Opinion
21-P-109
01-03-2022
DOUGLAS BESSETT v. DEUTSCHE BANK NATIONAL TRUST COMPANY. [1]
Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass.App.Ct. 1017 (2020) (formerly known as 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 23.0 or 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 23.0
Plaintiff Douglas Bessett appeals from a summary judgment entered by a judge of the Superior Court dismissing his claims against defendants Deutsche Bank National Trust and America's Servicing Company (collectively, bank). The plaintiff alleged that the bank breached its duty of good faith and reasonable diligence in foreclosing on his home. Concluding that the plaintiff has, at most, raised a question about the inadequacy of the sale price, which alone "does not necessarily prove an absence of good faith or reasonable diligence," Property Acquisition Group, LLC v. Ivester, 95 Mass.App.Ct. 170, 175 (2019), we affirm.
Background.
We briefly summarize the relevant undisputed facts. In 2002, the plaintiff purchased residential property in Framingham (property) for $207,000. He refinanced his mortgage in June 2004 with a promissory note in the amount of $203,000, but defaulted on the mortgage in or around 2012.
The bank conducted a duly noticed foreclosure sale on September 30, 2015, and the sale was attended by approximately eight to ten individuals. The value of the property at the time of the sale was disputed, but it was not disputed that the bank had valued the property; its records included an "account summary" containing an entry for "[d]ate and [a]mount of [m]ost [r]ecent [v]alue" of "July 15, 2015, $335,000 [ .]" Reem Property, LLC (Reem) was not the high bidder at the auction. After the auction concluded, however, each of the three highest bidders serially defaulted on their offers to purchase the property; ultimately, it was sold to Reem, the fourth-highest bidder, for $175,000. The foreclosure deed was recorded in June 2016.
The record does not include any information about the amounts of the three highest bids.
Reem filed a summary process action against the plaintiff, who vacated the property in 2016 pursuant to an agreement for judgment with Reem.
Later that year, the plaintiff brought a complaint for monetary damages against the bank alleging violations of G. L. c. 93A, breach of contract, and breach of the covenant of good faith and fair dealing. He subsequently limited his claims to those relating to the allegation that the bank breached its duty of good faith and fair dealing by "[flailing to get . . . the highest possible price for his home at the foreclosure sale." The bank moved for summary judgment on this claim, and, when it prevailed, the plaintiff appealed.
Discussion.
We review a grant of summary judgment de novo, Miller v. Cotter, 448 Mass. 671, 676 (2007), to determine "whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to judgment as a matter of law." Kitras v. Zoning Administrator of Aquinnah, 453 Mass. 245, 251 (2009), quoting Cargill, Inc. v. Beaver Coal & Oil Co., 424 Mass. 356, 358 (1997). See Mass. R. Civ. P. 56 (c), as amended, 436 Mass. 1404 (2002). "[The] party moving for summary judgment in a case in which the opposing party will have the burden of proof at trial is entitled to summary judgment if he demonstrates . . . that the party opposing the motion has no reasonable expectation of proving an essential element of that party's case." R.L. Currie Corp. v. East Coast Sand & Gravel, Inc., 93 Mass.App.Ct. 782, 784 (2018), quoting Dulgarian v. Stone, 420 Mass. 843, 846 (1995). To defeat the motion, the opposing party "must respond and allege specific facts which would establish the existence of a genuine issue of material fact." Pederson v. Time, Inc., 404 Mass. 14, 17 (1989).
In exercising the power of sale under a mortgage, "[t]he mortgagee 'must act in good faith and must use reasonable diligence to protect the interests of the mortgagor.'" Williams v. Resolution GGF Oy, 417 Mass. 377, 382-383 (1994), quoting Seppala & Aho Constr. Co. v. Peterson, 373 Mass. 316, 320 (1977). As part of that duty, it is incumbent on a mortgagee to "get for the property as much as it can reasonably be made to bring . . . [and] do what a reasonable [person] would be expected to do to accomplish that result." Ivester, 95 Mass.App.Ct. at 175, quoting Clark v. Simmons, 150 Mass. 357, 360 (1890). Of particular importance to our analysis in this case, however, "mere inadequacy of a foreclosure sale price, alone, does not necessarily prove an absence of good faith or reasonable diligence." Ivester, supra, citing Sher v. South Shore Nat'1 Bank, 360 Mass. 400, 402 (1971). See Pemstein v. Stimpson, 36 Mass.App.Ct. 283, 287 (1994) .
The plaintiff's attempts to analogize his case to Ivester are unsuccessful. In that case, we vacated the grant of summary judgment in favor of a mortgagee where the nonmoving parties not only raised a genuinely disputed question as to whether the foreclosure sale price was adequate but also produced additional evidence from which a fact finder reasonably could conclude that the mortgagee failed to exercise reasonable diligence: the mortgagee's failure to obtain any appraisal or other determination of the value of the property prior to the sale. Ivester, 95 Mass.App.Ct. at 178. The mortgagee's failure to take any steps toward determining the fair market value of the property, which had unaccounted-for development potential, was critical to our holding. Id. at 177-178. While we agree that Ivester controls here, it does so to the plaintiff's detriment, not to his advantage.
Here, the most the plaintiff can show is a price disparity between the bank's valuation of the property and the selling price. Even assuming that his showing is enough to raise a question of material fact about whether the price was so low as to be "inadequate," he has failed to allege any other facts that would support a lack of good faith or reasonable diligence. See Ivester, 95 Mass.App.Ct. at 175, 177. The plaintiff's reliance on the bank's failure to obtain a valuation of the property as of the date of the transfer to Reem is misplaced; he fails to explain how or on what authority the value of the property several months after the auction would be relevant to the issue of the bank's good faith and reasonable diligence in conducting the sale. Further, even assuming that it were relevant, the plaintiff fails to demonstrate how, if at all, the value of the property materially changed from the date of the sale to the date of the transfer.
We are also not persuaded that additional support is to be found in the bank's failure to adjourn and reschedule the auction "because of the absence of bidders willing to pay a reasonable price." Given the lack of record evidence about the amount of any of the three highest bids at the auction, the plaintiff has not shown "[an] absence of bidders willing to pay a reasonable price." Even had the bank been aware of what the ultimate selling price would be, and thus of the difference between the valuation in its records and the selling price, the bank was not under an obligation to reschedule a sale that drew at least four willing bidders. See, e.g., Kavolsky v. Kaufman, 273 Mass. 418, 422-423 (1930) (reasonably prudent seller would reschedule sale when, unlike here, "it becomes apparent that the terms are unusual and cannot be met by those who have attended"), citing Clark, 150 Mass. 357. Cf. Seppala, 373 Mass. at 328 (when mortgagee is both conducting sale and bidding, there is "no duty to bid the full value of the property" so long as mortgagee has "done his full duty to the mortgagor in his conduct of the sale").
"There are any number of reasons that a foreclosure sale might bring a price below the fair market value." Ivester, 95 Mass.App.Ct. at 175. See Pemstein, 36 Mass.App.Ct. at 286-287. Here, for example, the purchaser was buying a home in as-is condition that still was occupied by the plaintiff. Thus, the purchaser was buying not just the property but also the need to bring a summary process action to take possession. Where the plaintiff's appeal rests only on the alleged "inadequacy of a foreclosure sale price," we discern no error in the allowance of the bank's motion for summary judgment. See Ivester, supra.
Given our conclusion, we need not address the plaintiff's c. 93A claims. See Macoviak v. Chase Home Mtge. Corp., 40 Mass.App.Ct. 755, 760 (1996) .
Judgment affirmed.
The panelists are listed in order of seniority.