EGREMONT — After insisting that a mortgage was tied to a home when the loan documents said that it wasn't, a bank has settled with a local couple who endured several years of its threatening foreclosure preparations.
The strange case of the loan mismatch was set to go to trial July 15 in U.S. District Court in Springfield, but a settlement was reached between attorneys for CitiFinancial and James and JoAnn Spaulding. The confidential agreement discharges the $20,000 mortgage and compensates the couple for attorney's fees, emotional distress, trespass and unfair trade practices.
The settlement earlier this month came several days after a judge found the bank in contempt for violating a preliminary injunction to stop trespassing and posting foreclosure notices at the couple's longtime family home on Mount Washington Road, and for sending letters to the couple.
Peter Puciloski, the Spauldings' attorney, said it was the contempt finding that likely swayed the bank to stop what has grown into a costly legal battle for both sides. Though he could not be more specific about the amount of the settlement, he said he thought the matter was fairly resolved.
"We're pleased," Puciloski said.
The Spauldings, both in their early 70s, learned in 2015 that the $20,000 mortgage JoAnn Spaulding's ailing mother, Josephine Curtiss, took out in 2002 to pay some bills was actually linked to the adjacent property, which is mostly wetlands and does not have a home on it.
The couple didn't know Curtiss had taken out the loan, but when they discovered it soon after, they began paying the monthly bill.
When hard times hit in 2008, they began to miss payments and the struggle with CitiFinancial began. Fearing the loss of the home JoAnn Spaulding's father built, the couple hired Puciloski, who then discovered the mortgage mixup.
In 2016, the couple sued in Berkshire Superior Court. Soon after, CitiFinancial attorneys had the case moved to federal court.
On July 1, the bank finally conceded that the mortgage was not tied to the house, but to the parcel out back, which the Spauldings say has little value other than its beauty.
Both lots are assessed together at $265,000, which Puciloski estimates is significantly less than the legal fees incurred over the last few years. And given interest and penalties, the $20,000 mortgage amount had remained about where it was when Curtiss got it in 2002.
The Spauldings could not be reached for comment Monday.
But Puciloski has referred to the situation as a "bizarre" mortgage case, and the most unusual one he's ever seen in his 44 years of practicing law.
"You hear a lot about these mortgage cases, but this is the only one I've seen where they didn't actually have a mortgage on the property," he said.
Heather Bellow can be reached at firstname.lastname@example.org or on Twitter @BE_hbellow and 413-329-6871.