Fannie Mae v. Branch

• Docket Number: SJC-13510
• Decision Date: 12 July 2024
• Citation: Fannie Mae v. Branch, 236 N.E.3d 1181 (Mass. 2024)
• Parties: FANNIE MAE & another v. Anthony Michael BRANCH.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

236 N.E.3d 1181

FANNIE MAE ¹ & another²

v.Anthony Michael BRANCH.

SJC-13510

Supreme Judicial Court of Massachusetts, Plymouth.

Argued March 6, 2024

Decided July 12, 2024

Summary Process, Appeal, Practice, Civil, Summary process, Moot case, Intervention, Substitution, Counterclaim and cross-claim, Summary judgment.Mortgage, Real estate, Foreclosure, Validity.Notice, Foreclosure of mortgage.

Summary process.Complaint filed in the Southeast Division of the Housing Court Department on June 12, 2017.

The case was heard by Wilbur P. Edwards, Jr., J., on a motion for summary judgment; and after transfer to the Metro South Division of the Housing Court Department, a motion to intervene, substitute a party, and amend the judgment was heard by Neil K. Sherring, J.

After review by the Appeals Court, the Supreme Judicial Court granted leave to obtain further appellate review.

Anthony Michael Branch, pro se.

Karl F. Stammen, Jr., Boston, for the intervener.

Thomas J. Santolucito, Newton, for the plaintiff.

Grace C. Ross, pro se, amicus curiae, submitted a brief.

Present: Budd, C.J., Gaziano, Kafker, Wendlandt, & Dewar, JJ.

KAFKER, J.

After being assigned the high bid at the 2016 foreclosure sale of Anthony Michael Branch’s property in Brockton, the Federal National Mortgage Association, better known as Fannie Mae, commenced a summary process action against Branch in the Housing Court.Judgment for possession entered in Fannie Mae’s favor, and Branch appealed.In December of 2018, during the pendency of the appeal, Fannie Mae sold the property to a third party, Roberto Pina Cardoso.Over the next four years, while Branch remained in possession of the property, Cardoso would successfully intervene and be joined as a party as of right with Fannie Mae and be awarded use and occupancy payments.In an unpublished May 2023 decision, however, a panel of the Appeals Court vacated the Housing Court’s judgment of possession as moot, reasoning that after the sale to Cardoso, Fannie Mae’s possessory interest was no longer superior to Branch’s.The panel likewise declared moot Branch’s appeal from the order allowing Cardoso to intervene but affirmed dismissal of Branch’s counterclaims.SeeFannie Mae v. Branch, 102 Mass. App. Ct. 1121, 211 N.E.3d 1065(2023)(memorandum and order pursuant to rule 23.0).The Appeals Court decision thereby required Cardoso to reestablish a right to possession and use and occupancy payments in a new and separate case in the Housing Court.We granted further appellate review.

We disagree with the Appeals Court’s determinations of mootness.Because it is undisputed that Fannie Mae transferred its entire interest in the property -- including any possessory interest -- to Cardoso after foreclosure, we conclude that he maintains a live stake in adjudication of the judgment for possession.We therefore affirm the order allowing Cardoso to intervene and, reaching the summary judgment issues that the Appeals Court did not, affirm entry of judgment for possession in favor of Fannie Mae.We likewise affirm the dismissal of Branch’s counterclaims.³

Background.In 2009, Branch purchased the subject property using a loan from Pentagon Federal Credit Union (Pentagon), secured by a mortgage on the property.On February 28, 2013, Pentagon mailed Branch a notice informing him that his loan was in default.⁴Further notices followed on June 12, 2013, and June 30, 2014.Branch was unsuccessful in negotiating a loan modification, and when he did not cure the default, Pentagon elected to move forward with foreclosure.A foreclosure sale was scheduled but was subsequently canceled after Branch filed for bankruptcy in January 2016.Bankruptcy proceedings were terminated in June of 2016.

In August 2016, Pentagon gave notice of an impending foreclosure sale, both by mailed notice to Branch and publication in a local newspaper.⁵The sale was held on September 14, 2016.Pentagon was the high bidder and assigned its bid to Fannie Mae.On November 15, 2016, a foreclosure deed granting the property to Fannie Mae was recorded with the Plymouth County registry of deeds.⁶

On April 6, 2017, Fannie Mae served Branch with a fourteen-day notice to quit, followed on June 5, 2017, by a summary process summons and complaint, which sought both possession and use and occupancy payments.A trial date was set for June 28.

On June 19, 2017, Branch timely filed his answer and brought a number of counterclaims.⁷He also requested discovery, and the trial date was continued.In November 2017, Fannie Mae moved for partial summary judgment on its claim for possession and on Branch’s counterclaims.⁸On March 21, 2018, the motion judge ruled in Fannie Mae’s favor on all issues, entering a judgment for possession and dismissing Branch’s counterclaims.Branch appealed.Shortly thereafter, Branch was also ordered to pay $1,800 per month to Fannie Mae for use and occupancy.Branch appealed from that order; that appeal took over four years to resolve.⁹See generallyBranch v. Federal Nat’l Mtge. Ass’n, 491 Mass. 1009, 1009-1011, 199 N.E.3d 857(2022).

On December 10, 2018, during the pendency of Branch’s appeals, Fannie Mae sold the subject property to Cardoso, transferring "all the estate, right, title interest, lien equity and claim whatsoever" to Cardoso via quitclaim deed.SeeG. L. c. 183, § 17(listing applicable quitclaim covenants).Cardoso filed a summary process complaint against Branch and successfully moved to intervene in the existing Appeals Court case.

In September 2020, a panel of the Appeals Court held that the dispute over use and occupancy payments owed to Fannie Mae was moot, as Fannie Mae no longer sought those payments after selling the property to Cardoso.The panel did, however, remand the case to the Housing Court and "grant Cardoso leave to file, and the Housing Court leave to consider, a motion to intervene or to substitute Cardoso as the plaintiff in the summary process action."

Cardoso thereafter filed such a motion on November 3, 2020.Branch opposed.The motion judge concluded that Cardoso "should be allowed to intervene as a party as of right," and "be joined with [Fannie Mae]."The successful intervention and joinder prompted Cardoso to voluntarily dismiss his own, seemingly duplicative, summary process action.¹⁰He also obtained an order for use and occupancy payments from Branch, and successfully defended that order on appeal.¹¹

On April 14, 2023, over five years after initial entry of the judgment for possession, oral argument on Branch’s appeal from that judgment was held before a panel of the Appeals Court.At argument, the panel sua sponte raised the question of mootness, and indeed, in its unpublished decision of May 23, 2023, the panel would rely on mootness to dispose of most of the issues before it.The panel first vacated the judgment for possession, reasoning that it was moot "because [Fannie Mae] no longer has any possessory interest in the property."This decision, in the panel’s view, obviated the need to consider Branch’s foreclosure-related defenses and rendered moot the appeal from Cardoso’s motion to intervene.The panel did, however, uphold dismissal of Branch’s counterclaims.Cardoso’s motion for reconsideration of the determinations of mootness was summarily denied.We subsequently granted Cardoso’s application for further appellate review.

[1–5]Discussion.1.Mootness.We begin with the threshold question of mootness.The principle that courts do not decide moot cases"lies at the foundation of the common law."Sullivan v. Secretary of the Commonwealth, 233 Mass. 543, 546, 124 N.E. 422(1919).A case becomes moot when "no actual controversy remains, or the party claiming to be aggrieved ‘ceases to have a personal stake in its outcome.’ "DiMasi v. Secretary of the Commonwealth, 491 Mass. 186, 190, 199 N.E.3d 1274(2023), quotingSeney v. Morhy, 467 Mass. 58, 61, 3 N.E.3d 577(2014).In such cases, "a ruling … would offer no additional relief and would not alter [any]party’s legal position."Lynn v. Murrell, 489 Mass. 579, 583, 185 N.E.3d 912(2022).We hew to this rule for several important reasons: "because (a) only factually concrete disputes are capable of resolution through the adversary process, (b) it is feared that the parties will not adequately represent positions in which they no longer have a personal stake, (c) the adjudication of hypothetical disputes would encroach on the legislative domain, and (d) judicial economy requires that insubstantial controversies not be litigated."¹²Wolf v. Commissioner of Pub. Welfare, 367 Mass. 293, 298, 327 N.E.2d 885(1975).

[6] Scrutinizing the case before us, we conclude that the appeal is not moot.There remains an actual controversy, and a party claiming to be aggrieved retains a personal stake in the outcome of this case.In the Housing Court and on appeal, Branch’s principal challenge to the claim for possession and to the use and occupancy payments has been attacking the validity of the foreclosure and, therefore, the validity of Fannie Mae’s acquisition of a unified title to the property.SeeEaton v. Federal Nat’l Mtge. Ass’n, 462 Mass. 569, 575-576, 969 N.E.2d 1118(2012)(foreclosure extinguishes mortgagor’s equitable right of redemption, reuniting equitable and legal titles in mortgagee).This necessarily implicates Cardoso’s own right to possession.It is undisputed that Fannie Mae transferred its entire interest in the property -- including any possessory interest -- to Cardoso after foreclosure, and Cardoso has been allowed to intervene as a party as a matter of right and joined as a party with Fannie Mae.Cardoso’s rights to possession and use and occupancy are thus derivative of Fannie Mae’s, and although Fannie Mae’s stake in the case has diminished, Cardoso’s has not.SeeMatter of a R.I. Select Comm’n Subpoena, 415 Mass. 890, 894, 616 N.E.2d 458(1993)(question of defunct commission’s right to certain documents was not moot where...