PHILIP GODUTI as trustee of the Pension Nominee Trust, and MICHELLE BOUFFARD v. CITY OF WORCESTER.

Introduction

These two cases concern the unpaid taxes on the residence at 2 Gambier Avenue in Worcester and the validity of the City’s taking of that property in consequence. See G.L. c. 60, §53 et seq. [Note 1] The taxes date from 2006, and the City filed its instrument of taking on June 4, 2007 when the residence was owned of record by Sandra Dunn. But there was also of record a Certificate of Entry (recorded October 9, 1996), purportedly reflecting a September 30, 1996 foreclosure by entry of a mortgage held by Philip Goduti, as trustee of the Pension Nominee Trust, pursuant to G.L. c. 244, §1. [Note 2] Mr. Goduti claims that that entry resulted in his obtaining Ms. Dunn’s title three years after the Certificate’s recording (i.e., on October 9, 1999, see G.L. c. 244, §2; Goff v. White, 37 Mass. App. Ct. 128 , 131 (1994)), making him the true owner of the property at the time of the City’s assessment and taking, and that Ms. Dunn’s June 14, 2011 deed to him was merely “confirmatory” of that earlier transfer. It is undisputed that Ms. Dunn and/or her family members continued to live at the property until the time of Ms. Dunn’s deed to Mr. Goduti in 2011, and that Mr. Goduti has never paid or offered to pay any of the taxes or other property expenses himself.

Because the taxes that underlay the taking were assessed against Ms. Dunn, not Mr. Goduti, Mr. Goduti claims the taking was invalid and “no real estate taxes assessed on or after January 1, 1997 and on or before July 1, 2011 are due and payable to the City of Worcester.” [Note 3] The City disagrees.

The City and Mr. Goduti have now cross-moved for summary judgment. For purposes of those motions (and that purpose alone; there would likely be a contest if the case went to trial), the parties agree that Mr. Goduti had a valid mortgage on the 2 Gambier Avenue property and conducted a valid foreclosure by entry with its certificate properly recorded on October 9, 1996. [Note 4] Each advances a number of reasons why they should be granted summary judgment. Because it is dispositive, I address only one of the questions so raised: did Mr. Goduti waive his foreclosure by entry, leaving Ms. Dunn the property’s owner until her deed to him on June 14, 2011, recorded July 1, 2011? On the undisputed facts, as a matter of law, he did. The City’s taking was thus valid, and judgment foreclosing the right of redemption shall thus enter unless the full amount owed is paid within thirty days (i.e., on or before March 21, 2014). A hearing to determine that amount — principal, interest, attorneys’ fees and costs — will take place March 7, 2014 at 9:30 a.m.

Discussion

Summary judgment may be granted when the facts material to the claims at issue are not in genuine dispute and the moving party is entitled to judgment on those claims as a matter of law. Mass. R. Civ. P. 56(c); Ng Bros. Constr. v. Crannery, 436 Mass. 638 , 643-644 (2002). Facts, either to be established or set up in dispute, must be specific and supported by admissible evidence. Mass. R. Civ. P. 56(e). Conclusory allegations are disregarded. Ng Bros. Constr., 436 Mass. at 647-648.

Once facts have been properly established, the inferences to be drawn from those facts must be viewed in the light most favorable to the party opposing summary judgment. Attorney Gen. v. Bailey, 386 Mass. 367 , 371 (1982). The court does not “pass upon the credibility of witnesses or the weight of the evidence or make its own decision of facts.” Id. at 370 (citations omitted). However, a fact is genuinely in dispute only if “the evidence is such that a reasonable jury could return a verdict for the non-moving party,” and any inferences drawn must be reasonable ones. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). See also Reardon v. Parisi, 63 Mass. App. Ct. 39 , 40 (2005) (factual disputes must be based on a “rational view of the evidence”); Goulart v. Canton Hous. Auth., 57 Mass. App. Ct. 440 , 441 (2003) and cases cited therein (same). “Even in cases where elusive concepts such as motive and intent are at issue, summary judgment may be appropriate if the non-moving party rests merely upon conclusory allegations, improbable inferences, and unsupported speculation.” Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990).

Importantly for this case, if there is a difference between a document and its characterization, no factual dispute is created. The document controls. Ng Bros. Constr., 436 Mass. at 647-648. Likewise, a party cannot create a material issue of fact and defeat summary judgment simply by submitting affidavits or making arguments that contradict its deposition testimony. The deposition testimony controls. Id. See also O’Brien v. Analog Devices Inc., 34 Mass. App. Ct. 905 , 906 (1993) (“a party cannot create a disputed issue of fact by the expedient of contradicting by affidavit statements previously made under oath at a deposition”). For this reason, I have disregarded any affidavit or argument that contradicts, or is inconsistent with, the deposition testimony of Mr. Goduti or the material contemporaneous documents.

The relevant, material facts can be briefly stated.

Sandra Dunn and her then-husband James acquired the 2 Gambier Avenue residence on November 13, 1973, financing the purchase with a $20,500 mortgage from the Worcester County Institution for Savings, later part of Bank of America. The mortgage remained of record until April, 2004, when it was discharged in acknowledgment of full payment. In May 1984, the Dunns took out another mortgage in the amount of $22,791.18, this time from Edward Flynn, Jr., and this too remained of record until discharged in June 2011. The mortgage at issue in the cross-motions was granted in July 1986 for $40,700, and had an interest rate of 28.25%. The original mortgagee was the Mortgage Company of New England (“MCNE”), represented by Mr. Goduti — an attorney as well as a “high rate/high risk” lender himself. [Note 5] Mr. Goduti later purchased the mortgage from MCNE through his company Pension Nominee Corporation (February 1989), which then assigned it to one of Mr. Goduti’s nominee trusts, Pension Nominee Trust, in March 1991. For ease of reference, I will refer to it hereafter as the “Goduti mortgage.”

The record does not disclose any problems with the Worcester County Institution for Savings mortgage, and the Dunns remained current with the Flynn mortgage throughout. They fell behind, however, with the Goduti mortgage, and Mr. Goduti began taking steps to collect.

The first was to conduct a foreclosure by entry. This was done on September 27, 1996, with the Certificate of Entry recorded on October 9, 1996, right after Mr. Goduti recorded the Pension Nominee Trust assignment making him the mortgagee of record. Mr. Goduti’s attorney Michael Markoff, the same counsel who represents him in these proceedings, then sent a series of threatening “notices to vacate” to the Dunns (October 21, 1996; October 30, 1996; and July 10, 1997), followed-up by the filing of a summary process eviction complaint on December 31, 1997. That complaint was soon dropped, and the 1996-1997 notices to vacate never acted upon, probably because they had no legal basis. There had been no foreclosure under power of sale, only the foreclosure by entry, and three years had not run from the filing of the entry Certificate. An entry by foreclosure does not “ripen so as to end the defendant’s title” until the three years is up, and summary process eviction cannot take place until then, “unless there has been an actual possession in the plaintiff and a forcible entry upon or a forcible detainer against that possession”, none of which occurred. Dayton v. Brannelly, 255 Mass. 551 , 552-553 (1926). Here, the Dunns remained in the residence throughout, Ms. Dunn not leaving until the time of her deed to Mr. Goduti in June 2011. [Note 6]

When the Dunns’ attorney brought this to Mr. Goduti’s attention, Mr. Goduti changed tack. Instead of continuing to threaten eviction, he agreed to renegotiate the terms of the mortgage. They were, in fact, renegotiated and Ms. Dunn’s subsequent payments to Mr. Goduti were booked and reported by him as “interest.” See letter from Dunns’ attorney Steven Knessler to Goduti’s attorney Michael Markoff (Nov. 1, 1996); letter from attorney Knessler to attorney Markoff (Jul. 12, 1997); Goduti fax to Markoff and Kressler (Jul. 31, 1997); Kressler letter to Markoff (Aug. 22, 1997); Goduti fax to Kressler (Sept. 27, 1997); letter from Dunns’ attorney Henry Raphaelson to Goduti’s attorney Michael Markoff (Feb. 5, 1998); Raphaelson letter to Markoff (Feb. 26, 1998); Goduti fax to Raphaelson (Mar. 4, 1998); Goduti fax to Raphaelson (Mar. 11, 1998); Raphaelson letter to Goduti (Mar. 20, 1998); Goduti fax to Raphaelson (Mar. 27, 1998); Goduti fax to Markoff (Sept. 22, 1999) with postscripts (Oct. 9, 1999; Apr. 8, 2000 & Apr. 23, 2000); Goduti ledger entitled “2000 Int[erest] Rec’d” (reflecting payment from Dunn of $400); Goduti fax to Markoff (Aug. 25, 2003) (reflecting Dunn’s payment of $1800 in 2002 and, in 2003, “$2905 to date”); Goduti letter to Dunn (Jan. 1, 2004) (“This form constitutes our alternative report to you of the gross interest paid on your loan during calendar year 2003. During the calendar year 2003 you paid interest in the amount of $3305.00”); Goduti letter to Dunn (Jan. 9, 2005) (“During the calendar year 2004 you paid interest in the amount of $3195”).

A mortgagee acquires absolute title to the mortgaged estate after the lapse of three years from the time of his entry to foreclose, unless he waived or opened the foreclosure. Trow v. Berry, 113 Mass. 139 , 147 (1873). Such waiver occurs if there is intentional act which, as a matter of law, constitutes a waiver or requires an inference of waiver, and can arise out of an act “inconsistent with reliance on foreclosure.” Joyner v. Lenox Savings Bank, 322 Mass. 46 , 54 (1947). Thus, “the receipt of rents and their application to the payment of sums due on the mortgage debt are not a waiver if the amount currently owing on that debt is not thereby paid in full” because “these are objects for which possession of mortgaged property is commonly taken and are not inconsistent with possession for the purposes of foreclosure.” Id. However, “[i]f after the entry to foreclose a mortgage the mortgagee accepts any portion of the mortgage debt, or interest thereon, the entry is deemed to have been waived.” Willard v. Kimball, 277 Mass. 350 , 358 (1931) (emphasis added). This is evidenced, among others, if it can be shown that “any payment was made to the bank for application to the mortgage indebtedness, or was applied by the bank to the mortgage indebtedness.” Joyner, 322 Mass. at 56 (emphasis added). Here, as shown by the correspondence and ledgers cited above, it cannot be genuinely disputed that Ms. Dunn’s payments were applied to interest on the mortgage indebtedness. Indeed, as noted above, the tax reporting forms sent by Mr. Goduti to Ms. Dunn said exactly that. Mr. Goduti thus waived his foreclosure, his title never ripened, and Ms. Dunn remained the owner. [Note 7] The tax assessment against her, and the City’s subsequent taking when the assessment went unpaid, were thus indisputedly valid.

Mr. Goduti contends that such a summary judgment is improper by seeking to create an issue of fact based on his attorney’s post-1999 notices to vacate and that attorney’s letters to Ms. Dunn offering to let her continue in residence at the property if she paid “use and occupation” and signed an agreement for judgment for her prompt eviction if she failed to make those payments. He has also proferred his own affidavit in support of the same argument. These do not, however, create a genuine issue of fact, for two reasons. First, they are contradicted by Mr. Goduti’s contemporaneous ledgers and tax reporting forms to Ms. Dunn, which unequivocally list the payments as “interest” and are decisive for summary judgment purposes. Ng Bros. Constr., 436 Mass. at 647-648. See also Goduti dep. at 74-76 (confirming that the annual tax statements he sent — his “alternate Form 1098 or nine, whatever it is” — “recite[d] the amount of interest paid during the year.”) Second, as Mr. Goduti’s deposition makes plain, his attorney’s notices and letters were simply tactics to get Ms. Dunn to pay as much as possible — the threat of homelessness being the most effective means of doing so. [Note 8] See, e.g., Goduti dep. at 82; [Note 9] Goduti dep. at 89-91; [Note 10] Goduti dep. at 93. [Note 11]

Mr. Goduti’s citation to the Agreement for Judgment in Goduti v. Dunn, Land Court Case 10 MISC. 436157 (KCL), is similarly unavailing to create a genuine issue of material fact. In that case, Mr. Goduti alleged that he held clear record title to the property as a result of his 1996 foreclosure by entry and Ms. Dunn’s waiver of any claim to title in a subsequent written agreement between them. Notice of Docket Entry (Feb. 4, 2011). Ms. Dunn disagreed, contending that that she had retained the equity interest (Mr. Goduti holding only a mortgage) as corroborated by Mr. Goduti’s receipts to her for “interest paid” rather than “rents received.” Id. The merits of those arguments were never reached. Instead, the parties settled. Mr. Goduti paid Ms. Dunn $15,000, dropped his claims for any monetary relief, and Ms. Dunn deeded him her interest in the property. Agreement for Judgment Between Philip Goduti, Trustee, Pension Nominee Trust, and Sandra M. Dunn (Jul. 18, 2011). The Agreement’s statements (1) that “commencing on September 27, 1996, and at all times thereafter, Dunn’s occupation at the Premises has been cognizant of [Goduti’s September 27, 1996 entry to foreclose] and pursuant to agreements with Goduti, recognizing and effectuating Goduti’s constructive possession of the premises”, (2) that “[a]t all times since said Entry, Dunn and persons holding through her have occupied the Premises by agreement with Goduti pursuant to Goduti’s right of possession and in recognition of his constructive possession of the Premises and not by right held by Dunn,” and (3) that the June 14, 2011 deed from Ms. Dunn to Mr. Goduti was simply a “confirmatory” deed, were an ineffective attempt to rewrite history (see discussion above), [Note 12] wrong as a matter of law (id.) and, as expressly stated, “without prejudice to the rights of anyone not a party to [that] action.” Agreement for Judgment at 2. The City was not a party, and is thus unaffected.

Conclusion

For the foregoing reasons, the City’s motion for summary judgment is ALLOWED and Mr. Goduti’s is DENIED. The City’s June 4, 2007 tax taking of the property was valid, and Judgment shall so enter in Case No. 11 MISC. 454001. Judgment foreclosing the right of redemption shall enter in Case No. 12 TL 143662 unless the full amount owed is paid within thirty days (i.e., on or before March 21, 2014). A hearing to determine that amount — principal, interest, attorneys’ fees and costs — will take place March 7, 2014 at 9:30 a.m.

SO ORDERED.