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Lewis v. Bank of New York Mellon Trust Co. N.A.

United States District Court, D. Massachusetts

January 12, 2017

JOHN N. LEWIS and SUSAN A. LEWIS, Plaintiffs,


          F. Dennis Saylor IV United States District Judge.

         This action arises out of a home mortgage foreclosure. Plaintiffs John Lewis and Susan Lewis have brought suit against defendants Bank of New York Mellon Trust Company, N.A. (“BNYM”), Mortgage Electronic Registration Systems, Inc. (“MERS”), and Wells Fargo Bank, N.A (“WFB”) for alleged violations of law stemming from proceedings to foreclose on their home. The complaint asserts claims for declaratory and injunctive relief, conversion, and violation of Mass. Gen. Laws ch. 93A. Plaintiffs essentially seek a two-part declaration that BNYM is not the holder of the promissory note that plaintiffs granted to their original lender, Peoples Mortgage Corporation (“PMC”), and that MERS, the mortgagee, did not have authority to assign the mortgage to the purported note holder BNYM.

         Defendants have moved for summary judgment pursuant to Fed.R.Civ.P. 56.[1] In opposing defendants' motion, plaintiffs have moved for additional time to conduct discovery under Rule 56(d). For the reasons set forth below, defendants' motion for summary judgment will be granted and plaintiffs' motion for additional time to conduct discovery will be denied.

         I. Background

         The facts are presented in the light most favorable to plaintiffs, except where otherwise noted.

         A. Factual Background

         On December 22, 2004, plaintiffs John and Susan Lewis purchased a home at 22 Cutler Road, in Needham, Massachusetts. (Compl. ¶ 5; Penno Aff. Ex. A Adjustable Rate Note at 1). To finance their purchase, plaintiffs executed a $1.2 million promissory note in favor of PMC, their lender. (Penno Aff. Ex. A at 1). The note was secured by a mortgage on the property. (Compl. Ex. 2, Mortgage on the 22 Cutler Road Property).

         The mortgage designates plaintiffs as the borrowers, PMC as the lender, and MERS as the mortgagee. (Id. at 1). According to the mortgage, MERS “is a separate corporation that is acting solely as a nominee for lender and lender's successors and assigns.” (Id.). Plaintiffs agreed to “mortgage, grant and convey to MERS (solely as nominee for lender and lender's successors and assigns) and to the successors and assigns of MERS, with power of sale the [Cutler Road property].” (Id. at 2). MERS promptly recorded the mortgage in the Norfolk County Registry of Deeds. (Id. at 11).

         Prior to the execution of the note, PMC executed a limited power of attorney appointing Mortgage Network, Inc. “as its agent and attorney in fact for the . . . purpose of endorsing and assigning mortgage loan documents, including promissory notes and mortgage assignments” in transactions where the intent was to sell loans from PMC to Mortgage Network. (Penno Aff. Ex. A at 10). The power of attorney empowers certain Mortgage Network employees, including Chad Goodwin, to endorse or assign documents on behalf of PMC. (Id.).

         Pursuant to the power of attorney, the note was specially endorsed from PMC to Mortgage Network without recourse and signed by Goodwin. (Id. at 4; Def. SMF ¶ 6). Subsequently, Goodwin endorsed the note in blank without recourse. (Penno Aff. Ex. A at 4; Def. SMF ¶ 7).[2] On January 25, 2005, BNYM took possession of the original note endorsed in blank, and has maintained possession of it since that time. (Penno Aff. ¶ 7-8).

         In November 2008, PMC was voluntarily dissolved. (Compl. Ex. 3, PMC Articles of Voluntary Dissolution). In October 2014, plaintiffs stopped paying their mortgage. (Compl. ¶ 10). According to plaintiffs, they did so “upon a coincidental review of their title which revealed that PMC had been dissolved and that there was no record of any assignment of the mortgage in the Land Court or Norfolk Registry of Deeds or that the note had been sold, transferred or assigned to a subsequent holder.” (Id.). At that time, MERS still owned the mortgage in trust for the successors and assigns of PMC.

         Shortly after the default, in December 2014, MERS assigned the mortgage to BNYM. (Compl. Ex. 4, Corporate Assignment of Mortgage, at 1). The assignment, which was prepared by WFB, was signed by an assistant secretary of MERS, “as nominee for [PMC], its successors and assigns.” (Id. at 2). The assignment was recorded in January 2015. (Id.). At all times relevant to this action, WFB has been acting as the servicer for plaintiffs' loan on behalf of BNYM. (Id.; Compl. ¶ 21; Compl. Ex. 6, Oct. 27, 2015 Letter to Lewises from ASC; Docket No. 20, WFB Aff.).

         In July 2015, BNYM initiated foreclosure proceedings by filing a Servicemembers Civil Relief Act case in the Massachusetts Land Court. (Compl. ¶ 14).

         B. Procedu ...

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