MARIANNE B. BOWLER, Magistrate Judge.
Pending before this court is a motion for summary judgment filed by defendants Ocwen Loan Servicing, LLC ("Ocwen") and Litton Loan Servicing, LP ("Litton") (collectively "defendants") (Docket Entry # 28). Plaintiff Anthony Lydon Benjamin ("plaintiff") opposes the motion. (Docket Entry # 31). After a hearing, this court took defendants' motion (Docket Entry # 28) under advisement. Plaintiff's cross motion for summary judgment (Docket Entry # 31) is also ripe for review.
On February 1, 2017, plaintiff filed a pro se complaint in Massachusetts Superior Court (Norfolk County) alleging misconduct by Ocwen, Litton, and defendant Fremont Investment & Loan ("Fremont") in connection with a mortgage loan plaintiff received in 2005.
On August 6, 2018, this court issued a Report and Recommendation recommending that defendants' motion to dismiss (Docket Entry # 8) be allowed in part and denied in part. (Docket Entry # 25). The district judge adopted the Report and Recommendation without objection on August 22, 2018. (Docket Entry # 26). Accordingly, the chapter 93A claim was dismissed without prejudice and the following claims remain: (1) breach of contract based on lack of notice and a related request to rescind or void the November 2016 foreclosure; and (2) violation of the Due Process Clause of the Fourteenth Amendment. (Docket Entry # 25, pp. 13, 20-22, 29-30).
On May 28, 2019, defendants filed the summary judgment motion on all remaining claims, i.e., the lack of notice claim and the due process claim. (Docket Entry # 28). On June 17, 2019, plaintiff filed the opposition and the cross motion for summary judgment. (Docket Entry # 31). The opposition and cross motion address only the lack of notice claim regarding paragraph 22 of the mortgage. (Docket Entry # 31). They do not address the due process claim. (Docket Entry # 31). In late June 2019, defendants filed a reply to the opposition and cross motion. (Docket Entry # 32).
Summary judgment is designed "to `pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required.'"
"An issue is `genuine' when a rational factfinder could resolve it [in] either direction" and "[a] fact is `material' when its (non)existence could change a case's outcome."
Prior to a November 2016 foreclosure, plaintiff owned property located at 10 Lothrop Avenue in Milton, Massachusetts ("the property"). (Docket Entry # 29-2, p. 6). On September 23, 2005, he executed a promissory note ("the note" or "the mortgage loan") for $340,800 to Fremont, the lender. (Docket Entry # 29-2, p. 6). On the same day, plaintiff executed a mortgage ("the mortgage") pledging the property as security for the note.
The mortgage specifies that the mortgage loan applies the borrower's payments as follows:
(Docket Entry # 29-2, p. 18). The mortgage identifies plaintiff as the borrower and the mortgagor, and Fremont as the lender. (Docket Entry # 29-2, pp. 15-16). The first page of the mortgage names Mortgage Electronic Registration Systems, Inc. ("MERS") as a "separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns." (Docket Entry # 29-2, p. 15). The mortgage also states that, "MERS is the mortgagee under this Security Instrument." (Docket Entry # 29-2, p. 15) (bold font omitted).
Under the mortgage, MERS, as mortgagee, "holds only legal title to the interests granted by [plaintiff] in this Security Instrument." (Docket Entry # 29-2, p. 17). The mortgage gives MERS, as holder of legal title, the right to exercise the interests granted by plaintiff in the mortgage, including "the right to foreclose and sell the Property." (Docket Entry # 29-2, p. 17). The relevant language reads as follows:
(Docket Entry # 29-2, p. 17). The mortgage also gives MERS, as mortgagee, the power of sale and the authority to assign the mortgage. (Docket Entry # 29-2, p. 17). The relevant language in the mortgage states that:
(Docket Entry # 29-2, p. 17) (capitalization and bold font omitted).
In paragraph 22, the mortgage provides that if the lender invokes the "statutory power of sale," the lender "shall mail a copy of a notice of sale to Borrower, and to other persons prescribed by Applicable Law, in the manner provided by Applicable Law." (Docket Entry # 29-2, p. 27, ¶ 22) (capitalization and bold font omitted). The notice must specify the default and "the action required to cure the default" and that a failure to cure the default "may result in acceleration of the" money owed and a "sale of the Property." (Docket Entry # 29-2, p. 27, ¶ 22) (bold font omitted). As further stated in paragraph 22, the lender must "publish the notice of sale, and the Property shall be sold in the manner prescribed by Applicable Law."
The mortgage secures to Fremont, as the lender, "the repayment of the Loan."
On June 24, 2014, Ocwen sent plaintiff a letter by first class certified mail titled "150 DAY RIGHT TO CURE YOUR MORTGAGE DEFAULT." (Docket Entry # 29-2, pp. 38-44) (bold font omitted). The June 24, 2014 letter ("June letter") specifies the dates when monthly loan payments were not paid spanning inclusively from May 1, 2006 to June 1, 2014 and the amounts plaintiff should have paid on each date. (Docket Entry # 29-2, pp. 38-40). The June letter further states that plaintiff "must pay the past due amount of $228[,]546.65 on or before 11/24/2014 which is 150 days from the date of this notice." (Docket Entry # 29-2, p. 38). It also instructs plaintiff who he should pay and outlines various resources for individuals facing foreclosure. (Docket Entry # 29-2, p. 41). Moreover, the June letter notifies plaintiff in bold writing that, "If you do not pay the total past due amount of $228[,]546.65 and any additional payments that may become due by 11/24/2014 you may be evicted from your home after a foreclosure sale . . . [and] the mortgagee or new buyer will take over ownership of your home." (Docket Entry # 29-2, p. 41) (bold font omitted). Also, the June letter provides contact information including HSBC's telephone number and hours of availability and Ocwen's mailing address for written requests. (Docket Entry # 29-2, p. 41).
The letter then enumerates options and rights plaintiff may have including: "the right to bring a court action to challenge the existence of the default, or assert other defenses to immediate payment and sale that may be available in your mortgage documents or under applicable law"; "the right to reinstate your account up to five days before the foreclosure sale of your home"; "the right to sell the property prior to foreclosure sale and use the proceeds to pay the mortgage in full"; "the option of voluntarily granting a deed to the residential mortgage in lieu of foreclosure"; and the option to "attempt to refinance the obligation by obtaining a new loan." (Docket Entry # 29-2, p. 43).
On October 11, 2014, Ocwen sent plaintiff another letter by first class certified mail reminding him that: "We have not received your mortgage payments for the months of 05/01/06 through 10/01/14. This means your account is now in default, and if you do not make these payments or reach another resolution with us, we may soon refer your loan to foreclosure." (Docket Entry # 29-2, pp. 46-50). The October 11, 2014 letter ("October letter") contains contact information for counseling services and mentions options available to plaintiff including refinancing, modification, forbearance, sale, short sale, and deed in lieu of foreclosure. (Docket Entry # 29-2, pp. 46-47). It also states that even if plaintiff pursues these options, "[c]ollection activity will continue and your monthly mortgage payment will still be due while we evaluate your financial situation." (Docket Entry # 29-2, p. 47). The October letter names "Marilinda Ponce De Leon" as plaintiff's "Home Retention Specialist" and lists her contact details. (Docket Entry # 29-2, p. 47). The letter also provides telephone, online, and postal contact details for Ocwen. (Docket Entry # 29-2, p. 47).
On July 1, 2016, counsel for HSBC sent copies of a notice of sale letter to plaintiff by first class certified mail. The letters each state:
(Docket Entry # 29-2, pp. 61-64). A notice of sale was published in the Milton Times on August 25, September 1, and September 8, 2016. (Docket Entry # 29-2, pp. 4, 72).
On or about November 17, 2016, HSBC, through its servicer, Ocwen, foreclosed on the property. (Docket Entry # 29-2, p. 70). The property was subsequently sold to HSBC for $428,000 at the scheduled foreclosure auction.
On November 30, 2016, Carlene Reid, a contract management coordinator for Ocwen, signed the foreclosure deed on the property. (Docket Entry # 29-2, p. 74). The same day, Jose Manrique, also a contract management coordinator for Ocwen, signed an affidavit confirming that "the contractual notice of default was sent to the mortgagor(s) on or before July 17, 2015." (Docket Entry # 29-2, pp. 75-76). Both the foreclosure deed and the affidavit are notarized and recorded in the Norfolk County Registry of Deeds. (Docket Entry # 29-2, pp. 74-76).
In moving for summary judgment on the lack of notice breach of contract claim, defendants submit they complied with the provisions in the mortgage by providing sufficient notice of the foreclosure sale to plaintiff. (Docket Entry # 29). Defendants initially relied on the October letter as providing the requisite notice under paragraph 22 (Docket Entry # 29) before relying on the June letter as satisfying paragraph 22 (Docket Entry # 32). Plaintiff, in turn, seeks summary judgment on the same breach of contract claim based on defendants' failure to strictly comply with paragraph 22. (Docket Entry # 31). Plaintiff relies exclusively on the October letter as the notice of default that did not comply with paragraph 22. (Docket Entry # 31).
As determined by the Massachusetts Supreme Judicial Court ("SJC"), a foreclosing bank's "strict compliance with the notice of default required by paragraph 22 [of the mortgage] is necessary in order for a foreclosure sale to be valid."
Paragraph 22 in the mortgage requires the inclusion of certain language in the notice that HSBC, as the lender's assignee, or Ocwen as its agent, must send to plaintiff before invoking the statutory power of sale. (Docket Entry # 29-2, p. 27, ¶ 22). As stated in paragraph 22, the notice must include:
(Docket Entry # 29-2, p. 27, ¶ 22).
As noted, plaintiff contends that defendants failed to comply with a number of the requirements contained in paragraph 22 and that such failure voids the foreclosure sale. (Docket Entry # 31). Plaintiff submits that the "notice of default" sent to plaintiff on October 11, 2014, i.e., the October letter, was deficient. Specifically, plaintiff maintains that the October letter did not comply with paragraph 22 and is therefore deficient because the letter: (1) "does not specify a date, not less than 30 days from the date the notice is given to the borrower, by which the default must be cured" ("item one"); (2) "does not specify that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by the security instrument and sale of the property" ("item two"); (3) "does not inform the borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of the borrower to acceleration and sale" ("item three"); (4) "does not specify that if the default is not cured on or before the date specified in the notice[,] lender at its option may require immediate payment in full of all sums secured by the security instrument without further demand and may invoke the statutory power of sale and any other remedies permitted by applicable law" ("item four"); and (5) "does not specify that lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in section 22 including, but not limited to, reasonable attorney's fees and cost of title evidence" ("item five"). (Docket Entry # 31).
Plaintiff sets out this argument that the October letter does not comply with paragraph 22 in a three-page opposition (Docket Entry # 31) to defendants' summary judgment motion and reiterated the argument at the June 2019 hearing. The origin of the argument stems from a post-foreclosure, summary judgment affidavit by an Ocwen Senior Loan Analyst that authenticates and briefly describes various documents in the loan file. (Docket Entry # 29-2, pp. 2-4). Admittedly, the May 20, 2019 affidavit identifies the October letter as "a notice of default letter" and the June letter as "a right to cure letter." (Docket Entry # 29-2, p. 3, ¶¶ 9-10). Defendants' supporting memorandum carries the description of the October letter forward by describing it as the "notice of default" that "describes the default" and how to cure it in compliance with "paragraph 22." (Docket Entry # 29, pp. 6-7). Accordingly, at the June 2019 hearing, plaintiff asserted that defendants relied on the October letter as satisfying paragraph 22 and that
The argument overlooks that defendants corrected any misconception in a reply brief filed prior to the hearing. (Docket Entry # 32). Therein, they point out that the June letter "completely satisfies" paragraph 22 as well as
Moreover, defendants did not waive the argument that the June letter complies with paragraph 22. Rather, they raised it in response to plaintiff's opposition, and they repeated it at the June 2019 hearing. Hence, in light of their sufficient development of the argument, there was no waiver.
Accordingly, in seeking summary judgment, defendants properly submit that the June letter satisfies paragraph 22. Plaintiff does not address the June letter's compliance with paragraph 22. Rather, he relies on the October letter. Plaintiff's waiver of the argument obviates the need to address the June letter's compliance with paragraph 22 and the
Turning to item one of plaintiff's argument, plaintiff submits that the October letter does not comply with paragraph 22(c) because "it does not specify a date, not less than 30 days from the date the notice is given to the borrower, by which the default must be cured." (Docket Entry # 31, p. 1). Although true, the June letter gives plaintiff more than 30 days notice to cure the default when it states, "[y]ou must pay the past due amount of $228[,]546.65 on or before 11/24/2014 which is 150 days from the date of this notice." (Docket Entry # 29-2, p. 38). The June letter, as its title states, complies with paragraph 22 because it gives plaintiff the ability to cure the default in 150 days, which is more than 30 days from the date of the letter giving notice of default.
Plaintiff next submits that the October letter did not comply with item two. Paragraph 22(d) requires notice that the "failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property." (Docket Entry # 29-2, p. 27, ¶ 22). Again, while true with respect to the October letter, the June letter satisfies paragraph 22(d) because it states that, "Failure to cure the default on or before the date specified in this notice may result in acceleration of the sums secured by the Mortgage and sale of the Property." (Docket Entry # 29-2, p. 43) (underlining omitted).
As set out in item three above, plaintiff maintains that the October letter did not comply with this requirement. (Docket Entry # 31). Paragraph 22 requires that, "The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale." (Docket Entry # 29-2, p. 27, ¶ 22). Paragraph 19 describes this right to reinstate after acceleration and places a time limit upon it of five days before the sale. (Docket Entry # 29-2, p. 25, ¶ 19). Whereas the October letter is noncompliant with the above-noted provisions, the June letter satisfies these provisions by stating, "Even after the loan has been accelerated, you have the right to reinstate your account up to five days before the foreclosure sale of your home . . . ." (Docket Entry # 29-2, p. 43). The June letter further states, "You have the right to bring a court action to challenge the existence of the default, or assert other defenses to immediate payment and sale that may be available in your mortgage documents or under applicable law." (Docket Entry # 29-2, p. 43). Hence, it complies with the foregoing requirement of paragraph 22.
Turning to items four and five and as previously stated, plaintiff maintains that the October letter does not include the following language: "if the default is not cured on or before the date specified in the notice lender at its option may require immediate payment in full of all sums secured by the security instrument without further demand and may invoke the statutory power of sale and any other remedies permitted by applicable law" (item four); and "lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in section 22 including, but not limited to, reasonable attorney's fees and cost of title evidence" (item five). (Docket Entry # 31, p. 2). Because the October letter did not contain this language, it did not strictly comply with paragraph 22, according to plaintiff. (Docket Entry # 31).
Examining whether paragraph 22 requires the inclusion of this language as part of the notice, the paragraph, in greater detail than previously quoted, reads as follows:
(Docket Entry # 29-2, p. 27, ¶ 22) (emphasis added and bold font omitted). The emphasized language corresponds to the language of items four and five that plaintiff submits paragraph 22 requires in the notice.
"`[W]hen the language of a contract is clear, it alone determines the contract's meaning.'"
The language in the fourth and fifth sentences of paragraph 22 does not address the contents of the notice. Rather, the second and third sentences depict the contents of the notice, each beginning with, "The notice shall . . . ." (Docket Entry # 29-2, p. 27, ¶ 22). In contrast, the fourth and fifth sentences of the paragraph add that if the default is not cured, then the Lender may require payment in full, exercise the power of sale, and collect attorneys' fees and costs. (Docket Entry # 29-2, p. 27, ¶ 22). The language of these two sentences admonish the borrower about what will occur "[i]f the default is not cured" rather than describe the substance or content of the notice itself. (Docket Entry # 29-2, p. 27, ¶ 22).
Likewise, the SJC in
In sum, notwithstanding plaintiff's arguments to the contrary, defendants fully complied with the contractual notice requirements of paragraph 22 and afforded plaintiff with proper notice. Plaintiff also waived the argument that the June letter does not comply with paragraph 22 and
Defendants argue that they complied with the statutory notice requirements in section 14 ("section 14") of Massachusetts General Laws chapter 244. (Docket Entry # 29). In the complaint, plaintiff raises a breach of contract claim based on lack of notice and seeks to rescind the foreclosure on that basis. (Docket Entry # 10, pp. 4-5). Plaintiff fails to address the statutory notice argument and therefore waives any argument that defendants did not comply with these statutory notice laws.
In Massachusetts, "strict compliance with the statutory notice of sale provision is `essential to the valid exercise of [the] power' of sale."
Section 21 of Massachusetts General Laws 183 ("section 21") requires the mortgagee to "`first comply[] with the terms of the mortgage and with the statutes relating to the foreclosure of mortgages by the exercise of a power of sale'" in order "for a foreclosure sale pursuant to the power" of sale to be valid.
Mass. Gen. Laws ch. 244, § 14.
In the case at bar, defendants complied with the notice requirements in section 14. (Docket Entry # 29-2, pp. 70-72). They mailed plaintiff notice of the sale as previously detailed by certified first class delivery. "Registered mail, for purposes of sending notice, includes certified mail."
Further, defendants confirmed their compliance with section 14 in a publicly-recorded affidavit of sale. (Docket Entry # 29-2, pp. 70-71). Contract Management Coordinator for Ocwen Carlene Reid certified that "[HSBC] complied with Chapter 244, Section 14 of the Massachusetts General Laws, as amended, by causing to be mailed the required notices, certified mail, return receipt requested." (Docket Entry # 29-2, p. 70).
Accordingly, defendants complied with the statutory notice provisions in section 14. Thus, to the extent the pro se complaint raises a claim that defendants did not fulfill the notice requirements of section 14, they are entitled to summary judgment on the claim.
Defendants next seek summary judgment on the due process claim. They submit that their actions complied with "all contractual and statutory notice provisions" and the same conduct provides adequate notice under the Due Process Clause. (Docket Entry # 29, p. 4). In the alternative, they contend there is no state action. (Docket Entry # 29, p. 4).
Plaintiff fails to raise an argument in response to defendants' contentions regarding the Due Process Clause claim. Accordingly, he waived any argument that the notice provided was insufficient under the Due Process Clause or that state action is present.
Here, as in
In accordance with the foregoing discussion, this court