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In re Reznikov

United States District Court, D. Massachusetts

February 7, 2017

In re FANNI REZNIKOV, Debtor,
v.
MARK G. DEGIACOMO, Trustee, Estate of Fanni Reznikov, Defendant. JAMES B. NUTTER & CO., Plaintiff,

         Chapter 7

          MEMORANDUM AND ORDER

          ALLISON D. BURROUGHS U.S. DISTRICT JUDGE

         Appellant James B. Nutter & Company (“Nutter”) appeals a final judgment of the Bankruptcy Court denying its motion for summary judgment and entering summary judgment in favor of Appellee Mark G. DeGiacomo, the trustee for the bankruptcy estate of Fanni Reznikov. For the reasons set forth below, the Court affirms the judgment of the bankruptcy court.

         I.BACKGROUND

         Fanni Reznikov resided at 143 Gould Street, Needham, Massachusetts, in a condominium unit that she owned. In July 2008, Reznikov obtained a reverse mortgage on the property. She executed an adjustable rate note on July 16, 2008 in favor of First Call as the lender. The note was secured by a first position home equity conversion mortgage on the 143 Gould Street property. The mortgage was filed with the Norfolk County Land Court on July 22, 2008. The notary acknowledgement on page nine of the mortgage states:

         On this 16 day of July, 2008 before me personally appeared

         Fanni Reznikov

to me known and known to me to be the individual(s) described in and who executed the foregoing instrument, and duly acknowledged to me that he/she/they executed the same. [. . .]

         First Call subsequently assigned the mortgage to Nutter, and the assignment was recorded at the Norfolk County Land Court on January 13, 2015.

         Reznikov filed a Chapter 7 bankruptcy petition on February 17, 2014. Schedule A to Reznikov's bankruptcy petition lists the 143 Gould Street property with a fair market value of $420, 000. On Schedule C to the bankruptcy petition, Reznikov asserted a homestead exemption of her interest in the property in the amount of $500, 000, pursuant to her declaration of homestead, which was filed pre-petition but after execution of the mortgage. On Schedule D to the bankruptcy petition, Reznikov listed Nutter as the holder of a claim in the amount of $301, 838.15 secured by the mortgage.

         On January 5, 2015, the trustee filed a complaint to avoid the mortgage under 11 U.S.C. § 544(a)(3), asserting that the notary's certificate of acknowledgment was defective. The trustee sought to preserve the value of the mortgage for the benefit of the estate pursuant to 11 U.S.C. § 551. In September 2015, the trustee moved for summary judgment, and Nutter filed a cross-motion for summary judgment. The bankruptcy court entered summary judgment in favor of the trustee and denied Nutter's cross-motion on March 29, 2016.

         II. DISCUSSION

         This Court has jurisdiction to hear appeals from “final judgments, orders, and decrees” of the bankruptcy court. 28 U.S.C. § 158. “An order granting summary judgment is a final order for purposes of appeal.” In re Dunn, 324 B.R. 175, 178 (D. Mass. 2005) (quoting Wicheff v. Baumgart (In re Wicheff), 215 B.R. 839, 840 (6th Cir. BAP 1998)). The Court “reviews de novo the bankruptcy court's rulings of law.” In re Spookyworld, Inc., 318 B.R. 1, 2 (D. Mass.), aff'd, 346 F.3d 1 (1st Cir. 2003).

         The sole question presented to the bankruptcy court, and to this Court on appeal, is whether the trustee may avoid, pursuant to the strong arm powers granted to him by 11 U.S.C. § 544, a mortgage containing a certificate of acknowledgment that does not contain explicit language affirming that Reznikov's execution of the mortgage was voluntary. Neither the Court nor the parties are aware of a case that addresses this precise question. Nutter contends that the bankruptcy court erred in deciding that the trustee may avoid the mortgage. The ...


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