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Stewart Title Guaranty Co. v. Emigrant Mortgage Co.

Superior Court of Massachusetts, Middlesex

December 4, 2018

Stewart Title Guaranty Company
v.
Emigrant Mortgage Company

          Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Yarashus, Valerie A., J.

          MEMORANDUM OF DECISION AND ORDER ON CROSS MOTIONS FOR PARTIAL SUMMARY JUDGMENT AS TO INTEREST

          Valerie A. Yarashus Justice Superior Court

         I. Introduction

         This case arises out of a foreclosure which was determined to be void by the Supreme Judicial Court in Pinti v. Emigrant Mortgage Co., 472 Mass. 226 (2015). As a result of that decision, the sale of the property was void, the transaction was unwound and the purchase price was returned to the buyer more than three years after the sale. The plaintiff, Stewart Title Guaranty Company ("Stewart Title"), [1] and the defendant, Emigrant Mortgage Co. ("Emigrant") have now cross moved for partial summary judgment on the sole issue of whether, as a matter of law, Emigrant was required to refund not only the purchase price to the buyer, Harold Wilion, but also interest from the date of the sale to the date the funds were returned. For the reasons stated below, Stewart Title’s Motion for Partial Summary Judgment on this issue is ALLOWED and Emigrant’s Cross Motion for Summary Judgment is DENIED.[2]

         II. Background

         The relevant facts in this matter are not disputed. On March 13, 2008, Linda S. Pinti and Lesley R. Phillips (collectively, "Pinti") purchased the property located at 1643 Cambridge Street, Unit 52, in Cambridge, Massachusetts (the "Property"). Pinti executed and delivered a promissory note to Emigrant in the amount of $160, 000.00. To secure the loan obligation, Pinti gave a mortgage for the Property to Emigrant on the same date. Eventually, Pinti defaulted on the loan and Emigrant initiated foreclosure proceedings.

         Emigrant conducted its foreclosure sale of the Property on August 9, 2012. The original plaintiff in the instant action, Harold Wilion ("Wilion"), was the highest bidder and purchased the Property at this foreclosure sale. In exchange for the purchase price of $260, 000.00, Emigrant gave Wilion a foreclosure deed to the Property on September 10, 2012. In connection with this foreclosure sale, Wilion obtained a policy of title insurance which was underwritten by Stewart Title.

         Pinti remained at the Property, and so Wilion filed a summary process action for possession in the Cambridge District Court against Pinti. Pinti defended the summary process action and raised issues of the validity of the foreclosure sale in the Superior Court action of Pinti v. Emigrant Mortgage Co., Inc., Civil Action No. 1381CV00348. The Superior Court entered judgment against Pinti, who appealed. The Supreme Judicial Court accepted the matter sua sponte for direct appellate review. On July 17, 2015, the SJC issued its decision in Pinti and held that Emigrant failed to comply strictly with the notice provision set forth in paragraph 22 of the Property’s mortgage and therefore the foreclosure sale to Wilion was void. See 472 Mass. at 227, 242. The SJC gave its decision in Pinti prospective application only, but applied its decision to the parties in Pinti. Id. at 243.

         As a result of the decision and a demand letter, Emigrant returned the purchase price of $260, 000.00 to Wilion by check with a cover letter dated October 8, 2015. Although Wilion included a demand for interest, Emigrant declined to include interest with its check, based on its interpretation that interest was not required.

         Wilion made a claim to Stewart Title on the policy of title insurance he purchased in connection with the foreclosure deed. Stewart Title paid Wilion $120, 000.00 (including the interest that is the subject of these cross motions for partial summary judgment), and the parties executed a Release and Settlement Agreement as well as an Assignment of Claims.

         Emigrant has refused to pay Wilion any additional amount for interest or otherwise, and has refused Stewart Title’s similar demands as subrogee and assignee to Wilion’s rights. Statutory interest on $260, 000.00 from September 10, 2012 (date of foreclosure sale) through October 13, 2015 (date of repayment of the purchase price) calculated at 12% per annum pursuant to G.L.c. 231, § 6C equals $96, 420.82.

         III. Discussion

         A. Standard for Summary Judgment

         Summary judgment is granted where there are no genuine issues of material fact and where the moving party is entitled to judgment as a matter of law. Mass.R.Civ.P. 56(c); Cassesso v. Commissioner of Corr.,390 Mass. 419, 422 (1983); Community Nat’l Bank v. Dawes, 369 Mass. 550, 553 (1976). The moving party bears the burden of affirmatively demonstrating the absence of a triable issue, and that the summary judgment record entitles the moving party to judgment as a matter of law. Flesner v. Technical Commc’ns Corp.,410 Mass. 805, 808-09 (1991); Pederson v. Time, Inc.,404 Mass. 14, 16-17 (1989); see Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). The court considers the evidence presented in the light most favorable to the nonmoving party. Mass.R.Civ.P. 56(c); Augat, Inc. v. Liberty Mut. Ins. Co.,410 Mass. 117, 120 (1991); Parent v. Stone & Webster Eng’g Corp.,408 Mass. 108, 113 (1990); Flynn v. Boston,59 Mass.App.Ct. 490, 491 (2003). The nonmoving party, however, cannot rest on his or her pleadings and mere assertions of disputed facts to defeat ...


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