626 F.Supp.3d 223
D. Mass.2022Background
- In April 2008 Bourke and Hayward executed a nearly $1M promissory note secured by a registered mortgage on 6 Arkansas Ave., Nantucket; they defaulted in April 2009 and made no payments thereafter.
- Emigrant foreclosed in March 2011; RRI was high bidder and, in December 2012, Emigrant recorded a Foreclosure Deed to RRI and a Certificate of Entry in the Land Court Registry; the original Certificate of Title was canceled and replaced.
- RRI sued for possession in Nantucket District Court (summary process); the trial court awarded possession but the Appellate Division vacated the judgment in 2019 (Bourke II), finding Emigrant’s ¶22 notice defective (under Pinti) and that RRI lacked standing for summary process based on the Certificate of Entry.
- In June 2021 RRI served a post-foreclosure notice to quit; plaintiffs sued in federal court in July 2021 seeking declaratory judgment of title, possession, and unpaid use & occupancy; defendants moved to dismiss for lack of jurisdiction and failure to state a claim.
- Defendants argued (inter alia) federal courts lack jurisdiction over registered-land title disputes, res judicata barred plaintiffs’ claims, defects in the ¶22 notice voided any foreclosure by entry, and the Certificate of Entry placement on the canceled title invalidated the entry.
- The District Court denied the motions to dismiss, holding federal diversity jurisdiction is proper, res judicata did not bar the suit because prior dismissal was for lack of standing (not on the merits), defects in ¶22 affect power-of-sale foreclosures but not foreclosure by entry, and other challenges were unpersuasive.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Federal jurisdiction over title to registered land | Diversity and amount in controversy confer federal jurisdiction | Massachusetts Land Court has exclusive jurisdiction over registered-land title, so federal court lacks jurisdiction | Federal courts are not divested by state statute; diversity jurisdiction proper and federal court may hear the suit |
| Preclusion / res judicata | Previous summary-process judgment did not resolve title on the merits; plaintiffs may relitigate | Bourke II adjudicated RRI’s title; claim precluded | Prior Appellate Division decision dismissed for lack of standing (jurisdictional), not a merits adjudication; res judicata does not bar suit |
| Effect of defective ¶22 notice on foreclosure by entry | Foreclosure by entry remains valid despite ¶22 notice defects | Defective ¶22 notice voids any foreclosure, including by entry | ¶22 strict-notice requirements apply to statutory power-of-sale foreclosures, not to foreclosure by entry; ¶22 defect is irrelevant to entry-based foreclosure |
| Validity/recording of Certificate of Entry | Certificate of Entry and Transfer Certificate establish plaintiffs’ rights | Certificate of Entry noted on canceled prior certificate, so entry is invalid | Court found defendants’ argument unclear and unsupported; it did not defeat plaintiffs’ claims at the pleading stage |
Key Cases Cited
- Pinti v. Emigrant Mortg. Co., 33 N.E.3d 1213 (Mass. 2015) (strict notice requirement under ¶22 for power-of-sale foreclosures)
- Joyner v. Lenox Sav. Bank, 76 N.E.2d 169 (Mass. 1947) (foreclosure by entry does not require ¶22-style notice)
- Serra v. Quantum Servicing, Corp., 747 F.3d 37 (1st Cir. 2014) (Massachusetts law recognizes an action for possession post-foreclosure)
- Davis v. Comerford, 137 N.E.3d 341 (Mass. 2019) (use-and-occupancy claims can lie despite occupant’s adverse title claim)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (plaintiff bears burden to establish jurisdiction)
- Valentin v. Hospital Bella Vista, 254 F.3d 358 (1st Cir. 2001) (standards for 12(b)(1) sufficiency vs factual challenges)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for 12(b)(6))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must be plausible)
- Montserrat v. Newman, 28 F.4th 314 (1st Cir. 2022) (res judicata may be resolved on motion to dismiss when facts are clear)
- Bevilacqua v. Rodriguez, 955 N.E.2d 884 (Mass. 2011) (dismissal for lack of jurisdiction/standing is not an adjudication on the merits)