WELLS FARGO BANK, N.A. v. ALFRED BYRON COFFIN, III.

Procedural History

The Petition for Declaratory Relief to Declare Adverse Claim Invalid and Expunge Adverse Claim from Certificate of Title (Complaint) and the Motion to Adjudicate the Validity of Adverse Claim were filed by Wells Fargo Bank, N.A. (Wells Fargo) on March 28, 2018. The Complaint seeks a judgment striking the Adverse Claim Pursuant to M.G.L. c.185, § 112 Alleging Right or Interest in Registered Land filed with the Nantucket County Land Court Registry District (registry district) on July 13, 2017, as Document No. 00155627 and noted on the Memorandum of Encumbrances for Certificate of Title 22919 (Notice of Adverse Claim) for the property at 265 Madaket Road, Nantucket, Massachusetts (Property). The Defendant's Motion to Dismiss was filed on April 18, 2018. At the case management conference on May 10, 2018, defendant Alfred Byron Coffin, III (Coffin) was instructed to file a verified counterclaim and motion for lis pendens. The Defendant's Verified Counterclaim (Counterclaim) and Defendant's Motion for Approval of Memorandum of Lis Pendens were filed on June 4, 2018. Wells Fargo filed its Notice of Non-Opposition to Motion for Approval of Memorandum of Lis Pendens on June 14, 2018. The court entered its Finding and Order of Approval of Motion for Memorandum of Lis Pendens on June 19, 2018, and endorsed the Memorandum of Lis Pendens. The Memorandum of Lis Pendens was filed with the registry district on June 26, 2018, as Document No. 00158869 and noted on the Memorandum of Encumbrances for Certificate of Title 22919.

On June 22, 2018, Wells Fargo filed Petitioner Wells Fargo Bank N.A.'s Motion to Dismiss Verified Counterclaims by Respondent Alfred Byron Coffin, III (Motion to Dismiss) and the Memorandum of Law in Support of Petitioner Wells Fargo Bank N.A.'s Motion to Dismiss Verified Counterclaims by Respondent Alfred Byron Coffin, III (Pl. Mem.). On July 25, 2018, Coffin filed Defendant's Opposition to the Plaintiff's Motion to Dismiss and Defendant's Motion for Leave to Amend His Counterclaims Adding a Count for Declaratory Relief and a Count to Quiet Title (Motion to Amend). On August 6, 2018, Wells Fargo filed Petitioner Wells Fargo Bank N.A.'s Opposition to Respondent's Motion for Leave to Amend his Counterclaim. On August 8, 2018, Coffin filed Defendant's Motion for Land Court Judge to Seek Interdepartmental Assignment to Sit as Superior Court Judge Over Claims Not Within the Jurisdiction of the Land Court (Motion for Interdepartmental Assignment). That same day, the court heard the Motion to Dismiss and the Motion to Amend, and took them under advisement. On August 14, 2018, the court issued its Order Striking Notice of Adverse Claim and Dismissing Complaint Without Prejudice. This Memorandum and Order follows.

Standard on Motion to Dismiss

The Motion to Dismiss is brought pursuant to Mass. R. Civ. P. 12(b)(1), for lack of subject matter jurisdiction, and 12(b)(6), for failure to state a claim upon which relief can be granted. The court will consider the Motion to Dismiss under the standard for a motion to dismiss for failure to state a claim. In considering a motion to dismiss for failure to state a claim, the court accepts as true well-pleaded factual allegations and reasonable inferences drawn therefrom, Marram v. Kobrick Offshore Fund, Ltd., 442 Mass. 43 , 45 (2004), but does not accept "legal conclusions cast in the form of factual allegations." Iannacchino v. Ford Motor Co., 451 Mass. 623 , 633 (2008), quoting Schaer v. Brandeis Univ., 432 Mass. 474 , 477 (2000). Generally, if matters outside the pleadings are presented to and not excluded by the court, the motion will be treated as a motion for summary judgment. Mass. R. Civ. P. 12(b), 12(c). The court may, however, take into account matters of public record and documents integral to, referred to, or explicitly relied on in the complaint, whether or not attached, without converting the motion to a motion for summary judgment. Marram, 442 Mass. at 45 n. 4; Schaer, 432 Mass. at 477; Reliance Ins. Co. v. City of Boston, 71 Mass. App. Ct. 550 , 555 (2008); Shuel v. DeIeso, 16 LCR 329 , 329 n.2 (2008). For the purposes of the Motion to Dismiss, these outside matters of public record and documents include the pleadings and other documents in the related multi-district class action lawsuit, In re Wachovia Corp. "Pick-A-Payment" Mortgage Marketing and Sales Practices Litigation, Case No. M:09-CV-2015-JF (N.D. Cal.) (the Class Action).

Factual Allegations

The following facts are either undisputed or accepted as true, with inferences drawn in Coffin's favor, for the purposes of this Motion to Dismiss:

1. Coffin acquired the Property by a deed registered on his certificate of title (#17894) on May 16, 1997 with the registry district. The Property consists of a single-family residence in which he continues to reside. Counterclaim ¶ 3.

2. Coffin gave a mortgage to Option One Mortgage which was registered on his certificate of title on August 21, 2006. Counterclaim ¶ 4.

3. Coffin refinanced this mortgage with mortgage loan from World Savings Bank, FSB (WSB), a Federal Savings Bank located in Oakland, California. He gave a mortgage to WSB in the original principal amount of $750,000 that was registered on his certificate of title and noted on the memoranda of encumbrances on September 19, 2007 (the Mortgage). The Option One Mortgage was discharged on January 4, 2008. Counterclaim ¶¶ 5-6; Complaint Exhs. B, C.

4. The loan that Coffin obtained from WSB and that is secured by the Mortgage is a so-called "Pick-a-Payment" mortgage. This was a residential mortgage product created by WSB and used widely across the country between 2003 and 2008. The overriding feature of these loans is that they had an initial interest rate that was deceptively low, allowing WSB to qualify people for the loan. In addition, there was no verification of borrowers' incomes, which further expanded WSB's pool of borrowers. Counterclaim ¶¶ 12-13.

5. The problem for borrowers with the "Pick-a-Payment" mortgage was that the real interest rate was not disclosed. The initial interest rate was intentionally lowered by WSB to qualify the borrower. The interest rate would adjust upward abruptly, starting as soon as three months after the origination of the mortgage. Coffin's initial monthly payment under the Mortgage was $2,194.95 but increased to $3,911.92. Counterclaim ¶¶ 14-15.

6. Through the "Pick-a-Payment "program, WSB deceived customers by failing to disclose that borrowers could face negative amortization of their payment option mortgages by choosing to make minimum payments in amounts less than the interest accrued during the payment period. The remaining interest would then be capitalized, or added to the loan principle, which would itself accrue interest. The tantalizingly low payments of these "Pick-a-Payment" loans were a common feature of home mortgage loans that, in the expectation of a perpetual refinancing market, eventually entailed enormous balloon payments once the early-phase, unnaturally low payments expired. Counterclaim ¶ 16.

7. The success of the "Pick-a-Payment" mortgage program collided headfirst with the home mortgage crisis in 2008. These loans quickly became unaffordable to the borrower as the loan-to-value plummeted. Counterclaim ¶ 17.

8. Starting in August of 2007, WSB and then Wachovia Mortgage, FSB (Wachovia) were sued in multiple class actions in multiple federal district courts and by ten different state attorneys general. New actions continued to be filed through 2010 alleging substantially similar claims involving the "Pick-a-Payment" Loans. Counterclaim ¶ 18.

9. On February 13, 2009, the federal Multi District Litigation Panel transferred all of the then pending cases to the Northern District of California in the Class Action. Cases filed after that date were also transferred and consolidated into the Class Action. Counterclaim ¶ 20.

10. In December 2010, the parties to the Class Action entered into a comprehensive class action settlement agreement, set out in an "Agreement and Stipulation of Settlement of Class Action" (settlement agreement). The settlement agreement was intended to cover everyone who entered into a "Pick-a-Payment" mortgage loan between August 2003 and December 2008. The Class Action plaintiffs were divided into three groups: people who had sold their property prior to the settlement were put in Class A; people who still had their "Pick-a-Payment" loans and were not in default were put in Class B; and people who were in default were placed in Class C. Coffin was and is a member of Class B. Counterclaim ¶¶ 21, 23 & Exh. H.

11. Section VI.A of the settlement agreement provides for a $50,000,000 Common Fund, part of which would be distributed to Class B members. Coffin was not notified that he was a member of Class B and he did not receive any funds from the Common Fund. Counterclaim ¶¶ 24-25 & Exh. H, at 32-33.

12. Section VI.E of the settlement agreement also provides that a loan modification program would be made available to Class B members. Mr. Coffin was not notified that he had a right to participate in the loan modification program. Counterclaim ¶¶ 26-27 & Exh. H at 35-42.

13. Section X of the settlement required that upon preliminary approval, notice must be disseminated to class members, including Class B Members. On the date of preliminary approval, WFB and Wachovia knew that Coffin was a qualified member of Class B, but Coffin did not receive the notice. Counterclaim ¶¶ 28-30 & Exh. H at 49-51.

14. On December 16, 2010, the district court entered a Preliminary Order certifying the members of the classes to the settlement and ordering the defendants to provide the Settlement Administrator within 30 days with the mail and property addresses of any reasonably identifiable persons who are potential settlement class members. Coffin was reasonably identifiable as a potential settlement class member, but Wells Fargo did not notify or advise Coffin that the district court had entered the Preliminary Order or advise the Settlement Administrator that Coffin was one of the members of Class B. Counterclaim ¶¶ 32-33, 53.

15. As a direct result of these failures, the Settlement Administrator did not advise Coffin of his rights under the settlement agreement and did not send him the payment that he was owed as a member of Class B. As a direct result, Coffin was deprived of the opportunity to modify the Mortgage between December 18, 2010 and June 30, 2013, and he continued to make "Pick-a-Payment" mortgage payments at the inflated monthly rate of $3,911.92. Counterclaim ¶¶ 54-56.

16. On March 18, 2008, Coffin filed with the registry district a deed transferring the Property to Alfred Byron Coffin, III, Trustee under a Declaration of Trust entitled Coffin Realty Trust, dated March 6, 2017. The registry district issued Transfer Certificate of Title No. 22919. Counterclaim ¶ 35 & Exh. I.

17. Wells Fargo sent Coffin two letters dated September 22, 2014, purporting to be a 150 Day Right Cure Your Mortgage Default letter as required under G.L. c. 244, § 35A (35A Notice). Complaint Exh. D; Counterclaim ¶ 36.

18. Wells Fargo sent Coffin another letter dated September 22, 2014, purporting to be a Right to Request a Modified Mortgage Loan letter as required under G.L. c. 244, § 35B (35B Notice). The first sentence of the 35B Notice states: "We are contacting you because our records indicate that you are eligible to request a modification of your mortgage with Wells Fargo." This second letter is dated more than one year after the modification period under the settlement agreement ended. Complaint Exh. D; Counterclaim ¶¶ 37-38.

19. When it prepared and sent the 35B Notice, Wells Fargo knew or should have known that Coffin was a member of Class B who had not been notified about the class action settlement and who had not been offered the opportunity to modify his loan under the terms of the settlement agreement. It knew that it had committed multiple violations of the settlement agreement, including the repeated failure to comply with the obligation to enter into loan modifications. Counterclaim ¶¶ 39-40.

20. Wells Fargo knew that it had been involved in multiple legal proceedings involving its failure to perform its obligations under the settlement agreement, including a repeated failure to modify the "Pick-a-Payment" mortgages, and at the time of this letter, knew that it had been found to have violated the settlement agreement in those judicial proceedings. Counterclaim ¶¶ 41-42.

21. On August 25, 2016, Coffin's counsel sent Wells Fargo a completed "Request for Mortgage Assistance" application. When Wells Fargo received the application, it knew that Coffin was entitled to the benefits of the settlement agreement and that those benefits had not yet been extended to Coffin. It knew that it was obligated to modify the Mortgage as provided for in the settlement agreement, not under the ad hoc "Request for Mortgage Assistance" program it had created. Counterclaim ¶¶ 43-45.

22. Wells Fargo did not modify the Mortgage as provided for in the settlement agreement or in accordance with the "Request for Mortgage Assistance" program. Counterclaim ¶¶ 46-47.

23. On June 28, 2016, Wells Fargo filed with the registry district an "Affidavit Pursuant to M.G.L. Ch. 244, §§ 35B and 35C," dated April 29, 2016 and filed as Document 152027 and noted on Certificate of Title 22919 for the Property (35C Affidavit). Complaint Exh. G; Counterclaim ¶ 62.

24. When Wells Fargo registered the 35C Affidavit, it knew that it had not complied with the provisions of the settlement agreement, a prerequisite to commencing any foreclosure of the Mortgage. It knew that the statements contained in the 35C Affidavit were inaccurate or false. Wells Fargo made the statements in the 35C Affidavit with the intention of depriving Coffin of his rights under the settlement agreement and his rights and protections afforded to him by G.L. c. 244, §§ 35A, 35B, and 35C. Wells Fargo's failure or refusal to comply with these statutes has resulted in fundamental unfairness to Coffin. Counterclaim ¶¶ 66-69.

25. Wells Fargo sent Coffin a Notice of Foreclosure sale on August 2, 2016, and conducted a foreclosure auction of the Property on September 1, 2016. Complaint ¶¶ 12-13 & Exh. E; Counterclaim ¶ 48.

26. On September 29, 2016, Coffin's counsel notified Wells Fargo that they had not complied with the provisions of the class action settlement by failing to offer him a loan modification. Counterclaim ¶ 57 & Exh. K.

27. Wells Fargo's failure or refusal to comply with G.L. c. 244, §§ 35A, 35B, and 35C has resulted in fundamental unfairness to Coffin. Counterclaim ¶ 70.

Discussion

A. Motion to Dismiss.

From these factual allegations, the Counterclaim brings four counts. Count One is for breach of contract, alleging that Wells Fargo has breached the settlement agreement, causing Coffin damage. Count Two is labeled "M.G.L. Ch. 244 Sec. 35A, B, & C." Count Two alleges that Wells Fargo did not comply with the notice requirements of these sections, precluding it from foreclosing on the Mortgage. Count Three is for violation of G.L. c. 93, § 49, and Count Four is for violation of G.L. c. 93A, § 9.

Wells Fargo seeks to dismiss the Counterclaim on several grounds. First, Wells Fargo argues that this court lacks jurisdiction over all the counts in the Counterclaim because these counts seek to enforce the Class Action settlement agreement, and jurisdiction over the interpretation and enforcement of that agreement was retained by the district court in the Class Action. Second, Wells Fargo argues, for the same reason the Counterclaim is barred by res judicata: Coffin's claims about the Mortgage were decided or released by the settlement agreement, and he is bound by the terms of that agreement. Third, the facts as pled in the Counterclaim cannot establish a violation of G.L. c. 244, § 35B. Fourth, claims under G.L. c. 93, § 49, and G.L. c. 93A, § 9, do not involve "any right, title or interest in land." G.L. c. 185, §1(k). Fifth, the claims under those statutes are time-barred, as the Counterclaim was brought more than four years after the settlement agreement was approved. Sixth, G.L. c. 93, §49, does not provide a private cause of action. Finally, Wells Fargo argues that the facts as pled cannot establish a violation of G.L. c. 93A, § 9. The court discusses each count in turn, somewhat out of order.

i. Count One

In Count One, Coffin alleges that he was a member of Class B, and that Wells Fargo has breached the settlement agreement by not notifying him of his rights under the settlement agreement and depriving him of the opportunity to modify the Mortgage. Counterclaim ¶¶ 49-60. This in turn, Coffin alleges, constitutes a breach of the Mortgage. Count One must be dismissed because the court lacks subject matter jurisdiction to hear it. First, the Land Court cannot consider a breach of contract claim because it is not one "where any right, title or interest in land is involved." G.L. c. 185, § 1(k). Even assuming that Count One does involve a right, title or interest in land, the court lacks subject matter jurisdiction to consider a claim for breach of the settlement agreement or to otherwise enforce the settlement agreement. The settlement agreement provides that it "shall be the sole and exclusive remedy of Settlement Class Members against any Released Entity relating to any and all Alleged Claims." Counterclaim Exh. H at § XIV.A. It further provides that the "Parties agree that the Court shall retain exclusive and continuing jurisdiction over the Lawsuit, the Parties, Settlement Class Members, and the Settlement Administrator in order to interpret and enforce the terms, conditions, and obligations under" the settlement agreement. Id. at § XIV.B. Wells Fargo is a "Party" as defined by the settlement agreement: it is defined as a "Defendant" both by name and by virtue of being the successor by merger to WSB and Wachovia. Id. at §§ I.1.19, 1.51; Rice v. Wells Fargo Bank, N.A., 2 F. Supp. 3d 25, 28 & n.7 (D. Mass. 2014); In re Wachovia Corp. "Pick-a-Payment" Mtge. Mktg. & Sales Practices Litig., 2012 WL 5868931, No. 5:09-md-02015-JF (N.D. Cal. Nov. 19, 2012), at *2 n.2 (In re Wachovia). Thus, if Coffin is a "Party" or a "Settlement Class Member" as defined in the settlement agreement, the only court in which he can seek to enforce the settlement agreement or bring a claim for breach of the settlement agreement is the Northern District of California. Houman v. Wells Fargo Bank, N.A., 2016 WL 7444869, No. CV 15- 08740-AB (PLAx) (C.D. Cal. Feb. 5, 2016) at *7; Hare v. Wells Fargo Bank, N.A., 2012 WL 3940517, No. 2:12-cv-435-FtM-99SPC (M.D. Fla. Aug. 20, 2012), at *2-*3; In re Wachovia, 2012 WL 5868931 at *1.

While Coffin is not a Party as defined in the settlement agreement, he is a Settlement Class Member. The Settlement Class Members are all persons who are members of one of the Settlement Classes and who have not opted out. Counterclaim Exh. H at §§ I.1.66, 1.67. Coffin alleges that he "was and is a member of Class B." Counterclaim ¶ 23. He did not opt out of the settlement agreement. Pl. Mem. Exh. 2. He is a "Settlement Class Member" bound by the settlement agreement.

Coffin's claim that he did not get notice of the settlement agreement does not change his status as a Settlement Class Member bound by the settlement agreement. A class member is bound by a class action settlement, even if he or she did not receive actual notice, so long as the notice provided to the class members was "the best notice practicable, 'reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.'" Silber v. Mabon, 18 F.3d 1449, 1454 (9th Cir 1994), quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950); Reppert v. Marvin Lumber & Cedar Co., 359 F.3d 53, 56-57 (1st Cir. 2004). The Claims Administrator for the Class Action described the notice procedures and declared under oath that the notice reached 99% of potential class members, and the district court approved the notice and settlement agreement. Pl. Mem. Exh. 3. Whether or not Coffin actually received notice, he is deemed to have notice and is bound by the settlement agreement.

The court lacks subject matter jurisdiction over Count One. "Dismissals for lack of subject matter jurisdiction are ordinarily without prejudice because dismissal for lack of subject matter jurisdiction is typically not an adjudication on the merits." Abate v. Fremont Inv. & Loan, 470 Mass. 821 , 836 (2015). Count One will be dismissed without prejudice.

ii. Count Three

In Count Three, Coffin alleges that facts set forth in the Counterclaim "are unfair and deceptive acts and practices which are prohibited by M.G.L. Ch. 93 §49." Counterclaim ¶ 73. General Laws c. 93, § 49, bars unfair, deceptive, or unreasonable debt collection practices. Section 49 does not itself provide a private cause of action for violation of its provisions. Rather, it provides that "[f]ailure to comply with the provisions of this section shall constitute an unfair or deceptive act or practice under the provisions of chapter ninety-three A." Id. Therefore, Coffin cannot bring a separate count for violation of G.L. c. 93, § 49; to the extent that he claims a violation of that statute, it must be pled as an unfair and deceptive act in violation of G.L. c. 93A, §§ 2 and 9. McGrath v. Mishara, 386 Mass. 74 , 78 (1982); see O'Connor v. Nantucket Bank, 992 F. Supp. 2d 24, 33-34 (D. Mass. 2014). Count Four of the Counterclaim is a claim under G.L. c. 93A, § 9, and it incorporates all the allegations of the Counterclaim that would support a claim of violation of G.L. c. 93, § 49. Count Three is dismissed without prejudice.

iii. Count Four

Count Four is a claim that the facts alleged in the Counterclaim constitute unfair and deceptive acts in violation of G.L. c. 93A, §§ 2 and 9. [Note 1] As discussed, Count Four incorporates Coffin's claim for a violation of G.L. c. 93, § 49. Wells Fargo moves to dismiss Count Four on several grounds. First, it argues that Count Four is barred by the four-year statute of limitations for claims under G.L. c. 93A. See G.L. c. 260, § 5A. Construing the facts alleged in the Counterclaim in Coffin's favor, as the court must, Count Four cannot be dismissed on statute of limitations grounds. Coffin alleges, in part, that his c. 93A claim arises out of the two letters that Wells Fargo sent him on September 22, 2014. The Complaint was filed on March 28, 2018 and the Counterclaim on June 4, 2018, less than four years after the date of those letters.

Wells Fargo fares better on its argument that the court does not have subject matter jurisdiction over Count Four. Like the breach of contract claim brought in Count One, a claim for violation of G.L. c. 93A, §§ 2 and 9, is not one "where any right, title or interest in land is involved." G.L. c. 185, § 1(k). Moreover, even assuming that Count Four does involve a right, title or interest in land, Count Four must be dismissed because, in effect, it seeks relief for Wells Fargo's or Wachovia's breach of or failure to comply with the settlement agreement. For the reasons discussed above, the court lacks subject matter jurisdiction to consider a claim for breach of the settlement agreement or to otherwise enforce the settlement agreement.

To the extent that Count Four alleges that the Mortgage itself constitutes a violation of c. 93A, it must be dismissed because that claim was released in the settlement agreement. The settlement agreement provides that the Plaintiffs, including Settlement Class Members such as Coffin, release the "Alleged Claims and any and every actual or potential known or unknown claim . . . arising out of the Alleged Claims." Counterclaim Exh. H at §§ I.1.54, V.A. "Alleged Claims" is defined to include any claims that Wells Fargo or Wachovia "violated . . . state unfair and deceptive trade practices statutes" with respect to the Mortgage. Id. at § I.1.6. "Massachusetts law favors the enforcement of releases." Sharon v. City of Newton, 437 Mass. 99 , 105 (2002). Coffin, as a person bound by the settlement agreement, released his c. 93A claim to the extent that it alleges that the Mortgage was unfair or deceptive in violation of G.L. c. 93A, § 2. Count Four will be dismissed without prejudice.

iv. Count Two

This leaves Count Two. Count Two is named "M.G.L. Ch. 244 Sec. 35A, B, & C." Notwithstanding its title, Count Two makes no reference to G.L. c. 244, § 35A, and the 35A Notice, but instead alleges that Wells Fargo's 35B Notice did not comply with G.L. c. 244, § 35B, and that Wells Fargo violated G.L. c. 244, § 35C(d), by filing a misleading 35C Affidavit with the Land Court. [Note 2] Coffin's specific claim is that Wells Fargo violated these provisions because neither the 35B Notice nor any other notice informed Coffin of his right to a loan modification under the settlement agreement and, therefore, the 35C Affidavit was false in stating that Wells Fargo had complied with § 35B when it knew that it had not complied with the settlement agreement. These failures, Coffin alleges, resulted in fundamental unfairness to Coffin and render the foreclosure void.

Wells Fargo raises several arguments why Count II should be dismissed. First, Wells Fargo points to G.L. c. 244, § 35B(f), which provides that the "affidavit certifying compliance with this section," namely, the 35C Affidavit, "shall be conclusive evidence" that Wells Fargo fully complied with § 35B. Id. In quoting this provision in its memorandum of law, Wells Fargo uses an artful ellipsis to overlook the rest of § 35B(f), which states that the 35C Affidavit shall be conclusive evidence "in favor of an arm's-length third party purchaser for value, at or subsequent to the resulting foreclosure sale." Id. Wells Fargo is not an arm's-length third party purchaser for value; it is the foreclosing mortgagee. Section 35B(f) further provides that the "filing of such affidavit shall not relieve the affiant, or any other person on whose behalf the affidavit is executed, from liability for failure to comply with this section, including by reason of any statement in the affidavit." Id. This is precisely the liability with which Coffin is charging Wells Fargo. Wells Fargo is not entitled to the benefit of § 35B(f).

Wells Fargo's more fundamental argument is that the 35B Notice complied with the requirements of § 35B, and that Wells Fargo had no obligation under the statute to inform Coffin of the settlement agreement, and did not purport in the 35C Affidavit to certify that it had so informed Coffin. It argues that the sole purpose of the 35C Affidavit is to certify compliance with § 35B, which it did.

Wells Fargo was required to send Coffin "notice . . . of [his] rights to pursue a modified mortgage loan." G.L. c. 244, § 35B(c). A "modified mortgage loan" is defined as "a mortgage loan modified from its original terms including, but not limited to," various approved federal loan modification programs and "any modification program that a lender uses which is based on accepted principles and the safety and soundness of the institution and authorized by the National Credit Union Administration, the division of banks or any other instrumentality of the commonwealth." G.L. c. 244, § 35B(a). On its face, the 35B Notice could be construed to have provided such notice. It informed Coffin that he is "eligible to request a modification of [his] mortgage with Wells Fargo," and included a loan modification form. Complaint Exh. D. Construing allegations in Coffin's favor however, as the court must, Count Two raises a legitimate claim that the loan modification program provided for in the settlement agreement was a "modified mortgage loan" as defined in § 35B(a), and that Wells Fargo was obligated to inform Coffin of this modification program. Because, as Coffin alleges, neither the 35B Notice nor any other notice from Wells Fargo informed Coffin of his right under the settlement agreement to seek a modification, the 35B Notice could be deemed defective. This means, in turn, that based on Coffin's allegations, the 35C Affidavit falsely stated that Wells Fargo had complied with § 35B in violation of G.L. c. 244. G.L. c. 244, § 35C(f). Coffin has stated a claim under Count Two.

Unlike Counts One, Three, and Four, the settlement agreement does not deprive the court of subject matter jurisdiction over Count Two. Count Two is not a claim that Wells Fargo breached the settlement agreement, although its alleged failure to comply with the settlement agreement is part of the claim. Rather, Count Two seeks a determination of whether Wells Fargo complied with Massachusetts foreclosure law as set forth in G.L. c. 244. The settlement agreement does not reach so far as to deprive this court of jurisdiction to determine the scope of Massachusetts law.

B. Motion to Amend.

In the Motion to Amend, Coffin seeks leave to file an amended counterclaim (Amended Counterclaim) that alleges additional facts and adds two more counts, for a declaratory judgment and to quiet title under G.L. c. 240, §§ 6-10. The additional factual allegations are that Wells Fargo is not, or has not shown that it is, the successor to WSB as mortgagee holding the Mortgage; that Wells Fargo did not comply with the notice requirements of the Mortgage; that Coffin did not receive the 35A Notice or the 35B Notice; that Coffin did not receive the notice of sale required by G.L. c. 244, § 14; and that the foreclosure sale did not take place, in contradiction to the affidavit of sale registered by Wells Fargo pursuant to G.L. c. 244, § 15(b). Wells Fargo opposes the Motion to Amend.

Leave to amend a pleading "shall be freely given when justice so requires." Mass. R. Civ. P. 15(a). Thus, especially at the early stages of an action, such as this, a motion to amend "should be granted unless there appears some good reason for denying the motion." Goulet v. Whitin Mach. Works, Inc., 399 Mass. 547 , 549 (1987). One reason justifying denial of a motion to amend is futility: that is, the amended pleading could be dismissed for failure to state a claim upon which relief could be granted. Johnston v. Box, 453 Mass. 569 , 583 (2009); Brown v. Savings Bank Life Ins. Co., 93 Mass. App. Ct. 572 (2018). As discussed above, the court is dismissing Counts One, Three, and Four of the Counterclaim, which are restated as Counts Four, Five, and Six of the Amended Counterclaim. Count Two of the Counterclaim is restated as Count Three of the Amended Counterclaim, and states a claim. Count One of the Amended Counterclaim would be subject to a motion to dismiss because it fails to state the declaration that Coffin is seeking.

This leaves Count Two of the Amended Counterclaim, to quiet title. By this claim, Coffin seeks to establish that the foreclosure sale was void and that he has title to the Property, not Wells Fargo. The factual allegations he alleges to support this claim are the ones that support Count Two of the Counterclaim (restated as Count Three of the Amended Counterclaim) and the new factual allegations regarding Wells Fargo's successor status, the various notices, and the foreclosure sale. Thus, to determine if Count Two of the Amended Counterclaim would be futile, it is necessary to determine if these factual allegations, if true, would result in the voiding of the foreclosure sale and a judgment that title to the Property remained with Coffin.

Coffin's first new factual allegation, that Wells Fargo is not, or has not established, that it is the successor to WSB, cannot be pled. It is set forth in the settlement agreement and has been determined judicially that Wells Fargo is in fact the successor to WSB and Wachovia. Counterclaim Exh. H at 1, 15, 24; Rice, 2 F. Supp. 3d at 28. As the District of Massachusetts stated in Rice: "Numerous courts have taken judicial notice of World Savings' progression to Wells Fargo. See, e.g., Viets v. Wachovia Mortg., FSB, No. 2:11-CV-000169-GMN-RJJ, 2011 WL 6181934, at *4 n.1 (D. Nev. Dec. 12, 2012): Logvinov v. Wells Fargo Bank, No. C-11-04772 DM R, 2011 WL 6140995, at *1 n.2 (N.D. Cal. Dec. 9, 2011). This series of transactions is not subject to reasonable dispute and this court takes judicial notice of the progression of World Savings to Wells Fargo." Id. at 28 n.7.

Coffin next alleges that Wells Fargo did not follow the notice requirements set forth in paragraphs 14 and 27 of the Mortgage. Amended Counterclaim ¶¶ 9, 11, 15. Paragraph 14 specifies that compliant notice "must be given by delivering it or mailing it first class, unless applicable law requires use of another method." Complaint Exh. C. Paragraph 14 further provides that the notice be addressed to mortgagor at "265 Madaket Rd, Nantucket, MA 02554- 2620," and that "[a]ny notice required by the Security Instrument is given when it is mailed or when it is delivered according to the requirements of this Paragraph 14 or of applicable law." Id. Paragraph 27 of the Mortgage provides, in relevant part: "Lender does not have to give me notice of a Breach of Duty unless notice is required by Applicable Law," defining "Applicable Law" as "any applicable Federal Law, rule or regulation and, where federal law is not applicable, under the law of the state where the Property is located". Id. Thus, the Mortgage only required Wells Fargo to send those notices called for under Massachusetts law, namely the 35A and 35B Notices and the notice of sale, and that those notices be sent to the Property. The 35A and 35B notices and the notice of sale were in fact addressed to the Property. Complaint Exhs. D, E. Because the Mortgage only requires whatever notice is called for under Massachusetts law, the question of whether these notices were properly sent is solely an issue under Massachusetts law, not a separate issue of whether the notice requirements of the Mortgage were complied with. Any claim relying on the factual allegations regarding notice under the Mortgage is futile.

Coffin then alleges that the 35A Notice and the 35B Notice were never sent, and that this failure to strictly comply with G.L. c. 244, §§ 35A and 35B, voids the foreclosure. Amended Counterclaim ¶¶ 13, 16. Sections 35A and 35B are not statutes relating to the foreclosure of mortgages by the exercise of a power of sale, and, therefore, failure to strictly comply with those provisions does not void an otherwise valid foreclosure. U.S. Bank Nat. Ass'n v. Schumacher, 467 Mass. 421 , 431 (2014); see Bank of New York Mellon v. Fernandez, 87 Mass. App. Ct. 1136 (2015) (Rule 1:28 decision). The foreclosure may be voided only upon Coffin's showing that the alleged failure to send the 35A and 35B notices rendered the foreclosure fundamentally unfair. Schumacher, 467 Mass. at 433 (Gants, J., concurring). Coffin has already pled, in connection with Count Two of the Counterclaim (Count Three of the Amended Counterclaim), that the alleged failure to comply with § 35B by not informing him of the his modification rights under the settlement agreement has resulted in a fundamental unfairness to Coffin. All the issues relating to the 35B Notice are brought within the ambit of Count Two of the original Counterclaim, and cannot form the basis for a separate claim to void the foreclosure. Further, the 35A Notice complied with the requirements of § 35A.

In any event, whether pled in other claims or not, any claims based on Coffin's allegations that he did not receive the 35A and 35B Notices are not likely to withstand their first contact with the facts. Neither § 35A nor § 35B require that the notices be received. Rather, they expressly provide that notice is deemed made when the notice letter is sent by first class or certified mail to the borrower's last known address. G.L. c. 244, §§ 35A(g), 35B(c). Thus, "it is sufficient for defendant[s] to prove that the letters were mailed; [they] need not prove that they were delivered." Biltcliffe v. CitiMortgage, Inc., 952 F. Supp. 2d 371, 379 (D. Mass. 2013). The 35A and 35B Notices are attached to the Complaint. They were sent to the correct address for Coffin, but the attached copies do not include proof of mailing. Complaint Exh. D. Wells Fargo may show that the notices were sent by submitting an affidavit attaching proof of mailing. If it does so, Coffin's claims about the mailing of the 35A and 35B Notices will be dismissed.

Next, Coffin alleges Coffin did not receive the notice of sale required by G.L. c. 244, § 14. Amended Counterclaim ¶¶ 14, 16. Unlike G.L. c. 244, §§ 35A and 35B, § 14 is a "statute[] relating to the foreclosure of mortgages by the power of sale," Schumacher, 467 Mass. at 431, and therefore a failure to give notice of sale as required under § 14 would void a foreclosure sale. Section 14 requires that "a copy of [said] notice be sent by registered mail to all persons of record as of 30 days prior to the date of sale holding an interest in the property junior to the mortgage being foreclosed, said notice to be mailed at least 14 days prior to the date of sale to each such person at the address of such person set forth in any document evidencing the interest or the last address of such person known to the mortgagee." G.L. c. 244, § 14. As with the notices under §§ 35A and 35B, this notice requirement "is satisfied by mailing and non-receipt is irrelevant." Hull v. Attleboro Sav. Bank, 33 Mass. App. Ct. 18 , 25 (1992); see In re Bailey, 468 B.R. 464, 473 (Bankr. D. Mass 2012). "Nowhere in… the relevant statutes… is it required that the [mortgagee] confirm receipt of Notice." Dooling v. James B. Nutter & Co., 139 F. Supp. 3d 505, 512 (D. Mass. 2015). Evidence sufficient to show compliance with § 14 can include certified mail labels, certified mail receipts, and certified mail return notices, as these documents demonstrate that the defendant sent the requisite notice to the appropriate addresses, thus complying with the notice requirement of §14. See Louis v. Bank of America, 2017 WL 2615742, No. 16-10859-MLW, *3 (D. Mass. June 16, 2017).

The Complaint attaches a copy of the notice of sale, along with what appears to be a certified mail receipt of sending. Complaint Exh. E. Drawing inferences in Coffin's favor, it is not clear if this is the receipt for the notice. As set forth below, Coffin will be asked to file an amended counterclaim consistent with this memorandum and order. If that amended counterclaim asserts that Coffin did not receive the notice of sale or that it was not sent, then, as with the 35A and 35B Notices, Wells Fargo may show that it sent the notice of sale by submitting an affidavit verifying the certified mailing and attaching copies of the notice and the appropriate receipts and those assertions will be dismissed.

Finally, Coffin alleges that contrary to the affidavit of sale registered on his certificate of title, no foreclosure sale of the Property took place. [Note 3] Amended Counterclaim ¶¶ 21, 22. The affidavit of sale is "evidence that the power of sale was duly executed" and the foreclosure sale properly held. G.L. c. 244, § 15. "An affidavit that meets the requirements of G.L. c. 244, § 15, does nothing more. Such an affidavit is not conclusive proof of compliance with G.L. c. 244, § 15." Federal Nat. Mortg. Ass'n v. Hendricks, 463 Mass. 635 , 641 (2012), citing Atkins v. Atkins, 195 Mass. 124 (1907). Notwithstanding the affidavit of sale, Coffin may challenge the foreclosure sale and allege, as he does, that it did not take place. Such an allegation states a claim that Wells Fargo did not comply with G.L. c. 244, § 14, or properly exercise the power of sale, and, therefore, that the foreclosure is void. Coffin's allegation that the foreclosure sale was not held would survive a motion to dismiss, and may be part of an amended counterclaim.

Given the court's analysis of the proposed Amended Counterclaim, the most efficient course is to deny the Motion to Amend without prejudice, and give Coffin leave to file an amended counterclaim consistent with this memorandum and order. At a minimum, this new amended counterclaim should include Count Two of the original Counterclaim and its supporting facts; Count One of the first Amended Counterclaim, so long as it states what declaration Coffin is seeking and bases that declaration on factual allegations and claims that have not been dismissed; Count Two of the Amended Counterclaim for try title, again so long as that claim is based on factual allegations and claims that have not been dismissed; and the factual allegations that survive this memorandum and order, recognizing that claims based on allegations that Coffin did not receive the 35A Notice, the 35B Notice, or the notice of sale are not likely to survive a motion for judgment on the pleadings or for summary judgment.

Conclusion

For the foregoing reasons, the Motion to Dismiss is ALLOWED IN PART AND DENIED IN PART. Counts One, Three, and Four of the Counterclaim are DISMISSED without prejudice. The Motion to Amend is DENIED without prejudice. Coffin is granted leave to file an amended counterclaim consistent with this memorandum and order within ten days of the date of this memorandum and order. A further case management conference is set down for November 19, 2018 at 12:00 noon.

SO ORDERED