COMMONWEALTH OF MASSACHUSETTS

COURT OF APPEALS

NO. 2019-P-0179

STEPHEN D. NIMS & another

Plaintiffs-Appellants,

v.

THE BANK OF NEW YORK MELLON & another

Defendants-Appellees.

ON APPEAL FROM A JUDGMENT FROM

THE WORCESTER COUNTY SUPERIOR COURT

BRIEF OF APPELLEE THE BANK OF NEW YORK MELLON

Edward P. O’Leary, BBO #551932

HARMON LAW OFFICES, P.C.
150 California Street
Newton, MA 02458
Tel. (617) 558-6109
Fax (617) 244-7304
eoleary@harmonlaw.com
Dated: July 16, 2019
 CORPORATE DISCLOSURE STATEMENT

Pursuant to Supreme Judicial Court Rule 1:21, Defendant-Appellee, Bank of

New York Mellon as Trustee for the Certificateholders of CWALT Inc.,

Alternative Loan Trust 2005-53T2 (“BNYM”) submits the following as its

corporate disclosure statement:

1. The filing party, a nongovernmental corporation, identifies The Bank

of New York Mellon Corporation as the parent corporation of BNYM; and

2. The Bank of New York Mellon Corporation is a publicly held

company and no corporation owns 10% or more of its stock.

Respectfully submitted,

/s/ Edward P. O’Leary _

Edward P. O’Leary

2
 TABLE OF CONTENTS

TABLE OF AUTHORITIES………………………………………….....................2

STATEMENT OF ISSUES………………………………………………………...6

STATEMENT OF THE CASE…………………………………………………….6

STATEMENT OF FACTS………………………………………………………....7

SUMMARY OF THE ARGUMENT……………………………………………....9

ARGUMENT……………………………………………………………………...10

A. Standard of Review…………………………………………………...9

B. The trial court correctly ruled that BNYM

held plaintiffs’-appellants’ note and
mortgage and therefore had standing
to foreclose…………………………………………… 10

C. The Nimses lack standing to raise a defense

based on an alleged PSA violation, and in any
event there are no missing assignments……………….11

CONCLUSION…………………………………………………………….……..17

RULE 16K CERTIFICATE………………………………………………………18

CERTIFICATE OF SERVICE……………………………………………………19

ADDENDUM……………………………………………………………………..20

3
 TABLE OF AUTHORITIES

Page(s)
Cases

Bank of New York Mellon Corp. v. Wain,

85 Mass.App.Ct. 498 (2014)………….…………..….…………………….….…12

Boulanger v. Wells Fargo Bank, N.A,

88 Mass.App.Ct.1108 (2015)…………..…………………………….…..……….15

Butler v. Deutsche Bank Trust Co. Americas,

748 F.3d 28 (1st Cir. 2014)..……….....…..…………..….…….…..........13,14,15,16

Culhane v. Aurora Loan Servs. of Neb.,

708 F.3d 282 (1st Cir. 2013)….…….…….….….….…...….…….….….……..12,14

Curtis v. Herb Chambers i-95, Inc.,

458 Mass. 674 (2011)…….….….….….…………..……..……..………..…….….9

Deutsche Bank Nat. Trust Co. v. Diaz,

65 N.E. 2d 672 (Table) (Mass.App.Ct. 2017)…….…...….……..…….….............16

Dyer v. Wells Fargo Bank, N.A.,

841 F.3d 550 (1st Cir. 2016)……………….….….……….…..….….…….….….16

Eaton v. Fed. Nat. Mortgage Ass’n,

462 Mass. 569 (2012)…..….…….…….….….….….….….….…………….…10,14

Golchin v. Liberty Mut. Ins. Co.,

460 Mass. 222 (2011).….….….….….….….……….….…..….…..….….….…..…9

Harhen v. Brown,
431 Mass. 838 (2000).….….…..….….….….….….…….…….…….….….………9

Hayden v. HSBC Bank USA, National Association,

867 F.3d 222 (1st Cir. 2017).….….….….….….….….….….….….….….…….…16

Hully v. Deutsche Bank Nat. Trust Co., 89 Mass.App.Ct. 1112 (2016) (Rule
1:28)..….….….….….….….….….….….….….….….….….….….….….….…….15

4
In Re Sheedy,
801 F.3d 12 (1st Cir. 2015)……..…..…….……………………………………….16

O’Neil v. Bank of New York Mellon,

90 Mass.App.Ct. 1121 (2016).……..………………...…….…….….….………...16

Samuelsson v. HSBC Bank USA, N.A. ex rel. Ace Sec. Corp.,

729 F. App’x. 13 (1st Cir. 2018) …………………………………………………16

Strawbridge v. Bank of New York Mellon,

91 Mass.App.Ct. 827 (2017)…….….….….…………………………………..… 16

Statutes

M.G.L. c. 244, § 14……….….………………………………………………….….6

M.G.L. c. 260, § 33..….……………………………………...….….…...………….6

Other Authorities

Mass.R.Civ.P. Rule 12(b)(6)….….….….….….….….………...….….….….….9,11

5
 STATEMENT OF ISSUES

1. Whether the trial court correctly ruled that the BNYM held the

plaintiffs’-appellants’ note and mortgage and therefore had standing to foreclose.

2. Whether the trial court correctly ruled that the plaintiffs-appellants

lacked standing to raise a defense based on an alleged violation of the pooling and

servicing agreement.

3. Whether the trial court correctly dismissed the complaint against

BNYM for failure to state a claim upon which relief can be granted.

STATEMENT OF CASE

The appeal arises from a mortgage given by the plaintiffs-appellants Stephen

D. Nims and Vickie L. Nims (“the Nimses”) to Omega Mortgage Corp. (“Omega”)

on July 6, 2005. (RA. 58-75).1 The Nimses gave Omega the mortgage to secure a

note. (RA. 51-53). After they defaulted on the mortgage, the Nimses filed suit

against BNYM alleging BNYM failed to comply with M.G.L. c. 244, § 14 (Count

I) and M.G.L. c. 260, § 33 (Count III) in foreclosing on their mortgage. (RA. 31-

47). The Nimses requested that the court issue a preliminary injunction preventing

the foreclosure sale. (RA. 13-30). After conducting a hearing, the court denied the

injunction on the ground that the Nimses had failed to demonstrate that they were

1
References the record appendix herein are identified as “RA” followed by the
corresponding Bates number, and references to the to the Addendum attached to
the Nimses’ Opening brief are identified as “Add.” followed by the Bates number.
6
likely to succeed on the merits (RA. 490, 492-497). The Nimses then sought

reconsideration of that order, which the court denied. (RA. 519).

Thereafter, BNYM filed a motion to dismiss the complaint (RA. 520-522),

and the court held a hearing on that motion, (RA. 568-605), and issued an order

dismissing all claims against BNYM. (Add. 1-5). The court held that the Nimses

lacked standing to challenge the sufficiency of any assignments that resulted in

BNYM as the holder of the note and mortgage at the time of the foreclosure.

(Add. 1-5). The court also ruled that the Nimses’ claim under the obsolete

mortgage statue lacked merit because, inter alia, the mortgage would not become

obsolete until 2040, assuming it was not extended. (Add. 1-5).

Inasmuch as the Nimses lack standing to challenge the assignments of

mortgage, and the mortgage is not obsolete, the Court should affirm the trial

court’s order dismissing all claims against BNYM because they fail to state a claim

upon which relief can be granted.

STATEMENT OF FACTS

The Nimses executed a promissory note on July 6, 2005 in favor of Omega

in the amount of $375,000.00. (RA. 51-53). To secure repayment under the

promissory note the Nimses gave Omega a mortgage on their property located at

402 Ashby Road in Ashburnham, Massachusetts (“Property”). (RA. 58-75). The

mortgage identified Mortgage Electronic Registration Systems, Inc. (“MERS”) as

7
the nominee for Omega, and also as a mortgagee. MERS assigned the Nimses’

mortgage to BNYM in October, 2011, and BNYM also became the holder of the

Note. (RA. 79). The Nimses defaulted on their mortgage, and in July, 2012 they

filed for bankruptcy. (RA. 93-96; 106). They were discharged from personal

liability on their debts by the bankruptcy court in October, 2102, and the

bankruptcy case was closed. (RA. 93-96). In June, 2014, the Nimses received a

document entitled 150 Day Right to Cure Your Mortgage Default. (RA. 457-459).

They did not cure the default. (RA. 461-462). BNYM sent the Nimses a notice of

acceleration of their defaulted debt in May, 2015. (RA. 463-464). In June, 2017 the

loan servicer Shellpoint Mortgage Servicing (“Shellpoint”) executed an affidavit

under M.G.L. c. 244, § 35B certifying its compliance with that statute. (RA. 466-

467). BNYM certified through Shellpoint in September, 2017 that it held the

Nimses note and mortgage, and that there had been only one assignment of the

mortgage, that being the assignment from MERS to BNYM. (RA. 469).

The Nimses were given notice in September, 2017 that the Property would

be sold at a foreclosure auction on October 23, 2017 pursuant to the power of sale

provision in the mortgage. (RA. 49). The Nimses filed the superior court action

on October 18, 2017 against BNYM and defendant-appellee Bank of America,

N.A. (“BANA”) (RA. 31-428), and they also sought a preliminary injunction to

stop the foreclosure sale. (RA. 13-30). The court denied the injunction on

8
November 13, 2017 (RA. 490, 492-497), denied the Nimses’ request for

reconsideration of that order on December 13, 2019 (RA. 519), and dismissed the

claims against BNYM and BANA on September 4, 2018 (A. 1-10). Having

dismissed all claims against BNYM and BANA, on September 12, 2018 the

Superior Court entered judgment against the Nimses on all counts of the complaint.

(RA. 620). This appeal ensured.

SUMMARY OF ARGUMENT

The Court should affirm the trial court’s order dismissing the complaint

under Rule 12(b)(6) of the Massachusetts Rules of Civil Procedure because the

Nimses have failed to state a claim against BNYM upon which relief can be

granted. BNYM holds the Nimses’ note and mortgage by assignment and therefore

has standing to foreclose. The Nimses were not parties to the pooling and servicing

agreement (“PSA”), and therefore they lack standing to assert a claim under that

agreement.

STANDARD OF REVIEW

This Court reviews a trial court’s order dismissing a complaint de novo.

Harhen v. Brown, 431 Mass. 838, 845 (2000). On appeal, the court must accept as

true all facts alleged in the complaint. Golchin v. Liberty Mut. Ins. Co., 460 Mass.

222, 223 (2011). All reasonable inferences from the facts alleged in the complaint

9
should be drawn in the plaintiff’s favor. Curtis v. Herb Chambers i-95, Inc., 458

Mass. 674, 676 (2011).

ARGUMENT

I. THE TRIAL COURT CORRECTLY RULED THAT BNYM HELD

PLAINTIFFS’-APPELLANTS’ NOTE AND MORTGAGE AND
THEREFORE HAD STANDING TO FORECLOSE.

The record before the Court establishes that the Nimses gave a note to a

lender and a mortgage to MERS as nominee for the lender; that the note has been

endorsed to the BNYM; that MERS assigned the mortgage to BNYM; that the

assignment was timely recorded; that BNYM held the note on the date of the

foreclosure; and, that BNYM held the mortgage since before the notice of sale was

sent in September, 2017. The record also establishes that BNYM had standing to

foreclose in response to the Nimses’ undisputed default because it holds the note

and the mortgage. Eaton v. Fed. Nat. Mortgage Ass’n, 462 Mass. 569, 571 (2012)

(foreclosing party must be the mortgagee and the note holder or acting on behalf of

the noteholder); U.S. Bank, N.A. v. Ibanez, 458 Mass. 637, 651 (2011) (“the

foreclosing entity must hold the mortgage at the time of the notice and sale in order

accurately to identify itself as the present holder in the notice and sale in order to

have the authority to foreclose under the power of sale”). As the Nimses had no

cognizable claim based on lack of standing to foreclose, the trial court correctly

10
denied their request for an injunction and dismissed their case under Mass.R.Civ.P.

Rule 12(b)(6). The dismissal should be affirmed.

II. THE NIMSES LACK STANDING TO RAISE A DEFENSE

BASED ON AN ALLEGED PSA VIOLATION, AND IN ANY
EVENT THERE ARE NO “MISSING” ASSIGNMENTS.

The history of the mortgage is simple: the Nimses gave a mortgage to MERS

as nominee for the lender, and MERS assigned the mortgage to BNYM.

Undaunted, the Nimses claim, based on references to certain aspects of unverified

lengthy pooling and servicing (“PSA”) documents attached to the complaint, that

about six years ago their mortgage and a pool of thousands of other mortgages

were actually assigned to or should have been assigned to a PSA sponsor and

master servicer, which then did assign them or should have assigned them to a PSA

depositor, which then did assign them or should have assigned them to BNYM.

Therefore, the argument goes, BNYM obtained their mortgage in violation of the

PSA because there were no intermediary assignments along the chain of title, or

MERS had no mortgage to assign directly to BNYM and, either way, BNYM has

no standing to foreclose. This argument fails for at least two reasons.

First, because the Nimses are not a party to the assignment between MERS

and BNYM but are in fact a stranger to that contract, they have no standing to raise

a claim that the assignment of their mortgage to BNYM is voidable. This is

because even a meritorious voidable claim “would not automatically invalidate the

11
title of a foreclosing mortgagee, and accordingly would not render void a

foreclosure sale conducted by the assignee or its successor in interest.” Sullivan v.

Kondaur Capital Corp., 85 Mass. App.Ct. 202, 206 at n. 7 (2104), citing and

following, Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282, 291 (1st Cir.

2013) (holding “only that a mortgagor has standing to challenge a mortgage

assignment as invalid, ineffective, or void (if, say, the assignor had nothing to

assign…”)).

Moreover, in Bank of New York Mellon Corp. v. Wain, 85 Mass.App.Ct. 498

(2014), the Appeals Court, relying on Sullivan and Culhane and the void versus

voidable distinction, held that “where the foreclosing entity has established that it

validly holds the mortgage, a mortgagor in default has no legally cognizable stake

in whether there otherwise might be latent defects in the assignment process.” Id.

at 502.

In 2013 in Culhane, supra, the First Circuit ruled that under Massachusetts

law “a mortgagor has standing to challenge a mortgage assignment as invalid,

ineffective, or void,” but does not have standing to raise “shortcomings in an

assignment that render it merely voidable at the election of one party [to the

assignment] but otherwise effective to pass legal title.” Id. at 291.

About eight months later, in Woods v. Wells Fargo Bank, N.A. as Trustee,

733 F.3d 349 (1st Cir. 2013), the First Circuit relied on Culhane to rule that

12
“claims that merely assert procedural infirmities in the assignment of a mortgage,

such as failure to abide by the terms of a governing trust agreement [i.e., a PSA]

are barred for lack of standing.” Id. at 355.

About six months later, in Butler v. Deutsche Bank Trust Co. Americas, 748

F.3d 28 (1st Cir. 2014), the First Circuit rejected the exact same PSA argument that

plaintiffs’ have raised in this case.

In Butler, the borrower claimed that his mortgage could not be directly

assigned to the foreclosing trustee because the trust’s PSA required that the

mortgage “undergo a series of transfers through three predetermined parties”

before it could be assigned to the trustee. Id. at 34. Butler argued that because the

foreclosing trustee “received the mortgage without its first going through these

required intermediaries,” the trust’s terms were violated and the violation was

“sufficient to render its possession of the mortgage void.” Id.

In affirming dismissal of Butler’s case, the First Circuit rejected the notion

that there were “a number of unaccounted for ‘off record’ transfers of the Butler

mortgage.” Id. at 33, n. 3. The Court noted: “At most… [the] PSA proves that the

trust set forth a specified process for the receipt of mortgage loans. It does not

prove that such assignments indeed occurred and were not accounted for in

Deutsche Bank’s chain of title.” Id. The First Circuit concluded that because

Butler’s claim “only presented facts sufficient to show the assignment was

13
voidable under Massachusetts law, Butler lack[ed] standing to challenge Deutsche

Bank’s possession of the mortgage on this ground.” Id. at 37, citing Culhane and

Woods.

In addition, the First Circuit noted without deciding that under New York

law a trustee’s acts in violation of a trust “may be ratified, and are thus voidable.”

Id. at 37, n.8. Thus, even if Butler’s claim were governed by New York law, she

still lacked standing to raise a “voidable” as opposed to void claim. Id.

Here, as in Butler, nothing in the PSA documents indicates that the Nimses’

mortgage was supposed to be or actually was assigned to anyone before MERS

assigned it to BNYM. Instead, the undisputed sworn record establishes that the

mortgage went directly from MERS to BNYM without any intended or unintended

detours along the way. While the PSA documents reference a pool of mortgage

loans being sold, there is no mention of a pool of assignments being executed.

And, there is nothing wrong with that because in Massachusetts a note can be held

by one party and the mortgage can be held by another, and “the mere transfer of a

mortgage note does not carry with it the mortgage.” Eaton, 462 Mass. at 576. “As a

consequence, in Massachusetts a mortgage and the underlying note can be split.”

Id. This allows for a pool of thousands of mortgage notes to be sold without a

corresponding need to have thousands of mortgage assignments simultaneously

executed and recorded. Therefore, when the Nimses defaulted years after BNYM

14
acquired their mortgage loan, BNYM arranged, as the holder of the note, to have

MERS assign the mortgage to it for foreclosure purposes. The Nimses have no

cognizable claims.

The judgment for BNYM is proper based upon Butler alone. In the five

years since Butler, however, there has been a growing number of appellate

decisions from the Appeals Court and the First Circuit reiterating that defaulting

borrowers cannot avoid foreclosure by claiming that the foreclosing mortgagee

was assigned their mortgage in violation of a PSA. In Re Sheedy, 801 F.3d 12,

25(1st Cir.2015) (mortgagor lacks standing to challenge foreclosure based on claim

that mortgage “was transferred into the Securitized Trust in violation of the PSA,

six years after the trust was created”); Boulanger v. Wells Fargo Bank, N.A, 88

Mass.App.Ct.1108 (2015), 2015 WL 5927967 at *2 (Rule 1:28) (PSA claim made

“with no documentation to support” it properly dismissed because “plaintiffs lack

enforceable rights under the PSA”); Hully v. Deutsche Bank Nat. Trust Co., 89

Mass.App.Ct. 1112 (2016), 2016 WL 983565 at *2 (Rule 1:28) (plaintiffs’ claims

that the assignment of their mortgage “violated the terms of the trust involved in

Deutsche Bank’s pooling and servicing agreement (PSA), and that the assignment

does not comply with New York law” were properly dismissed because plaintiffs

“lack standing” to assert these claims); U.S. Bank Nat. Ass’n v. Bolling, 90

Mass.App.Ct. 154, 157 (2016) (under Massachusetts law (and New York law, see

15
n. 6) a mortgagor does not have “standing to challenge the assignment of a

mortgage that was not made in accordance with the terms of a pooling and

servicing agreement (PSA) to which she was not a party,” because “the defect

rendered the assignment merely voidable rather than void.”); Dyer v. Wells Fargo

Bank, N.A., 841 F.3d 550, 554 (1st Cir. 2016) (argument that assignment of Dyer’s

mortgage to U.S. Bank “in violation of a trust agreement between U.S. Bank and

the investors in the loan…rendered the assignment void” is barred by Butler

because such a violation “is at most voidable at the option of the parties to the trust

agreement, not void as a matter of law”); O’Neil v. Bank of New York Mellon, 90

Mass.App.Ct. 1121 (2016), 2016 WL 7380760 at *1 (Rule 1:28) (claim based on

assignment occurring in violation of the PSA correctly dismissed because

“[w]hatever the merit of this contention” mortgagors have no standing to raise

claims that would render assignment “merely voidable”); Deutsche Bank Nat.

Trust Co. v. Diaz, 65 N.E. 2d 672 (Table) (Mass.App.Ct. 2017), 2017 WL 35481 at

* 1 (Rule 1:28) (“Like the defendant in Bolling, the defendants here do not have

standing to assert the alleged violation of the PSA upon which the judgment

awarding them possession was premised”); Strawbridge v. Bank of New York

Mellon, 91 Mass.App.Ct. 827, 832 (2017) (borrower lacks standing to claim that

assignment of mortgage was voidable under PSA); Hayden v. HSBC Bank USA,

National Association, 867 F.3d 222, 223 (1st Cir. 2017) (borrower lacks standing

16
to challenge assignment based on alleged violation of PSA) and Samuelsson v.

HSBC Bank USA, N.A. ex rel. Ace Sec. Corp., 729 F. App’x. 13, 15 (1st Cir. 2018)

(mortgagors lacked standing, under Massachusetts law, to bring claim that

assignment of their mortgage violated the PSA governing the Trust.)

Inasmuch as it is settled law that a mortgagor lacks standing to assert

cognizable claims alleging violation of a PSA, the Court should affirm the trial

court’s dismissal of the complaint.

CONCLUSION

The Nimses have not set forth plausible facts or arguments that would

require the Court to overturn the trial court’s decisions to deny the Nimses’ motion

for a preliminary injunction and to dismiss their complaint for failure to state a

claim upon which relief can be granted. The trial court correctly determined that

BNYM had the right to foreclose the mortgage and sell the encumbered Property.

The Court should affirm the trial court’s orders.

17
 MASS. R.A.P. 16(K) CERTIFICATE OF COMPLIANCE

I, Edward P. O’Leary, counsel for defendant-appellee BNYM, hereby certify

that the foregoing brief complies with the rules of court that pertain to the filing of

briefs, including, but not limited to:

Mass. R.A.P. 16(a)(6) (pertinent findings or memorandum of decision);

Mass. R.A.P. 16 (e) (references to the record);

Mass. R.A.P. 16 (f) (reproduction of statutes, rules, regulations);

Mass. R.A.P. 16(h) (length of briefs);

Mass. R.A.P. 18 (appendix to the brief); and

Mass. R.A.P. 20 (form of briefs, appendices and other papers).

Using the Word Count feature of Microsoft Word, I certify that there are
there are 3,529 words in the brief of the defendant-appellee Bank of New York
Mellon.

/s/ Edward P. O’Leary _

Edward P. O’Leary

18
 CERTIFICATE OF SERVICE

I, Edward P. O’Leary, hereby certify that on July 16, 2019, a true and

accurate copy of Defendant-Appellee, BNYM’s brief were served via the

Massachusetts Appeals Court’s E-File System or by first class mail, postage pre-

paid to:

Glenn F. Russell, Jr., Esquire

Glenn F. Russell, Jr. & Associates, P.C.
38 Rock Street, Suite 12
Fall River, MA 02720

John H. McCann, Esquire

Schechtman Halperin Savage, LLP
1080 Main Street
Pawtucket, RI 02860

/s/ Edward P. O’Leary _

Edward P. O’Leary

19
ADDENDUM

20
 Table of Contents

Boulanger v. Wells Fargo Bank, N.A,

88 Mass.App.Ct.1108 (2015) (Rule 1:28)….………….….…...…………ADD-001

Deutsche Bank Nat. Trust Co. v. Diaz,

65 N.E. 2d 672 (Table) (Mass.App.Ct. 2017)..….…….………………….ADD-004

Hully v. Deutsche Bank Nat. Trust Co., 89 Mass.App.Ct. 1112 (2016) (Rule
1:28).………….…………………………………….…………………….ADD-006

O’Neil v. Bank of New York Mellon,

90 Mass.App.Ct. 1121 (2016)………..…………….……………………..ADD-009

Samuelsson v. HSBC Bank USA, N.A. ex rel. Ace Sec. Corp.,

729 F. App’x. 13 (1st Cir. 2018). ….………….……………………….…ADD-011

21