MARY JANE GANDOLFO and PETER A. GANDOLFO, JR. v. ROBERT GRAHAM, EXECUTOR OF THE ESTATE OF RICHARD GRAHAM

INTRODUCTION

Mary Jane Gandolfo and Peter A. Gandolfo, Jr. (plaintiffs) initiated this action by verified complaint filed on April 27, 2007. It focuses primarily upon the validity of a mortgage on the property at 619 Washington Avenue, Revere, Massachusetts (Premises).

On or about November 30, 2004, Allessandra Caruso, a/k/a Sandra Caruso (Caruso), obtained title to the Premises from Joan R. Graham, the former spouse of decedent Richard Graham. The plaintiffs, in turn, acquired the Premises from Caruso on or about November 21, 2006.

On May 17, 1984, Joan R. Graham (Joan) and Richard Graham (Richard) entered into a separation agreement under which Joan granted Richard a mortgage (Mortgage) on the Premises. The Mortgage was recorded with the Suffolk Registry of Deeds (Registry) at Book 10923, Page 243. On July 1, 2005 Richard passed away. Soon thereafter, on October 31, 2005, Joan passed away, as well. Robert Graham (Robert) in his capacity as Executor of the Estate of Richard Graham purports to be the current holder of the Mortgage. Simply stated, the question at hand is whether G.L. c. 260, §§ 33 and 34, as amended, operate to discharge the Mortgage as a matter of law.

By Order of March 21, 2008 another Judge of this court (Lombardi, J.) determined that the interpretation of the relevant law advanced by the plaintiffs “would have eliminated the accrued right of the defendant to exercise the power of sale on the 1984 mortgage . . . [S]uch a retroactive application of the shortened statute of limitations would run afoul of constitutional protections.” That court concluded therefore that the said Mortgage had not been discharged as a matter of law. [Note 1]

For the reasons that follow, I must disagree, respectfully so, with that earlier determination. Rather, I now conclude that the relevant statutory provisions lead inexorably to the conclusion that effective October 1, 2006 the said Mortgage was fully discharged.

BACKGROUND

Plaintiffs’ complaint contains four Counts. Count I asserts that the Mortgage has been discharged as a matter of law. Counts II and III assert that laches and estoppel, respectively, foreclose the defendant’s right to enforce the Mortgage. Assuming the Mortgage’s continuing vitality, Count IV seeks an accounting of amounts due thereunder.

On November 30, 2007, the plaintiffs filed a motion for summary judgment, while the defendant filed a cross-motion for summary judgment. Thereafter, on March 21, 2008, the court (Lombardi, J.) issued an Order on Motions for Summary Judgment (Order). This court recites the following undisputed facts based substantially upon those set out in that Order:

1. Plaintiffs reside in Revere, Massachusetts.

2. Defendant, one of two co-executors under the will of Richard Graham resides in Madison, Connecticut. Defendant is the brother of the late Richard Graham.

3. In connection with their divorce proceedings, Joan R. Graham and Richard Graham entered into a Separation Agreement dated May 17, 1984.

That Agreement addressed the disposition of the Premises [Note 2] in relevant part, as follows:

Husband agrees to deed [the Premises] to Wife . . . In exchange . .. , Husband shall take back an interest free mortgage on [Premises] in an amount equivalent to one-third (1/3) of the equity in the real estate on May 19, 1989. The mortgage shall be secured by a promissory note executed by Joan Graham . . . The mortgage shall remain in force and effect for a period of five years or upon the sale of the property, whichever shall occur first.

4. By deed of even date, Joan Graham and Richard Graham conveyed the premises to Joan Graham. The Deed was recorded with the Registry at Book 10923, Page 242.

5. On the same date, Joan delivered the Mortgage on the Premises to Richard as per the terms of the Agreement. The Mortgage was recorded with the Registry at Book 10923, Page 243 on May 17, 1984.

6. The Mortgage provides in relevant part as follows:

I, Joan Graham of Revere . . . for consideration paid, grant to Richard A. Graham, of Somerville . . . with mortgage . . . covenants, to secure the payment of the principal sum which is one-third of the equity of the mortgage on May 19, 1989, in five (5) years with no interest, payable as provided in my note of even date.

7. Contemporaneously therewith, Joan executed a Note establishing 1989 as the date of the final installment. Under the terms of the Note, Joan was to pay $35.00 weekly, to be applied to the “principal sum which is one third of the equity of the [premises] on May 19, 1989, in five years with no interest . . .”

8. Upon the expiration of the five (5) year term, one Robert J. Gregory inspected the Premises and provided an appraisal as of July 27, 1989 of $175,000.00. [Note 3]

9. On June 6, 1996, Joan transferred title to the Premises to her son, Patrick Graham (Patrick) for nominal consideration and a reserved life estate. The deed to Patrick was recorded with the Registry at Book 20628, Page 322.

10. Thereafter, on January 3, 2003, Patrick and Joan conveyed the Premises to Joan for nominal consideration. That deed was recorded with the Registry at Book 35502, Page 109.

11. On November 30, 2004, Joan conveyed the Premises to Alessandra Caruso for nominal consideration and a reserved life estate. That deed was recorded with the Registry at Book 36373, Page 282.

12. Richard passed away on July 1, 2005, while Joan passed away on October 31, 2005.

13. By deed dated November 21, 2006, and recorded with the Registry at Book 40789, Page 8, Caruso conveyed the Premises to Mary Jane Gandolfo and Peter A. Gandolfo, Jr., the plaintiffs herein, for a consideration of $335,000.00.

14. At the time of the conveyance to the plaintiffs, the Mortgage remained undischarged of record. 15. On September 27, 2007, the defendant recorded an Affidavit pursuant to G.L. 260, §§ 33 and 34 with the Registry at Book 42526, Page 5.

In its Order, the court (Lombardi, J.) rejected the plaintiffs’ equitable claims predicated upon laches and estoppel, and granted defendant’s Cross-Motion for Summary Judgment as to those Counts II and III. Of perhaps greater significance, however, the court granted the defendant’s cross-motion as to Count I, concluding that the Mortgage had not been discharged as a matter of law, pursuant to G. L c. 260, § 33, but rather remained in full force and effect. In this regard, the court offered the following observation:

[T]here are a number of drafting problems with St. 2006, c. 63 and no appellate court has yet had the opportunity to interpret the statute. An initial observation is that a mortgage does not have a ‘term’ [Note 4] yet the word appears in more than one section of Chapter 63. This court finds that the statute evades a plain meaning analysis.

The court continued:

The interpretation of s. 8 [Note 5] advanced by the plaintiffs…would have eliminated the accrued right of defendant to exercise the power of sale in the 1984 mortgage…. [S]uch retroactive application of the shortened statute of limitations would run afoul of constitutional protections. (emphasis added)

The court concluded therefore:

[T]he shortened statute of limitations contained in Chapter 63, § 6 as applied to the 1984 mortgage was extended as a result of s. 8 until October 1, 2007. Consequently, this court finds that the defendant filed timely the Section 34 Affidavit and that the defendant has the right to exercise the power of sale under the 1984 mortgage on or before October 1, 2012. Based upon the foregoing, this court grants summary judgment to defendant on counts I, II, and III of the complaint. (emphasis added).

Judgment, however, never issued in this matter because, as the court observed, the “defendant ‘concede[d] that he ha[d] not provided the [p]laintiffs with information on how much [wa]s owed on the outstanding balance on the mortgage ’ and admit[ted] he ‘d[id] not know if Joan Graham ha[d] submitted any payments on the underlying mortgage.’” The court, therefore, also concluded that the dissolution of a 2007 injunction, enjoining the foreclosure of the 1984 mortgage, would be appropriate only after the defendant had fulfilled his obligation under Count IV to provide the plaintiffs with an accounting.

In the interim period, during which the accounting was to be rendered pursuant to Count IV, the instant matter was transferred to this court (Grossman, J). The accounting was filed by the defendant on March 24, 2009. The plaintiffs filed a Motion for Reconsideration of the Order on Motions for Summary Judgment on September 4, 2009, and hearings on that motion were heard on April 20, 2010. Thereafter, the matter was taken under advisement.

SUMMARY JUDGMENT

Summary judgment is to be granted when “pleadings, depositions, answers to interrogatories, and responses to requests for admission . . . together with affidavits . . . show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.” Mass. R. Civ. P. 56(c). The moving party bears the burden of proving the absence of controversy over material facts and that he or she deserves a judgment as a matter of law. See Highlands Ins. Co. v. Aerovox Inc., 424 Mass. 226 , 232 (1997). The substantive law which controls the outcome of the issue determines which facts are material for purposes of summary judgment. Houghton v. Johnson, 2006 WL 2304036 (Mass. Land Ct.), citing, e.g., Hogan v. Riemer, 35 Mass. App. Ct. 360 , 364 (1993). The record before this court reveals no genuine factual dispute. Rather, as the disposition of Count I depends upon a pure question of law, the proper resolution of which will dispose of the plaintiffs’ suit, this matter is ripe for summary judgment.

DISCUSSION

The question of law presented by Count I concerns the appropriate construction to be given the relevant provisions of St. 2006, c. 63. In interpreting a statute, "[this court] begin[s] with the language of the statute." Commonwealth v. Raposo, 453 Mass. 739 , 743 (2009). This court is to give effect to each word and phrase in a statute, and seek to avoid an interpretation that treats some words as meaningless. See Milford v. Boyd, 434 Mass. 754 , 757 (2001); Commonwealth v. Super, 431 Mass. 492 , 497-498 (2000). Though this court’s inquiry begins with the language of the statute itself, it shall "not consider the language of the statute alone, but seek to determine the intent of the Legislature in enacting the statute, 'ascertained from all its words construed by the ordinary and approved usage of the language, considered in connection with the cause of its enactment, the mischief or imperfection to be remedied and the main object to be accomplished, to the end that the purpose of its framers may be effectuated.'" Halebian v. Berv, No. SJC-10641, Slip Opinion, at 13 (August 23, 2010), quoting from Harvard Crimson, Inc. v. President & Fellows of Harvard College, 445 Mass. 745 , 749 (2006).

At the time the Mortgage was executed, G. L. c. 260, § 33, provided in relevant part as follows:

No power of sale in any mortgage of real estate shall be exercised and no entry shall be made nor possession taken nor proceeding begun for foreclosure of any such mortgage after the expiration of fifty years from the recording of the mortgage in case of mortgages recorded on or after January first, nineteen hundred and thirteen….unless…an extension of the mortgage or an acknowledgement or affidavit that the mortgage is not satisfied, is recorded within the last ten years of such period. In case an extension of the mortgage or such an acknowledgement or affidavit is so recorded, the period shall continue until ten years shall have elapsed . . . The period shall not be extended…by any…extension, acknowledgement, affidavit or other action not meeting the requirements of this section and section . . . thirty-four.

However, St. 2006, c. 63, § 6 (Act/Amendment), amended G. L. c. 260, § 33, to shorten the statute of limitations period during which a mortgage may be enforced. Section 33 now provides in relevant part, as follows:

A power of sale in any mortgage of real estate shall not be exercised and an entry shall not be made nor possession taken nor proceeding begun for foreclosure of any such mortgage after the expiration of, in the case of a mortgage in which no term of the mortgage is stated, 35 years from the recording of the mortgage or, in the case of a mortgage in which the term or maturity date of the mortgage is stated, 5 years from the expiration of the term or from the maturity date, unless an extension of the mortgage or the acknowledgement or affidavit that the mortgage is not satisfied, is recorded before the expiration of such period…The period shall not be extended by reason of . . . agreement, extension, acknowledgement, affidavit or other action not meeting the requirements of this section and sections 34 and 35. Upon the expiration of the period provided herein, the mortgage shall be considered discharged for all purposes without the necessity of further action by the owner of the equity of redemption [Note 6] or any other person having an interest in the mortgaged property . . . (emphasis added)

Thus, prior to the 2006 Act, under § 33 a mortgagee was accorded fifty years from the date on which the mortgage was recorded in which to initiate foreclosure proceedings. In contrast, if, under the Act, the mortgage is for a fixed term, the mortgagee is afforded five years from the expiration of the mortgage term or maturity date in which to initiate appropriate enforcement action. If, on the other hand, the mortgage lacks a specified durational term or maturity date, a mortgagee is afforded 35 years from the recording of the mortgage in which to do the same.

In short, by means of this Amendment, the Legislature intended to reduce significantly the period during which a mortgagee might foreclose upon mortgaged real property. significantly, the Legislature deferred the Act’s effective date [Note 7] until October 1, 2006, [Note 8] though it was signed into law on April 13, 2006

Returning to the undisputed facts of this case, on May 17, 1984, Joan executed the document giving Richard a mortgage on the Premises. The Mortgage expressly provides that it was to be fully performed “in five (5) years with no interest, payable as provided in my note of even date.” The Note executed by the parties further provides that Joan was to pay $35.00 weekly, to be applied to the “principal sum which is one third of the equity of the [premises] on May 19, 1989, in five years with no interest . . .” Joan and Richard, therefore, entered into a mortgage contract having a term of five years. That term expired on May 17, 1989.

As soon as the Act became effective on October 1, 2006 without action by the defendant, the Mortgage ceased to have legal force as of May 17, 1994, i.e., five years after the end of the Mortgage term. Prior to the effective date, the former version of § 33 remained in place, so that the Mortgage remained operative. The defendant could have acted to preserve his rights under the Mortgage by taking appropriate action any time prior to the October 1, 2006 effective date. He failed to act, however, until September 27, 2007, when he filed a statutory Affidavit. [Note 9] By that time, the Mortgage had been discharged as matter of law.

The plaintiffs argue, and the court (Lombardi, J.) agreed, that this application of the Act “would run afoul of constitutional protections” because, “[i]f a statute of limitations restricts the time for enforcing . . . accrued rights, it is constitutional [only] if there is a reasonable time after the enactment of the statute for the enforcing of these rights.” Anderson v. Phoenix Inv. Counsel of Boston, Inc., 387 Mass. 444 , 454 (1982), citing to Atchafalaya Land Co. v. F. B. Williams Cypress Co., 258 U.S. 190, 197 (1922). The plaintiffs assert that the Act fails to provide such reasonable time unless § 8 were read to extend the effective date of § 6 through October 1, 2007. This court disagrees and will address the constitutional argument, and the argument concerning § 8, seriatim.

It is well to recall at the outset, the principle that “[a] Legislative enactment carries with it a presumption of constitutionality and the challenging party must demonstrate beyond a reasonable doubt that there are no conceivable grounds which would support its validity . . . We inquire only whether the statute falls within the legislative power to enact, not whether it comports with a court’s idea of wise or efficient legislation.” Leibovich v. Antonellis, 410 Mass. 568 , 576 (1991) (internal citations omitted) (emphasis added). This court views the constitutional issue at bar as substantially controlled by the case of Cioffi v. Guenther, 374 Mass. 1 (1977). As has been observed, St. 2006, c. 63, § 6 was signed into law on April 13, 2006 and would generally have become effective ninety days thereafter. However, the Legislature explicitly deferred the effective date until October 1, 2006. [Note 10] Applying the principles enunciated in Cioffi, [Note 11] this court is satisfied that the approximate five and a half month period afforded by the Legislature in which to pursue a foreclosure claim, [Note 12] is entirely adequate from a constitutional perspective. Id. at 3-4. See generally Mulvey v. Boston, 197 Mass. 178 , 183-185 (1908) (30 day period sufficient for change to statute of limitations relating to personal injury claims sounding in tort). [Note 13] See also Messere v. Murphy, 32 Mass. App. Ct. 917 , 918-919 (1992), and cases cited. Compare Anderson, supra at 455 (finding six days inadequate). Consequently, this court rejects the premise that plaintiffs’ proposed interpretation presents due process or other constitutional infirmities.

We turn next to defendant’s argument concerning § 8 of the Act which the court (Lombardi, J.) adopted for purposes of its Order. Section 8, a bridging or transitional provision, recites in relevant part that § 6 shall apply to all mortgages, whether recorded before, on or after the effective date hereof, except that the term of a mortgage which as a result of sections 5 and 6 would expire within 1 year after the effective date of this Act shall be extended for a period of 1 year from the effective date of this Act. (emphasis added)

The defendant argues that this provision extends the Act’s effective date to October 1, 2007 with regard to those mortgages “affected” or otherwise discharged by virtue of its enactment. It is this court’s view, however, that such interpretation is at odds with the plain meaning of § 8; that it would require this court to supplement the § 8 language; and that it would effectively treat provisions of § 9 as surplusage.

It seems clear that § 8 is designed to extend the period of time in which a discreet group of mortgage holders may act to preserve their rights of foreclosure. This group is, at once, defined and limited by the phraseology appearing in § 8. That language describes those mortgages subject to extension thereunder as those that “as a result of sections 5 and 6 would expire within 1 year after the effective date of this act.” (emphasis added)

Thus, it is clear that any mortgagee whose foreclosure or extension rights (1) would terminate with the effective date of the Act, or (b) would continue beyond October 1, 2007, would in no way be impacted by § 8. Rather, the mortgages subject to extension under § 8 are those whose foreclosure or extension rights would have terminated sometime between October 1, 2006 and October 1, 2007.

However, the Mortgage in question is one of those whose foreclosure or extension rights terminated as the Act became effective on October 1, 2006.

Those accrued rights were available under the fifty year provision of pre-Amendment § 33. Post-amendment however, the mortgage holder was afforded five years from the expiration of the term or maturity date in which to initiate foreclosure or extension proceedings. In the event the five year period expired prior to the effective date of the Act, [Note 14] the mortgage holder would be afforded a grace period, commencing with the April 13, 2006 approval date through October 1, 2006, in which to extend or foreclose.

In the matter at bar, through the application of § 6, the Mortgage ceased to have legal effect as of May 17, 1994. [Note 15] Notwithstanding, the defendant was still presented with a five and a half month grace period [Note 16] in which to preserve his rights under the Mortgage by taking advantage of the still operative iteration of G. L. c. 260, § 33. This he failed to do.

Section 8 of the Act speaks to another category of mortgage holder. According to its plain meaning, § 8 provides an alternative period within which a mortgagee may preserve its foreclosure rights, when “as a result of sections 5 and 6 [the mortgage] would expire within 1 year after the effective date of this Act.” (emphasis added). Section 8 then, pertains to a category of mortgage distinct from that here at issue which expired before the Act went in to effect.

For example, § 8 would come into play in the event the five year extension period referenced in § 6 were to expire sometime between the October 1, 2006 effective date and October 1, 2007. Under such circumstances, the mortgage holder would find itself, perhaps abruptly so, with no grace period in which to foreclose or seek to extend. Through the application of § 8, that mortgage holder would be afforded until October 1, 2007 in which to preserve its rights under the mortgage.

The defendant would have this court construe the § 8 one year extension as applying, in essence, to all mortgages adversely affected by the Amendment. The court rejects that notion however, given the plain language of § 8. Moreover, such an interpretation would effectively render superfluous, § 9 [Note 17] to the extent it pertains to the sections relevant herein. Finally, the defendant’s interpretation would be inconsistent with the overarching Legislative intent to shorten the foreclosure period while enhancing the mortgaged property’s transferability and ultimately its marketability. [Note 18]

Conclusion

Based upon the foregoing, this court concludes that as of the effective date of St. 2006 c. 63, the Mortgage had been discharged. I conclude further that the Mortgage holder could not avail himself of § 8 or the extension that it provides. [Note 19]

Accordingly, it is hereby

ORDERED that plaintiffs’ Motion for Reconsideration be, and hereby is,

ALLOWED as to Count I. [Note 20] It is further

ORDERED that the plaintiffs’ Motion for Summary Judgment be and hereby is ALLOWED as to Count I. It is further

ORDERED that the defendant’s Cross-Motion for Summary Judgment be and hereby is DENIED as to Count I. It is further

ORDERED that the Mortgage on 619 Washington Ave, Revere, MA recorded with the Suffolk County Registry of Deeds on May 17, 1989 at Book 10923, Page 243 has been discharged. It is further

ORDERED that the preliminary injunction entered by the court on May 9, 2007, be, and hereby is DISSOLVED.

SO ORDERED

By the court (Grossman, J.)

Attest:

Deborah J. Patterson

Recorder

Dated: October 8, 2010.