Justia Massachusetts Supreme Court Opinion Summaries

Articles Posted in Banking
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The Supreme Judicial Court reversed in part the Housing Court judge's grant of summary judgment in favor of HSBC Bank USA, N.A., as trustee of the Fremont Home Loan Trust 2005-E, Mortgage Backed Certificate, Series 2005-E (HSBC), in this summary process action, holding that one of Defendants' counterclaims was not barred.Defendants purchased their home with proceeds from two loans secured by a mortgage on the property. The primary loan was at issue on appeal. After Defendants defaulted on their monthly payments HSBC, the assignee of the home mortgage loan, held a foreclosure sale and sold Defendants' home to the highest bidder. When Defendants refused to vacate the property HSBC initiated the present summary process action. Defendants brought counterclaims under section 15(b)(2) of the Predatory Home Loan Practices Act (PHLPA), Mass. Gen. Laws ch. 183C and under Mass. Gen. Laws ch. 93A. The trial judge granted summary judgment in favor of HSBC. The appeals court affirmed. The Supreme Judicial Court reversed, holding (1) Defendants were entitled to assert a counterclaim under PHLPA to limited monetary damages; and (2) Defendants' counterclaim under chapter 93A was barred. View "HSBC Bank USA, N.A. v. Morris" on Justia Law

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The Supreme Judicial Court affirmed the judgment of a judge of the superior court dismissing Relator's claims alleging that Defendants collectively engaged in and conspired to engage in fraud, holding that this suit was subject to the public disclosure bar of the Massachusetts False Claims Act (MFCA), Mass. Gen. Laws ch. 12, 5A-50.The MCFA contains a public disclosure bar that generally requires that an action be dismissed if substantially the same allegations or transactions as alleged have previously been disclosed through certain enumerated sources. Relator commenced this action on behalf of the Commonwealth against certain financial institutions and their subsidiaries. Defendants argued that dismissal was required pursuant to the MFCA's public disclosure bar because the subject transactions had previously been disclosed to the public through news media and Relator was not an original source of the information concerning the fraud. The superior court dismissed the complaint. The Supreme Judicial Court affirmed, holding that the superior court correctly dismissed Relator's claims. View "Rosenberg v. JPMorgan Chase & Co." on Justia Law

Posted in: Banking
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The Supreme Judicial Court affirmed the decision of the Housing Court ordering Defendant to pay $4,000 in use and occupancy to the Bank during the course of his appeal from a judgment in favor of the Bank in a summary process action, holding that the postforeclosure defendant whose appeal bond is waived may be ordered to pay use and occupancy to the plaintiff.After foreclosing on Defendant's property, the Bank obtained judgment in a summary process action against Defendant. Defendant appealed and moved to waive the appeal bond. The judge waived the bond but ordered Defendant to pay monthly use and occupancy to the Bank while the appeal was pending. The Appeals Court vacated the portion of the order requiring use and occupancy payments. The Supreme Judicial Court held (1) the bond for a defendant appealing from an adverse judgment in a postforeclosure summary process action may be waived if he is indigent and pursuing nonfrivolous arguments on appeal; (2) the postforeclosure defendant whose bond is waived may be ordered to pay use and occupancy to the plaintiff; and (3) the amount Defendant was ordered to pay as use and occupancy in this case reflected a fair balancing of interests. View "Bank of New York Mellon v. King" on Justia Law

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The Supreme Judicial Court affirmed the judgment of a single justice of the court denying Petitioner's complaint for relief in the nature of mandamus and for extraordinary relief under Mass. Gen. Laws ch. 211, 3, holding that the single justice did not err or abuse her discretion in denying relief.On March 31, 2017, judgment entered against Petitioner in the underlying superior court case. Petitioner filed a motion to vacate the judgment. After the motion to vacate was denied Petitioner filed a motion for reconsideration and a motion to recuse. Both motions were denied. Petitioner then filed her complaint for relief in the nature of mandamus and for extraordinary relief pursuant to Mass. Gen. Laws ch. 211, 3. The single justice denied relief. The Supreme Judicial Court affirmed, holding that where Petitioner had an adequate alternative avenue to obtain the relief sought - an appeal to the Appeals Court - and chose not to pursue that avenue, Petitioner was not entitled to invoke the extraordinary relief set forth in Mass. Gen. Laws ch. 211, 3. View "Harrington v. Deutsche Bank National Trust Co." on Justia Law

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The language in the reverse mortgages at issue in this case incorporated the statutory power of sale as set forth in Mass. Gen. Laws ch. 183, 21 and allowed the Mortgagee to foreclose on the mortgaged property in accordance with the requirements in section 21.Three Homeowners obtained loans from Mortgagee secured by reverse mortgages on their homes. Later, alleging default, Mortgagee sought to foreclose on the mortgages. Mortgagee brought separate actions against each borrower or the executors of their estate seeking a declaratory judgment allowing it to foreclose pursuant to the statutory power of sale. The trial judge granted Mortgagee’s motion for partial judgment on the pleadings, concluding that Mortgagee’s reverse mortgage incorporated the statutory power of sale by reference. The Court of Appeals affirmed, holding that the language of Mortgagee’s reverse mortgages incorporated the statutory power of sale as defined in section 21. View "James B. Nutter & Co. v. Estate of Murphy" on Justia Law

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Plaintiff filed suit against Deutsche Bank, seeking a declaratory judgment that the bank's foreclosure of the mortgage on plaintiff's home was invalid and seeking to quiet title to the property. The superior court granted the bank's motion to dismiss. The court concluded, as did the trial court judge, that a foreclosing mortgagee's failure to comply with G. L. c. 244, § 15A, by failing to send the postforeclosure notices required by the statute, does not render the foreclosure void. In this case, where the provision in question does not set forth preforeclosure requirements that are a part of the foreclosure process, the Bank's failure to comply with section 15A's postforeclosure notice provisions did not render the foreclosure void. Accordingly, the court affirmed the judgment. View "Turra v. Deutsche Bank Trust Company Americas" on Justia Law

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In Suffolk I, the Supreme Judicial Court held that Reading Co-Operative Bank (Bank) was allowed to require Suffolk Construction Company, Inc. (Suffolk) to perform fully Suffolk’s obligations pursuant to a collateral assignment of payments under a subcontract between Suffolk and Benchmark Mechanical Systems, Inc. (Benchmark) to secure a debt owed by Bankmark to the Bank. Suffolk subsequently commenced this action to recover the surplus that resulted when the Bank applied that collateral to satisfy Benchmark’s debt. Suffolk’s equitable claims for implied subrogation and implied indemnification were dismissed for failure to state a claim, and Suffolk’s common-law claims were dismissed as time-barred. The Supreme Judicial Court affirmed in part and reversed in part, holding (1) Suffolk’s common-law claims were time-barred; but (2) Suffolk stated viable equitable claims to prevent Benchmark’s potential windfall and unjust enrichment for which relief can be granted. View "Suffolk Constr. Co., Inc. v. Benchmark Mechanical Sys., Inc." on Justia Law

Posted in: Banking, Contracts
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The Federal National Mortgage Association (Fannie Mae) filed a complaint for summary process in the Housing Court to establish its right to possession of the Rego house, which Fannie Mae purchased at a foreclosure sale. The Regos argued that the foreclosure sale conducted by GMAC, which held the mortgage, was void because GMAC's attorneys had not been authorized by a prior writing to undertake the actions set forth in G. L. 244, 14. They also asserted an equitable defense and counterclaims. The judge granted Fannie Mae summary judgment "as to possession only," and scheduled a bench trial on the counterclaims, but later dismissed the counterclaims for lack of subject matter jurisdiction. The Massachusetts Supreme Judicial Court vacated. The foreclosure suffered no defect on the asserted ground that GMAC failed to provide such authorization to its attorneys, but the Housing Court has limited authorization to entertain counterclaims and an equitable defense to the foreclosure sale in the summary process action. View "Fed. Nat'l Mortgage Ass'n v. Rego" on Justia Law

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At issue in this case was a 2006 amendment to the “obsolete mortgage” statute, under which a mortgage becomes unenforceable after a certain number of years. A mortgage in which the term or maturity date is stated becomes unenforceable five years after the expiration of the term, and a mortgage in which the term or maturity date is not stated becomes unenforceable thirty-five years after recording. Here, Defendant conducted a foreclosure auction purporting to sell certain property that secured two mortgages held by Defendant. At the time, both mortgages would be unenforceable under the amended obsolete mortgage statute if the five-year statute of limitations was applicable. Plaintiff sought a declaration that the mortgages were discharged under the obsolete mortgage statute and that the foreclosure auction was null and void. A land court judge granted partial summary judgment for Plaintiff, concluding that a reference in the mortgages to the term of the underlying debt was sufficient to state the “term or maturity date of the mortgage.” The Supreme Judicial Court affirmed, holding (1) the two mortgages were subject to the five-year period and thus were discharged under the obsolete mortgage statute; and (2) the application of the statute in this case did not violate due process and contracts clause protections. View "Deutsche Bank Nat’l Trust Co. v. Fitchburg Capital, LLC" on Justia Law

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At issue in this appeal was whether a respondent in a try title action may test the substantive merits of a petition’s claims in the first step of such an action, where the first step requires that the petition satisfy the jurisdictional elements of the statute. Petitioner in this case filed a petition to try title in the Land Court asserting that a purported assignment of a mortgage was invalid, thereby challenging a foreclosure by a Bank as trustee. Respondents filed motions to dismiss for failure to state a claim because, at the time of filing, the Bank as the assignee of the mortgage had already foreclosed on Petitioner’s mortgage. The Land Court allowed the motion, concluding that Petitioner’s petition failed to sufficiently allege effective record title, which in turn resulted in a lack of standing, because none of the allegations established any ground on which the assignment could be found invalid. The Supreme Court affirmed, holding (1) a petitioner claiming defect in the legal title of a purported mortgagee may only meet the jurisdictional element of an “adverse claim” after that mortgagee has foreclosed; and (2) the judge correctly considered the merits of Petitioner’s claims as a necessary step in determining the absence of his record title, and therefore, dismissal with prejudice was proper. View "Abate v. Fremont Inv. & Loan" on Justia Law