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Pehoviak, et al. v. Deutsche Bank National Trust Company (Lawyers Weekly No. 11-024-14)

NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us         12‑P‑1485                                       Appeals Court   PAUL PEHOVIAK & another[1]  vs.  DEUTSCHE BANK NATIONAL TRUST COMPANY. No. 12‑P‑1485. Worcester.     November 5, 2013.  ‑  March 11, 2014. Present:  Cypher, Brown, & Fecteau, JJ.   Mortgage, Foreclosure, Junior lien.  Notice, Foreclosure of mortgage.  Real Property, Mortgage.  Taxation, Federal tax lien.  Lien.  Practice, Civil, Discovery, Findings by judge, Waiver.  Damages, Mitigation.  Waiver.       Civil action commenced in the Superior Court Department on April 10, 2006.   The case was heard by John S. Ferrara, J.     Marissa I. Delinks for the defendant. Howard B. D’Amico for the intervener.       FECTEAU, J.  The defendant, Deutsche Bank National Trust Company (Deutsche Bank), appeals from a judgment in the amount of $ 141,784.20,[2] plus interest, entered in favor of the intervening plaintiff, Commerce Bank and Trust Company (Commerce), after a jury-waived trial.  Deutsche Bank claims that the judge erred in (1) applying G. L. c. 244, § 14, under the facts presented, (2) finding that Deutsche Bank’s failure to act in good faith and to use reasonable diligence to complete and close the foreclosure sale with Pehoviak caused Commerce harm, and (3) failing to account for Commerce’s lack of mitigation efforts.  We conclude that (1) Deutsche Bank breached its duty to exercise reasonable diligence by refusing the prospective buyer’s request to provide him with evidence that it had sent statutorily required notices of foreclosure to junior lienholders, (2) the judge’s finding on causation was not clearly erroneous, and (3) Deutsche Bank waived the affirmative defense of mitigation of damages by failing to raise it in its first responsive pleading.   1.  Background.  Deutsche Bank was the holder of a first mortgage on real property in Westborough, Massachusetts.  The mortgagors defaulted on the mortgage loan, and Deutsche Bank foreclosed on the property.  The mortgagors owed Deutsche approximately $ 500,000.  Commerce was the holder of a mortgage on the same property securing a home equity loan, which was subordinate to Deutsche Bank’s mortgage.  The mortgagors were also in default on Commerce’s loan and owed Commerce approximately $ 170,000.  In addition, there were two other liens on the property that were subordinate to Commerce; one was a Federal tax lien, and the other was a writ of attachment by one Dennis Armstrong. At the foreclosure sale on March 6, 2006, Pehoviak was the highest bidder […]

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Posted by Massachusetts Legal Resources - March 12, 2014 at 12:54 am

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