Strawbridge v. The Bank of New York Mellon
AC 16-P-1244
| Mass. App. Ct. | Jul 20, 2017Background
- In 2007 Strawbridge refinanced her home with Countrywide, executing a promissory note payable to Countrywide and a mortgage naming MERS as mortgagee "solely as nominee" for Countrywide with an express right for MERS to foreclose on default.
- Strawbridge defaulted in 2009. In February 2010 MERS executed a notarized, recorded assignment of the mortgage to Bank of New York Mellon (the Bank), trustee for the CWABS trust.
- In 2015 the Bank's loan servicer filed an affidavit asserting the Bank was holder of the note and a certificate under 209 C.M.R. §18.21A(2)(c) certifying the Bank as holder of the mortgage and the note or authorized agent of the note holder; the Bank sent a G. L. c. 244, §14 notice of foreclosure sale.
- Strawbridge sued in Superior Court seeking declaratory and injunctive relief, alleging the Bank lacked authority to use the statutory power of sale—claiming failure to comply with §14/Eaton and that the MERS assignment violated the CWABS trust PSA timing.
- A judge vacated an ex parte restraining order, denied a preliminary injunction, and granted the Bank’s Rule 12(b)(6) motion to dismiss; Strawbridge appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Bank had standing/authority to exercise the mortgage power of sale under G. L. c. 244, § 14 (Eaton) | Strawbridge: Bank did not hold both mortgage and underlying note at time of foreclosure and thus lacked power of sale under Eaton | Bank: Presented recorded assignment from MERS and affidavits/certificates showing it held the note or acted as authorized agent; complied with G. L. c. 183, §54B and §14 requirements | Court: Bank established possession/authority via assignment and §54B filings; plaintiff failed to plead a plausible claim—dismissal affirmed |
| Validity of MERS assignment given "nominee" status | Strawbridge: MERS lacked capacity to convey or assignment defective | Bank: Mortgage expressly authorized MERS to act as nominee including foreclosure; notarized recorded assignment meets statutory requirements | Court: Mortgage granted MERS power to foreclose; notarized assignment valid under §54B; assignment conveyed title and authority to Bank |
| Challenge based on PSA timing (assignment after PSA transfer date) | Strawbridge: Assignment post-dated PSA deadline means Bank lacked trust authority to foreclose | Bank: PSA timing is between trust parties; mortgagor lacks standing to attack a potentially voidable but not void assignment | Court: Mortgagor lacks standing to raise contract/PSA timing claims that render assignments merely voidable; no standing absent a showing assignment was void as matter of law |
| Claim for attorney's fees on appeal | Bank: Sought fees and costs under G. L. c. 211A and Mass.R.A.P. 25 | Strawbridge: (opposed implicitly by pursuing appeal) | Court: Denied fees because some issues were decided only in unpublished opinions and appeal was not frivolous |
Key Cases Cited
- Eaton v. Federal Natl. Mort. Assn., 462 Mass. 569 (SJC 2012) (mortgagee must hold the underlying note or act as authorized agent of the note holder to exercise power of sale)
- U.S. Bank Natl. Assn. v. Ibanez, 458 Mass. 637 (SJC 2011) (foreclosing party must prove it held the mortgage at time of notice of sale)
- Sullivan v. Kondaur Capital Corp., 85 Mass. App. Ct. 202 (Mass. App. Ct. 2014) (mortgagor lacks standing to challenge an assignment that is merely voidable; §54B compliance is controlling)
- Haskins v. Deutsche Bank Natl. Trust Co., 86 Mass. App. Ct. 632 (Mass. App. Ct. 2014) (MERS, even as "nominee," can validly assign a mortgage when instruments permit)
- Bank of N.Y. Mellon Corp. v. Wain, 85 Mass. App. Ct. 498 (Mass. App. Ct. 2014) (procedural defects in assignments that do not render them void do not give a defaulting mortgagor a legally cognizable stake)
- Khalsa v. Sovereign Bank, N.A., 88 Mass. App. Ct. 824 (Mass. App. Ct. 2016) (discusses burden of proof related to establishing entitlement to foreclose under Eaton)