Pinti v. Emigrant Mortgage Co.

Spouses Lesley Phillips and Linda Pinti (collectively, Phillips) (plaintiffs) owned a Massachusetts condominium. When Phillips borrowed $160,000 from Emigrant Mortgage Co. (Emigrant) (defendant), Phillips executed a mortgage on the condo. The mortgage allowed Emigrant to accelerate the loan and demand immediate, full repayment if Phillips defaulted. If full repayment was not made, then Emigrant could foreclose on the condo without judicial authorization, as allowed under Massachusetts law. However, paragraph 22 of the mortgage stated that before Emigrant could accelerate the loan, Emigrant must provide notice to Phillips specifying (1) the default, (2) the actions needed to cure the default, (3) a date by which the default must be cured, (4) that failure to cure would result in acceleration, and (5) that Phillips had “the right to bring a court action to assert the non-existence of a default or any other defense” to acceleration and foreclosure. In August and September 2009, Phillips missed monthly payments. Emigrant sent notice demanding payment by December 28, 2009, or else Emigrant could invoke its statutory power of sale. The notice informed Phillips of “the right to assert in any lawsuit for foreclosure and sale the nonexistence of a default or any other defense.” Phillips failed to cure the default, and Emigrant held a foreclosure sale at which Harold Wilion (defendant) purchased the condo. Phillips sued Emigrant and Wilion, seeking a declaratory judgment that the foreclosure sale and Wilion’s title were void because Emigrant failed to strictly comply with paragraph 22. Emigrant argued its notice was substantially compliant and that was sufficient. The trial court agreed and granted Emigrant’s motion to dismiss and Wilion’s motion for summary judgment attesting to his superior title. Phillips appealed.