Defendants James and Marita Barlow (the Barlows) filed this motion to vacate judgment to prevent the foreclosure auction and sale of property in Russell (the Subject Property), formerly owned by the Barlows and acquired by the Town of Russell (the Town) through a tax taking in 1991 and a judgment foreclosing the Barlows right of redemption entered in this action on February 28, 2008. The Barlows seek to have the judgment vacated on the grounds that the tax taking and foreclosure were invalid because the Town violated their due process rights. They also seek sanctions against the Town for spoliation, arguing that the Town lost or destroyed records of tax assessments and payments related to this matter. The Town vehemently opposes the Barlows motion to vacate the judgment, arguing that there was no due process violation and if there was such a violation, the Barlows failed to seek to vacate the judgment within a reasonable period of time by waiting over six years after the entry of final judgment before bringing this motion. The Town also asserts that there is no evidence suggesting that records relating to the Barlows tax title account were destroyed or lost and the motion for sanctions should be denied. In a two-day trial, I heard evidence and testimony on all these issues. As discussed below, based on my findings and conclusions of law, the Barlows Motion for Sanctions Based on Claims of Spoliation is DENIED, and their Motion to Vacate is ALLOWED.
On September 16, 2003, the Town filed its Complaint to Foreclose Tax Lien. The Land Court citation was sent to the Barlows on December 19, 2003. On November 23, 2004, a Motion for General Default and Affidavit of Military Service was filed and allowed, but no judgment was entered. A few years later, on February 11, 2008, the Town again filed a Motion for General Default and Affidavit as to Military Service. The Motion for General Default was allowed and the court entered a decree of Final Judgment on February 28, 2008.
On April 7, 2014, the Barlows filed a Petition to Vacate Decree, an Ex-Parte Motion for Temporary Restraining Order or Preliminary Injunction pending Petition to Vacate Decree, and an Affidavit in Support of Petition to Vacate Decree and Motion for Ex Parte Temporary Restraining Order or Preliminary Injunction. A hearing on Defendants Ex-Parte Motion for Temporary Restraining Order or Preliminary Injunction Pending Petition to Vacate Decree was held on April 7, 2014 and the court allowed the motion. The court ordered the Town not to hold any auction on the Subject Property pending a hearing on Defendants Motion for Preliminary Injunction.
On April 11, 2014, the Town filed a Motion in Opposition to Defendants Motion for Preliminary Injunction pending Petition to Vacate Decree, Memorandum in Support of Motion in Opposition to Defendants Motion for Preliminary Injunction pending Petition to Vacate Decree, and Affidavit in Support of Motion in Opposition to Defendants Motion for Preliminary Injunction pending Petition to Vacate Decree. The Defendants Motion for Preliminary Injunction was heard on April 14, 2014 and was taken under advisement. On April 18, 2014, the Barlows filed a Reply to Opposition to Motion for Preliminary Injunction pending Petition to Vacate Decree, an Affidavit of Damien Pittola in Support of Preliminary Injunction, and a Motion to File Answer Late pending Petition to Vacate Decree.
On April 22, 2014, the Barlows filed an Answer. On April 24, 2014, the Town filed Plaintiffs Motion to Strike Defendants Assertion of Spoliation, Affidavit by Damien Pittola, and Motion to File Late Answer pending Petition to Vacate Decree from Reply Brief. On April 28, 2014, the Barlows filed an Opposition to Plaintiffs Motion to Strike Defendants Assertion of Spoliation, Affidavit by Damien Pittola, and Motion to File Late Answer pending Petition to Vacate Decree from Reply Brief. On May 23, 2014, the court allowed the Barlows Motion for Preliminary Injunction.
On December 9, 2014, the Barlows filed Defendants Memorandum in Support of 1) Motion to Set Schedule for Filing Motion for Summary Judgment on their Petition to Vacate Tax Title Foreclosure and File Answer Late; 2) Motion to Claim a Jury Trial on their Counterclaims for Damages for Violation of Civil Rights, and 3) Motion for Sanctions Based on the Failure of Plaintiff to Preserve Evidence and Retain Records as Required by Law. On January 9, 2015, the Town filed Plaintiffs Opposition to Defendants Motion to File Late Answer and Assert Counterclaims and Plaintiffs Opposition to Defendants Motion for Sanctions Based on Claims of Spoliation. On January 21, 2015, the Barlows filed Defendants Reply Memorandum in Response to Opposition to Motions for Sanctions and Defendants Reply Memorandum in Response to Opposition to Motions to File Answer Late, and Claim for a Jury Trial on their Counterclaim for Damages.
On January 23, 2015, a pre-trial conference was held where the court denied Defendants Motion to File Late Answer and Assert Counterclaims, the Barlows withdrew their request for a jury trial apart from the counterclaims, and the court ruled that the Barlows Motion for Sanctions Based on Claims of Spoliation would be decided at trial. A trial was held on July 14-15, 2016. Exhibits 1 through 26 were marked. Testimony was heard from Wendy Thompson, Dennis Moran, Jerry York, Marita Barlow, Susan Maxwell, Nancy Boersig, James Barlow, and Joseph Cennamo. On the second day of trial, July 15, 2015, the Town filed Plaintiffs Motion for Directed Verdict and the Barlows filed Defendants Motion for Required Finding. The court heard and denied both motions. At the end of the second trial day the court heard and denied both Defendants Renewed Motion for Required Finding and Plaintiffs Renewed Motion for Directed Verdict.
On October 29, 2015, the Town filed Plaintiffs Post-Trial Brief. On November 2, 2015, the Barlows filed Defendants Request for Findings and Conclusions. The court heard closing arguments on November 24, 2015 and took the motion under advisement. This memorandum and order follows.
FINDINGS OF FACT
Based on the undisputed facts, the admitted exhibits, the sworn testimony of the witnesses at trial, my assessment of credibility, and the inferences I draw from the entirety of the evidence, these are the facts as I find them after trial:
The 1984 Agreement
1. On April 6, 1979, the Barlows took title to property at 163 Main Street in Russell (the Subject Property) by deed recorded in the Hampden County Registry of Deeds (registry) at Book 4750 Page 123. On the same day, they gave a mortgage to Westfield Savings Bank (Bank), recorded at the registry at Book 4750, page 125. The Barlows have five children (Kolleen, Kathleen, Karrie, Kristy, and Kaitlyn) and several grandchildren. Kolleen and her children have also resided at the Subject Property the majority of the time. Exh. 1, ¶ 1; Tr. 1:84, 174; Tr. 2:116.
2. In 1983, one of the Barlows children, Kathleen, was born with a severe heart condition that progressively got worse and required open-heart surgery the following year, when Kathleen was only nine months old. The Barlows did not have health insurance and had to pay the medical bills out-of-pocket and upfront. Tr. 1:87, 145-147.
3. Prior to the surgery, the Barlows allegedly sought financial relief from the Bank. Marita Barlow (Mrs. Barlow) testified that she spoke with Richard Mansfield (Mansfield) at the Bank and informed him of their familys medical situation. Mrs. Barlow stated that Mansfield proposed that the Barlows pay for Kathleens heart surgery and when they could afford to make mortgage payments they would be applied to the principal. Tax payments to the Town would be made from the Barlows in the form of escrow disbursements from the Bank. When the Barlows could start making complete payments for the mortgage and taxes, the payments would be applied to the current year and any extra to the arrears. I credit Mrs. Barlows testimony. Tr. 1:146-148, 174.
4. In early 1984, Mrs. Barlow and Mansfield spoke to the Town and sought a similar arrangement like the Barlows had with the Bank. Mrs. Barlow testified they went to a board of selectmen meeting where they reached a handshake agreement between Town selectmen George Tarbell (Tarbell) and Bob Drake (Drake) regarding the payment of their real estate taxes (the 1984 Agreement). Mrs. Barlow recalled that another selectmen, David Gerald York (York), was not present at the meeting where they reached the Agreement. To enable the Barlows to pay for Kathleens medical bills, the Town, like the Bank, purportedly agreed that the Barlows would only pay the principal on their mortgage for each current year (through the Banks escrow disbursements) and after the mortgage was brought current, any extra amounts paid would be allocated to arrears in real estate tax. Mrs. Barlow testified that there was no grace period that the Town set for not paying the real estate taxes and the board members told her that no interest would be charged on the overdue amounts. I credit Mrs. Barlows testimony that the Town, through Tarbell and Drake, entered into an oral agreement with the Barlows regarding their real estate tax payments and that York was not present when the agreement was reached. This agreement was never memorialized in writing. Exh. 21, pp. 19-20; Tr. 1:87-88, 139-140, 146-152, 165-166, 172-174; 2:9-10.
5. Mrs. Barlow testified that Drake was the individual she was most in contact with regarding the 1984 Agreement and the status of their ability to make payments. She would often go to his house and talk about where things were at with their familys health and their ability to make payments. Drake is now deceased, as is Tarbell. I credit Mrs. Barlows testimony. Exh. 21, pp. 19-20; Tr. 1:149-152; 165-166.
6. York was on the board of selectmen from 1974 to 1986. York testified in his deposition that he did not recall any interactions with the Barlows during his time in Russell as a board member. York denied ever even meeting the Barlows. Conversely, the Barlows testified that York knew them from working for the Russell Fire Department and Mr. Russell would occasional get a beer with York after work. York also did not remember any agreements that were made between the Town and the Barlows, nor any other taxpayers in Russell, regarding the payment of real estate taxes. York testified that the board of selectmen would keep minutes of all their meetings and kept records of those minutes in the Town archives, but as he now lives out of state, he was not able to check the Town archives for a record of minutes in reference to the 1984 Agreement. No meeting minutes are in the record. I find that York was not present at any meeting that took place between the Barlows and the board of selectmen. Further, I do not credit Yorks testimony because despite knowing the Barlows for several years through the fire department, York could not recall them. Exh. 21, pp. 11-13, 28-30, 34-37; Tr. 1:85-86; Tr. 2:117-119.
7. Dennis Moran (Moran), a member of the board of selectmen from 1989 to 2010, testified at trial that he was not aware of any prior agreements the Town had made with the Barlows related to providing them a grace period in which to pay taxes owed. While serving on the board of selectmen, Moran stated that they never entered into an agreement with the Barlows and is not aware of any other similar agreements the Town entered into with other residents of Russell. Tr. 1:79-82.
8. Though I credit Mrs. Barlows testimony and find that the 1984 Agreement existed, because of the lack of evidence regarding the terms of the agreement and its informal nature, I find that such an agreement is not enforceable against the Town. The 1984 Agreement was a handshake agreement, meaning there was never any written agreement setting out the terms for deferring payment of taxes or how the Barlows payments on the taxes would be applied. The only person that testified as to such an agreement was Mrs. Barlow. York was not present at the meeting where the alleged agreement was made and the other two selectmen that supposedly were at the meeting are both deceased. Moran was not aware of any agreement regarding delaying payment of property taxes or late payment application made between the Town and the Barlows, or any resident in Russell for that matter, while he was on the board of selectmen. Additionally, no meeting minutes regarding the 1984 Agreement were provided from the Town archives. Under these circumstances, I find that the agreement between the Barlows and the Town cannot be enforced.
The 1991 Taking
9. In 1989, the Barlows sought and obtained additional financing in the form of an equity line mortgage from the Bank. Tr. 2:10-11; Exh. 25.
10. Prior to 1990, the Barlows were mainly making principal mortgage payments when they could. Between 1981 and 1991, the Town received only a few tax payments from the Barlows in the form of escrow disbursements from the Bank. Exh. 2; Tr. 1:113, 152-154.
11. On December 23, 1991, the Town executed an Instrument of Taking (taking) of the Subject Property for unpaid taxes from years 1982 through 1990. The taking was recorded on February 5, 1992 with the registry at Book 7929, Page 161. According to the taking, the total amount owed was $13,493.43$7,862.12 in principal taxes owed, $5,571.31 in interest, and $60.00 in additional charges. Exh. 1, ¶ 2.
12. Payments received by the Town prior to 1992 were accounted for in the taking balance. Exhs. 15, 18; Tr. 2:92-99.
13. The Barlows were aware of the recorded taking, but Mrs. Barlow could not recall whether she spoke to anyone from the Town at that time. Exh. 15; Tr. 1:171-173.
The 2004 Complaint to Foreclose Tax Title
14. Following the taking, the Barlows were eventually able to start making more consistent payments to the Bank on their mortgage and real estate taxes. The Town continued to receive these payments in the form of escrow disbursements from the Bank. Exh. 1, ¶ 4; Exh. 2; Tr. 2:10.
15. The Barlows health problems did not end with their daughter Kathleens heart condition and surgery. In 1992, Mrs. Barlow was diagnosed with mastocytosis, a form of mast cell leukemia. She cannot work because of the illness. The symptoms of the disease are described as a constant allergic reaction and anaphylactic shock. James Barlow (Mr. Barlow) does work as a truck driver based out of Illinois and is on the road from Monday 2:00 a.m. until Friday night. Because of Mr. Barlows work schedule, Mrs. Barlow primarily communicated with the Town and the Bank, as well as handled retaining counsel in connection with the taking. Tr. 1:138-140; 2:114-115, 122-123, 127.
16. In 2002, the Barlows obtained a car loan through the Bank. At this time, the Barlows were notified by the Bank that it was still paying arrears on their property taxes. The Bank provided a printout for the period 1995 to 2002, which was the earliest record retained by the Bank. Tr. 1:88-89, 166, 170-171; Tr. 2:11-12, 89; Exh. 4.
17. Shortly after, on April 16, 2002, Mrs. Barlow delivered a letter to the Town submitting the Banks record printout and stating that the Town had failed to apply their tax payments according to the 1984 Agreement. Instead of applying payments to the current years taxes due, and then the remaining amounts applied to arrears, the Town applied their payments to the debt memorialized in the 1991 taking, paying it in full but still leaving the Barlows in arrears again for taxes accrued after the taking. Mrs. Barlow testified that she did not receive any response to her 2002 letter. Exh. 4; Tr. 1:89, 94-95, 170-171, 173-175; Tr. 2:12, 76-77.
18. Around this time, the Barlows did not attend any board of selectmen meetings to discuss the taking or the application of their payments to outstanding taxes because Mrs. Barlow was taking care of her sick mother, who later passed away in 2003, and because Mr. Barlows health began to deteriorate. Mr. Barlow suffers from type II diabetes and has suffered two heart attacks. After the first heart attack, in 2002, Mr. Barlow underwent surgery and rehabilitation. Shortly after returning to work, Mr. Barlow suffered another heart attack in 2002. Additionally, he has four stents in his leg and is due for another surgery soon. Tr. 1:89-90, 175; Tr. 2:8, 116- 117.
19. Since the early 2000s, the Barlows daughter Kolleen and her three children (Taylor, Morgan, and Erika) have lived with the Barlows the majority of the time because of their serious health problems. Like Mrs. Barlow, Kolleen and her daughter Erika (the Barlows granddaughter) were both diagnosed with mastocytosis. Tr. 1:137-139; Tr. 2:115-116.
20. Over the years, Mrs. Barlow periodically called or went into the Town Hall to discuss the status of taxes owed and how payments were being applied. Mrs. Barlow testified that along with the escrow disbursements from the Bank, her mother was also helping to pay off the real estate taxes. Because the Barlows have no documentation to support such payments made by Mrs. Barlows mother, and she is now deceased, I cannot find that these alleged additional payments were made on behalf of the Barlows. Based on Mrs. Barlows conversations with the Bank, the Barlows believed they were current on their mortgage payments and did not owe any taxes beyond the current year. Tr. 1:38-40, 79-80, 168-169, 179; Tr. 2:7-9, 12-13, 17, 23-26, 63-65.
21. On September 16, 2003, the Town of Russell commenced this action by filing a Complaint to Foreclose Tax Lien. The citation was served at the Subject Property on December 19, 2003. Exh. 1, ¶ 6.
22. On January 14, 2004, Mrs. Barlow sent a letter to the Land Court and Town counsel Dorothea McNeil, incorrectly believing she worked for the Land Court, contesting the foreclosure and stating that they were paying their real estate taxes through the escrow portion of their mortgage payment. She attached a copy of the 2002 letter sent to the Town. Mrs. Barlow testified that she believed her letter would constitute an answer in response to the Complaint. Exh. 1, ¶ 7; Exh. 5; Tr. 1:95-97, 176-179.
23. On January 20, 2004, the Land Court sent a letter to the Barlows informing them that the January 14, 2004 letter could not be accepted as an answer to the Towns Complaint since it did not have an original signature. The court instructed the Barlows to contact the Town to make arrangements for filing a late answer. Although the Barlows acknowledge they received the letter from the Land Court, Mrs. Barlow believed she had filed her answer with an original signature and did not understand why it was not accepted, and thus, mistakenly took no further action. No late answer was ever filed. Exh. 1, ¶ 7; Exh. 6; Tr. 1:95-97, 178-181.
The 2008 Final Judgment
24. On February 7, 2008, the Barlows received notice from the Towns tax title attorney, Dawn Bloom (Attorney Bloom), notifying them that the Town would be requesting a final judgment to be entered by the Land Court in the tax foreclosure case and all rights of redemption would be foreclosed upon issuances of the judgment. In the letter, Attorney Bloom also stated that all occupants would be requested to vacate the premises within 72 hours of issuance of the final judgment. Tr. 1:140, 181-182; Tr. 2:18; Exhs. 7-8.
25. The Barlows did not take further action in response to this letter in part because of the ongoing health issues in the family. Around 2008, Mr. Barlow had two more heart surgeries and was given a very limited life outcome. Kolleen underwent nine brain surgeries as well as surgeries on the back of her neck. Further, Kolleens daughter Erika requires weekly infusions, administered by Kolleen, to treat the mastocytosis that involve four needles put into her stomach, a process that takes over two hours. These injections take place at the Barlows home because that is where Erika is most comfortable. Also in 2008, Mrs. Barlows father was diagnosed with Alzheimers disease and colon cancer and had to move in with the Barlows so they could care for him until his death in March 2009. Exh. 8; Tr. 1:138-140; Tr. 2:18, 115-116
26. Final Judgment was entered by the Land Court on February 28, 2008. Exh. 1, ¶ 8.
27. Town accountant Nancy Boersig (Boersig) testified that at the time of judgment, payments made by the Barlows had generally been applied to the arrears with the exception of payments made in 2004, 2006, 2007, and 2008, which were applied to the current year. These payments were only applied to the current years when notations on the Banks checks indicated that the payment was for a specific fiscal year. All of these payments only brought the account current as of 1993. Boersig stated that all payments sent from the Bank on behalf of the Barlows have been received, accounted for, and credited to the Barlow account as of the judgment date. Tr. 2:68-69, 74-76, 80; Exh. 26.
The Eviction and Foreclosure Auction
28. Between April and July 2009, Mrs. Barlow suffered three strokes leaving her with neuropathy on the left side of her body and a speech impediment. Exh. 8; Tr. 1:140-141.
29. On September 18, 2009, the Barlows were served a 30 Day Notice to Quit and given until October 22, 2009, to vacate the premises. In response, Mrs. Barlow wrote another letter to the Town reiterating her familys medical issues and the 1984 Agreement she had with the Bank and the Town. Mrs. Barlow testified that she never heard back from the Town after submitting the 2009 letter. Exh. 8; Tr. 1:97-98, 130, 188; Tr. 2:18-20, 32-33.
30. The Barlows retained Attorney Hugh Flynn (Attorney Flynn) to represent them in challenging the eviction. On November 4, 2009, Attorney Flynn sent a letter to the Town accountant, Boersig, providing a printout from the Bank of payments made from 2001 to 2006. He stated that the Barlows had indicated they continued to pay the Banks tax escrow payments and wanted to confirm the payments have been set off against the amount owed to the Town. He requested a breakdown of what would be currently owed. Exh. 14, 20; Tr. 1:99-100; Tr. 2:20-22, 37-40.
31. On November 30, 2009, Boersig responded to Attorney Flynn and attached a spreadsheet of what taxes were owed on the Subject Property following the Land Court judgment. The spreadsheet did not show payments or indicate how payments received from the Bank were applied to the taxes. Boersig stated that the Barlows should talk with the Bank if there was an issue with their escrow account. Boersig stated that the Town needed an answer by December 31 as to what actions they were planning on taking or the eviction process would continue. Tr. 1:131; Tr. 2:41-42; Exh. 9.
32. No summary process action was ever filed. Tr. 1:131; Exh. 9.
33. In July 2010, the Barlows daughter Karrie died of a heart attack at the age of 40. Tr. 1:137.
34. On February 25, 2014, the Barlows received notice from the Town that the Subject Property would be sold at auction pursuant to the 1991 taking. It mistakenly stated that the auction was scheduled for May 29, 2014. The auction was in fact scheduled for March 29, 2014. Tr. 1:132-134; Exh. 22.
35. After receiving notice of the auction, the Barlows paid $2,100.00 to rent a new apartment and purchase furniture to assure that they would have a roof over their head in the event that the auction and eviction occurred. Tr. 1:136.
36. In response to the notice of auction, the Barlows obtained new counsel. Attorney Melissa Campagna (Attorney Campagna) inquired about what tax payments were received by the Town and how they were applied to the Subject Property. Attorney Bloom responded in an email on March 17, 2014 stating: Attached is a list of every check on your behalf from Westfield Savings Bank . . . You must be aware that NOTHING has been received from the bank since 1998 and we are now in FY 2014. Attached to her email were June 1996 and November 1999 faxes from the Bank to the Town. Attorney Bloom also noted that utilities were the Barlows responsibility and unpaid bills are treated as a tax. Tr. 1:141-142; Tr. 2:47-53; Exhs. 18, 23.
37. Attorney Campagna responded and provided the Banks escrow balance history from 2000 to 2009 showing numerous payments. Campagna questioned how the Town did not have any records of these payments. Exh. 18.
38. The following day, on March 18, 2014, Attorney Bloom responded to Campagnas email and stated I spoke to Nancy [Boersig] from the Town of Russell this morning and have a better understanding of what happened with the Barlows tax title account. I misunderstood what Nancy was saying yesterday about the payments received, and misspoke to Rita. She explained that because the outstanding balance of taxes for the Subject Property was so old and high, all payments received from the Bank were first applied towards the older taxes due. This only paid up the total taxes and interest due through fiscal year 1993. The earliest year outstanding, Bloom said, was 1994. Exh. 18; Tr. 2:50-52.
39. No records showing the application of payments to prior fiscal years were provided by the Town. Tr. 2:47-48.
40. On March 29, 2014, the Town held an auction of the Subject Property, but received no acceptable offer for their asking price. The auction was adjourned to April 8, 2014, with a minimum bid of $38,000. The Barlows filed their Petition to Vacate Decree and their Ex- Parte Motion for Temporary Restraining Order or Preliminary Injunction pending Petition to Vacate Decree on April 7, 2014. That day, the court issued a temporary restraining order against any sale of the Subject Property and on May 23, 2014, the Motion for Preliminary Injunction was allowed.
The Towns Record Keeping
41. Russell is a small town with a population of only about 1,200 people. There is very little staff in the Town collectors and treasurers offices, and residents of the Town often take up dual roles within the local government. Until recently, there were also no formal procedural guidelines for tax title properties in Russell. Tr. 1:32, 40, 70-71, 85.
42. At trial, Susan Maxwell (Maxwell), the Town treasurer from 1979 to 2013, and Wendy Thompson (Thompson), who currently serves the dual role as Town collector and treasurer, testified about the record keeping practices in Russell. The collector receives payments made on real estate taxes. Maxwells system was that all taxes collected by the collector would be sent to her in total amount. When she received the money, it was not coded for any particular parcel of real estate. The payments would be manually tracked for individual parcels on the commitment list. Exh. 16; Tr. 1:32, 40,107, 110.
43. Maxwell kept a log of receipts of payments, known as a cashbook, which was a handwritten book where she posted payment into. It became computerized later in the form of an excel spreadsheet. Logs of payments received by the Town from the collector or treasurer only go back to 1992; there are no records of payments received before then. Since the taking, the Town contends it has received $30,312.14 as payment on behalf of the Barlows real estate taxes. I credit this amount as the amount of payments received for the Subject Property. Tr. 1:32, 40, 49-50, 106-107, 110.
44. The collector receives the commitment list from the assessor, listing the taxes owed on each property in the Town for a particular year. The yearly lists are kept by the collector in a commitment book. Commitment records for the Subject Property go from 1982 to 2003. Using the receipts of payments found in the cashbook, the collector applies any payments made to the commitment list and calculates any remaining balance. Interest accrues at 14% on the principal of any unpaid taxes prior to a taking. Exh. 16; Tr. 1:30, 50-51, 58, 65-67.
45. When a tax title taking is done on a property for failure to pay off any remaining balance owed, the collectors records get zeroed out and certified to the treasurer. The treasurer keeps a second record of subsequent taxes, known as certification records. Separate certification records of subsequent taxes for the Subject Property begin in 2004. There are no records of subsequent taxes prior to 2004. The interest on subsequent taxes not collected increases to 16% following the taking. Separate files and accounts are kept for each tax title property such as the Barlows. The certificate of subsequent taxes is then added to the corresponding tax title account. Tr. 1:51-53, 64-65, 70-72, 116; Tr. 2:53-59.
46. When payments would come in for tax title properties, Maxwell would make a copy of any checks, deposit them, and post them in the cashbook. The cashbook was sent to the Town accountant, Boersig, who would reconcile the outstanding amount with the payments made for each parcel in tax title. Boersig balanced each tax title property once a year, corresponding with the time when the Town was going to be audited. After reconciling the payments, Boersig created a payoff spreadsheet for what was still owed to the Town as of a specific point in time, including interest. Each property in tax title had a corresponding payoff spreadsheet that was used as a rolling document year-to-year. Essentially, Boersig would start with the principal still owed, add new subsequent tax years and subtract payments from the oldest years arrears interest and then principal. Exh. 26; Tr. 1:110-115; Tr. 2:51-53, 67-69.
47. Maxwell testified that before 2004, the accounting system used for keeping track of tax title properties was simply for the collector (who at the time was Eva Drake) to draw a red check mark on the page of the commitment list as proof that subsequent taxes were certified at the end of each fiscal year. The collectors records were entered manually on the commitment list. For the Subject Property, red checks seen in the commitment book prior to 1991 were only entered following the taking. There was no policy or procedure dictating this method of record keeping; it was just the method that the former collector had used. In addition, Maxwell and Thompson acknowledged that in the commitment book for the Subject Property there were only red check marks and sometimes the word tax title for each year, but no payments were shown to have been made and applied except for 1982. They also identified several erasures and whiteout marks over writings entered for the Subject Property in the commitment book, but had no explanation for the alterations. Exh. 16; Tr. 1:60-62, 119-121, 124-127; Tr. 2:96-98, 166-167.
48. Prior to the 1980s, the Town treasurer was not doing tax title. The Subject Property was the first tax title property Maxwell ever did. Maxwell testified that the Town did not start compiling documents for tax titles until the early 1990s. Tr. 1:119-121.
49. A new system of record keeping began in 2004, after the Subject Property had been taken and the foreclosure was initiated in this court. Policies and procedures issued by the Department of Revenue began being used for certification. Documentation of taxes owed and payments made on those taxes were no longer manual, but became computerized. Tr. 1:122, 126- 129.
50. Joseph Cennamo (Cennamo), an auditor, became involved in auditing the Town in the early 1990s. Cennamo performed annual audits in the Town around September or October of each year. He testified that over the years he became familiar with Eva Drakes red check system for certifying taxes and it was not unusual in the 1980s for towns to maintain records in such a way. He did not have any concerns regarding the process or the accuracy of the process for certifying taxes. Cennamo stated that he independently audited tax title takings by [looking] at the document of taking and [making] sure that it [went] into the tax title account, that interest was computed on that tax title account to the point of taking and then possibly look at fees that would be associated with the trust and treasurers interest. To audit a tax title taking he generally relied on supporting documentation, but sometimes confirmed with taxpayers themselves. For any opening balances at the end of the year, he would send a confirmation letter to those residents. If they replied that they subsequently paid their taxes, Cennamo would trace that to a subsequent receipt to confirm payment. If he got no response, he would still look at the subsequent receipts and assessors records to determine if any payments were made. Every three years, Cennamos own audits were peer-reviewed by CPA firms.
As part of the audit, Cennamo was also required to issue a management letter evaluating the Towns internal control or financial reporting and accounting. Material weaknesses or significant deficiencies would be reported in the letters. From 2003 to 2014, Cennamos management letter stated there was a significant deficiency that the Town did not have a specific written accounting policy or procedures manual, which he testified could cause errors in the future for someone else trying to take over the accounting position. However, he noted that just because there wasnt a written manual didnt mean that the Town didnt have known policies in place.
In his 2003 and 2004 letters, he expressed concerns about residents having dual roles in the Town and the need to segregate duties as much as possible. Further, he stated that minutes of meetings of various boards did not contain details of matters discussed or decisions made and testified that [s]uch minutes are an important part of the towns records and help to keep and demonstrate proper stewardship and accountability. Cennamo also found accounting records were nearly obsolete and its computer software systems were outdated and inefficient. He testified that there was no reasonable explanation for the erasures and whiteouts in the commitment book and that was not a proper record keeping policy. Despite all of the Towns deficiencies, Cennamos management letters state that he did not believe any of the reportable conditions were material weakness. The Town was aware of these deficiencies and was working to remedy them by establishing the necessary policies and procedures. Exh. 19; Tr. 2:136-141; 143-147, 152-158, 161-168.
This action was initiated by the Barlows petition to vacate the foreclosure of their right of redemption. The Barlows seek to have the judgment vacated on the grounds that the tax taking and foreclosure were invalid because they violated their due process rights. Additionally, they brought a motion for sanctions for spoliation, claiming that the Town lost or destroyed records relating to this matter. For reasons more fully explained below, I find that there is no evidence that the Town destroyed any records relating to this action, and, therefore, the Barlows motion for sanctions based on spoliation is denied. I find that the Barlows did not receive sufficient notice and were not able to adequately participate in the foreclosure proceedings due to their familys systematic medical issues. While the Barlows did not move to vacate the judgment for some years, in the circumstances of this case, I find that their delay was excusable and that the interests of justice require vacating the judgment. The Town will be deemed to have moved for entry of judgment, and judgment shall enter one year from the date of this Memorandum and Order, or July 13, 2017, unless the Barlows will have redeemed during that time. The amount of redemption and the treatment of taxes accruing since the judgment are discussed below.
Spoliation is the failure to preserve evidence. Fletcher v. Dorchester Mut. Ins. Co., 437 Mass. 544 , 549-550 (2002). Massachusetts, like the majority of jurisdictions, does not recognize a cause of action for spoliation of evidence. Id. at 547. But sanctions may be imposed where a duty arises and where a reasonable person in the spoliators position would realize, at the time of spoliation, the possible importance of the evidence to the resolution of the potential dispute. Kippenhan v. Chaulk Servs., Inc., 428 Mass. 124 , 127 (1998). There is a duty to preserve such evidence in the interests of fairness. Id. The court has broad discretion to impose a variety of sanctions, but the general rule in the Commonwealth is that a judge should impose the least severe sanction necessary to remedy the prejudice to the nonspoliating party. Keene v. Brigham & Womens Hosp., Inc., 439 Mass. 223 , 235 (2003).
The Barlows argue that some of the Towns records showing the amounts owed and payments made are missing by either the Towns negligence or its intentional wrongdoing. They rest their assertion on several assumptions and claims that are unsupported by the evidence. The Barlows rely on the lack of any records supporting their alleged agreement as a basis for their claim of spoliation. The mere absence of records is not a sufficient basis on which to assert that particular documents once existed and to further surmise that those documents must have been lost or destroyed. Similarly, the Barlows argue that the Town failed to provide records for the Barlows tax title account or certifications of subsequent taxes in response to the Barlows public records request. Based on the record before the court, the Town provided each and every document necessary to prove and calculate the Barlows tax title account dating back to 1981.
These documents include commitment books, cash receipts, copies of checks from the Bank, and certification records. In fact, the Town produced documents evidencing payments made on behalf of the Barlows for which the Bank had no record. Although part of the Barlows motion for sanctions relates to the manner in which the Town maintained their records, many small towns had similar record keeping practices before computerization and the Barlows difficulty in interpreting the Towns records cannot form the basis for sanctions to be imposed. The Barlows also argue that the Town improperly destroyed records from auditors. In accordance with state law, however, the Town was only required to maintain such records for a period of ten years, and they provided the Barlows with reports from auditors going back twelve years. See William Galvin, The Commonwealth of Massachusetts Municipal Records Retention Manual 50 (2011).
The only evidence indicating that certain documents may be missing came from the confusion or misstatement of Town counsel Bloom in asserting that payments had not been made by the Bank since 1998. This misunderstanding was corrected the following day when Attorney Bloom communicated to the Barlows that she misspoke and payments had been made by the Bank, but that subsequent payments to the tax taking had been credited to amounts owed prior, up through 1993. Exh. 18; Tr. 2:47-53.
The Barlows have presented no evidence to substantiate their claims that missing records were either lost or destroyed negligently or intentionally by the Town. They provide only speculative arguments and inferences about how these missing records have prejudiced them because the Town cannot accurately calculate the tax title. In light of the absence of any reasonable evidence demonstrating that the Town failed to keep or destroyed records it was legally obligated to retain, the Barlows motion for sanctions based on spoliation is DENIED. I now turn to the Barlows substantive claim of a due process violation.
Due Process Violation & Right of Redemption
The Barlows argue that insufficient notice or other irregularities in procedure violated their right to due process and are grounds upon which the court should vacate the final judgment. General Laws c. 60, § 69A provides that a petition to vacate a decree of foreclosure must be filed within one year after entry of the decree. The judgment may be vacated within one year if the court, after careful consideration and in instances where . . . [it is] required to accomplish justice. Lynch v. City of Boston, 313 Mass. 478 , 480 (1943), quoting Russell v. Foley, 278 Mass. 145 , 148 (1932). Following this one-year period, the statute imposes an absolute bar on petitions to vacate. This bar protects the publics need for an efficient and final determination of any dispute regarding a public taking, so that title to the land taken can be settled. Town of Andover v. State Fin. Servs., Inc., 432 Mass. 571 , 577 (2000), quoting Town of Sharon v. Kafka, 18 Mass. App. Ct. 541 , 543 (1984). While courts are consistent in applying the statutory deadline, strict application of the one-year limitation may be excused when there has been a denial of due process. Christian v. Mooney, 400 Mass. 753 , 760-761 (1987); Town of Sharon, 18 Mass. App. Ct. at 544. Such relief is usually based on a denial of the taxpayers due process rights and of their ability to participate in the original litigation. Town of Andover, 432 Mass. at 574-575; Town of N. Reading v. Welch, 46 Mass. App. Ct. 818 , 819-820 (1999) (failure to give owner of survivorship notice of tax title foreclosure resulted in denial of due process); Town of Mashpee v. Norris, No. 68684, 1990 WL 10092007 at * 2 (Mass. Land Ct. March 15, 1990) (vacating decree of foreclosure after elapse of one year because Town did not provide adequate notice to heirs with an interest in the property).
Due process, both under the Fifth and Fourteenth Amendment of the U.S. Constitution and the comparable Massachusetts provisions (Massachusetts Constitution Part II c. 1, § 1, art. 4; Declaration of Rights arts. 1, 10, 12), requires [n]otice by mail or other means as certain as to ensure actual notice is a minimum constitutional precondition to a proceeding which will adversely affect the liberty or property interests of any party . . . if its name and address are reasonably ascertainable. Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 800 (1983); see Town of Andover, 432 Mass. at 574-575 (The notice provision of our tax title foreclosure law, G.L. c. 60, § 66, requires that notice of the petition to foreclose be sent to interested parties by certified mail.). Due process does not require a property owner to receive actual notice of foreclosure proceedings, only notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. Jones v. Flowers, 547 U.S. 220, 226 (2006), quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950). Thus, a municipality has a constitutional obligation to provide notice to a taxpayer of a petition to foreclose rights of redemption, and courts have vacated the decree of foreclosure based on a violation of due process when they fail to do so. Town of N. Reading, 47 Mass. App. Ct. at 819-820; City of Boston v. James, 26 Mass. App. Ct. 625 , 630 (1988); Robertson v. Town of Plymouth, 18 Mass. App. Ct. 592 , 594 (1984). It is within the judges discretion to determine whether a violation of due process has occurred. City of Boston v. Johnson, No. 04-P-1200, 2006 WL 1843404, at *1 (Mass. App. Ct. July 5, 2006) (unpublished decision).
The evidence in this matter demonstrates, and I so find, that the Barlows were not given sufficient notice of the prior foreclosure proceedings nor an adequate opportunity to participate in the action at that time. Although Mrs. Barlow testified that she was aware of the 1991 taking, neither she nor Mr. Barlow could recall speaking to anyone from the Town in reference to it. Tr. 1:171-173. Their lack of attentiveness concerning the taking was primarily due to the fact that the Barlows were suffering through serious and ongoing medical issues in their family. Not only was their daughter Kathleen born with massive heart problems, but shortly after the 1991 taking, Mrs. Barlow was diagnosed with mastocytosis, the symptoms of which are described as a constant allergic reaction and anaphylactic shock, and she became unable to work. Tr. 1:138- 140.
Before and after the taking, the Barlows mistakenly believed that they were current on their taxes and that their tax payments were being applied by the Town in accordance with the 1984 Agreement. It wasnt until 2002, when the Barlows obtained a car loan from the Bank, that they were informed the Bank was still paying arrears on their property taxes. Tr. 1:88-89, 166- 171, 170-171; Tr. 2:11-12, 23-26. Upon learning they were not caught up with tax payments, Mrs. Barlow testified she wrote and delivered a letter to the Town stating that the Town had failed to apply their payments in accordance with the 1984 Agreement. Unfortunately, the Barlows were unable to attend any board of selectmen meetings during this time to discuss the taking or the application of payments because of several health problems in the family. In 2002, Mrs. Barlow was taking care of her sick and dying mother. Mr. Barlows type II diabetes worsened, he suffered two heart attacks that required surgery and rehabilitation, and had stents put in his legs. Their daughter Kolleen and granddaughter Erika, who were also diagnosed with mastocytosis, began living at the Subject Property the majority of the time. Tr. 1:90, 137-139, 175; Tr. 2:115-117.
Despite recording the instrument of taking in 1992, the Town did not commence a foreclosure action against the Barlows until September 16, 2003, and the citation for that action was served on December 19, 2003. The Barlows do not dispute receiving notice of the 2003 foreclosure complaint, but testified that based on the Towns inaction in nearly ten years they believed they were current on their mortgage payments once again and did not owe any taxes beyond the current year. On January 14, 2004, Mrs. Barlow sent the Barlows answer to the Land Court and Attorney McNeil, counsel for the Town, believing she had met all the requirements for the filing to be considered an answer in accordance with the rules. On January 20, 2004, the Land Court sent the Barlows a letter informing them that their January 14 letter could not be accepted as an answer to the Towns complaint because it did not have an original signature. Mrs. Barlow testified that she received the letter from the Land Court and understood that it meant the court was not accepting her answer, but was confused by the language in the letter as to why it was being rejected. Mrs. Barlow did not understand the term original signature, and believed that because she had signed her own name it was an original that should have been accepted by the court. Tr. 1:95-97, 177-181; Exh. 1, ¶¶ 6-7; Exhs. 5, 6.
Due to this confusion, and thinking that she had satisfied the filing requirements, Mrs. Barlow did not refile an answer. At this time, the Barlows were still dealing with many health issues in their family, which severely disrupted their lives and their ability to participate in the litigation. Unbeknownst to the Barlows, a default entered against them for their failure to timely respond to the complaint. Approximately four years later, on February 7, 2008, the Town sent further notice to the Barlows reminding them that the Land Court had rejected their answer and that no hearing would be required for entry of a final judgment. The letter urged the Barlows to obtain counsel to assist them in this matter. At trial, Mrs. Barlow testified that after receipt of the follow-up letter, she contacted Town counsel where she was again advised to retain an attorney. Judgment was entered on February 28, 2008. Tr. 1:179, 181-183; Exh. 7.
The Barlows, however, took no further action because they were once again in the midst of family medical crises. Tr. 1:96-97, 180-181. In 2008, Mr. Barlow had two more heart surgeries and was given a very limited life expectation. Kolleen underwent nine brain surgeries, as well as surgeries on the back of her neck. The Barlows granddaughter Erika began requiring weekly infusions to treat the mastocytosis, which were done at the Subject Property. The infusions required four needles inserted in her stomach, a process taking approximately two and a half hours. In addition, Mrs. Barlows father was diagnosed with Alzheimers disease and colon cancer and he moved in with the Barlows so that they could care for him. He passed away in 2009. Between April and July 2009, Mrs. Barlow had three strokes that left her with nerve damage along the entire left side of her body and a speech impediment. Exh. 8; Tr. 1:138-141; Tr. 2:18, 115-116. In September 2009, the Barlows received an eviction notice from the Town. After receiving the notice, the Barlows retained Attorney Flynn in November 2009. Tr. 1:98-99, 130; Exh. 20. No summary process action was ever filed. Tr. 1:131; Exh. 9. While successful in stopping the eviction process, Attorney Flynn made no attempt to contact the Land Court. The Barlows suffered further tragedy when their daughter Karrie died of a massive heart attack in 2010. In February 2014, the Barlows received notice of a foreclosure sale and auction of their property, which prompted them retain new counsel and file the present motion to vacate the judgment.
Based on the foregoing, I find that Barlows were not given an adequate opportunity to participate in the original foreclosure action. It is clear that the Barlows, who did not have an attorney when the original complaint was filed in 2003, were confused by the response from the Land Court rejecting their answer. Understandably unfamiliar with the specifics of the courts proper filing procedures, the Barlows mistakenly thought that their answer was sufficient to meet the requirements. Caught up with their familys health problems and believing their answer satisfactory, the Barlows did not respond to the Land Court or follow up with Town counsel at that time. Had the court clarified the grounds on which it was rejecting the answer, or instead of rejecting the document, accepted it subject to obtaining an original signature as a replacement, no default judgment would have entered and the Barlows claims would likely have been heard in a timely fashion with redemption occurring on more reasonable terms.
The question is whether this lack of opportunity to be heard justifies vacating the 2008 judgment when the Barlows did not bring their motion to vacate until 2014. That the time limit for redemption may be extended beyond one year does not mean that the time is extended indefinitely. Town of Brewster v. Sherwood Forest Realty, Inc., 56 Mass. App. Ct. 905 , 906 (2002). The public interest in providing conclusiveness to foreclosure decrees must also be considered. [T]he time factor is properly weighed against the party challenging the tax title, especially where . . . the party making the challenge has sat on his rights for years after hearing of the foreclosure. Id. (internal citations omitted); Town of Lancaster v. Foley, 15 Mass. App. Ct. 967 , 968-969 (1983) (finding facts not sufficient to excuse the failure to raise defects in the foreclosure proceedings for 19 years and in regards to another parcel, there was no effort to pay taxes for almost 37 years); Town of Sharon, 18 Mass. App. Ct. at 543 (finding legislative determination that public interest in marketable titles . . . outweighs considerations of individual hardship after one year); Robertson, 18 Mass. App. Ct. at 596 ([W]hen the validity of tax titles is put in question long after the event, it is appropriate for the judge . . . to weigh the factor of time against those making the challenge.), quoting Krueger v. Devine, 18 Mass. App. Ct. 397 , 402 (1984). Whether the owner delayed unreasonably in seeking to vacate a foreclosure decree after learning of its entry is a question of fact. Town of Brewster, 56 Mass. App. Ct. at 906.
Certainly the Barlows six-year delay in moving to vacate the judgment could be found unreasonable and foreclose any motion to vacate, although many of the relevant cases involve much longer delays. See, e.g., Deveney v. City of Boston, 346 Mass. 764 , 764 (1963) (finding that the petitioner had every opportunity to file an answer in the tax lien case and to raise any competent matter, and that the ends of justice would not be promoted by reopening the case); Town of Brewster, 56 Mass. App. Ct. at 926 (finding 23 year delay in seeking to vacate foreclosure decree after learning of its entry was an unreasonable delay); Town of N. Reading, 46 Mass. App. Ct. at 819-820 (five-year delay not unreasonable); Lamontagne v. Knightly, 30 Mass. App. Ct. 647 , 657-658 (1991) (holding that the party making the challenge sat on his rights for years after hearing of the foreclosure); Town of Lancaster v. Foley, 15 Mass. at 968-969 (nineteen-year delay unreasonable); Town of Brewster v. Owners Unknown, No. 86 TL 079199 (Mass. Land Ct. July 8, 2016) (Patterson, Recorder); Town of Yarmouth v. Snowden-Lebel, 17 LCR 654 , 656 (2009) (At some point, the balance tips in favor of the certainty of title, and the decree of foreclosure ordinarily becomes absolute and final, with all claims against the resulting title forever barred.).
On the other hand, given the Barlows understandable mistake in failing to file a proper answer based on the lack of clarity in the courts letter and the familys significant medical issues that prevailed throughout the pendency of this action, foreclosing the Barlows right of redemption with no opportunity to redeem is not supported by principals of equity. Where a party is seeking to redeem property taken in tax title, equitable principles apply in addition to constitutional concerns of due process. Certain cases of extraordinary circumstances cry out for equitable relief. See Town of Sharon, 18 Mass. App. Ct. at 543; compare Town of Brewster, 56 Mass. App. Ct. at 907.
In Tallage, LLC v. Meaney, the Land Court addressed whether health issues in a family were justifiable grounds for vacating a foreclosure decree. Tallage, LLC v. Meany, 23 LCR 375 , 375-376 (2015). The property owners children had serious health issues at the time notices regarding unpaid water and sewer bills were sent to their home and took no action on them. Id. at 376. The court noted that they fully intended to take care of such obligations once they were able to focus on their mail and had no idea that failure to pay minor utility bills could result in the total loss of their property. Id. at 382. The property owners moved to vacate the judgment within one year after entry of judgment. Id. at 381. The court found that these were extraordinary circumstances fully justifying the exercise of its discretion to vacate the foreclosure. Id. at 382. In reaching its decision, the court also relied on principles of equity, finding that without vacating the judgment, the lien holder would profit from a windfall by obtaining full title to the property for the small amount of principal and interest outstanding on the utility bills. Id.
Although in Tallage only minor utility bills were unpaid and the owners promptly filed a motion to vacate the judgment shortly after learning of it, the facts pertaining to the fairness to the property owners in foreclosing their right of redemption similarly apply to this case. Like the family in Tallage, the Barlows also suffered serious health ailments over the years that dominated their lives and caused issues related to the payment of taxes and foreclosure to take a back seat. The Barlows testified at length that during the foreclosure proceedings their family was overwhelmed with health issues and not much attention was paid to notices or filing requirements. Not only were the Barlows inundated with the health problems of their children, grandchildren, and aging parents who they took care of, but they also suffered from critical illnesses themselves. Undoubtedly, the health issues in the family caused the Barlows to lose focus on the payment of taxes and the foreclosure proceedings that followed.
Generally tax redemption statutes, being remedial in their nature, are interpreted liberally in favor of a person seeking to recover his land. Union Trust Co. v. Reed, 213 Mass. 199 , 201 (1912). In keeping with the respect with which our society regards the private ownership of property, the long standing policy in this Commonwealth favors allowing an owner to redeem property taken for the nonpayment of taxes. Town of Lynnfield v. Owners Unknown, 397 Mass. 470 , 473-474 (1986). Moreover, [t]he purpose of those provisions is not to provide municipalities with a method of acquiring property for municipal purposes without paying the owner of the property fair compensation as in eminent domain proceedings. The redemption provisions were enacted by the Legislature to provide municipalities with a mechanism for the prompt collection of delinquent real estate taxes. Id. at 474; City of Boston v. James, 26 Mass. App. Ct. at 630 (the only legitimate interest of a town in seeking to foreclose rights of redemption is the collection of taxes due on the property, together with other costs and interest). The risk to the Barlows, the loss of their residence, outweighs the fiscal and administrative burdens on the government, which are small in comparison. The municipality has not sold the property to any third party and the Barlow family remains the occupants of the home.
Under the circumstances of this case, the Barlows six-year delay in bringing their motion to vacate is not unreasonable. See Town of N. Reading, 46 Mass. App. Ct. at 819-820. Justice is served by allowing the Barlows Motion to Vacate, but also deeming the Town to have made a motion for entry of judgment. This motion for judgment shall be allowed one year from the date of this Memorandum and Order, or July 13, 2017, unless the Barlows have within that time redeemed the Subject Property by paying the amount due as set forth below. If the Barlows do not redeem before July 13, 2017, judgment shall enter foreclosing their right to redeem.
Amount Required to Redeem
The amount necessary to redeem is another point of contention in this case. The Barlows maintain that the Town failed to comply with the Massachusetts statutory and regulatory requirements for the collection of payments received and application of those payments to outstanding taxes, as well as the record keeping requirements for notice and retention of records. They assert that the Town did not ensure that it correctly assessed their property, nor did the Town ensure that there was no error in the taking that may be deemed substantial or misleading. G. L. c. 60, § 37. I find that while the Towns record keeping practices were not the most efficient and readily ascertainable, the testimony of several witnesses at trial indicates that the records reflect all of the real estate taxes assessed against the Barlows during the relevant time period (1982 to 2008) and there was no evidence presented that suggested the records of amounts assessed were inaccurate or incomplete. Exh. 16.
I credit the Towns calculation that at the time of the 2008 judgment, the total amount of assessed taxes (without interest) owed was $33,959.86. This amount includes the amount in taking ($7,862.12) and the taxes assessed between the taking up until the entry of judgment ($26,097.74). Tr. 2:76; Exh. 16. Similarly, I find that the Town properly maintained records of all payments received for real estate taxes by or on behalf of the Barlows. At trial, Boersig testified that the Town kept track of every payment received for the Subject Property over the years. Tr. 1:107-108; Tr. 2:77-80; Exhs. 12, 17. Those payments were recorded in the cashbook. Maxwell stated that she also double-checked with the Bank to verify that there were no missing payments made for which the Barlows were not credited. Tr. 1:112-113; Exhs. 2, 3. I credit the Towns contention that it has received $30,312.14 as payment on behalf of the Barlows real estate taxes since the taking. Exh. 17; Tr. 2:91-92. There is nothing in the evidence to support Mrs. Barlows assertion that her now deceased mother made additional payments not credited to the account. Mrs. Barlow admitted at trial that she had no documentation of any such payments that were not reflected in the Towns records. Tr. 1:145, 162-163.
Though the Barlows may not be satisfied with the application of their tax payments, because the 1984 Agreement is not enforceable, I find that the Town applied the Barlows payments to their tax title account pursuant to G. L. c. 60, §3Efirst to any interest due, then to any collection costs, and lastly to the principal tax. See Property Tax Bureaus Informational Guideline Release, No. 03-210, Collection Costs and Procedures 3 (Aug. 2003). The Town properly certified the unpaid taxes on the Subject Property into tax title and appropriately applied all payments. The Town auditor, Cennamo, was aware of the process used by the Town in certifying unpaid taxes into tax title and he had no concerns about the accuracy of the process. Tr. 2:143-145.
Once the property went into tax title in 1991, unpaid taxes for all prior years that were included in the taking were certified over from the collector to the treasurer. Each year thereafter, the unpaid taxes for that fiscal year were similarly certified over to the treasurer. The underlying records were consolidated by Boersig into a rolling record of taxes assessed each year and payments received towards the tax title. When payments were received on behalf of the Barlows, they were applied to the most arreared years interest, then to its principal. Slowly, the payments chipped away at the outstanding taxes. The rolling record created by Boersig would account for these payments and as prior years taxes would be paid off, the record would eliminate the corresponding year from tax title. Tr. 2: 96-100. As of the date of judgment, February 28, 2008, the rolling record reflects the Barlows were paid off through fiscal year 1993, with a total of $39,308.67 (including interest) still owed. Exh. 26. Therefore, I find that the Barlows may redeem the Subject Property upon payment to the Town of the sum of $39,308.67, within a year of this Memorandum and Order, or by July 13, 2017.
Interest in tax foreclosure cases is unusually high and uniquely calculated. The interest accrues at 14% from the time taxes are due until the tax taking occurs, and at 16% thereafter. G.L. c. 59, § 57; G.L. c. 60, § 62. This means that a relatively small bill can become larger quickly and make it easy for people to fall behind, especially when they have other significant and pressing life concerns. See Tallage LLC, 23 LCR at 377. Because this rate is provided for in the statute, this huge accrual of interest on a valid lien [cannot] be challenged. Abdelahad v. Town of Grafton, 23 LCR 433 , 435 (2015). While [p]roperty owners should pay their taxes . . . a Procrustean application of 14 %/16 % interest rates and a complete loss of equity once redemption rights are foreclosed can arguably lead to inequitable results. Tallage LLC, 23 LCR at 377. The Land Court may exercise other potential powers to address inequities, either inherent or conferred by statute, expressly or by implication. Id. at 377, n. 9 (stating these include the power to set legal fees and the power to reduce interest). Having found that substantial interest accrued as a result of Mrs. Barlows reliance on the 1984 Agreement with the Town and the courts error in failing to adequately notify the Barlows as to why their answer was rejected, it is unjust and inequitable to subject the Barlows to an additional 16% interest on the unpaid taxes that has continued to accumulate since judgment was entered. Therefore, in the interests of justice and equity, no additional interest will be added to the taxes owed as of the date of the 2008 judgment. If the Barlows are able to redeem within a year, assessed taxes that have accrued from the judgement to the date of redemption will then become outstanding. I credit the Towns submissions that from fiscal years 2008 to 2015, the total taxes accrued on the Subject Property without interest is $17,296.18. Taxes for fiscal years after 2015 to the date of redemption will have to be assessed and calculated.
The amount of redemption for taxes subsequent to the 2008 judgment would also include all interest accrued since the debts became delinquent. General Laws c. 59, § 57 provides that interest on unpaid taxes runs from certain dates in the fiscal year in which the tax is payable. That interest accrues at the rate of 14% per year. Should the Barlows redeem within the allotted time, the fiscal year in which the remaining unpaid taxes from the 2008 judgment to the date of redemption were payable is hereby deemed to be the fiscal year of the date of redemption, and interest on those unpaid taxes shall be calculated accordingly pursuant to G. L. c. 59, § 57.
Attorneys Fees and Costs
The Town also seeks payment of all attorneys fees and costs associated with collection of these unpaid taxes pursuant to G.L. c. 60, § 65. This court may upon motion, order the payment of legal fees to a city or town, which amount shall be added to the tax title account of the land to which the right of redemption is being foreclosed; in no event shall the legal fees awarded exceed the actual costs incurred and the judge shall consider the taxpayers ability to pay said fees in any such award. G.L. c. 60, § 65. Such an order is permitted to the extent the costs and attorneys fees are reasonable. G.L. c. 60, § 68; see Town of Abington v. Walsh, 18 LCR 290 , 292-293 (2010).
Since the complaint was brought in 2004, counsel for the Town has dedicated significant time and effort to resolving this matter. Numerous pleadings, motions, and affidavits were prepared and appearances in court by counsel made in connection with the foreclosure proceedings. The Town is, thus, entitled to payment of reasonable attorneys fees and costs associated with the collection of these unpaid taxes and in bringing the foreclosure action. G. L. c. 60, § 65. Town counsel is not, however, entitled to fees and costs incurred after the Barlows motion to vacate was filed. As the motion to vacate is allowed, the Barlows are a prevailing party. For this reason, the Barlows are not accountable for any attorneys fees and costs stemming from the motion to vacate.
The Town submitted two affidavits from counsel attached to their post-trial brief. Specifically, the Town seeks payment of $21,434.60 in legal fees and costs for services rendered by Attorney Bloom as of October 27, 2015 and $85,827.36 for legal fees and costs for Attorney Jesse Belcher-Timme as of October 28, 2015. See Plaintiffs Post-Trial Brief, Exhs. B, C. Because the affidavits do not provide a breakdown of legal services performed in this matter, I am unable to adequately assess whether the fees requested are reasonable. Counsel shall submit a fee affidavit to the court detailing the computation of attorneys fees and costs asserted by the Town in relation to the foreclosure proceedings within 21 days of the date of this Memorandum and Order. The Barlows shall file their response, if any, within 14 days. The court will then in its discretion approve those fees and costs it deems to be reasonable without further hearing.
As set forth above, I find and rule as follows: (1) The Barlows Motion for Sanctions Based on Claims of Spoliation is DENIED. (2) The Barlows Motion to Vacate is ALLOWED. (3) The Final Judgment entered in this action on February 28, 2008, is hereby VACATED. (4) The Town is hereby DEEMED to have moved for entry of final judgment. (5) Final judgment shall enter, foreclosing the Barlows right of redemption, on July 17, 2017, unless within that time shall have redeemed the Subject Property by payment to the Town of $39,308.67 plus attorneys fees to be determined, with no additional interest to accrue. (5) If the Barlows successfully redeem, taxes assessed from the date of the 2008 judgment to the date of redemption will become outstanding; the fiscal year in which the remaining unpaid taxes from the 2008 judgment to the date of redemption were payable is hereby deemed to be the fiscal year of the date of redemption, and interest on those unpaid taxes shall be calculated accordingly pursuant to G.L. c. 59, § 57.