WELLS FARGO v. LAIRD JAMES HEAL (2026)

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

In this postforeclosure summary process action, a judge of the Housing Court (motion judge) granted summary judgment in part in favor of the plaintiff-appellee (hereinafter, the plaintiff), Wells Fargo Bank, N.A., as trustee of WaMu Mortgage Pass-Through Certificates Series 2006-PR2 Trust (Wells Fargo). The self-represented defendant-appellant (hereinafter, the defendant), Laird James Heal, appeals, raising a multitude of claims. Discerning no error beyond the calculation of prejudgment interest, we vacate and remand on that limited issue, and otherwise affirm the judgment.

Background. The plaintiff commenced this summary process action against the defendant, seeking possession of the property located at 8 Linden Street in Winchendon (property) based upon a claim for nonpayment of rent. Mark Paoluccio is the former owner of the property.² After Paoluccio defaulted on his mortgage loan payments, the plaintiff foreclosed on the mortgage and purchased the property at a foreclosure sale on January 10, 2018. On April 30, 2018, the plaintiff served the defendant with a “Tenant Notification,” detailing information about the new owner.

The defendant resided as a tenant at the property beginning in October 2010 under the terms of a written month-to-month lease agreement with Paoluccio dated October 20, 2010. The lease agreement between the defendant and Paoluccio survived the foreclosure sale. Accordingly, on January 10, 2018, the plaintiff became the defendant's landlord under the terms of the October 20, 2010 written lease. Since then, the defendant has not made any rent payments to the plaintiff for his use and occupancy of the property. From February 2018 through January 2025, the defendant's unpaid rent totaled $42,000.

Prior litigation. On June 21, 2017, Heal and Paoluccio filed a civil action in the Superior Court asserting affirmative claims against the loan servicer, JPMorgan Chase Bank, National Association, and Wells Fargo (together, the mortgagee banks), as well as their maintenance agent, Mortgage Contract Services LLC (MCS).³ The mortgagee banks and MCS removed the case to the United States District Court for the District of Massachusetts,⁴ and moved for summary judgment. On September 1, 2021, the District Court judge granted summary judgment in favor of the mortgagee banks and MCS on all claims asserted by Heal covering the period between July 7, 2012, and January 10, 2018. Judgment was entered in favor of the mortgagee banks and MCS on all remaining counts (I, III, and IV).⁵ Heal exhausted all his appeals.

Current litigation. On November 26, 2018, the plaintiff filed the summary process complaint in the Housing Court. The defendant filed an answer that included defenses, affirmative defenses, and counterclaims. The plaintiff filed a motion for summary judgment on August 19, 2024, which the defendant opposed.⁶ On April 16, 2025, the motion judge ordered that judgment be entered for the plaintiff for possession, awarded $42,000 in damages for unpaid rent, dismissed the defendant's common law counterclaims and statutory G. L. c. 186, § 14, counterclaim, and severed the defendant's conditions-based counterclaims.⁷ Judgment entered on April 17, 2025, and the defendant filed a timely notice of appeal.

Discussion. 1. Standard of Review. “The allowance of a motion for summary judgment is appropriate where there are no genuine issues of material fact in dispute and the moving party is entitled to judgment as a matter of law” (quotation and citation omitted). Williams v. Board of Appeals of Norwell, 490 Mass. 684, 689 (2022). When a party moves for summary judgment on claims that the opposing party will have the burden of proving at trial, the moving party must demonstrate “that the party opposing the motion has no reasonable expectation of proving an essential element of that party's case.” Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). We review a grant of summary judgment de novo. See Casseus v. Eastern Bus Co., 478 Mass. 786, 792 (2018).

2. Summary Process Action. a. The plaintiff's possession. To establish a valid foreclosure by sale and corresponding right to possession of the property, the plaintiff was required to present evidence demonstrating compliance with the foreclosure process. Specifically, the plaintiff can meet this initial burden by providing the foreclosure deed and affidavit of sale (that meets the requirements of G. L. c. 244, § 15). See Federal Nat'l Mtge. Ass'n v. Hendricks, 463 Mass. 635, 642 (2012), citing Bank of N.Y. v. Bailey, 460 Mass. 327, 334 (2011), and Deutsche Bank Nat'l Trust Co. v. Gabriel, 81 Mass. App. Ct. 564, 568-570 (2012). The plaintiff provided both, establishing their prima facie case. The defendant did not dispute that the plaintiff produced those documents. Instead, the defendant argues on appeal that the plaintiff failed to strictly comply with the power of sale provisions because, according to the defendant, the plaintiff did not send the required notice to the correct address. In his opposition to the plaintiff's motion for summary judgment, the defendant alleged that he had not received “any billing mail from ․ Wells Fargo after June, 2017” and that “Paoluccio did not receive any notice of impending scheduled foreclosure sale.” The motion judge noted that the defendant “did not provide[ ] an affidavit from Paoluccio, [addressing whether he had received the required notice,] and [the defendant's] statements alone do not constitute competent evidence on these issues.” Accordingly, the motion judge found that the defendant failed to raise a genuine issue of material fact as to whether the plaintiff sent the notice to the correct address. We see no basis to disturb this finding. Thus, we agree with the motion judge's determination that the plaintiff established a valid foreclosure by sale. See Kirschbaum v. Wennett, 60 Mass. App. Ct. 807, 809 n.4 (2004).⁸

b. The defendant's counterclaims. The defendant argues that the motion judge erred in applying the doctrine of res judicata to resolve his counterclaims because those matters had been previously litigated in Federal court. Specifically, the defendant contends that when determining the preclusive effect of a prior Federal judgment, State courts are required to apply Federal preclusion law rather than Massachusetts law. See Salem v. Massachusetts Comm'n Against Discrimination, 44 Mass. App. Ct. 627, 637 (1998). The motion judge concluded that the defendant was barred from relitigating issues previously raised and decided in the Federal action, including matters arising prior to January 10, 2018, before the plaintiff acquired ownership of the property and became the defendant's landlord. We agree.

Although the defendant correctly notes that Federal law governs the preclusive effect of a Federal judgment, see id., he identified no material difference between applicable Federal and Massachusetts preclusion principles that would affect the outcome here, see Korn v. Paul Revere Life Ins. Co., 83 Mass. App. Ct. 432, 436-437 (2013). Nor does the defendant's reliance on Fidler v. E.M. Parker Co., 394 Mass. 534 (1985), require a different result. In Fidler, the Supreme Judicial Court carefully reviewed a prior Federal judgment because the Federal courts had been required to resolve an important and unresolved question of Massachusetts law before the Supreme Judicial Court later clarified that law. See id. at 543-547. Nevertheless, the Supreme Judicial Court found that the Federal court's judgment was a reasonable interpretation of Massachusetts law such that it had preclusive effect. See id. Here, the defendant identified no unresolved question of law or subsequent Massachusetts authority undermining the Federal courts’ interpretation of Massachusetts law in the prior litigation. His assertion that the Federal decisions conflict with Sarvis v. Boston Safe Deposit & Trust Co., 47 Mass. App. Ct. 86, 87, 98 (1999), is unavailing. The defendant does not identify any point of Massachusetts law in that case that is relevant to his counterclaims, much less how it contradicted anything in the Federal decisions.

Moreover, under the governing Federal preclusion principles, even an allegedly erroneous judgment is entitled to preclusive effect. See Patton v. Johnson, 915 F.3d 827, 833-834 (1st Cir. 2019); Depianti v. Jan-Pro Franchising Int'l, Inc., 873 F.3d 21, 32 (1st Cir. 2017). The record demonstrates that the defendant exhausted his available avenues for appellate review in Federal litigation, appealing all the way to the Supreme Court of the United States. We therefore agree with the motion judge that the defendant had a “full and fair opportunity” to raise and litigate those claims in the Federal action and thus is barred from relitigating them in State court. Pierce v. Morrison Mahoney LLP, 452 Mass. 718, 730 (2008), quoting Matter of Goldstone, 445 Mass. 551, 559 (2005).

The defendant further argues that the plaintiff waived all affirmative defenses to his counterclaims, including res judicata, by failing to raise them in their first two motions for summary judgment. This argument also fails. The plaintiff filed their initial summary judgment motions in 2019 and 2020, before the Federal judge had ruled on the merits of the defendant's claims in his 2017 Federal complaint -- the basis of the issue and claim preclusion. See Kobrin v. Board of Registration in Med., 444 Mass. 837, 843 (2005). That final judgment was not entered until 2021. Accordingly, the plaintiff raised issue and claim preclusion at the first available opportunity, and the motion judge mitigated any potential unfair surprise by affording the defendant an additional opportunity to address those arguments through a supplemental memorandum.

Because we agree with the motion judge that the defendant's previously asserted claims are barred by principles of issue and claim preclusion, we need not address each of those claims individually here.⁹ Those claims may not be relitigated in the present matter. See DeGiacomo v. Quincy, 476 Mass. 38, 41-42 (2016).

The defendant also argues that the motion judge abused his discretion by severing the defendant's counterclaims for breach of the implied warranty of habitability and violation of G. L. c. 186, § 14. Such counterclaims may properly be raised in a summary process action concerning possession of a residential premises. See G. L. c. 239, § 8A. However, “[c]ounterclaims may be severed and separately tried, but only in circumstances where the nature of the counterclaim is such that it cannot defeat the plaintiff's claim for possession.” Morse v. Ortiz-Vazquez, 99 Mass. App. Ct. 474, 482 (2021), quoting Residential Landlord-Tenant Benchbook 15 (W.E. Hartwell ed., 3d ed. 2013). Although the defendant contested the plaintiff's right to possession, the motion judge concluded that the defendant's conditions-based counterclaims could not serve as a defense to possession because the defendant failed to provide the requisite notice of the alleged defective conditions. See G. L. c. 239, § 8A. Accordingly, the motion judge had discretion to sever the conditions-based counterclaims and transfer them to the civil docket where the defendant may pursue them for monetary relief. See Morse, supra.

c. The judgment. Finally, the defendant argues that the judgment amount exceeds the plaintiff's demand in the complaint and that the prejudgment interest was miscalculated. The complaint, at the time of filing, sought judgment for unpaid rent for June, July, August, September, and October of 2018. The plaintiff filed that complaint in November 2018. The record reflects that the defendant continued to occupy the premises, without making any rent payments, through January 2025. Following the foreclosure, the tenancy continued under the same terms, including the agreed-upon monthly rent of $500, so the defendant cannot plausibly contend that he lacked notice that the plaintiff would seek recovery for the full amount of unpaid rent, which accrued during his continued occupancy of the premises. Moreover, Mass. R. Civ. P. 54 (c), as amended, 463 Mass. 1401 (2012), provides that “every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings.” Thus, although the plaintiff did not identify the amount of unpaid rent in the complaint, they were nevertheless entitled to recover the full amount of rent and use and occupancy damages that accrued during the defendant's continued possession of the premises. See Mass. R. Civ. P. 54 (c), as amended, 463 Mass. 1401 (2012).

The defendant argues that the motion judge erred in calculating the prejudgment interest owed to the plaintiff. We agree. Prejudgment interest is awarded “from the date of the breach or demand, if established, but otherwise from the date of the commencement of the action” (quotation omitted). Aronovitz v. Fafard, 78 Mass. App. Ct. 1, 13 (2010), quoting G. L. c. 231 § 6C. The plaintiff commenced this summary process action when they served the defendant on November 19, 2018. See Rule 2(b) of the Uniform Summary Process Rules (1993). Although the action commenced on that date, the damages awarded included monthly rent and occupancy charges that accrued through January 2025. As to those amounts that had not yet become due when the action commenced, the relevant breach occurred only when each monthly payment became due. Accordingly, prejudgment interest should be calculated separately for each outstanding monthly obligation, rather than as a lump sum for the entire award based on the date the action commenced. Alternatively, in the judge's discretion, interest may be calculated based on the total amount of rent or use and occupancy payments that became due in each applicable twelve-month period, running from the last day of that period, so as to fairly approximate the interest due while avoiding the need for dozens of separate interest calculations. See Bank v. Thermo Elemental Inc., 451 Mass. 638, 662-663 (2008). We therefore vacate the award of prejudgment interest and remand for recalculation of that sum consistent with G. L. c. 231, § 6C.

Conclusion. So much of the judgment as awarded prejudgment interest is vacated, and the case is remanded for further proceedings consistent with this memorandum and order. The judgment is otherwise affirmed.

So ordered.

FOOTNOTES

2.   On January 12, 2006, Paoluccio granted a mortgage on the property to Washington Mutual Bank, F.A., to secure the promissory note. On March 27, 2012, JPMorgan Chase Bank, National Association, as successor in interest to Washington Mutual Bank, F.A., assigned the mortgage to the plaintiff.

3.   The five claims, with respect to conduct occurring prior to January 2018 and involving Wells Fargo, included alleged forcible entry (count I), breach of contract (count II), tort to chattel (count III), conversion (count IV), and breach of fiduciary relationship (count V).

4.   Paoluccio voluntarily dismissed all his claims against these defendants on March 5, 2018.

5.   Count II and count V were dismissed on January 11, 2019.

6.   This was the third motion for summary judgment filed by the plaintiff. On September 16, 2019, the plaintiff filed a motion for partial summary judgment pertaining to the defendant's counterclaims, which was allowed on December 9, 2019. On February 3, 2020, the plaintiff filed a motion for summary judgment, which was withdrawn on October 29, 2020, during the COVID-19 pandemic.

7.   The motion judge transferred the conditions-based counterclaims for breach of the implied warranty of habitability and for violation of G. L. c. 186, § 14 (covering the period subsequent to January 10, 2018), to the civil docket.

8.   Accordingly, we need not address the defendant's claim that the motion judge erred in finding, in the alternative, that the plaintiff established a valid foreclosure by entry.

9.   With respect to the defendant's argument that his counterclaim is based on a “continuing tort,” the motion judge found that there was “no evidence of continuing tortious conduct engaged in by Wells Fargo after January 2018,” the date through which the Federal judge made findings. We agree.