Fed. Nat'l Mortgage Ass'n v. Nunez1

• Decision Date: 06 September 2011
• Docket Number: SJC–10881.
• Citation: 952 N.E.2d 923,460 Mass. 511
• Parties: FEDERAL NATIONAL MORTGAGE ASSOCIATIONv.Jose NUNEZ.1
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

460 Mass. 511

952 N.E.2d 923

FEDERAL NATIONAL MORTGAGE ASSOCIATION

v.Jose NUNEZ.1

SJC–10881.

Supreme Judicial Court of Massachusetts, Hampden.

Submitted May 2, 2011.Decided Sept. 6, 2011.

Thomas I. Elkind (Michael Thompson with him), Boston, for the plaintiff.Suzanne Garrow (Thomas P. Zito with her) for the defendant.David Grossman, Boston, Charlotte Alvarez, Elizabeth Benton, Ayalon Eliach, Caitlin Kekacs, Samuel Levine, Marielle Macher, Adrianna Rodriguez, Samuel Simon, & David Williams, for City Life/Vida Urbana, amicus curiae, submitted a brief.Judith Liben, Boston, for Massachusetts Law Reform Institute, amicus curiae, submitted a brief.Present: IRELAND, C.J., SPINA, CORDY, BOTSFORD, GANTS, & DUFFLY, JJ.GANTS, J.

On August 7, 2010, the Legislature enacted and made immediately effective St.2010, c. 258(act), which prohibits institutional lenders and certain financial institutions who own foreclosed properties from evicting residential tenants without just cause. The issue raised in this case is whether the act requires dismissal of a no-cause summary process case that was already pending when the act went into effect, or whether the application of the act to such a case is impermissibly retroactive. We conclude that the provision of the act that prevents eviction without just cause is properly applied to protect all residential tenants on foreclosed properties who, on or after August 7, 2010, had yet to vacate or be removed from the premises by an eviction, even where the owner purchased the property before the act's effective date and initiated a summary process action before that date. Because the tenant, Jose Nunez, was still residing on the property on August 7, 2010, and the owner, the Federal National Mortgage Association (Fannie Mae), was seeking to evict him without just cause, we conclude that the Housing Court judge properly applied the act to dismiss Fannie Mae's pending claim for possession.²

Factual background. Fannie Mae became the owner of the property located at 16–18 Hampden Street, unit 18, in the Indian Orchard section of Springfield at a foreclosure sale on November 30, 2009. On January 11, 2010, Fannie Mae served the tenants in the property with a ninety-day notice to quit, as required by the Federal Protecting Tenants at Foreclosure Act, Pub.L. 111–22, §§ 701–704, 123 Stat. 1660 (2009). The notice did not state any cause for termination of the tenancy, and Fannie Mae has conceded that it did not have just cause for the eviction. When Nunez did not leave after the ninety-day period, Fannie Mae served and filed a summary process complaint on May 10, 2010, seeking to obtain possession of the premises. Nunez timely filed an answer asserting various defenses and counterclaims, none of which is relevant to the issue raised on appeal.

On September 22, 2010, Nunez filed a motion to dismiss Fannie Mae's claim for possession on the grounds that, under the newly-enacted St.2010, c. 258, Fannie Mae could no longer evict Nunez without just cause. A judge in the Housing Court agreed and dismissed Fannie Mae's claim for possession, while transferring other claims and counterclaims to the civil docket. Fannie Mae petitioned for an interlocutory appeal to a single justice of the Appeals Court, who referred the case to a full panel of that court. We transferred the case to this court on our own motion.

Statutory background. Section 6 of the act added a new chapter to the General Laws, G.L. c. 186A, entitled, “Tenant Protections in Foreclosed Properties.” General Laws c. 186A, § 2, provides: “Notwithstanding any general or special law to the contrary, a foreclosing owner shall not evict a tenant except for just cause or unless a binding purchase and sale agreement has been executed for a bona fide third party to purchase the housing accommodation from a foreclosing owner.” The statute defines an “[e]viction” as “an action, without limitation, by a foreclosing owner of a housing accommodation which is intended to actually or constructively evict a tenant or otherwise compel a tenant to vacate such housing accommodation.” G.L. c. 186A, § 1.

A “[f]oreclosing owner” covered by the act is an entity that held the mortgage prior to foreclosure, or a financial institution that acquired the property after a foreclosure. G.L. c. 186A, § 1.³ A “[t]enant” is “a person or group of persons who at the time of foreclosure is entitled to occupy a housing accommodation pursuant to a bona fide lease or tenancy or a tenancy at will.” Id.⁴ The “[j]ust cause” that permits a foreclosing owner to evict a tenant includes nonpayment of rent; refusal to renew or extend a written lease that has expired; nuisance, damage or interference with quiet enjoyment caused by the tenant; the tenant's use of the property for illegal purposes; or the tenant's failure to permit reasonable access to the property for necessary repairs or improvements. Id.

The statute provides a fine of not less than $5,000 for “[a] foreclosing owner that evicts a tenant in violation of this chapter,” and specifies that “[e]ach such illegal eviction shall constitute a separate offense.” G.L. c. 186A, § 6. It is also a defense to an “eviction proceeding” that “the foreclosing owner attempted to evict a tenant in violation of this chapter.” Id.

Apart from the provisions prohibiting eviction without just cause, c. 186A seeks to ensure that tenants in foreclosed residential properties be informed of the name, address, and telephone number of the foreclosing owner and the building manager, and the address to which rent should be sent, no later than thirty days after the foreclosure. G.L. c. 186A, § 3. This notice must be provided in three ways: by posting in a prominent location in the building, by first class mail to each unit, and by sliding the information under the door of each unit. Id. A foreclosing owner “shall not evict a tenant” for just cause until the notice required by G.L. c. 186A, § 3, is posted and delivered, or until thirty days after the posting and delivery of the notice, depending on the nature of the action that constitutes just cause. G.L. c. 186A, § 4 ( a), ( b).⁵

The act included an emergency preamble that made it effective immediately on its enactment on August 7, 2010, rather than ninety days later as ordinarily required by art. 48 of the Amendments to the Massachusetts Constitution. This preamble declared the act an “emergency law” and provided that the “deferred operation of this act would tend to defeat its purpose, which is to protect forthwith the citizens and neighborhoods of the commonwealth.” St.2010, c. 258, Preamble.

The legislative history of the act demonstrates that the Legislature, in promulgating the act, including c. 186A, was attempting to address the problem that large numbers of residential tenants were being evicted and left homeless by institutional lenders and other entities that purchased foreclosed houses and apartment buildings. Legislators appeared to be concerned that empty, foreclosed homes and apartments were scarring neighborhoods and lowering property values, that large numbers of former tenants were now homeless, and that the increase in the homeless population was placing a greater burden on already strained State and local finances.⁶

Discussion. Fannie Mae argues that because it had already purchased the subject property at the foreclosure sale, served a notice to quit, waited for the statutory period to run, and filed a summary process complaint before c. 186A went into effect, the judge improperly gave retroactive effect to c. 186A when she concluded that the newly enacted statute barred Fannie Mae from evicting Nunez without just cause.

“Whether a statutory enactment applies prospectively or retrospectively is a question of legislative intent.” Fleet Nat'l Bank v. Commissioner of Revenue, 448 Mass. 441, 448, 862 N.E.2d 22 (2007). We have applied general rules of thumb in determining whether the Legislature intended prospective or retroactive application of a statute:

“As a general matter, ‘all statutes are prospective in their operation, unless an intention that they shall be retrospective appears by necessary implication from their words, context or objects when considered in the light of the subject matter, the pre-existing state of the law and the effect upon existent rights, remedies and obligations. Doubtless all legislation commonly looks to the future, not to the past, and has no retroactive effect unless such effect manifestly is required by unequivocal terms.’ ”

Id. at 448–449, 862 N.E.2d 22, quoting Hanscom v. Malden & Melrose Gas Light Co., 220 Mass. 1, 3, 107 N.E. 426 (1914). See Fernandez–Vargas v. Gonzales, 548 U.S. 30, 37, 126 S.Ct. 2422, 165 L.Ed.2d 323 (2006); Rosnov v. Molloy, 460 Mass. 474, 477, 952 N.E.2d 901 (2011).⁷ Thus, where the language of a statute and the ordinary tools of statutory interpretation do not resolve the statute's application to cases that are pending or to preenactment conduct or transactions, “we ask whether applying the statute to the person objecting would have a retroactive consequence in the disfavored sense of ‘affecting substantive rights, liabilities, or duties [on the basis of] conduct arising before [its] enactment’ ” and, if so, apply the presumption that such a retroactive effect was not intended by the Legislature. Fernandez–Vargas v. Gonzales, supra at 37–38, 126 S.Ct. 2422, quoting Landgraf v. USI Film Prods., 511 U.S. 244, 278, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994).

Fannie Mae presents two separate arguments that the judge applied the act retroactively without any plain legislative intent to permit such retroactive effect. First, Fannie Mae argues that, based on the definition of “eviction” in G.L. c. 186A, § 1, the “eviction” covered by the statute began when the summary process complaint was filed, and the judge's dismissal of its claim for possession effectively made unlawful an action—the filing of the summary...