Opinion
18-P-72
05-13-2019
LISA A. BUTKUS v. CHARLES L. SILTON, INC., & another.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its 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 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).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
In this dispute over the surplus sale proceeds following a real estate tax taking, the plaintiff, Lisa Butkus, appeals from a Superior Court judge's order entering summary judgment in favor of the town of Framingham (town) and the denial of her cross motion for summary judgment. We affirm.
Background. On December 3, 2010, the town executed a tax taking on property located at 618 Waverly Street (property) owned by Charles L. Silton, Inc. (Silton), in the amount of $5,684.87. Notice of the tax taking was duly recorded in the registry of deeds on January 18, 2011. On January 2, 2012, the town filed a petition in the Land Court to foreclose all rights of redemption on the property, and on March 6, 2012, it recorded a notice of its petition in the registry of deeds. The town's petition was allowed and a foreclosure judgment entered in the town's favor on September 2, 2014. The judgment was recorded on November 17, 2014. On January 26, 2016, the town sold the property at auction for approximately $815,000, the conveyance taking place on February 29, 2016.
By the time of the auction, Silton's tax debt had increased to approximately $115,000.
Meanwhile, in December 2012, Butkus filed in the Superior Court a Wage Act claim under G. L. c. 149 against Silton. In August 2014, a judge entered an agreed-upon judgment against Silton in favor of Butkus in the amount of $250,000, to be secured by a mortgage on the property, which Butkus recorded on August 18, 2014. Apparently after learning the town had entered into an agreement via auction to sell the property, Butkus filed -- before the closing -- this action against the town and Silton seeking a declaratory judgment that Silton was entitled to the surplus of the tax debt from the sale, and that Butkus was entitled to a "reach and apply" judgment to satisfy Butkus's unsatisfied money judgment in her Wage Action case against Silton.
On February 29, 2016, after a judge denied Butkus's motion for a reach and apply real estate attachment (which, by agreement of the parties, was treated by the judge as a motion for preliminary injunction to enjoin the town's sale), the town conveyed the property to the nominee of the highest bidder at the auction for $750,000. Thereafter, the town filed a motion for judgment on the pleadings to which Butkus responded with her cross motion for summary judgment. Following a hearing, a judge denied Butkus's cross motion, and entered summary judgment in favor of the town. Relying on the Supreme Judicial Court's decision in Kelly v. Boston, the judge concluded that municipalities are exclusively entitled to any surplus from tax foreclosure sales. See Kelly v. Boston, 348 Mass. 385, 388 (1965) (Legislature intended that surplus from sale of land taken for nonpayment of taxes belongs to municipality where right of redemption was foreclosed in Land Court).
While the town styled its dispositive motion as one for judgment on the pleadings, given Butkus's cross motion for summary judgment, which raised matters outside of the pleadings, the judge correctly applied the summary judgment standard to the town's motion. See Mass. R. Civ. P. 12 (c), 365 Mass. 754 (1974) ("If, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56"). See also Golchin v. Liberty Mut. Ins. Co., 466 Mass. 156, 159 (2013).
On appeal, Butkus maintains that the judge erred in entering summary judgment in favor of the town, and in denying her cross motion for summary judgment, because G. L. c. 60, § 28, requires the town to return any surplus from the sale of the property to Silton, and because Kelly v. Boston, 348 Mass. at 88, relied on by the motion judge, is distinguishable from her case.
Standard of review. We review de novo the allowance of a motion for summary judgment. Dorrian v. LVNV Funding, LLC, 479 Mass. 265, 270 (2018). "In a case like this one where both parties have [in essence] moved for summary judgment, the evidence is viewed in the light most favorable to the party against whom judgment [has entered]" (quotation omitted). Id. at 271. A decision on a motion for summary judgment will be upheld if the judge "ruled on undisputed material facts and the ruling was correct as a matter of law" (citation omitted). M.P.M. Bldrs., LLC v. Dwyer, 442 Mass. 87, 89 (2004).
Discussion. Butkus contends that pursuant to G. L. c. 60, § 28, the town must pay over to Silton the surplus from the foreclosure sale of the property, to be used to satisfy her judgment against Silton. To this end, Butkus argues that the statute requires the tax collector to "give a written account of every sale on distress or seizure and charges, and pay to the owner any surplus above the taxes, interest and charges of keeping and sale." The town denies that G. L. c. 60, § 28, applies, and counters that G. L. c. 60, § 64, controls the sale proceeds because that section specifies that "[t]he title conveyed by a tax collector's deed or by a taking of land for taxes shall be absolute after foreclosure of the right of redemption by decree of the [L]and [C]ourt." Consequently, the town argues, "interests in the land of one claiming through the record owner, such as 'mortgagees, lienors, attaching creditors' . . . are terminated by the [Land Court] decree." Sandwich v. Quirk, 409 Mass. 380, 384 (1991). We agree.
The town urges that we construe § 28 as extending solely to the surplus proceeds of tax taking sales of personal property. Without addressing the issue, we note that there is no language in the statute to that effect, and observe that, to our knowledge, no Massachusetts court has had occasion to cite, much less interpret it.
Once a municipality forecloses all rights of redemption, "§ 64 clears the record title so that the municipality may sell the property or keep it for municipal purposes, free of the claims of the prior owner and other persons whose rights are extinguished." Sandwich, 409 Mass. at 384. See Lhu v. Dignoti, 431 Mass. 292, 296 (2000) ("The purpose of absolute title under § 64 is to clear the new title of all encumbrances placed on the property by the prior record owner").
Here, we conclude that neither Silton nor Butkus were entitled to the surplus from the town's sale of the property under G. L. c. 60, § 28, because the foreclosure judgment issued by the Land Court on September 2, 2014, terminated any interests they may have held in the property. See G. L. c. 60, § 64; Sandwich, 409 Mass. at 384. The town, having acquired its interest in the property through a tax taking, held "absolute" title to the property as of the date of the Land Court foreclosure judgment. G. L. c. 60, § 64. Accordingly, Butkus and Silton are charged with notice of the town's interest in the property when the town recorded its notice of tax taking, and notice of petition in the Land Court. Consequently, both parties were required to assert their purported interests in the property in the town's Land Court action prior to the date of the foreclosure judgment, September 2, 2014. See Sandwich, supra. Butkus obtained her August 2014 Wage Act money judgment against Silton -- which included a mortgage to her from Silton on the property -- but failed to intervene in the Land Court case to assert her interest. She further delayed filing this action against Silton and the town until February 2016 -- more than a year after the Land Court foreclosure judgment. Silton, for its part, was a party to the town's Land Court action, yet made no attempt to redeem its ownership interest in the property, nor did it appeal the Land Court judgment. Thus, Butkus's and Silton's inaction prior to the entry of the Land Court foreclosure judgment necessarily extinguished their asserted interests in the property, enabling the town to "sell the property . . . free of [Butkus's and Silton's] claims." See Sandwich, 409 Mass. at 384.
To preserve her asserted interest, Butkus was required to seek intervention in the town's Land Court action, rather than the Superior Court, because the Land Court has "exclusive jurisdiction of the foreclosure of all rights of redemption from titles conveyed by a tax collector's deed or a taking of land for taxes." G. L. c. 60, § 64. Butkus counters that she was unaware of the town's Land Court action because the town spelled the address for the property incorrectly on the instrument of taking, and because the town necessarily was aware of her interest in the property. Her argument is unavailing. The town filed its Land Court foreclosure petition on January 3, 2012, some thirty-six months before Butkus recorded her mortgage on the property in August of 2014, and roughly eleven months before Butkus filed the action before us. Accordingly, at the time the town filed its Land Court foreclosure petition, the town was not chargeable with knowledge of Butkus's asserted interest. See G. L. c. 60, § 6 (mandating notification of "all persons appearing to be interested" of petition to foreclose rights of redemption). See also Devine v. Nantucket, 449 Mass. 499, 507 (2007); Frost Coal Co. v. Boston, 259 Mass. 354, 357-358 (1927) (town established constructive notice of pending petition where it recorded instrument of taking).
We conclude that neither Butkus nor Silton was entitled to the surplus from the town's sale of the property on February 29, 2016, because by then, neither retained any interest in the property. Sandwich, 409 Mass. at 384. Thus, the judge correctly entered summary judgment in favor of the town. See Dorrian, 479 Mass. at 271.
Because Butkus held no interest in the property after the Land Court entered the foreclosure judgment in favor the town on September 2, 2014, we need not address the judge's rejection of her claim that the town's retention of the surplus is contrary to G. L. c. 60, § 28 (see note 4, supra). Nor do we address Butkus's argument that the town's actions constitute an unconstitutional taking of the property without just compensation, except to observe that Butkus did not hold title to the property she claims was unconstitutionally taken. Likewise, we need not address the town's contention that the holding in Kelly v. Boston, 348 Mass. 385 (1965), by itself, precludes Butkus's claim.
Judgment affirmed.
By the Court (Vuono, Wolohojian & McDonough, JJ.),
The panelists are listed in order of seniority.
/s/
Clerk Entered: May 13, 2019.