Bank of N.Y. Mellon v. King

485 Mass. 37

147 N.E.3d 450

BANK OF NEW YORK MELLON,¹ trustee²

v.Alton KING, Jr. & another.³

SJC-12859

Supreme Judicial Court of Massachusetts, Suffolk..

Argued March 2, 2020.

Decided June 17, 2020.

Carl E. Fumarola (Christine Kingston also present), Boston, for the plaintiff.

Lucas McArdle, Lawrence, for the defendants.

The following submitted briefs for amici curiae:

Jeffrey B. Loeb & Nathaniel Donoghue, Boston, for Jason Scaduto.

Jane Alexandra Sugarman & Richard M.W. Bauer, Boston, for South Coastal Counties Legal Services, Inc., & others.

Deirdre Dundon, pro se.

Gale Lutz-Henrickson, pro se.

Ruth Adjartey, pro se.

Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, & Kafker, JJ.

KAFKER, J.

After foreclosing on the property of the defendant, Alton King, Jr., the Bank of New York Mellon (bank), acting as a trustee, successfully obtained judgment in a summary process action against the defendant. The defendant appealed from the decision and moved to waive the appeal bond required under G. L. c. 239, § 5. The judge waived the bond but also ordered the defendant to prospectively pay monthly use and occupancy to the bank while the appeal was pending. A single justice of the Appeals Court vacated the portion of the order requiring use and occupancy payments, concluding that such payments constituted a part of the bond, which had been waived, and that the provision in G. L. c. 239, § 5 (e ), requiring a defendant to pay "all or any portion of any rent which shall become due" when his or her bond has been waived, did not apply to situations where there was no landlord-tenant relationship.

The issue before us on appeal is whether the bond required for a defendant to appeal an adverse judgment under G. L. c. 239, § 5, may be waived for a defendant who appeals from a decision in a postforeclosure summary process action, and, if so, whether a court may still order a defendant to make use and occupancy payments to the plaintiff even where the defendant's bond has been waived. We conclude that, based on a consistent, harmonious reading of G. L. c. 239, §§ 5 and 6, that construes the language of the statutory scheme as a whole, the bond for a defendant appealing from an adverse judgment in a postforeclosure summary process action may be waived if he or she is indigent and pursuing nonfrivolous arguments on appeal. Further, we conclude that the postforeclosure defendant whose bond is waived may be ordered to pay use and occupancy to the plaintiff, based on "all or any portion" of the reasonable monthly rental value of the property. We also conclude that the $4,000 per month the defendant was ordered to pay as use and occupancy reflects a fair balancing of interests given the facts of this case.⁴

1. Background. In October 2015, Terri Mayes-King defaulted on a promissory note secured by property owned by her and the defendant in Longmeadow (property).⁵ The defendant was sent notice pursuant to G. L. c. 244, §§ 35A and 35B, and paragraph 22 of the defendant's mortgage.⁶ After the defendant failed to cure the default, the bank foreclosed on the mortgage on August 24, 2018. The bank was the highest bidder at the foreclosure sale and took title to the property.

After the bank took title, it filed a postforeclosure summary process action against the defendant in the Western District of the Housing Court Department for possession of the property. The defendant filed an answer, in which he denied that he lived at the property unlawfully or owed any rent or use and occupancy to the bank. In the answer, he also asserted that the bank did not comply with paragraph 22 of the defendant's mortgage when foreclosing on the property. See Pinti v. Emigrant Mtge. Co., 472 Mass. 226, 236-237, 33 N.E.3d 1213 (2015). On May 31, 2019, the bank filed a motion for summary judgment on its claim for possession, to which the defendant filed no written opposition. Instead, at a hearing on the motion, the defendant requested time to obtain legal counsel, but the Housing Court judge denied the defendant's request. The judge granted the bank's motion for summary judgment on July 5, 2019. The defendant filed a motion for relief from judgment, which the judge denied.

The defendant then appealed from the decision of the Housing Court judge and moved to waive the appeal bond pursuant to G. L. c. 239, § 5 (e ). The bank opposed the waiver of the bond and also filed a motion to set the bond. The bank supported its motion to set bond with an affidavit of a licensed real estate broker who had inspected the interior and exterior of the property. The broker averred that the property, consisting of a single-family, colonial style home with 7,540 square feet of living area, five bedrooms, five and one-half bathrooms, an indoor basketball court, an in-law style apartment, and a three-car garage, had a fair rental value of $5,000 per month.

After a hearing on the bond motions, the Housing Court judge issued an order setting appeal bond on October 31, 2019. In analyzing whether a waiver of the bond was appropriate pursuant to G. L. c. 239, §§ 5 and 6, the judge found that the defendant was indigent in accordance with G. L. c. 261, §§ 27A - 27G, and had nonfrivolous defenses on appeal such that he was entitled to a waiver of the bond. Those defenses included the defendant's claims under Pinti, 472 Mass. at 236-237, 33 N.E.3d 1213, that the bank did not strictly comply with the defendant's mortgage contract when giving notice of the foreclosure. The judge also ordered that the defendant prospectively make $4,000 monthly use and occupancy payments starting November 30, 2019.⁷

The defendant then appealed from the bond order pursuant to G. L. c. 239, § 5 (f ). After a hearing on December 9, 2019, a single justice of the Appeals Court concluded that the defendant could not be required to make periodic payments pending appeal when his bond had been waived, relying on and attaching to his order an opinion by a different single justice of the Appeals Court in Bank of New York Mellon vs. Dundon, Mass. App. Ct., No. 2019-J-257 (July 17, 2019). The single justice in the Dundon case reasoned:

"[ General Laws, c. 239, § 5 (e ),] does not require the payment of ‘monthly payments pending appeal,’ but only ‘rent which shall become due,’ and [the statute] forbids the court from ordering any other payments. Here, the parties have no tenancy relationship and the defendant does not owe rent. [General Laws] c. 239, § 5 (e ) [,] therefore forbade the Housing Court [judge] from ordering periodic payments pending appeal."

The single justice in the Dundon case further reasoned that the periodic payments sometimes required by G. L. c. 239, § 6, when the defendant is a foreclosed-on entity are a "condition of the bond," and "[b]ecause there is no bond in this case, § 6 is inapplicable."

The single justice in the instant case reported the correctness of his decision to a panel of the Appeals Court pursuant to Rule 2:01 of the Rules of the Appeals Court (1975) and Mass. R. Civ. P. 64 (a ), as amended, 423 Mass. 1403 (1996). We transferred that appeal to this court on our own motion.

2. Discussion. a. Standard of review. The issue raised in this case is one of statutory interpretation -- namely, whether the provisions of G. L. c. 239, § 5, allowing for a waiver of the appeal bond and requiring the payment of any rent when the bond is waived, apply to postforeclosure summary process actions. "The interpretive question here is purely legal, and we review it de novo because [t]he duty of statutory interpretation rests ultimately with the courts," (quotations and citation omitted). Tirado v. Board of Appeal on Motor Vehicle Liab. Policies & Bonds, 472 Mass. 333, 337, 34 N.E.3d 334 (2015). With regard to the reasonableness of periodic payments ordered by the court, we also review de novo. G. L. c. 239, § 5 (f ) ("The court receiving the request shall review the findings, the amount of bond or deposit, if any, and the amount of periodic payment required, if any, as if it were initially deciding the matter, and the court may withdraw or amend any finding or reduce or rescind any amount of bond, deposit or periodic payment when in its judgment the facts so warrant").

b. The relevant statutory provisions. At issue in the instant case is the interrelationship of various provisions of G. L. c. 239, §§ 5 and 6. Neither the bank nor the defendant read them together as an integrated whole with common purposes. In order to correctly interpret the statute, we therefore set out the various relevant provisions and explain their relationship.

Section 5 provides guidance on appeal bonds generally, explaining the requirements of appeal bonds, the conditions of those bonds, and the procedures governing them, including waiver of the bonds and the appeal of a decision denying waiver.

Section 5 (c ) covers the conditions of appeal bonds demanded in cases in which the plaintiff at the time of establishment of the appeals bond seeks to recover possession of land or tenements. Section 5 (c ) provides:

"Except as provided in section 6, the defendant shall, before any appeal under this section is allowed from a judgment ...

rendered for the plaintiff for the possession of the land or tenements demanded in a case in which the plaintiff continues at the time of establishment of bond to seek to recover possession, give bond in a sum as the court orders, payable to the plaintiff, with sufficient surety or sureties approved by the court, or secured by cash or its equivalent deposited with the clerk, in a reasonable amount to be fixed by the court.... The bond shall also be conditioned to pay to the plaintiff, if final judgment is in plaintiff's favor, all rent accrued at the date of the bond, all intervening rent, and all damage and loss which the plaintiff may sustain by the withholding of possession of the land or tenements demanded and by any injury done thereto during the withholding, with all costs, until delivery of possession

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