MISC 18-000144

December 7, 2018

Middlesex, ss.



Mohan Harihar bought a residential property at 168 Parkview Avenue in Lowell, Massachusetts in December 2005. In connection with that purchase, Mr. Harihar obtained a loan from Wells Fargo Bank, N.A. in the amount of $370,500. He secured his obligations to repay that loan by granting Wells Fargo a mortgage on 168 Parkview Avenue.

In September 2010, a different bank, U.S. Bank, N.A., which is the Indenture Trustee for something called CMLTI 2006 AR-1, foreclosed on the Harihar mortgage. U.S. Bank was the highest bidder at the resulting foreclosure auction, and in 2011 it received a foreclosure deed to 168 Parkview Avenue. In 2014, U.S. Bank sold 168 Parkview Avenue to Jeffrey and Isabelle Perkins, who still live there.

Since May 2011, Mr. Harihar has persistently challenged U.S. Bank's foreclosure activities. That effort has proceeded in numerous courts. In March 2018, he chose to sue in this Court Wells Fargo, U.S. Bank, the Perkinses, and the Perkinses' mortgagee, Mortgage Electronic Registration System, Inc. ("MERS"; together with the other parties Harihar has sued, the "Defendants"). According to his amended complaint, Harihar seeks to quiet title to what he regards as his rightful property, 168 Parkview Avenue. He also asks for various declarations that challenge U.S. Bank's standing to have foreclosed on 168 Parkview Avenue and the enforceability of his original Wells Fargo mortgage. He also contends that various defects and problems with Wells Fargo's loan and the mortgage, as well as misconduct in the administration and assignment of that loan and mortgage, merit rescission of the mortgage as well as Wells Fargo's loan.

Defendants have moved for summary judgment. They contend that in the course of over seven years of litigation among the parties, other courts have entered final judgments that have decided all of the issues Mr. Harihar is raising in this proceeding. The Perkinses and MERS separately argue that G.L. c. 244, §§ 15(c)-(d) (effective on December 31, 2015, see St. 2015, c. 141, §§ 2 and 6), require Harihar to have filed his present lawsuit prior to December 31, 2016. The statutes cited by the Perkinses and MERS, and the inherent limits on this Court's jurisdiction, now result in dismissal of all of Harihar's claims that pertain to his right, title and interest in 168 Parkview Avenue. The Court must transfer the remaining claims, over which this Court lacks subject-matter jurisdiction, to the Middlesex Superior Court.

The Court begins with the statutes that the Perkinses and MERS cite. Chapter 244, § 15(b) requires the recording of an affidavit following a foreclosure sale that has resulted from a "power of sale" contained in the foreclosed mortgage. It's undisputed that U.S. Bank's foreclosure sale of 168 Parkview Avenue followed the bank's invocation of a power of sale in Mr. Harihar's mortgage. It's further undisputed that U.S. Bank recorded at the Middlesex Registry of Deeds on May 11, 2011, an affidavit in accordance with § 15(b), along with the foreclosure deed it received for 168 Parkview Avenue.

Filing a § 15(b) affidavit triggers the provisions of § 15(c). That statute provides:

If an affidavit is executed in accordance with this section [15], it shall, after 3 years from the date of its recording, be conclusive evidence in favor of an arm's length third party purchaser for value at or subsequent to the foreclosure sale that the power of sale under the foreclosed mortgage was duly executed and that the sale complied with this chapter and section 21 of . . . chapter 183. An arm's length third party purchaser for value relying on an affidavit shall not be liable for a foreclosure if the power of sale was not duly exercised. Absent a challenge as set forth in clause (i) or (ii) of subsection (d), title to the real property acquired by an arm's length third party purchaser for value shall not be set aside.

Section 15(a) defines "arm's length third party purchaser for value" as "an arm's length purchaser who pays valuable consideration," with certain exceptions not relevant here. It is undisputed that the Perkinses bought 168 Parkview Avenue from U.S. Bank in 2014 for $325,000. As the Perkinses aren't U.S. Bank, they are "arm's length third-party purchasers," and $325,000 passes for "valuable consideration." Hence, § 15(c) might give the Perkinses three protections: (1) U.S. Bank's § 15(b) affidavit may be "conclusive evidence" in favor of the Perkinses that the power of sale under the Harihar mortgage "was duly executed and that [U.S. Bank's] sale complied with [c. 244] and section 21 of . . . chapter 183"; (2) if they relied on the affidavit, the Perkinses "shall not be liable for a foreclosure" if in fact U.S. Bank did not "duly exercise" the power of sale in the Harihar mortgage; and, most critically, (3) the Perkinses' title in 168 Parkview Avenue may be sacrosanct. (Since MERS's title to 168 Parkview Avenue flows from the Perkinses' title, a win for the Perkinses means a win for MERS too.)

Section 15(c) "might" give the Perkinses and MERS three protections because there's a way Mr. Harihar could defeat them. Section 15(d) states that § 15(c) "shall not apply" if:

(i) an action to challenge the validity of the foreclosure sale has been commenced in a court of competent jurisdiction by a party entitled to notice of the sale under section 14 [of chapter 244] or a challenge has been asserted as a defense or counterclaim in a legal action in a court of competent jurisdiction, including the housing court department pursuant to section 3 of chapter 185C, by a party entitled to notice of the sale under said section 14 and a true and correct copy of the complaint or pleading asserting a challenge has been duly recorded before the deadline in the registry of deeds for the county or district in which the subject property lies . . . ; or (ii) a challenge to the validity of the foreclosure sale is asserted as a defense or counterclaim in a legal action in a court of competent jurisdiction, including the housing court department pursuant to section 3 of said chapter 185C, by a party entitled to notice of the sale under said section 14 who continues to occupy the mortgaged premises as the party's principal place of residence, regardless of whether the challenge was asserted prior to the deadline, and a true and correct copy of any pleading asserting the challenge in the legal action was duly recorded in the registry of deeds for the county or district in which the subject property lies within 60 days of the challenge or before the deadline, whichever is later.

(Where an affidavit has been recorded after December 31, 2015, the "deadline" in § 15(d) is "3 years from the date of recording of the affidavit." Id. at § 15(a). For affidavits like U.S. Bank's that were recorded prior to December 31, 2015, the deadline is December 31, 2016. See St. 2015, c. 141, § 3.)

Mr. Harihar hasn't done enough to defeat the Perkinses' protections under § 15(c). Granted, he timely challenged the validity of U.S. Bank's foreclosure sale as a defendant in a case brought by U.S. Bank in 2011, a case that ended up in the Northeast Housing Court ("Case 1"). He also brought a timely lawsuit of his own in Middlesex Superior Court in 2012 ("Case 2"), against both Wells Fargo and U.S. Bank, in which he again attacked U.S. Bank's foreclosure sale. It's also undisputed that, at the time of Case 1 and Case 2, he occupied 168 Parkview Avenue as his principal place of residence.

But § 15(d) is demanding: it requires a party who challenges a foreclosure sale not only to file suit (or raise a defense, or file a counterclaim) promptly, but also record at the appropriate registry of deeds proof of the filing of the pleading that presents the challenge. See Kenney v. Brown, 25 LCR 499 , 502-503 (2017) (Foster, J.) ("The language of the Statute is conjunctive. It requires both the commencement of an action in court and the recording of the complaint or pleading with the registry before the deadline. The recording requirement is not surplusage." (Emphasis in original.)). Mr. Harihar offered no proof on summary judgment that he recorded at the Middlesex Registry of Deeds any notice of what he was doing in Case 1 or Case 2, let alone notice before the applicable "deadline" under § 15, December 31, 2016.

The Perkinses thus are entitled to the protections of § 15(c). That means this Court may not set aside their title (and, by extension, the title they gave to MERS as their mortgagee) in 168 Parkview Avenue. Furthermore, it's apparent that anything Mr. Harihar has alleged in this Court concerning the origination and administration of his Wells Fargo mortgage, the assignment of that mortgage, or the foreclosure on 168 Parkview Avenue won't result in his regaining his former title to 168 Parkview Avenue. Section 15(c) effectively leaves Harihar only with damages or other statutory remedies (for example, those provided under G.L. c. 93A) for Wells Fargo and U.S. Bank's alleged misconduct, see c. 244, §§ 15(e)-(f) – provided, of course, that the final judgments in Case 1, Case 2 or other cases involving Harihar, Wells Fargo and U.S. Bank haven't already decided those claims.

Because § 15(c) resolves all of the issues concerning anyone's right, title and interest to 168 Parkview Avenue, this Court's inquiry must end, short of any ruling on the preclusive effects of the final judgments in Cases 1 and 2. The Land Court is a court of limited jurisdiction. Except in circumstances not present here (all of which depend on the Court holding that a claimant has a right, title or interest in a property that's central to the dispute, see Ritter v. Bergmann, 72 Mass. App. Ct. 296 , 301 (2008)), this Court has long held that it lacks subject-matter jurisdiction over tort and contract claims. See, for example, Watson v. YMCA of Greater Boston, Inc., 14 LCR 528 , 531 (2006) (Lombardi, J.); see also G.L. c. 185, § 1 (setting forth Court's subject-matter jurisdiction). The Court's lack of jurisdiction over many of Mr. Harihar's claims should be no surprise: in their Answer, the Perkinses and MERS raised that very issue.

The Court thus will resolve Mr. Harihar's quiet-title and other "real estate" claims by order of dismissal from this Court. The Court will then transfer his remaining damages claims to the Middlesex Superior Court. See id. at § 15 (allowing Land Court to "transfer to the superior court any action in which no right, title or interest to land is involved and which is not set forth in section one [of c. 185] as being within the exclusive original jurisdiction of the land court").

Order of dismissal and transfer to issue accordingly.