United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
Bank of New York Mellon ("BNY") filed a Verified
Complaint in the Land Court for the Commonwealth of
Massachusetts, seeking to resolve disputes about the validity
and priority of a mortgage on the property at 20 Crosby
Village Road, Eastham, Massachusetts (the
"Property"). Defendant United States of America
removed the case to this court.
alleges that defendant Noreen Lezdey executed a mortgage with
BNY's predecessor in interest on July 13, 2004 (the
"Mortgage"). After the Mortgage was executed, but
before it was recorded at the registry of deeds, Lezdey
allegedly improperly: (1) transferred the Property to
defendant Jaime Holding Company, LLC ("Jaime
Holding"), a company controlled by Lezdey and her
husband, and (2) recorded the transfer at the registry before
the Mortgage was recorded. The United States Internal Revenue
Service (the "IRS") subsequently recorded tax liens
on the Property. The Mortgage was later assigned to BNY.
Defendant World-Pharm Trust ("World-Pharm"),
another Lezdey-associated entity, now holds title to the
Verified Complaint asserts two counts. Count I seeks a
declaratory judgment that BNY's "right, title and
interest in the [Property] is a valid first mortgage on the
[Property] and is superior to any lien, right or interest
held by the Defendants." Verified Complaint ¶24.
Count II seeks to quiet title to the property pursuant to
Massachusetts General Laws Chapter 240, Section 6.
moved for summary judgment, which Lezdey opposes. The motion
was referred to Magistrate Judge Marianne Bowler. In her
August 25, 2016 Report and Recommendation, the Magistrate
Judge recommended allowing BNY's motion in part, and
denying it in part. The Magistrate Judge concluded that the
Mortgage has priority over any of the defendants'
interests because defendants had actual notice of the
Mortgage when their interests were created. More
specifically, the Magistrate Judge concluded that Jaime
Holding had actual notice of the Mortgage at the time of
conveyance to because its principals, Lezdey and her husband
John Lezdey, had actual notice of the Mortgage. The remaining
defendants had actual notice because the Mortgage had been
recorded at the registry by the time they took interest in
the Property. The Magistrate Judge also concluded that BNY
had standing because the Mortgage had been properly assigned
to BNY under Massachusetts law, and that none of
defendants' asserted affirmative defenses were relevant
to the requested declaratory judgment.
Magistrate Judge recommended denying summary judgment as to
Count II, concluding that BNY had not proffered sufficient
evidence or sufficiently developed arguments in support of
judgment on the quiet title claim.
September 7, 2016, Lezdey filed an objection to the Report
and Recommendation (the "Objection"). On September
21, 2016, BNY filed a response to the Objection (the
court has considered the Magistrate Judge's Report and
Recommendation and the submissions of the parties on the
motion and the Objection. The court has also reviewed de
novo the questions of law and the issues to which
Lezdey has objected. See Fed. R. Civ. P. 27(c).
essence, Lezdey asserts that the Magistrate Judge improperly
relied on evidence submitted by BNY in deciding that BNY had
standing. In particular, Lezdey challenges three pieces of
evidence. First, she states that the Affidavit of Gabriel
Ruzzi (the "Ruzzi Affidavit") was inadmissible
because it was not based on personal knowledge, as required
by Federal Rule of Evidence 602 and Federal Rule of Civil
Procedure 56(4). See Objection at 3-4. Second, she
argues that the court should not have considered the Verified
Complaint, and its attachments, because (1) BNY did not
purport to rely on the Verified Complaint in its motion for
summary judgment, and (2) the BNY Vice President who verified
the Complaint, like Ruzzi, did not have the knowledge
necessary to address the purported assignment. See
id. at 5-6. Finally, Lezdey argues that the court should
not have considered the copy of the Mortgage attached to the
Affidavit of John Allen (the "Allen Affidavit")
because Allen did not establish that he had personal
knowledge that the attached Mortgage was true and correct.
See id. at 6.
objections are not meritorious. First, the Magistrate Judge
did not rely on the Ruzzi Affidavit to conclude that the
assignment to BNY was proper. See Report and Recommendation
at 20-21. Instead, the Magistrate Judge relied on copies of
the assignment filed at the Barnstable County Registry of
Deed that were attached to BNY's Verified Complaint.
Id. Therefore, as the Magistrate Judge noted,
Lezdey1s arguments concerning the Ruzzi Affidavit are
irrelevant. See Report and Recommendation at 9 n.5 (noting
that "[w]ith respect to a number of other arguments made
by defendants to exclude certain evidence proffered by
plaintiff to support summary judgment, this court did not
consider the challenged evidence thereby rendering
defendants' arguments moot . . .").
it was proper for the Magistrate Judge to consider the
documents attached to the Verified Complaint. The Federal
Rules of Civil Procedure provide that the court may consider
materials in the record that were not cited by the parties.
See F.R. Civ. P. 56(c) (3). The First Circuit has
held that "a Verified Complaint ought to be treated as
the functional equivalent of an affidavit to the extent that
it satisfies the standards explicated in Rule 56(e) . .
."' Sheinkopf v. Stone, 927 F.2d 1259, 1262
(1st Cir. 1991). Therefore, it was appropriate for the
Magistrate Judge to consider the government records attached
to the Verified Complaint.
documents are also properly authenticated. As the Magistrate
Judge correctly concluded:
[t]he copy of the assignment attached to the complaint is
stamped as recorded at the registry and verified as a true
and accurate copy of the assignment. (Docket Entry # 7,
¶ 20, p. 14); (Docket Entry #7, p. 47, Ex. H). It is
therefore properly authenticated, see Fed.R.Evid.
902, and admissible as a duplicate, see Fed.R.Evid.
and Recommendation at 8-9 n.5. The same analysis applies to
the copy of the Mortgage attached to the Allen Affidavit. It
too is stamped as recorded at the registry of deeds and Allen