Opinion
No. 12–P–757.
2013-05-10
SELECT PORTFOLIO SERVICING, INC. v. Nancy M. NEEDEL & another.
By the Court (GRAINGER, BROWN & RUBIN, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
This is a dispute arising from an institutional lender's action for repayment of a loan secured by an improperly documented mortgage on real property owned by the defendant borrowers (Needels) as tenants by the entirety. The plaintiff Select Portfolio Servicing, Inc. (Select) initiated the underlying action in the Land Court seeking equitable subrogation to a prior mortgage as described below, asserting itself to be the agent for U.S. Bank National Association (U.S.Bank), the mortgagee by assignment from the original borrower, New Century Mortgage Association (New Century).
Background. The material facts are undisputed. In 2000 the Needels, husband and wife, executed a promissory note in the amount of $440,000, secured by a mortgage on their home granted to Full Spectrum Lending, Inc. (Full Spectrum). In 2001 Nancy Needel alone executed a promissory note in the amount of $485,000 in favor of New Century, and also executed a mortgage in favor of New Century on the marital property previously mortgaged to Full Spectrum. The proceeds of the New Century loan were used to satisfy the Full Spectrum outstanding debt and discharge the Full Spectrum mortgage. The New Century loan has been in payment default since 2003. After U.S. Bank acquired the loan and initiated foreclosure efforts, the Needels instituted a civil action based on theories of lender liability in the Superior Court. U.S. Bank's motion to dismiss the complaint was allowed by the judge; the Needels' ensuing appeal to this court was dismissed with prejudice by stipulation of the parties.
Needel v. U.S. Bank National Association, CV 2005–00489 (the Superior Court action). The Needels asserted a violation of the covenant of good faith and fair dealing and sought damages for the infliction of emotional distress.
After a Land Court judge entered summary judgment in favor of Select on its claim to subrogate the U.S. Bank mortgage to the Full Spectrum mortgage, the Needels filed a chapter 13 bankruptcy action in the United States Bankruptcy Court. That action was dismissed with a finding that it had been filed in “bad faith.”
This determination is not raised on appeal.
We refer to additional facts as they appear pertinent to the issues raised on appeal.
Discussion. Agency status. The Needels contest Select's entitlement to summary judgment asserting that there remains a genuine issue whether Select is the agent of U.S. Bank. Select filed a verified complaint asserting that it is the “servicing agent of U .S. Bank National association,” and produced a fully executed power of attorney assigning, in its first numbered paragraph, the authority to “[d]emand, sue for, recover, collect and receive and every sum of money, debt ... belonging to or claimed by U.S. Bank National Association.” The sole response presented by the Needels was that they are “unable to admit or deny this allegation.” Further, and notwithstanding the production of the power of attorney, the Needels requested the judge to “require record documentation” from Select.
We note as well that Nancy Needel filed an affidavit in the Superior Court action stating under penalties of perjury that Select, under its former name Fairbanks Capital Corp., acted as the servicing agent for U.S. Bank.
It is familiar to the point of tedium that the party opposing summary judgment “cannot rest on his or her pleadings and mere assertions of disputed facts to defeat the motion for summary judgment.” LaLonde v. Eissner, 405 Mass. 207, 209 (1989). This issue therefore need not detain us further. See Ng Bros. Constr., Inc. v. Cranney, 436 Mass. 638, 648 (2002).
Successor in interest. The Needels also assign error to the judge's determination that no genuine issue exists with respect to the status of U.S. Bank as successor in interest to New Century, the original lender. The verified complaint states that U.S. Bank holds the debt “as successor-in-interest to New Century.” The Needels argue that, without more, assertions in a complaint do not satisfy a plaintiff's burden of proof. They are correct in this, and they point to the somewhat ambiguous departure in the language of the verified complaint from the requirements of Mass.R.Civ.P. 56(e), 365 Mass. 824 (1974). While the rule requires affidavits to be made on “personal knowledge,” the plaintiff's verification swears that the facts in the complaint “are true to the best of my knowledge and belief.”
The language can be interpreted as an assertion that all facts in the complaint are alleged on both knowledge and belief (belief being superfluous) or that some facts are alleged on knowledge, others on belief. In the latter case we are left without any basis to assign any particular allegation of fact to one category or the other.
In the absence of any proffer from the nonmoving party, we might be willing to overlook what can be characterized as a pro forma declaration reasonably intended to assert knowledge by the affiant, were it not for an additional problem. The attachments to the complaint establish that Select is the servicing agent for all debt owed to U.S. Bank, and also that U.S. Bank is the assignee of a loan pool purchased from New Century. However, the inclusion of the Needels' loan in that pool remains undocumented in the record as it now stands; manifestly we cannot require the Needels to do more than put the plaintiff to its proof under these circumstances.
Better practice by the Needels, including promulgation of discovery or a submission pursuant to Mass.R.Civ.P. 56(f), would potentially have avoided the inchoate state of the record presented on appeal.
Accordingly, we vacate that portion of the judgment determining the issue of U.S. Bank's successor status.
We note that the Needels have acknowledged U.S. Bank's successor status in both the Superior Court and Bankruptcy Court proceedings, both of which they initiated. See East Cambridge Sav. Bank v. Wheeler, 422 Mass. 621, 623 (1996) (“In deciding whether a party should be judicially estopped, we will look to see whether that party is seeking to use the judicial process in an inconsistent way that courts should not tolerate”). But see Otis v. Arabella Mut. Ins. Co., 443 Mass. 634, 641 (2005) (generally the party against whom judicial estoppel is applied “must have succeeded in convincing the court to accept its prior position”).
Motion in limine. Finally, the Needels assign reversible error to the judge's denial of their motion in limine seeking to introduce evidence in the pursuit of a ruling that would protect Peter Needel personally from any deficiency claim asserted after the foreclosure sale. This was an effort to expand the Land Court proceeding well beyond the issue at bar. Neither the existence of a deficiency, nor the creditor's decision to seek that deficiency from Peter Needel have been shown to be ripe for determination. The judge was well within his discretion to deny the motion.
Conclusion. That portion of the judgment determining that U.S. Bank has demonstrated its ownership of the debt is vacated, and the case is remanded for further proceedings consistent with this memorandum and order. The judgment is otherwise affirmed.
So ordered.