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Appeals Court of Massachusetts.

Reginald HALL & another 1 v. FEDERAL NATIONAL MORTGAGE ASSOCIATION 2& another.3


Decided: October 01, 2021

By the Court (Wolohojian, Sullivan & Ditkoff, JJ.4)


The plaintiffs appeal from the judgment dismissing their complaint on res judicata grounds, as well as from the order denying their motion to reconsider. We affirm.

Factual and procedural background. The plaintiffs bought a property located at 52 Ash Street, New Bedford (property) in 2004, with the proceeds of a loan from Santander Bank, N.A. (then known as Sovereign Bank) (collectively, Santander) which was secured by a mortgage. The note and mortgage subsequently passed to the Federal National Mortgage Association (Fannie Mae), with Santander continuing to act as administrator as Fannie Mae's agent. At some point not specified in the appellate record, the plaintiffs stopped making payments on the note. This caused Santander to send a notice of default on August 13, 2013.

The plaintiffs then filed an action against Santander in the Superior Court seeking a declaratory judgment that Santander did not have authority to foreclose (Superior Court action). While the Superior Court action was pending, Santander conducted a public foreclosure auction. Thereafter, it assigned its winning bid to Fannie Mae, which then took title pursuant to a foreclosure deed. Judgment entered in the Superior Court in Santander's favor on May 26, 2015. That foreclosure judgment was affirmed on appeal by a panel of this court. Hall v. Santander, N.A., 89 Mass. App. Ct. 1134 (2016). The plaintiffs acknowledge that the foreclosure judgment became final in 2015.

In 2015, Fannie Mae filed a summary process action in the Housing Court seeking possession of the property and to evict the plaintiffs (summary process action). Judgment entered in Fannie's Mae's favor in 2017. The plaintiffs did not appeal that judgment, and they acknowledge that it has become final.

The plaintiffs then filed two separate suits in Federal District Courts in New York and Massachusetts, both of which were dismissed without prejudice and which, because they have no bearing on our analysis, we do not discuss further.

We now arrive at the complaint underlying the current appeal, which was filed by the plaintiffs in Housing Court on November 2, 2017 (second Housing Court action). The complaint alleged violation of the Fair Housing Act, 42 U.S.C. §§ 3605 & 3617, breach of contract, fraud, and violation of G. L. c. 93A. As relief, the plaintiffs sought to have the court enjoin the defendants from evicting the plaintiffs from the property, enjoin the defendants from selling the property to anyone other than the plaintiffs, order that ownership of the property revert to the plaintiffs, and order the defendants to act upon the plaintiffs’ loan modification applications nunc pro tunc. The plaintiffs also sought $1 million in compensatory damages and $5 million in punitive damages. After a hearing, the Housing Court judge allowed the defendants’ motion to dismiss on the ground that the claims were barred by the doctrine of res judicata. This appeal followed.

Discussion. The plaintiffs correctly acknowledge that the Superior Court foreclosure judgment is not before us. They equally correctly acknowledge that the foreclosure judgment became final when it was affirmed on appeal. The question is whether the claims they have asserted in the second Housing Court action are barred by either the prohibition on collateral attacks of prior judgments, or by the doctrine of res judicata, or both.5

The prohibition on collateral attacks prevents litigants from attempting to undermine one court's ruling in a different court. See Commonwealth v. Wallace, 431 Mass. 705, 707 (2000) (“defendant improperly challenge[d] the validity of the [Superior Court] injunction in his motion to dismiss the [District Court] contempt proceeding”; “[t]he proper method for challenging the injunction was either to exercise his statutory right to seek to modify or vacate the injunction”). Except in a few limited circumstances, collateral attacks are prohibited because they “substantially impair[ ]” “the finality of judgments.” Cohen v. Cohen, 470 Mass. 708, 717 (2015), quoting Harker v. Holyoke, 390 Mass. 555, 558 (1983). See Harker, supra (“By attempting to relitigate in the Superior Court the same claim on which judgment had previously been entered in the Housing Court, the plaintiffs have challenged the Housing Court judgment collaterally. If we were to permit such an attack as a general rule, the finality of judgments would be substantially impaired. This would not be in the best interests of litigants or the public” [footnote omitted]). See also Wallace, supra (rule prohibiting collateral attack “applies even if a judge's order is erroneous”).

Unlike the prohibition on collateral attacks on prior judgments, “[t]he term res judicata describes doctrines by which a judgment has a binding effect in future actions. It comprises both claim preclusion (also known as ‘merger’ and ‘bar’) and issue preclusion (also known as ‘collateral estoppel’).” (Emphasis added.) Petrillo v. Zoning Bd. of Appeals of Cohasset, 65 Mass. App. Ct. 453, 456-457 (2006), quoting Jarosz v. Palmer, 436 Mass. 526, 530-531 n.3 (2002). “ ‘Claim preclusion makes a valid, final judgment conclusive on the parties and their privies, and prevents relitigation of all matters that were or could have been adjudicated in the action.’ This ‘is based on the idea that the party to be precluded has had the incentive and opportunity to litigate the matter fully in the first lawsuit.’ ” Kobrin v. Board of Registration in Med., 444 Mass. 837, 843 (2005), quoting O'Neill v. City Manager of Cambridge, 428 Mass. 257, 259 (1998). “[I]ssue preclusion prevents relitigation of an issue determined in an earlier action where the same issue arises in a later action, based on a different claim, between the same parties or their privies. Before precluding a party from relitigating an issue, a court must determine that (1) there was a final judgment on the merits in the prior adjudication; (2) the party against whom preclusion is asserted was a party (or in privity with a party) to the prior adjudication; and (3) the issue in the prior adjudication was identical to the issue in the current adjudication. Additionally, the issue decided in the prior adjudication must have been essential to the earlier judgment. Issue preclusion can be used only to prevent relitigation of issues actually litigated in the prior action” (quotations and citations omitted). Kobrin, supra at 843-844.

The prohibition on collateral attacks on prior judgments and the doctrine of res judicata are closely related, and they both rely on similar principles. Old Colony Trust Co. v. Porter, 324 Mass. 581, 586 (1949) (prohibition on collateral attack relies on the same “principles which also form the basis for the familiar doctrine of res judicata”). Accordingly, the core analysis we follow is essentially the same, regardless of whether we conceive of the second Housing Court action as a collateral attack on the Superior Court foreclosure judgment, or whether we look at the second Housing Court action to see whether it is barred by the earlier Superior Court judgment by res judicata. That analysis follows.

As we noted above, there is no dispute that the foreclosure judgment is final. Thus, the first element of claim preclusion is met. As to the second element, there is no dispute that the plaintiffs and Santander were parties in both the foreclosure action and the Second Housing Court action. As to Fannie Mae, the complaint in the second Housing Court action affirmatively pleaded that Santander acted as Fannie Mae's agent at all relevant times.6 See DeGiacomo v. Quincy, 476 Mass. 38, 43-44 (2016) (“the determination whether a nonparty is in privity with a party depends on the nature of the nonparty's interest, whether that interest was adequately represented by a party to the prior litigation, and whether binding the nonparty to the judgment is consistent with due process and common-law principles of fairness”). Thus, all parties to the Second Housing Court action were either parties to the Superior Court action or in privity with them.

What remains is whether the claims asserted by the plaintiffs in the second Housing Court action were or could have been litigated in the Superior Court action. With one exception (which we discuss further below), we conclude that they were. Specifically, claims that Santander did not have authority to foreclose on the property were encompassed by the Superior Court action, which specifically sought a declaration to that effect. In addition, claims relating to (1) Santander's alleged refusal to modify or refinance the loan, (2) Santander's alleged representations on which the plaintiffs allegedly relied to stop making timely payments on the loan, and (3) alleged discrimination against the plaintiffs due to their race given the historic nature of their home (which was associated with the underground railroad), were all based on acts or events preceding the Superior Court action and on facts that were known or knowable to the plaintiffs at that time. Thus, all of these claims could have been brought by the plaintiffs in the Superior Court action. This is precisely the situation contemplated by Brookline v. Alston, 487 Mass. 278, 297 (2021), and the line of cases leading to it. See DeGiacomo, 476 Mass. at 41; Kobrin, 444 Mass. at 837; O'Neill, 428 Mass. at 259; Heacock v. Heacock, 402 Mass. 21, 23-24 (1988).

Relying on Andrew Robinson Int'l, Inc. v. Hartford Fire Ins. Co., 547 F.3d 48 (1st Cir. 2008), the plaintiffs argue that -- even if the elements of res judicata are met -- they fall within an exception pertaining to declaratory judgment actions. They contend that Robinson stands for the proposition that a judgment in a declaratory judgment action (such as the Superior Court action) does not bar a subsequent action for compensatory relief. But Robinson does not stand for the broad proposition the plaintiffs claim. Instead, it merely holds that Massachusetts courts would adopt Restatement (Second) of Judgments § 33 (1982) (Restatement).7 Robinson, supra at 54-55. We do not quarrel with that conclusion. But it only goes so far, because § 33 does not apply in the circumstances here since (1) the second Housing Court action did not seek solely compensatory damages, and (2) the plaintiffs did not win the Superior Court action. See Restatement, supra & comment (c).

Finally, we turn to the plaintiffs’ claim based on the defendants’ refusal to sell the property to the plaintiffs’ agent after the foreclosure. This claim arose after the foreclosure judgment and thus was not barred by res judicata principles. But the judge did not dismiss it on those grounds. Instead, it was dismissed under Mass. R. Civ. P. 12 (b) (6), 365 Mass. 754 (1974), for failure to state a claim in light of a provision in the purchase and sale agreement (P&S) allowing Fannie Mae to terminate the agreement if the purchaser was “related to or affiliated in any way with the former mortgagor.” The plaintiffs offer no argument on appeal as to why the judge erred in dismissing the claim on this basis.8 A party's “failure to address [an] issue on appeal waives [their] right to appellate review.” Abate v. Fremont Inv. & Loan, 470 Mass 821, 833 (2015). Even were the issue not waived, we see no error in the judge's reasoning.

Accordingly, we affirm the judgment dismissing the plaintiffs’ complaint and the order denying the plaintiffs’ motion for reconsideration.

So ordered.



5.   At our request, the parties have submitted supplemental briefs concerning prohibited collateral attacks on prior judgments. The plaintiffs’ supplemental submission argues (1) that for the same reason res judicata does not apply, the second Housing Court action is not a collateral attack on the Superior Court judgment, and (2) that the defendants have waived any argument that the second Housing Court action is a prohibited collateral attack on a prior judgment to the extent that the case seeks monetary relief.

6.   The complaint in the second Housing Court action also alleged that Santander and Fannie Mae acted jointly at all times, and that they acted “in concert, together, and in a conspiracy.”

7.   Section 33 of the Restatement provides:“A valid and final judgment in an action brought to declare rights or other legal relations of the parties is conclusive in a subsequent action between them as to the matters declared, and, in accordance with the rules of issue preclusion, as to any issues actually litigated by them and determined in the action.”

8.   Likewise, in the second Housing Court action, the plaintiffs left unrebutted Santander and Fannie Mae's arguments that the P&S not only contained the provision permitting Fannie Mae to cancel the contract if the buyer was affiliated with the mortgagor, but that it also a waiver of any right to pursue specific performance.

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Docket No: 19-P-1848

Decided: October 01, 2021

Court: Appeals Court of Massachusetts.

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