Source: http://masscases.com/cases/app/88/88massappct726.html
Timestamp: 2019-04-23 22:05:45+00:00

Document:
Present: Berry, Meade, & Maldonado, JJ.
Mortgage, Foreclosure, Real estate. Real Property, Mortgage, Sale. Sale, Real estate. Notice, Foreclosure of mortgage. Practice, Civil, Retroactivity of judicial holding. Retroactivity of Judicial Holding.
SUMMARY PROCESS. Complaint filed in the Southeast Division of the Housing Court Department on February 6, 2012.
The case was heard by Anne Kenney Chaplin, J., and a motion for reconsideration was heard by her.
Paul R. Collier, III, for the defendant.
Shawn Michael Masterson for the plaintiff.
and purchased the property in an extrajudicial foreclosure auction. Thereafter, Aurora commenced a summary process action to evict Murphy.
In the Housing Court, the judge determined that Aurora, as mortgage servicer, adequately complied with the requirements under G. L. c. 244, § 35A, as mortgagee, and granted it summary process to recover possession of the premises. On appeal from the judgment, Murphy claims that, pursuant to the Supreme Judicial Court's recent decision in Pinti v. Emigrant Mort. Co., 472 Mass. 226 (2015), Aurora's failure to strictly comply with the notice of foreclosure procedures contained in Murphy's mortgage renders the subsequent foreclosure void. Asserting that a ruling in his favor would not impair existing property interests and doing so would apply Pinti's otherwise prospective limitation equitably and without appearing arbitrary and capricious, Murphy claims the Pinti ruling ought to extend to cases pending on appeal (when the claim was raised and preserved) at the time of the Pinti decision's release. We agree and therefore reverse.
1. Background. Murphy purchased 245 Holmes Street in Halifax on March 13, 2007, through a mortgage loan secured from GreenPoint in the principal amount of $230,000. The mortgage conveys a security interest in Murphy's home and explicitly sets out the rights, powers, and obligations of the parties. Under its terms, Murphy was the mortgagor (borrower), and GreenPoint was the mortgagee and lender, with MERS as nominee for its successors and assigns.
In a letter dated November 4, 2010, Aurora informed Murphy that his loan was in default and that it would accelerate the loan unless he remitted the overdue balance and cured the default by April 4, 2011. In the letter, Aurora asserted that unless Murphy cured the default, it would take steps to terminate his ownership in a foreclosure proceeding. The letter also notified Murphy of his right to assert the non-existence of a default or any other defense that he might have to acceleration of the loan and sale of his property.
Nothing in the record indicates that Murphy cured the default within the prescribed 150-day period. After this period passed, MERS formally assigned the mortgage to Aurora on or about April 13, 2011. On October 6, 2011, Aurora commenced foreclosure proceedings against Murphy and subsequently recorded a foreclosure deed through which Aurora purported to become the title owner of the property. In a mailing dated December 16, 2011, Aurora sent Murphy a notice to quit and vacate premises informing him that his rights to occupy the property would terminate within seventy-two hours; Aurora then commenced a summary process action to evict him.
right to cure itself did not comply with either § 35A or paragraph 22 of Murphy's mortgage.
Murphy further contested the notice of his right to cure as inadequate in a motion for reconsideration. He claimed that, because Massachusetts is a nonjudicial foreclosure State without a mandated foreclosure proceeding, Aurora's failure to notify him that he would need affirmatively to bring a court action in order to assert a defense or the nonexistence of default deprived him of proper notice, and made the foreclosure sale void ab initio, not merely voidable. In her order denying the motion, the judge held that, while providing such notice is a necessary condition precedent, the content of the notice is not. Relying on Superior Court decisions, Murphy claimed that other Massachusetts courts had found that parties must strictly comply with § 35A as a statute that is part of the power of sale under G. L. c. 183, § 21. Because the Supreme Judicial Court had not yet decided the relevant points governing this matter, the judge declined to follow the trend in the Superior Court and denied Murphy's motion for reconsideration. Murphy timely filed a notice of appeal from the judgment and the order denying reconsideration.
(2014). However, where the judge has not assessed witness credibility, but instead based her findings on documentary evidence, we may draw our own conclusions from the record. Ibid. We examine the judge's rulings on questions of law de novo. Ibid.
On appeal, Murphy claims that Pinti, 472 Mass. at 231-244, which holds that the failure to comply strictly with the notice of default provisions in the mortgage renders the foreclosure sale void, not merely voidable, ought to apply to cases pending on appeal when that claim was raised and preserved. [Note 3] Applying the principles governing application of new doctrines to cases pending on appeal determined in Galiastro v. Mortgage Electronic Registration Sys., Inc., 467 Mass. 160 , 165-170 (2014), we agree.
In Pinti, supra at 235-236, the Supreme Judicial Court held that a notice of default provision (nearly identical to Murphy's) in paragraph 22 of the plaintiff's mortgage required strict compliance as a necessary component of the power of sale in the mortgage and the statutory power of sale in G. L. c. 183, § 21. The court explained that the errant notice, which informed the defaulting mortgagors of their right to bring a court action, did not strictly comply with the provisions of paragraph 22 of the mortgage because the notice did not inform the mortgagors of their right and the need to initiate legal action to challenge the validity of the foreclosure, a necessary step in a nonjudicial foreclosure State like Massachusetts. Pinti, supra at 237. Therefore, because the notice failed to strictly comply with paragraph 22 of the mortgage, the court held the subsequent foreclosure sale was void, not voidable. Id. at 238, 240-243.
Citing a willingness to apply property law decisions prospectively and noting the impact the case otherwise could have on the validity of titles, the Pinti court applied the decision prospectively. Id. at 243. Specifically, the court stated that the case will apply to mortgage foreclosure sales of properties that are the subject of a mortgage containing paragraph 22 or its equivalent and for which the notice of default required by paragraph 22 is sent after the date of [the Pinti] opinion. Ibid. However, the court specifically left open the question whether its decision should be applied to any other class of cases pending on appeal. Id. at 243 n.25.
This case presents the opportunity to resolve that open question. Murphy claims that a failure to extend Pinti to this and other pending cases (where the issue has been raised and preserved) would unjustly deprive him of the benefit that the similarly situated Pinti mortgagors received. See Galiastro, 467 Mass. at 167-168. We agree.
challenging the old rule, nor deterred from challenging existing precedent merely because the Supreme Judicial Court selected Pinti, and not Murphy, to announce and to clarify the terms and statutes requiring strict compliance. Id. at 169, quoting from Powers v. Wilkinson, 399 Mass. 650 , 664 (1987) (Abrams, J., concurring in part and dissenting in part). Applying Pinti to Murphy's appeal also comports with the Supreme Judicial Court's practice of extending prospective-only holdings to the parties that bring the issue before the court, as well as similar actions pending on appeal. [Note 5] See Galiastro, supra at 170. See also Commonwealth v. Pring-Wilson, 448 Mass. 718 , 736 (2007) (applying new rule of criminal law decided in prior case to different defendant on appeal, even though we said in the decision that the new rule would apply prospectively). This exception to the prospective-only rule for the party bringing the doctrinal case (Pinti) and the party on appeal specifically preserving and raising the issue (here, Murphy) helps to limit the unevenness and inequity that might otherwise follow a doctrinal change. See Galiastro, supra. We do not extend the Pinti rule to cases pending in the trial court as the Supreme Judicial Court has already limited the new rule's application to mortgage foreclosure sales of properties that are the subject of a mortgage containing paragraph 22 or its equivalent and for which the notice of default required by paragraph 22 is sent after [July 17, 2015,] the date of [the Pinti] opinion. Pinti, 472 Mass. at 243.
3. Conclusion. The motion for reconsideration should have been allowed. The judgment is reversed, and the case is remanded for further proceedings consistent with this opinion.
[Note 1] Also known as Walter W. Murphy.
[Note 2] The Supreme Judicial Court since has resolved this legal question in U.S. Bank Natl. Assn. v. Schumacher, 467 Mass. 421 , 430-431 (2014), which holds that § 35A is not one of the statutes relating to the foreclosure of mortgages by exercise of the power of sale under G. L. c. 183, § 21, because § 35A is designed to give a mortgagor a fair opportunity to cure a mortgage before the debt is accelerated and foreclosure proceedings begin. Therefore, a mere violation of § 35A is insufficient to render a foreclosure proceeding void; the violation must be so fundamentally unfair as to entitle the mortgagor to equitable relief. Schumacher, supra at 433 (Gants, J., concurring). Because we reverse on alternate grounds, we need not consider here whether the notice under § 35A was fundamentally unfair.
[Note 3] Murphy also claims that Aurora had no right to exercise authority as lender because it did not receive a written assignment of the mortgage for several months after it sent the notice of foreclosure and right to cure. In support of his argument, Murphy claims that G. L. c. 183, § 21, confirms that only the original mortgage holder or holder of the written mortgage assignment may exercise the powers of foreclosure granted under a mortgage. We need not reach the issue.
[Note 4] Aurora also argues that compliance with § 35A satisfies the notice requirements of paragraph 22 and cites to paragraph 15 of Murphy's mortgage, which provides: If 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. Because Aurora raises this claim for the first time on appeal, we decline to reach it. See Cariglia v. Bar Counsel, 442 Mass. 372 , 379 (2004).
[Note 5] As in Galiastro, cases that were pending on appeal when Pinti was released included those cases in which the case was docketed in this court before July 17, 2015, and this court had not yet issued a decision in the case. See Galiastro, supra at 167 n.14. Cases where we had issued a decision, and the litigants have filed a petition for further appellate review, will also be considered pending on appeal for purposes of the retroactive reach of Pinti. Ibid.

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