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COMMONWEALTH OF MASSACHUSETTS
APPEALS COURT
Docket No. 201 1-P-1478 SJC Docket No. SJC-11041
HENRIETTA EATON,
Appellee,
V.
FEDERAL NATIONAL MORTGAGE ASSOCIATION and GREEN TREE SERVICTNG, r ,K
Appellants.
ON APPEAL FROM AN INTERLOCUTORY ORDER OF THE SUFFOLK SUPERIOR COURT
BRIEF OF APPELLANTS
Richard E. Briansky, BBO# 632709 rhrrianskv~,princelobel.com Joseph P. Calandrelli, BBO#666128 jcal~idrelli~i),princelobel.com PRINCE LOBEL TYE LLY 100 Cambridge Street, Suite 2200 Boston, MA 021 14 Tel: (617) 456-8000 Fax: (617) 456-8100
TABLE OF CONTENTS
Page Corpora t e D i s c l o s u r e S t a t e m e n t ....................... 1
Sta t emen t of t h e I s s u e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Sta t emen t of the Case ................................. 1
S ta t emea t u f F a c t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ._ . . . . . . .+ . . . 6
I. :;t.andard o f Review . . . . . . . . . . . . . ~ . . . . _ . . _ . . _ 6
11. The S u p e r i o r Cour t Commjtted R e v e r s i b l e Error By I g n o r i n g t h e f 3 c t T h a t Grccn Tree Way E n t i t 1 . d To Foreclose Under The Plan Language O f The Mortgage . . . . . . . . . . ._ . . . . . . . 7
111. The P l a i n Language of G . L . c . 2 4 4 , 5 1 4 A i i t h c l r i z e ( i G r e e n Tree t o F o r e c l o s e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1
A . The C o u r t ' s T n t e r p r e t a t i v n Or P r e - E x i s t i n g Casm Law Was Er roneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
H. 'The Lower CourC's R e l i a n c e on G.L. c* 344, 5 1713 was Misplaced; S e c t i o n 1 7 8 S u p p o r t s Green T r c c and Fonnic Mae's I n t c r p r e t a t i o n . . . . . . _ . . . . . . . . . . 19
1V. P u b l i c P o l i c y R e q u i r c s Tha t 'The Court. Enforce T h e P a r t i e s ' Cont rac t .ua l Aqrccment ..._......._._l.._l.. 2 2
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3
CERTIFICATE O F COMPLIANCE ........................... 2 4
CERTIFTCA'l'k' OF $b:KV I CK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1
ADDENDUM ....t,.................._....._....____.._.. 2 5
TAELE OF AUTHORITIES
Case
8 1 Spooner Road LLC v. Town of Brook l inc ,
~
452 Mass. 109, 114 (2008) ......................... 2 1
Adamson v. Mortgage E l e c t r o n i c . -. . Sys., I n c . , No. 11-0693, 2011 WL 1136462, * 3 (Mass. Super . C t . Mar. 23, 2 0 1 1 ) . ........................... H, 1 4
2011 WL 1625036, * 6 ( 0 . Mass. Apr. %H, 2011) . . . 0, 14 A1ibert.i - V. . . . GMAC MortAeige, T > T K , No. 11-10171,
~ Barnes .. v. R o a r d m s , 1 4 9 Mass. 106, 1 1 4 ( 1 8 8 9 ) . ....... 1 8
- Boston l i o u s i n g A u t h o r i t y v. Ndti-onal Coo,!.erence .... of-Firernen and Oilers, L o c a l 3, 450 Mass+ 15S, 162 (2010) ................................... 1 6
Bucci v. Lchman Bros. Bank, FSB, No. PC-2009-3888, 2009 K.I. Super . LEXIS 1 1 0 ( R . I . S u p c r . Ct, Aug. 25, 2 0 0 9 ) 8, 9 ..................................
C a r l s o n v . W c l 1 ~ k'arqc IRnnk N.A., a$ Trustee , - _- . - NO. 10-41291, 7 0 1 1 WL 3470436, * 6 (Bankr . 0 . Mass. Auy. 2 , 2 0 1 1 ) .................... 14
-. Commonwealth v . .Toric:;, 4 1 7 Mass. 661, 664 119941 ............................................ 23
Crowley v . Addnis, 2 2 6 Mass. 582 (1917) . . . . . . . . . . 17, 18
~ Doe v. A t t o r n e y Ccncral , 4 7 5 Mass. 210, 215 ( 1 9 9 7 ) ............................................ 2 0
w s h v. Flags t a r B a n k , No. 09-1.1705, 2009 WL 3429674 (E.D. Mich. O c t . 21, 2009) ................. Y
l ? o r d ~ ~ v . Town U T liarlover, 457 Mass. 2 4 0 , ..................................... 256 12010) 6 , .I
. . . . . . . . . . . . . . . . . . . . . . . . . - Hilrnon v . Mortqaqc Elec. R e q j s t r a t i o n S y s . , I n c . , 06-13055, 2007 WL 1 2 1 8 7 1 8 . [E.U. Mi.ch. Apr . 2 3 , 2 0 0 7 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ii
It] re H u g y i n s , 35.1 B . R . 180 (Rankr. D. Mass. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 10, 15
I n re Lopez, 4 4 6 U.K. 1 2 , 17-18 ( n a n k r . D. Mass. 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4 , 15
I n re Marron, No. 10-45395-MSH, 2011 WL 2600543 ( B a n k r . r). M a s s . J u n e 29, 2011) ............ 8, 13, 1 4
15 , 1 8 , 1 9
I n re MCI WorldCom-NeLtwork %yy..i,, Iric., 4 5 4 Mass. 635, 647 ( 2 0 0 9 ) ......................... 20
L a c o s t a V . , , . McCal ,.. l a Raymer, .- .. I.I.C, 110-CV-1171-RWS, 2011 WI, 1 6 6 9 0 2 (N.n. Ga. Jan . l e , 2011) ........... 11.
Lamson & C o . , I n c . v . Ahrams, 305 Mass. 230, -- 245 (1940) . ....................................... 15
Lyons v . Mortrjage E1ectroni .c Keg. S y s . , l p . ~ , , No. 0 9 MISC 4 1 6 3 7 7 . 2011 WL 61186 (Mass. L a n d Ct.. Jarl. 4 , 201.1) . . . . . . . . . . . . . . . . . . 0 , 1 4
Marifsates v. 1,awrrnf:ct P l a z a Ltd. P a r t - n e r s h i p , .- - .- .... ~. 4 1 Mass. A p p . C t . '409, 412 n.4 ( 1 9 9 6 ) . . . . . . . . . . . . . . 7
McKenna v. Wel1.3 Fargo R a n k , N . A . , N O . 10-10411, 2011 WL 1100160, "2 I n . Mass. M a r . 21, 2011) . . . . . . 1 4
~ Mortgage ... E l e c . R e q i s t r a t . i o n - S y s . , .. T n c . v. R a l i c h , 982 A.2d 77 , 8 1 (Pa . S u p e r . Ct:. 2009) . ............. 9
P o r t e r v. F i r s t NLC F i n a n c i a l S c r v i c c s , LLC, No. PC 10-2526, 2011. WL 1251246 ( R . I . S u p e r . C t . Mar. 31, 2011) ................................. 3
fyle v. School Committee ot S o u t h Hadley, - 423 Mass. 2 8 3 , 7 9 5 ( 1 9 9 6 ) ......................... 16
Schwanbeck v . Federal-Mogul Corp., 412 Mass. 703, 706 (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
. . . . . . . . . . . . . . . . . . Tamulcvich v. Robie, 426 Mass. 712, 713-714 ((99%)
U.S. R a n k Nat. Ass'n-v. I b a n e z , 4!i8 Mass. 6 3 7 , (2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 0 , 12
1 3 , 1 4
i i .i
V a l c x i o v. U.SI=k, N . A . , 716 F. Supp. 2d 124, 128 (D. Mass. 20101 ...............................
Wolcott - - v. Winchrui.ez, . - - 81 Mass. 461 (1860) . . . . . . . . . .
statutes
G . L . c. 2 4 4 . 5 1.4 . . . . . . . . . . .
G . L . c. 2 4 4 , 5 1.78 . . . . . . . . . .
H.1.G.L. 5 34-11-22 . . . . . . . . .
. . . . . . . . . . . . . . 10, 11, 13, lC,
. . . . . . . . . . . . . . 1'3, 2 0 ,
..................
14
17
12 2 I.
21
9
....
i v
CORPORATE DISCLOSURE STATEMENT
Green Tree S e r v i c i n g , LLC ("Green Trce")
d.i.scl.oses, j n accnrdance with Supreme J u d i c i a l Cour t
R u l e 1 : 2 1 , t h a t i t : h a s t h e f o l l o w i n g members and
c o r p o r a t e p a r e n t e n t i t i e s : Green T r e E L i c e n s i n g , LLC,
G r e c n T r c C MIILLC, Green T r c a H E / H T LLC, Grcen 'Trec M H
Corp . , Green Tree CL LLC, G r e e n T r e e HE/III Corp . ,
Grecn 'Tree I n v e s t m e n t s L K , G r e e n Tree Holding LLC,
Green Tree Investment Hold ings I1 LLC, Green Tree
Cred1.t S o l u t i o n s LLC, G'TCS Ho ld ings LLC, Walter
I nve s ttnent. Ho 1 d i n y$;, LLC , and Wd 1 t er I nve s tmen t:
Manaqernent Corp. Walter: I n v e s t m e n t Management C o r p .
is a p u b l i c l y t r a d e d company.
STATEMENT OF THE ISSUES
1. Whether rhe J.ower court commit ted a n e r r o r
of I.aw by r e q u j r - i n q tha t : a promjssory n o t e be "re
u n i t e d " with a mor tgage as a c o n d i t i o n precedent . t o
Eocecl.osure.
STATEMENT OF THE CASE
Tn 2 0 0 7 , H c n r i e t t c i Ea ton ( " E a t o r i " ) s i g n e d il
promissory n o r e i n t h e p r i n c i p a l amount of $ 1 4 5 , 0 0 0
p a y a b l e t o Bankun i t ed , FSB ("Bankuni ted") ( t h e
"Note") + S h e also s i q n c d a mor tgagc ( t h e "Mortgdye")
yrant . i r iy a ser;urit.y jn t .e res t . and "power. oL sa1.e" i n
. . . . . . . . . . . . . . . . . .... .. .. . .
property located at 141 DeForest Street, Roslindale,
Massachusetts (the "Property") to Mortgage Electronic
Registration Systems, Inc. ("MERS") , in i L s c2pacit .y
as nominee f0.r B a n k U n i t e d .
In April. 2009, MER5 assigned the Mortgage to
Green Tree Servicing, LLC ("Green Tree"). Following
Eaton's default. o r i L h c Note, Green Tree foreclured and
assigned its winning bid to Federal National Mortgage
Association ( " F a n n i e Mae") . Fa.nni.e Mae then soiiqhl: L o
evict Eaton from the Property.
Tn response, E a t o n riled a one count Complai.nz 4.n
Suffolk Superior Court seeking a declaratory judgment
i nva 1 ida I. in y h t i e pre v .i ou 5 I y comp 1 et ed Tor ~ c 1 o s ure .
E a t o n ' s sole claim is that Green 'Tree, thc foreclosing
mortgagee, d i d not. curlduct A v d l i r i foreclosurc twcause
it was n0.t the holder of thc Notc at thc time it
foreclosed upoa and so1.d the E'roperty. Eaton a l s o
filed a motion for injunctive relief seeking to enjoin
FarinLe Mae's coritiriucd prosecution 01 t h e evictiori.
Green Tree and Fannie Mae opposed the motion.
On June 17, 201.1, t h e Superior Court (McTnt.yrc,
. . . .... .. . .... ... ..... .. .. . . . .... .. .. . ... . J.) granted t.:;lt.on's mot.j.on. ' In i t s Memorandum of
Decision and Order on Plaintiff's Motion for
Prcl.iminary Injunction (the "Order"), the lower court
r e c o g n i z e d t h a t under Massachuse t t s law, t h e Note and
Mortgage c o u l d “ t r a v e l i n d e p e n d e n t l y ” and be
“ s e p a r a t e l y t r a n s f e r r e d o r a s s i g n e d . “ However, i t
h e l d t h a t “ t h e t w o i n s t r u m e n t s must be r e - u n i t c d i n
order t o efrectively forecl.rise [.he morlyayor’ s r i g h t
t o redeem t h e P r o p e r t y . “ Because Green T r e e had
s t i .pu la ted for purposcc nf t-he m o t i o n t h a t j t d i d n o t
h o l d t he N 0 l . e aL t h e time of t he fo rcc : l i~su re , t h e
c o u r t found t h a t Eaton was l i k e l y t o p r e v a i l on h c r
c l a i m t h a t Green Tree had conducted dn i n v a l i d
f o r e c l o s u r e .
On J u l y 18, 2 0 1 1 , G r e e n Tree and Fann ie Mae
sough t i n t c r l o c u t o r y r ev iew from J s i n q l e j u s t i c e of
t h i s Cour t . By o r d e r d a t e d A u g u s t 1 8 , 2011, t h e
s lng1 .c j u s t j c ? (Cjrhar t . , J..) denj.ed Crccn T r e e arid
Fann ie Mae’s p e t i t i o n b u t conc luded t h a t t h e “ i s s u e s
p r ’ c s m l e d meriL Lull panel co r i s i ( i t ? r a t ion” and r e p o r t e d
h i s d e c i s i o n t o a p a n e l of t h i s C o u r t .
STATEMENT OF FACTS
On Sept-ember 1 2 , 2 0 0 7 , BankUnit.ed .funded a l o a n
i n t h e p r i n c i p a l m o u n t o f 5145 ,000 t o Eaton. Record
Appendix [”K’’), 7 , 2 7 . I n connec:t.Ion wi.t..h t . he l o a n ,
E a t o n s i g n e d t h e Note payable t o BankIJni.t.ed and a
Mortgage g r a n t i n g a s e c u r i t y i n t e r e s t i n t h e P r o p e r t y
. . . . . . . . . . . . . . . . . .
3 U1343311 101086/2
. . . ~
r o MEHS as “mortgagee”, in its capacity A S riixninee Lor
HankUnited, the “[llender.” R . , 7, 8 , 1 2 . By signing
t h e Mortgage, Eaton expressly agreed:
[ T l o mortgage, grant and convey to MER3 (solely as nominee f o r [BankUnited] and I R a n k I J n i t e d ’ s ] successors and assigns) and to the successors and assigns of MERS, w i t h power o f sale, thc [Property]
MERS holds only legal 1.itle to r h e interesls yranted by [her-] i.n this Secur iLy Instrurncnt, but if necessary to comply with law or custom, MERS (as nominee f o r [BankUnited] of [B~nkUnited’s] successors and assigns) has thc right to exercise any or all oi those interests, including, but. not limited to, the r i g h t to foreclose and sell the Property
R , 14 (emphasis supplied).
A f L t r the loan was funded , the Note was indorsed
in blank and transferred to Fannie Mae, which retained
Grcen ‘Tree to service the loan. R . , 29. On April 22,
2009. MERS assigned i t . s int:nrm;t. in l-.hP Mortgage to
Green Tree Ithe “Assignment”). R., 7, 8, 3 0 . On
Novembctr 4, 7009, Green Trcc conductcd a foreclosurc
..... . . . . . . . . . . . . . . . . . . . . . . sale where it. submitled the highest.bid UT ...............
I l l333377 104086/1 4
$170,185.89. ' R . , R, 21-32 . T?. t h e n a s s i g n e d j t s
r i g h t s i n t h e Memorandum o f S a l e t o F a n n i e Mae. K . ,
8 , 33-34. On November 24 , 2009, a f o r e c l o s u r e deed
was c x c c u t c d t r a n s f e r r i n g t h e P r o p e r t y t o Fann ie Mae.
R . , 35-36.
On J a n u a r y 25, 2010 , Fanni.e Mae commenced a
si,imrdry process a c t i o n s e e k i n g t o e v i c t Eaton from t h e
P r o p e r t y . R . , 8 . In r e s p o n s e , Eaton f i l ed a one-
c o c i n t V c r i f i e d Complaint i n S u p e r i o r Court s e e k i n g a
d e c l a r a t i o n t.hat t h e f o r m losure cooipleted by G r e e n
T x e e was i n v a l i d . H., 6-11. Eaton m a i n t a i n c d t h a t
t h e f o r e c l o s u r e was i n v a l i d b e c a u s e G r e e n Tree d i d not
h o l d t:he Note at. t .he t.jrnc .of f o r e c l o s u r e , and
rcqucsLed t h a t t h e Cour t i s s u e a p r e l i m i n a r y
1 n j u n c t . i o n Lo prevent h e r ev; ct i n n pendinq r e s o l u t i o n
of h e r S u p e r i o r Cour t c l a i m . R . , 4 , 9-10. G r e e n Tree
and Fann ie Mae opposed Lhe motion. R . , 4 .
A f t . c r t w o h e a r i n g s , t h e c o u r t found t h a t Eatori
had demons t r a t ed a r e a s o n a b l e l j k e l i h o o d of success on
t h e m e r i t s o f her c l a i m . A d d . , 27-31. I n i t 5 O r r k r ,
t.he court dc te rmincd t h a t : . .
' For piirposcs of t t r preliminary i n j u n c t i o n , i t was sti .pu.Lated t h a t Green Tree d i d no t h o l d t h e Note a t t h e t i m e of f o r e c l o s u r e . Addendum ( " A d d . " ) , 2 6 .
M a s s a c h u s e t t s law reCogni7cd t h a t the Rote a n d Mortqaqe c o u l d be " s e p a r a t e l y t r a n s f e r r e d o r a s s i q n e d , " but t h a t t h e "common l a w " r e q u i r e d t h a t t .he " two i n s t r u r n c n t s m i l s t be re-uni t . 4 i n o r d e r t o e f f e c t i v e l y f o r e c l o s e t h e m o r t g a g o r ' s r i g h t t o redeem t h e Propert-y";
G.L. [:. 2 4 4 , 5 1 4 , which yuverns f o r e c l o s u r e s , does n o t a l t e r t h e common law r u l e ;
a l t h o u g h G . L . c . 2 4 4 , 5 1 4 i s d i r e c t e d t o Che "mori:gageft, " " t h e ~ c : g i s l . ~ L u r e l i k e l y d i d n o t i n t e n d t . h c w o r d mortgagee t o mean t h a t one can i n i t i a t e a f o r e c l o s u r e without. the n0V.e;"
t h e l e g i s l a t u r e i n G . L . c. 2 4 4 , 5 178 - a sLdI:uLe dealing w i t h d c f i c i c n c y a c t i o n s Cullowing a f o r e c l o s u r e - " i m p l i c i t l y assumes t h a t t h e h o l d e r of t h e mor tgage is a l s o t h e h o l d e r o f t h e mor tgage note ;" and
all or t h e s t a t e Superior Court. and f e d e r a l d j s1:ricl and b a n k r i l p t . c y c o u r t d e c i s j - o n s h o l d i n g l . t i A t . t . h c mort.qaq@e can €03-ecloso w i t h o u t t.he n o t c a r e d i s t i n g u i s h a b l e because i n each case t h e p l a i n t i f f s " f a i l e d t o p r o v i d e support: lor Lheir p o s i t i o n . "
Addm., 7 7 - 3 3 . O n Auqust 18 , 2011, t h e s i n g l e j u s t i c e
d e n i e d Green Tree and Fdr in i e Mae's p e t i f i o n f o r
i n t . e z l o c u t o r y r e v i c w and r c p o r t c d h i s d e c i s i o n t o a
p a n e l of t h i s C o u r t . Addm., 35
ARGUMENT
I. Standard af Review
T h e smle issuc before! t h e C o i . i r t . i s a c o n c l u s i o n . . .. ... . . . . . . . . .. .
of law which must bc r ev iewed de novo. - Fordyce v .
T o w n .~ nf Ilariover, 457 Mass. 2 4 0 , 2 5 6 ( 2 0 1 0 ) . ("On
6 # I 3 9 3 3 7 1 101.086/2
rev iew, t h e mot ion j u d g e ' s ' c o n c l u s i o n s of l aw a r e
s u b j e c t t o b r o a d review and w i l l be r e v e r s e d i f
incorrect'"1; - see - a.L%o Manf ra t e s . .- v . Lawrence Plaza
L t d . Fart"n?.rship, - 41. Mas%. A p p . Ct. 409. 4 1 3 n. 4
( 1 9 9 6 ) .
TI. Tha Superior CourC Committed Revorsible Error By Ignoring The Fact That Green Tree Was E n t i t l e d To Foreclose Under The Plain Language Of The Mortgage.
T h e l . o w e r GUULI.' Y cor ic lus i o n t h a l . Green Tree's
f o r e c l o s u r e was i n v a l i d b e c a u s e t h e Note was n o t "re-
u n i t e d " w i t h the Mor tgage vitiates t,he part - ies '
c o n t r a c t u a l ag reemen t .
The p l a i n languaqe of t.hc M o r t q a y e , s j .qned h y
Eaton a s mor tgagor , e x p r e s s l y a u t h o r i z e s MERS and i t s
$uccesL;ors and ass; q r i s Co cxcrci .sc t h e s t . a t u t o r y power
of s a l c and t o " e x e r c i s e any OL a l l o f t h e [Lende r ' s ]
interest-s i n c l u d i n g b u t not l i m i t e d t o t h e r i g h t t o
f o r e c l o s e and s e l l t h e P r o p e r t y . " See Schwanheck v.
. rcderal-Mogul -. . .. Corp . , 4 1 2 Mass. 703, 7 0 6 (19921 I"IA1n
unambiguous agreement m i l s t he e n f o r m d a c c o r d i n g t o
i t s t e r m s . " ) . C o n s i s t e n t w i t h thc e x p r e s s terms of
.!;.he Mort.gage,. . c o u r t s i n ?,@vera1 j u r i s d i c t i o n s ,
i n c l u d i n g M a s s a c h u s e t t s , have h e l d ILhaI,. where a
mor tgagor g r a n t s t h e s t a t u t o r y power of sa le t o t h e
mnrtqagee ( a s i d e n t i f i e d i n t h e r m r t g a g e ) , Irhe
mortgage? or i t s a s s i g n e e may f o r e c l o s e , even i.1 i t
does not a l s o hold t h c n o t e . S e e c . g . , 1" re Marron,
N o . 10-4539S-MSH, 201.1 WT, 2600543 ( h n k r . D. Mass.
Junc 29, 2011) (Hoffman, J.) ( M E W ' r i g h t to foreclose
was "dcknowladged e x p l i c i t l y i n t h e debtors'
mortgage") ; g ~ m s o n y . Mortgage b:l e c t . r o n i c R e Q . S y s . ,
- l n c . , . . No. 11-0693, 2 0 1 1 WL 1136462, * 3 (Mass. Super .
Ct. Mar. 23, 2011) ( B r a s s a r d , 2.) ("The Mortgage,
however, c x p r e s s l y g r a n t s MERS t h e a u t h o r i t - y L o
f o r e c l o s e on t.he P r o p e r t y and t o sell t h e P r o p e r t y " ) ;
5liL)crLi v. GMAC Mortgage, LLC, No. 11-101.12. 2 0 1 1 WL
1625036, *6 ( 0 . Mass. A p r . 7 8 , 2011) (Cort.on, J.)
( h o l d j . r l y L h a t a s s i g n e e of o r i g i n a l . mor tgagee e n t i t l . e d
t o f o r e c l o s e without. holding the i1ot.e because power o f
.sal.e grant -ed by t h e mor tgage i t s c l f ) ; -, I n re Huggins,
357 B . R . 180 , 183 (Rankr. D. Mass. 2 0 0 6 ) (where MeRS
was the named mor tgagee i n a r e c o r d e d mortgage and was
a u t h o r i z e d to exercise t.he s f a t . u t o i - y powcr of salt,
MERS c o u l d f o r e c l o s e e v e n though it was not. t,h? n o t e
h o l d e r ) i T s n s v MurC9Lq-c E l e c t r n n i c Rcq. S y s . , I n c . ,
No. 0 9 MISC 4163'7.7, 2Ul l WL 61.186 ( M a s s . L a n d C t . J a n .
4 , 2011) ( C u t l e r , J.) ( s a m e ) .
. . . . . . . . . .. . . .. . . . .. . .
2
- . . - .. __ ' See a l s o Bucci v . Ietman .- Firo3. H t n k , k'SB, No. PC- --
0 U1'193377 l C P O R S / Z
Here, t h e l anguage of the Morl.gagFi is c l c a r a n d
m a n i f e s t s t h e par t ies ' i n t - e n t t o empower a L.hird parLy
- n o t t h c l e n d e r - w i t h t h e r i g h t t o f o r e c l o s e . E a t o n
and Rankuni ted, t h e l e n d e r , c o u l d have r e q u i r e d t h a t
B a n k [ J n i t e d be rhe e n t j t y a u t h o r i z e d t o f o r c c l o s c i n
the e v e n t of d e f a u l t . However, by s i g n i n g t h r ?
Mortgage, E a t o n c o n t r a c t u a l l y q r a n t e d thc power of
sa le n o t t o Bankunited, b u t t.o MERS arld i.t:; succ~?ssors
and a s s i g n s . R . , 1 4 . Indeed , t h e l anguage s e l e c t e d
by t h e p a r t i e s and i n c o r p o r a t e d i n t o Lhe cunl ; racL
acknowlcdgcs t h a t MLRS, a s "mortgagee," had t h e " r i g h t
t o e x e r c i s e a n y and all of [ c h e lender'^] in t . e r e s t s
i n c l n d i n y , twt n o t Lirnjted t o t h e rj.qht. t o f o r e c l o s e
and scll t h c P r o p e r t y . . . ." R . , 12, 14.
NoLhLny i r i M a s s a c h u s c t t s law prohj b i t e d Eaton and
h e r l e n d c r from a g r e e i n g t o g r a n t t h e r i g h t t u
2009-3808, 2009 R . I . S u p e r . L G X l S 1 1 0 ( R . I . Supe r . C t . Aug . 2 5 , 7009) (S i I v e r s r - e i n , J.) (same) ; E-rtcr v. - FirsI . NIL Fi .nanc ia1 S e r v i c e s , LLC, No. PC 10-2526, 2011 WL 1251246 (R. I . super. Ct. Mar. 31, 2011) (Rubine , J. ) (same) ; H i l m o n v . Mortgage El.ec. - Re-ratiuLi .. S y s . , I n c . , 06-13055, 2007 WI, 1 2 1 8 7 1 8 ( E . D . Mich. A p r . 2 3 , 200'7) (Duggan, J.) (sdme); English v . F lags l - a r Uank , N o . 09-11705. 2009 WT. 3429674 (E.D. Mich. Oct. 21, 2 0 0 9 ) (Cohn, 3 . ) (same): Mortjage'Elcc. ' R e g i s t r a t i o n S y s . , Tnc. v . Ral ic t r ," 982 r 2 d '/7, 81 ( P a . S u p e r . C t . 2 0 0 9 ) ( s a m e ) . & and Pur1.ri: wcrc d e c i d e d unde r Rhode l s l a n d law, w h i c h , l i k e M a s s a c h u s e t t s l a w , a u t h o r i z e s non-judicial f o r e c l o s u r e s u n d e r che sLdl . i i tory powcr o f :;ale. - S?e
- - ~ -
~
- _ -
R.T.G.1,. 5 34-11 -22 .
L3 x i 3 9 3 3 7 7 i 0 4 o a w
foreclose Lo a t h i r d p a r t y . I n f a c t , t h i s w a s
recently ronf j r rned by t h c Supreme J u d i c i a l Cour t whcn
i t r u l e d t h a t "a mortgage h o l d e r can furcclose on a
p r o p e r t y . . . by exercise of t h e s t - a t u t n r y power of
s a l e , i f s i i d i power is g r a n t e d by t h e mortgage
i t s e l f . " U.S. Bank Nat. . . Ass'n v . Tbanez, 4 5 8 Mass.
637 , 6 4 6 ( 2 0 1 1 ) . 'The Cour t i n I b a n e z r ecogn ized t h a t
t . h i s arrangement. is spw:.I i .calI .y au tho r i . zed b y G . L . c .
214 , § 1 4 which g r a n t s t h e authoricy to Foreclose not.
just t o che mortgagee but . a l s o t.o t h r "person
a u t h o r i z e d b y t h e power of s a l e . " G.L. c. 2 4 4 , § 1 4 .
T o i n v a l i d a t e this specific: q r a n t o f a u t h o r i c y " w o u l d
].cad LO a n o m a l o u s and p e r h a p s i n c q u i t a b l e r e s u l t s , t o
w i t , i f [ t h e mor tgagee] cannot- foreclose though named
as mori.qagee, t . h e n c i t h c r [ t h e n o t e h o l d e r ] c a n
f o r e c l o s e though n o t named as mort-gagee or n n one c a n
fOfeClOse, oucc:omes n o t r e a s o n a b l y or demons t r ab ly
i n t e n d e d by t h e p a r t j e s . " In re H n g y i n s , 3 5 7 R . R . ?IL
184.3
I n sum, t h r Mortgage r c f l cc t s no i n t e n t . on t h e
p a r t . of Eaton t o p r o h i b i t MERS o r it.s a s s i g n s from
f o r e c l . o s i n g o n t h c P r o p e r t y i f a n o t h e r p a r t y h c l d t h e . . .. . .. . . . . . . . . . . . .
In ~- Ibanez , t h e Supreme J u d i c i a l C o u r t al.su conEirmed ? .ha t a not.e holder c a n n o t forcclose i f i t i s n o t t h e mor tqaqee . - I d . , 458 Mass. a t 6 5 2 - 6 5 3 .
i n u i : u 1 3 3 i i i o m 6 / 2
Note. Lacos t a v. . .. McCalla - Haymer, ~ LLC, 110-CV-
1171-KWS, 2011 WL 166902 ( N . D . Ga. Jar). 1.8, 2 0 1 1 )
( S t o r y , J.) ( r e j ec t ing argument t h a t MERS' a s s i g n e e
could n o t foreclose mere ly because i t d id n o t a l s o
possess the promisso ry no te , wherc murtqdgc g r a n t e d
MERS s u c h power and c o n t a i n e d no reqiii.rernent t .hat . ;.I.
must a 1 w h o l d not? 1:o exerci .sc i t . ) *Although b o t h
Bankuni ted and Eaton c o u l d have condiLioned the
a s s ignmcn t of t h c Mortgage on a " r e - u n i t i n g " of t h e
Note w i t h t h e Mortgaye, t h e y did not , and L h i s
decisj .on m a n i f e s t s an i n t e n t t o a l l o w MERS o r i t s
a s s i g n s t o f o r e c l o s e w i t h o u t p o s s e s s i o n of t.he Note.
Gr-*en Tree, as ME:KS' i l s s jgnee , t h a r c f n r c had t h e
c o n t r a c t u a l r i g h t t o exercise t h e s t a t u t o r y power of
sa1.e and f o r c c l n s c , even i f i t d i d n o t h o l d t h e Note
a t t h e t i m e of f o r e c l o s u r e . T h e c o u r t erred by
i g n o r i n g and esuenr . ia l .1 y i n v a l i . d a t i n g t . h i s c o n t r a c t u a l
a r r angemen t .
111. The Plain Language of G.L. c. 2 4 4 , 5 1 4 Authorized Green Tree to Foreclose.
I n add i t . i on t.o b e i n q q ran t . cd wiLh t h e a u t h o r i t y
t o forec1os.e i n t h e Mortgage . . . . . . i l s e l f , Green . . 'I'rw . . .. .. .. . . . . was
a u t h o r i z e d t o f o r e c l o s e unde r G . L . c . 2 1 4 , 5 1 4 ,
b e c a u s e il, was t h e "mortgagee" and t h e "person
1 1 11313311 131086/2
a u t h o r i z e d by the power of s a l e " at. {.he tjmc of
L o r e c l o s u r e . G.L. c . 2 4 4 § 14.
Sec t ion 1 4 of Chap tc r 2 4 1 p r o v i d e s , i n r e l e v a n t
p a r t , t h a t :
the mortgagee or pe r son hav ing his est.aKe i n V-he land morLgaged, or J person authorized by the power of sale . . . may, upon b r e a c h of condiLiun and wiChout. actinn, do a l l t h e a c t s a u t h o r i z e d or r e q u i r e d by I:he power lof salct l .
G . J , . c. 2 4 4 , 5 14 (emphas is s u p p l i e d ) . T h u s , Che
p l a i n l anguage of t h e s t a t u i - e g r a n t s G w e n 'Tree t h e
right. t o foreclose because i t i s b o t h t h e "mortgagee"
a n d t h e "pe r son a u t h o r i z e d by t h e power of ,sale."
Tbanez 458 Mass. a t 618 ( a mortgagee o r a n e n t i t y
h o l d i n g a mor:i.gaye by assignrnenr. is enti.L.lecl t o
f o r e c l o s e ) .
I n t h i s c a s e , E a t o n ' s Mortgage s p e c i € j . ( ? a l l y
i d e n t i l i e s MEKS and i t s S u c c e s s o r s and a s s i g n s as t h e
"mortgagee" arid BankUnited a s t h c " 11.1 c n d e r . " 'f'hc
10we. t court acknowledged t h a t t h e w e l l - u n d e r s t o o d
d e f i n i l l i o n o f "mortgagee" nl. t h e t.).rne t h e s t a t u t e was
enacted..w.as.. t h e en~ . . i . t y . . ' : . ~ .ha t lakes YI receivcs . . . . . . .. . . .... . . a . . . . .. ... . .
11393371 1040Rhl2 12
mortgage." Addrri., 3 0 . ' Nowhcrc docs the statutc
reference "morl.gage note holder" or impose any
condition that. the foreclosing party hold t h e n o t c at
the time of the foreclosure.
Evcry other court that has considcred the issue
u n d e r Massachusctts law has concluded, c o n t r a r y to the
lowcr court's ruling, that a mortgagee need not hold
t h e under-1.ying noLe t .o foreclosc. k'or example, in
Marron, the court held:
[Iln MdssachUsctts, when a mortgage and applicable note are owned by different entities, t.he mortyayttc is deemed t.o h o l d t-he mortgage in t . r u s t for r.he o w n e r of thc note, and thc note owner has the righL to seek judicial order requiring t.he mortgagee L o assign the i i i o r t g ~ g e . U r l l e u s And unt:i 1 Lhe morr.gage . i s then assigned, however, the mortgagee retains legal title to the mortgage . . .
-. Id., 2011 WL 2600543 at ' *4 (internal citations
omitted); see also Ibanez, 458 Mass. at 657. The
c o u r t fiirthcr hcld that:
- ~ ..._".I__
The lowcr court relied on a 1999 change to the definition of "mortgagee" in B i a c k ' s Law Dict.ion8ry t h d t n o w includcs the "lender." Addm., 30. This modification was made more than fifty years followiny 'the enactin&flL Clf G.I., (;. and t .hus cantlo[. silpport . thc court's conclusion that it demonstrates legislative intent at. t.he time of enactment. It actually s u p p o r t s Green T r r i e and Fanni.e Mac's argument that. t .he 1 c q i s l a t u r e intended the term "mortgagee" "01 to include the note ho l .de r .
2 4 4 . . . . ~ ..I.I
13 U139:137 l l U 4 1 1 H h l l
Massachusetts law does not require unity of ownership of a mortgage and its underlying note prior to the foreclosure. Taken to its logical conclusion, a mortgagee who is not the note holder may exercise the power of sale and foreclose the mortgage but as a fiduciary for the note holder, to whom it must account for foreclosure sale proceeds.
Miirron, 2011 WL 2600543, at. *5 (emphosi .s added); - see
also C a r l s o n v. Wells F a r g o n k , - N.A., -_ a s Trustee, . .. .. ... .. ..
NO. 10-412Y1, 203.1 WL 3420436, ' k6 (Bankr. n. MaSS.
Aug. 2, 2011) [Hoffman, J.) ("the h o l d e r of a i no r tyage
on reA1 esi.aLe i n MdssachusettS may foreclose t h e
mortqage even if it is not: en t i r - l ed to enforce the:
r e l a t e d promissory n o t e ) ; / \ l j t w r t i , No. l l - . - i 0 1 7 4 , 2 0 1 1
WL 1.62S036 at . ' 6 ( h u l d i n q t h a t mortgagee need n o t a l s o
hold promissory n o t e in order l.0 val i .d ly foreclose) ;
McKenna TI. Wells E'argo Bank, N . A . , N o . 10-10417, 2011
WL 1100160, *% (D. MAS$. Mar. 2 1 , 2011) (Tauro , J.)
(si ime:); Adamson, No. 11-0693, 2011 WL 1136462 (same);
Valerio v. U . S . .. B a t i k , -. N.A., .- 71.6 F. Supp. 2d 124, 128
(D. Mass. 2010) (Gorton, J.); Lyons, No. 09 MISC
~ . . . .
416377, 3011 WL 61186; In re Lopez, 446 B.H. 12, 17-18
t 1 3 4 3 3 1 1 104086/2 14
(Bankr. D. Mass. 2011 . ) ; Huqqins, 357 B . R . a t 183
( s a m e ) . 5
Here, t h e lower court acknowledged t h a t a n o t e
and mortgage may "be s e p a r a t e l y t rans€er ' red o r
assigned." Addm., 2 1 ; see Lamson & C o . , I n c . v .
Abrams, - 305 Mass. 2 3 8 , 2 4 5 ( 1 9 4 0 ) ( ' [ t l h c h o l d e r of
t h e mortgage and t h e h o l d e r of t h e n o t e may be
d i f f e r e n t p e r s o n s " ) . Howcver, i . t t h e n f a i l e d t o t a k e
t h i s premise t o i ts "1.ciyicdl. c o n c l u s i , o n ; " t h a t a
mortgagee may foreclose, a n d i f t h e r e i s a s u r p l u s ,
h o l d t h e p r o c e e d s i n t r u s t for t h e n o t e hol .dcr . - Sce
Marron, a t * 4 . Tnsl-ead, t h e l.ower c o u r t r e l i e d on
l a n q u a g e i n two cases, one of them n e a r l y 150 years
o l d , t o e r r o n e o u s l y conc lude thnl. c. 2 4 4 5 1 4
aut .hori .zes f o r c c l o s u r c o n l y by a p e r s o n who i.s b o t h
Lhe "mortgagee" and t h e " n o t e h o l d e r . " T h e lower
c o u r t r eached t h i s c o n c l u s i o n despite t h e f a d t h a t
t h e statutory 1.ariguagc expressly a l l o w s f o r e c l o s u r e by
a n y "mortgagee" o r p e r s o n "aut.horizt!d by t h c power of
' court , e r roneous ly s t a t e d t h a t " t h e s e d e c i s i o n s were based upon p l a i n t i f f ' s f a i l u r e 1.0 c i . t c $ u p p o r t i n q a u t h o r i t y . " Acidm., 32-33 . -Jn f a c t , a l l of t h e s e d e c j s i o n s a p p l i e d t h e terms of r h e morl.gayt. a i d I.hc p l a i n l anguage o t Lhe s I . ~ t ~ i ? . e , d n d conc luded t h a t t h c y a u t h o r i z e d for:eclosure w i t h o u t t h e u n i f i c a t i o n of t h c t.wo i n s t r u r n c n t s .
I n t h e f a c e o t t h i s wei .qht of a u t . h o r i t y , t h e lower
. ..
15 Y l : I Y 3 3 1 1 101006/7
s a l e , " a n d c o n t a i n s nn r squi re rncnt t h a t suc:h
r o r e c l o s i n g p e r s o n s a l s o ho ld t h e u n d e r l y i n g debt:.
G.L. C. 2 4 4 5 14.
"Wherc t h e l anguage of a s t a t u t e j.s clear and
unambiguous, i t is conclusive a s t o l e q i s l a t i v e
i . n t e n t . " P y l e v. School. Committee -. of South .... Hadley,
123 Mass, 283, 285 ( 1 3 9 6 ) ( emphas i s s u p p l . i c d ) . I f t h e
n rd i .na ry meaning of a st .ar- .utory t e r m y i e l d s a
"workable rcsult ," t h e n a c o u r t s h o u l d not. r e s o r t t rs
exCrlns; .c a i d s , such as prior c a s e l a w or l e g i s l a t i v e
h i s t o r y , t o g u i d e i t s s t a t u t o r y i n t e r p r e t a t i o n .
Boston Housing A u t h o r i t = . N a t i o n a l . ... Conference of
Firemen and Oilcrs, Local 3 , 4 5 0 M a s ~ . 155, 162 I 2 0 1 0 )
( " W e cio n o t look t o e x t r i n s i c source:; t o v a r y t h e
mcaning of a n ijrrarnbj.gunus s t a t u t e u n l e s s a 1 i C c r a 1
c o n s t r u c t i o n would y i e l d a n a h s u r t i o r unworkable
result") i - . Fyle, . 4 7 3 Mass. a t 286 ( a 5taLut.e. n r i ~ u s t ; be
" c o n s t r u e d as w r i t t e n " if 3.1: i s urrambiguous). Here,
G.L . c . 2 4 4 § 1 4 unambiquously g r a n t s t h e ~ i q h t t.o
f o r e c l o s e t o b o t h t.he "morl.gagee, " meaning a persoil
who t a k e s a mor tgage , and to t h e "pe r son a u t h o r i z e d by
t h e power oL' sa le . " G.L. c. 244 § 1 4 . Ilrider t h e
Mort.qagc, MERS and i t . s a s s i g n s wcrc b o t h . I ts
-. --
bss . ignec , Green Tree, was t h e r e f o r e e n t i t l e d t o
foreclose.
A. T h e Court’s I n t e l - p r e t a t i o n Or Pre - L ‘ x i . s t i n q Case Law Was E r r O i I e O l J S .
E v e n if t h e s t aLu t . e were s u b j e c t t o
i n t e r p r e t a t i o n i n l i g h t of pre-ex i s t ihy caselaw, t h e
lower c o u r t i d e n t i l . ’ i e d nu a u t h o r i t y r e q u i r i n y
t h a t t h e Note and Mortyage be “re-url iP.ed“ p r i o r t o
foreclosure. The l l w o cases t h e lower c o u r t r e l i e d
upori, Wolcot t v . Winches t e r , 8 1 Mass. 4 6 1 ( 1 0 6 0 ) and
- CrowLcy v . Adams, 226 Mass. 582 (1917), d i d - noli hold
t h a t a mtirlgagec m u s t a l s o possess t.he note i n o r d e r
t-o f o r e c l o s e . R a t h e r , t h c cases dcal w i t h t h e rule
t h a t a mort.qage may n o t b e foreclosed i f t , h e
u n d e r l y i n g drbl. h a s been pa;.cI o f f . See Wolc:?Lt:, R 1
Mass. a t 4 6 5 (“lt. is well e s t a b l i s h e d k h a t a mere
ou t - s t and ing naked mortgage t i t l e , the debt already
h a v i n g heen paid, c a n n o t a v a i l t h e niortqagee, s o a s t o
s u s t a i n an a(:t.jon lipon t h e mor tgaye” ) (ernphasi s
supplied);' Crowley, 2 2 6 Mfis:;. at. 584-585 ( “ I t i s p l a i n
--
- Wolcot t ~. involved a p r i o r i t y d i s p u t e between t.wo
mortgagees , onc of which d s c l held the u n d c r l y i n g r1nt.e. To t h e ex ten l . t.h;lt t h c Cour t h e l d t h e mortg.igee w i t h p o s s e s s i o n of t h e n o t e had a prioriLy ovcr onc who d i d not. hold t h e not-e, such a h o l d i n g does n o t support a conc1us;orr t . h a t o n e i s required t o h o l d t.he n o t e i . r l o rder t o v a l i d l y Lort-tclos?. T n Lac t , almost
1 7 ~ 1 1 9 3 ~ 7 i n 4 o a 6 / ?
however, t h a t I T ill Lhe d a t e of t h e a s s i g n m e n t s t.o
Murphy t h e debca s e c u r c d had been p a i d a s t h e jiidq‘e
found, t h e r e w a s n o d e f a u l t o r b r e a c h of c o n d i t i o n and
under such c i r c u m s l - a n t e s l.he f o r e c l o s u r e i n e a c h
i n s t a n c e whether by c n t r y o r sa le under t h e power d i d
n o t pass a good r - i t l e t o t h e p u r c h a s e r . . . ,I ) . The
cases do not r e f l e c t . any m d e r l y i . n g “common law” r u l e
t h a t a noi-.e and mor tgagc , s e p a r a t e l y t r a n s f e r r c d , must
be “ r e - u n i t e d ” pr i .o r t o foreclosure, as t h e lower
c o u r t h e l d .
The lower court‘s er ror was r e c e n t l y r e c o g n i z e d
by t h e Bankruptcy C o u r t . I n Marron, Case N o . 10-
45395, * 3 (Bankr . 0 . Mdss. A l l y , 79, 201.1) ( o r d e r o n
mot ion for: r c ? c i > r i s i d e r , ~ t i o n ) , t h e c o u r t d e n i e d A n o t . i o : ~
fox t e c o n s i d c r a t i o n t h a t r e l i e d upori t h e 1 . o w e r c o u r t ’ s
d e c i s i o n h e r e . See Addrn., 4 3 . I n d e c l i n i n g t.o €oll.ow
t h e lower c o u r t ‘ s i n t e r p r e r - a i - i o n of Wolco t t and
Crowley, t h e Marron - c o u r t r e c o g n i z e d t h a t “ [ t l h e Lact
that t h c d c b t h a s been p a i d [ i n those c:a,ses] i s what
l e d t h e SJC 1.0 cnriclude t h a t t h e a s s i g n e e ‘ shou ld be
h e l d t o have known . . . t h a t p o s s e s s i o n of t h e n o t e
~.
-
- - .~
t h i r t y years fol . lowing i t s d e c i s i o n i n Wul~o&, t h e Supremc J u d i c i a l Courl. recognized t h a t M a s s a c h u s e t t s l a w p c r m i t s a mort-yage and n o t c t o bo s p l i t and sepa ra t e1 .y a s s i q r i e d . See Barnes v . B o a t d m a n , 1 4 9 Mas% 1 0 6 , 114 ( 1 0 8 9 1 .
- . -. - - .-
IO 11393317 lU508(1/1
w a s e s s c n t i a l t o an enforceable mortgage."' - I d . A s
recognized by - Marrot!, -. t h e court's r e l i a n c e on t h e s e
cases was e r r o n e o u s .
B. The Lowcr C o u r t ' s R e l i a n c e 011 G.1,. c. 2 4 4 , § 17R W a s Misplaced; Sect.ior, 17N Supports Green T r e e and Fann ie Mae's l n t e r p r r t a t i o n .
T h e c o u r t n e x t r e l i e d o n G . L . c . 211, 5 178, a
d i f f e r e n t sectjon of C h a p t e r 2 4 4 gove rn ing d e f i c i e n c y
a c t i o n s f o l l o w i n g a Sorecl osure, t o i n t e r p r e t s e c t i o n
1 4 . Sect-ion 1.78 p r o v i d e s :
N o a c t ion T o r a d c r i c i e n c y s h a l l be b r o u q h t a f t e r June t h i r t i e t h , r i i n e , t e e n hundred and Lorty-si x by t h e h o l d e r of a mclrtgdgc n o t e o r o t h e r o b l i g a t j o r i s e c u r e d by mor tgage of real c s l a t e a f t e r a f o r e c l o s u r c sale by him Laki,riy place a f t e r January tirs.l., n i n c t e e n hundred artd forty-six u n l e s s d nn..icc i.n w r i . t i n g of t.he mort.qayce'3 i n t e n t i o n t o f o r e c l o s e t h e mor tgage h a s been rrmiled, p o s t a g e p r e p a i d , by registered m a i l w i t h r e t u r n r c c e i p t r e q u e s t e d
G . T . , . c + 2 4 4 , 4: 1 7 8 . T h e lower cour t . conc luded tha t .
because S e c t i o n 1 7 R is d i r e c t e d t u "Ehe h o l . d e r nP a
mortgage n o t e " and a l l o w s d d c f i c i c n c y a c t i u r l
f -o l lowing a " f o r e c l o s u r e s a l e b y h i m , " t h c l e g i s l a t u r e
m u s t have i n t e n d e d S e c t i o n 1 4 , which addresses
f o r e c l o s u r e s , t o qrant. t h r a u t h o r i t y t.o forec:l.ose o n l y
t o t.he " h o l d e r of d mr,rt.yaye n 0 t . e . "
Tt ic lower c o u r t ' s cclncl i i$ion i s j u s t i f i . w d n e i t h e r
by l [ q i c nor t h e s t a t u t o r y language . 5ecti.m 178
gove rns d e t i c i e n c y a c t i o n s , noL f o r e c l o s u r e s . Even if
t h e t w o s ta tu tes c o n f l i c t e d (which t h e y do n o t , as w e
expl .a in bc low) , t h e lower c o u r t was obli.g;lt:.ed t o a p p l y
t h e f o r e c l o s u r e s e c t i o n t o this c o n t r o v e r s y , rial. a
d i f f e r e n t p rov i s i . on g o v e r n i n g defici.erl(:.y act . ions. see
I n re MCI WorldCom Network Servs . , lnc., 4 5 4 Mass.
6 3 5 , 617 (2009) (where t w o s t a t u t e s c o n f l i c t , t h e more
s p e c i f i c s t - a tu t e a p p l i e s ) ; ne v . A t t o r n e y Gerl,c.r,aJ,
4 2 5 Mass. 210 , 2 1 5 (19971 ( same) .
To t h e e x t e n t S e c t i o n 1 7 8 is even useful i n
i i n l c r p r c t i n g S e c t i o n 1 .4 , i t a c t u a l l y s u p p o r t s Green
Tree and F a n n i e Mae's i n t e r p r e r a t i o n of t h e sLatu l .e ,
no: t h a t of Ea ton . S e c t i o n 1 7 8 e x p l i c i t l y
d i s t i n g u i s h e s between a "mortgage note h o l d e r " and a
"mortqagae." G . L . c. 2 4 4 5 1 7 U ("No a c t i o n f o r a
d e f i c i e n c y shall bc b r o u g h t . . . by t h e holder of a
mor.tqiage n o t e . . . a f t e r a f o r e c l o s u r e s a l e by h i m .
. . u n l e s s a n o t i c e i n w, r i t . ing nf t h c m o r t y a g r w ' s
i n t e n t i o n t o forecl.ose t h e mortgage h a s hecn ma i l ed ,
pos t age p r e p a i d , by r e g i s l . e r e d m a i l w i t h r e t . u r n
r e c e i p t r e q u e s t e d . . . . " ) T h c S t a t u t e u s e s t.lle t - e r m
mortgagee" when r e f e r e n c i n g t,he pe r son a u t h o r i z e d t o \\
2 0 1131133'1'1 1040RA/Z
Fc>reL'Iosc, and ' ho lde r of a mor tgage no te" t.r> descrj-he
Lhe p e r s o n a u t h o r i z e d t o b r i n g a d e f i c i e n c y a c t i o n .
Its use of t-hese two separale phrases demonst . ra tes i t s
i n t e n t t o a s c r i b e t o t-hem ditfererlt. meanins:;, even i f
t h c y may o c c a s i o n a l l y be used i n t e r c h a n g e a b l y . - . See 8 1 .
*Fane_r Road LLC . v . Town of Brook l ine , 452 Mass. 109,
1 1 4 ( 2 0 0 8 ) ( h o l d i n g t h a t "although t h e s e t w o i-,?rms
[ ' s j z e ' and ' b u l k ' ] are o f t e n u s e d synonymously, t h e i r
appea rance i n t h e same s i ;a tul :ory .series rcqiii res us t.o
consr r i l s t . hcm d i f f e . r e n t l y i f each i s t o have
meaning") i T a m u l e v i c h ~. .. .. . . - v . Robie, ... .. 4 2 6 Mass. 7 1 2 , 7 1 3 - 1 1 4
( 1 9 O H ) . S e c t i o n l l B , j n u s i n q t h e t e r m " t h e h o l d e r of
a mortqage n o t e , " d e m o n s t r a t e s t ha t t . h e 1egis la t .u rc
knew how t.o rerer s p e c i f j c a l l y t o d e b t h o l d e r s . tiad
i t i n t e n d e d t o r e s t r i c t f o r e c l o s u r e to s u c h er iLi t ie8,
i t would h a v e used t h a t t e r m i n S e c t i o n 1 4 .
Ry i g n o r i n g t h e p l a i n l anguage of G . L . c . 2 4 4 , §
1 4 , by s u p p l a n t i n g t h e p l a i n l anguaqe w i t h r e s o r t to a
r n i s i n t c r p r e t a t i o n of pret--exisL.i.rq case Law, and by
e r r o n e o u s l y r e l y i n g on l anguage c o n t a i n e d i n G . L . c .
2 4 4 , § 1'1R. t.he (mi l r t commi.tted r c v c r s i b l c e r r o r .
21
I V . P u b l i c P o l i c y R e q u i r e s That The Court Enforce The Parties' Contractual A g r e e m e n t .
F i n a l l y , t h e l o w e r c o u r t e r r o n e o u s l y s i igges ted
t h a t pub1.j.c p o l i c y r e q u i r e d a " r e - u n i t i n g " of t h e
Mortgage and Note, because of p o t e n t i a l " u n f a i r n e s s "
t o bo r rowers . Addm., 33. The lower c o u r t ' s concerns
are i l l i . i s o r y , b o t h i n t h i . 5 CJSC a n d a s genera1 m a t t c r .
I n th i . s cast?, Eaton, BankUniLed, and MERS
s p e c i f i c n l L y ag reed , a s t h e y were a u t h o r i z e d t o do b y
s t a t u t e , t h a r . M U S and i t s a s 3 i g n e ~ s would have t h e
power of s a l e upon Eaton'..; f a i l u r e t o make rnonth1.y
paymcnts d u e under t h c Note. A s such , t h c r e i s
n o t h i n g "unLai r" abou t a3 1 o w . i n q MERS' a s s i g n e e Lo
cxerc;::e t h a t powrr a n d e n f o r c e ?.tie p a r t i e s '
agreement . 'The c o u r t ' s r:oncl.iisnry s t a t e m e n t thar.
"sound reason'' requi.res t h i s dnomal DLIS r e s u l t i s
suppor t -ed by n o t h i n g more than pure s p e c u l a t i o n , a n d
is i n s u f f i c i e n t t o o v e r r i d e t h e express t e r m s of t h e
p a r t i e s ' agreement .
I n any e v e n t . , t h e lower cour1I'S " p o l i c y " c o n c e r n s
do noI. permit it t o i g n o r c t h e c l e a r l anguage o f
Section 1 4 , which a u t h o r i t ? E o r c c l o s u r e by a
"mortgayec" or a p e r s o n " a u t h o r i z e d b y the power of
sa1.e." . . h e r e , G r e w 1 'I'rec - w i t h o u t r c y a r d t.o whcther
2% Y13933JJ 101086/2
t h a t e n t i t y .i.s also the "mortgagc n o t e h o l d e r . "
C o u r t s a r e "not t ree 1.0 ignorc o r t o tamper w i t h [a ]
c l e a r e x p r e s s i o n of 1eg ia lRLive i n t e n t . I f t h e law i s
t.o be changed, t h e change can o n l y he made by t h e
L,egisLat.iire." Commonwealth .. . .. v. Jones, 4 1 1 Mass. 661.,
664 ( 1 9 9 4 ) .
CONCLUSION
F u r t h e f o r e q o i n q r e a s o n s , G r e e n T r e e n r l t i k ' annj r
Mac r e s p e c t f u l l y submi t t . t i a L ti-,@ S u p e r i o r Cour t
commit ted a n error of law i n i s s u i n g t h e Order, and
t . h a t t h e s i n g l e j u s t i c e commitlcd T.he same error by
denyjriy t h e i r petition. A s such , t h e y r e s p e c t f l i l l y
r e q u e s t t h a t t h i u Honorable Court. r e v e ~ s e t h c Order
and e n t e r ~n order deriy.inq E a t o n ' s mot ion f o r
i n j u n c t i v e r e l i e f .
2 3
K c s p c t f u l l y Subrni ILted,
FEDERAL NATIONAL MORTGAGE ASSOCIATION and GREEN TREE SERVICTNG, LIK, By t h c i r a t t o r n e y s ,
+ 1 m& E . Br i anskv , BBOjl 632709 - .
r i ~ n s k y @ p r i . n ~ e l o t ) ~ t l , c o r n P . C a l a n d r e l l i , u130#666128
[email protected] PRINCE LOBEL TYE LLP 1.00 Camhridye S t r e e t , S u i t e 2 2 0 0 Bos ton , MA 02114 T e l : (617) 4 5 6 - 8 0 0 0 Fax: (617) 456-8100
Dated: Septcmber 2 , 2 0 1 1
- Cezr t . i Ficatc of Compliance
L, Joseph C a l a n d r e l l i , (:ert.i f y p u r s u a n t to Mass. K . App. P . 16(k) t h d l . Lhe f o r e g o i n q b r i e f compl i e s w i t h t.he rtil?s of t h i s C o u r t .
@_cd&L- I
h C a l a n d r e l l i
C e r t i f i c a t e of Ser&
1, Joseph Calandre l .1 i, c e r t i f y t h a t o n September 2 , % O J l , , t w o t r u e and a c c u r a t e c o p i e s o f r.he foregoing b r i e f were s e r v e d on coun$e l o f rccord for E a t o n by d e l i v e r i n g t h e m by o v e r n i g h t m a i l , p o s t a g e p r e p a i d t o :
David Grossman, Esq. Harvard Legdl A i d Bureau 2 3 E v e r e t t S t r e e t , F i r s t F ~ O ( J I Cambridge, MA 02138
I 1 197.177 1 0 4 0 8 6 l 7 24