In an important decision for mortgage lenders and property owners, the Massachusetts Supreme Judicial Court (SJC) held that an indigent “holdover mortgagor”1 who has had his appeal bond requirement waived in a summary process case must make prospective “fair and reasonable” use and occupancy payments “as rent” to the prevailing bidder in order to maintain a non-frivolous appeal of a judgment entitling the owner to possession of the property.
The SJC’s June 17, 2020 unanimous decision in Bank of New York Mellon v. King2 resolved a split among lower courts. It reversed a Mass. Appeals Court single justice’s order finding that an indigency waiver of the appeal bond requirement prevented the trial court from requiring use and occupancy payments. The SJC held, rather, that the Mass. Legislature mandated prospective use and occupancy payments “as rent” in order for a holdover mortgagor—even an indigent one who has successfully moved to have the appeal bond requirement waived—to pursue a non-frivolous appeal of a summary process court’s judgment of possession in favor of the foreclosing bank or prevailing auction bidder.
The King case provided an opportunity for the SJC to weigh in, and settle the law, on whether use and occupancy payments are required in post-foreclosure, summary process eviction appeals. This issue had divided summary process trial courts even in the face of Mass. appellate decisions holding that post-appeal orders waiving or limiting the appeal bond requirement for holdover mortgagors prevented requiring prospective use and occupancy payments.3 As described by the SJC, the King case required it to interpret the Mass. statutes’ appeal bond procedural requirements, and their “interrelationship,” governing appeals of summary process judgments awarding possession to the foreclosing bank.4
The facts are straightforward. Plaintiff in the summary process eviction case was the foreclosing mortgagee, Bank of New York Mellon (Bank), which held title to the property, while the defendant occupying the property was a holdover mortgagor, Alton King, Jr.5 The Bank prevailed in the summary process court, which rendered it a judgment of possession. King timely appealed, planning to challenge the Bank’s superior right to possession by allegedly failing to strictly comply with paragraph 22 of the mortgage during the foreclosure process, an issue deemed non-frivolous under settled authority.6
King also moved to waive the appeal bond requirement under M.G.L. c. 239, § 5(e)7 due to his indigent status, which the trial court granted.8 But over King’s objection, and after an evidentiary hearing in which a real estate broker testified as to market rental amounts for comparable properties in the same geographic area, the trial court granted the Bank’s motion to require prospective use and occupancy...
