476 B.R. 33
Bankr. D. Mass.2012Background
- Plaintiffs Daniel and Sandra Mitchell purchased property in Gardner, MA on April 24, 2007, financing with a loan from Superior Mortgage Corp. and a MERS nominal mortgage.
- The Mitchells allege the beneficiary rights under their loan were transferred to Freddie Mac in 2007 and later assigned to Wells Fargo on July 29, 2009, which then foreclosed.
- Wells Fargo filed a Massachusetts Land Court action under the Servicemembers Civil Relief Act to foreclose, and the Mitchells received default notices in December 2009.
- The Mitchells engaged in loss-mitigation efforts, including a 90-day trial modification, with multiple postponements of the foreclosure sale in 2010.
- Foreclosure sale occurred on August 20, 2010, Wells Fargo was the high bidder; Mitchells filed for Chapter 13 bankruptcy on August 24, 2010 and initiated this adversary proceeding seeking four counts.
- The court treated the matter as a non-core proceeding with proposed findings of fact and conclusions of law, subject to district court review, and later granted Wells Fargo summary judgment on all counts while allowing a possible amendment for a trial-period plan claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper treatment of Wells Fargo's motion | Mitchells argue motion resembles a 12(b)(6) dismissal | Wells Fargo contends motion is proper summary judgment after discovery | Motion treated as summary judgment |
| Estoppel viability | Mitchells rely on estoppel (promissory/equitable) due to loss-mitigation promises | No reasonable and detrimental reliance established | Estoppel rejected; lack of reliance defeats claim |
| Trial period plan as independent contract | Trial plan created enforceable contract with implied good faith | Not adequately pled; no response received; not shown as independent contract | Count not pled as independent contract; leave to amend to be analyzed later |
| Third-party beneficiary status under HAMP/SPAs | Mitchells are intended beneficiaries of SPAs or Freddie Mac Contract | Borrowers not intended beneficiaries under SPAs/Freddie Mac Contract | Not third-party beneficiaries; not entitled to enforce HAMP provisions |
| Power to foreclose | MERS lacked authority or assignment invalid | MERS valid as nominee; assignment to Wells Fargo valid; not attackable | Summary judgment for Wells Fargo on power to foreclose |
Key Cases Cited
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (evidence must be viewed in light most favorable to nonmovant; genuine issues exist if material facts are in dispute)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment standard; movant bears initial burden to show absence of facts)
- In re Marron, 455 B.R. 1 (Bankr. D. Mass. 2011) (validity of MERS assignments and considerations of Massachusetts law)