This action was filed by Joseph B. Solans and Christine P. Solans (collectively Plaintiffs) on August 25, 2008 seeking declaratory judgment pursuant to G. L. c. 231A that an attachment recorded by them encumbers a parcel of property in the town of Ware and, more importantly, that it takes precedence and priority in the chain of title over a mortgage held by WM Specialty Mortgage, LLC (WM or Defendant) encumbering the same property.
The Court endorsed Plaintiffs Ex Parte Lis Pendens on August 26, 2008 and issued a Temporary Restraining Order on that date enjoining WM from taking any steps to foreclose the mortgage. After notice and a hearing, the Court entered a Preliminary Injunction on October 9, 2008 continuing the order precluding foreclosure, denying WMs Special Motion to Dismiss, and denying also WMs Motion to dissolve the lis pendens.
On September 28, 2009, WM filed a Motion for Summary Judgment, a Memorandum in support thereof, and a list of facts which it deemed to be not in dispute. Plaintiffs filed a Memorandum in Opposition to WMs motion on November 9, 2009, along with a statement of legal elements and a statement of facts which they alleged to be not in dispute. WMs Motion for Summary Judgment was argued and taken under advisement on January 11, 2010, and is the matter presently before the Court. [Note 1]
The Court finds that the following facts are not in dispute:
1. Plaintiffs Joseph B. Solans and Christine P. Solans reside in Groton and were plaintiffs is an action brought by them in Middlesex Superior Court against Brian McMenimen (McMenimen), one of the defendants in the current action. Plaintiffs obtained a Pre-Judgment attachment against McMenimen in that action in the amount of $70,000. The general writ of attachment, dated September 14, 2006, was recorded at the Hampshire County Registry of Deeds on September 22, 2006 in Book 8885, Page 1. [Note 2]
2. Pursuant to an Agreement for Judgment, Plaintiffs obtained judgment in the amount of $200,000 and levied thereon by recording the Execution within thirty days thereof, on May 29, 2008, in Book 9497, Page 242.
3. The property which is the subject of this action, known as and numbered 18 Aspen Street in Ware (the Property), had previously been owned by Jeanne Slate. Ms. Slate conveyed the Property to Christine Solans, Trustee of 18 Aspen Street Realty Trust, by deed dated and recorded November 10, 2005 in Book 8515, Page 122. Christine Solans resigned as Trustee by instrument dated March 30, 2006 and recorded April 13, 2006.
4. A Trustees Certificate dated June 8, 2006 but not recorded until October 13, 2006 states that Richard J. Gauthier has been appointed as the new and sole trustee of the 18 Aspen Street Realty Trust and that he has been directed by the beneficiaries of the trust to convey the Property to Brian P. McMenimen. The notary public on the certificate was Laird J. Heal, an attorney having an address of 3 Clinton Road in Sterling, Mass.
5. Pursuant to the authorization memorialized in the above mentioned trustees certificate, Gauthier, the successor trustee, conveyed the Property to Defendant Brian McMenimen by deed dated June 8, 2006 but, once again, not recorded until October 13, 2006 in Book 8911, Page 91. Laird J. Heal was the notary public on that deed.
6. On June 8, 2006, after the date of the deed into him but several months before it was recorded, McMenimen granted a mortgage on the Property to Mortgage Electronic Registration Systems, Inc. (MERS). Like the deed, the mortgage was not recorded until October 13, 2006 in Book 8911, Page 128. As was the case in the deed into McMenimen and on the Trustees Certificate, Laird J. Heal acted as notary public.
7. MERS assigned the mortgage to WM Specialty Mortgage, LLC. by instrument dated March 20, 2008 and recorded on April 22, 2008 in Book 9460, Page 338. WM is the present holder of the mortgage.
8. Plaintiffs contend that their attachment and judgment take priority over the WM mortgage because the Attachment and Judgment relate back to the original attachment. WM disagrees, arguing that the attachment did not capture or catch the Property because McMenimen was not the record owner thereof at the time the attachment was recorded. Plaintiffs also contend that WM should be charged with knowledge of the title snafu because it was Laird Heal, Esquire, acting on behalf of MERS and serving also as notary public on various instruments, who caused the problem by failing to record the deed, trustees certificate and mortgage for several months after they were executed.
Standard of Review
Summary Judgment is granted where there are no issues of genuine material fact, and the moving party is entitled to judgment as a matter of law. Ng. Bros Constr., Inc. v. Cranney, 436 Mass. 638 , 643-44 (2002); accord Mass. R. Civ. P. 56(c). The moving party bears the burden of proving the absence of material issues of fact, and its entitlement to judgment as a matter of law. Pederson v. Time, Inc., 404 Mass. 14 , 16-17 (1989). With respect to any claim on which the party moving for summary judgment does not have the burden of proof at trial, it may demonstrate the absence of a triable issue either by submitting affirmative evidence that negates an essential element of the opponents case, or, by demonstrating that proof of that element is unlikely to be forthcoming at trial. Flesner v. Technical Communications Corp., 410 Mass. 805 , 809 (1991). In determining the absence or presence of a dispute as to material facts, the court can look to the pleadings, depositions, answers to interrogatories, and responses to requests for admissions under Rule 36, together with affidavits, if any... Mass. R. Civ. P. 56(c) However, the party opposing summary judgment cannot rest on his or her pleadings and mere assertions of disputed facts to defeat the motion for summary judgment. LaLonde v. Eissner, 405 Mass. 207 , 209 (1976). Summary judgment, when appropriate, may be rendered against the moving party.
Whether a fact is considered material is determined by the substantive law. [o]nly disputes over facts that might affect the outcome of the suit under the governing law properly preclude the entry of summary judgment. Anderson v. Liberty Lobby, 477 U. S. 242, 248 (1986). Because this Court detects no issues of genuine material fact and finds that Defendant WM Specialty Mortgage, LLC. is entitled to judgment as a matter of law, I grant summary judgment in favor of Defendant WM.
There is no dispute as to when the relevant instruments were recorded; the deed into McMenimen and his mortgage to MERS were obviously recorded after Plaintiffs attachment. Put another way, Plaintiffs attachment against McMenimen was recorded before he even took title to the Aspen Street property and before he granted the mortgage currently held by WM. Plaintiffs concede that a party ordinarily cannot be bound by a deed or mortgage which has not yet been recorded, but contend that the present case is an exception to that rule because Attorney Heal, who served as counsel for the mortgagee and acted as notary public on both the deed and mortgage, had actual knowledge that McMenimen now owned the Property, notwithstanding the fact that the instruments had yet to be recorded. Plaintiffs further contend that the actual knowledge of the attorney should be imputed to the client, and specifically to MERS and its assignee, WM. Defendant WM counters that the attachment cannot bind an interest which did not yet exist, and that to allow it to do so would turn the recording rules and practices on their head.
G. L. c. 183, § 4 provides, in pertinent part, that A conveyance of an estate in fee simple, fee tail or for life ..., shall not be valid as against any person, except the grantor or lessor, his heirs and devisees and persons having actual notice of it, unless it, ...is recorded in the registry of deeds for the county or district in which the land to which it relates lies. It is legally irrelevant when the deed and mortgage were delivered. An unrecorded mortgage cannot bind persons who are without actual knowledge of the facts therein recited. See Moore v. Gerrity Co., 62 Mass. App. Ct. 522 (2004). ....recordation is required to render valid a conveyance of an estate in fee simple against any person, except those having actual knowledge of the conveyance. Brogna v. Metro Credit Union, 2009 WL 2196890, *3 (Mass. Land Court 2009).
The important date in the present dispute is the date on which the attachment was recorded, September 22, 2006. On that date, Brian McMenimen was not the record owner of the Property, and the attachment, therefore, could not reach or impair the Property. See Haynes v. Jones, 46 Mass. 292 (1842). Barring something out of the ordinary, ....an attachment does not cover after-acquired property, unless a court were expressly so to order. See Mass. R. Civ. P. 4.1(c ) 65 Mass. 737 (1974). An attaching officer, e.g., the sheriff, cannot obtain through attachment a title the defendant does not possess. See Shamrock, Inc. v. FDIC, 36 Mass. App. Ct. 162 , 165 (1994). Cf. Perivoliotis v. Eveleth, 251 Mass. 444 , 446 (1925). This Court finds and rules that no evidence has been introduced to establish that McMenimen, MERS or WM knew about the attachment prior to the execution and subsequent recording of the deed and mortgage at issue in this case. The fact that Attorney Heal was the notary public or handled the closing does not prove that he knew about the attachment. Actual notice is strictly construed and is necessarily exclusive of inquiry notice. Knowledge of facts which might arouse suspicion would not be sufficient to destroy the bona fides of the subsequent purchaser. Richardson v. Lee Realty Corp., 364 Mass. 632 , 634 (1974).
Plaintiffs, nevertheless, continue to contend that because of other circumstances in the case, the attachment should catch the after-acquired property. They base this contention on their claim that the 18 Aspen Realty Trust is a nominee trust, with McMenimen as the controlling beneficiary. [Note 3] The fact that McMenimen was the sole beneficiary of a nominee trust is not a deciding factor in this case. Such a trust is often used in this Commonwealth, admittedly in some instances to hide the identity of the real owner of the property. However, a nominee trust is a legitimate form of ownership. Plaintiffs chose to obtain and record a general attachment. If they suspected that the property they sought to capture was about to be the subject of a fraudulent conveyance, they could have obtained a special attachment and attempted to catch property of McMenimen standing in the name of another person or entity. They did not do so. Hence, their attachment only caught property standing in the name of Brian McMenimen as of the moment it was recorded. It did not capture the Property at issue in this case because McMenimen was not the owner of record at that moment in time.
For all of the above reasons, this Court rules that Brian McMenimen is the current owner of the property, subject to the mortgage currently held by Defendant WM Specialty Mortgage, LLC. McMenimens title and WMs mortgage are not subject to Plaintiffs attachment recorded in Book 8885, Page 1 because McMenimen was not the record owner of the property at the time the attachment was recorded. Judgment to issue accordingly.
Charles W. Trombly, Jr.
Dated: March 29, 2010
[Note 1] Defendant Brian McMenimen, though duly served with notice, did not appear or file a responsive pleading of any kind in this action.
[Note 2] Unless otherwise indicated, all references to recorded documents refer to instruments recorded at this Registry of Deeds.
[Note 3] Blacks Law Dictionary, Abridged Sixth Edition, 1991, defines a nominee trust as an arrangement for holding title to real property under which one or more persons or corporations, pursuant to a written declaration of trust, declare that they will hold any property that they acquire as trustees for the benefit of one or more undisclosed beneficiaries.