HENRY VARIAN and MIRIAM VARIAN v. BANK OF NEW YORK MELLON s/b/m to The BANK OF NEW YORK as SUCCESSOR TRUSTEE to JPMORGAN CHASE BANK, N.A., as Trustee for the Holders of SAMI II Trust 2006-AR7, Mortgage Pass-Through Certificates, Series 2006-AR7; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; and WELLS FARGO BANK, N.A.

The motion to dismiss before the court asks it to rule that the plaintiffs (landowners and mortgagors) are legally unable to proceed under the try title statute, G.L. c. 240, §§ 1-5, to require the defendant, who claims to hold a mortgage on plaintiffs’ land, to bring an action to establish that the defendant truly does hold title to that mortgage. Well aware that in doing so, it is drawing a conclusion directly contrary to that reached by at least one other judge of this court, and followed by a panel of federal appellate judges, this court concludes that the law allows these plaintiffs to bring such an action, and that the motion to dismiss must be denied.

This is an action to try title under G.L. c. 240, §§ 1-5, commenced April 24, 2012. The plaintiffs, Henry Varian and Miriam Varian, allege that they hold title to, and are in possession of, real property that is subject to a mortgage; however, they allege the party claiming to be the mortgagee, the defendant The Bank of New York Mellon s/b/m to The Bank of New York as Successor Trustee to JPMorgan Chase Bank, N.A., as Trustee for the Holders of SAMI II Trust 2006AR7, Mortgage Pass-Through Certificates, Series 2006AR7 (“Bank of NY”), lacks that status. The Varians seek a judgment from the court requiring those claiming to be the current holder of the mortgage to come forward and prove their title.

On October 19, 2012, Bank of NY, Mortgage Electronic Registration Systems, Inc. (“MERS”), and Wells Fargo Bank, N.A. (“Wells Fargo”) (collectively, “defendants”) filed an answer that claims title to the subject property, and denying any need to bring an action to prove their title. See G.L. c. 240, § 3. In the same filing, the defendants assert a counterclaim for declaratory judgment, asking the court to declare that Bank of NY is the holder of both the note and mortgage, and has full authority to foreclose. [Note 1] On June 10, 2013, the defendants filed a motion to dismiss pursuant to Mass. R. Civ. P. 12 (b) (1) and 12 (c). [Note 2] The plaintiffs filed an opposition on July 8, 2013. The court (Piper, J.) held a hearing on the motion on July 10, 2013. Following argument, the court offered the parties the opportunity, if desired, to file supplemental legal memoranda addressing the case Brewster v. Seeger, 173 Mass. 281 (1899), which counsel had not earlier considered. Both parties did file supplemental papers on July 29, 2013, and the court took the motion under advisement.

The issue posed by this motion to dismiss is whether a mortgagor in possession and with record title may bring a try title action to compel a putative mortgagee to prove its title prior to foreclosure. The following facts are relevant and are found in the pleadings in a way that makes them available for the court’s consideration for purposes of motions filed under Mass. R. Civ. P. 12 (b) (1) or Mass. R. Civ. P. 12 (c):

1. The plaintiffs hold title to, and remain in possession of, the property (“Property”) known as 54 Union Street, Nantucket, Nantucket County, Massachusetts by deed dated July 23, 1998 and recorded with the Nantucket County Registry of Deeds (“Registry”) in Book 588 at Page 70.

2. On or about July 16, 2006, the Varians executed a promissory note in an original principal amount of $722,500.00. The note was payable to Countywide Bank, N.A. 1.

3. The note was secured by a mortgage granted by the Varians and recorded with the Registry in Book 1031 at Page 225. The grantee of the mortgage was MERS.

4. Recorded with the Registry on April 2, 2010, in Book 1226 at Page 76, is an instrument purporting to assign the Mortgage from MERS to “The Bank of New York Mellon s/b/m to The Bank of New York as Successor to JPMorgan Chase Bank, N.A., as Trustee for Holders of SAMI II Trust 2006AR7 c/o BAC Home Loans Servicing, L.P.”

5. Recorded with the Registry on November 16, 2011, at Book 1300, Page 289, is an instrument titled “Confirmatory Assignment of Mortgage” purporting to “confirm[] and correct[] the prior Assignment of Mortgage..., which failed to state the entire legal name of the assignee.” According to the Confirmatory Assignment of Mortgage, the subject Mortgage was assigned from MERS to “The Bank of New York Mellon as s/b/m to The Bank of New York as Successor Trustee to JPMorgan Chase Bank, N.A., as Trustee for the Holders Of SAMI II Trust 2006AR7, Mortgage Pass-Through Certificates, Series 2006-AR7, c/o BAC Home Loans Servicing, LP.”

6. The Varians allege that both the April 2, 2010 Assignment and the November 16, 2011 Confirmatory Assignment are “fraudulent, invalid, void and/or legally inoperative” for a number of reasons, the legal or factual sufficiency of which are not at issue in this narrowly-framed motion to dismiss, see note 2, supra.

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Mass. R. Civ. P. 12 (c) provides: “Motion for Judgment on the Pleadings. After the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings. If, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.” When a motion for judgment on the pleadings seeks dismissal, the court must take all wellpleaded allegations in the complaint as true, and all contravening assertions in the defendants’s papers as false. A judgment on the pleadings may enter in a party’s favor where there are no material facts in dispute on the face of the pleadings, and the undisputed facts establish, as a legal matter, that that party is entitled to a judgment. See Wing Memorial Hosp. v. Deparment of Pub. Health, 10 Mass. App. Ct. 593 , 596 (1980). In reviewing a motion to dismiss under Mass. R. Civ. P. 12 (b) (1) for lack of subject matter jurisdiction, the court accepts as true the factual allegations in the complaint, as well as any favorable inferences which reasonably may be drawn from those allegations. Ginther v. Comm’r of Ins., 427 Mass. 319 , 322 (1998). The try title statute, G.L. c. 240, §§ 1-5, provides that: “If the record title of land is clouded by an adverse claim, or by the possibility thereof, a person in possession of such land... may file a petition in the land court stating his interest, describing the land, the claims and the possible adverse claimants so far as known to him, and praying that such claimants may be summoned to show cause why they should not bring an action to try such claim.” G.L. c. 240, § 1 (emphasis supplied). There is no requirement that a plaintiff plead a “superior” title. Id. [Note 3]

Our Supreme Judicial Court in Bevilacqua v. Rodriguez, 460 Mass. 762 (2011), ruled that a mortgagee (or one standing in the mortgagee’s shoes) may not use the try title statute to compel a mortgagor to try its title. Id. at 776-77. To bring an action to compel another to try its title, a plaintiff must allege an adverse claim, or the possibility thereof. G.L. c. 240, § 1. Bevilacqua, 460 Mass. at 773. The title of mortgagee and mortgagor ordinarily are not adverse to each other. 460 Mass. at 776 (“The crucial point is that a mortgage, by its nature, necessarily implies the simultaneous existence of two separate but complementary claims to the property that do not survive the mortgage or each other.”). “[A] litigant who asserts that he or she is the holder of a mortgage necessarily asserts that the mortgage continues to exist and that the mortgagor’s claims to the property remain valid.” Id. Accordingly, the Bevilacqua court ruled that the plaintiff, in asserting a status as mortgagee, was not able to use the try title statute to obtain relief against a party, the original mortgagor, who held an interest which was complementary and not adverse. Id. at 777.

A recent decision of this court, however, has extended this principle of Bevilacqua to the reciprocal scenario, where the try title plaintiff is the mortgagor, seeking a try title judgment against a putative mortgagee. Doing so in effect, flips Bevilacqua on its head, ruling that a plaintiff mortgagor “cannot bring a try title action to compel a purported mortgagee to try its mortgage title before a foreclosure.” Abate v. Freemont Inv. & Loan, 20 LCR 630 , 632 (2012) (Misc. Case No. 12 MISC 464822) (Foster, J.) (emphasis added). Citing to Bevilacqua, the order in Abate reasoned “[t]he try title act may be used to challenge a party’s claim to hold a mortgage only after that party has foreclosed, because it is only after foreclosure that the mortgagee has a claim of superior title.” 20 LCR at 632. The Court of Appeals for the First Circuit has since cited favorably to Abate, affirming dismissal of a complaint to try title filed by a mortgagor for the reason that the defendant’s “interest in the [p]roperty as mortgagee was not adverse to the [plaintiffs’] interest as mortgagor under Massachusetts law.” Lemelson v. U.S. Bank Nat’l Assoc., No. 12-2275, slip op. at 12 (1st Cir. July 1, 2013). The First Circuit went on to say: “Uncertainty as to who holds a valid mortgage does not provide the requisite adversity to cloud a mortgagor’s claim of equitable title.” Id. at 14 n. 7. [Note 4]

For the following reasons, this court today parts from the earlier decision of the Land Court in Abate, and from the First Circuit’s treatment of Massachusetts law in Lemelson. This court respectfully suggests that the outcomes in these two cases are not compelled by Bevilacqua. The opposite alignment of the parties in those cases--between Bevilacqua, on the one hand, where a party asserting rights as mortgagee sought to compel its mortgagor to try title, and Abate and Lemelson, on the other, where it was the mortgagors seeking to require putative mortgagees to try their titles--is critical. Bevilacqua v. Rodriguez was not Rodriguez v. Bevilacqua.

Apparently noting that a mortgagor and putative mortgagee might, on some set of facts, have claims to the same property that are adverse, the Bevilacqua court noted: “[A] plaintiff in a try title action may be heard to claim that a mortgage no longer exists, that claims to the contrary are adverse, and that the putative mortgagee should be required to bring an action trying the claim. See, e.g., Brewster v. Seeger, 173 Mass. 281 (1899).” 460 Mass. at 776-77 (citation in original). Brewster v. Seeger was a try title action brought by a title holder against a putative mortgagee. 173 Mass. at 282. The dispute in Brewster centered around a certain mortgage, originally given to one Perry, “as he is guardian of Elsie S. Adams, a minor.” Id. After the minor had come of age, Perry assigned the mortgage, which was later paid and discharged. Id. Elsie S. Adams, now married and known as Elsie S. Seeger, claimed that title to the mortgage had vested in her once she came of age, that Perry had no authority to assign the mortgage, and that she had “entered to foreclose.” Id. The suit was brought to test Seeger’s right to enter as mortgagee to avail herself of the mortgagee’s remedy of foreclosure by entry. [Note 5] Thus, the case of Brewster v. Seeger was a pre-foreclosure try title action, commenced by a title holder in possession, against one who claimed to be the mortgagee and was taking affirmative steps to terminate the right of redemption under the mortgage. The central issue in the case was whether the assignor of a mortgage possessed the requisite title or authority to make a valid assignment. Notably, the Supreme Judicial Court (Holmes, J.) reached the merits without pausing to consider whether defendant’s theory of the case, i.e., that the two parties had complementary estates, required the court to dismiss for lack of an adverse claim. 173 Mass. 282 -83. It should be obvious why: because on the plaintiff’s theory of the case, Elsie Seeger, the putative mortgagee, was a stranger to the property, holding no title whatsoever.

To be sure, the difference between Brewster v. Seeger and the case at bar is that in Brewster, the plaintiff alleged the mortgage was fully discharged by payment of the underlying obligation, the dispute being whether the payment had been made to the appropriate person; in the pending case, the plaintiffs admit the mortgage is outstanding, but dispute that the defendant is the holder. In both instances, however, the merits of the case turn on the validity, or not, of an assignment. And a judgment in favor of the defendant would establish (or confirm) a relationship of mortgagor/mortgagee. Just as it would have made no sense to force Brewster to wait until Seeger foreclosed her “mortgage” before allowing Brewster to file a try title action, it makes no sense to order that today, in ruling on the pending motion. This is because if Brewster prevailed in his try title, the result would be that Seeger had no ability to proceed with foreclosure, which is the same outcome sought in the case at bar. If the Varians prevail fully on the merits of this case, then Bank of NY will lack the ability to foreclose. An interpretation of the try title statute that requires the Varians to suffer a foreclosure to take place before contesting the ability to foreclose is strange indeed, and certainly not the conclusion compelled by Bevilacqua.

The crucial difference between the instant case and the Bevilacqua decision is that in Bevilacqua, the plaintiff, as a matter of law and logic, had to admit the existence of the subject mortgage, admit he stood before the court as the mortgagee, and simultaneously allege that the defendant Rodriguez was the mortgagor. Taking all these allegations together, the plaintiff failed to plead any adversity of interest. See 460 Mass. at 775: “The title that [plaintiff] might claim as mortgagee, however, would be inconsistent with the relief that might be provided under G.L. c. 240, §§ 1-5.” Here, the Varians’ title is established independently of the mortgage because they indisputably hold a fee interest under a recorded deed. The Varians have not pleaded any facts which, if true, would be inconsistent with the relief they seek. On the contrary, and unlike the facts in Bevilacqua, the Varians allege that Bank of NY is a stranger to the title. Admitting that they (the Varians) have granted a mortgage to some party does not prevent them from arguing that Bank of NY is not that party. As between the mortgagor and a stranger–who holds no title but nonetheless claims to–clearly there is an adverse relationship.

The problem with reading Bevilacqua to require dismissal on the facts in this case is that such a reading assumes that the party claiming to be the mortgagee is, in fact, the mortgagee, despite the contents of the plaintiff’s complaint. Here, Bank of NY’s argument is that the court should dismiss this action because the Varians and Bank of NY hold complementary title. But this assumes Bank of NY is in fact the “mortgagee,” and this is disputed at the very core of the Varians’ complaint. The Varians claim that Bank of NY is not the mortgage holder, and if that is true (and the court must assume it is when ruling on a motion under Rule 12), then Bank of NY’s contrary claim absolutely is adverse to the Varians’ title. Allowing dismissal under Rule 12 because Bank of NY alleges it is the mortgagee would be tantamount to granting a motion to dismiss because the defendant is convinced it will prevail at trial: to do so simply sidesteps the legal standard the court must apply when considering these dismissal motions.

The First Circuit in Lemelson in a footnote says that “[u]ncertainty as to who holds a valid mortgage does not provide the requisite adversity to cloud a mortgagor’s claim of equitable title.” Lemelson, supra at 14 n. 7. It is not clear why this should be the case, and there is no state appellate decisional law the court is aware of to compel that conclusion. Both Bevilacqua, supra, at 776-77, and Brewster v. Seeger, supra, assume that uncertainty--as to whether a certain mortgage is valid--provides the requisite adversity. [Note 6] There is no compelling reason why uncertainty as to the holder of a mortgage should be treated any differently. [Note 7], [Note 8]

None of this is to say that Bank of NY will ultimately be unable to prove its title, either by assembling a record and moving for summary judgment, or by offering evidence at trial. In fact, the court would be remiss if it did not express a healthy skepticism about the merits of the Varians’ challenge to Bank of NY’s title, most of which focuses on whether the signatories on certain instruments possessed the proper authority. Contra G.L. c. 183, § 54B. Nonetheless, the determination of those questions needs to await further proceedings. It is

ORDERED that the Motion to Dismiss pursuant to Mass. R. Civ. P. 12 (b) (1) and 12 (c) is DENIED. It is further

ORDERED that within fourteen (14) days from the date of this Order, the parties are to file a joint report detailing their collective or respective views on how the court should proceed to adjudicate this case on the merits. Without limitation, the required report should address the need for additional discovery, if any, and whether either party intends to file a motion under Mass. R. Civ. P. 56. The court will review the submission of the parties and issue appropriate instructions without another hearing unless otherwise ordered.

So Ordered.