United States District Court, D. Massachusetts
ANTONE J. PERREIRA and KAREN A. PERREIRA, Plaintiffs,
BANK OF NEW YORK MELLON as Trustee for the certificateholders of CWABS, Inc. asset backed certificates series 2006-6, DITECH FINANCIAL LLC, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., and MERSCORP HOLDINGS, INC., Defendants.
ORDER ON MOTION TO DISMISS (DOC. NO. 17)
SOROKIN UNITED STATES DISTRICT JUDGE.
and Karen Perreira filed suit (1) seeking a declaratory
judgment that the Bank of New York Mellon (BNY Mellon) cannot
utilize the statutory remedy under Mass. Gen. Laws ch. 244,
§ 14, (2) asserting that Ditech Financial violated Mass.
Gen. Laws ch. 93A by not accurately certifying the mortgage,
(3) alleging slander of title by BNY Mellon, Mortgage
Electronic Registration Systems, Inc. (MERS), and MERSCORP
Holdings, LLC because MERS falsely recorded the ownership of
the mortgage, and (4) seeking a declaratory judgment against
BNY Mellon, MERS, and MERSCORP that the Plaintiffs'
mortgage is obsolete under Mass. Gen. Laws ch. 260, §
33. Defendants filed a Motion to Dismiss, Doc. No. 17,
Plaintiffs responded, Doc. No. 21, and Defendants replied,
Doc. No. 24. For the reasons stated below, the Motion to
Dismiss is ALLOWED.
December 30, 2006, Antone Perreira entered into a loan
agreement with Residential Finance Corporation (RFC).
Perreira signed a promissory note in the amount of $338, 000,
made payable to RFC. At the same time, Perreira signed a
mortgage naming RFC as the lender and allowing MERS to act as
nominee on the mortgage.
America's Loan Counseling Center sent Plaintiffs a Notice
of Intention to Foreclose on May 28, 2010, on behalf of
Defendants informing Plaintiffs that the loan was “in
serious default” and that they owed $54, 307.08. Doc.
No. 1-4 at 6. The letter stated that “[i]f the default
is not cured on or before June 27, 2010, the mortgage
payments will be accelerated with the full amount remaining
accelerated and becoming due and payable in full, and
foreclosure proceedings will be initiated at that
27, 2011, MERS executed an assignment of the mortgage to BNY
Mellon. Doc. No. 1-4 at 11. The assignment lists MERS as the
“holder of a Mortgage” and states that MERS is
granting “all beneficial interest under [the Perreira
mortgage] together with the note(s) and obligations therein
described and the money due and to become due thereon with
interest and all rights accrued or to accrue under said
Mortgage.” Id. The document was recorded at
the Bristol County Registry of Deeds on October 17, 2011.
claims are based on that July 27, 2011 assignment being
invalid because of transfers that happened between the
initial mortgage and the assignment to BNY Mellon. As alleged
in the complaint, Plaintiffs assert that the mortgage was
assigned from MERS to BNY Mellon on June 30, 2011, meaning
that MERS had nothing to assign at the time of the written
assignment on July 27, 2011. Doc. No. 1-3 at 9. Plaintiffs
received an automated message from MERS “stating that
as of July 08, 2011, MERS no longer had any interest in
Plaintiffs' mortgage.” Id.
March 31, 2016, Ditech completed a certification pursuant to
209 C.M.R. 18.21A(2) which listed one assignment, the July
27, 2011 assignment from MERS to BNY Mellon. Doc. No. 1-4 at
17. On May 3, 2016, BNY Mellon sent a Notice of Mortgage
Foreclosure Sale to Antone Perreira. Doc. No. 1-4 at 18. On
June 6, 2016, Plaintiffs filed an Amended Complaint in
Bristol County Superior Court. Doc. No. 1-3 at 18. Defendants
removed the action to this Court based on diversity
jurisdiction. Doc. No. 1.
considering a motion to dismiss, the Court “must take
the allegations in the complaint as true and must make all
reasonable inferences in favor of the plaintiffs.”
Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993).
Dismissal for failure to state a claim is appropriate when
the pleadings set forth “factual allegations, either
direct or inferential, respecting each material element
necessary to sustain recovery under some actionable legal
theory.” Berner v. Delhanty, 129 F.3d 20, 25
(1st Cir. 1997) (quoting Gooley v. Mobil Oil Corp.,
851 F.2d 513, 515 (1st Cir. 1988)).
Declaratory judgment on the statutory remedy under Mass. Gen.
Laws ch. 244, § 14
seek a declaratory judgment that the statutory remedy under
Mass. Gen. Laws ch. 244, § 14 is not available here
because MERS did not have the authority to transfer the
mortgage as they were never a mortgagee. In their Response to
the Motion to Dismiss, Plaintiffs assert that, because the
mortgage states that it is “subordinate to Governing
Law” and defines “Applicable Law, ” MERS is
not a proper mortgagee as that would violate Eaton v.
Fed. Nat'l Mortg. Ass'n, 969 N.E.2d 1118 (Mass.
unquestionably a proper mortgagee under First Circuit law.
The First Circuit has noted that Massachusetts law allows the
note and the mortgage to be held by different entities.
Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282,
292 (1st Cir. 2013). “Under such an arrangement, the
mortgagee is an equitable trustee who holds bare legal title
to the mortgaged premises in trust for the noteholder. The
noteholder possesses an equitable right to demand and obtain
an assignment of the mortgage.” Id. (citing
U.S. Bank Nat'l Ass'n v. Ibanez, 941 N.E.2d
40, 53 (Mass. 2011)) (citation omitted). “[W]hen held
by separate parties, the mortgagee holds a bare legal
interest and the noteholder enjoys the beneficial interest.
The mortgagee need not possess any scintilla of a beneficial
interest in order to hold the mortgage.” Id.
at 293 (citing Eaton, 969 N.E.2d at 1124) (citation
omitted). The First Circuit has held that “MERS's
role as mortgagee of record and custodian of the bare legal
interest as nominee for the member-noteholder, and the
member-noteholder's role as owner of the beneficial
interest in the loan, fit comfortably with each other and fit
comfortably within the structure of Massachusetts mortgage
law.” Id. Plaintiffs' citation to
Eaton is inapposite as Culhane was decided
after Eaton and took the Eaton decision
into consideration. The First Circuit has chided
Plaintiffs' attorney for this argument in the past,
stating that he is attempting to “repackage ‘old
wine in a new bottle . . . we see no point in decanting it
again.'” Serra v. Quantum Servicing Corp.,
747 F.3d 37, 40 (1st Cir. 2014) (quoting Culhane,
708 F.3d at 294). MERS validly held the mortgage on the
Perreiras property at the time of the assignment to BNY
Mass. Gen. Laws ch. 93A ...