Massachusetts Agencies

Title Standard Spotlight

Articles from The Massachusetts Focus

Newsletter of Stewart Title Guaranty Company, Massachusetts Offices
Fall 2004, Volume 3, Number 4

Title Standard Spotlight
by Ward P. Graham, New England Region Counsel

This issue of The Massachusetts Focus presents an opportunity to take a look at REBA Title Standard No. 20, Levy of Execution by Sale (a.k.a. "the Sheriff's Sale Title Standard"). In this article, we will particularly focus on a revision to that title standard in May of 2000, which makes passing on sheriff's sale titles much easier than before but which, based on the phone calls I receive, has evaded the attention of many practitioners.

As of May, 2000, Title Standard No. 20 provides as follows:

A title based on a levy of execution is not on that account defective if title into the judgment debtor is acceptable, and:

A. (1) there was compliance with the procedural requirements of G.L.c. 236 which may be evidenced by full and detailed recitations in the sheriff's deed as to the required elements;
(2) more than one year has passed;
(3) notice by personal service or mail has been given to the record owner and all junior creditors of record as of the date of the sale;

B. more than 21 years have passed since the recording of the sheriff's deed and the record discloses no evidence of any action to redeem or set aside the conveyance;

C. there is of record a decree confirming the validity of the sale under G.L.c. 237.

The introductory clause and Items A (1), B and C are essentially the same as in the prior version of the title standard. Items A (2) and A (3) are new and the items upon which we'll focus in this article.

Previously, in passing on a sheriff's deed title, not only did you have to make sure that all the appropriate statutory prerequisites were met,[1] but you also had to either wait 21 years to see if any kind of challenge was made to the sheriff's sale or you had to find on record (or put on record) a Writ of Entry pursuant to G.L.c. 237 or some other court judgment affirming the sheriff's sale or the title derived from it. This was despite the fact that G.L.c. 236, §33 provides only a right of redemption for one year. That has now been recognized with the addition of the one-year provision of Item A (2).

Being in the nature of a forfeiture proceeding, however, sheriff's sales, although pursuant to an execution issued by a court after a judgment for the creditor in an underlying debt action, have been suspect on the basis of due process concerns. Those, too, have been addressed in the revised title standard by the addition of Item A (3) on the basis of two cases cited at the end of the title standard: Teschke v. Keller, 38 Mass.App.Ct. 627, 650 N.E.2d 1279 (1995) and Bahnan v. PHNB Realty, Inc., 48 Mass.App.Ct. 909, 719 N.E.2d 518 (1999), rev. den. 430 Mass. 1115, 724 N.E.2d 709 (2000).

Section 27 of the statute has always provided for delivery of notice to the debtor as one of the procedural criteria for a sheriff's sale and that is one of the procedural prerequisites listed in the Comment to the Sheriff's Sale Title Standard. See footnote 1, supra. Notice that the requirement is to deliver notice to the debtor. What is missing from both the statute and the listing of prerequisites in the title standard is a requirement that notice be given to junior interest holders, including mortgagees or intervening title holders. That omission was the subject of the Teschke[2] and Bahnan[3] cases and has been addressed in Item A (3) of the revised title standard in providing for notice to not just the debtor, but also to the record owner and junior creditors. In particular, support for the wording of Item A (3) as a criterion for us as title counsel and conveyancers to rely on can be found in the following quote from the Bahnan case:

This court in Teschke v. Keller, 38 Mass.App.Ct. 627, 650 N.E.2d 1279 (1995), held that a sheriff's sale conducted pursuant to G.L.c. 236, §28, without actual notice to a junior mortgagee violated its due process rights afforded by the Fourteenth Amendment to the United States Constitution. The judge correctly rejected Bahnan's attempt to narrowly confine Teschke on the basis that this case does not involve a junior mortgage interest. In Teschke, we relied on Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983), in which the Supreme Court stated that "[n]otice by mail or other means as certain to ensure actual notice is a minimum constitutional precondition to a proceeding which will adversely affect the liberty or property interests of anyparty . . . if its name and address are reasonably ascertainable." See Teschke v. Keller, supra at 633, 650 N.E.2d 1279.

Bahnan, supra at 910, 719 N.E.2d at 519. Further support, with one little caveat, comes from a Supreme Judicial Court case decided just under a year after Bahnan, Town of Andover v. State Financial Services, Inc., 432 Mass. 571, 736 N.E.2d 837 (2000). In an action by a taxpayer to vacate a tax title foreclosure proceeding more than four years after the decree was entered, the SJC revisited the issue of the kind of notice to be afforded a taxpayer in a tax title foreclosure proceeding. The taxpayer, of course, said that it was entitled to actual, in-hand service.

The Court properly rejected that notion, citing, inter alia, the classic United States Supreme Court notice/due process cases of Mullane v. Central Hanover Bank & Trust Company, 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950), Mennonite, supra, and Tulsa Professional Collection Servs., Inc., v. Pope, 485 U.S. 478, 108 S.Ct. 1340, 99 L.Ed.2d 565 (1988). While certainly agreeing with the basicMullane principle that due process requires "notice reasonably calculated, under all of the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections,"[4] the Court has a slight disagreement with the United States Supreme Court's elucidation of this concept in Mennonite when the Court says, "[n]otice by mail or other means as certain to ensure actual notice is a minimum constitutional precondition to a proceeding which will adversely affect the liberty or property interests of any party, whether unlettered or well versed in commercial practice, if its name and address are reasonably ascertainable."[5] The SJC's slight disagreement relates to the type of mail.

It appears that, in the SJC's view, at a minimum, the form of mail to be used for due process notice purposes is certified (or registered) mail. In discussing the notice provisions of the tax title foreclosure statute, the SJC discusses favorably its requirement of certified mail in such a way as to indicate that this is the form of mail that meets at least minimum due process standards. The SJC put it this way:

By requiring certified mail, as opposed to first class mail, our notice statute not only satisfies due process, but provides greater assurance to our property owners that notice will actually be received. Compare G.L.c. 60, §66 and G.L.c. 4, §7, Forty-fourth, with Mennonite v. Adams, supra, at 800, 103 S.Ct. 2706. See Weigner v. City of N.Y., [852 F.2d 646,] 650-651 [(2d Cir. 1988)] (recognizing certified mail's superiority to regular first class mail for providing notice). Sending notice by certified mail with a return receipt increases the likelihood the letter will reach its intended recipient. See id. at 650 (explaining advantages of certified mail).

Accordingly, it is likely that Massachusetts courts, if faced with the question, will require that notices under G.L.c. 236, §28, like those under the tax title statues and the mortgage foreclosure statute (G.L.c. 244, §14) be sent by certified mail and not just regular mail in a case where the debtor, a subsequent owner or a junior lienholder alleges, if not actually proves, that he or she never got the notice despite their mailing address being readily ascertainable by the record title or otherwise.

One last issue: How do we establish compliance with both the procedural requirements and the notice requirements for purposes of record title? The Sheriff's Sale Title Standard helps us out with that. Comment No. 2 states: "Evidence of compliance with the procedural and notice requirements should be preserved for the record by an affidavit under the provisions of G.L.c. 183, §5B." However, the sheriff's return, if, as cautioned by Caveat No. 1 of the title standard, contains a detailed enough description of his actions, the return may be used to establish some or all of the requirements. Cautionary conveyancers and title counsel may also ask for copies of the so-called "green cards" (certified mail return receipt cards) in an attempt to verify actual receipt whenever possible but more so for interest holders other than the debtor. Keep in mind, however, that actual receipt is not a constitutional requirement, as discussed in the State Financial Services case. And well it ought not be, not only for the reasons discussed in that case, but also from the standpoint that many debtors, for obvious reasons, refuse to accept any certified mail.

1 These are derived primarily from sections 27, 28 and 49A of G.L.c. 236 and are listed in the Comment to the title standard as follows:

The procedural requirements of G.L.c. 236 include:

(a) a sale by public auction to the highest bidder;

(b) an officer's return;

(c) a sheriff's deed recorded within three months after the sale, if there was any intervening conveyance by the debtor;

(d) written notice of the time and place of sale (i) delivered by the officer to the debtor 30 days at least prior to sale, (ii) posted in a public place in the town where the land lies and two adjoining towns in the same county, and (iii) published once in each of three successive weeks, the first not less than 21 days prior to sale in a newspaper published in the town where the land lies;

(e) a deed recorded within six years of levy or any bringing forward of the same.

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2 In Teschke, the Appeals Court, analogizing (as did the Land Court) to notice of tax sale cases, primarily Christian v. Mooney, 400 Mass. 753, 511 N.E.2d 587 (1987) and the renowned Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983), concluded that the failure to provide personal notice to mortgagees of record prior to the sheriff's sale (in this case, well more than 30 days prior) was a violation of due process and invalidated the sale despite the statutory posting and publishing.
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3 In Bahnan, the Appeals Court addressed the situation in which a title holder downstream from the debtor, whose deed was recorded after the execution but almost two months prior to the sheriff's sale, received no personal notice of the sale and, again, found such failure to be constitutionally deficient. [Back to Text]

4 State Financial Services, Inc., supra, at 574, 736 N.E.2d at 839, quoting Mullane, supra, 339 U.S. at 314. [Back to Text]

5 Id., quoting from Mennonite, supra, 462 U.S. at 800. [Back to Text]