Opinion
20-P-1208
01-11-2022
NEWTON LENDING, INC. v. DEUTSCHE BANK.
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
Newton Lending filed this wrongful foreclosure action six years after Deutsche Bank foreclosed on and sold property in Sandwich on which it held the first mortgage and Newton Lending held the second. A judge granted Deutsche Bank's motion for summary judgment, concluding that the statute of limitations barred Newton Lending's claim. Newton Lending appeals, maintaining that (1) it never received notice of the foreclosure proceedings, with the consequence that the foreclosure was invalid, and (2) its claim was timely. Because we conclude that the judge correctly granted summary judgment, as the record raised no triable issue about whether Deutsche Bank complied with the applicable notice requirements before foreclosing on and selling the property, and because the statute of limitations ran before Newton Lending filed its lawsuit, we affirm.
1. Summary judgment. Summary judgment may enter when the pleadings and discovery, together with affidavits, show "no genuine issue as to any material fact" and the moving party is entitled to judgment as a matter of law. Mass. R. Civ. P. 56 (c), as amended, 436 Mass. 1404 (2002). "On an appropriate record, summary judgment may be granted on the question whether a particular statute of limitations has run." Malapanis v. Shirazi, 21 Mass. App. Ct. 378, 383 (1986). We review a summary judgment decision de novo. American Int'l Ins. Co. v. Robert Seuffer GMBH & Co. KG, 468 Mass. 109, 113 (2014), cert denied, 574 U.S. 1061 (2014).
Deutsche Bank also moved, in the alternative, to dismiss Newton Lending's case pursuant to Mass. R. Civ. P 12 (c), 365 Mass. 754 (1974). The judge denied this aspect of the motion, and it is not now before us.
2. Undisputed facts. Deutsche Bank held a first mortgage on the Sandwich property of Suzanne and Robert Cronin; that mortgage was recorded in the Barnstable Land Court Registry. Newton Lending's second mortgage on the Sandwich property secured a note to Robert Cronin and his business partner, Lillian Arevian (Newton Note). The Newton Note was also secured by a mortgage on Arevian's property.
By late 2008, both mortgages were in default. In June 2009, Deutsche Bank began a foreclosure proceeding on the Sandwich property; in December 2009, the property was sold at a loss. The transaction was duly recorded at the Barnstable Land Court Registry. In October 2010, Newton Lending sued Robert Cronin and Arevian for nonpayment of the Newton Note.
3. Discussion. Newton Lending claims not to have received notice of the foreclosure. The foreclosure statute requires proof of service, not proof of receipt. G. L. c. 244, § 14. Hull v. Attleboro Sav. Bank, 33 Mass. App. Ct. 18, 25 (1992). Deutsche Bank submitted that proof: an affidavit, based on personal knowledge and a review of business records, from a lawyer at the firm that conducted the 2009 foreclosure and sale on the bank's behalf. See First Nat'l Bank v. North Adams Hoosac Sav. Bank, 7 Mass. App. Ct. 790, 794 (1979). That affidavit and exhibits established that Deutsche Bank sent notice to Newton Lending by certified mail and published a notice of the impending foreclosure sale in the local newspaper for three successive weeks. Accordingly, Deutsche Bank met its initial burden of showing that it provided proper notice. See McLaughlin v. CGU Ins. Co., 445 Mass. 815, 818 (2006). The burden then shifted to Newton Lending to advance admissible evidence calling that mailing and publication into question, which Newton Lending failed to do. Sea Breeze Estates, LLC v. Jarema, 94 Mass. App. Ct. 210, 215 (2018).
Newton Lending's claim, filed more than three years after the cause of action accrued, is also time-barred, and is not saved by the discovery rule. See G. L. c. 260, § 2A ; Levin v. Reliance Co-op. Bank, 301 Mass. 101, 103 (1938). "[A] cause of action accrues on the happening of an event likely to put the plaintiff on notice" of the possible harm. Flynn v. Associated Press, 401 Mass. 776, 780 (1988), quoting Hendrickson v. Sears, 365 Mass. 83, 89-90 (1974). The statute began to run in the final months of 2009 when Deutsche Bank served notice of the impending foreclosure or, at the latest, in October 2010, when Newton Lending sued Cronin and Arevian for nonpayment of the Newton Note, alleging that the note was "secured by the residences of each defendant." Reasonable diligence would have included title searches for these properties which, in turn, would have revealed the 2009 foreclosure and sale. Indeed, Newton Lending learned the status of the Arevian mortgage during the lawsuit, as it admitted at oral argument. Under these circumstances, the October 2010 lawsuit was "the happening of an event likely to put the plaintiff on notice" of the Deutsche Bank foreclosure. See Friedman v. Jablonski, 371 Mass. 482, 486 (1976) (interests in land discoverable through title search). This same analysis renders the discovery rule unavailable. See Doe v. Creighton, 439 Mass. 281, 283-284 (2003).
Judgment affirmed.