Opinion
20-P-435
06-29-2021
TEN DIAMOND STREET WORCESTER REALTY TRUST v. Samantha FARRAR & others (and two companion cases ).
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The occupants of residential property (defendants or occupants) known as 10 Diamond Street, Worcester (property or premises), timely appeal from judgments of possession entered in favor of Ten Diamond Street Worcester Realty Trust (plaintiff or trust). Defendants Samantha Farrar and Brian Beebe also timely appeal from a February 6, 2020 order dismissing their summary process appeal for failure to pay use and occupancy. We affirm.
The February 6, 2020 order was entered in Central Div. of Hous. Ct. Dept., No. 18H85-SP-003352.
Background. In February 2005, Beverly Farrar became the sole owner of two parcels in Worcester, one with the property on it and one undeveloped lot. Beverly subsequently borrowed $230,000 from Wells Fargo Bank, N.A., giving a mortgage dated March 29, 2007, to secure the repayment of the loan. The defendants claim that the mortgage covered only parcel one. Thereafter, Beverly defaulted on her loan obligations. Following a modification agreement and three assignments of the mortgage, US Bank National Association, as trustee for Citigroup Mortgage Loan Trust 2007-WFHE3, Asset-Backed Pass-Through Certificates, Series 2007-WFHE3 (bank), foreclosed the mortgage for breach of conditions.
As several defendants share last names, we refer to them by their first names where necessary to avoid confusion.
After purchasing the premises at the public auction in September 2017, the bank brought two separate summary process proceedings in the Central Division of the Housing Court Department, seeking to regain possession of the property. The Housing Court consolidated the actions. While the actions were pending, the bank sold the property to the trust. Because the bank no longer held title, the claims for possession were dismissed. The occupants' counterclaims, however, proceeded to a hearing before a judge, who granted summary judgment against the occupants on all of their counterclaims.
At all relevant times, Beverly, her granddaughter, Courtney, and Courtney's boyfriend, Jeremia Huertas, have occupied the first floor of the three-family residence (first floor occupants); and another granddaughter, Samantha, and her boyfriend, Brian Beebe, have occupied the third floor (third floor occupants). Beverly's daughter, Darlene Hubert, and Darlene's son, Joshua, who currently reside in the second floor apartment, did not reside at the property at that time (second floor occupants).
In August 2018, the trust commenced three separate summary process proceedings against each floor of occupants. The cases were not consolidated. After bench trials on the same day, a judge issued three separate decisions, awarding possession to the trust; judgments entered in favor of the trust on December 21, 2018. The judge subsequently dismissed the defendants' appeals from those judgments based upon their failure to file a second notice of appeal after the disposition of their postjudgment motions. Following the reinstatement of the appeals and remand by this court, a judge waived the appeal bond in each of the cases, but ordered the defendants to pay monthly use and occupancy of $500 per unit into the court escrow account, commencing August 3, 2019 (bond order).
In early May 2018, the defendants had brought a civil action against two trustees of the trust and a third party to prevent a self-help eviction, and had obtained a temporary restraining order. Our review of the Housing Court docket establishes that, in May 2019, that case was dismissed on the grounds that all issues were moot.
The judge previously struck the defendants' jury demands as sanctions for their failure to pay pretrial use and occupancy. The defendants provided us with only one of the three decisions issued by the judge (the one issued in the case against Samantha, Beebe, and John Farrar). The trust's attorney briefed the case as if there was only one decision. We exercised our discretion to call for the other two decisions.
Samantha and Beebe did not timely exercise their right to appeal from the July 3, 2019 bond order. They made the first periodic payment, and none thereafter. As a result of that nonpayment, on February 6, 2020, a judge allowed the trust's motion to dismiss their appeal from the summary process judgment. After a "judgment" for the trust entered that day in error, the docket was subsequently corrected to reflect that the December 21, 2018 judgment was the operative one. On February 20, 2020, a Housing Court judge allowed their motion for a temporary stay of execution. A single justice of this court dismissed as moot their petition for relief seeking a stay. Following the lifting of the stay by the Housing Court, on March 5, 2020, Samantha and Beebe filed another prolix petition for relief in which they, among other things, challenged the use and occupancy payments. A single justice treated their petition as a motion for a stay and denied it along with two subsequent motions for reconsideration. Although Samantha and Beebe purported to appeal to a full panel, they failed to take any action on the matter. For that reason, no issue regarding that appeal is before us.
Discussion. 1. Trust's standing. We discern no error in the judge's conclusion that the trust had standing to bring these summary process actions. See Youghal, LLC v. Entwistle, 484 Mass. 1019, 1019-1020 (2020) (findings of Housing Court judge must stand unless they are clearly erroneous; judge's rulings of law are reviewed de novo). As the judge properly noted, the central inquiry in the standing question is whether the plaintiff was the owner or the lessor of the property at the time the summary process proceedings were commenced. See Rental Prop. Mgt. Servs. v. Hatcher, 479 Mass. 542, 546-547 (2018).
Here, the notices to quit identified Kensington Management, LLC (Kensington Management) as the property owner, while the summons and complaints identified Ten Diamond Street Worcester Realty Trust (the plaintiff) as the owner. The judge found that "at all relevant times" (i.e., on and after May 8, 2018), Kensington Management served as a trustee of the trust. The judge further found that, while the plaintiff "could have been more precise in identifying the nature of Kensington Management's interest in the [p]roperty," the plaintiff was in fact the record owner of the property. These findings were supported by the documentary evidence (the quitclaim deed from the bank to the trust recorded on May 1, 2018, and the trustee's certificate), and are thus not clearly erroneous. See Youghal, LLC, 484 Mass. at 1019. The trust was entitled to the remedy of summary process. See G. L. c. 239, § 1.
The defendants correctly point out that, on the date the property was deeded to the plaintiff, the trust apparently had not yet been created. Any error in the judge's findings on this point was harmless. By the date the deed was recorded and the notices to quit were served on the defendants, the trust had been created, and through its trustee, Kensington Management, owned the property.
The bank signed the deed on April 17, 2018. The trustee's certificate refers to "an unrecorded Declaration of Trust, dated April 30, 2018." There is no copy of the declaration of trust in the record appendix.
To the extent that the defendants challenge the legality of the sale from the bank to the trust, they have no standing to raise the issue. Cf. HSBC Bank USA, N.A. v. Morris, 99 Mass. App. Ct. 417, 425 (2021) (in eviction proceeding following foreclosure sale, former mortgagors lacked standing to challenge latent defects in assignment of mortgage; "[a]ny such defect is a matter between the assignor and the assignee").
2. Third floor occupants. The appeal of Samantha Farrar and Brian Beebe stands on a different footing than the appeals of the other defendants. It is undisputed that, while the trust has continued to seek possession, they have remained in possession of the third floor apartment. Where they neither timely sought review of the bond order to a single justice of this court nor complied with the bond order by making regular use and occupancy payments, the judge properly dismissed their summary process appeal. See G. L. c. 239, § 5 (f ) - (h ) ; Bigelow v. Massachusetts Courts Promulgator of the Official Forms, 484 Mass. 1056, 1056-1057 (2020) ; Adjartey v. Central Div. of the Hous. Court Dep't, 481 Mass. 830, 859 (2019) ; Wallace v. PNC Bank, N.A., 478 Mass. 1020, 1021 (2018) ; PGR Mgt. Co. v. Credle, 427 Mass. 636, 639 (1998) ; Brockton Redev. Auth. v. Gilbride, 9 Mass. App. Ct. 836 (1980). For that reason, no issue regarding the use and occupancy payments or the judgment of possession in favor of the trust is properly before us. The order dismissing their appeal must be affirmed.
In any event, were their appeal of the summary process judgment properly here, for the reasons that follow, we would find their claims of error lacking in merit. Moreover, were we to consider their many arguments relating to the bond order, we would find none of them persuasive.
3. Trust's prima facie cases. At each trial, the parties agreed to a number of stipulated facts. The third floor occupants agreed that (1) they received the notice to quit from a constable on May 8, 2018; (2) they never entered into a tenancy agreement with the trust; (3) they never made any use and occupancy payments to the trust; and (4) they still occupied the premises. The first floor occupants stipulated to facts (1), (3), and (4). The second floor occupants stipulated to facts (2), (3), and (4).
Darlene Hubert denied being served with the notice to quit by the constable on May 8, 2018, claiming that the Huberts received it much later. The notice to quit and the constable's return of service were entered into evidence. Following the Huberts' trial, the judge concluded that, in fact, she had earlier determined that in-hand service occurred on May 8, 2018, in connection with the Huberts' motion to dismiss. Accordingly, the judge found that the Huberts had received the notice to quit on May 8. See Johnson v. Witkowski, 30 Mass. App. Ct. 697, 714 (1991) (constable's return of service prima facie evidence of facts contained therein). On appeal, the Huberts failed to show that the judge's finding that service occurred on May 8, 2018, was clearly erroneous. See Youghal, LLC, 484 Mass. at 1019.
To the extent that the other occupants now dispute the propriety of the service of the notices to quit, absent judicial action, they may not revoke their factual stipulations. See Metropolitan Credit Union v. Matthes, 46 Mass. App. Ct. 326, 331 (1999). The defendants do not challenge the judge's findings that all defendants received the summons and complaints after the expiration of the notices to quit.
In sum, we conclude that the judge did not err by ruling that the trust established a prima facie case for possession in each case.
4. Defenses and counterclaims. The main defense at each trial was the alleged illegal foreclosure by the bank and the trust's lack of ownership. According to Beverly, she thought the foreclosure "was done illegally," she questioned the subsequent transfer of the property to the trust, and she did not "believe that [the trust] actually own[s] the property." However, as the judge properly ruled, none of the defendants, except Beverly, was a party to the loan agreement or mortgage. None had bona fide tenant status or any tenancy relationship with the bank. Cf. U.S. Bank Trust, N.A. v. Johnson, 96 Mass. App. Ct. 291, 297-298 (2019). Thus, they had no standing to challenge the validity of the foreclosure. See Massachusetts Comm'n Against Discrimination v. Colangelo, 344 Mass. 387, 392 (1962) (rental agent with no ownership interest in property lacked standing to raise rights of others). While Beverly had standing, she raised this defense and counterclaim in the first summary process action brought by the bank. In November 2018, the same judge who tried these actions resolved the issue adversely to Beverly and ordered summary judgment to enter for the bank. See Federal Nat'l Mtge. Ass'n v. Hendricks, 463 Mass. 635, 642 (2012). Having failed to appeal from that final judgment on the merits, which has res judicata effect, Beverly cannot collaterally attack it by reasserting the defense and counterclaim in this proceeding. See Jarosz v. Palmer, 436 Mass. 526, 530-535 (2002). Moreover, Beverly did not raise the defense of illegal foreclosure or superior possession in her answer to the summary process complaint. See Adjartey, 481 Mass. at 855 (under Uniform Summary Process Rules, affirmative defenses and counterclaims are generally waived unless stated in answer). Although, contrary to the judge's assertion, Beverly did raise foreclosure-related defenses at the trial, she did not make the argument pursued on appeal that the extra parcel of land was included illegally in the foreclosure sale (and she introduced no evidence to support that claim).
As the judge noted, neither the second nor third floor occupants claimed at their respective trials to be bona fide tenants of the mortgagor entitled to the protections of G. L. c. 186A. To the extent that they now seek such statutory protection, the issue is waived as to them. See NES Rentals v. Maine Drilling & Blasting, Inc., 465 Mass. 856, 860 n.8 (2013). The first floor occupants did claim protected status at their trial. Given Beverly's status as the mortgagor, the first floor occupants' admitted failure to make any payments for use and occupancy to the trust, and the lack of evidence of any arm's length lease between Courtney and Huertas and Beverly, we conclude that the judge properly found and ruled that these defendants were not bona fide tenants entitled to statutory protection under G. L. c. 186A. See Federal Nat'l Mtge. Ass'n v. Nunez, 460 Mass. 511, 513-514 & n.4 (2011). Moreover, the first floor occupants have not demonstrated error in the judge's ruling rejecting their "court-ordered" tenancy argument on the ground that, even if a tenancy were created, they failed to make any payments. See Youghal, LLC, 484 Mass. at 1019-1020.
In any event, we note that, although the legal description of the property in the mortgage extended only to parcel one, it also described the property covered as "[b]eing the same premises conveyed to Beverly A. Farrar by deed dated February 25, 2005 ...," which included both parcels one and two. Moreover, the loan modification agreement dated October 16, 2009, "amend[ed] and supplement[ed]" the mortgage, and plainly covered both parcels, including the property occupied by the defendants. For these reasons, we reject the defendants' argument that the bank had no right to sell the two parcels to itself at the auction, and no right to sell "anything" to the trust; and that the trust "bought nothing."
The judge properly ruled that none of the defendants were entitled to raise conditions defenses or counterclaims under the rent withholding statute, G. L. c. 239, § 8A. See Deutsche Bank Nat'l Trust Co. v. Gabriel, 81 Mass. App. Ct. 564, 570-573 (2012) (occupants who never rented or leased premises had no right to raise conditions defenses).
When the trust purchased the property, the three-family residence was in serious disrepair and the yard was filled with rubbish and debris. A housing inspector called in by the defendants cited the trust for several violations of the State sanitary code and city ordinances.
We discern no grounds to disturb the judge's rulings that the defendants' quiet enjoyment defenses and counterclaims failed either because of the absence of a landlord-tenant relationship with the trust or based upon the disposition of the prior self-help eviction action. See G. L. c. 186, § 14. For similar reasons, the defendants' retaliation counterclaims failed as a matter of law. See G. L. c. 186, § 18.
Upon review of the three transcripts, we are satisfied that the judge treated the defendants fairly and did not violate their due process rights. We have considered the defendants' remaining arguments, but find nothing about them requiring discussion. Commonwealth v. Domanski, 332 Mass. 66, 78 (1954).
The defendants have not addressed the adverse findings on their G. L. c. 93A counterclaims. We thus consider any argument pertaining to those counterclaims waived. See Sullivan v. Liberty Mut. Ins. Co., 444 Mass. 34, 35 n.1 (2005). Any issues and arguments raised for the first time on appeal are not properly before us, and are deemed waived. See NES Rentals, 465 Mass. at 860 n.8.
Conclusion. In Central Div. of Hous. Ct. Dept. No. 18H85-SP-003351 and 18H85-SP-003353, the December 18, 2018 judgments of possession are affirmed. In Central Div. of Hous. Ct. Dept. No. 18H85-SP-003352, the February 6, 2020 order dismissing the defendants' appeal is affirmed.
So ordered.
affirmed