Dyer v. Wells Fargo Bank, N.A.
2016 U.S. App. LEXIS 20432
| 1st Cir. | 2016Background
- In 2004 Dyer executed a mortgage naming MERS as nominee for Dreamhouse; the mortgage encumbered her Boston condominium.
- MERS recorded an assignment of the mortgage to U.S. Bank in 2008; later filings include a 2011 assignment, a 2012 “Confirmatory Assignment” (clarifying 2011 was a nullity), and a 2013 Wells Fargo affidavit stating U.S. Bank held the note.
- In April 2015 U.S. Bank (via statutory power of sale under Mass. Gen. Laws ch. 244 § 14) initiated foreclosure sale procedures; Dyer sued in state court challenging U.S. Bank’s right to foreclose and asserting slander of title; she also sued Wells Fargo under Mass. Gen. Laws ch. 93A.
- Defendants removed to federal court on diversity; the parties consented to magistrate-judge adjudication; the magistrate denied Dyer’s preliminary injunction and granted defendants’ Rule 12(c) motion, dismissing all claims.
- On appeal Dyer argued (1) the 2008 MERS→U.S. Bank assignment was void (because MERS lacked authority, violated a trust agreement, and was contradicted by the 2012 confirmatory assignment) and (2) the sale notice failed to comply with § 14’s recording/chain-of-title requirements; she also argued Wells Fargo violated Chapter 93A but had not sent the pre-suit demand letter.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether U.S. Bank was authorized under § 14 to exercise statutory power of sale | 2008 assignment void because MERS lacked authority as nominee and thus U.S. Bank did not hold the mortgage/note | 2008 assignment valid; MERS as nominee may hold/assign mortgage; U.S. Bank held the note (endorsed in blank, servicer affidavit) | Affirmed: U.S. Bank was authorized; 2008 assignment valid and U.S. Bank held the note |
| Whether an assignment that contravenes a trust agreement is void | Assignment violated trust and is void, so U.S. Bank lacks title | Breach of trust renders assignment voidable only by trust parties, not void as a matter of law | Rejected: such assignments are voidable, not automatically void; does not defeat U.S. Bank’s status |
| Whether the § 14 notice failed by omitting intermediate transfers/chain of title | Notice did not reference all intermediate transfers; therefore noncompliant with § 14 | Notice need only reference assignment from record holder (MERS) to foreclosing mortgagee; that was done | Rejected: notice complied by referencing the recorded 2008 assignment from MERS (record holder) to U.S. Bank |
| Whether Dyer’s Chapter 93A claim against Wells Fargo was procedurally barred for failure to send pre-suit demand | Complaint served as demand or exception to demand requirement applies because defendant lacks assets/place of business in MA | Dyer failed to plead or send a pre-suit demand; she did not raise exception below so argument waived | Affirmed dismissal: Dyer failed to satisfy the § 9(3) pre-suit demand requirement and waived the exception argument on appeal |
Key Cases Cited
- Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282 (1st Cir.) (MERS named as nominee can hold and assign mortgage)
- Eaton v. Fed. Nat'l Mortg. Ass'n, 969 N.E.2d 1118 (Mass. 2012) (to foreclose under § 14, foreclosing party must hold mortgage and either hold the note or act as agent of noteholder)
- Butler v. Deutsche Bank Trust Co. Americas, 748 F.3d 28 (1st Cir.) (assignment made in breach of trust agreement is voidable, not automatically void)
- McKenna v. Wells Fargo Bank, N.A., 693 F.3d 207 (1st Cir.) (discussing § 14 and demand-letter/standing issues)
- U.S. Bank Nat'l Ass'n v. Ibanez, 941 N.E.2d 40 (Mass. 2011) (clarifies content of assignment/chain requirements in foreclosure context)
- Rodi v. S. New England Sch. of Law, 389 F.3d 5 (1st Cir.) (pre-suit demand letter requirement under Mass. Gen. Laws ch. 93A must be sent before filing suit)
- Malave v. Carney Hosp., 170 F.3d 217 (1st Cir.) (appellate waiver rule: issues not raised below generally forfeited on appeal)