COMMONWEALTH OF MASSACHUSETTS

HAMPSHIRE, SS WESTERN HOUSING COURT

CASE NO. 10 SP 1330

RESIDENTIAL FUNDING )
REAL ESTATE HOLDINGS, LLC, )
Plaintiff )
)
v. )
)
KATHERINE RACINE, )
Defendant )

KATHERINE RACINE’S TRIAL BRIEF

I. NATURE OF THE CASE

Defendant Katherine Racine (“Racine”) resides at 8 Cornell Street, South Hadley,

Hampshire County, Massachusetts. Plaintiff Residential Funding Real Estate Holdings,

LLC (“Holdings”) is a limited liability company having an address of 35 Linden Street,

Yonkers, New York. Holdings claims to be the owner of 8 Cornell Street, South Hadley,

Hampshire County, Massachusetts, and brought the above-captioned action to evict

Racine from her home. Racine claims that the foreclosure sale conducted by Residential

Funding Company, LLC (“Residential”), Holdings’ purported predecessor in title, was

invalid; the Foreclosure Deed Recorded with the Hampshire County Registry of Deeds

(“Deeds”) was of no effect; and accordingly Holdings has no standing to maintain the

present eviction action.

All documents annexed hereto as exhibits are true and complete copies of the

originals filed with Deeds, with the Secretary of the Commonwealth, and/or with this

Honorable Court.

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II. JURISDICTION

In its Pre-Trial Memorandum, Holdings challenges this court’s jurisdiction to hear

evidence regarding the foreclosure sale as a defense to this action to evict. The ability of

the Housing Court to hear such evidence was set forth in Demeter v. Dyer, Northeast

Housing Court Decision, 09-SP-01238, Kerman, J. In that post-foreclosure summary

process action, Dyer, the defendant former mortgagor defended on the ground that the

foreclosing mortgagee caused one or more of the foreclosure sale notices that are

required by G..L. c.244, §14 to be published after the mortgagor petitioned for

bankruptcy without the mortgagee obtaining relief from the automatic stay. In the instant

case, Racine says that Holdings did not have the right to foreclose at the time of the

Foreclosure sale. The case law relied upon in Demeter applies here. In order for a

foreclosure sale to be valid there must be a “strict compliance” with the requirements of

G. L. c.244 §14. A mortgage is a contract. It is fundamental and basic that a party

seeking to exercise a contractual right (here, the power of sale) has the contractual right

to do so at the time of its exercise. As the statute, G. L. c.244, § 14 recognizes, these are

the mortgagee or his valid assignee, a person specifically authorized by the power of sale,

or an attorney, legal guardian or conservator of those persons acting in the name of those

persons. It is familiar law that one who sells under a power must follow strictly its terms.

If he fails to do so there is no valid execution of the power and the sale is wholly void.

See G.L. c. 183, § 21 (“statutory power of sale in mortgage, recognizing that person

seeking to exercise the power must “first comply with the terms of the mortgage and with

the statutes relating to the foreclosure of mortgages by the exercise of a power of sale”).

See, Bottomly v. Kabachnick 13 Mass.App. 480, 483-484 (1982) (notice which failed to

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identify mortgage holder rendered foreclosure sale void as a matter of law); Moore v.

Dick 187 Mass. 207, 211-212 (1905) (publication of notice in wrong newspaper rendered

foreclosure sale “wholly void”; sale was “treated as a nullity” and was “not valid” equally

“as though there had been no attempt to foreclose”). Racine contends that, as a matter of

state statute and case law, for reasons set forth below, Holdings has no right of possession

under the invalid foreclosure deed, and thus no right to judgment in this summary process

case. It is clear that in a summary process action to obtain possession of premises

purchased at a foreclosure sale, the right to possession must be shown and legal title may

be put in issue. Wayne Investment Corp v. Abbott 350 Mass. 775 (1966) (rescript); New

England Mutual Life Insurance Co. v. Wing 191 Mass. 192, 195 (1906) . See also,

Sheehan Const Co. v. Dudley 299 Mass. 51 (1937) (writ of entry case giving res

adjudicata effect to decision in summary process case; Barry v. Dudley 282 Mass. 258

(1933) (where title was put in issue and validity of foreclosure decided) . And see, Page

v. Dwight 170 Mass. 29 (1897) (summary process case where jury found title and right of

possession by a foreclosure sale in the defendant who had ousted the plaintiff and his

family by unlawful use of force without resorting to judicial process). Racine may show,

under a general denial, that the foreclosure deed under which possession of the premises

is demanded is invalid. New England Mutual Life Insurance Co., supra, at 196. If the

title is invalid because the mortgage was not regularly foreclosed, the summary process

action cannot be maintained. Id, at 293-294.

III. ARGUMENT

The outcome of this case turns on a single document: “Residential Funding

Company., LLC Certificate of Assistant Secretary”, recorded with Deeds in Book 10070

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at Page 219 (Exhibit 1). Exhibit 1 purports to authorize Jeffrey Stephan (“Stephan”) to

appoint another through Power of Attorney recorded with Deeds in Book 10070 at Page

228 (Exhibit 2) to enter upon the mortgaged premises for purpose of foreclosure. See

Certificate of Entry recorded with Deeds in Book 10070 at page 230 (Exhibit 3). It

purports to authorize Stephan to sign a Foreclosure Deed recorded with Deeds in Book

10070 at page 231 (Exhibit 4). It purports to authorize Stephan to sign an Assignment of

Bid recorded with Deeds in Book 10070 at page 236 (Exhibit 5).

Residential has registered with the Massachusetts Secretary of the

Commonwealth. That registration is memorialized in Residential Funding Company,

LLC Summary Screen (Exhibit 6). According to that document, Residential names two

individuals who serve as Manager of the LLC. One is James N. Young and the other is

Steven M. Abreu. The registration names nine other individuals authorized to “execute,

acknowledge, deliver and record any recordable instruments purporting to affect an

interest in real property”. The Delaware Limited Liability Company Act, at § 18-402

provides in pertinent part “that if a limited liability company provides for the

management, in whole or in part, of a limited liability company by a manager, the

management of the limited liability company, to the extent so provided, shall be vested in

the manager….”

Exhibit 1, which specifically with the authority to execute, acknowledge, deliver

and record any recordable instruments purporting to affect an interest in real property is

not signed by either of the named managers nor by the nine individuals authorized to

affect an interest in real property. : “Residential Funding Company, LLC Certificate of

Assistant Secretary” recorded with Deeds in Book 10070 at Page 219 (Exhibit 1) bases its

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authority on a “resolution(s) adopted by the Board of Directors of the Company by the

Unanimous Written Consent dated July 7, 2008”. In this flawed document Stephan is

named as a “Junior Officer”. This designation would give him limited authority to

execute certain documents on behalf of Residential. Whether the documents he executed

are within such authority is open to debate. We never reach that issue, because as a

matter of law, Exhibit 1 affords no such authority to Stephan.

The Entry was without authority. The Foreclosure Deed was executed without

authority. The Assignment of Bid to Holdings was without authority. The foreclosure

sale was and is invalid and the purported assignment to Holdings was and is invalid.

Accordingly Holdings is not in possession of the premises and has no right to seek

to evict Racine. This issue is not fixable through curative or confirmatory filings.

In U.S. Bank National Association v. Ibanez, Mass. Land Court Case No. 08 Misc

384283(KCL) Decision on Motion for Reconsideration dated October 14, 2009, Judge

Long commented on “the likely chilling of other bids due to the plaintiff’s inability at the

time of sale to show (by proof of a valid mortgage assignment) their legal capacity to

convey title”. “Without the ability to ‘go to record’ immediately, the title is in doubt and

potential bidders cannot help but be chilled. To say that bidders are absolutely certain that

the foreclosing party will be able to produce the requisite assignment at some point and

they are not deterred in the slightest by the prospect of delays of up to fourteen months is

to ignore reality. G.L. c. 244, § 14, with its mandate for clarity, permits no such

assumptions. Bottomly, supra at 483-84. The legislature has not forgotten that a person’s

home, his or her equity in that home, and the potential of thousands of dollars in

avoidable deficiency debt are at stake.

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 III. CONCLUSION

For the aforesaid reasons and in the interest of justice and fairness, judgment for

Racine must enter on Holdings’ complaint to evict Racine.

Respectfully submitted,

___________________
Donald C. Kupperstein
BBO No. 543683
704 Foundry Street
South Easton, MA 02375
(508) 230-0363

CERTIFICATE OF SERVICE

The within Trial Brief was served on 8/27/10 by e-mail to:

David Rhein, Esquire

Orlans Moran PLLC
45 School Street
Boston, MA 02108

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