KELLEY, U.S.M.J.
On October 24, 2012, Plaintiff, James A. Dooling, acting pro se, filed an action against Defendant James B. Nutter & Co., Inc. ("Defendant Nutter") in the Northeast Housing Court, Salem Division, for the alleged wrongful destruction of his property.
The undisputed facts are as follows. Plaintiff, born in 1933, received a home
A little more than three months later, on October 4, 2011, Defendant Nutter sent a Notice of Intent to Foreclose on the Roundy Property (the "Notice") to Plaintiff. (# 37-4.) The Notice was sent to the Roundy Property. Id. at 2. Dooling alleges that on May 31, 2012, he spoke with a Mr. Madden, an employee of Defendant Nutter, who promised Plaintiff that Defendant Nutter would give him until "at least" September 1, 2012 to try to resolve the condemnation issues before they foreclosed on the Roundy Property.
On August 15, 2012, Defendant Nutter deeded the Roundy Property to Defendant Fannie Mae. (# 37-7.) At some point after obtaining ownership of the property, Defendant Fannie Mae discarded all of the items found in the residence. (# 10 ¶ 27.) Included in the items that were discarded were Dooling's belongings. (# 10 ¶¶ 28-9.) On June 20, 2013, Plaintiff sent a Mass. Gen. Laws c. 93A demand letter in regard to the allegations within the amended complaint. (# 10 ¶ 73.) Defendant Nutter responded
The purpose of summary judgment is "to pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required." Rojas-Ithier v. Sociedad Espanola de Auxilio Mutuo y Beneficiencia de Puerto Rico, 394 F.3d 40, 42 (1st Cir.2005) (internal quotations marks and citation omitted). When considering a motion for summary judgment, "a court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party bears the initial burden of asserting the absence of a genuine issue of material fact and "support[ing] that assertion by affidavits, admissions, or other materials of evidentiary quality." Mulvihill v. Top-Flite Golf Co., 335 F.3d 15, 19 (1st Cir.2003) (citations omitted). "Once the moving party avers the absence of genuine issues of material fact, the non-movant must show that a factual dispute does exist, but summary judgment cannot be defeated by relying on improbable inferences, conclusory allegations, or rank speculation." Fontánez-Núñez v. Janssen Ortho LLC, 447 F.3d 50, 54-55 (1st Cir.2006) (internal quotation marks and citation omitted).
In determining whether summary judgment is proper, "a court must view the record in the light most favorable to the nonmoving party and give that party the benefit of all reasonable inferences in its favor." Clifford v. Barnhart, 449 F.3d 276, 280 (1st Cir.2006). Rule 56 "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "`Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.'" Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (further internal quotation marks omitted)).
Defendants argue that Dooling has failed to present any issues of genuine material fact and therefore they are entitled to the entry of summary judgment in their favor. It is Defendants' position that Plaintiff was properly noticed of the foreclosure, the foreclosure proceedings were proper, and that Defendant Fannie Mae was within its legal right when it discarded Plaintiff's possessions. (See # 37.)
Plaintiff alleges that Defendant Nutter failed to satisfy the requisite notice requirement, per Mass. Gen. Laws c. 183 § 21 and section 16
Defendant Nutter's understanding that the Roundy Property was uninhabited as it had been condemned at the time it sent the Notice of Foreclosure, does not, on its own, equate to a violation of the statutory requirement set forth in Mass. Gen. Laws c. 244 § 14.
Paragraph 16 of the reverse mortgage states, in relevant part, "[t]he notice shall be directed to the Property Address or any other address all Borrowers jointly designate." (# 37-2 at 7 ¶ 16.) The term "designate" implies that a change of the address on record from the Roundy Property to some other location must have been done by an overt action of the borrower. Plaintiff relies on an inference based on a single correspondence, and has failed sufficiently to demonstrate how communication from another address equates to a designation of said address as the appropriate address for notification. Dooling has provided no other evidence to support his position.
In like manner to paragraph 16 of the reverse mortgage, section 21 of Mass. Gen. Laws c. 183 refers to the statutory Power of Sale provision that may be incorporated in any mortgage by reference, which addresses, in part, proper notice of foreclosure. See Mass. Gen. Laws c. 183 § 21. In the instant case, the Power of Sale provision was included in the reverse mortgage agreement. (See # 37-2 at 8 ¶ 20.) Understanding that the Power of Sale applies and was exercised by Defendant Nutter, the Court must look to Mass. Gen. Laws c. 244 § 14 which states:
Dooling does not take issue with Defendant Nutter's publication of notice for three consecutive weeks, the content of the Notice, or that the Notice was certified. (See # 10.) Instead, he argues that, by mailing the Notice to the Roundy Property, Defendant Nutter failed to send notice to the "last address... appearing on the records of [Defendant Nutter]."
Dooling's reliance on non-statutory communication
The statutory notice requirement was satisfied with Defendant Nutter's October Notice. Noteworthy is the date of the correspondence upon which Plaintiff relies to show Defendant Nutter's knowledge of the Monument Square address; the correspondence (# 45-2 at 12) is dated February 2, 2012, four months after the October Notice was sent. See id.; (# 37-4.) Dooling has presented no evidence of communication between the parties in the period between the June letter from Plaintiff (# 37-5) and the October Notice sent to the Roundy Property. (# 37-4.) Thus, at the time Defendant Nutter sent the Notice, the Roundy Property was clearly the last address on record.
Dooling alleges that Defendant Nutter, through its agent Caleb Shureb, admitted its failure to comply with the Power of Sale provision of the reverse mortgage, as required by Mass. Gen. Laws c. 244 § 14, when he failed to check a box indicating he had done so on the Affidavit of Sale. (# 37-6 at 3; # 44 at 15-16.) However, upon examination of the relevant section of the Affidavit of Sale,
Upon review of all of the relevant documentation, there are no genuine issues of material fact with regard to the Notice of Foreclosure. Therefore, Plaintiff's claim of insufficient notice must fail.
The amended complaint alleges violations of c. 186 generally with reference to § 4(h). (# 10 ¶ 42.) Section 4(h) does not exist under c. 186 and "§ 4," noted in the introduction of Plaintiff's amended complaint, addresses the liability of a tenant for rent for proportion of land in possession. (See # 10 at 1); Mass. Gen. Laws c. 186 § 4. In his opposition, Dooling references § 14 of c. 186, which deals with "the interference with the quiet enjoyment of any residential premises or an attempt to regain possession of such premises by force without the benefit of judicial process." (# 44 at 19.) Under § 14, Plaintiff argues that Defendant Fannie Mae violated his rights by executing a self-help eviction. Id. However, Dooling fails to allege such a claim in his amended complaint and is barred from doing so at this stage. See Neenan v. CitiMortgage, Inc., No. 13-cv-435-JD, 2013 WL 6195579, at *4 (D.N.H. Nov. 26, 2013) ("Although [Plaintiff] argues a theory of impermissible self-help eviction in her objection to [defendant's] motion to dismiss, she did not allege that claim in her complaint. As a result, she has not alleged facts to support a claim of wrongful self-help eviction.") (internal citations omitted).
Count III alleges that Defendant Nutter acted in bad faith when it failed to provide money to Dooling to make the necessary repairs to bring the Roundy Property up to code. (# 10 ¶ 46.) In his Opposition, Dooling alleges that the duty of good faith was also breached when Defendant Nutter exercised the Power of Sale provision of the mortgage when it foreclosed on the Roundy Property.
Aragao v. Mortgage Electronic Registration Systems, Inc., 22 F.Supp.3d 133, 140-41 (D.Mass.2014) (internal quotations omitted).
Speakman v. Allmerica Financial Life Ins., 367 F.Supp.2d 122, 132 (D.Mass. 2005). There are limitations to a claim for breach of good faith and fair dealing: "Courts have cabined this obligation, however, and it may not be invoked to create rights and duties not otherwise provided for in the existing contractual relationship." Aragao, 22 F.Supp.3d at 141.
Plaintiff's interpretation of the parties' performance obligations overstates what is actually set forth in the contract. Dooling alleges that, per the reverse mortgage, he was entitled to remain on the property for the remainder of his life and Defendant Nutter was to possess the property upon his death. (# 10 ¶ 45.) Dooling further alleges that Defendant Nutter breached the implied covenant of good faith and fair dealing when it "failed to timely provide him with the money he needed to prevent the house from falling into condemnation." (# 10 ¶ 46.)
Plaintiff does not cite any specific contractual provision in the reverse mortgage or attached repair rider requiring Defendant Nutter to provide funding to bring the Roundy Property up to code. (See # 10 ¶¶ 45-7.) Nor does an independent examination of the documents reveal such a provision.
Dooling argues that Defendant Nutter was under an obligation to act in good faith when it exercised its rights under the Power of Sale provision contained within the mortgage. (# 44 at 14.)
Shaw v. Bank of America, NA, No. 10-cv-11021, 2015 WL 224666, at *7 n. 6 (D.Mass. Jan. 15, 2015) (internal citation omitted).
Shaw, 2015 WL 224666, at 7 (internal citation omitted). With an understanding that Defendant Nutter was obligated to act in good faith throughout the foreclosure proceedings, all of Defendant Nutter's relevant conduct must be examined. This examination extends beyond basic contractual compliance, as Defendant Nutter was the purchaser of the Roundy Property.
There are two actions that merit analysis to determine if Defendant Nutter acted in bad faith.
First, with regard to noticing of Dooling with respect to the imminent foreclosure of the Roundy Property, Defendant Nutter complied with the statutory requirements. However, Defendant Nutter sent the Notice to an address it knew to be uninhabited, as it had been condemned. While this would give pause if Defendant Nutter had no reasonable expectation that Dooling would receive such a communication, any concern is mitigated by the fact that Defendant Nutter received a response from the communication it sent to the Roundy Property after it had been abandoned. This response reflects that Plaintiff was receiving mail sent to the Roundy property, despite its state of uninhabitability.
Dooling refers the Court to several cases he proffers under the theory that Defendant Nutter's practices with regard to the Notice constituted bad faith. A review of Plaintiff's cases
Applying the court's logic in Sandler to the case at bar, Defendant Nutter's actions fail to demonstrate bad faith. Defendant Nutter complied with Dooling's stated wishes: that the Roundy Property be considered his permanent residence. Further, there is no evidence that Defendant Nutter's actions with regard to the sale of the Roundy Property were done in an effort to circumvent Plaintiff's ability to exercise his rights. Dooling told Defendant Nutter, in his June letter, that he did not have the money to pay for the necessary repairs to bring the property up to code, and even asked for assistance in the form of a loan from Defendant Nutter. Understanding that Plaintiff was suffering financial hardship, Defendant Nutter had no incentive to not make Dooling aware of the imminent sale of the Roundy Property. The Court finds that Defendant Nutter's actions are not comparable to those of the defendants in Sandler.
In similar fashion, Dooling's other cited cases can be easily distinguished. Moore v. Dick, 187 Mass. 207, 72 N.E. 967 (1905) pertains to the execution of a power of sale agreement that required the defendant to post notice in "the Reporter Newspaper." Moore, 187 Mass. at 210, 72 N.E. 967. The issue before the court was that there were two different publications that were termed "the Reporter." Id. at 211, 72 N.E. 967. The court found that the publication in which the defendant posted notice was improper and, had the notice been posted in the other publication, there was a high probability that the plaintiffs would have been aware of the sale. Id. In conclusion, the court held that the defendant's failure to post notice in the appropriate publication was a failure strictly to comply with the terms of the power of sale. Id. at 212, 72 N.E. 967.
Dooling cites Bottomly v. Kabachnick, 13 Mass.App.Ct. 480, 434 N.E.2d 667 (1982) as well. Bottomly is in line with Moore and actually cites Moore for the proposition that strict compliance is a requirement for a valid execution of a power of sale. See Bottomly, 13 Mass.App.Ct. at 484, 434 N.E.2d 667. The Bottomly court found the notice of foreclosure to be fatally defective in its failure to identify the holder of the mortgage and the result was the invalidation of the sale as a matter of law. Id at 483-84, 434 N.E.2d 667. As stated above, Plaintiff does not take issue with the substance of Defendant Nutter's Notice.
The last case to be addressed is Montague v. Dawes, 96 Mass. 369 (1867)).
The facts here are more like those in Shaw, where the defendant foreclosed and subsequently purchased the property at the foreclosure sale. Summary judgment was allowed on a claim for breach of good faith and fair dealing when the court found that the defendant complied with the statutorily required notice under Mass. Gen. Laws c. 244 § 14. See Shaw, No. 10-cv-11021, 2015 WL 224666, at *8 ("The remaining bases for Shaw's claim for breach of the obligation of good faith and fair dealing are lack of statutorily required notice and the postponement and rescission of the foreclosure sale. The unrebutted record before the Court indicates that [the defendant] provided notice as required by Mass. Gen. Laws c. 244, § 14. The Court, therefore, allows [the defendant's] motion for summary judgment....").
The second issue is the price Defendant Nutter paid for the property. The purchase price of $180,000.00 was substantially less than its appraised value in 2008.
In any event, Defendant Nutter's purchase of the Roundy Property at the foreclosure sale for approximately half of its previously appraised value does not rise to the level of bad faith or lack of reasonable diligence. See Federal Deposit Insurance Corp. v. Elder Care Services, Inc., 82 F.3d 524, 528 (1st Cir.1996) (disparity between estimated liquidation price of $2,000,000 and later sales price of $300,000 not so gross as to withstand summary judgment motion); Resolution Trust Corp. v. Carr, 13 F.3d 425, 430 (1st Cir.1993) (disparity between appraisal price of $350,000 and sales price of $195,000 not enough to withstand a summary judgment motion); Fairhaven Savings Bank v. Callahan, 391 Mass. 1011, 1011, 462 N.E.2d 112 (1984) (purchase price of $10,000 on property securing a $40,000 debt not so inadequate as to constitute a breach of fiduciary duty as a matter of law); Sher v. South Shore Nat'l
Establishing a breach of implied good faith is a substantial hurdle:
Young v. Wells Fargo, 717 F.3d 224, 238 (1st Cir.2013). The high threshold for such a claim is evidenced in one of Dooling's cited cases: Hull v. Attleboro Sav. Bank, 25 Mass.App.Ct. 960, 519 N.E.2d 775 (1988). In Hull, the court found:
Hull, 25 Mass.App.Ct. at 962-63, 519 N.E.2d 775. The Hull court held that these actions did not rise to the level of a breach of good faith. See id. at 963, 519 N.E.2d 775 ("These facts are not sufficient to create a factual question upon which reasonable minds could differ relative to the reasonableness of the bank's conduct in regard to the foreclosure sale. There was no error in allowing the defendants' motions on this claim.").
Based on this case law, Defendant Nutter's notice to Dooling and the price at which the Roundy Property was sold fail to raise genuine issues of material fact on Plaintiff's claim for breach of good faith. Defendant Nutter is entitled to judgment in its favor.
Dooling alleges Counts IV and V under the same factual scenario: He relied on a representation made by a Mr. Madden, alleged to be an employee and agent of Defendant Nutter, that Defendant Nutter would not foreclose on the Roundy Property until September 1, 2012. (# 10 ¶¶ 18, 49.)
Plaintiff fails to provide any evidence to demonstrate that this conversation took place, much less its content, and Defendant Nutter has denied its existence. (# 8 ¶¶ 18, 49-57.) While a party's testimony is evidence and Dooling has submitted an affidavit on his own behalf (# 10 at 28), no mention is made in that affidavit of any verbal promise given by Defendant Nutter or any of its agents. (See # 10 at 28-9.) Without evidentiary support, Plaintiff's conclusory assertions regarding Defendant Nutter's alleged promises fail to demonstrate a genuine issue of material fact. See Fontánez-Núñez, 447 F.3d at 54-55.
Dooling alleges that Defendants' actions of foreclosing on the Roundy Property, despite promising otherwise, and discarding all of Plaintiff's possessions were "extreme and outrageous." (# 10 ¶¶ 66-7.) Additionally, Plaintiff alleges that Defendants knew that their actions were wrong, and, as a result of the loss of his property, he suffered severe shock and was hospitalized. (# 10 ¶¶ 30, 59-67.)
Lund v. Henderson, 22 F.Supp.3d 94, 105-06 (D.Mass.2014). Dooling fails to make a prima facie showing for his IIED claim. Beyond the conclusory assertions stated in the amended complaint, he has not demonstrated that either defendant intended to inflict, or should have known that their actions would cause, emotional distress.
Defendant Nutter properly notified Plaintiff under the statutory and mortgage requirements, and there is no evidence to support Plaintiff's allegation of promises not to foreclose. Thus, the action of foreclosing on Dooling's property was proper and would not lead a reasonable person to conclude that it would cause extreme emotional distress. With regard to Defendant Fannie Mae's actions in discarding Plaintiff's possessions, Defendant Fannie Mae was in legal possession of the property at the time, and as such had the right to remove Plaintiff's possessions as they were assumed to have been abandoned. (See # 37-7.) There is no evidence to show how any of Defendants' actions were extreme and outrageous as is required to make out a claim for IIED.
Dooling also fails to demonstrate how the actions of either defendant were the cause of his emotional distress, i.e., the heart attack. While Dooling, in his affidavit, references a heart attack he suffered, he does not attribute his heart attack to the actions of either Defendant. (See # 10 at 28-9.) The other documented medical issue appears in Plaintiff's letter to Defendant Nutter wherein Plaintiff states that he suffered a heart attack as a result of the city of Beverly's decision to condemn
Mass. Gen. Laws c. 93A makes unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce unlawful. See Mass. Gen. Laws c. 93A § 2(a). Dooling makes several allegations that Defendants violated this statute: 1) The actions alleged in the complaint generally amount to unfair and deceptive practices; 2) Defendant Nutter engaged in table funding;
Allegations 1) and 2) are conclusory assertions and Dooling has failed to provide sufficient evidence in support of either allegation. Defendants' actions in foreclosing on the Roundy Property and discarding Plaintiff's belongings were legal. Plaintiff's reference to table funding in Count VII is the first in the entire amended complaint, and a bare allegation is not enough. Dooling has provided no evidence of a third party that actually funded the reverse mortgage, and fails to even address a potential source of the funds for the mortgage beyond Defendant Nutter. (See # 10.)
Plaintiff's assertion that Defendant Nutter "should have known that Plaintiff could not afford a reverse mortgage," without any allegation of a statutory violation or a failure of due diligence on the part of Defendant Nutter, fails to state a cause of action. Dooling's opinion as to what he believes would have been an appropriate course of action by Defendant Nutter does not equate to unfair and deceptive practices, and Dooling provides no case law to demonstrate otherwise. Further, Plaintiff has not alleged that Defendant Nutter mislead, or in any way wrongfully induced him, to enter into the reverse mortgage. At no point in the amended complaint was Dooling's capacity to enter into the reverse mortgage agreement called into question. Based on the record before the Court, there is no issue of material fact as to Dooling's third allegation.
With regard to the fourth allegation, i.e., that Defendant Nutter failed to provide notice of a right to cure, Defendants argue that the notice requirement pertaining to a potential right to cure under Mass. Gen. Laws c. 244 § 35A is inapplicable in the case of a reverse mortgage. Defendants refer the Court to subsection (b) of § 35A, which Defendants characterize as only applicable to mortgages where the borrower is making payments on the loan. (# 37-1 at 6-7.) As a result of a recent Supreme Judicial Court of Massachusetts decision, it is unnecessary to address the applicability of § 35A to a reverse mortgage. The Supreme Judicial Court addressed the right to cure notice requirement as it applies to a traditional mortgage. The court held "... [M.]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." U.S. Bank National Association v. Schumacher, 467 Mass. 421, 431 (2014). Defendant Nutter
In support of their position that Dooling's notice of right to cure argument is misguided, Defendants note Plaintiff's breach of the reverse mortgage and the resulting infeasibility of curing the breach. (# 37-1 at 6.) One of Plaintiff's contractual obligations under the reverse mortgage was a requirement of occupancy. (See # 37-2 at 3 ¶ 4.) When the city of Beverly condemned the Roundy Property on June 9, 2009, Dooling was in violation of the occupancy requirement, as no one was allowed to reside in the residence until it was brought up to code. (# 10 ¶ 13; # 37-5 at 4; 37-10.) Throughout the foreclosure proceeding, the Roundy Property was condemned. Thus, Dooling could not have cured his occupancy violation even if he was physically able to return to the Property until it had been brought up to code.
Plaintiff's fourth allegation must fail both because Defendants' actions were not fundamentally unfair in that they abided by the requisite statutory and contractual provisions, and in light of the substantial amount of time Plaintiff was in breach of the contract, three years at the date of foreclosure.
For the above reasons, it is ORDERED that Defendants' Motion For Summary Judgment (# 37) be, and the same hereby is, ALLOWED. Judgment shall enter for the defendants.
In any event, that there may be genuine issues of material fact when Plaintiff bears the burden of proof does not mean that there necessarily are genuine issues of fact when the burden is on the Defendants. Plaintiff's argument on claim preclusion is without merit. The Court will address all counts alleged in the amended complaint.
