Chaves et al v. U.S. Bank, N.A. as Trustee et al
Filing
56
Judge Mark L. Wolf: MEMORDANUM AND ORDER entered granting 49 Motion for Summary Judgment. (Bono, Christine)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
MARIA CRAVES and FRANCISCO
MONTEIRO,
Plaintiffs,
C.A.
V.
U.S. BANK,
No.
15-12359-MLW
N.A. AS TRUSTEE
and WELLS FARGO BANK,
N.A.,
Defendants.
MEMORANDUM AND ORDER
WOLF, D.J.
I.
September 26, 2018
INTRODUCTION
Plaintiffs Maria Chaves and Francisco Monteiro brought this
case against the defendants U.S. Bank, N.A. as Trustee ("U.S.
Bank") and Wells Fargo Bank, N.A. ("Wells Fargo") challenging the
defendants'
foreclosure
on
their
home
in
Marlborough,
Massachusetts. Plaintiffs obtained a refinancing loan from Wells
Fargo in September 2003.^ See Joint Stip. of Facts (Docket No. 40)
%2, In exchange for the loan, plaintiffs granted Wells Fargo a
mortgage on their property. See id. tUl, 3. Plaintiffs defaulted
on the loan by failing to make required payments. See id. 1|5. U.S.
^ The company that originated plaintiffs' loan was Wells Fargo Home
Mortgage, Inc. The parties stipulated that Wells Fargo is the
successor-in-interest to Wells Fargo Home Mortgage, Inc. S^ Joint
Stip. of Facts (Docket No. 40) 1|2. Accordingly, this Memorandum
and Order refers to both entities as "Wells Fargo."
Bank, as the mortgagee pursuant to an assignment executed in 2012,
sold the property at a foreclosure sale on April 24, 2015. See id.
11114, 6.2 Plaintiffs filed this action in state court shortly after,
on May 6, 2015, seeking primarily to unwind the sale. See id. 11111617.
It was
removed to this
court on the basis of
diversity
jurisdiction on June 17, 2015.
The operative pleading, the First Amended Verified Complaint,
asserted
eight
claims
against
defendants
related
to
the
origination, servicing, and foreclosure of their mortgage loan.
See Docket No. 16 (Compl.). Plaintiffs were seeking, among other
things, an injunction, declaratory relief voiding the foreclosure
sale and awarding plaintiffs title to the property, and damages.^
The court dismissed Counts I, II, III, V, and VI on September 27,
2017, and simultaneously denied without prejudice plaintiffs'
request for leave to amend the complaint because they failed to
2 There is no challenge to U.S. Bank's standing to conduct the
foreclosure sale. The parties stipulated that U.S. Bank was the
"mortgagee" entitled to foreclose. Joint Stip. of Facts 1I1I2, 6;
see also Eaton v. Fed. Nat'l Mortg. Ass'n, 969 N.E.2d 1118, 1121
"(Mass. 2012) (holding that for foreclosures conducted pursuant to
the power of sale, where statutory notice of the sale was provided
after the date of this decision, the foreclosing entity must hold
the mortgage and also hold the note or be the agent of the
noteholder).
3 The First Amended Verified Complaint mislabeled Counts VI through
VIII by restarting the numbering on these counts at "IV."
Therefore, the court refers to the final three counts by their
correct numbers, i.e., Counts VI, VII, and VIII.
submit a memorandum as required by Local Rule 7.1(b) (1)
for the
District of Massachusetts. See Docket No. 32 (Sept. 21, 2017 Order)
at 19. Plaintiffs subsequently withdrew Count VIII, see Joint Stip.
of Facts 1|22, and did not renew their request for leave to amend.
Therefore, only Counts IV and VII remain.
Count IV claims defendants violated M.G.L. Chapter 244 §35A,
the terms of the mortgage contract, and M.G.L. Chapter 93A because
they allegedly failed to provide plaintiffs with notice of their
right
to
cure
their
default
before
foreclosing.
Therefore,
according to plaintiffs, the foreclosure sale is void. Count VII
claims
defendants
violated
M.G.L.
Chapter
244
§14,
which
establishes the notice requirements for conducting a foreclosure
by power of sale, because defendants did not properly announce
postponements of the foreclosure sale. Plaintiffs contend the
foreclosure sale is, therefore, void for this separate reason.
Defendants have filed a Motion for Summary Judgment on both
remaining counts (the "Motion"), which plaintiffs oppose. For the
reasons explained in this Memorandum, the Motion is being allowed.
II.
ANALYSIS
The court must grant summary judgment if "the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law." Fed. R. Civ.
P. 56(a). A fact is "material" if it "might affect the outcome of
the suit" in light of the relevant substantive law. Anderson v.
LibBirty Lobby*/
Inc./
477 U.S.
242,
247-48
(1986) . A disput©
concerning a material fact is "genuine" only if "the evidence is
such that
a
reasonable
jury could return a
verdict
for
the
nonmoving party. " Id. at 248; see also Chadwick v. WellPoint, Inc.,
561 F.3d 38, 43
(1st Cir. 2009).
To obtain summary judgment, the movant "bears the initial
responsibility of informing the district court of the basis for
its motion, and identifying those portions of [the record] which
it believes demonstrate the absence of a genuine issue of material
fact." Celotex Corp v. Catrett,
477 U.S. 317,
323
(1986). The
movant can discharge its burden by "affirmatively demonstrat[ing] "
that "there is an absence of evidence to support the nonmoving
party's case." I^ at 325, 331-32. Once the movant does so, the
nonmoving party "must set forth specific facts showing there is a
genuine issue for trial." Anderson, 477 U.S. at 250; see Celotex,
477 U.S. at 322 & n.3. The court must view the record "in the light
most favorable to the nonmovant, drawing reasonable inferences in
his favor." Noonan v. Staples, Inc., 556 F.3d 20, 25 (1st Cir.
2009) (quotations omitted). "[T]he court's task is not to weigh
the evidence and determine the truth of the matter but to determine
whether there is a genuine issue for trial." Id.
A. Failure to Provide Notice of Right to Cure and Derivative
93A Claim (Count IV)
Plaintiffs claim the foreclosure
sale is void because the
defendants failed to provide them with notice of their right to
cure the default, as required by Chapter 244 §35A and paragraph 22
of the mortgage contract. Furthermore, plaintiffs allege that this
failure to provide proper notice was an unfair and deceptive
business practice that violated Chapter 93A.
The version of §35A in effect in May 2010 — which governs
because that is the date of the notice at issue - gave mortgagors
a 90-day right to cure a default before the full balance of their
mortgage note could be accelerated. See M.G.L. c. 244 §35A(a) (eff.
May 1, 2008) . It provided that the mortgagee cannot accelerate the
unpaid balance "or otherwise enforce the mortgage because of a
default" until at least 90 days after providing written notice to
the mortgagor. Id. §35A(b). The written notice had to contain
certain information, including the identity of the mortgagee, the
nature of the default, a statement that the mortgagor has a right
to cure, and the deadline for curing the default. See id. §35A(c).
Such notice is "deemed . . . delivered to the mortgagor . . • when
mailed to the mortgagor at the mortgagor's address last known to
the mortgagee." Id. §35A(b).
However, as a threshold matter, violations of §35A cannot,
a^lone, void a foreclosure sale. In Flores v. OneWest Bank, F.S.B.,
the First Circuit affirmed dismissal of the plaintiff's claim that
a
foreclosure
sale
was
void
"because
it
was
carried out
in
violation of ... §35A. " 886 F.3d 160, 164-65 (1st Cir. 2018) . The
court explained that " [t] he claim that the sale is void because it
was
carried
out
in
violation
of
§35A
fails
because
the
[Massachusetts Supreme Judicial Court ('SJC')] held in Schumacher
that
an alleged violation of
that
statute does
not void a
foreclosure sale." Id. (citing U.S. Bank Nat'l Ass'n v. Schumacher,
5 N.E.3d 882,
890
(Mass. 2014)
(holding that violations of the
notice provisions in §35A cannot void a foreclosure sale because
the statute relates to "preforeclosure" proceedings)); see also
Fed. Nat. Mortg. Ass'n v. Carvalho, 29 N.E.3d 212, 212 (Mass. App.
Ct. 2015) ("Failure to comply with §35A is insufficient to void a
foreclosure unless a mortgagor can show that the noncompliance led
to fundamental unfairness in the entire foreclosure process.").
Therefore, the plaintiffs in this case cannot void the foreclosure
sale by relying on alleged violations of §35A, without more.
Plaintiffs
also
rely on paragraph 22 of
their mortgage
contract. Paragraph 22 of the plaintiffs' mortgage states that
before accelerating the loan and invoking the statutory power of
sale, the lender must give the borrowers notice of the default and
their right to cure, in a manner substantially similar to that
required by §35A.
Defs. Mem. in Support of Mot. to Dismiss,
Ex. A (Docket No. 20-1) 1|22 (Mortgage) . However, in Flores, the
First Circuit held that the plaintiff's claim that the sale was
void "because it was carried out in violation of paragraph twenty-
two of the mortgage instrument, " which required the mortgagee to
provide notice of the default and right to cure, failed for the
same reason as the §35A claim. 886 F.3d at 165. Even though the
SJC has voided a foreclosure sale because the mortgagee did not
strictly comply with the same contractual notice provision, the
decision was expressly given "prospective effect only." Pinti v.
Emigrant Mortgage Co., 33 N.E.3d 1213, 1226-27 (Mass. 2015). As
the foreclosure sale in Flores occurred before the SJC decided
Pinti in July 2015, the First Circuit affirmed dismissal of the
plaintiff's claim that the foreclosure sale was void for violating
the contractual notice provision. See Flores,
886 F.3d at 165
(citing Pinti, 33 N.E.3d at 1226-27). Therefore, plaintiffs' claim
that the April 2015 foreclosure sale is void for violating the
notice requirement in paragraph 22 of their mortgage is not
i;][\0]fitorious
decided.
because
the
sale
was
conducted
before
was
See id.
In any event, based on the evidence in the record, no genuine
dispute exists concerning defendants' compliance with the notice
requirements of either §35A or paragraph 22 of the mortgage.
Plaintiffs defaulted on their loan and defendants subsequently
foreclosed on the mortgage by auctioning their property on April
24, 2015. See Joint Stip. of Facts K1I5-6. Defendants have submitted
a letter dated May 16, 2010, addressed to Frank Monteiro at his
mortgaged property from Wells Fargo, that appears to be a right to
cure notice pursuant to §35A. See Smith Aff., Ex. B ("Right to
Cure Notice").
It states,
among other things,
that: Monteiro's
loan is in default; he has the right to cure the default by August
14, 2010; and if he fails to do so. Wells Fargo may accelerate his
loan and foreclose on the mortgage.
See id.
In addition.
Wells
Fargo's Vice President of Loan Documentation, Shae Smith, attested
that: "On or about[] May 16, 2010, Wells Fargo mailed to Plaintiffs
a notice to cure by regular mail through the United States Postal
Service, as required by G.L. c. 244, §35A." Smith Aff. 1|8.
Plaintiffs do not dispute that the May 2010 Right to Cure
Notice,
if
delivered,
would
otherwise
satisfy
the
notice
requirements of §35A and the mortgage. Rather, plaintiffs' contend
that the Right to Cure Notice was never sent to them. See Pltfs.
Resp. to Def. Statement of Facts (Docket No. 52, Ex. A) 1l6.
However, viewing the evidence in the light most favorable to
plaintiffs, they have failed to raise a genuine dispute concerning
whether the Right to Cure Notice was ever "delivered." M.G.L. c.
244 §35A(b). Plaintiffs stipulated that their "only proof that
Defendants failed to send notice under G.L. c. 244, §35A is their
own testimony that they did not receive notice." Joint Stip. of
Facts 1126 (emphasis added). They state that: "Defendants never
sent us any notice under G.L. c. 244, §35A on or about May 16,
8
[2010] providing the amount due to cure the default and outlining
the consequences of failure to cure the default. We know that is
the case as we never received them." Pltfs. Aff.
(Docket No. SI,
Ex. B) 1|8 (emphasis added)
However, viewing the evidence in the light most favorable to
plaintiffs, this testimony is insufficient to raise a dispute of
material fact. In Biltcliffe v. CitiMortgage, Inc., Judge Dennis
Saylor held that
"plaintiff's sworn statement that he never
received the [notice of default] letters did not create an issue
of material fact, because the law did not require proof of receipt,
only of mailing." 952 F. Supp. 2d 371, 383 (D. Mass. 2013) (citing
2007 Mass. Ch. 206, §11, H.B. 4387 (enacting Chapter 244 §35A) ) .
The First Circuit affirmed Judge Baylor's decision and endorsed
this particular holding in dictum. See Biltcliffe v. CitiMortgage,
Inc., 772 F.3d 925, 931 n.3 (1st Cir. 2014). Therefore, this court
concludes that,
as Judge Saylor wrote,
"it is sufficient for
defendant [s] to prove that the letters were mailed; [they] need
^ Plaintiffs appear to have made a typographical error in their
affidavit where they state that defendants never sent, and
plaintiffs never received, a §35A notice in May 2016. See Pltfs.
Aff. ^8. That would have been after the foreclosure sale in April
2015, and after plaintiffs filed this lawsuit in May 2015.
Presumably plaintiffs meant to assert they never received the May
2010 §35A notice, which has been produced and discussed in this
litigation. See Smith Aff. (Docket No. 49-1) 1l8 &Ex. B (Right to
Cure Notice dated May 16, 2010) . There is no indication that there
is a second, subsequent §35A notice at issue.
not prove that they were delivered." Biltcliffe, 952 F. Supp. 2d
at 379-80. Similarly, in this case, defendants' evidence that the
Right to Cure Notice was mailed to the plaintiffs in May 2010 is
not put in genuine dispute by plaintiffs' sworn assertion that
they did not receive it. See id. at 383; see also Leonard v. PNC
Bank, NA, 2014 WL 1117990, at *13 (D. Mass. 2014)
(Gorton, J.)
(granting summary judgment for defendant on plaintiff's §35A
claim, where plaintiff had "no memory of receiving a default notice
and no
record of
receipt
in his
files,"
because defendant's
employees stated that it sent the notice).
Therefore,
defendants
there is no genuine dispute concerning whether
mailed
the
May 2010
Right
to
Cure Notice
conducting the foreclosure sale. As a result,
before
no reasonable
factfinder could conclude that they failed to comply with §35A and
paragraph 22 of the mortgage.
In addition, defendants are entitled to summary judgment on
plaintiffs'
Chapter 93A claim.^ It is based solely on the
allegation that defendants
failed to provide proper notice
pursuant to §35A and the mortgage, and that " [f]ailure to send
such notice is unfair and deceptive." Compl. 192. Such derivative
5 Plaintiffs do not mention their 93A claim or argue that it should
survive in their Opposition to defendant's Motion. See generally
0pp. (Docket No. 52).
10
Chapter 93A claims cannot stand alone when the defendant is granted
judgment on the underlying substantive claim. See, e.g./ Galvin v.
U.S.
Bank Nat'l Ass'n/
2015 WL 8664207/
at *2
(D. Mass.
2015)
(Steams/ J.) (granting summary judgment for defendant on Chapter
93A claim because it was "derivative" of the meritless trespass
claim)/ aff'd/ 852 F.3d 146/ 165-66 (1st Cir. 2017); Park Drive
Towing/ Inc. v. City Of Revere/ 809 N.E.2d 1045/ 1050 (Mass. 2004)
(affirming summary judgment for defendant on "derivative" Chapter
93A
claim
based
on
alleged
"unfair
and
deceptive
conduct
surrounding the breach of contract/" because the court found no
contract existed);
Bank/
Pembroke Country Club/
Inc.
v.
Regency Sav.
815 N.E.2d 241/ 247 (Mass. App. Ct. 2004) (holding
that plaintiff's 93A claim was "wholly derivative of the tortious
interference claim"; therefore/ "the evidence being insufficient
to establish" tortious interference/ "it is likewise insufficient
to establish an unfair method of competition or an unfair or
deceptive act or practice"). Because plaintiffs' 93A claim is based
on their unmeritorious claim that defendants failed to provide
them notice of their default and right to cure as required by §35A
and the mortgage contract/ the 93A claim must fail as well.
Therefore/
Count
defendants are entitled to summary judgment on
IV.
11
B. Failure to Provide Notice of Foreclosure Sale (Count VII)
Plaintiffs claim the foreclosure sale is void for the separate
reason
that
foreclosure
defendants
sale
failed
pursuant
to
to
provide
M.G.L.
proper
Chapter
244
notice
§14.
of
More
specifically, plaintiffs contend the defendants did not properly
announce postponements of the foreclosure sale.
If a mortgagee has provided the required notices of default,
and the mortgagor has failed to cure the default, the mortgagee is
authorized to foreclose pursuant to the statutory power of sale
found in M.G.L.
Chapter 183 §21. A foreclosure sale conducted
pursuant to the power of sale "must comply with all applicable
statutory provisions, including in particular G.L. c. 183, §21,
and G.L. c. 244, §14." Eaton, 969 N.E.2d at 1121. Chapter 183 §21
provides that the mortgagee may sell the property at public auction
if
it
complies
with
the
statutory
and contractual
notice
requirements for the sale. See id. Chapter 244 §14 creates various
requirements for providing notice to the mortgagors and the public
of the foreclosure sale, which may also be incorporated into the
mortgage contract. More specifically, §14 requires the mortgagee
to publish notice of the sale in a local newspaper three times,
"once in each of 3 successive weeks," the first of which must be
published "not less than 21 days before the sale." M.G.L. c. 244
§14 (eff. Nov. 1, 2012) . In addition, notice of the sale must be
12
"sent by registered mail" to the mortgagor at least 14 days prior
to the day of the sale. Id.
In addition, after the foreclosure sale, the mortgagee must
record with the registry of deeds a copy of the notice of sale
that it published, as well as an affidavit concerning the sale.
See M.G.L.
c.
244
§15
(eff.
Jan.
11,
1995).
If
the
recorded
affidavit "shows that the requirements of the power of sale and of
the statute have in all respects been complied with, " the affidavit
serves as admissible evidence "that the power of sale was duly
executed."
Id.
Defendants argue they are entitled to summary judgment on
plaintiffs' Count VII because their recorded affidavit of sale
establishes a prima facie case that they have complied with the
statutory requirements for conducting a foreclosure by power of
sale, including the notice requirements of §14, and that plaintiffs
have failed to rebut this evidence. Defendants are correct that a
mortgagee "may make a prima facie showing of its right to
possession by producing an attested
copy of
the
recorded
foreclosure deed and affidavit of sale." Fed. Nat. Mortg. Ass'nv.
Hendricks, 977 N.E.2d 552, 555 (Mass. 2012). A recorded affidavit
of sale that is in the form provided by M.G.L.
Appendix Form 12,
Chapter 183,
or that otherwise complies with the more
particularized affidavit requirements of §15, serves "as prima
13
facie evidence of compliance with [the notice requirements of]
§14." Id.
at 555-58.
The recorded affidavit of sale "is not conclusive proof of
compliance with .
.
. §14," however.
Id. at 558-59. Once the
mortgagee presents a prima facie case that it complied with §14
before foreclosing, it is "incumbent" on the mortgagor to "counter
with his own affidavit or acceptable alternative demonstrating at
least the existence of a genuine issue of material fact to avoid
summary
judgment against
him."
Id.
at
559.
Accordingly,
in
Hendricks, the SJC held that the mortgagee Fannie Mae was entitled
to summary judgment because it submitted an affidavit of sale in
the statutory form, demonstrating prima facie compliance with §14,
and the plaintiff "did not controvert Fannie Mae's showing with
his own affidavit or some acceptable alternative." Id.
Here, the defendants have produced a recorded affidavit of
sale that is in the statutory form. Compare M.G.L. c. 183, App'x
Form 12, with Defs. Mem. in Support of Mot. to Dismiss, Ex. C
(Docket
No.
20-3)
at
3
("Affidavit of
Sale") .
The parties
stipulated that U.S. Bank recorded this Affidavit of Sale on
October 20,
2015,
which "recited the actions it undertook in
conducting the [April 24, 2015] foreclosure." Joint Stip. of Facts
11^6-8. The Affidavit of Sale states, among other things, that
plaintiffs' mortgage was in default; that U.S. Bank published a
notice of sale in the MetroWest Daily News on January 12, 19, and
14
26, 2015; and that U.S. Bank "complied with Chapter 244, Section
14 . . . as amended, by mailing the required notices by certified
mail." Affidavit of Sale; see Joint Stip. of Facts HHS-ll. The
notice of sale attached to the Affidavit of Sale states that the
auction would be held February 2, 2015 on the property, although,
as explained below, it was postponed several times. See Defs. Mem.
in Support of Mot. to Dismiss, Ex. C (Docket No. 20-3) at 4 ("Notice
of Sale"); Joint Stip. of Facts 1|ll.
Therefore, by submitting an Affidavit of Sale in the statutory
form defendants have demonstrated prima facie compliance with the
§14 notice requirements. See Hendricks,
977 N.E.2d at 559. To
prevent
entered
summary
judgment
from being
against
them,
plaintiffs must produce evidence demonstrating a genuine dispute
of material fact concerning defendants' compliance with §14. See
id. Plaintiffs have failed to do so.
As noted earlier,
the Affidavit of Sale states that the
defendants published the Notice of Sale in the MetroWest Daily
News on January 12, 19, and 26, 2015, and mailed notice of the
sale to the plaintiffs by certified mail. See Joint Stip. of Facts
These are acts which would satisfy §14. Plaintiffs now
claim that they "dispute [] " that U.S. Bank published the Notice of
Sale and mailed notice to them. Resp. to Defs. Statement of Facts
15
1l1|7-8. However, they cite no evidence to support their assertions.®
Moreover, after reviewing the record, the court concludes that no
reasonable
factfinder could conclude
that defendants
failed to
comply with the §14 notice requirements.
Plaintiffs stated in their First Amended Verified Complaint,
which they incorporated into their joint affidavit, that "[n]otice
of the purported foreclosure sale was published in the Metrowest
Daily News on January 12, 2015, January 19, 2015 and January 26,
2015." Compl. 1|3 9; Pltfs. Aff. Hi. They subsequently testified
that: "We believe that Defendants are truthful when stating that
they published on January 12, 2015, January 19, 2015 and January
26, 2015 notice of its foreclosure sale scheduled for February 2,
2015,
in the MetroWest Daily News. However,
we never saw the
publication." Pltfs. Aff. HlO/ see also id. 1Il4 (acknowledging
6 Plaintiffs cite no evidence in support of any of their assertions,
in their Response to defendants' Statement of Material Facts, that
certain facts are "disputed." S^ generally Resp. to Defs.
Statement of Facts (Docket No. 52, Ex. A). Therefore, the material
assertions in defendants' Statement of Facts (Docket No. 51) may
be deemed admitted pursuant to Rule 56.1 of the Local Rules of the
District of Massachusetts. Rule 56.1 states that "[m] aterial facts
of record set forth in the statement required to be served by the
moving party will be deemed for purposes of the motion to be
admitted by opposing parties unless controverted by the statement
required to be served by opposing parties," which "shall include
a concise statement of the material facts of record as to which it
is contended that there exists a genuine issue to be tried, with
page
references
to
affidavits,
depositions
documentation." L.R. 56.1 (emphasis added).
16
and
other
"the notice of sale that was published in the MetroWest Daily
News").
In addition,
plaintiffs state that
"[d]efendants never
sent us or mailed notices of the foreclosure sale by certified
mail, return receipt requested. We know that is the case as we
never received them." Id. 1|9.
However,
there is no requirement that plaintiffs must have
seen the published notices in order for the defendants to have
complied with §14. See Hull v. Attleboro Sav. Bank, 596 N.E.2d
358,
362
(Mass.
App.
Ct.
1992).
Moreover,
"the
fourteen-day
registered mail notice requirement is satisfied by mailing and
nonreceipt
purpose"
is
of
irrelevant."
both
the
Id.
(emphasis
newspaper
added).
publication
"The
and
main
mailing
requirements "is to provide notice to those affected by the
foreclosure
sale and to facilitate proof of notice."
Id.
The
Massachusetts Appeals Court held in Hull that these purposes "were
fully achieved" when the plaintiff "had actual notice of the sale
at least seven days before the scheduled [sale] date." Id.
In this case, the undisputed evidence shows that plaintiffs
had actual notice of the impending February 2, 2015 sale at least
a month earlier. They attested in their First Amended Verified
Complaint that U.S. Bank sent them a letter dated January 2, 2015,
"threaten[ing] to foreclose upon the Property on February 2, 2015."
Compl. 1l36; Pltfs. Aff. 1|l. Plaintiffs also alleged under oath
that after plaintiffs contacted the defendants "in an effort to
17
negotiate
the
matter,"
defendants
"agreed
foreclosure scheduled for February 2,
the Homeowners[']
to
postpone
the
2015 in order to consider
application for a loan modification." Compl.
H1138, 40. Therefore, plaintiffs have admitted that they were aware
a month before of the sale scheduled for February 2, 2015, which
is
sufficient
to
demonstrate
compliance
with
§14's
notice
requirements. See Hull, 596 N.E.2d at 362.
Having attested in their First Amended Verified Complaint
that the notices were published and that they knew about the
February 2, 2015 sale, plaintiffs cannot now "manufacture a dispute
of fact by contradicting . . . earlier sworn testimony." AbreuGuzman v. Ford, 241 F.3d 69, 74 (1st Cir. 2001). Moreover, even if
they did not see the publications or do not recall receiving notice
in the mail,
such facts
are
"irrelevant,"
particularly where
plaintiffs had actual notice of the impending February 2, 2015
sale. Hull, 596 N.E.2d at 362. Therefore, no reasonable factfinder
could conclude that plaintiffs have rebutted the defendants' prima
facie evidence of compliance with both the publication and mailing
requirements of §14 before the initial auction scheduled for
February 2,
2015.
Nevertheless,
plaintiffs contend that there is a genuine
dispute concerning defendants' compliance with §14 because the
foreclosure sale was postponed several times, and according to
plaintiffs,
the
defendants
did
18
not
properly
announce
the
postponements. Plaintiffs concede, however, that defendants were
not
required
to
re-publish and re-send
them notices
postponements in order to comply with §14. See 0pp.
52)
at 9.
In Fitzgerald v.
mortgagors
argued
that
of
the
{Docket No.
First National Bank of Boston,
the mortgagee
failed
to
the
comply with
statutory requirements for conducting a foreclosure by power of
sale, including §14 notice requirements, because it postponed the
sale by public announcement at the action site, and did not provide
additional written notice and publication. See 703 N.E.2d 1192,
1194
(Mass.
App.
Ct.
1999).
The Massachusetts
Appeals
Court
rejected this argument, explaining that:
It has long been accepted practice in Massachusetts
that, while details of the initial auction must be
provided by written notice to the appropriate parties
and published in a newspaper . . . a postponement of the
sale may be announced by public proclamation to those
present at the auction site,
particularly when the
adjournment is requested by the mortgagor. . . . It was
appropriate in this case for the bank to continue the
sale by public proclamation at the time and place of the
scheduled auction, where that auction was properly
noticed and advertised in the first instance . . . and
where
the postponement was
made
to accommodate
the
mortgagors. Apart from the statutory requisites, to
which the mortgagee must strictly adhere, questions
regarding notice of foreclosure proceedings will
continue to be viewed according to the criteria set forth
in our cases, rather than under any hard and fast rule,
in light of the mortgagee's general obligations of good
faith, diligence, and fairness in the disposition of the
mortgaged property.
Id. at 1194-95 (emphasis added). Therefore, if the defendants did
not publish or mail notice of any the postponements, any such
19
failures would be immaterial because they were not required to do
so to comply with §14.
Plaintiffs argue, instead, that there is a genuine dispute
concerning whether defendants actually postponed the
sale by
"piiblic proclamation." Public proclamation is a permissible way to
provide notice of a postponement after §14 has been satisfied with
respect to the "initial auction." Fitzgerald, 703 N.E.2d at 119495. This is "particularly" true where, as here, the postponement
was at the request of the mortgagors to allow plaintiffs to submit
an application for a loan modification, which they state they
completed on April 9, 2015. See id. ; Compl. ^^40, 45.
Defendants submitted the following evidence to prove that
they publicly announced the postponements. The Affidavit of Sale
states that the auction, originally scheduled for February 2, 2015,
was
"postponed
by
public
proclamation"
several
times.
See
Affidavit of Sale. It also states that "at the time and place
therein appointed" in the published notice, meaning on February 2,
2015, the sale was postponed to February 9, 2015; on February 9,
2015, it was postponed to March 12, 2015; and on March 12, 2015,
it was postponed to April 24, 2015. See id.; Joint Stip. of Facts
5[11l3-14.
Defendants also
submitted an affidavit
of Theresa
Gravlin, Auction Director of Towne Auctions ("Towne"), stating
that Towne publicly announced the postponements at the property.
20
which corroborates the Affidavit of Sale. See Gravlin Aff.
(Docket
No. 49-2) 1I1I5-8.
Plaintiffs
counter
this
evidence
with
testimony
that
the
defendants "did not . . . postpone the sale by public proclamation"
on any of those dates because they "did not see anyone engaging in
such
action."
Pltfs.
Aff.
1l1|ll-13;
see
Joint
Stip.
1|1|28-29
(stipulating plaintiffs have no other evidence that defendants
failed
to
publicly postpone
the
foreclosure
sale).
However,
plaintiffs' affidavit does not create a genuine dispute of material
fact because a party cannot "manufacture a dispute of fact by
contradicting . . . earlier sworn testimony." Abreu-Guzman, 241
F.3d at 74. In their First Amended Verified Complaint, plaintiffs
previously attested that the February 2, 2015 sale was postponed,
and also that there was a public postponement on at least February
9, 2015. See Compl. 1|1|40-41. Therefore, the affidavit plaintiffs
filed in support of their opposition to the Motion for Summary
Judgment is insufficient to create a genuine dispute concerning
whether the postponements were publicly announced.
Moreover,
plaintiffs'
even accepting as true
affidavit,
the assertions
in the
a possible dispute concerning whether
defendants failed to publicly proclaim the postponements would not
constitute a violation of §14 and, therefore, is not material.
While defendants must "strictly adhere" to the publication and
mailing requirements of §14,
after the statutorily required
21
notices
are
provided,
questions
concerning
the
mortgagee's
subsequent conduct during foreclosure proceedings are viewed "in
light of
the mortgagee's general obligations of good faith,
diligence,
and fairness."
Fitzgerald,
703 N.E.2d at 1195. The
Massachusetts Appeals Court explained in Pemstein v.
Stimpson
that:
[i] f the statutory norms found in G.L. c. 244, §§11-17B,
governing foreclosure of real estate mortgages,
been
adhered
to,
Massachusetts
cases
have
have
generally
regarded that as satisfying the fiduciary duty of a
mortgagee to deal fairly with the mortgaged property,
unless the mortgagee's conduct manifested fraud, bad
faith,
or the absence of reasonable diligence in the
foreclosure sale process.
630 N.E.2d 608, 611 (Mass. App. Ct. 1994)
(citing cases in which
mortgagees violated their obligations by demonstrating "bad faith
or failure of diligence
.
character").
although
Therefore,
.
.
of an active and conspicuous
public
permissible way to postpone a sale,
proclamation
is
it is not required.
a
See
Stephens-Martin v. Bank of N.Y. Mellon Tr. Co. , 2015 WL 732087, at
*12
(Mass.
Land
Ct.
2015)
(finding
at
trial
that
public
proclamation was made, but noting that "there is not even any hard
and fast requirement for a public proclamation to have been made,"
and the burden is on plaintiffs to prove mortgagor acted in
commercially unreasonable manner in postponing the sale). Thus,
fallur© to publicly proclaim a postponement does not necessarily
22
violate
a
mortgagee's
obligations
to
deal
fairly
with
the
mortgagors in the foreclosure process. See id.
Here,
plaintiffs only assert in a conclusory manner that
defendants "did not act diligently and in good faith with us when
performing the foreclosure sale by failing to use due diligence
and follow the required statute." Pltfs. Aff. 1|15. This assertion
of
bad faith and
lack of
diligence
based solely on statutory
noncompliance is negated by the fact that defendants did comply
with §14, as explained earlier. See Pemstein, 630 N.E.2d at 611.
Defendants' compliance with §14 was complete when it published
three times and mailed the notices of February 2, 2015 sale. S^
M.G.L. c. 244 §14. There is no additional evidence of bad faith
conduct or lack of diligence concerning the foreclosure process.
In any event, even if a factfinder could conclude that defendants
failed to exercise reasonable diligence or exhibited bad faith
with respect to the postponements, such conduct would not violate
§14
because,
as
explained
earlier,
§14
does
not
govern
postponements. See Fitzgerald, 703 N.E.2d at 1194-95; StephensMartin, 2015 WL 732087, at *11 (holding that although mortgagees
must "strictly adhere to . . . §14, with regard to publishing for
23
three consecutive weeks and notice to the mortgagee by registered
mail," there is no statute addressing postponements)
Therefore, plaintiffs have failed to raise a genuine dispute
of
material
fact
concerning
whether
defendants
complied with
Chapter 244 §14 before conducting the foreclosure sale of their
property on April 24, 2015. Defendants' Affidavit of Sale in the
statutory form provides prima facie proof of compliance with the
publication and mailing requirements of §14, and plaintiffs have
failed to introduce evidence sufficient to make this issue triable.
Because
no
reasonable
factfinder
could
conclude
defendants
violated §14, defendants are entitled to summary judgment on Count
VII.
Plaintiffs' First Amended Verified Complaint included a claim
for "improper foreclosure [and] breach of [the] duty of good faith
(Count VI), based on defendants' alleged failure to properly
consider their application for a loan modification. Compl. ^^10107. This claim was dismissed. Plaintiffs have not asserted a claim
that the foreclosure sale is void because defendants acted
unreasonably or in bad faith when postponing the sale. They only
assert
that
the
foreclosure
sale
is void because
violated §14 by allegedly not publicly
postponements (Count VII). See id. KflllO-16.
24
defendants
proclaiming
the
III.
ORDER
For
the
foregoing
reasons,
it
is
hereby
ORDERED
that
defendants' Motion for Summary Judgment (Docket No. 49) is ALLOWED.
Judgment shall enter for the defendants.
UNlTElK STATES DISTRICT JUDGE
25
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