Federal National Mortgage Association v. Gordon ( 2017 )

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15-P-441 Appeals Court
FEDERAL NATIONAL MORTGAGE ASSOCIATION vs. HEATHER GORDON
& another.1
No. 15-P-441.
Suffolk. March 8, 2016. - May 17, 2017.
Present: Hanlon, Sullivan, & Massing, JJ.
Trespass. Real Property, Trespass, Mortgage, Lease. Mortgage,
Foreclosure. Landlord and Tenant, Control of premises.
Housing Court, Jurisdiction. Jurisdiction, Housing Court.
Summary Process. Practice, Civil, Summary judgment,
Summary process.
Civil action commenced in the City of Boston Division of
the Housing Court Department on June 24, 2013.
The case was heard by MaryLou Muirhead, J., on a motion for
summary judgment.
Thomas B. Vawter for the defendants.
Danielle C. Gaudreau (Thomas J. Santolucito also present)
for the plaintiff.
HANLON, J. The defendants in this trespass action, Heather
Gordon and her granddaughter, Kaire Holman, challenge the
1
Kaire Holman.
2
validity of a judgment for possession entered by the Housing
Court in favor of the plaintiff, the Federal National Mortgage
Association (Fannie Mae), on its motion for summary judgment.
Fannie Mae claims ownership, through foreclosure, of the
residential condominium at issue, known as Unit 2 at 7 Valentine
Street, in the Roxbury section of Boston (the property). Gordon
claims that she and Holman occupy the property pursuant to a
lease from Carolyn Grant, who held record title to the
condominium as a joint tenant with Gilbert R. Emery prior to the
foreclosure. The lease on which Gordon and Holman rely,
however, is dated after both (i) the date of the foreclosure,
and (ii) the date on which Fannie Mae began a summary process
action against Emery, Grant, and another occupant2 to obtain
possession of the property.
When Fannie Mae learned that Gordon and others had moved
into the property as ostensible lessees, Fannie Mae brought a
new action (separate from the summary process case) for common
law trespass, which is the case now before us.3
After review, we reverse the final judgment, holding as
follows: (i) the Housing Court has jurisdiction pursuant to
2
Jeffrey Grant. Hereinafter, we refer to Caroline Grant as
"Grant," and Caroline and Jeffrey Grant collectively as "the
Grants."
3
Hereinafter, we refer to the purported tenants,
individually and collectively, as "Gordon."
3
G. L. c. 185C, § 3, to hear trespass claims; (ii) the teaching
of Attorney Gen. v. Dime Sav. Bank of N.Y., FSB, 413 Mass. 284,
288 (1992) (Dime Savings), with respect to whether G. L. c. 184,
§ 18, bars trespass actions by postforeclosure owners against
tenants with actual possession, applies with equal force in the
circumstances of this case; and (iii) the summary judgment
record does not establish Fannie Mae's actual or constructive
possession of the subject property, a prerequisite for a
trespass claim.
Background. The following facts are taken from the record
and, essentially, are undisputed. In 2007, Emery granted a
mortgage on the property to Wells Fargo Bank, N.A. (Wells Fargo)
to secure a loan. On or about August 15, 2007, Emery deeded his
interest in the property to himself and Grant as joint tenants
with the right of survivorship.
By July, 2010, Emery was in arrears on his loan payments.
Acting pursuant to the statutory power of sale contained in its
mortgage, Wells Fargo4 conducted a foreclosure auction on August
27, 2010, at which it submitted the high bid. Thereafter, Wells
Fargo executed an assignment of its bid to Fannie Mae, and
executed and recorded a foreclosure deed of the property to
Fannie Mae. Shortly thereafter, Fannie Mae filed a summary
4
Wells Fargo is not a party to this case.
4
process action in Boston Housing Court against Emery and the
Grants.
Almost two years later, on July 27, 2012, Grant and Gordon
executed a document entitled "Residential Lease." The purported
lease names Gordon as "Tenant" and Grant as "Landlord" and
provides for a three-year rental term beginning on August 1,
2012, and concluding on August 1, 2015, at a rental rate of
$1,300 per month.5 It appears from the record that Gordon began
paying rent to Grant in July, 2012.6 Gordon's affidavit states
that the March and April, 2013, rent payments were discounted
because Grant was "behind thousands of dollars in her utility
bills," which had to be paid before the utilities could be
placed in Gordon's name.7 Gordon's affidavit further states that
she was to move into the unit in August of 2012, but that there
was a delay in Grant's moving out, and Gordon did not actually
5
The lease also lists three children, including Holman, as
having Grant's express permission to occupy the unit as part of
the tenancy.
6
Specifically, Gordon's uncontroverted affidavit states
that she paid a total of $3,900 to Grant from July through
September, 2012, for first and last month's rent and a security
deposit; $1,300 on October 5, 2012, for rent for an unspecified
month; $1,300 in rent for January and February, 2013; and $600
"in rent in March and April 2013."
7
The record is silent as to whether Grant accepted rent
after April, 2013; however, it is undisputed that she accepted
rent from Gordon for several months after Grant moved out of the
property in December, 2012 (see note 6, supra).
5
move in until December 16, 2012, the same day Grant moved to
Florida.
The Housing Court docket indicates that, on or about
October 1, 2012 -- after execution of the lease on which Gordon
relies, but before Grant left the property -- one or more
parties to Fannie Mae's summary process action reported that
matter settled, and the Housing Court issued a sixty-day nisi
order. The record includes an unsigned "Agreement for Judgment"
for possession stating that Emery and the Grants would move out
of the property by December 15, 2012, and that no other
occupants would reside therein. However, after the report of a
settlement to the Housing Court, a disagreement apparently arose
between Fannie Mae and the defendants in the summary process
action about whether they had actually perfected a deal.
Consequently, a stipulation of dismissal was never filed in that
matter, and the summary process action retained "active" status
on the Housing Court's docket throughout the course of the
proceedings in the present case.8
8
Although the nisi order in the summary process action
stated that all the claims and counterclaims in the action would
be dismissed sixty days from the date of the order "in the event
the parties fail to file a stipulation of dismissal," the docket
of that case, reproduced in the record appendix, does not show
that judgment for possession for Fannie Mae was ever entered.
Rather, the docket shows active litigation in the matter at
least into May of 2013.
6
Meanwhile, on December 16, 2012, Grant moved out of the
property and, on that same date, Gordon moved in.9 At some time
thereafter, Fannie Mae learned that Gordon had moved in to the
property, and, on or about June 24, 2013, Fannie Mae began the
instant action in the Boston Housing Court, filing a complaint
against Gordon in two counts, for trespass and injunctive
relief, respectively. After amending the complaint to name
other occupants as defendants, Fannie Mae then brought a motion
for summary judgment on June 27, 2014.
The motion judge allowed the motion on or about October 21,
2014. In so doing, the judge focused on the question whether
Fannie Mae had obtained possession of the property, a
prerequisite for maintaining a common-law trespass action. See
Dime Savings, 413 Mass. at 288 ("An action of trespass, being a
possessory action, cannot be maintained, unless the plaintiff
had the actual or constructive possession of the property
trespassed upon at the time of the trespass"). The judge
determined that Fannie Mae's constructive possession of the
property was established during the period of time, however
short, between when Grant moved out of the property and Gordon
moved in.
9
There appears to be some dispute about this timing
reflected in the record, but, for purposes of this appeal, we
view the facts in the light most favorable to the nonmoving
party, Gordon.
7
The judge ordered that "judgment . . . enter for the
Plaintiff as prayed for in the complaint." In a further order
dated December 31, 2014, she dismissed Fannie Mae's claim for
money damages and ordered that "final judgment for possession
shall enter and the execution shall issue in the usual course."10
Gordon appeals, arguing that the Housing Court's judgment
should be vacated on the following grounds: (i) the Housing
Court lacks subject matter jurisdiction pursuant to G. L.
c. 185C, § 3, over a common-law trespass claim; (ii) a trespass
claim is unavailable to Fannie Mae here because it is barred by
G. L. c. 184, § 18; and (iii) Fannie Mae failed substantively to
demonstrate its entitlement to judgment because it did not show
that it ever obtained the requisite actual or constructive
possession of the property necessary to prevail on a trespass
claim.
Discussion. 1. Jurisdiction of the Housing Court over
trespass actions. We first consider the defendants' claim that
the Housing Court is without subject matter jurisdiction to hear
Fannie Mae's trespass claim. Although, as Fannie Mae correctly
observes, the subject matter jurisdiction of the Housing Court
10
The Housing Court's final judgment entered on January 7,
2015. Notwithstanding that this case was not commenced or
treated as a summary process action, the judgment issued by the
court is entitled "Judgment of Summary Process for Plaintiff."
The docket reflects that execution issued as of January 20,
2015, but no copy of the execution appears in the record.
8
to hear its trespass claim was not raised by the defendants in
the proceedings below, a lack of subject matter jurisdiction
cannot be waived and must be considered by the court at any time
-- even on appeal, and even sua sponte.11 See Cohen v. Cohen,
470 Mass. 708, 713 (2015); Abate v. Fremont Inv. & Loan, 470
Mass. 821, 828 (2015). See also Chestnut-Adams Ltd. Partnership
v. Bricklayers & Masons Trust Funds of Boston, 415 Mass. 87, 90
(1993); Worcester Heritage Soc., Inc. v. Trussell, 31 Mass. App.
Ct. 343, 347 n.3 (1991) ("Although neither party raises any
question concerning the jurisdiction of the Housing Court, we
have considered the question, as we must").
The Housing Court's general subject matter jurisdiction is
described in G. L. c. 185C, § 3, which has been called
"imprecise and more than a little ungainly." Murphy v. Miller,
75 Mass. App. Ct. 210, 214 (2009). The statute was inserted
into the General Laws by St. 1978, c. 478, § 92, and the Housing
Court's jurisdictional reach was greatly expanded through a
series of amendments, beginning with St. 1979, c. 72, § 3. See
Tedford v. Massachusetts Hous. Fin. Agency, 390 Mass. 688, 693
n.7 (1984); Patry v. Liberty Mobilhome Sales, Inc., 15 Mass.
App. Ct. 701, 704-705 (1983). Nonetheless, the Housing Court
11
Fannie Mae acknowledges that the claim of a lack of
subject matter jurisdiction may be raised for the first time on
appeal.
9
"remains a court of limited jurisdiction with its [primary]
expertise in the area of housing." LeBlanc v. Sherwin Williams
Co., 406 Mass. 888, 897 (1990).
In its current form, the Housing Court's jurisdiction
includes matters brought "under the provisions of common law and
of equity and any other general or special law, ordinance, by-
law, rule or regulation as is concerned directly or indirectly
with the health, safety, or welfare, of any occupant of any
place used, or intended for use, as a place of human habitation
and the possession, condition, or use of any particular housing
accommodations or household goods or services situated therein
or furnished in connection there with." G. L. c. 185C, § 3, as
appearing in St. 1987, c. 755, § 3.
The Housing Court also has jurisdiction over "all housing
problems, including all contract and tort actions which affect
the health, safety and welfare of the occupants or owners
thereof, arising within and affecting residents in the city of
Boston, in the case of that division, . . . and shall also have
jurisdiction in equity, concurrent with the divisions of the
district court department, the divisions of the probate and
family court department, the superior court department, the
appeals court, and the supreme judicial court, of all cases and
matters so arising." Ibid.
10
The defendants argue that Fannie Mae's case is not
concerned with housing, but rather with the question whether
they are trespassers on the property, and, thus, the case falls
outside the jurisdiction of the Housing Court. We disagree.
The Housing Court's jurisdiction broadly encompasses "all
contract and tort actions which affect the health, safety and
welfare of the occupants or owners thereof." G. L. c. 185C,
§ 3. Although there appears to be no appellate authority for
the specific proposition that this language includes trespass
claims concerning residential real estate (and the parties have
cited none), we have no doubt that a trespass on residential
land would typically affect the "health, safety and welfare of
the occupants or owners thereof." G. L. c. 185C, § 3. The fact
that the Housing Court is particularly concerned with claims
regarding the physical condition of housing, see Ryan v. Kehoe,
408 Mass. 636, 640 (1990); Murphy, 75 Mass. App. Ct. at 215,
does not limit the scope of matters that could affect the
health, safety, and welfare of owners and occupants to only
those concerning the habitability or safety of the physical
premises. The presence of trespassers in residential housing
will, in many cases, affect the health, safety, and welfare of
an owner or occupant. As we are satisfied that the Housing
Court has jurisdiction, we turn to the question whether an
11
action for trespass is available in the circumstances of this
case.
2. Whether an action against Gordon for trespass was
available to Fannie Mae. Relying on Dime Savings, supra, Gordon
argues that G. L. c. 184, § 18, bars Fannie Mae's common-law
trespass claim, and requires that the Housing Court's judgment
for possession be vacated. In her view, Fannie Mae's only
remedy to evict her is through summary process.12
In Dime Savings, the Attorney General brought an action for
declaratory and injunctive relief against the Dime Savings Bank
of New York, asking the court to enjoin the bank from bringing
"actions in trespass against foreclosed mortgagors and tenants
holding over after notice to quit" and from seeking "to eject
holdover mortgagors and tenants from the mortgaged properties."
413 Mass. at 284-285. The court concluded that "the procedure
employed by Dime in [those] cases violate[d] G. L. c. 184, § 18,
12
The defendants did not raise in the Housing Court their
argument that Fannie Mae's trespass action is foreclosed
pursuant to G. L. c. 184, § 18. In Dime Savings, the parties
both treated this question as one of "subject matter
jurisdiction," and the Supreme Judicial Court had no reason to
second-guess that assumption. See Dime Savings, 413 Mass. at
287. See also Commonwealth v. DeJesus, 440 Mass. 147, 151
(2003) (questions of subject matter jurisdiction can be raised
at any time and are not waived even when not argued below). In
the exercise of our discretion, we shall reach Gordon's
argument, as a question of important public interest, even
though it may have otherwise been waived. See Pryor v. Holiday
Inns, Inc., 401 Mass. 506, 509-510 (1988); Slawsby v. Slawsby,
33 Mass. App. Ct. 465, 469-470 (1992).
12
[and] therefore remand[ed] the matter to the county court for
entry of a declaration that a mortgagee who forecloses on real
property by sale may not bring a trespass action against a
holdover tenant or mortgagor in actual possession of the
foreclosed premises." Id. at 285.
General Laws c. 184, § 18, as amended by St. 1973, c. 778,
§ 1, provides that "[n]o person shall attempt to recover
possession of land or tenements in any manner other than through
an action brought pursuant to chapter two hundred and thirty-
nine or such other proceedings authorized by law." In Dime
Savings the Supreme Judicial Court determined that a trespass
action is not available under the statute's provision for "such
other proceedings authorized by law," to a purchaser at a
foreclosure sale seeking to gain possession from a mortgagor or
its tenants in actual possession of the premises and holding
over from before the foreclosure. See Dime Savings, 413 Mass.
at 285. See also Deutsche Bank Natl. Trust Co. v. Gabriel, 81
Mass. App. Ct. 564, 565-566 (2012) ("Deutsche Bank, having
acquired the property after a foreclosure sale, was both
required and entitled to use summary process, G. L. c. 239, § 1,
to recover possession from the defendants, who continued to
occupy the premises after the foreclosure. . . . Dime
Sav[ings], 413 Mass. [at] 291").
13
Fannie Mae argues, however, that neither G. L. c. 184,
§ 18, nor the summary process statute, G. L. c. 239, bars its
trespass claim. The Supreme Judicial Court addressed this issue
in Dime Savings. In holding that the bank's trespass actions
should be enjoined pursuant to G. L. c. 184, § 18, the court
specifically noted that, "[i]n each of the cases in question,
the property was occupied at the time of the foreclosure either
by the mortgagor or a tenant of the mortgagor." Dime Savings,
413 Mass. at 286. Moreover, "[a]ll such occupants initially
entered the respective properties lawfully." Ibid.
There is no dispute here that Grant, as a joint tenant with
Emery, the mortgagor, occupied the property at the time of the
foreclosure. Thus, the initial question presented here is
whether Dime Savings can be distinguished from the instant case
on the ground that Gordon (unlike the tenants in Dime Savings)
did not initially enter the subject property "lawfully." See
Dilbert v. Hanover Ins. Co., 63 Mass. App. Ct. 327, 333 (2005)
("trespass equates to wrongful entry"). We are persuaded that
the holding of Dime Savings also applies on the facts of this
case.
In Dime Savings, the court determined that "[t]here is
. . . no basis, on this record, for distinguishing holdover
tenants of mortgagors from holdover mortgagors." Id. at 285
 14
n.4.13 That reasoning is equally applicable here. We see no
principled basis for distinguishing Gordon from the tenants in
Dime Savings. Moreover, to treat Gordon's status in relation to
the property as somehow lesser than or different from that held
by the holdover tenants in Dime Savings could only be justified
by ascribing to Gordon some actual or constructive knowledge
about the legal status of Grant's title. In other words, to
treat a purported tenant such as Gordon differently from the
bona fide tenants in Dime Savings14 could only be justified by
applying some expectation that residential renters will take
steps to determine the validity of their landlord's title prior
to entering a lease. We know of no basis for any such
expectation.
Accordingly, we decline to adopt a rule that would
distinguish this case from Dime Savings based solely on the
13
In addition, in Dime Savings, the Supreme Judicial Court
cited approvingly the Attorney General's argument that "unlike
the situation of the holdover mortgagors, there is nothing in
the stipulation of facts to suggest that the holdover tenants
were responsible for the defaults." 413 Mass. at 285 n.4. This
point is also applicable here. Like the defendants in Dime
Savings, Gordon was not responsible for the defaults on loan
obligations that led to the foreclosure.
14
We use the term "purported" because the question whether
Fannie Mae obtained good title as a result of the foreclosure
sale and assignment has never been reduced to a judgment against
Grant. See note 8, supra. In contrast, in Dime Savings there
was no question presented as to the validity of the occupants'
tenancies. 413 Mass. at 286.
15
state of the purported landlord's title, or would deem a
purported lessee's possession of premises to be "unlawful" in
all circumstances where the purported landlord's title is later
adjudicated to be lacking. Here, Grant was lawfully occupying
the subject property while defending against Fannie Mae's
summary process action at the time she entered the purported
lease with Gordon. Like the tenants in Dime Savings, Gordon was
never a true stranger to the property. Instead, at a minimum,
she entered at the invitation of a person with actual
possession, who was defending an active eviction case that had
yet to conclude with the entry of a judgment for possession for
any other party. We note that this situation is easily
distinguishable from a case in which a person makes a forced
entry into a vacant property and, without permission from any
purported owner, takes up residence therein.
We conclude that the Supreme Judicial Court's declaration
in Dime Savings that a postforeclosure owner may not bring a
trespass action against a holdover tenant who is in actual
possession of the premises applies with equal force here, where
the purported tenants claim to have leasehold rights arising
after a foreclosure, but before a final judgment for possession
has entered against the landlord. That, however, does not end
our inquiry, as, under Dime Savings, supra, and its construction
of G. L. c. 184, § 18, it was open to Fannie Mae to maintain the
16
trespass action if it could demonstrate that it had obtained at
least constructive possession of the premises before Gordon
entered.
3. Whether Fannie Mae obtained constructive possession.
The motion judge reasoned that, because the foreclosure was
effective, Fannie Mae and not Grant held title to the property
on the date Grant moved out. As a result, the judge concluded
that Fannie Mae obtained constructive possession at the moment
Grant vacated the property, making Gordon a trespasser. We
disagree.15 In our view, Fannie Mae did not establish its
constructive possession on the summary judgment record before
us, and Dime Savings governs this point as well.
Some older cases concerning the tort of trespass assert
that a plaintiff's "actual" possession of the subject land prior
to the trespass is an elemental requirement. See New England
Box Co. v. C & R Constr. Co., 313 Mass. 696, 707 (1943), quoting
from Perry v. Weeks, 137 Mass. 584, 587 (1884) ("To support an
action of trespass . . . , it is necessary to prove the actual
possession of the plaintiff, and an illegal entry by the
15
Assuming a lawful foreclosure (a question we do not
decide, see note 14, supra), Grant's ownership interest in the
property was terminated and she became a tenant at sufferance,
with no legal interest in the property. See Margosian v.
Markarian, 288 Mass. 197, 199 (1934). If she held no legal
interest in the property, she could not validly convey an
interest, by lease or otherwise, to anyone else. However, that
alone does not extinguish Grant's possessory interest, a
necessary element in Fannie Mae's trespass claim.
17
defendant"). It is now established, however, that, for the
purposes of a trespass claim, "possession does not require that
the plaintiff physically occupy the property at the time of the
alleged trespass," and a plaintiff with "constructive
possession" may maintain a trespass claim "against other parties
without [actual] possession at the time of [their] entry."
Dilbert v. Hanover Ins. Co., 63 Mass. App. Ct. at 334. See Dime
Savings, 413 Mass. at 288, quoting from Emerson v. Thompson, 2
Pick. 473, 484 (1824).
In Dime Savings, as here, neither party contended that the
bank had actual possession of the subject property. 413 Mass.
at 288. The court considered (and ultimately adopted) the view
from several other jurisdictions that "for the purposes of a
trespass action, there can be no constructive possession by an
owner of property actually possessed by another." Id. at 288-
289. Accordingly, here, Fannie Mae's claim required proof that
there was a period of time, however brief, when no other person
was in actual possession.
For summary judgment purposes in this case, viewing the
facts in the light most favorable to the nonmoving party, Grant
moved out and Gordon moved into the premises on the same day.
See note 9, supra. The motion judge held, as a matter of law,
that this constituted a brief period of vacancy, which was
sufficient to establish Fannie Mae's constructive possession.
18
We disagree. Because we are satisfied that, on the summary
judgment record presented, Grant's "actual" possession did not
necessarily end at the moment she moved out, we reverse. It is
undisputed that Grant executed a lease on or about July 27,
2012, which, on its face, entitled Gordon to occupy the premises
for a term of three years, beginning on August 1, 2012. Grant's
execution of the lease and her surrender of the purportedly
leased premises to Gordon pursuant to that lease do not indicate
Grant's surrender of possession in relation to others who might
claim title. On the contrary, these facts suggest the opposite.
Cf. Shoer v. Daffe, 337 Mass. 420, 424 (1958) (letting of
premises by adverse possessor, and subsequent possession by
succession of tenants under purported leases, did not interrupt
adverse possessor's claim as against the record title holder for
purposes of the twenty-year prescriptive period). Nor does a
gap in time between when Grant vacated and Gordon entered the
premises signify that Grant surrendered her actual possession.
Cf. ibid., quoting from Wishart v. McKnight, 184 Mass. 283, 285-
286 (1903) ("To warrant a finding that there was a continuity of
possession, we do not deem it necessary to show by express
testimony that the new occupant was personally present upon the
premises before the former occupant departed, and that there was
a formal manual transfer of possession. . . . There is a fair
inference that . . . the[] possession [of the tenant and the
19
owner] is continuous, or rather, that the possession of the
owner is continuous, although the two do not meet personally
upon the premises at the end of the term").
The question whether Grant surrendered possession of the
property "is to be determined by the intent as expressed by
words and acts of all the parties in the light of the
circumstances." Net Realty Holding Trust v. Giannini, 13 Mass.
App. Ct. 273, 278 (1982), quoting from Tudor Press, Inc. v.
University Distrib. Co., 292 Mass. 339, 341 (1935). Indicative
of Grant's continuing possession is Gordon's uncontroverted
affidavit, which states that, although Grant moved out on
December 16, 2012, Grant's name remained on certain utilities
for an unspecified period of time after that date, and Gordon
paid rent to Grant for several months after that date. Contrast
Caruso v. Shelit, 282 Mass. 196, 199 (1933) (surrender by
operation of law). The record is silent as to whether Grant
acted in any other way that would suggest that she intended to
maintain possession of the property (as against anyone but her
tenant) after she moved out, such as by making repairs, paying
taxes, or paying utility bills. It is undisputed, however, that
the summary process case against Grant remained pending with no
adjudication of the title as of the date Grant left the property
and Gordon moved in. Furthermore, as we have noted, the docket
20
in that case continues to reflect active litigation as late as
May, 2013.
We are satisfied that, on this record, and taking the facts
in the light most favorable to the nonmoving party, Fannie Mae
has not demonstrated a gap in Grant's possession such that
Fannie Mae gained constructive possession of the premises.
Thus, under Dime Savings, the summary judgment in favor of
Fannie Mae cannot stand.
Judgment reversed.