CHRISTOPHER HAYDEN; DENINE L. MURPHY, a/k/a Denine L. Hayden, Plaintiffs, Appellants,
HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee for Wells Fargo Asset Securities Corporation Mortgage Asset-Backed Pass Through Certificates Series 2007-PA3; WELLS FARGO BANK, N.A., Defendants, Appellees.
FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS [Hon. Denise J. Casper, U.S. District Judge]
F. Russell, Jr. and Glenn F. Russell, Jr., & Associates,
P.C. on brief for appellants.
R. Higgins, Y. Frank Ren, and K&L Gates LLP on brief for
Lynch, Kayatta, and Barron, Circuit Judges.
March 2007, Christopher Hayden and Denine Murphy ("the
Haydens") borrowed $800, 000 from GN Mortgage, LLC
("the lender") to purchase a property in Rehoboth,
Massachusetts. The Haydens executed a promissory note
memorializing the loan and a mortgage identifying Mortgage
Electronic Registration Systems, Inc. ("MERS") as
the mortgagee, acting "solely as a nominee" for the
lender and the lender's successors and assigns. The
mortgage also granted MERS, and its successors and assigns,
power of sale over the property. In January 2008, MERS
assigned the mortgage to HSBC Bank USA, N.A.
("HSBC") as trustee for WFALT 2007-PA03. In
February 2010, HSBC reassigned the mortgage to itself as
trustee for Wells Fargo Asset Securities Corporation,
Mortgage Asset-Backed Pass Through Certificates, Series
Haydens defaulted on their loan in 2008. They then filed
several bankruptcy petitions and requested injunctive relief,
thereby delaying foreclosure until 2016.
After HSBC provided notice of a foreclosure sale in June
2016, the Haydens sued HSBC and Wells Fargo Bank, N.A.
("Wells Fargo"), the mortgage servicer, to enjoin
the sale. They now appeal the district court's decision
to deny their request for a preliminary injunction and to
grant HSBC's and Wells Fargo's motion to dismiss
under Federal Rule of Civil Procedure 12(b)(6). Specifically,
the Haydens challenge the district court's dismissal of
their claims that (1)
cannot foreclose on their property under Mass. Gen. Laws ch.
244, § 14, and (2) the mortgage is obsolete by operation
of Mass. Gen. Laws ch. 260, § 33.
review the district court's order of dismissal for
failure to state a claim de novo. Lemelson v. U.S. Bank
Nat'l Ass'n, 721 F.3d 18, 21 (1st Cir. 2013)
(citing Artuso v. Vertex Pharm., Inc., 637 F.3d 1, 5
(1st Cir. 2011)). The district court properly dismissed the
Haydens' claim that HSBC cannot foreclose on the property
on their view that MERS's assignment of the mortgage to
HSBC was invalid. As the district court found, this claim is
foreclosed by precedent, which holds that MERS can validly
assign a mortgage without holding beneficial title to the
underlying property, see Culhane v. Aurora Loan Servs. of
Neb., 708 F.3d 282, 291-93 (1st Cir. 2013), and that
borrowers do not have standing to challenge a mortgage
assignment based on an alleged violation of a trust's
pooling and servicing agreement, see Butler v. Deutsche
Bank Tr. Co. Ams., 748 F.3d 28, 37 (1st Cir. 2014)
(citing Woods v. Wells Fargo Bank, N.A., 733 F.3d
349, 354 (1st Cir. 2013)).
decision in Dyer v. Wells Fargo Bank, N.A., 841 F.3d
550 (1st Cir. 2016), which was issued approximately six weeks
after the district court issued its decision in this case,
provides further support for this finding. Dyer
reaffirmed Culhane's holding that a mortgage
contract can validly make MERS the mortgagee and authorize it
to assign the mortgage on behalf of the lender to the
lender's successors and assigns. Id. at 553.
Dyer also disposed of the claim that the
Massachusetts Supreme Judicial Court's ("SJC")
decision in Eaton v. Federal National Mortgage
Association, 969 N.E.2d 1118 (Mass. 2012), renders
Culhane noncontrolling where, as here, the
foreclosing party holds both the note and the mortgage.
See Dyer, 841 F.3d at 553-54 & n.2; see also
Eaton, 969 N.E.2d at 1133 n.28 ("[A] foreclosing
mortgage holder such as [the nominee's assignee] may
establish that it either held the note or acted on behalf of
the note holder at the time of a foreclosure sale by filing
an affidavit in the appropriate registry of deeds . . .
."). In fact, many of the arguments advanced by the
Haydens' counsel, who also represented the borrower in
Dyer, mirror the arguments that we rejected in
district court also properly dismissed the Haydens'
obsolete mortgage claim, which has no basis in the plain text
of the statute or in precedent. Under Massachusetts's
obsolete mortgage statute, Mass. Gen. Laws ch. 260, §
33, a mortgage becomes obsolete and is automatically
discharged five years after the expiration of the stated term
or maturity date of the mortgage. Nothing in the text of the
statute supports the Haydens' assertion that the
acceleration of the maturity date of a note affects
the five-year limitations period for the related
mortgage. Their citation to the SJC's decision
in Deutsche Bank National Trust Co. v. Fitchburg Capital,
LLC, 28 N.E.3d 416 (Mass. 2015), is inapposite because
the decision makes no mention of the impact of an accelerated
note on the obsolete mortgage statute's limitations
agree that the Haydens failed to state a claim, substantially
for the reasons articulated by the district court. Without
adopting the district court's opinion, we summarily
affirm. See 1st Cir. R. 27.0(c).