That discharge became the focal point of the current litigation. EMC contended the discharge had been sent in error, noting that its established policy prohibited issuing discharges after third-party foreclosure sales. Although a discharge was prepared and mailed, the note was never returned, canceled, or marked satisfied. A company executive later attested that the discharge occurred because internal documentation failed to clarify that the loan had been foreclosed through a third-party sale.
After a prior action was dismissed due to standing issues, Emigrant Residential filed the present case in 2019. By then, it had recorded a 2009 assignment of the mortgage and obtained a 2019 assignment from the Federal Home Loan Bank of New York to reinforce its claim. The district court granted summary judgment to Emigrant, holding that the discharge was mistaken and that equitable relief was appropriate. Pinti appealed.
In affirming the lower court’s ruling, the First Circuit held that Emigrant had standing to challenge the discharge as the bearer of the note and assignee of the mortgage. The court found no material dispute that the discharge had been issued in error, relying on sworn affidavits, deposition testimony, and Emigrant’s internal loan servicing policies. The opinion also noted that the discharge listed EMC as the mortgagee despite its prior assignment of the mortgage to another Emigrant affiliate.
Pinti’s counterclaims were dismissed. The court held that her Chapter 93A claim under Massachusetts consumer protection law was time-barred, and that her claims for emotional distress lacked merit or were precluded by earlier proceedings.
Massachusetts law allows courts to strike mortgage discharges made by mistake, so long as third-party interests have not intervened. The First Circuit ruled that those conditions were met. Because Pinti and Phillips had not repaid the debt or exercised their right of redemption, and because the note remained in Emigrant’s possession, the court found that equity supported reinstating the mortgage lien.