United States District Court, D. Massachusetts
EMIGRANT MORTGAGE CO., INC. Plaintiff
LINDA PINTI and LESLEY PHILLIPS, Defendants.
MEMORANDUM AND ORDER
Emigrant Mortgage Co., Inc. ("Emigrant") brought
this action concerning a Cambridge, Massachusetts apartment
(the "Property") occupied by defendant-mortgagors
Linda Pinti and Lesley Phillips. Emigrant sought declaratory
judgments: (1) striking an October 2012 discharge of a
mortgage on the Property; and (2) finding that it foreclosed
on the Property by entry from 2012 to 2015.
January 11, 2019, following a two-day bench trial, the court
dismissed this case for lack of standing. It found that
Emigrant assigned the mortgage note to ESB-MH Holdings, LLC
("ESB- MH") in November 2009 and, therefore,
Emigrant did not have authority to discharge the mortgage in
2012 or to foreclose on the Property in 2015. See
Dkt. No. 110.
specifically, Massachusetts law requires that in order to
foreclose on a mortgage by entry, an entity must have been
the mortgagee at the time of entry. See id. at
13:20-24 (citing Bank of N.Y. v. Bailey, 951 N.E.2d
331, 334 n.10 (Mass. 2011); U.S. Bank Nat'l Ass'n
v. Ibanez, 941 N.E.2d 40, 49 n.15 (Mass. 2011)). In
2012, the Massachusetts Supreme Judicial Court construed the
term "mortgagee" to mean "the person or entity
then holding the mortgage and also either holding
the mortgage note or acting on behalf of the note
holder." Id. at 12-13 (emphasis added) (quoting
Eaton v. Fed. Nat'l Mortg. Ass'n, 969 N.E.2d
1118, 1121 (Mass. 2012)). Here, the court concluded that the
term "mortgagee" had the same meaning with regard
to foreclosure by entry. Id. at 13. Emigrant did not
before or at trial argue that Massachusetts law is different
with regard to a request to strike the discharge of a
mortgage. Therefore, because Emigrant had transferred the
mortgage note to ESB-MH, the court found that it lacked
standing concerning both its foreclosure by entry and
now moves, pursuant to Federal Rules of Civil Procedure 59(e)
and 60(b), for reconsideration of the order of dismissal as
to Count I, which sought declaratory relief striking the
discharge of mortgage. See Dkt. No. 115.
59(e) provides that "[a] motion to alter or amend a
judgment must be filed no later than 28 days after the entry
of the judgment." Rule 59(e) does not describe the
specific requirements for allowing such a motion. However,
the First Circuit has held that a Rule 59(e) motion may be
granted based on "a manifest error or law or fact."
DiMarco-Zappa v. Cabanillas, 238 F.3d 25, 34 (1st
Cir. 2001) (quoting Aybar v. Crispin Reyes, 118 F.3d
10, 16 (1st Cir. 1997)). Courts may exercise considerable
discretion when deciding a Rule 59(e) motion. See
Venegas-Hernandez v. Sonolux Records, 370 F.3d 183, 190
(1st Cir. 2004). However," [t]he rule does not provide a
vehicle for a party to undo its own procedural failures, and
it certainly does not allow a party to . . . advance
arguments that could and should have been presented to the
district court prior to judgment."
DiMarco-Zappa, 238 F.3d at 34 (quoting
Aybar, 118 F.3d at 16).
60(b) also gives the court the discretion to revise a final
judgement when the party satisfies one of several grounds for
relief. It provides, in pertinent part, that the court may
allow a motion for reconsideration when: (1) the moving party
presents newly discovered evidence that is material to the
court's decision; (2) there has been an intervening
change in the law; or (3) the earlier decision was based on a
manifest error of law or was clearly unjust. See United
States v. Allen, 573 F.3d 42, 53 (1st Cir. 2009) . As
with Rule 59(e), parties may not use Rule 60(b) as a vehicle
for making arguments they could have made earlier. See
Palmer v. Champion Mortg., 465 F.3d 24, 30 (1st Cir.
Motion to Reconsider, Emigrant argues that it has standing to
seek a declaratory judgment striking the discharge of the
mortgage notwithstanding the fact that it assigned the
mortgage note in 2009 to ESB-MH. See Dkt. No. 116.
More specifically, Emigrant argues that it is the "real
party in interest" under a subservicing agreement that
authorizes Emigrant to commence proceedings on behalf of
ESB-MH, and requires Emigrant to indemnify ESB-MH for certain
losses. Emigrant asserts it has standing pursuant to Mass.
Gen. Laws ch. 183, §§ 54C and 55, which provide
that a mortgage servicer may take certain, defined actions to
correct a defect in a discharge of a mortgage. However, the
statutes do not expressly authorize a mortgage servicer to
prosecute an equitable action to strike a discharge. Emigrant
also argues that the injuries it has suffered as a result of
the allegedly mistaken discharge provide it standing to seek
to strike the discharge. See id. at 7-13.
indicated earlier, Emigrant did not raise these arguments at
trial and does not contend that it raised them before trial.
Nor does Emigrant offer any explanation of why it did not or
could not have raised them prior to filing the instant Motion
extensive pretrial briefing and arguments led the court to
understand that if Emigrant lacked standing to prosecute its
claims concerning foreclosure, it also lacked standing to
seek relief from the allegedly mistaken discharge of the
mortgage. At the outset of the trial, the court expressed
this understanding, and thus provided Emigrant an opportunity
to address it. See Jan. 9, 2019 Tr. at 6-7 (Dkt. No.
112) . More specifically, the court stated that "[i]f I
find that Emigrant has not proven it was the holder of the
note, then everything else becomes moot . . . ."
Id. at 7:19-21. Counsel for Emigrant did not dispute
this statement. Later, the court stated that "[i]f
[Emigrant does not] have standing, then there's no reason
to have more evidence on the discharge of the mortgage. So I
want to confine the record at the moment to issues that are
relevant to standing." Id. at 106:3-6. Counsel
for Emigrant did not then mention the subservicing agreement
on which Emigrant's Motion to Reconsider relies. Instead,
he responded, "Very good, Your honor." Id.
the court orally explained its decision that Emigrant lacked
standing, counsel for Emigrant did reference the subservicing
agreement, but did not mention the discharge of the mortgage.
See Jan. 11, 2019 Tr. at 20:22-24 (Dkt. No. 110).
The court responded, "I may not have addressed it
directly, but I don't believe that the subservicing
agreement provided the authority for [Emigrant] to act for
the mortgagee-well, I don't think the subservicing
agreement alters the analysis here." Id. at
20-21. Counsel for Emigrant again did not mention the
discharge of the mortgage, but rather only requested the
return of the promissory note. See id. at 21:9-10.
court finds, therefore, that Emigrant's failure to make
the argument on which its Motion for Reconsideration relies
was inexcusable. The argument could and should have been
presented to the court prior to judgment. See
DiMarco-Zappa, 238 F.3d at 34.
the court is not persuaded that it has made a "manifest
error of law" in finding that Emigrant lacks standing.
As indicated earlier, Mass. Gen. Laws ch. 183, §§
54C and 55 describe certain actions that a mortgage servicer
is authorized to take concerning the discharge of a mortgage
that do not include prosecuting a case in equity to strike a
discharge. Emigrant has not cited any case holding that a
subservicer of a loan is a proper party in a case seeking to
strike the discharge of a mortgage. This case contrasts, for
example, with Aldephia Agios Demetrios, LLC v.
Arista Development, LLC, No. 12-10486-RWS, 2013 WL
1622675 (D. Mass. Apr. 16, 2013). There, the court granted a
motion to reconsider based on a manifest error of law
The dismissal of Adelphia's chapter 93A claim against
Botsivales rested on the mistaken conclusion that Botsivales
could not be held personally liable under chapter 93A for
actions that he took solely as an agent for Arista. But as
Adelphia now points out, Massachusetts law squarely holds
that "corporate officers may be held liable under C.93A
for their personal participation in conduct invoking its
sanctions." Cmty. Builders v. Indian Motocycle
Assocs., 44 Mass.App.Ct. 537, 692 N.E.2d 964, 979 (Mass.