Xifaras v. LNV Corporation et al

Filing 54

Judge Nathaniel M. Gorton: ENDORSED MEMORANDUM & ORDER entered 1) the motion of defendant Safeguard Properties, LLC to dismiss (Docket No. 10) is ALLOWED,2) the motion of defendants LNV Corporation and MGC Mortgage, Inc. to dismiss ( Docket No. 13) is ALLOWED,3) the motion of defendants Mortgage Electronic Registration Systems, Inc. and Regions Mortgage, Inc. to dismiss (Docket No. 14) is ALLOWED, and4) the motion of defendants Mortgage Electronic Regi stration Systems, Inc. and Regions Mortgage, Inc. for joinder (Docket No. 22) is ALLOWED.Because plaintiff is a pro se party who cannot assert claims on behalf of a corporate entity, all claims in this action, including those against defendant Dovenmuehle Mortgage, Inc., are DISMISSED WITHOUT PREJUDICE. All other pending motions in this action (Docket Nos. 36, 38, 40, 46, 47, 48, 49, 50 and 51) are DENIED AS MOOT. So ordered. (Caruso, Stephanie)

United States District Court
District of Massachusetts
)
)
)
Plaintiff,
)
)
v.
)
)
LNV CORPORATION, DOVENMUEHLE
)
MORTGAGE, INC., MGC MORTGAGE,
)
INC., SAFEGUARD PROPERTIES, LLC, )
MORTGAGE ELECTRONIC REGISTRATION )
SYSTEMS, INC. and REGIONS
)
MORTGAGE, INC.,
)
)
Defendants.
)
)
ROBERT L. XIFARAS,

Civil Action No.
16-10207-NMG

MEMORANDUM & ORDER
GORTON, J.
This case concerns a dispute with respect to a mortgage on
real estate located at 116 Rockdale Avenue in New Bedford,
Massachusetts (“the Property”).
Pending before the Court are motions to dismiss by three
sets of defendants and a motion for joinder by one set of
defendants.

For the reasons that follow, all of those motions

will be allowed and the claims against defendants will be
dismissed without prejudice.

All other pending motions in the

action will be denied as moot.

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I.

Background
A.

The parties

Plaintiff Robert Xifaras (“Xifaras” or “plaintiff”) is an
86-year-old resident of Massachusetts.

He purports to be an

officer of Epic Realty Associates, Inc. (“Epic Realty”), a
Massachusetts corporation.

He helped Epic Realty purchase the

property at issue in 2012 and to reach an agreement with the
assignee of the mortgage in 2014.

Xifaras is a former member of

the bar of Massachusetts but resigned his license to practice
law in 1993 and appears in this case pro se.
Defendant LNV Corporation (“LNV”) is apparently a Texas
corporation and the current assignee of the mortgage.
Defendant Dovenmuehle Mortgage, Inc. (“Dovenmuehle”) is
apparently an Illinois or Michigan corporation and the mortgage
loan servicer for LNV.
Defendant MGC Mortgage, Inc. (“MGC”) is apparently a Texas
or Illinois corporation, related to LNV.
Defendant Safeguard Properties, LLC (“Safeguard”) is
apparently a limited liability company, with some connection
with Ohio, which was hired by Dovenmuehle to take possession of
the Property and secure it on Dovenmuehle’s behalf.
Defendant Mortgage Electronic Registration Systems, Inc.
(“MERS”) is apparently a Michigan corporation and the initial
mortgagee on the Property.
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Defendant Regions Mortgage, Inc. (“Regions”) is apparently
a Texas corporation.

MERS and Regions disclaim any continuing

interest in the mortgage or the instant dispute.
B.

The Property and the mortgage

In 2006, the first owner of the Property and two other
individuals granted a mortgage on the Property to secure a
promissory note which they executed in favor of Freemont
Investment & Loan (“Freemont”).

It is undisputed that MERS was

the mortgagee and acted as the “nominee for the original lender,
Freemont, and its successors and assigns”.

In 2007, MERS

assigned the mortgage to another party before it was ultimately
assigned to LNV in 2013.
The complaint alleges that in 2012, after “five months of
investigation and negotiations” by plaintiff, Epic Realty
purchased the Property for $375 subject to the mortgage and
“without having becoming personally liable for the debt”.
In March, 2014, Xifaras helped Epic Realty enter into a
Settlement Agreement and Release (“the Agreement”) with LNV
whereby LNV agreed to release its mortgage lien on the Property
in exchange for a payment of $35,000 to LNV on or before October
31, 2014.

It is undisputed that neither plaintiff nor Epic

Realty made the specified payment to LNV before the deadline in
that agreement expired.

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In November, 2015, LNV informed plaintiff that it would no
longer accept a payment of $35,000 in satisfaction of the
mortgage but was willing to consider a “higher settlement amount
more consistent with the fair market value of the property”.
Plaintiff claims that LNV reneged on the 2014 Agreement in bad
faith in order to take advantage of his successful efforts to
“rehabilitate” the Property and increase its market value.
C.

Procedural history

In December, 2015, plaintiff brought this action in
Massachusetts Superior Court by filing a complaint alleging
breach of contract, predatory practices, extortion, conspiracy,
fraud, trespass and interference with contractual relations.
Plaintiff sought damages in the amounts of $53,528 for the cost
of purchasing, securing and “rehabilitating” the Property,
$36,800 in “lost rents” and three times the sum of those amounts
($270,984) as treble damages pursuant to Chapter 93A of the
Massachusetts General Laws.
Defendants removed the action on diversity grounds to
federal court in early February, 2016.
an answer to the complaint.

Dovenmuehle then filed

The five other named defendants

filed three motions to dismiss the complaint.

MERS and Regions

also submitted a motion, which this Court will allow, to join
Safeguard’s motion to dismiss.

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II.

Motions to dismiss
Defendants seek to dismiss the complaint because, inter

alia, Epic Realty is the actual party in interest and the pro se
plaintiff lacks standing to assert claims on its behalf.
Fed. R. Civ. P. 17(a)(1) requires that “[a]n action must be
prosecuted in the name of the real party in interest”. Fed. R.
Civ. P. 17(a)(1).

This action concerns the status of a mortgage

placed on certain real estate and the propriety of defendants’
conduct in disputing the status of that mortgage.
Defendants contend, and a review of the complaint and its
exhibits confirms, that Epic Realty is the owner of the Property
and that plaintiff
1) represented in his correspondence that Epic Realty is
the owner of the Property,
2) engaged in discussions and developments concerning the
Property on behalf of Epic Realty as its officer and
3) now raises claims against defendants for the actions
they undertook in connection with the Property and seeks
to recover damages that he incurred as an officer of
Epic Realty.
Defendants also point out that the purported dissolution of
Epic Realty in June, 2014 does not bar that corporation from
prosecuting its own claims (through a duly qualified attorney)
within three years of the date of dissolution, see M.G.L. c.
155; M.G.L. c. 156B, § 102; Pagounis v. Pendleton, 52 Mass. App.
Ct. 270, 275 (2001)(finding that, pursuant to the “corporate

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continuation statutes”, a corporate officer lacks standing to
assert a claim belonging to a corporation which dissolved less
than three years earlier).
Plaintiff does not dispute defendants’ assertions.
The Court thus concludes that Epic Realty, not plaintiff,
is the “real party in interest” in this action.

Plaintiff

appears pro se and cannot prosecute this action on behalf of
Epic Realty which is a corporation.

All claims in this case,

including those against Dovenmuehle, the only defendant which
did not move for dismissal, will be dismissed without prejudice.
If Epic Realty intends to pursue its purported claims, it must
retain counsel and initiate a new action in its own name.
Accordingly, the Court will dismiss the complaint in its
entirety.

ORDER

For the foregoing reasons,
1)

the motion of defendant Safeguard Properties, LLC to
dismiss (Docket No. 10) is ALLOWED,

2)

the motion of defendants LNV Corporation and MGC
Mortgage, Inc. to dismiss (Docket No. 13) is ALLOWED,

3)

the motion of defendants Mortgage Electronic
Registration Systems, Inc. and Regions Mortgage, Inc.
to dismiss (Docket No. 14) is ALLOWED, and
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4)

the motion of defendants Mortgage Electronic
Registration Systems, Inc. and Regions Mortgage, Inc.
for joinder (Docket No. 22) is ALLOWED.

Because plaintiff is a pro se party who cannot assert claims on
behalf of a corporate entity, all claims in this action,
including those against defendant Dovenmuehle Mortgage, Inc.,
are DISMISSED WITHOUT PREJUDICE.

All other pending motions in

this action (Docket Nos. 36, 38, 40, 46, 47, 48, 49, 50 and 51)
are DENIED AS MOOT.

So ordered.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated July 22, 2016

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