Fadili v. Deutsche Bank National Trust , 772 F.3d 951 ( 2014 )

United States Court of Appeals
For the First Circuit
No. 14-1381
ADEL A. FADILI,
Plaintiff, Appellant,
v.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as trustee for LONG BEACH MORTGAGE LOAN TRUST, 2006-5,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Joseph A. DiClerico, Jr., U.S. District Judge]
Before
Lynch, Chief Judge,
Stahl and Kayatta, Circuit Judges.
Stephen T. Martin and Martin & Hipple, PLLC, on brief for
appellant.
Peter G. Callaghan, Preti Flaherty Beliveau & Pachios PLLP,
Robert E. Murphy, Jr., and Wadleigh, Starr & Peters, P.L.L.C., on
brief for appellee.
December 1, 2014
STAHL, Circuit Judge. Plaintiff Adel Fadili seeks to
halt foreclosure proceedings on a vacant lot on the shores of Lake
Winnipesaukee, claiming that he holds title to the property.
Defendant Deutsche Bank asserts that Adel's daughter held title to
the property, at least until she defaulted on her mortgage payments
to the bank. On cross-motions for summary judgment, the district
court ruled in the bank's favor. We affirm.
I. Facts & Background
By 1984, Adel Fadili, a Massachusetts resident, owned two
non-contiguous lots in Alton, New Hampshire. One property, located
at 132 Roger Street,1 fronts Lake Winnipesaukee and has various
improvements, including a house (the "House Lot"). The other
property is located further down Roger Street, but does not have a
street address or any improvements (the "Vacant Lot"). Both lots
are bisected by Roger Street, which used to be known as Mount Major
Park Road.
In December of 2001, Adel2 entered into a purchase and
sale agreement with his son, Amir, to sell property "located at
Mount Major Road." While father and son intended to convey the
House Lot, both the warranty deed and Amir's mortgage contained a
legal description of the Vacant Lot. The warranty deed did not
1
Various documents in the record refer to the House Lot's
street address as "132 Rogers Road" or a variant thereof.
2
We refer to each family member by his or her first name.
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include a street address. Although there are no buildings on the
Vacant Lot, the deed's description of the land references "[a]
tract of land . . . with the buildings thereon," before reciting
the metes and bounds of the Vacant Lot.
In 2000, the town of Alton recorded a lien on the Vacant
Lot for unpaid taxes. In October 2002, because the taxes still had
not been paid, a tax collector conveyed the Vacant Lot to the town
by tax collector's deed. In July 2005, Adel's mortgagee paid off
the tax debt, and on August 3, 2005, the town reconveyed the Vacant
Lot to Adel by quitclaim deed.
On January 20, 2006, Amir entered into a purchase and
sale agreement to convey "land and building situated at 132 Rogers
Road, Alton, NH" to his sister, Alia (daughter of Adel). Though
the agreement referenced the House Lot's address, it referred to
the deed from Adel to Amir for the property description. As stated
above, that deed described the Vacant Lot, and not the House Lot.
Alia's mortgage agreement with Long Beach Mortgage Company, dated
April 27, 2006, stated that the property securing the loan was
located at 132 Rogers Road, the House Lot's street address, but
included a legal description of the Vacant Lot. The warranty deed
from Amir to Alia recites the same legal description of the Vacant
Lot found in the deed from Adel to Amir, and does not include a
street address. Alia's mortgage was eventually assigned to
Deutsche Bank, the defendant here.
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Meanwhile, Adel filed for Chapter 7 bankruptcy in 2005.
The bankruptcy Trustee considered the House Lot to be part of the
bankruptcy estate, and in July 2008, filed a notice of intent to
sell the House Lot at public auction. Over the objection of both
Alia and the servicer of her mortgage loan, the bankruptcy court
granted the Trustee's motion to sell the House Lot.3 Subsequently,
the House Lot was sold. Alia stopped making her mortgage payments
in August 2008, and Deutsche Bank notified her that it intended to
foreclose on the Vacant Lot.
Adel brought suit in state court, styling his complaint
as a petition to quiet title on the Vacant Lot (Count I) and for a
declaratory judgment that he held a fee simple title to the Vacant
Lot (Count II). Deutsche Bank removed the case to federal court on
diversity grounds. The district court allowed Adel to amend his
complaint and add a petition to invalidate Alia's mortgage
agreement with Defendant (Count III). Both parties moved for
summary judgment. The district court granted Deutsche Bank's
motion and denied Adel's, reasoning that Adel was estopped from
3
While the record does not clarify what happened during
Adel's bankruptcy proceedings with respect to the House Lot, it is
evident that the bankruptcy court determined that Adel still owned
the House Lot because the 2002 deed conveyed the Vacant Lot to
Amir. Thus, the House Lot was conveyable by the bankruptcy
trustee. From the record we have, it appears that Adel did not
appeal the bankruptcy court's order permitting the sale of the
House Lot.
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claiming title to the Vacant Lot because he had conveyed that
property to his son in 2002. This appeal followed.
II. Analysis
We afford a grant of summary judgment de novo review.
Jakobiec v. Merrill Lynch Life Ins. Co., 711 F.3d 217, 223 (1st
Cir. 2013). To succeed on a motion for summary judgment, the
moving party must show that there is no genuine dispute as to any
material fact, entitling that party to judgment as a matter of law.
Fed. R. Civ. P. 56(a). Where the parties file cross-motions for
summary judgment, we employ the same standard of review, but view
each motion separately, drawing all inferences in favor of the non-
moving party. OneBeacon Am. Ins. Co. v. Commercial Union Assurance
Co. of Can., 684 F.3d 237, 241 (1st Cir. 2012).
A. Adel's Motion for Summary Judgment
Adel's motion for summary judgment rests on two
arguments: first, that he still holds title to the Vacant Lot
pursuant to the quitclaim deed issued to him by the town of Alton
in August 2005, and second, that Deutsche Bank's mortgage interest
in the Vacant Lot is invalid because Alia was not a bona fide
purchaser for value. We address each in turn.
Under New Hampshire law, the party seeking to quiet title
bears the burden of establishing his good title to the property
against the interests of all others. Porter v. Coco, 910 A.2d
1187, 1191 (N.H. 2006). Counts I and II of Adel's complaint
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ollapse into one another for purposes of this analysis. See id.("Quiet title petitions essentially seek a declaratory judgment
from the court regarding the parties' land interests."). Adel
points to the August 2005 quitclaim deed as evidence of his good
title; Deutsche Bank counters that he is estopped from claiming
title pursuant to the deed from the town because Adel conveyed the
property to his son in January 2002 by warranty deed.
New Hampshire recognizes the doctrine of estoppel by
deed, which prevents a party from denying representations made in
a valid deed. See Hilco Prop. Servs., Inc. v. United States, 929
F. Supp. 526, 545 (D.N.H. 1996) ("[A] party who has executed a
deed, is thereby estopped from denying not only the deed itself,
but every fact it recites and every covenant it contains
. . . [including] his grant thereof to the [grantee].") (citing
Foss v. Strachn, 42 N.H. 40 (1860)). Even if an individual does
not possess clear title at the time he grants the deed, he is
estopped from denying the grant of the deed once his title is
perfected. White v. Ford, 471 A.2d 1176, 1178 (N.H. 1984); Kimball
v. Blaisdell, 5 N.H. 533, 535 (1831) ("If A convey[s] lands to
which he has no title, to B, with warranty, any title which A may
subsequently acquire, will enure to the benefit of B, and A cannot
claim the land against his deed.").
The parties are in agreement that Adel's deed to Amir
described the Vacant Lot, on which the town then held a lien due to
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unpaid taxes. Thus, when Adel deeded the property to Amir in 2002,
he did not hold complete title to the Vacant Lot. Deutsche Bank
argues that the title issue was cured when the taxes were paid off
by Adel's mortgagee and the town deeded the Vacant Lot back to Adel
in 2005. As the district court correctly noted, the Supreme Court
of New Hampshire's opinion in White v. Ford supports Deutsche
Bank's argument. In White, an uncle conveyed property to his
nephew by quitclaim deed while the property was held by the town
under a tax collector's deed. Id. at 1177. Some evidence
indicated that the nephew loaned the uncle money to pay the taxes
owed to the town, and the uncle continued to live on the property
until he died. Id. The Supreme Court of New Hampshire held that
the uncle's "after-acquired title" passed to the nephew based on
the doctrine of estoppel by deed. Id. at 1178. Similarly, any
deficiencies in Adel's title passed to Amir when Adel's mortgagee
paid the taxes owed to the town of Alton in 2005, making fully
valid his conveyance of the Vacant Lot to Amir in January 2002.
Thus, as of August 3, 2005, it was Amir rather than his father who
held title to the Vacant Lot, and thus Adel cannot meet his burden
to establish his good title to the Vacant Lot. The district court
rightly denied his motion for summary judgment as to Counts I and
II.
In support of his motion for summary judgment on Count
III, his petition to invalidate Deutsche Bank's mortgage on the
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Vacant Lot, Adel asserts that Alia could not grant Long Beach
Mortgage Company a mortgage on the Vacant Lot because she held no
interest in the Vacant Lot. Adel argues that Alia cannot claim
title to the Vacant Lot because the town's quitclaim deed to him in
2005 defeats her purchase from Amir in 2006. According to Adel's
reasoning, because the quitclaim conveyance from the town to him
was recorded, a proper title search would have put Alia and her
mortgagee on notice of Adel's interest in the vacant lot. See
Thomas v. Finger, 743 A.2d 1283, 1285 (N.H. 1999) ("A bona fide
purchaser for value is one who acquires title to property for
value, in good faith, and without notice of competing claims or
interests in the property.") (emphasis added) (internal quotation
marks omitted) ; see also C F Invs., Inc. v. Option One Mortg.
Corp., 42 A.3d 847, 849-50 (N.H. 2012) (explaining that bona fide
purchasers must lack "actual, record, or inquiry" notice of another
party's prior interest in the property). To the contrary, if Alia
had conducted a proper title search in the Vacant Lot at the time
of her purchase, she would have found both the 2005 quitclaim deed
and the 2002 warranty deed from Adel to Amir, by which Adel
divested himself of any interest in the Vacant Lot. Since Adel
holds no interest in the Vacant Lot, and is not a party to Alia's
mortgage agreement with Deutsche Bank, the district court properly
denied his motion for summary judgment on Count III.
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B. Deutsche Bank's Motion for Summary Judgment
In our review of Deutsche Bank's motion for summary
judgment, we draw all inferences in favor of Adel, the non-moving
party, Alicea v. Machete Music, 744 F.3d 773, 778 (1st Cir. 2014),
but because Adel bears the burden of proof in his quiet title
action, he "must offer 'definite, competent evidence to rebut the
motion.'" Cahoon v. Shelton, 647 F.3d 18, 27 n.6 (1st Cir. 2011)
(quoting Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir.
1991)). This he is not able to do. As the district court
concluded, and as discussed above, the doctrine of estoppel by deed
forecloses Adel's argument that he holds title to the Vacant Lot
and merits summary judgment in Deutsche Bank's favor on Counts I
and II of his complaint. Because Adel cannot establish his valid
title to the Vacant Lot, he has no basis to contest either Alia's
title to the property or her mortgage agreement with Deutsche Bank,
warranting a grant of summary judgment to Deutsche Bank as to Count
III.4
4
Contrary to Adel's argument, parol evidence as to his and
Amir's intent in the transaction would not change the outcome here.
It is undisputed that Adel intended to sell, and Amir (and then
later, Alia) intended to buy, the House Lot. As far as the record
shows, neither Adel nor Amir brought an action in equity to reform
the 2002 deed by parol evidence, and thus the plain language of the
deed trumps whatever intentions they might have had. See Bell v.
Morse, 6 N.H. 205, 209 (1833) ("[W]here a particular tract of land
is granted, by a deed, in clear and express terms, the grantor
. . . [is] estopped to say that the land, thus described in the
deed, was inserted by mistake, and that another tract, and not
that, was intended to be granted."). The House Lot already has
been sold as a result of Adel's bankruptcy proceedings, and thus an
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III. Conclusion
For the foregoing reasons, we affirm the decision of the
district court. Costs to appellee.
action in equity would not be possible at this late stage. In any
event, Adel failed to ask the district court to reform the deed.
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