Petitioners Robert F. Gustin, Jr. and Elizabeth A. Doris Gustin ("Gustins") filed a Petition to Amend Certificate of Title on October 12, 2017 seeking to expunge two mortgage assignments from the certificate of title for their property at 8 Walker Court, Dedham ("Property"). The Gustins assert that the assignment from Option One Mortgage Corporation ("Option One") to Deutsche Bank National Trust Company, As Trustee For The Certificate Holders Of Soundview Home Loan Trust 2005-Opt4, Asset-Backed Certificates, Series 2005-Opt 4 ("Deutsche Bank"), of a mortgage on the Property is void because at the time the mortgage was assigned to Deutsche Bank, the assignor, Option One, did not yet itself have title to the mortgage; therefore, Option One had nothing to assign. The Gustins further allege that the notary acknowledgment of the assignment from Option One to Deutsche Bank by a California notary public, although compliant on its face with all acknowledgment requirements, failed to conform to California law because the notary public failed to note the acknowledgment in her journal when she turned in her notary journal to the Orange County Clerk-Recorder upon the expiration of her commission.
Deutsche Bank and Option One argue that the assignment from Option One to Deutsche Bank was valid because the date the assignment was registered is determinative of title, not the date of execution. Therefore, at the time the instrument was registered with the Norfolk Registry District of the Land Court on February 9, 2007, Option One held a valid assignment of the mortgage. In addition, Deutsche Bank and Option One assert that the Gustins lack standing to argue that the notary acknowledgment is insufficient because the Gustins, as mortgagors in default, do not have a legally cognizable stake in whether latent defects exist in the assignment.
On October 12, 2017, along with a petition to amend their certificate of title, the petitioners filed a motion for preliminary injunctive relief to enjoin a foreclosure of their property, scheduled for October 25, 2017. Following a hearing on October 20, 2017, which the respondents did not attend, most likely because they were not timely served, I denied petitioners' motion for a preliminary injunction.
On November 27, 2017, Deutsche Bank filed its motion to dismiss and on July 16, 2018, following a stay occasioned by the bankruptcy filing of one of the petitioners, Option One filed its motion to dismiss. Successive counsel for the petitioners filed separate memoranda in opposition to the motions to dismiss. I held a hearing on the motions on October 17, 2018. For the reasons stated below, the respondents' motions to dismiss are ALLOWED.
FACTS
The following allegations of the petitioners' Petition to Amend Certificate of Title are accepted as true for purposes of these motions. See Iannacchino v. Ford Motor Co., 451 Mass. 623 (2008). The court also considers undisputed documents in the record, including the subject mortgage and the two mortgage assignments. See Buffalo-Water 1, LLC v. Fidelity Real Estate Company, LLC., SJC-12487, slip. op. at 3 (November 26, 2018).
1. The Property is registered land acquired by the Gustins by deed registered with the Norfolk Registry District of the Land Court on March 18, 1987. [Note 1]
2. The Gustins granted a mortgage to H&R Block Mortgage Corporation ("H&R Block") dated September 23, 2005 and registered on October 5, 2005. [Note 2]
3. H&R Block executed an assignment of the mortgage to Option One by an assignment dated January 23, 2007 and registered with the Norfolk Registry District of the Land Court as Document 122231 on February 9, 2007 at 11:36 A.M. [Note 3]
4. The assignment from H&R Block to Option One was notarized by Cindy Duong, a California notary public. After a search, the Orange County Clerk-Recorder was unable to find an entry in Ms. Duong's notary journal, filed with the Clerk-Recorder, for the assignment of the mortgage on January 23, 2007. [Note 4]
5. Option One executed an assignment of the mortgage to Deutsche Bank by an assignment dated January 11, 2007twelve days prior to the date of the assignment to Option Oneand registered with the Norfolk Registry District of the Land Court as Document 1122232 on February 9, 2007 at 11:36 A.M.. [Note 5]
6. The assignment of the mortgage from H&R Block to Option One (Land Court Document No. 1122231) was registered just prior to the assignment of mortgage from Option One to Deutsche Bank (Land Court Document No. 1122232).
DISCUSSION
Standard of Review for a Motion to Dismiss.
On a motion to dismiss for failure to state a claim, the plaintiff is required to plead "factual 'allegations plausibly suggesting (not merely consistent with)' an entitlement to relief[.]" Iannacchino v. Ford Motor Co., 451 Mass. 623 , 636 (2008), quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007). Generally, if matters outside the pleadings are presented to and not excluded by the court, the motion will be treated as a motion for summary judgment. Mass. R. Civ. P. 12(b), (c). The court may also take into account matters of public record and documents integral to, referred to, or explicitly relied on in the complaint, whether or not attached, without converting the motion to a motion for summary judgment. See Marram v. Kobrick Offshore Fund, Ltd., 442 Mass. 43 , 45 n.4 (2004); Schaer v. Brandeis Univ., 432 Mass. 474 , 477 (2000); Reliance Ins. Co. v. Boston, 71 Mass. App. Ct. 550 , 555 (2008). Accordingly, the court has taken into account as part of the pleadings, the mortgage, mortgage assignments, and other documents attached to the petition and to the parties' memoranda as exhibits.
1. The Assignment to Deutsche Bank Was Not Invalid by Reason of Its Execution Prior to the Assignment from H&R Block to Option One.
In a pre-foreclosure quiet title action, a mortgagor has standing "to challenge a foreclosing entity's status qua mortgagee. This may, in certain instances, require challenging the validity of an assignment that purports to transfer the mortgage to a successor mortgagee." Culhane v. Aurora Loan Servs., 708 F.3d 282, 291 (1st Cir. 2013). This right, however, extends only to "a mortgagor's challenge to an assignment asserting that it is void." Sullivan v. Kondaur Capital, 85 Mass. App. Ct. 202 , 206 n. 7 (2014) (Kondaur Capital). This is because "[a] deficiency in an assignment that makes it merely voidable at the election of one party or the other would not automatically invalidate the title of a foreclosing mortgagee, and accordingly would not render void a foreclosure sale conducted by the assignee or its successors in interest." Id. In contrast, "where the foreclosing entity has established that it validly holds the mortgage, a mortgagor in default has no legally cognizable stake in whether there otherwise might be latent defects in the assignment process." Bank of New York Mellon Corp. v. Wain, 85 Mass. App. Ct. 498 , 502 (2014) (Wain).
The assignment in Kondaur Capital was void because, on its face, it failed to meet the "relaxed requirements" of G.L. c. 183, § 54B. Kondaur Capital, supra, 85 Mass. App. Ct. at 212-13. [Note 6] In contrast, in Wain, the challenged assignment on its face complied with G. L. c. 183, § 54B; the issue raised by the mortgagor in Wain was whether the signatory in fact had the authority he claimed to have, which if true, would render the assignment voidable, but not void. Wain, supra, 85 Mass. App. Ct. at 503-504. "Because the record title holder of the mortgage satisfied the dictates of the statute governing the assignment of mortgages, the homeowners have no basis for arguing that the assignment is void. Regardless of whether any hidden problems they seek to raise might provide a basis for a third party to claim that the assignment was potentially voidable, the homeowners themselves have no right to raise such issues." Id. at 504. See also Wilson v. HSBC Mortgage Servs., Inc., 744 F.3d 1, 10 (1st Cir. 2014) (concluding a challenge to the authority of an officer to execute an assignment is in the "voidable" rather than "void" category).
The Gustins allege that the assignment to Deutsche Bank is void, rather than voidable, in one respect: they argue that the assignment from Option One to Deutsche Bank, dated January 11, 2007, was a nullity because the assignment from H&R Block to Option One was not executed until January 23, 2007, twelve days later. The Gustins argue that this court must follow the holding in Federal Nat'l Mortgage Assoc. v. Carr, 2012 Mass. App. Div. 223 (Dist. Ct. 2012), finding that "[a]n assignment of a mortgage is a transfer of legal title in Massachusetts only upon the transfer or execution date, not the recording date." Id. at 3. Carr, however, is distinguishable on its facts, and is inapplicable to the present case because it involved recorded land not subject to the statutory rules of G. L. c. 185, § 67, applicable to registered land, as is the case here. G. L. c. 185, § 67 provides in relevant part that a "mortgage deed, and all instruments which assign, extend, discharge and otherwise deal with the mortgage, shall be registered, and shall take effect upon the title only from the time of registration."
The two assignments were registered consecutively with the Land Court on February 9, 2007. By the time the two assignments were registered, Option One held a valid assignment of the mortgage from H&R Block. This assignment, when registered so as to become effective on February 9, 2007, was sufficient to provide Option One with title that it could then assign by the previously executed, but simultaneously registered assignment to Deutsche Bank. Thus, the assignment from H&R Block to Option One was effective to assign the mortgage by the time Option One then assigned the mortgage to Deutsche Bank. Moreover, the assignment was not wrongfully accepted for registration because at the time the assignment from Option One to Deutsche Bank was registered, Option One had a valid assignment of the mortgage. G. L. c. 185, § 67; G. L. c. 185, § 114; see also Zullo v. HMC Assets, LLC, 22 LCR 391 (2014) (Foster, J.) (the execution and registration of a mortgage assignment on registered land to the defendant did not take effect until it was registered); Collette v. Wells Fargo Bank, N.A., 22 LCR 48 (2014) (Long, J.).
The Gustins similarly argue that the Supreme Judicial Court's holding in Bevilacqua v. Rodriguez, 460 Mass. 762 (2011) that "a single deed considered without reference to its chain of title is insufficient to show 'record title' as required by G. L. c. 240, § 1" applies to the instant action. Id. at 771. In Bevilacqua, the Court noted that an otherwise void document cannot become legally sufficient merely because it was recorded. However, the petitioners argue that the assignment to Deutsche Bank was void on the basis of their invalid premise that the Option One assignment to Deutsche Bank stood outside of the chain of title. As stated above, the assignment by Option One to Deutsche Bank was not outside the chain of title because by the time it was registered, Option One already held a valid assignment from H&R Block that was registered just prior to the registration of the assignment to Deutsche Bank.
2. The Alleged Defect, By Reason of Failure to Note the Acknowledgement in the Notary Journal, at Most Rendered the Assignment Voidable, Not Void.
The Gustins also advance arguments in their petition, which, they concede, even if proved, would at most render the assignment voidable, but not void. They concede that the acknowledgement of the assignment meets all statutory requirements on its face, but argue only that it is voidable because the notary failed to list the transaction in her journal when she turned in her notary journal to the Orange County Clerk-Recorder upon the expiration of her commission. Regardless of whether the Gustins proved this allegation, it is of no moment because an allegation that a mortgage assignment is voidable, but not void, does not support a finding that the Gustins possess standing as an interested party to maintain the action. Wain, supra, 85 Mass. App. Ct. at 502 (holding that in foreclosure actions, "where the foreclosing entity has established that it validly holds the mortgage, a mortgagor in default has no legally cognizable stake in whether there otherwise might be latent defects in the assignment process.")
The court does not reach the petitioners' assertion that there are other unspecified "plausible grounds" for their claimed entitlement to relief. The petitioners' failed to timely assert any additional grounds for relief and the court will not address claims that remain unspecified and unasserted.
CONCLUSION
For the foregoing reasons, the respondents' motions to dismiss are ALLOWED.
Judgment dismissing the petitioners' Petition to Amend Certificate of Title, seeking to expunge the mortgage assignments from the certificate of title, will be entered accordingly.
ROBERT F. GUSTIN, JR. and ELIZABETH A. DORIS GUSTIN v. DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR THE CERTIFICATE HOLDERS OF SOUNDVIEW HOME LOAN TRUST 2005-OPT4, ASSET-BACKED CERTIFICATES, SERIES 2005-OPT 4 and OPTION ONE MORTGAGE CORPORATION.