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Klevisha v. Provident Funding Associates L.P.

United States District Court, D. Massachusetts

March 9, 2016

ROSARIO KLEVISHA, Plaintiff/Defendant-in-Counterclaim,
v.
PROVIDENT FUNDING ASSOCIATES L.P., Defendant/Plaintiff-in-Counterclaim, and FEDERAL HOME MORTGAGE CORPORATION, Plaintiff-in-Counterclaim.

MEMORANDUM AND ORDER ON DEFENDANT’S (sic) MOTION FOR SUMMARY JUDGMENT (#57).

M. Page Kelley United States Magistrate Judge

I. Introduction.

On February 27, 2015, Plaintiff/Defendant-in-Counterclaim Rosario Klevisha commenced this civil action in the Middlesex Superior Court in Massachusetts for predatory lending and wrongful foreclosure on the property located at 52 Kings Field Road, Dracut, MA (“the Property”). (#2-3.) Defendant/Plaintiff-in-Counterclaim Provident Funding Associates L.P. removed the case to the federal court on March 3, 2015 (#2), and, seventeen days later, filed an answer to the complaint and a counterclaim. (#6.) The counterclaim incorporates six claims: Count I - Breach of Contract; Count II - Unjust Enrichment; Count III - Foreclosure; Count IV - Deficiency; Count V -Possession; Count VI - Writ of Assistance. (#6.) The docket does not reflect that Klevisha ever filed an answer to the counterclaim.

On November 9, 2015, Provident Funding conducted a non-judicial foreclosure by entry and sale of the Property. (#59 ¶ 53.) Federal Home Mortgage Corporation (“Freddie Mac”) purchased the Property at the foreclosure sale for three hundred twenty-three thousand two hundred ninety-three dollars and thirty-six cents ($323, 293.36). (#59 ¶ 54.) By Order entered on February 16, 2016, Freddie Mac, now the owner of the Property, was added to this case as a Plaintiff-in-Counterclaim. (#64.) Provident Funding and Freddie Mac are moving for the entry of judgment as a matter of law on the counterclaim. (#57.) Plaintiffs-in-Counterclaim have fully briefed the issues (##58-60); Klevisha has filed nothing.

II. The Facts.

The undisputed facts[2] are as follows. On December 29, 2006, Klevisha executed a promissory note (“Klevisha Note”) in favor of Quicken Loans Inc. in the amount of two hundred eighty-three thousand two hundred dollars ($283, 200.00). (Statement of Undisputed Facts #59 ¶ 1; Affidavit of Provident Funding Associates, L.P. #13 ¶ 5 and Exh. A.) In order to secure the loan obligation, Klevisha gave a mortgage (“Klevisha Mortgage”) to Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee for Quicken Loans Inc. dated December 29, 2006 and recorded in the Middlesex County (Northern District) Registry of Deeds in Book 2091, Page 108 on January 24, 2007. (#59 ¶ 2; #13 ¶ 6 and Exh. B.) On April 15, 2010, the Klevisha Mortgage was assigned from MERS to Provident Funding, and eleven days later the Assignment of Mortgage (“Provident Funding Assignment”) was recorded in the Middlesex County (Northern District) Registry of Deeds in Book 23900, Page 211. (#59 ¶ 3; #13 ¶ 7 and Exh. C.) The Klevisha Note was endorsed without recourse by Quicken Loans Inc. to Provident Funding; Provident Funding endorsed the note in blank. (#13, Exh. A.) Freddie Mac acquired the Klevisha Note on January 31, 2007 and is the true and lawful holder/owner of the Klevisha Note. (#67 ¶¶ 6-7.)

Provident Funding entered into a Loan Modification agreement with Klevisha in January 2011. (#59 ¶ 4; #13 ¶ 8 and Exh. D.) Klevisha defaulted under the terms of the Klevisha Note and the Klevisha Mortgage, and the September 1, 2013 payment and all subsequent payments were due. (#59 ¶ 5; #13 ¶ 9 and Exh. E.) Consequent to her default, on December 31, 2013 Provident Funding sent Klevisha a 150-day Notice of Right to Cure pursuant to Mass. Gen. L. c. 24, § 35A and a Notice of Right to Pursue a Modification pursuant to Mass. Gen. L. c. 244, § 35B. (#59 ¶ 6; #13 ¶ 10 and Exh. E.)

In March of 2014 Klevisha submitted a Borrower Response Package requesting to modify her mortgage loan. (#59 ¶ 7; #13 ¶ 11.) The Borrower Response Package was reviewed by Provident Funding, and by letter dated March 4, 2014, Klevisha was advised that her request for a modification was denied due to insufficient income. (#59 ¶ 8; #13 ¶ 12 and Exh. F.) Klevisha filed a second loan modification package in March 2014. (#59 ¶ 9; #13 ¶ 13.) By letter dated April 22, 2014, Provident Funding informed Klevisha that her request for forbearance was denied due to an incomplete package. (#59 ¶ 10; #13 ¶ 14 and Exh. G.) When Klevisha failed to cure her default by June 2, 2014, the expiration date of the Notice of Right to Cure, Provident Funding referred the loan to counsel for foreclosure. (#59 ¶ 11; #13 ¶ 15.)

On July 15, 2014, Provident Funding filed a complaint in the Massachusetts Land Court pursuant to the Servicemembers Civil Relief Act. (#59 ¶ 12; Affidavit of Brian C. Linehan, Esq. #14 ¶ 2 and Exh. 1.) On July 31, 2014, the Order of Notice was published in the Lowell Sun newspaper pursuant to the Servicemembers Civil Relief Act. (#59 ¶ 13; #14 ¶ 4 and Exh. 2.) That same day, the Order of Notice was served on Klevisha at the Property pursuant to the Servicemembers Civil Relief Act. (#59 ¶ 14; #14 ¶ 5 and Exh. 2.) On August 6, 2014, the Order of Notice was recorded in the Middlesex County (Northern District) Registry of Deeds in Book 28375, Page 181, pursuant to the Servicemembers Civil Relief Act. (#59 ¶ 15; #14 ¶ 6 and Exh. 2.) On August 26, 2014, an Affidavit Regarding Note Secured By A Mortgage To Be Foreclosed (Pre-Foreclosure Sale) was recorded in the Middlesex County (Northern District) Registry of Deeds in Book 28425, Page 136. (#59 ¶ 16; #13 ¶ 16 and Exh. H.) On September 3, 2014, the Land Court entered a judgment confirming that none of the named defendants were entitled to the benefits of the Servicemembers Civil Relief Act as of that date. (#59 ¶ 17; #14 ¶ 7 and Exh. 3.)

On August 29, 2014, Klevisha submitted a new, second Borrower Response Package seeking to modify her mortgage loan. (#59 ¶ 18; #13 ¶ 17 and Exh. I.) By letter dated September 2, 2014, Provident Funding acknowledged receipt of the Borrower Response Package, but advised Klevisha that the package was incomplete and that she had to provide certain specific missing documents in order to complete the package. (#59 ¶ 19; #13 ¶ 17 and Exh. I.) On September 23, 2014, September 30, 2014 and October 7, 2014, Provident Funding caused to be published in the Lowell Sun newspaper a Notice Of Mortgagee’s Sale of Real Estate (“First Notice of Sale”) advertising the public auction of the Property scheduled for October 23, 2014. (#59 ¶ 20; #14 ¶ 8 and Exh. 4.) Pursuant to Mass. Gen. L. c. 244, §§ 14 and 17B, on September 24, 2014, a Notice of Intent to Foreclose Mortgage and Intent to Pursue Deficiency After Foreclosure of Mortgage was sent to Klevisha. (#59 ¶ 21; #14 ¶ 9 and Exh. 5.) On October 2, 2014, Klevisha submitted the documents necessary to complete her second Borrower Response Package. (#59 ¶ 22; #13 ¶ 19.) After reviewing Klevisha’s completed second Borrower Response Package, by letter dated October 8, 2014, Provident Funding denied her request for a loan modification due to insufficient income. (#59 ¶ 23; #13 ¶ 20 and Exh. J.)

Klevisha submitted a third Borrower Response Package requesting to modify her mortgage loan on October 22, 2014. (#59 ¶ 24; #13 ¶ 21.) That same day Provident Funding sent Klevisha a letter denying her request for a modification due to insufficient income. (#59 ¶ 25; #13 ¶ 22 and Exh. K.) On October 23, 2014, Provident Funding conducted a foreclosure sale of the Property. (#59 ¶ 26; #13 ¶ 23.) The October 23rd foreclosure sale was thereafter rescinded because a junior lienholder of record on the Property had not been sent notice of the foreclosure sale date. (#59 ¶ 27; #14 ¶ 10.)

On December 30, 2014, January 6, 2015 and January 13, 2015, a Notice of Mortgagee’s Sale of Real Estate (“Second Notice of Sale”) was published in the Lowell Sun newspaper advertising a foreclosure sale of the Property scheduled for January 28, 2015. (#59 ¶ 28; #14 ¶ 11 and Exh. 6.) Pursuant to Mass. Gen. L. c. 244, §§ 14 and 17B, on January 2, 2015 Provident Funding mailed Klevisha a Notice of Intent to Foreclose Mortgage and Intent to Pursue Deficiency After Foreclosure of Mortgage on or after January 28, 2015. (#59 ¶ 29; #14 ¶ 12 and Exh. 7.) On January 21, 2015, Klevisha’s attorney sent Provident Funding a demand letter pursuant to Mass. Gen. L. c. 93A. (#59 ¶ 30; #13 ¶ 24 and Exh. L.) In order to allow time to respond to the chapter 93A letter, the foreclosure sale scheduled for January 28, 2015 was postponed by public proclamation to March 2, 2015. (#59 ¶ 31; #14 ¶ 13.) On February 20, 2015, Provident Funding responded to Klevisha’s demand letter. (#59 ¶ 32; #14 ¶ 14 and Exh. 8.)

On February 27, 2015, Klevisha instituted the instant litigation. (#2-3.) Because this case was filed, the March 2, 2015 foreclosure sale was postponed by public proclamation to April 2, 2015. (#59 ¶ 34; #14 ¶ 15.) On April 1, 2015, Klevisha filed a motion for preliminary injunction to stop the April 2, 2015 foreclosure sale.[3] (#59 ¶ 36; #7.) Due to the filing of the preliminary injunction motion, the April 2, 2015 foreclosure sale was postponed by public proclamation to May 6, 2015. (#59 ¶ 37; #14 ¶ 16.) The May 6, 2015 foreclosure sale was ultimately cancelled due to this pending litigation.

The motion for a preliminary injunction was allowed on June 24, 2016 (#36) primarily on the ground that the state of the law in Massachusetts was unclear as to whether Mass. Gen. L. c. 183, § 21 required strict compliance with the contractual terms of the mortgage. (#37.) Approximately a month and a half later, Provident Funding moved to dissolve the preliminary injunction (#38) in light of the intervening Massachusetts Supreme Judicial Court’s decision in Pinti v. Emigrant Mortgage Company, Inc., 472 Mass. 226 (2015), which resolved the legal uncertainty. In Pinti, although the SJC concluded that “strict compliance with the notice of default provisions in paragraph 22 of the mortgage was required as a condition of a valid foreclosure sale, ” that decision was to be given “prospective effect only.” Id. at 227, 243. With Massachusetts law now clear, Klevisha could not demonstrate a likelihood of success on the merits in ...


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