HSBC BANK USA, N.A., trustee, [Note 1] vs. JODI B. MATT.

LENK, J. The plaintiff, HSBC Bank USA, N.A. (HSBC), claiming to be the holder of a mortgage given by the defendant, Jodi B. Matt, filed a complaint in equity in the Land Court, under the Massachusetts Soldiers' and Sailors' Civil Relief Act (Massachusetts act or act), to determine if Matt was entitled to foreclosure protections under the Federal Servicemembers Civil Relief Act (Federal SCRA or SCRA), 50 U.S.C. app. §§ 501 et seq. (2006). The Massachusetts act, which provides a procedural framework for ascertaining whether mortgagors are entitled to protections under the SCRA, expressly permits only those defendants who assert entitlement to such rights to appear in equitable proceedings brought pursuant to the SCRA (servicemember proceedings). See St. 1943, c. 57 (1943), as amended through St. 1998, c. 142.

While conceding that she is not entitled to protection under the SCRA, Matt nonetheless moved to dismiss the complaint on the ground that HSBC lacked standing to bring a servicemember proceeding because it was not the clear holder of either her note or her mortgage. After ordering discovery, a Land Court judge denied Matt's motion, concluding that HSBC had standing by virtue of its right to purchase Matt's mortgage.

Because Matt was not entitled to appear or be heard at the servicemember proceeding, the court should not have accepted or entertained Matt's filings. Nonetheless, the judge having undertaken to examine HSBC's standing, the question before us is whether he properly applied the correct standard in concluding that HSBC had established standing. Because standing to bring a servicemember proceeding is limited to plaintiffs who satisfactorily establish that they are mortgagees or agents thereof, we conclude that the judge's determination of HSBC's standing on the basis of a different standard is incorrect.

1. Statutory framework. The Federal SCRA, passed in 1940, is modeled after the Soldiers' and Sailors' Civil Relief Act of 1918, which in turn was based on State civil relief acts passed during the American Civil War. See Folk, Tolling of Statutes of Limitations Under Section 205 of the Soldiers' and Sailors' Civil Relief Act, 102 Mil. L. Rev. 157, 159 (1983). In its current form, and consistent with its history, the SCRA "provide[s] for the temporary suspension of judicial and administrative

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proceedings and transactions that may adversely affect the civil rights of servicemembers during their military service." 50 U.S.C. app. § 502. Among the protections granted to servicemembers, the SCRA provides that a "sale, foreclosure, or seizure of property for a breach of an obligation" conducted while a party is in the military [Note 2] "shall not be valid . . . except . . . (1) upon a court order granted before such sale, foreclosure, or seizure; or (2) if made pursuant to an agreement [between the parties]." 50 U.S.C. app. § 533(c).

In Massachusetts, a mortgagee [Note 3] seeking to assure compliance with the SCRA prior to commencing foreclosure proceedings could bring an action in equity to obtain an appropriate court order. [Note 4] See Lynn Inst. for Sav. v. Taff, 314 Mass. 380, 386 (1943); Great Barrington Sav. Bank v. Brown, 239 Mass. 546, 547 (1921). In 1941, the Legislature, concerned that servicemembers were not receiving adequate notice of servicemember proceedings, passed the Massachusetts act, which set forth certain procedural requirements for such equitable actions. [Note 5] St. 1941, c. 25, preamble. The act was thereafter amended on multiple

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occasions to provide additional procedural and substantive limitations. See St. 1943, c. 57.

Prominent among these are the jurisdictional limitations, which provide:

"In proceedings under this section, no person who is not a record owner of the equity of redemption in the mortgaged property and who is not entitled to the benefit of the [SCRA] . . . shall be entitled to appear or be heard in such proceeding, except on behalf of a person so entitled, or unless an affidavit by the claimant, . . . stating that he is entitled to the benefits of [the SCRA], is filed with the appearances. Such proceedings shall be limited to the issues of the existence of such persons and their rights if any." (Emphasis added.)

St. 1943, c. 57, § 1, as amended through St. 1990, c. 496, § 1. In concert with the limited subject matter of the proceeding, the act now limits the relief granted at proceedings where a defendant is not entitled to the benefits of the SCRA to a "decree by the court that no person is then subject to or is entitled to the benefits of the [SCRA], [which] shall forever bar the persons named in the bill or complaint from complaining that such foreclosure or seizure is invalid under said act." [Note 6] Id.

Servicemember proceedings "occur independently of the actual foreclosure itself and of any judicial proceedings determinative of the general validity of the foreclosure." Beaton v. Land Court, 367 Mass. 385, 390, appeal dismissed, 423 U.S. 806 (1975) (Beaton). See Akar v. Federal Nat'l Mtge. Ass'n, 845 F. Supp. 2d 381, 396-397 (D. Mass. 2012) ("the Land Court [servicemember] action [does] not mark the commencement of foreclosure proceedings"). "If a foreclosure were otherwise properly made, failure to comply with the [SCRA] would not render the foreclosure invalid as to anyone not entitled to the protection of that act." Beaton, supra at 390. Failure to

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bring a servicemember proceeding, however, will leave the title vulnerable to a challenge that the foreclosure sale was defective due to the possibility that it violated a mortgagor's rights under the SCRA. See id. Thus, a servicemember proceeding is neither a part of nor necessary to the foreclosure process; it simply ensures that a foreclosure will not be rendered invalid for failure to provide the protections of the SCRA to anyone so entitled, an assurance that also could be obtained at a postforeclosure action to quiet title under G. L. c. 240, § 6. See Silva v. Massachusetts, 351 Fed. Appx. 450, 452 n.2 (1st Cir. 2009).

2. Background and prior proceedings. HSBC, the trustee for Ace Securities Corp. Home Equity Loan Trust Series 2005-HE4 Asset Backed Pass-Through Certificates (trust), asserted in its servicemember complaint that it was "the assignee and holder of a mortgage" given by Matt. HSBC additionally submitted a mortgagee's affidavit, [Note 7] signed by Countrywide Home Loans Servicing, LP (Countrywide), a servicer of loans contained in the trust, in which Countrywide averred that it was "authorized to act by and on behalf of either of the Mortgagee or one holding under the Mortgagee" and that it had provided notice to Matt of her right to cure a default in payment on her mortgage, as required by G. L. c. 244, § 35A. Matt conceded that she was not entitled to the protections of the SCRA, yet nevertheless she moved to dismiss, claiming that HSBC did not have standing to bring the servicemember complaint because it had not shown it was the holder of either her mortgage or her note.

On the basis of supplemental discovery submissions ordered following a hearing on Matt's motion, the judge denied the motion, concluding that, even though "it is not clear from the record that HSBC is the current holder of either the note or the mortgage," HSBC nonetheless had standing under the act because

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it had "a contractual right to become [the] holder" of Matt's mortgage. The judge determined that a plaintiff in a servicemember proceeding "need not be the current holder of the note or the mortgage to have standing . . . . [I]t is sufficient if the plaintiff satisfies the general requirements of standing." The judge reasoned that a party with a contractual right to purchase the mortgage has a sufficient interest in the servicemember proceeding because the proceeding "affects the present collectability of that loan . . . and thus the present value of the loan."

Matt's motion for reconsideration was denied, as was her petition for interlocutory review pursuant to G. L. c. 231, § 118, and her ensuing appeal of that denial. Thereafter, a judgment entered "that the plaintiff be authorized and empower[ed] to make an entry and to sell the property covered by the mortgage as set forth in this complaint in accordance with the powers contained in said mortgage." Matt appealed from this judgment, [Note 8] and we transferred the case to this court on our own motion.

3. Discussion. We review de novo the judge's determination of the appropriate standard for standing in servicemember proceedings, and his conclusion that HSBC has met this standard. See Indeck Me. Energy, LLC v. Commissioner of Energy Resources, 454 Mass. 511, 516 (2009) ("Because the Superior Court judge decided the standing issue as a matter of law, we review that legal conclusion de novo").

As an initial matter, we consider whether Matt was correctly permitted to appear in this action and to lodge a challenge to HSBC's standing. The Massachusetts act, as stated, provides that only those defendants who are entitled to the benefits of the SCRA, or those acting on their behalf, "shall be entitled to appear or be heard in [a servicemember] proceeding." St. 1943, c. 57, § 1, as amended through St. 1990, c. 496, § 1. In Beaton, supra at 388, we held that "the Judges [of the Land Court] acted properly in denying [a] motion to compel the recorder to accept [an] answer" filed by the defendants where "the answer . . . [did] not assert that the petitioners or any other concerned parties [were] entitled to the protection of the

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[SCRA]." See Boston Five Cents Sav. Bank v. Johnson, 3 Mass. App. Ct. 790, 790 (1975) (defendants' appearance and answer properly struck where record did not indicate they were entitled to benefits under SCRA). Because Matt did not assert in her responsive pleading that she was entitled to the protections of the SCRA, the court erred in accepting her filings and allowing her to appear and be heard.

The rationale for this limitation lies in the extremely narrow subject matter of the proceeding itself. Simply put, because a servicemember proceeding cannot affect the rights or interests of nonservicemembers, nonservicemembers have no interest in the proceeding. See Beaton, supra at 390-391. "[C]ourts are not established to enable parties to litigate matters in which they have no interest affecting their liberty, rights or property." See Razin v. Razin, 332 Mass. 754, 754 (1955), quoting Hogarth-Swann v. Weed, 274 Mass. 125, 132 (1931). To allow challenges by nonservicemembers, even to threshold issues such as standing, would contravene the clear statutory language and the legislative intent to create a uniquely narrow procedure.

Notwithstanding a nonservicemember's inability under the act to raise the issue, however, a plaintiff must establish standing in order for a court to decide the merits of a dispute or claim. See Beard Motors, Inc. v. Toyota Motor Distribs., Inc., 395 Mass. 428, 432 (1985). Because standing is a question of subject matter jurisdiction, Indeck Me. Energy, LLC v. Commissioner of Energy Resources, supra at 516, it must be established irrespective of whether it is challenged by an opposing party. See Nature Church v. Assessors of Belchertown, 384 Mass. 811, 812 (1981) ("Courts . . . have both the power and the obligation to resolve problems of subject matter jurisdiction whenever they become apparent, regardless whether the issue is raised by the parties"). See also Mass. R. Civ. P. 12 (h) (3), 365 Mass. 754 (1974) ("Whenever it appears by suggestion of a party or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action"). [Note 9]

Therefore, a plaintiff must establish standing in servicemember

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proceedings even if a defendant is statutorily prohibited from appearing. See Bevilacqua v. Rodriquez, 460 Mass. 762, 763-764 (2011). If an issue of standing becomes apparent in such cases, it falls to the judge to inquire into the plaintiff's standing sua sponte. See Nature Church v. Assessors of Belchertown, supra.

We turn next to whether a plaintiff must be a mortgagee [Note 10] to establish standing in a servicemember proceeding, or whether, as the judge determined, standing may be established upon a showing that a plaintiff holds a right to purchase a mortgage. "To have standing in any capacity, a litigant must show that the challenged action has caused the litigant injury." Sullivan v. Chief Justice for Admin. & Mgt. of the Trial Court, 448 Mass. 15, 21 (2006), quoting Slama v. Attorney Gen., 384 Mass. 620, 624 (1981) "[T]he injury alleged must fall 'within the area of concern of the statute or regulatory scheme under which the injurious action has occurred.' " Sullivan v. Chief Justice for Admin. & Mgt. of the Trial Court, supra at 21-22, quoting Gunther v. Commissioner of Ins., 427 Mass. 319, 323 (1998). A plaintiff must have "a definite interest in the matters in contention in the sense that his rights will be significantly affected by a resolution of the contested point." Bonan v. Boston, 398 Mass. 315, 320 (1986). "We decide whether standing exists by examining several considerations, including the language of the statute [and] the Legislature's intent and purpose in enacting [it] . . . ." Massachusetts State Police Commissioned Officers Ass'n v. Commonwealth, 462 Mass. 219, 223 (2012), quoting Indeck Me. Energy, LLC v. Commissioner of Energy Resources, supra at 517-518.

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A servicemember proceeding is a proceeding in equity brought because of the Federal SCRA and subject to the procedural and subject matter limitations contained in the Massachusetts act. See Lynn Inst. for Sav. v. Taff, 314 Mass. 380, 385 (1943). We thus first consider the "area of concern" of the Federal SCRA and the Massachusetts act. The stated purpose of the SCRA is "to provide for, strengthen, and expedite the national defense [through the] temporary suspension of judicial and administrative proceedings and transactions that may adversely affect the civil rights of servicemembers during their military service." 50 U.S.C. app. § 502. The SCRA invalidates a foreclosure conducted during a servicemember's period of military service unless done pursuant to a court order or agreement between the parties. 50 U.S.C. app. § 533. Because nonmortgagees cannot, by law, take actions to foreclose that would trigger the protections accorded servicemembers by the SCRA, extending standing in servicemember proceedings to nonmortgagees would not further the stated purpose of the SCRA. See Eaton v. Federal Nat'l Mtge. Ass'n, 462 Mass. 569, 571 (2012) (party other than mortgagee or agent of mortgagee cannot validly foreclose on mortgage).

The purpose of this portion of the SCRA, however, is "not only to protect [servicemember mortgagors], but also to afford relief to mortgagees, who might suffer great loss if compelled to await the termination of the period of military service of any person interested who might be so engaged, before exercising the power of sale." Lynn Inst. for Sav. v. Taff, supra at 386. Because nonmortgagees are not, by law, in a position to foreclose on a mortgage, see Eaton v. Federal Nat'l Mtge. Ass'n, supra, they could not suffer the loss that the servicemember proceeding redresses. As to foreclosures involving nonservicemember mortgagors, the act contemplates a benefit to mortgagees through the issuance of a judicial decree that such a mortgagor is not entitled to the protections of the SCRA. See Beaton, supra. The decree protects the mortgagee by ensuring that a foreclosure will not subsequently be rendered invalid for failure to provide the protections of the SCRA to anyone so entitled. Id. at 390. Insofar as nonmortgagees are unable to foreclose on a mortgage, the decree affords them no protections.

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Those who, like HSBC, are said to have an option to become the holder of a mortgage do not have the present authority to foreclose. See Eaton v. Federal Nat'l Mtge. Ass'n, supra. Their interest in ascertaining whether the mortgagor is protected under the SCRA is limited to any impact the mortgagor's servicemember status may have upon the present value of the investment they have under consideration. Such an interest does not give rise to a definite injury "within the area of concern" of the SCRA, see Sullivan v. Chief Justice for Admin. & Mgt. of the Trial Court, supra at 21-22, nor will a judicial resolution under the act "significantly affect[]" their rights. See Bonan v. Boston, supra.

Turning to the Massachusetts act, it is clear from its language and history that nonmortgagees likewise do not fall within the act's "area of concern." The act sets forth a procedural and substantive framework for servicemember proceedings in order to implement the SCRA. St. 1943, c. 57, § 1. Section 1 of the act, which imposes a notice requirement, limits the act to proceedings brought "in equity for authority to foreclose a mortgage . . . because of an Act of Congress known as the [SCRA]." Id. The statutory notice form provided thereafter begins:

"[Plaintiff,] claiming to be the holder of a mortgage [or] trust deed [or] security in the nature of a mortgage . . . , has filed with said court a bill in equity for authority to foreclose said mortgage [or] trust deed [or] security in the nature of a mortgage . . ." (emphasis added).

Id. [Note 11] While largely identical to the notice set forth in the repealed 1941 version of the act, the current notice form contains additional language identifying the plaintiff as one "claiming to be the holder of a mortgage," therefore reflecting the legislative

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intent, see Charles C. v. Commonwealth, 415 Mass. 58, 67 n.5 (1993) (amendment to statute properly may be considered as indicative of legislative intent), that only mortgagees bring such complaints. Compare St. 1943, c. 57, with St. 1941, c. 25.

Finally, the preamble to the initial version of the Massachusetts act states that the servicemember procedure "should immediately be available for such mortgagees, mortgagors and others [Note 12] so that all future foreclosures in which they are interested may be conducted in accordance with the [SCRA]." St. 1943, c. 57, preamble. From its inception, then, the act contemplated that only mortgagees would have the requisite standing to bring a servicemember complaint. See Brennan v. The Governor, 405 Mass. 390, 395 (1989) ("Statements regarding the scope or purpose of an act that appear in its preamble may aid the construction of doubtful clauses . . .").

In light of the foregoing, we conclude that only mortgagees or those acting on behalf of mortgagees [Note 13] have standing to bring servicemember proceedings. [Note 14] In the present case, the judge determined that HSBC had standing on the sole basis of its purported right to purchase Matt's mortgage. [Note 15] Given the incorrect standard employed in making this determination, neither it nor the ensuing judgment may stand. [Note 16]

Going forward, to establish standing in servicemember

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proceedings, plaintiffs must present such evidence as may be necessary and appropriate in the circumstances reasonably to satisfy the judge as to their status as mortgagees or agents thereof. [Note 17] We emphasize, however, that servicemember proceedings, where nonservicemember defendants may not appear and be heard, are not determinative of any issue beyond the extent of such defendants' rights under the SCRA, if any. See St. 1943, c. 57. See also Beaton, supra at 390-391. The servicemember proceeding is not part of the foreclosure process. Accordingly, in any separate action challenging a foreclosure or a mortgagee's right to foreclose, [Note 18] the fact that the purported mortgagee was determined to have standing to maintain a servicemember proceeding does not itself in any way establish the purported mortgagee's status as such in that separate action.

4. Conclusion. The judgment for entry and sale is vacated and the matter is remanded to the Land Court for further proceedings consistent with this opinion.

So ordered.