Galvin v. U.S. Bank, N.A., 852 F.3d 146

Background

Mark and Jenny Galvin borrowed $2,385,000 in 2006, executed a mortgage naming MERS as nominee, and later defaulted; note was indorsed to U.S. Bank as Trustee and mortgage assigned to U.S. Bank (assignment recorded 2012).
From Dec. 2011–Nov. 2014, the servicer's agent conducted ~26 property inspections (mostly exterior); two interior winterization entries involved lock changes; Galvins objected and sent a Chapter 93A demand letter in April 2013.
Galvins sued (declaratory relief invalidating foreclosure, breach of contract, breach of covenant of good faith, trespass, Chapter 93A, negligent/intentional infliction of emotional distress); U.S. Bank counterclaimed for possession, deficiency and unjust enrichment.
District court dismissed many claims (Rule 12(b)(6)), granted summary judgment to U.S. Bank on possession and most Galvins’ claims, and entered a second judgment awarding U.S. Bank a deficiency; district court also issued a preliminary injunction limiting short-term occupancies pending resolution.
On appeal, First Circuit affirmed most rulings (standing, contract, trespass, Chapter 93A, emotional distress) but reversed the deficiency award because U.S. Bank failed to file the affidavit required by Mass. Gen. Laws ch. 244, § 17B within 30 days after the foreclosure sale.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing to foreclose: did U.S. Bank hold both note and mortgage?	Galvin: assignments/indorsements were defective (paragraph 20, MERS membership rules, indorsement vague) so U.S. Bank lacked standing.	U.S. Bank: note indorsed to U.S. Bank as Trustee valid under UCC; MERS assignment not void; paragraph 20 doesn’t bar separation.	Held: U.S. Bank had sufficient holder status/equitable rights; plaintiffs failed to show a void assignment—claims dismissed.
Compliance with mortgage ¶22 (default notice) — does servicer’s notice or failure to provide fee/owner breakdown void foreclosure?	Galvin: default notice failed to comply with ¶22 (no owner ID, servicer mislabeled, no breakdown of $30k fees).	Defendants: ¶22 does not require servicer to provide the requested breakdown; notice here did not create a viable ¶22 claim.	Held: Galvins’ ¶22 theory (as briefed) fails; no ¶22 violation established.
Trespass and related Chapter 93A claim based on inspections and lock changes	Galvin: frequent inspections, interior entries, lock changes and lack of written notice were unreasonable and trespass; fees for inspections were unreasonable → 93A.	U.S. Bank: mortgage permits reasonable entries/inspections and securing actions after default (¶¶7,9); inspections were infrequent and reasonable; only one charge ($366) shown.	Held: Inspections and two winterization entries were reasonable as matter of law; trespass and 93A claims fail.
Deficiency claim — compliance with Mass. Gen. Laws ch.244 §17B affidavit requirement	Galvin: U.S. Bank did not file required sworn affidavit within 30 days, so cannot bring deficiency action.	U.S. Bank: actual receipt of notice or equitable cure akin to §15 precedent should suffice; no affidavit required to bar deficiency.	Held: §17B requires a sworn affidavit within 30 days; U.S. Bank did not file one → deficiency judgment reversed; Galvins entitled to summary judgment on deficiency counterclaim.

Key Cases Cited

Eaton v. Fed. Nat'l Mortg. Ass'n, 969 N.E.2d 1118 (Mass. 2012) (holding note and mortgage generally must be held together for valid statutory power-of-sale foreclosures).
U.S. Bank Nat'l Ass'n v. Ibanez, 941 N.E.2d 40 (Mass. 2011) (assignment of mortgage confers statutory power to sell even if unrecorded; requirements for valid assignments).
Pinti v. Emigrant Mortg. Co., 33 N.E.3d 1213 (Mass. 2015) (strict compliance with mortgage ¶22 default-notice requirement can be required for valid power-of-sale).
Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282 (1st Cir. 2013) (interpretation of mortgage clauses and paragraph 20 regarding transfer without borrower notice).
Mills v. U.S. Bank, N.A., 753 F.3d 47 (1st Cir. 2014) (treating paragraph permitting sale of note without notice as not restricting transfer of note separate from mortgage).
Wilson v. HSBC Mortg. Servs., Inc., 744 F.3d 1 (1st Cir. 2014) (assignment challenges under Mass. law: defects may render assignments voidable, not void, limiting borrower standing).
Galiastro v. Mortg. Elec. Registration Sys., Inc., 4 N.E.3d 270 (Mass. 2014) (addresses who must hold note/mortgage for valid foreclosure post-Eaton).
Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100 (2009) (definition of a "final decision" for appeals context).
Polay v. McMahon, 10 N.E.3d 1122 (Mass. 2014) (elements and demanding standard for intentional infliction of emotional distress).
Roman v. Trustees of Tufts College, 964 N.E.2d 331 (Mass. 2012) (defining "extreme and outrageous" conduct for IIED claims).
Federal Nat'l Mortg. Ass'n v. Hendricks, 977 N.E.2d 552 (Mass. 2012) (section 15 affidavit context; court allowed extrinsic cure for defective §15 affidavit but did not speak to §17B).