James B. Nutter & Company v. Estate of Murphy, et al. (and two consolidated cases) (Lawyers Weekly No. 10-013-18)
NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us SJC-12325 JAMES B. NUTTER & COMPANY vs. ESTATE OF BARBARA A. MURPHY & others[1] (and two consolidated cases[2]). Suffolk. October 2, 2017. – January 18, 2018. Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, & Kafker, JJ. Mortgage, Foreclosure. Real Property, Mortgage. Civil actions commenced in the Land Court Department on October 27, 2015; January 28, 2016; and February 11, 2016, respectively. A motion for partial judgment on the pleadings was heard by Robert B. Foster, J., and the cases were reported by him to the Appeals Court. The Supreme Judicial Court on its own initiative transferred the cases from the Appeals Court. Daniel Bahls (Uri Strauss also present) for Brett Jamieson. Effie Gikas Tchobanian for the plaintiff. Elaine Benkoski, for Estate of Barbara A. Murphy & others, was present but did not argue. GANTS, C.J. In 2007 and 2008, three elderly homeowners obtained loans from James B. Nutter & Company (Nutter), secured by reverse mortgages on their homes. A few years later, two of the borrowers died; the third took ill and could no longer live in her home. Alleging default, Nutter now seeks to foreclose on the mortgages. Rather than proceed directly to foreclosure, however, Nutter brought separate actions in the Land Court against each borrower or the executors of their estate,[3] seeking in each case a declaratory judgment allowing it to foreclose pursuant to the statutory power of sale. Each of the reverse mortgages adhered to Nutter’s standard form, which states in paragraph 20 that, in the event of default, “[l]ender may invoke the power of sale and any other remedies permitted by applicable law.” The issue we must resolve is whether this language in the reverse mortgage incorporates the statutory power of sale as set forth in G. L. c. 183, § 21, and allows Nutter to foreclose on the mortgaged property in accordance with the requirements in § 21. We hold that it does. Background. 1. Reverse mortgages. For many retirees, one of the most reliable potential sources of income in later life is the accrued equity in their homes. See Consumer Financial Protection Bureau, Issue Brief: The costs and risks of using a reverse mortgage to delay collecting Social Security, at 8 (2017). In order to secure cash for their living expenses, many […]