Opinion
No. 16–P–157.
01-04-2017
DEUTSCHE BANK NATIONAL TRUST COMPANY, trustee, v. Luz DIAZ & another.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff (trustee) appeals from a judgment of the Housing Court awarding possession of certain real property to the defendant mortgagors. Because the judgment was based on an error of law—which was not evident at the time it was entered—we vacate the judgment and remand for further proceedings.
Background. In 2006, the defendants purchased a property located in the Indian Orchard section of Springfield, securing a loan from WMC Mortgage Corp. and granting a mortgage to Mortgage Electronic Registration Systems (MERS) as nominee for the lender. In 2009, MERS assigned the mortgage to the trustee. In 2012, the trustee purchased the property at a foreclosure sale. The trustee served upon the defendants a notice to quit, and later commenced a summary process action. The defendants challenged the trustee's right to possession, and the trustee moved for summary judgment. In opposition, as relevant here, the defendants argued that the foreclosure from which the trustee's claim of title was derived was void, because the mortgage assignment occurred after the "closing date" set forth in the trust's pooling and servicing agreement (PSA).
In 2015, a judge of the Housing Court accepted the defendants' argument, denying the trustee's motion for summary judgment and dismissing its claim for possession. After subsequent briefing, the judge declined to reconsider his ruling and entered judgment awarding possession to the defendants, from which the trustee now appeals.
The judge reasoned that "[t]he mortgage loan in question was accepted by the plaintiff trust in a manner contrary to the Pooling and Servicing Agreement.... [T]he mortgage loan was not transferred to the trust until after the Closing Date as defined by the Pooling and Servicing Agreement and, as such, it was an ultra vires action by the trustee and is thus void. Accordingly, the plaintiff had no authority to foreclose and does not have superior right to possession in this summary process action and the plaintiff's claim for possession is dismissed."
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Discussion. This case is controlled by U.S. Bank Natl. Assn. v. Bolling, 90 Mass.App.Ct. 154 (2016), decided after the judgment entered in this case. In Bolling, a defendant mortgagor challenged the assignment of a mortgage on precisely the same grounds as the defendants do here, arguing that the assignment was void because the transfer was effectuated after the closing date set forth in the governing PSA. Id. at 155. This court held that the mortgagor, who was not herself a party to the PSA, lacked standing to challenge the assignment on these grounds, because such a defect would render the assignment merely voidable at the election of one of the parties. Id. at 156–157. See Sullivan v. Kondaur Capital Corp., 85 Mass.App.Ct. 202, 206 n.7 (2014) ("A deficiency in an assignment that makes it merely voidable at the election of one party or the other would not automatically invalidate the title of a foreclosing mortgagee, and accordingly would not render void a foreclosure sale conducted by the assignee or its successors in interest").
Like the defendant in Bolling, the defendants here do not have standing to assert the alleged violation of the PSA upon which the judgment awarding them possession was premised. Accordingly, we vacate the judgment and remand the matter for further proceedings consistent with this memorandum and order.
So ordered.