288 A.3d 967
R.I.2023Background
- In 2008 Raymond and Paula Montaquila obtained a mortgage from Flagstar on 33 Zella St., Providence; the mortgage included a notice provision directing notices to the property address or any other address the borrower designates.
- In 2016 they executed a partial-claim mortgage with a similar notice clause; both mortgages incorporated the statutory power-of-sale provisions by reference.
- Flagstar sent a face-to-face meeting letter by certified mail to Raymond in December 2018, then a third‑party vendor visited the property and left a door hanger; Flagstar did not send a similar face‑to‑face letter to Paula.
- Flagstar received authorization from Rhode Island Housing in April 2019 and mailed certified notices of intent to foreclose addressed to the Property for both Raymond and Paula; a foreclosure sale occurred June 24, 2019.
- The Montaquilas sued for wrongful acceleration and defective notice, alleging Paula’s last known address on the city tax assessor’s rolls was 25 Enfield Ave. (different from the Property) and that Flagstar failed to send her required notices and a face‑to‑face letter.
- The Superior Court granted Flagstar’s motion for judgment on the pleadings; the Supreme Court affirmed in part, vacated in part, and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether mailing Paula’s foreclosure notice only to the Property complied with § 34‑27‑4(b)’s requirement to mail to the property and, if different, the mortgagor’s address listed with the tax assessor | Montaquila: Paula’s tax‑assessor address was 25 Enfield Ave; statute requires mailing to both property and that address, so Flagstar failed to comply | Flagstar: Mortgage notice clause (mail to property or any address borrower designates) aligned with statute; Paula never told Flagstar she did not live at the Property, so mailing to the Property was sufficient | Vacated Superior Court’s ruling and remanded — on a 12(c) the court must accept plaintiffs’ allegation that the tax‑assessor address differed; disputed fact should be resolved in plaintiffs’ favor, so dismissal was improper |
| Whether Flagstar complied with 24 C.F.R. § 203.604 by sending a face‑to‑face meeting letter only to Raymond and leaving a door hanger at the Property (and by not sending Paula a letter) | Montaquila: Paula was entitled to a face‑to‑face meeting notice and an in‑person visit; door hanger was insufficient and Paula received no letter | Flagstar: Regulation does not require a face‑to‑face letter if mortgagor does not reside at the property; Raymond (who resided there) received the letter and a vendor trip/door hanger satisfies the “trip” requirement | Affirmed — if Paula did not reside at the Property § 203.604(c)(1) excuses a face‑to‑face letter; plaintiffs pleaded Raymond received proper notice and the vendor trip satisfied § 203.604(d) |
Key Cases Cited
- Woel v. Christiana Trust, as Trustee for Stanwich Mortgage Loan Trust Series 2017‑17, 228 A.3d 339 (R.I. 2020) (mortgage notice provisions require strict compliance; especially important in nonjudicial foreclosures)
- Bucci v. Lehman Brothers Bank, FSB, 68 A.3d 1069 (R.I. 2013) (statutory power of sale may be incorporated into mortgage by reference)
- Houle v. Liberty Ins. Corp., 271 A.3d 591 (R.I. 2022) (standard of review and early disposition under Rule 12(c))
- Chase v. Nationwide Mut. Fire Ins. Co., 160 A.3d 970 (R.I. 2017) (Rule 12(c) motion uses the Rule 12(b)(6) test; confine review to complaint and incorporated documents)
- Tri‑Town Constr. Co. v. Commerce Park Assocs. 12, LLC, 139 A.3d 467 (R.I. 2016) (on motion to dismiss, accept complaint allegations as true and resolve doubts for plaintiff)
- Peter Scotti & Assocs., Inc. v. Yurdin, 276 A.3d 915 (R.I. 2022) (statutory construction: give effect to plain meaning of statute)
- Heritage Healthcare Servs., Inc. v. Beacon Mut. Ins. Co., 109 A.3d 373 (R.I. 2015) (on Rule 12(c) the court accepts nonmovant’s factual allegations and draws all inferences in their favor)