189 F. Supp. 3d 312
D. Mass.2016Background
- Plaintiffs Lawrence R. Clockedile, Jr. and Charlene Byrnes-Clockedile executed a $276,497.98 mortgage in 2007; they defaulted in April 2010.
- Household Finance assigned the mortgage to U.S. Bank on July 31, 2014; Caliber (the servicer) executed the assignment and referenced a power of attorney (POA) that had expired, though a different valid POA existed on the assignment date.
- The assignment was recorded August 6, 2014; Caliber (servicer for U.S. Bank) began foreclosure proceedings in 2016 and scheduled a sale that was later postponed.
- Plaintiffs sued in December 2016 seeking injunctive relief and asserting claims including breach of covenant of good faith, Chapter 93A violations, intentional infliction of emotional distress, negligence, and breach of contract; an accounting claim was withdrawn.
- Plaintiffs’ core contentions: (1) the assignment was invalid because it referenced an expired POA, so U.S. Bank lacks authority to foreclose; (2) defendants failed to negotiate a loan modification and violated Mass. Gen. Laws ch. 244, § 35B.
- The court granted defendants’ summary judgment motion in full and entered judgment for defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of assignment / standing to challenge foreclosure | Assignment invalid due to reference to expired POA; therefore U.S. Bank not mortgagee and cannot foreclose | Assignment valid because Caliber was operating under a different valid POA at the time; scrivener’s error does not void assignment | Court: Plaintiffs lack standing to deny foreclosure based on a mere scrivener’s error; assignment valid and defendants may foreclose |
| Compliance with Mass. Gen. Laws ch. 244, § 35B / duty to negotiate modification | Defendants should have negotiated a loan modification and made good faith efforts before publishing foreclosure notice | § 35B imposes internal, recordkeeping/affidavit requirements; it does not create an affirmative duty to negotiate with borrower before foreclosure | Court: No evidence § 35B was violated; statute does not require pre-foreclosure negotiation; no duty to negotiate absent explicit mortgage term |
| Tort and contract claims premised on POA error or failure to modify | Various claims (Chapter 93A, negligence, IIED, breach of contract) arise from the POA error and failure to offer modification | POA reference was a scrivener’s error that did not cause plaintiffs’ harm; no legal duty to negotiate modification; claims unsupported | Court: Claims fail as based on non-void assignment and on legally insufficient theory; summary judgment for defendants |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard and genuine dispute analysis)
- Bank of New York Mellon Corp. v. Wain, 85 Mass. App. Ct. 498 (mortgagor’s standing to challenge assignment limited to defects rendering assignment void)
- Sullivan v. Kondaur Capital Corp., 86 Mass. App. Ct. 202 (assignment defects that are merely voidable do not defeat foreclosure legitimacy)
- Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282 (mortgagor lacks standing to challenge assignments that are merely voidable)
- MacKenzie v. Flagstar Bank, FSB, 738 F.3d 486 (no duty to negotiate loan modification absent explicit mortgage provision)