GUSTIN v. DEUTSCHE BANK NATIONAL TRUST COMPANY (2020)

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

In this appeal, the plaintiffs, Robert F. Gustin, Jr. and Elizabeth A. Doris Gustin (collectively, Gustins), challenge the title of defendant Deutsche Bank National Trust Company, as trustee for the Certificateholders of Soundview Home Loan Trust 2005-0PT4, Asset-Backed Certificates, Series 2005-OPT4, (Deutsche Bank) to a mortgage secured by their property located at 8 Walker Court in Dedham (property). They contend that Deutsche Bank was not the holder of the mortgage at the time it sought to foreclose on the property because two prior mortgage assignments, one from H&R Block Mortgage Corporation (H&R Block) to Option One Mortgage Corporation (Option One) and a second one from Option One to Deutsche Bank, were void. A judge of the Land Court found otherwise and dismissed the Gustins' petition requesting expungement of both mortgage assignments from the certificate of title. We affirm.

Background. We summarize the facts set forth in the petition to amend the certificate of title, which we accept as true.⁵ See Iannacchino v. Ford Motor Co., 451 Mass. 623, 625 n.7 (2008). The property is registered land and was acquired by the Gustins in 1987. In 2005, the Gustins granted a mortgage in the amount of $287,000, to H&R Block. That mortgage was assigned from H&R Block to Option One on January 23, 2007, and the assignment was recorded at the Norfolk County Registry District of the Land Court as Document 1122231 on February 9, 2007, at 11:36 a.m. The acknowledgement on the assignment was signed by a California notary on a separate page prior to the recording. The notary did not note the notarization in her notary journal.

Option One assigned the mortgage to Deutsche Bank on January 11, 2007, approximately two weeks before it received the assignment from H&R Block. Although the assignment from Option One to Deutsche Bank was registered at the Norfolk County Registry District of the Land Court on the same date and time as the assignment from H&R Block to Option One, that is, on February 9, 2007, at 11:36 a.m., it was recorded just afterward as Document 1122232.

The Gustins filed a petition requesting that both mortgage assignments be expunged from their certificate of title,⁶ claiming that the assignment from H&R Block to Option One was void because (1) the notary acknowledgement does not appear on the same page as the assignment, and (2) the California notary who notarized the document failed to note it in her notary journal when she turned the journal in to the Orange County Clerk-Recorder upon the expiration of her commission. They contend that the assignment from Option One to Deutsche Bank was void because, at the time of the assignment, Option One did not hold the mortgage and had nothing to assign.

The defendants filed motions to dismiss pursuant to Mass. R. Civ. P. 12 (b) (6), 365 Mass. 754 (1974), contending that both assignments of the mortgage were legally effective and, as a result, that Deutsche Bank was the holder of the mortgage. In a well-reasoned memorandum of decision, the judge held that because the land at issue is registered, the assignments were not effective until the date of registration. See G. L. c. 185, § 67.⁷ Thus, by the effective date of the assignment to Deutsche Bank, Option One already held title via the assignment from H&R Block. Accordingly, the judge held the assignment to Deutsche Bank was valid.

As to the alleged problems with the notary acknowledgment, the judge concluded that, at most, these purported defects could render the assignment from H&R Block to Option One voidable, but not void. Because a mortgagor has no standing to attack a merely voidable assignment, the judge found those alleged defects to be of no consequence.

Discussion. We review the allowance of a motion to dismiss de novo. See Galiastro v. Mortgage Elec. Registration Sys., 467 Mass. 160, 164 (2014). In this case, however, we agree with the judge's analysis in all respects. Even though Option One's assignment to Deutsche Bank was executed prior to the date Option One received an assignment from H&R Block, the assignment from H&R Block to Option One was registered just prior to the assignment from Option One to Deutsche Bank. Thus, as the judge correctly observed, because the transfer of a mortgage on registered land occurs at the time the document is recorded and not at the time the document is executed, the assignment from Option One to Deutsche Bank is valid.

Furthermore, like the judge below, we are not persuaded by the Gustins' argument that Federal Nat'l Mtge. Ass'n v. Carr, 2012 Mass. App. Div. 223 (Dist. Ct. 2012), compels a different outcome. Passing on the question whether we are bound by that decision, the case is distinguishable, as the judge noted, because it did not involve registered land.

We also agree with the judge's conclusion that the Gustins lack standing to challenge the assignment from H&R Block to Option One. The Gustins did not claim that the assignment is invalid on its face due to a failure to comply with statutory requirements. Their sole contention regarding its validity was based on two latent defects, namely, the notary's attaching the acknowledgement as a separate page and her failure to record the acknowledgement in her notary journal. These errors render the assignment at most voidable, but not void. See Bank of New York Mellon Corp. v. Wain, 85 Mass. App. Ct. 498, 503-504 (2014) (because assignment complied with applicable statute, homeowners had no basis to argue that assignment was void; latent defects rendered assignment potentially voidable). Thus, the Gustins lack standing to challenge the assignment from H&R Block to Option One. See id. at 502 (“a mortgagor's standing [is] limited to claims that a defect in the assignment rendered it void, not merely voidable”).

Judgment affirmed.

FOOTNOTES

5.   We also accept as true the facts established by the exhibits attached to the petition.

6.   With their petition, the Gustins filed a motion for a preliminary injunction to enjoin the foreclosure of their interest in the property. The motion for a preliminary injunction was denied.

7.   The statute states in relevant part that registered land may be subject to a mortgage and a mortgage deed may be assigned, but that “such mortgage deed, and all instruments which assign, extend, discharge and otherwise deal with the mortgage, ․ shall take effect upon the title only from the time of registration.” G. L. c. 185, § 67.