In Fannie Mae v. Branch, after a long and complicated litigation involving two Appeals Court decisions, the SJC recently ruled that an appeal of a summary process (i.e., eviction) claim was not rendered moot by a bidder’s transfer of its interests in the property at issue to a successor purchaser.
In 2009, the defendant purchased property using a loan from a credit union, secured by a mortgage on the property. A few years later, the credit union notified the defendant that the loan was in default. The credit union foreclosed on the property, and the foreclosure deed granted the property to Fannie Mae. Fannie Mae served the defendant with a notice to quit, and filed a summary process action in Housing Court. The defendant filed several counterclaims. Fannie Mae moved for partial summary judgment on possession and the counterclaims, and judgment entered in Fannie Mae’s favor. Among other things, the defendant was ordered to pay a monthly use and occupancy fee.
The defendant appealed, and the appeal took four years to resolve. While the appeal was pending, Fannie Mae sold the property to a third party, transferring “all the estate, right, title interest, lien equity and claim whatsoever.” The third party successfully intervened and was joined as a party of right with Fannie Mae.
In September 2020, in an unpublished decision, the Appeals Court vacated the Housing Court’s judgment of possession as moot because, after the sale to the third party, Fannie Mae’s possessory interest was no longer superior to the defendant’s interest. Accordingly, the third party needed to reestablish a right to possession in a new and separate case in the Housing Court. He was successful in doing so, and obtaining an order for use and occupancy payments from the defendant.
The case returned to the Appeals Court, which disposed many of the issues as moot, once again, including vacating the judgment for possession in favor of Fannie Mae because Fannie Mae no longer had any possessory interest in the property. This decision had the effect of making the third party’s appeal from its motion to intervene also moot. The third party sought further appellate review.
The SJC disagreed with the Appeals Court on the issue of mootness, stating “Because it is undisputed that Fannie Mae transferred its entire interest in the property — including any possessory interest — to [the third party] after foreclosure, we conclude that he maintains a live stake in adjudication of the judgment for possession.” In other words, although Fannie Mae’s interest in the case had “diminished,” the third party’s interest had not. Turning to the merits of the claim for possession, the SJC upheld the entry of summary judgment in favor of the third party on the possession and the counterclaims.