In previous posts (here and here) we’ve discussed the question of whether ownership of the mortgage and the note must be unified in the same person.  Superior Court Judge Cornelius Moriarty has now weighed in, with his split decision on the defendants’ motion to dismiss in Mack v. Wells Fargo Bank, N.A., 29 Mass. L. Rptr. No. 1, 14 (WOCV2010-02228, August 31, 2011).   

Unlike some of his fellow Superior Court Judges, Judge Moriarty has followed Kiah v. Aurora Loan Services, LLC (pdf) and other federal cases in ruling that, under Massachusetts law, MERS had authority to foreclose and assign mortgages despite the fact that it “held only bare legal title to the mortgage . . . in its capacity as trustee for the note owner.”

Judge Moriarty also relies on federal case law and M.G.L. c. 183, § 54B for the proposition that an assignment of a mortgage executed before a notary public on MERS’s behalf by individuals identified as MERS officers is binding without further proof of their authority to assign the mortgage.

However, all is not lost for the borrower.  Judge Moriarty’s ruling keeps alive the borrower’s claims for breach of contract and breach of the covenant of good faith and fair dealing in connection with an alleged oral modification of the payment terms.  The judge also has refused to dismiss counts for promissory estoppel, violation of M.G.L. c. 93A (except that claims pertaining to MERS’s authority to assign and foreclose were dismissed), violation of the Massachusetts Civil Rights Act, and unjust enrichment (in the event Wells Fargo turns out not to be the holder of the promissory note secured by the mortgage).

This case is a putative class action, and Judge Moriarty has allowed the defendants’ separate motion for a more definite statement to help them assess the size and nature of the alleged class. 

The judge’s ruling stresses that it’s being made at an early stage of the proceedings.