City of Worcester v. AME Realty Corp.

928 N.E.2d 656, 77 Mass. App. Ct. 64, 2010 Mass. App. LEXIS 809
CourtMassachusetts Appeals Court
DecidedJune 21, 2010
DocketNo. 08-P-2049
StatusPublished
Cited by10 cases

This text of 928 N.E.2d 656 (City of Worcester v. AME Realty Corp.) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Worcester v. AME Realty Corp., 928 N.E.2d 656, 77 Mass. App. Ct. 64, 2010 Mass. App. LEXIS 809 (Mass. Ct. App. 2010).

Opinion

Sikora, J.

Demetrios G. Venetis, an alleged party-in-interest whom we shall treat as an effective intervener in the Land Court proceedings, appeals from a 2008 final order of that court denying his motion to vacate a tax lien foreclosure judgment entered in favor of plaintiff city of Worcester (city) on October 2, 2001. That order effectively concluded his claim to a mortgage interest purportedly conveyed to him on or about November 1, 1996. The order also preserved the current ownership of the property by Main South Community Development Corporation (Main South) by purchase from the city on September 13, 2005. In addition, the order imposed financial sanctions upon both Venetis and his counsel for prosecution of a claim “not advanced in good faith, as both Venetis and his Attorney . . . had actual knowledge of both the [prior] Land Court judgment and Appeals Court decision” negating that claim. For the following reasons we affirm all terms of the final order.

Background. A summary of the main events of the long and winding history of this litigation is unavoidable. As of the close of fiscal year 1991, Ripley Real Estate Realty Tmst, as owner of the property at 10 Ripley Street, had failed to pay its municipal real estate taxes. On or before March 30, 1992, mortgagee JRS Holdings Corporation (JRS) pursuant to G. L. c. 244, §§ 1 and 2, made an open, peaceable, unopposed entry onto the property for breach of mortgage conditions and recorded its certificate of entry. By deed dated January 19,1993, and recorded on December 31, 1993, Ripley Real Estate Realty Trust conveyed the property to defendant AME Realty Corporation (AME). On or about January 4, 1993, the city’s tax collector delivered a tax collection deed to the city by reason of Ripley Real Estate Realty Trust’s nonpayment of the 1991 taxes. The city recorded that deed on February 2, 1993. On March 31, 1995, by operation of law pursuant to G. L. c. 244, § 1, JRS’s certificate of entry [66]*66would have ripened into a fee interest. On November 1, 1996, JRS, by its president Ara Eresian, Jr., granted and recorded a $15,000 mortgage interest to Venetis.

In June of 1999, the city brought a tax lien foreclosure action in the Land Court and achieved a judgment extinguishing all rights of redemption in the property. The city had provided notice to AME as the recorded owner. AME did not appear for scheduled hearings and incurred a default judgment.

In May, 2002, AME brought a petition to vacate the judgment upon the contention that JRS as true owner of the property had not received notice of the foreclosure action and could not be bound by it.

A Land Court judge concluded that JRS’s certificate of entry had not matured into a fee of ownership on March 31, 1995, because it had not acted as a genuine arm’s-length mortgagee during the three year gestation period prescribed by G. L. c. 244, §§ 1 and 2, but rather as a hand’s-length business cohort of AME. That collusive relationship negated the right of foreclosure by entry. See Trow v. Berry, 113 Mass. 139, 147 (1873); Willard v. Kimball, 277 Mass. 350, 358 (1931). The judge concluded further that, if JRS had been entitled to notice of the city’s tax lien foreclosure action, it had effectively received it because the entities were thoroughly entwined in the person of Eresian as the president of AME and as the rent-collecting agent of JRS.2

On appeal, this court affirmed the Land Court’s order, and its reasoning, denying AME’s motion to vacate the tax lien judgment in an unpublished memorandum and order on November 10, 2004. Worcester v. AME Realty Corp., 62 Mass. App. Ct. 1110 (2004). The memorandum included the following observation:

“The record also reflects evidence consistent with owner[67]*67ship of the property by AME and inconsistent with ownership by JRS, and reflects interruptions in the purported three-year period JRS would have had to have been the owner in order to perfect any right to hold the subject property under its mortgage foreclosure and notice of entry.”

This element of the holding further diminished the probable merits of any argument premised upon JRS’s ownership of the property and upon the validity of any consequent mortgage to Venetis dependent upon that ownership.

Nonetheless in April of 2008, almost three and one-half years after this court’s affirmance and more than two and one-half years after the purchase of the abandoned property from the city by Main South for the construction of two units of low or moderate income housing, Venetis brought the underlying petition (captioned as a “motion”) to vacate the city’s foreclosure judgment. A Land Court deputy recorder concluded that Venetis had submitted no grounds to overcome the Land Court’s original reasoning (and that of the Appeals Court) locating true ownership of the property in AME and not JRS, and precluding the grant of any purported mortgage by JRS to Venetis on November 1, 1996. The deputy recorder accordingly denied the petition and assessed Venetis and his counsel attorney’s fees and costs in favor of Main South in the sum of $2,890. Venetis appeals from that final order.

Analysis. 1. Standard of review. General Laws c. 60, § 69A, and related case law, govern petitions to vacate judgments of foreclosure. An interested party must file such a petition within one year of the entry of the judgment sought to be vacated, unless that party alleges a violation of its rights to substantive or procedural due process. See ibid.; Andover v. State Financial Servs., Inc., 432 Mass. 571, 574-576 (2000); North Reading v. Welch, 46 Mass. App. Ct. 818, 819-820 (1999). “Such petitions ‘are extraordinary in nature and ought to be granted only after careful consideration and in instances where they are required to accomplish justice.’ ” Lynch v. Boston, 313 Mass. 478, 480 (1943), quoting from Russell v. Foley, 278 Mass. 145, 148 (1932). Allowance of a petition rests “largely but not entirely in the discretion of the trial judge.” Lynch v. Boston, supra, quoting from Bucher v. Randolph, 307 Mass. 391, 393 (1940). Consequently we review the denial of the petition for abuse of discretion and error of law.

[68]*682. Merits. In this court Venetis advances essentially two arguments: (a) that the tax collector’s deed to the city on January 4, 1993, failed to recite “the name of the person to whom the [unpaid tax] was assessed” in accordance with G. L. c. 60, § 54, and the name of the person upon whom the collector had made demand for payment before commencement of enforcement proceedings in accordance with G. L. c. 60, §§ 16 and 43; and (b) that the city and the Land Court failed to furnish Venetis, as a recorded mortgagee, notice of the tax title foreclosure proceedings and so deprived him of procedural and (impliedly) substantive due process. As to his first contention, Venetis argues that the collector’s designation of “Ripley Real Estate Realty Trust” in the deed to the city was insufficient because it failed to identify the individual trustees; and that, consequently, the city never acquired valid tax foreclosure title for later conveyance to Main South.

Multiple weaknesses doom Venetis’s first contention. First, he lacks standing to challenge the city’s title because he lacks a valid mortgagee’s interest, as explained below.

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Cite This Page — Counsel Stack

Bluebook (online)
928 N.E.2d 656, 77 Mass. App. Ct. 64, 2010 Mass. App. LEXIS 809, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-worcester-v-ame-realty-corp-massappct-2010.