712 F.Supp.3d 164
D. Mass.2024Background
- Defendants Bourke and Hayward owned property in Nantucket and mortgaged it to Emigrant Mortgage Company in 2008; they defaulted on payments in 2009.
- After default, Emigrant attempted to foreclose: by entry in March 2011, recording a certificate of entry (COE) in December 2012, and conducting a foreclosure sale (later found void).
- Emigrant remained in peaceable possession of the property for over three years after recording the COE, which under Massachusetts law can extinguish the mortgagor’s right of redemption.
- Plaintiff Retained Realty, Inc. (RRI) received a purported foreclosure deed and certificate of title from Land Court but its initial attempt to acquire possession via summary process was dismissed due to timing, not on merits of ownership.
- Defendants contested the entry and validity of foreclosure, raising jurisdictional and preclusion defenses; both sides moved for summary judgment in federal court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Federal court jurisdiction/sufficiency of amount | Amount in controversy met; fair market value applies | Amount in controversy not met, RRI only has claim | Court has jurisdiction |
| Foreclosure by entry/possession | Entry occurred, COE valid, peaceable possession for 3 years extinguished redemption | Entry/COE was dubious, witnesses don’t recall, COE invalid | Entry presumed valid, no triable issue, redemption extinguished |
| Effect of void foreclosure deed | Title passes to RRI via estoppel by deed after redemption period | Void foreclosure deed means RRI has no title | RRI acquires title after redemption period by estoppel by deed |
| Right to possession/use and occupancy payments | RRI entitled to possession and fair rental value since March 2011 | Must proceed in state summary process; RRI not entitled | RRI entitled to possession and fair rental value |
| Preclusion/res judicata from prior proceedings | No preclusion—prior case dismissed for lack of standing, not merits | State decisions bar all claims | No preclusion; case can proceed |
Key Cases Cited
- Wornat Dev. Corp. v. Vakalis, 403 Mass. 340 (Mass. 1988) (mortgagee extinguishes redemption right via three years of peaceable possession after entry)
- Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333 (U.S. 1977) (value of property determines amount in controversy in title actions)
- Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (U.S. 2005) (supplemental jurisdiction over claims less than jurisdictional amount)
- Hale v. Hale, 332 Mass. 329 (Mass. 1955) (notary acknowledgments presumed valid)
- Singh v. 207-211 Main Street, LLC, 78 Mass. App. Ct. 901 (Mass. App. Ct. 2010) (challenge to foreclosure by entry must be timely)
- Dale v. H.B. Smith Co., Inc., 136 F.3d 843 (1st Cir. 1998) (tenants at sufferance liable for use and occupancy after foreclosure)