Court: District Court, D. Massachusetts; March 8, 2016; Federal District Court
On February 27, 2015, Rosario Klevisha initiated a civil action in Middlesex Superior Court, Massachusetts, against Provident Funding Associates L.P. for predatory lending and wrongful foreclosure concerning her property at 52 Kings Field Road, Dracut, MA. The case was removed to federal court on March 3, 2015, where Provident Funding filed an answer and a counterclaim incorporating six claims: breach of contract, unjust enrichment, foreclosure, deficiency, possession, and a writ of assistance. Klevisha did not respond to the counterclaim. On November 9, 2015, Provident Funding executed a non-judicial foreclosure, selling the property to Freddie Mac for $323,293.36. Freddie Mac was added as a plaintiff-in-counterclaim on February 16, 2016. Both Provident Funding and Freddie Mac sought judgment on the counterclaim, with Klevisha filing no response.
Undisputed facts reveal that Klevisha executed a promissory note for $283,200 in favor of Quicken Loans Inc. on December 29, 2006, securing it with a mortgage to Mortgage Electronic Registration Systems, Inc. (MERS), which was recorded on January 24, 2007. The mortgage was assigned to Provident Funding on April 15, 2010, with the assignment recorded shortly thereafter. Freddie Mac acquired the Klevisha Note on January 31, 2007. Klevisha entered into a loan modification agreement with Provident Funding in January 2011 but defaulted on her payments starting September 1, 2013. Following her default, Provident Funding issued a 150-day Notice of Right to Cure and a Notice of Right to Pursue a Modification. Klevisha submitted a modification request in March 2014, which was denied due to insufficient income. A second modification package was submitted but later deemed incomplete, resulting in Provident Funding referring the loan for foreclosure when Klevisha failed to cure her default by June 2, 2014.
On July 15, 2014, Provident Funding initiated a complaint in the Massachusetts Land Court under the Servicemembers Civil Relief Act (SCRA). An Order of Notice was published and served on Klevisha on July 31, 2014, and subsequently recorded in the Middlesex County Registry of Deeds on August 6, 2014. A pre-foreclosure affidavit was recorded on August 26, 2014. The Land Court confirmed on September 3, 2014, that none of the defendants qualified for SCRA protections. Klevisha submitted a second Borrower Response Package on August 29, 2014, but it was deemed incomplete by Provident Funding. Notices regarding a public auction of the Property were published on September 23, 30, and October 7, 2014, with an intent to foreclose communicated to Klevisha on September 24, 2014. Klevisha completed her second package on October 2, 2014, but her request for loan modification was denied on October 8, 2014, due to insufficient income. A third modification request submitted on October 22, 2014, was also denied on the same day. A foreclosure sale occurred on October 23, 2014, but was rescinded as a junior lienholder had not been notified. Further notices for a second foreclosure sale were published in late December 2014, with the sale scheduled for January 28, 2015. A demand letter was sent by Klevisha's attorney on January 21, 2015, prompting a postponement of the sale to March 2, 2015. Provident Funding responded to the demand letter on February 20, 2015, and Klevisha filed litigation on February 27, 2015, resulting in another postponement of the sale to April 2, 2015.
On April 1, 2015, Klevisha sought a preliminary injunction to halt a foreclosure sale scheduled for April 2, 2015. This motion resulted in the postponement of the sale to May 6, 2015, which was ultimately cancelled due to ongoing litigation. The preliminary injunction was granted on June 24, 2016, primarily because Massachusetts law was unclear regarding the strict compliance required under Mass. Gen. L. c. 183, § 21. Subsequently, Provident Funding requested to dissolve the injunction following the Massachusetts Supreme Judicial Court's decision in Pinti v. Emigrant Mortgage Company, which clarified that strict compliance with notice provisions was necessary for a valid foreclosure, but ruled this decision would apply prospectively. Consequently, Klevisha was unable to show a likelihood of success on the merits, leading to the dissolution of the injunction.
After Klevisha failed to attend several hearings and respond to an Order to Show Cause, her complaint was dismissed on October 27, 2015. The foreclosure sale was rescheduled for November 9, 2015, with proper notices published and sent to Klevisha, including a Notice of Intent to Foreclose. On November 9, 2015, Provident Funding executed a non-judicial foreclosure sale, with Freddie Mac purchasing the property for $323,293.36. The foreclosure deed was recorded on December 2, 2015, along with an affidavit regarding the note. At the time of the sale, the total debt owed under the Klevisha Note and Mortgage was $329,790.92, resulting in a deficiency of $6,497.56 following the sale.
The excerpt concludes with a reference to the standard for summary judgment, stating that it is granted when there is no genuine dispute regarding any material fact, thus allowing a judgment as a matter of law.
Summary judgment is inappropriate when the record allows for reasonable resolution of material factual disputes favoring either party. The moving party must first prove the absence of genuine issues of material fact using credible evidence. A genuine issue exists if a fact finder could favor the non-moving party, while material facts are those that could affect the case's outcome. The non-moving party must then demonstrate that a factual dispute exists; however, this cannot be based on improbable inferences or speculation. Evidence is assessed in the light most favorable to the non-moving party. Rule 56 requires summary judgment if the non-moving party fails to show an essential element of their case, on which they bear the burden of proof. If the overall record does not allow a rational trier of fact to favor the non-moving party, there is no genuine issue for trial.
In the context of breach of contract claims under Massachusetts law, plaintiffs must establish the existence of a valid contract, a breach by the defendant, and resulting damages. In this case, Klevisha’s default on the Klevisha Mortgage is undisputed, causing Freddie Mac to incur damages amounting to $6,497.56. Although the elements of the breach of contract claim are established, Freddie Mac's success is uncertain due to the requirement of statutory notice under Massachusetts law, which acts as a condition precedent to pursuing a deficiency judgment post-foreclosure.
Freddie Mac cannot succeed solely on a breach of contract claim because such a claim would have been discharged by the foreclosure sale. However, by fulfilling the requirements set forth in Massachusetts General Laws chapters 244, sections 14 and 17B, Freddie Mac is entitled to a deficiency judgment. Specifically, section 14 allows a mortgagee to take actions authorized by the power of sale upon breach of condition, provided that proper notice is given. Notice of the mortgagee's sale was published in the Lowell Sun on three consecutive weeks and a Notice of Intent to Foreclose was sent to Klevisha, meeting the statutory requirements. An affidavit confirming the mailing of these notices further supports Freddie Mac's position. As a result of the foreclosure sale, there was a deficiency of $6,497.56 under the terms of the Klevisha Note and Mortgage, and Freddie Mac is entitled to judgment for this amount.
Regarding unjust enrichment, although it is a quasi-contractual claim that does not require consideration, it hinges on the principles of equity and the idea that one party should not be unjustly enriched at the expense of another. However, since Freddie Mac has successfully established its deficiency claim, there is no need to pursue the unjust enrichment claim further.
The foreclosure of the property occurred on November 9, 2015.
The claim for foreclosure is currently moot. Under Massachusetts General Laws chapter 239, a person entitled to land after a mortgage foreclosure can recover possession. Summary process serves as a statutory action allowing a legal title holder to reclaim property wrongfully withheld. The right to possession requires proof of legal title acquired according to the mortgage's power of sale. In summary process post-foreclosure, the plaintiff must provide evidence of a deed and a recorded affidavit demonstrating compliance with statutory requirements. Provident Funding has met this burden by submitting certified copies of the foreclosure deed and post-sale affidavit recorded in Middlesex County. Consequently, Freddie Mac is entitled to possession of the property.
If the court finds the plaintiff entitled to possession, they may receive a judgment for possession and costs. Since Freddie Mac is the record owner, it is entitled to an execution to enforce this judgment. The Court can issue a Writ of Assistance to facilitate this process under the All Writs Act.
In conclusion, the Defendant’s Motion for Summary Judgment is partially granted and partially denied; Counts I, II, and III of the counterclaim are dismissed as moot, while judgment is entered for Freddie Mac on Counts VI, V, and VI of the counterclaim. Additionally, a prior motion by Klevisha’s attorney to withdraw was allowed, and specific statutory requirements for deficiency actions post-foreclosure are noted.
