DeMustchine v. RAHI Real Estate Holdings LLC et al

Filing 33

Judge Douglas P. Woodlock: MEMORANDUM AND ORDER entered denying 30 Motion to Vacate (Woodlock, Douglas)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

BRUCE CLARK DEMUSTCHINE,

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Plaintiff,
v.
RAHI REAL ESTATE HOLDINGS, LLC
and JP MORGAN CHASE BANK
NATIONAL ASSOCIATION, as
successor-in-interest to
WASHINGTON MUTUAL BANK
successor-in-interest to
LONG BANK MORTGAGE COMPANY
Defendants.

CIVIL ACTION NO.
10-11245-DPW

MEMORANDUM AND ORDER
September 24, 2012
The defendant RAHI Real Estate Holding LLC, over a year
after entry of a default judgment against it in this case, seeks
to vacate the judgment on grounds that under Fed. R. Civ. P.
60(b)(5) applying the judgment prospectively is no longer
equitable and under Rule 60(b)(6), the Rule’s catch-all provision
for “any other reason that justifies relief.”

The reason for

this belated response to the requests for default and default
judgment is said to be “inadvertent oversight and
miscommunication between it and its former counsel.”

This

oversight concededly consisted of a failure to defend legal
action of which the defendant was at least constructively aware,

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while attempting to negotiate a settlement of the underlying
dispute between the parties.
I find no reason that justifies relieving a sophisticated
defendant, well aware of the potential for litigation in the
mortgage context, from the consequences of the failure of the
attorney it chooses to take necessary steps to defend ongoing
litigation.

Cf. KPS & Assoc. v. Designs by FMC, Inc., 318 F.3d

1, 16 (1st Cir. 2003).

To the degree that the defendant suffered

harm, any claim it may have must be found in the realm of legal
malpractice and not in the reopening of litigation it knowingly
neglected.
The text of Rule 60(b), of course, is plain that there is no
categorical limit of one year to the assertion of a motion to
vacate under either Rule 60(b)(5) or 60(b)(6).

Nevertheless, the

Rule does require that such a motion for relief “be made within a
reasonable time.”

Especially here, where the grounds are a vain

effort to recast what is essentially a claim of inadvertence - a
matter governed by Rule 60(b)(1), which does have a one year
limitation - there is nothing reasonable about the time the
defendant took to get around to addressing its default and the
judgment which flowed from it.
As to the merits, the defendant continues to decline to
demonstrate that it holds both the mortgage and the note.

As the

Supreme Judicial Court has made clear, Easton v. Federal National
Mortgage Ass’n., 462 Mass. 569 (2012), in order for a party to be

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able to foreclose at this point, the party must hold both the
mortgage and the note.
There is nothing inequitable in holding a sophisticated but
neglectful defendant to the consequences of its failure to
defend.

I note only that while this defendant may not be in a

position to foreclose under the judgment in this case, an
independent third party holding both the mortgage and the note
may still be able to do so under my reading of the permanent
injunction that is part of the default judgment entered here.

To

be sure, the defendant may not be able to negotiate with such a
party a particularly advantageous arrangement for the sale of
whatever interest it still has.

But that difficulty is one of

the defendant’s own making and not a grounds for disturbing a
judgment that the defendant took well over a year to challenge.
Accordingly, the defendant’s motion to vacate (#30) is
hereby DENIED.

/s/ Douglas P. Woodlock
DOUGLAS P. WOODLOCK
UNITED STATES DISTRICT JUDGE

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