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Wells Fargo Bank, N.A. v. Comeau

Appeals Court of Massachusetts, Essex

November 15, 2017

WELLS FARGO BANK, N.A., trustee, [1]
v.
NANCY P. COMEAU.

          Heard: November 3, 2016.

         Civil action commenced in the Superior Court Department on June 17, 2013.

         The case was heard by Timothy Q. Feeley, J., on motions for summary judgment.

          Andrew S. Lee for the plaintiff.

          Gregory N. Eaton for the defendant.

          Present: Agnes, Blake, & Desmond, JJ.

          AGNES, JUDGE.

         Where, as in this case, the doctrine of equitable subrogation is invoked by a mortgagee, it usually refers to a situation in which that party claims that because it has paid the obligation of another person or entity, it is entitled to be put into the shoes of the party it has paid in order to recover from the person or entity that had the obligation.[2] In the present case, on the other hand, the plaintiff, Wells Fargo Bank, N.A., as trustee for WAMU Mortgage Pass Through Certificates Series 2005-PR2 Trust (Wells Fargo), asks us to employ the doctrine of equitable subrogation to impose on a surviving spouse an obligation to pay the balance of a note that her deceased husband was obligated to pay when he refinanced their home in circumstances in which the surviving spouse was a party to neither the note nor the accompanying mortgage. For the reasons that follow, we reject this novel argument as fundamentally at odds with the framework established by the Supreme Judicial Court in East Boston Sav. Bank v. Ogan, 428 Mass. 327 (1998) .

         Background.

         Nancy P. Comeau (Nancy) and her husband, William L. Comeau (William), [3] owned a residence as tenants by the entirety in Groveland (locus), which, as of September 22, 2003, was encumbered by a mortgage to the Haverhill Co-Operative Bank (Haverhill) in the amount of $150, 000. Both William and Nancy were mortgagors-grantors on that mortgage to Haverhill, but Nancy was not a signatory to the note. There is no evidence that Nancy represented, directly or indirectly, that she was bound by the terms of the note. Two years later, in 2005, William refinanced the 2003 loan by executing a note in his name only to Washington Mutual Bank, F.A. (Washington Mutual), in the amount of $300, 000 secured by a mortgage deed to Washington Mutual in which he (William) was the sole mortgagor-grantor. There is no reference to Nancy in the mortgage deed to Washington Mutual, and no evidence in the record of any representations made by Nancy to Washington Mutual concerning the transaction. William used a portion of the loan proceeds from the refinancing to pay off and satisfy the first mortgage to Haverhill in the amount of $142, 871.51. William passed away on January 10, 2008. His undivided interest in the locus passed to Nancy by right of survivorship. At the time, a balance remained outstanding on the 2005 note to Washington Mutual.

         Although Wells Fargo, as successor to Washington Mutual, holds a claim against William's estate arising from the unpaid 2005 note, it has never made a claim against William's estate and the statute of limitations has since expired. Seeking to avoid a total loss on the 2005 note, Wells Fargo filed a complaint seeking a declaratory judgment that its 2005 mortgage must be equitably subrogated to the record position of Haverhill's 2003 mortgage, so that Wells Fargo's mortgage would also encumber Nancy's interest in the property. On cross motions for summary judgment, the judge issued a thoughtful and comprehensive memorandum and order and a declaratory judgment which denied Wells Fargo's motion for summary judgment, denied "as moot" Nancy's motion for summary judgment, and declared that "Wells Fargo is not equitably subrogated in the amount of $142, 871.51 plus interest since February 9, 2005, to the record position of the mortgage from William L. Comeau and Nancy P. Comeau to Haverhill Co-Operative Bank on September 16, 2003, recorded in the Essex County Southern District Registry of Deeds in Book 21800, Page 169 against 100% fee simple interest in 2 Pond Street, Groveland, MA." Wells Fargo now appeals.

         Discussion.

         1. Standard of review.

         The judge denied Wells Fargo's motion for summary judgment and declared the rights of the parties based on his view that there were no material facts in dispute and that, as a matter of law, on the facts before the court, the remedy of subrogation was not available to Wells Fargo. In such circumstances, ...


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