Opinion
14-P-1676
07-21-2015
BANK OF NEW YORK MELLON v. DAMARIS FERNANDEZ.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The defendant, Damaris Fernandez (homeowner), appeals from a judgment of the Northeast Housing Court awarding possession of the residential premises to the plaintiff, Bank of New York Mellon (BNY Mellon), and dismissing the counterclaims brought by the homeowner under G. L. c. 93A. Because the homeowner's counterclaims were dismissed with her assent and without prejudice, we review only that portion of the judgment awarding possession to BNY Mellon. For the reasons that follow, we affirm.
Background. This case arises out of a postforeclosure residential summary process action whereby BNY Mellon sought to recover possession of the property located at 35 Perkins Street, unit 1, Salem, Massachusetts. The homeowner answered with both affirmative defenses and counterclaims under c. 93A, asserting that BNY Mellon's mortgage servicer, American Servicing Company (ASC), had engaged in unfair and deceptive review of her loan modification request. She specifically alleges that ASC violated the Home Affordable Modification Program (HAMP) regulations, and G. L. c. 244, § 35B, when it denied her request to modify her loan.
As successor in interest to JP Morgan Chase Bank N.A. as trustee for Structured Asset Mortgage Investments II, Inc., Bear Stearns ALT-A Trust 2005-7, Mortgage Pass-Through Certificates Series 2005-7.
BNY Mellon correctly points out that the homeowner's allegations of unfair and deceptive acts and practices under G. L. c. 93A focus exclusively on the conduct of BNY Mellon's mortgage servicer, ASC, and that the judgment should be affirmed for that reason alone. As this question was not addressed by the judge below, we do not consider it further.
Prior to trial, BNY Mellon moved for summary judgment on the sole issue of possession, and the judge entered an order for judgment in favor of BNY Mellon on that issue alone. The judge offered to set a trial date on the homeowner's counterclaims. However, after that order entered, on July 15, 2014, both parties entered into a joint stipulation for dismissal of the defendant's counterclaims without prejudice, as well as a joint motion for final judgment in BNY Mellon's favor.
Discussion. In this case, as in U.S. Bank Natl. Assn. v. Schumacher, 467 Mass. 421 (2014), the defendant's claim is not that BNY Mellon failed to acquire legal title to the property in strict accordance with the power of sale as set out in G. L. c. 183, § 21, and further regulated by G. L. c. 244, §§ 11-17C. Instead, the homeowner seeks to use BNY Mellon's summary process action to invalidate the foreclosure by arguing that its mortgage servicer, ASC, violated G. L. c. 93A in its denial of her request for loan modification. In Schumacher, supra at 429, the court explained that generally in a postforeclosure summary process action in the Housing Court, the only legal issue for the court is whether the mortgagee obtained title to the property in strict accordance with the power of sale. The court held that a claim that notice of the homeowner's statutory right to cure a default, issued pursuant to G. L. c. 244, § 35A, was deficient does not affect the mortgagee bank's title and right to possession. See Schumacher, 467 Mass. at 431 ("G. L. c. 244, § 35A, is not one of the statutes relating to the foreclosure of mortgages by the exercise of a power of sale" [quotations omitted]). The same logic applies with regard to the homeowner's claim that ASC failed to comply with the HAMP regulations and G. L. c. 244, § 35B, in that the statute and regulations governing the loan modification program are not related to the foreclosure of mortgages by the exercise of a power of sale.
Nonetheless, violations of the law during the foreclosure process may render the foreclosure so "fundamentally unfair" that the homeowner is "entitled to affirmative equitable relief, specifically the setting aside of the foreclosure sale 'for reasons other than failure to comply strictly with the power of sale provided in the mortgage.'" Schumacher, 467 Mass. at 433 (Gants, J., concurring), quoting from Bank of Am., N.A. v. Rosa, 466 Mass. 613, 624 (2013). And, in Rosa, id. at 617-625, the Supreme Judicial Court made it clear that homeowners may assert claims of fundamental unfairness in the form of G. L. c. 93A counterclaims and defenses challenging the bank's right to possession and title, including but not limited to claims alleging failure to comply strictly with the power of sale in the mortgage, payment of the mortgage note, violation of unfair business practices statutes, and unlawful discrimination. In Rosa, the court also made it clear that the Housing Court has authority to grant affirmative relief in equity, and, where appropriate, to award monetary damages, attorney's fees, and costs. Id. at 625.
In the present case, BNY Mellon's motion for summary judgment was supported by documentation that established a prima facie case that it held title to the property and was entitled to recover possession. The homeowner's opposition consisted of a claim that there were material facts in dispute relating to the denial of the homeowner's request for a loan modification and the validity of an assignment of the mortgage to the bank. The homeowner submitted two affidavits in support of her opposition to summary judgment -- one by the homeowner and one by her counsel. With regard to the allegedly invalid assignment, the plaintiff offered no admissible evidence in support of her claim. Rather, as BNY Mellon argues, the record establishes that there is a single assignment from MERS, the original mortgagee, to BNY Mellon, the foreclosing entity. With regard to the loan modification program, the homeowner offered evidence that she made a good faith effort to qualify for a loan modification in that she had not only made trial period payments for three months, but in fact made trial period payments for one year from October, 2010, to October, 2011. The homeowner also offered evidence that she obtained all the documentation she was required to provide to ASC. However, despite these efforts, the homeowner offered evidence that she was informed by ASC on April 4 and May 18, 2012, of HAMP denial letters stating that "we are unable to create an affordable payment equal to 31% of your reported monthly gross income."
Based on this evidence, the homeowner contends that there were material facts in dispute and that it was improper to grant summary judgment and foreclose her from litigating her meritorious G. L. c. 93A claim. Because, as we noted above, the denial of a request for a loan modification does not affect the bank's title, the homeowner is left with the argument that the denial of her request for a loan modification was so fundamentally unfair that she was entitled to equitable relief. On the record before us, it is not possible to assess the merits of the homeowner's loan modification request or whether the HAMP regulations were violated, and thus the homeowner has not presented evidence that would permit an inference that ASC or BNY Mellon engaged in any act or omission that constitutes "fundamental unfairness." Moreover, an erroneous denial of a loan modification request, standing alone, would not constitute "fundamental unfairness."
It is also important to note that in granting BNY Mellon's motion for summary judgment on its complaint to recover possession, the judge did not order judgment for the plaintiff on the homeowner's counterclaim under G. L. c. 93A. At the hearing on the bank's motion, the homeowner indicated that she was not ready to try the G. L. c. 93A claim at that time, and was given an opportunity to schedule it for trial. However, the record demonstrates that the homeowner voluntarily dismissed her G. L. c. 93A claim before final judgment was entered and before this appeal was taken.
While the homeowner may have a right to revive her G. L. c. 93A claims by bringing a new complaint, at this stage she would be limited to monetary relief only.
Conclusion. For the above reasons, the judge was correct in allowing the BNY Mellon's motion for summary judgment on its claim for possession.
Judgment affirmed.
By the Court (Trainor, Agnes & Blake, JJ.),
The panelists are listed in order of seniority. --------
Clerk Entered: July 21, 2015.