Justia U.S. 1st Circuit Court of Appeals Opinion Summaries

Appellants Heang Ouch and Morcos Hanna sought to represent a putative class of borrowers who had not kept up with their mortgage loan payments. The borrowers’ loan servicers made a number of contractually-mandated advances (dubbed “delinquency advances”) of funds to the holders of the notes. The loan servicers also, as agents of the holders of the notes, initiated foreclosure proceedings against the borrowers. The borrowers filed separate suits arguing that, despite their non-payment, the servicers’ delinquency advances constituted payments on the borrowers’ debts, that their mortgages were not in default and, accordingly, that the mortgage-holders lacked the power to foreclose. The district court concluded that the services’ payments were not made “on behalf of” the borrowers. The First Circuit consolidated Ouch’s and Hanna’s appeals and affirmed the district court’s rulings denying an amendment to Ouch’s complaint and dismissing Hanna’s complaint with prejudice, holding that the district court did not err in concluding that the payments were not made “on behalf of” the borrowers. View "Ouch v. Fed. Nat’l Mortgage Ass’n" on Justia Law

At issue in this case was the correct interpretation of two different state statutes concerning defects in real estate titles. A Chapter 7 bankruptcy trustee filed this action to avoid a mortgage held by a bank that contained a material defect: the certificate of acknowledgement did not include the names of the mortgagors. After the mortgage was recorded, the notary on the mortgage executed an affidavit, later recorded, attesting that the debtors had personally and voluntarily signed the mortgage. The debtors later went into bankruptcy. At issue in this case was whether, under Massachusetts law, the affidavit could cure the defective acknowledgement or otherwise provide constructive notice to a bona fide purchaser. If not, the bankruptcy trustee could avoid the mortgage. Because the state law questions were dispositive and unresolved by the Massachusetts Supreme Judicial Court (SJC), the First Circuit certified the questions for resolution by the Massachusetts SJC. View "Bank of America, N.A. v. Casey" on Justia Law

Claiming that they were uncertain as to which entity held an enforceable mortgage on their home, Plaintiffs brought actions against numerous potential mortgagees, seeking “interim relief,” “quieting of title,” and “credit reporting.” The district court granted Defendants’ motions to dismiss for failure to state a claim. The First Circuit affirmed but for different reasons than those stated by the district court, holding that because Plaintiff relinquished legal title to the property and because Plaintiff’s assertions respecting uncertainty over the mortgage speak solely to the legal title and not to her equitable interest in the property, there was not the requisite adversity to cloud her claim of equitable title as required by the quiet title statute. View "Lister v. Bank of America, N.A." on Justia Law

After Plaintiff defaulted on a mortgage loan secured by her property, a complaint was filed in the Massachusetts land court as a preliminary step to foreclose on Plaintiff’s house. Plaintiff subsequently filed this case in federal district court against Defendants, asserting multiple claims arising from the purportedly invalid transfer and assignment of the mortgage on her home. The district court granted summary judgment in favor of Defendants. While this appeal was pending, the parties reached an agreement, which resulted in the mortgage loan becoming current and Plaintiff no longer being subject to any actual or threatened foreclosure proceedings. The First Circuit dismissed this appeal as moot, holding that the circumstances evolved in such a way that there was no longer a live case or controversy. View "Matt v. HSBC Bank USA, N.A." on Justia Law

In 2011, a tornado ripped through the downtown area of the City of Springfield, Massachusetts and caused significant damage. City officials quickly determined that the South Commons Condominiums were among the properties that suffered substantial damage. The City hired a private company to demolish most of those buildings the next evening. The owners of the condos brought suit against the City, its officials, and the demolition company that took down the buildings, claiming violations of the owners’ procedural and substantive due process rights under 42 U.S.C. 1983, as well as various violations of Massachusetts state law. The district court dismissed the federal claims for failure to state a claim and dismissed the state claims without prejudice as an exercise of its discretion to deal with pendent claims. The Supreme Court affirmed, holding that when a city decides buildings are so damaged that they must be immediately demolished, and when the city does so pursuant to a state law that authorizes the use of summary procedure to respond to such an emergency, the remedy for any wrong, absent behavior that objectively “shocks the conscience,” must come from the remedies the state itself supplies rather than from a federal suit premised on the U.S. Constitution’s due process clause. View "South Commons Condo. Ass’n v. Charlie Arment Trucking, Inc." on Justia Law

Plaintiff owned a vacant lot in Alton, New Hampshire. In 2002, Plaintiff deeded the lot to his son. Because the town of Alton then held a lien due to unpaid taxes, Plaintiff did not then hold complete title to the property. The taxes were later paid off by Plaintiff’s mortgage, and, in 2005, the town deeded the lot back to Plaintiff. In 2006, Plaintiff’s daughter purchased the property from the son. The daughter’s mortgage was eventually assigned to Defendant. When the daughter stopped making her mortgage payments, Defendant sought to foreclose on the property. Plaintiff brought suit claiming he held title to the lot. The district court granted summary judgment for Defendant. The First Circuit affirmed, holding that the district court correctly granted summary judgment for Defendant where Plaintiff did not meet his burden to establish his good title to the lot and had no basis to contest either his daughter’s title to the property or her mortgage agreement with Defendant. View "Fadili v. Deutsche Bank Nat’l Trust Co." on Justia Law

Plaintiff and his wife purchased a home in Massachusetts that was encumbered by a mortgage. The mortgage was eventually assigned to Defendant CitiMortgage, Inc. Defendant ultimately invoked its statutory power of sale and sent a notice of foreclosure sale to Plaintiff’s home address. Plaintiff sued, alleging breach of contract, unjust enrichment, and breach of the covenant of good faith and fair dealing. A federal district court granted summary judgment for Defendant on all counts and denied Plaintiff’s motion for reconsideration. The First Circuit affirmed the district court’s denial of Plaintiff’s motion for reconsideration, holding that none of the grounds advanced by Plaintiff for reversal of the district court’s denial of reconsideration warranted relief. View "Biltcliffe v. CitiMortgage, Inc." on Justia Law

At issue in this case was whether New Hampshire law requires a foreclosing entity to hold both mortgage and note before it can exercise a power of sale under N.H. Rev. Stat. Ann. 479:25, which authorizes a mortgagee to conduct a non-judicial foreclosure where, as in this case, the mortgage document contains a clause allowing them. Plaintiff executed a promissory note and a mortgage. The note and mortgage document and the note were subsequently assigned to different entities. After Plaintiff failed to make mortgage payments, Defendant, the mortgagee, moved to foreclose. Defendant removed the case from New Hampshire state court to federal court. The district court allowed Defendant’s motion to dismiss, concluding that the parties’ intent to separate the mortgage and note at the beginning of the transaction trumped any common law rule requiring unity, and thus, Defendant could proceed with the foreclosure under section 479:25. Plaintiff appealed. Because controlling state precedent did not provide definitive guidance on how to resolve the questions of whether the common law or state statute mandates the unity of a mortgage and note, and if so, whether parties can override that rule by agreement, the First Circuit certified the questions to the New Hampshire Supreme Court. View "Castagnaro v. Bank of New York Mellon" on Justia Law

With the threat of foreclosure looming on his home, Plaintiff sued Bank for failing to consider him for a mortgage loan modification, which a California class action settlement agreement required Bank to do before attempting to foreclose on Plaintiff’s home. The complaint alleged breach of contract, violation of Mass. Gen. Laws ch. 244, 35A and 35B, violation of Mass. Gen. Laws ch. 93A, and breach of the implied covenant of good faith and fair dealing. The district court dismissed the complaint in its entirety. The First Circuit vacated in part and remanded Plaintiff’s claims for breach of contract and breach of the implied covenant of good faith and fair dealing, holding (1) Plaintiff’s statutory causes of action fell short of stating a cognizable claim; but (2) the district court improperly converted Bank’s motion to dismiss Plaintiff’s contract-based claims into a motion for summary judgment, warranting a remand of those claims. View "Foley v. Wells Fargo Bank, N.A." on Justia Law

Plaintiff’s property was subject to a mortgage. Plaintiff discussed refinancing with a predecessor in interest to Wells Fargo Bank, N.A., as well as a mortgage broker and his firm, whom Plaintiff referred to as “agents” of Wells Fargo. Based on these discussions, Plaintiff began making improvements to increase the property’s appraised value. Ultimately, Plaintiff was unable to refinance her mortgage. Plaintiff brought suit against Wells Fargo, alleging, among other claims, a violation of N.H. Rev. Stat. Ann. 397-A:2(VI) (count one) and promissory estoppel (count five). The district court dismissed counts one and five of Plaintiff’s complaint, concluding both claims were inadequately pleaded. Plaintiff appealed, arguing, among other things, that although she could not claim a private right of action under section 397-A:2(VI), she did state a claim for common law fraud. The First Circuit affirmed, holding that the district court properly dismissed any state law fraud claim that Plaintiff belatedly attempted to advance and correctly dismissed Plaintiff’s promissory estoppel claim.View "Ruivo v. Wells Fargo Bank, N.A." on Justia Law