Professional Documents
Culture Documents
I. qUESTIONS PRESENTED.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
1I.STATEMENT O F FACTS .................................... 1
A. Fact5 be.fore t h e Land Court a t E n t r y o f
Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
6. F a c t s p r e s e n t e d t o t h e Land Court i n t h e P o s t -
JudgmenT Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
b) F o r e c l o s u r e Evidence .................................................................... 12
-iv-
U . S . Bank N a t ’ 7 Ass’n v . .Tbanez, 1 7 Mass. Land
C o u r t R p t r . 202 (Mar. 2 6 , 2009) . . . . . . . . . . . . . . . . . . . . . . . . . 4
U.5. Bank N a t ’ 7 As5’17 v . Ibanez, 1 7 Mass. [.and
C o u r t R p t r . 679 (Ocr. 1 4 , 2009) . . . . . . . . . . . . . . . . . . . . . . . . 18
U.S. Bank N d t ’ r . AS-.5’/7 V . KOSdk, 1 6 M i S C . 3 C l
1133(A) (N.V. Sup. C t . 2008) ........................... 23
u n i t e d Technologics Corp. v . L i b e r r y mt. I n s .
CO., 407 Mass. 591 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
warden v . A d a m , 1 5 Mass 233 (1818) ................. 21, 4 1
state statutes
E s t . Powers & T r u s t s 5 7 - 2 . 4 ............................ 37
Massachusetts General Laws
c h a p t e r 106 5 3-204 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Massachusetts General Laws
chapter 183, 5 2 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 1 7 , 1 9 , 20, 21
Massachusetts General Laws
chapter 183, 6c ...................................... 22
Massachusetts General Laws
c h a p t e r 2 4 4 , 5 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Massachusetts General Caws
c h a p t e r 2 4 4 , 5 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
Massachusetts General Laws
c h a p t e r 259, 5 l ( 4 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Ru1es
Massachusetts Rules o f C i v i l procedure GO (b) . . . . . . . . . . . . 1
Treatises
ARTHURL . ENO, J A . , W I L L I A M V. H O V E Y , ET AI., 28B
MASSACHUSETTS P R n C T I C E : RKAL ESTATE LAW,REBA T i tle
s t a n d a r d N O . 58 (4t“Ed. 2008) .......................... 28
-V-
I. QUESTIONS PRESENTED
1. Whether a Land c n u r t j u d g e c o r r e c t l y e n t e r e d
judgment a g a i n s t u . S . sank on t h e ground
t h a t G . L. c . 244, 14, authorizes a
f o r e c l o s u r e o n l y by t h e h o l d e r o f t h e
mortgage, where t h e r e c o r d e s t a b l i s h e d t h a . t
U . S . Bank d i d n o t become ,the h o l d e r o f t h e
mortgage u n t i l f o u r t e e n mon-rhs a f t e r ,the
foreclosure sale.
2. whether a Land C o u r t judge abused h i s
d i s c r e t i o n i n denying 1J.S. sank’s Rule 60(b)
morion t o vacate judgment on t h e grounds
t h a t U.S. Bank l a c k e d a v a l i d , f o r e c l o s a b l e
i n t e r e s t a t the t i m e o f i t s foreclosure
s a l e , where U . S . Rank f a i l e d t o produce
t i t l e documents as promised and as o r d e r e d
produced, and where t h e Rule 60(b) morion
was based upon claimed t i t l e o b t a i n e d b y
mortgage assignments “ i n b l a n k , ” a p o s t -
f o r e c l o s u r e mortg:?? assignment, possession
o f t h e n o t e , and inancial interest[sl”,
“splintered rights” or “-indicia o f
owncrshi p?”
3. whether u . 5 . Bank can p r e v a i l on appeal on
rhe b a s i s o f arguments which U . S . Bank
f a i l e d t o make i n t h e Land Cour’c
proceed-ings?
11. STATEMENT OF FACTS
A. Facts b e f o r e t h e Land C o u r t a t E n t r y o f
Judgment.’
P l a i n t i f f - A p p e l l a n r U.S. Bank N a t i o n a l
Association (“Plaintiff-Appellant”, “sank” o r “ U . S .
I
The s t a n d a r d o f r e v i e w f o r t h e Land C o u r t ’ s two
d e c i s i o n s v a r i e s markedly. see S e c t i o n IV, infra.
-1-
r a i s e d i n t h i s appeal, t h e r e c o r d b e f o r e t h e Land
c o u r t a t r h e e n t r y o f judgment i n t h i s a c t i o n was
l i m i - t e d , c o n s i s t i n g o f t h e a l l e g a t i o n s of t h e
compl a i n.t and statements and admissions made by U . S .
Bank counsel a t t h e h e a r i n g on t.he M o t i o n f o r E n t r y o f
DefaulT Judgment. The Comp’laint, a r RA 18-19, 117 3 , 5
and 8 , s t a t e s s i m p l y :
fl 3 . B Y v i r t u e o f an Assignnlentr from American
Home Mortgage S e r v i c i n g Company ... K O U.S. Bank
Made on September 11, 2008 ... by U . S . sank became
t h e h o l d e r o-F a mortgage from Ibanez to R O S ~
Mortgage ...;
7 5 . U.S. Bank caused a “ N o t i c e o f Mortgagee’s
Sale o f Real E s t a t e ” t o be p u b l i s h e d on June 24
2007, June 21, 2007, and June 28, 2007 ... t h a r t h e
P r o p e r t y would be s o l d a t a u c t i o n on J u l y 5 ,
2007.Y;
-2-
assiynmenr] and t h e n proceed w i t h your
[foreclosure] norice
U.S. Bank: ... I t was never r e a l l y i d e n t i f i e d as a
problem ... a d m i t t e d l y , i t ’ s t h e i r own f a u l t , t h e
s e c u r i t i z e d i n d u s t r y , you know, has been caught
w i t h t h e i r “ p a n t s down’ so t o speak because t h e y
h a v e n ’ t done a v e r y good j o b o f keeping on -cop of
t h e paperwork, keeping everybody i n f o r m e d , and
making s u r e a l l There “IS” w e r e d o t t e d and t h e i r
“Ts” were crossed.
And I t h i n k t h e r e ’ s been a r i p p l e a f f e c t [ s i c ]
coming o u t o f t h a t , you know, a t t o r n e y s see t h a t
h a p ~ e n i n ~t h, e y s t a r t t o c h a l l e n g e r h e s t a t u s o f
t i r e. T e t i t l e com a n i e s see i t happening, t h e y
R
s t a r t To c h a l l e n g e t e s t a t u s o f t i t l e ... I t e l l
ou f o r o u r l a w f i r m we do j u s t whar you say. we
K ave changed o u r p r a c t i c e ... and we d o n ’ t s t a r ‘ t
t h e N o t i c e o f Sale process u n t i l we do t h e
assignment and g e t i t o f r e c o r d .
RA 498-501. A l s o , U . S . Bank counsel t o l d t h e
c o u r t t h a . t banks “ i n v a r i a b l y have us b i d t h e v a l u e o f
.rhe mortgage ... [so] a t l e a s t f o r t h e borrowers t h e r e ’ s
no d e f i c i e n c y . ” RA 502. The Land c o u r t ’ s r e v i e w o f t h e
f o r e c l o s u r e s a l e r e c o r d s a c t u a l l y f i l e d by U . S . Bank
e s t a b l i s h e d , t o t h e c o n t r a r y , t h a t t h e bank’s purchase
was “ $ 1 6 , 4 3 7 . 2 7 l e s s t h a n -che amount of t h e
o u t s t a n d i n g l o a n and 15% ‘less t h a n t h e b a n k ’ s
c a l c u l a t i o n 0.F The p r o p e r t y ’ s market v a l u e . ” RA 579.
A t t h e c l o s e o f t h e February 11, 2009 h e a r i n g ,
-3-
f o r e c l o s u r e s a l e . RA 5 1 1 . 3 The c o u r t t h e n e n t e r e d
Judgrnenr a g a i n s t r h e bank, h o l d i n g t h a t :
To a l l o w a f o r e c l o s i n g p a r t y , w i t h o u r any
j n t e r e s - t .in t h e morrgage ar t h e t i m e o f t h e s a l e
(recorded o r unrecorded), t o conduct t h e s a l e i n
these c i r c u m s t a n c c s , b i d and t h e n a c q u i r e good
t i t l e by l a t e r assignmenr i s c o m p l e r e l y c o n t r a r y
t o G . L . c . 244, 0 1 4 ’ s i n t e n t and commands.
. .
.
-4-
motion t o vacate judgment was t o r e f l e c t t h e r e c o r d s
“at the time o f rhe forec70su1-e sn7e.” RA 734
The C o u r t e n t e r e d a docket o r d e r on A p r i l 2 7 ,
2 0 0 9 , which a u t h o r i z e d f i l i n g o f o n l y t h e f o l l o w i n g :
(1) t h e documents which c r e a t e d r h e s e c u r i r i z e d
t r u s t and govern i t s o p e r a t i o n s , (2) t h e
documenrs i d e n t i f y i n g t h e “ b l o c k s o f mortgages
s o l d i n t o r h a t t r u s t , ” which p u r p o r t e d l y i n c l u d e
t h e mortgage a t i s s u e i n t h i s case, (3) t h e
“ c o l l a t e r a l f i l e ” f o r t h e mort age as i t e x i s t e d
9
ar t h e t i m e The f o r e c l o s u r e sa e was n o t i c e d and
conducted, which was r e p r e s e n t e d t o i n c l u d e t h e
o r i g i n a l n o t e , The o r i g i n a l (or a copy) o f t h e I,
mortgage, endorsements o r assignments “ i n b l a n k ,
“ o t h e r documenrs , ” and perhaps a time1 y
assignment i n r e c o r d a b l e form, [and) (4) t h e
master s e r v i c l ’ n g agreement, showing t h e
r e l a r i o n s h i p between t h e t r u s t and t h e l o a n
r j c r v i c e r (which a p p a r e n t l y was t h e e n t i t y
i n s t r u c t i n g and s u p e r v i s i n t h e a t t o r n e y s who
7
no-ciced and conducted t h e o r e c l o s u r e ) ..., The
c o u r t has concerns about t h e a p a r e n t p r a c t i c e o f
assignments “ i n b l a n k , ” what p ? a i n t i f f means by
t h a t rerm, t h e l e g a l s u f f i c i e n c y o f such a
p r a c t i c e i n t h e c o n t e x t o f mortgage assignments
and G.L.. c . 244, 5 1 4 , and t h e p o s s i b i l i t y t h a t
names may have been p l a c e d on t h o s e documents
p o s t - n o t i c e and p o s r - s a l e . A c c o r d i n g l y , a l l
documents r e f l e c t i n g o r p u r p o r t i n g t o r e f l e c t an
assignment o f t h e promissory n o t e o r mortgage
must be produced i n t h e form t h e y e x i s t e d a t t h e
t i m e the foreclosure sale was n o t i c e d and
conducted, a l o n g w i t h an a f f i d a v i t f r o m a w i t n e s s
w i t h d i r e c t personal knowled e so a t t e s t i n g . r h a t
9
w i t n e s s must also be a v a i l a b e f o r e x a m i n a t i o n a t
an e v i d e n t i a r y h e a r i n g i f t h e court so d i r e c t s .
RA 7 4 2 - 3 . The Court o r d e r e d t h e s e documents f i l e d
no l a t e r Than May 27, 2009. rd.
-5-
by U . 5 . Bank, even though t h e s e c u r i t i z a t i o n records
which U . S . Bank p r o v i d e d e x p r e s s l y r e q u i r e d t h a t
“ [ e l n c h Mortgage Loan w f 7 7 be i d e n r i f i e d i n a schedu7e
appearing as a n e x h i b i t t o the T r u s t Agreement”. RA
2. s e c u r i t f z a t i o n Evidence b e f o r e t h e
court.
Although i t d i d n o t comply w i t h e i t h e r i t s
r e p r e s e n t a t i o n s t o r h e Land C o u r t , o r w i t h t h e Land
-~ -..
I n what can o n l y be c h a r a c r e r i z e d as d e l i b e r a t e
d i s t o r t i o n , U . S . Bank f i r s t c i r e s an a l l e g e d T r u s t
Agreement i t f a i l e d t o produce as o p e r a t i n g as a
conveyance, and t h e n c l a i m s t h a t t h e same T r u s t
Agreernenr was n o t produced because “ t h e p a r t i e s never
engaged i n d i s c o v e r y r e l a t e d t o t h e s e c u r i t i z a t i o n
agreements”. see App. B r . a t 19-20, n. 6.
U n s u r p r i s i n g l y , r h e Bank does n o t d i s c l o s e t h a t i t
promised t o produce t h a t v e r y T r u s t Agreement, o r t h a t
t h e Land cour‘t: e n t e r e d an o r d e r m e m o r i a l i z i n g t h e U s .
sank’s r e p r e s e n t a t i o n s . Id.
-6-
C o u r t ’ s A p r i l 2 7 , 2009 o r d e r , U.S. Bank d i d produce
some s e c u r i t i z a t i o n r e c o r d s i n t h e proceedings below:
i nc’l u d i ng a “ P r i v a t e P1 acement Memorandum” (“PPM”)
dated December Z G , 2006, which p u r p o r r e d t o d e s c r i b e
a c c i o n s wh-ich “ w ~ i 1 1 ” be t a k e n a t a f u t u r e d a t e t o f o r m
t h e “ S t r u c t u r e d Asset S e c u r i t i e s C o r p o r a t i o n Mortgage
Loan TrUST, 2006-Z” (“SASC”) , RA 1169-1441, and t o
The p r e c a t o r y n a t u r e o f t h e PPM i s s i g n i f i c a n t i n
l i g h r o f u.5. sank’s newly a s s e r t e d c l a i m t h a t t h e PPM
proves a l e g a l l y e f f e c t i v e conveyance. ~ p p .~ r a.t 10-
11, and 19-20.
’ The Larace PSA i s even s r r i c t e r i n i t s assignment
r e q u i rements : r e q u i r i n g b o t h “an o r i g i n a l Assignment
o f MOrTgage (which may be i n b l a n k ) , i n f o r m and
substance acceptab7e f o r recording” and “an o r i g i n a l
r o p y of any i n t e r v e n i n g assignment o f Mortgage showing
a complete c h a i n o f assignments”. RA 1 5 2 2 - 1 5 2 3 .
O b v i o u s l y , no such r e c o r d s were produced i n The
r e l a t e d Larace a c t i o n .
-7-
u l t i m a t e l y s e l l r h e loans t o U.S. Bank, RA 1179, t h a t
” [ a l p p r o x i m a t e l y 46.28%... o f r h e Mortgage Loans were
acquired by [Lehman Brochers] from O p t i o n One Mortgage
C o r p o r a r i o n , ” RA 1 2 4 2 (emphasis added), and t h a t
“ [ a l p p r o x i m a r e l y 46.28% ...o f t h e Mortgage Loans were
o r i g i n a r e d g e n e r a l l y i n compliance w i t h t h e o p t i o n One
U n d e r w r i t i n g G u i d e l i n e s ” , RA 1250: m e r i t i n g r h e
c o n c l u s i o n t h a t a l l o f t h e l o a n s which Lehman B r o t h e r s
purchased f r o m o p t i o n One Mortgage C o r p o r a t i o n
( “ O p t i o n One”) were o r i g i n a t e d by O p t i o n One. ~ d .
F i n a l l y , U.S. sank produced a “ b a i l e e l e t t e r ” dared
May 11, 2009 a u t h o r i z i n g i t s counsel t o “commence and
p r o s e c u t e a f o r e c l o s u r e a c t i o n ” as t o t h e Ibanez l o a n ,
w i t h “ F o r e c l o s u r e S t a r t Date o f 04-09-07.” RA 959.
I n c o n r r a s t , t h e r e c o r d c o n t a i n s pub1 ic F i n a n c i a l
r e p o r t i n g d a t a from t h e T r u s r - s u b m i t r e d t o t h e Land
Court by I b a n e z - which i n d i c a t e s That t h e I b a n e r
mortgage i s n o t an a s s e t o f t h e T r u s t . I b a n e z
Suppl emental Appendix (“ISA”) 22-54 The “Mortgage
Pass-Through C e r t i f i c a t e s ” i s s u e d by t h e T r u s t were
a p p a r e n t l y “ n o t r e g i s t e r e d under t h e s e c u r i t i e s A c t ...
o r any s t a t e s e c u r i t i e s o r b l u e sky l a w s , b u r were
-8-
Eloomberq P r o f e s s i o n a l s e r v i c e . ’ I S A 19-21.. Through
Bloomberg, a search o b t a i n e d a r e p o r t i d e n t l f y i n g
mortgage-assets baclri ng t h e S t r u c t u r e d ASS&
S e c u r i t i e s C o r p o r a t i o n Morrgage Pass-Through
c e r t i f i c a t e s S e r i e s 200G-z.9 ISA 22-54. NO S e r i e s 2006-
Z e n t r y i n r h e Bloomberg r e p o r t i d e n t l ’ f i e d any
[ ~ r o p e r t y ] ...
Lender ... may i n v o k e the STATUTORY POWER O F SALE...
and t h e P r o - e r t y s h a l l be s o l d i n t h e manner
E
p r e s c r i b e d y A p p l i c a b l e Law.
a See A f f i d a v i t o f Thomas A. T a r t e r , I S A 5 5 , t o t h e
e f f e c t t h a t Bloomberg f i n a n c i a l d a t a c o m p i l a t i o n s a r e
r o u t i n e l y r e l i e d upon by t h e p u b l i c , and by t h o s e
engaged i n f i n a n c i a l and banking s e r v i c e s e c t o r s f o r
their activities.
It See A f f i d a v i t of Max W e i n s t e i n , I S A 19.
-9-
RA 967, 968, 977 (emphasis i n o r i g i n a l ) . ’ ”
F o l l o w i n g t h e e x e c u t i o n of t h e i n i t i a l mortgage,
on December 8 , 2005, Rose Mortgage executed and had
n o t a r i z e d t h e o r i g i n a l Assignment o f t h e Ibanez
Morcgage, to no one ( o r “ i n b l a n k ” .- i.e., w i t h nn
assignee named) .I1 The o r i g i n a l Assignment t h e n
reappears, w i t h t h e same s i g n a t u r e s , dares and
n o t a r i z a t i o n s , i d e n t i f i e d t h i s t i m e as a “ c e r t i f i e d
T r u e Copy”; however, when i t reappears, r h e “ c e r t i f i e d
T r u e copy” had been a l t e r e d i n m u l t i p l e ways: one o f
which was t h e p o s c - n o r a r i z a t i o n a d d i t i o n , b y c o r p o r a r e
stamp, o f an assignee - “ O p t i o n One Mortgage
C o r p o r a t i o n , a C a l i f o r n i a C o r p o r a t i o n . ” RA 999. T h a t
same document, w-ith t h e e x a c t same s i g n a r u r e and t h e
e x a c t same n o t a r i z a t i o n i n r h e e x a c t Same l o c a t i o n on
t h e document, was t h e n a l t e r e d y e t another t i m e : this
t i m e , as r h e “orl’g.ina1 Assignment” upon which U.S.
io
N o t a b l y , t h e I b a n e z mortgage e x p r e s s l y d i s t i n g u i s h e s
between t h e “Lender” and “any purchaser o f rrhe Note”.
RA 973, 1 3 . Only t h e Lender i s a u t h o r i z e d t o “ i n v o k e
r h e STATUTORY POWER O F S A L E . “ RA 977.
I T h i s assignment was produced by U.S. Bank, was f i l e d
’
i n t h e c o u r t below, and i s i n c l u d e d i n t h e Ibanez
Supplemental Appendix, ( “ I S A ” ) a t 1.
-10-
f o l l o w i n g t h e s e r e p e a t e d l y a l t e r e d assignments of t h e
nose morrgage, U . S . Rank has y e t another assignment o f
-11-
Then, on seprember 2 , 2008, fourteen months a f t e r
the forec1orure sale, American Home Mortgage
S e r v i c i ng , I n c . ( “ m e r i can Home”) “as successor i n
i n t e r e s t t o O p t i o n One Morryaye corpora.t,ion,
,,
-12-
s a l e was undertaken pursuant t o s t a t u t o r y p r o v i s i o n s
which r e q u i r e d t h a t n o n - j u d i c i a l f o r e c l o s u r e s a l e s be
conducted o n l y by morrgagces. 0-r t h e i r assignees. (pp.
17-18) The f o r e c l o s u r e s a l e was a u t h o r i z e d by a power
o f s a l e i n t h e mortgage b e i n g f o r e c l o s e d , which
a l l o w e d o n l y ' t h e o r i g i n a l l e n d e r and i-Ls assignees t o
e x e r c i s e t h e power, and 11.5. Bank was n e i t h e r . (pp.
16-17) j u d i c i a l precedent e s t a b l i s h e s t h a t
f o r e c l o s u r e s under such powers o f s a l e must s t r i c t l y
comply w i r h t h e terms o f t h e power - and i n v a l i d a r e s
f o r e c l o s u r e s a l e s which do no't name t h e mortgagee a t
t h e t i m e o f s a l e . (pp.18-40) Consequently, i t seems
unremarkable t h a t t h e Land c o u r t i n v a l i d a t e d r h e U.S.
-13- '
e n t i t y w i t h mere “ f i n a n c i a l i n t e r e s r s [ s ] ” or
“ s p l i n r e r e d r - i g h t s ” may conduct f o r e c l o s u r e
sales.(pp.23-33) However, t h e r u l e t h a t U . S . sank asks
t h i s CourL: t o c r e a t e . i s c o n t r a r y t o b o t h s t a t u t o r y
commandments and e x p l i c i t c o n t r a c r u a l agreements
berween t h e borrowers and l e n d e r s themselves, and,
moreover, 1ik e l y t o add u n c e r r a i n.ry and .inaccuracy t o
foreclosure t i t l e s .
The c o n f l i c t a c t u a l l y presented by t h i s appeal
i s , i n d e e d , a s i g n i f i c a n t one. (pp. 30-46) For
l i t e r a l l y hundreds o f years, o u r sysrem o f
conveyancing and r e c o r d i n g o f t i t‘les , deeds, and
in c o r p o r a r e , and r e q u i r e compliance w i t h , a p p l i c a b l e
t i t l e and assignment r e c o r d i n g r u l e s f o r t h e
s e c u r i t i z e d mortgages h e l d by them. (pp.35-36)
However, n e i r h e r T r u s r has p r o v i d e d evidence t h a t i t
complied w i r h t h e r e c o r d i n g requirements o f t h e i r own
T r u s t documents, o r t h e f o r e c l o s u r e s t a t u t e s and
c o n t r a c t u a l terms which govern conveyance and
ownership o f t h e s e mortgages. .rd. I n s t e a d , U . S . Bank
argues t h a t t h i s Court s h o u l d do what U.S. s a n k ’ s own
g o v e r n i n g r u l e s do nor : re’l ax o r abrogate r e q u i rements
-14-
which ensure t h a t t i t l e t o r e a l p r o p e r t y i s p u b l i c and
t r a n s p a r e n t , and a l l o w u n d i s c l o s e d and p r i v a t e
conveyance o f mortgages, and even n o n - j u d i c i a l
f o r e c l o s u r c s a l e s based on p r i v a t e and u n d i s c l o s e d
conveyance, i n t h e name o f expediency. (pp.23-44)
1he r e c o r d here evidences repeated i n s t a n c e s o f
careless - even r e c k l e s s ... treacment o-f l o n g - s t a n d i n g
r u l e s g o v e r n i n g r h e i n t e g r i t y o f conveyancing
documenrs, and c a r e l e s s - even r e c k l e s s - d i s r e g a r d o f
s t a t u t o r y and c o n t r a c t u a l o b l i g a t i o n s g o v e r n i n g non.-
j u d i c i a l property foreclosures. (pp.41-46) Indeed,
t h e r e i s n o t h i n g i n t h e r e c o r d which l e n d s c o n f i d e n c e
to t h e i n t e y r ' i t y t h a t p r i v a t e , u n d i s c l o s e d and
unrecorded s e c u r i c i z e d conveyances would have, w e r e
t h e c o u r r t o accept t h e i n v i t a t i o n to abrogate t h e
t i t l e p r o t e c t i o n s c o n t a i n e d ,in mortgages and
-15-
s t a t u t o r y requirements shou’ld be a p p l i e d o n l y to
f u t u r e conveyances. (pp.47-49)
IV. PLAINTIFF-APPELLANT MISSTATED THE STANDARD
GOVERNING REVIEW OF U . S . BANK’S RULE 59 AND 60
MOTfONS T O VACATE JUDGMENT
Defcndant-Appellee concurs T h a t r e v i e w of t h e
Land C o u r t ‘ s E n t r y of d e f a u l t judgment i s de novo.
However, U . S . Bank m a t e r i a l l y m i s s t a t e d t h e s t a n d a r d
f o r r e v i e w of t h e d e n i a l o f U . 5 . Rank’s Rule 59 and
GO(b)(1) and (2) Motions ‘to Vacate Judgment, as t h e
C o u r t w i l l r e v e r s e r h e d e n i a l o f u . 5 . Bank ‘ s m o t i o n
o n l y f o r “ c l e a r abuse o f d i s c r e t i o n ” - w i t h “marked
deference To t h e l o w e r c o u r t ’ s r e s o l u t i o n ” :
I n a m o t i o n under s u b s e c t i o n (1) o f r u l e 60 (b),
t h e moving p a r t y bears t h e burden o f j u s t i f y i n g
r h e m o t i o n ... and “must make some showing o f why
he was j u s t i f i e d i n f a i l i n g t o a v o i d m i s t a k e o r
i n a d v e r t e n c e ” . R e l i e f i s n o t j u s t i f i e d f o r “any
k i n d of g a r d e n - v a r i e t y o v e r s i g h t ” .., I n s read,
“ [t]he inadverrence, m i s t a k e o r s u r p r i se as we1 1
a5 n e g l e c t must be excusable ... . The moving p a r t y
may p r e v a i - I o n l y i , F “ t h e evidence r e l i e d on was
n o t a v a i l a b l e ... f o r i n t r o d u c t i o n a t t h e o r i g i n a l
[proceeding] by t h e e x e r c i s e o f reasonable
d i l i ence ...” I f t h e moving p a r t y f a i l s t o show
1
why e d i d n o t have t h e evidence a t t h e t i m e o f
t h e o r i g i n a l proceeding, r h e p a r t y w i l l n o t
p r e v a i l ...
R e s o l u t i o n o f a r u l e 60 (b) m o t i o n r e s t s i n t h e
d i s c r e t i o n o f t h e t r i a l ‘udge, and we “ w i l l show
marked deference t o t h e l o w e r c o u r t ’ s r e s o l u t i o n
o f such a m o t i o n . ” A d e n i a l o f a r u l e 60 (b)
morion “ w i l l be s e t a s i d e o n l y on a c l e a r showing
o f an abuse of d i s c r e t i o n . ”
- 1.6-
(2001) (“The j u d g e ’ s d e t e r m i n a t i o n under r u l e GO(b)
w i l l n o t be d i s t u r b e d absenr abuse o f d i s c r e t i o n . ” ) .
V. MASSACHUSETTS FORECLOSURE STATUTES P E R M I T ONLY A
NARROW CATEGORY OF PERSONS - P R I M A R I L Y , THE
MORTGAGEE -
T O CONDUCT A FORECLOSURE SALE.
The Massachusetts f o r e c l o s u r e s a l e s t a t u t e i s
c l e a r and unambiguous; o n l y t h e f o l l o w i n g may conduct
a f o r e c l o s u r e pursuanr t o a power o f s a l e :
[ t l h e mortgagee o r person h a v i n g h i s e s t a t e i n
t h e l a n d mortgaged, o r a person a u t h o r i z e d by the
power o f s a l e , o r t h e a t t o r n e y d u l y a u t h o r i z e d by
a w r i t i n g under s e a l , o r t h e l e g a l g u a r d i a n o r
c o n s e r v a t o r o f such mortgagee o r person a c t i n g i n
t h c name o f such mortgagee o r person, may,
breach o f c o n d i t i o n and w i t h o u t a c t i o n , do a 1 Yon
t h e a c t s a u t h o r i z e d o r r e q u i r e d by t h e power ...
G.L. c . 244, 5 1 4 . T h i s l i m i t a t i o n o f persons l e g a l l y
a u t h o r i z e d t o e x e r c i s e t h e power o f s a l e repears
t h r o u g h o u t t h e Massachuserrs f o r e c l o s u r e s t a t u t e s :
A mortgagee may, a f t e r breach o f c o n d i t i o n o f a
mortgage o f l a n d , recover possession o f t h e l a n d
mortgaged by an open and peaceable e n r r y Thereon
... t . L c . 244, 5 1;
upon any d e f a u l t ... the mortgagee o r h i s
...
e x e c u t o r s I admini s ‘ c r a t o r s , successors o r assigns
may s e l l the mortgaged premises. G . L . c . 1 8 3 ,
§ 21
Massachusetts c o u r t s have u n i f o r m l y e n f o r c e d T h i s
unequivocal requirement i n a p p l y i n g C . L . c . 244, 5 14:
I t i s f a m i l i a r l a w tha,r one who s e l l s under a
power must f o l l o w s t r i c t l y i t s terms. ~ f he : fails
t o do so t h e r e ,is no v a l i d e x e c u t i o n of t h e power
and t h e s a l e i s w h o l l y v o i d ... The manner i n which
r h e n o t i c e of t h e proposed s a l e s h a l l be g i v e n i s
one of ,the i m p o r t a n t terms o f t h e power, and a
s t r i c t compliance w i t h i t i s e s s e n t i a l r o r h e
v a l i d e x e r c i s e o f t h e power ... A purchaser under a
power o f s a l e musr see t o i t a t h i s p e r i l t h a t
t h e r e has been J. compliance w i r h r h e l e g a l and
essenria‘l terms o f t h e power. I f t h e r e has n o t
been, t h e n he i s n o t p r o r e c t e d whether a c t i n g i n
good f a i r h o r n o t .
McGreevey v . Chr7estown F i v e Cents S a . Bank, 294
Mass. 480, 484 (1936); accord, sottom7y v . Kabachnick,
1 3 Mass. ~ p p .C t . 480 (1990); Lainson & CO, v . Abrams,
305 Mass, 2 3 8 (1.940) ; Roche v. Farnsworrh, 106 Mass.
509, 5 1 3 (1871). Moreover, t h e power o f s a l e must be
e x e r c i s e d a c c o r d i n g t o t h e express terms o f t h e
underlyl’ng c o n r r a c t , and t h e I b a n e z mortgage
a u t h o r i z e s o n l y t h e mortgagee, o r an e n t i r y then-
h o l d i n g a v a l i d assignment f r o m t h e mortgagee, r o
f o r e c l o s e under t h e c o n r r a c t u a l power o f s a l e :
[ T l h e o n l y person a u t h o r i z e d b y t h e I b a n c z
mortgage to i n v o k e t h e power o f s a l e i s t h e
“Lender”, d e f i n e d i n t h e morrgage as Rose
Morryage, I n c . i n i t s c a p a c i t y as mortgagee ...
Thus, i n f u l l accordance w i t h Massachusetts l a w...,
r h e mortgage a u t h o r i z e s o n l y t h e mortgagee o r a
z
v a l i d assignee o f t h e mort agee TO i n v o k e t h e
s t a t u c o r y power o f s a l e . T i s does n o t i n c l u d e a
person o r e n t i t y which o n l y h o l d s t h e n o t e . See
Mortgage a t 7 , t h i r d , F u l l paragraph
( d i s r i n g u i s h i ng between “Lender” and “any
purchaser of t h e Note”).
u.5. Bank Nat’7 Ass’n v . xbanez, 1 7 Mass. Land Courr
R p t r . 679, 688 n. 5 3 ( o c t . 14, 2009) ( h e r e i n a f t e r
“ J h n e z IT’)( i n r e r n a l c i t l a t i o n s ornirted) . N o t h i n g i n
t h e mortgage a u t h o r i z e s a power o f s a l e f o r e c l o s u r e by
an e n t i t y t h a t possesses o n l y “ f i n a n c i a l i n t e r e s t C s ] ” ,
“ s p l i n t e r e d r i g h t s ” a r “ i n d i c i a o f ownership.” App.
B r . (“app. Br.”) a t 34-37.
-18-
A. A l e n d e r can o n l y o b t a i n t h e s t a t u s and
r i g h t s o f a “mortgagee,” i n c l u d i n g t h e r i h t
t o conduct a f o r e c l o s u r e sale, by means o a
wr-i t t e n c o n t r a c t w i t h t h e mortgagor.
?
A mortgage l e n d e r does n n t become a “mortgagee”
t h e mortgaged p r e m i s e s . ” ) . Accordingly, a p a r r y ’ s
r i y h t , i f any, t o s e l l a morrgaged p r o p e r t y a t a
f o r e c l o s u r e a u c t i o n pursuanr t o a power of sale i s
c o n f e r r e d by a p a r r i c u l a r mortgagor upon a p a r t i c u l a r
mortgagee by rhe rerim of t h a t mortgage c o n t r a c t . The
Ibanez mortgage a u t h o r i z e s no one o t h e r t h a n r h e
l e n d e r (and i t s assigns) t o conducr a f o r e c l o s u r e
sale.
Mortgagees conduct t h e v a s t m a j o r i t y o f
f o r e c l o s u r e s i n Massachusetts pursuant t o r h e
“ s t a t u t o r y power o f s a l e , ” c o d i f i e d a t G . L . c. 183,
5 21. I n o r d e r f o r a mortgagee t o e x e r c i s e t h e
-19-
s t a t u t o r y power o f s a l e , i t must be an e x p l i c . i t r e r m
i n t h e mortgage c o n r r a c r be-cween r h e morrgagor and
mortgagee. Norton v . Joseph, 2009 WL 58896 a t “ 3 ,
Docket No. 374733 (CWT) (Mass. Land. Ct. Ian. 1 2 ,
2009) (“The s t a t u t o r y power i s n o t a p p l i e d by d e f a u l t
i n t h e event o f i r s omission; f a i l u r e YO invoke rhe
power i n some way [ i n a c o n t r a c t ] r e s u l t s i n no such
power.”). If i n c o r p o r a r e d , r h e s r a r u t o r y power o f s a l e
a u t h o r i z e s a mortgagee “upon any d e f a u l t ” t o “ s e l l t h e
mortgaged premises ... by p u b l i c a u c t i o n on o r near t h e
premises ....’I G.L. c . 183, 5 21.15 where, and o n l y
where, t h e r e i s a u t h o r i t y t o f o r e c l o s e p u r s u a n t t o a
c o n t r a c t u a l power o f s a l e does G.L. c.244, 5 14 set
o u t a d d i t i o n a l s r a t u t o r y p r o t e c t i o n s which supplement
B. A p a r t y who i s n o t t h e o r i g i n a l l e n d e r and
mortga ee under t h e mortgage c o n t r a c t can
xE
on1 o t a i n t h e s t a t u s and c o n r r a c t u a l
r i g ts of the o r i g i n a l mortgagee by means of
a v a l i d , w r i t t e n assignment t o t h a t p a r t y .
under r h e d e f a u l t common l a w r u l e , a p a r r y may
f r e e l y a s s i g n i t s c o n t r a c t r i g h t s . However, i f a p a r t y
The s t a t u t o r y z h o r t form p r o v i d e s o n l y t h e c o n t e n t
f o r a t e r m o f a c o n t r a c t between a p a r t i c u l a r
mortgagor and a p a r t i c u l a r mortgagee.
-20-
o t h e r t h a n The o r i g i n a l morLgagee seeks t o f o r e c l o s e
p u r s u a n t t o t h e s t a r u r o r y power o f s a l e , t h a t p a r t y
must have o h r a i n e d an assignment o f t h e mortgage. see
G.L c. 83, 5 23. ( “ [ T j h e mortgagee o r h i s e x e c u m r 5 ,
a d m i n i s t r a t o r s , succes~orso r assign5 may s e l l t h e
mortgaged premises ...” ) . w h i l e a mortgagee may a s s i g n
t o another p a r r y i r s r i g h t s i n a mortgage c o n t r a c t ,
i n c l u d i n g The c o n t r a c t u a l r i g h t to f o r e c l o s e , such an
assignment i s i t s e l f a c o n t r a c t f o r t h e conveyance o f
an i n t e r e s t i n l a n d . A c c o r d i n g l y , under w e l l - s e t t l e d
Massachusetrs l a w , t h e assignment o f a mortgagee’s
c o n t r a c r r i g h t s must be i n w r i t i n g . o n l y t h e w r i t t e n ,
execu‘red assignment o f a mortgage c o n t r a c t can
e f f e c t i v e l y t r a n s f e r ownership o f t h a t mortgage. See
warden v . d a m s , 1.5 Mass 2 3 3 , 236 (1818) (“No “ i n t e r e s t
passes by a mere d e l i v e r y o f a mortgage deed, w i t h o u t
an assignment i n w r i t i n g and by deed.”); 5ec a750 G . L .
c . 259, 5 l(4).
Moreover, and as U . S . Bank concedes, a w r i t t e n
-21-
i t must be signed by ,the p a r t y t o be charged o r by
someone a u t h o r i z e d t o s i g n on h i s b e h a l f . I ’ cousbe7is,
3 1 5 Mass. a t 730 ( q u o t i n g Des B r i s a y v . Foss, 264
Mass. 102, 109 (1928)). Our General Laws c o d i f y t h e s e
r e q u i rernents, i n t e r a 7 i a , by p r e c l u d i n g t h e r e c o r d i n g
o f any assignment t h a t does n o r s p e c i f i c a l l y name t h c
__.
,
l6 The Schwartz d e c i s i o n i n v a l i d a t i n g p o s t - f o r e c l o s u r e
s a l e a s s i nments i s s u e d on A p r i l 19, 2007, two and a
2
h a l f mont s b e f o r e t h e Ibanez f o r e c l o s u r e s a l e .
17See, e.g., countrywide Home Loans, I n c . v . ray7or, 17
Misc.3d 595 (N.Y. Sup. C t . , 2007) (“Language i n t h e
p u r o r t e d assignment t o Countrywide s t a t e s t h a t t h e
‘ [ayssignment s h a l l be deemed e f f e c r i v e as o f August
1, 2 0 0 6 . ’ Such artem t a t r e t r o a c t i v i t y , however, is
E.
i n s u f f i c i e n t o e s t a l i s h c o u n t r y w i d e ’ s ownership
i n r e r e s t a t t h e t i m e t h e a c t i o n was commenced. Indeed,
f o r e c l o s u r e o f a mortgage may n o t be broughr by one
who has no i t l e t o i r . . . ’ I ) ; Deutsche Bank T r u s t Co.
-22-
attemprs t o j u s t i f y an i n v a l i d f o r e c l o s u r e i t
conducted p r i o r o b t a i n i n g t h e r i g h t t o f o r e c l o s e by
w r i t t e n , v a l i d assignment. 1 R
“ s p l i n t e r e d r i g h r s , ” o r “ i n d i c i a o f ownership.” ~ p p .
Br. a t 34-37. Adoption of: t h e s e a s s e r t i o n s would,
q u i t e l i t e r a l l y , abrogate t h e terms o f t h e s t a t u t o r y
-23-
power o f s a l e i n ,rhe I b a n e z mortgage c o n t r a c t and
annul G . L . c . 244, !j 1 4 , which p e r m i t o n l y a
“mortgagee” t o e x e r c i s e a power o f sa’le. I t would a l s o
c r e a t e u n d e s i r a b l e u n c e r t a i n t y as t o t h e v a l i d i t y o r
i n v a l i d i t y o f a f o r e c l o s u r e ; d i s p u t e s about t h e
adequacy o f t h e f o r e c l o s e r ’ s f i n a n c i a l i n t e r e s t s o r
s p l i n t e r e d r i g h t s would be i n e v i t a b l e .
U . S . Rank c i t e s i n s u p p o r t o f i t s d i r e c t assault
on t h e Massachusetts s t a t u t e and Massachusetts
d e c i s i o n a l l a w o n l y two f e d e r a l d e c i s i o n s , S a f f m n v .
NOVaSKar Mortgage, I n c . , No. 4:07-cv-40257-PBS (0.
’’ I n s a f f r a n , t h e m o r t g a g o r ’ s o r i g i n a l l e n d e r and
o r i g i n a l mortgagee, Novastar, sought t o e s y a b l i s h i t s
a u t h o r i t y t o conduct a f o r e c l o s u r e a u c t i o n o f The
mortgagor’s home. I n t h e mortgage c o n r r a c t , Novastar
had d e s i g n a t e d a t h i r d p a r r y as i t s “nominee” f o r
c e r t a i n purposes. However, i n r h e m o r t age c o n t r a c t ,
7
Novastar e x p l i c i t l y r e s e r v e d f o r i t s e l t h e r i g h t T o
conduct a f o r e c l o s u r e pursuant t o t h e power o f s a l e .
The c o u r r found t h a t Novastar was e n t i t l e d t o conduct
a f o r e c l o s u r e as t h e o r i g i n a l mortgagee and pursuanr
t o t h e e x p l i c i t terms o f t h e mortgage, which
a u t h o r i z e d NOVaStar by name t o e x e r c i s e t h e power o f
sale .
I n Nicho75, i t was u n c o n t r o v e r t e d t h a t r h e
f o r e c l o s i n g mortgagee, c a d l e Co., had been assigned
t h e s u b j e c t n o t e and mortgage c o n t r a c t b y t h e FDIC.
c a d l e e n t e r e d i n t o a w r i t t e n “ l o a n agreement” w i t h a
t h i r d p a r t y , b u t t h a t agreement “ r e s e r v e [ d ] t o c a d l e
t h e r e s p o n s i b i l i r y t o c o l l e c r on t h e nore and ( i f
necessary) t o f o r e c l o s e on t h e mortgage.” Nicho75, 139
F.3d a t 6 1 . The Nicho7s c o u r t i n r e r p r e t e d “ t h e l o a n
agreement as l e a v i n g c a d l e as t h e mortgagee,” and
t h e r e b y h e l d t h a t c a d l e had a u t h o r i t y as t h e mortgagee
t o e x e r c i s e t h e mortgage c o n t r a c t ’ s power o f s a l e
p u r s u a n t t o G . L . c . 244, 5 1 4 . Id. a t 6 2 .
-24-
a c t u a l l y stands f o r t h e p r o p o s i t i o n t h a t a non-
mortgagee p o s s e s s i n g mere “ f i n a n c . i a 1 i n t e r e s r s [ s ] ” or
“ s p l i n t e r e d r i g h t s ” may conduct a f o r e c l o s u r e . I n
f a c t , .in b o t h cases, t h e c o u r t s found thac the
f o r e c l o s i n g e n t i t y possessed t h e power o f s a l e
p u r s u a n t t o t h e e x p l i c i t w r i r t e n Terms 0-T The
o p e r a t i v e c o n t r a c t . A c c o r d i n g l y , U . S . nanlc asks t h i s
cour’c j u d i c i a l l y To amend t h e p l a i n language o f t h e
Massachusetrs f o r e c l o s u r e s a l e scaru’re ‘to c r e a t e from
whole c l o t h a new c a t e g o r y o f persons who may s e l l a
b o r r o w e r ’ s home i n a f o r e c l o s u r e a u c t i o n , s u r e l y an
i11- a d v i sed r e q u e s t .
F i n a l l y , U . S . Bank advances t h e p o s i t i o n t h a t .it
was e n t i t l e d t o conduct a f o r e c l o s u r e s a l c because i t
had “ e q u i t a b l e ownership o f t h e i n c i d e n t s o f t h e
mortgage” as t h e p u r p o r t e d “ h o l d e r [SI” of‘ t h e Ibanez
enforcement, i t i s w e l l s e t t l e d i n Massachusetts t h a t
-25-
t h e l a s t assignee o f a morcgage c o n t r a c t .is t h e h o ' l d e r
o f r h a r mortgage - even i f o n l y a h o l d e r o f i n t r u s t :
I n some j u r i s d i c t i o n s i , c I s he'ld t h a t t h e mere
t r a n s f e r of t h e d e b t w i t h o u t any assignmenr o r
even mention of t h e mortgage, c a r r i e s The
morrgage w i t h "it, S O a5 t o enable t h e assignee t o
a s s e r t h i s t i t l e i n an a c t i o n at. l a w . T h i s
d o c t r i n e has n o r p r e v a i 1ed i n Massachusetts, and
t h e tendency o f t h e d e c i s i o n s here has been ,rhar
i n such case t h e mortgagee would h o l d t h e l e g a l
t i r l e i n t r u s t f o r t h e urchaser o f t h e d e b t , and
t h a t t h e l a t t e r m i g h t &rain a conveyance by a
b.il1 i n equity.
Barnes v . Boardman, 149 Mass. 1 0 6 , 1 1 4 ( 1 8 8 9 ) ; see
-26-
5 1 4 (and t h e r e l a t e d s t a t u t e s ) a r e s,imple and d i r e c t :
o n l y a mortgagee may e x e r c i s e a mortgagee’s
c o n t r a c t u a l power YO conduct a f o r e c l o s u r c sa‘le.
“[wlhen a s t a t u t e speaks w i t h c l a r - i t y t o an i s s u e r , ]
j u d i c i a . 1 i n q u i r y i n t o t h e s t a t u t e ’ s meaning, -in a l l
I,
b u r t h e most e x r r a o r d i n a r y circumstance, i s f i n i s h e d .
seaupre v . ~ 7 l f Smith
f & ASSDC., 50 Mass. ~ p p .c t .
480, 491 (2000) ( q u o t i n g Estate o f cowart v. Njck70s
4 r i 7 7 i n g Cu., 505 U . S . 469, 475 (1992)). As t h e Land
c o u r t i r s e l f recognized, “ [ w l h a t [u.S. sank] rru7y
seel<[s] i s a change i n r h e f o r e c l o s u r e s a l e s t a t u e ,
wh ch can o n l y comc from t h e l e g i s l a t u r e . ” Ibaner 11,
1 7 Mass. Land c o u r t R p t r a~ 681, RA 1141.
There i s n o t h i n g i n these s t a t u t o r y enactments,
o r i n t h e common l a w d o c t r i n e s t h e y embody, which was
-27-
I n s h o r t , t h e r e c o r d c o n f i r m s t h a t both t h c Land
c o u r t and U.S. sank understood t h a t a f o r e c l o s u r e s a l e
c o u l d o n l y be conducted by t h e t h e n - c u r r e n t h o l d e r o f
a mortgage.
D. N e i t h e r REBA T i t l e Standard 58 n o r i t s
doomsday s c e n a r i o a l t e r s t h e s t a t u t o r y
command t h a t o n l y martgagees may f o r e c l o s e
by sale under G . L . c . 244 5 14
I n an e f f o r t t o uphold i t s p o s t - f o r e c l o s u r e
assignmenr, U.S. sank a s s e r t s t h e a u r h o r i r y o f Real
E s t a t e Bar A s s o c i a t i o n Standard No. 58, and, w i t h o u t
any f a c r u a l b a s i s , s t a t e s t h a t u p h o l d i n g t h e Land
c o u r t ’ s dec s i o n “createt‘s] serious uncertainty
I,
throughout he mortgage and t i t l e i n d u s t r i e s .
Appel1 a n t ’ s s r i e l : ac 46-50; En0 & HOVey, 286 Mass.
Prac. : Real E s t a t e L . , REBA T i t . s t d . No. 58 ( 4 t h ed.
2008). Even were t h i s t r u e I which t h e year and a h a l f
s i n c e t h e I b a n e r d e c i s i o n suggest i t ‘is n o t - this
argument cannot s h i e l d i t f r o m t h e t r u t h t h a t , i n t h e
-28-
b l u n t words o f t i t l e d o c t r i n e “ [ u . s . Bank] c o u l d n u t
24 O r , as t h e Land Court h e l d i n r e j e c r i n g an e f f o r t t o
determine t i t l e on t h e b a s i s o f a REBA T i t l e Standard,
“ I n any evenr, t h e c o u r t r e $ e c t ? t h e ... argument which
c o n f l a t e s a standard o f a r o e s s i onal resoonsi b i 1i r v
w i r h t h e l a w ....“ 5077ivan’ v . i.eonard, 1 3 Land Court’
R p t r . 482, 484 (2005).
F i n a l l y , as the Land C o u r t s c t OUT -in c a r e f u l d e t a i l ,
REBA T i t . t e s t a n d a r d No. 5 X i s j u s t p l a i n wrong:
The p l a , i n t i f f s ' f i n a l c i t a t i o n i s REBA T i t l e
Standard NO. 58 ... IT p r o v i d e s , i n r e l e v a n t p a r t ,
" [ a ] t i t l e 'is n o t d e f e c t i v e by reason o f . . .
[,K] he r e c o r d i nq o f an Assignment 0.r Mortgage
executed e i t h e r p r l o r , o r subsequent, ro
f o r e c l o s u r e whet-e s a i d Mortgage has been
rl
f o r e c l o s e d , of r e c o r d , b t h e Assignee!. " REEA
T i r l e Standard No. 58. T e accompanying n o t e
sta'tes t h a t t h i s p o r t i o n o f t h e standard " i s
based on Montague v . Dawe5, 1 2 A^I'Ien 397 (1866)."
I d . (Comment) ... I have g r e a t r e s p e c t f o r REBA ...
[ b l u t t h e l a t t e r p o r t i o n [ o f t h e t i t l e standard]
( r e l a t i n g t o assignments made a f t e r n o t i c e i s
p u b l i s h e d and s a l e ha5 occurred) m i s c o n s t r u e s t h e
z
s t a t u t e , t h e h o l d i n g i n ~ o n t aue, and t h e
t e a c h i n g s o f BuTront7y and ROC e. As discussed
above, G . L . c . 244, 5 14 r e q u i r e s p u b l i c a r i o n i n
s
.the name o f r h e h o l d e r o f t h e mor'rga e f o r t h e
f o r e c l o s u r e s a l e t o be Val-id. B o t t o m y, 13 Mass.
App. tt. a t 483-84. It does so t o assure
p o t e n t i a l bl'dders t h a t t h e f o r e c l o s - i n g p a r t y can
p r o m p t l y d e l i v e r good t i t l e and t o p r e v e n t
" O p p o r K u n i t i e s f o r c o l l u s i o n and f o r t a k i n g
u n f a i r advantage o f t h e mortgagor." See Roche,
106 M ~ S S . a t 5 1 3 . ... TO a l l o w a f o r e c l o s i n p a r t y ,
w i t h o u r any i n t e r e s t i n t h e mortgage a t r e t i m ei?
o f t h e s a l e (recorded o r unrecorded), t o conduct
t h e s a l e i n -these circumstances, b i d , and then
a c q u i r e ood t i t l e by l a t e r assignment i s
complete7y c o n t r a r y t o G . L . c . 244, 5 1 4 ' s i n t e n t
and commands.
Ihanez I, a t 207.
VI. AT T H E T I M E OF THE FORECLOSURE SALE, APPELLANT
HAD NOT OBTAINED A W R I T r E N , VALID ASSIGNMENT O F
THE MORTGAGEE'S R I G H T 5 UNDER THE MORTGAGE
CONTRACT.
As TO u . 5 . Bank's appeal of t h e d e n i a l o f i t s
M o t i o n t o VacaTe Judgment pursuant t o Mass. R . C i v .
P r o . 59 and 60, U . S . Bank's u n e x p l a i n e d and
u n j u s t i f i e d f a i l u r e t o keep t h e e v i d e n t i a r y promises
i t made t o t h e Land c o u r t j u d g e was reason enough f o r
-30-
d e n i a l upon appeal . 1-iowever, and more i r n p o r t a n c l y , t h e
motion proceedings e s t a b l i s h e d t h a t U . S . Bank l a c k e d
l e g a l a u t h o r i t y t o f o r e c l o s e upon t h e Ibanez mortgage
a t t h e r i m e t h a t i t s o l d and bought The I b a n e z
p r o p e r t y . S p e c i f i c a l l y , t h e PPM f i l e d w i t h t h e c o u r t
below d i d n o t and c o u l d n o t convey t h e Ibanez mortgage
t o U.S. Bank, t h e assignments “ i n b l a n k ” d i d n o t and
c o u l d n o t convey t h e morrgage t o u . S . Bank, t h e
assignment a l t e r e d p o s r - e x e c u t i o n and n o t a r i z a t i o n dl’d
n o t and c o u l d n o t convey The mortgage t o u.5. Bank,
and t h e r e c o r d evidence i n d i c a r e s t h a t t h e rnorryagc i s
n o t , i n a c t u a l i t y , an a s s e t o f U.S Bank, as T r u s t e e .
The r e a l dispuye presented i n t h i s appeal i s more
profound t h a n each o f U . S . Bank’s f l a w e d o r a l t e r e d
documenrs, i t s b e l a t e d o r r e t r o a c t i v e assignments, and
i t s c a r e l e s s and unkept promises. what U.S. Bank i s
a c t u a l l y seeking, i n t h e name o f s e c u r i t i z a t i o n
convenience, i s f o r t h i s c o u r t 110 d i s c a r d t h e
transparency and c l a r i t y o f o u r l o n g - s r a n d i n g l a n d
r e c o r d i n g d o c r r i nes and systems, ’’ and rep1ace them
w i t h a conveyance scheme which, uses s o - c a l l e d
“assignments i n b l a n k ” and p o s t - n o t a r i z a t i o n “ f i l l e d -
’‘ A t i t s c o r e , T h i s e f f o r t i s f l a w e d i n t h e mosr
fundamental way: becausc, no m a t t e r how viewed, t i t l e
t o r e a l e s t a t e i s n o t , and should n o t be t r e a t e d as,
bearer p a p e r . A Note i s j u s t a d e b t , c a r r y i n g no power
beyond t h e r i g h t t o c l a i m payment, and w i r h no r e a l
f o r c e u n t i l p r e s e n t e d t o a c o u r t . A mortga e i s , i n
Massachusetts, q u i r e l i t e r a l l y ownership o? a f a m i l y ’ s
-31-
i n ” assignments t o c o n v e r t r e a l e s t a t e t i t l e documents
i n t o “ b e a r e r paper” - as though t i t l e s a r e t h e
e q u i v a l e n c s o f as $20.00 b i l l s . T h i s sysrem would, i t
i s true, a l i d a t e U . S . Bank’s lbanez f o r e c l o s u r e , by
doc t r ina1 y a p p r o v i n g rhe numerous conveyances +char
U.S. Bank ‘ s f i l i n g s c l a i m t o o k p l a c e here - without
v e r i . F i car on, w i t h o u r documenrati on, and w i rhouc
recorded conveyance o f any k i n d ; c e r t a i n l y , such an
opaque, r e c o r d l e s s system would make e a s i e r The
i n s t a n t , p r i v a t e t r a d i n g o f b o r r o w e r s ’ mortgages whr’ch
U.S. Bank d e s i r e s .
The c o s t , however, would be s u b s t a n t i a l , as t h i s
C o u r t long-ago h e l d :
The conveni ence which men m i g h t o c c a s i o n a l 1y f i nd
i n l e a v i n g b l a n k s i n s c a l e d i n s t r u m e n t s t o be
f i l l e d a f t e r d e l i v e r y , would be b u r a s l i h t
compensation f o r t h e e v i l s which would f o l o w t h e 7 ”
a b r o g a t i o n o f t h e a n c i e n t r u l e o f t h e common l a w .
B U ~ I I Sv . Lynde, 6 A l l e n 305, 312 (1863).
A. U . S . Bank was n o t t h e h o l d e r of t h e I b a n e z
mortga e when t h e f o r e c l o s u r e n o t i c e s were
E
p u b l i s ed and t h e a u c t i o n was conducted.
Although t h e Land C o u r t gave U . S . Bank l e a v e t o
submir a l l t h e documenrs i n i t s possession, custody o r
c o n t r o l t h a t “may e x i s t which may show a pre-notice,
pre-sn7e assignment s u f f i c i e n t under G. L . c. 244,
4 14,” RA 742, r h e p l a i n Facr remains r h a t U . S . Bank
f i r s t o b t a i n e d a w r i t t e n assignment of t h e Ibanez
- -.---..I -
home: a home which, Through r h e power o f s a l e , may be
t a k e n w i t h o u t any j u d i c i a1 a c t i o n whatsoever.
-32-
mortgage on September 2 , 2008, more t h a n a year a f t e r
U.S. Bank conducted i t s .Foreclosure sa.le. I n f a c t , r h e
r e c o r d demonstrares t h a t (1) ROSe Mortgage executed an
assignment “ i n b l a n k ” o f r h e Ibanez morrgage on
December 8, 2005, (2) a t some t i m e subsequent t o
December 8 , 2005, t h e Rose Mortgage assignment was
a l T e r e d by t h e a d d i ’ t i o n o f t h e oplrion One c o r p o r a t e
stamp, i d e n t i f y i n g O p t i o n One as t h e assignee - an
a l t e r a t i o n made on t h e f a c e o f t h e p r e v i o u s l y
n o t a r i z e d “ o r i g i n a l assignment”; and (3) on o r about
January 2 3 , 2006, o p t i o n one executed another
assignmenr “ i n b l a n k ” . No subsequent assignment o f t h e
Tbanez mortgage o c c u r r e d u n t i l American Home execuyed
t h e p o s t - f o r e c l o s u r e assignment on September 2 , 2008.
T h e r e f o r e , a t t h e t i m e o f t h e June, 2007 f o r e c l o s u r e
n o t i c e s and J u l y F o r e c l o s u r e s a l e , t h e besr case f o r
U.S. Bank i s lrhar o p t i o n one was, and remained, t h e
mortgagee and h o l d e r o f t h e Ibanez Mortgage.
B. Pespi t e i t s unsupported r e p r e s e n t a t i o nIs,
r e g a r d i n g an a l l e g e d “ T r u s t Agreement, U . S .
sank submitted no v a l i d w r i t i n g e f f e c t u a t i n g
an assignment o f the mortga ee s r i g h t s
9
p r i o r t o conducting a f o r e c osure a u c t i o n ,
Recognizing t h e importance o f a v a l i d , w r i t t e n
p r e - f o r e c l o s u r e assignment, r h e Bank argues t h a t t h e
“Ibanez TrUSt Agreement ... assigned a l l i n t e r e s t i n t h e
s u b j e c t l o a n s ( i n c l u d i n g t h e [Ibanez] mortgage) t o
-33-
U.S. Bank.” App. E r . a t 17.28However, U.S. Bank never
s u b m i t t e d t h i s document co The Land C o u r t . Moreover,
U.S. Bank never s u b m i t t e d a “schedule” of mortgage
l o a n s governed by r h e a l l e g e d TrUSt Agreement, d e s p i t e
r e c e i v i n g l e a v e from t h e Land C o u r t t o do so. 2’1
Fina’lly, U.S. sank r e p r e s e n t s t h a t Lehman Brothers and
SASC were t h e e n t i t i e s who, by means o f t h e unproduced
TrUSt Agreement, v a l i d l y assigned t h e Ibanez mortgage
t o U.S. Bank - b u t t h e r e i s no evidence i n t h e r e c o r d
t h a t e , i t h e r o f chese e n t i t i e s ever owned o r h e l d t h e
I b a n c z mortgage. Given t h e Land c o u r t ’ s express
r e q u e s t f o r t h e T r u s t documents, and U . S . Bank’s
wholesale f a . i l u r e t o p r o v i d e rhem below, i t i s
d i f f i c u l t t o imagine a more a p p r o p r i a t e o c c a s i o n f o r
applicarion o f the r u l e t h a t the reviewing court w i l l
d i s r e g a r d and s t r i k e statements o f counsel i n t h e i r
a p p e l l a t e b r i e f n o t based upon, and supported by
c i t a t i o n t o , t h e r e c o r d below. Service Pub7ications,
-34-
InC. V . GOVf?f%7i?n, 396 Mass. 567, 580 (1986); B0St“Ofl
App. C c . 6 3 , 69 (1980)
-35-
c o n t a i n s no d i r e c t evidence o f t h e terms o f t h e
a l l e g e d T r u s t Agreemenr; i n s r e a d i t “ r e p r e s e n t s t h a r
t h e language o f assignmenr c o n t a i n e d i n t h e T r u s t
Agreement i s i n accord w i t h t h e analogous language
c o n t a i n e d i n t h e LaRace PSA.” App. B r . a t 20 n . 6
(emphasis added). B u r see V 1 . B supra. However, t h e PPM
e x p l i c i t l y r e p r e s e n t s t h a t “ [ e l a c h Morryage Loan [ h e l d
by t h e T r u s t ] w i l l be i d e n t i f i e d i n a schedule
appearing as an e x h i b i t TO t h e T r u s t Agreement.” RA
1295. D e s p i t e The PPM‘s r e p r e s e n t a t i o n t h a t a schedule
o f mortgage l o a n s governed by t h e T r u s t Agreementr
“ w i 7 7 ” e x i s t , U.S. Bank never s u b m i t t e d such a
document, o r any o t h e r document i n any way i n d i c a t i n g
t h a t t h e Ibanez mortgage i s one o f t h e mortgage l o a n s
t o which t h e PPM r e f e r s , nor any o t h e r evidence t h a t
U.S. Bank, as T r u s r e e owns t h e Ibanez mortgage.
A c c o r d i n g l y , U . S . Bank cannot c r e d i b l y c l a i m t o have
e s t a b l i s h e d i t s a u t h o r i t y TO f o r e c l o s e on r h e b a s i s o f
such a document.
The o n l y evidence t h a t t h e mortgage was e v e r
r r a n s f e r r e d t o U.S. sank i s t h e September, 2008 p o s r -
f o r e c l o s u r e assignment f r o m o p t i o n one - more t h a n a
year a f t e r U.S. Bank’s f o r e c l o s u r e s a l e . 3 2
-36-
D. Even under In r e Samue75, t h e l o n e
Massachusetts d e c i s i o n on which U .S, Bank
r e l i e s , t h e a l l e g e d t r u s t a reement cannot
E
demonstrate u . S . sank’s a u t o r i t y t o conduct
a foreclosure sale.
U.S. Bank c i t e s o n l y a s i n g l e Massachusetts
d c c i s i o n , I n r e Sarnue7s, 415 B . R . 8 (sankr. D . Mass.
r e q u i r e d t o a s s i g n a l l mortgage l o a n s t o t h e T r u s t e e .
RA 1 2 9 5 . Based on r h e d e s c r i p t i o n o f t h e a l l e g e d T r u s t
Agreement i n t h e PPM (because t h e T r u s t Agreement was
never produced), t h e r e i s no i n d i c a t i o n t h a t U . S .
Bank, as T r u s t e e , had t h e a u t h o r i r y r o accepr a s s e t s
f r o m any p a r t y o t h e r t h a n t h e “De o s i t o r . ” I f t h i s i s
E
The case, t h e acceptance o f t h e I anez mortgage by
U . S . Bank pursuant t o t h e p o s t - f o r e c l o s u r e assignmenr
would have been u l t r a v i r e s and v o i d under New York
l a w , which presumably governs t h e T r U S t (though
Appellees cannot be c e r t a i n w i t h o u t t h e T r u s t
Agreement). E s t . Powers & T r u s t s 5 7-2.4 ( p r o v i d i n g
t h a t under New York l a w , a c t s by a t r u s t e e i n
c o n t r a v e n t i o n o f an express t r u s t a r e v o i d ) .
-37-
t o t r a n s f e r mortgage l o a n s t o A m e r i q u e s t , b u t i t
has adduced no w r i t i n g e v i d e n c i n g t h e assignment
o f t h e ... Mortgage ,From Argent t o Ameriquest.
Consequently, t h e c h a i n o f t i t l e i s incomple,ce...
SamueJs, 415 B . R . a t 20.”
-38-
support U.S. Bank’s a . l l e g a t i o n t h a t ,it was t h e p r e -
f o r e c l o s u r e assignee o f r h e Ibancz mortgage, because
t h i s assignmenr “ i n b l a n k ” i d e n t i f i e s no assignee.
Massachuserts common l a w has l o n g h e l d t h a t a
conveyance i n l a n d , i n which a b l a n k had been l e f t f o r
t h e name o f r h e g r a n t e e , i s i n o p e r a t i v e as a
conveyance. See Macurda v . FU77er, 2 2 5 Mass. 341, 344
(1916); Phe7ps v . su77ivan, 140 Mass. 36, 36-37
-39-
.
o u r c o u r t s recognize, a conveyance o f r e a l e s t a t e
which l a c k s a g r a n t e e i s , q u i r e s.imp.ly, v o i d :
The deed s i g n e d b h e r , i n c o m p l e t e because o f
i
f a i l u r e t o name t e g r a n t e e , ... was i n v a l i d.... I t
conveyed no t i t l e .
F7aVin v . M o r r i s e y , 327 Mass. 2 1 7 , 2 1 9 ( 1 9 5 1 ) . The
reasons f o r t h i s r u l e were w e l l - e x p l a i n e d l o n g ago:
Every deed w e l l made must be w r i r t e n ; i . e . r h e
agreemenr must be a l l w r i t t e n b e f o r e t h e s e a l i n g
and d e l i v e r y o f i t ; f o r i f a man seal and d e l i v e r
an empty p i e c e o f paper o r parchment, a l b e i t he
do t h e r e w i t h a l i v e commandment t h a t an
!
o b l i g a t i o n o r o t e r m a t t e r s h a l l be w r i t t e n i n
i t , and t h i s be done a c c o r d i n g l y , y e t t h i s i s no
good deed.
When t h e paper was d e l i v e r e d , i t had no v a l i d i t
o r meaning. The f i l l i n g 0.F t h e b l a n k s c r e a t e d t e i
s u b s t a n t i a l a r t s o f t h e i n s t r u m e n t i t s e l f ; as
t:
much so as t e s i.g n i’n g o r s e a l i n g ... o u r s t a t u t e s ,
which p r o v i d e f o r t h e conveyance o f r e a l e s - t a t e
by deed, acknowledged and recorded, and f o r t h e
acknowled ment and r e c o r d i n g o f powers o f
7
a t t o r n e y o r making deeds, a r e e v i d e n t l y based on
r h e a n c i e n t d o c t r i n e s o f t h e common l a w
r e s p e c t i n g t h e e x e c u t i o n o f deeds; and a v a l u a b l e
and i m p o r t a n t purpose which these d o c t r i n e s s t i l l
s e r v e i s , t o guard a g a i n s t miscakes which a r e
l i k e l y TO a r i s e o u t o f v e r b a l arrangements, f r o m
misunderstanding and d e f e c r o f memory, even where
rhere i s no fraud.
The convenience which men m i g h t o c c a s i o n a l 1 f i n d
i n l e a v i n g b l a n k s i n s e a l e d i n s t r u m e n t s ‘to ge
f i l l e d a f t e r d e l i v e r y , would be b u t a s l i h t
compensation f o r t h e e v i l s which would f o g l o w t h e
a b r o g a t i o n o f t h e a n c i e n t r u l e o f t h e common l a w .
Burns, 6 A l l e n a t 312.35T h i s f l o w s f r o m a f i r s r
p r i n c i p l e o f c o n t r a c t l a w : t h a t one cannot c o n t r a c t
-40-
w i t h h i s o r h e r s e l f . Eastmiln, 6 p-ick. a t 321. U , S .
Bank po,ints t o no l e g a l a u t h o r i t y t h a t an assignment
i s v a l i d when there. i s no p a r r y B . Indeed,
~ ~ neither
s r a t u t o r y p r o v i s i o n s nor d e c i s i o n a l l a w suggest t h a t
t h e r e i s a v a l i d assignmenr from one p a r t y t o anorher,
where “ a n o t h e r ” i s merely a b l a n k space. Id.
F. The Assignment from Rose M o r t age t o O p t i o n
%
one i s v o i d , as i t was a l t e r e a f t e r i t s
E x e c u t i o n and N o t a r i z a t i o n .
The common 1aw d o c t r i pes in v a l i d a r i ny documents
conveying r e a l e s t a t e where no g r a n t e e i s named have
y e t another consequence i n r h i s a c t i o n : t h e
i n v a l i d a t i o n o f t h e assignment from Rose Mortgage,
where t h e granree - o p t i o n One . was f i l l e d i n a f t e r
t h e assignment was n o t a r i z e d , o r sealed:
The l n s t r u m e n t d e l i v e r e d t o [ G r a n t o r ’ s agent] was
w i t h o u r v a l i d i t y and t h e d i r e c t i o n t o ... t o f i l l
t h e b l a n k space [ f o r grantee] w i t h t h e name...o f
~ ~~
c o n t e n t i o n t h a t assignments i n b l a n k a r e completed
v a l i d t r a n s f e r s i s t h e obvious q u e s t i o n : t r a n s f e r s t o
whom? To no one? B U t t h e broader i m p l i c a t i o n s a r e more
s o b e r i n g : do we r e a l l y want assignments o f m o r t ages -
i n Massachusetts, documents conveying b o t h l e g a 7
ownership and t h e r i g h r t o n o n - j u d i c i a l f o r e c l o s u r e -
t o be “ v a l i d t r a n s f e r s ” where t h e owner i s j u s r a
b l a n k “ t o be f i l l e d i n i a t e r ? ”
’’ o n l y The w r i t t e n , executed assignmenr o f a mortgage
c o n t a c t can e f f e c t i v e l y t r a n s f e r ownership o f t h a r
mortgage. See warden, 1 5 Mass a t 236 (“No ‘ I n t e r e s t
passes by a mere d e l i v e r y o f a mortgage deed, w i t h o u t
an assignment i n w r l ’ t i n g and by deed.’ ) . To s a t i s f y
t h e s t a t u t e o f f r a u d s , an assignment % u s t c o n t a i n t h e
terms o f t h e contract agreed upon - t h e p a r t i e s , t h e
locus ( i f an i n t e r e s t i n r e a l e s t a t e i s d e a l t w i t h ) ,
i n some circumstances t h e p r i c e , and i t must be s i g n e d
by t h e p a r t t o be charged o r by some one a u t h o r i z e d
t:
t o s i g n on i s b e h a l f . ” cousbe7is v. n7ex;lnd~r,315
Mass. 729, 730 (1944).
-43.-
[ t h e a l l e g e d Grantee] c o n f e r r e d... no l e g a l r i g h - t
because t h e F i l l i n g i n o f such a b l a n k c r e a t e d a
s u b s t a n t i a l p a r t o f t h e deed i t s e l f , ” s t o o d on
t h e same f o o t i n g as s i g n i n g and s e a l i n g and could
be a u r h o r i z e d o n l y by a power under s e a l . ,,
MacUrda, 2 2 5 Mass. a t 3 4 4 ( i n t e r n a l c i t a t i o n s omi.cted).
AS t h e r e i s no v a l i d assignment from Rose Mortgage t o
o p t i o n one, b o t h t h e assignment “ i n b l a n k ” and t h e
American Home c o n f i rmarory assignment a r e i n v a l i d .
G. The Post-Foreclosure Assignment “confirmed”
Nothing.
U.S. Bank a-lsn i n s i s t s t h a t t h e Land C o u r t e r r e d
i n c o n c l u d i n g t h a t t h e p o s t - f o r e c l o s u r e assignment
dated September 8 , 2008 d i d n o t v a l i d a . t e t h e J u l y 5 ,
2007 f o r e c l o s u r e s a l e . The f l a w s i n t h i s argument a r e
l e g i o n s t a r t i n g w i t h t h e problem t h a t t h e c o n f i r m a t o r y
g r a n r o r had no r i t l e t o convey. See supra.
Even d i s r e g a r d i n g r h - i s f a t a l f l a w , f i r s t , and
most o b v i o u s l y , an indepcndenr a c t i s n o r a
c o n f i r m a t o r y conveyance, and a c o n f i r m a t o r y assignment
a c t s merely t o c u r e a d e f e c t i n ,rhe assignment b e i n g
“confirmed.” A “confirmable” error frusrrates the
i n t e n t i o n s t h e p a r t i e s soughr t o accomplish i n t h e
assignment b e i n g confirmed:
[ ~ l o n f i r m a t i o ni s t h e a p p r o b a t i o n o r a s s e n t t o an
e s t a t e a1 ready c r e a r e d [by t h e c o n f i r m e r l , which,
as f a r as i r i s i n t h e c o n f i r m e r ’ s power, makes
i t good and v a l i d . SO t h a t the c o n f i r m a t i o n does
not regularly create an e s t a t e ... such a w r i t i n g
c r e a t e s no t i - r l e , and conveys n o t h i n g which has
come i n t o t h e g r a n t o r ’ s ownership s i n c e t h e
making of t h e o r i g i n a l [ g r a n t ] . I t t a k e s t h e
p l a c e o f t h e o r i g i n a l [ g r a n t ] , and i s evidence of
t h e making o f r h e former conveyance as o f t h e
time when i t was made. I f under o u r system of
-42-
r e g i s t r a t i o n o r o t h e r w i s e , i t i s necessary t o
g i v e i t e f f e c t as i n i t s e l f a conveyance, i t i s
o n l y c o n f i r m a t o r y evidcncc of t h c t i t l c which
passed by t h e o r i g - i n a l [ g r a n t ] .
5cap7cn v . 67anchard, 3.87 Mass. 7 3 , 7 6 (1904); accord
Gou7dv. W a g n e r , 196 Mass. 270, 2 7 6 (1907) (“The deed
was g i v e n t o c o r r e c t e r r o r s of d e s c r i p t i o n ... and t o
c o n f i r m t h e r i , c l e conveyed by sa.id [Grantor] ... and i t
may we’l1 be doubted whether i t operated t o convey any
t i t l e on t h e p a r t o f t h e p e t i t i o n e r . ” )
No such “ c o n f i r m a b l e ” e r r o r o c c u r r e d , when o p t i o n
-43-
O p t i o n One. w i t h o u r an assignment from O p t i o n One t o
American Home, o r w i t h o u t some o t h e r evidence of t h e
r r a n s f e r o f O p t i o n One’s i n t e r e s t i n t h e MOrTgage TO
American Home, U . S . sank has produced no evidence t h a t
American tiome had any a u t h o r i t y t o a s s i g n t h e Ibanez
Mortgage. Sarnuels, 415 B . R . a t 20.
I n s h o r t , whatever t h e September 2 , 2008 American
Home assignment accomplished, i t d i d n o t , and c o u l d
n o t r e t r o a c r i v e l y v a l i d a t e a f o r e c l o s u r e s a l e by an
e n t i t y which l a c k e d power o f s a l e r i g h t s a r r h e r i m e
t h e f o r e c l o s u r e s a l e was conducted.
H. The undated and c o n f l i c t i n g Allonges Make
doubtful whether U . S . sank Possessed t h e
Note at t h e Time o f t h e F o r e c l o s u r e s a l e .
I n another u n a v a i l i n y a t t e m p t t o b o l s t e r i t s
a l l e g a t i o n t h a t i t h e l d t h e I b a n e z morrgage, U.S. sank
a l s o s u b m i t t e d To The Land c o u r t a copy o f t h e I b a n c z
nore and two a l l o n y e s . I n i n f o r m a l d i s c o v e r y , U . S .
Bank a l s o produced t o counsel che Loan closing File,
as o f t h e d a t e o f t h e c l o s i n g . ISA 8-9. That f i l e
i n c l u d e s y e r a r h i r d a77onge - a p p a r e n t l y e x i s t i n g as
o f the closing - which i t s e l f c a s t s doubr on t h e
i n t e g r i t y o f t h e c h a i n o f possession o f t h e I b a n e z
Note. Id. The f i r s r allonge, which has no i n d i c a t i o n
o f r h e d a t e o f i t s e x e c u t i o n , was made payable To
“ O p t i o n One Mortgage c o r p o r a t i o n , A C a l i f o r n i a
C o r p o r a t i o n ( w i t h o u t Recourse)” and was executed by
Rdlph V i t i e l l o , CEO o f Rose Morrgage. RA 965. The
-44-
second a l l o n g e i s made payable i n b l a n k , and i s
executed by sheryn c e r v a n t e s as A s s i s t a n t s e c r e t a r y o f
O p r i o n One. RA 966. The second a l l o n g e c o n t a i n s
m u l t i p l e dares, w-ith none i d e n t i f i e d as the d a t e o f
execu.cion. According t o t h e a f f i d a v i t s s u b m i t t e d b y
U.S. Bank, t h e NoTe and t h e s e two a l l o n g e s were h e l d
by W e l l s Fargo, f o r American HOllle on May 4 , 2009. RA
1073-83. U.S. Bank has p r o v i d e d no t e s t i m o n y o r
evidence i n d i c a t i n g who had possession o f t h e n o t e o r
t h e . s t a t u s o f t h e a l l o n g e s as o f t h e o p e r a t i v e d a t e s -
r h e f o r e c l o s u r e n o t i c e and s a l e d a t e s .
Although produced t o rbanez counsel, u . 5 . Bank
e x i s t e n c e o f a r h i r d a l l o n g e r a i s e s t h e v e r y -issue of
why t h e law r e q u i r e s an a l l o n g e must be a f f i x e d t o a
note. G.L. c . 106 5 3-204 (’‘For t h e purpose o f
dererrnining whether a s i g n a t u r e i s made on an
i n s t r u m e n t , a paper a f f i x e d t o t h e instrumenrr i s a
p a r t o f the instrument”) .jU The requirement t h a t an
36
See also Town o f Freeport v . Ring, 727 A.2d 901, 905
(Me. 1999) ( r e g a r d i n g n e a r l y i d e n t i c a l Maine s t a t u t e
c o u r t h e l d “a s i g n a t u r e on a s e p a r a t e , unattached
p i e c e o f paper i s nor an indorsement o f t h e
-45-
a l l o n g e be a f f i x e d t o t h e nore h e l p s m e e t r h e dua.1
p o l i c y o b j e c t i v e s o f p r e v e n t i n g f r a u d and p r e s e r v i n g
t h e c h a i n o f t i t l e t o an i n s t r u m e n t . ~ a u t h w e s t c r n
Reso7ution Corp. v . Watson, 964 S.w.2d 262, 264 (Tex.
Comm’n App.1997) ( c i t i n g ~damns, 853 F.2d a t 1 6 7 ) . In
t h i s i n s t a n c e , t h e s e o b j e c t i v e s a r e deFeared by
s i g n i f i c a n t u n c e r t a i n t y s u r r o u n d i n g how, when, which,
o r even whether any o f these t h r e e a l l o n g e s were
physica’l-ly attached t o t h e note. Notably, d e s p i t e t h e
C o u r t ’ s r e q u e s t f o r an a f f i d a v i t v e r i f y i n g t h e
p h y s i c a l s t a r e o f t h e s e documenrs as of t h e d a r e o f
t h e f o r e c l o s u r e s a l e , no a f f i a n t has “spoken” a$ t o
t h e attachment o f any o f t h e a l l o n g e s on r h a r d a t e : o r
on any o t h e r d a t e , f o r t h a t m a t t e r . It i s i m p o s s i b l e
t o ltnow based on t h e v a r i o u s u n - a f f i x e d and undated
a l l o n g e s who was t h e h o l d e r o f t h e n o t e a t r h e r i m e o f
t h e Ibanez f o r e c l o s u r e p u b l i c a t i o n and s a l e . And, o f
course, t h e n o t e -~ 7acking any power o f sa7e -
p r o v i d e s no a u r h o r i t y ro f o r e c l o s e , and does n o r
convey w i t h i t “mortgagee” s t a t u s . 39
-46-
I. Evidence t h a t t h e Tbanez M o r t g a e -is not
included i n the only available gisting o f
T r u s t - h e l d Mortgages i s reason enough t o
deny t h e sank’s M o t i o n t o vacate Judgment.
Upon o f f e r by U . S . sank c o u n s e l , t h e Land C o u r t ,
.in t h e proceedi rigs below, e x p r e s s l y requested t h a t
U.S. sank p r o v i d e t h e T r u s r e x h i b i t “ i d e n t i f y i n g t h e
‘ b l o c k s o f mortgages s o l d i n t o t h a r T r u s t , ”’ which
p u r p o r t e d l y -include t h e mortgage a t i s s u e i n r h i s
case.” RA 742-3. I n breach o f t h i s r e q u e s t , u.5. Bank
p r o v i d e d n o t h i n g o f t h e k i n d . I b a n e z , however,
p r o v i d e d p r o p e r l y a u t h e n t i c a t e d (and u n o b j e c t e d - t o )
evidence t h a t t h e Ibanez mortgage was n o t i n c l u d e d i n
t h e T r u s t a s s e r s . ISA 22-54, And, as record-evidence
t o which no o b j e c t i o n was made, t h e Land Court was
e n t i t l e d t o accept i t s accuracy. adse en v . ~ r w i n ,395
MaSS 7 1 5 , 721 (1985).
On t h i s b a s i s alone, t h e Land c o u r t was w i t h i n
i t s d i s c r e t i o n i n denying U.S. Bank’s M o t i o n ‘to v a c a t e
Judgment.
V I I . U . S . BANK’S ARGUMENT THAT THE LAND COURT ERRED I N
NOT APPLYING THE PROSPECTIVE A P P L I C A T I O N DOCTRINE
TO A T H I R T Y F I V E YEAR OLD STATUTE IS MERITLESS.
-47-
“Prospecci ve Appl ic a t i o n ” requesr o f Amicus Real
E s t a t e Bar A s s o c i a t i o n (REBA) i n t h e t r i a l c o u r r does
not a l t e r t h a t r e s u l t - as t h e c o u r t “ d e a l s o n l y w i t h
-issues p r e s e n t e d by r h e p a r t i e s , ” and need n o r even
c o n s i d e r i s s u e s r a i s e d o n l y i n r h e b r i e f s o f an
amicus. u n i t e d Technologies Corp. v. L i b e r r y MUt. rns.
C o . , 407 M a s . 591, 593 (1990); Pine0 v. Executive
cuunci7, 412 Mass. 3 1 , 36 (1992).
However, even moving p a s t i t s w a i v e r problem,
U.5. Bank’s argument i s m e r i t l e s s ; indeed, i r i s an
argument t h a t c o n f l a t e s a j u r i s p r u d e n t i a l d o c t r i n e
a p p l i c a b l e o n l y t o j u d i c i a l changes i n w e l l -
e s t a b l i s h e d and l o n g - s t a n d i n g r u l e s o f common 7aw
a f f e c t i n g r e a l p r o p e r t y ; and t h e d o c t r i n e t h a t
recent7y enacted s t a t u r e s a r e p r o s p e c t i v e l y a p p l i e d ,
absent a c l e a r l y expressed l e g i s l a t i v e command f o r
r e t r o a c r i ve appl ic a t i o n , powers v . w i Ikinson, 399
Mass. 650, 662-63 (1987) and Turner v . Greenaway, 391
Mass. 1002, 1003 (1984). There i s n o t , and has never
been, a d o c t r i n e t h a t an i n t e r p r e r a t i o n o f a l o n g
enacted s t a t u t e can be l i m i r e d t o p r o s p e c t i v e cases.
L a s t l y , o f c o u r s e , U . S . Bank’s e n t i r e argument
r e s t s upon i t s i n s i s t e n c e t h a t t h e Land C o u r t ’ s Ibanez
decision a l t e r e d long-standing j u d i c i a l i n t e r p r e t a t i o n
of G . L . c . 244, 5 1 4 , a c o n t e n t i o n which Judge Long
rebutted i n conscientious d e t a i l :
Bank’s argument] i nore5 B o t t o m 7 v .
F i r s t , [U.S.
2
Kabachnick. which s t a t e s t h a t t e n o r i c e i n t a t IY
-4a-
case “was d e f e c r i v e because i t f a i l e d t o i d e n t i f y
t h e h o l d e r of t h e mortgage, t h e r e b y r e n d e r i n g t h c
f i r s t r F o r e c l o s u r e s a l e v o i d as a m a r t e r o f l a w . ”
... ~ o t t o m 7 yi s Lhe most r e c e n t case c o n s t r u i n g t h e
n o t i c e p r o v i s i o n s o f the s t a t u t e and i s t h e
s t a r t i n p o i n t f o r t h e proper i n r e r p r e t a t i o n o f
t h e e a r y i e r cases and proper t i t l e p r a c r i c e . A S
x
n o t e d above, ~ o r r o m 7 yunequivocal1 h o l d s t h a t a
notice t h a t f a i l s t o i d e n t i f the older o f the
i:
mortga e i s d e f e c t i v e , t h e r e y r e n d e r i n g t h e
7
“ f o r e c o s u r e s d l e v o i d as a m a t t e r o f l a w . ...
,I
G.L. c . 2 4 4 , 5 1 4 r e q u i r e s p u b l i c a t i o n i n t h e
name o f t h e h o l d e r o f rhe mortgage f o r t h e
f o r e c l o s u r e s a l e t o be v a l i d .
-49-
j u d g e has t h e r i g h t t o expect t h a t J. p a r t y , i n
proceedings b e f o r e him, will p r e s e n t a l l o f t h e f a c t s
and argumenrs which j u s t i f y h i s c l a i m s . Our t r i a l
c o u r t s , and o u r t r i a l judges, have t h e r i g h t n o t to be
sand-bagged b y c l a i m s wi.chou-c h a v i n g had r h e
o p p o r t u n i t y t o c o n s i d e r and address them - and
Appel1 a.re RU1 e 1 6 mandates .chi s :
The requirement t h a t a p a r t y p r o v i d e ‘ a n
a p p r o p r i a t e and a c c u r a t e r e c o r d r e f e r e n c e ’ f o r
each and e v e r y Tact ... i n t h e b r i e f . I i s n o t an
i d l e t e c h n i c a l r e q u i r e m e n t . Among o t h e r t h i n g s ,
i t p r e v e n t s a r t i e s from e x a g g e r a t i n g o r
E
d i s r o r r i n g r e f a c r s ..., o r f r o m i n s e r r i n g i n t o che
a n a l y s i s on appeal f a c t s t h a t a r e s i m p l y
nonexi s t c n t .
C i t y o f Lynn v . Thompson, 435 Mass. 54, 56 (2001).
This court should d i s r e g a r d , and srrl’lce, a l l
a l l e g e d “ f a c t s ” which a r e n o t accompanied by a c t u a l
c i r a r i o n s t o r h e r e c o r d i n The Land C o u r t proceedings,
and a l l arguments which U.S. Bank f a i l e d t o p r e s e n t i n
t h o s e proceedings. s e r v i c e ~ u b 7 i c a t i o n s ,m c . , supra;
Boston Edison co. I supra.
IX. CONCLUSION
-50-
Respy&fully submitted,
--
A t t o r n e y A t Law
675 Massachusetts Ave.,
1 Z t h Floor
Cambridge, MA 02139
(617) 441-3303
P a u l .collier@paulcollierlawof
f i ce .com
Max Weinstein, SBO# 600982
WilmerHale Legal Services
Center
o f Harvard Law School
122 Boylsron S t r e e t
Jamaica P l a i n , MA 02130
mmwei n s t e i ne1 aw. harvard .edu
(617) 522-3003
ON THE BRIEF:
E l o i s e P . Lawrence, BBO #655764
Meyer H . Potashman, BBO #667196
Grearer B O S T O n Legal Services
197 F r i e n d S t r e e t
B o s t o n , MA 02114
(617) 603-1647
-51-