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Easthampton Savings Bank v. City of Springfield

Supreme Judicial Court of Massachusetts, Suffolk

December 19, 2014

Easthampton Savings Bank & others [1]
v.
City of Springfield

Argued September 4, 2014

Certification of questions of law to the Supreme Judicial Court

Page 285

by the United States Court of Appeals for the First Circuit.

Tani E. Sapirstein for the plaintiffs.

Thomas D. Moore, Associate City Solicitor ( Lisa C. deSousa, Associate City Solicitor, with him) for the defendant.

The following submitted briefs for amici curiae:

Lee D. Goldstein for Harvard Legal Aid Bureau & others.

Robert G. Rowe, III, of the District of Columbia, for American Bankers Association, Inc.

Francis J. Nolan & Nathalie K. Salomon for Real Estate Bar Association for Massachusetts, Inc., & another.

Michael McDonagh for Massachusetts Association of Realtors.

Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, & Hines, JJ.

OPINION

[21 N.E.3d 927] Spina, J.

We consider in the present case challenges brought against two ordinances adopted by the city of Springfield (city) in response to a wave of foreclosures triggered by the economic downturn of 2008. The United States Court of Appeals for the First Circuit has certified the following questions to this court, pursuant to S.J.C. Rule 1:03, as appearing in 382 Mass. 700 (1981):[2]

" 1. Are Springfield's municipal ordinances Chapter 285, Article II, 'Vacant or Foreclosing Residential Property' (the [f]oreclosure [o]rdinance) or Chapter 182, Article I, 'Mediation of Foreclosures of Owner-Occupied Residential Properties' (the [m]ediation [o]rdinance) preempted, in part or in whole, by those state laws and regulations identified by the plaintiffs?
" 2. Does the [f]oreclosure [o]rdinance impose an unlawful tax in violation of the Constitution of the Commonwealth of Massachusetts?"

Easthampton Sav. Bank v. Springfield, 736 F.3d 46, 53 (1st Cir. 2013).

We answer the first question that the mediation ordinance is preempted by G. L. c. 244 and that the foreclosure ordinance is preempted by G. L. c. 21E and G. L. c. 111 but not by G. L. c. 244.

Page 286

We answer the second question in the negative.[3]

1. Procedural background.

We summarize certain undisputed facts in the order of certification and in the record before us. In 2011, in response to an increased number of foreclosures due to the housing market collapse of 2008 and its effect on public safety, the city enacted two ordinances addressing properties left vacant during or after the foreclosure process. The plaintiffs, six banks holding mortgage notes on properties in Springfield, filed suit in State court seeking declaratory and injunctive relief from the enforcement of the ordinances. The defendant city removed the case to Federal court. The Federal District Court allowed the city's motion for summary judgment. The plaintiffs appealed to the United States Court of Appeals for the First Circuit. That court determined that the outcome of the case centered on unresolved questions of Massachusetts [21 N.E.3d 928] law better suited for this Court. We now consider the questions presented to this court.

2. Springfield ordinances.

The two ordinances deal specifically with the foreclosure process. The mediation ordinance is entitled " Facilitating Mediation of Mortgage Foreclosures of Owner Occupied Residential Properties" and is codified in Chapter 7.60 of Title 7 of the Revised Ordinances of the city of Springfield, 1986, as amended (city ordinances). The foreclosure ordinance is entitled " Regulating the Maintenance of Vacant and/or Foreclosing Residential Properties and Foreclosures of Owner Occupied Residential Properties," and is codified in Chapter 7.50 of Title 7 of the city ordinances.

a. Mediation ordinance.

The mediation ordinance establishes a program requiring mandatory mediation between mortgagors and mortgagees. The ordinance requires that, upon giving notice of a default and the statutory right of redemption to the mortgagor, mediation must begin within forty-five days. The mediation consists of a conference between the mortgagor and mortgagee in which the parties must make a good faith effort to renegotiate the terms of the mortgage that was the subject of the notice or other-

Page 287

wise to resolve the pending foreclosure. If, after a mediation conference, the city-provided mediation program manager determines that the mortgagee has made a good faith effort to mediate but that the parties were unable to come to an agreement to avoid foreclosure, the manager will issue a certificate stating that the mortgagee has satisfied the requirements of the mediation ordinance and authorizing the mortgagee to proceed with its rights pursuant to G. L. c. 244. Failure of a mortgagee ...


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