# Emigrant Residential LLC v. Pinti

> District Court, D. Massachusetts · December 18, 2023

URL: https://www.frixlaw.com/law-library/cases/10201675

## Case

- **Court:** District Court, D. Massachusetts
- **Decided:** December 18, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10201675

## How later opinions describe it (automated extraction)

- rejecting unclean hands defense where plaintiff’s failure to disclose his interest in surplus funds was “unconnected” to his claim that Bank erroneously distributed funds
- affirming district judge’s finding that discharge was not erroneous where mortgagors received cancelled note along with discharge and explaining that debtor’s possession of cancelled note creates rebuttable presumption of discharge
- holding that unclean hands defense did not apply to copyright infringement claim where defendants could not “prove that any omission [in copyright application] was an intentional, knowing or purposeful concealment”
- affirming that mortgage was discharged by mistake where lender’s attorney failed to discover intervening lien during title search

## Opinion text

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
__________________________________________
)
)
EMIGRANT RESIDENTIAL LLC, )
)
Plaintiff, )
)
v. )
) No. 19-cv-12258-DJC
LINDA S. PINTI, LESLEY R. PHILLIPS, )
and any and all occupants, )
)
Defendants. )
)
__________________________________________)

MEMORANDUM AND ORDER

CASPER, J. December 18, 2023

I. Introduction
Plaintiff Emigrant Residential LLC (“Emigrant”) has sued Defendants Linda S. Pinti
(“Pinti”), Lesley R. Phillips (“Phillips”) and any and all occupants of a property located at 1643
Cambridge Street #52, Cambridge, MA (“the Property”) (collectively, “Defendants”) seeking a
declaratory judgment to strike the discharge of mortgage from title of the Property. D. 1.
Defendants counterclaimed that Emigrant perpetrated fraud on the Court, engaged in unfair and
deceptive business practices in violation of Mass. Gen. L. c. 93A, and intentionally and negligently
inflicted emotional distress. D. 20. After remand from the First Circuit, allowing Defendants
additional discovery in two areas and permitting the parties to supplement their briefing, the Court
ALLOWS the motion for summary judgment, D. 28, filed by Emigrant on its claims and
Defendants’ counterclaims for the reasons stated below.
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II. Standard of Review
The Court grants summary judgment where there is no genuine dispute regarding any
material fact and the undisputed facts demonstrate that the moving party is entitled to judgment as
a matter of law. Fed. R. Civ. P. 56(a). A material fact is one that “carries with it the potential to
affect the outcome of the suit under the applicable law.” García-González v. Puig-Morales, 761

F.3d 81, 87 (1st Cir. 2014) (quoting Newman v. Advanced Tech. Innovation Corp., 749 F.3d 33,
36 (1st Cir. 2014)) (internal quotation mark omitted). The moving party “bears the burden of
demonstrating the absence of a genuine issue of material fact.” Rosciti v. Ins. Co. of Pa., 659 F.3d
92, 96 (1st Cir. 2011) (citation omitted). Once that burden is met, the non-moving party may not
rest on the allegations or denials in its pleadings. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
256 (1986) (citation omitted). Instead, “with respect to each issue on which [it] would bear the
burden of proof at trial,” the non-moving party must “demonstrate that a trier of fact could
reasonably resolve that issue in [his] favor.” Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d
1, 5 (1st Cir. 2010) (citations omitted). The Court views the record in the light most favorable to
the non-moving party, “drawing reasonable inferences” in its favor. Noonan v. Staples, Inc., 556

F.3d 20, 25 (1st Cir. 2009) (citation omitted). “Conclusory allegations, improbable inferences,
and unsupported speculation,” however, are “insufficient to establish a genuine dispute of fact.”
Travers v. Flight Servs. & Sys., Inc., 737 F.3d 144, 146 (1st Cir. 2013) (citation and internal
quotation marks omitted).
III. Factual Background
The following facts, which are undisputed unless otherwise noted, are drawn from
Emigrant’s statement of material facts, D. 30, Defendants’ response to the same and Defendants’
statement of additional material facts, D. 45-5, Emigrant’s response thereto, D. 47, Defendants’

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supplemental response and statement of facts, D. 111, Emigrant’s response to the supplemental
statement of facts, D. 117, and the exhibits referenced in these documents.
A. Default of Pinti Mortgage and Note
Pinti and Phillips have lived in the Property since the 1980s. D. 117 ¶¶ 67–68. On March
13, 2008, Pinti and Phillips executed and delivered a promissory note to Emigrant Mortgage

Company, Inc. (“EMC”) for $160,000.00 (“Pinti Note”) as part of refinancing a home equity loan.
D. 45-5 ¶ 1; D. 117 ¶ 69. On that same date, Pinti and Phillips provided a mortgage (“Pinti
Mortgage”) on the Property to EMC to secure the Pinti Note and recorded it with the Middlesex
County (Southern District) Registry of Deeds. D. 45-5 ¶ 3; D. 117 ¶ 69.
Roughly eighteen months later, on August 1, 2009, Defendants defaulted on the Pinti Note
by failing to make payment and failed to make all subsequent payments thereafter. D. 45-5 ¶ 4;
D. 117 ¶ 71. EMC sent Defendants a 90-day notice of right to cure on September 29, 2009. D.
45-5 ¶ 5; see D. 31-1 at 31.
B. Relationship Between EMC, ESB-MH, Emigrant, and FHLBNY
On November 30, 2009, EMC assigned the Pinti Mortgage to ESB-MH Holdings, LLC
(“ESB-MH”) and recorded it with the Middlesex County (Southern District) Registry of Deeds on

September 30, 2019 (“ESB-MH Assignment”). D. 45-5 ¶ 6; D. 117 ¶ 75. Plaintiff Emigrant is the
successor-by-merger to ESB-MH. D. 45-5 ¶ 7; D. 117 ¶ 76; see D. 31-1 at 36–39. On the same
day as the ESB-MH Assignment, ESB-MH executed an assignment of the Pinti Mortgage to
Federal Home Loan Bank of New York (“FHLBNY”), but did not immediately deliver the
assignment to FHLBNY (“FHLBNY Assignment”). D. 45-5 ¶ 8–9; D. 117 ¶ 77.
As to FHLBNY’s relationship with the various Emigrant entities, the Court notes the
following. Emigrant Savings Bank (“Emigrant Bank”) is the parent of Emigrant. D. 117 ¶ 78. On

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December 1999, FHLBNY and Emigrant Bank entered into the Advances, Collateral Pledge and
Security Agreement (“Advances Agreement”). D. 117 ¶ 79. The Advances Agreement provides
that as security for loans that FHLBNY may advance to Emigrant Bank, Emigrant Bank “hereby
assigns, transfers, and pledges to [FHLBNY], and grants to [FHLBNY] a security interest in all of
the Capital Stock, Mortgage Collateral, Securities Collateral and Other Collateral.” D. 117 ¶ 80;

see D. 112-3 at 5. Mortgage Collateral is defined to include “first mortgages and deeds of
trust . . . and all notes, bonds or other instruments evidencing loans secured thereby.” D. 117
¶¶ 80–81; D. 112-3 at 3. The Advances Agreement gives FHLBNY certain rights over the
Mortgage Collateral and Emigrant Bank certain responsibilities regarding maintenance of the
collateral. D. 117 ¶¶ 82–88; D. 112-3 at 5–9, 11.
On April 7, 2008, roughly a month after the Pinti Note and Mortgage were executed, ESB-
MH, Emigrant Bank and FHLBNY executed the Subsidiary/Affiliate Collateral Pledge and
Security Agreement (“Pledge Agreement”). D. 117 ¶ 89. The Pledge Agreement acted as an
extension of the Advances Agreement, wherein ESB-MH, as an affiliate of Emigrant Bank, agreed

to “pledge certain of its property as collateral to” FHLBNY. D. 112-5 at 2; D. 117 ¶ 91. Under the
Pledge Agreement, ESB-MH “hereby assign[ed], transfer[ed] and pledge[d] to [FHLBNY], and
grant[ed] to [FHLBNY] a security interest in, those certain instruments (and the related
mortgages), securities and other property which are: (i) specifically listed and identified in
Attachment ‘A’ hereto.” D. 112-5 at 2–3; see D. 117 ¶ 90. The Pledge Agreement further provided
that Attachment A could be substituted from time to time and, much like the Advances Agreement,
set forth FHLBNY’s rights and ESB-MH’s responsibilities with regard to the collateral pledged.
D. 112-5 at 3–6; see D. 117 ¶ 92.

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In a letter dated August 4, 2009, FHLBNY informed Emigrant Bank that it had “moved
Emigrant [Bank] to the Listing & Segregation II collateral category for all its mortgage collateral”
(“Category Change Letter”). Id. ¶¶ 97–98; D. 112-9 at 2. The letter indicated that “the process is
to be completed within ninety days or Friday, October 30, 2009.” D. 117 ¶ 98; D. 112-9 at 2. The
Listing & Segregation II collateral category imposed (on Emigrant Bank and its subsidiaries,

including ESB-MH) certain requirements for maintaining collateral as outlined in the Delivery of
Mortgage Collateral Procedures document (“Delivery Procedures”), D. 112-9 at 2, 4–25, and
FHLBNY’s Member Products Guide (“Products Guide”), D. 112-10; D. 118-1 at 101–10. D. 117
¶¶ 99–100. These requirements included endorsing promissory notes in blank and preparing
individual mortgage assignments to FHLBNY in recordable form. D. 117 ¶ 101; see 112-9 at 5–
6; D. 112-10 at 4–5. ESB-MH was also required to stamp loan files as assigned to FHLBNY and
maintain said files in a segregated vault or storage area marked “Federal Home Loan Bank of New
York.” D. 117 ¶¶ 102–103.
As of August 2009, Emigrant Bank was borrowing money from FHLBNY and ESB-MH

intended to comply with these obligations. D. 117 ¶ 104. Between November 2009 and January
2010, “ESB-MH prepared mortgage assignments and note allonges for Mortgage Collateral
pledged or to be pledged as security for loans from FHLBNY.” Id. ¶ 106. Emigrant disputes,
however, that as of November 2009 ESB-MH was still pledging mortgage loans as collateral and
asserts that it had elected to pledge securities instead. Id. ¶¶ 80, 82–88, 90–93, 95–103, 105, 109.
Setting aside whether Pinti Note and Mortgage were already pledged, intended to be pledged, or
simply swept into a larger project wherein even loans that did not qualify as collateral under the
Products Guide were prepared, see id. ¶¶ 106–07, 110–11; D. 112-4 at 11, it is undisputed that

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ESB-MH endorsed the Pinti Note in blank and executed the FHLBNY Assignment on November
30, 2009. Id. ¶ 107.
C. Attempted Foreclosure Sale on the Property
Defendants failed to cure their default by December 28, 2009, the expiration date of the
90-day notice of right to cure, and EMC initiated foreclosure proceedings on the Property. D. 45-

5 ¶ 10; D. 117 ¶ 113. Pinti filed for Chapter 7 bankruptcy and obtained a discharge on February
4, 2011. D. 45-5 ¶ 11–12; D. 117 ¶ 114. On August 22, 2011, EMC served a written response
(“QWR Response”) to a qualified written request from the Defendants seeking information
pertaining to the ownership of the Pinti Mortgage pursuant to 12 U.S.C. § 2605(e). D. 45-5 ¶ 13;
D. 117 ¶ 115. The QWR Response named ESB-MH as the owner of the loan and EMC as the
servicer of the loan and further explained that the ESB-MH Assignment was not recorded. D. 117
¶ 116; see D. 31-1 at 42. It also stated that the Pinti Note, Pinti Mortgage, ESB-MH Assignment
were in the possession of EMC. D. 117 ¶ 116; see D. 31-1 at 42. About a year later, on August 9,
2012, EMC sold the Property to Harold Wilion (“Wilion”) for $260,000 and recorded the
foreclosure deed with the Middlesex County (Southern District) Registry of Deeds. D. 45-5 ¶¶

14-16; 19; D. 117 ¶ 118.
EMC’s assistant treasurer, Joel Marcano (“Marcano”) attests that under “EMC’s
established loan servicing policies and procedures” when EMC receives foreclosure sale proceeds
from a third-party purchaser following a foreclosure sale, EMC’s loan servicing department
prepares a memorandum to EMC’s loan payoff department. D. 31 ¶ 18. The memorandum states
the amount of the funds received, confirms that the funds were received following a foreclosure
sale to a third party and instructs that the loan payoff department should not prepare a discharge
of mortgage. Id. Marcano also attests that neither EMC nor Emigrant has ever had a policy of

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providing a discharge of mortgage to a borrower upon receiving proceeds from a third-party
purchaser following a foreclosure. Id. ¶ 19.
On September 18, 2012, Anna Sorvillo, an EMC employee at the time, prepared a
memorandum for another EMC employee, Juan Minier (“Minier”) attaching the $260,000.00
check from the Wilion foreclosure sale and identifying said check as “the amount of a Third Party

Sale to payoff this loan” (“Payoff Memo”). D. 31-1 at 94; see D. 117 ¶ 119. The memorandum
did not state that the funds were received following a foreclosure on the Property nor did it discuss
whether Minier should prepare a discharge of the Pinti Mortgage. D. 31-1 at 94. Nonetheless, on
October 3, 2012, EMC prepared a discharge of the Pinti Mortgage (“Discharge”) and sent it to
Defendants for recording. D. 117 ¶ 120; see D. 31-1 at 99–100. Marcano attests that EMC staff
prepared the Discharge by mistake as a result of the Payoff Memo’s “fail[ure] to properly inform
Minier that a Discharge of Mortgage should not be prepared” and “a misunderstanding . . . as to
how the foreclosure sale proceeds were to be applied to the Pinti Mortgage Loan.” D. 31 ¶¶ 25–
27. Neither EMC nor Emigrant have returned the Pinti Note, cancelled or otherwise, to

Defendants. Id. ¶ 28, D. 45-5 ¶ 28.
D. Pinti I
On October 29, 2012, Wilion filed a summary process action in state court against the
Defendants for possession of the Property. D. 45-5 ¶ 30; D. 117 ¶ 122. In response, Defendants
filed a separate litigation in state court against Wilion and EMC, challenging the foreclosure sale.
D. 45-5 ¶ 31. On November 7, 2013, the state court found in favor of Wilion and EMC and the
case was appealed. Id. ¶¶ 32–34; D. 117 ¶¶ 123–24. During the pendency of the state court
litigation, Defendants made monthly $2000 use and occupancy payments to Wilion, part of which
were used to satisfy condo fees, and have since continued to pay condo fees. D. 117 ¶ 129–30.

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On July 17, 2015, the Massachusetts Supreme Judicial Court (“SJC”) ruled that the foreclosure
sale was void because EMC’s notice of right to cure failed to strictly comply with the notice
provisions set forth in the Pinti Mortgage. D. 45-5 ¶¶ 34-35; D. 117 ¶ 124–125; Pinti v. Emigrant
Mortg. Co., Inc., 472 Mass. 226, 233–38 (2015) (“Pinti I”). In light of this decision, Emigrant
returned the foreclosure sale proceeds to Wilion. D. 45-5 ¶ 39; D. 117 ¶ 126. Since Pinti I, EMC

paid bi-annual real estate taxes to the City of Cambridge. D. 45-5 ¶ 41.
Within a few days of the Pinti I decision, Pinti discovered the Discharge within an envelope
that she had previously overlooked. D. 45-3 ¶ 16. On July 29, 2015, two weeks after Pinti I, Pinti
recorded the Discharge with the Middlesex County (Southern District) Registry of Deeds. D. 45-
5 ¶ 38; D. 117 ¶ 127. Defendants, however, have not exercised their right of redemption in the
Property by satisfying the total debt owed under the terms of the loan. D. 45-5 ¶ 42. On or about
December 30, 2015, EMC sent the original Pinti Note and the originally recorded Pinti Mortgage
to Emigrant’s counsel. D. 32 ¶ 14.
E. Pinti II
On June 17, 2016, EMC sued Defendants in another session of this Court (Wolf, J.)

seeking, inter alia, a declaratory judgment striking the Discharge from title to the Property. D. 45-
5 ¶ 46; D. 117 ¶ 131; see Emigrant Mortg. Co., Inc. v. Pinti, 16-cv-11136-MLW (D. Mass. Jan.
17, 2019) (“Pinti II”). Defendants asserted counterclaims, seeking a declaratory judgment that
Defendants owned the Property free of any mortgage, as well as a claim for negligent infliction of
emotional distress. Pinti II, D. 30. EMC moved for summary judgment on its claim and
Defendants’ counterclaims. D. 117 ¶ 133; Pinti II, D. 35. The Court allowed EMC’s motion with
respect to Defendants’ counterclaim for negligent infliction of emotional distress, but otherwise
denied it without prejudice. D. 117 ¶ 134; Pinti II, D. 54. After a bench trial, D. 117 ¶ 135; see

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Pinti II, D. 105, 108, 112-13, the Court (Wolf, J.) dismissed the case “because plaintiff [EMC]
lacks standing.” D. 117 ¶ 136; Pinti II, D. 109. In Pinti II, the Defendants argued that EMC was
not the mortgagee on August 9, 2012 because the Pinti Mortgage had been assigned to ESB-MH.
Pinti II, D. 45 at 19–20. The Court agreed, ruling that EMC was not the mortgagee of the loan in
August 2012 because the Pinti Note had been previously assigned to ESB-MH and that ESB-MH

did not reassign it to EMC. D. 117 ¶ 137; Pinti II, D. 110 at 5-6, 8. Thus, the Court dismissed
EMC’s action without prejudice, holding that “ESB-MH was the mortgagee on August 9, 2012.
EMC was not the proper entity to attempt to foreclose by entry.” D. 45-5 ¶ 60; Pinti II, D. 110 at
17, 20.
EMC moved for reconsideration of the Court’s order dismissing its claim to strike the
Discharge, arguing that it is the real party in interest under a subservicing agreement that
authorized it to commence proceedings on behalf of ESB-MH and required Emigrant to indemnify
ESB-MH for certain losses. D. 45-5 ¶ 61; D. 117 ¶ 138; Pinti II, D. 115-16. The Court denied the
motion because EMC had not raised this argument at trial. D. 117 ¶ 139; Pinti II, D. 121 at 4, 7.

The Court, moreover, stated that the holder of the Pinti Note could seek to strike the allegedly
mistaken discharge of the Pinti Mortgage. Pinti II, D. 121 at 7; see D. 117 ¶ 140.
F. Post Pinti-II Emigrant Assignment
After the Court’s ruling in Pinti II, Emigrant reached out to FHLBNY in an effort to address
issues raised regarding FHLBNY Assignment. D. 117 ¶¶ 142, 143. On June 24, 2019, FHLBNY
executed and emailed to Emigrant an assignment of the Pinti Mortgage back to Emigrant
(“Emigrant Assignment”). D. 117 ¶ 144. On September 30, 2019, Emigrant recorded both the
2009 and FHLBNY Assignment in the Middlesex County (Southern District) Registry of Deeds.
Id. ¶¶ 146–47.

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During this time, FHLBNY and Emigrant also negotiated the language of a letter
expressing FHLBNY’s position as to assignments that were prepared by ESB-MH in 2009. Id.
¶¶ 143, 145. On January 15, 2020, FHLBNY sent a letter to Emigrant stating that “[o]n the date
of this letter . . . the signed Assignments of Mortgage for the Subject Loans, naming FHLBNY a
assignee are null and void.” D. 112-17 at 3. The loan number for the Pinti Mortgage is listed as

one of the Subject Loans. Id. at 8; see D. 112-4 at 36.
IV. Procedural History
Emigrant filed its complaint in this case on November 4, 2019. D. 1. After the Court
denied Defendants’ motion to dismiss, D. 13, Defendants filed an answer with counterclaims
against Emigrant. D. 20. Emigrant moved for summary judgment on its declaratory judgment
claim and Defendants’ counterclaims. D. 28. In response, Defendants moved for discovery under
Fed. R. Civ. P. 56(d), D. 35, which this Court denied. D. 43. On March 24, 2021, this Court
allowed Emigrant’s motion for summary judgment. D. 61. On Defendants’ appeal, the First
Circuit affirmed in part and reversed in part this Court’s decision on the motion for discovery,
vacated the order allowing the motion for summary judgment and remanded the case for limited

discovery regarding “the chain of custody and authenticity of the Note” and
“the 2019 assignments” and supplemental briefing. D. 85. On remand, the parties have engaged
in discovery and submitted supplemental briefs. D. 110; D. 116. The Court heard the parties on
the summary judgment motion and took the matter under advisement. D. 119.
V. Discussion
The First Circuit vacated this Court’s prior order on Emigrant’s motion for summary
judgment, D. 61, without examining the merits of the parties’ claims. D. 84 at 11. Where the
parties’ supplemental briefs do not raise new arguments or present new evidence relating to certain

10
issues, the Court’s analysis is largely unchanged. As to new arguments and evidence, however,
the Court has considered the discovery and supplemental briefing. As to all issues, this Court has
decided the summary judgment motion, D. 28, anew.
A. Emigrant’s Claim Is Not Barred by Res Judicata
Defendants argue that Emigrant’s claim is barred by the doctrine of res judicata because

in Pinti II, EMC “failed to bring up the fact that they had standing to challenge the discharge as
the servicer under the mortgage.” D. 45-1 at 3. Defendants further assert that EMC’s failure
“forever waived their rights to reinstate the mortgage.” Id. A claim is precluded under res
judicata if there is “(1) a final judgment on the merits in an earlier action; (2) sufficient identity
between the causes of action asserted in the earlier and later suits; and (3) sufficient identity
between the parties in the two suits.” Bay State HMO Mgmt., Inc. v. Tingley Sys., Inc., 181 F.3d
174, 177 (1st Cir. 1999).
Defendants’ argument fails on the first prong because there was no final judgment on the
merits in an earlier action. The Court in Pinti II dismissed EMC’s claim because EMC lacked
standing. Pinti II, D. 109. “The standing inquiry does not focus on the merits of the dispute. It

focuses only on whether the litigant is entitled to have the court decide the merits of the dispute.”
City of Hope Nat. Med. Ctr. V. HealthPlus, Inc., 156 F.3d 223, 228 (1st Cir. 1998) (internal
quotation marks omitted) (quoting Warth v. Seldin, 422 U.S. 490, 498 (1975)). Given that the
Court did not reach the merits, Emigrant’s claims are not barred by res judicata. See McCarney
v. Ford Motor Co., 657 F.2d 230, 234 (8th Cir. 1981) (ruling that “a dismissal based upon a lack
of standing is not ‘on the merits’ of the underlying substantive claim and is not a bar to asserting
another theory of relief based upon the same operative facts assuming the other elements of claim
preclusion are satisfied”).

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This is particularly true here where the Court in Pinti II, dismissed EMC’s claims without
prejudice. See O’Connell v. Gross, No. 19-11654-FDS, 2020 WL 1821832, at *4 n.3 (D. Mass.
Apr. 10, 2020) (noting that even if prior court had reached substantive issues, claim preclusion
was not applicable where prior complaint was dismissed without prejudice). In fact, the Court in
Pinti II expressly stated that its decision was not a final adjudication on the issue, noting that “a

new case can be filed by the party or parties with standing to contest the discharge of the mortgage.
It is likely that another case will be filed by the noteholder to foreclose. It appears that the
noteholder—or if [EMC] has standing, the noteholder and [EMC]—could in that case, or another,
again seek to strike the allegedly mistaken discharge of the mortgage.” Pinti II, D. 121 at 7.
Accordingly, the Court concludes that Emigrant’s claims are not barred by res judicata because
Pinti II does not constitute a final adjudication on the merits.
B. Emigrant Has Established Standing to Strike the Discharge of Mortgage
The term “mortgagee” refers to a person or entity holding the mortgage and either holding
the mortgage note or acting on behalf of the note holder. Eaton v. Fed. Nat’l Mortg. Ass’n, 462
Mass. 569, 571 (2012). The mortgagee is entitled to foreclose on the secured property in the event

of default. Id. at 579–80. Before initiating a foreclosure, however, the mortgagee must hold the
mortgage pursuant to a valid written assignment and be able to provide proof of such. See U.S.
Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637, 649–53 (2011).
In their supplemental brief, Defendants assert that Emigrant lacks standing to bring this
action because Emigrant is not the mortgagee. D. 110 at 2. In short, Defendants argue that ESB-
MH transferred the Pinti Note and Pinti Mortgage to the FHLBNY sometime in 2008 or 2009 and
that any transfer back to Emigrant in 2019 was void because the Pinti Mortgage had been
discharged. Id. Emigrant replies that it need only establish that it is the holder of the Pinti Note,

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because it seeks to strike the Discharge, rather than foreclose. D. 116 at 10 (citing Pinti II, D. 121
at 7). Emigrant further argues that even if the Pinti Mortgage had been delivered to FHLBNY in
2009, FHLBNY assigned the Pinti Mortgage back to Emigrant in 2019. Id. at 2.
The Court begins with the ownership of the Pinti Note. Defendants originally executed the
Pinti Note in favor of EMC on March 13, 2008 alongside the Pinti Mortgage. D. 31-1 at 1. On

November 30, 2009, the Pinti Note was then endorsed by EMC in favor of ESB-MH. D. 31-1 at
7; D. 45-2 at 217–18; see Pinti II, D. 110 at 6, 14 (concluding that ESB-MH was the owner of the
Pinti Note as of November 30, 2009). Emigrant merged with ESB-MH in March 2013. D. 31-1
at 36–39.
Defendants assert that sometime in 2008 or 2009 prior to the Emigrant and ESB-MH
merger, ESB-MH transferred ownership of the Pinti Note (and assigned the Pinti Mortgage) to
FHLBNY under the terms of the Advances Agreement and the Pledge Agreement. D. 110 at 4.
As an initial matter, the Court rejects Defendants’ assertion that “ESB-MH (Emigrant’s
predecessor) transferred the Pinti Note and Pinti Mortgage to FHLBNY in April 2008” when the

Pledge Agreement was executed. Id. It is undisputed that the Pinti Note and Mortgage were not
transferred from EMC to ESB-MH until November 30, 2009. D. 45-5 ¶¶ 6, 61; D. 117 ¶¶ 75; see
D. 45-2 at 217–18; Pinti II, D. 110 at 6, 13–14. ESB-MH did not own the Pinti Note and Mortgage
prior to that date and could not have transferred any interest in those instruments to FHLBNY.
See Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282, 291 (1st Cir. 2013).
Several months after receiving the August 4, 2009 Category Change Letter, Emigrant
endorsed the Pinti Note in blank. D. 117 ¶ 107. As a result of this endorsement, the Pinti Note is
held by whichever entity possessed it. Mass. Gen. L. c, 106, § 3-205(b) (providing that instrument
“indorsed in blank . . . may be negotiated by transfer of possession alone”); see Deutsche Bank

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Nat. Tr. Co. v. Lefebvre, 90 Mass. App. Ct. 1104, 2016 WL 4536285, at *2-3 (2016) (unpublished
decision) (ruling that bank that possessed endorsed-in-blank note was owner). Despite being
granted the opportunity on remand to conduct additional discovery into the matter, Defendants
have not adduced any evidence controverting that the authentic Note is in Emigrant’s possession.
See D. 45-5 ¶ 45. The undisputed record shows that the Pinti Note has been in Emigrant’s

possession (via its counsel) since the start of this litigation. D. 118 ¶¶ 9–11; D. 112-8 at 6. Thus
Emigrant is the holder and owner of the Pinti Note.
Defendants make various arguments about the transfer of the Pinti Note based on the rights
of FHLBNY and obligations of ESB-MH and Emigrant Bank under the terms of the Advances
Agreement, Pledge Agreement and Products Guide which required, inter alia, the documents
protecting FHLBNY’s security interest to be marked as assigned to FHLBNY, kept in a
“segregated area” and gave FHLBNY the contractual right to take physical possession of the Pinti
Note. D. 117 ¶¶ 82, 92, 102–03, 107–08. While these contractual rights and obligations are
unambiguous, the undisputed evidence in the record shows that FHLBNY never took physical

possession of the Pinti Note. D. 112-2 at 24 (testifying that Pinti Note was in ESB-MH’s vault);
D. 112-4 at 37 (testifying that FHLBNY never removed “the Pinti collateral from the Emigrant
vault or the Emigrant offices in general”). The evidence also indicates that although ESB-MH was
taking steps to comply with the requirements of Listing & Segregation II, ESB-MH never in fact
met those requirements because it ultimately decided not to follow-through with the project. D.
112-4 at 14–15, 22–23; D. 112-6 at 18; D. 112-7 at 13; D. 112-12; D. 112-13; D. 118 ¶ 13. Even
if the Court inferred in Defendants’ favor that at some point the Pinti Note was transferred to
FHLBNY as part of the Pledge Agreement or Advances Agreement, this would not negate the fact

14
that the Note is endorsed in blank and has been in the physical possession of Emigrant’s agent
since before Emigrant initiated this litigation. D. 118 ¶¶ 9–11; D. 112-8 at 6; see D. 45-5 ¶ 45.
As to the Pinti Mortgage, the parties dispute whether the FHLBNY Assignment was
delivered in 2009, as collateral under the Pledge Agreement, or in 2019, as part of Emigrant’s
attempts to clarify its chain of title prior to filing the present lawsuit. D. 110 at 10 (arguing that

assignment was delivered on November 30, 2009 based on the “plain language of the Advances
Agreement and the Pledge Agreement, coupled with the August 4, 2009 letter and Member Product
Guide”); D. 116 at 5 (asserting that FHLBNY assignment was delivered on June 4, 2019 (citing
D. 112-4 at 36)); D. 117 ¶ 97 (arguing that Pinti loan was ‘more than 60 days delinquent as of
November 2009” and thus “no longer eligible to be pledged as collateral” pursuant to Member
Products Guide). For the purposes of the present motion, the Court assumes, without deciding, in
Defendants’ favor, that before the Discharge was issued, ESB-MH transferred the Pinti Mortgage
to FHLBNY. See D. 110 at 10. Even with this assumption, if the Emigrant Assignment executed
by FHLBNY on June 24, 2019 was effective, then regardless of when the Pinti Mortgage

previously was assigned to FHLBNY, Emigrant became the mortgage holder prior to initiating
this litigation.
Despite the opportunity for discovery on remand, Defendants adduced no evidence as to
the 2019 Emigrant Assignment and continue to argue that the assignment was void because the
Discharge then left “nothing to assign,” D. 110 at 4, D. 45-1 at 4, an argument the Court previously
rejected, D. 61 at 10. Emigrant contends that its status as a noteholder is sufficient to establish
standing to strike the mistaken discharge. D. 116 at 2–3 (citing Pinti II, D. 121 at 7 (stating that
“[i]t appears that the noteholder . . . could in that case, or another, again seek to strike the allegedly
mistaken discharge of the mortgage”)). That is, that it has a personal stake in striking the Discharge

15
so that it can enforce its rights under the Pinti Note. See Baker v. Carr, 369 U.S. 186, 204 (1962);
Mass. Ass’n of Indep. Ins. Agents & Brokers, Inc. v. Comm’r of Ins., 373 Mass. 290, 292 (1977).
In Gleason v. Dorney, the Supreme Judicial Court (“SJC”) held that discharge of a
mortgage “extinguished” the mortgage and a subsequent assignment “was a nullity, for the bank
at that time had nothing to assign.” Gleason v. Dorney, 332 Mass. 646, 648 (1955). The SJC

acknowledged, however, the line of Massachusetts cases wherein “equity will set aside” a
discharge made by mistake and emphasized that there were “no findings of mistake or of any other
facts that would entitle the [bank] to equitable relief” in that case. Id. That is, although a discharge
typically extinguishes the mortgage, where the discharge was made by mistake, the former
mortgage-holder is not stripped of standing to seek equitable relief striking the discharge. While
no Massachusetts case explicitly states that ownership of the note alone establishes standing to
strike a discharge, at least one Massachusetts court has allowed the party who holds the note and
a post-discharge assignment of mortgage to strike a discharge erroneously issued by its
predecessor. U.S. Bank Nat’l Ass’n v. Twomey, No. MICV200905070F, 2012 WL 2335295, at

*1, 4–5 (Mass. Super. May 23, 2012), aff’d, 83 Mass. App. Ct. 1130 (2013) (granting U.S. Bank’s
request that discharge recorded on January 26, 2006 be stricken, where U.S. Bank possessed
original promissory note endorsed in blank but did not receive formal assignment of mortgage
until December 17, 2009).
The Court concludes that as the bearer of the Pinti Note and the assignee of the 2019
Emigrant Assignment, Emigrant has standing to seek cancellation of the allegedly erroneous
Discharge.

16
C. Emigrant Has Established That the Mortgage Was Discharged in Error
“It is the general rule that, where a mortgage has been discharged by mistake, equity will
set the discharge aside and reinstate the mortgage to the position the parties intended it to occupy,
where the rights of intervening lienors have not been affected.” North Easton Co-op. Bank v.
MacLean, 300 Mass. 285, 292 (1938); see Provident Coop. Bank v. James Talcott, Inc., 358 Mass.

180, 189-90 (1970); E. Bos. Sav. Bank v. Ogan, 428 Mass. 327, 329–32 (1998). Mistakes include
misunderstandings of the facts surrounding the transaction at issue as well as administrative and
clerical errors. See James Talcott, Inc., 358 Mass. at 183, 189 (affirming that mortgage was
discharged by mistake where lender’s attorney failed to discover intervening lien during title
search); Wells Fargo Home Mortg., Inc. v. Foley, No. 298686(CWT), 2007 WL 2285809, at *3
(Mass. Land Ct. Aug. 10, 2007) (striking discharge entered by Wells Fargo due to “administrative
mistake”).
Here, the record establishes that the Discharge occurred due to an administrative error.
Defendants do not assert that their mortgage loan was somehow paid off or that there was some
other basis for the Discharge. See D. 45-5 ¶ 42; D. 112-1 ¶ 4; D. 117 ¶ 71; Foley, 2007 WL

2285809, at *3 (reinstating mortgage that had not been paid off where no intervening lienor would
be prejudiced). As evidence of how the mistake occurred, Emigrant provides a sworn affidavit
from Marcano averring that “EMC inadvertently prepared a discharge of the Pinti Mortgage”
because EMC’s September 18, 2012 memorandum “failed to properly inform Minier that a
Discharge of Mortgage should not be prepared and sent to the Defendants.” D. 31 ¶¶ 25–27.
Marcano further avers that EMC has a policy of instructing its loan servicing department not to
prepare a discharge following a third-party foreclosure sale. D. 31 ¶ 18.

17
Defendants argue that Marcano lacked personal knowledge for his testimony, that he
testified as to Emigrant’s policies and procedures despite being EMC’s deponent and employee
and that any statements made regarding EMC’s policies and procedures are inadmissible hearsay
because he did not attach them to his affidavit. D. 110 at 12–14; see D. 45-5 ¶ 25 (disputing that
the Discharge was a mistake on basis that Marcano was “merely speculating” that the “discharge

was made in error” and arguing that Marcano’s affidavit is “self-serving hearsay” and relies on no
business records prepared prior to the September 18, 2012 memorandum).
“A party’s own affidavit, containing relevant information of which he has first-hand
knowledge, may be self-serving, but it is nonetheless competent to support or
defeat summary judgment.” Cadle Co. v. Hayes, 116 F.3d 957, 961 n. 5 (1st Cir. 1997); see Hays
v. Jefferson Capital Systems, LLC, No. 15-cv-14025-GAO, 2017 WL 449590, at *2 (D. Mass.
Feb. 2, 2017) (citing Wallace Motor Sales, Inc. v. Am. Motors Sales Corp., 780 F.2d 1049, 1061
(1st Cir. 1985); and Schwartz v. CACH, LLC, No. 13-12644-FDS, 2014 WL 298107, at *2 n.2 (D.
Mass. Jan. 27, 2014) (considering affidavit where affiant had custodial responsibilities and

personal knowledge regarding business records)).
Here, Marcano avers that his affidavit is made based on his “personal knowledge” and
“upon review of the servicing records for the subject property, which records were made and
maintained in the regular or ordinary course of business of EMC.” D. 31 ¶ 3. Defendants argue
that Marcano cannot attest to “EMC’s established loan servicing policies and procedures” without
attaching any record of the same to the affidavit. D. 110 at 12; D. 31 ¶ 18. Marcano’s affidavit
makes clear that he is relying upon his personal knowledge and observations of EMC’s policies
and practices in his role as Assistant Treasurer in the foreclosure department since 2007. D. 31
¶¶ 1, 3; D. 45-2 at 171.

18
The Court also disagrees with Defendants’ contention that Marcano lacked personal
knowledge to aver that Emigrant, rather than his employer EMC, never “had a policy or preparing
or otherwise providing a Discharge of Mortgage to a borrower upon receiving proceeds from a
third-party purchaser following a foreclosure sale.” D. 110 at 13–14; D. 31 ¶ 19. Under the terms
of a subservicing agreement with Emigrant’s predecessor-in-interest, EMC acted as Emigrant’s

servicer “on a group of loans,” a role that includes preparing payoff documents. See D. 45-2 at
435–36; id. at 171. As an employee within EMC’s foreclosure department, there is no basis here
to question that Marcano would be aware if Emigrant routinely issued discharges for foreclosed
loans, at least as to the group of loans serviced by EMC. Moreover, the Defendants offer no
evidence that Emigrant or ESB-MH would have intentionally directed the loan be discharged and
no reasonable jury could find such intent where the Discharge contradicted the financial interests
of EMC and Emigrant. See Progressive Consumers, 79 F.3d at 1237.
Finally, Defendants point to a statement by Marcano in his deposition, “I believe [the
Discharge] was created in error” for the proposition that Marcano lacked personal knowledge of

the error. D. 110 at 12 (citing D. 45-2 at 735). Marcano’s subsequent testimony shows that he
based his belief upon review of a “memo that was provided along with the check to send to our
Payoff Department for processing.” D. 45-2 at 735. The Payoff Memo from Sorvillo to Minier,
along with other documents related to the attempted foreclosure and discharge, was attached to
Marcano’s affidavit as business records. D. 31; see Facey v. Dickhaut, 91 F. Supp. 3d 12, 20–21
(D. Mass. 2014) (ruling that affidavit could survive motion to strike “even when the declarant did
not personally experience the matters discussed in the affidavit, but did review business or public
records and included information from those records with the affidavit”). The Court will,
therefore, rely upon Marcano’s sworn statement to conclude that the Discharge was in error. See

19
Cremaldi v. Wells Fargo Bank, No. 13-11767-MLW, 2017 WL 1190377, at *3 (D. Mass. Mar. 30,
2017) (finding sufficient foundation at summary judgment stage when affiant asserted that she was
“familiar with the business records maintained by Wells Fargo for the purpose of servicing
mortgage loans and [has] personal knowledge of the operations and the circumstances surrounding
the preparation, maintenance and retrieval of records in Wells Fargo’s recordkeeping systems”

(alteration in original)).
Defendants further argue that Sorvillo’s deposition testimony creates a factual dispute as
to whether the Discharge was in error. D. 45-1 at 18; D. 45-5 ¶ 22; D. 110 at 14. First, Defendants
argue that “Sorvillo testified that she did not believe that she made a mistake in preparing the
memorandum that would have caused a discharge to be accidentally made.” D. 110 at 14 (citing
D. 45-2 at 684). As noted in the Court’s prior decision, Sorvillo’s subjective belief or intentions,
however, are not at issue here, but rather the objective indications of corporate actors. D. 61 at 12.
Moreover, Defendants misleadingly cite to a portion of Sorvillo’s deposition testimony discussing
a mistake concerning an unrelated August 2012 memorandum, rather than the September 2012

Payoff Memo. D. 45-2 at 683–86 (testifying as to potential errors that occurred in August when
Sorvillo “did an REO acquisition” instead of a third-party sale); id. 709–12 (explaining that
memorandum in August relating to REO acquisition was separate from September 18
memorandum to servicing department). With regard to the September Payoff Memo, Sorvillo
testified that the person receiving the Payoff Memo could misunderstand the word “payoff” to
mean an “actual payoff” or “full payoff,” thus leading to an erroneous discharge. D. 45-2 at 714–
16; see id. at 690 (testifying that “full payoff” would lead to discharge of a mortgage). Whether
Sorvillo, or some recipient of the Payoff Memo, personally accepts blame for the mistake is
irrelevant.

20
Second, Defendants argue that Sorvillo did not “recall[] any policies in place at EMC in
2012 regarding the preparation of such memoranda.” D. 110 at 14 (citing D. 45-2 at 694).
Defendants’ characterization of the record untenable. As Emigrant points out, “Sorvillo testified
that she ‘wouldn’t call them policies. Procedure or something, yes.’” D. 116 at 16 (citing D. 45-2
at 694).

The Court concludes that Emigrant’s continued possession of the unreleased Pinti Note is
further evidence that the discharge was unintentional. Defendants do not dispute that neither EMC
nor Emigrant have returned the Pinti Note cancelled or otherwise to Defendants. D. 45-5 ¶ 28.
Nor do Defendants dispute that EMC has not otherwise marked the Pinti Note as satisfied. D. 31
¶ 27; see D. 45-5 ¶ 27. The return of the Pinti Note may not be a “prerequisite for a valid discharge
of the Pinti Mortgage.” See D. 110 at 15. Cancellation of the mortgage note, however, typically
accompanies discharge of a mortgage. Cf. NationsBanc Mortg. Corp. v. Eisenhauer, 49 Mass.
App. Ct. 727, 732 (2000) (affirming district judge’s finding that discharge was not erroneous where
mortgagors received cancelled note along with discharge and explaining that debtor’s possession

of cancelled note creates rebuttable presumption of discharge); Dickman v. McClellan, 302 Mass.
87, 88 (1939) (ruling that discharge of mortgage should be reformed to explicitly release liability
on note). At the very least, the non-cancellation of the Pinti Note is further evidence that the
Discharge was issued through inadvertence rather than intent.
Defendants, with no supporting case law, argue that even if there was a mistake made, it
was a unilateral mistake and thus Emigrant’s remedy should be against EMC because EMC made
the mistake. D. 45-1 at 12. While some Massachusetts cases refer to reformation of the mortgage
contract based on the parties’ mutual mistake, Massachusetts cases contemplate reinstating
discharged mortgages even where there is no apparent fault or mistake on the part of the mortgagor.

21
Foley, 2007 WL 2285809, at *3 (striking discharge and recognizing that discharge was part of
series of “obvious and repeated clerical and administrative errors on the part of Wells Fargo”); see
United Fruit Co. v. United States, 186 F.2d 890, 895–96 (1st Cir. 1951) (holding that recission of
mistakenly executed release “will not be denied . . . merely because the [plaintiff’s] unilateral
mistake may have been attributable in some sense to lack of care or diligence” where defendant

never “changed its position in reliance on the release”).
Defendants also argue that Emigrant is not entitled to a remedy because EMC’s mistake
was based on a “business decision” to act without retaining a Massachusetts attorney to advise it
or hire a compliance officer for Massachusetts. D. 45-1 at 16-17. Even if Defendants had provided
any legal support for this argument, id., the factual record does not indicate that the Discharge
occurred due to any failure to comply with Massachusetts law, rather than simply misreading or
mis-drafting of the Payoff Memo. D. 31 ¶¶ 25-27; D. 45-2 at 714–16.
No reasonable jury could find that EMC intentionally discharged the Pinti Mortgage on the
uncontroverted record recited here. D. 31 ¶¶ 25–27; D. 45-2 at 714–16; D. 117 ¶ 119–20.

Accordingly, the Court concludes, on an undisputed record, that the Discharge was issued by
mistake.1
D. Emigrant Is Entitled to Recovery in Equity
Defendants argue that even if the Pinti Mortgage was discharged by mistake, Emigrant is
not entitled to equity where (1) it acted with unclean hands and (2) Defendants cannot be restored
to their status quo ante position. D. 110 at 18–21.

1 Defendants’ argument regarding unjust enrichment, D. 45-1 at 13, does not warrant a different
conclusion. Emigrant has not brought a claim for unjust enrichment and notes that it “merely relies
upon Defendants’ unjust enrichment as evidence that the discharge of [the Pinti Mortgage] was
recorded by mistake, and is not seeking money damages under an independent state law claim for
unjust enrichment.” D. 46 at 9.
22
1. Emigrant Did Not Act with Unclean Hands
“The doctrine of unclean hands denies equitable relief ‘to one tainted with the
inequitableness or bad faith relative to the matter in which [he] seeks relief.’” Murphy v. Wachovia
Bank of Del., N.A., 88 Mass. App. Ct. 9, 15 (2015) (quoting Fidelity Mgmt. & Rsch Co. v.
Ostrander, 40 Mass. App. Ct. 195, 200 (1996)). The doctrine “only applies when the claimant’s

misconduct is directly related to the merits of the controversy between the parties.” Travers v.
Flight Servs. & Sys., Inc., 808 F.3d 525, 538 (1st Cir. 2015). “Its purpose is to prevent a party
from benefiting by his dishonesty.” Fisher v. Fisher, 349 Mass. 675, 677 (1965). As such, it
typically applies where a party engages in “willful misconduct” rather than “an inadvertent act or
misapprehension of legal rights.” 30A C.J.S. Equity § 118 (2023); see, e.g., Precision Instrument
Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 815 (1945) (explaining that “[a]ny willful act
concerning the cause of action which rightfully can be said to transgress equitable standards of
conduct is sufficient cause for the invocation of” the unclean hands doctrine); Williams v. Arndt,
626 F. Supp. 571, 578 (D. Mass. 1985) (holding that unclean hands defense did not apply to
copyright infringement claim where defendants could not “prove that any omission [in copyright

application] was an intentional, knowing or purposeful concealment”).
In their initial opposition, Defendants contend that “EMC acted with unclean hands when
it told Defendants that they were the mortgage holder.” D. 45-1 at 10. Defendants point to no
evidence that EMC did not believe in good faith that it was the “holder and servicer of the loan”
when it prepared its August 22, 2011 QWR Response, D. 45-2 at 311, or when it continued to
litigate Pinti II. Defendants also argue that Emigrant “cloud[ed] Defendants title by executing new
assignments of a discharged mortgage” to manufacture standing and to deny discovery to
Defendants. D. 45-1 at 11. Again, despite being accorded discovery regarding the 2019

23
assignments, Defendants have adduced no evidence that the assignments were fictitious. The
Court does not doubt, and indeed Emigrant does not contest, that the Emigrant Assignment was
executed to bolster Emigrant’s standing for this and future litigations, but it is unclear why this
motive would amount to bad faith misconduct. See D. 117 ¶ 143 (acknowledging that “Emigrant
delivered the FHLBNY Assignment and sought a further Assignment of Mortgage from FHLBNY

back to itself to address the Defendants’ anticipated challenges to its standing in the context of the
FHLBNY Assignment had the instrument been left unrecorded”).
Defendants’ supplemental opposition asserts that “EMC’s preparation of the discharge
might not in these circumstances have been a mere negligent mistake but rather, ‘reckless,
deliberate, unprofessional, incompetent, and possibly misfeasant.’” D. 110 at 19. General
observations about “EMC’s shoddy business practices” do not, at this summary judgment stage,
answer the merits of the relief that Emigrant seeks here. D. 110 at 19; see Murphy, 88 Mass. App.
Ct. at 16 (rejecting unclean hands defense where plaintiff’s failure to disclose his interest in surplus
funds was “unconnected” to his claim that Bank erroneously distributed funds). Defendants fail

to offer any evidence regarding recklessness, much less intentional misconduct, with regard to the
Discharge.
First, to the extent that EMC’s knowledge of its own mistake and failure to act on that
knowledge in a timely manner would indicate bad faith, see D. 110 at 19, this case is
distinguishable from Nat’l Lumber. There, the court denied equitable subrogation on summary
judgment because evidence showed that the bank’s attorney became aware of the junior lien before
closing on refinancing, intended to seek a discharge or subordination from junior lienholder to
ensure seniority of the refinanced mortgage, but for unknown reasons did not actually obtain the
discharge or subordination. Nat’l Lumber Co., 76 Mass. App. Ct. at 3, 7; cf. James Talcott, Inc.,

24
358 Mass. at 183 (granting equitable relief where attorney did not discover intervening lien during
title search). By contrast, here, Defendants have adduced no evidence that EMC became aware of
the potential mistake in time to avert it. Indeed, two representatives of EMC testified to their lack
of knowledge regarding the mistaken Discharge. D. 45-2 at 155, 252-53 (testifying that as vice
president of loan administration, “didn’t even know it existed”); D. 45-2 at 610 (testifying that as

senior vice president and general counsel of Emigrant Savings Bank, could not recall being told
about a mistakenly discharged note).
Second, Defendants argue the Court has not considered the “apparent thousands . . . of
mortgage assignments that . . . have never, apparently, been accurately reflected in the recordings
by EMC.” D. 110 at 19; see D. 117 ¶¶ 149–151 (describing destruction of some portion of
mortgage assignments prepared in late 2009). Even if the Court were to credit Defendants’
position that “thousands” of mortgage assignments were prepared and left unrecorded for a bad-
faith purpose, this would have no bearing on the merits of the equitable claim at issue, namely
whether the Discharge may be stricken as issued by mistake.

Moreover, barring equitable relief in this case would not serve the doctrine’s usual purpose
of preventing a dishonest actor from benefiting from its own misconduct. See Fisher, 349 Mass.
at 677. Here, the Discharge did not benefit Emigrant, but rather delayed its ability to foreclose on
the Property and enforce its rights under the Pinti Note pending the resolution of Pinti II and the
present matter. Striking the Discharge will not convert those losses into a windfall. For all of
these reasons, the Court concludes that EMC did not act with unclean hands with regard to the
Discharge.

25
2. Defendants Restored to Their Pre-Discharge Position
Defendants argue that rescinding the Discharge is inappropriate where Defendants cannot
be restored to their original, pre-Discharge position. D. 110 at 20. Defendants list the following
expenses, which they assert exceed the amount owed under the Pinti Note, as evidence of their
changed position: (1) attorneys’ fees “in excess of $150,000” across “three separate cases;” (2)

condo fees paid after the Discharge; (3) entry into a “settlement with their condo association based
on the mortgage having been discharged” and (4) use and occupancy payments to Wilion, the
foreclosure buyer, and attorney’s fees in connection to their dispute with Wilion. Id.
Massachusetts law does not preclude recission even where restoration of the status quo is
not feasible. Levy v. Bendetson, 6 Mass. App. Ct. 558, 565 (1978) (ruling that recission of
property sale was appropriate even though property had since been resold to another buyer where
trial court could “exercise[e] its equitable powers to impose conditions on the grant of
relief . . . and fashion a remedy which will be fair to [seller] in the circumstances”). This Court
may tailor its award of equitable relief based on the facts of a given case. See, e.g., Francis v.
Pinault, No. CIV.A. C96-00625, 1997 WL 414970, at *5–6 (Mass. Super. July 18, 1997)

(cancelling mortgage discharge but crediting defendant-mortgagor with $1800 in financing costs
incurred to pay off loan and forgiving half the interest that would have accrued while discharge
was recorded), vacated on other grounds, 50 Mass. App. Ct. 1109 (2000) (affirming trial judge’s
reasoning but vacating due to mathematical error); Bank of Mass. v. Cassin, No. 185782, 1994
WL 16193971, at *3 (Mass. Land Ct. Jan. 18, 1994) (granting equitable relief from mistaken
discharge by restoring plaintiff to intended position as holder of first mortgage, except as to
intervening lienholder who recorded its interest without notice of plaintiff’s position).

26
Here, the Court’s remedy returns Defendants to the position they would have occupied if
the Discharge had not occurred. Defendants’ bases for arguing that their position is irreversibly
changed relate to financial liability Defendants incurred while living at the Property. See D. 110
at 20. Prior to execution of the Discharge on October 3, 2012, however, Defendants were already
in default on their loan and the Property had already been sold to Wilion. D. 45-5 ¶¶ 14-16; 19;

D. 117 ¶¶ 118, 120; see D. 31-1 at 99–100. Moreover, the Discharge was not at issue in Pinti I as
Defendants had not discovered it until after the SJC issued its ruling. D. 45-3 ¶ 16; D. 112-1 ¶¶ 22–
23. Thus Defendants may be restored to their pre-Discharge position without accounting for
payments related to Wilion or related to the state court litigation, as those expenses would have
been incurred regardless of the Discharge. D. 116 at 20.
As to attorneys’ fees arising from this litigation and Pinti II, Defendant has not identified
any case granting reimbursement of attorneys’ fees expended defending against recission or
striking a mistaken discharge. Simply put, such litigation expenses do not appear necessary to
restore Defendants to their pre-Discharge positions. See Less v. Berkshire Hous. Ser., No. 00-

30033-MAP, 2000 WL 1615740, at *7 (D. Mass. Sept. 8, 2000) (declining to shift attorney’s fees
in absence of bad faith in pursuing litigation). Moreover, as Emigrant points out, D. 116 at 20,
Defendants provide no documentation from which the Court can determine how much Defendants
expended to defend the Discharge, rather than any of the numerous other disputes between the
parties.
The Court understands Defendants’ position regarding the condo fees and settlement to be
that Defendants would not have agreed to pay such fees but for their belief that the Mortgage had
been discharged. While Defendants may have sought to avoid paying condo fees for a Property
they anticipated being evicted from, Defendants do not explain why liability for such fees would

27
not have been incurred but for the Discharge. As Emigrant points out, the litigation between
Defendants and the condo association was initiated in January 2010, well before the Discharge
was executed, over fees that likely predated the Discharge and which Defendants conceded were
owed to the condo association. D. 116 at 19–20 (citing D. 45-3 ¶ 27). Fairness does not require
the Court to credit Defendants for paying any amount that was already owed to the condo

association prior to the Discharge.
Accordingly, the Court finds that Defendants have not shown they cannot be restored to
their original positions and will enter a judgment striking the Discharge.
E. Defendants Adduced No Evidence of Fraud on the Court
“A ‘fraud on the court’ occurs where it can be demonstrated, clearly and convincingly, that
a party has sentiently set in motion some unconscionable scheme calculated to interfere with the
judicial system’s ability to impartially adjudicate a matter by improperly influencing the trier or
unfairly hampering the presentation of the opposing party’s claim or defense.” Aoude v. Mobil
Oil Corporation, 892 F.2d 1115, 1118 (1st Cir. 1989). Defendants must surmount a “high bar” to
obtain relief for fraud upon the court. United States v. 6 Fox St., 480 F.3d 38, 46 (1st Cir. 2007).

“[T]he power of a court to set aside a judgment for fraud upon the court . . . [is a] traditional
inherent power of a court to protect its own essential functioning and integrity. It is, however, a
power rarely to be used.” Simon v. Navon, 116 F.3d 1, 6 (1st Cir. 1997). A finding of fraud upon
the court “may be justified only by the most egregious misconduct directed to the court itself,
and . . . it must be supported by clear, unequivocal and convincing evidence.” United States v.
Yeje-Cabrera, 430 F.3d 1, 28 n.22 (1st Cir. 2005) (internal citation and quotation marks omitted).
Defendants assert that EMC perpetrated a fraud on the Court because (1) in Pinti I and Pinti
II, EMC argued that it was the true holder of the Pinti Mortgage and had standing to foreclose,

28
despite knowing it was merely servicing that mortgage; (2) assignment of the discharged Pinti
Mortgage is fictitious; (3) EMC’s litigation counsel falsely swore that EMC had standing to
foreclose in an affidavit filed in Pinti II and (4) EMC’s in-house counsel manipulated or withheld
her client’s corporate tax records. D. 45-1 at 6–7. First, to the extent that that EMC argued in
prior litigations that it had standing to strike the Discharge or foreclose on the Property,

“[c]hanging legal or factual positions in different cases . . . falls significantly short of committing
a fraud on the court.” Lu v. Menino, 98 F. Supp. 3d 85, 99 n.12 (D. Mass. 2015). Moreover, EMC
never denied being the servicer of the loan in Pinti II. Instead, EMC argued that, as the servicer,
it was authorized to act on behalf of Emigrant, the holder of the Pinti Note. Pinti II, D. 12 at 7.
As to the Pinti Note and 2019 Pinti Mortgage assignments, Defendants offer no evidence of fraud
relating to the authenticity of these documents despite the opportunity to conduct discovery on
these issues. Nor have Defendants ever introduced evidence showing the Emigrant or EMC (or
their counsel) manipulated or withheld their corporate tax records. For all of these reasons,
Defendants have failed to adduce any evidence that would meet the high burden that is necessary

to establish that EMC, Emigrant or their attorneys have committed fraud on the Court.
F. Defendants’ Counterclaim for Violation of Chapter 93A Is Barred by the
Statute of Limitations
In their counterclaim, Defendants allege that Emigrant engaged in unfair and deceptive
practices by repeatedly attempting to seize the Property and by sending fraudulent mailings,
including notices of Servicemembers Civil Relief Act in Massachusetts Land Court and notices of
intent to auction the Property in violation of Chapter 93A. D. 20 at 10. Nothing in Defendants’
supplemental opposition indicates that the Court should reconsider its prior conclusion that this
claim is time-barred. D. 61 at 16.

29
Defendants’ Chapter 93A counterclaim is governed by a four-year statute of limitations.
Mass. Gen. L. c. 260, § 5A. Under Massachusetts law, “[t]he limitations period begins to run
‘when a [party] discovers, or any earlier date when she should reasonably have discovered, that
she has been harmed or may have been harmed by the defendant’s conduct.’” Epstein v. C.R.
Bard, Inc., 460 F.3d 183, 187 (1st Cir. 2006) (quoting Bowen v. Eli Lilly & Co., 408 Mass. 204,

205–06 (1990)). Under the discovery rule, “the limitations period is tolled until ‘events occur or
facts surface which would cause a reasonably prudent person to become aware that she or he had
been harmed.’” Epstein, 460 F.3d at 187 (quoting Felton v. Labor Rels. Comm’n, 33 Mass. App.
Ct. 926, 927 (1992)). This discovery must include two components: “not only knowledge that
one has been injured but knowledge of its cause—that [the party] ‘has been harmed as a result of
the defendant’s conduct.’” Fidler v. Eastman Kodak Co., 714 F.2d 192, 198 (1st Cir.
1983) (quoting Olsen v. Bell Tel. Labs., Inc., 388 Mass. 171, 175 (1983)).
Here, Defendants reasonably knew as on August 9, 2012, the date of the attempted
foreclosure sale, of the conduct that it alleges violates Chapter 93A. D. 20 at 10; D. 45-5 ¶¶ 14–

16. Thus, Defendants’ claim expired four years later, on August 9, 2016. Defendants did not
assert their claim for violations of Chapter 93A until May 18, 2020, see D. 20, thus the statute of
limitations bars their claim.
Defendants argue that in equity it would be “unfair to allow [Emigrant] to delay in bringing
the action, to prevent meritorious claims, that were held back because of the discharge.” D. 45-1
at 15. The Court, however, does not conclude that Emigrant’s claim was delayed unreasonably
when it was brought within the requisite statute of limitations period. See Petrella v. Metro-
Goldwyn-Mayer, Inc., 572 U.S. 663, 679 (2014) (holding that laches cannot defeat a claim brought
within the period prescribed by statute of limitations). “An action for the recovery of land shall

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commence . . . within twenty years after the right of action . . . first accrue[s].” Mass. Gen. L. c.
260 § 21. Defendants recorded the discharge of the Pinti Mortgage on July 29, 2015. D. 45-5 ¶
38. Thus the statute of limitations for any claim regarding same by Emigrant expires twenty years
from July 29, 2015. Given that Emigrant brought its claim within the requisite statute of
limitations, D. 1, the Court cannot conclude that Emigrant unreasonably delayed in bringing its

action.
To the extent that Defendants argue that because Emigrant’s claim has a longer statute of
limitations period, the Court should equitably toll the statute of limitation for Defendants’ Chapter
93A claims, they, again, do not cite any case law for this position. Moreover, case law stresses
that “equitable tolling is proper only when [a party] has in some extraordinary way . . . been
prevented from asserting his or her rights.” Mosso v. Matesanz, No. 00-10199-GAO, 2001 WL
1688900, at *1 (Dec. 5, 2001) (internal citation and quotation marks omitted). Defendants have
not explained why any alleged delay on the part of Emigrant to file its claim prevented Defendants
from bringing for their own Chapter 93A claim. Indeed, the June 17, 2016 Pinti II complaint made

clear that EMC intended to seek cancellation of the Discharge and yet Defendants did not raise
their Chapter 93A claims until nearly four years later. Pinti II, D. 1 ¶¶ 37–42. Thus, the Court
will not equitably toll the statute of limitations for Defendants’ counterclaim and their Chapter
93A counterclaim is time barred.2
G. Defendants’ Counterclaim for Negligent Infliction of Emotional Distress Fails
Defendants assert that Emigrant negligently inflicted emotional distress when it failed to
have EMC “confirm that it had the authority to attempt to foreclose, and this negligence is the

2 Given this ruling, the Court need not reach Emigrant’s arguments on the merits or its argument
that Defendants’ Chapter 93A claim is barred by res judicata. D. 29 at 11, 13-16.
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direct cause of the harm suffered by Linda Pinti.” D. 20 at 11. Emigrant asserts that this claim is
barred by the doctrine of claim preclusion and fails on the merits. D. 29 at 16–18. First, a claim
is precluded under the doctrine of res judicata if there is “(1) a final judgment on the merits in an
earlier action; (2) sufficient identity between the causes of action asserted in the earlier and later
suits; and (3) sufficient identity between the parties in the two suits.” Bay State HMO Mgmt., 181

F.3d at 177. Defendants previously asserted a negligent infliction of emotional distress claim in
Pinti II premised on EMC’s efforts to foreclose the Pinti Mortgage. Pinti II, D. 31-1 ¶¶ 62–68.
The Court in Pinti II, entered a final judgment on the merits of this claim when it granted summary
judgment in favor of EMC. Pinti II, D. 54 ¶ 3. Second, there is sufficient identity between the
causes of action asserted in Pinti II and the current case because both arise out of EMC’s conduct
in attempting to foreclose the Property. Third, EMC and Emigrant share a sufficient identity
because EMC is Emigrant’s servicer. See R.G. Fin. Corp. v. Vergara-Nunez, 446 F.3d 178, 185–
86 (1st Cir. 2006). Accordingly, EMC and Emigrant are sufficiently identical with regard to Pinti
II and the present case, and Defendants’ allegations of negligent infliction of emotional distress

are barred.
Even if this claim was not barred by res judicata, it fails on the merits. To succeed on their
counterclaim for negligent infliction of emotional distress, Defendants must demonstrate that
Emigrant owed them a duty of care. See Young v. Wells Fargo Bank, N.A., 717 F.3d 224, 239
(1st Cir. 2013). Mortgagor-mortgagee relationships, however, do not give rise to a duty of care.
Id. at 239 & n.15 (citing Corcoran v. Saxon Mortg. Servs., Inc., No. 09–11468–NMG, 2010 WL
2106179, at *4 (D. Mass. May 24, 2010)); see MacKenzie v. Flagstar Bank, FSB, 738 F.3d 486,
495 (1st Cir. 2013) (holding that “relationship between a borrower and lender does not give rise to
a duty of care under Massachusetts law”).

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Accordingly, Emigrant is entitled to summary judgment on Defendants’ counterclaim for
negligent infliction of emotional distress.
H. Defendants’ Counterclaim Intentional Infliction of Emotional Distress Claim
Also Fails
Defendants also assert that Emigrant intentionally inflicted emotional distress by allowing
EMC fraudulently to attempt to foreclose on the Property, despite knowing the effect the
foreclosure would reasonably have on Pinti. D. 20 at 11. Unlike the claim for negligent infliction
of emotional distress, Defendants previously did not assert this claim. “[C]laim preclusion
[however,] bars the relitigation of any issue that was, or might have been, raised in respect to
subject matter of the prior litigation prior litigation.” Grella v. Salem Five Cent Sav. Bank, 42
F.3d 26, 30 (1st Cir. 1994) (emphasis in original) (citations omitted). Defendants’ counterclaim

for intentional infliction of emotional distress is premised on similar facts as its negligently
infliction of emotional distress claim, namely EMC’s conduct in attempting to foreclose on the
Property. This conduct occurred prior to Pinti II and thus Defendants were obligated to bring such
a claim in Pinti II. See Airframe Sys., Inc. v. Raytheon Co., 520 F. Supp. 2d 258, 267 (D. Mass.
2007) (ruling that claim preclusion wiped out liability based on any actions or conduct preceding
the court’s prior decision).
Even assuming, however, that Defendants’ claim for intentional infliction of emotional
distress is not precluded, it too fails on the merits. Under Massachusetts law, a claimant must
show the following for a claim of intentional infliction of emotional distress: “(1) the defendant

intended to inflict emotional distress, or knew or should have known that emotional distress was
the likely result of his conduct . . . (2) the defendant’s conduct was extreme and outrageous,
beyond all possible bounds of decency and utterly intolerable in a civilized community, (3) the
actions of the defendant were the cause of the plaintiff's distress, and (4) the emotional distress
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suffered by the plaintiff was severe and of such a nature that no reasonable person could be
expected to endure it.” Payton v. Abbott Labs, 386 Mass. 540, 555 (1982). “Liability cannot be
predicated on mere insults, indignities, threats, annoyances, petty oppressions or other trivialities[;]
nor even is it enough that the defendant has acted with an intent which is tortious or even criminal,
or that he has intended to inflict emotional distress, or even that his conduct has been characterized

by malice or a degree of aggravation which would entitle the plaintiff to punitive damages for
another tort.” Tetrault v. Mahoney, Hawkes & Goldings, 425 Mass. 456, 466 (1997) (citations
and internal quotation marks omitted). “[W]hile home foreclosure is a terrible event and likely
fraught with unique emotions and angst, foreclosures, even ones that may involve improper
conduct, do not readily go beyond all possible bounds of decency.” Asfour v. Citizens Bank, N.A.,
No. 16-11732-FDS, 2016 WL 7428224, at *6 (D. Mass. Dec. 23, 2016) (quoting Payton v. Wells
Fargo Bank, N.A., 2013 WL 782601, at *4 (D. Mass. Feb. 28, 2013)).
Here, on this developed record, there is no support for an assertion that Emigrant or EMC
acted intentionally to inflict emotional distress or knew or should have known that emotional

distress would result. Accordingly, the Court also allows Emigrant’s motion for summary
judgment as to Defendants’ counterclaim for intentional infliction of emotional distress.
I. Defendants’ Defense of Laches
“A defense of laches exists upon a factual finding that there has been unjustified,
unreasonable, and prejudicial delay in raising a claim.” Santagate v. Tower, 64 Mass. App. Ct.
324, 333 (2005) (citation omitted). Defendants argue that there is a factual dispute as to why
Emigrant waited “from 2012 to the filing of the instant case to assert their rights.” D. 45-1 at 15.
A defense of laches, however, cannot be invoked to bar legal relief in the face of a statute of
limitations enacted by Congress. SCA Hygiene Products Aktiebolag v. First Quality Baby

34
Products, LLC, 580 U.S. 328, 334–35 (2017). As discussed above, the statute of limitations for
Emigrant’s claim is twenty years from July 29, 2015. That date has not yet passed. Moreover,
given Defendants’ recording of the Discharge in 2015, the significant history of litigation between
Defendants and Emigrant’s affiliates and the Emigrant’s filing of the present action after Pinti II,
the Court does not find that there was any unreasonable delay in Emigrant’s pursuit of its claims.

Thus, the Court does not conclude as a matter of equity or otherwise that Emigrant’s claim was
delayed unreasonably. See Petrella, 572 U.S. at 675-81 (holding that laches cannot defeat a claim
brought within the period prescribed by statute of limitations).
VI. Conclusion
For the foregoing reasons, the Court ALLOWS Defendants’ motion for summary
judgment, D. 28.
So Ordered.

/s/ Denise J. Casper
United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10201675. Public record. Not legal advice.