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Fadili v. Deutsche Bank National Trust Co.

United States District Court, District of New Hampshire

March 6, 2014

Adel A. Fadili
v.
Deutsche Bank National Trust Company, as Trustee for Long Beach Mortgage Loan Trust, 2006-5 Opinion No. 2014 DNH 048

Philip A. Brouillard, Esq. Peter G. Callaghan, Esq. Robert E. Murphy Jr., Esq.

ORDER

Joseph A. DiCrericb, Jr. United States District Judge

Adel A. Fadili brought a petition to quiet title to property located in Alton, New Hampshire. The defendant, Deutsche Bank National Trust Company, as Trustee for Long Beach Mortgage Loan Trust, 2006-5, removed the case to this court. The case was consolidated with two related cases, and the cases are being considered, ad seriatim, pursuant to the court's order of May 16, 2012, (document no. 13). Fadili and Deutsche Bank have filed cross motions for summary judgment.

Standard of Review

Cross motions for summary judgment proceed under the same standard applicable to all motions for summary judgment, but the motions are addressed separately. Sun Capital Partners III, LP v. New England Teamsters & Trucking Indus. Pension Fund, 724 F.3d 129, 138 (1st Cir. 2013) .

Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). "A genuine issue is one that can be resolved in favor of either party, and a material fact is one which has the potential of affecting the outcome of the case." Jakobiec v. Merrill Lynch Life Ins. Co., 711 F.3d 217, 223 (1st Cir. 2013) (internal quotation marks omitted). In deciding a motion for summary judgment, the court draws all reasonable factual inferences in favor of the nonmovant. Kenney v. Floyd, 700 F.3d 604, 608 (1st Cir. 2012) .

Background

This case and the two related cases arose from the sale of property located in Alton, New Hampshire, among members of the Fadili family. The property was subject to mortgages entered into for each transaction. Although the parties intended by the pertinent transactions to transfer and mortgage lakefront property that included a house and other buildings, the deeds and mortgage documents described a different and unimproved lot.

Adel Fadili acquired property in Alton that was comprised of several lots. Two parcels are at issue here: a lot without improvements ("Vacant Lot") and a lakefront lot with a house, garage, and dock ("House Lot"). A right of way, which was first known as Mount Major Road, or Mount Major Park Road, and which is now known as Roger Road, goes through both the Vacant Lot and the House Lot. The Vacant Lot had no street address, while the House Lot was referred to as 132 Roger Road. The Vacant Lot was subject to a mortgage and conditional assignment of rents and leases from Adel and Denise Fadili to the Trustee of the Apogee Trust, which is dated January 3, 1997.

In December of 2001, Adel Fadili entered a into purchase and sale agreement to sell property "located at Mount Major Rd" to his son, Amir Fadili. Amir obtained a loan to purchase the property, and the mortgage described the Vacant Lot as the mortgaged property. The warranty deed dated January 16, 2002, from Adel to Amir included the same legal description of the Vacant Lot but the description included the phrase "with the buildings thereon." There were no buildings on the Vacant Lot. Amir's mortgage on the property was assigned several times to different entities.

On January 20, 2006, Amir entered into a purchase and sale agreement with his sister, Alia Fadili, to sell the property that he had purchased from Adel. Alia obtained a loan to finance her purchase from Long Beach Mortgage Company. The mortgage described the property that secured the loan as the Vacant Lot but also stated that the property had the address of 132 Roger Road, which was the address of the House Lot. The warranty deed from Amir to Alia, dated April 27, 2006, recites the same property description as used in the warranty deed from Adel to Amir and does not include a street address. Stewart Title Company was the closing agent for that transaction. Alia's mortgage was eventually assigned to Deutsche Bank.

In the meantime, on August 4, 2000, the Town of Alton recorded a tax lien for unpaid real estate taxes on the Vacant Lot. When the taxes were not paid, the Alton Tax Collector conveyed the Vacant Lot to the Town of Alton by tax collector's deed on October 1, 2002. On July 18, 2005, the Trustee of the Apogee Trust, holder of Adel's mortgage on the Vacant Lot, forwarded payment to the town, and the Vacant Lot was deeded back to Adel, by quitclaim deed, on August 3, 2005.

Adel filed for Chapter 7 bankruptcy in early 2005. His bankruptcy estate included the House Lot. The bankruptcy trustee filed a notice of intent to sell the House Lot at public auction in July of 2008. Adel and Washington Mutual, as servicer of the Alia's mortgage, objected to the sale, arguing that Adel had intended to convey the House Lot to Amir, which Amir then conveyed to Alia, for which Alia obtained a mortgage. Washington Mutual argued that the mortgage was intended to secure a loan based on the value of the House Lot, not the Vacant Lot. The objections were unavailing, and the House Lot was sold as part of the bankruptcy proceeding.

Because Alia stopped making mortgage payments in August of 2008, Deutsche Bank notified Alia that it would foreclose on the mortgaged property. When the issue about what property was subject to the mortgage arose, Deutsche Bank brought suit against Alia, Stewart Title Company, and Stewart Title Guaranty Company, 09-cv-385-JD, and Alia brought counterclaims against Deutsche Bank. Adel brought a quiet title action against Deutsche Bank, 12-cv-68. Deutsche Bank brought a separate suit against Stewart Title Guaranty Company seeking a declaratory judgment to require Stewart Title Guaranty Company to provide a defense and indemnification in Adel's suit, 12-cv-106. The three cases were consolidated and then have proceeded, as previously noted, beginning with 12-cv-106, which has been resolved by settlement. The court will address 09-cv-385-JD after this case, Adel's suit, has been resolved.

Discussion

In his amended complaint, Adel brings three claims aimed at establishing his ownership of the Vacant Lot, free and clear of Deutsche Bank's mortgage: Count I - Petition to Quiet Title; Count II - Declaratory Judgment; and Count III - Petition to Invalidate Mortgage and Nullify Effect of Recording Mortgage. Deutsche Bank contends that it holds a mortgage on the Vacant Lot, based on the loan to Alia for purchasing the property from Amir, which is recorded. Deutsche Bank ...


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