Emigrant Residential LLC v. Pinti
| Decision Date | 24 March 2021 |
| Docket Number | No. 19-cv-12258-DJC,19-cv-12258-DJC |
| Parties | EMIGRANT RESIDENTIAL LLC, Plaintiff, v. LINDA S. PINTI, LESLEY R. PHILLIPS, AND ANY AND ALL OCCUPANTS, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Plaintiff Emigrant Residential LLC ("Emigrant") has sued Defendants Linda S. Pinti ("Pinti"), Lesley R. Phillips ("Phillips") and any and all occupants of a property located at 1643 Cambridge Street #52, Cambridge, Massachusetts ("the Property") (collectively, "Defendants") seeking a declaratory judgment to strike the discharge of mortgage from title of the Property. D. 1. Defendants counterclaimed that Emigrant perpetrated fraud on the Court, engaged in unfair and deceptive business practices in violation of Mass. Gen. L. c. 93A and intentionally and negligently inflicted emotional distress. D. 20. Emigrant now moves for summary judgment on its claims and Defendants' counterclaims. D. 28. For the reasons stated below, the Court ALLOWS the motion.
The Court grants summary judgment where there is no genuine dispute regarding any material fact and the undisputed facts demonstrate that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A material fact is one that "carries with it the potential to affect the outcome of the suit under the applicable law." García-González v. Puig-Morales, 761 F.3d 81, 87 (1st Cir. 2014) (quoting Newman v. Advanced Tech. Innovation Corp., 749 F.3d 33, 36 (1st Cir. 2014)) (internal quotation mark omitted). The moving party "bears the burden of demonstrating the absence of a genuine issue of material fact." Rosciti v. Ins. Co. of Pa., 659 F.3d 92, 96 (1st Cir. 2011) (citation omitted). Once that burden is met, the non-moving party may not rest on the allegations or denials in his pleadings. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). Instead, "with respect to each issue on which [he] would bear the burden of proof at trial," he must "demonstrate that a trier of fact could reasonably resolve that issue in [his] favor." Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st Cir. 2010) (citations omitted). The Court views the record in the light most favorable to the non-moving party, "drawing reasonable inferences" in his favor. Noonan v. Staples, Inc., 556 F.3d 20, 25 (1st Cir. 2009) (citation omitted). "Conclusory allegations, improbable inferences, and unsupported speculation," however, are "insufficient to establish a genuine dispute of fact." Travers v. Flight Servs. & Sys., Inc., 737 F.3d 144, 146 (1st Cir. 2013) (citation and internal quotation marks omitted).
The following facts, which are undisputed unless otherwise noted, are drawn from Emigrant's statement of material facts, D. 30, Defendants' response and Defendants' statement of material facts, D. 45-5, Emigrant's response, D. 47, and exhibits referenced in these filings.
Pinti and Phillips executed and delivered a promissory note to Emigrant Mortgage Company, Inc. ("EMC") for $160,000.000 ("Pinti Note") on March 13, 2008. D. 45-5 ¶ 1. On that same date, Pinti and Phillips provided a mortgage ("Pinti Mortgage") on the Property to EMCto secure the Pinti Note and recorded it with the Middlesex County (Southern District) Registry of Deeds. Id. ¶ 3. A little more than a year later, on August 1, 2009, Defendants defaulted on the Pinti Note by failing to make payment and all subsequent payments thereafter. Id. ¶ 48; see D. 31-1 at 31. Defendants, however, continue to pay taxes, insurance, and condominium fees. D. 45-3 ¶¶ 27-28. EMC sent Defendants a 90-day notice of right to cure on September 29, 2009. D. 45-5 ¶ 5.
On November 30, 2009, EMC assigned the Pinti Mortgage to ESB-MH Holdings, LLC ("ESB-MH") and recorded it with the Middlesex County (Southern District) Registry of Deeds ("ESB-MH Assignment"). Id. ¶ 6. Plaintiff Emigrant is the successor-by-merger to ESB-MH. Id. ¶ 7. That same day, ESB-MH assigned the Pinti Mortgage to Federal Home Loan Bank of New York ("FHLBNY") however it was not delivered. Id. ¶ 8-9.
Defendants subsequently failed to cure their default by December 28, 2019, the expiration date of the 90-day notice of right to cure, and EMC initiated foreclosure proceedings on the Property. Id. ¶ 10. On September 22, 2010, Pinti filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code. Id. ¶ 11. Pinti later obtained a discharge in the bankruptcy on February 4, 2011. Id. ¶ 12.
On August 22, 2011, EMC served a written response to a Qualified Written Request from the Defendants, which provided Defendants with information pertaining to the ownership of the Pinti Mortgage. Id. ¶ 13. It named ESB-MH as the owner of the loan and EMC as the servicer of the loan. D. 31-1 at 42. It also explained that the transferring ownership of the note and mortgage to ESB-MH was not recorded and that the Pinti Note and Pinti Mortgage, as well as the assignment of the Pinti Mortgage were in the possession of EMC. Id. About a year later, on August 9, 2012,EMC sold the Property to Harold Wilion ("Wilion") for $260,000 and recorded the foreclosure deed with the Middlesex County (Southern District) Registry of Deeds. D. 45-5 ¶¶ 14-16; 19.
EMC's assistant treasurer, Joel Marcano ("Marcano") attests in a sworn affidavit that under "EMC's established loan servicing policies and procedures" when EMC receives foreclosure sale proceeds from a third party purchaser following a foreclosure sale, EMC's loan servicing department prepares a memorandum to EMC's loan payoff department that states the amount of the funds received, a confirmation that the fund was received following a foreclosure sale to a third party and instructions that the discharge of mortgage should not be prepared or sent to the foreclosed borrower. D. 31 ¶ 18. Marcano also attests that neither EMC nor Emigrant has a policy of providing a discharge of mortgage to a borrower upon receiving proceeds from a third-party purchaser following a foreclosure. Id. ¶ 19.
Despite this policies and procedures, on September 18, 2012, Anna Sorvillo, an EMC employee at the time, prepared a memorandum for another EMC employee, Juan Minier ("Minier") stating that a third party paid off the loan for the Pinti Note in the amount of $260,000.00, the amount of the foreclosure sale, requested that Minier credit $48,289.92 to an account for "Legal, RESPA and appraisal," and requested that Minier provide James Jung with "a copy of the credit advance." D. 31-1 at 95. The memorandum did not note that the funds were received following a foreclosure on the Property nor did it discuss whether Minier should prepare a discharge of the Pinti Mortgage. See id. Nonetheless, on October 3, 2012, EMC prepared a discharge of the Pinti Mortgage and sent it to Defendants for recording. See D. 31-1 at 99. Marcano attests that EMC staff prepared the discharge by mistake as a result of the omissions in the memorandum. D. 31 ¶¶ 25-27. Neither EMC nor Emigrant have returned the Pinti Note, cancelled or otherwise to Defendants. Id. ¶ 28, D. 45-5 ¶ 28.
On October 29, 2012, Wilion filed a summary process action against the Defendants for possession of the Property. Id. ¶ 30. On November 7, 2013, the state district court entered judgment in favor of Wilion and EMC. Id. ¶ 32. On Defendants' appeal, the Supreme Judicial Court ruled that EMC's notice of right to cure failed to comply strictly with the notice provisions set forth in the Pinti Mortgage, voiding the foreclosure sale. D. 45-5 ¶¶ 34-35; Pinti v. Emigrant Mortg. Co., Inc., 472 Mass. 226, 233-38 (2015) ("Pinti I"). In light of this decision, Emigrant returned the foreclosure sale proceeds to Wilion. D. 45-5 ¶ 39. Since Pinti I, EMC has made bi-annual payments to the City of Cambridge for real estate taxes assessed to the Property. D. 45-5 ¶ 41.
After Pinti I, on July 29, 2015, Pinti recorded the discharge of the Pinti Mortgage with the Middlesex County (Southern District) Registry of Deeds. Id. ¶ 38. Defendants, however, have not exercised their right of redemption in the Property by satisfying the total debt owed under the terms of the loan. D. 45-5 ¶ 42. On or about December 30, 2015, EMC sent the original Pinti Note and the original recorded Pinti Mortgage to Emigrant's counsel. D. 32 ¶ 14.
On June 17, 2016, EMC sued Defendants in this Court (Wolf, J.) seeking a declaratory judgment, inter alia, striking the discharge of the Pinti Mortgage from title to the Property. D. 45-5 ¶ 46; see Emigrant Mortgage Company, Inc. v. Pinti et al., 16-cv-11136-MLW (D. Mass. Jan. 17, 2019) ("Pinti II"). Defendants asserted counterclaims, seeking a declaratory judgment that Defendants owned the Property free of any mortgage, as well as a claim for negligent infliction of emotional distress. Pinti II, D. 30. EMC moved for summary judgment on its claim and Defendants' counterclaims. Pinti II, D. 35. The Court allowed in part and denied in part the motion, allowing it with respect to Defendants' counterclaim for negligent infliction of emotional distress, but otherwise denying it without prejudice. Pinti II, D. 54. The Court held a two-daybench trial on January 9, 2019 and January 10, 2019. See Pinti II, D. 112 & D. 113. After the bench trial, the Court in Pinti II dismissed the case "because plaintiff [EMC] lacks standing." Pinti II, D. 109. In Pinti II, the Defendants, same as in this case, argued that EMC was not the mortgagee on August 9, 2012 because the Pinti Mortgage had been assigned to ESB-MH. Pinti II, D. 45 at 19-20. The Court agreed, ruling that EMC was not the mortgagee of the loan in August 2012 because the Pinti Note had been previously assigned to ESB-MH and that ESB-MH did not reassign it to EMC. Pinti II, D. 110 at 5, 8. Thus, the Court held that Id. at 17. The Court then dismissed EMC's...
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