Harris v. PHH Mortg. Corp.

Citations: 103 N.E.3d 769; 93 Mass. App. Ct. 1104Docket: 17–P–71

Court: Massachusetts Appeals Court; April 4, 2018; massachusetts; State Appellate Court

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The appeal involves two consolidated matters concerning a mortgage issued by Roney L. Harris for property at 615 White Street, Springfield. Harris successfully claimed under G. L. c. 93A against PHH Mortgage Corporation (PHH) after PHH sent a foreclosure notice while a bankruptcy court had already ruled that PHH did not hold the mortgage. However, PHH won its action to quiet title, establishing it as the rightful holder of the mortgage and note, prompting Harris's appeal of that judgment, which has been affirmed.

The factual background reveals that Harris obtained a loan of $122,640 from BMC Mortgage Co. on February 13, 2004, executing a mortgage deed that day. The mortgage was assigned first to Mortgage Electronic Registration System, Inc. (MERS) and then to Cendant Mortgage Corporation. Following Cendant's merger into PHH in 2005, Harris defaulted on his loan in 2007 and filed for bankruptcy under Chapter 7. He initiated an adversary proceeding on January 29, 2008, contesting PHH's claim to the mortgage. The bankruptcy court ruled on July 19, 2010, that PHH did not hold a valid mortgage at the time Harris filed for bankruptcy, stating the assignment from BMC to Cendant was invalid because BMC had already assigned the mortgage to MERS.

After closing his bankruptcy case in July 2011, Harris received a foreclosure notice from PHH, leading him to file a Superior Court action to prevent the foreclosure. A preliminary injunction was issued on September 20, 2011, halting the foreclosure. Harris later amended his complaint to include additional claims against PHH, while PHH filed its own action against BMC to quiet title, naming Harris as a defendant. The court consolidated these actions on August 9, 2012. A Superior Court judge partially allowed Harris's motion for summary judgment on December 5, 2012, determining that PHH lacked standing to foreclose at that time.

On April 10, 2013, BMC assigned the mortgage to PHH. After a two-day trial in June 2014, the trial judge concluded that PHH had demonstrated it was the holder of the note and mortgage, leading to the judgment in favor of PHH in its quiet title action.

Harris's lawsuit resulted in a judgment in his favor solely on his c. 93A claim, where he was awarded nominal damages that were subsequently doubled. Other claims were dismissed. The trial judge determined that PHH had knowingly violated c. 93A. It was clarified that a bankruptcy discharge only eliminates a creditor's right to pursue a debtor personally but does not prevent actions against collateral property. The trial judge invalidated assignments of the mortgage from BMC to Cendant and then to MERS, as BMC had already assigned the mortgage to MERS prior to those transactions. MERS's assignment to BMC on March 8, 2004, was valid, but MERS's later assignment to PHH on May 23, 2008, was invalid due to lack of authority at that time. Therefore, as of 2013, BMC held the mortgage, and the trial judge ruled that PHH was the lawful owner based on a valid assignment from BMC on April 10, 2013. Subsequent orders and judgments, including denials of Harris's motions for reconsideration and dismissal, were affirmed. Harris also appealed the nominal damages awarded and other orders, but the appellate court found his arguments insufficiently developed to warrant consideration. The timing of the mortgage assignments was noted, with the assignment to MERS recorded on February 13, 2004, and the assignment to Cendant recorded later. Although the bankruptcy court's judgment was referenced, it did not conclusively determine the validity of the mortgage or that it was a 'perfected lien.' The appellate panel noted a lack of sufficient documentation to evaluate Harris's claims regarding the bankruptcy court's findings.

The judgment states that PHH did not hold a valid and perfected mortgage at the start of the action, which indicates that while no valid lien was held by PHH, it does not imply that no lien existed. The trial judge identified claims in Harris's amended complaint, including intentional infliction of emotional distress, libel, quiet title, and abuse of process, and affirmed that PHH is the holder of the note. Harris noted in his reply that the indorsements on the note show a transfer from BMC to Wachovia Mortgage Corporation, which was later crossed out in favor of Cendant, who then indorsed the note in blank. However, Harris did not clarify the significance of the initial indorsement, nor did the record confirm if this issue was raised during the trial. The appellant has the responsibility to include sufficient transcripts to demonstrate whether an issue was properly presented, as established in previous case law. There is no basis to overturn the trial judge's finding that PHH is the note holder, and Harris has not shown that the finding of PHH's physical possession of the note is 'clearly erroneous.' Additionally, any other arguments made by Harris that are not discussed have not been overlooked but do not warrant further examination.