Barrasso v. New Century Mortg. Corp.

• Decision Date: 08 February 2017
• Docket Number: No. 15-P-1458.,15-P-1458.
• Citation: 69 N.E.3d 1010,91 Mass.App.Ct. 42
• Parties: William T. BARRASSO, Jr. v. NEW CENTURY MORTGAGE CORPORATION & others.
• Court: Appeals Court of Massachusetts

91 Mass.App.Ct. 42

69 N.E.3d 1010

William T. BARRASSO, Jr.

v.NEW CENTURY MORTGAGE CORPORATION & others.¹

No. 15-P-1458.

Appeals Court of Massachusetts, Suffolk..

Argued October 20, 2016.

Decided February 8, 2017.

Glenn F. Russell, Jr ., Fall River, for the plaintiff.

Roger Soun , Boston, for the defendants.

Present: Hanlon, Sullivan, & Blake, JJ.

SULLIVAN, J.

The plaintiff, William T. Barrasso, Jr., brought this action to quiet title, alleging that two mortgages on his condominium unit constitute a cloud on his title. See G. L. c. 240, § 6.

He claimed that the encumbrances should be struck from the land records because the original mortgagee no longer exists and the identity of any present mortgagee cannot be ascertained. A judge of the Land Court awarded summary judgment to the defendants, determining that U.S. Bank, National Associates (U.S. Bank), holds the first mortgage as trustee for the C-BASS Mortgage Loan Asset-Backed Certificates Series 2007-SP2 and that Deutsche Bank National Trust Company (Deutsche Bank) holds the second mortgage as trustee for the New Century Home Equity Loan Trust Series 2005-C, Asset-Backed Pass-Through Certificates.

We affirm those portions of the judgment entered in favor of the defendants dismissing the claims asserted by Barrasso and granting affirmative relief to U.S. Bank. We vacate the portion of the judgment granting Deutsche Bank affirmative relief in the form of a declaration as to the validity of its title.

Background. We set out the facts in the summary judgment record viewed in the light most favorable to the plaintiff. See Cuddyer v. Stop & Shop Supermkt. Co., 434 Mass. 521, 522, 750 N.E.2d 928 (2001). On or about September 16, 2005, Barrasso purchased unit 315 of the Walnut Place Condominium, located at 8 Walnut Street in Peabody (property), for $264,000. To finance the purchase, Barrasso obtained two loans from New Century Mortgage Corporation (New Century), memorialized with two promissory notes and secured by two mortgages on the property. The larger of the two notes is in the amount of $211,200 (first note), and the smaller is in the amount of $52,800 (second note)—together, they comprised the entire purchase price.

The original of the first note is now physically in the possession of U.S. Bank. Although the location of the original second note cannot be ascertained from the record, there appears to be no controversy between the parties about whether it is in Deutsche Bank's control.

In connection with the notes, Barrasso granted a first mortgage to New Century, and a second mortgage to New Century, both of which are dated September 16, 2005, and both of which were recorded in the registry of deeds. Before the execution of the second mortgage, on or about March 2, 2005, New Century granted Ocwen Loan Servicing, LLC (Ocwen), a limited power of attorney, with Ocwen's enumerated powers including the authority to "execute, acknowledge, seal and deliver ... assignments of deed of trust/mortgage and other recorded documents."

1. New Century bankruptcy and the postbankruptcy transfer of the first mortgage. New Century filed a voluntary petition for bankruptcy in the United States Bankruptcy Court for the District of Delaware (Bankruptcy Court) on or about April 2, 2007. U.S. Bank contends (and Barrasso disputes) that, notwithstanding New Century's bankruptcy, the first mortgage was transferred to the C-BASS Mortgage Loan Asset-Backed Certificates Series 2007-SP2 (C-BASS Trust) shortly thereafter, on or before June 29, 2007, via a pooling and servicing agreement dated June 1, 2007 (2007 PSA). The 2007 PSA listed C-BASS ABS, LLC, as "Depositor"; Credit-Based Asset Servicing and Securitization LLC as "Seller"; Litton Loan Servicing LP (Litton) as "Servicer"; and LaSalle Bank National Association (LaSalle) as "Trustee." A mortgage loan schedule associated with the 2007 PSA specifically identified the first mortgage by loan number as included in the assets transferred to the C-BASS Trust. Additionally, a limited power of attorney dated June 22, 2007, granted Litton the power to "execute, acknowledge, seal and deliver" mortgage assignments on behalf of New Century. However, New Century was not listed as a party to the 2007 PSA, and no assignment of the first mortgage by New Century to any other entity was immediately recorded in connection with the 2007 PSA.

On January 17, 2008, Barrasso signed a loan modification agreement (modification agreement) effective December 1, 2007. The modification agreement was between Barrasso and LaSalle, as trustee for the C-BASS Trust, and specifically referred to the first mortgage and to the street address of the property. Several months later, during the fall of 2008, LaSalle merged into Bank of America, National Association (Bank of America). Bank of America became trustee of the C-BASS Trust and successor to LaSalle in connection with the modification agreement.

In an assignment dated April 14, 2009, Litton, in its capacity as attorney-in-fact for New Century, assigned the first mortgage to Bank of America, as successor by merger to LaSalle and as trustee for the C-BASS Trust. That assignment was recorded in the registry of deeds on or about April 8, 2010.

Barrasso commenced this action by filing a quiet title complaint in the Land Court on March 30, 2012. At some point, U.S. Bank replaced Bank of America as trustee for the C-BASS Trust. In an assignment dated June 5, 2013, Ocwen, as Litton's successor and as attorney-in-fact for Bank of America, purported to assign the first mortgage to U.S. Bank as trustee for the C-BASS Trust.² The April 14, 2009, assignment by Litton to Bank of America, and the June 5, 2013, assignment by Ocwen to U.S. Bank are the only assignments of the first mortgage appearing in the recorded title chain.

2. Prebankruptcy transfer of the second mortgage. Deutsche Bank contends (and Barrasso disputes) that on or before December 6, 2005, the second mortgage was transferred into the New Century Home Equity Loan Trust Series 2005-C, Asset-Backed Pass-Through Certificates (Home Equity Trust). A pooling and servicing agreement related to that trust, dated November 1, 2005 (2005 PSA), listed New Century Mortgage Securities, Inc., as "Depositor," JPMorgan Chase Bank, National Association, as "Servicer," and Deutsche Bank National Trust Company as "Trustee." A mortgage loan schedule associated with the 2005 PSA specifically identified the second mortgage as among those transferred to the Home Equity Trust. New Century, however, was not named as a party to the 2005 PSA. Additionally, no assignment of the second mortgage by New Century to any other entity was immediately recorded in connection with the 2005 PSA.

While this case was pending, Ocwen, as attorney-in-fact for New Century, purported to assign the second mortgage to Deutsche Bank as trustee for the Home Equity Trust in an assignment dated August 10, 2012.³ The assignment of the second mortgage from Ocwen to Deutsche Bank is the only assignment of the second mortgage appearing in the recorded title chain.

3. Land Court litigation. In the Land Court, Barrasso claimed that New Century could not have effectively transferred either of the mortgages after the date of New Century's bankruptcy filing—and certainly could not have done so after the Bankruptcy Court approved a liquidation plan on July 15, 2008. Accordingly, Barrasso claimed that the recorded assignments of both the first and second mortgage were void. As to the theory that valid, off-record assignments existed and were confirmed in one or more of the recorded documents, Barrasso claimed that neither the 2005 PSA nor the 2007 PSA operated as a valid assignment because New Century, the original mortgagee, was not a party to either document. The defendants argued that the recorded assignments were valid because the bankruptcy did not strip New Century of the power to assign one or both mortgages, and they were confirmatory of off-record assignments.

A judge of the Land Court concluded that the bankruptcy was not a bar to the transfer, that the undisputed facts showed a transfer of the mortgages to the defendant trusts, and, alternatively, that the modification agreement estopped Barrasso from disputing the state of the title as to the first mortgage as of the date of the modification agreement. Citing Eaton v. Federal Natl. Mort. Assn., 462 Mass. 569, 577–578, 969 N.E.2d 1118 (2012), the judge also reasoned that "even if there were any doubt as to who holds the [first] mortgage, the note-holder could simply compel a transfer of the mortgage." Judgment entered dismissing Barrasso's claims and affirmatively declaring that U.S. Bank held the first mortgage and Deutsche Bank held the second mortgage.

Discussion. "We review a decision to grant summary judgment de novo." Boazova v. Safety Ins. Co., 462 Mass. 346, 350, 968 N.E.2d 385 (2012). We review the record to determine whether, in the light most favorable to the nonmoving party, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Commissioners of the Bristol County Mosquito Control Dist. v. State Reclamation & Mosquito Control Bd., 466 Mass. 523, 528, 997 N.E.2d 1188 (2013). The moving party assumes the burden of affirmatively demonstrating that no genuine issue of fact exists on any relevant issue, even if the movant would not bear the burden of proof on that issue at trial. See Attorney Gen. v. Bailey, 386 Mass. 367, 371, 436 N.E.2d 139, cert. denied, 459 U.S. 970, 103 S.Ct. 301, 74 L.Ed.2d 282 (1982).

However, if the nonmoving party, here Barrasso, fails to establish an essential element of the claim asserted, any remaining disputed facts are immaterial. See Sarkisian v. Concept Restaurants, Inc., 471 Mass. 679, 681, 32 N.E.3d 854 (2015). Barrasso seeks to have the titles held by U.S. Bank and Deutsche Bank declared invalid before either bank can foreclose. Only a wholly void assignment in the chain of title...