Ressler v. Deutsche Bank Trust Co. Americas
AC 16-P-1711
| Mass. App. Ct. | Dec 1, 2017Background
- In 2006 Ressler obtained a $500,000 mortgage from Lendia, recorded at the registry of deeds; the note later passed through SunTrust and RFC and an assignment recorded showing Deutsche Bank as trustee for RALI 2006-QS18.
- In 2016 Deutsche Bank (trustee) notified Ressler of a foreclosure sale and provided a servicer certification including the endorsed note, as required by 209 Code Mass. Regs. §18.21A(2).
- Ressler sued to enjoin the foreclosure, alleging the Pooling and Servicing Agreement (PSA) required intermediary assignments through RFC and RALI before the trust closing date, so Deutsche Bank’s acceptance of her mortgage/note violated the PSA and was therefore void under trust and New York law.
- She also alleged the servicer’s certification violated the regulation (and G. L. c. 93A) by failing to show the PSA-required chain, and asserted slander of title and sought declaratory relief.
- The trial court denied injunctive relief and dismissed the complaint under Mass.R.Civ.P. 12(b)(6) for lack of standing to assert PSA noncompliance; Ressler appealed and the Appeals Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge assignment for PSA noncompliance | Ressler: PSA is a trust instrument; under trust law a third party may challenge trustee acting beyond trust terms, so assignments accepting her loan were void | Deutsche Bank: Borrower is not a party or beneficiary of the PSA; claims of procedural noncompliance are barred and assignments are at most voidable | Held: No standing; borrower cannot invalidate assignments for PSA noncompliance; dismissal affirmed |
| Characterization: trust-law vs contract-law remedy | Ressler: Framed claim as trust‑law (not contract) to avoid Bolling’s bar on non‑party contract challenges | Deutsche Bank: Whether called trust or contract, non‑beneficiary borrowers lack standing to challenge trustee acts absent alleged statutory or authority defects | Held: Recasting as trust issue fails; settled law bars borrower standing under trust or contract principles |
| Validity of assignments under state statutory requirements | Ressler: Assignments invalid because they did not follow PSA chain | Deutsche Bank: Assignments complied with recording and statutory formalities; even if procedural PSA steps weren’t followed, assignments would be voidable, not void | Held: No plausible allegation that assignments were void; statutory/formal requirements met; assignment ownership sufficient for foreclosure power |
| Alleged regulatory violation and request for sanctions | Ressler: Servicer certification violated 209 CMR §18.21A(2) by not listing PSA intermediaries; seeks damages under G. L. c. 93A; appeals | Deutsche Bank: Certification included the endorsed note and chain as required; appeal is frivolous and sanctionable | Held: Regulatory/Chapter 93A claim fails; appeal close to frivolous but not sanctionable — no fees awarded, but court cautions against repetitive unmeritorious appeals |
Key Cases Cited
- Curtis v. Herb Chambers I-95, Inc., 458 Mass. 674 (appellate standard for reviewing dismissal) (establishing de novo review and pleading standards)
- Eaton v. Federal Natl. Mort. Assn., 462 Mass. 569 (construing "mortgagee" as holder of note or acting under note holder's authority)
- U.S. Bank Natl. Assn. v. Bolling, 90 Mass. App. Ct. 154 (borrower lacks standing to challenge PSA noncompliance as non‑party)
- Strawbridge v. Bank of N.Y. Mellon, 91 Mass. App. Ct. 827 (rejection of framing PSA claim as trust issue to avoid standing bar)
- Woods v. Wells Fargo Bank, N.A., 733 F.3d 349 (1st Cir.) (procedural infirmities in assignment barred for lack of borrower standing)
- Rajamin v. Deutsche Bank Natl. Trust Co., 757 F.3d 79 (2d Cir.) (borrower lacks standing under trust and contract law to invalidate foreclosure based on PSA noncompliance)
- Bank of N.Y. Mellon v. Wain, 85 Mass. App. Ct. 498 (assignment executed consistent with G. L. c. 183, §54B binds assignor; assignment is at most voidable)
- Butler v. Deutsche Bank Trust Co. Americas, 748 F.3d 28 (1st Cir.) (recognizing limits on borrower challenges to assignments)