HAMMOND v. JPMC SPECIALTY MORTGAGE LLC.
| Decision Date | 15 April 2011 |
| Docket Number | CIVIL ACTION NO. 10-11121-DPW |
| Parties | DEIRDRE HAMMOND, Plaintiff, v. JPMC SPECIALTY MORTGAGE LLC, f/k/a WM SPECIALTY MORTGAGE LLC, Defendant. |
| Court | U.S. District Court — District of Massachusetts |
OPINION TEXT STARTS HERE
Plaintiff Deirdre Hammonds1 defaulted on a mortgage secured by her residential property, and the creditor-defendant JPMC Specialty Mortgage LLC ("JPMC"), formerly known as WM Specialty Mortgage LLC ("WM"),2 initiated foreclosure proceedings in November 2006. An auction to sell the property under the terms of the mortgage's power of sale took place on November 20, 2008. Hammonds then filed this action over a year later challenging the validity of that sale and seeking relief from the state court judgment of foreclosure and damages in the amount outstanding on her mortgage at the time of sale. JPMC has moved for summary judgment, and, after considering the record carefully, I will grant the motion.
In 1999, Hammonds purchased her home, 24 Pennacook Avenue, Oak Bluffs, Massachusetts, (the "property") for $300,000. In 2006, Hammonds sought to refinance her outstanding mortgage on the home in order to meet family expenses. Hammonds applied for and was granted a refinanced mortgage from Ameriquest Mortgage Company ("Ameriquest") in the amount of $575,000. During the application process, Hammonds falsely represented her income, although she claims that Ameriquest was aware of the falsity and encouraged her to inflate her income on the application. Prior to closing on the refinanced mortgage, Hammonds faxed Ameriquest a statement listing her monthly income as $12,000 and, at closing, signed a document entitled "Borrower's Certification of Income" confirming that she earned $12,000 per month.3 The mortgage documents were executed and the mortgage duly recorded on February 25, 2006. After the prior mortgage and more than $40,000 in outstanding tax liens had been satisfied, Hammonds received $41,370.67 as a cash payout.
Hammonds ceased payments on the mortgage after June 2006. Failure to make payments constituted default under the terms of the mortgage. Consequently, JPMC, as holder of the mortgage, initiated foreclosure proceedings on November 1, 2006. Ameriquest subsequently assigned the mortgage to JPMC on December 14, 2006, and the assignment was properly recorded on December 27, 2006.
On January 24, 2007, the Massachusetts Land Court issued a judgment authorizing JPMC to foreclose on the property by power of sale and by entry. A foreclosure sale was scheduled for 12:00 p.m. on November 20, 2008, and the parties agree that this sale was properly noticed.4 JPMC had contracted with Bay State Auction Company ("Bay State") to conduct the auction sale, and Bay State, in turn, hired Stewart Kusinitz, a licensed auctioneer, to run the auction on November 20, 2008. In paperwork provided to Kusinitz by Bay State, JPMC's counsel indicated that Corinne DeLangavant would be acting as the bank representative contact, listed $22,886.47 in federal tax liens, and included the foreclosure notice, a blank memorandum of sale, and a blank certificate of entry. On the morning of November 20, 2008, JPMC faxed Kusinitz bid instructions permitting Kusinitz to bid on JPMC's behalf in an amount up to $730,911.13 if a third party bid on the property or in the amount of $734,672.73 as the bank buyback if no other bids were forthcoming.
Hammonds was present at the property at 12:00 p.m. on November 20, 2008, when the foreclosure sale was scheduled to begin. In deposition testimony, she notes that also present at that time were Kusinitz, DeLangavant, an unidentified male, and an unidentified female. Kusinitz recalls that DeLangavant and an acquaintance-witness, Andrew Cohen, were present at 12:00 p.m. Cohen, the unidentified male, had accompanied Kusinitz to act as witness to the sale and entry. The unknown woman had driven up to the property around noon, and, according to Hammonds, 5 Although Hammonds states in her affidavit and Opposition Memorandum that she saw other individuals present at the property at 12:00 p.m., she concedes, in her deposition that she was referring in that statement only to the woman in the car and Cohen.
Kusinitz did not open auction at 12:00 p.m., but instead continued it to 2:30 p.m. that same day. JPMC maintains that Kusinitz continued the sale at the request of Hammonds, who had asked for time to confer with her attorney. Hammonds denies that she asked Kusinitz to postpone the sale.6 She also maintains that DeLangavant left the property before the 2:30 p.m. sale, although Kusinitz maintains that she was present. Via its faxed bid, JPMC was the only bidder at the auction and, consequently, Kusinitz contends that he accepted JPMC's previously made bid. Kusinitz then signed the memorandum of sale, recording the full buyback bid as the purchase price. DeLangavant did not sign the memorandum of sale as purchaser or as seller, and no amount of deposit was listed in the memorandum of sale. The terms listed in the public notice waived the deposit requirement for the mortgagee.
JPMC also performed a foreclosure by entry on November 20, 2008. Kusinitz and Cohen witnessed the peaceable entry by DeLangavant and signed a Certificate of Entry attesting to it. The Certificate of Entry was recorded with the foreclosure deed.
Although the sale took place on November 20, 2008, the foreclosure deed was not recorded until March 12, 2009, when JPMC filed a notice of foreclosure, foreclosure deed, and affidavit of sale, all dated March 9, 2009. The affidavit of sale, signed by Cathleen Cooley of JPMC, states that the property was sold by and to JPMC at a foreclosure auction conducted at 12:00 p.m. on November 20, 2008.
On February 4, 2010, Hammonds filed a lawsuit in Massachusetts Superior Court against Ameriquest, JPMC, and Kusinitz. In a seven-count amended verified complaint, Hammonds alleges violations of 209 C.M.R. § 18.16(2), Mass. Gen. Laws ch. 93A, and Mass. Gen. Laws ch. 183C, § 4, by Ameriquest and JPMC; violations of Mass. Gen. Laws ch. 244, §§ 12 and 15, by JPMC; and intentional and negligent misrepresentation by all defendants. She also seeks damages equal to $734,672.73 (the amount owed on her mortgage at the time of sale and the purchase price listed on the Memorandum of Sale) from all three defendants and relief from the final judgment of foreclosure due to fraud, misrepresentation, or other misconduct.
The case was removed to this court on July 1, 2010, and Ameriquest and Kusinitz were subsequently dismissed from the suit, as were the counts alleging violations of 209 C.M.R. § 18.16(2), Mass. Gen. Laws ch. 93A, and Mass. Gen. Laws ch. 183C, § 4. JPMC filed a motion for summary judgment as to the four remaining counts against it.
A movant is entitled to summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."7Fed. Rule Civ. P. 56(a). If the moving party meets this burden, "the opposing party can then defeat the motion by showing that there is a genuine issue of material fact." Rivera-Colon v. Mills, — F.3d —, 2011 WL 504049, at *2 (1st Cir. Feb. 15, 2011). An issue is genuine "if 'a reasonable jury could resolve the point in favor of the nonmoving party.'" Tropigas de P.R., Inc. v. Certain Underwriters at Lloyd's of London, — F.3d —, 2011 WL 834072, at *2 (1st Cir. Mar. 11, 2011) (quoting McCarthy v. Nw. Airlines, Inc. , 56 F.3d 313, 315 (1st Cir. 1995)). A fact is material if "its existence or nonexistence has the potential to change the outcome of the suit." Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st Cir. 2010).
"In evaluating whether there is a genuine issue of material fact, the court examines the record — pleadings, affidavits, depositions, admissions, and answers to interrogatories — viewing the evidence in the light most favorable to the party opposing summary judgment." Id. (citations omitted). However, I may "afford no evidentiary weight to 'conclusory allegations, empty rhetoric, unsupported speculation, or evidence which, in the aggregate, is less than significantly probative.'" Tropigas de P.R., Inc., 2011 WL 834072, at *2 (quoting Rogan v. City of Boston, 267 F.3d 24, 27 (1st Cir. 2001)). Thus, in order to meet its burden, the nonmoving party "must point to competent evidence and specific facts." Tropigas de P.R., Inc., 2011 WL 834072, at *3 (citation omitted). Such a "burden cannot be satisfied with a declaration that 'without proper explanation' contradicts his/her prior deposition testimony." Meuser v. Fed. Express Corp. , 564 F.3d 507, 515 (1st Cir. 2009) (citation omitted).
The four surviving counts essentially attack the validity of the foreclosure sale. Hammonds contends that the sale did not take place, and, therefore, JPMC did not purchase the property and could not transfer title. She further argues that JPMC misrepresented itself as the valid purchaser and that she was damaged by that misrepresentation because she lost her home. It bears emphasizing at the outset, however, that strictly speaking any sale would not result in the loss of her home, but rather the loss of her right to redeem her mortgage. Williams v. Resolution GGF OY, 630 N.E.2d 581, 585 (Mass. 1994) (citation omitted) ("The execution of the memorandum of sale terminate[s] the plaintiff's equity of redemption."). Consequently, invalidation of the sale — which is what Hammonds's suit ultimately seeks — would result in the reinstatement of that right, not in any money damages or satisfaction of her defaulted mortgage.8 JPMC would retain the right to foreclose by another sale pursuant to the Land Court judgment of January 24, 2007.
JPMC maintains that...
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