Wilion v. Emigrant Mortgage Co., Inc.
| Decision Date | 26 September 2016 |
| Docket Number | MICV2015-06127-H |
| Parties | Harold Wilion v. Emigrant Mortgage Company, Inc No. 134854 |
| Court | Massachusetts Superior Court |
Filed September 27, 2016
MEMORANDUM AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT
After plaintiff Harold Wilion purchased certain residential property at 1643 Cambridge Street in Cambridge (" the property") from defendant Emigrant Mortgage Company Inc. (" Emigrant") at a foreclosure sale, the Supreme Judicial Court found Emigrant's foreclosure invalid because Emigrant had failed to comply with the notice of default provisions in the mortgage. Pinti v. Emigrant Mortgage Co., Inc. (" Pinti "), 472 Mass. 226, 231-44, 33 N.E.3d 1213 (2015). This action followed. Plaintiff seeks to recover his costs and associated damages in connection with his purchase of the property which Emigrant, it turned out, did not have the lawful right to convey. Before me are cross motions for summary judgment. After hearing, and consideration of the parties' post-hearing submissions, [1] the plaintiff's motion is ALLOWED and defendant's cross motion is DENIED.
In 2008, Linda Pinti and Lesley Phillips (together, " Pinti") owned the property. In March 2008, Pinti gave Emigrant a mortgage on the property in exchange for a loan. Pinti defaulted on the loan in December 2009 and Emigrant initiated foreclosure proceedings. On August 9, 2012 Emigrant held a foreclosure sale of the property. Plaintiff was the highest bidder. See generally Pinti, 472 Mass. at 227-29.
On August 9, 2012, plaintiff and Emigrant executed a Memorandum of Sale (" the MOS") for the property and plaintiff paid an initial $5, 000 deposit. At argument, the parties agreed the MOS was drafted by Emigrant. The MOS defined Emigrant as " the Bank" and plaintiff as " Buyer." As is relevant to this case, Section 6 of the MOS provides:
On September 10, 2012, Emigrant conveyed the property to plaintiff for the purchase price of $260, 000. Pinti, 472 Mass. at 229.
After plaintiff purchased the property, Pinti remained at the property. Plaintiff filed a summary process action for possession. In defense, Pinti challenged the validity of Emigrant's foreclosure sale. In October 2013, the Superior Court upheld the foreclosure process and entered judgment in favor of plaintiff [31 Mass.L.Rptr. 528]. Pinti appealed. In a decision dated July 17, 2015, a divided Supreme Judicial Court reversed, finding that Emigrant failed strictly to comply with the notice of default provision in the mortgage and therefore that the foreclosure sale was void. Pinti, 472 Mass. at 227, 232-42.
Finding himself divested of title to the property by the decision in Pinti, plaintiff sought to recover his damages from Emigrant.[2] On September 25, 2015, plaintiff's counsel sent a letter to Emigrant's counsel demanding that Emigrant pay plaintiff the then-fair market value of the property, which he contended had appreciated considerably beyond the $260, 000 purchase price, plus his out-of-pocket expenses incurred as a result of Emigrant's invalid foreclosure of the property. When the parties were unable to reach an agreement, on September 30, 2015, plaintiff's counsel demanded at least " that Emigrant refund the purchase price immediately, without any conditions and without any party releasing rights, claims or defenses." According to plaintiff's counsel, plaintiff " is in desperate need of his funds that are being wrongly held by Emigrant." In response, on October 2, 2015, Emigrant's counsel requested plaintiff's address in order " to cut the check." Plaintiff's counsel responded on the same day by providing plaintiff's address, directing Emigrant to send the check directly to plaintiff, and wrote: " To avoid any later confusion, I should again [s]ay that the receipt of this payment is without prejudice and without waiver of any rights or defenses of any party." [3]
Emigrant sent plaintiff a check dated October 5, 2015 for $260, 000 with a cover letter dated October 8, 2015.[4] The cover letter stated:
Emigrant is returning Mr. Wilion's purchase funds in accordance with the terms of the Memorandum of Sale executed by Mr. Wilion on August 9, 2012. Pursuant to the terms of the Memorandum of Sale, the return of these monies constitutes full satisfaction of any obligations Emigrant may have had to Mr. Wilion, and he has no further recourse against [Emigrant].
Plaintiff cashed the check on October 14, 2015.
Two weeks later, plaintiff filed this action. Plaintiff brings claims for negligence, negligent misrepresentation, breach of contract and breach of warranty. Based on a largely stipulated record, [5] the parties each move for summary judgment. Emigrant argues the language of the MOS applies, it properly invoked the termination clause, and the MOS caps plaintiff's potential recovery at the purchase price. Plaintiff contends the MOS does not apply to this situation. Emigrant also argues plaintiff's claims are barred by principles of accord and satisfaction and equitable estoppel. I address each argument in turn.
Summary judgment is granted when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Mass.R.Civ.P. 56(c); Cassesso v. Commissioner of Corr., 390 Mass. 419, 422, 456 N.E.2d 1123 (1983); Community Nat'l Bank v. Dawes, 369 Mass. 550, 553, 340 N.E.2d 877 (1976). Each moving party must demonstrate the absence of a triable issue on its claim, and that the summary judgment record entitles it to judgment as a matter of law. Flesner v. Technical Commc'ns Corp., 410 Mass. 805, 808-09, 575 N.E.2d 1107 (1991); Pederson v. Time, Inc., 404 Mass. 14, 16-17, 532 N.E.2d 1211 (1989); see Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716, 575 N.E.2d 734 (1991). " [B]are assertions and conclusions . . . are not enough to withstand a well-pleaded motion for summary judgment." Polaroid Corp. v. Rollins Envtl. Servs., Inc., 416 Mass. 684, 696, 624 N.E.2d 959 (1993).
The MOS, in relevant part, contains two provisions under which the Bank may refund plaintiff's deposit and the balance of the purchase price and thereby avoid further recourse for damages suffered by plaintiff: (1) " [i]n the event the Bank for any reason cannot convey title to the Property as stipulated, " in which event the " Buyer shall have the election to accept such title as the Bank can deliver to the Property in its then condition and to pay therefore the purchase price without deduction"; or (2) " as a result of claims asserted by third parties against the Bank or against the Property" the Bank may " cancel" the MOS if " the Bank determines that it is not in the best interest of the Bank and/or the mortgagor(s) to convey the Property to Buyer." These two provisions address very different scenarios. The first provision addresses the situation where the Bank is able to convey title in some measure, but not " as stipulated." In such case, the Buyer has the election to accept such title as the Bank is able to deliver for the original purchase price.[6] The second provision, allowing the Bank to cancel the MOS, applies to a situation where the Bank is able to convey the Property to the Buyer, but " the Bank determines" it ought not do so.
Neither scenario is presented in this case. After the Supreme Judicial Court's decision voiding the foreclosure sale, Emigrant had no title left to convey, and therefore nothing for plaintiff to elect to accept. Nor was Emigrant without fault. It was Emigrant that failed to comply with the notice of default provisions in the Pinti mortgage. The second provision is also inapplicable. It was not the Bank that made a decision that it was not in its best interest to convey the property when it sent its letter to plaintiff's attorney on October 8, 2015. The Supreme Judicial Court had already determined the Bank had no power to do so.
The Supreme Judicial Court decided that Emigrant's foreclosure sale of the property was void because Emigrant failed to comply strictly with the notice of default provisions in the mortgage instrument. This failure by Emigrant was not known to plaintiff at the time he acquired the property. To say for purposes of title conveyance that the foreclosure sale was void and that no title passed to plaintiff, see, e.g., Pinti, 472 Mass. at 242; id. at 245 (Cordy, J., dissenting), does...
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