Sullivan v. Kondaur Capital Corp.
85 Mass. App. Ct. 202
| Mass. App. Ct. | 2014Background
- Sullivans owned 98 Wild Hunter Rd, Dennis; title issued as registered land (certificate 174074).
- They granted a mortgage on Jan 11, 2006 to MERS as nominee for WMC and successors; mortgage filed in Barnstable Land Court registry.
- First assignment May 21, 2008: MERS to Saxon; second assignment Feb 12, 2009: Saxon to Kondaur; both recorded.
- Kondaur foreclosed Oct 15, 2009 under the mortgage's power of sale and obtained a foreclosure deed.
- Sullivans sued in 2010–2013 asserting Kondaur lacked valid title; Land Court dismissed; appeal followed.
- Court reverses dismissal, holding Sullivans had standing to challenge Kondaur’s title and that issues with second assignment require further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge mortgage assignments | Sullivans can challenge Kondaur’s title | Sullivans lack standing as nonparties to assignments | Sullivans have standing to challenge assignments |
| Effect of certificate of title on challenge | Certificate in Kondaur’s name does not bar challenge | Certificate conclusive; precludes challenges | Certificate does not bar challenge; exceptions apply to fraud, forged instruments, or post-issuance issues |
| Validity of MERS to Saxon assignment | MERS cannot assign without owner authorization | Note that separation of legal/equitable interests allowed; authority implied | No merit in challenge to MERS assignment; note separation allowed; focus shifts to second assignment |
| Authority of the signatory to the second assignment | Natalie Flowers lacked Saxon officer status; authority uncertain | Section 54B allows certain officers to bind mortgagees with notary acknowledgment | Second assignment deficient for lack of Saxon officer evidence; remand for cure |
Key Cases Cited
- U.S. Bank Natl. Assn. v. Ibanez, 458 Mass. 637 (Mass. 2011) (foreclosure requires valid title and chain of assignments)
- Eaton v. Federal Natl. Mort. Assn., 462 Mass. 569 (Mass. 2012) (note ownership may be separate from legal title; foreclose if authorized)
- Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282 (1st Cir. 2013) (standing to challenge title supported in First Circuit)
- Doyle v. Commonwealth, 444 Mass. 686 (Mass. 2005) (exceptions to certificate of title protections for fraud/void judgments)
- Galiastro v. Mortgage Elec. Registration Sys., Inc., 467 Mass. 160 (Mass. 2014) (extends Eaton rule to pending appeals; note on note possession)