lewis, 383 Mass. 801 , 806 (1981). "In other words, to prevail under rule 60(b)(6), a party must show that there is a reason to justify the relief, and also that the reason is not within the grounds set forth in rule 60(b)(1)–(5)." Id. at 814-15. "[R]ule 60(b)(6) motions may be brought within a reasonable time, and the determination of what constitutes a reasonable time [] is 'addressed solely to the judge's discretion'" Id. at 815, quoting Chavoor, 383 Mass. at 805 n.4. "In considering a motion under rule 60(b)(6), a judge may consider whether the moving party has a meritorious claim or defense, whether extraordinary circumstances warrant relief, and whether the substantial rights of the parties in the matter in controversy will be affected by granting the motion." Id. at 815 (internal citations and quotations omitted). "In essence, rule 60(b)(6) vests 'power in courts adequate to enable them to vacate judgments whenever such action is appropriate to accomplish justice.'" Id. at 815, quoting Klapprott v. United States, 335 U.S. 601, 615 (1949).

The relief sought by the Petitioners is not otherwise available through Rule 60(b)(1)-(5). Thus, the applicability of 60(b)(6) turns first on whether the Petitioners' motion for relief was brought in a reasonable time. Judgment in this action was entered on October 7, 2016, and the Marroquin decision, which gives rise to the Petitioners' motion, did not issue until May 11, 2017. The Petitioners' 60(b)(6) motion, filed on November 8, 2017, was brought within six months of the Marroquin decision. The court finds this to be a reasonable amount of time. Further, the unique circumstances of this 60(b)(6) motion—where the Petitioners claim to have timely raised the Pinti issue before July 17, 2015, but were not permitted to pursue it until Marroquin issued after the entry of judgment in this action—are so extraordinary, if not unique, that the requested relief is warranted if the Petitioners indeed raised a Pinti claim in this action before July 17, 2015, as provided in Marroquin.

II. Applicability of Pinti

The Marroquin decision extends the rule under Pinti only to those cases where failure to strictly comply with the paragraph 22 notice provisions was "fairly asserted in the trial court or on appeal before July 17, 2015." Marroquin, 477 Mass. at 83. Applying Marroquin to this action requires a review of the progression of the litigation up to July 17, 2015. [Note 1] In the Petitioners' Amended Petition to Compel Adverse Claimants to Try Title Pursuant to G.L. c. 240, §§ 1-5, filed on September 19, 2012 (Amended Petition or Am. Pet.), the Petitioners alleged:

17. [AARE] cannot establish that they have complied with the terms of any mortgage recorded with respect to the premises; and thus, it cannot establish any right to foreclose…

24. The Petitioners deny that the Lender…complied with the terms of the mortgage, in accelerating the mortgage, in invoking the Statutory Power of Sale, in strictly complying with the Statutory Power of Sale as set out in G.L. c. 183, sec. 21.

Am. Pet. at ¶¶ 17, 24. Further, the Petitioners in their Answers and Affirmative Defenses to the counterclaims of AARE's predecessor in interest and AARE, filed on January 16, 2013, and October 30 2014, respectively, raised as an affirmative defense that AARE or its predecessor in interest:

failed to give a proper notice of any default under the mortgage and/or failed to give a proper notice to Defendants under G.L. c. 244, s. 14, and /or G.L. c. 244, s. 35A and/or G.L. c. 244, s. 17B and/or any other statutory or contractual notice or otherwise prior to exercising any purported rights under any applicable mortgage. As a result any foreclosure is unlawful and void.

Defendants-In-Counterclaim Answer and Affirmative Defenses to Plaintiffs-In-Counterclaim Counterclaim at p. 4-5; Defendants-In-Counterclaim Answer and Affirmative Defenses to Plaintiff-In-Counterclaim Asset Acquisition and Resolution Entity, LLC's Counterclaims at p. 4. The allegations in the Amended Petition generally allege that AARE failed to comply with the terms of the mortgage—which could include a failure of strict compliance with the notice provision. Those allegations are not particularized enough to be treated as having fairly asserted the Pinti issue.

The Petitioners' affirmative defense quoted above, on the other hand, did explicitly challenge AARE's compliance with the notice of default requirement of the mortgage: it claimed that AARE "failed to give a proper notice of any default under the mortgage." Id. AARE argues that this affirmative defense is insufficient because it does not expressly refer to paragraph 22, which is the provision requiring notice of default that was the subject of Pinti. The court finds that the Petitioners need not have referred explicitly to paragraph 22 to have "timely and fairly asserted" a Pinti defense. Marroquin, 477 Mass. at 83. They need only have put AARE on notice that they were challenging the sufficiency of the notice of default that was required by and sent under the mortgage. The Petitioners raised the issue of whether the mortgage's notice of default provision was strictly complied with. Having fairly raised the Pinti issue in responsive pleadings prior to the issuance of the Pinti decision on July 17, 2015, the Petitioners meet the criterion of Marroquin for application of the Pinti rule. They are entitled to vacation of the Judgment so that the Order may be reconsidered.

III. Waiver

AARE argues that even if the Petitioners fairly raised the Pinti issue in their pleadings prior to July 17, 2015, they are not entitled to relief under Marroquin because they did not proceed with an appeal of the Judgement and Order. That the Petitioners never pursued their appeal does not preclude them from seeking relief under Rule 60(b)(6). Were this the case, the 30-day window for appeal following the entry of judgment in civil cases provided by Mass. R. App. P. 4(a) would serve to bar all Mass. R. Civ. P. 60(b) motions brought outside that span of time. As motions brought under Rule 60(b)(1)-(3) may be brought up to one year after entry of judgment, this cannot be the case. It would contravene the purpose to Rule 60(b)(6) to condition its applicability on the maintenance of an appeal by a movant who may not possess information tending to support a legitimate appeal until after the time to file a notice of appeal has expired. Parrell, 389 Mass. at 815 ("In essence, rule 60(b)(6) vests 'power in courts adequate to enable them to vacate judgments whenever such action is appropriate to accomplish justice.' Klapprott v. United States, 335 U.S. 601, 615 [] (1949)").

The Petitioners' not pursuing their appeal is not conclusive evidence that they waived their Pinti argument. It would have been reasonable for them to have concluded that an appeal based on the Pinti issue would be unlikely to succeed or even frivolous. The environment in which the Petitioners had to decide whether to maintain an appeal included Pinti, which was prospective in application only, and Aurora, which in dictum asserted that the Pinti rule was not available to cases which had been pending in the trial court. That environment did not include Marroquin. Indeed, it is a fair inference from the record that the Petitioners made the decision not to pursue their appeal at some point shortly after notice of the assembly of the record was issued on April 5, 2017, before the Marroquin decision was issued on May 11, 2017. Under the unique circumstances of this action, the Petitioners did not waive their right to raise the Pinti issue through a Rule 60(b)(6) motion. This conclusion does not unduly impinge on the finality of judgments or the validity of titles to any greater degree than was already anticipated by the SJC. Marroquin, 477 Mass. at 88 n.5 ("We recognize that this ruling will increase the impact our Pinti decision may have on the validity of titles, but we expect the increase to be modest and that it will simply be part of the inherent 'unevenness [that] is an inevitable consequence of any change in doctrine.'(citations omitted)"). The Petitioners are entitled to vacation of the Judgment pursuant to Mass. R. Civ. P. 60(b)(6) so that the court may consider whether AARE strictly complied with paragraph 22 of the Petitioners' mortgage as required by Pinti and its progeny.

Conclusion

For the foregoing reasons, the Motion to Vacate is ALLOWED. The Judgment entered on October 7, 2016 is hereby VACATED and this action is REINSTATED. The court will not reconsider the Order at this time, as AARE did not brief the Pinti question in its opposition. A telephone status conference is set down for February 16, 2018 at 9:45 am to discuss a briefing schedule and hearing date for a motion for reconsideration of the Order and for summary judgment on the Pinti issue.

SO ORDERED