BankBoston, N.A. v. Yodice

Citations: 54 Mass. App. Ct. 901; 763 N.E.2d 80; 2002 Mass. App. LEXIS 240Docket: No. 99-P-2153

Court: Massachusetts Appeals Court; February 21, 2002; Massachusetts; State Appellate Court

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Arnold J.F. Yodice and Trudy S. Yodice executed a $25,200 note on July 29, 1975, secured by a first mortgage on their home, which was subsequently transferred to Worcester County Institution for Savings (WCIS). In the 1980s, they took out an additional note secured by a second mortgage. On September 26, 1988, they, along with Daniel B. Yodice, executed a third note for $82,000, also secured by a mortgage on the property. After the merger of WCIS with the plaintiff bank, the bank notified the Yodices of their default on the third note in 1997 and announced intentions to foreclose the first mortgage. The property was sold in a foreclosure auction on November 7, 1997, for $67,000, covering the first and second mortgages but leaving a deficiency on the third note. The bank later initiated enforcement of the third note against the Yodices in November 1998. The Yodices contended that the bank failed to provide necessary notice under G. L. c. 244, § 17B regarding the deficiency after foreclosure. However, the court denied the bank’s motion for summary judgment and allowed the Yodices' motion, citing improper notice. 

The court's conclusion was challenged by the argument that since the bank had already foreclosed on the first mortgage and applied the sale proceeds to the second mortgage, there was no obligation for the third mortgagee to provide notice regarding the third note. The ruling emphasized that the third mortgage was still valid despite the first mortgage’s foreclosure, as the third mortgagee was not required to notify the Yodices about the deficiency related to a mortgage they were not exercising. The situation was distinguished from a previous case where a deficiency arose from simultaneous actions on multiple notes after a foreclosure. In this case, because the bank had not foreclosed on the third mortgage, there was no deficiency to report under § 17B, allowing the third mortgagee to pursue legal action on the note.

Judgment has been reversed in favor of the plaintiff. General Laws Chapter 244, Section 17B, enacted by St. 1945, Chapter 604, Section 1, prohibits actions for deficiency judgments by mortgage holders after June 30, 1946, unless specific conditions are met. These include mailing a written notice of foreclosure intention to the defendant at their known address via registered mail, including a warning regarding potential deficiency liability, at least 21 days prior to the foreclosure sale. Additionally, an affidavit confirming the mailing of this notice must be signed and sworn to within 30 days post-sale. The statute establishes that such a mailed notice and a timely affidavit serve as sufficient evidence of notice. The prescribed forms for the notice and affidavit are included in the statute. Notably, the case references HRPT Advisors, Inc. v. MacDonald, Levine, Jenkins, Co., which clarifies the roles of mortgagees and assigns but does not require further consideration of the adequacy of the April 1997 letters in this context.