Former Owners Are Required to Raise All Claims Arising out of the Same Transaction or Occurrence in Summary Process Proceedings.

Posted in Blog, Business Law by on November 15th, 2016

By: Attorney Raymond C. Pelote| Partner

Massachusetts-Attorney-Summary-Process-Proceedings” width=Any former owners who have been foreclosed upon tend to use the Housing Court as its battleground to contest the foreclosure. Once a property is foreclosed upon and the property is purchased by the foreclosing mortgagee or its nominee, the foreclosing mortgagee or its nominee typically proceeds to evict former owners from the property. However, in the course of doing so, many former owners file answers and counterclaims objecting to the foreclosure and its process. Often times, former owners will claim that the foreclosing mortgagee failed to strictly follow the power of sale contained in the mortgage and the applicable foreclosure statutes set out in Chapter 244 of the Massachusetts General Laws.

In making any counterclaims regarding the foreclosure, former owners are required to assert any and all counterclaims arising from the foreclosure at the time the former owners file their answer to the summary process summons and complaint. Failing to do so, could prove fatal if another potential counterclaim surfaces after final judgment has entered in the summary process case. I recently handled such a case in the Southeast Housing Court sitting in Taunton, Massachusetts. I represented the foreclosing mortgagee who was seeking to evict the former owners from a property. In the course of answering the summary process summons and complaint, the former owners asserted a counterclaim for wrongful foreclosure stemming from the foreclosure action. Specifically, the former owners alleged that the foreclosing mortgagee chilled the foreclosure sale of the property. The Housing Court ultimately decided against the former owners and entered summary judgment in favor of the foreclosing mortgagee. Almost a year after the Southeast Housing Court entered summary judgment in favor of the foreclosing mortgagee, the former owners filed a motion for reconsideration of the Court’s Judgment attempting to assert another counterclaim stemming from the foreclosure action. Essentially, the former owners claimed that the foreclosing mortgagee failed to provide notice to the municipal water department once the foreclosing mortgagee conveyed the property to itself.

G.L. c. 244, §15A requires a foreclosing mortgagee to provide notice to any and all residential tenants, the tax assessor or collector of the municipality, and the department which handles water or sewer services for the municipality. The foreclosing mortgagee did not send notice to residential tenants as none existed given that the property was occupied by the former owners. The foreclosing mortgagee provided notice to the tax collector of the municipality. However, the foreclosing mortgagee did not provide notice to the municipal water department as is required by §15A. However, the fact that the foreclosing mortgagee did not provide notice to the municipal water department was available to the former owners at the time they filed their answer and counterclaim. Consequently, the Southeast Housing Court ruled that the former owners are precluded from raising their claim under §15A, as that claim should have been brought at the time they filed their answer and counterclaim. Res Judicata requires that all claims arising out of a transaction or occurrence be brought in the same action so as to avoid multiple actions arising from the same transaction or occurrence

This result is important for foreclosing mortgagees looking for finality to their summary process proceeding. Without it, former owners could prolong the summary process proceeding ad infinitum without any finality. This ruling requires former owners to assert any and all counterclaims that are or should be available at the time former owners file their answer and counterclaim to a summary process summons and complaint.

If you have questions or would like assistance from an experienced attorney, please call Wynn & Wynn, P.C. 1.800.852.5211 or request a free consultation.

¹The Massachusetts Appeals Court in Kiah v. Carpenter ruled that the failure to comply with §15A does not invalidate a foreclosure as the requirement contained in §15A is a post-foreclosure requirement which does not impact the mortgagee/mortgagor relationship. In fact, the Court stated that the mortgagor is not in the protected class contained in §15A. Ultimately, the Court ruled that §15A is not part of the power of sale, G.L. c. 183, §21, or the applicable foreclosure statutes. However, since the Kiah v. Carpenter case, another case deciding §15A was appealed to the Appeals Court which was immediately granted certiorari by the Supreme Judicial Court of Massachusetts. As such, I am anxiously awaiting the SJC’s ruling on whether failure to comply with §15A invalidates a foreclosure.

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