ROBERT BARISH v. EDITH BARISH and OCWEN LOAN SERVICING, LLC.

Introduction

This is a partition case between an adult son, plaintiff Robert Barish, and his mother, defendant Edith Barish, who were joint tenants of record of the property at 19 Appleton Road in Natick. [Note 1] Partition was by sale, and the property has now been sold by order of this court. Neither party has raised any issues regarding that sale or the price so obtained. The only remaining disputes between them are the division of the $225,864.19 net proceeds from the sale, [Note 2] and of $22,681.89 from the equity taken from the house in a 2013 refinancing.

These issues were tried before me, jury-waived, in an evidentiary proceeding with witness testimony, exhibits and arguments offered in support of each side's contentions. Based on my assessment of the credibility, weight, and the inferences I draw from that evidence, [Note 3] for the reasons set forth below, I find and rule that Edith is entitled to the full $22,769.50 from the 2016 refinancing plus whatever interest has, or should have, accrued on that sum, and that the $225,864.19 in net proceeds from the sale of the house shall be split equally between Edith and Robert.

Facts

As the parties correctly noted in the trial proceedings, the task before the court is to determine the agreement between the parties regarding the property at issue — most of which was verbal, and then corroborated by their course of dealing — and then to enforce that agreement. The analysis involves both the parties' explicit understandings regarding the property and, where not otherwise modified by those understandings, the legal consequences of their tenancy in common (subsequently changed to joint tenancy) and applicable partition law. See Moseley v. Moseley, 240 Mass. 22 , 25-26 (1921) (parties' agreements can modify what otherwise would govern tenancies in common — in Moseley, an agreement by a co-tenant to pay rent); Stylianopoulos v. Stylianopoulos, 17 Mass. App. Ct. 64 , 66 n. 4 (1983) (same).

These are the facts as I find them after trial.

The property partitioned was the lot at 19 Appleton Road in Natick and the single family house that was on the lot at the time of the partition. That house was torn down by the purchasers who bought the property at the partition sale, and they then built an entirely new structure, showing that the value of the property at the time of the partition sale (the entirety of the $426,000 sale price) was solely in the land (a highly desirable location in Natick) and the use and dimensional rights that the former house grandfathered. Thus, nothing that either Edith or Robert physically did (or neglected to do) to the house during the time they owned the property increased or decreased its fair market value at the time of sale. Accordingly, no adjustments to compensate one party or the other for disproportionate contributions to physical improvements or responsibility for loss from neglect are appropriate. See G.L. c. 241, §23; Asker v. Asker, 8 Mass. App. Ct. 634 , 638-639 (1979) (to be compensable, improvements must have resulted in an increase in property value, i.e., the price obtained at sale).

Disproportionate contributions to the maintenance of the property's value during their ownership (e.g., mortgage, taxes, insurance), not otherwise offset by "any benefit which the party claiming compensation has received from the common land", might still have been subject to G.L. c. 241, §23 evaluation. See Stylianopoulos, 17 Mass. App. Ct. at 69-70. But here, as discussed more fully below, these maintenance contributions were part of the parties' overall agreement regarding the property, as well as being offset by the benefits they received, and are thus addressed in that context.

This was not a classic "tenant in common" situation, where each party was intended to have co-equal rights and responsibilities in all aspects of the property from beginning to end. To the contrary, the house was purchased for Edith to live in and maintain, with Robert intended to exercise his rights only when Edith left. She chose the house, negotiated its purchase, arranged its financing, and paid all of its financing and acquisition costs wholly on her own, with no contribution or expected contribution from Robert at that time. The agreement was that she alone would live there (Robert, fresh out of college, stayed only a few months until he found his own place), she would pay all its bills, and — like many children for their elderly parents — Robert would take care of the mowing and plantings in the yard. Implicit in this (and explicit in the parties' later conduct), was the agreement that Edith — close to retirement, and never the best of money managers — would be able periodically to refinance the property and take equity from it to pay property-related obligations and supplement her retirement income for personal needs. Robert was part of the transaction only because Edith could not qualify for the mortgage on her own, and he was put on the deed as a tenant in common to secure his risk as a co-signer of the note. [Note 4]

The consequence of the deed, which I take as the intent of the parties, was that Robert would be a 50% owner of whatever equity there was in the property at the time of its disposition. Edith's ability periodically to take and keep equity from refinancings of the property made perfect sense in the context of the transaction. It was Edith's house, and it was her obligation to pay its bills. Robert, personally, made only minimal cash and other contributions towards it over the years. With the continually-rising real estate market in Natick, whatever equity remained to be divided at the time of disposition would be a more than fair return for the risks he took as a co-signer on the notes, and any major risks were effectively covered by his being a tenant in common with the ability to force a partition sale at any time he felt unreasonably exposed financially. See O'Brien v. Mahoney, 179 Mass. 200 , 203-204 (1901). By the same token, by having Robert on the deed, Edith knowingly took the risk that such a sale could come at any time, leaving her with only half the then-equity in the house. Her protection of having enough money to supplement her upcoming retirement was her ability periodically to take and keep equity from the house in connection with refinancings.

The purchase took place on July 15, 1992 with a $104,000 mortgage and an 8.375% interest rate. Edith paid the entire down payment and financing costs out of her savings (an expenditure of over $30,000). Both signed the note and mortgage.

The property was refinanced on June 9, 1998 for a lesser amount ($93,400) and lesser interest rate (6.875%). Both Edith and Robert signed the new mortgage and note. So far as the record shows, Edith had been current with all the bills, and the mortgage principal had been steadily reduced. $5,794.54 was needed to bring the new mortgage to $93,400 and for its associated closing costs, which Robert paid. I find that he did so by agreement of the parties, with no expectation of reimbursement — a modest contribution in recognition of the value he would ultimately receive thanks to his mother's role in finding the house. It was his only payment towards the property out of his own funds, ever, other than periodic lawn maintenance costs, all of which were relatively minor and nothing compared to Edith's expenditures. [Note 5]

The property was refinanced again on July 30, 2004, this time for $146,600. Both Edith and Robert signed the new mortgage and note. $57,725.38 in equity was taken from the property. This went to Edith, who had retired some years earlier and needed the money to supplement her retirement income. She was also planning on using some of the money to do work on the house. As previously noted, I find that this was by agreement of the parties, reflecting Edith's needs now that she was no longer working, the continuing significant appreciation in the value of the property (Edith had chosen well when she selected it), the parties' recognition that the money should be hers as an appropriate balance in their ownership of its equity, and further find that this agreement applied to all subsequent refinancings. As noted above, the deal between them was that Edith would live in the house as long as she could, and this clearly required periodic refinancings to address her cash needs. Any other type of arrangement would have given Robert an unwarranted windfall from what was only a minimal outlay of cash on his part. [Note 6] Consistent with this, the deed was changed on August 31, 2004 to make Edith and Robert joint tenants with rights of survivorship. [Note 7]

The property was refinanced a last time on September 3, 2013, this time for $180,000 and a lower interest rate of 4.25%. Again, both Edith and Robert signed the new mortgage and note. An additional $47,695.84 in equity was taken from the property. This time, however, Robert put the money into an escrow account, seeking to control its use. Edith had fallen behind on various property-related bills, the house needed work, she was struggling with the housekeeping, and Robert was concerned about the effect of these unpaid bills on his credit rating and the risk of losing the house to foreclosure. Accordingly, over the next three years, he used $25,013.95 of the money to fix the roof, bring the property taxes current, roto-rooter the drains, pay three lawn maintenance bills (although he should have paid these from his personal funds), and to pay for Edith's health insurance and the cost of the rehabilitation facility she had been in after an injury. He did not assert a right to keep any of it for himself until October 2016 — over three years after the refinancing took place. [Note 8]

In 2016, when Edith could no longer keep up with the mortgage using only her retirement income, Edith attempted to withdraw the rest of the money from the 2013 refinancing ($22,681.89 remained). As noted above, by agreement and the parties' past practice, she was entitled to do so, or at least to have it used to pay property-related bills. Robert, however, blocked the withdrawal, moved the money to another account, and, in his October 1, 2016 letter, stated that it would "remain in [his] possession, held at the bank, until the property is sold." Trial Ex. 11 at 2. Rather than use the money for the further repairs the house needed or to keep the mortgage and taxes current, he declared that he would keep it "until such time as the house was sold" and, at that point, take half of it for himself. Id. If the result was that "the house [fell] into arrears again with the Town of Natick or the mortgage company," so be it; "I will allow foreclosure proceedings on the property to move forward." Id. Notably, he did not use — or even offer to use — any of his own funds to pay any property-related bills, despite being a co- owner. Under his bargain with Edith, this was his right, to be sure. But to insist on that right, he was obligated to live up to his side of the bargain and release the remainder of the funds from the refinancing ($22,681.89) to Edith. That obligation remains.

The inevitable resulted. With the mortgage unpaid and the property taxes in arrears, the bank took initial steps towards foreclosure and the town put a tax lien on the property. Also, Edith clearly needed to move to an assisted living facility. [Note 9] As was his right, and what he should have done rather than withhold the remaining cash from the 2013 refinancing from Edith, Robert brought these partition proceedings. See O'Brien, 179 Mass. at 203-204. The house has now been sold, and Edith is in assisted living. Robert has achieved his goal of protecting his credit rating (he owns a cannabis-accessory business), and is entitled to a share of the net sale proceeds. Even he admits that the size of that share is far more than he expected. Rather than the $250,000 sale price he anticipated as a maximum [Note 10] (which would have left approximately $50,000 in equity to be divided between he and Edith), the house sold for $426,000, leaving $225,864.19 in net sale proceeds.

Analysis

As set forth above, in accordance with the parties' agreement and corroborating conduct, Edith is entitled to the full $22,681.89 remaining from the cash received at the 2013 refinancing, plus all interest that has accrued, or should have accrued, on those funds. Whatever portion of those funds that Robert has used to pay his lawyer's fees, the costs of this partition proceeding, or anything else, must be restored and paid to Edith.

The $225,864.19 from the net sale proceeds shall be divided as follows. Pursuant to G.L. c. 241, §22, Robert is entitled to reimbursement of the $255 filing fee for the partition petition, $187.27 for the summons and cost of service of process on the defendants, and $325 in legal fees incurred in connection with drafting the petition, [Note 11] since it is clear that Edith would never have agreed to the sale of the property absent the bringing of the petition. I decline Robert's request for any further legal fees, since I find that both parties contributed equally to the ultimate outcome — an advantageous sale price of $426,000 — and acted cooperatively throughout the sale process without the need for a partition commissioner and the associated expense of that commissioner. Each side should pay their own counsel for those activities and expenses.

This leaves $225,096.92 to be divided, which I find and rule should be 50-50. As detailed above, the parties agreed on how the expenses and cash withdrawn from refinancings were to be allocated while Edith was in possession. Both share responsibility for the unpaid taxes and mortgage payments subsequent to the 2013 refinancing — Robert for not using the escrowed funds to pay them, and Edith for not contributing more than she did from her own retirement income — so no adjustment, to one party or the other, is appropriate for those sums. As previously noted, because nothing done to the house, or not done to it, contributed to or detracted from its ultimate sale price, no adjustments are appropriate for that.

The joint tenancy reflects the parties' agreement on the disposition of the property upon the death of either. The only "gap" in the parties' explicit understandings is the disposition of the net proceeds from the property's sale, whenever and however that occurred, and here the law (and their implicit agreement from the specific wording in the original deed) plugs that gap. "[T]here is a rebuttable presumption that partitioned property should be equally divided." Canepari v. Pascale, 78 Mass. App. Ct. 840 , 844 (2011). That presumption has not been rebutted. Indeed, the parties' original deed, explicitly stating a 50-50 ownership, reflects it. Accordingly, it applies.

Conclusion

For the foregoing reasons, Robert shall pay Edith $22,681.89 from the cash proceeds of the 2013 refinancing of the 19 Appleton Road property, plus accrued interest on that sum from and after October 1, 2016 (when he stopped paying Edith's and property-related expenses from the escrowed funds and declared his intention to make no further expenditures for those purposes), or that total shall be deducted from his share of the net sale proceeds from the August 30, 2017 partition sale and paid to Edith.

Robert is to be paid $767.27 from the net sale proceeds to reimburse him for the filing fee for this action, the service fees, and the fees awarded by this court for the reasonable time spent by his attorney drafting and filing the partition petition.

The remaining $225,096.92 from the net sale proceeds is to be divided and paid equally to Edith and Robert. Edith has already had two partial payments from her share, so the current distribution to her should be reduced by those amounts.

Judgment shall enter accordingly.

SO ORDERED.