Source: http://masscases.com/cases/land/2019/2019-13-146731-DECISION.html
Timestamp: 2020-04-08 21:10:35
Document Index: 474363357

Matched Legal Cases: ['§2', '§69', '§69', '§66', '§66', '§69', '§66', '§66', '§66']

ITHACA FINANCE, LLC. vs. CORTES, TL 13-146731
ITHACA FINANCE, LLC v. FERNANDO CORTES, TRUSTEE of IVNI REALTY TRUST; 401-411 JACKSON STREET, LL; and READING CO-OPERATIVE BANK
TL 13-146731
Plymouth Park Tax Services, LLC, d/b/a XSPAND, a private assignee of a municipal tax lien, filed this action to foreclose on the right of redemption of a tax title on July 9, 2013. Ithaca Finance, LLC was subsequently substituted as the plaintiff in 2014. Judgment entered against the taxpayer pursuant to the allowance of a motion for general default on January 10, 2017. On July 13, 2018, the defendant, Fernando Cortes, Trustee of Ivni Realty Trust ("Cortes"), filed a motion for relief from judgment. On August 8, 2018, a hearing was held at which the motions of 401- 411 Jackson Street, LLC and Reading Co-Operative Bank to intervene were allowed, and Cortes's motion for endorsement of a memorandum of lis pendens was also allowed. On December 20, 2018, Reading Co-Operative Bank filed a "motion for summary judgment," claiming it was a mortgagee and interested party and had been deprived of due process. On June 17, 2019, intervenor 401-411 Jackson Street, LLC also filed a "motion for summary judgment" against Cortes, claiming that as a bona fide third-party purchaser of the subject property after the default judgment, it should not be subject to the possible loss of the property. A hearing on Cortes's motion for relief from judgment and the summary judgment motions was held before me on October 2, 2019, after which I took the matter under advisement.
Based on the facts stipulated by the parties, the documentary evidence admitted at the hearing, other material submitted and not excluded in connection with the motion for relief from judgment, and the motions for summary judgment, [Note 1] I make the factual findings below.
1. The property that is the subject of this dispute is located at 117-125 Union Street in Lawrence ("locus"). [Note 2] It is a sixteen-unit multi-family dwelling.
2. In 2003, Cortes conveyed the locus from himself in his individual capacity to himself as trustee of IVNI Realty Trust ("IVNI Realty Trust" or "IVNI"), by quitclaim deed recorded with the Essex County North District Registry of Deeds ("Registry") on May 21, 2003, in Book 7819, Page 27. [Note 3] Cortes had a business address at 314 Market Street in Lawrence. [Note 4]
3. In 2008, Cortes, in his capacity as trustee, granted two mortgages to River Bank. The first was granted on July 17, 2008, and recorded at the Registry in Book 11253, Page 39. [Note 5] The second was granted on September 30, 2008, and recorded at the Registry in Book 11329, Page 296. [Note 6] Both mortgages named the locus as security for loans made by River Bank to Cortes, as trustee of IVNI Realty Trust. [Note 7]
4. On March 8, 2010, pursuant to G. L. c. 60, §2C, the city of Lawrence executed a bulk assignment of certain tax receivables to Plymouth Park Tax Services, LLC, d/b/a XSPAND ("Plymouth Park"), by instrument recorded at the Registry on March 10, 2010, in Book 11969, Page 150. [Note 8] The assignment included receivables for unpaid real estate taxes owed to the city of Lawrence on the locus. [Note 9] The total balance owed at that time, as indicated on the assignment instrument, totaled $2878.36. [Note 10]
5. After the assignment of the tax receivables to Plymouth Park, Plymouth Park's counsel sent a letter to IVNI Realty Trust, dated August 12, 2010, advising IVNI that the locus was "about to be advertised for nonpayment of taxes" and that the "taking of this property will occur fourteen (14) days after advertisement" if full payment of the amount due was not made within fourteen days. [Note 11] Towards the bottom of the letter was an indication that Spanish speakers were available for those who had questions and spoke Spanish as their primary language. [Note 12] Cortes acknowledges he received the letter, and that he understood the letter to be indicating that he owed real estate taxes on the locus. [Note 13]
6. On September 14, 2010, an Instrument of Taking by Assignee was executed by Plymouth Park, to effectuate a taking of the locus for nonpayment of due taxes "within 14 days after a demand for payment was made[.]" [Note 14] The Instrument of Taking by Assignee was recorded with the Registry on November 10, 2010 in Book 12274, Page 197. [Note 15]
7. Plymouth Park's counsel sent a letter to "IVNI Realty Trust[,] Fernando Cortes," dated July 13, 2012, advising Cortes that IVNI Realty Trust presently owed a total of $4354.54 (including interest), and that if payment was not made within thirty days of the letter, Plymouth Park may initiate a foreclosure action against the property. [Note 16] This letter also indicated, in Spanish, that questions from Spanish speakers about the letter could be directed to a certain phone number. [Note 17] Cortes acknowledges receipt of this letter. [Note 18]
8. On July 8, 2013, Plymouth Park filed a complaint to foreclose the right of redemption on the locus in the Land Court, and notice of the same was recorded at the Registry on July 26, 2013, in Book 13570, Page 2. [Note 19]
9. The city of Lawrence issued a municipal lien certificate for the locus on August 13, 2013. [Note 20] The Certificate did not list the tax taking as an encumbrance on the locus, as it only reflected that the tax owed to Lawrence (rather than to Plymouth Park) was not outstanding. [Note 21]
10. The Land Court title examiner appointed in the tax case filed her title report with the Land Court on September 23, 2013. [Note 22] In it, the examiner identified only the two outstanding River Bank mortgages as encumbrances on the locus. [Note 23]
11. Also on September 23, 2013, Cortes, as Trustee of IVNI Realty Trust, executed a quitclaim deed purporting to convey the locus to INVI Realty, LLC. [Note 24] This deed was recorded at the Registry on September 23, 2013, in Book 13643, Page 143. [Note 25]
12. Additionally on September 23, 2013, Reading Co-Operative Bank ("Reading") made a loan to INVI Realty, LLC, in the amount of $900,000. [Note 26] The loan was secured by a mortgage and security agreement on the locus granted to Reading by INVI Realty, LLC. [Note 27] The mortgage and security agreement was recorded at the Registry on September 23, 2019 in Book 13643, Page 150. [Note 28] The proceeds of the loan were used in part to pay off the outstanding loan and mortgage to River Bank. [Note 29]
13. Reading retained an attorney to conduct the closing of the mortgage loan. [Note 30] The attorney issued Reading a title certification letter on September 23, 2013. [Note 31] The letter did not reference the Instrument of Taking by Assignee executed by Plymouth Park on September 14, 2010 as an encumbrance on the locus, nor the filing of the foreclosure complaint, notice of which had been recorded at the Registry on July 26, 2013. [Note 32]
14. On November 25, 2013, citations serving notice of the foreclosure complaint by Plymouth Park were sent by certified mail to Cortes, as trustee of IVNI Realty Trust, and to River Bank. [Note 33] The notice described the tax title foreclosure complaint filed against IVNI Realty Trust, and advised that failure of IVNI Realty Trust to make any response may result in default entered against it. [Note 34] Cortes, or someone on his behalf, signed the green card receipts for the certified mail, indicating receipt of the notice. [Note 35]
15. On February 26, 2014, Cortes, signing as "Fernando Co[r]tes, Trustee" of IVNI Realty Trust, entered into a payment agreement with Plymouth Park. [Note 36] In the agreement, Cortes acknowledged that IVNI Realty Trust owed $7,163.59 in unpaid real estate taxes attributable to the locus, acknowledged that a petition to foreclose was pending in the Land Court, and agreed to pay Plymouth Park six installments of $1200, beginning on March 1, 2014 and recurring on the first of each month thereafter, until the debt of $7163.59 was paid in full. [Note 37] Cortes was to contact counsel for Plymouth Park about the amount of the final payment. [Note 38] In exchange, Plymouth Park agreed to stay its efforts to foreclose the right of redemption for the locus while Cortes remained in compliance with the agreement. [Note 39]
16. On February 26, 2014, INVI Realty, LLC sent Plymouth Park a check in the amount of $1200 pursuant to the payment agreement, with no notation in the memo line. [Note 40]
17. On March 21, 2014, Plymouth Park assigned its interest in the tax taking of the locus to Ithaca Finance, LLC ("Ithaca") by assignment recorded at the Registry on March 24, 2014, in Book 13804, Page 225. [Note 41] The assignment stated that the tax taking had not, by that date, been redeemed. [Note 42]
18. On March 31, 2014, Ithaca sent IVNI Realty Trust a notice of assignment of the tax lien. [Note 43] The letter included information about the assignment and stated that "Non- payment of the outstanding amount due on this lien could result in foreclosure proceedings and possible loss of the property." [Note 44]
19. On April 20, 2014, INVI Realty, LLC sent Plymouth Park a second check in the amount of $1200, citing "117-125 Union St LAW MA ID: 1525685" on the memo line of the check. [Note 45] No further payments on the payment agreement were made by Cortes, IVNI Realty Trust, or INVI Realty, LLC.
20. On January 10, 2017, judgment entered in Land Court case number 13 TL 146731, against IVNI Realty Trust. [Note 46] The judgment was recorded in the Registry on February 27, 2017, in Book 14998, Page 325. [Note 47] The judgment ordered that all rights of redemption in the property subject to the tax taking recorded on November 11, 2010 [Note 48] were foreclosed and barred. [Note 49]
21. In June 2018, Ithaca conveyed the locus to 401-411 Jackson Street LLC ("Jackson") by quitclaim deed recorded at the Registry on June 22, 2018, in Book 15524, Page 247. [Note 50] Jackson paid $825,000 in consideration for the property to Ithaca. [Note 51]
G. L. c. 60, §69A provides that, "No petition to vacate a decree of foreclosure . . . shall be commenced by any person other than the petitioner except within one year after the final entry of the decree[.]" Motions to vacate foreclosure judgments are "extraordinary in nature" and should only be allowed "after careful consideration and in instances where they are required to accomplish justice." Lynch v. City of Boston, 313 Mass. 478 , 480 (1943), citing Russell v. Foley, 278 Mass. 145 , 148 (1940). The granting of a motion to vacate a judgment of foreclosure rests "largely but not entirely" in the discretion of the court. Lynch v. City of Boston, supra, 313 Mass. at 480.
Once the statutory year-long redemption period has elapsed, the right to vacate a foreclosure decree is typically extinguished. "Following this one-year period, the statute imposes an absolute bar on petitions to vacate[, a bar that] protects the public's 'need for an efficient and final determination of any dispute regarding a public taking, so that title to the land taken can be settled.'" Town of Brewster v. Sherwood Forest Realty, Inc., 56 Mass. App. Ct. 905 , 905-906 (2002), quoting Andover v. State Fin. Servs., Inc., 432 Mass. 571 , 577 (2000). The instant motions for relief from judgment, brought by Cortes, as trustee of IVNI Realty Trust, and Reading Co-Operative Bank - and not by petitioner Ithaca - were filed more than a year after the final entry of the foreclosure decree in this action. Therefore, neither IVNI nor Reading can seek relief from the tax foreclosure judgment under the one year period cited in G. L. c. 60, §69A.
However, "strict observance of the time limit can be excused if the entry of the decree involves a denial of due process." Town of Brewster v. Sherwood Forest Realty, Inc., supra, 56 Mass. App. Ct. at 906. The policy of the law favors redemption from tax sales, and "[t]hese equitable proceedings are not to be rendered futile by satisfying minimal constitutional guarantees." West v. Bd. of Selectmen of Yarmouth, 354 Mass. 547 , 550-551. The burden of proving that an interested party was denied due process is high. Ithaca Finance, LLC v. Leger, 27 LCR 224 , 227 (2019) (Speicher, J.), citing Vincent Realty Corp. v. City of Boston, 375 Mass. 775 (1978). A petition seeking to vacate a foreclosure judgment is "extraordinary in nature and ought to be granted only after careful consideration and in instances where they are required to accomplish justice." Russell v. Foley, 278 Mass. 145 , 148 (1932).
I. IVNI REALTY TRUST HAS FAILED TO SHOW THAT IT WAS DEPRIVED OF DUE PROCESS.
In order to prevail in vacating the foreclosure judgment after the one-year redemption period has passed, IVNI Realty Trust would have to establish a violation of its due process rights. Town of Sharon v. Kafka, 18 Mass. App. Ct. 541 , 543 (1984). The strictures of due process require that the delinquent taxpayer be given notice of its default, and of any foreclosure complaint issued against it. G. L. c. 60, §66. The notice to be afforded must be "reasonably calculated, under all of the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950).
IVNI Realty Trust has failed to sustain its burden with respect to a due process violation. The facts demonstrate that after Plymouth Park became the owner of the tax receivable for the property, it sent a letter to Cortes, as trustee of IVNI, advising the trust that Plymouth Park would initiate a tax taking of the property 14 days thereafter if the tax debt was not paid in full. The letter featured an advisement that Spanish speakers were available to help those whose primary language was not English - such as Cortes, IVNI's trustee. There is no dispute that Cortes received this letter.
When payment from IVNI was not forthcoming, Plymouth Park instituted and completed a tax taking of the property by recording the Instrument of Taking by Assignee. Almost two years later, on July 13, 2012 (during which time Cortes retained control of the property and did not pay back the delinquent taxes), Plymouth Park again wrote to IVNI. Plymouth Park advised that if the total taxes owed were not paid within thirty days, Plymouth Park would begin foreclosure proceedings in Land Court. Again at the bottom of the letter was a notation, in Spanish, directing Spanish speakers to use a specific contact number for questions. Cortes also remembers having received this letter.
On July 8, 2013, after nearly another year had elapsed, Plymouth Park filed a foreclosure complaint in Land Court. Notice of the complaint was recorded at the Registry on July 26, 2013, in Book 13570, Page 2. IVNI received notice of this complaint after it was filed. Once a petition for foreclosure of rights of redemption is filed with the Land Court, a title examiner examines title to determine the parties interested in the property on that date. G. L. c. 60, §66. Notice of the foreclosure complaint is provided to all interested parties either by certified mail or publication. Id.; Town of Andover v. State Fin. Servs., Inc., supra, 432 Mass. at 575. Here, notice was sent to IVNI by certified mail on November 25, 2013. "Green cards" indicating receipt of the notice were filled out and returned, confirming that the notice was delivered and received at IVNI's business address. Summarily, then, IVNI - through its trustee Cortes - received at least three actual notices from Plymouth Park, explaining, respectively, the possibility of a tax taking, the possibility of a foreclosure complaint, and the filing of a foreclosure complaint in the Land Court.
With the foreclosure complaint pending, in February of 2014, Plymouth Park and IVNI Realty Trust reached an agreement that would allow IVNI to avoid losing the property in exchange for payment of all taxes and interest then due, an amount equal to $7163.59. Cortes, as trustee of IVNI Realty Trust, executed the payment agreement with Plymouth Park on February 26, 2014 (although he had already purported to convey the property to another entity, INVI Realty, LLC). Pursuant to the payment agreement between the parties, Cortes paid Plymouth Park two of the required $1200 installments towards satisfaction of the debt, on behalf of IVNI Realty Trust. [Note 52] The first was paid on February 26, 2014, and the second was paid on April 20, 2014. After these two payments, Cortes failed to pay Plymouth Park further, claiming to have "totally overlooked it." [Note 53] When Plymouth Park assigned the tax lien to Ithaca, a notice of the assignment was sent to IVNI at its Lawrence business address, noting that non-payment of the amount due on the lien could ultimately result in loss of the property. Trustee Cortes does not remember, but also does not deny receiving this letter notifying him of the assignment. I find that Cortes has failed to overcome the evidentiary presumption that the notice, having been mailed to him, was received by him. See Huntley v. Whittier, 105 Mass. 391 (1870).
Plymouth Park more than complied with the statutory requirements of notice to IVNI Realty Trust. Plymouth Park communicated with IVNI before initiating a tax taking or filing a foreclosure complaint, and again upon filing of the foreclosure complaint. Even after the complaint was filed, Plymouth Park maintained communication with IVNI such that the parties were able to work out and enter into a payment agreement. This provided IVNI with plentiful notice of the tax taking and subsequent foreclosure complaint. Cortes cannot legitimately argue that his inexplicable failure to make the final four required payments on the payment agreement were the result of a deprivation of his due process rights. He was aware of the debt, and he cannot complain that no one gave him inadequate notice of the consequences of failure to comply with his agreed-upon payment obligations.
IVNI argues, in part, that although he received the notices, trustee Cortes had difficulty understanding the notices, as his first language is not English. By extension, then, he argues that the notices he received were not sufficient to comply with his due process rights. However, Cortes's difficulty understanding English would not itself necessarily cause a deprivation of due process sufficient to permit vacating the foreclosure judgment. A defendant cannot rely on his failure to have notice translated, and seek to avoid the ramifications of ignoring the notice, if the defendant "received adequate notice which, if translated, would have advised [him] that failure to obey the orders" could result in serious consequences. Commonwealth v. Olivo, 369 Mass. 62 , 69 (1975).
Here, Cortes is not absolved from knowing what was contained in the notices simply because English was his second language. He concedes that he speaks and understands English as his second language. [Note 54] Cortes also had the help of his brother, Hugo Cortes, who speaks English fluently and reviewed the notices sent to IVNI. [Note 55] While Hugo maintains that he did not understand from the notices that "there was a risk that the ownership of the subject property could be lost," this assertion is contradicted by the contents of those notices. The notice of advertising sent to and received by IVNI in August 2010 stated clearly that the property was about to be advertised for nonpayment of taxes, and that if payment was not forthcoming within fourteen days, "the taking may result in a future foreclosure action against the property." [Note 56] The next letter to IVNI from Plymouth Park's counsel warned that "You have failed to pay the Tax Lien.Unless the required payment is received by [Plymouth Park] within 30 days of the date of this letter, [Plymouth Park] may . . . [undertake] commencement of a foreclosure against the property." [Note 57] The notice of the foreclosure complaint from the Court, which IVNI received, included information explaining the nature of IVNI's property rights, such as "You are at risk of foreclosure. If a judgment of foreclosure is entered you will lose ALL of your ownership or other rights in this property, regardless of the amount of the tax lien, and you will not be refunded any amount exceeding the balance due." [Note 58] Additionally, the 2010 and 2013 notices indicated that Spanish speakers could obtain help at a separate phone number. Cortes was provided every opportunity to understand the notices, and cannot avoid the consequences of receiving notice by willfully ignoring their plain meanings.
In addition, IVNI entered into a payment agreement with Plymouth Park. The agreement acknowledged the unpaid taxes, noting that "[Plymouth Park] has filed a Petition to Foreclose" on the tax lien, and that IVNI "desires to make payments on the outstanding tax balance to reserve their right to redeem the property" (emphasis added). [Note 59] This language contemplates the consequence of IVNI's failure to abide by it - loss of the right to redeem the property, and loss of the property. IVNI's partial, two-payment compliance with the agreement is evidence that Cortes understood and agreed to the terms in the agreement, including the consequences of non-payment.
It is plain and undisputed that Cortes both knew of the existence of the foreclosure action and the necessity of paying back the tax debt to avoid foreclosure, because of ample notice provided by Plymouth Park. Cf. Ithaca Fin., LLC v. Leger, supra, 27 LCR at 229 ("[T]he failure to communicate with the taxpayer until it was too late for the taxpayer to petition to redeem the Property was . . . the result of a willful plan to do the opposite of what is required by statute[.]"). It would strain credulity to conclude that one who willingly enters into a payment agreement with a tax lien holder, after receiving notices of the possibility he would lose the property for non-payment, did not have adequate notice that failure to abide by the payment agreement could result in his loss of the property. To the extent that IVNI argues its trustee Cortes simply did not understand the nature of the payment agreement, this argument also fails for the above reasons. The court finds that IVNI was not deprived of due process, but rather received adequate notice of the tax taking and foreclosure action against it.
II. READING CO-OPERATIVE BANK HAS FAILED TO SUSTAIN THE BURDEN OF ITS DUE PROCESS VIOLATION CLAIM BECAUSE IT WAS NOT ENTITLED TO STATUTORY NOTICE AND IT HAD CONSTRUCTIVE NOTICE OF THE FORECLOSURE COMPLAINT.
Reading did not petition to redeem the tax lien or vacate the foreclosure judgment within a year of the entry of judgment in the case, as required by G. L. c. 60, §69A. Rather, Reading did not seek to intervene in this action until more than a year after entry of judgment, and filed its motion seeking to vacate the foreclosure judgment (the "motion for summary judgment") some seventeen months after judgment entered in the foreclosure action. Therefore, for Reading to succeed in attempting to vacate the foreclosure judgment, it can only proceed under a theory that its due process rights were violated.
Here, all the parties to this action concede that Reading did not receive actual notice from either the foreclosing party, Ithaca, or from the Land Court following the title examination by the Land Court's title examiner. Nonetheless, there was no violation of the requirements of G. L. c. 60, §66.
Chapter 60, §66 provides that a court title examiner shall determine the parties with interests in the property "upon the filing of" a foreclosure petition. The Land Court title examiner began the examination before IVNI granted Reading a mortgage in exchange for the $900,000 loan. By coincidence, the Land Court title examiner ultimately completed her title examination and issued her report to the Land Court, upon which the issuance of citations was based, on the very same day that IVNI Realty Trust conveyed the locus to INVI Realty, LLC, which then granted a mortgage to Reading. Although the title examiner was only required to determine those with an interest in the property as of the date of filing of the notice - July 26, 2013 - had the mortgage been granted earlier, the title examination would have fortuitously picked up the new mortgage. But this was not required by the statute. At the time the title examiner was investigating which parties had interests in the property, Reading was not an interested party because it had not yet received the mortgage from INVI Realty, LLC. For that reason, Reading was not deprived of any statutorily required notice at the time the title examiner identified parties with an interest in the locus.
Reading points out that by the time the foreclosure judgment issued, more than three years had elapsed since the Land Court title examiner identified parties with an interest in the locus. Reading argues that due process required that another title examination be conducted before entry of judgment, to identify additional parties in interest. While updating the title after a lengthy delay without the entry of judgment is a reasonable suggestion, such a re-examination of the title is not what the statute requires, and, at least under the circumstances of the present case, the lack of such an update in the title examination does not implicate any due process rights. Nothing in the text of the statute mandates that another title examination take place when foreclosure judgment does not issue for any particular length of time. Therefore, the notice requirements of the statute were met as a matter of law. Because Reading was not entitled to notice by statute, it cannot cite statutory noncompliance as the basis of a due process violation.
Additionally, although Reading did not receive actual notice of the foreclosure complaint, it did have constructive notice of the tax taking and the foreclosure complaint. Constructive notice can suffice to provide notice that is "reasonably calculated, under all of the circumstances, to apprise interested parties of the pendency of the action[.]" Ithaca Fin., LLC v. Lopez, 95 Mass. App. Ct. 241 , 246, citing Andover v. State Fin. Servs., Inc., supra, 432 Mass. at 574.
In accordance with usual practice, Reading engaged an attorney to represent it with respect to the proposed mortgage transaction with Cortes. This representation included doing a title examination to insure that Reading would receive good title to its first mortgage on the locus. It hired an experienced attorney who had ample experience with title work. The attorney issued a title certification letter to Reading on September 23, 2013, noting that his title examination was conducted using the indices of the "Essex County (Northern District) Registry of Deeds and the pertinent Probate Court records[.]" [Note 60]
In this instance, there were documents recorded with the Registry and in the chain of title for the locus that constructively gave notice to Reading of the tax taking and foreclosure action, and that should have in fact provided actual notice to Reading when its attorney was doing the title work in preparation for the mortgage closing in which Reading was lending funds to Cortes. The bulk sale of tax receivables, whereby Plymouth Park bought its interest in the property, was recorded on March 10, 2010. The tax taking of the property by Plymouth Park was recorded on November 11, 2010. The complaint for foreclosure of the tax lien was filed on July 8, 2013, and notice of the same was recorded on July 26, 2013. All of these documents were recorded with the Registry before Reading granted a mortgage to INVI Realty, LLC on September 23, 2013.
While Reading's attorney appears to have acknowledged that he did not come across the relevant recorded documents when doing his title work in preparation for the mortgage closing, there is no claim by Reading that the documents were out of the chain of title or otherwise could not have been found. Inexplicably, when the attorney conducted a title examination of the locus property (including searches using the terms "IVNI" and "INVI"), he did not discover the bulk assignment, the tax taking, or the foreclosure complaint filed by Plymouth Park, although all were recorded with the Registry and there is no claim that any of these documents were mis-indexed. [Note 61] For reasons he could not explain, the attorney failed to identify these encumbrances on the property and to inform Reading of their existence before Reading granted the loan and accepted the mortgage as security.
The attorney's failure to discover the recorded encumbrances does not absolve Reading from being charged with constructive notice of what a diligent record index search should have produced. One-O-Six Realty, Inc. v. Quinn, 66 Mass. App. Ct. 149 , 155 (2006) ("A client is bound by the mistakes of its counsel."); Massachusetts Parole Bd. v. Civ. Serv. Comm'n, 47 Mass. App. Ct. 760 , 766 (1999) ("[O]rdinarily, a person is held accountable for the conclusions of his attorney to the extent that one accedes to those conclusions or permits counsel to act in one's stead."). In the circumstances, the attorney's constructive notice is imputed to Reading, and Reading is charged with having notice of the recorded encumbrances. Because Reading had constructive notice of the bulk assignment, the tax taking, and the foreclosure complaint, it has not been denied due process with respect to the foreclosure of the locus.
For the reasons stated above, I find and rule that Plymouth Park (and by extension, its assignee Ithaca) complied with the statutory notice obligations of G. L. c. 60, §66, and with the requirements of due process, with respect to both Cortes, as trustee of IVNI Realty Trust, and with respect to Reading Co-Operative Bank. I further find and rule that neither IVNI nor Reading were deprived of their due process rights with respect to the tax taking and foreclosure of the locus.
Accordingly, IVNI's and Reading's motions for relief from the tax foreclosure judgment of January 10, 2017, are DENIED. The memorandum of lis pendens issued by the court on August 8, 2018 is hereby DISSOLVED, and notice of such dissolution may be effected by recording a duly attested copy of this decision with the Essex County North District Registry of Deeds.
[Note 1] The two intervenors filed motions "for summary judgment." However, since a judgment has already entered in this matter (the foreclosure judgment), Reading's motion is more appropriately treated as a motion for relief from judgment, and Jackson's motion is more appropriately treated as an opposition to Cortes's and Reading's motions for relief from judgment. The remainder of this decision will proceed as if the intervening parties had correctly named their motions.
[Note 2] Quitclaim Deed dated May 21, 2003.
[Note 3] Id.
[Note 4] Deposition of Fernando Cortes, 17, March 20, 2019 ("Cortes Dep.").
[Note 5] Mortgage dated July 17, 2008. This mortgage was erroneously listed as being granted by mortgagor "INVI Realty Trust," which appears to be a spelling error and was not repeated in the September 2008 mortgage.
[Note 6] Mortgage dated Sept. 30, 2008, and recorded at the Registry on Sept. 30, 2008, in Book 11329, Page 296.
[Note 7] Id., Mortgage dated July 17, 2008.
[Note 8] Bulk Sale Assignment of Tax Receivables dated March 8, 2010.
[Note 9] Id.
[Note 11] Notice of Advertising, Michael P. Foley to IVNI Realty Trust, Aug. 12, 2010.
[Note 13] Cortes Dep. 1013, 93.
[Note 14] Instrument of Taking by Assignee,Sept. 14, 2010.
[Note 15] Id.
[Note 16] Letter from John J. McKenna to IVNI Realty Trust, July 13, 2012.
[Note 18] Cortes Dep. 14-15.
[Note 19] Notice of Compl., July 8, 2013.
[Note 20] Municipal Lien Certificate, city of Lawrence, dated Aug. 13, 2013, and recorded at the Registry on Sept. 23, 2013, in Book 12643, Page 139.
[Note 22] Report of Land Court Examiner Victoria A. Farrell, Sept. 23, 2013.
[Note 24] The change from "IVNI" to "INVI" may have been inadvertent, and may have led to some confusion, but none of any legal significance.
[Note 25] Quitclaim Deed dated September 23, 2013, and recorded at the Registry on Sept. 23, 2013, in Book 13642, Page 143.
[Note 26] Affidavit of James Real ¶3, Dec. 11, 2018 ("Real Aff."); Promissory Note from INVI Realty, LLC to Reading Co-Operative Bank, Sept. 23, 2013.
[Note 27] Mortgage and Security Agreement dated September 23, 2013, and recorded at the Registry on Sept. 23, 2013, in Book 13643, Page 150.
[Note 28] Id.
[Note 29] Settlement Statement, Sept. 23, 2013; Real Aff. ¶6.
[Note 30] Real Aff. ¶7.
[Note 31] Letter from Joseph E. Boulanger to Reading Co-Operative Bank, Sept. 23, 2013.
[Note 32] Id.
[Note 33] Notice issued to Invi Realty Trust, Commonwealth of Massachusetts Land Court, Nov. 25, 2013.
[Note 34] Id.
[Note 35] Domestic Return Receipt, United States Postal Service, Article Number 7112-4369-4680-0388-4330, filed at the Land Court on Dec. 4, 2013; Domestic Return Receipt, United States Postal Service, Article Number 7112-4369- 4680-0388-4316, filed at the Land Court on Dec. 4, 2013.
[Note 36] Payment Agreement between Plymouth Park and Ivni Realty Trust, February 26, 2014. (The handwritten date on the Agreement is not entirely legible, but appears to be February 28, 2014, the same date as the first payment check.)
[Note 38] Id.
[Note 39] Id.
[Note 40] Check numbered 110 from Invi Realty, LLC to Plymouth Park Tax Services, Feb. 26, 2014.
[Note 41] Assignment of Tax Taking dated March 21, 2014, and recorded at the Registry on March 24, 2014, in Book 13804, Page 225.
[Note 42] Id.
[Note 43] Notice of Assignment of Real Estate Tax Lien dated March 31, 2014 ("Notice of Assignment").
[Note 44] Id.
[Note 45] Check numbered 120 from Invi Realty, LLC to Plymouth Park Tax Services LLC, April 20, 2014.
[Note 46] Judgment, Ithaca Finance, LLC v. Ivni Realty Trust, dated January 2017, and recorded at the Registry on February 27, 2017 in Book 14998, Page 325 ("Judgment").
[Note 47] Id.
[Note 48] Both the Assignment of Tax Taking from Plymouth Park to Ithaca and the Judgment entered on January 10, 2017, erroneously refer to November 5, 2010 as the date the tax taking was recorded. The Tax taking document is stamped with a recorded date of November 11, 2010, and this decision will refer to that date as the correct date the Tax Taking was recorded.
[Note 49] Judgment.
[Note 50] Quitclaim Deed recorded at the Registry on June 22, 2018, in Book 15524, Page 247.
[Note 51] Id.
[Note 52] Though the payment agreement was entered into between Plymouth Park and Cortes as Trustee of the Ivni Realty Trust, payments made pursuant to the agreement were made from INVI Realty, LLC. No party disagrees that the payments from INVI Realty, LLC were valid as payments as payments made by IVNI Realty Trust in compliance with its agreement.
[Note 53] Cortes Dep. 27.
[Note 54] Affidavit of Fernando Cortes, Trustee of INVI (sic) Realty Trust in Support of its Motion to Vacate Judgment ¶2, July 13, 2018.
[Note 55] Affidavit of Hugo Cortes in Support of Motion of IVNI Realty Trust to Vacate Judgment of this Court ¶¶2, 4, July 13, 2019.
[Note 56] Notice of Advertising, Michael P. Foley to IVNI Realty Trust, Aug. 12, 2010.
[Note 57] Letter from John J. McKenna to IVNI Realty Trust, July 13, 2012.
[Note 58] Notice issued to Ivni Realty Trust, Commonwealth of Massachusetts Land Court, Nov. 25, 2013.
[Note 59] Payment Agreement between Plymouth Park and Ivni Realty Trust, February 26, 2014.
[Note 60] Title Certification Letter from Attorney Joseph E. Boulanger, Sept. 23, 2013 ("Title Certification").
[Note 61] Title Certification; Deposition of Joseph Boulanger 120-130, Jan. 4, 2019.