Schwartz v. HomEq Servicing agent for Deutsche Bank National T
07-04098
Bankr. D. Mass.Apr 7, 2011Background
- Sima Schwartz, debtor in a Chapter 7 case, sued HomEq Servicing and Deutsche Bank as Trustee in an adversary proceeding.
- A March 16, 2011 bench trial featured Schwartz as the sole witness and seven exhibits; defendants moved for judgment on partial findings after Schwartz rested.
- Judge granted judgment on all counts in favor of defendants, and Schwartz moved for a new trial on March 20, 2011.
- A central issue was whether Deutsche owned Schwartz’s mortgage at the foreclosure start; a May 23, 2006 Assignment of Mortgage was admitted, dated before the sale but after notice publication.
- Massachusetts law in Ibanez requires a proper assignment prior to the first publication of sale notice; the May 23, 2006 assignment may not suffice to prove ownership if not made by a holder of the mortgage.
- The court opened the judgment to re-try Count I, vacating the March 6, 2011 judgment as to Count I and allowing a half-day trial limited to Count I, while other counts remained resolved in favor of defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Deutsche the mortgage holder at sale notice? | Schwartz contends Ibanez requires pre-notice assignment to have occurred before first publication. | Deutsche argues the securitized trust structure and the Depositor/Trust terms show ownership earlier. | Open judgment for Count I to re-try; ownership not proven pre-notice as to the sale. |
| Does the May 23, 2006 assignment establish Deutsche’s ownership under Ibanez? | The assignment, dated after notice but before sale, may still show ownership under Ibanez because it identifies the mortgage within the trust pool. | Assignment must be by a party that held the mortgage and predate first publication; evidence did not prove this. | Vacate/open judgment on Count I; the assignment alone does not conclusively establish ownership pre-notice. |
| Should Count II (fraud/misrepresentation) be reconsidered upon reopening? | If sale invalid, plaintiff may claim fraud in foreclosure process. | No evidence of intent to defraud or misrepresentation; counts fail regardless. | Count II remains resolved in favor of defendants. |
| Should Count III (lien voiding under 506(d)) be revisited? | Motions for relief from stay should be treated as informal proofs of claim. | No formal claim or intent to hold debtor liable; not an informal claim. | Count III remains resolved in favor of defendants. |
| Does 93A/CAA framework require vacating Count IV–VII if 93A claim flawed? | Failure to issue a pre-suit demand under 93A should allow 93A/CAA claims. | Defendants raised conditions precedent; waiver and defenses apply; no vacatur. | Counts IV–VII remain resolved in favor of defendants; no opening of judgment for plaintiff on these counts. |
Key Cases Cited
- In re Schwartz, 366 B.R. 265 (Mass. Bankr. D. Mass. 2007) (precedential context for eviction-related rulings (not central here))
- Dewsnup v. Timm, 502 U.S. 410 (U.S. 1992) (lien avoidance when claim is disallowed)
- Ibanez, 458 Mass. 673 (Mass. Sup. Judicial Ct. 2011) (assignment before first publication required; pool/trust assignments may suffice if by holder)