Court Opinion

ID: 6460114
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:46:53.089234+00
Date Added: 2024-06-11T15:53:28.677817
License: Public Domain

Gillerman, J.
(dissenting). In my view, notice is not an issue in this case; I would order summary judgment for the plaintiff.
Section 17B precludes an action for a deficiency on an “obligation secured by mortgage of real estate” unless the required notice is sent to the person to be charged for the deficiency (emphasis added). That section also sets forth the form of notice. The notice must state the mortgagee’s intention to foreclose the mortgage on property which “secure[s] a note (or other obligation) signed by you, for the whole, or part, of which you may be liable to me in case of a deficiency in the proceeds of the foreclosure sale” (emphasis added). It is the mortgage note, signed by the person to be charged for any deficiency, which identifies the person to whom notice must be given. Additional makers of the note — but who are not also mortgagors of record — are entitled to notice, failing which they cannot be held liable. See, e.g., IAG Fed. Credit Union v. Laterman, 40 Mass. App. Ct. 116, 117 (1996).
Thus we have held that where the defendant signed a guaranty *252promising to pay up to $1,000,000 upon any default in the payment of principal and interest on a mortgage note signed by another, the plaintiff’s failure to comply with the notice provisions of § 17B did not bar the plaintiff’s recovery. We reasoned that the action was based on “a separate personal obligation on the part of the defendant. . . . [H]is obligations [did not] arise from the mortgage. They stem from the contract of guaranty, the independence of which is apparent from its provisions. . . -”1 Senior Corp. v. Perine, 16 Mass. App. Ct. 967, 967 (1983). We also stated that the guaranty was “not an ‘obligation secured by a mortgage’ ” and that the legislative history of § 17B supported our conclusion.
It is true that, in Senior Corp. v. Perine, supra, the maker of the mortgage note and the guarantor were not the same person, but that is a difference without a distinction, for the guaranty in that case was limited to assuring payment only of the mortgage note (up to a stipulated amount).
Here, the guaranties make no mention of the note and are separate documents. Each “unconditionally guarantee^]” (emphasis added) the full and prompt payment at maturity of all present and future obligations of the general partners of the limited partnership. Upon any default of the general partners, the liability of the guarantors “shall be effective immediately, without demand, presentment, protest or notice of any kind, all of which are hereby waived . . . and without further steps to be taken or further conditions to be performed by Holder or anyone” (emphasis added).
Such was the unconditional obligation of the defendants, and I know of no reason why they should be relieved of that obligation. The majority assert that the defendants’ liability was not “actually enlarged” by their guaranties (and thus were mere “duplicates” of the note) and make that fact decisive. But it is not a fact. To be sure, the liability of the defendants as makers of the note was made conditional upon the fulfillment of the required notice described in G. L. c. 244, § 17B. But a guaranty is different; it is an unconditional commitment which does not arise out of a note secured by a mortgage, and that undertaking is not governed by § 17B either as a matter of public policy or of statutory interpretation. As the Court of Appeals for the First *253Circuit points out in Federal Deposit Ins. Corp. v. Singh, 977 F.2d 18, 25 n.10 (1st Cir. 1992), certain States have enacted statutes that prohibit or limit deficiency judgments after foreclosure, and that policy is understandably enforced where makers are also guarantors. But Massachusetts, the court said, “has no such policy,” citing c. 244, § 17B.
That interpretation of Massachusetts law is correct. Section 17B protects the makers of mortgage notes who have assumed the “statutory obligations,” see G. L. c. 183, § 20 (mortgagors are liable for any unpaid balances due on the mortgage note); it assures them of notice of any foreclosure sale. But where the lender and the borrower separately agree that the borrower will be hable, in any event, for any unpaid balances then or thereafter due the lender, § 17B does not impose the obligation of notice, and there is nothing in the wording of the statute that could bring one to the opposite conclusion.
The court in Singh was confronted with the same argument advanced here — that the guaranty is mere surplusage because the maker of the mortgage note is the same person as the guarantor. The court dismissed that argument: “The Guaranty does not refer to the repayment of any specific liability in any specific time period, but rather was clearly meant to secure any liability running from [the borrower] to the bank. Stated another way, the obligation undertaken under the Guaranty is not bounded by the term of the 1987 Note — or any specific note, for that matter .... [T]he Guaranty is not surplusage by any stretch of the most active imagination.” Id. at 25. In these circumstances the court concluded that the maker-guarantor “incurred liability in two separate and distinct capacities.” Id. at 22. The reasoning of Singh is fully applicable to this case.2
Judgment for the plaintiff should be entered on its motion for summary judgment.

Certain provisions of the guaranty are set out in note 2 to our opinion in Senior Corp. v. Perine, 16 Mass. App. Ct. 967 (1983). Those provisions are similar to the guaranties in this case.

Seronick v. Levy, 26 Mass. App. Ct. 367 (1988), does not stand for any proposition contrary to what I urge here. That case deals with the equitable obligations between coguarantors; we held that where one coguarantor is on notice of a potential deficiency which may arise after foreclosure, he has the equitable obligation to notify his coguarantor.