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Bank of America, N.A. v. Casey

Supreme Judicial Court of Massachusetts

June 16, 2016

BANK OF AMERICA, N.A.
v.
DEBORA A. CASEY, trustee. [1]

          Heard Date February 11, 2 016.

         Certification of questions of law to the Supreme Judicial Court by the United States Court of Appeals for the First Circuit.

          Adam C. Ponte for the defendant.

          Mark B. Johnson for the plaintiff.

          Lawrence P. Heffernan & Danielle Andrews Long, for The Abstract Club & another, amici curiae, submitted a brief.

          Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, & Hines, JJ.

          BOTSFORD, J.

         We consider two questions certified to this court by the United States Court of Appeals for the First Circuit (First Circuit).[2] The questions, which arise in connection with a bankruptcy proceeding, concern the power and effect of an affidavit of an attorney executed pursuant to G. L. c. 183, § 5B, in relation to a mortgage containing a defective certificate of acknowledgment. The two questions ask:

"1. May an affidavit executed and recorded pursuant to [G. L. c.] 183, § 5B, attesting to the proper acknowledgment of a recorded mortgage containing a Certificate of Acknowledgment that omits the name of the mortgagor, correct what the parties say is a material defect in the Certificate of Acknowledgment of that mortgage?
"2. May an affidavit executed and recorded pursuant to [G. L. c.] 183, § 5B, attesting to the proper acknowledgment of a recorded mortgage containing a Certificate of Acknowledgment that omits the name of the mortgagor, provide constructive notice of the existence of the mortgage to a bona fide purchaser, either independently or in combination with the mortgage?"

         For the reasons that follow, we answer both questions yes, in certain circumstances.[3]

         1. Background.[4]

         By quitclaim deed dated September 29, 1999, Alvaro and Lisa Pereira (collectively, Pereiras) acquired title to the property located at 107 Colonial Drive in New Bedford (property). On October 1, 1999, the deed was recorded with the Southern Bristol County registry of deeds (registry). On December 27, 2005, the Pereiras refinanced the property, granting to Bank of America, N.A. (bank), a mortgage in the principal amount of $240, 000. The Pereiras individually initialed the bottom of each page of the mortgage agreement except the signature page, on which the full signature of each appears. Attorney Raymond J. Quintin also signed this page, as witness to the Pereiras' execution of the mortgage. The mortgage agreement contains a certificate of acknowledgment (acknowledgment) on a separate page. The Pereiras individually initialed the acknowledgment page at the bottom, but the acknowledgment itself is blank in the space designated for the names of the persons appearing before the notary public, and the Pereiras' names do not appear elsewhere on the page.[5] Quintin notarized the acknowledgment, affixing his signature and his notary public seal.[6] The mortgage agreement, with the acknowledgment included, was recorded in the registry on December 28, 2005.

         On January 19, 2012, Quintin caused to be recorded in the registry an affidavit titled "Attorney's Affidavit, M.G.L. Ch. 183, Sec. 5B" (attorney's affidavit) that was dated January 11, 2012. The attorney's affidavit states in relevant part:

"I, Raymond J. Quintin, do under oath depose and say that I am a practicing [a]ttorney . . .; that I have personal knowledge of the facts stated herein; that they are relevant to the title to land in the property described herein; and that this affidavit will be of benefit to clarify the chain of title; and do hereby under oath depose and say as follows:
"1. On December 27, 2005, I witnessed the execution of a [m]ortgage from Lisa M. Pereira and Alvaro M. Pereira to Bank of America, N.A. in the original principal amount of $240, 000.00, for the property located at 107 Colonial Drive, New Bedford .... I subsequently recorded this mortgage at the [registry] on December 28, 2005, in Book 7940, Page 14.
"2. Through inadvertence, the names of the parties executing this mortgage, Lisa M. Pereira and Alvaro M. Pereira, were omitted from the notary clause.
"3. I hereby certify that I witnessed their signatures on said mortgage, that they provided satisfactory evidence of their identity to me, and that they acknowledged that they signed said mortgage voluntarily.

         "Signed under the pains and penalties of perjury this 11th day of January, 2012.

"Raymond J. Quintin" [7]

         Approximately six months later, in July, 2012, Alvaro Pereira (debtor) filed a voluntary petition in the United States Bankruptcy Court for the District of Massachusetts, Eastern Division (Bankruptcy Court), seeking bankruptcy relief pursuant to Chapter 7 of the United States Bankruptcy Code, 11 U.S.C. §§ 301 et seq. (2012) (Chapter 7). In September, 2012, Debora Casey, the Chapter 7 trustee (trustee), filed an adversary complaint in the bankruptcy action, seeking to avoid the 2005 mortgage granted by the Pereiras to the bank on the ground that the mortgage contained a material defect, namely, the omission of the mortgagors' names from the acknowledgment. On April 16, 2013, the bank filed a motion for summary judgment, arguing that any material defect in the mortgage was cured by Quintin's attorney's affidavit. The trustee opposed the motion, and after a hearing, a judge in the Bankruptcy Court granted summary judgment to the trustee, concluding that the material defect in the mortgage -- the incomplete acknowledgment -- was not cured, and could not be cured, by the attorney's affidavit. Ruling on the bank's appeal, a judge in the United States District Court for the District of Massachusetts (District Court) reversed and granted summary judgment to the bank, based on the judge's determination that Quintin's attorney's affidavit did clarify the chain of title and in substance cured the material defect in the mortgage created by the absence of the mortgagors' names from the acknowledgment. Bank of Am., N.A. v. Casey, 517 B.R. 1 (D. Mass. 2014). The trustee appealed to the First Circuit, which concluded that a proper resolution of the appeal turned on undecided issues of Massachusetts law and accordingly certified to this court the two questions previously set out.

         2. Discussion.

         The starting point for both of the First Circuit's questions is that a recorded mortgage, like the Pereiras, ' that omits the names of the mortgagors from the mortgage's certificate of acknowledgment contains a material defect. Both questions then focus on whether and, if so, how an attorney's affidavit prepared pursuant to G. L. c. 183, § 5B (§ 5B), may affect the material defect and the recording of the mortgage.[8] Before turning to the questions, it is useful to summarize certain principles relating to deeds and mortgages that provide context for the questions.

         Under Massachusetts law,

"[t]itle to real estate may be transferred by a deed which has not been acknowledged or which contains a certificate showing a defective acknowledgement, and the deed is good against the grantor and his heirs and those having actual notice, G. L. (Ter. Ed.) c. 183, § 4 ...; but the grantor must acknowledge that he has executed the instrument as his free act and deed, and a certificate reciting that the grantor appeared before the officer making the certificate and made such acknowledgment must be attached to the instrument in order to entitle it to be recorded, G. L. (Ter. Ed.) c. 183, § 29; ... so that notice of the conveyance shall be given to all the world. . . . The certificate of acknowledgment furnishes formal proof of the authenticity of the execution of the instrument when presented for recording" (citations omitted).

McOuatt v. McOuatt, 320 Mass. 410, 413 (1946). Although mortgages are not specifically mentioned in G. L. c. 183, § 4, [9] referenced in the quoted passage from McOuatt, that statute applies to mortgages, and requires that a mortgage be recorded in the appropriate registry of deeds in order to provide effective notice to anyone beyond the parties to the mortgage transaction and those with actual notice of it. See Tramontozzi v. D'Amicis, 344 Mass. 514, 517 ...


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