The instant action was initiated by Joseph L. and Mary R. Sullivan (plaintiffs / Sullivans) by means of an Amended Verified Complaint challenging the foreclosure on a parcel of property located at 98 Wild Hunter Road, Dennis, Massachusetts (locus / property) by Kondaur Capital Corporation (the defendant / Kondaur). Plaintiffs argue, inter alia, that the foreclosure is invalid because of alleged irregularities in the mortgage assignments. For their part, the defendant maintains that the foreclosure was valid, and requests that the court dismiss the complaint, dissolving a previously approved lis pendens.
Plaintiffs hold title to a parcel of registered land located at 98 Wild Hunter Road, Dennis, Massachusetts, which is described as Lots C-31 and C-34 on Land Court Plan No. 647-I, Certificate of Title No. 174074. [Note 1] On January 11, 2006, the Sullivans granted a mortgage (Mortgage) to Mortgage Electronic Registration Systems, Inc. (MERS) as mortgagee and nominee for the lender, WMC Mortgage Corp. (WMC), in the amount of $704,000.00. [Note 2] The Mortgage was registered with the Barnstable Registry District of the Land Court (Registry District) on January 13, 2006 as Document No. 1,023,753. [Note 3] On May 21, 2008, WMC assigned (first assignment) the Mortgage to Saxon Mortgage Services, Inc. (Saxon). [Note 4] The first assignment was registered with the Registry District on June 20, 2008 as Document No. 1,092,434. [Note 5] On February 12, 2009, Saxon assigned (second assignment) the Mortgage to Kondaur. [Note 6] The second assignment was registered with the Registry District on February 25, 2009 as Document No. 1,107,431. [Note 7] On October 15, 2009, Kondaur foreclosed under the power of sale contained in the Mortgage, subsequently acquiring the property at the foreclosure sale. [Note 8]
The plaintiffs initiated an action in the Barnstable Superior Court challenging the foreclosure as well as their pending eviction from their dwelling. The Court approved a lis pendens which the defendant now seeks to dissolve. On February 25, 2010 the parties entered into an Agreement for Judgment in Orleans District Court whereby the plaintiffs voluntarily relinquished possession of the property to Kondaur. [Note 9] In early March of 2010, the plaintiffs vacated the property. [Note 10]
Thereafter, the Superior Court concluded that it lacked subject matter jurisdiction inasmuch as the Locus consists of registered land. Consequently, it transferred the instant matter to the Land Court pursuant to G.L. c. 212, § 26A.
Upon consideration of the oral arguments and the record before it, this court will allow the defendants Motion to Dismiss and will, as a consequence, dissolve the lis pendens.
When considering a motion to dismiss, the allegations of the complaint, as well as such inferences as may be drawn therefrom in the plaintiffs favor, are to be taken as true. Nader v. Citron, 372 Mass. 96 , 98 (1977). In the case of Iannacchino v. Ford Motor Co., 451 Mass. 623 , 636 (2008) the Court offered the following guidance:
While a complaint attacked by a . . . motion to dismiss does not need detailed factual allegations . . . a plaintiffs obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions . . . Factual allegations must be enough to raise a right to relief above the speculative level . . . [based] on the assumption that all the allegations in the complaint are true (even if doubtful in fact) . . . .
What is required at the pleading stage are factual allegations plausibly suggesting (not merely consistent with) an entitlement to relief, in order to reflect the threshold requirement that the plain statement possesses enough heft to show that the pleader is entitled to relief. (internal citations omitted)
Furthermore, a motion to dismiss is appropriate where the plaintiff lacks standing to bring the claim. See Ginther v. Commissioner of Insurance, 427 Mass. 319 , 322 (1998). Standing is treated as a matter of subject matter jurisdiction. See Doe v. The Governor, 381 Mass. 702 , 705 (1980). The same deferential standard is applied when considering the allegations in a plaintiffs complaint for the purposes of a motion to dismiss for lack of standing. See Nader, supra at 98.
Plaintiffs assert, based upon alleged irregularities in the mortgage assignments, that the defendant improperly foreclosed upon the Property. For its part, the defendant argues (a) that the plaintiffs lack standing to challenge the assignments, but (b) even should the plaintiffs be shown to possess the requisite standing, the assignments were valid and the foreclosure proper. The defendant argues, as well, that as the Property is registered land and a new certificate of title has issued in Kondaurs name, plaintiffs are now barred from challenging the foreclosure.
A. Plaintiffs Standing to Challenge the Assignments
The fact that the interest conveyed under an assignment consists of mortgage rights does not alter that basic legal characteristic of an assignment as a contract. See Oum v. Wells Fargo, N.A., 842 F.Supp.2d 407, 413 (2012). If one is to challenge a contract, one must generally be either a party to the contract or a third-party beneficiary. Cumis Ins. Soc'y, Inc. v. BJ's Wholesale Club, Inc., 445 Mass. 458 464 (2009). In the case at bar, the plaintiffs are neither.
There is a much case law which addresses the question whether the property owner/ mortgagor has standing to challenge the assignment of a mortgage. The overwhelming majority of the relevant decisions have ruled that mortgagors lack the requisite standing to challenge such assignment. See, e.g.,Oum v. Wells Fargo, 842 F.Supp.2d. 407 (D. Mass. 2012) (mortgagor suffered no injury as result of assignment of mortgage); Wenzel v. Sand Canyon Corp., 841 F. Supp. 2d 463 (D. Mass. 2012) (plaintiffs have no standing to seek a declaration that the assignment of their mortgage was invalid); Culhane v. Aurora Loan Servs. of Nebraska, 826 F. Supp. 2d 3 52 (D. Mass. 2011) (homeowner-mortgagors, as non-parties to the assignments of their mortgages, are left with little recourse where they suspect impropriety); Kelly v. Deutsche Bank Natl Trust Co., 789 F. Supp. 2d 262, 267-68 (D. Mass. 2011).
In the above cited cases, the respective Courts have reasoned that, as the borrower is not a party or third-party beneficiary to the assignment, he or she lacks standing to challenge the assignment.
However, the question of whether the [plaintiffs have] standing to challenge the assignment is different from the question of whether [they have] standing to challenge the foreclosure on the basis that [the foreclosing bank] did not properly hold the mortgage at the time of the foreclosure. Wenzel, 841 F. Supp. 2d 463, 479 n.16. In considering cases presenting the latter question, a number of decisions have held that plaintiffs similarly situated to the Sullivans, lack standing to contest the validity of an assignment as a way of challenging the title [Note 11] resulting from a foreclosure sale. Id.; Peterson v. GMAC Mortg., LLC, 2011 WL 5075613, at *4 (D. Mass. Oct. 25, 2011) (I do not read [U.S. Bank Nat. Ass'n v. Ibanez)] to provide an independent basis for mortgagors to collaterally contest previously executed mortgage assignments to which they are not a party and that do not grant them any interests or rights); Kiah v. Aurora Loan Servs., LLC, No. 10-40161-FDS , 2011 WL 841282, at *6 (D. Mass. Mar. 4, 2011) (stating it is difficult to see why plaintiff has standing to assert [that the assignment is void]); Correia v. Deutsche Bank Nat'l Trust Co., 452 B.R. 319, 324 (BAP 1st Cir. June 30, 2011) (affirming lower court's finding that non-party to mortgage assignment lacked standing to challenge the validity of the assignment).
Thus, there is adequate authority in this jurisdiction to support the conclusion that the plaintiffs herein lack standing to challenge the assignments notwithstanding their interests as homeowner-mortgagors in protecting their rights impacted through foreclosure. This court finds the weight and reasoning of these decisions to be persuasive.
However, while the mortgagors may lack standing to contest the validity of the assignments under the circumstances that pertain herein, they are not precluded from challenging the foreclosure on other grounds, i.e. that the foreclosing entity did not hold the mortgage at the requisite time prior to foreclosure, or the mortgage was not in default. See U.S. Bank Natl Assoc. v. Ibanez, 458 Mass. 637 , 650-51 (2011). In the case at bar, however, the plaintiffs do no more than contest the validity of the assignments on bases which this court deems to be without merit.
Consequently, even if the plaintiffs were possessed of standing in this matter, they have failed plausibly to state a claim for relief in challenging the assignments.
B. Plaintiffs Allegations
Of the two mortgage assignments at issue, the plaintiffs allege that the first was defective, fatally so, as it was purported to have been back-dated. The second of the mortgage assignments is alleged to be defective as it was purportedly signed by one lacking the requisite legal authority.
In point of fact, the first assignment was executed on May 21,2008 and contains language to the effect that [t]his assignment has an effective date of December 12, 2007. This is not per se an instance of back-dating at all, but rather an effort to give the document retroactive effect. However, as the foreclosure notice [Note 12] and actual foreclosure occurred well after the actual date of the assignment, the effort at retroactivity is immaterial. See Kiah v. Aurora Loan Services No. 10-40161-FDS, 2011 WL 841282 (D. Mass. March 4, 2011).
Plaintiffs allegations with regard to the second assignment also fail to state a basis for relief. First, plaintiffs allege that the second assignment is invalid because the person signing on behalf of Saxon failed to include a formal title. [Note 13] This court assumes that plaintiffs are essentially challenging the authority of the signer. General Laws c. 183, § 54B is pertinent to this discussion. It provides, in part, as follows:
An assignment of mortgage . . . executed before a notary public . . . whether executed within or without the commonwealth, by a person purporting to hold the position of president, vice president, treasurer, clerk, secretary, cashier, loan representative, principal, investment, mortgage or other officer, agent, asset manager, or other similar office or position, including assistant to any such office or position, of the entity holding record title thereto on behalf of such entity acting in its own capacity . . . shall be binding upon such entity and shall be entitled to be recorded or filed, and no vote of the entity affirming such authority shall be required to permit recording of filing.
The statute is broadly written, so that, as a practical matter, a person purporting to be an agent of the assigning entity may execute the document on behalf of the assignor. Here, the signer affixed her signature beneath the name of the assignor, Saxon Mortgage Services, Inc. Although she did not list the particular position she holds within the entity, her presence, when combined with the following acknowledgement before the notary public, will suffice, in the view of this court, to meet the statutory requirement:
On 2-12-2009 before me personally appeared Natalie Flowers and acknowledged to me that [she] executed the same in [her] authorized capacity.., and that by [her] signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. (emphasis added)
Second, plaintiff claims that the Assignment of Mortgage is invalid for want of a corporate seal. It is this courts view that the challenges to the assignments advanced by the plaintiffs are without merit. See, in this regard, the case of Kingston Housing Authority v. Sandonato & Bogue, Inc. 31 Mass. App. Ct. 270 , 276 (1991). When speaking of corporate seals and their diminished significance, in contemporary society, the Court stated as follows:
[T]hey do not convert the contract as one to be specially regarded as under seal. In similar circumstances authorities have construed a corporate seal stamp as authentication of the authority of the signing officers and not as a manifestation of the intent that the instrument is under seal. If impressed in this case, we think the corporate seals had a similarly limited significance . Such an interpretation is appropriate in light of the diminished significance of the seal in contemporary law and practice .
In addition to the decisional law, there are relevant statutory provisions, as well.
See for example, G.L. c. 4, s. 9A which provides in part, as follows:
In any written instrument, a recital that such instrument is intended to take effect as a sealed instrument, shall be sufficient to give such instrument the legal effect of a sealed instrument without the additional of any seal or any semblance of a seal by impression or otherwise . (emphasis added)
In the case at hand, there is, in this courts view, such a recital of intent. In this regard, the document of assignment provides as follows:
Mortgage Electronic Registration Systems, Inc. as nominee for WMC Mortgage Corp. [Note 14] has caused these presents to be signed by its duly authorized officer and its corporate seal to be hereunto affixed, this 12th day of February 2009. (emphasis added) [Note 15]
Lastly, reference is made to G.L. c. 183, s. 1A which provides in express terms that:
[n]o instrument purporting to affect an interest in land shall be void because it is not sealed or does not recite a seal.
This court is fully satisfied that the assignment at issue has not been rendered invalid or defective by virtue of the purported failure to affix the corporate seal to the document.
I. Request for Injunctive Relief
The plaintiffs contend that the first assignment is invalid because it purports to contain a back-dated effective date. See in this regard, Count 1 of the Complaint [Note 16] which states in pertinent part, as follows:
27. the assignment of the Mortgage from MERS/WMC to Saxon was back-dated and therefore fatally defective (as was the foreclosure process initiated by Saxon). 28. Because the assignment to Saxon was defective Saxon did not have proper legal ownership of the Mortgage when it subsequently assigned the Mortgage o Kondaur.
WHEREFORE, the Sullivans respectfully request that the Court issue immediately a temporary restraining order enjoining Kondaur from proceeding with the eviction of the Sullivans
As noted supra, the request for injunctive relief, has been rendered moot. Notwithstanding, this court has determined that the assignments are not defective as the plaintiffs argue. Consequently, any request for relief herein predicated upon a contrary assumption would fail to provide the grounds for the plaintiffs claimed entitlement to relief.
II. Request for Declaratory Relief
Count 2 of the Plaintiffs Amended Complaint seeks declaratory relief, as follows:
32. [T]he chain of ownership of the mortgage was broken in two places [Note 17] prior to the present foreclosure action brought by Kondaur against the Sullivans.
WHEREFORE the Sullivans respectfully request that the Court enter a declaratory judgment holding that the two assignments were invalid; that Kondaur has not legally established itself as the rightful owner of the Mortgage and Property; that the mortgage foreclosure and subsequent eviction attempt by Kondaur are null and void as a matter of law; [and] that the Sullivans own the property in fee simple .
Count 2 alleges, and is predicated upon, the invalidity of the two mortgage assignments.
However, this court has previously addressed allegations that the said assignments were defective. The plaintiffs have failed, therefore, to reach the threshold required of them under Iannacchino.
III. Intentional or Negligent Misrepresentation
Count 3 of the Amended Verified Complaint entitled Intentional or Negligent Misrepresentation recites as follows;
34. Kondaur failed to exercise due diligence in recognizing and correcting the defects in the mortgage assignments, and therefore misrepresented its right to foreclose on the Property and evict the Sullivans. (emphasis added)
Clearly, the plaintiffs rely upon purported defects in the mortgage assignments as the underlying bases for their claims of misrepresentation. However, this court is satisfied that such assignments are not defective as a matter of law. It follows then that claims of misrepresentation predicated upon those alleged defects, are without foundation or substance. The plaintiffs are entitled therefore, to no relief on the claims asserted under count 3.
Furthermore, both intentional and negligent misrepresentation sound in tort. The Land Court is a court of limited jurisdiction. See G.L. c. 185, § 1. It possesses subject matter jurisdiction in various enumerated areas, including [c]omplaints affecting title to registered land. As a general rule, however, it is without subject matter jurisdiction to hear claims sounding in tort, with the exception of those in the nature of trespass involving title to real estate.
Moreover, in their Memorandum of Law To [certain] Questions Posed By the Court, the plaintiffs dwell at length on the defendants alleged fraudulent misrepresentations. Mass. R. Civ. P. 9 (b), in turn, provides in relevant part, as follows:
In all averments of fraud , the circumstances constituting fraud shall be stated with particularity. Malice, intent, knowledge and other condition of mind of a person may be averred generally.
In construing Rule 9 (b), the case of Equipment & Systems For Industry, Inc. v. Northmeadows Construction Co., Inc. 59 Mass. App. Ct. 931 is instructive. There, the court took note of a count for fraud and deceit. It continued as follows: Nothing here remotely complies with Mass. R. Civ. P. 9(b) which requires that allegations of fraud and deceit must be pleaded with particularity A claim for damages from deceit requires proof that (1) the defendant made a misrepresentation of fact; (2) it was made with the intention to induce another to act upon it; (3) it was made with the knowledge of its untruth; (4) it was intended that it be acted upon, and that it was in fact acted upon; and (5) damage directly resulted therefrom . At a minimum, a plaintiff alleging fraud must particularize the identity of the person(s) making the representation, the contents of the representation, and where and when it took place. In addition, the plaintiff should specify the materiality of the misrepresentation, its reliance thereon, and resulting harm. (emphasis added) (internal citations omitted).
It is clear that the Rule 9 (b) requisites specified supra are, by and large, wholly lacking in the plaintiffs Complaint. Even if it could be said therefore, that this court enjoys subject matter jurisdiction with regard to such tort claims, the failure to comport with the Rule 9 (b) requirements would provide yet an additional basis for dismissal.
Count 4 of the Plaintiffs Complaint is entitled Estopple. [sic]
That Count reads, in substance, as follows: 35. As set forth [earlier], the chain of ownership of the Mortgage was broken in two places [Note 18] prior to the present foreclosure action brought by Kondaur against the Sullivans.
WHEREFORE, the Sullivans respectfully request that the Court:
1. prevent Kondaur from any claim of ownership of the mortgage or property and 2. prevent Kondaur the right to proceed with the eviction, .
Once again, this court is satisfied that these allegations fail to reach the relatively modest threshold for the avoidance of dismissal as enunciated in Iannacchino.
Beyond a reference to the assignments on which this court has previously opined, there is no satisfactory factual basis for the claim of estoppel. Circumstances that may give rise to an estoppel are (1) a representation intended to induce reliance on the part of a person to whom the representation is made; (2) an act or omission by that person in reasonable reliance on the representation; and (3) detriment as a consequence of the act or omission. Bongaards v. Millen, 440 Mass. 10 , 15 (2003).
In light of the foregoing discussion, the court concludes that the plaintiffs have failed to advance factual allegations plausibly suggesting an entitlement to relief .
Consequently, it is hereby
ORDERED that the Defendants Motion to Dismiss be, and hereby is,
It is further
ORDERED that Defendants Motion to Dissolve Lis Pendens be, and hereby is,
Judgment to issue accordingly.
By the Court (Grossman, J.)
[Note 1] Amended Verified Complaint and Prayer for Injunctive and Declaratory Relief (Complaint I) ¶ 7; Complaint I, Exhibit (Ex.) 1.
[Note 2] Complaint I, Ex. 2.
[Note 3] Id.
[Note 4] Complaint I ¶ 11.
[Note 5] Complaint I, Ex. 3.
[Note 6] Complaint I ¶ 17.
[Note 7] Complaint I, Ex. 4.
[Note 8] Memorandum of Law in Support of Motion to Dismiss and Dissolve Lis Pendens (Memorandum I), Ex. C.
[Note 9] Memorandum I ¶ 5; Memorandum I, Ex. D.
[Note 10] Id.
[Note 11] The court notes that the instant case was not brought as a try-title case.
[Note 12] First published on September 24, 2009, as per affidavit appended to foreclosure deed.
[Note 13] The plaintiffs point to the erroneous statement in the second assignment from Saxon to Kondaur, to the effect that MERS as nominee for WMC Mortgage Corp. has caused these presents to be signed by its duly authorized officer and its corporate seal to be hereunto affixed , his 21 day of May 2008. This assignment has an effective date of December 12, 2007. This language was clearly carried over, erroneously so, from the first assignment. However, when viewed in context of the entire document, its meaning and intent are clear. This court views such language as no more than a typographical error which does not, in any event, invalidate the assignment.
[Note 14] See footnote 13, supra.
[Note 15] This recital is relevant, as well, to the discussion of corporate authority, supra.
[Note 16] The Amended Complaint was originally filed with the Barnstable Superior Court. Count 1 thereof , a Request for Injunctive Relief to prevent the eviction of the Sullivans, was therefore directed at that Court.
As the Plaintiffs have long since agreed voluntarily to vacate their premises in conjunction with a District Court proceeding, Count 1 has been rendered moot.
[Note 17] Presumably a reference to the two allegedly defective assignments.
[Note 18] A presumed reference to the two mortgage assignments which, in large measure, form the basis for this action.