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After Remand From The SJC Back To The Appeals Court - Firm Files 2nd FAR With SJC In Giannasca v. Deutsche Bank, N.T. Co. et. al.

In an almost unprecedented situation before the SJC and the Appeals Court, the SJC Denied our FAR filed under Ca. No. FAR-27062, WITHOUT PREJUDICE.and Remanded this appeal back to the Appeals Court for further examination as to the unbriefed legal issues related to Mr. Giannasca's selection of "surrender" of the property involved in this lawsuit, in his previous bankruptcy.

Mr, Giannasca defended a statutory foreclosure attempt by "the lender" pro se in a complaint filed before the Middlesex County Superior Court. The Judgment allowing Summary Judgment to enter against Mr. Giannasca focused almost primarily upon the Superior Court Judge finding that Mr. Giannasca's "selection" of "surrender" under his "statement of intention" filed with the Massachusetts Bankruptcy Court (Eastern District) operated as "res judicata" to now "estop" Mr. Giannasca from now being able to defend his property from foreclosure before the Superior Court. The Superior Court Judge relied upon other jurisdictional cases to make this finding.

See the Superior Court Order here

Mr. Giannasca filed an appeal of this decision (pro se). Mr. Giannasca thereafter drafted and filed a 10-page Opening Brief pro se as well. After oral argument was scheduled, Mr. Giannasca approached this firm to present oral argument before the Appeals Court.

Normally, the Firm's policy is not to take on matters to argue another individual's pleading and theory of the case. However, in this instance, we reviewed the fact pattern and the importance of the issues presented and agreed to present oral argment on Mr. Giannasca's Appeal, see the Appeal Docket for Ca. No. 2019-P-0349

On August 21, 2019 The Appeals Court issued its ruling that Affirmed the Superior Court Decision, however the ruling completely sidestepped the bankruptcy surrender issue predominantly relied upon by the Superior Court Judge. At oral argument in this matter, the panel used the entirety of my time to discuss the surrender issue once I brought it up.

The link to hear my oral argument can be found here

The Original ruling can be found at the following citation (and link) Giannasca v. Deutsche Bank Trust Company, 95 Mass. App. Ct. 775 | 130 N.E.3d 1256 | 2019 Mass. App. LEXIS 105

We also previously wrote a blog post on this case at the time of our original FAR filing in October of 2019, which can be found here

After filing the original FAR in this case, On February 21, 2020, the SJC made the following finding:

02/21/2020#9

"The application for further appellate review is denied without prejudice. It is further ordered, that the case is remanded to the Appeals Court for consideration of the issue of the plaintiff's standing, in light of the Superior Court's findings and conclusions regarding the effect of the plaintiff's bankruptcy. The Appeals Court may, in its discretion, invite further briefing with respect to this issue, or with respect to any other issue presented, including the prudential issues raised by the dissenting justice. Nothing in this order precludes either side from seeking further appellate review after the further decision of the Appeals Court."

This is an extremely rare development to have the SJC Issue a FAR Denial without prejudice and remand the appeal back to the Appeals Court for further briefing. Additionally, the SJC clearly signaled that either party would not be precluded from seeking a second FAR.

Upon remand the Appeals Court issued the following order on February 25, 2020:

ORDER: In light of the Supreme Judicial Court's order of February 21, 2020, remanding the case to this court, the parties are ordered to submit supplemental briefs, not to exceed twenty pages, addressing 'the issue of the plaintiff's standing, in light of the Superior Court's findings and conclusions regarding the effect of the plaintiff's bankruptcy.' The parties should make reference to, as relevant, the discharge of debt, the notice of intent to surrender, reaffirmation, if any, the post-discharge loan modification agreement, the April 14, 2016 letter from the loan servicer to the appellant, and any post-discharge payments on the loan by the plaintiff and their acceptance by the loan servicer. Appellant's supplemental brief is due on or before March 17, 2020, and subsequently, Appellee's supplemental brief is due on or before March 31, 2020. (Rubin, Kinder, Singh, JJ.). *Notice

Both sides submitted briefing on the bankruptcy issue. Notably, the Appeals Court Panel avoided the issues presented by the Dissenting Judge Rubin re MERS and the "securitization" of the Giannasca mortgage. The Panel solely restricted briefing to whether the surrender of a mortgage in a chapter 7 bankruptcy is preclusive to deny a borrower's defense under state statutory protections regarding the non-judicial foreclosure under G.L. c. 244, Sec. 14.

We relied upon the unpublished decision of Chacon v Everbank Ca. No. 2016-P-1467 and submitted our supplemental brief as directed by the Appeals Court, which limited us solely to the "surrender issue", despite the very strong dissent authored by Judge Rubin related to "prudential issues" regarding MERS

See our Supplemental Brief here

We also wrote a previous blog post on this development in February 2020, see here

On July 20, 2020 the Appeals Court issued its ruling (solely on the bankruptcy surrender issue),
See the Appeal Court second ruling in this matter here

The Appeals Court agreed with our reliance upon Chacon v. Everbank, and reversed the Superior Court Judge's finding regarding Mr. Giannasca's selection of bankruptcy, as the Court found that such selection would not constitute a "knowing waiver" of his rights. However, this issue (surrender) currently has a split of authority at the federal level, which the U.S. Supreme Court will eventually need to address. [the Appeals Court sidestepped that necessity by the way it fashioned its ruling and that it limited such ruling on remand to a non-precedential "panel ruling" under RULE 23.0 [like Chacon]

Following the guidance provided to us by the SJC in the decision, when it entered its ruling in our First FAR in this matter; stating that we could submit a new FAR after the Appeals Court issued its ruling on Remand, on August 21, 2020, we filed our 2nd Brief in FAR-27062B, see the docket for the new FAR here

In this second brief, we concentrated more on the fact that we question MERS (apparently magical) ability to evade centuries-old real property law of this commonwealth by stating that a purported "mortgage holder could act for an unidentified and open class of note owners (which Judge Rubin also questioned in his dissent in the original appeal court ruling in this matter).

To Review, Judge Rubin stated the following in his dissent to the original appeal court ruling in this matter Giannasca v. Deutsche Bank Trust Company, 95 Mass. App. Ct. 775 | 130 N.E.3d 1256 | 2019 Mass. App. LEXIS 105

"I note, however, that I am aware of no authority, and the majority cites none, answering the question whether an assignment like that purporting to be by a nominee acting on behalf of some nonspecific open and indefinite class, rather than on behalf of the actual note holder, would suffice to identify the capacity in which the assignor was acting." see Dissent at note 2.

Further, we questioned the SJC as to why there has been no additional guidance as to this Court's position as to the definition of the term "nominee" (as associated with MERS in the mortgage contractual language), since its ruling in Eaton v. Fed. Nat'l Mortgage Ass'n, 462 Mass. 569, at n. 29 (2012),

[Note 29] "As noted at the outset of this opinion, the mortgage identifies MERS as mortgagee, but one that acts as the "nominee" of the lender. It is not clear what "nominee" means in this context, but the use of the word may have some bearing on the agency question. We express no opinion whether MERS or Green Tree was acting as agent of the note holder or with the note holder's authority at the time of the foreclosure sale. Eaton is entitled to pursue discovery on this issue in connection with her Superior Court action."

and Galiastro v. MERS, 467 Mass. 160 at n. 19 (2014) [in which we successfully represented the Galiastro family before the SJC]

[Note 19] MERS accepted, for purposes of the motion to dismiss, the Galiastros' allegation that it was not an authorized agent of the note holder. See note 8, supra. On appeal, MERS argues for the first time that it was an agent of the note holder and thus should prevail even if the conclusion reached in Eaton applies. As support, MERS points to a clause in the Galiastros' mortgage providing that MERS is a "nominee for Lender and Lender's successors and assigns." As was the case in Eaton, supra at 590 n.4, "[i]t is not clear what 'nominee' means in this context, but the use of the word may have some bearing on the agency question."

The second FAR brief we filed on August 21, 2020 picks up on this theme, as well as much more, requesting that the SJC finally step up and provide definitive guidance as to MERS ability to act under the peculiarities of Massachusetts law, examining such issues as the fact that where under the peculiar law of Massachusetts, unlike most other states, the mortgage does not follow the note. The preceding blows up the theory that UNDER MASSACHUSETTS LAW a mortgage holder [like MERS] could automatically act for purported successive unnamed downstream future note owners

See our 2nd FAR Brief here

We will keep you posted on new developments, and will also post any Opposition brief filed by Deutsche Bank.

This is an extremely important appeal, which we hope that the SJC takes up for review