Opinion
16-P-312
05-26-2017
MENDELL WAY, LLC v. Heather GORDON & others.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff Mendell Way, LLC (Mendell Way) is the record owner of real estate as to which a foreclosure has occurred. Defendant Heather Gordon is the mortgagor whose interest in the subject property was foreclosed. The Huntington Bank (Huntington), as trustee for one of Mendell Way's predecessors-in-title, the Franklin Mortgage Asset Trust 2009-A (Franklin Trust), sued Gordon in a summary process eviction action after the foreclosure and obtained a judgment for possession against her. After obtaining record title to the property from a successor to the Franklin Trust, Mendell Way brought the instant action in the Land Court to clear its title of any lingering suggestion that Gordon retains an interest in the land. A Land Court judge entered judgment for Mendell Way on the ground that the question whether Gordon held title after the foreclosure was decided in the eviction case and that she is barred by that decision and the principle of res judicata. We agree and affirm.
Background. The facts are known to the parties, and a summary focused on the procedural history will suffice. In 1992, Gordon was deeded the property known as 3 Mendell Way in Boston in exchange for consideration of $62,500. In 2005, she granted a mortgage on the property in the amount of $287,000. Gordon's interest was later purportedly foreclosed through an auction sale in June, 2010. After the foreclosure, Franklin Trust purported to be the owner of the property, pursuant to a foreclosure deed. When Gordon (and possibly Steve Gayle) refused to vacate the property, Huntington, as trustee for the Franklin Trust, brought a summary process action for eviction in the Housing Court. On February 18, 2011, a Housing Court judge ordered entry of summary judgment for the Franklin Trust and dismissal of the counterclaims asserted by Gordon. Gordon appealed to this court from the judgment for possession against her, but the appeal was dismissed on March 15, 2012, for failure to prosecute.
In 2007, Gordon conveyed the property to herself and Steve Gayle. In April, 2010, Gordon and Gayle executed another deed granting the property back to Gordon.
Thereafter, in 2012, the Franklin Trust conveyed the property to Bosco Credit IV, LLC (Bosco). Bosco then conveyed the property to Mendell Way for $300,000. Mendell Way brought the instant action in the Land Court pursuant to the declaratory judgment and quiet title statutes (see G. L. c. 231A; G. L. c. 240, §§ 6 - 10 ) to clear its title of any competing claim by Gordon. The Land Court judge allowed Mendell Way's motion for summary judgment, but stayed entry of judgment until September 14, 2015, so that Gordon could bring a motion to vacate the Housing Court judgment. Gordon failed to do so, and the Land Court entered judgment in favor of Mendell Way on October 8, 2015.
Gordon asserted a counterclaim against Mendell Way for a declaratory judgment that the property remains in her name. She also asserted cross claims against all named defendants (other than herself and Steve Gayle) for (i) a declaratory judgment that the foreclosure sale was void and title to the property remains in her name, and (ii) for unlawful foreclosure. The Land Court judge treated the defendants' motion to dismiss the claims concerning title as a motion for summary judgment and allowed that motion on res judicata grounds, and dismissed the claims related to tort or consumer protection theories as outside of the court's subject matter jurisdiction.
Thereafter, Gordon brought a motion to vacate the Housing Court judgment in that court, and she brought a separate motion to vacate the Land Court judgment in the instant case. The Housing Court judge denied Gordon's motion to vacate the judgment for possession on December 1, 2015. The Land Court judge denied Gordon's motion to vacate Mendell Way's declaratory judgment on December 10, 2015. Gordon appeals both from the Land Court judgment and from the Land Court order denying her motion to vacate that judgment.
In a related appeal, Gordon challenged the Housing Court order denying her motion to vacate the Housing Court judgment. In a separate decision, also issued today, we affirmed the Housing Court order denying her motion.
Discussion. " 'Res judicata' is the generic term for various doctrines by which a judgment in one action has a binding effect in another." Bagley v. Moxley, 407 Mass. 633, 636 (1990), quoting from Heacock v. Heacock, 402 Mass. 21, 23 n.2 (1988). That phrase "encompasses both the doctrine of 'claim preclusion' and the doctrine of 'issue preclusion.' " Bagley, supra. " 'Issue preclusion' is the modern term for the doctrine traditionally known as 'collateral estoppel,' and 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." Id. at 636-637, quoting from Heacock, supra.
"A party is precluded from relitigating an issue where '(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,' was essential to the earlier judgment, and was actually litigated in the prior action." DeGiacomo v. Quincy, 476 Mass. 38, 42 (2016), quoting from Kobrin v. Board of Registration in Med., 444 Mass. 837, 843 (2005).
In the summary process action against Gordon, the Housing Court judge found that the foreclosing entity "was the holder of the mortgage at the time it foreclosed on the defendants' property," and "complied with the provisions of G. L. c. 244, § 14, with respect to notice and conduct of the foreclosure auction and sale." Thus, according to the Housing Court judge, Franklin Trust "acquired record title to the property by means of a foreclosure deed." Accordingly, the Housing Court judge held that Franklin Trust was entitled to a judgment for possession.
Because his decision predated the Supreme Judicial Court's opinion in Bank of America, N.A. v. Rosa, 466 Mass. 613 (2013), the Housing Court judge also determined that Gordon was not permitted to assert counterclaims or affirmative defenses in the summary process action. However, it is clear from the Housing Court judge's memorandum of decision in the eviction action that Gordon's challenge to the efficacy of the foreclosure was heard in accordance with Bank of N.Y. v. Bailey, 460 Mass. 327 (2011) (handed down a few months later in 2011), and was not treated as an unavailable affirmative defense. Moreover, Gordon had every opportunity to pursue an appeal from the Housing Court judgment until her appeal was dismissed by order of this court for lack of prosecution. The judgment of the Housing Court is long since final.
Here, the Land Court judge properly found that all the elements of issue preclusion are met. First, there was a final judgment on the merits in the Housing Court action. Second, Gordon, the party against whom issue preclusion is now sought, was a defendant in the Housing Court action. Third, the issue in the Housing Court adjudication was identical to the issue presented in the Land Court case, was essential to the Housing Court judgment, and was actually litigated in the Housing Court. See Federal Natl. Mort. Assn. v. Hendricks, 463 Mass. 635, 637-643 (2012) (explaining that a plaintiff in a postforeclosure summary process action may make a prima facie showing of the right to possession by producing an attested copy of the recorded foreclosure deed and affidavit, but that the defendant "may challenge a plaintiff's title, i.e., its right of possession").
It is also worth noting that Mendell Way is in privity with Franklin Trust.
Additionally, there is no doubt that a judgment for possession in a summary process case has preclusive effect on the issue of title in subsequent cases brought in other sessions or other divisions of the trial court. See Santos v. U.S. Bank Natl. Assn., 89 Mass. App. Ct. 687, 693 (2016) (upholding Superior Court judge's application of claim preclusion where a summary process judgment established the summary process plaintiff's postforeclosure title). See also Sheehan Constr. Co. v. Dudley, 299 Mass. 51, 54 (1937).
Gordon's claim that Mendell Way lacks standing to bring this action is without merit. See McCartin Leisure Indus., Inc. v. Baker, 376 Mass. 62, 66 (1978) ("While it is true that a plaintiff seeking to quiet title must possess sufficient legal interest in the property so as to avoid dismissal for lack of standing, a claim of rightful legal ownership satisfies these requirements").
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Here, "[t]he judge of the Land Court correctly interpreted the law of res judicata in its application to the facts before him." Ibid. The Land Court judgment for Mendell Way is, accordingly, affirmed in all respects. The Land Court order denying Gordon's motion to vacate that judgment is also affirmed.
So ordered.
Affirmed.