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HMC Assets, LLC v. Conley

United States District Court, D. Massachusetts

August 22, 2016

MARION R. CONLEY, Defendant.



         Pending before this court is a motion for summary judgment filed by plaintiff HMC Assets, LLC Solely in its Capacity as Separate Trustee of CAM Mortgage Trust 2013-1 (“plaintiff, ” “Home Assets” or “HMC as CAM Mortgage”) against defendant Marion R. Conley (“defendant”). (Docket Entry # 59). Defendant opposes the motion and separately moves to strike affidavits submitted in support of the motion for summary judgment. (Docket Entry ## 70 & 80). After conducting a hearing, this court took the motions (Docket Entry ## 59, 70, 80) under advisement.


         On April 18, 2014, plaintiff filed an amended complaint that sets out the following counts: (1) breach of contract due to defendant’s default on a loan and mortgage payments (Count I); (2) declaratory judgment that a March 7, 2014 foreclosure on the 23 Golf View Drive, Nantucket, Massachusetts property (“the property”) was valid (Count II); (3) deficiency judgment for the total amount of defendant’s debt owed to plaintiff (Count III);[1](4) judgment of possession of the property (Count IV); (5) use and occupancy payments for the period of time after the foreclosure (Count V); and (6) writ of assistance from the court to enforce the judgment (Count VI). (Docket Entry # 11).

         On October 2, 2015, plaintiff filed the summary judgment motion pursuant to Fed.R.Civ.P. 56 (“Rule 56”) on all claims in the amended complaint and on defendant’s counterclaim. (Docket Entry # 59). Plaintiff argues that it acquired title to the property pursuant to a lawful foreclosure sale and that the foreclosure was conducted in strict compliance with Massachusetts law thus giving plaintiff standing to foreclose. (Docket Entry # 60). The counterclaim set out seven counts. Counts two through seven respectively assert claims for breach of contract, breach of the implied covenant of good faith and fair dealing, negligence, unlawful foreclosure, an accounting and violation of Massachusetts General Laws chapter 93A (“chapter 93A”). Count One seeks relief under Massachusetts General Laws chapter 185, section 114. Defendant opposes the motion. (Docket Entry # 68).

         Subsequently, after filing the opposition to the summary judgment motion (Docket Entry # 68), defendant filed two motions to strike affidavits submitted by plaintiff (Docket Entry ## 70, 80). Defendant argues that the affidavits submitted by plaintiff (Docket Entry ## 62, 63, 63-11 & 73) are inadmissible because they are not based on personal knowledge and therefore constitute inadmissible hearsay. (Docket Entry ## 70, 80).

         Additionally, defendant asserts that exhibits submitted with the affidavits do not meet the business record exception under Fed.R.Evid. 803(6)(A) and that the affidavits made by plaintiff’s counsel (Docket Entry ## 62, 73) do not satisfy the qualified witness requirement under Fed.R.Evid. 803(6). (Docket Entry ## 70, 80). Defendant requests that this court strike the challenged affidavits and all of their associated exhibits from the summary judgment record and award plaintiff attorney’s fees and costs in bringing the motions. (Docket Entry ## 70, 80). Plaintiff opposes the motions to strike. (Docket Entry ## 71, 81).

         I. Motions to Strike

         “A motion to strike is the appropriate means of objecting to the use of affidavit evidence on a motion for summary judgment.” See Facey v. Dickhaut, 91 F.Supp.3d 12, 19 (D.Mass. 2014). Furthermore, Rule 56(c)(4) states that “[a]n affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.” Fed.R.Civ.P. 56(c)(4). “If evidence cannot be presented in a form that would be admissible at trial, the court may not rely on it.” Facey v. Dickhaut, 91 F.Supp.3d at 19.

         To establish an acceptable affidavit, the affiant should testify that he was somehow personally involved in the events for which he is testifying and not base his testimony upon out-of-court statements made for the truth of the matter asserted. See Fed.R.Evid. 802; Perez v. Lorraine Enterprises, Inc., 769 F.3d 23, 31 (1st Cir. 2014); Garside v. Osco Drug, Inc., 895 F.2d 46, 49-50 (1st Cir. 1990). Personal knowledge is satisfied when the statements made by the affiant are based in fact “as opposed to conclusions assumptions, or surmise.” Perez v. Volvo Car Corp., 247 F.3d 303, 316 (1st Cir. 2001) (internal citation omitted).

         Furthermore, Rule 56 “requires a scalpel not a butcher knife. The nisi prius court ordinarily must apply it to each segment of an affidavit, not to the affidavit as a whole.” Perez v. Volvo Car Corp., 247 F.3d at 315. The First Circuit in Perez instructs that a selective approach should be taken when determining the admissibility of an affidavit, “intending to disregard those parts of it that are inadmissible and to credit the remaining portions.” Id.

         Because the motions to strike bear on the evidence that this court will consider in deciding plaintiff’s motion for summary judgment, they shall be considered first. See Facey v. Dickhaut, 91 F.Supp.3d at 19. First, defendant has moved to strike the affidavit of Gary McCarthy (“McCarthy affidavit”) as well as the exhibits attached to the affidavit. (Docket Entry # 70). Defendant argues that the affidavit was not based on the personal knowledge of the affiant, Gary McCarthy (“McCarthy”), and therefore constitutes inadmissible hearsay. (Docket Entry # 70). Defendant further contends that the McCarthy affidavit lacks statements of fact and instead contains baseless and conclusory assumptions that lack a proper foundation and do not support the possible knowledge of the affiant. (Docket Entry # 70).

         As pointed out by plaintiff, McCarthy states that he made the affidavit on the basis of his personal knowledge. (Docket Entry # 63). Additionally, McCarthy, a member of Home Assets, attests in the affidavit that he personally reviewed the servicing records for the Nantucket property, which were prepared in the ordinary course of business of BSI Financial Services (“BSI”). (Docket Entry # 63). Plaintiff submits that the McCarthy affidavit and its attachments satisfy the foundational requirements for the business records exception to the hearsay rule and that the foreclosure affidavit of Manuel Villegas (“Villegas”) satisfies the requirements of Massachusetts General Laws chapter 244 (“chapter 244”), section 15. (Docket Entry # 71).

         McCarthy states in the affidavit that he has personal knowledge as a member of plaintiff’s business. (Docket Entry # 63). Having worked for plaintiff and reviewed the actual records of defendant’s mortgage loan, he avered that they were kept in the ordinary course of business of BSI, the servicer for Home Assets, and maintained by BSI or Home Assets employees. (Docket Entry # 63).

         Defendant argues that McCarthy does not attest to what personal knowledge he has or how he was able to obtain such personal knowledge. According to defendant, McCarthy, a manager for Home Assets, did not have a foundation showing how BSI “created, kept or maintained” the records. (Docket Entry # 70).

         “Evidence to prove personal knowledge may consist of the witness’s own testimony.” Fed.R.Evid. 602. McCarthy’s own testimony, however, reflects that he was able to obtain personal knowledge over defendant’s mortgage loan by explaining that he has been working for plaintiff for close to five years. (Docket Entry # 63). It is true that McCarthy, as an employee of Home Assets, is not qualified to testify about the ordinary course of BSI in maintaining the records of BSI. Villegas, however, is an employee of BSI and he submitted an affidavit that satisfies Rule 803(6) with respect to the records maintained by BSI including the note history and other business records of BSI regarding the “servicing and loan payment histories.” (Docket Entry # 62-6). The court in Perdomo v. Federal Nat’l Mortg. Ass’n, 2013 WL 1123629, at *2 (N.D. Tex. Mar. 18, 2013), rejected a similar challenge to an affidavit of an employee of a servicer in light of her review of the loan records at issue. Further, notwithstanding defendant’s argument to the contrary, the fact that McCarthy was an employee of Home Assets as opposed to BSI does not prevent him from being a qualified witness. See Phillips v. Mortg. Elec. Registration Systems, Inc., 2013 WL 1498956, *3 (N.D.Ala. April 5, 2013) (Rule 803(6) “does not require testimony by some witness associated with the predecessor entity when the records become part of the records of a successor entity”).

         The hearsay exception for business records allows admission into evidence of a record if it was made at or near the time by someone with knowledge, kept in the ordinary course of business, made within a regular business activity, and all of these requirements are shown by a qualified witness of the records, with no indication of trustworthiness made by the opponent. Fed.R.Evid. 803(6). In regards to the “qualified witness” requirement of the business record exception, “it is well established that the witness need not be the person who actually prepared the record. A qualified witness is simply one who can explain and be cross-examined concerning the manner in which the records are made and kept.[2] Wallace Motor Sales, Inc. v. American Motors Sales Corp., 780 F.2d 1049, 1061 (1st Cir. 1985) (citations omitted); see also United States v. Kayne, 90 F.3d 7, 12-13 (1st Cir. 1996) (citing to Wallace that qualifying witness need not have actually prepared the business record, just that he can be cross-examined on the matter of how record was made and kept).

         Defendant argues that McCarthy, despite being an employee of plaintiff, fails to meet the “qualified witness” requirement under the business records exception. (Docket Entry # 70). In the affidavit, however, McCarthy demonstrated a knowledge and a familiarity with how the loan documents were made with defendant and how those records were serviced and maintained. (Docket Entry # 63).

         Defendant further submits that McCarthy’s attestations are conclusory. To the contrary, the McCarthy affidavit lays out factual statements regarding the loan history between plaintiff and defendant based on McCarthy’s own personal knowledge as well as his review of the business records. (Docket Entry # 63). Defendant’s reliance on Sheinkopf v. Stone, 927 F.2d 1259, 1271 (1st Cir. 1991), is misplaced because in Sheinkopf the affidavit was deficient due to the conclusory statements and mere allegations made solely based on the belief of the affiant.

         Defendant further asserts that there is no specific evidence about how the records were created, kept or maintained. (Docket Entry # 70). Yet, an affiant is only required to have some familiarity and ability to explain the maintenance of the business records in question, especially when elements of trustworthiness are present. See Wallace Motor Sales, Inc. v. American Motors Sales Corp., 780 F.2d at 1061 (citing NLRB v. First Termite Control Co., Inc., 646 F.2d 424, 427 (9th Cir. 1981)); see also United States v. Kayne 90 F.3d at 12-13. McCarthy refers to a number of facts regarding the mortgage loan and he discusses the analysis plaintiff utilizes when assessing the possibilities for a loan modification as well as the procedures plaintiff took to engage in a foreclosure sale of the property. (Docket Entry # 63). Therefore, the McCarthy affidavit meets all of the necessary requirements under the business records exception as well as the personal knowledge requirement for affidavits in support of motions for summary judgment. Fed.R.Evid. 803(6); Fed.R.Civ.P. 56(c)(4).

         Defendant also raises two state statutory arguments as a means to strike documents attached to the McCarthy affidavit. (Docket Entry # 70). First, defendant states that there is “[n]o evidence of any contractual relationship” between plaintiff and BSI “to service[] Conley’s loan” thereby “implicating the Statute of Frauds” in Massachusetts General Laws chapter 259 (“chapter 259”), section one, a writing for the sale of real estate interests.” (Docket Entry # 70). The statute of frauds instructs that:

No action shall be brought . . . [u]pon a contract for the sale of lands . . . or of any interest in or concerning them . . . [u]nless the promise, contract or agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged therewith or by some person thereunto by him lawfully authorized.

         Mass. Gen. L. ch. 259, § 1 (“chapter 259”). Accordingly, “as a general matter, ‘a contract for the sale of land must comply with the Statute of Frauds, ’ and ‘an oral modification will not be enforced if it results in a “rewriting” of the contract or significantly changes the parties’ obligations.’” Akar v. Federal Nat’l Mortg. Ass’n, 845 F.Supp.2d 381, 397 (D.Mass. 2012) (brackets omitted); see Seidel v. Wells Fargo Bank, N.A., 2012 WL 2571200, at *4 (D.Mass. July 3, 2012) (“‘right to possession of land is an interest in it, and a contract to surrender possession or to forbear for a time to exercise a right to take and retain possession is within the statute of frauds’”); RFF Family Partnership, LP v. Link Development, LLC, 907 F.Supp.2d 155, 163 (D.Mass. 2012) (although “Statute of Frauds prohibits oral contracts for the sale of land, or interests in the sale of land, oral agreements that alter the method by which a mortgage is paid off but do not affect the ‘right, title and interest’ in the security are enforceable”).

         BSI’s authority to act on behalf of HMC as CAM Mortgage as a servicer does not implicate a “contract for the sale of lands” within the meaning of chapter 259, section one. See First Pennsylvania Mortg. Trust v. Dorchester Savings Bank, 481 N.E.2d 1132, 1138 (Mass. 1985); Aragao v. Mortg. Elec. Registration Systems, Inc., 22 F.Supp.3d 133, 139 n.6 (D.Mass. 2014); Akar v. Federal Nat’l Mortg. Ass’n, 845 F.Supp.2d at 397; see also Greenfield v. Pearlstein, 1995 WL 106051, at *2 (Mass.App.Div. Feb. 28, 1995) (statute of frauds “inapplicable to contracts which do not entail or contemplate a transfer of land or the creation of any estate or interest therein and which instead concern the profits or losses arising from the use or sale of realty”). As a servicer, BSI did not own the mortgage and its relationship as a servicer for HMC as CAM Mortgage, the mortgagee and lender, did not involve the transfer of land. In the alternative, a limited power of attorney (Docket Entry # 15-2) evidences that BSI had the authority to act as servicing agent for HMC as CAM Mortgage and satisfy the statute’s writing requirement. See also Financial Resources Network, Inc. v. Brown & Brown, Inc., 930 F.Supp.2d 287, 308 (D.Mass. 2013).

         Defendant’s other statutory argument relies on Massachusetts General Laws chapter 233, section 79A (“section 79A”), which provides for the admissibility of certified copies of public records. Similar to section 79A, certified and signed copies of documents of public records are self-authenticating under the applicable Federal Rule of Evidence, Fed.R.Evid. 902 (“Rule 902”). See Downey v. Bob’s Discount Furniture Holdings, Inc., 633 F.3d 1, 8 (1st Cir. 2011) (“[f]ederal evidentiary rules govern in diversity cases”); Ricciardi v. Children’s Hosp. Med. Ctr., 811 F.2d 18, 21 (1st Cir. 1987) (“Federal Rules apply to all cases in the district courts, including diversity actions”); Fed.R.Evid. 1101. As discussed above, however, a proper foundation has been established to admit documents attached to the McCarthy affidavit and maintained by BSI under the business records exception. Thus, although Rule 902 as well as section 79A provide one means to admit documents of public record into evidence, they are not the only means. Accordingly, defendant’s argument, which relies on a state evidentiary statute, is misguided.

         Defendant’s final argument regarding the motion to strike challenges the admissibility of the chapter 244, section 15 affidavit of Villegas (“foreclosure affidavit”), which is attached to the foreclosure deed (Docket Entry # 73-1). (Docket Entry # 70). As an employee of BSI, Villegas has a sufficient level of familiarity to satisfy the personal knowledge requirement of Rule 56, as he is personally involved with the handling of plaintiff’s records. Fed.R.Civ.P. 56(c) (4); see Perez v. Volvo Car Corp., 247 F.3d at 315. Moreover, the foreclosure affidavit contains purely factual statements about the publishing of the notice of sale and the occurrence of the public auction of the property. (Docket Entry # 63-11). Therefore, it satisfies the personal knowledge requirement of Rule 56. Fed.R.Civ.P. 56(c)(4); see Perez v. Volvo Car Corp., 247 F.3d at 315.

         Defendant’s only other challenge to the admissibility of the foreclosure affidavit is that it contains a false statement that BSI “caused a notice of sale to be published” and “mail[ed] the required notices” (Docket Entry # 63-11) when plaintiff’s counsel was the party actually completing these actions (Docket Entry # 62-8, p. 4). (Docket Entry # 70). Under Massachusetts law, “[a]n agency relationship is created when there is mutual consent, express or implied, that the agent is authorized to act on behalf and for the benefit of the principal, subject to the principal’s control.” RFF Family Partnership, LP v. Link Development, LLC 907 F.Supp.2d at 161 (citing Theos & Sons, Inc. v. Mack Trucks, Inc., 729 N.E.2d 1113, 1119 (2000)). “It is the conduct of the principal, not the agent, that creates apparent authority.” Id. (citing Sheinkopf, 927 F.2d at 1269).

         While defendant attempts to cite an inconsistency in the actions of BSI, the foreclosure affidavit expressly states that “BSI Financial Services, Inc., Attorney-in-Fact for [plaintiff] solely in its capacity as Separate Trustee of CAM Mortgage Trust 2013-1, caused a notice of sale to be published” and also establishes BSI Financial Services’ compliance with chapter 244 section 14. (Docket Entry # 63-11). Thus, BSI, in the limited capacity in which it acted as an agent for plaintiff, appropriately caused a notice of sale to be published. (Docket Entry # 63-11). Defendant has not presented this court with any evidence to the contrary, nor has defendant presented any evidence to suggest that plaintiff’s counsel, or BSI, acted outside of its actual agency in relation to plaintiff.

         In regards to defendant’s motion to strike the affidavits of plaintiff’s counsel (“Longoria affidavits”), defendant argues that they lack a basis for personal knowledge under Rule 56, particularly in regards to the testimony that the original note that plaintiff executed to purchase the property (“the Conley note”) is an “original business record” under the hearsay exception. (Docket Entry # 80). Additionally, defendant suggests in the motion to strike that plaintiff’s counsel is barred from making an affidavit because she is not a “qualified witness.”[3] (Docket Entry # 80).

         The Longoria affidavits satisfy the personal knowledge standard because the affidavits are based in fact, “as opposed to conclusions, assumptions, or surmise.” Perez v. Volvo Car Corp., 247 F.3d at 316. Plaintiff’s counsel stated that she had personally appeared at the foreclosure sale of the property in question. (Docket Entry # 73, ¶ 8). Moreover, the Longoria affidavits provide purely factual descriptions of the events that transpired at the foreclosure sale, rather than statements of assumptions or conclusions. Based on the personal observations made by the affiant, the affidavits set out statements of fact based on personal knowledge. See Perez v. Volvo Car Corp., 247 F.3d at 316.

         As to the testimony made in reference to the business records attached to the Longoria affidavits, the affiant was able to base this testimony on her own firm’s handling of plaintiff’s business records. (Docket Entry # 81). Defendant attempts to argue that the affidavit makes no reference as to who at the affiant’s law firm was involved with this process or that this was a regularly conducted activity. (Docket Entry # 80). Defendant continues by stating that the affiant herself had no personal involvement with anything related to the purported transfer of the Conley note from plaintiff to the affiant’s law firm. (Docket Entry # 80).

         As stated above, however, an affiant is only required to have some familiarity and ability to explain how the business records were handled to satisfy Rule 803(6), especially when there is no indication for a lack of trustworthiness. See Wallace Motor Sales, Inc. v. American Motor Sales Corp., 780 F.2d at 1061. As a member of the law firm representing plaintiff in this case, the affiant’s statements meet this standard. See id. Additionally, plaintiff’s counsel has submitted evidence, such as a June 25, 2013 bailee letter (“the bailee letter”), to adequately demonstrate the firm’s handling of the relevant business records. (Docket Entry # 73-1). The bailee letter attached to Longoria’s supplemental affidavit states in pertinent part, “CAM shall retain full ownership thereof and you [plaintiff’s counsel] shall hold possession of the Note evidencing the mortgage loan as agent and Bailee for and on behalf of CAM.” (Docket Entry # 73-1). Therefore, the affiant has the requisite ability to speak on behalf of the handling of the business records, even without performing the actual task herself. See id. Furthermore, because the documents attached to the Longoria affidavits meet the business record exception, an argument suggesting that they make statements for the truth of the matter asserted is precluded. Reliance on the bailee letter submitted with the supplemental Longoria affidavit, and any other business record meeting the hearsay exception, is therefore appropriate. Fed.R.Evid. 803(6); Wallace Motor Sales, Inc. v. American Motors Sales Corp., 780 F.2d at 1061.

         Finally, the mere fact that the affiant is counsel for plaintiff is not a sufficient reason to discredit the testimony provided in the affidavit in question, especially given that the affiant has met the personal knowledge requirement and the document at issue was kept in the ordinary course of counsel’s law firm. Fed.R.Evid. 602. “Every person is competent to be a witness” except as otherwise provided in the Federal Rules of Evidence. Fed.R.Evid. 601. Defendant has not produced any authority to support the contention that plaintiff’s counsel would be otherwise unfit to submit an affidavit where, as here, she is addressing under oath the maintenance of documents at her law firm and how documents at her law firm are handled.

         II. Motion for Summary Judgment

         Summary Judgment is designed “‘to pierce the boilerplate of the pleadings and assay the parties’ proof in order to determine whether trial is actually required.’” Dávila v. Corporación De Puerto Rico Para La Difusión Pública, 498 F.3d 9, 12 (1st Cir. 2007). “Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon the motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

         It is appropriate when the summary judgment record shows “there is no genuine dispute as to any material fact and the [moving party] is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56. “‘A dispute is genuine if the evidence about the fact is such that a reasonable jury could resolve the point in the favor of the non-moving party.’” American Steel Erectors, Inc. v. Local Union No. 7, Int’l Ass’n of Bridge, Structural, Ornamental & Reinforcing Iron Workers, 536 F.3d 68, 75 (1st Cir. 2008). “‘A fact is material if it carries with it the potential to affect the outcome of the suit under the applicable law.’” Id. Facts are viewed in favor of the non- movant, i.e., defendant. See Noonan v. Staples, Inc., 556 F.3d 20, 23 (1st Cir. 2009). The summary judgment record sets out the following facts.


         On August 15, 2006, defendant, as the borrower, executed the Conley note to American Home Mortgage, the lender, for $800, 000 (Docket Entry # 11-1) and, to secure the loan, gave a mortgage (“Conley mortgage”) on the property to Mortgage Electronic Registration Systems, Inc. (“MERS”), as nominee for American Home Mortgage. (Docket Entry # 11-2). The note required defendant to pay principal and interest by making monthly payments every month. (Docket Entry # 63-1). The payments on the mortgage were to begin on October 1, 2006 and continue to be made on the first day every month until the principal and interest were paid off. (Docket Entry # 63-1, p. 1). If defendant failed to make the required payment each month, then she would be in default under the terms of the Conley note. (Docket Entry # 63-1, p. 4).

         Furthermore, if defendant should default, the note stipulated that “the Note Holder may send [defendant] a written notice telling me that if [defendant does] not pay the overdue amount by a certain date, the Note Holder may require [defendant] to pay immediately the full amount of Principal which has not been paid and all the interest that [defendant] owe on that amount.”[4] (Docket Entry # 63-1, p. 4). In regards to notice, the Conley note required that the Note Holder provide at least ten days after the date on which the notice is delivered or mailed to defendant before the Note Holder could require defendant to pay off the entire principal due to the default. (Docket Entry # 63-1, p. 4). As the sole signor of the note, defendant was “fully and personally obligated to keep all of the promises made in the Note, including the promise to pay the full amount owed.” (Docket Entry # 63-1, p. 5).

         As previously noted, the property that secured the loan obligation was located at 23 Golf Drive in Nantucket. (Docket Entry # 11-1). The Conley mortgage was filed at the Nantucket County Land Court, Registry District (“Nantucket County Land Court”) on August 15, 2006. (Docket Entry # 11-2). The Conley mortgage was a refinance used to pay off defendant’s prior loan to Option One Mortgage in the amount of $620, 561.34 and resulted in a cash-out to defendant in the amount of $152, 222.89. (Docket Entry # 11-3). At the origination of the Conley mortgage and note, the property was valued at $1, 350, 000. (Docket Entry # 11-4).

         Paragraph 22 of the mortgage included a power of sale clause. It states, in pertinent part, that the “Lender shall give notice” of a default and:

If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the STATUTORY POWER OF SALE and any other remedies permitted by Applicable Law . . ..
If Lender invokes the STATUTORY POWER OF SALE, Lender shall mail a copy of a notice of sale to Borrower, and to other persons prescribed by Applicable Law, in the manner provided by applicable law. Lender shall publish the notice of sale, and the Property shall be sold in a manner prescribed by applicable law.

(Docket Entry # 63-2).

         Additionally, the Conley mortgage included a second home rider stating that the “Borrower shall occupy, and shall only use, the Property as [the] Borrower’s second home.” (Docket Entry # 63-2, p. 21). The Conley mortgage stated that defendant was expected to occupy and use the property as defendant’s principal place of residence within 60 days after execution of the mortgage, unless otherwise agreed to in writing. (Docket Entry # 63-2). The second home rider replaced this “principal place” requirement by explicitly stating that the property would be used as a second home for defendant. Both parties agreed to the second home rider. (Docket Entry # 63-2).

         As set forth in the loan application, plaintiff owned real property located on East 76th Street in New York City. (Docket Entry # 63-3). Defendant indicated on the loan application that her primary residence was this New York property. (Docket Entry # 63-3). Additionally, at no time prior to the initiation of the foreclosure process did defendant notify BSI or plaintiff that she was maintaining the property on Nantucket as a primary residence.

         On February 8, 2012, as stated in the notarized assignment filed in the Nantucket County Land Court, MERS assigned the Conley mortgage to J.P. Morgan Mortgage Acquisition Corp. (“J.P. Morgan”) for value received. (Docket Entry # 63-6). As set out in a July 2012 notarized assignment filed in Nantucket County Land Court, J.P. Morgan then assigned the Conley mortgage to HMC Assets, LLC solely in its capacity as Separate Trustee of CAM V Trust (“HMC as CAM V Trust”) on July 13, 2012. (Docket Entry # 63-7). Finally, as stated in the notarized assignment filed in Nantucket County Land Court, HMC as CAM V Trust assigned the Conley mortgage to HMC Assets, LLC solely in its capacity as Separate Trustee of CAM Mortgage Trust 2013-1, i.e., plaintiff, on May 3, 2013. (Docket Entry # 63-8).

         On June 26, 2013, HMC as CAM Mortgage was the holder of the original Conley note. On that date, HMC as CAM Mortgage tendered the Conley note to its attorney and agent, Doonan, Graves & Longoria, LLC (“DG&L”), to retain possession of the note on behalf of HMC as CAM Mortgage. (Docket Entry # 73). After June 26, 2016, HMC as CAM Mortgage retained full ownership of the Conley note with the authority to request that DG&L return the note to HMC as CAM Mortgage, the holder and owner of the note. (Docket Entry # 73-1) (Docket Entry # 73). At all times since June 26, 2013, DG&L, HMC as CAM Mortgage’s counsel and agent, remained in possession of the Conley note. (Docket Entry # 73-1) (Docket Entry # 73, ¶¶ 5-7).

         Moreover, as likewise established in the affidavit of McCarthy, plaintiff is currently the holder of the Conley note as well as the current assignee of record of the Conley mortgage.[5] (Docket Entry # 63, ¶¶ 15, 16). In pertinent part, McCarthy attests as follows:

An Assignment of Mortgage from HMC Assets, LLC solely in its capacity as Separate Trustee of CAM V Trust to HMC Assets, LLC solely in its capacity as Separate Trustee of CAM Mortgage Trust 2013-1 dated May 3, 2013, was registered with the Nantucket County Registry of District of the Land Court . . ..
HMC Assets is the current holder of the Conley Note and current assignee of record of the Conley Mortgage.

(Docket Entry # 63, ¶¶ 15, 16).

         By October 1, 2009, defendant had defaulted on her loan installment payments. (Docket Entry # 63, ¶ 17) (Docket Entry # 63-11, p. 3). As a result, BSI, as servicer of the mortgage for plaintiff, sent a 150 day “Notice of Right to Cure” letter (“35A letter”) dated June 25, 2013 to defendant pursuant to section 35A of chapter 244 (“section 35A”). (Docket Entry # 63-9). BSI is the servicer of plaintiff. (Docket Entry ## 62-6, 63-9) (Docket Entry # 62-8, p.5).[6] According to the 35A letter, defendant did not make the monthly loan payment due on October 1, 2009. (Docket Entry # 63-9). The accumulated past due amount totaled $169, 550.21. (Docket Entry # 63-9). In the 35A letter, BSI required defendant to pay off the past due amount on or before November 29, 2013, which was 150 days from the date BSI sent defendant the 35A letter notifying her of the default. (Docket Entry # 63-9). In addition, the 35A letter explained that if defendant did not pay the past due amount by the deadline, defendant could be evicted from the property after a foreclosure sale. (Docket Entry # 63-9).

         BSI accompanied the 35A letter with a “Right to Request a Modified Mortgage Loan” notice (“loan modification notice”). (Docket Entry # 63-10). The letter stated that under Massachusetts law defendant was eligible to request a modification of her mortgage. (Docket Entry # 63-10). The loan modification notice explained that a modification could potentially change the options given to defendant in the 35A letter. (Docket Entry # 63-10). Defendant submitted an application to modify the loan. (Docket Entry # 69-3). As stated in the McCarthy affidavit, there are a series of steps plaintiff applies when reviewing the eligibility of a loan modification request. (Docket Entry # 63, ¶¶ 22-26). The McCarthy affidavit states that:

As a good faith effort to avoid foreclosure, HMC Assets reviewed Conley for a modification of her mortgage in November of 2013.
[Plaintiff] utilizes FHA guidelines when considering its borrowers for a loan modification.
Under [Fair Housing Act] guidelines, a borrower’s mortgage payment must not be in excess of 31% of their verifiable monthly average income.
[Plaintiff] used [Defendant’s] Federal Tax Returns for 2011 and 2012 [to establish defendant’s] income.
[Defendant’s] mortgage payment including principal, interest, taxes and insurance is approximately 62.4% of her verifiable monthly average income . . ..
Given the approximate 62.4% ratio of her mortgage payment to verifiable monthly average income, Conley is not eligible for a modification under FHA guidelines.

(Docket Entry # 63, ¶¶ 21-26) (paragraph numbers omitted).[7]

         Without a loan modification, defendant failed to cure the default prior to expiration of the 150 days. Plaintiff subsequently filed with the Land Court Department of the Massachusetts Trial Court (“the Land Court”) a “Complaint to Determine Military Status” pursuant to the Servicemembers Civil Relief Act, 50 U.S.C. §§ 501 et seq. (“Servicemembers Act”). (Docket Entry # 11-9). Pursuant to the Servicemembers Act, an order of notice was published in the Nantucket Inquirer and Mirror on January 2, 2014, served on defendant on January 14, 2014, and recorded with the Land Court on January 10, 2014. (Docket Entry # 11, ¶ 18). The Land Court determined that defendant was not entitled to the benefits of the Servicemembers Act. (Docket Entry # 11-11).

         As set forth by affidavit (“noteholder affidavit”) dated December 17, 2013, HMC as CAM Mortgage was the foreclosing entity. As explained above, DG&L, plaintiff’s agent and attorney, was in possession of the note on behalf of HMC as CAM Mortgage, the owner of the note.[8] The affiant, Villegas, a vice president of BSI and an agent of HMC as CAM Mortgage, attests to his familiarity and review of BSI records kept in the ordinary course of BSI’s business. In the noteholder affidavit, Villegas certified that the requirements of section 35B of chapter 244 (“section 35B”) had “been compiled with” regarding the Conley note. (Docket Entry # 62-6). The noteholder affidavit also states that it is the regular practice of BSI to receive records related to a mortgage loan from another entity. (Docket Entry # 62-6). The noteholder affidavit was registered with the Land Court on January 29, 2014. (Docket Entry # 62-6). On December 17, 2013, Villegas separately sent defendant a certification pursuant to 209 C.M.R. § 18.21A(2)(c) that HMC as CAM Mortgage was the current owner of the Conley note and the assignee of the Conley mortgage. (Docket Entry # 62-8, p. 5) (Docket Entry # 62, ¶ 11).

         On February 6, 13 and 20, 2014, notice of the foreclosure sale (Docket Entry # 11-13) was published in the Nantucket Inquirer and Mirror, a newspaper of general circulation, for three consecutive weeks not less than 21 days prior to the foreclosure sale. (Docket Entry # 62-7). Pursuant to chapter 244, sections 14 and 17B, a “Notice of Intent to Foreclose Mortgage” and “Intent to Pursue Deficiency After Foreclosure of Mortgage” letter was mailed to defendant on February 7, 2014. (Docket Entry # 62-8). The letter alerted defendant that the mortgaged property would be sold at public auction on March 7, 2014, on the mortgaged premises. (Docket Entry # 62-8). Plaintiff also notified defendant that on or after the foreclosure sale, defendant may be liable for any deficiency in proceeds of the foreclosure sale although “[n]o deficiency after the foreclosure sale may be pursued if [defendant had] obtained or will obtain a Chapter 7 bankruptcy.” (Docket Entry # 62-8, p. 2). (Docket Entry # 62-8).

         Plaintiff purchased the property at a non-judicial foreclosure sale on March 7, 2014, and registered the foreclosure deed with the Land Court.[9] (Docket Entry ## 11-15, 11-16). On March 7, 2014, plaintiff, by itself or through its attorney-in-fact and agent (BSI), [10] conducted the foreclosure sale. (Docket Entry # 63-11, pp. 1, 3) (Docket Entry # 62, ¶¶ 12-13). The Monroe Auction Group, in turn, was the auctioneer and BSI was its client. (Docket Entry # 62-9). Double B Capital Group, Inc. (“Double B Capital”) was the successful bidder at the foreclosure sale, but failed to consummate the sale of the property. ...

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