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Sunningdale Ventures, Inc. v. Martin

United States District Court, D. Massachusetts

March 31, 2018

EASTERN SAVINGS BANK, FSB, Third-Party Defendant.



         This case involves a homeowner, defendant James Martin, who, like many during the recent recession, defaulted on his mortgage.[1] After a period of forbearance by his lender, defendant-in-counterclaim Eastern Savings Bank, F.S.B. (“Eastern”), the parties were unable to agree regarding modification and the property was foreclosed upon. Plaintiff Sunningdale Ventures, Inc. (“Sunningdale”), a subsidiary of Eastern, now seeks possession of the foreclosed property under Massachusetts state law.[2] In response, Martin asserts a number of counterclaims based on the negotiation of his forbearance agreements. He claims that Eastern caused him to believe that his mortgage obligations would be permanently modified, that this misrepresentation lured him deeper into debt, and as a consequence, foreclosure improperly ensued. Sunningdale has moved for summary judgment. I summarize the facts in the light most favorable to Martin, as the party opposing summary judgment.

         I. FACTS

         On December 19, 2003, Mr. Martin executed a note to Eastern in the amount of $260, 000, secured by a mortgage on his home at 38 Hesper Street in Saugus, Massachusetts. By 2005, Martin was in default. In early 2009, Martin's financial situation worsened and he began discussing with Eastern options for easing payments on his mortgage. In February, Martin spoke with Eastern employee Gerald Feinstein by telephone, and told him that he could only afford monthly payments of $2, 000, not the $3, 124.19 his payment schedule then required.

         In a letter dated February 10, 2009 to Martin, Feinstein referenced this telephone conversation, recounting that in the conversation “we advised you that we would look at a possible workout option to see if you will qualify for the program.” In that letter, Feinstein also requested that Martin submit financial information to Eastern. A handwritten notation, the authorship of which is unclear on the record before me, but which for purposes of the motion before me I will ascribe to Eastern, reads: “$2000 per month/6 months - possible mod after fulfilled.” Martin now states that he understood Eastern in this call to have offered an outright modification of his mortgage obligations, or at least to have had intimated that a modification would be forthcoming.

         On March 6, 2009, after receiving Martin's financial information, an Eastern representative again spoke with Martin on the phone and again sent a confirmatory letter. This letter made clear that what was being offered was only a forbearance program in which Martin's monthly payments would be reduced, but that he would continue to accumulate debt. The letter was styled as a “Forbearance Agreement” and stated that Eastern would accept a regular monthly payment of $2, 000 for a period of six months, with “[a]ll funds received under this Agreement [to] be applied to past due payments, late charges and advances at Eastern Savings Bank's sole discretion.” It reiterated that it “does not change the terms and conditions of the original loan documents.”

         The letter also made certain open-ended representations about Eastern's future actions and the possibility of a modification. Specifically, Eastern committed to review the loan in September and to consider modifying the terms of the loan, if Martin complied with the agreement. Eastern stated that the purpose of the agreement was “to determine your desirability to make timely payments” and that “[i]f payments are received as outlined, the loan may be reviewed for further workout options.” Eastern expressly reserved the right to extend the forbearance agreement rather than modify the terms.

         Martin then proceeded to make the agreed-upon $2, 000 monthly payments, although there is some dispute as to whether all were timely made. After the six month forbearance period, Eastern extended its forbearance agreement two additional times on substantially identical terms after receiving updated financial information from Martin.

         Then, in December 2010, Eastern extended the Forbearance Agreement for a fourth time, this time increasing the minimum monthly payment to the original monthly payment of $3, 124.19. By this point, Martin's arrearage had increased from $11, 771.93 as of the March 6, 2009 letter to $45, 696.49. After review of Martin's financial information, which had led to the increase of his monthly payment, Eastern also determined that his loan was not eligible for a modification.

         Martin made one payment under the new arrangement and then again defaulted on his obligation. Martin and Eastern engaged in additional negotiations over his mortgage payments, but were unable to reach an agreement. In response, Eastern began the foreclosure process. On February 9, 2011, Eastern sent Martin a 150-Day Notice of Right to Cure pursuant to Mass. Gen. Laws ch. 244, § 35A. When Martin failed to cure within 150 days, Eastern took the additional steps necessary to foreclose, including complying with the Servicemembers Civil Relief Act., 50 U.S.C. App. § 501, et seq., and publishing and mailing notice of the foreclosure sale as required by Mass. Gen. Laws ch. 244, § 14. The property was sold at auction on April 16, 2013, and Eastern was the successful bidder. Eastern assigned its bid to Sunningdale, an operating subsidiary, and the requisite deeds and affidavits were recorded with the Essex County Registry of Deeds on May 1, 2013. Martin refused to vacate the home, and this suit followed.

         Martin's ultimate contention is that, but for his misapprehension that a mortgage modification was coming, he would have been able to avoid foreclosure. He says a family member would have helped him refinance or stay current on his payments in order to avoid the significant costs of default and foreclosure. Only because he was misled, he asserts, did he fall so far behind and lose his home.


         Eastern initially filed a summary process action for possession, pursuant to Mass. Gen. Laws ch. 239, in Massachusetts Housing Court. In response, Martin asserted, among other things, that Eastern could not demonstrate that the foreclosure complied with the requirements of Mass. Gen. Laws ch. 183, § 21 and Mass. Gen. Laws ch. 244, §§ 35A and 35B. Because Martin's allegations of non-compliance with § 35A raised potential issues concerning pursuit of a summary process action in the Housing Court, cf. U.S. Bank Nat'l Ass'n. v. Schumacher, 5 N.E.3d 882 (Mass. 2014), Eastern elected voluntarily to dismiss that action and litigate this diversity matter in this court as a court of general jurisdiction competent to dispose of all claims.

         On January 6, 2014, Judge Tauro denied Martin's motion to dismiss for lack of subject matter jurisdiction. The case was then reassigned to Judge Young, who granted a motion to dismiss counts three and five of Martin's counterclaim which alleged fraudulent conveyance and civil RICO violations.

         After the case was then assigned to my session, I granted Sunningdale's motion for use and occupancy payments, set at $1, 600 monthly, pending resolution of the case. Before me is Sunningdale's motion for summary judgment as to all remaining claims and counterclaims. As one dimension of his opposition to summary judgment, Martin sought a continuance to conduct additional discovery. I turn to the discovery question first.


         To obtain a continuance of summary judgment disposition under Rule 56(d), a party must show “(i) good cause for his inability to have discovered or marshalled the necessary facts earlier in the proceedings; (ii) a plausible basis for believing that additional facts probably exist and can be retrieved within a reasonable time; and (iii) an explanation of how those facts, if collected, will suffice to defeat the pending summary judgment motion.” Rivera-Torres v. Rey-Hernandez, 502 F.3d 7, 10 (1st Cir. 2007). The party opposing summary judgment must also show due diligence in conducting discovery and pursuing an extension of time for additional discovery. Id. at 11.

         Martin has failed to satisfy this standard. Despite a substantial passage of time since the filing of Sunningdale's motion for summary judgment, he has provided no sufficiently concrete basis for believing that additional facts exist or how those facts could defeat summary judgment. He has only provided conclusory statements that the case is in an early posture, “that there are plausible bases for his belief that there are facts, discoverable within a reasonable time, which, if obtained, will suffice to engender an issue both genuine and material, ” and requests that “if any discovery is needed to establish the existence of a genuine dispute of material facts, that decision on the summary judgment motion should be deferred . . . .” But “[s]peculative conclusions, unanchored in facts, are not sufficient” to secure a continuance under Rule 56. Rivera-Torres, 502 F.3d at 12. Without any meaningful description of what discoverable facts are necessary to oppose summary judgment, a continuance is unwarranted. I now turn to consideration of Sunningdale's motion for summary judgment.


         A movant is entitled to summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. Rule Civ. P. 56(a). If the movant meets this burden, “the opposing party can then defeat the motion by showing that there is a genuine issue of material fact.” Rivera-Colon v. Mills, 635 F.3d 9, 12 (1st Cir. 2011). An issue is genuine “if a reasonable jury could resolve the point in favor of the nonmoving party.” Tropigas de P.R., Inc. v. Certain Underwriters at Lloyd's of London, 637 F.3d 53, 56 (1st Cir. 2011). A fact is material if “its existence or nonexistence has the potential to change the outcome of the suit.” Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st Cir. 2010).

         “In evaluating whether there is a genuine issue of material fact, the court examines the record - pleadings, affidavits, depositions, admissions, and answers to interrogatories - viewing the evidence in the light most favorable to the party opposing summary judgment.” Rivera-Colon, 635 F.3d at 12 (citations omitted). However, I may “afford no evidentiary weight to ‘conclusory allegations, empty rhetoric, unsupported speculation, or evidence which, in the aggregate, is less than significantly probative.'” Tropigas de P.R., Inc., 637 F.3d at 56 (quoting Rogan v. City of Boston, 267 F.3d 24, 27 (1st Cir. 2001)). Thus, in order to meet its burden, the nonmoving party “must point to competent evidence and specific facts.” Id. at 56.

         V. THE ...

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