Mack v. Wells Fargo Bank, N.A.

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14-P-1963 Appeals Court
DEVENIA MACK vs. WELLS FARGO BANK, N.A., & others.1
No. 14-P-1963.
Worcester. October 5, 2015. - December 1, 2015.
Present: Vuono, Carhart, & Sullivan, JJ.
Practice, Civil, Summary judgment. Real Property, Mortgage.
Mortgage, Foreclosure. Consumer Protection Act, Mortgage
of real estate. Massachusetts Civil Rights Act. Immunity
from suit. Rules of Professional Conduct.
Civil action commenced in the Superior Court Department on
October 15, 2010.
The case was heard by Brian A. Davis, J., on motions for
summary judgment.
Robert M. Mendillo for Harmon Law Offices, P.C., & another.
James L. O'Connor, Jr. (Barry M. Altman with him) for the
plaintiff.
CARHART, J. In this mortgage foreclosure action, the
plaintiff alleges that Harmon Law Offices, P.C. (Harmon), as
counsel for mortgagor Wells Fargo Bank, N.A. (Wells Fargo), and
1
Harmon Law Offices, P.C.; Commonwealth Auction Associates,
Inc.; Mortgage Electronic Registration Systems, Inc. (MERS); and
MERSCORP.
2
Commonwealth Auction Associates, Inc. (Commonwealth), violated
G. L. c. 93A, §§ 2 and 9, and the Massachusetts Civil Rights
Act, G. L. c. 12, § 11I (MCRA), by continuing to advertise and
schedule foreclosure auctions of her property in violation of a
temporary restraining order and preliminary injunction
prohibiting them from doing so.2 Harmon and Commonwealth
(together, the defendants) moved for summary judgment, arguing,
among other things, that the "litigation privilege" immunizes
them from civil liability for their actions. Summary judgment
was denied, and the defendants seek interlocutory review. See
Visnick v. Caulfield, 73 Mass. App. Ct. 809, 811 n.4 (2009).
We agree that Commonwealth's actions are not privileged as
a matter of law and affirm the order denying Commonwealth's
motion for summary judgment. However, because we conclude that
Harmon's actions are protected by the litigation privilege, we
reverse the denial of Harmon's motion for summary judgment and
remand for the entry of summary judgment in Harmon's favor.
Background. The following material facts are undisputed.
On May 28, 2010, Harmon notified the plaintiff that it had been
retained by Wells Fargo to foreclose on her mortgage. On
September 10, 2010, Harmon sent the plaintiff notice pursuant to
2
By stipulation, Wells Fargo was dismissed from the action
with prejudice. A motion to dismiss by MERS and MERSCORP was
allowed. Wells Fargo, MERS, and MERSCORP are not parties to
this appeal.
3
G. L. c. 244, §§ 14 and 17B, of Wells Fargo's intent to
foreclose on the mortgage and to collect from her any
deficiency. The notice also advised the plaintiff that a
mortgage foreclosure sale of her property would take place on
October 18, 2010. On October 13, 2010, the plaintiff's attorney
wrote to Harmon and challenged Wells Fargo's standing to
foreclose. The plaintiff's attorney requested a postponement of
the scheduled foreclosure auction and stated that, "[i]n the
event [he did] not receive written confirmation of a
postponement from [Harmon] by 4:00 P.M. on October 14, 2010, [he
would] seek a temporary restraining order in a court of
competent jurisdiction."
On October 15, 2010, the plaintiff filed a wrongful
foreclosure suit against Wells Fargo. She applied for a
preliminary injunction and was granted a temporary restraining
order (TRO), which stated:
"The Defendant Wells Fargo Bank, N.A., together with its
agents, attorneys and others acting in its behalf are
hereby ordered and temporarily restrained from foreclosing,
advertising for sale or otherwise transferring the real
estate of [the plaintiff] located at 25 Nichols Street,
Westminster, Massachusetts."
The same day, Wells Fargo postponed the scheduled foreclosure
auction until November 1, 2010, and Harmon received actual
notice of the TRO.
4
Harmon routinely hires Commonwealth, with which it shares a
common address and mutual officers, to conduct foreclosure
auctions for Harmon's clients. From October 15 through 18,
2010, Commonwealth continued to list the plaintiff's property on
its foreclosure auction Web site. However, at Harmon's
direction, it changed the status of the auction to "postponed."
On October 18, 2010, a Commonwealth agent appeared at the
property to publicly proclaim postponement of the sale to
November 1, 2010. On October 20, 2010, in response to a demand
from the plaintiff's attorney, Harmon told Commonwealth to
remove the plaintiff's property from its auction listing Web
site.
On October 28, 2010, after a hearing, a judge in the
Superior Court granted the plaintiff's request for a preliminary
injunction. An order entered enjoining and restraining Wells
Fargo, "its agents, servants, attorneys and deputies . . . from
foreclosing on the property owned by the plaintiff." The next
day, Harmon sent the plaintiff a letter "to inform [her] that
the foreclosure sale on [her] property which was scheduled for
November 1, 2010 has been postponed until January 26, 2011 at
10:00 a.m." (emphasis in original). On November 1, 2010, a
Commonwealth agent appeared at the plaintiff's home and publicly
proclaimed that the foreclosure auction had been postponed.
5
On December 23, 2010, the plaintiff filed a first amended
complaint naming Harmon and Commonwealth as additional
defendants, and alleging violations by them of G. L. c. 93A, §§
2 and 9, and MCRA. The first amended complaint alleged that the
defendants communicated directly with the plaintiff on October
29, 2010, while knowing her to be represented by an attorney;
engaged in conduct intended to harass, oppress, or abuse the
plaintiff in connection with the collection of a debt; and
continued to schedule and advertise foreclosure auctions of the
plaintiff's home in violation of the TRO and preliminary
injunction. On January 6, 2011, the plaintiff filed a verified
complaint for contempt, in which she alleged that the
defendants' rescheduling of the foreclosure auction for January
26, 2011, constituted contempt of the preliminary injunction.
In November, 2011, the plaintiff filed a second amended
complaint alleging the same violations of G. L. c. 93A and MCRA
by the defendants.
On July 13, 2012, a judge of the Superior Court dismissed
the plaintiff's contempt complaint after concluding that she had
failed to sustain her burden of proving "a clear and undoubted
disobedience of a clear and unequivocal command of the court."
On February 19, 2014, the defendants moved for summary judgment
and the plaintiff filed a cross motion for summary judgment as
to liability only. A different Superior Court judge denied both
6
summary judgment motions, ruling that the defendants' alleged
actions in violation of the TRO and preliminary injunction do
not fall within the scope of the "litigation privilege" because
"they were undertaken solely for the purpose of effecting a non-
judicial foreclosure of the Plaintiff's interest in the
Property." The defendants appeal from the judge's decision
insofar as it denied summary judgment "based upon their defense
of absolute litigation privilege."
Discussion. 1. Standard of review. We review the judge's
decision de novo, Miller v. Cotter, 448 Mass. 671, 676 (2007),
looking to the summary judgment record to determine "whether,
viewing the evidence in the light most favorable to the
nonmoving party, all material facts have been established and
the moving party is entitled to a judgment as a matter of law."
Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991).
We will uphold an order denying summary judgment "if the trial
judge ruled on undisputed material facts and his ruling was
correct as a matter of law." Commonwealth v. One 1987 Mercury
Cougar Auto., 413 Mass. 534, 536 (1992).
2. The litigation privilege. Our courts have held that
"statements by a party, counsel or witness in the institution
of, or during the course of, a judicial proceeding are
absolutely privileged provided such statements relate to that
proceeding." Sriberg v. Raymond, 370 Mass. 105, 108 (1976)
7
(Sriberg). The privilege applies "[w]here a communication to a
prospective defendant relates to a proceeding which is
contemplated in good faith and which is under serious
consideration," id. at 109, but does not encompass "attorneys'
conduct in counselling and assisting their clients in business
matters generally." Kurker v. Hill, 44 Mass. App. Ct. 184, 192
(1998). "The privilege applies not only to defamation claims
brought against an attorney, but to civil liability generally,"
Bartle v. Berry, 80 Mass. App. Ct. 372, 378 (2011), and is based
on "[t]he public policy of permitting attorneys complete freedom
of expression and candor in communications in their efforts to
secure justice for their clients." Sriberg, supra at 108.
"Whether an absolute privilege applies . . . is determined
on a case-by-case basis, after a fact-specific analysis."
Giuffrida v. High Country Investor, Inc., 73 Mass. App. Ct. 225,
242 (2008) (Giuffrida). As the parties seeking summary judgment
on the basis of the privilege, the defendants bear the burden of
demonstrating the absence of a triable issue on whether their
acts of sending letters to the plaintiff, appearing at her home
to announce the postponement of the foreclosure auctions, and
continuing to list the plaintiff's property on an auction Web
site, are privileged. See Smith v. Suburban Restaurants, Inc.,
374 Mass. 528, 531 (1978).
8
The judge correctly concluded that Commonwealth cannot
sustain this burden. The undisputed facts demonstrate that
Commonwealth appeared at the plaintiff's property, and continued
to list the property on its auction Web site, in furtherance of
Wells Fargo's foreclosure of the plaintiff's mortgage.
"Massachusetts does not require . . . judicial authorization to
foreclose on a mortgaged property," U.S. Bank Natl. Assn. v.
Ibanez, 458 Mass. 637, 645-646 (2011) (Ibanez), and "[t]he
privilege extends [only] to circumstances where the statements
are made preliminary to a proposed or contemplated judicial
proceeding" (emphasis added). Fisher v. Lint, 69 Mass. App. Ct.
360, 366 (2007). Commonwealth was not named as a defendant in
the plaintiff's original wrongful foreclosure complaint, and it
was neither "a party, counsel [n]or witness in the institution
of, or during the course of, [that] judicial proceeding" when it
engaged in the conduct complained of. Sriberg, supra. While
Commonwealth was later named as a defendant in the first amended
complaint, and "it is well-established that communications by a
party preliminary to a proposed judicial proceeding also are
entitled to protection," Giuffrida, supra, nothing in the
summary judgment record supports an inference that Commonwealth
took the actions complained of in contemplation of being named
as a party to the plaintiff's wrongful foreclosure suit. Thus,
9
as a matter of law, Commonwealth is not immune from civil
liability for its actions.
However, "the undisputed facts fully support the
application of the privilege" to Harmon. Ibid. Attorney Andrew
Harmon states in his affidavit in support of the motion for
summary judgment that (1) Harmon was retained by Wells Fargo to
foreclose on the plaintiff's mortgage; (2) in the course of this
representation, Harmon failed to advise Commonwealth of the TRO
until October 20, 2010, because it did not consider the postings
to violate the TRO; (3) Harmon sent the plaintiff a letter in
the course of its representation of Wells Fargo "advising that
the November 1, 2010 foreclosure sale was postponed until
January 26, 2011"; and (4) "[t]he letter was sent directly to
[the plaintiff] because [of] Harmon's legal interpretation of
the relevant statutes and case law." It is undisputed that
Harmon was pursuing the foreclosure in its role as attorney for
Wells Fargo; that the plaintiff advised Harmon of her intent to
file suit if Wells Fargo did not postpone the foreclosure
auction; and that Harmon represented Wells Fargo with respect to
that suit when it sent the October 29, 2010, letter to the
plaintiff.3 Accordingly, it is undisputed that the statements
3
An October 19, 2010, electronic mail message (e-mail) from
Harmon's attorney to the plaintiff's attorney, stating that
"Harmon Law Office has not been retained to represent Wells
Fargo" with respect to the plaintiff's suit, is insufficient to
10
and actions about which the plaintiff complains were "made by an
attorney engaged in his function as an attorney . . . in the
institution or conduct of litigation or in . . . communications
preliminary to litigation." Sriberg, supra at 109. The
statements were "relevant or pertinent to the judicial
proceedings" instituted by the plaintiff against Wells Fargo,
Robert L. Sullivan, D.D.S., P.C. v. Birmingham, 11 Mass. App.
Ct. 359, 362 (1981) (Sullivan), and "the absolute privilege
which attaches to those statements protects the maker from any
civil liability thereon." Doe v. Nutter, McClennen & Fish, 41
Mass. App. Ct. 137, 140 (1996). Thus, as a matter of law, the
plaintiff may not recover of Harmon under G. L. c. 93A, or MCRA.
We note that this conclusion is required by the undisputed
facts of this case. Our decision should not be interpreted as
condoning the actions taken by Harmon. We agree with the
plaintiff that Harmon's acts of communicating directly with her
while knowing her to be represented by counsel, failing to
advise Commonwealth that it was prohibited by the TRO from
advertising a sale of her property, and scheduling a foreclosure
create a genuine dispute as to whether litigation privilege
applies, where it is undisputed that Harmon represented Wells
Fargo in the foreclosure action that formed the basis of the
plaintiff's complaint; Harmon was notified of the plaintiff's
intention to file suit before it engaged in the acts complained
of; and, two days later on October 21, 2010, Harmon's attorney
sent the plaintiff's attorney another e-mail stating that Harmon
"ha[s] been retained to represent Wells Fargo in this case."
11
sale of the property despite being prohibited by the preliminary
injunction from conducting any such sale, are troubling. These
actions may not have risen to the level of contempt,4 but they
arguably violate our Rules of Professional Conduct.5 However, an
attorney's liability to a person injured by his misconduct "must
be based on a recognized and independent cause of action and not
on ethical violations." Sullivan, supra at 368. Absent
allegations that support a claim that is not barred by the
absolute privilege, see, e.g., Harmon Law Offices, P.C. v.
Attorney Gen., 83 Mass. App. Ct. 830, 837 n.9 (2013) (noting
that "a law firm may be liable under c. 93A if it engages in
conduct beyond the functions of traditional representation");
Akar v. Federal Natl. Mort. Assn., 843 F. Supp. 2d 154, 163-164
(D. Mass. 2012) (holding that litigation privilege does not bar
4
As noted infra, a judge in the Superior Court found that
the defendants were not in contempt of the preliminary
injunction.
5
See Mass.R.Prof.C. 4.2, as appearing in 471 Mass. 1440
(2015) ("In representing a client, a lawyer shall not
communicate about the subject of the representation with a
person the lawyer knows to be represented by another lawyer in
the matter, unless the lawyer has the consent of the other
lawyer or is authorized to do so or by law or a court order");
Mass.R.Prof.C. 4.4(a), as appearing in 471 Mass. 1443 (2015)
("In representing a client, a lawyer shall not use means that
have no substantial purpose other than to embarrass, delay or
burden a third person"); Mass.R.Prof.C. 8.4, as appearing in 471
Mass. 1482-1483 (2015) ("It is professional misconduct for a
lawyer to . . . [c] engage in conduct involving dishonesty,
fraud, deceit, or misrepresentation; [or] [d] engage in conduct
that is prejudicial to the administration of justice").
12
claims under Fair Debt Collection Practices Act, 15 U.S.C.
§§ 1692 et seq.); In re Lynn-Weaver, 385 B.R. 7, 11-12 (Bankr.
D. Mass. 2008) (holding that Harmon's acts of postponing
foreclosure sales after filing of bankruptcy petition violate
automatic stay provisions of 11 U.S.C. § 362[a]), we are
constrained to conclude that, in this case, Harmon "ha[s] an
absolute defense to all of the plaintiff's claims for relief."
Sullivan, supra.
3. Conclusion. In light of the foregoing, we affirm the
order denying Commonwealth's motion for summary judgment on the
basis that it is immune from civil liability under the
litigation privilege. However, because the privilege applies to
Harmon's actions, the order denying Harmon's motion for summary
judgment is reversed, and the matter is remanded for the entry
of summary judgment in favor of Harmon.6
So ordered.
6
The plaintiff's request for appellate attorney's fees and
costs is premature, and denied without prejudice.