Opinion
15-P-911
03-18-2016
DAVID KIAH v. BARBARA CARPENTER.
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 David Kiah appeals from a judgment in favor of the defendant Barbara Carpenter on the plaintiff's action seeking to nullify his mortgage on certain property, thereby invalidating the foreclosure action and subsequent sale of that property. We affirm.
Background. We recite the facts in the light most favorable to the plaintiff, the nonmoving party. The plaintiff purchased the property in question on May 24, 2007, executing a standard promissory note and mortgage in the amount of $180,000. Around October, 2009, the loan servicer sent the plaintiff a default notice based on his failure to make timely mortgage payments. In August, 2010, the plaintiff filed a complaint in the Land Court seeking to declare the mortgage null and void. The case was removed to the United States District Court for the District of Massachusetts (District Court) upon motion by the loan servicer and mortgagee, defendants in the case. All of the plaintiff's claims were dismissed with prejudice on November 16, 2010, and the dismissal was affirmed by the United States Court of Appeals for the First Circuit.
The mortgagee was Mortgage Electronic Registration Systems, Inc., acting solely as a nominee for the lender, First Magnus Financial Corporation. Thereafter, the lender filed for bankruptcy, and the note was sold to Federal National Mortgage Association. As of October, 2009, the loan servicer was Aurora Loan Services, LLC.
The plaintiff attempted to invalidate his mortgage by claiming: (1) the mortgage and assignment were void because after the lender became bankrupt, the mortgagee had no legal authority to transfer the mortgage, (2) the mortgagee had no authority to act for any of the lender's successors and assigns, (3) the lender only had authority to transfer the mortgage to Lehman Brothers after bankruptcy, (4) the assignment of the mortgage was fraudulent, (5) the term "successors and assigns" cannot be used "as a wildcard for whatever (undisclosed) person is the current holder of the note," (6) there was no consideration for the assignment, (7) the assignment is invalid because it was backdated, (8) the mortgagee had no authority to transfer the mortgage without the note, and (9) the assignment was a fraudulent conveyance and slander of title.
An amended memorandum and order was filed on March 4, 2011.
Thereafter, the servicer and the lender foreclosed on the property, holding a public auction at which Barbara Carpenter, the defendant in this action, bid unsuccessfully. The winner at auction was the then owner of the note. In June, 2012, Carpenter purchased the property and acquired a quitclaim deed in a private transaction from the owner. A year later, the plaintiff commenced this action in the Superior Court seeking to void the quitclaim deed. Carpenter filed a motion to dismiss, which the judge converted to a motion for summary judgment.
Discussion. "We review a grant of summary judgment de novo to determine whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law." Juliano v. Simpson, 461 Mass. 527, 529-330 (2012) (quotation omitted).
We consider the judge's disposition of the case to be a declaration of the parties' rights and obligations.
In the current action, the plaintiff brings two types of claims: claims associated with mortgage nullification fully adjudicated on the merits in the prior action in Federal court (prior claims), and claims relating to the foreclosure sale (new claims).
Prior claims. The plaintiff's claims that his mortgage is void were previously brought and fully adjudicated on the merits in the District Court. He now claims that he is entitled to seek a second review based on the Supreme Judicial Court's recent decision in Pinti v. Emigrant Mort. Co., 472 Mass. 226 (2015), which held prospectively that failure to comply strictly with a mortgage provision requiring notification to the mortgagor of the right to bring a court action rendered a foreclosure sale void. We extended Pinti's holding to include foreclosure cases pending on appeal where the issue was raised and preserved. Aurora Loan Servs., LLC v. Murphy, 88 Mass. App. Ct. 726, 731 (2015) (Murphy).
We granted the plaintiff a stay of this appeal pending Pinti.
We agree with the motion judge's well-reasoned memorandum of decision that the prior claims are precluded. "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." Kobrin v. Board of Registration in Med., 444 Mass. 837, 843 (2005) (quotation omitted). The element of identity or privity of parties is met as the defendant is the successor in title to the property. See Sarvis v. Boston Safe Deposit & Trust Co., 47 Mass. App. Ct. 86, 99-100 (1999), quoting from Old Dominion Copper Mining & Smelting Co. v. Bigelow, 203 Mass. 159, 218 (1909) ("One comprehensive definition of privies is such persons as are 'privies in estate'").
Each of the prior claims is based on the same transaction or series of transactions that occurred prior to the District Court action; each prior claim was either raised or could have been raised. "The doctrine of claim preclusion . . . bars further litigation of all matters that were or should have been adjudicated in the action." Heacock v. Heacock, 402 Mass. 21, 23 (1988). Finally, there is no question that there was a prior final judgment on the merits and that all appeals had been resolved almost four years prior to the Supreme Judicial Court's decision in Pinti.
The plaintiff now claims that: (1) the notice of default did not meet the disclosure requirements of G. L. c. 244, § 35A, (2) by sending the notice of default, the loan servicer made a deceptive or misleading representation in connection with the collection of a debt, (3) the notice of default failed to inform him of his right to bring a court action as required by the mortgage, (4) the notice of default was not sent by the mortgage lender, (5) the loan servicer violated G. L. c. 93, § 24A, by employing a law firm to collect his outstanding debt to the lender without the lender's written authorization, and (6) the foreclosure is null and void because the loan servicer did not accelerate his mortgage loan before foreclosing.
Having decided that the defendant's prior claims are precluded, we note that "[t]he res judicata consequences of a final, unappealed judgment on the merits [is not] altered by the fact that the judgment may have been wrong or rested on a legal principle subsequently overruled in another case." Federated Dept. Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981). The defendant cannot now claim the benefit of Pinti and Murphy.
New claims. The plaintiff also brings the following new claims which are based on alleged inadequacies during the foreclosure sale.
Notice of sale. The plaintiff contends that although he had actual notice, G. L. c. 244, § 14, still required the mortgagee to send notice to the correct address. The motion judge correctly determined that actual notice is sufficient. See Hull v. Attleboro Sav. Bank, 33 Mass. App. Ct. 18, 25 (1992) (The purpose of G. L. c. 244, § 14, was "fully achieved as to the plaintiff because he had actual notice . . . and the bank had proof of it"). Because the plaintiff had actual notice, failure to comply with the statutory procedure is not fatal. Cinder Prod. Corp. v. Schena Constr. Co., 22 Mass. App. Ct. 927, 929 (1986) ("If actual timely notice is proved . . . failure to comply with a registered or certified mail requirement is not a fatal deviation from statutory procedures").
There is no dispute that the mortgagee sent notice to the property being foreclosed instead of the defendant's current address as required.
Affidavit of sale. The plaintiff argues that the affidavit of sale does not clearly state that the affiant personally reviewed business records, contains double hearsay, and does not comply with G. L. c. 244, § 15, or the statutory form, G. L. c. 183, Appendix Form 12.
The affidavit of sale uses "the review" of business records rather than "my review." See note 9, infra.
The affidavit of sale largely tracks the language of the statutory form. "It omit[s] no material information from the statutory form, and its only additions were those pertinent to the specific facts of the foreclosure sale of the property at issue in this case." Deutsche Bank Natl. Trust Co. v. Gabriel, 81 Mass. App. Ct. 564, 569-570 (2012). There is no requirement in § 15 that the affidavit specify that the affiant reviewed the relevant business records "personally." Likewise, the statutory form contains no such provision. See G. L. c. 183, Appendix Form 12. Accordingly, the affidavit is, as a matter of law, sufficient under G. L. c. 183, § 8, and compliant with G. L. c. 244, § 15. See Federal Natl. Mort. Assn. v. Hendricks, 463 Mass. 635, 643 (2012).
The affidavit of sale states:
"I, Cheryl Merchant, being duly authorized Vice President for Aurora Loan Services, LLC, named in the foregoing deed, make oath and say that based on the review of Aurora's business records, the principal, interest, and tax obligations mentioned in the mortgage above referred to were not paid or tendered or performed when due or prior to the sale; and that Aurora caused to be published on October 27, 2010, November 3, 2010, and November 10, 2010, in the Gardner News, published in Massachusetts and by its cover page purporting to be published in Hubbardston and having a circulation therein, notice of which the following is a true copy;
"SEE EXHIBIT "A" ATTACHED HERETO AND MADE PART HEREOF
"Aurora has also complied with Chapter 244, § 14 of the General Lawrecordedetts [sic] as amended by mailing the required notices registered mail, return receipt requested.
"Pursuant to said notice, on November 22, 2010, at 01:00 PM, at which time and place upon the mortgaged premises, Aurora Loan Services, LLC sold the mortgaged premises at public auction by Julianna Tache of Tache Auction & Sales, Inc., a licensed auctioneer, to Federal National Mortgage Association, for One Hundred Thousand and 00/100 Dollars ($100,000.00), being the highest bid made therefore at said auction."
Power of attorney. The plaintiff posits that the power of attorney conferred to the law firm that initiated the foreclosure proceeding is fatally defective because the document conferring the power of attorney was drafted pursuant to a repealed statute, G. L. c. 201B, the Uniform Durable Power of Attorney Act. Regardless, G. L. c. 244, § 14, inserted by St. 1981, c. 795, § 11, enables an attorney to act pursuant the power of sale if "duly authorized by a writing under seal." The record supports the finding that the power of attorney expressly authorized the law firm to "do all acts authorized or required by the power of sale . . . for the purpose of foreclosing [on the plaintiff's] mortgage."
The chapter was replaced by the Massachusetts Uniform Probate Code, G. L. c. 190B. See Johnson v. Kindred Healthcare, Inc., 466 Mass. 779, 786 n.12 (2014).
Notice to town. Finally, the plaintiff claims that the failure of a mortgagee to provide notice to the town pursuant to G. L. c. 244, § 15A, requires invalidation of the foreclosure sale. We agree with the motion judge's careful reasoning that even if the mortgagee failed to provide the town notice, this does not invalidate the foreclosure sale.
"The foreclosure of a mortgage in the natural and common usage of words means a termination of all rights of the mortgagor or his grantee in the property covered by the mortgage." U.S. Bank Natl. Assn. v. Schumacher, 467 Mass. 421, 430 (2014) (Schumacher), quoting from Levin v. Century Indem. Co., 279 Mass. 256, 259 (1932). As the motion judge aptly observed, the requirement in § 15A to provide the town with notice, however, "imposes no restrictions or obligations on the mortgagee vis-a-vis the mortgagor . . . . Rather, the provisions of Section 15A are intended to ensure that various third parties, including any tenants and all potentially interested government entities, receive notice that a foreclosure is imminent or has occurred." Therefore, we conclude that § 15A "is not one of the statutes 'relating to the foreclosure of mortgages by the exercise of a power of sale.'" Schumacher, supra at 431, quoting from G. L. c. 183, § 21.
Accordingly, we affirm the judgment for the defendant.
So ordered.
By the Court (Vuono, Grainger & Massing, JJ.),
The panelists are listed in order of seniority. --------
/s/
Clerk Entered: March 18, 2016.