Lisa A. MacKey v. Santander Bank, N.A.

• Court: Massachusetts Appeals Court
• Decided: July 30, 2024
• Docket: 23-P-0472
• Status: Unpublished

Opinion

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).

COMMONWEALTH OF MASSACHUSETTS

APPEALS COURT

23-P-472

LISA A. MACKEY

vs.

SANTANDER BANK, N.A.

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

This is an action by Lisa A. Mackey for declaratory or

injunctive relief to invalidate a mortgage that her now ex-

husband, James F. Mackey, Jr.,1 purportedly as trustee of the

JLJM Realty Trust (trust), granted to the defendant, Santander

Bank, N.A. (Santander),2 in 2008 on real property located in

Tewksbury.3 This is the second appeal in this matter. In the

1Because Lisa Mackey and James Mackey share a last name, we refer to them by their first names to avoid confusion.

2The mortgage was granted to Santander's predecessor, Sovereign Bank. Hereinafter, we refer to the lender as Santander.

3James is not a party to this appeal. Lisa's claims against him were dismissed on the basis of res judicata and she did not appeal from that aspect of the judgment. Santander asserted a cross claim against James and a third-party claim first appeal, we vacated a judgment entered in favor of

Santander on the ground of estoppel by deed. Santander invited

us to affirm on an alternative ground raised for the first time

on appeal: that the mortgage was valid by operation of G. L.

c. 184, § 34 (§ 34). Mackey v. Santander Bank, N.A., 98 Mass.

App. Ct. 431, 432 (2020) (Mackey I). We declined, because "the

absence of a factual record properly presented to the motion

judge" meant "there [was] an insufficient basis to affirm on

this alternative theory." Id. at 438, 439. "[W]e remand[ed]

for further proceedings consistent with this opinion." Id. at

439.

On remand, the motion judge again granted summary judgment

to Santander, although not based on Santander's § 34 argument.

Instead, the judge relied on a third ground, namely that the

mortgage was valid by operation of G. L. c. 184, § 35 (§ 35).

The motion judge denied each party's motion for reconsideration.

On appeal, Lisa argues that the motion judge misconstrued § 35

and therefore Santander was not entitled to summary judgment

declaring the mortgage valid on this ground, or under § 34. For

its part, Santander defends the judge's reliance on § 35, but

against the trust for breach of contract based on James's or the trust's failure to repay the loan. On July 16, 2018, a judge of the Superior Court allowed Santander's motion for judgment on those claims. Neither James nor the trust appealed.

2 also argues that the judge should have ruled in its favor based

on § 34. Santander seeks to press its § 34 argument by way of a

cross appeal in which it argues, inter alia, that the judge

abused his discretion by not reopening discovery to develop a

factual record on which the § 34 issues could be decided. We

vacate the judgment and remand for further proceedings.

Background. We summarize the undisputed facts in the light

most favorable to the nonmoving party, Lisa. Molina v. State

Garden, Inc., 88 Mass. App. Ct. 173, 177 (2015). The facts are

largely as recited in Mackey I, 98 Mass. App. Ct. at 432-433.

1. Execution of the mortgage and recordings at the

registry of deeds. In 1998, while James and Lisa were married,

James established the trust, designated himself the trustee, and

had the title to the marital home transferred from his

construction company to the trust. The deed and the trust were

recorded in the Middlesex County North registry of deeds

(registry). Lisa and James were beneficiaries. Mackey I, 98

Mass. App. Ct. at 432. The trust provided that if James "shall

be unable or unwilling to serve as Trustee, then [Lisa] shall

serve as Successor Trustee hereunder." Otherwise, in the event

of a vacancy of the original and succeeding trustee, all of the

beneficiaries could appoint a new trustee.

3 Under the trust, the trustee could treat the property as if

it were the trustee's own, including mortgaging it, but

beneficiaries could not. The trust further provided that in

determining the identity of the trustee, "[a]ny person shall be

entitled to conclusively rely on the records at the appropriate

Registry of Deeds."

On October 9, 2000, without Lisa's knowledge, James

resigned as trustee. The terms of the trust did not expressly

require notice of the resignation to Lisa, the co-beneficiary

and successor trustee. James and his sister then signed

documents purporting to appoint James's sister as successor

trustee. These documents were recorded in the registry.4 It is

undisputed that James recorded his resignation, albeit without

noting the resignation on the margin of the trust document that

was on record. A title search readily would have revealed that

James was no longer the trustee.

In 2008, James applied for a $400,000 line of credit from

Santander secured by a mortgage on the property. Santander

employed a vendor known as Fiserv to perform a "limited title

search," purportedly "pursuant to general title underwriting

guidelines." Fiserv missed the fact that James had resigned as

4 "Both Lisa and Santander agree that the appointment of the sister was contrary to the terms of the trust." Mackey I, 98 Mass. App. Ct. at 432.

4 trustee and advised Santander that the mortgage should be signed

by James as trustee and accompanied by a certificate attesting

to James's authority, while the note should be signed by James

individually and as trustee. Even though James had resigned as

trustee more than seven years earlier, he supplied Santander

with a trustee's certificate falsely attesting that he was the

"current trustee" of the trust and specifically authorized by

the beneficiaries to grant the mortgage. Santander extended the

line of credit and James purported to execute the mortgage as

trustee.5 Although Santander had no actual notice that James had

resigned, it acknowledges "that the resignation could have been

found by a name search."

Over three years later, on December 14, 2011, James's

sister purported to resign as trustee, and she and James signed

and recorded documents purporting to reappoint James as trustee.

By 2015, James had ceased making payments on the loan, he

and Lisa were divorced, and foreclosure of the mortgage "was

imminent." Mackey I, 98 Mass. App. Ct. at 433. A judge of the

Probate and Family Court ordered the property sold and the

proceeds divided as part of the divorce, but that order was

stayed, as was the foreclosure, when Lisa filed suit to declare

5 "Lisa was unaware of the line of credit and the mortgage at that time." Mackey I, 98 Mass. App. Ct. at 432.

5 the mortgage invalid because James was not the trustee when he

granted it. See id. at 433 & n.6.

2. The first appeal. In the first appeal, we vacated a

judgment granted to Santander that declared that the mortgage

was "valid by virtue of the doctrine of estoppel by deed."

Mackey I, 98 Mass. App. Ct. at 432. "We conclude[d] that the

doctrine [was] unavailable [to Santander] because James was not

a trustee of the trust holding title to the real estate at the

time the mortgage was granted or any time thereafter." Id. We

declined to reach Santander's alternative argument, raised for

the first time on appeal, that pursuant to § 34, "the mortgage

is binding on the trust because James's resignation was not

noted on the margin of the trust in the registry of deeds." Id.

at 438. Lisa had asserted that "'handwritten references in the

margins of trust or other documents have been abandoned' due to

technological advances, and she urge[d] a more flexible

interpretation of the statute that comports with the goal of

notice." Id. We declined to reach the issue because the record

on appeal did not contain facts about "good title practice, how

notations were made on recorded documents, or the title search

results that would have appeared in 2008 when James executed the

mortgage 'as trustee.'" Id. at 438-439. In other words, the

appellate record was not adequate for us to decide the issue.

6 Accordingly, we remanded the case "for further proceedings

consistent with this opinion." Id. at 439.

3. Proceedings after remand. On remand, Santander moved

"to reopen expert discovery" so that it could supply an expert

to support its § 34 argument. Discovery had closed on February

17, 2017, which was before the first round of summary judgment

motions. The motion judge denied Santander's request to reopen

discovery.

After receiving permission to file a second summary

judgment motion, Santander then again moved for summary judgment

and asserted that the mortgage was valid under § 34.

Santander's § 34 argument was based on an additional "fact"

witness in the form of an affidavit of the Middlesex County

North register of deeds, Richard P. Howe, Jr. (Howe affidavit).

The Howe affidavit described the registry's practices for

marginal references and trustee resignations from and after

1995. In response, Lisa protested being forced "to have to

incur more time and expense to rebut, or supplement" the

affidavit after a judge had declined to reopen discovery, and

she asked for fees. She objected to consideration of the Howe

affidavit. In the alternative, she argued that some of the Howe

affidavit constituted legal opinion that should be disregarded,

and she also "hedged her bets" by supplementing the Howe

7 affidavit with her own submittal from Howe regarding the

practice of the registry he oversaw.

Santander, in addition to arguing that § 34 allowed it to

rely on the absence of a marginal notation that James had

resigned as trustee, argued in the alternative that § 35 allowed

it to rely on the trustee certificate that James had completed.

Santander had raised that argument in its original summary

judgment motion but chose not to press the issue in the first

appeal.

The motion judge noted Santander's "attempts to skirt the

court's order and reopen discovery on its own" by providing the

Howe affidavit. He concluded that "[r]eopening discovery is

unfair to the plaintiff" and did not consider the Howe

affidavit. "Because Santander's § 34 argument [was] predicated

entirely [on the Howe affidavit]," the motion judge concluded

that Santander's § 34 argument failed.

The motion judge, however, ruled in Santander's favor based

on its § 35 argument. He reasoned that because Santander had no

actual knowledge that James had resigned as trustee, Santander

was entitled as a matter of law to rely on James's certificate

that falsely claimed he was trustee. Judgment entered declaring

the mortgage valid and again dismissing the counterclaim for

unjust enrichment as moot. Both parties timely sought

8 reconsideration, and the motion judge denied both motions. This

appeal followed.

Discussion. 1. General Laws c. 184, § 35. As an initial

matter, Lisa argues that Santander should have been barred from

raising its § 35 argument on remand because it did not raise

§ 35 in the first appeal. We pass over this issue and conclude

Santander's § 35 argument fails on its merits.

In discerning the meaning of § 35, we start with the

statutory language, which "should be given effect consistent

with its plain meaning and in light of the aim of the

Legislature unless to do so would achieve an illogical result."

Commonwealth v. Wassilie, 482 Mass. 562, 573 (2019), quoting

Sullivan v. Brookline, 435 Mass. 353, 360 (2001). The plain

language of § 35 states that a third party can rely on a

trustee's certificate where the signature on that certificate is

that of "a person who from the records of the registry of deeds

. . . for the county or district in which real estate owned by a

nontestamentary trust lies, appears to be a trustee thereunder."6

6 Section 35 states:

"Notwithstanding section 25 to the contrary, a certificate sworn to or stated to be executed under the penalties of perjury, and in either case signed by a person who from the records of the registry of deeds or of the registry district of the land court, for the county or district in which real estate owned by a nontestamentary trust lies, appears to be a trustee thereunder and which certifies as

9 It necessarily follows that by its terms, § 35 does not apply

where the registry records show that the signatory is not the

trustee. It is undisputed that James's resignation was recorded

in the registry and that Santander readily could have discovered

this had Fiserv taken more than a cursory look. Moreover, it is

well established under the terms of the trust and general trust

law, as Santander correctly concedes, that a person may be

charged with constructive notice of a document recorded at the

registry, provided that it would be discovered by a

reasonablydiligent title search. See Bank of Am., N.A. v.

Casey, 474 Mass. 556, 567 (2016); Rogaris v. Albert, 431 Mass.

833, 835 (2000); Baker v. James, 280 Mass. 43, 47 (1932);

Plunkett v. First Fed. Sav. & Loan Ass'n of Boston, 18 Mass.

App. Ct. 294, 305 (1984); G. L. c. 203, § 2. The fact that

to: (a) the identity of the trustees or the beneficiaries thereunder; (b) the authority of the trustees to act with respect to real estate owned by the trust; or (c) the existence or nonexistence of a fact which constitutes a condition precedent to acts by the trustees or which are in any other manner germane to affairs of the trust, shall be binding on all trustees and the trust estate in favor of a purchaser or other person relying in good faith on the certificate. The certificate most recently recorded in the registry of deeds for the county or district in which the real estate lies shall control."

10 Santander had no actual notice that James had resigned does not

give it license to rely on James's false certification.7

2. General Laws c. 184, § 34. As noted, Santander argues

that the judge should have ruled in its favor based on § 34.

Section 34 provides third parties some measure of protection

with regard to trust amendments that are recorded but not noted

on the margin of trust documents filed on record. Because it is

undisputed that James's resignation was not noted on the margin

of the trust document here, Santander argued in the first appeal

that, by operation of § 34, the Santander mortgage is binding on

the trust. Mackey I, 98 Mass. App. Ct. at 438. As noted, we

declined to reach this issue in the first appeal because there

was not an adequately developed factual record on appeal with

respect to good title practices and the like. By way of cross

appeal, Santander argues that the judge abused his discretion in

not allowing Santander's request to reopen discovery.

We cannot reasonably say that the judge on remand abused

his discretion in holding the parties to the applicable

discovery deadlines for fact discovery and identifying experts.

See Nally v. Volkswagen of Am., Inc., 405 Mass. 191, 197 (1989)

7 This interpretation does not render § 35 surplusage. Trustees may change for any variety of reasons, including death, incapacity, and resignation, and the change may not be recorded. Section 35 protects a good faith purchaser or mortgagee in the event a change of trustee is not recorded.

11 ("Trial judges have 'broad discretion to make discovery and

evidentiary rulings conducive to the conduct of a fair and

orderly trial. . . . Within this discretion lies the power to

exclude or deny expert testimony . . . and to exclude testimony

of witnesses whose use at trial is in bad faith or would

unfairly prejudice an opposing party'" [citation omitted]);

George W. Prescott Publ. Co. v. Register of Probate for Norfolk

County, 395 Mass. 274, 282 (1985) ("The trial court is in the

best position to weigh fairly the competing needs and interests

of parties affected by discovery. The unique character of the

discovery process requires that the trial court have substantial

latitude" [citation omitted]). Indeed, Lisa contends on appeal

that had Santander raised the § 34 argument before the first

appeal, discovery might have given access to materials that

might have benefitted her. The fact that Lisa responded to

Santander's Howe affidavit with her own affidavit from Howe

rather than stand idly by does not change the analysis.8

8 On remand, if both parties seek to reopen discovery, whether to do so will be in the sound discretion of the Superior Court judge. We take no position on the matter. Of course, nothing prohibits either party from subpoenaing documents to trial, including Fiserv's title abstract that apparently was never produced in discovery. Even if that abstract is never produced, Santander's counsel's ethical obligations would prevent Santander from arguing as fact something it knows contradicts that abstract.

12 In the present context, all that we need to resolve is

whether to reach § 34 as a potential alternative basis for

affirming the allowance of summary judgment in Santander's

favor. Without the Howe affidavit, Santander's § 34 argument in

this appeal stands on no different footing than it did in Mackey

I. Accordingly, the motion judge did not err in concluding that

on the state of the record before him, Santander was not

entitled to summary judgment based on § 34.

Conclusion. The judgment declaring the mortgage valid and

dismissing the counterclaim as moot is vacated. The case is

remanded for further proceedings. To avoid further conflict

over the scope of the remand, we further order as follows: the

Superior Court should enter judgment for Lisa on Santander's

assertion that the mortgage is valid pursuant to § 35; on

remand, Santander may assert any other defenses timely and

properly asserted in its pleadings, none of which are before us,9

including § 34, to the extent that the record supports it, and

the defenses should be tried unless both parties agree

otherwise; if Santander has no such defense, judgment declaring

9 Indeed, neither the record appendix in Mackey I nor in this appeal even contain the complaint or answer.

13 the mortgage invalid shall enter in favor of Lisa. Santander's

claim for unjust enrichment also is remanded for resolution.

So ordered.

By the Court (Milkey, Henry & Desmond, JJ.10),

Clerk

Entered: July 30, 2024.

10 The panelists are listed in order of seniority.