Opinion
19-P-1253
08-06-2020
BOSTON REDEVELOPMENT AUTHORITY v. BOSTON PRIVATE BANK AND TRUST COMPANY & others.
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).
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
Boston Redevelopment Authority doing business as Boston Planning and Development Agency (BRA) appeals from the judgment dismissing its complaint alleging violations of the power of sale, breach of the duty of good faith, unjust enrichment, affordable housing violations, civil conspiracy, violations of G. L. c. 240, §§ 6, 10, and intentional interference with contractual relations. BRA's interest in the property at issue stems from a restrictive covenant which required the property to be used for affordable housing. By the express terms of a deed rider, the restrictive covenant terminated upon Boston Private Bank and Trust Company's (Boston Private) acquisition by foreclosure. Because the conduct alleged in the complaint occurred after foreclosure had been completed, the motion judge concluded that Boston Private's actions were irrelevant to BRA's interest. As such, the complaint was dismissed. On appeal, BRA contends that Boston Private's actions following the execution of the memorandum of sale voided the foreclosure and thus reanimated BRA's interest in the property. We affirm.
BRA also appeals from the order denying its motion to reconsider.
Discussion. "We review the allowance of a motion to dismiss de novo, accepting as true the facts alleged in the plaintiff's complaint as well as any favorable inferences that reasonably can be drawn from them. What is required at the pleading stage are factual allegations plausibly suggesting (not merely consistent with) an entitlement to relief. Factual allegations must be enough to raise a right to relief above the speculative level" (quotations and citations omitted). United Oil Heat, Inc. v. M.J. Meehan Excavating, Inc., 95 Mass. App. Ct. 579, 581 (2019).
BRA was the holder of a junior encumbrance on the property at issue, namely a restrictive covenant which requires that the property be used for affordable housing. By the express terms of a deed rider, however, "a mortgagee may hold a mortgage or security interest in the Premises and may acquire title to the Premises by foreclosure . . . ; upon either such acquisition, the covenants, restrictions and options contained in the Covenant shall terminate and have no further effect" (emphasis added). Thus, upon acquisition by foreclosure, the restrictive covenant -- and consequently BRA's interest -- terminated.
BRA also had an option to purchase the property before auction, however it is undisputed that BRA did not exercise this option.
"[F]oreclosure is complete at the time of the auction sale" (quotation and citation omitted). Outpost Cafe, Inc. v. Fairhaven Sav. Bank, 3 Mass. App. Ct. 1, 5 (1975). Many of the rights of the mortgagor, such as the right of redemption, terminate upon execution of the memorandum of sale. See Williams v. Resolution GGF Oy, 417 Mass. 377, 384 (1994); White v. Marcarelli, 267 Mass. 596, 599 (1929) ("the right of the intervener to redeem is gone when the contract of sale was made with the purchaser at the auction"). Furthermore, "[w]hen the right of redemption is foreclosed . . . the former mortgagee owns the legal and equitable interests in the property and the mortgage no longer exists." Bevilacqua v. Rodriguez, 460 Mass. 762, 775 (2011), quoting Santiago v. Alba Mgt., Inc., 77 Mass. App. Ct. 46, 50 (2010). We conclude, therefore, as did the motion judge, that Boston Private acquired the property when Mikhail Starikov executed the memorandum of sale. At that time, BRA's interest in the property terminated. As such, because the alleged violations and defects in the sale occurred after the memorandum of sale was executed, they are irrelevant. See Williams, supra ("The execution of the memorandum of sale terminated the plaintiffs' equity of redemption. The post-foreclosure events, therefore, lacked legal significance" [citations omitted]).
It is also clear that these rights terminate before the property is ultimately conveyed to the purchaser. See Brown v. Wentworth, 181 Mass. 49, 52 (1902) ("the plaintiff claims a right to redeem as matter of law because the bill, although filed after the sale, was brought before the conveyances were executed to carry it out. We are of opinion that she has no such right. Unless there was some defect in the proceedings, her rights were gone when the contract was made").
Although BRA has made vague allegations that there were defects in the notice of sale or auction itself, it has not pointed to any specific defects. These vague allegations are not sufficient to plausibly suggest a claim for relief.
BRA asserts, nevertheless, that Boston Private voided the foreclosure sale by deeding the property to itself and then selling the property to someone other than the highest bidder. BRA contends the restrictive covenant was, therefore, revived. We are not persuaded. Upon the execution of the memorandum of sale, ownership of the property transferred to Boston Private as the mortgagee. See Bevilacqua, 460 Mass. at 775. As previously discussed, the restrictive covenant terminated at that time. Recording a deed which eliminated the covenant and named Boston Private as the owner did no more than document the then-existing legal entitlements. See S & H Petroleum Corp. v. Register of Deeds for the County of Bristol, 46 Mass. App. Ct. 535, 537 (1999) ("The function of a registry of deeds is to record documents. It is essentially a ministerial function"). Cf. Bevilacqua, supra at 771 ("there is nothing magical in the act of recording an instrument with the registry that invests an otherwise meaningless document with legal effect"). We discern no defect in the sale of the property to Janet Blake, as she was the assignee of the assignee of the highest bidder. See, e.g., Ford Motor Credit Co. v. Morgan, 404 Mass. 537, 545 (1989) ("the assignee stands in the assignor's shoes").
Because BRA's interest terminated upon the execution of the memorandum of sale, and because there were no defects in the sale, BRA's claims that the sale violated the statutory power of sale or breached the duty of good faith were properly dismissed.
Finally, we see no merit in BRA's claims that the motion judge was required to transfer the motion to dismiss the amended complaint to the judge who ruled on the motion to dismiss the original complaint. Superior Court Rule 9D, on which BRA relies, deals only with motions to reconsider. The second motion to dismiss in this case was a separate motion to dismiss the amended complaint. It was not, in either style or substance, a motion to reconsider the original motion. Moreover, despite BRA's assertions that the "law of the case" doctrine prevents a second judge from hearing the second motion to dismiss, "the law of the case doctrine is permissive and not mandatory." Vittands v. Sudduth, 49 Mass. App. Ct. 401, 413 n.19 (2000). Accordingly, there was no error in allowing a second judge to consider a motion to dismiss the amended claims.
Because we agree that dismissal was proper, the motion judge did not err in denying the motion to reconsider.
Judgment affirmed.
Order denying motion to reconsider affirmed.
By the Court (Maldonado, Wendlandt & Hand, JJ.),
The panelists are listed in order of seniority.
/s/
Clerk Entered: August 6, 2020.