Case Title: Thompson v. JPMorgan Chase Bank, N.A.

Citation: 

Docket Number: SJC-12798

State: massachusetts

Court: Massachusetts Supreme Court

Date: 2020-11-25T00:00:00Z

Document:
NOTICE:  All slip opinions and orders are subject to formal 
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error or other formal error, please notify the Reporter of 
Decisions, Supreme Judicial Court, John Adams Courthouse, 1 
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SJC-12798 
 
MARK R. THOMPSON & another1  vs.  JPMORGAN CHASE BANK, N.A. 
 
 
 
Suffolk.     February 13, 2020. - November 25, 2020. 
 
Present:  Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, 
& Kafker, JJ.2 
 
 
Mortgage, Foreclosure, Real estate.  Real Property, Mortgage, 
Sale.  Sale, Real estate.  Notice, Foreclosure of mortgage. 
 
 
 
 
Certification of a question of law to the Supreme Judicial 
Court by the United States Court of Appeals for the First 
Circuit. 
 
 
 
Alan E. Schoenfeld, of New York (Arpit Garg, of the 
District of Columbia, & Mark C. Fleming also present) for the 
defendant. 
 
Todd S. Dion for the plaintiffs. 
 
The following submitted briefs for amici curiae: 
 
Andrew C. Glass, Gregory N. Blase, & Hollee M. Watson for 
American Bankers Association & others. 
 
Marissa I. Delinks & Samuel C. Bodurtha for Federal 
National Mortgage Association & another. 
 
Francis J. Nolan for Real Estate Bar Association for 
Massachusetts, Inc., & another. 
 
Jack Saade, pro se. 
                                                 
 
1 Beth A. Thompson. 
 
 
2 Chief Justice Gants participated in the deliberation on 
this case prior to his death. 
2 
 
 
 
 
 
GAZIANO, J.  Eight years after the plaintiff homeowners 
defaulted on their mortgage payments, JPMorgan Chase Bank, N.A. 
(Chase or bank), foreclosed on their home and sold it at auction 
pursuant to the statutory power of sale.  See G. L. c. 183, 
§ 21.  In the course of the foreclosure, Chase sent the notice 
required by G. L. c. 244, § 35A, and scripted in regulations 
issued by the Division of Banks (division) at 209 Code Mass. 
Regs. § 56.04.  The division does not permit a foreclosing 
mortgagee to alter the language of the required notice, which 
provides, inter alia, that "you can still avoid foreclosure by 
paying the total past-due amount before a foreclosure sale takes 
place."  209 Code Mass. Regs. § 56.04.  The terms of the 
plaintiffs' mortgage, however, specified that they could 
reinstate their mortgage by paying all past due amounts until 
"five days before sale of the Property pursuant to any power of 
sale contained in this Security Instrument." 
 
One month after the foreclosure sale, the plaintiffs 
commenced this action in the Superior Court to set aside the 
foreclosure.  They argued that these conflicting statements as 
to the last day upon which they possibly could reinstate their 
mortgage -- up to the foreclosure sale, as the notice stated, or 
up to five days before the foreclosure sale, as the terms of the 
mortgage provided -- meant that the bank's notice was 
3 
 
 
misleading, potentially deceptive, and therefore should render 
the foreclosure sale void.  See, e.g., Pinti v. Emigrant Mtge. 
Co., 472 Mass. 226, 240 (2015). 
After the matter was removed to the United States District 
Court for the District of Massachusetts, a Federal District 
Court judge granted summary judgment to Chase.  See Thompson vs. 
J.P. Morgan Chase Bank, N.A., U.S. Dist. Ct., No. 18-10131 (D. 
Mass. May 11, 2018) (Thompson I).  The United States Court of 
Appeals for the First Circuit reversed.  See Thompson v. 
JPMorgan Chase Bank, N.A., 915 F.3d 801, 805 (1st Cir.) 
(Thompson II), opinion withdrawn, 931 F.3d 109 (1st Cir. 2019) 
(Thompson III).  It concluded that, because the notice failed to 
include the five-day limitation specified in the mortgage 
contract, the notice was potentially deceptive and, therefore, 
void pursuant to our decision in Pinti.  Thompson II, 915 F.3d 
at 804-805, citing Pinti, 472 Mass. at 237-238. 
On a petition for reconsideration, in which Chase and 
numerous amici pointed out for the first time that the bank was 
required under Massachusetts law to send the notice verbatim, 
the First Circuit vacated its decision and certified the 
following question to this court: 
"Did the statement in the August 12, 2016, default and 
acceleration notice that 'you can still avoid 
foreclosure by paying the total past-due amount before 
a foreclosure sale takes place' render the notice 
inaccurate or deceptive in a manner that renders the 
4 
 
 
subsequent foreclosure sale void under Massachusetts 
law?" 
 
Thompson III, 931 F.3d at 111. 
We answer the reported question, "No."  Paragraph 16 of the 
plaintiffs' mortgage states that "[a]ll rights and obligations 
contained in this Security Instrument are subject to any 
requirements and limitations of Applicable Law."  Accordingly, 
the longer time for reinstatement specified by G. L. c. 244, 
§ 35A -- any time prior to the foreclosure sale -- constitutes 
controlling and applicable law that supersedes the conflicting 
provision of the mortgage contract.  Because that statute and 
its enabling regulations obligate mortgagees to accept a 
reinstatement payment at any time prior to a foreclosure sale, 
just as the notice stated, the notice sent by Chase was neither 
deceptive nor misleading. 
 
1.  Background.  On June 13, 2006, the plaintiffs entered 
into a residential mortgage agreement with Washington Mutual 
Bank to secure a $322,500 loan.  See Thompson II, 915 F.3d at 
802.  The mortgage was a standard form "Freddie Mac/Fannie Mae" 
residential mortgage (a so-called GSE Uniform Mortgage), an 
instrument widely used across Massachusetts.  See Pinti, 472 
Mass. at 236 n.16. 
a.  Legal background.  Two provisions of a GSE Uniform 
Mortgage contract are particularly relevant here.  Paragraph 22 
5 
 
 
specifies notice requirements that must be met before a 
mortgagee may accelerate a loan and begin foreclosure 
proceedings.3  Paragraph 19 of the GSE Uniform Mortgage places 
limits and conditions on mortgagors' rights to reinstate a 
mortgage after acceleration.  Paragraph 19 includes the 
provision at issue here, which purports to terminate the 
plaintiffs' right to reinstate "five days before sale of the 
Property pursuant to any power of sale contained in this 
Security Instrument."4 
                                                 
 
3 Paragraph 22 provides: 
 
"Lender shall give notice to Borrower prior to 
acceleration following Borrower's breach of any 
covenant or agreement in this Security Instrument (but 
not prior to acceleration under Section 18 unless 
Applicable Law provides otherwise).  The notice shall 
specify: (a) the default; (b) the action required to 
cure the default; (c) a date, not less than 30 days 
from the date the notice is given to Borrower, by 
which the default must be cured; and (d) that failure 
to cure the default on or before the date specified in 
the notice may result in acceleration of the sums 
secured by this Security Instrument and sale of the 
Property.  The notice shall further inform Borrower of 
the right to reinstate after acceleration and the 
right to bring a court action to assert the non-
existence of a default or any other defense of 
Borrower to acceleration and sale.  If the default is 
not cured on or before the date specified in the 
notice, Lender at its option may require immediate 
payment in full of all sums secured by this Security 
Instrument without further demand and may invoke the 
STATUTORY POWER OF SALE and any other remedies 
permitted by Applicable Law. . . ." 
 
 
4 Paragraph 19 of the mortgage states: 
 
6 
 
 
As do the contractual obligations of paragraph 22 of the 
GSE Uniform Mortgage, G. L. c. 244, § 35A, also establishes 
notice requirements before a foreclosing mortgagee can 
accelerate a mortgage obligation and foreclose based on borrower 
default.  Under the statute, the required notice must inform the 
mortgagor, inter alia, "that the mortgagor may redeem the 
property by paying the total amount due, prior to the 
foreclosure sale."  G. L. c. 244, § 35A (c) (8).  As mentioned, 
the division has issued regulations specifying the precise form 
that this notice must take; a foreclosing mortgagor may not 
                                                 
"Borrower's Right to Reinstate After Acceleration.  If 
Borrower meets certain conditions, Borrower shall have 
the right to have enforcement of this Security 
Instrument discontinued at any time prior to the 
earliest of:  (a) five days before sale of the 
Property pursuant to any power of sale contained in 
this Security Instrument; (b) such other period as 
Applicable Law might specify for the termination of 
Borrower's right to reinstate; or (c) entry of a 
judgment enforcing this Security Instrument.  Those 
conditions are that Borrower:  (a) pays Lender all 
sums which then would be due under this Security 
Instrument and the Note as if no acceleration had 
occurred; (b) cures any default of any other covenants 
or agreements; (c) pays all expenses incurred in 
enforcing this Security Instrument, including, but not 
limited to, reasonable attorneys' fees, property 
inspection and valuation fees, and other fees incurred 
for the purpose of protecting Lender's interest in the 
Property and rights under this Security Instrument; 
and (d) takes such action as Lender may reasonably 
require to assure that Lender's interest in the 
Property and rights under this Security Instrument, 
and Borrower's obligation to pay the sums secured by 
this Security Instrument, shall continue 
unchanged. . . ." 
7 
 
 
alter the notice.  See 209 Code Mass. Regs. § 56.04 ("the '90-
day Right to Cure Your Mortgage Default' notice must conform to 
the following: . . ." [emphasis added]). 
b.  Foreclosure and prior proceedings.  Sometime after 
2008, the United States Office of Thrift Supervision seized 
Washington Mutual Bank and placed it in receivership with the 
Federal Deposit Insurance Corporation (FDIC); the FDIC then sold 
its banking subsidiaries to Chase.  See Thompson II, 915 F.3d 
at 803.  In this way, Chase became the mortgagee on the 
plaintiffs' mortgage.  Id.  In July of 2009, the plaintiffs 
defaulted on their mortgage; since that time, they have made no 
payments. 
On August 12, 2016, Chase sent the plaintiffs notice of its 
intention to accelerate the loan and foreclose on their home.  
In accordance with the requirements of both G. L. c. 244, § 35A, 
and paragraph 22 of the plaintiffs' mortgage, the notice relayed 
that (1) the mortgage loan was in default; (2) tendering the 
past-due amount of $200,056.60 would cure the default; (3) the 
default had to be cured by November 10, 2016; and (4) if the 
plaintiffs failed "to cure the default on or before [November 
10, 2016], Chase [could] accelerate the maturity of the 
Loan, . . . declare all sums secured by the Security Instrument 
immediately due and payable, commence foreclosure proceedings, 
and sell the Property."  See Thompson II, 915 F.3d at 803.  The 
8 
 
 
notice also informed the plaintiffs of their right to reinstate 
the mortgage after acceleration, and explained that they could 
bring a court action asserting any defenses to foreclosure.  Id.  
It further stated that the plaintiffs could "still avoid 
foreclosure by paying the total past-due amount before a 
foreclosure sale takes place."  This notice conformed verbatim 
to the template required by 209 Code Mass. Regs. § 56.04. 
After the foreclosure sale and the filing of the 
plaintiffs' complaint to set aside the foreclosure in the 
Superior Court, Chase removed the case to the United States 
District Court for the District of Massachusetts.  There, the 
plaintiffs argued that, while the notice sent by Chase informed 
them of a "right to reinstate," it did not specify the temporal 
limitations on that right contained in paragraph 19 of their 
mortgage.  This, they claimed, rendered the notice potentially 
deceptive such that the foreclosure sale was void.  A United 
States District Court judge disagreed, and determined that 
strict compliance with the notice requirements of paragraph 22 
did not require specifying the conditions placed upon the 
plaintiffs' right to reinstate contained in paragraph 19.  
Accordingly, the judge allowed Chase's motion to dismiss. 
On appeal to the First Circuit, the plaintiffs renewed this 
argument.  See Thompson II, 915 F.3d at 803.  Considering the 
claim de novo, the court concluded that Chase had complied with 
9 
 
 
the facial requirements of paragraph 22, which only obligated 
Chase to give notice of the plaintiffs' substantive right to 
reinstate.  Id. at 804.  The court also correctly noted that 
paragraph 19 contains no independent notice requirement.  Id.  
Nonetheless, the court concluded Chase's notice was potentially 
deceptive because it "could mislead the [plaintiffs] into 
thinking that they could wait until a few days before the sale 
to tender the required payment."  Id.  The court reached this 
determination by reading our decision in Pinti, 472 Mass. at 
238, to stand for the proposition that "accuracy and avoidance 
of potential deception are conditions of the validity of the 
foreclosure."  Id. at 805.  Thus, it concluded that "the bank 
had no obligation under paragraph 19 to lay out its procedures, 
but it did have an obligation under paragraph 22 to provide 
notice and, under Pinti, to make anything it did say accurate 
and avoid potential deception."  Id. 
 
As noted, supra, Chase and several amici argued on 
reconsideration that Massachusetts law required the notice in 
question to be sent unaltered, and that substantial upheaval in 
the residential mortgage market would result from the 
Thompson II decision.  See Thompson III, 931 F.3d at 110.  The 
10 
 
 
First Circuit then set aside its decision and certified the 
relevant question to this court.  See id. at 110-111.5 
 
2.  Discussion.  Massachusetts is a "non-judicial 
foreclosure state," meaning that it allows a mortgagee to 
foreclose on a mortgaged property without judicial 
authorization, so long as the mortgage instrument grants that 
right by reference to the statutory power of sale.  See Pinti, 
472 Mass. at 232, citing U.S. Bank Nat'l Ass'n v. Ibanez, 458 
Mass. 637, 645–646 (2011); G. L. c. 183, § 21.  A foreclosing 
mortgagee, however, "first [must] comply[ ] with the terms of 
the mortgage and with the statutes relating to the foreclosure 
of mortgages by the exercise of a power of sale."  G. L. c. 183, 
§ 21.  Because of the "substantial power . . . to foreclose in 
Massachusetts without judicial oversight," we repeatedly have 
emphasized that "one who sells under a power [of sale] must 
follow strictly its terms; the failure to do so results in no 
valid execution of the power, and the sale is wholly void."  
Federal Nat'l Mtge. Ass'n v. Marroquin, 477 Mass. 82, 86 (2017), 
quoting Pinti, 472 Mass. at 232–233.  See Pryor v. Baker, 133 
                                                 
 
5 We acknowledge the amicus brief of American Bankers 
Association, American Financial Services Association, Bank 
Policy Institute, Massachusetts Bankers Association, 
Massachusetts Mortgage Bankers Association, and Mortgage Bankers 
Association in support of the defendant; of Federal National 
Mortgage Association and Federal Home Loan Mortgage Corporation 
in support of the defendant; of Real Estate Bar Association for 
Massachusetts, Inc., and the Abstract Club; and of Jack Saade. 
11 
 
 
Mass. 459, 460 (1882) ("The exercise of a power to sell by a 
mortgagee is always carefully watched, and is to be exercised 
with careful regard to the interests of the mortgagor"). 
 
This regime of strict compliance does not require a 
mortgagee to "demonstrate punctilious performance of every 
single mortgage term."  Pinti, 472 Mass. at 235.  Rather, since 
the Nineteenth Century, our cases consistently have required 
strict compliance "with the terms of the actual power of sale in 
the mortgage [and] with any conditions precedent to the exercise 
of the power that the mortgage might contain."  Id. at 233-234 
(collecting cases).  In Pinti, 472 Mass. at 235, we summarized 
our jurisprudence concerning what counts as a condition 
precedent as "(1) terms directly concerned with the foreclosure 
sale authorized by the power of sale in the mortgage,[6] and 
(2) those prescribing actions the mortgagee must take in 
connection with the foreclosure sale -- whether before or after 
the sale takes place."  Id. 
 
Consistent with these long-standing principles, in that and 
subsequent cases, we have continued to delineate which aspects 
                                                 
 
6 For example, in McGreevey v. Charlestown Five Cents Sav. 
Bank, 294 Mass. 480, 481, 484 (1936), we voided a foreclosure 
sale because the mortgage required the sale to be advertised and 
held in Suffolk County, even though the property was located in 
Middlesex County.  Similarly, in Moore v. Dick, 187 Mass. 207, 
210-212 (1905), we voided a foreclosure sale for failure to 
comply with the terms of a mortgage contract which specified 
that the sale be advertised in a particular newspaper. 
12 
 
 
of the regulatory scheme require strict compliance before a 
valid foreclosure sale may take place.  See, e.g., Turra v. 
Deutsche Bank Trust Co. Americas, 476 Mass. 1020, 1022 (2017) 
(failure strictly to comply with postforeclosure requirements of 
G. L. c. 244, § 15A, did not render sale void); Pinti, 472 Mass. 
at 227, 239–240 (failure strictly to comply with notice 
requirements of GSE Uniform Mortgage paragraph 22 renders 
foreclosure void); U.S. Bank Nat'l Ass'n v. Schumacher, 467 
Mass. 421, 422 (2014) (failure strictly to comply with notice 
requirements of G. L. c. 244, § 35A, does not render foreclosure 
void because G. L. c. 244, § 35A, is not part of foreclosure 
process); Eaton v. Federal Nat'l Mtge. Ass'n, 462 Mass. 569, 
571, 580–581 (2012) (failure strictly to comply with 
requirements of G. L. c. 244, § 14, renders foreclosure void). 
 
Here, Chase sent one notice which satisfied the 
requirements of both G. L. c. 244, § 35A, and, at least 
facially, those of paragraph 22 of the plaintiffs' GSE Uniform 
Mortgage.7  The possibility of such a so-called "hybrid notice" 
                                                 
 
7 Some potential complexity arises because we have concluded 
that the terms of GSE Uniform Mortgage paragraph 22 are subject 
to strict compliance, while the requirements of G. L. c. 244, 
§ 35A, are not.  See Pinti, 472 Mass. at 238-240 (distinguishing 
strict compliance requirement of paragraph 22 from decision in 
Schumacher, 467 Mass. at 430-431, that G. L. c. 244, § 35A, is 
not subject to strict compliance).  There is no actual conflict, 
however, in applying the holdings of both Pinti and Schumacher 
to a single notice.  Any provision contained in GSE Uniform 
Mortgage paragraph 22 must meet the heightened strictures of 
13 
 
 
is explicitly contemplated by paragraph 15 of the GSE Uniform 
Mortgage itself:  "[i]f any notice required by this Security 
Instrument is also required under Applicable Law, the Applicable 
Law requirement will satisfy the corresponding requirement under 
this Security Instrument." 
 
We agree with the First Circuit that Massachusetts law 
under Pinti, 472 Mass. at 235, 240, requires that any notice 
given pursuant to paragraph 22 of the GSE Uniform Mortgage, 
regardless whether hybrid, must be accurate and not deceptive.  
See Thompson II, 915 F.3d. at 804.  We disagree, however, that 
the notice here was potentially deceptive.  We reach this 
conclusion because we determine that the more generous 
reinstatement period provided under G. L. c. 244, § 35A, governs 
over the contractually imposed time limits on reinstatement 
articulated in paragraph 19 of the GSE Uniform Mortgage. 
 
"The words of a contract must be considered in the context 
of the entire contract rather than in isolation."  Brigade 
Leveraged Capital Structures Fund Ltd. v. PIMCO Income Strategy 
Fund, 466 Mass. 368, 374 (2013), quoting General Convention of 
New Jerusalem in the U.S. of Am., Inc. v. MacKenzie, 449 Mass. 
832, 835 (2007).  When interpreting a contract (such as the GSE 
                                                 
Pinti's compliance regime, while those notice provisions found 
only in G. L. c. 244, § 35A, would be subject to the lesser 
requirements articulated in Schumacher, supra. 
14 
 
 
Uniform Mortgage), we construe it "as a whole, so as to give 
reasonable effect to each of its provisions" (quotation 
omitted).  James B. Nutter & Co. v. Estate of Murphy, 478 Mass. 
664, 669 (2018). 
 
Here, paragraph 12 of the plaintiffs' mortgage gives Chase 
the contractual ability to extend the deadline for a 
reinstatement payment.  Paragraph 16 provides that all "rights 
and obligations contained in this Security Instrument are 
subject to any requirements and limitations of Applicable Law."  
Applicable law is defined to include all "[F]ederal, [S]tate and 
local statutes, regulations, ordinances and administrative rules 
and orders (that have the effect of law) as well as all 
applicable final, non-appealable judicial opinions."  Thus, the 
language of the mortgage itself gives notice to the plaintiffs 
that the five-day limitation of paragraph 19 could be extended 
either by the discretion of the mortgagee or, as is the case 
here, relevant provisions of State law. 
 
Specifically, G. L. c. 244, § 35A, and its accompanying 
regulations require foreclosing mortgagees to send a notice 
specifying that, even after acceleration, homeowners have a 
legal right to "avoid foreclosure by paying the total past-due 
amount before a foreclosure sale takes place."  209 Code Mass. 
Regs. § 56.04.  Reading paragraphs 12 and 16 of the plaintiffs' 
mortgage together with this applicable regulation makes clear 
15 
 
 
that Chase not only had the contractual option to accept a 
reinstatement payment at any point prior to foreclosure, it was 
required to do so.  Thus, while in other States the "five days 
prior" limitation contained in GSE Uniform Mortgage paragraph 19 
may limit a mortgagee's unequivocal reinstatement rights, in 
Massachusetts, this limitation is superseded by the more 
generous reinstatement time period specified in the  statutory 
scheme. 
 
For this reason, the scenario that concerned the First 
Circuit, in which the plaintiffs would arrive three days prior 
to the sale, cash-in-hand, only to be rebuffed by Chase pointing 
to paragraph 19, could not happen.  Chase would be obligated to 
accept such a reinstatement payment under Massachusetts law; the 
fact that Massachusetts law would govern to allow a longer 
reinstatement period might not be abundantly clear to 
homeowners, based on the language that "limitations" of 
applicable law are applicable to the mortgage, but it is 
properly represented by the terms of the notice. 
 
Ultimately, the plaintiffs' contention that the notice 
requirements of G. L. c. 244, § 35A, are "of no significance" to 
Chase's duty to notify pursuant to paragraph 22 is unavailing.  
While we have read the terms of a mortgage and the statutes 
relating to the foreclosure of mortgages "as being separately 
grounded and having an independent meaning," Pinti, 472 Mass. 
16 
 
 
at 240, and the signatories certainly must comply strictly with 
the requirements of paragraph 22, even if G. L. c. 244, § 35A, 
were to be repealed or modified, there is nothing that says a 
single notice could not satisfy both the requirements of G. L. 
c. 244, § 35A, and of paragraph 22.  Indeed, the possibility 
explicitly is contemplated in the GSE Uniform Mortgage itself in 
paragraph 15.  Moreover, as a practical matter, the consumer 
protection aims of both the statutory scheme8 and paragraphs 19 
and 22 of the GSE Uniform Mortgage are better served by a single 
accurate notice rather than two potentially conflicting 
communications. 
 
3.  Conclusion.  Because the notice in question was neither 
inaccurate nor deceptive, we answer the reported question, "No." 
 
The Reporter of Decisions is to furnish attested copies of 
this opinion to the clerk of this court.  The clerk in turn will 
transmit one copy, under the seal of the court, to the clerk of 
the United States Court of Appeals for the First Circuit, as the 
answer to the question certified, and also will transmit a copy 
to each party. 
                                                 
 
8 See Schumacher, 467 Mass. at 430.