Wenzel v. Sand Canyon Corp.
| Citation | 841 F.Supp.2d 463 |
| Decision Date | 05 January 2012 |
| Docket Number | Civil Action No. 11–30211–JCB. |
| Parties | Kevin M. WENZEL, et al., Plaintiffs, v. SAND CANYON CORPORATION, et al., Defendants. |
| Court | U.S. District Court — District of Massachusetts |
OPINION TEXT STARTS HERE
Andreas A. Kralios, The Law Office of Andy Kralios, William J. Brown, Jr., Springfield, MA, for Plaintiffs.
Dudley C. Goar, Concord, MA, Jennifer S. Bunce, Maura K. McKelvey, Paula-Lee Chambers, Boston, MA, Paul S. Weinberg, Weinberg & Garber, P.C., Northampton, MA, for Defendants.
ORDER ON DEFENDANTS' MOTIONS TO DISMISS THE COMPLAINT
Plaintiffs Kevin M. Wenzel and Melissa S. Wenzel (the “Wenzels”) filed this action challenging defendant Wells Fargo's 1 right to foreclose on their home located at 106 Surrey Road, Springfield, Massachusetts (the “Property”). The Wenzels claim, among other things, that defendant Sand Canyon Corporation's assignment of a mortgage on the Property to Wells Fargo was invalid and, as a result, Wells Fargo had no authority to foreclose on the Property.
The Wenzels originally filed this action in Massachusetts Superior Court and obtained a preliminary injunction prohibiting Wells Fargo from denying the Wenzels possession of the Property, from evicting the Wenzels from the Property, and from exercising any efforts designed toward gaining possession of the Property. Subsequent to removal to this Court, the Wenzels amended their complaint to, inter alia, bring claims against The Commerce Insurance Company (“Commerce”). All defendants have moved to dismiss the First Amended Complaint. For the following reasons, the Court grants the defendants' motions and dismisses the First Amended Complaint.
I. PROCEDURAL BACKGROUNDA. Housing Court
After the Wenzels defaulted on their mortgage, Wells Fargo foreclosed on September27, 2010. (Ex. B to Wells Fargo Mem.).2 The Foreclosure Deed was registered at the Hampden County Registry District of the Land Court at Document Number 186862 on January 10, 2011. ( Id.). Wells Fargo subsequently initiated a summary process action against the Wenzels to evict them from the Property. (Ex. D to Wells Fargo Mem.).
On January 6, 2011, Kevin Wenzel 3 and Wells Fargo executed an Agreement for Judgment in the summary process action. (Docket No. 50). Pursuant to the Agreement for Judgment, the Wenzels were to vacate the Property by April 15, 2011. (Docket No. 50 at 7). In addition, the Agreement for Judgment provided that “Defendants [the Wenzels] are free to file a separate Superior Court action to challenge the Foreclosure Sale, & in turn file any other necessary motions in Housing Court, prior [sic] the agreed upon vacate date.” ( Id. at ¶ 3(a)).
On March 13, 2011, Kevin Wenzel filed a motion to extend the vacate date. (Housing Court Docket, Docket No. 54–1). On March 29, 2011, the Housing Court granted the motion to vacate the Property and extended the vacate date to June 30, 2011. ( Id.). The March 29, 2011 order noted that Wells Fargo failed to appear at the hearing on the motion. (Docket No. 54–4).
On July 15, 2011, the Housing Court entered judgment in favor of Wells Fargo and against the Wenzels. (Docket No. 54–1). The Court issued an execution on the judgment on the same date. ( Id.).
B. Superior Court
Prior to the issuance of the execution on the summary process action, on June 15, 2011, the Wenzels filed their original complaint in Massachusetts Superior Court. (State Court Record, Docket No. 13, at 2, 65–76). On July 18, 2011, the Wenzels filed a motion for a temporary restraining order, which was allowed the same day. (State Court Record at 2). On July 22, 2011, the Wenzels filed a motion for a preliminary injunction prohibiting Wells Fargo from evicting them from the Property. (State Court Record at 2, 46–47). Wells Fargo initially opposed the motion for a preliminary injunction but then withdrew its opposition. (State Court Record at 18–45). On July 27, 2011, the Superior Court issued a preliminary injunction enjoining Wells Fargo from:
1.) denying the Plaintiffs possession of 106 Surrey Road, Springfield, Massachusetts, 01118–1141 (the “premises”); and
2.) evicting the Plaintiffs from the premises or exercising any efforts designed toward gaining possession of the premises, including, but not limited to, enforcing, asserting, or relying upon any Executions On Judgment for Summary Process.
(the “Injunction”). (State Court Record at 16).
C. Federal Court
On August 22, 2011, Wells Fargo removed the action to this Court on the basis of diversity jurisdiction. (Docket No. 1). The parties consented to jurisdiction by a United States Magistrate Judge for all purposes on August 29, 2011. (Docket No. 9).
On September 2, 2011, Wells Fargo filed its first motion to dissolve the Injunction. (Docket No. 15). After a hearing and further briefing, the Court denied the motion to dissolve the Injunction on October 4, 2011. (Docket No. 31).
After the defendants moved to dismiss the action (Docket Nos. 10, 17), the Wenzels filed a First Amended Complaint on September 29, 2011. (Docket No. 26). While the original complaint named Option One Mortgage Corporation (“Option One”) and Sand Canyon Corporation (“Sand Canyon”) as defendants, the First Amended Complaint named Sand Canyon f/k/a Option One as a defendant. It also added factual allegations, amended the theories of liability against Wells Fargo and Sand Canyon, and added Commerce as a defendant. As a result of the filing of the First Amended Complaint, the defendants agreed that their original motions to dismiss were moot. ( See Electronic Order dated October 3, 2011).
On September 30, 2011, Wells Fargo filed a motion to sever the claims against Commerce. (Docket No. 29). The Wenzels filed their opposition to the motion to sever on October 14, 2011. (Docket No. 39).
On October 13, 2011, Wells Fargo and Sand Canyon moved to dismiss the First Amended Complaint. (Docket Nos. 35, 37).4 On October 18, 2011, Commerce moved to dismiss the First Amended Complaint. (Docket No. 41). The Wenzels filed their oppositions to Wells Fargo and Sand Canyon's motion to dismiss on October 27, 2011. (Docket Nos. 44–45). On October 31, 2011, they filed their opposition to Commerce's motion to dismiss. (Docket No. 47). The Court heard oral argument on November 2, 2011.
After the hearing on the motions, the Court allowed the parties the opportunity to submit supplemental briefings on several issues. ( See Electronic Order dated November 2, 2011). The Wenzels filed a supplemental brief on November 17, 2011. (Docket No. 52). On November 23, 2011, Wells Fargo and Sand Canyon filed their responses to the Wenzels' supplemental brief. (Docket Nos. 53 and 54).
On December 14, 2011, the Wenzels filed a Request for Judicial Notice, asking the Court to take judicial notice of certain documents in connection with the pending motions to dismiss. (Docket No. 63). At a hearing on December 15, 2011, the Court allowed the parties time to submit further briefing on the pending motions to dismiss, including the Wenzels' request that the Court take judicial notice of certain documents. ( See Electronic Clerk's Notes dated December 15, 2011). On December 27, 2011, the Wenzels filed a supplemental brief. (Docket No. 68). On December 30, 2011, defendant Wells Fargo responded to the Wenzels' supplemental brief and objected to the Wenzels' request for judicial notice. (Docket Nos. 70–71).
D. Condemnation Proceedings
On June 1, 2011, the Property was severely damaged as a result of a tornado that swept through Springfield, Massachusetts. ( See Order dated October 4, 2011, Docket No. 31, at 6). On July 7, 2011, the City of Springfield issued a condemnation order for the Property to the Wenzels. ( Id.). On August 10, 2011, the City of Springfield issued a condemnation order and order to vacate to Wells Fargo as the owner of record of the Property. ( Id.). The condemnation order was the subject of Wells Fargo's first motion to dissolve the Injunction.
On December 6, 2011, Wells Fargo filed a second emergency motion to dissolve the Injunction. (Docket No. 56). Wells Fargo reported that on December 2, 2011, the City of Springfield filed a petition to enforce its condemnation order. ( Id. at 2). The Court held a hearing on Wells Fargo's second motion to dissolve the Injunction on December 15, 2011.5
On December 15, 2011, the Housing Court held a hearing regarding the City of Springfield's petition to enforce the condemnation order. The Housing Court ordered the Wenzels to vacate the Property by midnight on December 15, 2011; that Wells Fargo pay for hotel accommodations and provide a food stipend to the Wenzels; and set a further hearing for December 27, 2011. (Docket Nos. 65, 66). On December 27, 2011, the Housing Court continued its temporary order directing Wells Fargo to pay for alternative housing accommodations until the Housing Court makes a final decision regarding the application of Brown v. Guerrier, 390 Mass. 631, 457 N.E.2d 630 (1983), to the condemnation proceeding. (Docket No. 69).
II. FACTUAL BACKGROUND6A. The Allegations Against Wells Fargo And Sand Canyon
On May 31, 2005, the Wenzels obtained a loan from Option One and executed a mortgage on the Property in favor of Option One (the “Mortgage”). (First Amended Complaint (“Complaint”), ¶ 6).
Effective April 30, 2008, H & R Block, Inc., as the parent company of Option One, sold Option One's mortgage loan servicing business to American Home Mortgage Servicing, Inc. (“AHMSI”). (Complaint, ¶ 7). Pursuant to the sale agreement, Option One changed its name to Sand Canyon. (Complaint, ¶ 7). AHMSI services mortgages for Wells Fargo and was and continues to be the mortgage servicer for the Property. (Complaint, ¶ 7).
As of April 30, 2008, Sand Canyon was no longer engaged in the servicing of residential mortgage loans and had no servicing rights. (Complaint, ¶ 9). As of April 30, 2008, Sand Canyon did not own any residential real estate mortgages. (Complaint, ¶ 10). Indeed,...
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...trust documents,” the Court finds that she lacks standing to challenge adherence to the provisions of the PSA. In Wenzel v. Sand Canyon Corp., 841 F.Supp.2d 463 (D.Mass.2012), the court explained standing in the context of a challenge to a chain of assignments. It stated: “[s]tanding is a t......
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