Martin v. SPS (Select Portfolio) Servicing, Inc.
1:22-cv-12180
D. Mass.Feb 10, 2023Background:
- Plaintiffs Jason and Sonja Martin previously sued in 2020 challenging the foreclosure and related practices affecting 6 Nemasket Street; that action was removed to federal court and dismissed with prejudice for failure to state a claim.
- The 2020 complaint alleged defects in chain of title, lack of standing to foreclose, wrongful foreclosure, improper MERS assignments, RESPA and TILA violations, and related torts.
- The 2020 court rejected plaintiffs’ challenges to securitization and found MERS could be a mortgagee and assign the mortgage; all claims against SPS and the Trust were dismissed, and claims against Rockland Trust Co. were dismissed for insufficient pleading.
- The Martins filed a new action on December 6, 2022 asserting claims including intentional infliction of emotional distress, slander of title under c.93A, MCPA claims, slander of credit, TILA, and RESPA; Rockland Trust Co. was later voluntarily dismissed.
- The Martins moved for a preliminary injunction to enjoin a scheduled foreclosure sale; SPS removed the case, opposed the motion on res judicata and pleading-sufficiency grounds, and submitted deed registry documents; the court denied the preliminary injunction on February 10, 2023.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Martins’ claims are barred by res judicata | The new claims challenge the foreclosure and are properly pleaded as a new action | The claims were or could have been raised in the 2020 Litigation and are thus claim-precluded | Court: Res judicata applies to claims based on events before the 2020 judgment; such claims are barred |
| Whether the Complaint meets Rule 8 pleading standards for post-2020 events | Martins contend they face foreclosure and allege statutory and tort claims sufficient to enjoin sale | SPS argues the complaint contains only conclusory allegations (loan, default, foreclosure) and lacks factual support | Court: Complaint fails to allege facts showing entitlement to relief for claims not barred by res judicata |
| Whether plaintiffs demonstrated likelihood of success (prerequisite for a preliminary injunction) | Martins seek a strong likelihood of success to stop the sale | SPS contends plaintiffs cannot show a strong likelihood given res judicata and pleading defects | Court: Plaintiffs failed to show likelihood of success; therefore injunction denied |
| Whether the court must reach the other injunction factors (irreparable harm, balance of equities, public interest) | Martins argue emergency relief is warranted to prevent sale | SPS did not concede irreparable harm; focused on merits and preclusion | Court: Did not reach remaining factors because plaintiffs lacked likelihood of success |
Key Cases Cited
- Voice of the Arab World, Inc. v. MDTV Med. News Now, Inc., 645 F.3d 26 (1st Cir. 2011) (elements for preliminary injunction)
- Sindicato Puertorriqueño de Trabajadores v. Fortuño, 699 F.3d 1 (1st Cir. 2012) (likelihood of success is the sine qua non of preliminary-injunction inquiry)
- Respect Maine PAC v. McKee, 622 F.3d 13 (1st Cir. 2010) (plaintiff must show more than mere possibility—strong likelihood—of success)
- Goldstein v. Galvin, 719 F.3d 16 (1st Cir. 2013) (outlining Massachusetts claim-preclusion rules)
- Kobrin v. Bd. of Registration in Medicine, 444 Mass. 837 (2005) (explaining claim-preclusion under Massachusetts law)
- Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394 (1981) (dismissal for failure to state a claim is a judgment on the merits for claim-preclusion purposes)
- Willett v. Webster, 148 N.E.2d 267 (Mass. 1958) (same-transaction test for claim identity)