172 F. Supp. 3d 371
D. Mass.2016Background
- George Anderson borrowed in 2005; mortgage named MERS as nominee with power of sale and allowed successors/assigns to exercise lender rights. MERS assigned to Aurora; Aurora assigned to Nationstar; Capital One acquired ING Direct’s assets (including the note).
- Nationstar (as assignee/servicer) sent a notice of intent to foreclose in March 2015, scheduled sale was April then moved to August 4, 2015; Nationstar filed an order of notice and conducted the foreclosure sale, after which Capital One purchased and recorded a foreclosure deed.
- Anderson filed state-court wrongful-foreclosure suit after the sale; several counts were voluntarily dismissed, leaving Count I (mortgage power of sale) and Count VII (quiet title dependent on Count I).
- Anderson argued the notices were defective because the actual “lender” (Capital One) did not personally send default/foreclosure notices and that a 2009 default notice triggered M.G.L. ch. 244 § 35A protections requiring another notice after five years.
- Defendants contended assignees/servicers possessing MERS’s rights may give required notices and that Anderson’s proposed § 35A claim was futile because he did not allege ability or willingness to cure arrearages.
- The court dismissed the remaining claims for failure to state a claim and denied leave to amend as futile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether paragraph 22 requires the lender personally to send default/foreclosure notices | Anderson: the actual lender (Capital One) must send notices; notices by servicers/assignees are insufficient | Nationstar/Capital One: paragraph 22 permits successors/assignees (and servicers acting for them) to send notices; no personal-lender requirement | The court: no personal-lender requirement; assignees (MERS’s successors) could exercise the power of sale and give notice; Count I dismissed |
| Whether notices sent by Aurora/Nationstar failed strict mortgage requirements because they were servicers | Anderson: servicer-sent notices do not strictly comply with mortgage terms | Defendants: mortgage and assignments gave successors full power; servicer action authorized | Court: mortgage language granted MERS and its successors power of sale; servicer/assignee notices valid |
| Whether M.G.L. ch. 244 § 35A required a new notice every five years and supports amendment | Anderson: a 2009 default notice triggers § 35A rights requiring another notice after five years; amendment to plead that claim should be allowed | Defendants: no authority for a periodic notice requirement; claim is futile and Anderson lacks allegations he could cure arrears | Court: no caselaw imposing a rolling five-year notice duty; § 35A does not require strict compliance and Anderson failed to allege ability/willingness to cure, so amendment would be futile |
| Whether the plaintiff should be granted leave to amend based on newly discovered 2009 letters | Anderson: newly discovered letters justify amendment to add § 35A claim | Defendants: amendment is futile/bad faith | Court: denied leave to amend as futile under Rule 15 because proposed claim would fail Rule 12(b)(6) standard |
Key Cases Cited
- U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637, 941 N.E.2d 40 (Mass. 2011) (mortgage holder may foreclose by power of sale; one who sells under a power must strictly follow its terms)
- Pinti v. Emigrant Mortg. Co., 472 Mass. 226, 33 N.E.3d 1213 (Mass. 2015) (failure to adhere to power-of-sale notice provisions can render a sale void)
- U.S. Bank Nat’l Ass’n v. Schumacher, 467 Mass. 421, 5 N.E.3d 882 (Mass. 2014) (§ 35A gives a 90-day right to cure once every five years; post-foreclosure claim requires showing foreclosure was fundamentally unfair)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleading under Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility framework and limits on conclusory allegations)
- Centro Médico del Turabo, Inc. v. Feliciano de Melecio, 406 F.3d 1 (1st Cir. 2005) (complaint must allege each material element to survive dismissal)