Petitioner Eugene Bradstreet ("Bradstreet") filed a Petition for Partition relative to property located at 30 Clark Road, Bourne, MA (the "Property") pursuant to G.L. c. 241 on March 4, 2009. Rosemary Blackledge ("Blackledge") filed an Answer to the Complaint and Counterclaim on April 7, 2009, seeking to declare the deed of the Property to herself and Bradstreet ("Deed 2") null and void or, in the alternative, requiring Bradstreet to convey his interest in the Property to Blackledge. A case management conference was held on June 22, 2009, at which time the parties indicated that they wanted to try to settle the case through mediation and requested that a Commissioner not be appointed. At a status conference held on January 6, 2010, the parties indicated that they could not resolve the matter, and this court appointed Jan Dabrowski, Esq., to serve as the partition Commissioner (the "Commissioner"). On March 2, 2010, the Commissioner filed his initial report. On March 5, 2010, Bradstreet filed an Answer to Blackledge's Counterclaim.
A pre-trial conference was held on July 12, 2010 at which time the parties filed a Joint Motion to Bifurcate Trial pursuant to Mass.R.Civ.R. 42(B), to stay the Partition proceedings and to set a trial date on the Counterclaim. A trial was held on March 28, 2011 at the Land Court in Boston. Bradstreet filed a Motion for Directed Verdict on Blackledge's Counterclaim which was denied at trial. Bradstreet filed his Request for Findings of Fact, Conclusions of Law and Trial Brief on May 24, 2011. Blackledge filed her Post-Trial Brief and Requested Findings on May 25, 2011, at which time the case was taken under advisement.
At trial, testimony was given by Blackledge, and her son, Timothy Blackledge. Bradstreet had no witnesses. There were nine exhibits submitted at trial.
Based on the sworn pleadings and the evidence submitted at the trial, and the reasonable inferences drawn therefrom, I find the following material facts:
1. Bradstreet is a resident of Indianapolis, Indiana.
2. Blackledge is a resident of Sagamore Beach, Massachusetts.
3. Blackledge and her husband, who in the late 1970s both lived in New Jersey, purchased a parcel of vacant land in Bourne, Massachusetts (the Property) by deed dated December 12, 1978, and recorded in the Barnstable County Registry of Deeds (the "Registry") at Book 2839, Page 205 ("Deed 1").
4. Prior to purchasing the Property, Blackledge and her husband had owned and operated a motel in the area near the Property. Blackledge testified "[t]hen we moved up to the cape and I ran the motel because he was ill, and my children helped me until he got so sick that he wanted to go home to New Jersey. [Note 1]
5. On May 14, 1979, Blackledge's husband died. Shortly after her husband's death, in late 1979 or early 1980, Blackledge met Bradstreet, and they soon started a dating relationship. In 1980 or 1981, Bradstreet began renting a room from Blackledge in her New Jersey residence.
6. On or about February 27, 1984, Blackledge constructed a post and beam house on the Property. Blackledge took out a $50,000 mortgage which was recorded at the Registry at Book 4025, Page 34. After the construction was completed, Blackledge and Bradstreet moved into the house on the Property.
7. In 1994, Bradstreet asked Blackledge to finance his purchase of a new truck. Blackledge testified "[he] said that if I would take a loan out against the house, that he would use that money to buy the truck, and then I wouldn't have to put any money out because he would pay me back." While initially hesitant, she eventually agreed to finance the purchase of the truck.
8. Bradstreet executed a note for $111,000 (the "Note") and a mortgage dated September 26, 1994 (the "Mortgage") with GMAC Mortgage Company ("GMAC") prior to the loan transaction at the Registry, but he did not attend the closing. Bradstreet did not mention to Blackledge that he had already signed the documents.
9. Blackledge attended the loan closing at the Registry on September 26, 1994 with a representative and attorney for GMAC, where she executed the Note, Deed 2 and the Mortgage. [Note 2] Deed 2 and the Mortgage were notarized. Deed 2 conveyed the Property from herself to herself and Bradstreet as joint tenants. The Mortgage and the Note were both executed by both Bradstreet and Blackledge. Deed 2 was recorded in the Registry at Book 9386, Page 276, and the Mortgage was recorded in the Registry at Book 9386, Page 278.
10. At the closing, Blackledge was presented with a stack of documents, and was told "[j]ust sign everywhere you see that," referring to the "X" on the yellow sticker markers which had been placed to indicate the spots where a signature was required. A few days prior to the closing, Blackledge had met with the GMAC representative, who explained the documents relevant to the loan transaction to Blackledge. [Note 3] The documents were not shown to Blackledge at this meeting.
11. The parties refinanced the Property several times thereafter. The parties executed a mortgage dated August 2, 1999, in an amount of $111,300.00, which was recorded at the Registry at Book 12447, Page 326. They executed a mortgage dated August 19, 2003, in the amount of $99,000.00, which was recorded at the Registry at Book 17533, Page 57. They executed a mortgage dated August 19, 2003, in the amount of $32,200.00, which was recorded at the Registry at Book 17533, Page 76.
12. Bradstreet lived at the Property with Blackledge from 1984 until April 2008. Blackledge currently resides at the Property.
The central issue before this court is whether Deed 2 is valid. Bradstreet argues that he is entitled to a one-half interest in the Property because Deed 2 is valid. Blackledge argues that Deed 2 was not a valid transfer because Bradstreet wrongfully induced her to sign Deed 2 through false representations. Blackledge also argues that Deed 2 was not a valid transfer because the execution of Deed 2 was a mistake. I shall discuss each issue in turn.
The first issue for this court to address is whether Bradstreet made a false representation which induced Blackledge to execute Deed 2. Blackledge argues that a misrepresentation occurred because Bradstreet misled her to believe that she was conducting a loan transaction instead of a deed transfer. Bradstreet argues that he made no misrepresentation of any facts relating to Deed 2.
Case law confirms that "a court acting under general principles of equity jurisprudence has broad power to reform, rescind, or cancel written instruments, including mortgages, on grounds such as fraud, mistake, accident, or illegality." Beaton v. Land Court, 367 Mass. 385 , 392 (1975). For a party to recover for fraudulent misrepresentation, such party "must allege and prove that the defendant made a false representation of a material fact, with the knowledge of its falsity, for the purpose of inducing the plaintiff to act thereon, and that the plaintiff relied upon the representation as true and acted upon it to [her] damage." Kilroy v. Barron, 326 Mass. 464 , 465 (1950).
Applying these principles, no evidence exists in the trial record to indicate that Bradstreet made any misrepresentation to Blackledge relative to the execution of Deed 2. Bradstreet requested that Blackledge finance the purchase of a truck which he could use to generate income to pay back Blackledge for prior debts. Blackledge initially told Bradstreet that she would not finance the purchase. However, Bradstreet chose a truck that he wanted to purchase, and he explained that if she would take out a loan, that he could use that money to purchase a truck. He explained that she would not have to provide more money because he would pay her back. Prior to the closing, Blackledge met with the GMAC representative to review the loan transaction, at which meeting the representative explained the relevant documents, which presumably included Deed 2 as well as the Mortgage. At the closing, Blackledge asked if she should be represented by an attorney, and the GMAC representative responded that she did not need an attorney, because they had already discussed the documents. She was presented with a stack of documents, which she signed. The record does not provide any evidence to indicate that there was any discussion between Blackledge and either the GMAC representative or Bradstreet with regard to Deed 2. [Note 4] Moreover, there is little evidence to indicate what actually transpired between Blackledge and the GMAC representative, and no evidence as to whether Bradstreet or GMAC was the driving force for the execution of Deed 2. Bradstreet's failure to attend the loan closing is not enough. Therefore, misrepresentation cannot be shown since there is no evidence to indicate that Bradstreet attempted to persuade Blackledge to execute Deed 2. [Note 5]
As a result of the foregoing, I find that the evidence does not support a finding of a misrepresentation of any facts by Bradstreet to Blackledge. [Note 6]
The second issue for this court to address is whether Deed 2 can be reformed on a theory of mutual or unilateral mistake. Blackledge argues that a mistake occurred because she did not understand the legal import of executing Deed 2. Bradstreet argues that the failure to understand the legal effect of a deed cannot serve as a reason for reformation because such a misunderstanding is not considered a mistake.
"As a general rule, reformation of an instrument may be warranted not only by fraud or by mutual mistake, but also by a mistake of one party which is known to the other party." Torrao v. Cox, 26 Mass. App. Ct. 247 , 250 (1988) citing Mates v. Penn. Mutual Life Ins. Co., 316 Mass. 303 , 306 (1944); Wareham Say. Bank v. Partridge, 317 Mass. 83 , 84 (1944). Mutual mistake requires that both parties to a transaction are mistaken as to some material fact. There is no evidence that Blackledge did not intend to execute Deed 2; in fact, she testified that she knew she was executing Deed 2. Moreover, there is no evidence that Blackledge questioned that she was signing Deed 2. Before the closing, Blackledge had met with the GMAC representative, who explained the documents to her. In addition, Blackledge's past business experience, which she had acquired by running a motel, would indicate that she likely understood the legal import of executing a deed. Since Bradstreet did not execute Deed 2, he could not have been part of the mistake. With respect to a unilateral mistake, the grantee must be aware of and conceal the mistake from the grantor. Ingram v. Ingram, 72 Mass. App. Ct. 1108 (2008). There is no evidence that Bradstreet attempted to conceal the existence of Deed 2 from Blackledge.
Bradstreet also argues that, even if Blackledge did not understand the impact of the execution of Deed 2, she must be held responsible for what she signed. The failure to understand the legal effect of a deed is not considered a "mistake." Ward v. Ward, 70 Mass. App. Ct. 366 , 370 (2007), citing Coolidge v. Loring, 235 Mass. 220 , 224 (1920). A "[m]isconception of the legal effect of the language used in the instrument is not a 'mistake of law' against which our courts afford a remedy. The parties are bound by the legal effect of what has really been agreed on, and cannot have the declaration set aside on the ground that they did not fully understand the legal effect of the language used, and that certain legal consequences which were not anticipated by the settlors flowed from its execution." Id.
Applying these principles to this case, it appears, and I so find, that Deed 2 cannot be reformed on the basis of either a unilateral or a mutual mistake because Blackledge's testimony clearly indicates that she was aware that she had signed Deed 2.
The parties shall attend a status conference on Tuesday, September 20, 2011 at 10 AM to determine how to proceed on the partition action.
Alexander H. Sands, III
[Note 1] Blackledge also testified that she had been an assistant manager at the Pittsburgh Plate Glass inventory control.
[Note 2] Blackledge testified at trial that she recalled signing Deed 2, but did not indicate that there was any discussion as to the execution of Deed 2.
[Note 3] At the closing, Blackledge inquired as to whether she needed an attorney, and the GMAC representative responded that she did not because they had already discussed the relevant documents at a prior meeting. The trial record does not disclose whether Deed 2 was discussed at either the prior meeting or at the closing.
[Note 4] Even though Bradstreet knew he had signed the Mortgage (which was required of him because of his part ownership in the Property), there is no evidence as to his misrepresenting any facts to Blackledge. It should also be noted that both the attorney and loan representative for GMAC, who handled the loan transaction, were not witnesses and gave no testimony as to what happened at the loan transaction. There was no evidence as to the rationale for the execution of Deed 2. In addition, the evidence indicates that Blackledge knew she signed Deed 2, and her business experience, acquired in running a motel as well as several other jobs, including assistant manager at a plate glass company, would indicate that she was aware of business issues and should have known the import of executing a deed to herself and Bradstreet. In addition, she testified that she paid the monthly household bills herself.
[Note 5] The GMAC representative and the GMAC attorney were intervening forces in this matter, who dealt with Blackledge both before and at the closing, and the trial record is devoid of any information as to representations that either of them made as to Deed 2. At most, Bradstreet would only have known that Blackledge was expected to sign Deed 2 at the closing.
[Note 6] Blackledge testified that she was not aware of the existence of Deed 2 until this case was commenced. Her credibility in this regard, however, is at issue because she participated in three refinancings after the execution of the Mortgage, at each of which Bradstreet was a participant because of his ownership interest in the Property. Moreover, Blackledge testified that she recalled signing Deed 2 at the closing.