This case involves a dispute between Petitioner Acorn 420 Broadway LLC (Petitioner) and Respondent New England Phoenix Company, Inc. (NEPCO) (Respondent) as to the ownership of the property known as and located at 420 West Broadway, South Boston, MA (Locus). Both parties claim to own Locus by virtue of their foreclosure upon mortgages secured by Locus, which were granted by a prior owner of Locus. On June 25, 2013, after Respondent had asserted an ownership claim in Locus, Petitioner commenced this action by filing an unverified petition seeking, pursuant to G. L. c. 240, § 1, to compel Respondent to try its claim to title to Locus and its claim that it is in possession of Locus. Respondent filed an answer to the petition on August 29, 2013; Respondents answer denied that Petitioner owned Locus, but did not interpose a counterclaim to assert its own claim to title thereof. A case management conference was held on September 4, 2013, after which the parties began exchanging discovery.
On July 30, 2014, Petitioner filed a motion for summary judgment, seeking an order directing that Respondent must bring an action to assert its title claim or disclaim its interest in Locus, which was supported by a memorandum of law, a statement of undisputed material facts, and an appendix containing affidavits of Pradip Tandon (Tandon) (Chief Financial Officer of Petitioner) (Tandon Affidavit 1), John Troy, Esq. (Troy) (Land Court title examiner), and Douglas L. Whitaker, Esq. (Whitaker) (Petitioners attorney). On August 29, 2014, Respondent filed a cross-motion for summary judgment, together with a supporting memorandum of law, a statement of additional facts, and anappendixcontaining the affidavit of John M. Keough (Keough) (Respondents President and attorney) [Note 1]; on the same date, Respondent also filed a motion to strike portions of Tandon Affidavit 1. Petitioner filed its reply brief on September 12, 2014, together with a supporting memorandum of law and an appendix containing supplemental affidavits of Whitaker and Tandon (Tandon Affidavit 2); on the same date, Petitioner also filed opposition to the motion to strike. A hearing was held on all three motions on October 20, 2014, and, at that time, this matter was taken under advisement.
Based upon the affidavit testimony and documentary evidence in the summary judgment record, I find that the following material facts are not in dispute:
1. Title to Locus, for purposes of this dispute, can be traced back to an entity called the 420 West Broadway Realty Trust (the Trust), which held record title to Locus in 1999. The Trust was established by declaration of trust (the Declaration of Trust) dated November 26, 1986 and recorded in the Suffolk County Registry of Deeds (the Registry) at Book 13231, Page 191. [Note 2] Pursuant to the Declaration of Trust, Barbara A. Buckley (Buckley) was named as the sole trustee of the Trust as well as a twenty per cent beneficial owner of the Trust, with Francis K. Fraine (Fraine) [Note 3] named as an eighty per cent beneficial owner of the Trust. Paragraph 3 of the Declaration of Trust states, in relevant part, as follows:
Whenever there shall be more than one Trustee hereunder, any and all deeds, mortgages, leases, subleases, assignments, checks, drafts, notes, or other instruments having to do with the Trust property shall be executed by a majority of the then Trustees.
2. By Trustees certificate (the Fraine Certificate) dated February 18, 1999 and recorded in the Registry at Book 23463, Page 176, Fraine certified that he had been appointed as a co-trustee of the Trust by appointment of co-trustee (the Fraine Appointment) dated November 21, 1998 and recorded in the Registry at Book 23509, Page 23, which was executed by Buckley and Fraine, as beneficiaries of the Trust. The Fraine Certificate stated, inter alia, that [Fraine] ha[d] been duly authorized by the beneficiary of the said Trust to convey the subject property to a corporation known as On Broadway Corporation [OBC] for consideration. [Note 4]
3. By deed (OBC Deed 1) dated February 19, 1999 and recorded in the Registry at Book 23463, Page 177, Fraine, as trustee of the Trust, purported to convey Locus to OBC for consideration of less than $100.00 in accordance with the Fraine Certificate. Notwithstanding Paragraph 3 of the Declaration of Trust, however, only Fraine signed OBC Deed 1. [Note 5]
4. On March 3, 1999, OBC granted to the Massachusetts Bay Transportation Authority Retirement Fund (the MBTA) a $2,500,000.00 mortgage (the MBTA Mortgage) on Locus, which was recorded in the Registry at Book 23509, Page 24.
5. On September 6, 2000, OBC granted to Buckley (personally) a $100,000.00 second mortgage (Buckley Mortgage 2) on Locus, which was recorded in the Registryon October 2, 2000 at Book 25414, Page 165. [Note 6]
6. Also on September 6, 2000, Respondent commenced an action in Suffolk County Superior Court entitled New Eng. Phoenix Co. v. Buckley (Case No. SUCV2000-04021) (the P.I. Action), in which Respondent sought an equitable lien and to reach and apply several loans owed to Buckley (including Buckley Mortgage 1 and the Fraine Mortgage). [Note 7] On September 14, 2000, the Suffolk County Superior Court issued a preliminary injunction (the P.I.) restraining Buckley from assigning, transferring, paying, encumbering, or taking any other actions to diminish the value of any assets owned by Buckley ... including but not limited to . . . [Buckley Mortgage 1 and the Fraine Mortgage ]. [Note 8]
7. On May 19, 2001, the MBTA and various other parties (including Buckleyand Fraine, but not Respondent) signed a forbearance agreement (the Forbearance Agreement) by which the MBTA agreed to refrain from foreclosing on various mortgages -- including the MBTA Mortgage. As consideration for this promise, the signatories agreed, inter alia, (a) that OBC and the MBTA would execute an amendment to the MBTA Mortgage, (b) that Buckley, as trustee of the Trust, would execute a quitclaim deed conveying Locus to OBC (based upon alleged defects in OBC Deed 1 -- discussed, supra), and (c) that Buckley would agree to subordinate Buckley Mortgage 1 to the amended MBTA Mortgage. The parties also agreed that the Fraine Mortgage and two other, unrelated mortgages granted to Buckley, would be subordinated to the amended MBTA Mortgage. Buckley Mortgage 2 is not referenced in the Forbearance Agreement.
8. By assignment (the Buckley Mortgage 1 Assignment") dated June 8, 2001 and recorded in the Registry on February 9, 2002 at Book 28011, Page 94, Buckley assigned Buckley Mortgage 1 (as well as the Fraine Mortgage and two other, unrelated mortgages) to Respondent.
9. In accordance with the Forbearance Agreement, by deed (OBC Deed 2) dated June 19, 2001 and recorded in the Registry at Book 26715, Page 304, Buckley, as trustee of the Trust, conveyed Locus to OBC for consideration of less than $100.00. [Note 9] On the same day, Buckley, as trustee of the Trust, executed a trustees certificate (the Buckley Certificate), which was recorded in the Registry at Book 26715, Page292, and stated that Buckley was the sole trustee of the Trust. [Note 10]
10. Also on June 19, 2001, in accordance with the Forbearance Agreement, OBC and the MBTA executed a first amendment and restatement of the MBTA Mortgage (the MBTA Mortgage Amendment), which was recorded in the Registry at Book 26715, Page 306. The MBTA Mortgage Amendment increased the amount of the secured note from $2,500,000.00 to $6,000,000.00. [Note 11]
11. Also on June 19, 2001, in accordance with the Forbearance Agreement, Buckley executed a subordination of Buckley Mortgage 1 (the Buckley Subordination) to the MBTA Mortgage, as amended, which was recorded in the Registry at Book 26715, Page 310. [Note 12] On the same day Buckley also executed a subordination of the $600,000 mortgage to the MBTA Mortgage, which was recorded in the Registry at Book 26715, Page 315. Buckley did not execute a subordination of Buckley Mortgage 2, which, as noted, supra, was not referenced in the Forbearance Agreement.
12. By assignment (the Invictus Assignment) dated December 8, 2003 and recorded in the Registry at Book 33648, Page 139, the MBTA assigned the MBTA Mortgage to Invictus Holdings, LLC (Invictus).
13. On May 3, 2007, Buckley recorded in the Registry at Book 41759, Page 165 an assignment of Buckley Mortgage 2 to Respondent (the Buckley Mortgage 2 Assignment).
14. On September 18, 2007, several creditors of OBC filed an Involuntary Chapter 7 Bankruptcy Petition against OBC (the OBC Bankruptcy). On October 17, 2007, the United States Bankruptcy Court for the District of Massachusetts (the Bankruptcy Court) entered an Order for Relief adjudging OBC to be bankrupt.
15. On October 18, 2007, Invictus filed a motion for relief from the automatic stay (the Automatic Stay) that had issued in connection with the OBC Bankruptcy. This motion listed Respondent as a junior creditor and Buckley Mortgage 1 as a junior lien upon Locus. On November 13, 2007, the Bankruptcy Court granted Invictus relief from the Automatic Stay.
16. Byletter dated November 20, 2007, Invictus sent a notice of sale (the Invictus Notice of Sale) pursuant to G. L. c. 244, § 14 to creditors of record of Locus, including Respondent, which stated that a public sale of Locus would take place on December 4, 2007.
17. On December 4, 2007, Invictus made entry (the Invictus Entry) on Locus for the purpose of foreclosing upon the MBTA Mortgage and taking possession of Locus, as confirmed by a certificate of entry (the Invictus Certificate of Entry) dated December 4, 2007 and recorded at the Registry at Book 42882, Page 251. A public sale of Locus was held at that time, at which 420 W Broadway, LLC (420 West) [Note 13] was the highest bidder.
18. On or about December 7, 2007, Respondent also made entry (the NEPCO Entry) on Locus for the purpose of foreclosing upon Buckley Mortgage 2, as confirmed by a notice of entry (the NEPCO Notice of Entry) dated December 7, 2007 and recorded in the Registry at Book 42823, Page 70. [Note 14]
19. Byletter dated December 24, 2007 (the 2007 Letter), Respondent notified 420 West (which, at that time, was the highest bidder for Locus, but not yet record title owner) that Respondent believed Buckleys execution of the Forbearance Agreement and the Buckley Subordination had been improper because Buckley had done so while the P.I. was in effect.
20. Inaccordance with the Invictus Certificate of Entry, byforeclosure deed dated August 21, 2008 and recorded in the Registry at Book 43967, Page 314, Invictus conveyed Locus to itself. Annexed to this foreclosure deed were two affidavits pursuant to G. L. c. 244, §§ 15, 17B.
21. By deed (the 420 West Deed) dated March 13, 2009 and recorded in the Registry at Book 44665, Page 304, Invictus conveyed Locus to 420 West, for consideration of $722,022.00. [Note 15]
22. By deed (the Petitioner Deed) dated August 3, 2012 and recorded in the Registry at Book 50046, Page 229, 420 West conveyed Locus to Petitioner for consideration of $1.00.
23. By mortgage (the Enterprise Mortgage) dated August 23, 2012 and recorded in the Registry at Book 50046, Page 253, Petitioner granted a $2,080,000.00 mortgage secured by Locus to Enterprise Bank and Trust Company.
24. By letter dated January 14, 2013 (the 2013 Letter) from Respondent to Petitioner, Respondent asserted a claim to the ownership of Locus, stating that Respondent owns [Locus] free and clear from any claims or interests of [Petitioner], based on its foreclosure of Buckley Mortgage 2 (which, Respondent claimed, was superior to the MBTA Mortgage) and the NEPCO Entry. The 2013 Letter further alleged that Petitioners chain of title contained numerous infirmities.
25. In response to the 2013 Letter, Petitioner commenced this action to compel Respondent to try its title to Locus.
26. In Tandon Affidavit 1, Tandon testified that, prior to Petitioners ownership of Locus, its predecessor in title, 420 West (which held possession of Locus from 2009 to 2012) conducted and coordinated numerous inspections of [Locus], and worked with the City of Bostons Inspectional Services Department for the purpose of inspecting the condition of Locus and installing temporary structural supports inside the building -- at a cost to 420 West of around $35,000.00. Further, Tandon testified that, after taking possession of Locus, 420 West boarded up Locus, evicted a squatter therefrom, and re-secured [Locus] to prevent others from entering -- at a cost of nearly $75,000.00 to 420 West. [Note 16]
27. Tandon also testified that, since Petitioners purchase of Locus in August of 2012, Petitioner has continued to maintain [Locus] in its boarded-up state, has further secured [Locus], and has controlled who enters and uses [Locus]. Tandon further testified that, in furtherance of the development of Locus, Petitioner has taken further significant steps, including coordinat[ing] an environmental inspection [of Locus], retain[ing] an architectural team to begin design work on the development of Locus, and [holding] numerous meetings with state and cityofficials, agencies, and organizations, as well as prospective tenants. [Note 17]
28. Tandon also testified that, in August of 2012, Petitioner paid off a municipal lien [on Locus] (the amount of which was not specified) and that, in February of 2013, Petitioner applied for a tax abatement on Locus (which was denied). Further, Tandon testified that [Petitioner] and its predecessors have consistently paid real estate taxes on [Locus]; documentation that property taxes on Locus were paid in full (as of June of 2014) was annexed to Tandon Affidavit 1. Additionally, Tandon testified that [Petitioner] and [420 West] have purchased and maintained commercial and general liability insurance on [Locus] since March of 2009.
29. Locus is not currently occupied, and there is not currently a valid certificate of occupancy to do so.
30. On October 10, 2013 (over three months after this action was commenced), an entity called NEPREO, Inc. (NEPREO) [Note 18] recorded in the Registry at Book 52224, Page 93 a certificate of tax payment dated October 8, 2013, which stated that NEPREO had paid $7,406.73 in property taxes on Locus. This certificate did not specify the tax period for which such payment was made. [Note 19]
Respondents Motion to Strike
Before considering the merits of this dispute, the court must resolve Respondents motion seeking to strike portions of Tandon Affidavit 1. Here, Respondent claims that Tandon did not have personal knowledge of -- and/or was incompetent to testify as to -- certain facts stated in Tandon Affidavit 1. In response to Respondents motion, Tandon filed Tandon Affidavit 2 on September 12, 2014, in which he acknowledged that he had personal knowledge of the facts stated in Tandon Affidavit 1, and he stated the basis for this knowledge. The court finds Tandons explanation to be satisfactory. As such, Respondents motion to strike Tandon Affidavit 1 is hereby DENIED.
The Parties Dispositive Motions
As noted, supra, in this action, Petitioner seeks to compel Respondent to try its title to Locus. Petitioner argues that it is in possession of and has legal title to Locus, thereby satisfying all of the required elements to prevail in a try title action. Respondent argues that Petitioner cannot satisfy either element of the try title statute (G. L. c. 240, § 1); Respondent has not interposed a counterclaim to try its title to Locus. See, e.g., Cistercian Order of Strict Observance in Mass., Inc. v. Estate of Burnett, 21 LCR 352 , 353 (Mass. Land Ct. July 12, 2013) ([T]his court has treated an appropriately-filed counterclaim as complying with the statute without the need to file a separate action.). Both parties have now moved for summary judgment on the issue of whether Respondent should be compelled to try its title to Locus. It is well-settled that summary judgment is appropriate only where there are no genuine issues of material fact, and where the summary judgment record indicates that the moving party should be granted judgment as a matter of law. E.g., Cassesso v. Commr of Corr., 390 Mass. 419 , 422 (1983); Cmty. Natl Bank v. Dawes, 369 Mass. 550 , 553 (1976); Mass. R. Civ. P. 56(c).
Try title actions are governed by G. L. c. 240, § 1, which states, in pertinent part, as follows:
If the record title of land is clouded by an adverse claim, or by the possibility thereof, a person in possession of such land claiming an estate of freehold therein . . . may file a petition in the land court stating his interest, describing the land, the claims and the possible adverse claimants so far as known to him, and praying that such claimants may be summoned to show cause why they should not bring an action to try such claim.
In Bevilacqua v. Rodriguez, 460 Mass. 762 ,766 (2011), the Supreme Judicial Court interpreted G. L. c. 240, § 1 as prescribing a two-stage process in a try title action. In the first stage, the plaintiff [must] establish jurisdictional facts such that the adverse claimant might be summoned to show cause why [he] should not bring an action to try [his] claim[ ] . . . . Id. (quotation omitted). To succeed in this stage, [t]here appear to be two jurisdictional facts that must be shown to establish standing under G. L. c. 240, § 1. First, . . . only a person in possession of the disputed property may maintain a try title action. Second, . . . a plaintiff must hold a record title to the land in question. Id. (quotation omitted).
If a litigant successfully establishes record title to and possession of the property in question, the try title action then moves to the second stage, wherein the adverse claimant [is required] either to disclaim the relevant interest in the property or to bring an action to assert the claim in question . . . . Id. We consider first whether Petitioner has made a sufficient showing of standing to bring this try title action by demonstrating record title to and possession of Locus. [Note 20]
A. Record Title to Locus
Respondent claims that Petitioners chainoftitle contains numerous infirmities. Specifically, Respondent alleges that OBC Deeds 1 and 2 were invalid, and thus that the MBTA Mortage likewise should be invalidated. In the alternative, Respondent argues that, even if OBC Deeds 1 and/or 2 (and thus also the MBTA Mortgage) were found to be valid, the MBTA Mortgage Amendment should be deemed a new mortgage of lower priority to Buckley Mortgages 1 and 2 (as well as the Fraine Mortgage).
1. The Validity of the OBC Deeds
Pursuant to OBC Deed 1, Fraine (as Trustee of the Trust) purported to convey Locus to OBC. After apparently obtaining title to Locus pursuant to OBC Deed 1, OBC granted the MBTA Mortgage on Locus. However, Paragraph 3 of the Declaration of Trust required that any/all deeds conveying Trust property to be executed by a majority of the trustees of the Trust. At the time of OBC Deed 1, Fraine was one of two trustees of the Trust, so obtaining a majority of the Trust would have required both trustees (i.e., Fraine and Buckley) to execute the document. However, the Fraine Certificate stated, inter alia, that [Fraine] ha[d] been duly authorized by the beneficiary of the said Trust to convey the subject property to a corporation known as On Broadway Corporation [OBC] for consideration -- a statement that was confirmed bythe Confirmatory Fraine Certificate -- which suggested that Fraine had Buckleys proxy to enter into OBC Deed 1. [Note 21]
It appears that, at some point after the MBTA Mortgage was executed, the MBTA came to believe that the fact that only Fraine signed OBC Deed 1 might lead to a potential title defect in said deed, and therefore sought to secure its interest in Locus by negotiating a confirmation of OBC Deed 1 and an amendment to the MBTA Mortgage. As such, the MBTA required, as conditions of granting the Forbearance Agreement, (a) that Buckley execute a new deed conveying Locus to OBC, (b) that the MBTAMortgage be modified (so as to cross-collateralize and consolidate severalseparate loans), and (c) that Buckley subordinate several mortgages she held upon Locus (including Buckley Mortgage 1, but not Buckley Mortgage 2) to the amended MBTA Mortgage.
In view of the foregoing circumstances, OBC Deed 2 should be construed as a confirmatory deed confirming the prior conveyance of Locus to OBC pursuant to OBC Deed 1, and clarifying that, while only Fraine signed OBC Deed 1, both Trustees intended to convey Locus to OBC in conformance with the terms of the Declaration of Trust.
While OBC Deed 2 would therefore seem to have been effective to confirm the conveyance of title to Locus to OBC, Respondent argues that, in fact, OBC Deed 2 should be deemed null and void ab initio because, Respondent claims, Buckleys execution of said deed violated the terms of the P.I., which had restrained Buckley from assigning, transferring, paying, encumbering, or taking any other actions to diminish the value of any assets owned by Buckley . . . . The only authority cited by Respondent in support of its argument that OBC Deed 2 should be nullified is In re Dooley, 399 B.R. 340 (Bankr. D. Mass. 2009) -- a bankruptcy case pertaining to a settlement between a debtor and creditor in breach of an automatic bankruptcy stay, which is completely inapplicable to the present facts. [Note 22]
Even if Dooley were applicable here, Respondents argument would still fail for a number of reasons. First, the P.I. Action was commenced against Buckley personally, and the P.I. issued in said action only affected Buckley individually and property owned by her personally; however, it is clear that Buckley executed OBC Deed 2 not in her personal capacity, but rather in her capacity as trustee of the Trust. Moreover, as discussed, supra, the effect of said deed was merely to confirm a prior conveyance of property (which occurred prior to the date the P.I. came into effect) that had been owned by the Trust -- not Buckley personally.
Next, whereas the P.I. prohibited transactions that diminished the value of Buckleys personal assets, OBC Deed 2 confirmed the conveyance of Trust property pursuant to a deed that had already been granted by Fraine, for the same consideration, prior to the effective date of the P.I. Thus, it is not clear that there was any diminishment of Buckleys personal assets. [Note 23] In addition, although the P.I. made reference to multiple mortgages granted by Buckley to which it applied, it did not list Locus as one of the eight specific assets covered by the P.I.; moreover, every other asset listed was in the name of Buckley personally. [Note 24]
Finally, there is no indication that Respondent ever pursued a contempt action against Buckley for her alleged breach of the P.I., which undermines Respondents claimthat Buckleyviolated the P.I. by signing OBC Deed 2. Moreover, even if Respondent were correct on this point, based upon Respondents argument that a conveyance made in violation of the P.I. should be deemed null and void ab initio, the Buckley Mortgage 1 Assignment would itself have been rendered null and void. Similarly problematic is the fact that nothing in the record indicates that Respondent ever obtained relief from the Automatic Stay prior to the NEPCO Entry.
Based upon the foregoing considerations, I find that OBC Deed 1 was a valid conveyance, since, pursuant to the Fraine Certificate and Confirmatory Fraine Certificate, Buckleyunambiguously indicated that she had given her proxy to Fraine to execute OBC Deed 1 on her behalf. Further, I find that OBC Deed 2 was a valid confirmatory deed confirming her consent to the Trusts prior conveyance of Locus (prior to the effective date of the P.I.) pursuant to OBC Deed 1.
2. The Priority of the Buckley Mortgages after the MBTA Mortgage Amendment
On the same day that Buckley executed OBC Deed 2, she also executed the MBTA Mortgage Amendment and the Buckley Subordination, pursuant to which Buckley Mortgage 1 (but not Buckley Mortgage 2) was subordinated to the MBTA Mortgage, as amended. Nonetheless, Respondent argues, even if the MBTA Mortgage Amendment were found to have been valid (a finding already made, supra), the MBTA Mortgage should be found to have lost its priority to Buckley Mortgages 1 and 2 (and the Fraine Mortgage) when it was amended. [Note 25] Respondents argument here is that a senior mortgage loses its lien priority if it is modified in a way that prejudices the rights of a junior mortgage without the consent of the junior mortgagee. Here, Respondent claims, junior mortgagees (i.e., the mortgagee of Buckley Mortgages 1 and 2) were prejudiced because the MBTA Mortgage Amendment substantially increased the amount of the loan. [Note 26]
However, as is clear from Invictuss sale of Locus to 420 West, the proceeds from the sale of Locus were not even sufficient to cover the original $2.5 million debt under the MBTA Mortgage; thus, Respondent would have been left without recourse upon Locus whether or not the MBTA Mortgage had been amended. Moreover, Buckley, the mortgagee under Buckley Mortgages 1 and 2, was the party who executed the Forbearance Agreement, the MBTA Mortgage Amendment, and the Buckley Mortgage 1 Subordination. She thus agreed, on the one hand, to the increase in the amount of debt secured by the MBTA Mortgage, and, on the other, to subordinate her own loan.
Under such circumstances, Buckley would be hard pressed to demonstrate prejudice. [Note 27]
The legal authority cited by Respondent in support of its argument as to priority-shifting is extremely thin. Aside from unconvincing secondary authority and non-controlling (and factually inapplicable) case law, Respondent cites only Shane v. Winter Hills Fed. Sav. & Loan Assn, 397 Mass. 479 , 485-486 (1986) in support of its claim that the modification of the MBTA Mortgage should render Buckley Mortgages 1 and 2 senior to the MBTA Mortgage. However, in Shane, whereas the court did find that a later modification of the mortgage by a senior mortgagee may not prejudice the rights or impair the security of a junior mortgagee, without the latters consent, it did not allow a smaller junior mortgage to jump priority over an existing senior mortgage after such a modification. Id. Rather, the court ruled that when a senior mortgage was modified in a way that was prejudicial to and significantly impaired the security of a junior mortgage, the junior mortgage was not bound by the modification to the extent that it exceeded the interest charge contemplated by the junior mortgage. See id. at 488.
In sum, there is simply no basis for the relief suggested by Respondent. Irrespective of whether Buckley breached the P.I. (which, as noted, supra, even if true, would not by itself necessarily render instruments executed by Buckley in breach thereof void ab initio) by executing the Buckley Subordination and MBTA Mortgage Amendment, the fact that she did so unambiguously indicates that she consented to the subordination of Buckley Mortgage 1 to the MBTA Mortgage. For that reason, and because there is no definitive indication that the MBTA Mortgage Amendment actually prejudiced the holders of Buckley Mortgages 1 and 2, I find that the MBTA Mortgage Amendment did not have the effect of rendering the MBTA Mortgage junior to either Buckley Mortgages 1 or 2, or any other mortgage (including the Fraine Mortgage and the other mortgages referenced in the Buckley Subordination).
Subsequent to the MBTA Mortgage Amendment, Petitioners record title history is uneventful. On December 8, 2003, the MBTA Mortgage, as amended, was assigned to Invictus. After receiving relief from the Automatic Stay, Invictus made entry onto Locus, deeded Locus to itself by foreclosure deed, and then deeded Locus to 420 West, who deeded Locus to Petitioner in 2012. Respondent offers no challenge to any of these conveyances. Therefore, I find that the Invictus Assignment, the Invictus Notice of Sale, the Invictus Entry, the Invictus Certificate of Entry, the 420 West Deed, and the Petitioner Deed effectively conveyed title to Locus from the MBTA to Petitioner. Having found all conveyances of Locus from OBC Deed 1 to the Petitioner Deed, I find that Petitioner has record title to Locus, subject to the Enterprise Mortgage.
B. Possession of Locus
Based upon Tandons affidavit testimony, it is clear that Petitioners predecessor in title, 420 West, commencing in 2009, held possession of Locus before selling Locus. As a condition of closing on the foreclosure sale of Locus from Invictus, 420 West also paid several years of back property taxes due on Locus -- totaling approximately $150,000.00. Further, upon taking possession, 420 West evicted a squatter from Locus, boarded all windows and doors, and re-secured Locus to prevent further entry at a cost of nearly $75,000.00. 420 West also worked with the City of Bostons Inspectional Services Department in April and July of 2012 to both secure and inspect Locus as well as install temporary structural support inside the building; these services cost 420 West an additional $35,000.00. In addition, since Petitioners purchase of Locus in 2012, Petitioner has maintained Locus, had an environmental inspection of Locus, prepared design work for Locus, had meetings with Boston city officials, paid off a municipal lien on Locus, and paid commercial and general liability insurance and taxes on Locus. Petitioner has also given a mortgage on Locus, the validity of which is not specifically challenged by Respondent.
Petitioner argues that all of these actions demonstrate Petitioners use and possession of Locus based upon the fact that Petitioner, in fact, controls who is able to access Locus. Petitioner further claims that Respondents alleged cloud of title hinders both the occupancy and development of the building and the ability to take profits from Locus.
Respondent does not specifically dispute any of these facts. Rather, Respondent argues that, whereas G. L. c. 240, § 1 requires actual possession, boarding up a property and the resulting non-use does not satisfy that requirement. As a fallback position, Respondent argues that it shares mixed use of Locus -- based upon a single tax payment apparently made after this action was commenced by an entity that is related to Respondent but which is not party to this case. Additionally, Respondent argues (without explanation) that Petitioner should not be allowed to rely on the prior possession of 420 West, noting that doing so would be fundamentally unfair.
Because Locus does not have a current certificate of occupancy, the nature of the occupancy [must be examined] in relation to the character of the land. Kendall v. Selvaggio, 413 Mass. 619 , 624 (1992). While the Supreme Judicial Court has found that mere constructive possession is not enough when a property has been left generally vacant, Munroe v. Ward, 86 Mass. 150 , 152 (1862), Petitioner has shown multiple actual uses of Locus. Petitioner (as well as 420 West) has secured the building from adverse use (including evicting a squatter) and has incurred significant expenses to secure and improve Locus. Petitioner has also undertaken numerous activities to plan for the development of Locus and has made payments for real estate taxes, municipal liens, and insurance. Petitioner also has a current mortgage on Locus. All of these activities demonstrate Petitioners use of Locus. Moreover, the court is convinced by Petitioners explanation as to why it had not taken steps to develop Locus and install occupants therein, since the cloud upon the title to Locus would mean that anysuch activities would be at risk. Respondents reference to a single tax payment made by an entity that is not party to this case after this case was already commenced is simply insufficient to rebut Petitioners showing of actual possession. [Note 28] In sum, I find that Petitioner has adequately demonstrated that it has possession of Locus.
Based upon the foregoing discussion, because Petitioner has amplydemonstrated both record title to and possession of Locus, I find that Petitioner has standing to bring this try title action. Having found such standing, the burden would normally shift to Respondent to either disclaim any/all interest in Locus or file an action to establish such interest as Respondent may claim. See Bevilacqua, 460 Mass. at 766. Here, although Respondent did not interpose a counterclaim to establish an ownership interest in Locus, the parties competing claims to record title of Locus were already fully briefed by both parties. In the estimation of this court, since the issue of record title to Locus has already been determined as a matter of law, nothing that was not previously submitted by Respondent could possibly establish that Respondent has superior title to Locus. It therefore would appear to be unnecessary for this case to proceed further, as doing so would merely be to relitigate issues this court has already determined. E.g., Bank of N.Y. Mellon Corp. v. Wain, 85 Mass. App. Ct. 498 , 506 (2014) (Having established its superior title as a matter of law, the bank demonstrated that it would prevail in the second phase of any try title litigation. Other than mere delay, nothing would be served by going through such additional process.). As such, I find that Petitioner holds record title to Locus free and clear of any claim of Respondent.
Accordingly, Petitioners Motion for Summary Judgment is hereby ALLOWED in all respects; Respondents Cross-Motion for Summary Judgment is hereby DENIED in all respects. Further, Respondents claims to record title to Locus are hereby DISMISSED, with prejudice.
Judgment to enter accordingly.
[Note 1] As discussed, infra, Keough is not only Respondents attorney in this case, he is the President, Treasurer, a Developer, and registered agent of both Respondent and a related entity, NEPREO, Inc.
[Note 2] The Declaration of Trust was confirmed by a confirmatory declaration of trust recorded on February 14, 1989 in the Registry at Book 15369, Page 292. The terms of the Trust were the same in this confirmatory declaration. The record does not contain the signature page of this confirmatory declaration of trust.
[Note 3] Respondent describes Fraine as Buckleys estranged husband.
[Note 4] A confirmatory trustees certificate (the Confirmatory Fraine Certificate) was executed by Fraine on April 7, 1999 and recorded in the Registry at Book 23659, Page 61. The Confirmatory Fraine Certificate confirmed that [Fraine] ha[d] been duly authorized by the beneficiaries of the said Trust to convey the subject property to [OBC] for consideration of less than One Hundred Dollars ($100.00).
[Note 5] In Respondents December 24, 2007 letter to one of Petitioners predecessor in title (discussed, infra), Respondent claimed that OBC Deed 1had been an act of forgery, and alleged that Buckley contends she was defrauded out of her ownership of [Locus]. Respondent did not submit any testimony from Buckley herself. Respondent also claimed that the Fraine Certificate and Confirmatory Fraine Certificate were a series of egregious and self-serving purported trustee certificates that were intended tocreate (falsely, Respondent claims) the appearance that Fraine was authorized to sell Locus. Respondent provides no evidence of any kind to support these claims.
Notably, Paragraph 7 of the Declaration of Trust provides that [a]ny person dealing with the Trust Estate or any Trustee may always rely fully and without further inquiry on a certificate signed by any person appearing from the records of the Registry of Deeds to be a Trustee hereunder . . . as to the authority of the Trustee to act or as to the existence or non-existence of any fact or facts which constitute or may constitute conditions precedent to any acts or actions by the Trustee or which are in any other manner germane to the affairs of the Trust . . . .
[Note 6] It is unclear whether OBC actually granted one or two $100,000.00 mortgages to Buckley on September 6, 2000. Petitioner alleges that Buckley Mortgage 2 is a duplicate of another mortgage (which appears to be identical to Buckley Mortgage 2) that was recorded in the Registry on September 7, 2000 at Book 25330, Page 276 (Buckley Mortgage 1"), and that Buckley Mortgage 2 and Buckley Mortgage 1 are actually a single mortgage that was recorded twice. Respondent claims that there were actually two mortgages granted. It is not necessaryto resolve this dispute for present purposes, as it is clear (based upon the Buckley Mortgage 2 Assignment and the NEPCO Entry, both defined, infra) that the mortgage from which Respondent derives its claim to title to Locus is Buckley Mortgage 2. For present purposes, this court will presume that Buckley Mortgages 1 and 2 were, in fact, two separate mortgages, but makes no formal finding as to whether there was actually one mortgage or two.
Notably, also on September 6, 2000, OBC, together with two companies associated with Fraine (Corporation 655 and Corporation 320 -- together, the Fraine Companies), granted to Buckley a $600,000.00 mortgage (the Fraine Mortgage), which was secured by Locus (and two unrelated properties owned by the Fraine Companies), which was recorded in the Registry at Book 25330, Page 327.
[Note 7] Notably, at the time the P.I. Action was commenced, Buckley Mortgages 1 and 2 and the Fraine Mortgage had not yet been assigned to Respondent (see discussion, infra). The pleadings in the prior case are not in evidence, so it is unclear what interest (if any) Respondent held, at that time, in Locus or any of the loans owed to Buckley.
[Note 8] The P.I., at Paragraph 7, erroneously refers to Buckley Mortgage 1 with reference to Book 25330, Page 296 of the Registry. As noted, supra, Buckley Mortgage 1 was actually recorded at Book 25330, Page 276.
[Note 9] OBC Deed 2 does not specifically state that it was a confirmatory deed, nor does it refer to OBC Deed 1. Nonetheless, Petitioner claims that the effect of OBC Deed 2 was as a confirmatory deed to confirm OBC Deed 1 based upon perceived title defects therein resulting from the fact that only Fraine executed OBC Deed 1.
[Note 10] The Buckley Certificate does not reference the Fraine Appointment or indicate the circumstances under which Fraine was removed as trustee of the Trust. Paragraph 5 of the Declaration of Trust provides that [n]o [ ] appointment or removal shall be effective until the recording of the instrument or instruments of appointment or removal.
[Note 11] Respondent claims that the purpose of the Forbearance Agreement was to consolidate and cross-collateralize several loans made by the MBTA to Fraine and entities with which Fraine was associated. Petitioner argues that, although the amount of debt on the MBTA Mortgage Amendment increased, because that debt became collateralized by multiple properties (i.e., not just Locus), there was not necessarily any increased debt burden upon Locus. There is no evidence in the record on this issue.
[Note 12] Notably, the Buckley Mortgage 1 Assignment was dated eleven days prior to the recording of the Buckley Subordination, but was not recorded until more than eight months later, by which time the Buckley Subordination had been recorded.
[Note 13] Respondent claims that 420 West is related to Petitioner and that 420 Wests knowledge of Respondents allegations as to title defects should be imputed to Petitioner. However, a review of public records on file with the Massachusetts Division of Corporations shows that 420 West and Petitioner have no common managers and do not share a business address. The only evidence of any connection between the two entities is the fact that 420 Wests principal, Michael Rooney, is described by Petitioner as a consultant of Petitioner.
[Note 14] The NEPCO Entry was conducted three days after the Invictus Entry; however, the NEPCO Certificate of Entry was actually recorded prior to the Invictus Certificate of Entry. Nothing in the summary judgment record indicates that Respondent received relief from the Automatic Stay (or served a notice of sale) prior to making this entry. Thus, the effectiveness of the NEPCO Entryis questionable. Neither partyaddressed this issue in their summary judgment briefs.
[Note 15] In connection with the closing for this sale, 420 West was required to pay several years of back real estate taxes on Locus, which totaled approximately $150,000.00. No documentation was provided to substantiate the expenses claimed by Tandon. As noted, infra, however, Respondent did not challenge any of these facts with respect to 420 Wests activities relative to Locus.
[Note 16] Tandon does not specify what the exact purposes of the numerous inspections of Locus were, nor what exactly was done to re-secure Locus.
[Note 17] Here, again, Tandon is unspecific as to the exact nature and purpose of these activities. He made no claim as to the costs (if any) associated with these activities. Respondent did not challenge any of these activities.
[Note 18] NEPREO appears to be related to Respondent. A review of public records on file with the Massachusetts Division of Corporations (of which this court takes judicial notice) shows that NEPREO and Respondent have the same business address, and that Keough (Respondents attorney in this case) is the President, Treasurer, a Developer, and registered agent of both entities. In addition, James L. Keough is the Secretary of NEPREO and a Director of both NEPREO and Respondent.
[Note 19] Respondent submitted no other evidence of any kind suggesting that it has ever taken any action relative to maintaining, controlling, accessing, or possessing Locus.
[Note 20] Before considering whether Petitioner has demonstrated standing, the court must consider Respondents claim that this case should be dismissed because Petitioner has the ability to file an action to quiet title. This claim is unconvincing, as there is no legal requirement that a party must choose a quiet title action over a try title action; as such, there is no reason for Petitioners petition to be dismissed for this reason. Rather, this case falls directly in the classic application of [G. L. c. 240, § 1] whereby a landowner in possession confronts assertions of adverse title interests and needs the courts assistance to ferret out those making those assertions . . . . Varian v. Bank of N.Y. Mellon, (Mass. Land Ct. Aug. 13, 2013) (finding that contests as to the validity of mortgages is appropriate in a try title action), abrogated on other grounds by Abate v. Freemont Investment & Loan, 470 Mass. 821 (2015).
[Note 21] On this point, Petitioner also argues that, pursuant to Paragraph 7 of the Declaration of Trust (which states that [a]ny person dealing with the Trust Estate or any Trustee may always rely fully and without further inquiry on a certificate signed by any person appearing from the records of the Registry of Deeds to be a Trustee), OBC and the MBTA (and its successors in title) were entitled to rely on OBC Deed 1.
It should be noted that, while Respondent makes vague allegations questioning the authenticity of the Fraine Certificate and Confirmatory Fraine Certificate, it submitted no concrete evidence that would lead the court to doubt the efficacyof those documents. In particular, while Respondent makes certain representations as to Buckleys opinion on this matter, it did not proffer anytestimonyfrom Buckleyherself explaining why, if Fraines trustee certificates were spurious, she later agreed to execute OCB Deed 2, the MBTA Mortgage Amendment, and the Buckley Subordination.
[Note 22] At most, even if Buckleys execution of OBC Deed 2 would have violated the P.I., thus depriving her of legal authority to do so, that would have rendered OBC Deed 2 voidable, not void. E.g., Bank of N.Y. Mellon Corp. v. Wain, 85 Mass. App. Ct. 498 , 503 (2014) (transferors lack of authority rendered transfer voidable, not void ab initio, where the instrument was otherwise effective to pass legal title). Moreover, even if Buckley had violated the P.I. and if such breach rendered OBC Deed 2 voidable, Respondents window in which to enforce the P.I. to void OBC Deed 2 has long since run. See G. L. c. 260, § 2 (actions upon judgments or decrees of courts of record . . . shall, except as otherwise provided, be commenced only within six years next after the cause of action accrues).
[Note 23] Buckley owned a twenty per cent beneficial interest in the Trust (and thus in Trust property, including Locus). Arguably, the sale of Locus could have diminished the value of the Trusts property, which in turn could have proportionallydiminished Buckleys beneficial interest therein -- and thus ran afoul of the P.I. Neither partyraised this issue, so the court declines to rule upon it.
[Note 24] It should also be noted that OBC was listed as a reach and apply defendant in the P.I. Action, which meant that OBC owed a debt to Buckley(who apparently herself owed a debt to Respondent) and Respondent sought to circumvent Buckley and receive payment directly from OBC. This would suggest that OBC, which owed a debt to Buckley, was not in a position to diminish any of Buckleys personal assets.
[Note 25] En route to this conclusion, Respondent argues that, even though Buckley Mortgage 1 was specifically subordinated to the MBTA Mortgage, the Buckley Subordination should be deemed to have been invalid based upon the P.I. And, with respect to Buckley Mortgage 2, Respondent notes that Buckley Mortgage 2 was not included in the Buckley Subordination or the Forbearance Agreement. Here, Petitioner argues that, in fact, Buckley Mortgage 2 was actually a duplicate of Buckley Mortgage 1 that was recorded a second time for unknown reasons.
[Note 26] On this point, Petitioner argues that the MBTA Mortgage Amendment and the Forbearance Agreement did not necessarily result in a higher pro rata debt load upon Locus, since the Forbearance Agreement had the effect of consolidating and cross-collateralizing several loans. There is insufficient evidence in the record to make a determination as to the validity of this claim.
[Note 27] As a fallback position, Petitioner -- citing the Restatement (Third) of Property (Mortgages) § 7.3 (1997) -- argues that, at worst, Buckley Mortgages 1 and 2 could only possibly be found to be prior to the increased indebtedness set forth in the MBTA Mortgage Amendment -- not the original $2.5 million. Because, as discussed, infra, the court rejects Respondents priority-shifting argument, it is not necessary to consider the merits of Petitioners claim here.
[Note 28] The facts surrounding the single payment of taxes by Respondent are not entirely clear. Respondent claims to have paid the taxes for the Q1 2014 (which it claims were past due, due to Petitioners failure to pay); however, the payment was dated October 13, 2013.
Regardless of the circumstances of this payment, it was clearly made to create an appearance of possession. Even if that were not the case, however, mere payment of taxes, by itself, is not sufficient on its own to show possession. E.g., Blanchard v. Lowell, 177 Mass. 501 , 505-506 (1901). Here, Petitioner (and its predecessor in title), has not only made tax payments, it has taken concrete steps to maintain and secure Locus from outside access (including Respondents access) -- further showing that Petitioner is the sole party with actual access to and possession of Locus. Respondent does not dispute any of these facts proffered by Petitioner, nor does it allege having ever been in actual possession of Locus.