- Case Type:
- Case Status:
- No. 16-1465 (1st Circuit, Oct 01,2021) Not Published
- "[n]o particular words are necessary as long as they amount to an admission that [the grantor] has voluntarily and freely executed the instrument." McOuatt, 69 N.E.2d at 810; see also In re Demore, 844 F.3d 292, 298-99 (1st Cir. 2018). We see no reason to, in effect, eliminate an express requirement that the Massachusetts legislature has specified as a condition for proper recording. Accordingly, we conclude that the recording of the mortgage was not effective to give constructive notice to third parties. Bank of Am, N.A., vs Casey, 52 N.E.3d 1030, 1035 (2016).
- Procedural context:
- U.S. Bank sought to dismiss the adversary proceeding. It advanced two arguments: The recording of a mortgage with such a defect was effective to provide constructive notice of the mortgage; and, in any event, registration of the mortgage provided sufficient notice to subsequent bona fide purchasers. In the alternative, U.S. Bank asked the bankruptcy court to certify to Massachusetts' highest court the questions concerning the effect of the missing name. The bankruptcy court denied both U.S. Bank's motion to dismiss and its request to certify any questions to the Massachusetts Supreme Judicial Court ("SJC"). In re Mbazira, 518 B.R. 11, 23–24 (Bankr. D. Mass. 2014). It held that the incomplete certificate of acknowledgment was materially defective under Massachusetts law and that, therefore, third parties do not have constructive notice of the encumbrance on the property. Id. at 22. The court then invited Mbazira to file a motion for judgment on the pleadings, which became a motion for summary judgment once additional documents were appended. Following its prior ruling, the court granted the Mbazira's motion and allowed her to avoid the mortgage. In re Mbazira, No. 13-16586-WCH, 2015 WL 1543908, at *1 (Bankr. D. Mass. Mar. 31, 2015).
- The facts are undisputed. Mbazira purchased a home in Waltham, Massachusetts in July 2005, which she financed through two mortgages. This matter only concerns the first, which had an initial principal of $528,000. Under Massachusetts law, a mortgage must include a "certificate of acknowledgment," signed before a notary public or similar official, that the grantor has voluntarily signed the mortgage instrument. See McOuatt v. McOuatt, 69 N.E.2d 806, 809-10 (Mass. 1946); Mass. Gen. Laws ch. 183, § 30. Although a notarized certificate of acknowledgment accompanied Mbazira's mortgage, the space for her name was left blank. Mbazira's handwritten initials, however, do appear on the bottom of the page. Two months after U.S. Bank initiated the pre-foreclosure proceedings, Mbazira filed for Chapter 11 bankruptcy. The petition identified the mortgage at issue here as "unliquidated" and "disputed" with a claim amount of $564,700. Mbazira then commenced an adversary proceeding against U.S. Bank, seeking to "avoid" the mortgage because her name is missing from the certificate of acknowledgment. See 11 U.S.C. §§ 506, 544, 551.
- Howard (CJ), Thompson and Kayatta
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