Deutsche Bank Nat'l Trust Co. v. Fitchburg Capital, LLC

• Decision Date: 15 April 2015
• Docket Number: SJC–11756.
• Parties: DEUTSCHE BANK NATIONAL TRUST COMPANY, trustee, v. FITCHBURG CAPITAL, LLC, & others.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

471 Mass. 248

28 N.E.3d 416

DEUTSCHE BANK NATIONAL TRUST COMPANY, trustee¹

v.FITCHBURG CAPITAL, LLC, & others.²

SJC–11756.

Supreme Judicial Court of Massachusetts, Suffolk.

Submitted Jan. 5, 2015.

Decided April 15, 2015.

Jeffrey T. Angley (Robert K. Hopkins with him), Boston, for Fitchburg Capital, LLC.

Jeffrey B. Loeb, Boston, for the plaintiff.

Thomas O. Moriarty, Braintree, for Real Estate Bar Association for Massachusetts, Inc., & another, amici curiae, submitted a brief.

Philip F. Coppinger, for Ry–Co International, Ltd., amicus curiae, submitted a brief.

Present: GANTS, C.J., SPINA, CORDY, BOTSFORD, DUFFLY, LENK, & HINES, JJ.

Opinion

HINES

, J.

Under a 2006 amendment to the so-called “obsolete mortgage” statute, a mortgage becomes unenforceable after a certain number of years: a mortgage in which the term or maturity date is stated becomes unenforceable five years after the expiration of the term and a mortgage in which the term or maturity date is not stated becomes unenforceable thirty-five years after recording.³ G.L. c. 260, § 33

, as amended by St. 2006, c. 63, § 6. The defendant Fitchburg Capital, LLC (Fitchburg), foreclosed on two mortgages at a time when both mortgages would be unenforceable under the amended statute if the five-year statute of limitations was applicable. In this appeal, we interpret the amended statute to determine whether a mortgage stating only the term or maturity date of the underlying debt is a “mortgage in which the term or maturity date of the mortgage is stated” under G.L. c. 260, § 33, and whether the retroactive application of § 33 to mortgages recorded before the effective date of the amendment is constitutional.

The plaintiff, Deutsche Bank National Trust Company, as trustee of Ameriquest Mortgage Securities, Inc., Asset-backed Pass-through Certificates, Series 2004–R11 under the Pooling and Servicing Agreement dated as of December 1, 2004 (Deutsche Bank), filed a motion for partial summary judgment seeking a declaration that the mortgages are discharged under the obsolete mortgage statute and the foreclosure auction conducted on the property securing those mortgages is null and void.⁴ In a well-reasoned opinion, a Land Court judge granted partial summary

judgment for Deutsche Bank, concluding that reference in the mortgages to the term of the underlying debt was sufficient to state the “term or maturity date of the mortgage”; that the mortgages became obsolete pursuant to G.L. c. 260, § 33

; and, therefore, that the foreclosure sale conducted by Fitchburg was and void. The judge rejected Fitchburg's constitutional challenge to the statute. We transferred Fitchburg's appeal to this court on our own motion and now affirm.⁵

1. Background. The following facts, viewed in the light most favorable to the nonmoving party, are drawn from the summary judgment record. On or about April 30, 2012, Fitchburg conducted a foreclosure auction purporting to sell a property located at 11 Nutting Street, Fitchburg (property). Lee Bourque, a defendant, held record title to the property at all relevant times.

At the time of the purported foreclosure sale, Fitchburg held two mortgages secured by the property: (1) a mortgage dated April 13, 1999, from Lee Bourque to John Christiano, recorded May 14, 1999 (Christiano mortgage);⁶ and (2) a mortgage dated December 16, 2002, from Lee Bourque to Bourque Development Corp., recorded December 18, 2002 (BDC mortgage).⁷ There is no evidence that any party recorded an extension for either mortgage, an acknowledgement or affidavit that either of the mortgages was not satisfied, or a discharge of either mortgage.

The original mortgagee assigned the BDC mortgage to Fitchburg by agreement dated March 19, 2010. The Christiano mortgage was assigned to Fitchburg on August 5, 2011, by the then-current holder and prior assignee, the estate of Jack Rosenblit.

The obligation underlying the Christiano mortgage is a note dated April 13, 1999, with a maturity date of May 1, 2000. The only obligation indicated in the record as underlying the BDC mortgage is a note dated December 16, 2002, with a maturity date of December 31, 2003. Fitchburg asserts that the maturity date of the loan underlying the BDC mortgage was extended to December 1, 2007, but the agreement extending the note was never recorded.

Deutsche Bank holds a mortgage dated September 10, 2004, granted by Lee Bourque to Ameriquest Mortgage Company and recorded October 1, 2004 (Ameriquest mortgage). The mortgage was assigned to Deutsche Bank by agreement dated March 5, 2007.

On April 20, 2011, Lee Bourque filed a Chapter 13 petition for bankruptcy, which was later converted to Chapter 7. During bankruptcy proceedings, the parties discussed the relative priority of the mortgages and Deutsche Bank's counsel represented to Fitchburg's counsel that Fitchburg's mortgages held first and second priority on the property and that Deutsche Bank's mortgage was third priority. On September 26, 2011, Deutsche Bank filed a motion for relief from automatic stay to allow it to commence foreclosure proceedings, which acknowledged Fitchburg's first and second priority positions. Fitchburg did not oppose the motion, and asserts that it did not oppose because of the acknowledgment in the motion and conversation with Deutsche Bank's counsel in which the counsel recognized Fitchburg's first and second priority positions. On October 24, 2011, Fitchburg filed a motion for relief from automatic stay to allow it to commence foreclosure proceedings, which was granted on February 21, 2012. Fitchburg conducted an auction purporting to foreclose on the property on April 30, 2012. Fitchburg was the high bidder at the auction and recorded a foreclosure deed purporting to grant fee simple title to itself on that date.

2. Statutory background. The obsolete mortgage statute was enacted in 1957 to create a statute of limitations on foreclosures against mortgages that had been recorded for fifty years or more, unless either an extension or a document asserting nonsatisfaction

of the mortgage was recorded in the ten years preceding the end of the fifty-year period. G.L. c. 260, § 33

, inserted by St. 1957, c. 370. In 2006, the statute was amended to create two different limitations periods, one for any “mortgage in which the term or maturity date of the mortgage is stated” and one for any “mortgage in which no term of the mortgage is stated.” G.L. c. 260, § 33, as amended by St. 2006, c. 63, § 6. The limitations period for stated term mortgages is five years after expiration of the term or maturity date, and the limitations period for nonstated term mortgages is thirty-five years from the recording of the mortgage.⁸

Id. The amended statute allows enforcement of the mortgage if an extension or a document asserting nonsatisfaction of the mortgage had been recorded, but reduced the ten-year period in the prior statute to five years. Id. The amended statute also became self-executing so that any mortgage rendered obsolete by the terms of the statute is discharged without further legal action. Id.

3. Standard of review. We review a grant of summary judgment

de novo. Twomey v. Middleborough, 468 Mass. 260, 267, 10 N.E.3d 618 (2014)

, citing Ritter v. Massachusetts Cas. Ins. Co., 439 Mass. 214, 215, 786 N.E.2d 817 (2003). “Summary judgment is appropriate where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.” Twomey, supra, citing Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716, 575 N.E.2d 734 (1991). Mass. R. Civ. P. 56(c), as amended, 436 Mass. 1404 (2002).

4. Limitations period applicable to Fitchburg's foreclosure under obsolete mortgage statute. The judge allowed partial summary judgment in favor of Deutsche Bank after concluding that Fitchburg's purported foreclosure was void because the BDC and Christiano mortgages had been discharged as a matter of law before foreclosure.⁹ Although neither mortgage expressly contained the “term or maturity date” of the mortgage itself, the judge reasoned that “the dates and terms [of the underlying debt] set forth in the Christiano Mortgage and the BDC Mortgage are statements of ‘the term or maturity date of the mortgage’ that make these two mortgages subject to the five-year period.” We agree.

We answer the question presented by applying well-settled rules of statutory construction. When the meaning of a statute is at issue, “[w]e begin with the canon of statutory construction that the primary source of insight into the intent of the Legislature is the language of the statute.” International Fid. Ins. Co. v. Wilson, 387 Mass. 841, 853, 443 N.E.2d 1308 (1983)

. The language is interpreted in accordance with its plain meaning, and if the language is clear and unambiguous, it is conclusive as to the intent of the Legislature. Commissioner of Correction v. Superior Ct. Dep't of the Trial Court, 446 Mass. 123, 124, 842 N.E.2d 926 (2006), citing Commonwealth v. Clerk–Magistrate of the W. Roxbury Div. of the Dist. Court Dep't, 439 Mass. 352, 355–356, 787 N.E.2d 1032 (2003).

When interpreting the phrase, “mortgage in which the term or maturity date of the mortgage is stated,” that triggers the five-year statute of limitations, “[w]ords and phrases shall be construed

according to the common and approved usage of the language.” G.L. c. 4, § 6

, Third. According to Black's Law Dictionary 478, 1163 (10th ed. 2014), “maturity date” means “[t]he date when a debt falls due, such as a debt on a promissory note or bond,” and “mortgage” means “[a] conveyance of title to property that is given as security for the payment of a debt or performance of a duty and that will become void upon payment or performance according to the stipulated terms.” Thus, the common meaning of the “maturity date of the mortgage” is the date on which the underlying debt is due because a mortgage derives its vitality from the debt that it secures.

This definition comports with the...