Case 1:18-cv-10401-LTS Document 20 Filed 05/21/18 Page 3 of 11 Case: 16-2274 Document: 00117291506 Page: 1 Date Filed: 05/18/2018 Entry ID: 6171206 OFFICE OF THE CLERK UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT: MARGARE! CARTER LUND Seares COURTHOUSE May 18, 2018 Re: Hayden, et al v. HSBC Bank USA, N.A., etal ‘Appeal No. [6-274 Dear Counsel: Judge David Barron, who participated in this vourt’s January 20, 2017 order and August 8, 2017 Opinion in the above-referenced case, has advised me thet, during the time this case was pending, he would have been required to recuse under Canon 3C(1}(e) of the Code of Conduct for United States Judges and 28 U.S.C. § 455(b)(4) due to a financial interest in Wells Fargo Bank, N.A.,a party to this case. The judge was unaware of this conflict until this month. Upon learning ofthe issue, Judge Barron directed that I notify the parties of his recusal and invite them to respond to the disclosure if they wish to do so. Advisory Opinion No. 71 (“Disqualification After Oral Argument”), issued by the Judicial Conference's Committee on Codes of Conduct, provides the following guidance for addressing a disqualification that is not discovered until after a judge’s participation in the case: [Al judge should disclose to the parties the Facts bearing on disqualification as soon as those facts are learned, even though that may occur after entry of the decision, The parties may then determine what relief they may seek and a court (without the disqualified judge) will decide the legal consequence, if any, arising fiom the participation of the disqualified judge in the entered decision, In accordance with Advisory Opinion No. 71, | am disclosing the conflict for your consideration. Should you wish to respond, please file your response with the Clerk's office by June 1, 2018. Any response will be publicly docketed, absent a motion to seal, and will be considered by the court without participation by Judge Barron. Sincerely, sl Margaret Carter, Clerk Enclosures Order dated January 20, 2017 Opinion dated August 8, 2017 Advisory Opinion No. 71 “ Glenn Francis Russell Jr. Sean R. Higgins Yuan Frank RenCase 1:18-cv-10401-LTS Document 20 Filed 05/21/18 Page 4 of 11 Case Cas02¥¢-22D0cumenuID6nE 2B1588g¢ Page:Wate Elsie: Rik/200818/20 Entry HotGOSRGTEY 1206 United States Court of Appeals For the First Circuit No. 16-2274 CHRISTOPL #R 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, ORDER OF COURT Entered: January 20, 2017 On November 3, 2016, the appellants filed a suggestion of bankruptcy, informing the court that plaintff-appellant Denine Hayden had filed a Chapter 13 bankruptcy petition on Oetober 18, 2016. The filing of a bankruptcy petition triggers the automatic stay contained in 11 US.C. § 362, which, among other things, stays the "continuation" of an action "against the debtor.” Id. § 362(a)(1). As this appeal does not constitute an action "against the debtor,” we discern no impediment to this appeat proceeding in the ordinary course, The Clerk will seta briefing schedule By the Court ‘s/ Margaret Carter, Clerk, cc: Glenn Francis Russell Jr, Sean R. Higgins Yuan Frank RenCase 1:18-cv-10401-TS Document 20 Filed 05/21/18 Page 5 of 11 Case Cs8276-22DocuBeoui0SbE 2D 1594ge Page: Cale Bled: ERORO18/20E try EMi/NE 4317 1206 United States Court of Appeals For the First Circuit No, 16-2274 CHRISTOPHER HAYDEN; DENINE L. MURPHY, a/k/a Den . 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, W.A., Defendants, Appellees. APPRAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Denise J. Casper, S. District Judge] Before Lynch, Kayatta, and Barron, Circuit Judges. Glenn F. Russell, and Glenn F. Russell, Jr., & Associates, P.C. on brief for appellants. Sean R. Higgins, Y. Frank Ren, and K&L Gates LLP on brief for appellees. August 8, 2017Case 1:18-cv-10401-LTS Document 20 Filed 05/21/18 Page 6 of 11 Case C4s@276-226cuienui0Onl 7RD1SPAge Page: Hate Eikad: R/OG0R 18/20 EBriry ED GALE BIT 1206 LYNCH, Cixeuit Judge, In March 2007, Christopher fiayden and Denine Murphy ("the Haydens") borrowed $800,000 from GN Mortgage, LLC ("the lender") to purchase a property in Rehoboth, Massachusetts. The Haydens executed promissory note —_——nenorializing—the—loan—and a mortgage identiying—Mortgage— Electronic Registration Systems, Inc. ("MBRS")_as the mortgagee, acting solely as a nominee" for the lender and the Lender's successors and assigns. The mortgage also granted NERS, 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-PAO3. In February 2010, HSBC reassigned the mortgage to itself as trustee for Wells Fargo Asset Securities Corporation, Mortgage Asset-Backed Pass Through Certificates, Series 2007-PA3. ‘The 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 dec sion 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 court's dismissal of their claims that (1) eeoae challenge the districtCase 1:18-cv-10401-LTS Document 20 Filed 05/21/18 Page 7 of 11 Case:Cs2276-22D6cufeati6it 240 15Page Rage: Bate Dktd MROBO018/20 Entry EDL GLDE G7 1206 HSBC 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, § 33.1 We review the district court's order of dismissal for failure to—stateaclaim de novo. Lemelson v~ UrS.—Rank Nat! Ass'n, 72) F.3d 18, 21. (1st Cir, 2013) (citing Artuso_v. Vertex. Pharm., Inc., 637 F.3d 1, 5 {Ist Cir. 2011)), The district court properly dismissed the Haydens' claim that HSBC cannot foreclose on the property on thelr 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 4 mortgage without holding beneficial title to the underlying property, see Culhane Aurora Loan Servs. of Neb., 108 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 ods v, Wells Fargo Bank, N. 1 733 F.3d 349, 354 (ist cir. 2013)). our decision in Dyer v. Wells Fargo Bank, N.A., 841 F.3d 550 [1st Civ. 2016), which was issued approximately six weeks after The Haydens do not challenge the district court's dismissal of their claim that Wells Fargo violated Mass. Gen. Laws ch. 93A by failing to comply with 209 C.M.R. § 18.17 and § 18.21. -3-Case 1:18-cv-10401-LTS Document 20 Filed 05/21/18 Page 8 of 11 Case:0182278-22becurDeuuraeht 7291 5Dage-Rage:Tate Blaid: RIWOBORLB/20ERry ENG IDL 4517 1206 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 NERS the mortgagee and authorize it to assign the mortgage on behalf of the ——— ——tenier-to-the-tender's-successors and assigns, —Edzat-553:—Byer ———— 4 lsod.isposedof.the claim that the Massachusetts.Suprene Judicial Court's ("SIC") decision in Baton v. Federal National Mortgage Association, 969 N.B.2d 1118 (Mass. 2012), renders culhane noncontrelling 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,B.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 . . Tn fact, many of the arguments advanced by the Haydens' counsel, who also represented the borrower in Dyer, mirror the arguments that we rejected in Byer. ‘The 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 gage. eaeCase 1:18-cv-10401-LTS Document 20 Filed 05/21/18 Page 9 of 11 Case:Cas@276-22DbcuentiMadt 7401 5BAge Rage (ate Eiedd: FigiO50 1/20 Fantry HX GUD 1206 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 C -—v-—Bitehburg—Gapitel, LIC, 28 N.B.3d 416 (Mass-—2015),—ie——_____ inapposite because the decision makes no mention of the impact. of an accelerated note on the obsolete mortgage statute's Limitations period. We 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 Ist Cir, R. 27.0{c). So orderedCase 1:18-cv-10401-LTS Document 20_ Filed 05/21/18, Page 10 of 11. Case: 16-2274 “Document: 00117291622 — Page: 1 “ Date Filed: 05/18/2018" ‘Entry ID: 6171206 Guide t0 Judtclany Policy, Vol, 28, Ch. 2 Page 102 Committee on Codes of Conduct Advisory Opinion No. 71: Disqualification After Oral Argument This opinion considers the recusal obligations of the remaining judges on a panel when one judge must recuse after the matter has been argued. Inquiries have raised two questions regarding this situation: (1) whether a decision that has been —_——-entered must be-vacated,-and-the-case-submitted to a new panel,.wher-its discovered after entry of the decision that one of the judges who participated in it was disqualified; and (2) whether, af fred but has not reached a decision,.ajudge___ 7 finds that he or she is disqualified, the other judges are also disqualified or may proceed to decide the case? The first question encompasses areas beyond this Committee's authority. Determination of what circumstances may taint a decision already entered is a judicial function, not that of a committee established to advise on ethical standards of the ‘conduct of judges. The Committee does advise that a judge should disclose to the parties the facts bearing on disqualification as soon as those facts are learned, even though that may occur after entry of the decision. The parties may then determine what relief they may seek and a court (without the disqualified judge) will decide the legal consequence. if any, arising from the participation of the disqualified judge in the entered decision. ‘Similar considerations would apply when a judgment is entered in a district court by a judge and itis later learned that the judge was disqualified, ‘The second question, because it concems the appearance of impropriety and Canon 3C of the Code of Conduct for United States Judges, is within the Committee's purview. Canon 3C(1) provides that ‘fal judge shall disquaiity himself or herself in a proceeding in which the judge's impartiality might reasonably be questioned ....” The Commitee is of the opinion that the remaining two judges on the panel are not disqualified merely because they conferred with the disqualified judge. Numerous situations arise in which a judge becomes aware of an important fact and yet must proceed to decide without regard to that fact (e.g., inadmissible evidence in atrial). Those who might believe that the disqualified judge exerted influence on the other two, and those who might believe the disqualified judge would attempt to influence his colleagues on the new panel, are unlikely to be satisfied regardless of what is done, Canon 3C looks to disqualification when the impartiality of the two remaining panel members can “reasonably be questioned.” The Committee believes that no reasonable basis exists for questioning the impartiality of the remaining panel members when the third judge recuses, whether that recusal occurs after oral argument or after conference on the case. The Committee notes that recusal decisions are also governed by the recusal statutes, 28 U.S.C. §§ 455 and 144, and the case law interpreting them. Although the Committee on Codes of Conduct is not authorized to render advisory opinionsCase 1:18-cv-10401-LTS Document 20 Filed 05/21/18 Page 11 of 11. Case: 16-2274 ~ Document: 00117291622 Page: 2 Date Filed: 05/18/2018 Entry ID: 6171206 Guide to Juatciary Policy, Vol. 28, Ch. 2 Page 103 interpreting §§ 455 and 144, Canon 3C of the Code of Conduct for United States Judges ciosely tracks the language of § 455, and the Committee is authorized to provide advice regarding the application of the Code. June 2009