TOWN OF WARE and GLEN DESJARDINS, REBECCA DESJARDINS, RICHARD O'REILLY and KERRY-SUE O'REILLY v. OWNERS UNKOWN and HULL FORESTLANDS LP

Introduction

This is a long-closed tax lien foreclosure case involving approximately 34 acres of undeveloped, landlocked woodland in Ware taken by the Town for unpaid taxes, and a claimant (Intervenor-Defendant Hull Forestlands LP) ("Hull"), years after learning of the Judgment foreclosing the right of redemption and long after the property was sold to new owners, moving to vacate that Judgment and assert ownership of the land.

A trial was held on the merits of the motion. As more fully explained below, based on the witness testimony and exhibits admitted into evidence at the trial, my assessment of the credibility and reliability of that evidence, and the reasonable inferences I draw, the motion is DENIED.

Facts

These are the facts as I find them after trial.

The land at issue is an approximately 34 acre parcel of undeveloped, landlocked woodland in Ware, shown as Parcel 27-0-4 on tax assessor's Map 27. The parties are (1) the Town (which assessed the taxes on the parcel, took tax title when those taxes went unpaid, filed the action that foreclosed the right of redemption, and then auctioned the parcel to new owners), (2) intervenor-plaintiffs Glen Desjardins, Rebecca Desjardins, Richard O'Reilly, and Kerry-Sue O'Reilly (the new owners of the parcel, who purchased it from the Town at public auction), (3) intervenor-defendant Hull Forestlands LLC (which currently asserts ownership of the parcel and has moved to vacate the foreclosure judgment), and (4) defendant "owners unknown," as explained below.

The record does not indicate when Parcel 27-0-4 was first designated as a taxable parcel and placed on the assessor's map. What was in evidence was that it was on the map and assessed as a separate parcel at least as early as Fiscal Year 1998 (July 1, 1997 - June 30, 1998) since those were the unpaid taxes that lead to the taking. According to Hull, the parcel is not based on any particular individual deed, or at least none that Hull could trace. But based on the presumption of administrative regularity [Note 1] and simple common sense, [Note 2] I infer, and so find, that there was a reason and basis for its creation and, in any event, any owner paying reasonable attention to their land would know from the parcel's location on the assessor's map that they owned it, would know the parcel designation it was given by the assessor, and would know that they needed to pay taxes on it. [Note 3]

No one reached out to the assessor with this information, however, and by the mid-1990's the assessor's office could not identify or locate the owner of the parcel. Thus, in 1997, the Town applied to the Massachusetts Department of Revenue for authorization to assess the parcel to "owners unknown" and, on August 27, 1997, after review of the Town's search efforts, the Department of Revenue gave that authorization. [Note 4] Tax bills were then prepared and made public with that designation, all clearly identifying the parcel (Tax Map 27, Parcel 4).

After six years went by with no one coming forward to claim the parcel or pay its taxes, the Town took tax title on October 17, 2003 with the recording of an Instrument of Taking at the Hampshire Registry of Deeds. [Note 5] G.L. c.60, §§53 & 54, 77. The recording of that instrument was "prima facie evidence of all facts essential to the validity of the title so taken," and title immediately vested in the Town subject only to the right of redemption until foreclosure of that right. G.L. c.60, §54. [Note 6]

No claimant emerged after an additional year of waiting so, on July 28, 2004, the Town proceeded to file this action to foreclose the right of redemption. In connection with that filing, a copy of the complaint was recorded at the Registry [Note 7] and two further searches for the owner, one by the Town [Note 8] and the other by an independent court-appointed title examiner, [Note 9] were conducted. Neither search found anyone. Service by publication then occurred in accordance with the court's order, [Note 10] no one responded, and judgment "forever foreclos[ing] and barr[ing]" all rights of redemption of the property" was entered on March 7, 2006. [Note 11] That judgment was promptly recorded at the Registry of Deeds. [Note 12]

Nothing further happened until October 2008 when the Town scheduled and gave notice of an upcoming public auction in December at which its tax title would be sold. Intervenor- Defendant Hull had purchased land owned by Catherine McLaughlin in May 2008 - land described in that deed as "Ware Assessors Map 26, Parcel 16", [Note 13] a parcel abutting the land at issue in this proceeding - and, after purchasing it, its principal William Hull thought that land might also potentially include this tax parcel (Map 27, Parcel 4). [Note 14] Mr. Hull saw the auction notice, wrote to the Town on December 1, 2008 asserting his belief that Hull owned the property, and the Town withdrew the parcel from auction, expecting to hear further from Mr. Hull. However, neither Mr. Hull nor anyone else made any follow-up with the assessor's office thereafter - no proof of ownership, no tender of back taxes, and, most significantly, no motion to vacate the judgment in this case. Indeed, Hull made no effort to put together any such proof. It did not have a title search conducted, or a survey.

After waiting nearly five years and hearing nothing, the Town once again scheduled the parcel for auction, this time for February 28, 2013, and published due notice. Mr. Hull saw the notice, wrote to the Town asserting Hull's potential ownership and protesting the sale, but again provided neither proof of ownership, [Note 15] nor tender of back taxes, nor motion to vacate the foreclosure judgment.

This time the Town proceeded with the auction. Despite knowing that the auction was going forward, Hull did not seek an injunction. Instead, Mr. Hull attended the auction, handed up an unsupported letter of protest, [Note 16] and then made a bid. That bid was topped by the Intervenor Plaintiffs (Glen Desjardins, Rebecca Desjardins, Richard O'Reilly, and Kerry-Sue O'Reilly), who received and recorded a Treasurer's Deed approximately a month later (March 25, 2013). [Note 17] During that month, Hull made no attempt to file a court proceeding or enjoin the delivery of the Treasurer's Deed. Indeed, he waited more than a year after the property was conveyed (until "late 2014 or early 2015") to hire a surveyor or even conduct a "preliminary" survey. Tellingly, the surveyor's opinion was that this parcel was not included in Hull's deed from Ms. McLaughlin. Mr. Hull then hired a title attorney who thought it did, and the surveyor's new plan, now including this parcel, was produced on June 26, 2015.

Without any court review of its accuracy, and despite knowing of its conflict with the Treasurer's Deed to the intervenor-plaintiffs issued and recorded 2 ½ years before, Mr. Hull immediately went to the Registry and recorded his plan. [Note 18] He then wrote to the intervenor-plaintiffs, offering to sell them whatever interest he had in that land for a price over five-times what he had spent on it ($317,000 on a $60,000 expenditure). When the intervenor-defendants refused, Mr. Hull waited nearly another year to file a "try title" action against them in this court. Hull Forestlands LP, et al. v. Desjardins, et al., 16 MISC. 000324, filed June 13, 2016. In that action, Hull alleged both record title of this parcel and, in the alternative, title by adverse possession. Since record title to the parcel is in the intervenor-plaintiffs pursuant to the Judgment in this case and the subsequent Treasurer's Deed, Hull's "try title" action was stayed pending the filing and outcome of a motion by Hull to vacate this Judgment. That motion was filed on August 22, 2016 - 10 ½ years after the Judgment it seeks to vacate was entered - and is the motion addressed in this Memorandum and Order.

Further facts are addressed in the Discussion selection below.

Discussion

Judgments in tax lien cases foreclosing the right of redemption must be challenged within one year after entry. G. L. c. 60, §69A. If they are not, those challenges are forever barred. Town of Andover v. State Fin. Services. Inc., 432 Mass. 571 , 577 (2000). As the Andover court noted:

This bar protects the public's need for an efficient and final determination of any dispute regarding a public taking, so that title to the land taken can be settled. Any public policy issues have been resolved by this enactment. The Legislature has determined that the public interest in marketable titles for tax takings outweighs considerations of individual hardship after one year.

Andover, 432 Mass. at 577 (internal quotations and citations omitted).

The only exception to that one-year bar is if the entry of the decree involves a denial of due process. Town of Brewster v. Sherwood Forest Realty, Inc., 56 Mass. App. Ct. 905 , 906 (2002). Even then, motions to vacate 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, 313 Mass. 478 , 480 (1943), citing Russell v. Foley, 278 Mass. 145 , 148 (1932). See also Vincent Realty Corp. v. City of Boston, 375 Mass. 775 , 780, n. 6 (1978) (citing Lynch and Russell, and reversing Land Court's allowance of motion to vacate).

The one-year period to challenge the Judgment in this case expired 9 ½ years ago. Thus, Hull can only succeed in vacating the Judgment if it proves both: (1) that the person from whom its interest derives (Catherine McLaughlin) actually owned the parcel at issue, and (2) that a "due process" violation occurred and is presently actionable. For purposes of this motion I need not, and do not, reach the issue of Ms. McLaughlin's ownership because (a) there was no due process violation, and (b) even had such a violation occurred, the time to assert it has long since passed.

There Was No Violation of Due Process

The "due process" violation Hull alleges was the Town's failure to identify Ms. McLaughlin (whose interest Hull bought) as the property's owner and then serve her with the foreclosure complaint in this action. But the Town was not obligated to find Ms. McLaughlin and ensure she received actual notice. Jones v. Flowers, 547 U.S. 220, 226 (2006), Andover, 432 Mass. at 574-576. Its only "due process" obligation was to conduct a reasonably diligent search for the property owner and then serve them as best it could pursuant to that search. See id. This it did.

For purposes of this motion I assume, without deciding, that Ms. McLaughlin owned the parcel. Hull argues that a reasonably diligent search would have shown that ownership and how to find her. I disagree, for these reasons.

First, there is no reason to doubt the sincerity of the Town's efforts to find the parcel's owner. It is interested in collecting taxes, and had every incentive to locate the owner so that it could collect them.

Second, the Town conducted a search for the owner in 1997 at the time it applied to the Department of Revenue for "owners unknown" assessment. No owner could be found. That search was thorough enough to satisfy the DOR, and "owners unknown" authorization was given.

Third, the Town conducted another search at the time it filed this action. No owner could be found.

Fourth, an experienced Land Court title examiner appointed by this court conducted an independent search at the time of filing, and this too could not find an owner.

Fifth, this court reviewed those searches in connection with the Town's motion for service by publication, and it found those searches sufficient. Tellingly, nothing was found that indicated further efforts were warranted or likely to yield results. Service by publication was then authorized.

Sixth, Hull's own surveyor's opinion was that the McLaughlin property did not include this parcel, an opinion not changed until a title attorney hired by Hull instructed otherwise.

And Seventh, it took extensive efforts by Hull's title attorney to put together his case for Ms. McLaughlin's ownership - efforts far beyond those the Town could reasonably be expected to undertake, particularly where, as discussed below, Ms. McLaughlin had obligations as a property owner to stay in touch with her property and the assessor's office. See Jones, 547 U.S. at 236 (rejecting need for tax authority to conduct "open-ended" search for property owner's new address, especially when owner has obligation to keep address updated with tax collector).

This is not a case where no notice was given. As authorized by the court after review, notice was given by publication in the Ware River News, a newspaper of general circulation in the town. Notice by publication in these circumstances passes constitutional muster. Numerous diligent efforts to locate the owner had turned up nothing. Ware is a small community (by 2010 census, population 9,872), and it is more than reasonable to expect that an owner of property in the town would have either seen the notice or had it brought to their attention. The notice specifically identified the parcel (Map 29, Parcel 4) and, as previously discussed, a reasonably attentive landowner would have known, or certainly should have known, that they were its owner. Hull says that Ms. McLaughlin lives out of state and thus would not have read the published notice. But this does not mean that she did not know about it. Living out of state does not mean that a person with a strong connection to a small town - here, a large landowner - would not read the local newspaper or have friends in town who do and would then pass on the information. [Note 19] Even if she had no actual knowledge, she is accountable for it. As the Supreme Judicial Court has noted, "[r]eal property owners know, or at least are on constructive notice, that real estate taxes must be paid" and the "failure to pay property taxes will result in tax takings and foreclosure proceedings." Andover, 432 Mass. at 576.

Nor is this a case of "rushed judgment" where the property owner had no chance to learn of the tax deficiency and taking and no time to address them. The property was assessed "owner's unknown" in 1997. The tax taking did not occur until six years later (2003), and was publicly recorded at the Registry of Deeds. The foreclosure proceeding was not filed for yet another year (2004), was also publicly recorded, and did not go to judgment (again publicly recorded) until two years after that (2006). The tax title was not sold to new owners until a public auction seven years after that (2013) and, by that time, Hull (which had purchased Ms. McLaughlin's interest in 2008) had had actual knowledge of the taking, the foreclosure, and the foreclosure judgment for almost five years without moving to vacate that Judgment. Due process only requires "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 Mulane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)). Here there were many opportunities and years of time before the tax title was sold for the owner to come forward and move to vacate the foreclosure Judgment. None of those opportunities were taken. Due process was not violated.

Even If There Was A Due Process Violation, The Time To Assert It Has Long Past

Even if there was a due process violation in connection with the notice in this proceeding, Hull's motion to vacate the judgment must still be denied. As noted by the Appeals Court in affirming Brewster v. Sherwood Forest Realty Inc., 7 LCR 141 (Mass. Land Ct. 1999) (Green, J.):

[T]he fact that the year's limit for redemption gives way in the face of a clear due process violation does not mean that the time is extended indefinitely. The public policy interest in giving "conclusiveness to decrees foreclosing tax titles," quoting from the title of St. 1945, c. 226 which inserted [G.L. c.60,] §69A, must be weighed in the balance; and thus our decisions have stressed repeatedly that the time factor is properly weighed against the party challenging the tax title, [citing cases], especially where, as in Lancaster v. Foley [ 15 Mass. App. Ct. 967 (1983)] and Lamontagne v. Knightly, [ 30 Mass. App. Ct. 647 (1991)], the party making the challenge has sat on his rights for years after hearing of the foreclosure . . . . The principle applied in the cited cases seems not to be the strict equitable doctrine of laches but rather the statutory policy embodied in §69A [citing cases]. Whether the owner delayed unreasonably in seeking to vacate a foreclosure decree after learning of its entry is a question of fact . . .

Brewster v. Sherwood Forest Realty Inc., 56 Mass. App. Ct. 905 , 906 (2002). In making that factual assessment, as then- Land Court Judge Green noted in the Decision the Appeals Court affirmed:

[T]hough the statute does not address specifically the period for redemption by an owner who received no notice of the foreclosure prior to decree, the one year redemptive period prescribed in G.L. c.60, §69A, is instructive on the question of how promptly such an owner should move to redeem after becoming aware of the decree. If an owner who receives notice of foreclosure must move to redeem within a year following entry of a decree, I see no reason why an owner who first learns of the decree at a later time should be allowed twenty-three years to seek to vacate the decree after learning of it.

Brewster, 7 LCR at 144.

There is also no reason why an owner - here, Hull - should be allowed eight years after actual knowledge to move to vacate, particularly in the circumstances of this case. Judgment was entered in 2006. Hull, which purchased Ms. McLaughlin's interest in this and other land in 2008, learned of that Judgment by the Fall of that year. Despite believing that the interests it purchased included this parcel, it did nothing to confirm that "belief" (no survey, no title search), made no proffer of the taxes owed, made no attempt to vacate the Judgment at that time and, indeed, did nothing but write an unsupported letter to the Town. The Town withdrew the parcel from auction to give Hull time to make its case, but heard nothing further until it again put the parcel up for auction five years later. During those five years, Hull continued to do nothing. It did not conduct a survey. It did not conduct a title search. It made no proffer of the taxes owed. And it made no motion to vacate the foreclosure Judgment. When the Town gave notice of the auction in 2013, Hull - which had made no contact with the Town at any time during the five year interim - wrote to the Town again, but again provided no support for its claim. It still had not conducted a survey. It still had not conducted a title search. It still made no proffer of the taxes owed. It still made no motion to vacate the foreclosure Judgment. And, despite knowing that the auction was going forward (Mr. Hull attended in person and submitted a bid), it made no attempt to obtain a court injunction of that sale. It did nothing during the month before the Town deeded the parcel to the intervenor-plaintiffs despite its full knowledge that that conveyance was occurring. It did not have a survey or title search done until nearly two years after that conveyance (July 2015). And it did nothing in court for yet another year (2016).

In these circumstances, I find Hull's eight year delay after having actual knowledge of the foreclosure Judgment to be unreasonable, and find and rule that Hull's motion to vacate is thus barred.

Conclusion

For the foregoing reasons, the motion of Hull Forestland LP to vacate the Judgment in this case is DENIED.

SO ORDERED.