49 N.E.3d 686
Mass. App. Ct.2016Background
- Marie Darbouze purchased a Billerica home in 2006; the first mortgage named MERS as mortgagee "acting solely as nominee" and Deutsche Bank later acquired the loan's beneficial interest.
- MERS obtained a judgment under the servicemembers act and conducted a foreclosure sale on February 8, 2010; Gary Litchfield bought the property at auction and later assigned his bid to Gold Star Homes, LLC.
- While Marie pursued separate litigation (Superior Court challenge to the loan), MERS executed a foreclosure deed to Gold Star in September 2011; MERS later recorded an assignment of the mortgage to Deutsche Bank in November 2011.
- Gold Star accepted delivery of the deed and paid the remaining balance on May 17, 2013, after Marie’s Superior Court action became final; Gold Star then filed a summary process (eviction) action in Housing Court including both co-occupants Marcus and Marie.
- Marie had filed a related declaratory-judgment action in Land Court in May 2013 challenging the foreclosure; the Housing Court denied the Darbouzes’ motion to dismiss under Mass.R.Civ.P. 12(b)(9) and proceeded to a summary process trial, which resulted in judgment for Gold Star.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Housing Court should have been dismissed or stayed because of a prior Land Court action | Gold Star: summary process relief (possession/eviction) is not available in Land Court; Housing Court may proceed and Marcus is a necessary party there | Darbouzes: the prior Land Court action addressing foreclosure/deed validity meant Housing Court action was improper (claim-splitting) | Denied dismissal; Housing Court properly exercised discretion to try summary process because eviction remedy was not available in prior action and no unfairness resulted |
| Whether MERS lacked authority to foreclose because Deutsche Bank was the mortgage holder | Gold Star: MERS was mortgagee in the mortgage instrument, obtained judgment and carried out the sale as holder/agent | Darbouzes: Deutsche Bank (note holder) -- not MERS -- was mortgagee and MERS’s foreclosure was invalid | Court: MERS lawfully exercised power of sale; statutory usage of "mortgagee" included note holder and holder acting via MERS; defendants’ documentary arguments were not credible |
| Whether Deutsche Bank’s references to itself as holder negate MERS’s title | Gold Star: such references were imprecise or surplusage and do not defeat MERS’s exercise of the power of sale | Darbouzes: Deutsche Bank’s representations show MERS never had authority to convey | Court: statements were not binding admissions contradicting record; after Eaton, unity of interest concept explained but record supports MERS’s role; defendants’ point fails |
| Whether Gold Star received valid title given MERS’s later assignment of the mortgage to Deutsche Bank before Gold Star accepted the deed | Gold Star: foreclosure extinguished the mortgage; once deed accepted and recorded (with payment), Gold Star held fee simple | Darbouzes: MERS assigned mortgage to Deutsche Bank before Gold Star’s acceptance, so deed conveyed nothing | Court: once foreclosed, mortgage was extinguished; the later assignment could not assign a non-existent mortgage; Gold Star obtained fee simple on acceptance and payment |
Key Cases Cited
- U.S. Bank Natl. Assn. v. Ibanez, 458 Mass. 637 (foreclosure by party lacking authority is void)
- Eaton v. Federal Natl. Mort. Assn., 462 Mass. 569 (mortgagee term and unity of note-and-mortgage interests analyzed)
- Bank of N.Y. v. Bailey, 460 Mass. 327 (summary process judge may decide validity of defenses to possession based on foreclosure title)
- Bevilacqua v. Rodriguez, 460 Mass. 762 (foreclosure extinguishes the underlying mortgage)
- Santiago v. Alba Mgmt., Inc., 77 Mass. App. Ct. 46 (post-foreclosure attempted mortgage assignments ineffective)
- Haskins v. Deutsche Bank Natl. Trust Co., 86 Mass. App. Ct. 632 (defects in §35A notice do not invalidate foreclosure; remedy is equitable relief pre-foreclosure)
- U.S. Bank Natl. Assn. v. Schumacher, 467 Mass. 421 (documentary-record review standards and relevance of servicer references)
- Wayne Inv. Corp. v. Abbott, 350 Mass. 775 (summary process aims to restore legal title to holder who acquired it by lawful power of sale)
- M.J. Flaherty Co. v. United States Fid. & Guar. Co., 61 Mass. App. Ct. 337 (first-filed action and staying pending proceedings principles)
- Keen v. Western New England College, 23 Mass. App. Ct. 84 (Rule 12(b)(9) claim-splitting standard)