Opinion
No. 14–P–1083.
06-29-2016
RY–CO INTERNATIONAL, LTD. v. Douglas VONIDERSTEIN, trustee, & another.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Ry–Co International, Ltd. (RCI) appeals from an amended order of the Land Court, dismissing its complaint against Douglas and Linda VonIderstein (collectively, VonIdersteins), trustees of the VonIderstein Realty Trust (trust). A Land Court judge ruled that, by application of G.L. c. 260, § 33, RCI's mortgage had been discharged, five years after the expiration of its stated term, as a matter of law. Section 33 mandates that a mortgage, encumbering real property in this Commonwealth and providing a stated term or maturity date, becomes unenforceable five years after the stated term or maturity date. Deutsche Bank Natl. Trust Co. v. Fitchburg Capital, LLC, 471 Mass. 248, 249 (2015). On appeal, RCI argues that § 33 works an injustice by infringing on RCI's vested real property interests. To undo this perceived wrong, RCI contends that § 33's period of repose must be extended to six years (from the current five-year period mandated by § 33 ), or that its mortgage be equitably reinstated, in order to prevent an unfair windfall inuring to the benefit of the property owners. We affirm.
Section 33 is commonly referred to as the “obsolete mortgage statute.” Deutsche Bank Natl. Trust Co. v. Fitchburg Capital, LLC, 471 Mass. 248, 249 (2015).
Section 33, as amended by St.2006, c. 63, § 6, provides as follows:
“A power of sale in any mortgage of real estate shall not be exercised and an entry shall not be made nor possession taken nor proceeding begun for foreclosure of any such mortgage after the expiration of, in the case of a mortgage in which no term of the mortgage is stated, [thirty-five] years from the recording of the mortgage or, in the case of a mortgage in which the term or maturity date of the mortgage is stated, [five] years from the expiration of the term or from the maturity date, unless an extension of the mortgage, or an acknowledgment or affidavit that the mortgage is not satisfied, is recorded before the expiration of such period. In case an extension of the mortgage or the acknowledgment or affidavit is so recorded, the period shall continue until [five] years shall have elapsed during which there is not recorded any further extension of the mortgage or acknowledgment or affidavit that the mortgage is not satisfied. The period shall not be extended by reason of non-residence or disability of any person interested in the mortgage or the real estate, or by any partial payment, agreement, extension, acknowledgment, affidavit or other action not meeting the requirements of this section and [G.L. c. 260, §§ ] 34 and 35. Upon the expiration of the period provided herein, the mortgage shall be considered discharged for all purposes without the necessity of further action by the owner of the equity of redemption or any other persons having an interest in the mortgaged property and, in the case of registered land, upon the payment of the fee for the recording of a discharge, the mortgage shall be marked as discharged on the relevant memorandum of encumbrances in the same manner as for any other mortgage duly discharged.”
For a like mortgage with no stated term or date of maturity, the statute mandates that the instrument becomes unenforceable thirty-five years after recording. G.L. c. 260, § 33.
Background. On July 1, 1986, the VonIdersteins executed a mortgage (mortgage) on the subject registered property in Duxbury and delivered that instrument to the sellers, Thomas J. Riley and Concetta Riley (collectively, Rileys). The mortgage secured a promissory note payable to the Rileys in July of 1987.
In October of 1986, the Rileys assigned the VonIdersteins' mortgage to the Massachusetts Bank and Trust Company (bank). Five months later, in March of 1987, the Rileys caused a discharge of the mortgage to be recorded. Subsequently, the bank failed and, by way of a receivership, the Federal Deposit Insurance Corporation (FDIC) took control of the bank; in the course of winding up the bank's affairs, the FDIC sold the mortgage to RCI in 2012.
In 2013, by a petition filed in Land Court, RCI asked that the mortgage (and connected assignments) be brought forward and registered on certificates of title, giving notice that RCI was the current holder of the mortgage. Opposing this petition, the VonIdersteins asserted, among other contentions, that the underlying indebtedness had been satisfied. A flurry of motions by the parties followed, including a motion by RCI for judgment on the pleadings and a motion by the VonIdersteins to dismiss.
In the wake of the Supreme Judicial Court's decision in Deutsche Bank Natl. Trust Co. v. Fitchburg Capital, LLC, 471 Mass. 248 (2015), the VonIdersteins filed a supplemental memorandum of law in aid of their motion to dismiss. Acting on cross motions, the Land Court judge concluded the dispute could be reduced to a narrow legal question: whether the mortgage, given by the VonIdersteins to the Rileys on July 1, 1986, was rendered obsolete as matter of law by application of G.L. c. 260, § 33.
The mortgage had a stated date of maturity of “July, 1987.” The judge concluded that the five-year repose period, mandated by § 33, ran from and after July 31, 1987, rendering the mortgage instrument unenforceable, as a matter of law, on July 31, 1992, unless RCI (or its predecessor-in-interest) had timely recorded an affidavit or extension, with the registry of deeds, indicating that the mortgage had not been satisfied. There is no evidence that any party recorded a written extension, affidavit, or acknowledgment indicating that the mortgage had not been satisfied. For these reasons, the judge allowed the VonIdersteins' motion to dismiss, and ordered that the mortgage in question be deemed discharged for all purposes as of July 31, 1992, without the necessity of any further action. We concur.
This being the latest possible date within the stated month.
Nor did a dragnet clause in the mortgage instrument shield the holder from the conclusive legal effect of G.L. c. 260, § 33.
Discussion. This appeal is controlled in all material respects by the Supreme Judicial Court's decision in Deutsche Bank, supra —the holding of which the judge carefully and faithfully applied to the record facts here. We need offer but a few observations to seal off the points of departure advanced by RCI.
a. RCI's constitutionally-based challenge. RCI contends that the Legislature's 2006 amendment to G.L. c. 260, § 33, effected “an unconstitutional deprivation of [RCI's] property interests.” In Deutsche Bank, the SJC addressed the constitutionality of the Legislature's 2006 amendments to § 33. Id. at 258–260. The court concluded that the amendment is constitutional, reasoning that the Legislature provided “reasonable time for mortgagees to enforce their rights under mortgages that would be deemed obsolete under the revised statute or to record one of the other documents permitted by statute to preserve the mortgagee's rights.” Id. at 260. Under the circumstances, it saw no deprivation of rights. We need not traverse this same constitutional ground here.
b. RCI's argument for extending § 33's repose period. A statute of repose is a product of the Legislature. Its scope sweeps broader than any interests of judicial economy and it is not within our power to rewrite such legislation. Cf. Fidler v. E.M. Parker Co., 394 Mass. 534, 548 (1985) (statute of repose governing medical malpractice actions). The Legislature is not obliged to create statutory classifications “with surgical precision,” Opinion of the Justices, 408 Mass. 1215, 1224 (1990), for “[i]t is enough that there is an evil at hand for correction, and that it might be thought that the particular legislative measure was a rational way to correct it.” Zeller v. Cantu, 395 Mass. 76, 84 (1985), quoting from Williamson v. Lee Optical of Okla., Inc., 348 U.S. 483, 487–489 (1955). See Prudential Ins. Co. of America v. Boston, 369 Mass. 542, 547 (1976) (“function of the court” is to construe statute as it is written “and an event or contingency for which no provision is made does not justify” court to rewrite statute's terms or conditions to meet such event or contingency, as may arise).
c. RCI's request for equitable relief. RCI asserts that Massachusetts courts have had occasion to either equitably subordinate or reinstate a mortgage, discharged by a mortgagee, in circumstances where the discharge or reordered priority “was a mistake that could provide one party with an unfair windfall.” There is no room for fashioning some sort of equitable remedy for a party who has failed to comply with the strict requirements of § 33. The legislative language admits no such equitable shelter, and we are not at liberty to install one, no matter the given circumstances or claims of hardship advanced by a party.
Amended order affirmed.