Haskins v. Deutsche Bank Nat'l Trust Co.

• Decision Date: 10 November 2014
• Docket Number: No. 13–P–506.,13–P–506.
• Citation: 19 N.E.3d 455,86 Mass.App.Ct. 632
• Parties: John E. HASKINS v. DEUTSCHE BANK NATIONAL TRUST COMPANY, trustee, & others.
• Court: Appeals Court of Massachusetts

86 Mass.App.Ct. 632

19 N.E.3d 455

John E. HASKINS

v.DEUTSCHE BANK NATIONAL TRUST COMPANY, trustee¹ & others.²

No. 13–P–506.

Appeals Court of Massachusetts, Worcester.

Argued Sept. 3, 2014.

Decided Nov. 10, 2014.

Adam T. Sherwin, Somerville, for the plaintiff.

Christopher A. Cornetta, Boston, for the defendants.

Present: GREEN, GRAHAM, & KATZMANN, JJ.

Opinion

GREEN, J.

We are called upon to address a question raised but not resolved in U.S. Bank Natl. Assn. v. Schumacher, 467 Mass. 421, 5 N.E.3d 882 (2014) ( Schumacher ): whether a notice of a mortgagor's right to cure a mortgage loan default, sent pursuant to G.L. c. 244, § 35A, is deficient if it is sent by the mortgage servicing

agent (rather than the record holder of the mortgage), or if it identifies the servicing agent as the mortgage holder. We conclude that the notice in the present case complied with the statute, and affirm the judgment of the Superior Court dismissing the plaintiff's complaint.³

Background. The plaintiff, John E. Haskins, purchased his residence at 98 Southville Road, Southborough, in 2002. In 2004, incident to a refinancing transaction, he granted a mortgage to defendant Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for First Magnus Financial Corporation (First Magnus).⁴ Haskins thereafter defaulted on his loan payment obligations and, by letter dated May 4, 2010, IndyMac Mortgage Services, the mortgage servicing division of defendant OneWest Bank, FSB (IndyMac), informed Haskins that he was in default, but that he had the right to cure the default within ninety days. The letter identified “IndyMac Mortgage Services, a Division of OneWest Bank” as the mortgage holder.⁵ In fact, record title to the mortgage was held at the time by MERS, and the equitable or beneficial ownership of the loan secured by the mortgage was held by defendant Deutsche Bank National Trust Company (Deutsche Bank), as trustee of the Residential Asset Securitization Trust 2004–A2, Mortgage Pass–Through Certificates, Series 2004–B (securitization trust). By letter dated December 8, 2010, IndyMac again advised Haskins of the default, and of his right to cure the default (this time within 150 days); like the May 4 letter, the December 8 letter identified “IndyMac Mortgage Services, a Division of OneWest Bank” as the mortgage holder. Haskins did not cure the default, and Deutsche Bank thereafter obtained a judgment from the Land Court, pursuant to the Servicemembers Civil Relief Act, allowing it to foreclose the mortgage pursuant to the statutory power of sale. Prior to foreclosure, however, Haskins commenced the present action in Superior Court, seeking declaratory and injunctive relief to prevent the foreclosure, as well as money damages. A judge allowed the defendants' motion to dismiss the complaint for failure to state a claim upon which relief may be granted. The case comes to us on the plaintiff's appeal from

the resulting judgment of dismissal.

Discussion. 1. Section 35A notice. In Schumacher, the Supreme Judicial Court considered whether alleged deficiencies in notice given to a defaulted borrower pursuant to G.L. c. 244, § 35A, furnished a basis to challenge the title acquired pursuant to a subsequent extrajudicial foreclosure sale. 467 Mass. at 422, 5 N.E.3d 882. The court concluded that the notice of a borrower's right to cure a default, required under § 35A, is not a part of the foreclosure process, but instead “is designed to give a mortgagor a fair opportunity to cure a default before the debt is accelerated and before the foreclosure process is commenced through invocation of the power of sale.” Id. at 431, 5 N.E.3d 882. Accordingly, “G.L. c. 244, § 35A, is not one of the statutes ‘relating to the foreclosure of mortgages by the exercise of a power of sale,’ ” ibid., quoting from G.L. c. 183, § 21, and a deficiency in the notice sent pursuant to § 35A does not furnish a basis to challenge the validity of the foreclosure. See id. at 429–430, 5 N.E.3d 882. Instead, the appropriate avenue for a borrower to raise a challenge to the form of notice given under § 35A is by means of an equitable action, prior to foreclosure, seeking to enjoin the foreclosure. Id. at 422 n. 4, 5 N.E.3d 882.

By virtue of its conclusion, the court did not reach the second of two questions on which it solicited amicus briefs:⁶ whether a notice sent pursuant to § 35A that lists the name and address of the mortgage servicer, but incorrectly identifies it as the current holder of the mortgage, satisfies the statutory requirement that the notice inform the mortgagor of, inter alia, “the name and address of the mortgagee, or anyone holding thereunder.” G.L. c. 244, § 35A(c )(4), inserted by St. 2007, c. 206, § 11.⁷ The present appeal requires us to reach that question.

General Laws c. 244, § 35A, gives a mortgagor of real property in the Commonwealth a right to cure a payment default before foreclosure proceedings may be commenced.⁸ In its present form, the statute provides that “[t]he mortgagee, or anyone holding

thereunder, shall not accelerate maturity of the unpaid balance of [a residential mortgage or note secured thereby] or otherwise enforce the mortgage because of a default consisting of the mortgagor's failure to make any [payment required by such residential mortgage or note secured thereby] by any method authorized by this chapter or any other law until at least 150 days after the date a written notice is given by the mortgagee to the mortgagor.” G.L. c. 244, § 35A(g ), inserted by St. 2010, c. 258, § 7. Subsection (h ) of the statute provides that the required notice “shall inform” the mortgagor of various matters, as set out in the margin.⁹

At the time of the December 8 notice, MERS held record title

to the mortgage. Accordingly, the notice was inaccurate in its identification of IndyMac as the current mortgage holder, if and to the extent an entity's status as mortgagee under the statute is determined by record title.¹⁰ The plaintiff contends that the disparity requires a conclusion that the notice is ineffective, because “we adhere to the familiar rule that ‘one who sells under a power [of sale] must follow strictly its terms. If he fails to do so there is no valid execution of the power, and the sale is wholly void.’ ” U.S. Bank Natl. Assn. v. Ibanez, 458 Mass. 637, 646, 941 N.E.2d 40 (2011), quoting from Moore v. Dick, 187 Mass. 207, 211, 72 N.E. 967 (1905). In response, the defendants contend that a defect in a § 35A notice will render it ineffective only if the noncompliance would render a subsequent foreclosure “so fundamentally unfair that [the homeowner] is entitled to affirmative equitable relief ... ‘for reasons other

than failure to comply strictly with the power of sale provided in the mortgage.’ ” Schumacher, 467 Mass. at 433, 5 N.E.3d 882 (Gants, J., concurring), quoting from Bank of America, N.A. v. Rosa, 466 Mass. 613, 624, 999 N.E.2d 1080 (2013). See Bank of N.Y. Mellon Corp. v. Wain, 85 Mass.App.Ct. 498, 501–502, 11 N.E.3d 633 (2014). In our view, neither position is correct.

As the Supreme Judicial Court made clear in Schumacher, § 35A “is not one of the statutes ‘relating to the foreclosure of mortgages by the exercise of a power of sale.’ ” 467 Mass. at 431, 5 N.E.3d 882, quoting from G.L. c. 183, § 21. Accordingly, the rule of strict adherence observed in Ibanez and invoked by the plaintiff is inapposite. However, the circumstances here are unlike those in Schumacher in a particularly important respect; indeed, the present case is in precisely the posture recognized by the court in Schumacher as appropriate to challenge the validity of a § 35A notice in order to prevent a foreclosure sale from going forward. See Schumacher, supra at 422 n. 4, 5 N.E.3d 882. Accordingly, the standard of “fundamental unfairness” furnishes too narrow a lens through which to view potential grounds for relief based on a defective notice.¹¹ We accordingly consider how the statutory requirements should be construed, using familiar principles of statutory construction.

“Our primary duty in interpreting a statute is ‘to effectuate the intent of the Legislature in enacting it.’ International Org. of Masters v. Woods Hole, Martha's Vineyard & Nantucket S.S. Auth., 392 Mass. 811, 813 [467 N.E.2d 1331] (1984). We begin with the language of the statute, as ‘the principal source of insight into legislative intent.’ Providence & Worcester R.R. v. Energy Facilities Siting Bd., 453 Mass. 135, 142 [899 N.E.2d 829] (2009), quoting New Bedford v. Energy Facilities Siting Council, 413 Mass. 482, 485 [597 N.E.2d 1032] (1992), S.C., 419 Mass. 1003 [644 N.E.2d 963] (1995). Where the words are ‘plain and unambiguous' in their meaning, we view them as ‘conclusive as to legislative intent.’ Sterilite Corp. v. Continental Cas. Co., 397 Mass. 837, 839 [494 N.E.2d 1008] (1986). Where the meaning of a statute is not plain from its language, we consider ‘the cause of its enactment, the mischief or imperfection to be remedied and the main object to be accomplished, to the end that the purpose of its framers may be effectuated.’ DiFiore v. American Airlines, Inc., 454 Mass. 486, 490 [910 N.E.2d 889] (2009), quoting Industrial Fin. Corp. v. State Tax Comm'r [Commn.], 367 Mass. 360, 364 [326 N.E.2d 1] (1975). See Oxford v. Oxford Water Co., 391 Mass. 581, 588 [463 N.E.2d 330] (1984), quoting Commonwealth v. Welosky, 276 Mass. 398, 401–402 [177 N.E. 656] (1931), cert. denied, 284 U.S. 684 [52 S.Ct. 201, 76 L.Ed. 578] (1932) (‘Statutes are to be interpreted ... in connection with their development, their progression through the legislative body, the history of the times ...’). ‘Where possible, we construe the various provisions of a statute in harmony with one another, recognizing that the Legislature did not intend internal contradiction.’ DiFiore v. American Airlines, Inc., supra at 491 .”

Water Dept. of Fairhaven v. Department of Envtl. Protection, 455 Mass. 740, 744–745, 920

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