Dyer v. Wells Fargo Bank, N.A.

United States Court of Appeals
For the First Circuit

No. 15-2421

EDYTHE DYER,

Plaintiff, Appellant,

v.

WELLS FARGO BANK, N.A., d/b/a America's Servicing Company;
U.S. BANK, N.A., as Trustee for CSFB Mortgage-Backed
Pass-Through Certificates, Series 2005-2,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. M. Page Kelley, U.S. Magistrate Judge]

Before

Howard, Chief Judge,
Lipez and Thompson, Circuit Judges.

Glenn F. Russell, Jr., with whom Glenn F. Russell Jr., &
Associates, P.C. was on brief, for appellant.
David E. Fialkow, with whom Jeffrey S. Patterson, Michael R.
Stanley, and K&L Gates LLP were on brief, for appellees.

April 17, 2020
 Per Curiam.1 The plaintiff, Edythe Dyer, brought this

suit against U.S. Bank, N.A. ("U.S. Bank") and Wells Fargo Bank,

N.A. ("Wells Fargo"), arising out of a foreclosure sale on her

property. The suit was dismissed, and we now affirm.

I.

In 2004, Dyer executed a promissory note to Dreamhouse

Mortgage Corporation ("Dreamhouse") and granted a mortgage on her

property at 41 Commonwealth Avenue, Unit #9, in Boston,

Massachusetts (the "Property"). She granted the mortgage to

Mortgage Electronic Registration Systems, Inc. ("MERS") as the

"nominee" for Dreamhouse and its successors and assigns. In 2008,

MERS executed a document entitled "Assignment of Mortgage," which

transferred the mortgage to U.S. Bank, as trustee. The document

was recorded with the Registry of Deeds for Suffolk County,

Massachusetts. MERS also executed an assignment of the mortgage

to U.S. Bank in 2011. In 2012, MERS published a "Confirmatory

Assignment" confirming the 2008 assignment. That document

explained that the 2011 assignment was a nullity because, in 2011,

1 An opinion first issued in this appeal in November 2016.
In June 2018, that opinion was withdrawn, the judgment was vacated,
and the case was reassigned to the current, entirely different
panel. See Dyer v. Wells Fargo Bank, N.A., 841 F.3d 550 (1st Cir.
2016), withdrawn, 2018 WL 3018544 (1st Cir. June 14, 2018). Having
reviewed the record and relevant precedent, we now conclude that
the withdrawn opinion properly resolved the issues on appeal.
Accordingly, we reiterate here, in substantial part, the analysis
contained in the earlier opinion.

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MERS did not have standing to assign the mortgage, given that it

had already transferred the mortgage to U.S. Bank in 2008. In

2013, Wells Fargo, U.S. Bank's servicer of the loan, recorded an

affidavit in the registry of deeds attesting that, as of that time,

U.S. Bank held the note secured by Dyer's mortgage.

In April 2015, U.S. Bank notified Dyer that it intended

to foreclose on the Property by utilizing the statutory power of

sale granted in Massachusetts General Laws Chapter 183, § 21. That

provision permits a proper party to execute a foreclosure sale

without prior judicial authorization. See Eaton v. Fed. Nat'l

Mortg. Ass'n, 969 N.E.2d 1118, 1127 (Mass. 2012). The requirements

for exercising that statutory power of sale are laid out in

Massachusetts General Laws Chapter 244, § 14. See Fed. Nat'l

Mortg. Ass'n v. Rego, 50 N.E.3d 419, 422-23 (Mass. 2016).

Dyer filed suit against U.S. Bank and Wells Fargo in

Massachusetts state court in May 2015. She sought a declaratory

judgment that U.S. Bank is not a proper party to utilize the

statutory power of sale, and she also sought damages against U.S.

Bank for slander of title based on that same allegation. In her

claim against Wells Fargo, the servicer of the loan, Dyer sought

damages under Massachusetts's catch-all consumer protection

statute, Massachusetts General Laws Chapter 93A.

The defendants removed the case to federal court based

on diversity jurisdiction, and the parties consented to proceeding

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before a magistrate judge. See 28 U.S.C. § 636(c). Dyer then

filed a separate motion for a preliminary injunction to stop the

foreclosure sale, which the magistrate judge denied. The

defendants thereafter filed a motion for judgment on the pleadings.

See Fed. R. Civ. P. 12(c). The magistrate judge granted that

motion and dismissed all of Dyer's claims. Dyer now appeals.

II.

We start with the issues concerning U.S. Bank. The

declaratory judgment and slander of title counts in Dyer's

complaint both rest on the same contention: that U.S. Bank was not

authorized to exercise the statutory power of sale. Hence, if

U.S. Bank had such authority, both causes of action fail.2

In contending that U.S. Bank was not authorized to

exercise the statutory power of sale, Dyer chiefly argues that

U.S. Bank was not the holder of the mortgage when it purported to

exercise the statutory power and that, under Eaton, U.S. Bank was

not entitled to exercise that power. See 969 N.E.2d at 1129, 1131

(holding that, to foreclose under Section 14, an entity must both

hold the mortgage and either hold the note or act as an agent of

the noteholder). In so contending, Dyer acknowledges that there

2 Because Dyer seeks damages for slander of title, the appeal
is not moot even though the foreclosure sale went forward after
the magistrate judge denied Dyer's motion for a preliminary
injunction. See McKenna v. Wells Fargo Bank, N.A., 693 F.3d 207,
210 n.2 (1st Cir. 2012).

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was a purported 2008 assignment of the mortgage from MERS to U.S.

Bank. Dyer acknowledges as well that U.S. Bank referenced this

assignment in the statutorily required notice. See Mass. Gen.

Laws ch. 244, § 14. But, Dyer contends, that 2008 assignment was

void for a number of reasons. We do not agree.

Dyer first argues that the assignment was void because

MERS, when it made the 2008 assignment, was neither the noteholder

nor the agent of the noteholder. Instead, MERS held the mortgage

only as a "nominee" for the lender, Dreamhouse, and its successors

and assigns. But we held in Culhane v. Aurora Loan Services of

Nebraska, 708 F.3d 282 (1st Cir. 2013), that a mortgage contract

that names "MERS . . . as nominee for [Lender] and [Lender]'s

successors and assigns" does suffice to make MERS the mortgage

holder and thus authorizes MERS to assign the mortgage on behalf

of the lender to the lender's successors and assigns. Id. at 293.

And here, Dyer's 2004 mortgage contract contains the same language

regarding MERS, and its status as nominee (in this case for

Dreamhouse), as the one that we addressed in Culhane.

Dyer responds that Culhane is not controlling. She

contends that Culhane relied on a construction of Section 14 that

pre-dated the SJC's decision in Eaton and that Eaton renders that

construction impermissible. While Eaton did expressly reserve the

question of whether a "nominee" is an "agent" of the noteholder,

it did so only in connection with its discussion of whether MERS's

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status as a "nominee" of the lender empowered it to execute the

statutory power of sale. See Eaton, 969 N.E.2d at 1134 n.29.

Eaton in no way suggested that MERS's status as a nominee was

insufficient to permit it to hold or assign a mortgage to a

successor or assign of the lender. And, in Culhane, in which we

expressly applied Eaton, Culhane, 708 F.3d at 288 n.4, we concluded

that MERS's status as a nominee was sufficient to permit it to

hold a mortgage and to make such an assignment. Id. at 293. Thus,

Dyer's first ground for contending that the 2008 assignment is

void is without merit given the language of the 2004 contract

naming MERS as Dreamhouse's nominee.3

Dyer also contends that the 2008 assignment from MERS to

U.S. Bank is void for an independent reason. She argues that MERS

assigned the mortgage to U.S. Bank in violation of a trust

3 Eaton holds that, even if the mortgage and the note had
previously been separated, a party may only exercise Section 14's
power of sale if at the time of the sale it holds both the mortgage
and the note. Eaton, 969 N.E.2d at 1129. In addition to contesting
U.S. Bank's status as the mortgage holder, Dyer separately
challenges the magistrate judge's finding that U.S. Bank also held
the note. The magistrate judge based that finding on both a copy
of the note endorsed in blank that U.S. Bank produced and a copy
of the 2013 affidavit by Wells Fargo, U.S. Bank's agent and
servicer of the loan, stating that U.S. Bank held the note. Dyer
provides no basis for rejecting that finding beyond her conclusory
contrary assertion and a reference to an allonge, which she does
not develop into an argument that would warrant reversal of the
magistrate judge's finding. We thus treat as waived any argument
that U.S. Bank was not a proper party to execute the sale because
it did not hold the note in addition to the mortgage. See United
States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990).

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agreement between U.S. Bank and the investors in the loan and that

the breach of the trust agreement rendered the assignment void.

But in Butler v. Deutsche Bank Trust Co. Americas, 748 F.3d 28, 37

(1st Cir. 2014), we held that an assignment made in contravention

of such a trust agreement is at most voidable at the option of the

parties to the trust agreement, not void as a matter of law.

Hence, the alleged violation of the trust agreement does not void

the 2008 assignment and thereby strip U.S. Bank of its status as

a holder of the mortgage. Accordingly, this argument, too, fails.

Dyer next asserts that the 2008 assignment is void for

yet another reason: the 2012 Confirmatory Assignment states that

MERS lacked "standing" to assign the mortgage. That document,

however, makes clear that MERS lacked "standing" to assign the

mortgage in 2011, because MERS had validly assigned the mortgage

to U.S. Bank in 2008. The Confirmatory Assignment thus hardly

casts doubt on the validity of the 2008 assignment to U.S. Bank;

in fact, it appears to confirm it. We therefore reject this

argument as well.

Finally, we reject Dyer's separate argument that U.S.

Bank was not a proper party to exercise the statutory power of

sale because the notice of sale that Section 14 required U.S. Bank

to publish did not comply with the statutory requirements. See

Mass. Gen. Laws ch. 244, § 14 (stating that "in the event a

mortgagee holds a mortgage pursuant to an assignment, no notice

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under this section shall be valid unless (i) at the time such

notice is mailed, an assignment, or a chain of assignments,

evidencing the assignment of the mortgage to the foreclosing

mortgagee has been duly recorded in the registry of deeds for the

county or district where the land lies and (ii) the recording

information for all recorded assignments is referenced in the

notice of sale required in this section"). Specifically, she

contends that the notice failed to refer to what Dyer identifies

as various "intermediate transfers."

Dyer's complaint is less than clear as to what she

contends was being assigned in these "intermediate transfers," and

her briefing does not do much to help clarify matters. The premise

of this argument appears to be that MERS, as the nominee of

Dreamhouse, never properly held the mortgage. From this premise,

she contends that the notice published by U.S. Bank had to set

forth a chain of title that ran from Dreamhouse, the original

lender, to the various parties the complaint identifies as being

involved in "intermediate transfers" to U.S. Bank.

The problem with this argument stems from its mistaken

premise. As we have explained, per our decision in Culhane, MERS's

status as nominee did not bar it from holding the mortgage. See

Culhane, 708 F.3d at 291-92. Thus, MERS was the record holder of

the mortgage as nominee for Dreamhouse in 2004, and Dyer does not

allege that MERS subsequently assigned the mortgage back to

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Dreamhouse or to any other entity prior to MERS's 2008 assignment

of the mortgage to U.S. Bank.

Thus, even accepting as we must the factual allegations

in Dyer's complaint that there were what she calls "intermediate

transfers," she provides no basis for concluding that MERS did not

remain the sole record holder of the mortgage up until the time it

assigned that mortgage to U.S. Bank in 2008. In fact, because

MERS continued to hold the mortgage all along, in keeping with the

way the MERS system operates, it appears that the intermediate

transfers Dyer identifies in her complaint were merely transfers

of the "beneficial ownership interest[]" in the mortgage among

MERS members. Eaton, 969 N.E.2d at 1121 n.5.4

Against this background, the notice published by U.S.

Bank complied with Section 14 for a simple reason. The notice

referenced the assignment (in 2008) from the record holder of the

mortgage, MERS, to U.S. Bank. The notice thus did just what it

needed to do: it referenced "an assignment of the mortgage to the

foreclosing mortgagee" that "has been duly recorded in the registry

of deeds for the county or district where the land lies" and for

4 The SJC explained that MERS is the "mortgagee of record for
mortgage loans registered on the MERS electronic registration
system, which tracks servicing rights and beneficial ownership
interests in those loans; the system allows these servicing rights
and beneficial ownership interests to be traded electronically
between members without the need to record publicly each mortgage
assignment." Eaton, 969 N.E.2d at 1121 n.5.

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which "the recording information . . . [was] referenced in the

notice of sale required in this section." Mass. Gen. Laws ch.

244, § 14; cf. U.S. Bank Nat'l Ass'n v. Ibanez, 941 N.E.2d 40, 53

(Mass. 2011) ("A foreclosing entity may provide a complete chain

of assignments linking it to the record holder of the mortgage, or

a single assignment from the record holder of the mortgage.").

In sum, none of Dyer's arguments as to why U.S. Bank was

not authorized to exercise the statutory power of sale under

Section 14 have merit.

III.

Dyer also brought a claim for damages against Wells Fargo

under Chapter 93A, which prohibits "unfair or deceptive acts or

practices in the conduct of any trade or commerce." Mass. Gen.

Laws ch. 93A, § 2(a). The statute requires that, thirty days

before filing a claim under Chapter 93A, a claimant must, as a

general matter, send a "written demand for relief" to the

defendant, outlining the unfair or deceptive act or practice and

the injury suffered. Id. § 9(3).

Dyer alleged in her complaint that the suit itself served

as the demand letter required by Chapter 93A. The magistrate judge

rightly held that the suit could not serve to fulfill the demand

letter requirement, because the demand letter must be sent prior

to filing suit. See id.; Rodi v. S. New Eng. Sch. of Law, 389

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F.3d 5, 19 (1st Cir. 2004). Accordingly, the magistrate judge

ruled that the claim must be dismissed.

On appeal, Dyer contends for the first time that she was

not required to send a demand letter at all. She relies on the

exception to the demand letter requirement set forth in Section

9(3) of Chapter 93A. The exception provides that "[t]he demand

requirements of this paragraph shall not apply if . . . the

prospective respondent does not maintain a place of business or

does not keep assets within the [C]ommonwealth." Mass. Gen. Laws

ch. 93A, § 9(3).

Dyer contends that Moronta v. Nationstar Mortgage, LLC,

41 N.E.3d 311, 315 n.11 (Mass. App. Ct. 2015), makes clear that

this exception applies so long as the putative defendant does not

maintain both a place of business and assets within the

Commonwealth. She contends that Wells Fargo has no assets in the

Commonwealth. The defendants counter that Moronta describes the

exception's disjunctive nature only in dicta, and they contend

that the dicta conflicts with our decision in McKenna v. Wells

Fargo Bank, N.A., 693 F.3d 207, 218 (1st Cir. 2012).

We decline to engage with this debate. Because Dyer did

not argue in the district court that the demand letter requirement

was inapplicable, she waived the argument. See Malave v. Carney

Hosp., 170 F.3d 217, 222 (1st Cir. 1999) ("[E]xcept in the most

extraordinary circumstances (not present here), matters not raised

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in the trial court cannot be hawked for the first time on

appeal."). And, given that Dyer does not dispute that her

complaint failed to plead that she had sent a demand letter prior

to filing suit, we affirm the order dismissing Dyer's Chapter 93A

claim.

IV.

For the foregoing reasons, we affirm the dismissal of

Dyer's claims. So ordered.

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