Opinion
14-P-1340
03-11-2016
OLIVER B. HENDRICKS v. FEDERAL NATIONAL MORTGAGE ASSOCIATION.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff, Oliver B. Hendricks, filed in Land Court this petition subsequent to registration of land (S-Petition) pursuant to G. L. c. 185, §§ 114 et seq., seeking to expunge several instruments related to, and essentially challenging the validity of, the 2010 mortgage foreclosure through which the defendant, Federal National Mortgage Association (Fannie Mae), acquired title to his former home on registered land in the Roslindale section of Boston. Fannie Mae moved to dismiss the petition pursuant to Mass.R.Civ.P. 12(b)(6), 365 Mass. 754 (1979), and supplied the motion judge with, inter alia, documents from previous litigation against Hendricks regarding the same property.
The motion judge allowed the motion to dismiss on the basis of what he deemed three alternative but "independently sufficient" grounds: (1) that Hendricks's petition is barred as untimely by G. L. c. 185, § 70; (2) his claims have already been resolved in a previous action between the parties and so are barred by both claim preclusion and issue preclusion; and (3) that the allegations in his petition concerning the foreclosure conducted by Mortgage Electronic Registration Systems, Inc. (MERS) do not entitle him to relief in any event. Hendricks appeals.
We granted Hendricks leave to file a motion for reconsideration of the order in the Land Court pursuant to Mass.R.Civ.P. 60(b), 365 Mass. 828 (1974). Hendricks's appeal from the order denying the rule 60(b) motion was then consolidated with this pending appeal. However, Hendricks has failed to make any separate argument concerning the denial of his rule 60(b) motion on appeal. His "failure to address this issue on appeal waives his right to appellate review of the judge's ruling." Abate v. Fremont Invest. & Loan, 470 Mass. 821, 833 (2015), citing Mass.R.A.P. 16(a)(4), as amended, 367 Mass. 921 (1975).
Because we conclude that principles of res judicata preclude Hendricks from seeking to relitigate the validity of the mortgage procedure followed by MERS and Fannie Mae, we affirm the order dismissing the S-Petition.
We accordingly do not reach the other grounds for dismissal in the motion judge's decision.
Background. Much of the relevant background to this dispute is set out in Federal Natl. Mort. Assn. v. Hendricks, 463 Mass. 635, 636 (2012), the opinion rendered by the Supreme Judicial Court after it granted Hendricks's request for direct appellate review of a summary judgment entered by the Housing Court in favor of Fannie Mae in its summary process action.
Fannie Mae commenced that Housing Court action after it acquired a foreclosure deed to Hendricks's former home in July, 2010. Hendricks filed a cross motion for summary judgment and opposition to Fannie Mae's summary judgment motion in which he contended that there were "fatal defects in the foreclosure process" and, quoting from Wayne Inv. Corp. v. Abbott, 350 Mass. 775, 775 (1966), that Fannie Mae "did not acquire title 'strictly according to the power of sale provided in the mortgage.'"
Although Hendricks had argued in the Housing Court that MERS lacked the authority to foreclose on his mortgage, the Supreme Judicial Court's decision does not reflect his pursuit of that argument on appeal or any challenge to the Housing Court's subject matter jurisdiction over claims concerning MERS's authority to foreclose. The Supreme Judicial Court affirmed the judgment in favor of Fannie Mae on October 26, 2012. Hendricks, supra at 643.
Following proceedings initiated by Hendricks in various State and Federal courts, Fannie Mae took possession of the property on August 22, 2013. On August 28, 2013, Hendricks filed in Superior Court a verified complaint challenging the foreclosure and asserting various claims premised on his theory that MERS lacked authority to foreclose in its own name. On November 13, 2013, Hendricks voluntarily dismissed his Superior Court action.
Those proceedings included: (1) a chapter 13 voluntary petition filed January 22, 2013, in the United States Bankruptcy Court for the District of Massachusetts; (2) a petition before a single justice of this court filed June 12, 2013, seeking a stay of the execution issued by the Housing Court; and (3) an action filed in the Housing Court on August 1, 2013, seeking a temporary restraining order.
On November 18, 2013, Hendricks commenced the instant action in Land Court.
Discussion. Our review of an allowance of a motion to dismiss is de novo. Curtis v. Herb Chambers I-95, Inc., 458 Mass. 674, 676 (2011). Having reviewed the present S-Petition and the filings from the previous Housing Court action, we agree with the motion judge that Hendricks's S-Petition is barred by res judicata where all of the claims he raised in the Land Court action had been previously raised, and resolved against him, in the Housing Court summary process action.
"The term 'res judicata' includes both claim preclusion and issue preclusion. Claim preclusion makes a valid, final judgment conclusive on the parties and their privies, and prevents relitigation of all matters that were or could have been adjudicated in the action. This is based on the idea that the party to be precluded has had the incentive and opportunity to litigate the matter fully in the first lawsuit. The invocation of claim preclusion requires three elements: (1) the identity or privity of the parties to the present and prior actions, (2) identity of the cause of action, and (3) prior final judgment on the merits. Similarly, issue preclusion prevents relitigation of an issue determined in an earlier action where the same issue arises in a later action, based on a different claim, between the same parties or their privies. Before precluding a party from relitigating an issue, a court must determine that (1) there was a final judgment on the merits in the prior adjudication; (2) the party against whom preclusion is asserted was a party (or in privity with a party) to the prior adjudication; and (3) the issue in the prior adjudication was identical to the issue in the current adjudication. Additionally, the issue decided in the prior adjudication must have been essential to the earlier judgment. Issue preclusion can be used only to prevent relitigation of issues actually litigated in the prior action. Accordingly, we look to the record to see what was actually litigated." Kobrin v. Board of Registration in Med., 444 Mass. 837, 843-844 (2005) (citations and quotations omitted).
All of the requirements for both claim preclusion and issue preclusion are present here. Both Hendricks and Fannie Mae were parties to the Housing Court summary process action. Hendricks actively litigated his claim of an invalid foreclosure based on, inter alia, MERS's lack of authority to foreclose, prior to the Housing Court issuing a final judgment on the merits, which was then reviewed and affirmed by the Supreme Judicial Court.
The validity of the MERS foreclosure in accordance with the power of sale in the mortgage was central to the summary process action as it was through that sale that Fannie Mae acquired title. "The purpose of summary process is to enable the holder of the legal title to gain possession of premises wrongfully withheld. Right to possession must be shown and legal title may be put in issue. Legal title is established in summary process by proof that the title was acquired strictly according to the power of sale provided in the mortgage; and that alone is subject to challenge." Wayne Inv. Corp. v. Abbott, 350 Mass. at 775 (citation omitted). See U.S. Bank Natl. Assn. v. Schumacher, 467 Mass. 421, 428 (2014).
Hendricks explicitly relied on Abbott in the Housing Court to put legal title in issue, calling into question MERS's strict compliance with the power of sale. He argued specifically: "the entity that purported to exercise the power of sale -- MERS -- was not authorized to do so by the Mortgage. . . . Because it was MERS (referred to in the Mortgage as 'nominee for Lender' and 'mortgagee'), not Flagstar [Bank, FSB], the actual 'Lender' that purported to conduct the foreclosure, the foreclosure was not conducted strictly according to the power of sale in the mortgage. Therefore, the sale is void." Hendricks continued to pursue that argument in his motion for reconsideration before that court, stating, "MERS wrongfully conducted a foreclosure that it had no authority to conduct in the first place." It appears that Hendricks was given an opportunity to present those arguments in hearings before the Housing Court judge on both the cross motions for summary judgment and his motion for reconsideration. These are the same issues Hendricks seeks to litigate in his S-Petition.
In ruling against Hendricks, and denying his motion for reconsideration, the Housing Court judge, implicitly and explicitly, rejected these arguments. Although he obtained direct appellate review of the Housing Court judgment in the Supreme Judicial Court, it appears that Hendricks either failed to raise these specific arguments on appeal and so waived them, see Mass.R.A.P. 16(a)(4), as amended, 367 Mass. 921 (1975), or that the Supreme Judicial Court implicitly rejected them in affirming the Housing Court judgment. The Housing Court judgment, affirmed by the Supreme Judicial Court, is a sufficient final disposition for purposes of a res judicata claim. See Wright Mach. Corp. v. Seaman-Andwall Corp., 364 Mass. 683, 693-694 (1974) (summary judgment based on determination of substantive issues must be given res judicata effect).
Here, Hendricks does not dispute that the Land Court judge's conclusion that he has previously litigated the claim of an invalid foreclosure, and all the subsidiary issues subsumed therein, without success. Instead, Hendricks's primary contention is that the Housing Court lacked jurisdiction to hear such claims and so its judgment is without preclusive effect.
Although Hendricks repeatedly asserts that the Land Court's exclusive jurisdiction over his claims is undisputed, Fannie Mae in fact disputes this. Nevertheless, we need not reach this question where it is plain that "relitigation of the plaintiff['s] claims is precluded regardless of whether the Housing Court had subject matter jurisdiction." Harker v. Holyoke, 390 Mass. 555, 558 (1983).
We are persuaded that the reasoning of Harker is applicable and controlling here. Hendricks's S-Petition is essentially a collateral attack on the Housing Court judgment, that is, Hendricks is "challenging a judgment in an independent proceeding." Id. at 558 n.3. "If we were to permit such an attack as a general rule, the finality of judgments would be substantially impaired. This would not be in the best interests of litigants or the public. While it is important that judgments be rendered only by courts having the right to render them, it is also important that controversies be finally terminated after there has been full and fair litigation." Id. at 558. See Wright Mach. Corp., supra at 688.
We are satisfied that Hendricks and Fannie Mae engaged in full and fair litigation of the validity of the foreclosure that gave rise to the latter's title not only in the Housing Court but also in the Supreme Judicial Court after Hendricks availed himself of the opportunity to challenge the adverse judgment on appeal. The fact that, unlike the plaintiff in Harker, Hendricks did not himself first choose the forum of the Housing Court to litigate those issues is not dispositive where it appears that he nonetheless litigated the issues aggressively and never questioned the court's subject matter jurisdiction in that proceeding, on direct appeal, or in any of the many proceedings he initiated subsequently, until he filed the S-Petition.
"Considerations of fairness and the requirements of efficient judicial administration dictate that an opposing party in a particular action as well as the court is entitled to be free from continuing attempts to relitigate the same claim." Ibid. We defer to those considerations of fairness and the requirements of efficient judicial administration here. "Although there may be rare circumstances in which sound policy requires that finality give way to the enforcement of limitations on a court's authority by collateral attack, this is not such a case." Harker, supra at 558-559. Hendricks has had his "day in court" and is not "entitled to relitigate . . . the claims that were tried in the Housing Court, regardless of whether the Housing Court had subject matter jurisdiction of the[] controversy." Id. at 561.
Orders entered April 7, 2014, and December 16, 2014, affirmed.
By the Court (Katzmann, Maldonado & Blake, JJ.),
The panelists are listed in order of seniority. --------
/s/
Clerk Entered: March 11, 2016.