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 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 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. 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. 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. 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. The court issued its Memorandum and Order Allowing in Part and Denying in Part Plaintiff's Motion to Dismiss Counterclaim and Denying Defendant's Motion to File Amended Counterclaim without Prejudice (Memorandum and Order on Motion to Dismiss) on October 29, 2018.

The Defendant's Amended Counterclaims was filed on November 8, 2018. The Defendant's Verification of Amended Counterclaims was filed on December 5, 2018. The Answer to Amended Counterclaims was filed on December 17, 2018. The Petitioner Wells Fargo Bank, N.A.'s Motion for Summary Judgment, Memorandum of Law in Support of Petitioner Wells Fargo Bank, N.A.'s Motion for Summary Judgment, Petitioner Wells Fargo Bank, N.A.'s Land Court Rule 4 Statement of Undisputed Material Facts (Pl.'s SOF), and Appendix in Support of Petitioner Wells Fargo Bank, N.A.'s Motion for Summary Judgment (Appendix or App.) were filed on January 15, 2019. The Coffin's Limited Opposition to the Wells Fargo Bank, N.A.'s Motion for Summary Judgment and Coffin's Response to Wells Fargo Bank's Statement of Material Facts (Def.'s SOF) were filed on February 19, 2019. The Reply in Support of Petitioner Wells Fargo Bank, N.A.'s Motion for Summary Judgment was filed on February 22, 2019. The court heard the Motion for Summary Judgment on February 25, 2019, and took the matter under advisement. This Memorandum and Order follows.

Summary Judgment Standard

Generally, summary judgment may be entered if the "pleadings, depositions, answers to interrogatories, and responses to requests for admission . . . together with the affidavits . . . show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Mass. R. Civ. P. 56(c). In viewing the factual record presented as part of the motion, the court is to draw "all logically permissible inferences" from the facts in favor of the non-moving party. Willitts v. Roman Catholic Archbishop of Boston, 411 Mass. 202 , 203 (1991). "Summary judgment is appropriate when, 'viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law.'" Regis College v. Town of Weston, 462 Mass. 280 , 284 (2012), quoting Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117 , 120 (1991).

Undisputed Facts

The following facts are undisputed or are deemed admitted:

1. On or about May 16, 1997, Coffin took title to the Property by deed dated May 16, 1997, and registered with the registry district on May 16, 1997, as Document No. 76,128, and noted on Certificate of Title No. 17,096. Pl.'s SOF ¶ 1; Def.'s SOF ¶ 1; App. Exh. 1.

2. On or about January 17, 2008, Coffin transferred the Property to himself, as Trustee of the Coffin Realty Trust, by deed dated January 17, 2008, and registered with the registry district on March 18, 2008, as Document No. 123,426, and noted on Certificate of Title No. 22,919. Pl.'s SOF ¶ 2-3; Def.'s SOF ¶ 2-3; App. Exh. 2-3.

3. On September 14, 2007, Coffin obtained a mortgage loan from World Savings Bank, FSB (WSB) in the principal amount of $750,000, the repayment of which was secured by a mortgage on the Property in favor of WSB (Loan). Pl.'s SOF ¶ 4; Def.'s SOF ¶ 4; App. Exh. 4.

4. Wells Fargo is the successor-by-merger to WSB and its assets, including the Loan. Pl.'s SOF ¶ 5; Def.'s SOF ¶ 5. [Note 1]

5. On February 13, 2009, a multi-district class action lawsuit was commenced against Wachovia Mortgage, FSB concerning the disclosure and terms of certain "Pick-A-Payment" mortgage loans. Coffin's loan contained the "Pick-A-Payment" feature. See 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). Pl.'s SOF ¶ 6; Def.'s SOF ¶ 6.

6. The United States District Court for the Northern District of California approved a settlement of the Class Action on December 16, 2010, which was finalized on May 17, 2011 (Class Action Settlement). Pl.'s SOF ¶ 7; Def.'s SOF ¶ 7.

7. The Class Action Settlement provided for three settlement classes that included:

All current and former borrowers of World Savings Bank, FSB, now or formerly known as Wachovia Mortgage, FSB ("Wachovia mortgage") who, (a) on or after August 1, 2003 and on or before December 31, 2008 entered into a loan transaction with Wachovia Mortgage that, as of the date of the loan's funding, was secured by their primary residence; (b) obtained financing from Wachovia Mortgage pursuant to a Pick-a-Payment mortgage loan promissory note; (c) have not previously released their claims pursuant to another settlement agreement, final judgment, or other dealings with Wachovia Mortgage…

Pl.'s SOF ¶ 8; Def.'s SOF ¶ 8; App. Exh. 5.

8. The Class Action Settlement subdivided the borrowers into three classes based on whether the borrowers still had their original "Pick-a-Payment" and whether they were in default. Settlement Class A consisted of borrowers who no longer held their "Pick-a-Payment" loans; Settlement Class B consisted of borrowers who held their loans and were not in default as of the date of the preliminary approval of the Class Action Settlement; and Settlement Class C consisted of borrowers who held their loans and were in default. Pl.'s SOF ¶ 9; Def.'s SOF ¶ 9; App. Exh. 5.

9. As a part of the Class Action Settlement, Wells Fargo was required to establish a "Common Fund," which would be distributed to settlement class members by the Settlement Administrator. Pl.'s SOF ¶ 10; Def.'s SOF ¶ 10; App. Exh. 5.

10. In addition, between December 18, 2010 and June 30, 2013, Wells Fargo was required to review the loans of certain class members that were in default or in "Imminent Default" for loan modification in accordance with certain terms set forth in the settlement agreement. Pl.'s SOF ¶ 11; Def.'s SOF ¶ 11; App. Exh. 5.

11. Rust Consulting, Inc. (Rust) served as the class action administrator for the Class Action Settlement and in that role arranged for the mailing of class notices and distributed settlement benefits. Pl.'s SOF ¶ 12; Def.'s SOF ¶ 12; App. Exh. 6.

12. Rust received an electronic record of the names and last known addresses of all class members from Wells Fargo, and each of those addresses were updated from information available in the National Change of Address Database prior to the mailing of the class notices. Pl.'s SOF ¶ 13; Def.'s SOF ¶ 13; App. Exh. 6.

13. Coffin was listed as a class member in the electronic record provided to Rust by Wells Fargo. Specifically, Coffin was a member of Settlement Class B. Pl.'s SOF ¶ 14; Def.'s SOF ¶ 14; App. Exh. 6.

14. On January 28, 2011, Rust mailed the Court-approved settlement notice by First Class United States mail to 517,783 class members. Pl.'s SOF ¶ 15; Def.'s SOF ¶ 15; App. Exh. 6.

15. Rust sent Coffin the Class B Settlement Notice on January 28, 2011. The Class B Settlement Notice was mailed to Coffin at the Property address and was never returned to Rust as undeliverable. Coffin never opted out of the Class Action Settlement Agreement. Pl.'s SOF ¶ 15- 17; Def.'s SOF ¶ 15-17; App. Exh. 6.

16. After providing Coffin with notice, on October 7, 2011, Rust mailed Coffin a settlement check to the Property address, bearing check number 43014 and made payable to Coffin. The settlement check was cashed and cleared on October 24, 2011. Pl.'s SOF ¶ 18; Def.'s SOF ¶ 18; App. Exh. 6.

17. Coffin defaulted on the Loan by failing to make the June 2014 payment and each payment thereafter. Pl.'s SOF ¶ 19; Def.'s SOF ¶ 19; App. Exh. 7.

18. On or around September 22, 2014, Wells Fargo sent Coffin a Notice of Right to Cure pursuant to G.L. c. 244, § 35A (35A Notice), and a Notice of Right to Request a Modified Loan pursuant to G.L. c. 244, § 35B (35B Notice), by both First Class and Certified United States Mail to the Property. Pl.'s SOF ¶ 20; Def.'s SOF ¶ 20; App. Exh. 7.

19. On September 18, 2015, Wells Fargo filed a Mortgagee's Affidavit in an action commenced under the Servicemembers Civil Relief Act, Wells Fargo Bank, N.A. v. Alfred Byron Coffin, III, as Trustee of Coffin Realty Trust, Case No. 15 SM 007986, which certified, among other things, that notice had been provided to Coffin incompliance with G.L. c. 244, § 35A. Pl.'s SOF ¶ 21; Def.'s SOF ¶ 21; App. Exh. 8.

20. On April 29, 2016, Wells Fargo executed an affidavit certifying compliance with G.L. c. 244, §§ 35B-35C, which it subsequently registered with the registry district on June 28, 2016, as Document No. 152027, and noted on Certificate of Title No. 22919. Pl.'s SOF ¶ 22; Def.'s SOF ¶ 22; App. Exh. 9.

21. On August 2, 2016, Wells Fargo through its foreclosure counsel, Orlans, P.C., sent a Notice of Intention to Foreclose (Notice of Foreclosure) by Certified and First Class United States Mail to Coffin at the Property, which enclosed a "Mortgagee's Notice of Sale of Real Estate" and a "Certification Pursuant to Massachusetts 209 CMR 18.21A(2)(c)." Pl.'s SOF ¶ 23; Def.'s SOF ¶ 23; App. Exh. 10.

22. On September 1, 2016, Wells Fargo conducted a foreclosure auction of the Property, at which numerous bids were submitted and the winning bidder agreed to purchase the property. Complaint ¶ 13. Coffin has not disputed this allegation in the Complaint.

23. On July 13, 2017, Coffin registered an "Adverse Claim" in the registry district as Document No. 155,627 in an attempt to prevent foreclosure of the Property. Pl.'s SOF ¶ 24; Def.'s SOF ¶ 23; App. Exh. 11.

24. On July 26, 2018, Coffin registered a memorandum of lis pendens in the registry district as Document No. 158,869. Pl.'s SOF ¶ 25; Def.'s SOF ¶ 25; App. Exh. 12.

Discussion

In his amended counterclaims Coffin advanced claims challenging (1) whether Wells Fargo had mailed a notice of foreclosure sale in accordance with G.L. c. 244, § 14; (2) whether the foreclosure sale actually took place; and (3) whether notices sent to Coffin pursuant to G.L. c. 244, §§ 35B-35C, were fundamentally unfair to Coffin. Coffin has subsequently waived his claims that the foreclosure sale did not occur and that Wells Fargo did not comply with G.L. c. 244, § 14. The remaining issue in this case has been distilled down to whether the notice sent to Coffin pursuant to G.L. c. 244, § 35B (§ 35B or section 35B), was fundamentally unfair to Coffin under the Supreme Judicial Court's (SJC) decision in U.S. Bank Nat'l Ass'n v. Schumacher, 467 Mass. 421 , 433 (2014) (Gants, J., concurring) (Schumacher). Coffin argues that the 35B Notice was fundamentally unfair on the grounds that at the time Wells Fargo sent it to Coffin, Wells Fargo knew that the Class Action Settlement barred Coffin from taking advantage of any of the loan modification opportunities described therein, but failed to make any reference to the Class Action Settlement. Wells Fargo argues that it strictly complied with the requirements of § 35B, and that in any event, Coffin was not precluded from seeking other loan modification programs outside of the Class Action Settlement.

Section 35B(c) provides that "for certain mortgage loans, the creditor shall send notice, concurrently with the notice required by subsection (g) of section 35A, of the borrower's rights to pursue a modified mortgage loan." Id. Pursuant to 209 Code Mass. Regs. § 56.05, "[a] creditor must send a Right to Request a Modified Mortgage Loan Notice in accordance with 209 CMR 56.09" (hereafter § 56.09 or section 56.09). Id. Section 56.09 provides the form with which a creditor's Right to Request a Modified Mortgage Loan notice must comply. Id. The 35B Notice, appearing in the summary judgment record as Exhibit 7(B) to the Appendix, complies with the requirements of § 35B, and conforms to the form provided in § 56.09. Wells Fargo's 35B Notice complied with the requirements of § 35B.

A notice provided under § 35B, is a pre-foreclosure requirement which does not arise from "one of the statutes 'relating to the foreclosure of mortgages by the exercise of a power of sale.'" Schumacher, 467 Mass. at 431, quoting G.L. c. 183, § 21. In an action prior to foreclosure, the remedy for a violation of § 35B would be that the mortgage holder "must provide the proper notice required by § 35[B] and wait to see if the borrower will cure the default within the required time period before recommencing the foreclosure proceeding." Id. at 432 (Gants, J., concurring). In a post-foreclosure challenge by a borrower, as is the present case, a violation of § 35B by the mortgage holder will cause the foreclosure sale to be set aside only where the borrower has proved "that the violation of § 35[B] rendered the foreclosure so fundamentally unfair that [he] is entitled to equitable relief." Id. at 433 (Gants, J., concurring).

Here, Wells Fargo sent the 35B notice and subsequently held a foreclosure auction of the property. It is not clear from the record if the foreclosure auction was sufficiently complete so that the 35B notice would be analyzed under the post-foreclosure standard rather than the pre- foreclosure standard. Under either analysis, the 35B notice was sufficient. Coffin does not argue that Wells Fargo failed to comply with § 35B. Indeed, as discussed, the 35B notice complied with § 35B and § 56.09. Thus, under a pre-foreclosure analysis, the 35B notice was proper and the foreclosure sale could go forward.

Coffin rather argues that, under the post-foreclosure standard, the effect of the Class Action Settlement is to render Wells Fargo's compliance with § 35B fundamentally unfair to Coffin because the loan modification opportunities described in the 35B Notice were unavailable to Coffin following the Class Action Settlement. This argument, raised by Coffin for the first time in his opposition to Wells Fargo's motion for summary judgment, is unsupported by references to any facts or law which would limit Coffin's options for loan modification to those available under the Class Action Settlement. In the Memorandum and Order on Motion to Dismiss the court found that based on the pleadings, Coffin was bound by the Class Action Settlement and that 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 United States District Court for the Northern District of California. In arguing that the only loan modification relief available arises out of the Class Action Settlement, Coffin misreads this court's conclusion. While Coffin is bound by the Class Action Settlement and must go to the Northern District of California to press claims relating to the Class Action Settlement, nothing in the court's Memorandum and Order on Motion to Dismiss finds that the Class Action Settlement limits the availability of other avenues of debt relief which may exist outside the ambit of the Class Action.

Wells Fargo has demonstrated that it complied with the requirements of § 35B. Coffin's further challenge to the availability of the loan modification opportunities referenced in the 35B Notice is wholly unsupported and is insufficient to avoid the entry of summary judgment on the issue of whether Wells Fargo complied with § 35B. Coffin's bare assertions are unsupported by the materials contemplated in Mass. R. Civ. P. 56(e) and summary judgment shall enter in favor of Wells Fargo. In light of this conclusion, it is unnecessary to consider whether a creditor's notice under § 35B is defective or fundamentally unfair to the borrower if the borrower is not in fact eligible for a loan modification.

Conclusion

For the foregoing reasons, the Petitioner Wells Fargo Bank, N.A's Motion for Summary Judgment is ALLOWED. Judgment shall enter dismissing the Complaint without prejudice, dismissing Defendant's Amended Counterclaims with prejudice, and dissolving the Memorandum of Lis Pendens 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.

SO ORDERED