First Circuit Considering Certification of Defective Mortgage Notary Clause Issue to SJC

There is a First Circuit Court of Appeals case, Bank of America, N.A.  v. Debora A. Casey, Chapter 7 Trustee for Alvaro M. Pereira (1st Cir. Case No. 14-2115), on appeal from the U.S. District Court (MA), which raises interesting issues concerning defective notary acknowledgments in Massachusetts.  Our firm represents Bank of America, N.A., which holds a mortgage on the Debtor’s property.  The Trustee filed an adversary complaint in the bankruptcy proceedings seeking to avoid the Bank of America mortgage on the grounds that the names of the mortgagors were not inserted in the notary attestation clause, and therefore the mortgage, although recorded, could not give constructive notice to the Trustee in its position as a bona fide purchaser.  An affidavit was recorded pursuant to G.L. c. 183, § 5B, in which the attorney that notarized the mortgagor’s signatures attested to the proper acknowledgement of the mortgage.

The Bankruptcy Court, relying on the In re Giroux (Agin v. Mortg. Elec. Registration Sys., Inc., Adv. No. 08-1261 (Bankr. D. Mass. May 21, 2009)) line of cases, held that the mortgage was avoidable.  We appealed to the U.S. District Court.  Judge O’Toole reversed the Bankruptcy Court decision and held that the filing of a G.L. c. 183, § 5B affidavit provided constructive notice of the mortgage to the Trustee. 

The Trustee then appealed to the U.S. Court of Appeals.  At oral arguments on Wednesday, June 3, 2015, the panel indicated that they were inclined to certify the question to the Massachusetts Supreme Judicial Court and requested proposed questions from the parties.

We have submitted proposed questions for the Court’s consideration in drafting their certification to the Supreme Judicial Court, and the Trustee has done so as well.

If you have cases involving defective notary acknowledgments, you may want to review them in light of the possible certification to the Supreme Judicial Court.

Should you have any questions, please feel free to contact us.