RFF Family Partnership, LP v. Link Development, LLC
849 F. Supp. 2d 131
D. Mass.2012Background
- Link Development purchased the Property for $1.3M in 2005 and granted three senior mortgages (Desert Pine $2M, Desert Palm $2M, and BD Lending $600k/$100k) within two years, with a later instrument attempting to subordinate Desert Pine and Desert Palm to BD Lending.
- Desert Pine, Desert Palm, and BD Lending were owned or controlled by Karll, who was involved in the mortgage filings; a subordinate instrument purporting to subordinate the Desert Pine and Desert Palm mortgages to BD Lending was recorded.
- Stuart Sojcher allegedly fraudulently negotiated the BD Lending mortgage; Link retained Russell & Associates to challenge BD Lending, leading to consolidated Superior Court and Land Court litigation over the BD Lending mortgage.
- RFF Family Partnership loaned $1.4M to Link in October 2007, secured by a mortgage on the Property, with forbearance discussions and a subordination agreement to subordinate Desert Palm to the RFF mortgage.
- Link defaulted in 2008 on the Subject Loan; RFF foreclosed in 2009; in 2011 RFF filed this suit seeking to discharge encumbrances and recover the remaining balance; Link’s counterclaims and a separate Russell action concerning liens heighten the dispute, and Link seeks a lis pendens.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to seek declaratory relief on the BD Lending mortgage | RFF has standing as a property owner affected by encumbrances | Wallace argues RFF lacks standing since not a party to the BD Lending agreement | RFF has standing to challenge the BD Lending mortgage |
| Wilton/Brillhart abstention applicability | RFF should not be compelled to defer to state court; federal determination is appropriate | Abstention advisable because state court already addresses the matter | Abstention not warranted; presence of nonparty to state action precludes abstention |
| Necessity of Russell as a party to Count I | Russell's interest in the Property affects the declaratory judgment | Russell argues not a party to BD Lending dispute; unnecessary | Russell is a proper party; Count I not subject to dismissal for lack of joinder |
| Lis pendens relief | Counterclaim of wrongful foreclosure supports a right to title and need for lis pendens | Opposing party contends lack of viable title claim | Lis pendens memorandum allowed; related wrongful foreclosure claim denied |
Key Cases Cited
- Bailey v. Way, 266 Mass. 437 (Mass. 1929) (standing to challenge a later mortgage by a former purchaser)
- National Org. for Marriage v. McKee, 649 F.3d 34 (1st Cir. 2011) (standing framework for Article III)
- Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (U.S. 1942) (declaratory judgments in presence of related state proceedings)
- Wilton v. Seven Falls Co., 515 U.S. 277 (U.S. 1995) (abstention principles for declaratory actions)
- State Farm Mut. Auto. Ins. v. Mid-Continent Cas. Co., 518 F.2d 292 (10th Cir. 1975) (principles governing declaratory relief and related actions)
- Sutherland v. Aolean Dev. Corp., 399 Mass. 36 (Mass. 1987) (scope of lis pendens and title claims)