From: Mario Kenny
SJC Rules Housing Court Can Hear Title Challenges In Post-Foreclosure Evictions
In another favorable ruling for foreclosed homeowners, the Supreme Judicial Court today ruled that a distressed homeowner may challenge a bank’s title and foreclosure sale irregularities through counterclaims brought in the Housing Courts in response to a post-foreclosure eviction, rather than being forced to file separate lawsuits in the Superior Court. The case is Bank of America v. Rosa, SJC-11330 (Dec. 18, 2013).
BANK OF AMERICA, N.A. vs. Ceferino S. ROSA
(and three consolidated cases[FN1]).
SJC-11330.
Essex. Sept. 9, 2013. - Dec. 18, 2013.
In each of these consolidated appeals the plaintiff bank brought a summary process action against the former homeowner-mortgagor in the Housing Court after foreclosure. Each former homeowner raised various defenses and counterclaims in his or her answer to the complaint that challenged the bank's right to both possession and title as derived through foreclosure sale, as well as other defenses and counterclaims. In each case the bank filed a motion to strike the affirmative defenses and to dismiss the counterclaims on grounds that the only defenses and counterclaims available in summary process are (1) those allowed by G.L. c. 239, § 8A, which does not apply here because there was no landlord-tenant relationship between the parties, and (2) a challenge to title (and thereby possession) based only on a failure to comply strictly with the power of sale provided in the mortgage.
. . .
We turn to the question whether claims that historically were required to be raised in a separate action in equity may be raised by counterclaim in the Housing Court. As discussed above, there is no question that the former homeowners can challenge the title of the banks in these summary process actions, and that they can require the banks to establish that title was acquired strictly according to the power of sale provided in the mortgage. It also is undisputed that a foreclosure sale may be set aside for other reasons in a separate action filed in a court of equity. Wayne Inv. Corp. v. Abbott, 350 Mass. 775, 775 (1966); New England Mut. Life Ins. Co. v. Wing, 191 Mass. 192, 196 (1906). Such an action challenges the title of one claiming ownership under a foreclosure deed, and if successful, a former homeowner could preclude or defeat an eviction. Since Abbott and Wing were decided there have been many changes in the jurisdiction of courts hearing summary process cases, including the Housing Court.
. . .
Although the equitable jurisdiction of the Housing Court is limited, see St. Joseph's Polish Nat'l Catholic Church v. Lawn Care Assocs., Inc., 414 Mass. 1003, 1003 (1993), it necessarily includes the power to grant affirmative equitable relief in summary process actions where an equitable defense to the plaintiff's title has been raised under G.L. c. 231, § 31. [FN9] Thus, when the jurisdiction of the Housing Court has been invoked in a summary process action and the validity of a mortgage foreclosure has been made an issue insofar as it affects the plaintiff's title, the Housing Court has equitable jurisdiction to enjoin or set aside a foreclosure sale that could have been ordered by the Superior Court in an independent action. A judge in the Housing Court is not constrained simply to deny the plaintiff possession of the premises. The "affirmative relief in equity," which was required by New England Mut. Life Ins. Co. v. Wing, supra, in 1906, and affirmed by Wayne Inv. Corp. v. Abbott, supra, in 1966, to set aside a foreclosure sale for reasons other than failure to comply strictly with the power of sale provided in the mortgage, formerly available only in the Superior Court, is now available in the Housing Court as well. [FN10]
. . .
This approach was anticipated in the recent case of Bank of N.Y. v. Bailey, 460 Mass. 327, 334 (2011), and it is consistent with desirable considerations of judicial economy. We conclude that the Housing Court has jurisdiction to hear defenses and counterclaims that challenge the title of a postforeclosure summary process plaintiff, which previously only could have been the subject of an independent equity action in the Superior Court, and that the Housing Court has authority to award damages in conjunction with such counterclaims.
The decisions of the Housing Court are affirmed, and the cases are remanded for further proceedings consistent with this opinion.
So ordered.
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Summary
Summary Process; Mortgage Foreclosure-- This case deals with the scope of counterclaims and affirmative defenses available to a defendant in a summary process action brought against the former owner of a home after a mortgage foreclosure.
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Summary Process; Mortgage Foreclosure-- This case deals with the scope of counterclaims and affirmative defenses available to a defendant in a summary process action brought against the former owner of a home after a mortgage foreclosure.
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SJC Rules Housing Court Can Hear Title Challenges In Post-Foreclosure Evictions
In another favorable ruling for foreclosed homeowners, the Supreme Judicial Court today ruled that a distressed homeowner may challenge a bank’s title and foreclosure sale irregularities through counterclaims brought in the Housing Courts in response to a post-foreclosure eviction, rather than being forced to file separate lawsuits in the Superior Court. The case is Bank of America v. Rosa, SJC-11330 (Dec. 18, 2013).
______________________________
(and three consolidated cases[FN1]).
In each of these consolidated appeals the plaintiff bank brought a summary process action against the former homeowner-mortgagor in the Housing Court after foreclosure. Each former homeowner raised various defenses and counterclaims in his or her answer to the complaint that challenged the bank's right to both possession and title as derived through foreclosure sale, as well as other defenses and counterclaims. In each case the bank filed a motion to strike the affirmative defenses and to dismiss the counterclaims on grounds that the only defenses and counterclaims available in summary process are (1) those allowed by G.L. c. 239, § 8A, which does not apply here because there was no landlord-tenant relationship between the parties, and (2) a challenge to title (and thereby possession) based only on a failure to comply strictly with the power of sale provided in the mortgage.
. . .
We turn to the question whether claims that historically were required to be raised in a separate action in equity may be raised by counterclaim in the Housing Court. As discussed above, there is no question that the former homeowners can challenge the title of the banks in these summary process actions, and that they can require the banks to establish that title was acquired strictly according to the power of sale provided in the mortgage. It also is undisputed that a foreclosure sale may be set aside for other reasons in a separate action filed in a court of equity. Wayne Inv. Corp. v. Abbott, 350 Mass. 775, 775 (1966); New England Mut. Life Ins. Co. v. Wing, 191 Mass. 192, 196 (1906). Such an action challenges the title of one claiming ownership under a foreclosure deed, and if successful, a former homeowner could preclude or defeat an eviction. Since Abbott and Wing were decided there have been many changes in the jurisdiction of courts hearing summary process cases, including the Housing Court.
. . .
Although the equitable jurisdiction of the Housing Court is limited, see St. Joseph's Polish Nat'l Catholic Church v. Lawn Care Assocs., Inc., 414 Mass. 1003, 1003 (1993), it necessarily includes the power to grant affirmative equitable relief in summary process actions where an equitable defense to the plaintiff's title has been raised under G.L. c. 231, § 31. [FN9] Thus, when the jurisdiction of the Housing Court has been invoked in a summary process action and the validity of a mortgage foreclosure has been made an issue insofar as it affects the plaintiff's title, the Housing Court has equitable jurisdiction to enjoin or set aside a foreclosure sale that could have been ordered by the Superior Court in an independent action. A judge in the Housing Court is not constrained simply to deny the plaintiff possession of the premises. The "affirmative relief in equity," which was required by New England Mut. Life Ins. Co. v. Wing, supra, in 1906, and affirmed by Wayne Inv. Corp. v. Abbott, supra, in 1966, to set aside a foreclosure sale for reasons other than failure to comply strictly with the power of sale provided in the mortgage, formerly available only in the Superior Court, is now available in the Housing Court as well. [FN10]
. . .
This approach was anticipated in the recent case of Bank of N.Y. v. Bailey, 460 Mass. 327, 334 (2011), and it is consistent with desirable considerations of judicial economy. We conclude that the Housing Court has jurisdiction to hear defenses and counterclaims that challenge the title of a postforeclosure summary process plaintiff, which previously only could have been the subject of an independent equity action in the Superior Court, and that the Housing Court has authority to award damages in conjunction with such counterclaims.
The decisions of the Housing Court are affirmed, and the cases are remanded for further proceedings consistent with this opinion.
So ordered.
SJC-11330, Massachusetts Supreme Judicial Court Oral Arguments
Sep 9, 2013 - Bank of America, N.A. v. Rosa, Massachusetts Supreme Judicial Court docket SJC-11330
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