41 N.E.3d 751
Mass. App. Ct.2015Background
- Walter Murphy bought a Halifax home in 2007 secured by a mortgage from GreenPoint with MERS as nominee; paragraph 22 of the mortgage set a strict notice-of-default/power-of-sale scheme.
- Aurora, as servicer, sent Murphy a notice in November 2010 informing him of default and his right to cure; the mortgage was assigned to Aurora in April 2011.
- Aurora conducted a nonjudicial foreclosure in October 2011, purchased the property at auction, and then initiated summary process eviction proceedings.
- In Housing Court the judge held Aurora complied with G. L. c. 244, § 35A (mortgagee/servicer notice) and granted possession; Murphy’s motion for reconsideration was denied.
- After the SJC decided Pinti (holding strict compliance with mortgage paragraph 22 is required and failure renders sale void), Murphy appealed, arguing Pinti should apply to cases pending on appeal where the issue was preserved.
- The Appeals Court agreed that Pinti’s rule applies to this pending appeal, found Aurora’s notice did not strictly comply with paragraph 22 (it failed to inform Murphy he needed to initiate a court action to challenge the foreclosure), held the foreclosure void, reversed, and remanded.
Issues
| Issue | Plaintiff's Argument (Murphy) | Defendant's Argument (Aurora) | Held |
|---|---|---|---|
| Whether strict compliance with mortgage paragraph 22 is required and failure renders foreclosure void | Paragraph 22 requires strict compliance; failure to state need to initiate court action renders sale void (relying on Pinti) | Compliance with § 35A or servicer status suffices; defects are at most voidable | Court applied Pinti: paragraph 22 requires strict compliance; Aurora failed to comply; foreclosure is void |
| Whether Pinti’s new rule should apply to cases pending on appeal (retroactivity) | Pinti should extend to similarly situated cases pending on appeal where issue was preserved; inequitable to confine benefit to Pinti alone | Pinti was announced prospectively and should not affect prior cases except as limited by SJC | Court followed Galiastro and extended Pinti to this pending appeal (issue preserved), but not to trial-court cases not on appeal |
| Whether compliance with G. L. c. 244, § 35A satisfies paragraph 22 notice requirements | Paragraph 22 is separate and stricter; § 35A does not substitute for paragraph 22 | § 35A (and mortgage paragraph 15) can satisfy paragraph 22 requirements | Court treated § 35A as distinct; declined to reach Aurora’s § 35A/paragraph 15 contention (raised first on appeal) |
Key Cases Cited
- Pinti v. Emigrant Mort. Co., 472 Mass. 226 (SJC 2015) (paragraph 22 requires strict compliance; failure renders foreclosure sale void)
- U.S. Bank Natl. Assn. v. Schumacher, 467 Mass. 421 (SJC 2014) (§ 35A is not a foreclosure-sale statute requiring strict compliance)
- Galiastro v. Mortgage Electronic Registration Sys., Inc., 467 Mass. 160 (SJC 2014) (principles governing application of new doctrines to cases pending on appeal)
- Powers v. Wilkinson, 399 Mass. 650 (SJC 1987) (discussion of prospectivity and inequity when selecting a vehicle case)
- Commonwealth v. Pring-Wilson, 448 Mass. 718 (SJC 2007) (extending a new rule to another defendant on appeal despite prospective language)