506 F.Supp.3d 82
D. Mass.2020Background
- In July 2006 O'Brien purchased 430 Grove St., Needham, executing a $2.94M note and granting a mortgage to MERS as nominee for America’s Wholesale Lender.
- Multiple recorded assignments (five) exist in the chain of title; plaintiff challenges their validity and alleges defendant lacks the note and standing to foreclose.
- Massachusetts Superior Court granted a preliminary injunction (June 14, 2017) enjoining foreclosure but conditioning relief on insurance, tax payments, and $8,000/month escrow payments for use and occupancy.
- Wilmington Trust (as successor trustee) removed the case to federal court, filed an Affidavit Regarding Note in the registry, moved for judgment on the pleadings, and later moved to dissolve the preliminary injunction for noncompliance.
- Plaintiff stopped making the court-ordered escrow payments after March 2018 and is alleged to be approximately $248,000 in arrears; she did not meaningfully rebut the Affidavit or demonstrate a plausible defect in defendant’s standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a standalone injunction count survives | O'Brien seeks injunction to stop foreclosure due to lack of standing and defective assignments | Injunctive relief is a remedy, not an independent cause of action; duplicative of other counts | Count 1 dismissed as duplicative; judgment for defendant |
| Quiet title (Mass. Gen. Laws ch. 240 §6) | Mortgage assignments are defective so title is clouded and O'Brien is sole owner in fee simple | Mortgagor lacks standing to quiet title while mortgage remains in effect | Count 2 dismissed for lack of standing |
| Declaratory relief re: standing, chain of title, and foreclosure procedure | Assignments and absence of original note show defendant lacks standing; foreclosure certification defective under 209 C.M.R. §18.21A(2)(c) | Defendant filed an affidavit establishing note-holder status; some recorded assignments are void/null and thus need not appear in the certificate | Count 3 dismissed; plaintiff failed to plausibly allege lack of standing or procedural noncompliance |
| Intentional infliction of emotional distress (IIED) | Foreclosure attempts, fraudulent assignments, and defective notices caused severe emotional distress | Foreclosure conduct was not extreme or outrageous; allegations are conclusory | Count 4 dismissed for failure to plausibly plead extreme and outrageous conduct |
| Whether preliminary injunction should be dissolved | Plaintiff continues to seek to block foreclosure | Plaintiff breached injunction conditions (failed to make escrow payments; large arrearage) and equitable relief is inappropriate | Preliminary injunction dissolved for noncompliance and because defendant prevailed on the merits |
Key Cases Cited
- Eaton v. Federal Nat'l Mortgage Ass'n, 969 N.E.2d 1118 (Mass. 2012) (affidavit filed in registry can establish that foreclosing party held or acted for the note holder even without physical possession of the original note)
- U.S. Bank Nat'l Ass'n v. Ibanez, 941 N.E.2d 40 (Mass. 2011) (assignments made by an entity that did not hold the mortgage are void ab initio)
- Rezende v. Ocwen Loan Serv., LLC, 869 F.3d 40 (1st Cir. 2017) (mortgagor lacks standing to bring quiet title while a mortgage remains in effect)
- Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282 (1st Cir. 2013) (an assignment that is voidable rather than void cannot be challenged by the mortgagor to defeat standing)
- Bevilacqua v. Rodriguez, 955 N.E.2d 884 (Mass. 2011) (quiet title requires unity of legal title and possession; mere recorded assertions do not necessarily create a cognizable cloud on title)
- In re Sheedy, 801 F.3d 12 (1st Cir. 2015) (breaches of pooling and servicing agreements generally render assignments voidable, not void)
- Sullivan v. Kondaur Capital Corp., 7 N.E.3d 1113 (Mass. App. Ct. 2014) (MERS, as nominee, may validly assign mortgages)
- Mistovich v. U.S. Bank Nat'l Ass'n, 147 N.E.3d 1107 (Mass. App. Ct. 2020) (certificate of chain of title under 209 C.M.R. §18.21A demonstrates right to foreclose)