Opinion
No. 96-2628A
February, 1998
MEMORANDUM OF DECISION AND ORDER ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
This case arrives before the court on Plaintiff's Motion for Summary Judgment. Plaintiff, Unibank For Savings (Unibank), has foreclosed on a mortgage that secured a promissory note in the amount of $295,000 executed by Defendants, Ronald H. Rej and Carol K. Rej. Unibank sold the mortgaged property pursuant to a power of sale. The proceeds of the sale were, however, insufficient to satisfy the note. Unibank now seeks to collect the deficiency from the note's obligors. The Rejs contend that Unibank did not conduct the sale in good faith and is, therefore, not entitled to a deficiency judgment. For the reasons that follow, Plaintiff's Motion for Summary Judgment will be ALLOWED.
BACKGROUND
Mr. and Mrs. Rej executed and delivered to Unibank a promissory note dated December 11, 1991. The note recited a principal amount due of two hundred ninety-five thousand dollars ($295,000). Defendants secured the note with a mortgage on certain real property located at 13-23 B Street and 61-67 North Main Street in Whitinsville. In April, 1996 Unibank commenced a foreclosure action and, on September 17, 1996, sold the property at a foreclosure sale. The foreclosure sale proceeds accounted for approximately sixty-five percent and seventy-one percent, respectively, of the properties' market values, less outstanding municipal charges, as determined by appraisals obtained by Unibank immediately prior to the sales. Having been credited with the amounts realized from the foreclosure sales, and as of August 31, 1997, the Rejs owed $119,554.82 on the note.
The Rejs do not dispute that they signed the promissory note and the mortgage to secure the note. Rather, they contend that Unibank failed to effectuate the sale of the properties in good faith. The Rejs claim that Unibank should have displayed advertisements in addition to those required by statute and should have placed listings with local real estate brokers. Unibank asserts that its compliance with applicable statutory provisions satisfies its obligation to conduct the sale in good faith.
DISCUSSION
Summary judgment shall be granted where there are no genuine issues of material fact on any relevant issue raised by the pleadings and the moving party is entitled to judgment as a matter of law. Mass.R.Civ.P. 56 (c); McNeil v. Metropolitan Property Liability Ins. Co., 420 Mass. 587, 598 (1995). The moving party bears the burden of affirmatively demonstrating the absence of a triable issue and that the summary judgment record entitles the moving party to judgment as a matter of law. Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989). If the moving party establishes the absence of a triable issue, the party opposing the motion must, in order to defeat the motion, refer to specific matter in the summary judgment record demonstrating the existence of a genuine issue of material fact. Id. at 17. The opposing party cannot rest upon his or her pleadings or upon mere assertions of disputed facts to defeat the motion for summary judgment. LaLonde v. Eissner, 405 Mass. 207, 209 (1989).
Plaintiff has demonstrated that there are no genuine issues of material fact on the question as to whether its efforts in selling the foreclosed real estate were commercially reasonable. Defendants have not offered evidence to the contrary. We are instructed by the Appeals Court that: "If the statutory norms found in G.L.c. 244 §§ 11-17B, governing foreclosure of real estate mortgages have been adhered to, Massachusetts cases have generally regarded that as satisfying the fiduciary duty of a mortgagee to deal fairly with the mortgaged property, unless the mortgagee's conduct manifested fraud, bad faith, or the absence of reasonable diligence in the foreclosure sale process." Pemstein v. Stimpson, 36 Mass. App. Ct. 283, 286-287 (1994).
The affidavits contained in the summary judgment papers suggest no genuine issue as to Unibank's satisfaction of the notification and publication requirements of G.L.c. 211 §§ 14, and 17B. On July 31, 1996, Unibank's attorney mailed a certified letter to both Ronald and Carol Rej informing them of the bank's intention to foreclose under power of sale for breach of condition. The actual sale did not occur until September 17, 1996. Clearly, that letter satisfied the statutorily mandated thirty day notice requirement. See G.L c. 244, § 14 (foreclosing party must notify owners of equity of redemption by registered mail thirty days prior to sale). The letter, and accompanying affidavit, followed the statutory model contained in G.L.c. 244, § 17B and, therefore, satisfied the statutory demands. See G.L.c. 244, § 17B (registered letter with return receipt requested mailed more than twenty-one days before sale and affidavit attesting to mailing signed within thirty days of sale prima facie evidence of mailing of notice). Finally, Unibank included a copy of the notice that it published on August 14, 21, and 28 advertising the sale. The advertisement satisfied the statutory requirement that the foreclosing party publish notice of sale for three consecutive weeks with the first publication not less than twenty-one days prior to the sale. G.L.c. 244, § 14. Plaintiff's satisfaction of all of the statutory foreclosure requirements thus shifts the burden to defendants to show that plaintiff acted fraudulently, in bad faith, or without reasonable diligence. See Pemstein, 36 Mass. App. Ct. at 286-287.
The Rejs argue that Unibank failed to exercise good faith by accepting less than eighty percent of market value for their house. They also contend that Unibank should have enlisted the aid of local real estate brokers and pursued advertising in excess of that prescribed by statute. The Rejs' suggestions are wholly without legal or factual support. See id. at 287 (a low price for collateral does not by itself indicate bad faith or lack of diligence). The Rejs' joint affidavit in opposition to the instant motion contains a number of legal conclusions but it wholly fails to identify facts that would demonstrate the fraud, bad faith, or lack of diligence with which the Rejs allege Unibank to have acted. There is, therefore, no likelihood that the Rejs will be able to prove at trial that which, under the Pemstein rule, they will be required to establish. See Flesner v. Technical Communications Corp., 410 Mass. 805, 809 (1991) (moving party entitled to summary judgment where party with burden at trial has no reasonable expectation of proving essential element of its case).
The court finds helpful Judge Doerfer's treatment of similar issues in Brae Asset Fund, L.P. v. Petkauskos, Civ. A. No. 97-0022B (Worcester Sup. Ct. Aug. 7, 1997) (Doerfer, J). Like the Rejs, the defendants in Brae alleged a lack of diligence on the part of the foreclosing party. Judge Doerfer held that, in the absence of affidavits to support defendants' contention that plaintiff had not met the minimum notice requirements, their claim that the foreclosure process was not followed by due diligence was unsupported by the evidence. A similar situation exists at bar, and this court concludes that the Rejs have failed to place into factual dispute the issue of whether Unibank acted with due diligence. Accordingly, Unibank's Motion for Summary Judgment will be ALLOWED.
ORDER
It is therefore ORDERED that Plaintiff's Motion for Summary Judgment be ALLOWED.
______________________________ Daniel F. Toomey Justice of the Superior Court
Dated: February, 1998