Bessett v. Deutsche Bank Nat'l Trust Co.

• Decision Date: 03 January 2022
• Docket Number: 21-P-109
• Citation: 180 N.E.3d 1014 (Table)
• Parties: Douglas BESSETT v. DEUTSCHE BANK NATIONAL TRUST COMPANY.
• Court: Appeals Court of Massachusetts

180 N.E.3d 1014 (Table)

Douglas BESSETT

v.DEUTSCHE BANK NATIONAL TRUST COMPANY.¹

21-P-109

Appeals Court of Massachusetts.

Entered: January 3, 2022.

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

Plaintiff Douglas Bessett appeals from a summary judgment entered by a judge of the Superior Court dismissing his claims against defendants Deutsche Bank National Trust and America's Servicing Company (collectively, bank). The plaintiff alleged that the bank breached its duty of good faith and reasonable diligence in foreclosing on his home. Concluding that the plaintiff has, at most, raised a question about the inadequacy of the sale price, which alone "does not necessarily prove an absence of good faith or reasonable diligence," Property Acquisition Group, LLC v. Ivester, 95 Mass. App. Ct. 170, 175 (2019), we affirm.

Background. We briefly summarize the relevant undisputed facts. In 2002, the plaintiff purchased residential property in Framingham (property) for $207,000. He refinanced his mortgage in June 2004 with a promissory note in the amount of $203,000, but defaulted on the mortgage in or around 2012.

The bank conducted a duly noticed foreclosure sale on September 30, 2015, and the sale was attended by approximately eight to ten individuals. The value of the property at the time of the sale was disputed, but it was not disputed that the bank had valued the property; its records included an "account summary" containing an entry for "[d]ate and [a]mount of [m]ost [r]ecent [v]alue" of "July 15, 2015, $335,000[.]" Reem Property, LLC (Reem) was not the high bidder at the auction. After the auction concluded, however, each of the three highest bidders serially defaulted on their offers to purchase the property;³ ultimately, it was sold to Reem, the fourth-highest bidder, for $175,000. The foreclosure deed was recorded in June 2016.⁴

Later that year, the plaintiff brought a complaint for monetary damages against the bank alleging violations of G. L. c. 93A, breach of contract, and breach of the covenant of good faith and fair dealing. He subsequently limited his claims to those relating to the allegation that the bank breached its duty of good faith and fair dealing by "[f]ailing to get ... the highest possible price for his home at the foreclosure sale." The bank moved for summary judgment on this claim, and, when it prevailed, the plaintiff appealed.

Discussion. We review a grant of summary judgment de novo, Miller v. Cotter, 448 Mass. 671, 676 (2007), to determine "whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to judgment as a matter of law." Kitras v. Zoning Administrator of Aquinnah, 453 Mass. 245, 251 (2009), quoting Cargill, Inc. v. Beaver Coal & Oil Co., 424 Mass. 356, 358 (1997). See Mass. R. Civ. P. 56 (c), as amended, 436 Mass. 1404 (2002). "[The] party moving for summary judgment in a case in which the opposing party will have the burden of proof at trial is entitled to summary judgment if he demonstrates ... that the party opposing the motion has no reasonable expectation of proving an essential element of that party's case." R.L. Currie Corp. v. East Coast Sand & Gravel, Inc., 93 Mass. App. Ct. 782, 784 (2018), quoting Dulgarian v. Stone, 420 Mass. 843, 846 (1995). To defeat the motion, the opposing party "must respond and allege specific facts which would establish the existence of a genuine issue of material fact." Pederson v. Time, Inc., 404 Mass. 14, 17 (1989).

In exercising the power of sale under a mortgage, "[t]he mortgagee ‘must act in good faith and must use reasonable diligence to protect the interests of the mortgagor.’ " Williams v. Resolution GGF Oy, 417 Mass. 377, 382-383 (1994), quoting Seppala & Aho Constr. Co. v. Peterson, 373 Mass. 316, 320 (1977). As part of that duty, it is incumbent on a mortgagee to "get for the property as much as it can reasonably be made to bring ... [and] do what a reasonable [person] would be expected to do to accomplish that result." Ivester, 95 Mass. App. Ct. at 175, quoting Clark v. Simmons, 150 Mass. 357, 360 (1890). Of particular importance to our analysis in this case, however, "mere inadequacy of a foreclosure sale price, alone, does not necessarily prove an absence of good faith or reasonable diligence." Ivester, supra, citing Sher v. South Shore Nat'l Bank, 360 Mass. 400, 402 (1971). See Pemstein v. Stimpson, 36 Mass. App. Ct. 283, 287 (1994).

The plaintiff's attempts to analogize his case to Ivester are unsuccessful. In that case, we vacated the grant of summary judgment in favor of a mortgagee where the nonmoving parties not only raised a genuinely disputed question as to whether the foreclosure sale price was adequate but also produced additional evidence from which a fact finder reasonably could conclude that the mortgagee failed to exercise reasonable diligence: the mortgagee's failure to obtain any appraisal or other determination of the value of the property prior to the sale. Ivester, 95 Mass. App. Ct. at 178. The mortgagee's failure to take any steps toward determining the fair market value of the property, which had unaccounted-for development potential, was critical to our holding. Id. at 177-178. While we agree that Ivester controls here, it does so to the plaintiff's detriment, not to his advantage.

Here, the most the plaintiff can show is a price disparity between the bank's valuation of the property and the selling price. Even assuming that his showing is enough to raise a question of material fact about whether the price was so low as to be "inadequate," he has failed to allege any other facts that would support a lack of good faith or reasonable diligence. See Ivester, 95 Mass. App. Ct. at 175, 177. The plaintiff's reliance on the bank's failure to obtain a valuation of the property as of the date of the transfer to Reem is misplaced; he fails to explain how or on what authority the value of the property several months after the...