By John C. Lynch, Jason E. Manning and Elizabeth "Liz" S. Flowers
On April 30, 2012, the United States District Court for the District of Massachusetts denied class certification of Plaintiffs' unlawful foreclosure claims, finding that Plaintiffs failed to satisfy Rule 23(a) requirements. Significantly, the Court held that determination of Plaintiffs' unlawful foreclosure claims would require "highly individualized and case-specific inquiries," thus Plaintiffs could not meet their burden to show a "common" question for class certification purposes.
Plaintiffs' claims arise out of Defendants alleged foreclosure of properties without first obtaining valid assignments of the underlying mortgages in violation of Massachusetts statutory law ("Ibanez violations"). (See Mass. Gen. Laws ch. 244, § 14 & ch. 183, § 21). Plaintiffs' purported class includes all Massachusetts residents whose property was subject to foreclosure proceedings (commenced or completed) for a four-year period wherein the assignments transferring the mortgages into the name of Defendants were executed after the Notices of Sale were issued.
The Court explained that executing an assignment after the Notice of Sale is issued is not a per se violation. Instead, the statute is satisfied where the foreclosing entity is in possession of the executed assignment prior to the foreclosure sale, even if the assignment is not recorded until after the foreclosure sale.
Accordingly, the Court determined that common questions would only exist "after the merits of each case had been fully investigated" because it would have to make "highly individualized and case-specific inquiries" into each loan to determine if a valid pre-foreclosure assignment exists. Thus, the Court held that Plaintiffs could not meet the commonality requirement for certification under Rule 23(a)(2), or the predominance requirement for certification under Rule 23(b)(3).
Notably, the Court found that the relevant inquiry for the commonality requirement is "the capacity of a class-wide proceeding to general common answers apt to drive the resolution of litigation," and not "the raising of common 'questions.'" (citing Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011) [enhanced version available to lexis.com subscribers]). Further, the Court concluded that "an implicit prerequisite to class certification is that a 'class' exists - in other words, it must be 'administratively feasible for the court to determine whether a particular individual is a member.'" Here, a "post-dated recording evidences only the possibility that a particular homeowner might fall within the class," therefore, certification is not appropriate.
A copy of the Court's opinion is attached here. Manson v. GMAC Mortgage, LLC, No. 08-12166 (D. Mass. April 30, 2012) (Stearns, J.).
Please do not hesitate to contact John Lynch, Jason Manning or Liz Flowers if you have questions.
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