Culhane v. Aurora Loan Servs. of Nebraska

• Citation: 826 F.Supp.2d 352
• Decision Date: 28 November 2011
• Docket Number: Civil Action No. 11–11098–WGY.
• Parties: Court Oratai CULHANE, Plaintiff, v. AURORA LOAN SERVICES OF NEBRASKA, Defendant.
• Court: U.S. District Court — District of Massachusetts

826 F.Supp.2d 352

Court Oratai CULHANE, Plaintiff,

v.AURORA LOAN SERVICES OF NEBRASKA, Defendant.

Civil Action No. 11–11098–WGY.

United States District Court, D. Massachusetts.

Nov. 28, 2011.

Martin I. Flax, Law Office of Martin I. Flax, Dedham, MA, for Plaintiff.

John A. Doonan, Reneau J. Longoria, Erin Powers Severini, Stephen M. Valente, Doonan, Graves, Longoria, LLC, Beverly, MA, for Defendant.

MEMORANDUM & ORDER

YOUNG, District Judge.

“What does a judge do?” asked my three year old granddaughter Mia. Without half thinking, I answered, “A judge teaches law to people who come to court.”

Upon reflection, that answer is about as good as any.¹ Trial judges teach the law to lawyers through evidentiary rulings; they teach the law to juries through plain, easy to understand instructions; they teach the law to offenders and the public alike at sentencing hearings; ² and they teach the law to litigants through careful opinions that explicate judicial choice as “reasoned choice, candidly explained.” Robert E. Keeton, Judging 1 (1990). Yet, as I explained to Mia, they teach the law only “to people who come to court.” Trial judges have no roving commission to teach the law generally. Their teaching is limited only to “cases and controversies,” U.S. Const. art. III, and then only when the standards of ripeness, standing, and redressability are met.

Frankly, this is the central tension in this opinion, as much of what I have to say addresses the conduct of a non-party, the Mortgage Electronic Registration Systems, Inc. (“MERS”).³ While I consider this discussion appropriate to render judgment here, it must be borne in mind that MERS is not a litigant and is not bound in any way by this discussion.

I. INTRODUCTION

Oratai Culhane (“Culhane”) brought this action against Aurora Loan Services, LLC (“Aurora”) to prevent the imminent foreclosure of her family's home in Milton, Massachusetts (the “subject property”). Aurora, after removing the action from state court, moved for summary judgment. In ruling on the motion, this Court must resolve whether the mortgage properly was assigned from MERS (the original mortgagee), to Aurora and, if so, whether Aurora otherwise has standing to foreclose under the statutory power of sale.

A. Procedural Posture

Acting pro se, Culhane filed her complaint and a motion for a temporary restraining order (“TRO”) in the Massachusetts Superior Court sitting in and for the County of Norfolk on June 17, 2011, to stop the foreclosure sale of the subject property, which then was scheduled to take place on June 20, 2011. Compl. & TRO Mot., ECF No. 4. That same day, Aurora filed its notice of removal to this Court. Notice Removal, ECF No. 1.

The motion for a TRO was set to be heard by this Court on June 22, 2011. On June 21, Aurora filed its opposition papers. Def.'s Mem. Opp'n Pl.'s TRO Mot., ECF No. 5; Aff. Kristen Trompisz Supp. Def.'s Mem. Opp'n Pl.'s TRO Mot., ECF No. 6.

At the hearing on the motion for a TRO, the Court allowed Culhane's oral motion for a six-week continuance to allow her time to retain an attorney. Aurora requested time to file a motion for summary judgment, which it did two days later. Mot. Summ. J., ECF No. 7; Mem. Supp. Mot. Summ. J. (“Def.'s Mem.”), ECF No. 8. The hearing on the summary judgment motion was set for July 20, 2011. Aurora agreed to postpone the foreclosure sale until after that date.

On July 15, 2011, Culhane retained counsel, who promptly requested an extension of time to respond to Aurora's summary judgment motion. Pl.'s Mot. Extension Time, ECF No. 18. The Court allowed the motion, but declined to continue the hearing to a later date.

At the hearing on the motion for summary judgment on July 20, 2011, the Court took the matter under advisement. Culhane filed her opposition to Aurora's motion for summary judgment on August 5, 2011. Opp'n Mot. Summ. J., ECF No. 20; Mem. L. Opp'n Mot. Summ. J. (“Pl.'s Mem.”), ECF No. 24. On August 22, 2011, the Court granted Aurora's summary judgment motion, save as to the question of Aurora's standing to foreclose in view of MERS's involvement in the chain of title. On September 7, 2011, the Court heard further oral argument on the motion, focusing its inquiry on MERS's role in the assignment to Aurora, see Hr'g Tr., ECF No. 32, and subsequently ordered Aurora to submit documents pertaining to MERS's practice of appointing non-employee certifying officers for the purpose of making mortgage assignments, see Order, ECF No. 31.

On September 19, 2011, in accordance with the Court's order, Aurora submitted, as attachments to its supplemental memorandum in support of its motion for summary judgment, various documents produced by MERS detailing its operations, specifically its (1) Rules of Membership (the “MERS Rules”); (2) Terms and Conditions; (3) Procedures Manual; (4) Quality Assurance Quick Reference Guide; and (5) Quality Assurance Procedures Manual. Supplemental Mem. Supp. Mot. Summ. J. (“Def.'s Supplemental Mem.”), ECF No. 34; id., Exs. B–F, ECF Nos. 34–2 to –7. The next day, with the Court's permission, MERS filed a memorandum of law to assist the Court in understanding its unique role in the mortgage industry. Bench Mem. L. MERS (“MERS's Mem.”), ECF No. 36. On October 3, 2011, Culhane filed a supplemental memorandum in opposition to Aurora's motion for summary judgment. Supplemental Mem. Opp'n Mot. Summ. J. (“Pl.'s Supplemental Mem.”), ECF No. 37.

B. Facts ⁴

Culhane is the record owner of the subject property, where she has resided for sixteen years with her two children. Compl. ¶ 2; Pl.'s Resp. Def.'s Statement Facts Supp. Mot. Summ. J. (“Pl.'s Resp. SOF”) ¶ 1, ECF No. 22; Aff. Oratai Culhane ¶ 1, ECF No. 23. On April 4, 2006, Culhane executed a promissory note to Preferred Financial Group, Inc. doing business as Preferred Mortgage Services (“Preferred”) in the amount of $548,000. Pl.'s Resp. SOF ¶ 2; Aff. Cristal Blanchard Supp. Def.'s Mot. Summ. J., Ex. A, Adjustable Rate Note, ECF No. 16. As security for the promissory note, Culhane executed a mortgage on the subject property to MERS as nominee for Preferred. Pl.'s Resp. SOF ¶ 3; Aff. Cristal Blanchard Supp. Def.'s Mot. Summ. J., Ex. B, Mortgage (“Mortgage”), ECF No. 16–1. The mortgage was dated April 4, 2006, and recorded April 11, 2006, in the Norfolk County Registry of Deeds, in Book 23562, at Page 348. Pl.'s Resp. SOF ¶ 3.

On April 7, 2009, the mortgage was assigned from MERS as nominee for Preferred to Aurora.⁵ Pl.'s Resp. SOF ¶ 4; Aff. Cristal Blanchard Supp. Def.'s Mot. Summ. J., Ex. C, Corporate Assignment Mortgage (“Corporate Assignment Mortgage”), ECF No. 16–2. Aurora is a national loan servicing corporation with its principal place of business in Nebraska. Compl. ¶ 3. The assignment was executed before a notary public by JoAnn Rein, who was an employee of Aurora but acting as a vice president of MERS at the time of the assignment. Pl.'s Resp. SOF ¶ 4; see Corporate Assignment Mortgage; MERS's Mem., Ex. A, Corporate Resolution, ECF No. 36–1 (naming JoAnn Rein a certifying officer of MERS as of August 8, 2008). The assignment was recorded on April 24, 2009, in the Norfolk County Registry of Deeds, in Book 26575, at Page 562. See Corporate Assignment Mortgage.

As evidenced by an undated endorsement on the back of the note, Deutsche Bank Trust Company Americas (“Deutsche”), as trustee for Residential Accredit Loans Inc., Mortgage Asset–Backed Pass–Through Certificates, Series 2006–QO5 (the “RALI Series 2006–QO5 Trust”), is the current note holder. Aff. Cristal Blanchard Supp. Def.'s Mot. Summ. J. ¶ 9, ECF No. 15; Aff. Martin Flax Opp'n Mot. Summ. J., Ex. C, Prospectus Supplement RALI Series 2006–QO5 Trust S–3, May 26, 2006 (not filed electronically); see Note Endorsement & Allonge (not filed electronically). The RALI Series 2006–QO5 Trust holds a pool of one- to four-family residential, payment-option, adjustable-rate, first-lien mortgage loans with a negative amortization feature. Prospectus Supplement RALI Series 2006–QO5 Trust S–1. The cut-off date for mortgage loans to be transferred into this trust was May 1, 2006. Id. at S–3. The Mortgage Loan Schedule for the trust shows that Culhane's loan is part of the pool, but does not identify the date of transfer.⁶ Letter Reneau Longoria, Attach. 1, Mortgage Loan Schedule, ECF No. 41–1. Effective April 1, 2008, Aurora, as Deutsche's agent, services the loans held by the trust. Aff. Cristal Blanchard Supp. Def.'s Mot. Summ. J. ¶ 9; Supplemental Mem. Supp. Mot. Summ. J., Ex. G, Master Servicing Assignment & Assumption Agreement 1, ECF No. 34–8.

On April 30, 2009, Aurora filed a complaint pursuant to the Servicemembers Civil Relief Act (the “Servicemembers Act”) in the Massachusetts Land Court and satisfied the statute's requirements by causing the order of notice to be published, served, and recorded, and by subsequently submitting its return on the order to the Land Court. Pl.'s Resp. SOF ¶¶ 5–6; Aff. Reneau Longoria Supp. Def.'s Mot. Summ. J., Ex. AA, Land Ct. Compl., ECF No. 10–1. On October 21, 2009, the Land Court issued its judgment that Culhane was not entitled to the benefits of the Servicemembers Act and that Aurora could execute the power of sale contained in the mortgage. Aff. Reneau Longoria Supp. Def.'s Mot. Summ. J., Ex. AC, Land Ct. J., ECF No. 14–3.

Aurora first scheduled the foreclosure sale for October 22, 2009. Pl.'s Resp. SOF ¶ 7. The notice of mortgagee sale was sent to be published on September 21, 2009. Id. ¶ 8. Pursuant to Massachusetts General Laws chapter 244, section 14, Aurora sent letters giving notice of its intent to foreclose the mortgage and pursue a deficiency judgment to Culhane, MERS, and Countrywide Home Loans, Inc. on September 24, 2009. Id. ¶ 9; Aff. Reneau Longoria Supp. Def.'s Mot. Summ. J., Ex. AB, Notice Intent Foreclose Mortgage, Sept. 23, 2009, ECF No. 10–2.

The foreclosure sale scheduled for October 22, 2009, was cancelled prior to that day. Pl.'s...