Oum v. Wells Fargo, N.A.
842 F. Supp. 2d 407
D. Mass.2012Background
- Two related actions challenge allegedly invalid mortgage assignments from Sand Canyon to Wells Fargo as Trustee for two trusts and the corresponding foreclosures on mortgaged homes.
- Plaintiffs seek injunctive relief to halt evictions (Count I), to quiet title (Count II), and to recover for breach of good faith/diligence (Count III).
- Assignments at issue: O’Brien’s recorded November 23, 2009 (Sand Canyon f/k/a Option One to Wells Fargo as Trustee) and Oum’s recorded May 28, 2010 (Sand Canyon f/k/a Option One to Wells Fargo as Trustee).
- Massachusetts law governs title and standing: mortgagor holds equitable title while mortgagee holds legal title; quiet title requires possession and legal title; standing to contest assignments is contested since plaintiffs are not parties/beneficiaries to the assignments.
- The court consolidated the standing issue, dismissed AHMSI earlier, and ultimately held plaintiffs lack Article III standing to challenge the assignments, prompting remand to state court rather than merits resolution in federal court.
- The disposition: grant 12(b)(1) dismissal and remand to state court; dismiss unless standing cured.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge mortgage assignments | O’Brien/Oum claim rightful ownership and seek to defeat cloud on title | Mortgagors are not parties/third-party beneficiaries to assignments | Plaintiffs lack standing; dismissal warranted |
| Effect of invalid assignments on foreclosures | If assignments invalid, foreclosures void, allowing quiet title relief | Void assignments do not confer standing; foreclosures remain between assignor/assignee; no injury to mortgagors | Ibanez does not give mortgagors standing to challenge assignments; no quiet-title remedy here |
| Remand vs. dismissal with prejudice | Federal court should decide merits or remand to state court | Lack of standing requires dismissal | Without standing, remand to state court is proper; federal jurisdiction dismissed |
Key Cases Cited
- Ibanez, 458 Mass. 637 (Mass. 2011) (foreclosure power and authority; void foreclosures where power not properly exercised)
- Brand v. Suburban Land Co., 299 Mass. 336 (Mass. 1938) (contractual nature of mortgage assignment)
- Bevilacqua v. Rodriguez, 460 Mass. 762 (Mass. 2011) (quiet title requires right to possession and title; standing considerations)
- Sheriffs Meadow Found., Inc. v. Bay-Courte Edgartown, Inc., 401 Mass. 267 (Mass. 1987) (quiet title requires proving sufficient title to succeed)
- Massachusetts Mun. Wholesale Elec. Co. v. Town of Danvers, 411 Mass. 39 (Mass. 1991) (void ab initio contracts; remedies between contracting parties)