Lisa A. MacKey v. Santander Bank, N.A. ( 2024 )

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.
14