Summary
applying Norris logic to another “case on appeal when Eaton was decided”
Summary of this case from Koufos v. U.S. Bank, N.A.Opinion
No. 11–P–560.
2013-06-5
Daniel J. LYONS & another. v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. & another.
By the Court (BERRY, KATZMANN & RUBIN, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiffs, Daniel J. and Tammy A. Lyons, gave a mortgage on a piece of residential property where they lived. The note was originally held by defendant Countrywide Home Loans, Inc. Defendant Mortgage Electronic Registration Systems, Inc. (MERS), described in the mortgage as the mortgagee but “solely as a nominee for [the note holder],” purported to foreclose upon the property in its own name, although it is undisputed that it did not hold the note at the time of its nonjudicial foreclosure.
The Lyonses argue first that they are entitled to the protection of the rule announced in Eaton v. Federal Natl. Mort. Assn., 462 Mass. 569, 584–586 (2012). Although the holding of Eaton, that a mortgagee may foreclose under a power of sale only if it either holds the note or is acting under the direction or as the agent of the note holder, is of only prospective application, id. at 588–589, the Lyonses' case, in which they argued for such a rule, was on appeal at the time Eaton was decided. We find persuasive a recent case issued under our rule 1:28, HSBC Bank USA, N.A. v. Norris, 83 Mass.App.Ct. 1115 (2013). There, we stated:
“Norris is factually and procedurally in the identical situation as was Eaton at the time of the Supreme Judicial Court's decision in Eaton. Among other things, Norris advanced the same arguments to this court at the same time those arguments were being considered by the Supreme Judicial Court. It is certainly not Norris's fault that the issue was first decided favorably in Eaton's case rather than in his, and it would be inequitable to deprive him of its same resolution.... For the same reason that the Supreme Judicial Court applied its ruling retroactively to Eaton himself, we apply it to Norris.”
The two unpublished decisions of this court to which the defendants at argument directed us are not in conflict with Norris . In Reynolds v. GMAC Mort. LLC, 83 Mass.App.Ct. 1124 (2013), the mortgagee held the note, so the applicability of Eaton to the case was immaterial. In Federal Home Loan Mort. Corp. v. Doust, 83 Mass.App.Ct. 1115 (2013), decided prior to Norris, we ruled that a Federal decision issued before Eaton was res judicata on the question of the mortgagor's right to foreclose. Again, the applicability of Eaton was immaterial.
Not only was the present case on appeal when Eaton was decided, the Lyonses actually brought their action before Eaton had even been decided in the trial court. Because the Lyonses are in an identical situation to the plaintiffs in Eaton, not a “somewhat similar[ ]” position, Bouchard v. DeGagne, 368 Mass. 45, 48 (1975), cited in Eaton, supra at 589, we follow Norris, hold that the rule of Eaton is applicable to the Lyonses' case, and reverse the judgment. We note that the question of the applicability of Eaton to cases on appeal when Eaton was decided is currently before the Supreme Judicial Court in Galiastro vs. Mortgage Electronic Registration Sys., Inc., SJC–11299.
In light of our conclusion, we need not address the Lyonses' alternative argument that even if the rule in Eaton is not applicable in their case, given the text of the mortgage itself, MERS could not foreclose in its own right without authorization from or an agency relationship with the note holder. That argument turns in part on par. twenty of the mortgage, which the Lyonses read to indicate that the “Security Instrument,” i.e., the mortgage, (which par. twenty states may be sold “together” with the note) is owned by the note holder. The Lyonses contend that this informs and limits the meaning of the description of MERS in the mortgage as mortgagee “solely as a nominee for [the note holder].” We note that Galiastro may provide guidance on this question as well.
Judgment reversed.