WELLS FARGO BANK v. CAVALIERE (2020)

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

The plaintiff, Wells Fargo Bank, N.A. (Wells Fargo), brought a postforeclosure summary process action to establish possession of a mortgaged property located in Lynn (property). On cross motions for summary judgment, the judge allowed the defendant, Joseph S. Cavaliere's motion, and a judgment for possession entered for him. We conclude that the defendant failed to show that there were no genuine issues of material fact, thus precluding judgment for him as a matter of law. Accordingly, we vacate the judgment.

Discussion. Our review of the allowance of a motion for summary judgment is de novo. Federal Nat'l Mtge. Ass'n v. Hendricks, 463 Mass. 635, 637 (2012). We accord no deference to the decision of the judge. Id. Summary judgment shall be rendered “if the pleadings, depositions, answers to interrogatories, and responses to requests for admission under [Mass. R. Civ. P.] 36, [365 Mass. 795 (1974),] together with the affidavits, ․ show that there is no genuine issue as to any material fact” and that a party is “entitled to a judgment as a matter of law.” Mass. R. Civ. P. 56 (c), as amended, 436 Mass. 1404 (2002). We view the summary judgment record in the light most favorable to the nonmoving party. See Hendricks, supra. Summary judgment is appropriate if the defendant can “affirmatively demonstrate[ ] the complete failure of proof concerning an essential element of the plaintiff's claim.” Kourouvacilis v. General Motors Corp., 410 Mass. 706, 711 (1991).

1. Case-in-chief. Wells Fargo presented a prima facie case for its possession of the property by providing a certified copy of the foreclosure deed and an affidavit of sale made by an attorney representing Wells Fargo. See Hendricks, 463 Mass. at 637. Cavaliere argues that Wells Fargo will not be able to prove its case-in-chief because the affidavit of sale is not based on the affiant's personal knowledge and, thus, contains inadmissible hearsay evidence of the conduct of the four individuals who at the auction bid higher than Wells Fargo.² Cavaliere also contends that Wells Fargo is estopped from presenting additional evidence on the conduct of the bidders because it failed to do so during discovery. We disagree.

Without a written order by the judge that explicitly prohibits Wells Fargo from presenting additional evidence at trial, Wells Fargo has the opportunity to correct any deficiency in its case-in-chief if and when the case proceeds to trial. For example, Wells Fargo may bring in the bidders or the auctioneer from the foreclosure sale as trial witnesses. At most, Cavaliere raised the question whether Wells Fargo can prove its case-in-chief; he has not demonstrated Wells Fargo's complete failure to prove an essential element of its claim. See Kourouvacilis, 410 Mass. at 711. Cavaliere is therefore not entitled to summary judgment.

2. Estoppel. Wells Fargo argues that Cavaliere lacks standing and is estopped from raising his defenses and counterclaims challenging the loan foreclosure based on purported defects in the original loan, where he failed to raise these claims during a prior bankruptcy proceeding. We again disagree.

Judicial estoppel is an equitable doctrine. See Otis v. Arbella Mut. Ins. Co., 443 Mass. 634, 642 (2005). Therefore, “[s]trict application of the doctrine might not be called for if the new, inconsistent position is the product of information neither known nor readily available to the party at the time the initial position was taken” (quotation and citation omitted). Id. Here, Cavaliere successfully secured in a prior bankruptcy action a discharge of the loan; there was no mention by Cavaliere in his bankruptcy filings that he challenged the validity of the loan. His answers to Wells Fargo's interrogatories asserted that he did not know during his bankruptcy proceeding about the Borrower's Interest Act (which requires that the refinancing of an existing loan be in the borrower's interest), see G. L. c. 183, § 28C, or the relevant sections of G. L. c. 244 (foreclosure and redemption of mortgages), and G. L. c. 93A (regulation of business practices for consumer protection). As a result, a factual dispute remains as to whether Cavaliere failed in good faith to identify these claims during his bankruptcy proceeding. For summary judgment purposes, judicial estoppel does not bar Cavaliere's defenses and counterclaims. See Holland v. Kantrovitz & Kantrovitz LLP, 92 Mass. App. Ct. 66, 74 (2017).

Similarly, the question whether Cavaliere lacks standing to pursue his claims challenging the validity of the loan and Wells Fargo's statutory violations likewise depends upon disputed facts. As such, “[w]here a party's state of mind or motive is in issue, summary judgment is disfavored.” Maimaron v. Commonwealth, 449 Mass. 167, 177 (2007).

3. Class action settlement. Upon our review of the summary judgment record, we cannot conclude as a matter of law that Wells Fargo has breached the Wachovia “Pick-A-Payment” mortgage class action settlement (settlement), of which Cavaliere was a class member.³ Though the settlement required Wells Fargo to make loan modifications available to class members and to provide a “written explanation” to class members if they were denied a loan modification, class members were required to submit evidence of their income in order to be considered.

Wells Fargo claims that it attempted on several occasions to modify Cavaliere's loan but that he failed to provide the requisite financial documentation; there was no evidence presented below to show otherwise. Wells Fargo also contends that its attempts to provide Cavaliere with loss mitigation options in an effort to avoid foreclosure were stymied when he failed to provide it with requested financial documentation, and that he let lapse Wells Fargo's approval for a short sale of the property. Cavaliere contradicts these claims, arguing that Wells Fargo failed to contact him after the settlement during the period designated (between May 2011 and June 2013), and that during that time, it never sought his application for either loan modification assistance program as required by the settlement. Such delay and inaction, he claims, violated the terms of the settlement. These facts leave in dispute whether Cavaliere submitted the required financial documentation, and whether Wells Fargo provided a “written explanation” of denial. Therefore, summary judgment cannot be granted on this issue.

4. Borrower's Interest Act. Similarly, we cannot conclude as a matter of law that Wells Fargo violated the Borrower's Interest Act, G. L. c. 183, § 28C. The fact that Wells Fargo did not aver in interrogatory answers one way or the other whether the loan modification was in Cavaliere's interest does not suffice to entitle him to summary judgment. See Kourouvacilis, 410 Mass. at 711 (“In moving for summary judgment, the [moving party] ha[s] the burden of affirmatively demonstrating that there is no genuine issue of fact on every relevant issue raised by the pleadings”). It is unclear from this record whether Wells Fargo adequately considered Cavaliere's interest in modifying the original loan, or whether Wells Fargo adequately documented its analysis of Cavaliere's interest through, for example, an underwriting worksheet. See 209 Code Mass. Regs. § 53.07 (2014). As such, this issue is not ripe for summary judgment.

Judgment vacated.⁴

FOOTNOTES

2.   The affidavit of sale stated that the property was sold at auction for $380,179.16 to Wells Fargo (the fifth highest bidder) after the first highest bidder defaulted by walking away from the sale, and the second, third, and fourth highest bidders defaulted when they expressed no interest in purchasing the property.

3.   See In Re: Wachovia Corp. “Pick-A-Payment” Mtge. Mktg. & Sales Practices Litig., No. 3:09-MD-02015-RS (N.D. Cal.).

4.   Cavaliere's request for appellate attorney's fees is denied.