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Ressler v. Deutsche Bank Trust Company Americas, Trustee

Appeals Court of Massachusetts, Dukes

December 1, 2017

MONIKA M. RESSLER
v.
DEUTSCHE BANK TRUST COMPANY AMERICAS, trustee, [1] & others.[2]

          Heard: October 4, 2017.

         Civil action commenced in the Superior Court Department on July 7, 2016.

         A motion to dismiss was heard by Mitchell H. Kaplan, J.

          Glenn F. Russell, Jr., for the plaintiff.

          Robert M. Mendillo for Deutsche Bank Trust Company Americas & another.

          Grace C. Ross, pro se, amicus curiae, submitted a brief.

          Present: Agnes, Sacks, & Lemire, JJ.

          SACKS, J.

         The plaintiff Monika M. Ressler (the borrower) appeals a Superior Court judgment dismissing her complaint for declaratory and other relief based on her claim that the defendant Deutsche Bank Trust Company Americas, trustee of Residential Accredit Loans Inc. Mortgage Asset-Backed Pass-Through Certificates, Series 2006-QS18 (Deutsche Bank) had acquired her mortgage in violation of a governing pooling and service agreement, making its foreclosure on her mortgage invalid. Because the borrower's various arguments are either squarely barred by precedent or border on the frivolous, we affirm. Although we deny Deutsche Bank's request that, as a sanction for a frivolous appeal, we award attorney's fees and costs against the borrower and her counsel jointly and severally, we caution counsel here that such a sanction is within an appellate court's authority and is more likely to be imposed if counsel fails to heed warnings against repetitive pursuit of unmeritorious appeals.[3]

         Background.

         We review the sufficiency of the borrower's complaint de novo, taking as true its factual allegations and drawing all reasonable inferences in her favor. Curtis v. Herb Chambers 1-95, Inc., 458 Mass. 674, 676 (2011). "[W]e look beyond the conclusory allegations in the complaint and focus on whether the factual allegations plausibly suggest an entitlement to relief." Ibid., citing Iannacchino v. Ford Motor Co., 451 Mass. 623, 635-636 (2008). In doing so, we consider, among other things, exhibits attached to the complaint. Schaer v. Brandeis Univ., 432 Mass. 474, 477 (2000).

         In 2006 the borrower took a $500, 000 mortgage loan from Lendia, Inc. (the lender), giving the lender a promissory note for that amount and a mortgage on her property in West Tisbury to secure the loan. The mortgage was duly and promptly recorded at the appropriate registry of deeds. The copy of the mortgage attached to the complaint indicates that in March, 2012, the lender assigned the mortgage to Deutsche Bank, as trustee for Residential Accredit Loans, Inc. (RALI), Mortgage Asset-Backed Pass-Through Certificates, Series 2006-QS18, which assignment was also duly and promptly recorded at the appropriate registry. A copy of the original note, likewise attached to the complaint, indicates that the lender assigned the note, which passed through the hands of two intermediaries before being assigned to Deutsche Bank as trustee.[4]

         In 2016, Deutsche Bank, asserting that the borrower was in default, sent her a notice of mortgage foreclosure sale, citing G. L. c. 244, § 14. The notice attached a certification from Deutsche Bank's loan servicer, SunTrust Mortgage Co. (the servicer), pursuant to 209 Code Mass. Regs. § 18.21A(2) (2013), [5]asserting that Deutsche Bank had the right to foreclose because it owned both the mortgage and the note. The certification, which was attached to the complaint, described "the chain of title and ownership of the note and mortgage from the date of the recording of the mortgage being foreclosed upon, " Id. at § 18.21A(2)(c), including by attaching a copy of the note with all endorsements forming the chain between the lender and Deutsche Bank. See ibid.

         The borrower then filed this action against Deutsche Bank, the servicer, and the lender, seeking to enjoin the foreclosure. She alleged that Deutsche Bank acted as trustee for mortgages and notes placed in trust by RALI pursuant to a trust document, also known as a pooling and service agreement (PSA), attached to the complaint. She asserted that the PSA allowed mortgages and notes to be placed in the trust only if they had first been assigned by lenders to an entity known as Residential Funding Company, LLC (RFC), and then by RFC to RALI, and then by RALI to Deutsche Bank as trustee, all prior to the trust closing date of December 20, 2007. She asserted that because Deutsche Bank had not documented that it had received her mortgage and note through this chain of assignments, or before the closing date, the assignments were unauthorized by the PSA and thus were void under governing New York law[6] and the common law of trusts.

         Accordingly, the borrower claimed, Deutsche Bank did not validly hold the mortgage and note and so was not a "mortgagee" entitled to foreclose upon her property under G. L. c. 244, § 14, and the statutory power of sale set forth in G. L. c. 183, § 21. See Eaton v. Federal Natl. Mort. Assn., 462 Mass. 569, 584-586 (2012) (construing term "mortgagee" in G. L. c. 244, § 14, to mean entity that also holds underlying mortgage note or acts under note holder's authority). She also claimed that because the PSA required the mortgage and note to follow a particular chain of assignment through RFC and RALI, yet the certification from Deutsche Bank's loan servicer pursuant to 209 Code Mass. Regs. § 18.21A(2) had failed to list such a chain, the certification violated the regulation and thus G. L. c. 93A.[7]She sought declaratory relief as well as damages under G. L. c. 93A and for slander of title.[8]

         The borrower moved for a preliminary injunction to bar the scheduled August 11, 2016, foreclosure sale. Concluding that the borrower lacked standing to assert noncompliance with the PSA, and that no violation of the regulation had been shown, a judge denied the motion for failure to show a likelihood of success on the merits. Thereafter, a different judge (motion judge) allowed Deutsche Bank's[9] motion to dismiss under Mass.R.Civ.P. 12(b)(6), 365 Mass. 754 (1974). The motion judge concluded, based in particular on the decision in U.S. Bank Natl. Assn. v.Boiling, 90 Mass.App.Ct. 154 (2016), that the borrower had no basis to argue that the ...


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