Mortgages – Foreclosure – Interpleader

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Where an interplead action has been instituted by a bank following a mortgage foreclosure, a ruling on the parties’ cross-motions for summary judgment should be deferred pending resolution of a factual dispute regarding an alleged agreement for the sale of the underlying note.

“Plaintiff South Shore Savings Bank (‘South Shore’) brings this Interpleader action to determine the rights and entitlement of the Parties, Paceline Limited Partnership (‘Paceline’), Granite State Economic Development Corporation (‘Granite State’), the United State Small Business Administration (‘the SBA’) and Core Investments, Inc. (‘Core’), to proceeds (the ‘Proceeds’) generated from South Shore’s foreclosure of a first mortgage on real property in Massachusetts owned by Paceline. Core and SBA have submitted cross-motions for summary judgment. …

“[A]lthough the undisputed facts indicate that the contract was for a large amount of money ($250,000) and the SBA does not dispute that Core took steps to perform under the contract (i.e., sending funds to its attorney for later transmittal to the SBA), the parties do not address whether there were other material terms of the contract (other than the purchase price and method of transmittal of funds) contemplated by the parties, whether the contract is of a type usually put in writing, whether it needs a formal writing for its full expression, whether the final contract documents — i.e., those referenced in the September 7, 2010 e-mail or those transmitted from [Richard] Kennedy to [Carissa] Murray on September 8, 2010 (which have not been produced to the Court) — have few or many details, whether the parties considered the contract to be a common or unusual contract and whether, based upon the experience of the parties, it was a standard form of contract widely used in similar transactions. Although no single factor is determinative, the Court believes that it should have the parties’ relative positions on these factors. Moreover, although the current record before the Court is silent as these factors, it may well be that they are facts that are undisputed by the parties. Accordingly, the Court will deny the pending motions for summary judgment without prejudice, but will give the parties until April 13, 2012 to submit any supplemental statement of undisputed facts to address these factors and each party may file a supplemental brief of no more than five [5] pages to address any arguments regarding these factors. …”

South Shore Savings Bank v. Paceline Limited Partnership, et al. (Lawyers Weekly No. 02-140-12) (11 pages) (Casper, J.) (USDC) (Civil Action No. 10-11828-DJC) (March 14, 2012).

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