PETER O'CONNELL vs. DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE FOR THE MLMI TRUST SERIES 2007-MLN1 and RUSSELL E. KELCOURSE.

Plaintiff filed his unverified Complaint on February 14, 2012, pursuant to G.L. c. 231A, seeking a declaratory judgment relative to a mortgage (the “Deutsche Bank Mortgage”) granted by Defendant Russell E. Kelcourse (“Kelcourse”), presently held by Defendant Deutsche Bank National Trust Company as Trustee for the MLNI Trust Series 2007-MLN1 (“Deutsche Bank”). [Note 1] Also on February 14, 2012, Plaintiff filed an Application for a Temporary Restraining Order and Preliminary Injunction (the “Application”). Attached to the Application was the contested legal description for the Deutsche Bank Mortgage. This court denied the Application on February 14, 2012. Deutsche Bank filed its Answer, Counterclaims and Cross-claims on April 3, 2012. [Note 2] [Note 3] A case management conference was held on April 9, 2012. Plaintiff filed his Answer to Counterclaims on April 30, 2012. Kelcourse filed his Answer to Cross-claims on May 17, 2012. On August 7, 2012, Plaintiff and Deutsche Bank filed a Stipulation of Dismissal of all claims and counterclaims between them in this case with prejudice and without costs. On July 19, 2013, Plaintiff and Kelcourse filed a Stipulation of Dismissal of all claims and cross-claims between them in this case with prejudice and without costs. Deutsche Bank filed its Motion for Summary Judgment on January 15, 2014, together with supporting memorandum, Statement of Material Facts, and Appendix, including the Affidavit of Steven Manchini. On February 19, 2014, Kelcourse filed his Opposition and Cross-Motion for Summary Judgment, together with supporting memorandum, Supplemental Statement of Facts, and Affidavit of Russell E. Kelcourse (the “Kelcourse Affidavit”). A hearing was held on all motions on April 15, 2014, and all motions were taken under advisement.

Pursuant to Mass. R. Civ. P. 56(c), “summary judgment is appropriate where the pleadings...[taken] together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Cassesso v. Commissioner of Correction, 390 Mass. 419 , 422 (1983). “The burden on the moving party may be discharged by showing that there is an absence of evidence to support the non-moving party’s case.” Kourouvacilis v. General Motors Corp., 410 Mass. 706 , 711 (1991).

I find that the following material facts are not in dispute:

1. By deed dated August 15, 2006 (the “Trust Deed”), Kelcourse acquired property from the R&J Family Trust (Edward J. Kelcourse, Trustee) shown as Lots 395-399 on a plan titled “Plan of House Lots at Houghs Neck, Quincy, MA, owned by Wilton A. Dunham,” prepared by Ernest W. Branch, Civil Engineer, dated May 1, 1909 (the “1909 Plan”), and located in Quincy, MA, for consideration of $425,000.00 (“Kelcourse Property”). The Trust Deed was recorded in the Norfolk Registry of Deeds (the “Registry”), Book 23998, Page 520, on August 21, 2006. The legal description listed the five lots in three separate legal descriptions, one for Lot 395 located on Woodman Road, one for Lots 398 and 399 located on Rhoda Street, and one for Lots 396 and 397 located on Rhoda Street. The Trust Deed listed the property address for all five lots as 116 Rhoda Street, Quincy, MA. All five lots are contiguous. Four of the Lots, 396 through 399, are fronted by Rhoda Street, each running approximately twenty-five feet along the road and approximately ninety feet back to the lot line of Lot 395. Lot 395 backs up to the other four lots sharing a 100 foot lot line with the other four lots. All five lots are located in the Residence A Zoning District pursuant to the City of Quincy Zoning Ordinance [Note 4] (the “Ordinance”). There is a residential house which was constructed on both Lots 396 and 397 and straddles the lot line between the two lots. The house was constructed in 1925.

2. By document dated October 24, 2006, Kelcourse granted a mortgage in the amount of $460,000.00 to Mortgage Electronic Registration Systems, Inc. (“MERS”), as nominee for Mortgage Lenders Network USA, Inc. (the Deutsche Bank Mortgage). The Deutsche Bank Mortgage stated that it secured the property located at 116 Rhoda Street, but the legal description covered only Lots 396 and 397 on the 1909 Plan. [Note 5] The Deutsche Bank Mortgage was recorded with the Registry in Book 24197, Page 252. By document dated September 18, 2008 (effective date April 1, 2008) (the “Assignment”), MERS assigned the Deutsche Bank Mortgage to Deutsche Bank. The Assignment was recorded with the Registry at Book 26057, Page 177. The Assignment also listed the property address as 116 Rhoda Street, Quincy, MA. On October 28, 2009 the Assignment was confirmed in a document also listing the property address as 116 Rhoda Street. On November 5, 2009 the document confirming the Assignment was recorded in the Registry in Book 27194, Page 98.

3. By document dated March 19, 2007, Kelcourse mortgaged property located at 116 Rhoda Street, Quincy, MA to Plaintiff in the amount of $65,000.00 (“Plaintiff Mortgage 1”). The legal description described the property as Lots 395-399 on the 1909 Plan. [Note 6] This mortgage was recorded with the Registry at Book 24630, Page 411.

4. By document dated June 12, 2007, Kelcourse mortgaged property located at 116 Rhoda Street, Quincy, MA to Plaintiff in the amount of $21,042.00 (“Plaintiff Mortgage 2”). [Note 7] The legal description described the property as Lots 395-399 on the 1909 Plan. [Note 8] This mortgage was recorded with the Registry at Book 24888, Page 421. [Note 9]

5. Lots 396-399 are assessed by the City of Quincy as one lot containing 9,075 square feet (Assessors Account No. 207301). [Note 10] The address is listed as 112 Rhoda Street. Lots 396-399 are listed as Assessors Map 1076U, Lot 44, Sub 396 (“Assessors Lot 44”).

6. The Ordinance requires a minimum lot size of 7,650 square feet for the Residence A Zoning District. [Note 11]

7. An appraisal made for the Deutsche Bank Mortgage, with an effective date of August 9, 2006 (the “Appraisal”), was for Assessors Lot 44. The estimated market value of Assessors Lot 44 in the Appraisal was $460,000.00. The invoice for the Appraisal was dated October 17, 2006.

8. Deutsche Bank filed a Complaint with the Land Court on November 5, 2009, under the Servicemember’s Civil Relief Act (09 MISC 415754) relative to property located at 116 Rhoda Street, Quincy, MA. [Note 12] Judgment entered in this case on August 13, 2010. Deutsche Bank sent out a Mortgagee’s Notice of Sale of Real Estate dated January 27, 2012, for property located at Lots 395-399 on the 1909 Plan, for a foreclosure sale on February 21, 2012.

9. Kelcourse stated in the Kelcourse Affidavit that Lots 396 and 397 are known as 116 Rhoda Street, and that Lots 398 and 399 are known as 112 Rhoda Street. [Note 13] The Kelcourse Affidavit states that from 1943 to approximately 1949, Kelcourse resided in a winterized cottage (the “Cottage”) then situated on Lot 395. The Cottage was destroyed by a fire in 1987. The Kelcourse Affidavit also states that a private home with the address of 112 Rhoda Street was situated on Lots 398 and 399 and was the residence of the Chase family (the “Chase Home”). The Chase Home was purchased and demolished by Kelcourse’s father in 1979.

10. Deutsche Bank offered a satellite image (the “Image”) of the Kelcourse Property. The Image is a bird’s eye view of the Kelcourse Property, showing two abutting structures on either side of the Kelcourse Property. There is a marsh to the north of the Kelcourse Property, and Rhoda Street is situated to the south. There is a yard situated to the west of the house on the Kelcourse Property. There is a fence running along the front of the Kelcourse Property with a vehicle sized gap leading into the yard. [Note 14] A decorative rock wall feature is present in the yard. Kelcourse adopted the image as an accurate representation of the Kelcourse Property.

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The sole issue in this case is the Cross-claim issue of whether the Deutsche Bank Mortgage should be reformed to include Lots 398 and 399 on the 1909 Plan. [Note 15] Deutsche Bank argues that this court should reform the Deutsche Bank Mortgage based on mutual mistake and/or unjust enrichment in accordance with its equitable powers. Beaton v. Land Court, 367 Mass. 385 , 392 (1975) (“[Courts in equity have] broad powers to reform, rescind, or cancel written instruments, including mortgages, on grounds such as fraud, mistake, accident, or illegality.”); Buk Lhu v. Dignotti, 431 Mass. 292 , 294 (2000) (“It is well established that deeds may be reformed on the basis of mutual mistake.”); see also Santagate v. Tower, 64 Mass. App. Ct. 324 , 328 (2005) (noting unjust enrichment is an equitable ground for reformation). Kelcourse, on the other hand, argues that the language in the Deutsche Bank Mortgage is clear and unambiguous, and that “the presumed intent of the grantor is to be ascertained from the words used in the written instrument.” Sheftel v. Lebel, 44 Mass. App. Ct. 175 , 179 (1998).

Mutual Mistake.

The issue of mutual mistake concerns the intention of the parties as to the Deutsche Bank Mortgage. Kelcourse asserts in the Kelcourse Affidavit that he intended to mortgage only Lots 396 and 397 in the Deutsche Bank Mortgage and that the plain language of the property description, listing only Lots 396 and 397, reflects that intent. See Headwall Recovery Corp. v. Ron-Randall Constr. Inc., 11 LCR 278 , 280 (May 6, 2003) (Misc. Case No. 225810) (Trombly Jr., J). (“The interpretation of descriptions contained in deeds and mortgages is a question of law capable of resolution on summary judgment without additional oral evidence where the descriptions are definite, certain, and free from ambiguity.”). Deutsche Bank disagrees, arguing the description of the property in the Deutsche Bank Mortgage is incomplete, reflects a mistake between the parties, and offers evidence as proof of the intent of the parties. [Note 16] See Mickelson v. Barnet, 390 Mass. 786 , 791 (1984) (mistake is reformable “if the language [of the document] adopted by the parties did not reflect their true intent”). In order to reform the Deutsche Bank Mortgage, the purported “mistake must be mutual or made by one party and [such mistake is] known to the other party.” Torrao v. Cox, 26 Mass. App. Ct. 247 , 250 (1988). “Reformation is justified if the party knowing of the mistake fails to make it known to the mistaken party.” Id. In circumstances where a mistake is alleged, “the parol evidence rule does not bar extrinsic proof of intent.” Polaroid Corp. v. Travelers Indem. Co., 414 Mass. 747 , 756 (1993).

Contrary to Kelcourse’s assertion that the Deutsche Bank Mortgage is plain on its face, Deutsche Bank asserts that the property description is not free from ambiguity. The property description in the Deutsche Bank Mortgage refers to the Trust Deed. The description states: “For Title, see Deed in Book 23998, Page 520 of the Norfolk County Registry of Deeds.” The Trust Deed contains all three descriptions inclusive of Lots 395-399. The description also identifies the address of the property as “116 Rhoda Street, Quincy, Massachusetts 02169,” which is the address listed in the Trust Deed for all five lots. [Note 17] It can be argued, therefore, that the Deutsche Bank Mortgage purports to include all the subject lots.

This court has previously resolved such ambiguities by incorporating referenced deeds as if such referenced descriptions were present in the instrument under review. “[R]eference to a prior deed or mortgage has the same effect as if the description in the previous deed or mortgage is copied into the new deed or mortgage[,] [t]he deed[] and mortgage[], past and present, may be read together.” Headwall Recovery, 11 LCR at 280 (2003). See Abbott v. Frazier, 240 Mass. 586 , 593 (1922). Similar to Headwall, the present case concerns a mortgage with a challenged property description complete with a reference to a deed containing an identifiable description of the property. [Note 18] Here, the reference to the Trust Deed includes descriptions of all the lots in question, though Deutsche Bank did not move for the reformation of the Deutsche Bank Mortgage to include Lot 395. The itemization of Lots 396 and 397 contained in the Deutsche Bank Mortgage utilizes no language of limitation indicating that only the expressly mentioned lots are to be encumbered by the Deutsche Bank Mortgage. To resolve such an ambiguity, it is within this court’s equitable powers to include within the Deutsche Bank Mortgage all lots listed in the Trust Deed absent a showing of the parties’ intent to encumber only Lots 396 and 397 in the Deutsche Bank Mortgage. Beaton, 367 Mass. at 392.

An instrument may be reformed if it fails to reflect the intent of the parties. See Fireman’s Fund Ins. Co. v. Shapiro, 286 Mass. 577 , 582 (1934). It is undisputed that Kelcourse granted a mortgage to MERS in the amount of $460,000.00 on October 24, 2006. It is also undisputed that Kelcourse paid a $425,000.00 consideration to take full title of Lots 395-399 from the Kelcourse Family Trust, granted to Kelcourse by the Trust Deed on August 15, 2006. The question remains whether the Deutsche Bank Mortgage encumbers only Lots 396 and 397, or Lots 396-399. Deutsche Bank cites the case of Wells Fargo Bank, N.A. v. Aquino, 20 LCR 9 (11 MISC 444706) (Jan. 3, 2012) (Sands, J.) in support of its assertion of mistake. In Wells Fargo, on a finding of mutual mistake, this court reformed a mortgage to include an exhibit containing the legal description of the property that was never appended to the mortgage. Wells Fargo, 20 LCR at 9 (2012).

This court held that the defendants in Wells Fargo obtained $462,738.00 in purchase money mortgage funds by encumbering their property. Id. The mortgage indicated that it was intended to encumber the property in question by referencing an Exhibit A, which contained the legal description of the property but was never attached to the mortgage. Id. Defendants in Wells Fargo used the $462,738.00 to purchase the property. Id. This court held that “it would be unreasonable to assume that Defendants intended to obtain the funds to purchase [the property] without some security as collateral.” Id.

As mentioned above, the consideration price for all five lots of the Kelcourse Property and the house thereon was $425,000.00. Though Lots 396 and 397 hold the bulk of the Kelcourse Property’s value, as the home sits on both lots, it is questionable to expect that MERS would have loaned $460,000.00 for Lots 396 and 397 alone, (less than half of the five lots in question) for an amount in excess of the total consideration paid for all five lots of the Kelcourse Property and the house two months earlier, as this loan would be encumbered by insufficient collateral. See Id.

The Appraisal, which covered Assessors Lot 44 (Lots 396-399), shows a value of $460,000.00. The Appraisal described Assessors Lot 44 as containing “a large yard for recreational activities.” Considering the house occupies the majority of Lots 396 and 397 upon which it sits, [City of Quincy, Board of Assessors Account No. 00207301], the “large yard” logically refers to Lots 398 and 399. Thus the exhibits, offered by Deutsche Bank and adopted by Kelcourse, indicate that the Deutsche Bank Mortgage granted by Kelcourse was intended to encumber, at a minimum, Lots 396-399, as such lots were included in the Appraisal value of $460,000.00, which was the exact amount of the Deutsche Bank Mortgage two months later. [Note 19] Deutsche Bank next points to Kelcourse’s use of the Kelcourse Property, including Lots 398 and 399, as a unified parcel, citing Andrews v. Charon, 289 Mass. 1 (1935). [Note 20] In Andrews, the deed given by the defendant grantor to the plaintiff only described one half of the entire premises “used and occupied [by the plaintiffs] as their own and [plaintiffs] exercised full and complete ownership and control over the entire property.” Id. at 4. The City of Quincy assessed Lots 396 through 399 as one parcel [Assessors Lot 44]. Likewise, the property in Andrews was also assessed as a single parcel including the portion not described in the deed. Id. The plaintiffs in Andrews made use of the un-described parcel by planting a garden. Id. Here, visual inspection of the Kelcourse Property by examination of a bird’s eye view courtesy of satellite imagery (the Image), [Note 21] indicates that Kelcourse used Lots 398 and 399 in a manner consistent with a single parcel of property. The Image reveals a fence running across the front of Lots 396 through 399 with a vehicle sized gap allowing access to Lots 398 and 399. In addition, the Image reveals a decorative rock wall feature built up on Lots 398 and 399. There is nothing in the Image which suggests Lots 398 and 399 are separate and apart from Lots 396 and 397.

It is also worth noting that Kelcourse’s purported conveyance of Lots 396 and 397 alone violates the Ordinance. The Kelcourse Property sits within a Residence A Zoning District. The Ordinance requires a minimum lot size of 7,650 square feet. [Note 22] Reference to the square footage of each lot on the 1909 Plan indicates that the combined square footage of Lots 396 and 397 is only 4,532 square feet, well short of the minimum lot size. The property only conforms to the Ordinance if Lots 398 and 399 are included in the total. [Note 23] A summation calculated from the 1909 Plan indicates that the square footage of Lots 396-399 is 9,077 square feet. This figure is consistent with Quincy’s Assessors Lot 44 which states the square footage of this parcel is 9,075 square feet. Thus, Lots 398 and 399 must be included with Lots 396 and 397 to satisfy the Ordinance’s requirements.

As a result of the foregoing, I find that there was mutual mistake of the parties in not including Lots 398 and 399 as part of the legal description in the Deutsche Bank Mortgage.

Unjust Enrichment

Deutsche Bank alleges that a finding that Kelcourse mortgaged only Lots 396 and 397 amounts to an unjust enrichment. Unjust enrichment is a basis for the equitable remedy of reformation. See Santagate, 64 Mass. App. Ct. at 328. Unjust enrichment involves a party receiving an unjust benefit. See Community Builders v. Indian Motorcycle Assocs., 44 Mass. App. Ct. 537 , 560 (1998). Use of the full proceeds of a mortgage without an equal monetary burden on the property raises such an issue. See Wells Fargo, 20 LCR at 9 (2012). As discussed above, Kelcourse granted a mortgage in the amount of $460,000.00 equal to the appraisal value of 116 Rhoda Street, Assessors Lot 44, encompassing Lots 396-399. Should Lots 398 and 399 be exempted from the mortgage lien, Kelcourse would essentially be allowed to retain property included in the assessed value of the Appraisal and yet not encumbered by the Deutsche Bank Mortgage. Kelcourse offers no evidence on the matter of unjust enrichment outside of asserting the language of the description is plain on its face, and thus indicative of the parties’ intent.

As a result of the foregoing, I find that there would be unjust enrichment in not including Lots 398 and 399 as a part of the legal description in the Deutsche Bank Mortgage.

In light of the arguments presented before this court with supporting memoranda and affidavits, I find that the Deutsche Bank Mortgage was intended to cover Lots 396-399. As a result, I find that the Deutsche Bank Mortgage shall be reformed to include Lots 398 and 399 in the legal description of the property covered by the mortgage. I ALLOW Deutsche Bank’s Motion for Summary Judgment and DENY Kelcourse’s Cross-Motion for Summary Judgment.

Judgment to enter accordingly.