Opinion
MICV201102078.
02-08-2013
Mark A. KITNER et al. v. MORTGAGE LENDERS NETWORK USA, INC. et al.[1]
MEMORANDUM AND ORDER ALLOWING U.S. BANK'S MOTION FOR SUMMARY JUDGMENT ON COUNTS III AND IV AND ALLOWING HARMON LAW OFFICES' MOTION TO DISMISS ALL CLAIMS AGAINST IT
KENNETH W. SALINGER, Justice.
Mark and Julie Kitner challenge the mortgage foreclosure sale of their home at 12 Mountain View Drive, Dracut, Massachusetts. They assert twelve claims. Counts III and IV are brought only against U.S. Bank National Association; they allege that U.S. Bank has no standing to initiate foreclosure proceedings against the Kitners' home. Count XI is asserted only against Harmon Law Offices, P.C., which represents U.S. Bank in connection with this foreclosure. The nine other counts were asserted against all five defendants. In February 2012 the court dismissed Counts I, II, V, VI, VII, VIII, IX, X, and XII as against U.S. Bank, Mortgage Electronic Registration System, Inc. (" MERS"), and American Service Company (" ASC"); this resolved all claims against MERS and ASC. The claims against Mortgage Lenders Network USA, Inc., the original lender, were dismissed because the Kitners never filed proof that they served this defendant with process.
U.S. Bank now moves for summary judgment on Counts III and IV. Harmon Law Office has moved to dismiss all claims against it. For the reasons explained below, the Court ALLOWS the motion by U.S. Bank for summary judgment on the two remaining claims against it and ALLOWS the motion to dismiss the claims against Harmon Law Offices. This resolves all remaining claims.
The Court has considered the memorandum and affidavit filed by the Kitners in opposition to U.S. Bank's motion for summary judgment. The Court ALLOWS the Kitners' motion for leave to file those papers late. It DENIES the motion by U.S. Bank, MERS, and ASC to strike the affidavit of Mark Kitner and the opposition memorandum filed on behalf of the Kitners even though, as explained below, many of the statements in that affidavit are not admissible evidence.
1. Undisputed Facts Material to the Remaining Claims Against U.S. Bank
The Kitners never responded to U.S. Bank's statement of undisputed material facts. They did not do so in the manner required by Superior Court Rule 9A(b)(5). Nor does Mark Kitner's affidavit contain or authenticate any admissible evidence that contradicts the facts relied upon by U.S. Bank regarding the validity of the Kitners' promissory note or the assignment of the mortgage on their property to U.S. Bank. The Court therefore deems the facts set forth in U.S. Bank's Rule 9A(b)(5) statement of facts to be undisputed for purposes of this motion for summary judgment. Cf. Dziamba v. Warner & Stackpole, 56 Mass.App.Ct. 397, 401 (2002).
Mr. Kitner's assertions that he learned certain information through Google searches of the Internet— information that he believes calls into question the validity of the " corrective assignment of mortgage" that was recorded by U.S. Bank on April 12, 2012— is at best inadmissible hearsay, not admissible evidence based on personal knowledge. Cf. Grassi Design Group, Inc. v. Bank of America, N.A., 74 Mass.App.Ct. 456, 462 n. 12 (2009) (information " found on an Internet Web site" is " inadmissible hearsay"). Similarly, Mr. Kitner's assertions that he has various questions about the validity of the original lender's endorsement of the Kitners' promissory note are arguments, not evidence based on personal knowledge. The Court has considered those arguments in evaluating whether U.S. Bank has proved that it is entitled to judgment as a matter of law, but they do not create any disputed issue of material fact. " [M]ere assertions of the existence of disputed facts without evidentiary support cannot defeat [a] summary judgment motion." Bergendahl v. Massachusetts Elec. Co., 45 Mass.App.Ct. 715, 718-19 (1998), cert. denied, 528 U.S. 929 (1999); see also Baldwin v. Mortimer, 403 Mass. 142, 144 (1988) (" [s]pecific facts, and not mere allegations, are required" to raise genuine issue of material fact in opposing summary judgment motion).
Although the Kitners argue that they have not been able to obtain sufficient information and documentation from U.S. Bank, they had ample opportunity to do so through discovery. The Kitners filed this action on June 14, 2011. The deadline for completing all discovery was April 9, 2012. The Kitners never moved to extend that deadline. Any failure by the Kitners to press for discovery would provide no ground for delaying a decision on U.S. Bank's motion for summary judgment. The Kitners did not file any affidavit demonstrating pursuant to Mass.R.Civ.P. 56(f) why they should be allowed any additional time to conduct discovery. That failure " is fatal" to their argument that they should be allowed more time to rebut the undisputed evidence presented by U.S. Bank. See Bardige v. Performance Specialists, Inc., 74 Mass.App.Ct. 99, 104 (2009).
The parties' pleadings and the statement of undisputed material facts and supporting evidentiary materials filed by U.S. Bank establish that the following are undisputed facts or reasonable inferences that could be drawn from the undisputed facts. In evaluating U.S. Bank's motion for summary judgment, the Court " must ... draw all reasonable inferences" from the evidence presented " in favor of the nonmoving party, " as the fact finder would be free to do at trial. Godfrey v. Globe Newspaper Co., Inc., 457 Mass. 113, 119 (2010). The Court has done so.
On April 6, 2006 the Kitners signed a promissory note obligating them to repay Mortgage Lenders Network USA, Inc., $382, 500 plus interest accruing at 7.75 percent per year (the " Note"). To secure this obligation, the Kitners gave MERS a mortgage on the Kitners' property at 12 Mountain View Drive, Dracut, Massachusetts (the " Mortgage"). MERS recorded the Mortgage on April 11, 2006.
The Note contains an endorsement from Mortgage Lenders Network making the note payable instead to Emax Financial Group, LLC. The Note also has attached to it an allonge that contains one endorsement from Emax making the note payable instead to Residential Funding Corporation, and a further endorsement from Residential Funding Corporation making the note payable to U.S. Bank National Association as Trustee. Both of the endorsements on the allonge, including the one making the Note payable to U.S. Bank, were executed on or before May 8, 2012, which is the date that the Note with the allonge was authenticated by the affidavit of Dara Robinson. Today the Note is payable only to U.S. Bank, which is currently in possession of the Note.
U.S. Bank recorded an assignment of the Mortgage from MERS to U.S. Bank on December 1, 2009. It recorded a " corrective assignment of mortgage" that again assigned the Mortgage from MERS to U.S. Bank on April 12, 2012. That latter assignment was executed before a notary public on March 30, 2012, by John Kealy, who was purporting to hold the position of Assistant Secretary of MERS, which was acting as nominee for Mortgage Lenders Network USA, the entity then holding the Mortgage (if the prior assignment had not been effective).
On May 18, 2012, U.S. Bank notified the Kitners in writing that U.S. Bank intended to foreclose on the Mortgage by selling the property. These notices were not included in U.S. Bank's initial summary judgment papers, but were attached to its opposition to the Kitner's motion for leave to file their papers late. The Kitners do not contest the authenticity of these notices, that U.S. Bank sent these notices on May 18, 2012, or that the Kitners received the notices.
2. U.S. Bank's Motion for Summary Judgment
U.S. Bank has the legal right to enforce the Mortgage and to conduct a foreclosure sale on the Kitner's property so long as the Kitners are in default under the Note and all other prerequisites to foreclosure have been satisfied. As noted above, it is undisputed that an assignment of the Mortgage to U.S. Bank was executed before a notary public on March 30, 2012, by John Kealy, who was purporting to hold the position of Assistant Secretary of MERS, which was acting as nominee for Mortgage Lenders Network USA, the entity then holding the Mortgage (if the prior assignment had not been effective). As a matter of law, such an assignment " shall be binding upon" the entity then holding the mortgage, meaning MERS in this case, " and shall be entitled to be recorded, and no vote of the entity affirming such authority shall be required to permit recording." G.L.c. 183, § 54B. Since the corrective assignment of the Mortgage on its face binds MERS as a matter of law, the Kitners may not challenge the validity of this assignment on the theory that Mr. Kealy lacked actual authority to assign the Mortgage.
Nor can the Kitners attack the assignment of the Mortgage to U.S. Bank on the ground that the assignment mistakenly states that the Kitners' property is located in " ORACUT, MA" instead of Dracut, Massachusetts. This is obviously a typographical error. This instrument makes clear that the intent of MERS and U.S. Bank was to assign the Mortgage that the Kitners had given over to U.S. Bank. The assignment is valid and enforceable in accord with its evident meaning, notwithstanding this minor typographical error. Cf. LeBlanc v. Logan Hilton Joint Venture, 463 Mass. 316, 320 n. 6 (2012). A mortgage is " sufficiently certain" to be enforceable where it allows " subsequent creditors or purchasers to ascertain ... the extent of the incumberance" and the property or properties that are encumbered. Hampshire Nat. Bank of South Hadley v. Calkins, 3 Mass.App.Ct. 697, 698 (1975) (mortgage granted by debtors on " all of our land situated within Hampshire County Massachusetts" held sufficiently certain to be enforceable). Any reasonable creditor or purchaser would understand that the corrective assignment of the Mortgage from MERS to U.S. Bank conveyed the Kitner's mortgage of their property in Dracut, not property in the non-existent town of Oracut.
Nor may the Kitners challenge the planned foreclosure sale on the ground that only a mortgagee that also holds the underlying note may conduct a foreclosure sale in Massachusetts, and that the Note was never validly assigned to U.S. Bank. Although the Supreme Judicial Court has now construed G.L.c. 183, § 21, and G.L.c. 244, § 14, to provide that a mortgagee may not foreclose unless it also holds the note underlying the mortgage, the SJC exercised its discretion to hold that this interpretation and thus this requirement " is to apply only to mortgage foreclosure sales for which the mandatory notice of sale has been given after" June 22, 2012. See Eaton v. Federal Nat'l Mortgage Ass'n, 462 Mass. 569, 589 (June 22, 2012). It is undisputed that the Kitners received written notice of U.S. Bank's notice of intention to foreclose and sell their property in May 2012, a month or more before the new statutory interpretation announced in Eaton took effect.
In any case, the undisputed facts establish that the Note was assigned to U.S. Bank on or before May 8, 2012. Thus, U.S. Bank would be entitled to foreclose even if Eaton applied here, which it does not. The fact that the endorsements making the Note payable to U.S. Bank were made using stamped signatures does not make the endorsement to U.S. Bank invalid. A signature on a negotiable instrument is valid whether it is made " manually or by means of a device or machine." G.L.c. 106, § 3-401(b).
3. Harmon Law Office's Motion to Dismiss
Harmon Law Office's only connection to this case is that it has been representing U.S. Bank in connection with the foreclosure sale of the Kitner's property. It has moved to dismiss all claims against it. In its written response to Harmon Law Office's motion to dismiss, the Kitners " stipulate[d] as to dismissal of Counts I, III, IV, VI, VII, VIII and X." As explained below, the claims against Harmon Law Office in Counts II, V, IX, XI, and XII must also be dismissed.
Count II does not state a viable claim for negligent or intentional misrepresentation against Harmon Law Offices. The only allegations in the complaint regarding Harmon are that it is a law firm that represents U.S. Bank in foreclosure proceedings, that Harmon informed the Kitners that it had been retained to foreclose on their property, and Harmon sent the Kitners several notices of foreclosure as well as several letters indicating that foreclosure proceedings had been suspended at different times. But the Kitners never identify any particular false statement of fact by Harmon. Nor do they allege specific facts plausibly suggesting that the Kitners relied on any false statement by Harmon. Thus, the complaint does not satisfy the requirement that allegations of fraud or misrepresentation must be pled with particularity. See Mass.R.Civ.P. 9(b); Equipment & Systems for Industry, Inc. v. NorthMeadows Constr. Co., Inc., 59 Mass.App.Ct. 931, 931-32 (2003) (rescript).
Count V alleges that some or all of the Defendants breached the implied covenant of good faith and fair dealing that is allegedly part of the Note and the Mortgage. But there is no allegation that Harmon Law Offices was a party to the Note or the Mortgage, or that it had any other contract with the Kitners. Since the Kitners allege no facts plausibly suggesting that they ever had any contract of any kind with Harmon Law Offices, they cannot assert a claim against Harmon for breach of the implied covenant of good faith and fair dealing. Curtis v. Herb Chambers I-95, Inc., 75 Mass.App.Ct. 662, 670 (2009), aff'd in relevant part and rev'd in part, 458 Mass. 674, 680 n. 10 (2011).
Similarly, Count IX is a claim for breach of contract. But the Kitners allege no facts plausibly suggesting that Harmon Law Offices was a party to a contract with the Kitners. This claim must therefore also be dismissed under Mass.R.Civ.P. 12(b)(6). Cf. Lopez v. Commonwealth, 463 Mass. 696, 701 (2012) (to survive motion to dismiss under Mass.R.Civ.P. 12(b)(6), complaint must allege facts that, if true, would " plausibly suggest[ ] ... an entitlement to relief" (quoting Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008), and Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007)).
Count XI alleges that Harmon Law Offices owed the Kitners a non-contractual duty of good faith. But that is incorrect as a matter of law. Cf. DaRoza v. Arter, 416 Mass. 377, 381 (1993) (whether attorney owes person a duty of care " is a question of law"). Since the Kitners allege no facts plausibly suggesting that they ever " sought any advice or assistance" from Harmon Law Offices, they cannot claim that they were owed any duty of care by Harmon. Id. at 381-82. Furthermore, it is undisputed that Harmon represents U.S. Bank. Thus, as a matter of law, Harmon could not also owe a conflicting duty of care to the Kitners. See Lamare v. Basbanes, 418 Mass. 274, 276 (1994) (Massachusetts law does not impose on attorney duty of care to non-client where doing so " would potentially conflict with the duty the attorney owes to his or her client"); Logotheti v. Gordon, 414 Mass. 308, 312 (1993) (affirming dismissal of claim against attorney on this ground). " [I]t would be improper to impose" upon the attorneys representing U.S. Bank " a conflicting duty to [their] client's adversary." Bratcher v. Moriarty, Donoghue & Leja, P.C., 54 Mass.App.Ct. 111, 116 (2002). Here there is an actual conflict between the interests of U.S. Bank and the Kitners. But even if there were only a potential for conflict between mortgagor and mortgagee, that potential alone would preclude the imposition of any legal duty on Harmon Law Offices to the Kitners. See Miller v. Mooney, 431 Mass. 57, 63 (2000); accord Spinner v. Nutt, 417 Mass. 549, 554 (1994).
Count XII alleges that some or all of the Defendants violated the Truth in Lending Act " by failing to provide accurate disclosures." But the Kitners allege no facts plausibly suggesting that Harmon Law Offices was involved in the lending transaction that led the Kitners to sign the Note and the Mortgage, or that Harmon had any involvement in the making or failure to make of any other disclosures governed by the Massachusetts or Federal Truth-in-Lending Acts. Thus, Count XII fails to state any claim upon which relief could be granted against Harmon Law Offices. See Iannacchino, 451 Mass. at 636.
ORDER
The motions by U.S. Bank National Association for summary judgment on Counts III and IV, by Harmon Law Offices to dismiss all claims, and by the Plaintiffs for leave to file their summary judgment opposition and supporting affidavit late are ALLOWED. The motion by Mortgage Electronic Registration Systems, Inc., U.S. Bank, and America's Servicing Company to strike the affidavit and memorandum filed by the Plaintiffs in response to the summary judgment motion is DENIED. Final judgment shall enter in favor of the defendants.