MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
In this action, the plaintiff, Mark Glaser (Mark), asserted three declaratory judgment claims and a claim for wrongful foreclosure against the defendant, MTGLQ Investors, L.P. (defendant), all relating to real property located in Merrimac (property) that was acquired by Mark and his then wife, Christel Rae Glaser (Christel), by deed dated October 25, 1993. The motion judge allowed the defendants motion to dismiss Marks second amended complaint, and he has appealed.
Our review of a motion to dismiss is de novo. See Sacks v. Dissinger, 488 Mass. 780, 783 (2021). In undertaking our review, we accept as true the facts alleged in the plaintiffs complaint as well as any favorable inferences that reasonably can be drawn therefrom. See Galiastro v. Mortgage Elec. Registration Sys., 467 Mass. 160, 164 (2014). The following facts are taken from the second amended complaint (complaint).
The complaint asserts that, by deed dated October 25, 1993, and recorded with the registry of deeds, Mark and Christel jointly acquired the fee interest in the property. On April 22, 2004, Christel executed a promissory note in favor of First Residential Mortgage Network, Inc. of Louisville, Kentucky, on behalf of Mark, pursuant to a power of attorney granted by Mark to Christel. Appended to the complaint is a copy of that power of attorney dated April 20, 2004. Also appended are a copy of the note and mortgage from the original closing, both of which are signed, apparently in Christels hand, “Mark G. Glaser UPOA Christel Rae Glaser.”
The complaint further alleges that after the mortgage was signed, and before it was recorded more than three weeks after the closing, the signature lines of both the mortgage and a rider, as well as the notarys acknowledgment on the mortgage, were impermissibly altered using handwritten changes. Attached to the complaint is a copy of the mortgage as recorded. Dated April 22, 2004, it falsely purports to have been executed by “Mark G. Glaser, individually and as attorney in fact for Christel Rae Glaser pursuant to a power of attorney dated 4-20-04 to be recorded herewith.” The notarized acknowledgement set forth on the mortgage is undated and falsely recites that “Mark G. Glaser, individually and as attorney in fact as aforesaid,” appeared before the notary public. It also fails to set forth the method of identification utilized by the notary. The subject certificate of acknowledgment further states that Mark G. Glaser acknowledged that “he/she signed voluntarily for the stated purpose.” The only power of attorney recorded is that reciting that it was executed by Mark G. Glaser on April 20, 2004, purporting to grant Christel Rae Glaser the power to execute documents in Marks name with respect to the refinancing of the property. There is no executed, recorded power of attorney authorizing Mark to sign any conveyance documents on behalf of his then wife, Christel.
The complaint asserts that the note was not altered and was signed only by Christel as attorney in fact for Mark. It asserts that any claim or representation that Mark personally signed the mortgage or appeared before the notary on April 22, 2004, is false, and that the only party appearing at the closing was Christel. The complaint asserts that “the mortgage at best conveyed on the one-half undivided interest of Mark Glaser, and that it did not convey an undivided joint interest of Christel in the property.” It asserts that Mark did not learn of the unauthorized alterations to the mortgage until sometime in 2019.
The complaint goes on to allege that in 2014, Christel filed a voluntary petition under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Massachusetts. It alleges that Nationstar Mortgage, then the purported assignee of the mortgage, filed a motion for relief from the automatic stay pursuant to 11 U.S.C. § 362 in the Bankruptcy Court, which was withdrawn after the Bankruptcy Court trustee objected. It alleges that in 2016, the trustee for Christels bankruptcy estate filed an adversary proceeding against Nationstar seeking a declaration that Christel had no legal obligation under the note, that any purported signature of or on behalf of Christel individually on the mortgage was unauthorized and/or fraudulent, and to void the mortgage loan because its defective acknowledgment failed to provide actual and constructive notice of the mortgage notwithstanding its recording.
The complaint alleges that, following a purported further assignment of the mortgage from Nationstar to the defendant, in 2017, the defendant and the trustee for Christels bankruptcy estate “entered into a [s]tipulation of [c]ompromise whereby defendant paid to the [t]rustee for Christels [b]ankruptcy [e]state $80,000 to settle Christels challenges to the [m]ortgage [l]oan.”
The complaint asserts that Mark was not a party to the bankruptcy proceeding and was not aware until 2019 of the infirmities in the mortgage loan set forth in the pleadings in that matter.
As will be described in more detail below, the complaint also alleges certain infirmities in the chain of assignments of the mortgage and that the defendant is not in possession of the original note.
Discussion. Mark alleges, inter alia, that the recorded mortgage is not enforceable against him due to defects in the notary acknowledgment and because the recorded mortgage was forged. He argues further that the defendant may not properly foreclose on the property because Christels undivided interest in it has not been encumbered, there are defects in the chain of assignments, and the defendant does not actually hold the note.
a. Statute of limitations. In support of its motion to dismiss, the defendant argues first that Marks claim of deficiency in the notary acknowledgment is barred by the ten-year statute of limitations in G. L. c. 184, § 24, which reads:
“When any owner of land the title to which is not registered, or of any interest in such land, signs an instrument in writing conveying or purporting to convey his land or interest, or in any manner affecting or purporting to affect his title thereto, and the instrument, whether or not entitled to record, is recorded, and indexed, in the registry of deeds for the district wherein such land is situated, and a period of ten years elapses after the instrument is accepted for record, and the instrument or the record thereof because of defect, irregularity or omission fails to comply in any respect with any requirement of law relating to seals, corporate or individual, to the validity of acknowledgment, to certificate of acknowledgment, witnesses, attestation, proof of execution, or time of execution, to recitals of consideration, residence, address, or date, to the authority of a person signing for a corporation who purports to be the president or treasurer or a principal officer of the corporation, such instrument and the record thereof shall notwithstanding any or all of such defects, irregularities and omissions, be effective for all purposes to the same extent as though the instrument and the record thereof had originally not been subject to the defect, irregularity or omission, unless within said period of ten years a proceeding is commenced on account of the defect, irregularity or omission, and notice thereof is duly recorded in said registry of deeds and indexed and noted on the margin thereof under the name of the signer of the instrument and, in the event of such proceeding, unless relief is thereby in due course granted.”
This statute applies to an acknowledgment that “because of defect, irregularity or omission fails to comply in any respect with any requirement of law relating to seals, corporate or individual, to the validity of acknowledgment, to certificate of acknowledgment, witnesses, attestation, proof of execution, or time of execution.”
We do not think that a false and fraudulent acknowledgment, as the complaint alleges was utilized in this case, is one that merely contains “a defect, irregularity, or omission.” Consequently, we do not think that § 24 bars Mark from challenging the recorded deed on the basis of the acknowledgment.
2
Even if we were to consider § 24 applicable in a case like this, we think that the doctrine of fraudulent concealment would serve to toll the ten-year limitations period, as the complaint contains sufficient allegations of fraud by the defendants predecessor in interest. Magliacane v. Gardner, 483 Mass. 842, 852 (2020). Until some issue was raised with respect to the recorded mortgage, because of the fraudulent act in the filing of the false acknowledgment, Mark would have had no reason to be aware that a completely false acknowledgment had been recorded.
Mark is also correct that, to the extent the mortgage purports to encumber Christels undivided interest and thus the entire piece of property, this is not an instrument signed by the owner of the land within the meaning of the statute. Taking the allegations of the complaint as true, although to the extent it encumbered Marks undivided interest in the property the mortgage was signed by Christel on Marks behalf, it was not, in fact, signed by Christel in her individual capacity, or on her behalf by Mark as recited in the handwritten insertion added to the signature line of the mortgage. Therefore, to the extent the mortgage purports to encumber the entire property such that it could support foreclosure by the defendant, it was not signed by the owner, and § 24 does not apply.
It makes sense that this ten-year statute of limitations would not begin to run in the absence of an actual signature by the owner of the land conveying the interest that purports to be conveyed by the recorded document. The point of § 24 is that, if one has conveyed an interest, one cannot complain after ten years about some technical flaw in the acknowledgment of the signature. Here, what is complained about is not some technical flaw with the acknowledgment but a false acknowledgment purporting to acknowledge a signature on a mortgage that was never placed there by or on behalf of the owner of the relevant interest, Christel.
b. Standing. This brings us to the defendants next argument, that Mark does not have standing to challenge the mortgage based upon the claim that the mortgage failed to encumber Christels interest in the property.
The complaint alleges that Christel never conveyed any interest in the property, and that her undivided interest in the property remains unencumbered. The defendant argues that Mark, having encumbered his own undivided interest in the property, can have no objection to foreclosure on the basis that Christels interest in the property remains unencumbered. The defendant argues that the only person with a valid claim based on the fact that Christels undivided interest was unencumbered is Christel. The defendant notes that the claims of Christel against the defendant were settled by the trustee for Christels bankruptcy estate.
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The defendant argues that Marks “interest in the [p]roperty was unquestionably encumbered even if Christels was not. Therefore, [Mark] was not harmed in any way by alleged defects in Christels signature.”
We disagree. Although we are not certain under what circumstances a lender will grant a mortgage secured only by one spouses undivided interest in a property held in a tenancy by the entirety, there is no doubt that it is permitted to do so. Coraccio v. Lowell Five Cents Sav. Bank, 415 Mass. 145, 148-152 (1993). Indeed, this is not the first case in which we have encountered such a mortgage. When an individual encumbers his own undivided interest in property held as a tenant by the entirety while his spouse does not encumber her undivided interest, so that the entire property cannot be foreclosed upon and the couple dispossessed in the event of a default on the first spouses mortgage, that first spouse, at least to the extent he has a possessory interest in the property, see U.S. Bank Trust, N.A. v. Johnson, 96 Mass. App. Ct. 291, 297-298 (2019), is himself injured sufficiently by a fraudulent claim that his spouses interest has in fact been encumbered that he has standing to challenge a foreclosure on the property. That is what the complaint alleges happened here, although of course further factual development may result in a conclusion that it is not. Lack of standing therefore does not present an appropriate ground for dismissal of the complaint.
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c. Chain of assignments. For these reasons, the case must be remanded. The defendant does also argue that, as to the assignments in the chain of title, there are no deficiencies. Should the trial court on remand determine upon further factual developments that the recorded mortgage is invalid, this question may be academic. But, since it may not, we address the issue.
The complaint asserts that the chain of assignments is defective in that the defendant “cannot show a complete and unbroken chain of title with accompanying proof of the sale of said mortgage loan from and to each of the entities in the alleged chain of title.” It alleges that the second purported assignment, from Bank of America to Nationstar, was from an entity not in the chain of title. And it alleges “[t]here is no reference to the recording information for [an] alleged power of attorney from Nationstar to [defendant] MTGLQ” under which the third and final assignment of the mortgage, from Nationstar to MTGLQ, was signed. (It does note that there is a “fourth purported ‘corrective’ mortgage assignment ․ addressed to the deficiencies of the second assignment by Bank of America.”)
Although Mark did not attach the assignments to the complaint, since they were relied upon in framing the complaint, the defendant could have attached them to its motion to dismiss without converting it to a motion for summary judgment. See Marram v. Kobrick Offshore Fund, Ltd., 442 Mass. 43, 45 n.4 (2004). However, it did not do so. The motion judge concluded that Mark “does not identify any specific assignment that is deficient or, identify any missing assignment,” but, given the allegations of the complaint, we do not think that, in the absence of information about the power of attorney or examination of the Bank of America assignments, a court can properly conclude that the defendant has demonstrated the adequacy of the chain of title. The defendant has now produced before us a supplemental appendix that purports to contain the various assignments. But even if we may properly consider them, we think that in the first instance the trial court should assess the chain of title, in the event it should conclude the question with respect to its sufficiency is not moot.
d. Possession of the original note. Finally, the defendant argues that Mark cannot succeed on his claim that the defendant does not possess the original note because it has been “demonstrated” to be the notes possessor.
The Supreme Judicial Court has held that, in order to foreclose, one must physically possess the note or act at the direction of the party who physically possesses the note. See Eaton v. Fannie Mae, 462 Mass. 569, 586 (2012). The defendant has asserted that it possesses the note. Again, depending on what conclusions are reached by the trial court following further factual development, this question may be academic. But, at this motion to dismiss stage, we take the allegations of the complaint as true. And they are that the defendant does not possess the original “wet-ink” note.
The defendant would rely on the recorded affidavit regarding compliance with G. L. c. 244, §§ 35B and 35C, purportedly executed by the defendants agent, which it attached to the motion to dismiss. That affidavit states that “the [f]oreclosing [m]ortgagee is the holder of the promissory note secured by the above mortgage.”
At the motion to dismiss stage, however, we do not consider affidavits, but only the allegations of the complaint. Furthermore, given the plaintiffs attachment to the complaint of a copy of a note consistent with the unaltered mortgage, we think that there is a sufficient issue about the contents and possible alteration of the note upon which the defendant would rely that, regardless of whether an affidavit attesting to possession would ordinarily be sufficient, something we need not and do not decide, in this case at least, questions about what exactly the defendant possesses cannot be resolved without the production of the original physical note.
The order allowing the motion to dismiss is reversed, and the case is remanded for further proceedings consistent with this memorandum and order.
So ordered.
reversed and remanded
FOOTNOTES
2
. Nor, to the extent if any that the defendant argues the point, do we think that falsely and fraudulently adding a second signature to a mortgage so that it purports to encumber an actually unencumbered interest amounts to such a defect, irregularity, or omission.
3
. The defendant does not assert that Christel encumbered her interest in the property, but only that she settled her claims against the defendant. In any event, taking the allegations in the complaint as true, her interest remains unencumbered.
4
. We note that our reasoning means that the motion judges conclusion, that alterations in the mortgage relating to Christels interest would invalidate the mortgage only as to Christels interest, was incorrect. Mark may challenge the enforceability of the mortgage through any foreclosure action that would extinguish his possessory interest in the property.