Wells Fargo Bank v. Sutton
| Docket Number | 22-P-516 |
| Decision Date | 23 August 2023 |
| Parties | WELLS FARGO BANK, N.A. v. JASON A. SUTTON |
| Court | Appeals Court of Massachusetts |
Heard: May 12, 2023.
Summary process. Complaint filed in the Western Division of the Housing Court Department on July 5, 2018. A motion for summary judgment was heard by Dina E. Fein, J., and the case was also heard by her.
Sean R. Higgins (Brandon R. Dillman also present) for the plaintiff.
Jason A Sutton, pro se, submitted a brief.
Present: Massing, Ditkoff, & Singh, JJ.
The homeowner, Jason A. Sutton, appeals from a judgment after a Housing Court bench trial awarding the plaintiff, Wells Fargo Bank, N.A. (bank), possession after a foreclosure.[1] Based on its interpretation of the Massachusetts COVID-19 pandemic eviction moratorium, the Housing Court clerk's office refused to docket the homeowner's timely notice of appeal. We conclude that the clerk's office should have accepted the homeowner's notice of appeal and docketed it, and that the timely notice of appeal grants us appellate jurisdiction despite the clerk's office's refusal to accept it.
Further concluding that the bank complied with Federal regulations governing loans guaranteed by the United States Department of Veterans Affairs (VA), see 38 C.F.R. § 36.4350(g)(1) (2018), by making reasonable efforts to arrange a face-to-face meeting with the homeowner before foreclosing on the property, we affirm.
In July 2011, the homeowner obtained a mortgage loan from Residential Mortgage Services, Inc., in the amount of $237,900 to finance the purchase of a home in East Longmeadow (the property). The loan was guaranteed by the VA. On October 9, 2015, the mortgage was assigned to the bank. Shortly thereafter, the homeowner defaulted. On February 15, 2016, the bank sent the homeowner a letter informing him of his right to cure the default and his right "to request a modification of [his] mortgage." Because the loan was guaranteed by the VA, the bank was required to comply with the VA's regulations requiring reasonable efforts to avoid foreclosure, pursuant to 38 C.F.R. § 36.4350, before it could initiate foreclosure proceedings.
On November 30, 2017, the homeowner called the bank to discuss loan assistance options. The homeowner explained that he had fallen behind on payments after the death of his wife. The bank representative informed the homeowner that the bank had "several options available" to help him cure the default, including a loan modification program, a repayment program, and a forbearance option. After the representative explained these options, the homeowner asked if he could pay $15,000 up front, "and then do the repayment option over the next couple months?" The representative responded, "that's definitely a possibility." The representative then asked the homeowner if he could pay $3,000 per month, to which the homeowner replied that "[he] could for the next couple months." The homeowner stated, "Maybe I can try for a loan modification first and then if I have to, do the payment."
The representative proceeded to ask the homeowner various questions regarding his financial circumstances. The representative asked about the homeowner's employment status and learned that, although the homeowner was currently unemployed, he "plan[ned] on getting back into the workplace" at the start of the new year. Next, the representative inquired into the homeowner's income sources, which included social security payments, VA disability payments, and a military annuity. In addition, the representative confirmed the homeowner's contact information, including his mailing address, telephone number, and e-mail address.
The representative informed the homeowner that he would be sending the homeowner an application form and requesting certain documents, which the homeowner would then need to return so that the bank could conduct a formal review and modify his loan. At the end of the call the representative stated, "Throughout this process, we will need to have communication rather frequently, so look out for my phone and if I don't reach you, I will leave you a voicemail, so go ahead and check for those." That same day, the bank sent the homeowner a letter informing him that a payment of $23,712.52 would be sufficient to reinstate his mortgage (even without modification). On December 1, 2017, the representative sent the homeowner a packet containing the loan modification application, a step-by-step guide "that takes [the applicant] through the process," and an income documentation guide. The cover letter was signed by the representative who had spoken with the homeowner on the telephone, and it contained his e-mail address, telephone number, and extension.
The homeowner testified that he mailed the completed application with four months of monthly bank statements to the bank. At trial, the judge orally stated that she credited this testimony, although no such finding appears in the judge's written findings. In any event, there is no record of the bank having actually received the documents.
On five different occasions over the course of December, the bank attempted to establish contact with the homeowner regarding his request for mortgage assistance. On December 6, 8, and 13, 2017, the bank[2] called the homeowner to inform him that it had not received the necessary documentation, each time leaving a voice message. On December 15, the representative who had spoken with the homeowner sent an e-mail to the homeowner, stating, "we have not received any of the required documents needed to begin reviewing your home assistance application." The e-mail listed three different methods by which the homeowner could submit the documents. Again, the representative provided his e-mail address, telephone number, and extension. On December 20, the bank left another voice message. On January 10, 2018, the bank representative sent an e-mail to the homeowner to inform him that it was "no longer moving forward with [his] request" for mortgage assistance. On February 15, 2018, the bank (through counsel) sent the homeowner a letter informing him of the bank's intent to foreclose by sale on or after March 19, 2018. On March 19, 2018, the bank foreclosed on the property. On April 23, 2018, the bank transferred the property to the VA in exchange for $218,983.20, presumably the amount required for the VA to fulfill its guarantor obligation, see 38 U.S.C. § 3732(c)(5)(A).
On June 19, 2018, the VA served the homeowner with a notice to quit. On June 28, 2018, the VA served the homeowner with a summary process summons and complaint. The defendant timely answered, and the VA moved for summary judgment on the issue of possession. After a hearing, a judge denied the motion. On July 17, 2019, the parties proceeded to trial.
At trial, the sole issue was whether the bank had complied with the VA regulations, and specifically whether the bank was required to conduct a face-to-face meeting with the homeowner before it foreclosed on the property. The evidence at the first day of trial established the bank's December 2017 and January 2018 attempts to contact the homeowner, but the bank employee who testified was unable to provide information concerning the November 30, 2017, telephone call. The homeowner testified that, during the call, he repeatedly asked to pay off the deficiency, but the bank insisted that he modify the loan instead.[3]
Faced with this inconsistency, the judge ordered "additional testimony and evidence as to the telephone conversation on November 30, 2017, the amount in default at that time, and the [homeowner's] ability to cure the default at that time." The VA then transferred the property back to the bank, and the bank was substituted as the plaintiff by agreement. At the second day of trial, the bank provided a recording of the November 30 telephone call, as well as several other documents. The homeowner, for his part, testified that he had at least $26,000 in cash at the time of the November 30 telephone call. On April 7, 2020, the judge awarded the bank judgment for possession because it had "established its prima facie case and satisfied the requirements of 38 C.F.R. § 36.4350 without the necessity of a face-to-face meeting." The judge found that, after the November 30 call, "[the bank] sent multiple communications indicating that it had not received the necessary information and would proceed to foreclosure" and that it had "attempted to establish contact through phone calls and emails, to which [the homeowner] did not respond." The judge determined that "[the bank's] attempts to continue communication with [the homeowner] after the initial contact on November 30, 2017 constituted a reasonable effort to establish a realistic and mutually satisfactory loss mitigation plan." Judgment entered the same day.
Nine days later, on Thursday, April 16, 2020, the homeowner filed a timely notice of appeal from the judgment. On April 20, 2020, the Legislature passed an emergency act creating an eviction moratorium in response to the COVID-19 pandemic. St. 2020, c. 65. The Housing Court's clerk's office then rejected the notice of appeal and refused to docket it. When the homeowner's counsel inquired about the reason for this, the clerk's office stated that it had been "instructed to reject all items regarding" summary process actions because of the eviction moratorium. The clerk-magistrate opined that, "[i]n my reading, nothing will prejudice your client from pursuing an appeal once the moratorium is lifted."
The eviction moratorium ended on Saturday, October 17, 2020. See Expiration of Moratorium on Evictions and Foreclosures,...
To continue reading
Request your trial