Farmer v. Federal Natioanl Mortgage Association
| Decision Date | 09 May 2013 |
| Docket Number | 2012-3736B. |
| Parties | Dennis FARMER, Plaintiff v. FEDERAL NATIONAL MORTGAGE ASSOCIATION, Countrywide Home Loans, Inc ., Mortgage Electronic Registration Systems, Inc., Bank of America, N .A., BAC Home Loans Servicing, LP and Harmon Law Offices P.C., Defendants. |
| Court | Massachusetts Superior Court |
Defendant Harmon and Bank Defendants [1] (collectively " Defendants") each move to dismiss plaintiff Dennis Farmer's amended complaint. [2] Farmer moves for partial summary judgment on Count IV: Trespass, Count VI: Action to Quiet or Establish Title to Land, and Count VII: Declaratory Judgment.[3] For the reasons stated herein Defendants' Motions to Dismiss, in part treated as a Rule 56 Motion, [4] are DENIED and Farmer's Motion for Partial Summary Judgment is ALLOWED IN PART and DENIED IN PART.
Defendants' Motions to Dismiss require that the issue of res judicata be addressed. Farmer's Motion for Partial Summary Judgment requires that this court address, among other issues, the assignments of Farmer's mortgage as well as Defendants' required compliance with applicable statutes concerning notice of foreclosure.
Farmer claims that the foreclosure process was improper, that the resulting sale was void, and that his chain of title has been clouded. Defendants argue that the principles of res judicata prevent Farmer from now asserting these claims.[6] After consideration, this court concludes that Defendants are incorrect.
FNMA, and those in privity with it, [7] are judicially estopped from arguing that res judicata bars Farmer's instant claims. " ‘ Judicial estoppel is an equitable doctrine that precludes a party from asserting a position in one legal proceeding that is contrary to a position it had previously asserted in another proceeding.’ " Otis v. Arbella Mut. Ins. Co., 443 Mass. 634, 639-640 (2005), quoting Blanchette v. School Comm. of Westwood, 427 Mass. 176, 184 (1998). " ‘ The purpose of the doctrine is to prevent the manipulation of the judicial process by litigants.’ " Otis, 443 Mass. at 640, quoting Canavan's Case, 432 Mass. 304, 308 (2000). " Application of the equitable principle of judicial estoppel to a particular case is a matter of discretion." Id., citing New Hampshire v. Maine, 532 U.S. 742, 750 (2001).
In support of its Motion for Summary Judgment in the Housing Court, FNMA dedicated an entire section of its memorandum to arguing that Farmer was precluded from bringing his counterclaims, including his wrongful foreclosure and G.L. c. 93A counterclaims, in Housing Court.[8] Plaintiff's Supp'l Aff. in Supp. of Motion for Summary Judgment, Exhibit B, pp. 7-8. FNMA stressed that because Farmer failed to meet any of the statutory criteria set forth in G.L. c. 239, § 8A, Farmer could not avail himself of the right to raise any of his affirmative defenses or counterclaims. Id., Exhibit B, p. 8. While it is true that Farmer was neither a tenant nor a lease-holder under G.L. c. 239, § 8a, Bank of New York explicitly authorized the Housing Court to " consider the former homeowner's defense that the plaintiff's title is invalid because the foreclosure was not conducted strictly according to the statute." 460 Mass. at 332. FNMA was certainly aware of this proposition as it cited to Bank of New York numerous times throughout its Motion for Summary Judgment filed in the Housing Court. See Farmer's Supp'l Aff. in Supp. of Motion for Summary Judgment, Exhibit B. However, FNMA never sought to address the merits of Farmer's counterclaims in the Housing Court, and instead, as noted above, argued that all of Farmer's counterclaims, including his wrongful foreclosure counterclaims, must fail and should not even be addressed. See Id., Exhibit B, pp. 7-8 (). In turn, the Housing Court's Memorandum of Decision stated that Farmer " cannot assert an affirmative defense to possession or counterclaims in this summary process action pursuant to G.L. c. 239, § 8a, ¶ 1" and relied on the cases cited by FNMA in its Motion. Id., Exhibit C, p. 4. The Housing Court then dismissed all of Farmer's counterclaims without prejudice. Id., Exhibit C, p. 5.
FNMA now urges this court to rule that Farmer is barred from asserting his title-related wrongful foreclosure claims on the theory that those claims were already litigated in the Housing Court. See Banks' Supp'l Mem. of Law in Support of Motion to Dismiss, p. 1. FNMA, and those in privity with it, are estopped from asserting that res judicata bars Farmer's claims after FNMA erroneously argued that the Housing Court could not adjudicate those claims in the first place, and after the Housing Court accepted FNMA's proposition and dismissed Farmer's wrongful foreclosure counterclaims without prejudice. See Otis, 443 Mass. at 640-641 (). This court will not allow FNMA, and those in privity with it, to manipulate the judicial process in this way and judicially estops FNMA, and those in privity with it, from asserting res judicata.
Notwithstanding these waiver and judicial estoppel bases, this court goes on to address the merits of Defendants' res judicata argument. It is important to clarify that the term " res judicata " encompasses both claim preclusion and issue preclusion. Kobrin v. Board of Registration in Medicine, 444 Mass. 837, 843 (2005), citing Heacock v. Heacock, 402 Mass. 21, 23, n. 2 (1988). The defendant, Harmon, does not distinguish between claim preclusion and issue preclusion and only cites to the broad principles of res judicata. Although Bank Defendants assert that they can establish each element of both issue and claim preclusion, the only principle applicable here is issue preclusion, and therefore, this court need not consider Bank Defendants' claim preclusion argument.[9]
" The doctrine of issue preclusion prevents relitigation of an issue determined in an earlier action where the same issue arises in a later action, based on a different claim, between the same parties or their privies." Heacock, 402 Mass. at 23, n. 2. Before precluding a party from relitigating an issue, a court must determine that (1) there was a final judgment on the merits in the prior adjudication; (2) the issue in the prior adjudication was identical to the issue in the current adjudication; and (3) the party against whom preclusion is asserted was a party (or in privity with a party) to the prior adjudication. Kobrin, 444 Mass. at 843. " ‘ Additionally, the issue decided in the prior adjudication must have been essential to the earlier judgment.’ " Id. at 844, quoting Tuper v. North Adams Ambulance Serv., Inc., 428 Mass. 132, 134-135 (1998). " Once the initial criteria for the application of the doctrine of collateral estoppel are satisfied, the court must consider whether such application would be fair in a particular case." In Re Brauer, 452 Mass. 56, 70 (2008). As the party moving for dismissal on res judicata grounds, Defendants bear the burden of establishing these elements. Longval v. Commissioner of Correction, 448 Mass. 412, 416-417 (2007). This court will address each of these elements in turn.
The Housing Court's Order for Judgment reads as follows: See Bank Defs' Supp'l Mem. of Law in Supp. of Motion to Dismiss, Exhibit 1, p. 5.
A dismissal " without prejudice" is not considered a decision on the merits for res judicata purposes. Ogens v. Northern Indus. Chem. Co., 304 Mass. 401, 402-403 (1939); Chittenden Trust Co. v. Levitt, 26 Mass.App.Ct. 208, 212 (1988); Citibank v. Garabedian, 2010 Mass.App.Div. 89, 90 (2010). A dismissal without prejudice signifies that the court has not reached the substantive issues involved. Citibank, 2010 Mass.App.Div. at 90, citing Wright Mack Corp. v. Seaman-And-Wall Corp., 364 Mass. 683, 694 (1974). " The very purpose of designating a dismissal as one without prejudice is ‘ to prevent such dismissal from being a bar to further litigation, not, however, by limiting the effect of an actual adjudication on the merits, but rather by showing that no such adjudication was made.’ " Id., quoting Ogens, 304 Mass. at 402-403.
Defendants' argument fails to acknowledge the crucial fact that the Housing Court dismissed all of Farmer's counterclaims without prejudice, including his title-based wrongful foreclosure and G.L. c. 93A claims. Bank Defs' Supp. Mem of Law, Exhibit 1, p. 5, n. 3. The Housing Court did not render an adjudication on the merits of Farmer's asserted counterclaims and entered a judgment only as to possession in favor of FNMA. See Joyce v. Morgan, 39 Mass.App.Ct. 465, 470 (1995) (). By dismissing Farmer's counterclaims without prejudice, the Housing Court left the door open for him to raise those claims in a subsequent proceeding. See Pettinella v. Worcester, 355 Mass....
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