ITHACA FINANCE, LLC v. FRANCISCA LEGER, et al.

The unfortunate combination of victimization by the negligence of a real estate closing attorney and less-than-fastidious adherence to a strict statutory framework for the collection of municipal real estate taxes by a private assignee of a municipal tax lien can lead to harsh results. That was what appeared to happen to Francisca Leger, who lost the title to her home to a private purchaser of a municipal real estate tax lien, for failure to pay real estate taxes assessed against a prior owner of her home. Ms. Leger, claiming that the holder of the tax lien went beyond mere strict application of the tax laws, and crossed the line into a denial of due process in the manner in which the tax title lien against her home was foreclosed, seeks relief from the judgment of foreclosure awarded to Ithaca Finance, LLC, ("Ithaca") the second-tier assignee of a municipal tax receivable originally held by the city of Lawrence. Ithaca argues that it holds a valid final judgment of foreclosure on the tax lien against Ms. Leger's property, and that it complied with its legal obligations under both the applicable statutes and in its contractual relationship with the assignor of the tax lien and with the city of Lawrence.

I conducted an evidentiary hearing on Ms. Leger's motion for relief from judgment on April 26, 2018. The parties filed post-hearing submissions on June 20, 2018. Due to illness of counsel, closing arguments were not held until January 29, 2019, after which I took the matter under advisement. For the reasons stated below, I find and rule that Ithaca and its predecessor failed to comply with their statutory obligations and with the binding conditions of the assignment from the city of Lawrence requiring them to communicate with Ms. Leger and to provide her with notice of the assignment of the tax receivable to Ithaca. I further find and rule that these failures deprived Ms. Leger of the due process to which she was entitled, and consequently, she is entitled to relief from judgment notwithstanding the statutory expiration of the right to petition for relief from the judgment of foreclosure of the tax title.

FACTS

Based on the facts stipulated by the parties, the documentary and testimonial evidence admitted at the hearing, other material submitted and not excluded in connection with the motion for relief from judgment, and my assessment as the trier of fact of the credibility, weight and inferences reasonably to be drawn from the evidence admitted at the evidentiary hearing, I make the factual findings below.

1. In 2006, the city of Lawrence prepared an Invitation for Bids for the Assignment and Servicing of Delinquent Tax Liens ("Invitation"). [Note 1] This invitation to bid included the opportunity to purchase both tax receivables not yet in tax title, that is, those not yet the subject of a recorded instrument of taking, as well as a portfolio of tax titles.

2. On October 30, 2006, Plymouth Park Tax Services LLC d/b/a XSPAND ("Plymouth Park") submitted its Invitation for Bids Response ("Bid Response") offering to purchase a portfolio of delinquent tax receivables owed to the city of Lawrence. The Bid Response included a request that Plymouth Park also be awarded a right of first refusal to purchase current tax receivables not yet in tax title as well as the portfolio of receivables already reduced to a tax title. [Note 2]

3. Included with the Bid Response were documents describing Plymouth Park's offer, including a description of its plan to collect delinquent taxes and to communicate extensively with taxpayers, as well as a description of the company's former operations in Camden, New Jersey. [Note 3]

4. On November 3, 2006, the city of Lawrence determined Plymouth Park to be the successful bidder, subject to City Council approval, and began negotiating the terms of the agreement for the assignment of a portfolio of tax receivables to Plymouth Park. In a letter describing Plymouth Park's proposed services, dated September 28, 2007, Kurt V. Shadle, Senior Vice President of Plymouth Park, acknowledged that the contemplated sale of tax titles and current receivables was governed by G. L. c. 60, § 2C, and he further acknowledged and represented, "The purpose of the state law is to NOT take property but to pay back delinquencies. XSPAND works with property owners to develop plans to resolve the issues." [Note 4] (emphasis in original)

5. I find the supplemental materials given to the city of Lawrence by Plymouth Park, including the letter of September 28, 2007, represent terms and conditions of the acceptance by the city of Lawrence of Plymouth Park's bid.

6. On or about September 26, 2008, the city of Lawrence and Plymouth Park entered into a purchase and sale agreement for the transfer of both non-tax title tax delinquencies and tax titles to Plymouth Park. The city and Plymouth Park thereafter consummated the sale and Plymouth Park became the city's assignee of the right to collect current tax delinquencies including the delinquency pertaining to 116 Bunkerhill Street (the "Property"), then owned by Felicia Hilario. [Note 5]

7. On October 20, 2008, Plymouth Park sent a Change of Address Announcement to the city of Lawrence, notifying the city that Plymouth Park, which had been owned by Bear Stearns, had been purchased by J.P. Morgan Chase. [Note 6]

8. On June 9, 2009, the city of Lawrence executed a "Bulk Sale Assignment of Tax Receivables[,]" including the tax receivable for the Property, to Plymouth Park. The assignment was recorded with the Essex County North Registry of Deeds, ("Registry") on June 10, 2009 in Book 11635, Page 230. [Note 7]

9. Prior to the purchase of 116 Bunkerhill Street by the present defendant Francisca Leger, the previous owner of the Property, Felicia Hilario, owed the city of Lawrence $3,229.66 in unpaid taxes for the fiscal years 2008 and 2009. [Note 8] Although there had not yet been a tax taking made with respect to this delinquency, the lien against the Property for these unpaid taxes was among the tax receivables assigned by the city of Lawrence to Plymouth Park.

10. On February 16, 2010, while the Property was still owned by Ms. Hilario, Plymouth Park recorded an Instrument of Taking by Assignee against the Property for unpaid taxes for fiscal years 2008 and 2009, plus interest and incidental expenses, totaling $3,878.25. The instrument of taking was recorded in the Registry in Book 11946, Page 340. [Note 9]

11. On July 31, 2012, defendant Francisca Leger purchased the Property from Ms. Hilario for $164,340.00, by a deed recorded with the Registry on August 1, 2012 in Book 13052, Page 20. [Note 10] Ms. Leger financed the acquisition with a $148,608.00 mortgage loan from RBS Citizens, N.A. ("Citizens Bank") [Note 11] and additional financing of $14,999.00 from the city of Lawrence. [Note 12]

12. In connection with the mortgage loan, Ms. Leger established an escrow account with Citizens Bank for the payment of property taxes, homeowner's insurance, and private mortgage insurance. [Note 13]

13. The settlement agent for the closing on Ms. Leger's purchase of the Property was attorney Jasmin Polanco, who represented Citizens Bank and issued a title insurance policy as an agent of First American Title Insurance Company. [Note 14] It is not clear from the record whether attorney Polanco was representing Ms. Leger at the closing as well as Citizens Bank.

14. In connection with the transaction, attorney Polanco neglected to obtain a municipal lien certificate from the city of Lawrence (although she charged Ms. Leger $65.00 for recording a municipal lien certificate, as reflected on the HUD-1 settlement statement) or otherwise make inquiry about the status of real estate taxes that may have been outstanding with respect to the Property. [Note 15] Had she done so, she would have discovered that taxes were overdue on the Property and that there had been a tax taking as a result of Ms. Hilario's failure to pay taxes when due. Paying the outstanding amount and obtaining and recording a redemption certificate to discharge the instrument of tax taking would have been a routine and simple matter addressed by paying the outstanding taxes out of the seller's gross proceeds at the closing.

15. On May 24, 2013, the city of Lawrence recorded a second instrument of taking against the Property for additional taxes unpaid by the prior owner, Ms. Hilario, for fiscal year 2012, which ended on June 30, 2012, one month prior to the purchase by Ms. Leger. This document incorrectly listed the Property as owned by Ms. Hilario and not Ms. Leger. [Note 16] The tax delinquency reflected in this instrument of taking also would have been discovered and paid at the closing out of the seller's funds had attorney Polanco ordered a municipal lien certificate.

16. Attorney Polanco completed the closing and allowed the conveyance of the Property to Ms. Leger and the granting of a mortgage from Ms. Leger to Citizens Bank to be finalized and recorded with the Registry, notwithstanding the extant instrument of taking for fiscal years 2008 and 2009 recorded with the Registry and notwithstanding the outstanding tax delinquency for fiscal year 2012. [Note 17] As a result, neither Ms. Leger nor Citizens Bank were made aware at the closing that there was an outstanding tax lien against the Property.

17. Since purchasing the Property in 2012, Ms. Leger has remained current in her mortgage loan payments to Citizens Bank, including the payments to the escrow account used by Citizens Bank to pay city of Lawrence real estate taxes going forward. Accordingly, Ms. Leger has remained current in her obligations to pay real estate taxes incurred since her purchase of the Property. [Note 18] No payments were made on the delinquent taxes incurred by Ms. Hilario, the previous owner.

18. On or about March 21, 2014, Plymouth Park assigned its right, title and interest in and to the tax title for the Property, to Ithaca Finance, LLC for consideration of $6,478.42, which it represented to be the balance then owed on the tax title account. [Note 19] The assignment was recorded with the Registry on March 24, 2014 in Book 13804, Page 274.

19. On or about March 31, 2014, Ithaca sent a letter, dated March 31, 2014, via first class mail, with a heading, "Notice of Assignment of Real Estate Tax Lien," addressed to Felicia Hilario and Francesca [sic] Leger at 116 Bunkerhill Street, Lawrence MA 01841. The address did not include a unit or apartment number, and it was addressed to Ms. Hilario as well as to Ms. Leger despite the fact that Ms. Hilario had not been an owner of the Property for nearly two years. At the time the letter was sent, Ms. Hilario, the former owner of the Property, still lived at the Property despite having sold it to Ms. Leger, as did Ms. Leger. [Note 20]

20. The letter purported to notify both Ms. Hilario and Ms. Leger that the tax lien against the Property had been assigned to Ithaca. The letter gave an address for Ithaca in Hollywood, Florida, along with a Florida telephone number to call for payoff information. [Note 21]

21. I find that the evidentiary presumption that the letter addressed and mailed to both Ms. Hilario and Ms. Leger was received by Ms. Leger, was successfully rebutted by Ms. Leger. Ms. Leger testified that she does not remember receiving the March 31, 2014 letter notifying her and Ms. Hilario of the assignment of the tax lien to Ithaca. I credit her testimony in this regard, and I find that the letter was not received by her, as I found her testimony to be credible, and as I find that the letter was received by Ms. Hilario, the former owner of the Property, who was also an addressee, and who was still living at the Property.

22. I find that the evidentiary presumption that the letter, addressed to Ms. Hilario as well as to Ms. Leger, was received by Ms. Hilario was not rebutted by any evidence at the hearing. Furthermore, I find that it is more likely than not that when Ms. Hilario received the letter, she either did not understand its import because of a language issue and did not give it to Ms. Leger for that reason, or chose not to disclose it to Ms. Leger because it would reveal to Ms. Leger that Ms. Hilario had failed to pay outstanding taxes on the Property before she conveyed the Property to Ms. Leger.

23. On May 20, 2014, Ithaca filed this action to foreclose the rights of redemption of the owner of the Property, but it mistakenly named Felicia Hilario as the owner of the Property in its complaint. [Note 22]

24. On December 12, 2014, the Land Court required Ithaca to file a motion to amend its complaint to list Ms. Leger as a defendant. [Note 23]

25. Following the issuance of a special citation and service on Ms. Leger, as well as on Citizens Bank, neither Ms. Leger nor Citizens Bank filed an appearance or responded to the complaint. Ithaca's motion for general default was allowed on May 19, 2016, and final judgment foreclosing the rights of redemption for the Property was issued on May 31, 2016.

26. Between the issuance of the final judgment on May 31, 2016 and the final expiration of any right to petition to redeem one year later, Ithaca did not give notice to Ms. Leger of her right to petition to redeem the Property, nor did Ithaca make any attempt to contact her for any reason.

27. On May 31, 2017, the one-year statutory right under G. L. c. 60, § 69A to petition to redeem after entry of judgment expired.

28. By a letter dated June 16, 2017, about two weeks after the statutory right to petition to redeem expired, Ithaca, for the first time since the entry of judgment, contacted Ms. Leger. The letter, with the heading, "Re: Change in ownership and request for occupancy information at 116 Bunkerhill Street, Lawrence, MA, 01841," notified Ms. Leger of the change in ownership of her Property to Ithaca as a result of the judgment and asked her when she planned to vacate the Property. [Note 24]

29. Ms. Leger filed a motion for relief from judgment in response on August 22, 2017.

30. The assessed value of the Property as of the filing of Ms. Leger's motion for relief from judgment was $251,600. [Note 25]

DISCUSSION

I. MS. LEGER HAS MET HER BURDEN OF DEMONSTRATING A DENIAL OF DUE PROCESS.

G. L. c. 60, §69A provides that, "No petition to vacate a decree of foreclosure…shall be commenced by any person other than the petitioner except within one year after the final entry of the decree…" The present motion to vacate was filed with the court more than one year following the entry of the judgment in this action. However, "[i]t is the policy of the law of [sic] favor redemption from tax sales…These equitable proceedings are not to be rendered futile by satisfying minimal constitutional guarantees." West v. Bd. of Selectmen of Yarmouth, 345 Mass. 547 , 550-551 (1963). "If there was a denial of due process, the stricture of (G. L. c. 60) § 69A would not apply." Town of Sharon v. Kafka, 18 Mass. App. Ct. 541 , 544 (1984). The burden of showing Ms. Leger was denied due process is a high burden to meet. See Vincent Realty Corp. v. City of Boston, 375 Mass. 775 (1978) (relief denied where notice was not given to property owner, but property owner had actual notice of proceeding). The "granting of the petition to vacate the decree rest[s] largely but not entirely in the discretion of the trial judge." Lynch v. City of Boston, 313 Mass. 478 , 480 (1943), quoting Bucher v. Town of Randolph, 307 Mass. 391 , 393 (1940). Motions to vacate judgments of foreclosure, "are extraordinary in nature and ought to be granted only after careful consideration and in instances where they are required to accomplish justice." Lynch v. City of Boston, supra, 313 Mass. at 480.

For the reasons stated below, I find and rule that Ithaca denied Ms. Leger the process to which she was due, by failing to comply with the statutory requirements of G. L. c. 60, § 2C to communicate with the taxpayer, and by failing to comply with the specific promises made by its predecessor in consideration for the assignment of the tax liens by the city of Lawrence. I further find and rule that Ithaca denied Ms. Leger due process by failing to give her the notice specifically required by G. L. c. 60, § 2C of the assignment from Plymouth Park to Ithaca.

II. PLYMOUTH PARK WAS OBLIGATED TO COMPLY WITH ITS PLAN FOR COMMUNICATING WITH TAXPAYERS.

There are two statutes governing the sale of the right to collect taxes by cities and towns to private entities. Tallage Lincoln, LLC v. Williams, Land Court Tax Lien Case No. 16 TL 001739 (Apr. 17, 2019) (Vhay, J.). One is G. L. c. 60, § 52, which allows cities and towns to sell tax titles by public auction. The other was added in 1996, when the Legislature broadened the authority of municipalities to sell current tax receivables as well as tax titles by a public bidding process, by passage of St. 1996, c. 375, § 1, which added G. L. c. 60, § 2C. The new statute, as amended by St. 2004, c. 295, § 2, also added considerable procedural protections for the benefit of taxpayers.

Relevant provisions of G. L. c. 60, § 2C, include the following:

(c) Tax receivables so assigned or transferred by an appropriate financial official shall be sold subject to the following conditions:

(1) The sale of tax receivables shall be by public sale to the most responsible and responsive offeror taking into consideration the following evaluation criteria: (i) the price proposed by the offeror; (ii) the offeror's qualifications and experience; (iii) the offeror's plan for communicating with the taxpayers; (iv) whether the offeror has a regular place of business in the commonwealth; (v) whether the offeror is in good standing with the department of revenue; and (vi) other criteria determined by the commissioner and the municipality. …

(9) A purchaser owning any tax receivable shall give notice to a taxpayer and to the appropriate municipality of the name, address, telephone number and preferred method of communication with said purchaser and any service agent acting on behalf of said purchaser within 12 business days of purchasing said tax receivable. Upon written request by the taxpayer in such form as may be determined by the municipality, the municipality shall furnish a copy of such information to the taxpayer within 12 business days of receiving such request. Whenever the purchaser or the service agent of such tax receivables shall change, the new purchaser or service agent shall provide the notice required herein within 12 business days of the effective date of such change. …

(g) The sale agreement between a municipality and a purchaser shall include, but shall not be limited to, the following provisions:

(3) Tax receivables may be assigned and transferred successively under the same terms and conditions and in the same manner as originally assigned and transferred, provided, however, that the instrument (i) shall be signed by the assignor or transferror and (ii) need not recite the purchase price.

In making its successful proposal to the city of Lawrence, Plymouth Park recognized its obligations under the statute and sought to impress upon the city its intent to establish a robust system of communication with taxpayers so as to facilitate payment of taxes rather than foreclosure of tax titles. In its Bid Response, Plymouth Park proposed the use of an "Asset Recovery Plan." In the Asset Recovery Plan, Plymouth Park promised to import delinquent tax title information into its digital BlueHound database and conduct proper due diligence including a list of ownership. [Note 26] Plymouth Park promised it would "undertake[] traditional collection procedures which include: skip tracing, collection campaigns and calling campaigns." [Note 27] Also, Plymouth Park promised to implement "non-traditional" collection efforts through its Mortgage Assistance Program, which provided "counseling and referral services to taxpayers to finance outstanding tax lien balances." [Note 28]

Plymouth Park also detailed its efforts in Camden, New Jersey as an example of how it intended to operate in Lawrence. [Note 29] In Camden, Plymouth Park noted that many Camden taxpayers were not capable of paying off the entire sum of their tax liens at once. [Note 30] As a response, Plymouth Park "implemented a systemized installment payment process that allows them to pay off their back taxes over a three-year term." [Note 31] In Camden, Plymouth Park also created agreements to "keep taxpayers on their plans," which included reminders through mail and telephone in the event of a late payment. [Note 32] When the city of Lawrence selected Plymouth Park as the winner of the public bid, one of the deciding factors was Plymouth Park's ability to effectively communicate with taxpayers through its Asset Recovery Plan procedures, its demonstration of its past performance in Camden, and its claimed intention to implement a similar operation in Lawrence. Thus the plans and promises made in the Bid Response, were binding on Plymouth Park upon acceptance of its bid, not just because it made the promises, but because the promises detailed how it would fulfill its general taxpayer communications obligations imposed by the relevant portions of G. L. c. 60, § 2C.

After acceptance of its bid, Plymouth Park acknowledged and accepted its obligation to comply with this plan for communicating with and assisting taxpayers as a condition of the assignment to it of tax receivables. In a letter to Lawrence's City Council president on September 28, 2007, Plymouth Park acknowledged that "[T]he purpose of the state law is to NOT take property but to pay back delinquencies" and reminded the city that the company will work with property owners to resolve the delinquency issue. [Note 33]

Ithaca argues that: (1) Plymouth Park's purchase of the tax liens did not explicitly require it to communicate with taxpayers to the extent that Plymouth Park described in its bid materials and (2) to the extent the promises made by Plymouth Park were binding on Plymouth Park, they were not binding on Ithaca because the assignment from Plymouth Park to Ithaca did not impose any such requirements on Ithaca.

Both arguments fail. With regard to the intent of § 2C, the promises made by Plymouth Park's bid materials were binding regardless of the terms of the contract between Plymouth Park and the city; these promises and the obligations they entailed were subsequently passed on to Ithaca through its purchase of the tax receivables.

The assignment of tax receivables by the city of Lawrence to Plymouth Park, to the extent that it did not explicitly require Plymouth Park to be bound by its promises in the Bid Response, was still subject to the requirements imposed by the statute and agreed to by Plymouth Park in its accepted bid. These requirements included "the offeror's plan for communicating with the taxpayers." G. L. c. 60, § 2C(c)(1). The source of the obligation is the statute, but the manner of complying with the statute was defined by the terms of the accepted Bid Response. Both the general requirement of the statute and the specific plan described in the Bid Response were binding on Plymouth Park. The acceptance of a successful bid imposes an obligation on the part of the bidder to adhere to its promises, even before the execution of a formal contract. "The reasonable construction [of the bidding statute] is to hold that the bidder is bound to stand by his proposal, at least after its acceptance…" Wheaton Building & Lumber Co. v. City of Boston, 204 Mass. 218 , 222-223 (1910). "In the public contracting domain, an invitation to bid upon certain conditions followed by the submission of a bid on those conditions creates an implied contract obligating the bid solicitor to those conditions." New England Insulation Co. v. General Dynamics Corp., 26 Mass. App. Ct. 28 , 30-31 (1988). Thus, Plymouth Park was bound to adhere to the plan it proposed to the city for an elaborate program of communications with delinquent taxpayers and assistance to them in becoming current before taking the drastic final step of foreclosing on tax titles.

III. ITHACA WAS BOUND BY THE SAME OBLIGATIONS AS PLYMOUTH PARK.

The assignment of the tax title for the Property conveyed by Plymouth Park to Ithaca was a simple assignment that purported to convey only "[a]ll of Assignor's right, title, and interest in and to the Tax Taking" of the Property to Ithaca. [Note 34] Ithaca argues that the failure of this document to impose any obligation to communicate with the taxpayer means that it took the tax title free of any such obligation. However, the statute requires that an assignee of a tax receivable or tax title take subject to both the statutory requirement of communication with the taxpayer, and subject to any contractual conditions to which the assignor was subject. G. L. c. 60, § 2C(g)(3) explicitly imposes such an obligation on an assignee of a tax lien: "Tax receivables may be assigned and transferred successively under the same terms and conditions and in the same manner as originally assigned and transferred,…." (emphasis added) Any attempt to transfer the tax receivables without the acceptance of the conditions to which the assignor was subject would violate both this explicit provision of the statute and would do violence to the statutory intent of allowing the sale of tax receivables only if the statutory protections for the taxpayer imposed by the statute are included as obligations of the assignee.

When determining legislative intent, "the starting point of our analysis is the language of the statute." Simon v. State Exam'rs of Electricians, 395 Mass. 238 , 242 (1985). Courts must look at statutes "in connection with their development, their progression through the legislative body, the history of the times, prior legislation, [and] contemporary customs and conditions . . . General expressions may be restrained by relevant circumstances showing a legislative intent that they be narrowed and used in a particular sense." Id. at 243, quoting Commonwealth v. Welosky, 276 Mass. 398 (1931). In determining the intent of the Legislature in building protections for the taxpayer into the statute, one need look no further than the language of the statute itself. In requiring that a municipality consider an offeror's "plan for communicating with the taxpayers," (G. L. c. 60, § 2C(c)(1)) the Legislature made clear that the dangers of transferring public tax receivables to private entities were to be tempered by requiring the private holders of tax receivables to make an effort to work with taxpayers to get delinquent taxes paid, as is the practice of municipalities. This requirement of the statute for a demonstration of an offeror's plan for communication with taxpayers would be frustrated if, as suggested by Ithaca, having promised an elaborate program of communication with taxpayers in order to secure the assignment from a municipality, the offeror could avoid these accepted responsibilities and conditions of the assignment by simply assigning the tax receivables to a successor private entity without those conditions. The statute does not allow such an escape hatch for private holders of tax liens; hence the requirement in subsection (g)(3) that any further assignment to a successor private entity be "under the same terms and conditions and in the same manner as originally assigned and transferred…"

IV. BOTH PLYMOUTH PARK AND ITHACA FAILED TO COMPLY WITH THEIR OBLIGATIONS TO COMMUNICATE WITH MS. LEGER.

Despite its acknowledgment of its obligation to communicate with delinquent taxpayers as a condition of the city's acceptance of its bid, there was no evidence offered to even suggest that Plymouth Park made any effort to contact Ms. Hilario while she remained the owner of the Property at any time from the moment Plymouth Park received the assignment of tax receivables on June 9, 2009 until Ms. Hilario sold the Property to Ms. Leger on August 1, 2012. I also find that Plymouth Park made no effort to contact, and did not contact Ms. Leger, at any time from the date she took ownership of the Property to March 21, 2014, the date Plymouth Park assigned the tax receivable for the Property to Ithaca. Similarly, once Ithaca accepted the assignment of the tax receivable for the Property, it made no effort to communicate with Ms. Leger at any time until after it knew the one-year right to petition to vacate the foreclosure had expired. The one exception to this willful failure to communicate was the sending of the statutorily required notice of the assignment from Plymouth Park to Ithaca, which I have found was mis-addressed to the prior owner of the Property and was, as a result, not received by Ms. Leger. Not only was this notice not received by Ms. Leger, but it was not "provided" within the meaning of the statute, as it was addressed so as to be received by the wrong person.

This failure to communicate with the taxpayer until it was too late for the taxpayer to petition to redeem the Property was, I find, the result of a willful plan to do the opposite of what is required by the statute. The intent of the statute is to foster communication and to insure that taxpayers will be knowledgeable about their rights to redeem. Implementation of the robust plan for communication with taxpayers promised by Plymouth Park would have fulfilled the legislative intent, which is presumably why Plymouth Park was the successful bidder. Instead, Ithaca implemented a very different plan: to lay low in the hopes that the taxpayer would remain unaware of her rights, and to not communicate with the taxpayer until the one-year right to petition to redeem after the foreclosure judgment had expired. During the entire time Ithaca held the tax title for the Property, from March 21, 2014, it sent only one mis-directed letter, which was, predictably, not received by Ms. Leger, and did not attempt to communicate with her again until June, 2017, about two weeks after the one-year anniversary of the foreclosure judgment. I find that this timing was no coincidence, but rather was the result of a plan to maximize the possibility that Ms. Leger would fail to take action to protect her property, in the hopes that Ithaca could realize a windfall, acquiring a property worth a few hundred thousand dollars for an investment of only a few thousand dollars.

This is not surprising. As another judge of this court has cogently observed:

Tax foreclosure proceedings brought and pursued by private entities are outside the political process. Such entities are responsible to their investors, not the citizens of a city or town, and their goals and incentives are not the same. Maximizing return on investment may not include accommodation to individual circumstance to the same extent a municipality, acting for itself, might otherwise deem warranted.

Tallage LLC v. Meaney, 23 LCR 375 , 377 (Mass. Land Ct. 2015) (Long, J.).

This conduct on the part of Ithaca violated the terms and conditions of the assignment, which was subject to the agreement made by Plymouth Park to communicate with taxpayers as outlined in its Bid Response, and it violated the direct requirements of G. L. c. 60, § 2C.

V. ITHACA VIOLATED AN EXPLICIT STATUTORY REQUIREMENT OF SECTION 2C.

"A purchaser owning any tax receivable shall give notice to a taxpayer and to the appropriate municipality of the name, address, telephone number and preferred method of communication with said purchaser and any service agent acting on behalf of said purchaser within 12 business days of purchasing said tax receivable…Whenever the purchaser or the service agent of such tax receivables shall change, the new purchaser or service agent shall provide the notice required herein within 12 business days of the effective date of such change." G. L. c. 60, § 2C(c)(9).

Ithaca acquired the tax receivable for the Property on March 21, 2014. On or about March 31, 2014, Ithaca purported to comply with this statutory requirement by mailing a notice directed to Ms. Hilario, the former owner who still lived at the Property, and to Ms. Leger, addressed to both at the Property. It apparently made no attempt to comply with the requirement that it notify the municipality of its acquisition of the tax receivable.

The mailing of the notice gives rise to a presumption that it was received. "The depositing of a letter in the post-office, addressed to a merchant at his place of business, is prima facie evidence that he received it in the ordinary course of the mails; and where there is no other evidence, the jury should be so instructed." Huntley v. Whittier, 105 Mass. 391 (1870). "The depositing of a letter in the post office, properly addressed, postage prepaid, to a person at his place of business or residence, is prima facie evidence that it was received in the ordinary course of mails." Evelland v. Lawson, 240 Mass. 99 , 103 (1921). This rebuttable presumption is known as the "mailbox rule." Hoefs v. CACV of Colorado, LLC, 365 F.Supp.2d 69, 72-73 (2005); quoting Schikore v. BankAmerica Supplemental Ret. Plan, 269 F.3d 956, 961 (9th Cir.2001).

"The presumption so arising is not a conclusive presumption of law, but a mere inference of fact, founded on the probability that the officers of the government will do their duty, and the usual course of business; and, when it is opposed by evidence that the letter was never received, must be weighed, with all the other circumstances of the case, by the jury, in determining the question whether the letter was actually received or not;…" Huntley v. Whittier, supra, 105 Mass. at 392. A party may rebut this presumption through proof of non-receipt. West v. Bd. of Selectmen of Yarmouth, 345 Mass. 547 (1963).

As the finder of fact, I have found that the inference of receipt arising from the evidentiary presumption described above, was rebutted with respect to Ms. Leger by (1) the fact that the notice was not properly addressed, in that it was addressed not only to Ms. Leger, but to the prior owner as well, who was still a resident at the Property to which the notice was addressed; (2) the fact that Ms. Hilario, the former owner, whom I have found did indeed receive the notice, would have a motive not to pass it on to Ms. Leger, since it would reveal her failure to pay taxes that were her responsibility prior to the closing; and (3) Ms. Leger's testimony, which I credit, that she did not receive the letter. Accordingly, I have found that Ms. Leger has overcome the evidentiary presumption of receipt and I have found that Ms. Leger never received the notice.

I have further found that, the mailbox rule presumption having not been rebutted with respect to Ms. Hilario, the letter was received by her. I further find and rule that the failure of Ithaca to give notice was due to its own failure to properly address the notice to the present owner of the Property and not to her and the prior owner, who was also a resident at the same address. Accordingly, Ithaca failed to give the notice required by the statute.

Ithaca also violated the notice requirements of G. L. c. 60, §§ 2C(c)(9) and 2C(g)(4) by its failure to notify the city of Lawrence of the assignment to it of the tax receivable on Ms. Leger's Property within 12 business days of the transfer, and by its failure to provide the city with a copy of the recorded assignment. Charles Boddy, the attorney for the city of Lawrence, testified that the first time that he was notified of Ithaca's ownership of the city of Lawrence's tax receivables by assignment from Plymouth Park was when the city was served with a citation as a party in interest in another tax lien case. [Note 35] There was no evidence presented of any statutorily compliant notice to the city by Ithaca of its acquisition of the Plymouth Park tax receivables.

VI. ITHACA VIOLATED MS. LEGER'S RIGHT TO DUE PROCESS.

Each of these failures on Ithaca's part was individually a sufficient denial of due process to justify a ruling in favor of the taxpayer. Taken together, they are a shocking illustration of the observation that "the power to tax involves the power to destroy." Tallage LLC v. Meaney, supra, 23 LCR at 377, quoting McCulloch v. Maryland, 17 U.S. 316, 431 (1819).

Failure to make a conscientious and reasonably diligent effort to provide notice is a breach of due process which may justify the court in vacating a foreclosure judgment. See Boston v. James, 26 Mass. App. Ct. 625 (1988) (city's attempts at certified mail service were so ineffectual as to constitute a denial of due process and to warrant vacating judgment of foreclosure after expiration of one-year period for petitioning for relief from judgment of foreclosure). "[T]he only legitimate interest of a town in seeking to foreclose rights of redemption is the collection of the taxes due on the property, together with other costs and interest. When an owner of property taken for the nonpayment of real estate taxes comes forward with sufficient funds to redeem the property, the purpose of the statute has been fulfilled." Id., at 630. That purpose of the statute is no different when the foreclosing entity is a private entity instead of a municipality.

The denial of due process caused by Ithaca's and Plymouth Park's combined failures to comply with the conditions of the assignment and the requirements of the statute was not cured by Ms. Leger's receipt of the special citation served on her by the Land Court upon the initiation of the tax foreclosure proceeding. Ithaca's obligations, described above, did not end upon the filing of the tax foreclosure case. Plymouth Park's promise, and Ithaca's obligation, to communicate with the taxpayer required it to make sufficient information known to the taxpayer so that she would be in a position to exercise her right to petition to redeem. Ithaca had an obligation, which it purposefully failed to fulfill, to contact Ms. Leger before, not after, her right to petition to redeem had expired.

CONCLUSION

For the reasons stated above, I find and rule that Ithaca failed to comply with its statutory obligations and the conditions imposed by the city of Lawrence's acceptance of the terms of Plymouth Park's bid, to communicate with Ms. Leger with respect to the tax receivable pertaining to her Property, and thereby deprived Ms. Leger of her due process rights. Accordingly, the motion for relief from the tax foreclosure judgment of May 31, 2016 is ALLOWED. The judgment is VACATED.

Having vacated the judgment of foreclosure, I hereby find pursuant to G. L. c. 60, § 68 that the defendant Francisca Leger has a right to redeem the Property, and I treat her motion to vacate the judgment as an answer and offer to redeem.

Plaintiff Ithaca Finance, LLC, is hereby ORDERED to submit, within thirty days of the date of this decision, a motion for a finding of redemption setting forth the amount of taxes assessed and not paid for fiscal years 2008 and 2009, and any subsequent years, supported by affidavits with respect to taxes, costs, interest and legal fees, if any, attributable to those tax years, provided, however, that no interest, costs or legal fees accrued after June 9, 2009 shall be included, that being the date Plymouth Park acquired the tax receivable for the Property, and the court having found that both Plymouth Park and Ithaca failed to comply with their obligations to implement the communications plan that Plymouth Park had represented it would implement from the inception of the first assignment by the city of Lawrence of the tax receivables including that for the Property.

So ordered.