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Citibank, N.A. v. Najda

United States District Court, D. Massachusetts

March 29, 2017

CITIBANK, N.A. as Trustee for the Benefit of SWDNSI TRUST SERIES 2010-3, Plaintiff,
v.
RENEE ANNA NAJDA a/k/a RENEE NAJDA, ANDREW NAJDA, and ANY and ALL OCCUPANTS, Defendants and Counterclaimants,
v.
CITIBANK, N.A. as Trustee for the Benefit of SWDNSI TRUST SERIES 2010-3, PENNYMAC, CORP., SPECIALIZED LOAN SERVICING, LLC, and CITIMORTGAGE, INC., Counterclaim Defendants.

          OPINION AND ORDER

          GEORGE A. O'TOOLE, JR. UNITED STATES DISTRICT JUDGE

         This Opinion and Order resolves various pending motions, including those concerning the Najdas' counterclaims against Citibank, N.A., PennyMac, Corp., Specialized Loan Servicing, LLC (“SLS”), and CitiMortgage, Inc. The Najdas' claims are discussed more thoroughly in this Court's January 13, 2016, Opinion and Order (dkt. no. 89).

         After that Order, on motion Christiana Trust, a division of Wilmington Savings Fund Society, FSB, not in its individual capacity but solely as separate trustee for PMT NPL Financing 2015-1, was substituted as plaintiff for Citibank, N.A. as trustee for the benefit of SWDNSI Trust Series 2010-3, following a transfer in interest of the Najdas' mortgage (dkt. no. 96). As the result of a more recent retransfer, Citibank, as trustee of PMT NPL Financing 2015-1 is now again said to be the holder of the Najda mortgage. The motion to resubstitute Citibank Trustee for Christiana Trust as plaintiff (dkt. no. 161) is therefore GRANTED.[1]

         The various motions for leave to file reply briefs (dkt. nos. 181, 188, 193, 194, and 197) are GRANTED. The proposed briefs included with those motions are deemed to have been briefs and were considered by the Court. They do not need to be refiled separately.

         This Opinion and Order first addresses SLS's and PennyMac's respective motions for summary judgment, then evaluates the Najdas' second motion to amend their counterclaims, and resolves various discovery related motions.

         I. Standard of Review for Summary Judgment

         “[S]ummary judgment's role is to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.” Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991) (citation and quotation mark omitted). Summary judgment will be granted if the moving party can show “that there is no genuine dispute as to any material fact.” Fed.R.Civ.P. 56(a); see also Vineberg v. Bissonnette, 548 F.3d 50, 55-56 (1st Cir. 2008). Initially, the burden is on the moving party to point out a lack of dispute or “an absence of evidence to support the nonmoving party's case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). In response, the nonmoving party must demonstrate, “through submissions of evidentiary quality, that a trialworthy issue persists.” Vineberg, 548 F.3d at 56 (citation omitted). For issues where the nonmoving party will bear the burden of proof at trial, that party must produce “competent evidence” and may not rely on “conclusory allegations, improbable inferences, and unsupported speculation.” Id. (citations omitted).

         II. Specialized Loan Servicing, LLC's Motion for Summary Judgment (dkt. no. 103)

         A. Mass. Gen. Laws ch. 244, §§ 35A, 35B, 35C[2]

         Massachusetts law has a number of statutes that require notice be given to a borrower prior to foreclosure on their property. Massachusetts General Law Chapter 244, Section 35A required, at the relevant time, that notice of the borrower's right to cure the default on the mortgage loan be given at least 150 days before a loan in default could be accelerated.

         Here, the Najdas' right to cure notice, sent by SLS as the servicer of the loan, stated that the letter was on behalf of “Citibank, N.A., as trustee for the benefit of SWDNSI Trust Series 2010-3.” (Countercl. Pls.' Statement of Facts for Their Opp'n to SLS's Mot. for Summ. J., Ex. RR at 3 (dkt. no. 183-44).) This letter was sent on May 7, 2013. (Id.) As discussed in the January 13, 2016, Opinion and Order, Citibank did not hold the mortgage in 2013; PennyMac held the mortgage until it executed the assignment to Citibank in June 2014. Thus, the Najdas argue, this inaccuracy renders the § 35A letter deficient.

         The error was merely technical; SLS was the mortgage servicer, and the notice provided its contact information for any inquiry or response. The Najdas certainly do not dispute the fact that they were then in default under the note and mortgage. Section 35A's purpose is to “provide the mortgagor with the information necessary to contact the party who holds all relevant information about the loan.” Haskins v. Deutsche Bank Nat'l Trust Co., 19 N.E.3d 455, 462 (Mass.App. Ct. 2014). “In the circumstances of loans such as the one here, that party is the mortgage servicer.” Id. Because the notice provided the Najdas with the relevant information concerning their rights and their servicer, it substantially complied with § 35A; no new § 35A letter need be issued. See id. at 462-63 (dismissing challenge to § 35A notice that misidentified mortgagee but identified mortgage servicer). The misidentification of the current holder of the mortgage by the servicer was substantively harmless. Moreover, the remedy for any misinformation would be the reissuance of a new notice and the commencement of a new time period during which the borrower could cure the default. U.S. Bank Nat'l Ass'n v. Schumacher, 5 N.E.3d 882, 890 (Mass. 2014) (Gants, J., concurring).

         Section 35B provides borrowers with some rights to seek a mortgage modification and receive from their creditor information about this process. The Najdas requested a modification (as the Section 35B notice advised them they could) but allege that SLS never responded to their completed modification application. SLS responds, with record evidence, that the Najdas' application was incomplete for failure to include necessary financial information. (See, e.g., Aff. of Cynthia Wallace, Exs. 5-11 (dkt. no. 106-1).) The Najdas have not supported their contention that their application was complete with any evidence. Indeed, their correspondence with SLS during the relevant time period demonstrates their failure to furnish the financial information requested to make the request for modification complete.

         Section 35C states, among other things, that “[a] creditor violates this chapter if the creditor makes statements to a state or federal court related to foreclosure or compliance with this chapter, orally or in writing, that it knows or should know are false.” Mass. Gen. Laws ch. 244, § 35C(d). The only argument the Najdas make with any support in the record is that SLS, in its statement of facts in support of its motion for summary judgment, repeated the error made in the Section 35A letter by stating that Citibank held the mortgage and note on May 7, 2013. (See SLS's Statement of Undisputed Material Facts ¶ 17 (dkt. no. 107).) As discussed above, Citibank did not hold the mortgage at the time. However, this statement appears to be an unintentional oversight in a case with voluminous filings. It is likely that someone reconstructing the course of events took the May 7 letter at face value without fact-checking it against the actual chain of title and repeated the error. Nothing is shown to support a finding that the statement of facts was known to be false. Nor did the error itself work any substantial harm to the Najdas or the course of litigation.

         For these reasons, summary judgment in favor of SLS is appropriate under Count I. See LeBlanc v. Great Am. Ins. Co., 6 F.3d 836, 841 (1st Cir. 1993) (“[T]he nonmoving party . . . must oppose the motion [for summary judgment] by presenting facts that show that there is a ...


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