HMC Assets, LLC v. Conley

• Decision Date: 22 August 2016
• Docket Number: CIVIL ACTION NO. 14-10321-MBB
• Court: U.S. District Court — District of Massachusetts
• Parties: HMC ASSETS, LLC SOLELY IN ITS CAPACITY AS SEPARATE TRUSTEE OF CAM MORTGAGE TRUST 2013-1, Plaintiff, v. MARION R. CONLEY, Defendant.

HMC ASSETS, LLC SOLELY IN ITS CAPACITY AS SEPARATETRUSTEE OF CAM MORTGAGE TRUST 2013-1, Plaintiff, v. MARION R. CONLEY, Defendant.

CIVIL ACTION NO. 14-10321-MBB

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

August 22, 2016

MEMORANDUM AND ORDER RE: MOTION TO STRIKE THE AFFIDAVIT OF RENEAU LONGORIA (DOCKET ENTRY # 80); MOTION TO STRIKE THE AFFIDAVIT OF GARY MCCARTHY (DOCKET ENTRY # 70); PLAINTIFF HMC ASSETS, LLC SOLELY IN ITS CAPACITY AS SEPARATE TRUSTEE OF CAM MORTGAGE TRUST 2013-1'S MOTION FOR SUMMARY JUDGMENT (DOCKET ENTRY # 59)

BOWLER, U.S.M.J.

Pending before this court is a motion for summary judgment filed by plaintiff HMC Assets, LLC Solely in its Capacity as Separate Trustee of CAM Mortgage Trust 2013-1 ("plaintiff," "Home Assets" or "HMC as CAM Mortgage") against defendant Marion R. Conley ("defendant"). (Docket Entry # 59). Defendant opposes the motion and separately moves to strike affidavits submitted in support of the motion for summary judgment. (Docket Entry ## 70 & 80). After conducting a hearing, this court took the motions (Docket Entry ## 59, 70, 80) under advisement.

PROCEDURAL BACKGROUND

On April 18, 2014, plaintiff filed an amended complaint that sets out the following counts: (1) breach of contract due to defendant's default on a loan and mortgage payments (Count I); (2) declaratory judgment that a March 7, 2014 foreclosure on the 23 Golf View Drive, Nantucket, Massachusetts property ("the property") was valid (Count II); (3) deficiency judgment for the total amount of defendant's debt owed to plaintiff (Count III);¹ (4) judgment of possession of the property (Count IV); (5) use and occupancy payments for the period of time after the foreclosure (Count V); and (6) writ of assistance from the court to enforce the judgment (Count VI). (Docket Entry # 11).

On October 2, 2015, plaintiff filed the summary judgment motion pursuant to Fed.R.Civ.P. 56 ("Rule 56") on all claims in the amended complaint and on defendant's counterclaim. (Docket Entry # 59). Plaintiff argues that it acquired title to the property pursuant to a lawful foreclosure sale and that the foreclosure was conducted in strict compliance with Massachusetts law thus giving plaintiff standing to foreclose. (Docket Entry # 60). The counterclaim set out seven counts. Counts two through seven respectively assert claims for breach of contract, breach of the implied covenant of good faith and fair dealing, negligence, unlawful foreclosure, an accountingand violation of Massachusetts General Laws chapter 93A ("chapter 93A"). Count One seeks relief under Massachusetts General Laws chapter 185, section 114. Defendant opposes the motion. (Docket Entry # 68).

Subsequently, after filing the opposition to the summary judgment motion (Docket Entry # 68), defendant filed two motions to strike affidavits submitted by plaintiff (Docket Entry ## 70, 80). Defendant argues that the affidavits submitted by plaintiff (Docket Entry ## 62, 63, 63-11 & 73) are inadmissible because they are not based on personal knowledge and therefore constitute inadmissible hearsay. (Docket Entry ## 70, 80).

Additionally, defendant asserts that exhibits submitted with the affidavits do not meet the business record exception under Fed.R.Evid. 803(6)(A) and that the affidavits made by plaintiff's counsel (Docket Entry ## 62, 73) do not satisfy the qualified witness requirement under Fed.R.Evid. 803(6). (Docket Entry ## 70, 80). Defendant requests that this court strike the challenged affidavits and all of their associated exhibits from the summary judgment record and award plaintiff attorney's fees and costs in bringing the motions. (Docket Entry ## 70, 80). Plaintiff opposes the motions to strike. (Docket Entry ## 71, 81).

I. Motions to Strike

"A motion to strike is the appropriate means of objecting to the use of affidavit evidence on a motion for summary judgment." See Facey v. Dickhaut, 91 F.Supp.3d 12, 19 (D.Mass. 2014). Furthermore, Rule 56(c)(4) states that "[a]n affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated." Fed.R.Civ.P. 56(c)(4). "If evidence cannot be presented in a form that would be admissible at trial, the court may not rely on it." Facey v. Dickhaut, 91 F.Supp.3d at 19.

To establish an acceptable affidavit, the affiant should testify that he was somehow personally involved in the events for which he is testifying and not base his testimony upon out-of-court statements made for the truth of the matter asserted. See Fed.R.Evid. 802; Perez v. Lorraine Enterprises, Inc., 769 F.3d 23, 31 (1^st Cir. 2014); Garside v. Osco Drug, Inc., 895 F.2d 46, 49-50 (1^st Cir. 1990). Personal knowledge is satisfied when the statements made by the affiant are based in fact "as opposed to conclusions assumptions, or surmise." Perez v. Volvo Car Corp., 247 F.3d 303, 316 (1^st Cir. 2001) (internal citation omitted).

Furthermore, Rule 56 "requires a scalpel not a butcher knife. The nisi prius court ordinarily must apply it to eachsegment of an affidavit, not to the affidavit as a whole." Perez v. Volvo Car Corp., 247 F.3d at 315. The First Circuit in Perez instructs that a selective approach should be taken when determining the admissibility of an affidavit, "intending to disregard those parts of it that are inadmissible and to credit the remaining portions." Id.

Because the motions to strike bear on the evidence that this court will consider in deciding plaintiff's motion for summary judgment, they shall be considered first. See Facey v. Dickhaut, 91 F.Supp.3d at 19. First, defendant has moved to strike the affidavit of Gary McCarthy ("McCarthy affidavit") as well as the exhibits attached to the affidavit. (Docket Entry # 70). Defendant argues that the affidavit was not based on the personal knowledge of the affiant, Gary McCarthy ("McCarthy"), and therefore constitutes inadmissible hearsay. (Docket Entry # 70). Defendant further contends that the McCarthy affidavit lacks statements of fact and instead contains baseless and conclusory assumptions that lack a proper foundation and do not support the possible knowledge of the affiant. (Docket Entry # 70).

As pointed out by plaintiff, McCarthy states that he made the affidavit on the basis of his personal knowledge. (Docket Entry # 63). Additionally, McCarthy, a member of Home Assets, attests in the affidavit that he personally reviewed theservicing records for the Nantucket property, which were prepared in the ordinary course of business of BSI Financial Services ("BSI"). (Docket Entry # 63). Plaintiff submits that the McCarthy affidavit and its attachments satisfy the foundational requirements for the business records exception to the hearsay rule and that the foreclosure affidavit of Manuel Villegas ("Villegas") satisfies the requirements of Massachusetts General Laws chapter 244 ("chapter 244"), section 15. (Docket Entry # 71).

McCarthy states in the affidavit that he has personal knowledge as a member of plaintiff's business. (Docket Entry # 63). Having worked for plaintiff and reviewed the actual records of defendant's mortgage loan, he avered that they were kept in the ordinary course of business of BSI, the servicer for Home Assets, and maintained by BSI or Home Assets employees. (Docket Entry # 63).

Defendant argues that McCarthy does not attest to what personal knowledge he has or how he was able to obtain such personal knowledge. According to defendant, McCarthy, a manager for Home Assets, did not have a foundation showing how BSI "created, kept or maintained" the records. (Docket Entry # 70).

"Evidence to prove personal knowledge may consist of the witness's own testimony." Fed.R.Evid. 602. McCarthy's own testimony, however, reflects that he was able to obtain personalknowledge over defendant's mortgage loan by explaining that he has been working for plaintiff for close to five years. (Docket Entry # 63). It is true that McCarthy, as an employee of Home Assets, is not qualified to testify about the ordinary course of BSI in maintaining the records of BSI. Villegas, however, is an employee of BSI and he submitted an affidavit that satisfies Rule 803(6) with respect to the records maintained by BSI including the note history and other business records of BSI regarding the "servicing and loan payment histories." (Docket Entry # 62-6). The court in Perdomo v. Federal Nat'l Mortg. Ass'n, 2013 WL 1123629, at *2 (N.D. Tex. Mar. 18, 2013), rejected a similar challenge to an affidavit of an employee of a servicer in light of her review of the loan records at issue. Further, notwithstanding defendant's argument to the contrary, the fact that McCarthy was an employee of Home Assets as opposed to BSI does not prevent him from being a qualified witness. See Phillips v. Mortg. Elec. Registration Systems, Inc., 2013 WL 1498956, *3 (N.D.Ala. April 5, 2013) (Rule 803(6) "does not require testimony by some witness associated with the predecessor entity when the records become part of the records of a successor entity").

The hearsay exception for business records allows admission into evidence of a record if it was made at or near the time by someone with knowledge, kept in the ordinary course of business,made within a regular business activity, and all of these requirements are shown by a qualified witness of the records, with no indication of trustworthiness made by the opponent. Fed.R.Evid. 803(6). In regards to the "qualified witness" requirement of the business record exception, "it is well established that the witness need not be the person who actually prepared the record. A qualified witness is simply one who can explain and be cross-examined concerning the manner in which the records are made and kept.² Wallace Motor Sales, Inc. v. American Motors Sales Corp., 780 F.2d 1049, 1061 (1^st Cir. 1985) (citations omitted); see also United States...