Patriot Resorts Corp. v. Register of Deeds of Berkshire , 71 Mass. App. Ct. 114 ( 2008 )

Green, J.

At issue is the proper interpretation of G. L. c. 262, § 38, which specifies the fees for recording documents with a registry of deeds.² The plaintiff, Patriot Resorts Corporation (Patriot), assigned a number of mortgage interests to a single assignee, under a single instrument of assignment. The defendant register of deeds (register) assessed recording fees based on the number of mortgages assigned. Patriot, contending that the fee should instead have been based on the single instrument of assignment, sought declaratory relief in the Superior Court. A judge of the Superior Court agreed with the register’s position, and Patriot appealed. We reverse.

Background. Patriot develops and sells so-called time share estates in resort properties. See generally G. L. c. 183B, §§ 1 et seq. Incident to its sales of time share estates, Patriot often accepts payment of a portion of the purchase price by extending a loan to the purchaser; in those transactions the loan is represented by a note, and secured by a mortgage executed in Patriot’s favor. After recording a number of such purchase money mortgages, Patriot typically assigns the mortgage interests (and associated notes) to an institutional lender as collateral security for credit extended by such a lender to Patriot.

The fees for recording documents with the register of deeds are set by statute. As in effect at the times relevant to the present case,³ G. L. c. 262, § 38, as amended through St. 1985, c. 515, provided, in pertinent part, as follows:

“The fees of registers of deeds, except as otherwise provided, to be paid when the instrument is left for recording, filing or deposit shall be as follows: For entering and recording any paper, certifying the same on the original, and ■ indexing it and for all other duties pertaining thereto, ten dollars for the first four pages. The fee for recording a deed or conveyance shall be twenty-five dollars for the first four pages. The fee for recording a mortgage shall be twenty dollars for the first four pages. If the deed, conveyance, mortgage or other paper contains more than four pages, the rate shall be one dollar for each page after the first four pages.

“For entering any additional marginal reference or referenees when required, one dollar for each reference.”⁴,⁵

In addition to the basic recording fees, G. L. c. 44B, § 8, inserted by St. 2000, c. 267, § 1, imposes a surcharge, as follows:

“(a) The fees of the registers of deeds, except as otherwise provided, to be paid when the instrument is left for recording, filing or deposit shall be subject to a surcharge of $20. The fees for so recording, filing or depositing a municipal lien certificate shall be subject to a surcharge of $10. The surcharges shall be imposed for the purposes of community preservation. No surcharge shall apply to a declaration of homestead under chapter 188. No surcharge shall apply to the fees charged for additional pages, photostatic copies, abstract cards, additional square feet for the filing and recording of plans or for additional or required marginal references.”⁶,⁷

On July 17, 2002, Patriot presented to the register for recording an instrument of assignment (assignment) assigning to Liberty Bank a collateral security interest in 169 mortgages that had been granted to Patriot by various time share estate purchasers. The assignment instrument was eight pages in length, including two pages setting forth its substantive terms, a page containing a notarial acknowledgment, and a five-page schedule describing the various mortgages it assigned. The register imposed a total fee (including Community Preservation Act surcharge) of $5,074 for recording the assignment. The register assessed the fee based on his treatment of the assignment as constituting 169 separate assignments, with a separate recording fee of $10, and a separate surcharge of $20, imposed on each.⁸

By complaint filed in the Superior Court on August 16, 2002, Patriot sought a declaration that the fee imposed by the register exceeded the proper fee by $4,872.⁹ The parties filed cross motions for summary judgment; after hearing, a judge of the Superior Court allowed the register’s motion, and denied Patriot’s. Patriot filed a timely notice of appeal from the resulting judgment.

Discussion. “We interpret a statute according to the intent of the Legislature. Commonwealth v. Galvin, 388 Mass. 326, 328 (1983). ‘[T]he primary source of insight into the intent of the Legislature is the language of the statute,’ International Fid. Ins. Co. v. Wilson, 387 Mass. 841, 853 (1983), and that is our starting point. Simon v. State Examiners of Electricians, 395 Mass. 238, 242 (1985). Statutory language should be given effect consistent with its plain meaning. Where, as here, that language is clear and unambiguous, it is conclusive as to the intent of the Legislature. Commonwealth v. Clerk-Magistrate of the W. Roxbury Div. of the Dist. Court Dep’t, 439 Mass. 352, 355-356 (2003).” Commissioner of Correction v. Superior Ct. Dept. of the Trial Ct., 446 Mass. 123, 124 (2006).

Patriot contends, quite correctly in our view, that the assignment was a single “paper,” within the meaning of that term in G. L. c. 262, § 38, and a single “instrument,” within the meaning of that term in G. L. c. 44B, § 8. Accordingly, the charges for its recording should have included a basic recording fee of $10, a Community Preservation Act surcharge of $20, an additional $4 for the number of pages by which the assignment exceeded four pages, and an additional $168 for the number of additional marginal references the assignment necessitated.¹⁰

In opposition, the register first observes that a court should “not adopt a literal construction of a statute if the consequences of such construction are absurd or unreasonable,” Bates v. Director of the Office of Campaign & Political Fin., 436 Mass. 144, 165 (2002), quoting from Attorney Gen. v. School Comm. of Essex, 387 Mass. 326, 336 (1982), particularly where a literal construction “would defeat the aim and object of the legislation.” Lexington v. Bedford, 378 Mass. 562, 570 (1979). The register asserts that the purpose of the recording fees statute is to provide revenues to cover the costs involved in recording documents presented to the register, and that the Legislature accordingly must have intended that the fees imposed for recording particular documents bear a reasonable relationship to the amount of work involved in recording the document. The argument is flawed at two levels. First, accepting for the sake of argument the premise that the fee must correspond in some measure to the amount of work involved in recording a particular document, the statute, as then in effect, by its plain terms attempted to address the concern by increasing the fee for the number of pages in the document and the number of marginal references necessitated by the document. Particularly where, as here, the additional effort associated with recording a document lies principally in the number of marginal references required incident to the recording of an instrument, we see no material disparity between the apparent purpose of the statute and application of the statute in accordance with its terms.¹¹

Second, the specified recording fees do not strictly correspond to the amount of work associated with recording an instrument in any event. The recording of an assignment of mortgage involves no more work than the recording of a mortgage itself, yet under the statute as then in effect, the specified fee for recording an assignment of mortgage was ten dollars, while the fee for recording a mortgage was twenty dollars.¹² We also observe that recording fees collected by the register are not retained by the register but are paid into the General Fund, pursuant to G. L. c. 29, § 2. Accordingly, additional recording fees collected are not available to the register to cover any additional expenses he may incur in performing his required duties in any one or more particular transactions.¹³

The register also reminds us that a court must give substantial deference to the reasonable interpretation of a statute adopted by the administrative agency charged with its enforcement. See Commerce Ins. Co. v. Commissioner of Ins., 447 Mass. 478, 481 (2006). However, the principle is “ ‘one of deference, not abdication,’ ” and we will not hesitate to overrule an agency interpretation that is unreasonable or arbitrary. Moot v. Department of Envtl. Protection, 448 Mass. 340, 346 (2007), quoting from Boston Preservation Alliance, Inc. v. Secretary of Envtl. Affairs, 396 Mass. 489, 498 (1986).

The record includes the affidavit of Richard R Howe, Jr., the incumbent register of deeds for the northern Middlesex district and a former president of the Massachusetts Registers and Assistant Registers of Deeds Association. In his affidavit, Howe uses the term “multiple document” to describe a document (which, according to Howe, includes the assignment involved in the present case) that combines “two or more separate functions or transactions together into a single document.” Howe further explains that, due to the additional work associated with recording and indexing a document that effects multiple transactions, “it is standard practice for the registries throughout the Commonwealth to assess, pursuant to G. L. c. 262, § 38, a separate recording fee that accurately reflects the work associated with the multiple transactions or functions within the document.” However, though the registers’ desire to assess fees in proportion to the work involved in recording is perhaps understandable, neither the Howe affidavit, nor the register’s brief on appeal, makes any attempt to ground the registers’ practice in the fee schedule prescribed by the statute.¹⁴ In construing the statute it is of course the directive of the Legislature, rather than the practice of the registers, with which we are principally concerned.

We return to the point of beginning: an examination of the words of the statute. Black’s Law Dictionary 1142 (8th ed. 2004) defines “paper” as “[a]ny written or printed document or instrument.” As we have observed, G. L. c. 262, § 38, as then in effect, imposed a recording fee of $10 on any “paper,” while imposing higher fees on any “deed or conveyance” or any “mortgage.”¹⁵ The statute accordingly treats a “paper” as an object comparable to a “deed” or a “mortgage” for purposes of assessment of a recording fee, albeit in a different class for purposes of determining the amount of the fee. Chapter 36 of the General Laws, which generally describes the duties of the registers concerning the recordation of documents, consistently refers to assignments as “instruments.” See, e.g., G. L. c. 36, §§ 20, 21, 23. Moreover, the opening sentence of G. L. c. 262, § 38, uses the term “instrument” to refer collectively to the materials that may be left for recording, including any “paper,” “deed,” or “mortgage.” General Laws c. 44B, § 8, similarly employs the term “instrument” to refer to documents presented for recording, on which a recording fee is assessed.

Contrary to the register’s characterization of the assignment as comprising multiple assignments, it is a single instrument of assignment, from a single assignor to a single assignee.¹⁶ That it conveys a number of separate assets does not alter its character as a single instrument of conveyance any more than would occur in the case of a deed which conveys a number of discrete parcels of land, or a collateral assignment of leases conveyed incident to the financing of a large shopping center.

There are any number of conceivable methods for the assessment of recording fees on instruments presented to a registry of deeds for recording. The Legislature has adjusted both the manner and amount of such fees through various amendments to the statute since its first enactment in 1795. If the register believes that current conveyancing practice warrants a further refinement of the formula for assessing fees on one or more classes of documents, he is free to suggest to the Legislature an amendment to the statute. However, under the statute as in effect at the time of the transaction involved in the present case, the fees imposed by the register exceeded the fees authorized by the statute.

The judgment of the Superior Court is reversed. The case is remanded to the Superior Court for further proceedings consistent with this opinion, to determine the amount of excess fees collected by the register from Patriot.¹⁷

So ordered.

2 A related question concerns the application of G. L. c. 44B, § 8, which imposes a surcharge on recording fees, as part of the Community Preservation Act.

3 By St. 2003, c. 4, § 51, the Legislature rewrote the section, substantially increasing the base fees for recording various types of documents, and eliminating, inter alla, the separate charges for additional pages and additional marginal references.

4 A marginal reference is a written reference entered in the margin of an earlier recorded, related document that refers the reviewer to the book and page of the newly recorded document.

5 We have omitted from the quoted language the second, third, and fourth paragraphs of the statute (which do not bear on the question presented) as well as the sixth paragraph (which added a cross reference to the surcharge imposed under the Community Preservation Act).

6 A somewhat different fee schedule applies to instruments affecting land registered under G. L. c. 185. See G. L. c. 262, § 39; G. L. c. 44B, § 8(b).

7 A second surcharge (of five dollars per instrument) is imposed by G. L. c. 9, § 26, to be applied toward modernization of registries of deeds. However, that surcharge became effective on March 15, 2003, and hence did not apply at the time of the recording that gave rise to this action.

8 The register assessed an additional $4, at $1 per page for each page of the assignment that exceeded the initial four pages.

9 According to Patriot’s complaint, the register should have imposed a total fee of $202, comprised of one recording fee of $10, and one surcharge of $20, on the assignment, an additional $4 on each of the pages of the assignment that exceeded four, and an additional $168 for each marginal reference necessitated by the assignment in excess of the first such notation.

10 Each mortgage assigned would receive a marginal reference noting the book and page of the assignment. See note 4, supra.

11 The register contends that much more additional work is required to index the assignment in accordance with the dictates of G. L. c. 36, § 25, asserting that a separate index entry must record the name of each of the various borrowers on each assigned mortgage. The statute does not so require. Under G. L. c. 36, § 25, the register is required to maintain a grantor and grantee index, identifying as to each recorded instrument the (i) date of reception; (ii) grantor(s); (iii) grantee(s); (iv) book; (v) page; and (vi) town where the land lies. Under an instrument assigning a mortgage, the “grantor” is the assignor of the mortgagee’s interest in the mortgage, and the “grantee” is the assignee of that interest. The mortgagor’s (or borrower’s) interest in the property covered by the mortgage is unaffected by the assignment. The need to trace ownership of the mortgage interest (for, among other purposes, assuring authority to execute a discharge of the mortgage upon its satisfaction) is achieved by means of the marginal references on the mortgage and any assignments thereof.

12 Under the fee schedule currently in effect, see note 3, supra, the fee for recording an assignment of mortgage has increased to $50, while the fee for recording a mortgage has increased to $150. We also note that the fact that the Legislature chose in the most recent amendment to eliminate separate charges for additional pages and marginal references weighs against the register’s assertion that the Legislature must have intended for fees to correspond to the work involved in recording a particular document.

13 Surcharges collected under G. L. c. 44B, § 8, are paid into the Community Preservation Fund established under G. L. c. 44B, § 7. Surcharges collected under G. L. c. 9, § 31, from March 15, 2003, through June 30, 2008, see note 7, supra, are paid into the Registers Technological Fund established under G. L. c. 29, § 2JJJ; from and after July 1, 2008, such surcharges are to be forwarded to the General Fund.

14 The register’s argument gains no force from Technical Information Release 00-12, addressing Community Presentation Act Surcharges, issued by the Department of Revenue, which provides that “[i]f multiple recording fees are charged for one document, e.g., the registry charges three recording fees for an instrument assigning three mortgages, a surcharge is due on each separate fee collected.” The technical information release does not furnish any interpretive authority for the registers’ practice of imposing multiple recording fees on such documents, but simply clarifies that the Community Preservation Act surcharge is to be imposed whenever a separate recording fee is collected.

15 The differential persists in the current version of the statute, albeit in different amounts.

16 The dissent, without explanation, similarly characterizes the assignment as comprising multiple mortgage assignments, rather than as a single assignment of multiple mortgage interests. See post at 123.

17 In a supplemental complaint filed in the Superior Court, Patriot has identified several other assignment instruments on which it claims it was overcharged, based on the same statutory interpretation by the register.