Manson et al v. GMAC Mortgage, LLC et al
Filing
185
Judge Richard G. Stearns: ORDER entered granting 171 Motion to Stay. (Tyler, Rebecca)
Manson et al v. GMAC Mortgage, LLC et al
Doc. 185
UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS CIVIL ACTION NO. 08-12166-RGS DARLENE MANSON, et al v. GMAC MORTGAGE, LLC, et al ORDER ON MOTION TO STAY July 28, 2010 STEARNS, D. J. This putative class-action was brought by Massachusetts homeowners whose properties have been foreclosed or who are subject to imminent or eventual eviction. Plaintiffs seek the "injunction of various foreclosure and eviction proceedings . . . based on the defendants' routine failure to comply with [State] statutory prerequisites to foreclosure," as well as a determination of the validity of foreclosures that have already occurred. Consol. Am. Class Action Compl. ¶ 1. The crux of plaintiffs' allegations is that the defendant mortgage companies, banks, and law firms have, in repeated instances, violated Massachusetts statutory requirements by foreclosing on properties (or aiding foreclosure) without first obtaining an assignment of the mortgages and a power of sale. See id. ¶ 4.1 On May 5, 2010, defendant Ablitt Law Offices, P.C., filed a motion to stay this matter pending the outcome of a case pending before the Massachusetts Supreme Judicial Court
Plaintiffs assert claims of wrongful foreclosure (Count I), improper notice (Count II); breach of the duty of good faith and reasonable diligence (Count III); violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq. (Count IV); and violations of Mass. Gen. Laws ch. 93A (Count V). The named plaintiffs additionally bring specific individual claims of wrongful foreclosure and breach of the duty of good faith and reasonable diligence (Counts VI through XIII).
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(SJC), U.S. Bank Nat'l Ass'n v. Ibanez, SJC-10694.2 The SJC, in its request for amicus briefs in Ibanez, phrased the primary issue on appeal as whether a Land Court judge correctly entered judgment against the [foreclosing entities] on the ground that G.L. 244, § 14[] authorizes a foreclosure only by the holder of the mortgage, where the record established that the [foreclosing entities] did not become the holder of the mortgage until . . . after the foreclosure sale. Ablitt's Ex. 2.3 Ablitt argues for a stay based on the abstention doctrine articulated in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976). As defendants note, the Ibanez decision has the potential of impacting thousands of past and future foreclosures in Massachusetts, including those at issue here. The Supreme Court in Colorado River established a narrow basis for district courts to stay or dismiss federal lawsuits in deference to parallel state proceedings under "exceptional" circumstances. See 424 U.S. at 818. A federal court may decline jurisdiction based on "considerations of `[w]ise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation."' Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 15 (1983), quoting Colorado River, 424 U.S. at 817, quoting Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183 (1952).4
Co-defendants Harmon Law Offices, GMAC Mortgage, LLC, U.S. Bank National Association; and EMC Mortgage Corp. have all joined in Ablitt's motion to stay. The identical issue forms the basis of the claims asserted in the Consolidated Amended Class Action Complaint. The Court in Colorado River mentioned six illustrative factors for determining whether "exceptional circumstances" exist: (1) whether either court has assumed jurisdiction over a res: (2) the inconvenience of the federal forum; (3) the desirability of avoiding piecemeal litigation, and (4) the order in which the forums obtained jurisdiction. 2
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In Colorado River, the Supreme Court emphasized that the stay or dismissal power should be used sparingly. The Court spoke of the "virtually unflagging obligation of the federal courts to exercise the jurisdiction given them," 424 U.S. at 817, and cautioned that "[o]nly the clearest of justifications will warrant dismissal." Id. at 819. "The decision whether to surrender jurisdiction is necessarily left to the discretion of the district court in the first instance, and the district court's decision may be reversed only for an abuse of that discretion. Such discretion must be exercised, however, within the constraints of the
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