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COMMONWEALTH OF MASSACHUSETTS
MIDDLESEX, ss. SUPERIOR COURT DEPARTMENT
OF THE TRIAL COURT
xxxxx xxxxx, xxxxxx xxxxx
Plaintiffs,
v. CIVIL ACTION NO. 2 y- 3s 3
WILMINGTON TRUST NATIONAL
ASSOCIATION, MFRA TRUST 2015-1, PLANET
HOME LENDING, LLC, et al.,
Defendants.
I. INTRODUCTION
1. Plaintiffs xxxxx and xxxxxx xxxxx (collectively, the “Najdas”) are brining this action to
enjoin a wrongful foreclosure of their home and recover damages arising from the improper, bad
faith actions of Defendants Wilmington Trust National Association (“Wilmington”), MFRA Trust
2015-1 (“MFRA 2015”), and Planet Home Lending, LLC (“PHL”), Citibank, N.A. not in its
individual capacity, but solely as separate trustee for PMT NPL Financing 2015-1!, and PNMAC
Capital Management, LLC (“PNMAC’”) (collectively, the “Defendants”).
2. Plaintiffs are proceeding against Defendants on an emergency basis since Wilmington and
MFRA 2015’s noticed foreclosure sale is set for Monday, February 6, 2023 at 10:00 am. If the
Court does not prevent this, Plaintiffs will suffer irreparable harm from the loss of their property.
' Citibank, N.A. not in its individual capacity, but solely as separate trustee for PMT NPL
Financing 2015-1 (“Citibank No. 2”). The third plaintiff of the Judicial Foreclosure after two
substitutions.
13. Asalleged more fully below, Wilmington and MFRA 2015, in coordination with Citibank,
N.A. not in its individual capacity, but solely as separate trustee for PMT NPL Financing 2015-1
and PNMAC, in parallel with Citibank, N.A. v. xxxxx, No. 14-13593-GAO (D. Mass.), Nos. 19-
1434, 20-1057 (1st Cir.) (collectively, the “Judicial Foreclosure”) noticed the February 6, 2023
nonjudicial foreclosure sale in bad faith, as retribution for the Najdas arguing there was a lack of
subject matter jurisdiction in the Judicial Foreclosure and to undermine the judgment in the judicial
foreclosure Defendants’ privy litigated. Once the United States Court of Appeals for the First
Circuit (“First Circuit”) remanded on the issue of diversity jurisdiction, Defendants activated their
retaliation and scheduled the February 6, 2023 nonjudicial foreclosure sale that does not strictly
comply with the notice requirements of the statutory power of sale, pursuant to Mass. Gen. Laws
ch. 244, § 14, and does not strictly comply with the condition precedent to the Mortgage’s power
of sale that requires the paragraph 22 notice (“Paragraph 22 Notice”) be sent to the Najdas “prior
to acceleration”. A true and correct copy of the September 4, 2019 Paragraph 22 Notice is attached
hereto as Exhibit B. A true and correct copy of the Mortgage is attached hereto as Exhibit D.
4. Given that Defendants’ wrongful actions are patent, Plaintiffs are likely to succeed on their
claims, so an immediate injunction is necessary to prevent irreparable harm to Plaintiffs.
Il. PARTIES
5. Plaintiffs, xxxxx and xxxxxx xxxxx are individuals, who reside at 71 Flint Road, Concord,
Massachusetts 01742 (“Property”).
6. Defendant Wilmington is a company based in Wilmington Delaware. Wilmington does not
maintain a place of business in Massachusetts and does not keep assets within Massachusetts.7. Defendant MFRA 2015 is a Delaware statutory trust, which is an unincorporated entity.
Upon information and belief, MFRA 2015 has several members. MFRA 2015 does not maintain a
place of business in Massachusetts and does not keep assets within Massachusetts.
8. Defendant PHL is a limited liability company. Planet Financial Group, LLC (“PFG”) is a
limited liability company and owns 100% of PHL. MHR Institutional Partners III LP, IP II
Mortgages Carry LP, MHR Capital Partners Master Account LP, and MHR Capital Partners (700)
LP (collectively, “PHL Owners”), which are each a partnership, together own PFG. The PHL
Owners have several members including those with Massachusetts citizenship. PHL does not
maintain a place of business in Massachusetts and does not keep assets within Massachusetts.
9. Defendant Citibank No. 2 is a national bank chartered under the National Bank Act with a
usual place of business at 399 Park Avenue, New York, New York 10022; however Citibank No.
2 is a passive trustee without real and substantial control over PMT NPL Financing 2015-1’s assets
and litigation so the unincorporated entity’s citizenship controls. Citibank No. 2 does not maintain
a place of business in Massachusetts and does not keep assets within Massachusetts.
10. Defendant PMT NPL Financing 2015-1 (“PMT 2015”), a Delaware Statutory Trust dated
July 16, 2015. PMT 2015 is an unincorporated entity. PMT 2015’s members include PennyMac
Mortgage Investment Trust (“PMIT”) a Maryland real estate investment trust, an unincorporated
entity. PMIT has one or more members with Massachusetts citizenship. PMT 2015 does not
maintain a place of business in Massachusetts and does not keep assets within Massachusetts.
11. Defendant PNMAC is a Delaware limited liability company. PNMAC’s direct owners
include Private National Mortgage Acceptance Company, LLC, which is a Delaware limited
liability company. HC Partners LLC (“HC Partners”) owns between twenty five (25) and fifty (50)
percent of PNMAC. One or more members of HC Partners possess Massachusetts citizenship.PNMAC has Massachusetts citizenship. PNMAC is a registered investment advisor (“RIA”) with
the U.S. Securities and Exchange Commission (“SEC”). According to its SEC RIA -filings,
PNMAC specializes in managing mortgage-related assets, including residential nonperforming
and underperforming loans and mortgage-backed securities. PNMAC does not maintain a place of
business in Massachusetts and does not keep assets within Massachusetts.
Tl. JURISDICTION AND VENUE
12. This Court possesses jurisdiction over the Defendants as each Defendant generally
conducts business in the Commonwealth including, without limitation, with respect to the acts and
commissions from which this claim arises. Venue is lawful and proper in Middlesex County, given
that the Property is located here and most of the acts and omissions which give rise to this claim
took place here.
Iv. FACTUAL BACKGROUND
13. In May 1995, xxxxx xxxxx purchased a parcel of land located at 71 Flint Road, Concord,
Massachusetts. Over the course of the next six years, she build a home on the Property. Since
2005, the Property has been the Najdas’ primary residence.
14. On or about August 3, 2007, the Najdas refinanced a mortgage and executed an “Interest-
Only Period Adjustable Rate Note” in the amount of $3,464,000.00 (“Note”). Both xxxxxx and
xxxxx xxxxx are listed as debtors on the Note. The identity of the original lender, and source of
funding for the Note, is not known because several documents produced during discovery and
CitiMortgage’s own discovery responses establish that CitiMortgage was not the original lender.
The original lender may be Citibank, N.A., Ameriquest Mortgage Company (“Ameriquest”),
Capital Markets II, or a different entity.15.To secure the Note, xxxxx xxxxx granted a mortgage to MERS as nominee for
CitiMortgage (“Mortgage”). The Mortgage was recorded at the Middlesex County (Southern
District) Registry of Deeds on August 8, 2007 at book 49913, page 53.
16.On October 22, 2010, the Najdas received a letter dated October 21, 2010 from
CitiMortgage’s attorney (Harmon), stating that it had been retained by CitiMortgage to foreclose
on the Mortgage.
17. The letter stated that if the Najdas “notify this office in writing within the thirty-day period
. .. that the debt, or any portion thereof, is disputed, . . . this office shall cease collection of this
debt... .”
18. The letter further stated “that the note is hereby accelerated and the entire balance is due
and payable forthwith and without further notice.”
19. On October 21, 2010 the Note was accelerated. From this day and each day thereafter the
Note remained accelerated.
20. On September 9, 2014, Citibank No. 1? filed the Judicial Foreclosure complaint regarding
the same Property, loan, and alleged default as Defendants’ February 6, 2023 foreclosure sale
(Citibank, N.A. v. xxxxx, No. 14-13593-GAO (D. Mass.), Nos. 19-1434, 20-1057 (1st Cir.)) in the
United States District Court for the District of Massachusetts (“Federal District Court”). D. E. No.
1.
21. On June 6, 2016, the Najdas moved to dismiss challenging the existence of subject matter
jurisdiction. D. E. No. 150. On June 20, 2016, the Najdas moved for reconsideration on the issue
of subject matter jurisdiction. D. E. No. 158.
? Citibank, N.A., as Trustee for the Benefit of SWDNSI Trust Series 2010-3 (“Citibank No. 1”).
The original plaintiff of the Judicial Foreclosure.
522. Citibank No. 2 is the current plaintiff of the Judicial Foreclosure. From this day and each
day thereafter Citibank No. 2 was plaintiff. PNMAC manages PMT 2015’s assets and litigation
strategy not Citibank No. 2.
23. On April 7, 2017, the Najdas filed a motion for clarification on subject matter jurisdiction.
D. E. No. 204. On September 6, 2017, the Najdas moved to certify a jurisdictional question for
interlocutory review. D. E. No. 284.
24. On November 6, 2017, the trial began. The District Court bifurcated the trial into jury and
bench segments. On November 9, 2017 the jury verdict was returned. Also on November 9, 2017,
the Najdas moved for a directed verdict on the basis this Court lacked subject matter jurisdiction.
25. On or before November 20, 2017, Citibank No. 2 sold the loan to PennyMac, Corp. The
November 20, 2017 sale notice sent to the Najdas described this transaction.
26. On or before December 26, 2017, MFRA 2015 acquired the loan before the Judgment
entered on March 30, 2018. The December 26, 2017 sale notice sent to the Najdas described this
transaction.
27. On March 30, 2018, the Federal District Court entered the Judgment and denied the Najdas’
motion for directed verdict. ADD 8-12. The Najdas appealed to the First Circuit on April 26, 2019
(case no. 19-1434) and again on January 3, 2020 (case no. 20-1057).
28. On March 29, 2019, the Federal District Court denied assignment of the Judgment to
Wilmington and MFRA 2015. D. E. No. 410.
29. On September 4, 2019, Wilmington and MFRA 2015 sent the not-strictly complying
Paragraph 22 Notice (notice of default and right to cure) after acceleration and after the Judgment
in the Judicial Foreclosure had entered. Exhibit B, September 4, 2019 Paragraph 22 Notice. Not
before acceleration as the Mortgage required.30. On October 17, 2019, PHL sent the letter stating “MFA 2018-NPL1, LLC” owns the loan,
not Wilmington or MFRA 2015. A true and correct copy of the October 17, 2019 letter is attached
hereto as Exhibit C. Citibank No. 2, Wilmington and MFRA 2015’s privy, in the Judicial
Foreclosure did not dispute or challenge the authenticity and accuracy of the letter during that
action.
31. On December 23, 2019, the Najdas sent a M.G.L. c. 93A demand letter to PHL. PHL did
not respond with an offer of settlement.
32. On February 2, 2021, the Judicial Foreclosure appeal was submitted to a panel of the First
Circuit.
33. On December 30, 2022, the First Circuit “ordered that the matter be remanded to the district
court for further fact finding and a determination whether there was minimal or complete diversity
between the parties at the time the action was commenced” and denied plaintiff Citibank No. 2’s
motion to dismiss the appeal.
34. Upon information and belief, Defendants, including Citibank No. 2, Wilmington, MFRA
2015, and PHL, understood the First Circuit remanding on the issue of diversity jurisdiction to
mean there was a significant likelihood that the Judgment in the Judicial Foreclosure would be
vacated for lack of subject matter jurisdiction.
35. Upon information and belief, angry at having litigated an action for eight years without
having established subject matter jurisdiction, Defendants executed on a premeditated plan to
retaliate against the Najdas for arguing in filings to the Federal District Court and then First Circuit
that there was not subject matter jurisdiction from the start of the action and for the First Circuit
remanding on the issue of diversity jurisdiction. The First Circuit direct the Federal District Courtto report in writing within 60 days whether there was complete and minimal diversity when the
action commenced.
36. Upon information and belief, Defendants premeditated plan was to retaliate by racing to
complete a parallel nonjudicial foreclosure to exert maximum pressure on the Najdas.
37. Defendants knew before mailing the Notice of Sale for the February 6, 2023 10:00 am
nonjudicial foreclosure sale that it could not comply with comply with M.G.L. ch. 244, § 14 and
the Mortgage’s conditions precedent because the Notice of Sale would not be sent 30 days before
the sale and the loan’s note had been accelerated before the September 4, 2019 Paragraph 22 Notice
had been sent, making the notice noncompliant with paragraph 22.
38. Defendants still sent the illegal Notice of Sale.
39. On January 13, 2023, Defendants sent the Notice of Sale for the February 6, 2023 10:00
am nonjudicial foreclosure sale to the Najdas. Defendants did not send the Notice of Sale to the
Najdas 30 days before the sale.
40. On January 18, 2023, the Najdas received the Notice of Sale, dated January 13, 2023, from
Wilmington and MFRA 2015 stating the nonjudicial foreclosure sale would be held on February
6, 2023 at 10:00 am. A true and correct copy of the January 13, 2023 Notice of Sale is attached
hereto as Exhibit A. A true and correct copy of the Notice of Sale Tracking is attached hereto as
Exhibit E.
41. On January 19, 2023 and January 20, 2023, the Najdas emailed counsel for Citibank No.
2, Wilmington, and MFRA 2015 asking for assent for a motion to stay and for cancellation of the
February 6, 2023 nonjudicial foreclosure sale. A true and correct copy of the email is attached
hereto as Exhibit F.42. Wilmington and MFRA 2015, knowing the February 6, 2023 foreclosure sale did not
strictly comply with M.G.L. ch. 244, § 14 and the Mortgage’s conditions precedent, refused to
cancel the sale. Exhibit F, Email.
43. On January 19, 2023, the Najdas mailed via certified mail to PHL and priority mail to
Wilmington, MFRA 2015, and Citibank No. 2’s counsel a “Notice of Failure to Comply With
Judgment and Notice of Failure to Comply With Mortgage Paragraph 22”.
44. On January 30, 2023, Citibank No. 2 admitted to the Federal District Court in the
opposition it filed that Wilmington and MFRA 2015 sent the “Notice of Sale” on “January 13,
2023”. D. E. No. 478 at 9.
45. On February 2, 2023, the Najdas emailed counsel for Wilmington and MFRA 2015 to
explain again that the February 6, 2023 foreclosure sale was void for failing to “strictly comply
with Mass. Gen. Laws ch. 244, § 14” and for failing to strictly comply with the Mortgage’s
condition precedent in paragraph 22 to the power of sale. Wilmington and MFRA 2015 did not
cancel the February 6, 2023 foreclosure sale. Wilmington and MFRA 2015 willfully continued to
pursue the illegal foreclosure, knowing that it did not comply with Massachusetts law.
Vv. COUNTS
A. COUNT I (Injunctive Relief)
46. Plaintiffs repeat, re-allege and incorporate by reference the allegations contained in the
above paragraphs.
47. Plaintiffs have a reasonable likelihood of success on their claim that Defendants’ initiation
of foreclosure proceeding on the Property constitutes unfair and deceptive trade practice under
GL. c. 93A, intentional interference with advantageous business relations, violates Mass. Gen.
Laws ch. 244, § 14, and is a breach of the implied covenant of good faith and fair dealing.
9Wilmington, MFRA 2015, and PHL were so determined to retaliate against the Najdas for arguing
there was a lack of subject matter jurisdiction in the Judicial Foreclosure, to have the Judgment
vacated and action dismissed, that they failed to provide notice to the holder of the equity of
redemption, Ms. xxxxx, 30 days before the foreclosure sale as required under Mass. Gen. Laws ch.
244, § 14. The Notice of Sale was sent to her on January 13, 2023, only 24 days before the February
6, 2023 foreclosure sale.
48. In addition, Wilmington, MFRA 2015, and PHL failed to provide the September 4, 2019
Paragraph 22 Notice to the Najdas “prior to acceleration” as the condition precedent in paragraph
22 of the Mortgage’s power of sale requires. Defendants sent the Paragraph 22 Notice after the
loan’s note had been accelerated on October 21, 2010 and after the March 30, 2028 Judgment
entered in the Judicial Foreclosure.
49. Mortgage [P 22 requires the paragraph 22 notice be sent before acceleration as a condition
precedent to the power of sale.
50. If the Court does not enjoin Defendants from foreclosing on the Property, Plaintiffs will
suffer the irreparable harm of losing their real estate.
51. Wilmington and MFRA 2015 will suffer no harm from an injunction preventing it from
foreclosing on the Property. No valid title could pass at the sale given the insufficiency of the
Notice of Sale and insufficiency of the Paragraph 22 Notice.
52. Wilmington and MFRA 2015 cannot send a new paragraph 22 notice to cure the defect
because the loan was already accelerated October 21, 2010 and the Judicial Foreclosure Judgment
entered March 30, 2018.
1053. Without the ability to send a new strictly compliant paragraph 22 notice, Wilmington and
MFRA 2015 cannot foreclose nonjudicially using the February 6, 2023 sale or any other future
nonjudicial foreclosure sale.
54, Indeed, Wilmington and MFRA 2015 will suffer no harm from an injunction preventing it
from nonjudicially foreclosing on the Property because they can attempt to use the Judgment from
the Judicial Foreclosure (regarding the same loan, property, and alleged default) to attempt to
enforce any alleged interest they have.
55. Plaintiffs are entitled to a temporary restraining order, and, after a hearing, a preliminary
and permanent injunction, enjoining the Defendants from foreclosing on the Property.
B. COUNT II (Breach of the Implied Covenant of Good Faith and Fair Dealing)
56. Plaintiffs repeat, re-allege and incorporate by reference the allegations contained in the
above paragraphs.
57. Defendants in bad faith exercised their discretionary right to foreclose on the Property, as
they did so when they knew they could not do so nonjudicially while strictly complying with the
Massachusetts consumer protection statutes and the conditions precedent to the exercise of the
statutory power of sale in the Mortgage. Defendants brought the nonjudicial foreclosure in parallel
with the Judicial Foreclosure knowing that the power of sale in the Mortgage had been merged
into the Judgment.
58. Defendants knew they could not foreclose nonjudicially and were at risk of having the
Judgment vacated. In response, they willfully brought the not strictly compliant February 6, 2023
nonjudicial foreclosure in bad faith.
ll59. Defendants have breached the implied covenant of good faith and fair dealing, as a result
of which Plaintiffs have suffered substantial damages in an amount to be determined at trial and
will suffer the irreparable harm of the loss of their Property at the scheduled foreclosure.
C. COUNT Il (Declaratory Judgment, M.G.L. c. 244, § 14)
60. Plaintiffs repeat, re-allege and incorporate by reference the allegations contained in the
above paragraphs.
61. An actual case or controversy exists between Plaintiffs and Defendants as to whether
Defendants are entitled to undertake a foreclosure sale of the Property.
62. Defendants sent the notice of its intent to foreclose the Property, Notice of Sale, on January
13, 2023, 24 days before the foreclosure sale scheduled for February 6, 2023.
63. M.G.L. c. 244, § 14 provides that “no sale under such power [of foreclosure] shall be
effectual to foreclose a mortgage, unless . . . notice of the sale has been sent by registered mail to
the owner or owners of record of the equity of redemption as of 30 days prior to the date of sale
64. Plaintiffs are entitled to a declaration that under M.G.L. c. 244, § 14 Defendants are
prohibited from foreclosing on the Property on February 6, 2023, because they failed to provide
notice to the holder of the equity of redemption, Ms. xxxxx, “30 days prior to the date of sale”.
D. COUNT IV Declaratory Judgment, Mortgage’s Conditions Precedent to the Power
of Sale)
65. Plaintiffs repeat, re-allege and incorporate by reference the allegations contained in the
above paragraphs.
66. Defendants sent the September 4, 2019 Paragraph 22 Notice to the Najdas after the loan
had been accelerated on October 30, 2013 and after the March 30, 2018 Judgment had entered in
the Judicial Foreclosure about the same loan and Property.
1267. The condition precedent to the power of sale in paragraph 22 of the Mortgage required the
notice be sent to the Najdas “prior to acceleration”.
68. Massachusetts law requires strict compliance with any conditions precedent to the exercise
of the power that a mortgage might contain.
69. Plaintiffs are entitled to a declaration that under Massachusetts law Defendants are
prohibited from foreclosing on the Property on February 6, 2023, because they failed to provide
the Paragraph 22 Notice to the Najdas “prior to acceleration” as paragraph 22 required.
70. Plaintiffs are entitled to a declaration that under Massachusetts law Defendants are
prohibited from nonjudicially foreclosing on the Property on all future dates, because they cannot
provide a new paragraph 22 notice prior to the acceleration of the loan’s note.
E. COUNT V (Breach of M.G.L. c. 93A)
2. Plaintiffs repeat, re-allege and incorporate by reference the allegations contained in the
above paragraphs.
72. At all relevant times hereto, the Defendants were engaged in trade or commerce in the
Commonwealth.
73. As detailed herein, the Defendants engaged in unfair and deceptive conduct including but
not limited to the Defendants, in bad faith, conducting the illegal February 6, 2023 foreclosure sale
as retribution for the Najdas arguing there was a lack of subject matter jurisdiction in the Judicial
Foreclosure as evidenced by Defendants scheduling the February 6, 2023 foreclosure sale shortly
after the First Circuit remanded on the issue of diversity jurisdiction on December 30, 2022.
74. The February 6, 2023 foreclosure sale is to the detriment of the Najdas, who would not
otherwise be foreclosed on nonjudicially because none of the Defendants could send the Najdas a
strictly compliant paragraph 22 notice prior to acceleration.
1375. Defendants have violated M.G.L. c. 93A, as a result of which Plaintiffs have suffered
substantial damages in an amount to be determined at trial and will suffer the irreparable harm of
the loss of their Property at the scheduled foreclosure.
76. Defendants’ misconduct is unfair under Massachusetts consumer protection laws because
a chapter 93A violation arises where foreclosure of a mortgage, even when in default, is conducted
in bad faith to the detriment of the mortgagor.
77. Defendants either do not have offices in Massachusetts or do not have assets in
Massachusetts so it is not necessary to send 93A demand letters.
78. The unfair and deceptive conduct of the Defendants was knowing and willful. The unfair
and deceptive actions occurred primarily and substantially within the Commonwealth.
79. As a result, the Najdas are entitled to actual or consequential damages (doubled or trebled
because conduct of the Defendants was willful and knowing) in an amount to be proven at trial,
plus interest, costs, and attorneys’ fees.
VI. PRAYERS FOR RELIEF
WHEREFORE, the Najdas respectfully request that the Court grant them the following
relief:
1. enter a temporary restraining order, and a preliminary and permanent injunction, enjoining
Defendants from undertaking a foreclosure sale of the Property;
2. enter a declaration that Defendants’ February 6, 2023 scheduled foreclosure sale is invalid
under M.G.L. c. 244, § 14;
3. enter a declaration that Defendants’ February 6, 2023 scheduled foreclosure sale is invalid
under Massachusetts law that requires strict compliance with the conditions precedent to the
exercise of the power in the Mortgage;
144. enter a declaration no future nonjudicial foreclosure can be held because the mortgagee
cannot send a paragraph 22 notice that complies with paragraph 22 of the Mortgage;
5. enter judgment in favor of the Plaintiffs on each Count alleged herein;
6. award Plaintiffs damages on each Count in an amount to be determined at trial, plus
multiple damages and interest;
7. award Plaintiffs their reasonable attorneys’ fees and costs pursuant as allowed by law; and
8. grant Plaintiffs such other and further relief as the Court deems just and proper.
VI. JURY CLAIM
Plaintiffs demand a jury on all counts, claims and issues so triable.
Respectfully submitted,
xxxxxx xxxxx and xxxxx xxxxx,
/s/ xxxxxx xxxxx
and
/s/ xxxxx xxxxx
xxxxx.xxxxxx@gmail.com
71 Flint Road,
Date: February 3, 2023 Concord, MA 01742
15VII. VERIFICATION
I, xxxxxx xxxxx, verify that I have read the allegations contained in this Verified
Complaint and Jury Demand; that I have personal knowledge of the facts stated therein; that, other
than allegations made upon information and belief, the allegations are true to the best of my
knowledge and that I believe that the allegations made upon information and belief are true.
Signed under the penalties of perjury on February 3, 2023.
/s/ xxxxxx xxxxx
xxxxxx xxxxx
I, xxxxx xxxxx, verify that I have read the allegations contained in this Verified Complaint
and Jury Demand; that I have personal knowledge of the facts stated therein; that, other than
allegations made upon information and belief, the allegations are true to the best of my knowledge
and that I believe that the allegations made upon information and belief are true.
Signed under the penalties of perjury on February 3, 2023.
/s/ xxxxx xxxxxxxxxxx xxxxx
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\ — COMMONWEALTH OF MASSACHUSETTS MIDDLESEX, ss. SUPERIOR COURT DEPARTMENT OF THE TRIAL COURT xxxxx xxxxx, xxxxxx xxxxx Plaintiffs, v. CIVIL ACTION NO. 2 y- 3s 3 WILMINGTON TRUST NATIONAL ASSOCIATION, MFRA TRUST 2015-1, PLANET HOME LENDING, LLC, et al., Defendants. I. INTRODUCTION 1. Plaintiffs xxxxx and xxxxxx xxxxx (collectively, the “Najdas”) are brining this action to enjoin a wrongful foreclosure of their home and recover damages arising from the improper, bad faith actions of Defendants Wilmington Trust National Association (“Wilmington”), MFRA Trust 2015-1 (“MFRA 2015”), and Planet Home Lending, LLC (“PHL”), Citibank, N.A. not in its individual capacity, but solely as separate trustee for PMT NPL Financing 2015-1!, and PNMAC Capital Management, LLC (“PNMAC’”) (collectively, the “Defendants”). 2. Plaintiffs are proceeding against Defendants on an emergency basis since Wilmington and MFRA 2015’s noticed foreclosure sale is set for Monday, February 6, 2023 at 10:00 am. If the Court does not prevent this, Plaintiffs will suffer irreparable harm from the loss of their property. ' Citibank, N.A. not in its individual capacity, but solely as separate trustee for PMT NPL Financing 2015-1 (“Citibank No. 2”). The third plaintiff of the Judicial Foreclosure after two substitutions. 13. Asalleged more fully below, Wilmington and MFRA 2015, in coordination with Citibank, N.A. not in its individual capacity, but solely as separate trustee for PMT NPL Financing 2015-1 and PNMAC, in parallel with Citibank, N.A. v. xxxxx, No. 14-13593-GAO (D. Mass.), Nos. 19- 1434, 20-1057 (1st Cir.) (collectively, the “Judicial Foreclosure”) noticed the February 6, 2023 nonjudicial foreclosure sale in bad faith, as retribution for the Najdas arguing there was a lack of subject matter jurisdiction in the Judicial Foreclosure and to undermine the judgment in the judicial foreclosure Defendants’ privy litigated. Once the United States Court of Appeals for the First Circuit (“First Circuit”) remanded on the issue of diversity jurisdiction, Defendants activated their retaliation and scheduled the February 6, 2023 nonjudicial foreclosure sale that does not strictly comply with the notice requirements of the statutory power of sale, pursuant to Mass. Gen. Laws ch. 244, § 14, and does not strictly comply with the condition precedent to the Mortgage’s power of sale that requires the paragraph 22 notice (“Paragraph 22 Notice”) be sent to the Najdas “prior to acceleration”. A true and correct copy of the September 4, 2019 Paragraph 22 Notice is attached hereto as Exhibit B. A true and correct copy of the Mortgage is attached hereto as Exhibit D. 4. Given that Defendants’ wrongful actions are patent, Plaintiffs are likely to succeed on their claims, so an immediate injunction is necessary to prevent irreparable harm to Plaintiffs. Il. PARTIES 5. Plaintiffs, xxxxx and xxxxxx xxxxx are individuals, who reside at 71 Flint Road, Concord, Massachusetts 01742 (“Property”). 6. Defendant Wilmington is a company based in Wilmington Delaware. Wilmington does not maintain a place of business in Massachusetts and does not keep assets within Massachusetts.7. Defendant MFRA 2015 is a Delaware statutory trust, which is an unincorporated entity. Upon information and belief, MFRA 2015 has several members. MFRA 2015 does not maintain a place of business in Massachusetts and does not keep assets within Massachusetts. 8. Defendant PHL is a limited liability company. Planet Financial Group, LLC (“PFG”) is a limited liability company and owns 100% of PHL. MHR Institutional Partners III LP, IP II Mortgages Carry LP, MHR Capital Partners Master Account LP, and MHR Capital Partners (700) LP (collectively, “PHL Owners”), which are each a partnership, together own PFG. The PHL Owners have several members including those with Massachusetts citizenship. PHL does not maintain a place of business in Massachusetts and does not keep assets within Massachusetts. 9. Defendant Citibank No. 2 is a national bank chartered under the National Bank Act with a usual place of business at 399 Park Avenue, New York, New York 10022; however Citibank No. 2 is a passive trustee without real and substantial control over PMT NPL Financing 2015-1’s assets and litigation so the unincorporated entity’s citizenship controls. Citibank No. 2 does not maintain a place of business in Massachusetts and does not keep assets within Massachusetts. 10. Defendant PMT NPL Financing 2015-1 (“PMT 2015”), a Delaware Statutory Trust dated July 16, 2015. PMT 2015 is an unincorporated entity. PMT 2015’s members include PennyMac Mortgage Investment Trust (“PMIT”) a Maryland real estate investment trust, an unincorporated entity. PMIT has one or more members with Massachusetts citizenship. PMT 2015 does not maintain a place of business in Massachusetts and does not keep assets within Massachusetts. 11. Defendant PNMAC is a Delaware limited liability company. PNMAC’s direct owners include Private National Mortgage Acceptance Company, LLC, which is a Delaware limited liability company. HC Partners LLC (“HC Partners”) owns between twenty five (25) and fifty (50) percent of PNMAC. One or more members of HC Partners possess Massachusetts citizenship.PNMAC has Massachusetts citizenship. PNMAC is a registered investment advisor (“RIA”) with the U.S. Securities and Exchange Commission (“SEC”). According to its SEC RIA -filings, PNMAC specializes in managing mortgage-related assets, including residential nonperforming and underperforming loans and mortgage-backed securities. PNMAC does not maintain a place of business in Massachusetts and does not keep assets within Massachusetts. Tl. JURISDICTION AND VENUE 12. This Court possesses jurisdiction over the Defendants as each Defendant generally conducts business in the Commonwealth including, without limitation, with respect to the acts and commissions from which this claim arises. Venue is lawful and proper in Middlesex County, given that the Property is located here and most of the acts and omissions which give rise to this claim took place here. Iv. FACTUAL BACKGROUND 13. In May 1995, xxxxx xxxxx purchased a parcel of land located at 71 Flint Road, Concord, Massachusetts. Over the course of the next six years, she build a home on the Property. Since 2005, the Property has been the Najdas’ primary residence. 14. On or about August 3, 2007, the Najdas refinanced a mortgage and executed an “Interest- Only Period Adjustable Rate Note” in the amount of $3,464,000.00 (“Note”). Both xxxxxx and xxxxx xxxxx are listed as debtors on the Note. The identity of the original lender, and source of funding for the Note, is not known because several documents produced during discovery and CitiMortgage’s own discovery responses establish that CitiMortgage was not the original lender. The original lender may be Citibank, N.A., Ameriquest Mortgage Company (“Ameriquest”), Capital Markets II, or a different entity.15.To secure the Note, xxxxx xxxxx granted a mortgage to MERS as nominee for CitiMortgage (“Mortgage”). The Mortgage was recorded at the Middlesex County (Southern District) Registry of Deeds on August 8, 2007 at book 49913, page 53. 16.On October 22, 2010, the Najdas received a letter dated October 21, 2010 from CitiMortgage’s attorney (Harmon), stating that it had been retained by CitiMortgage to foreclose on the Mortgage. 17. The letter stated that if the Najdas “notify this office in writing within the thirty-day period . .. that the debt, or any portion thereof, is disputed, . . . this office shall cease collection of this debt... .” 18. The letter further stated “that the note is hereby accelerated and the entire balance is due and payable forthwith and without further notice.” 19. On October 21, 2010 the Note was accelerated. From this day and each day thereafter the Note remained accelerated. 20. On September 9, 2014, Citibank No. 1? filed the Judicial Foreclosure complaint regarding the same Property, loan, and alleged default as Defendants’ February 6, 2023 foreclosure sale (Citibank, N.A. v. xxxxx, No. 14-13593-GAO (D. Mass.), Nos. 19-1434, 20-1057 (1st Cir.)) in the United States District Court for the District of Massachusetts (“Federal District Court”). D. E. No. 1. 21. On June 6, 2016, the Najdas moved to dismiss challenging the existence of subject matter jurisdiction. D. E. No. 150. On June 20, 2016, the Najdas moved for reconsideration on the issue of subject matter jurisdiction. D. E. No. 158. ? Citibank, N.A., as Trustee for the Benefit of SWDNSI Trust Series 2010-3 (“Citibank No. 1”). The original plaintiff of the Judicial Foreclosure. 522. Citibank No. 2 is the current plaintiff of the Judicial Foreclosure. From this day and each day thereafter Citibank No. 2 was plaintiff. PNMAC manages PMT 2015’s assets and litigation strategy not Citibank No. 2. 23. On April 7, 2017, the Najdas filed a motion for clarification on subject matter jurisdiction. D. E. No. 204. On September 6, 2017, the Najdas moved to certify a jurisdictional question for interlocutory review. D. E. No. 284. 24. On November 6, 2017, the trial began. The District Court bifurcated the trial into jury and bench segments. On November 9, 2017 the jury verdict was returned. Also on November 9, 2017, the Najdas moved for a directed verdict on the basis this Court lacked subject matter jurisdiction. 25. On or before November 20, 2017, Citibank No. 2 sold the loan to PennyMac, Corp. The November 20, 2017 sale notice sent to the Najdas described this transaction. 26. On or before December 26, 2017, MFRA 2015 acquired the loan before the Judgment entered on March 30, 2018. The December 26, 2017 sale notice sent to the Najdas described this transaction. 27. On March 30, 2018, the Federal District Court entered the Judgment and denied the Najdas’ motion for directed verdict. ADD 8-12. The Najdas appealed to the First Circuit on April 26, 2019 (case no. 19-1434) and again on January 3, 2020 (case no. 20-1057). 28. On March 29, 2019, the Federal District Court denied assignment of the Judgment to Wilmington and MFRA 2015. D. E. No. 410. 29. On September 4, 2019, Wilmington and MFRA 2015 sent the not-strictly complying Paragraph 22 Notice (notice of default and right to cure) after acceleration and after the Judgment in the Judicial Foreclosure had entered. Exhibit B, September 4, 2019 Paragraph 22 Notice. Not before acceleration as the Mortgage required.30. On October 17, 2019, PHL sent the letter stating “MFA 2018-NPL1, LLC” owns the loan, not Wilmington or MFRA 2015. A true and correct copy of the October 17, 2019 letter is attached hereto as Exhibit C. Citibank No. 2, Wilmington and MFRA 2015’s privy, in the Judicial Foreclosure did not dispute or challenge the authenticity and accuracy of the letter during that action. 31. On December 23, 2019, the Najdas sent a M.G.L. c. 93A demand letter to PHL. PHL did not respond with an offer of settlement. 32. On February 2, 2021, the Judicial Foreclosure appeal was submitted to a panel of the First Circuit. 33. On December 30, 2022, the First Circuit “ordered that the matter be remanded to the district court for further fact finding and a determination whether there was minimal or complete diversity between the parties at the time the action was commenced” and denied plaintiff Citibank No. 2’s motion to dismiss the appeal. 34. Upon information and belief, Defendants, including Citibank No. 2, Wilmington, MFRA 2015, and PHL, understood the First Circuit remanding on the issue of diversity jurisdiction to mean there was a significant likelihood that the Judgment in the Judicial Foreclosure would be vacated for lack of subject matter jurisdiction. 35. Upon information and belief, angry at having litigated an action for eight years without having established subject matter jurisdiction, Defendants executed on a premeditated plan to retaliate against the Najdas for arguing in filings to the Federal District Court and then First Circuit that there was not subject matter jurisdiction from the start of the action and for the First Circuit remanding on the issue of diversity jurisdiction. The First Circuit direct the Federal District Courtto report in writing within 60 days whether there was complete and minimal diversity when the action commenced. 36. Upon information and belief, Defendants premeditated plan was to retaliate by racing to complete a parallel nonjudicial foreclosure to exert maximum pressure on the Najdas. 37. Defendants knew before mailing the Notice of Sale for the February 6, 2023 10:00 am nonjudicial foreclosure sale that it could not comply with comply with M.G.L. ch. 244, § 14 and the Mortgage’s conditions precedent because the Notice of Sale would not be sent 30 days before the sale and the loan’s note had been accelerated before the September 4, 2019 Paragraph 22 Notice had been sent, making the notice noncompliant with paragraph 22. 38. Defendants still sent the illegal Notice of Sale. 39. On January 13, 2023, Defendants sent the Notice of Sale for the February 6, 2023 10:00 am nonjudicial foreclosure sale to the Najdas. Defendants did not send the Notice of Sale to the Najdas 30 days before the sale. 40. On January 18, 2023, the Najdas received the Notice of Sale, dated January 13, 2023, from Wilmington and MFRA 2015 stating the nonjudicial foreclosure sale would be held on February 6, 2023 at 10:00 am. A true and correct copy of the January 13, 2023 Notice of Sale is attached hereto as Exhibit A. A true and correct copy of the Notice of Sale Tracking is attached hereto as Exhibit E. 41. On January 19, 2023 and January 20, 2023, the Najdas emailed counsel for Citibank No. 2, Wilmington, and MFRA 2015 asking for assent for a motion to stay and for cancellation of the February 6, 2023 nonjudicial foreclosure sale. A true and correct copy of the email is attached hereto as Exhibit F.42. Wilmington and MFRA 2015, knowing the February 6, 2023 foreclosure sale did not strictly comply with M.G.L. ch. 244, § 14 and the Mortgage’s conditions precedent, refused to cancel the sale. Exhibit F, Email. 43. On January 19, 2023, the Najdas mailed via certified mail to PHL and priority mail to Wilmington, MFRA 2015, and Citibank No. 2’s counsel a “Notice of Failure to Comply With Judgment and Notice of Failure to Comply With Mortgage Paragraph 22”. 44. On January 30, 2023, Citibank No. 2 admitted to the Federal District Court in the opposition it filed that Wilmington and MFRA 2015 sent the “Notice of Sale” on “January 13, 2023”. D. E. No. 478 at 9. 45. On February 2, 2023, the Najdas emailed counsel for Wilmington and MFRA 2015 to explain again that the February 6, 2023 foreclosure sale was void for failing to “strictly comply with Mass. Gen. Laws ch. 244, § 14” and for failing to strictly comply with the Mortgage’s condition precedent in paragraph 22 to the power of sale. Wilmington and MFRA 2015 did not cancel the February 6, 2023 foreclosure sale. Wilmington and MFRA 2015 willfully continued to pursue the illegal foreclosure, knowing that it did not comply with Massachusetts law. Vv. COUNTS A. COUNT I (Injunctive Relief) 46. Plaintiffs repeat, re-allege and incorporate by reference the allegations contained in the above paragraphs. 47. Plaintiffs have a reasonable likelihood of success on their claim that Defendants’ initiation of foreclosure proceeding on the Property constitutes unfair and deceptive trade practice under GL. c. 93A, intentional interference with advantageous business relations, violates Mass. Gen. Laws ch. 244, § 14, and is a breach of the implied covenant of good faith and fair dealing. 9Wilmington, MFRA 2015, and PHL were so determined to retaliate against the Najdas for arguing there was a lack of subject matter jurisdiction in the Judicial Foreclosure, to have the Judgment vacated and action dismissed, that they failed to provide notice to the holder of the equity of redemption, Ms. xxxxx, 30 days before the foreclosure sale as required under Mass. Gen. Laws ch. 244, § 14. The Notice of Sale was sent to her on January 13, 2023, only 24 days before the February 6, 2023 foreclosure sale. 48. In addition, Wilmington, MFRA 2015, and PHL failed to provide the September 4, 2019 Paragraph 22 Notice to the Najdas “prior to acceleration” as the condition precedent in paragraph 22 of the Mortgage’s power of sale requires. Defendants sent the Paragraph 22 Notice after the loan’s note had been accelerated on October 21, 2010 and after the March 30, 2028 Judgment entered in the Judicial Foreclosure. 49. Mortgage [P 22 requires the paragraph 22 notice be sent before acceleration as a condition precedent to the power of sale. 50. If the Court does not enjoin Defendants from foreclosing on the Property, Plaintiffs will suffer the irreparable harm of losing their real estate. 51. Wilmington and MFRA 2015 will suffer no harm from an injunction preventing it from foreclosing on the Property. No valid title could pass at the sale given the insufficiency of the Notice of Sale and insufficiency of the Paragraph 22 Notice. 52. Wilmington and MFRA 2015 cannot send a new paragraph 22 notice to cure the defect because the loan was already accelerated October 21, 2010 and the Judicial Foreclosure Judgment entered March 30, 2018. 1053. Without the ability to send a new strictly compliant paragraph 22 notice, Wilmington and MFRA 2015 cannot foreclose nonjudicially using the February 6, 2023 sale or any other future nonjudicial foreclosure sale. 54, Indeed, Wilmington and MFRA 2015 will suffer no harm from an injunction preventing it from nonjudicially foreclosing on the Property because they can attempt to use the Judgment from the Judicial Foreclosure (regarding the same loan, property, and alleged default) to attempt to enforce any alleged interest they have. 55. Plaintiffs are entitled to a temporary restraining order, and, after a hearing, a preliminary and permanent injunction, enjoining the Defendants from foreclosing on the Property. B. COUNT II (Breach of the Implied Covenant of Good Faith and Fair Dealing) 56. Plaintiffs repeat, re-allege and incorporate by reference the allegations contained in the above paragraphs. 57. Defendants in bad faith exercised their discretionary right to foreclose on the Property, as they did so when they knew they could not do so nonjudicially while strictly complying with the Massachusetts consumer protection statutes and the conditions precedent to the exercise of the statutory power of sale in the Mortgage. Defendants brought the nonjudicial foreclosure in parallel with the Judicial Foreclosure knowing that the power of sale in the Mortgage had been merged into the Judgment. 58. Defendants knew they could not foreclose nonjudicially and were at risk of having the Judgment vacated. In response, they willfully brought the not strictly compliant February 6, 2023 nonjudicial foreclosure in bad faith. ll59. Defendants have breached the implied covenant of good faith and fair dealing, as a result of which Plaintiffs have suffered substantial damages in an amount to be determined at trial and will suffer the irreparable harm of the loss of their Property at the scheduled foreclosure. C. COUNT Il (Declaratory Judgment, M.G.L. c. 244, § 14) 60. Plaintiffs repeat, re-allege and incorporate by reference the allegations contained in the above paragraphs. 61. An actual case or controversy exists between Plaintiffs and Defendants as to whether Defendants are entitled to undertake a foreclosure sale of the Property. 62. Defendants sent the notice of its intent to foreclose the Property, Notice of Sale, on January 13, 2023, 24 days before the foreclosure sale scheduled for February 6, 2023. 63. M.G.L. c. 244, § 14 provides that “no sale under such power [of foreclosure] shall be effectual to foreclose a mortgage, unless . . . notice of the sale has been sent by registered mail to the owner or owners of record of the equity of redemption as of 30 days prior to the date of sale 64. Plaintiffs are entitled to a declaration that under M.G.L. c. 244, § 14 Defendants are prohibited from foreclosing on the Property on February 6, 2023, because they failed to provide notice to the holder of the equity of redemption, Ms. xxxxx, “30 days prior to the date of sale”. D. COUNT IV Declaratory Judgment, Mortgage’s Conditions Precedent to the Power of Sale) 65. Plaintiffs repeat, re-allege and incorporate by reference the allegations contained in the above paragraphs. 66. Defendants sent the September 4, 2019 Paragraph 22 Notice to the Najdas after the loan had been accelerated on October 30, 2013 and after the March 30, 2018 Judgment had entered in the Judicial Foreclosure about the same loan and Property. 1267. The condition precedent to the power of sale in paragraph 22 of the Mortgage required the notice be sent to the Najdas “prior to acceleration”. 68. Massachusetts law requires strict compliance with any conditions precedent to the exercise of the power that a mortgage might contain. 69. Plaintiffs are entitled to a declaration that under Massachusetts law Defendants are prohibited from foreclosing on the Property on February 6, 2023, because they failed to provide the Paragraph 22 Notice to the Najdas “prior to acceleration” as paragraph 22 required. 70. Plaintiffs are entitled to a declaration that under Massachusetts law Defendants are prohibited from nonjudicially foreclosing on the Property on all future dates, because they cannot provide a new paragraph 22 notice prior to the acceleration of the loan’s note. E. COUNT V (Breach of M.G.L. c. 93A) 2. Plaintiffs repeat, re-allege and incorporate by reference the allegations contained in the above paragraphs. 72. At all relevant times hereto, the Defendants were engaged in trade or commerce in the Commonwealth. 73. As detailed herein, the Defendants engaged in unfair and deceptive conduct including but not limited to the Defendants, in bad faith, conducting the illegal February 6, 2023 foreclosure sale as retribution for the Najdas arguing there was a lack of subject matter jurisdiction in the Judicial Foreclosure as evidenced by Defendants scheduling the February 6, 2023 foreclosure sale shortly after the First Circuit remanded on the issue of diversity jurisdiction on December 30, 2022. 74. The February 6, 2023 foreclosure sale is to the detriment of the Najdas, who would not otherwise be foreclosed on nonjudicially because none of the Defendants could send the Najdas a strictly compliant paragraph 22 notice prior to acceleration. 1375. Defendants have violated M.G.L. c. 93A, as a result of which Plaintiffs have suffered substantial damages in an amount to be determined at trial and will suffer the irreparable harm of the loss of their Property at the scheduled foreclosure. 76. Defendants’ misconduct is unfair under Massachusetts consumer protection laws because a chapter 93A violation arises where foreclosure of a mortgage, even when in default, is conducted in bad faith to the detriment of the mortgagor. 77. Defendants either do not have offices in Massachusetts or do not have assets in Massachusetts so it is not necessary to send 93A demand letters. 78. The unfair and deceptive conduct of the Defendants was knowing and willful. The unfair and deceptive actions occurred primarily and substantially within the Commonwealth. 79. As a result, the Najdas are entitled to actual or consequential damages (doubled or trebled because conduct of the Defendants was willful and knowing) in an amount to be proven at trial, plus interest, costs, and attorneys’ fees. VI. PRAYERS FOR RELIEF WHEREFORE, the Najdas respectfully request that the Court grant them the following relief: 1. enter a temporary restraining order, and a preliminary and permanent injunction, enjoining Defendants from undertaking a foreclosure sale of the Property; 2. enter a declaration that Defendants’ February 6, 2023 scheduled foreclosure sale is invalid under M.G.L. c. 244, § 14; 3. enter a declaration that Defendants’ February 6, 2023 scheduled foreclosure sale is invalid under Massachusetts law that requires strict compliance with the conditions precedent to the exercise of the power in the Mortgage; 144. enter a declaration no future nonjudicial foreclosure can be held because the mortgagee cannot send a paragraph 22 notice that complies with paragraph 22 of the Mortgage; 5. enter judgment in favor of the Plaintiffs on each Count alleged herein; 6. award Plaintiffs damages on each Count in an amount to be determined at trial, plus multiple damages and interest; 7. award Plaintiffs their reasonable attorneys’ fees and costs pursuant as allowed by law; and 8. grant Plaintiffs such other and further relief as the Court deems just and proper. VI. JURY CLAIM Plaintiffs demand a jury on all counts, claims and issues so triable. Respectfully submitted, xxxxxx xxxxx and xxxxx xxxxx, /s/ xxxxxx xxxxx and /s/ xxxxx xxxxx xxxxx.xxxxxx@gmail.com 71 Flint Road, Date: February 3, 2023 Concord, MA 01742 15VII. VERIFICATION I, xxxxxx xxxxx, verify that I have read the allegations contained in this Verified Complaint and Jury Demand; that I have personal knowledge of the facts stated therein; that, other than allegations made upon information and belief, the allegations are true to the best of my knowledge and that I believe that the allegations made upon information and belief are true. Signed under the penalties of perjury on February 3, 2023. /s/ xxxxxx xxxxx xxxxxx xxxxx I, xxxxx xxxxx, verify that I have read the allegations contained in this Verified Complaint and Jury Demand; that I have personal knowledge of the facts stated therein; that, other than allegations made upon information and belief, the allegations are true to the best of my knowledge and that I believe that the allegations made upon information and belief are true. Signed under the penalties of perjury on February 3, 2023. /s/ xxxxx xxxxxxxxxxx xxxxx 16