Fadili v. Deutsche Bank National Trust Company, Trustee for Long Beach Mortgage Loan Trust, 2006-5

Filing 29

///ORDER granting 17 Motion for Summary Judgment; denying 23 Motion for Summary Judgment. The Clerk shall enter judgment and close the case. So Ordered by Judge Joseph A. DiClerico, Jr.(gla)

UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEW HAMPSHIRE

Adel A. Fadili
v.

Civil No. 12-cv-68-JD
Opinion No. 2014 DNH 048

Deutsche Bank National
Trust Company, as Trustee for
Long Beach Mortgage Loan Trust, 2006-5
O R D E R
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.

2

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.
mortgage was eventually assigned to Deutsche Bank.

3

Alia’s

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.
bankruptcy estate included the House Lot.

His

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

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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 contends that estoppel by

deed precludes Adel’s claims and that the mortgage on the Vacant
Lot is valid and enforceable.

I.

Adel Fadili’s Motion for Summary Judgment
In support of his motion for summary judgment, Adel contends

that he owns the Vacant Lot in fee simple pursuant to the Tax

5

Collector’s deed to him in August of 2005.

Adel does not

distinguish between his claims to quiet title, Count I, and for
declaratory judgment, Count II, for purposes of summary judgment.
In addressing Count III, Adel argues that the mortgage is invalid
because Deutsche Bank’s mortgage depends on Alia’s interest in
the property and Alia was not a bona fide purchaser for value
from Amir, leaving Adel as the owner of the Vacant Lot.

Adel

further argues that Deutsche Bank has no right to foreclose
because Deutsche Bank cannot prove that he owes the underlying
debt on the loan.

A.

Title to the Vacant Lot - Counts I and II

The burden is on the party asserting title to prove good
title against all others whose rights might be affected by the
ruling.

Porter v. Coco, 154 N.H. 353, 357 (2006).

Therefore,

Adel bears the burden of showing that he has good title to the
Vacant Lot.

“To be entitled to summary judgment, the party with

the burden of proof must provide evidence sufficient for the
court to hold that no reasonable trier of fact could find other
than in its favor.”

Am. Steel Fabricators, Inc. v. Local Union

No. 7, 536 F.3d 68, 75 (1st Cir. 2008).
Adel contends that he holds the title to the Vacant Lot
pursuant to the quitclaim deed from the town to him in August of
2005.

Deutsche Bank contends that Adel is estopped from denying

that he sold the Vacant Lot to Amir in January of 2002, based on

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Adel’s warranty deed to Amir.

Adel argues that estoppel by deed

does not apply in the circumstances of this case.

He also

contends that Deutsche Bank cannot claim an interest in the
Vacant Lot because Alia was not a bona fide purchaser for value.

1.

Estoppel by Deed

New Hampshire has long recognized the doctrine of estoppel
by deed through which a party who executes a deed is estopped
from denying the facts and covenants in the deed.

See Pedersen

v. Brook, 151 N.H. 65, 67-68 (2004); Kellison v. McIsaac, 131
N.H. 675, 681-82 (1989); White v. Ford, 124 N.H. 452, 454-55
(1984); 700 Lake Ave. Realty Co. v. Dolleman, 121 N.H. 619, 62325 (1981); Greenwood v. Wilton R.R., 3 Fost. 261, 1851 WL 2131 at
*4 (N.H. 1851).

Estoppel by deed prevents a grantor from denying

that he had lawful title to the property and that he conveyed the
property to his grantee.

Hilco Prop. Servs., Inc. v. United

States, 929 F.3d 526, 545-46 (D.N.H. 1996).

Further, between the

grantor and grantee, “the covenants of a warranty deed . . . are
not released or qualified by the public record that gives
incontrovertible notice of the falsity and consequent utility [of
the covenants], . . . .”

Fletcher v. Chamberlin, 61 N.H. 438,

1881 WL 4727, at *36 (N.H. 1881).

By statute, a warranty deed

has “the force and effect of a deed in fee simple” with covenants
that the “grantor was lawfully seized in fee simple of the
granted premises, that the said premises were free from all

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incumbrances [sic], except as stated, that the grantor had good
right to sell and convey the same to the grantee, . . ., and that
the grantor will . . . warrant and defend the same to the grantee
. . . .”

RSA 477:27.

Adel signed the warranty deed conveying the Vacant Lot to
Amir in January of 2002.

At that time, the parties believed that

the transaction involved the House Lot.

Adel acknowledges,

however, as he must, that the deed describes the Vacant Lot, not
the House Lot.1
Deutsche Bank contends that Adel is now precluded under the
doctrine of estoppel by deed from claiming that he did not convey
complete title to the Vacant Lot to Amir.

In support, Deutsche

Bank relies on White v. Ford, 124 N.H. 452 (1984).
In White, the executor of an estate sought to quiet title to
property against the interests of the deceased’s nephew, Ford,
when the deceased had conveyed the property by quitclaim deed to
Ford while it was held by the town under a tax collector’s deed
and was subject to a mortgage held by a third party.

Id. at 454.

Evidence surrounding the conveyance suggested that Ford had
loaned his uncle money to pay back taxes and loaned him other
money over a period of years.

Id.

1

After the transaction with

Although Adel cites White v. Ford, 124 N.H. 452, 455
(1984), to show that the parties’ intentions “at the time of the
conveyance are determinative,” he does not argue that the deed
should be reformed by parol evidence to convey the House Lot
rather than the Vacant Lot.
8

Ford, the deceased had purchased the property back from the town
and lived on the property until his death.

Id.

The court concluded that the deceased’s after-acquired title
to the property obtained from the town passed to Ford under the
doctrine of estoppel by deed based on the covenants in the
quitclaim deed.

Id. at 455.

The court also concluded, however,

that the quitclaim deed from the deceased to Ford was intended as
security for the money Ford lent to his uncle.

Id. at 455-56.

Therefore, to quiet title to the property in the estate, the
court ruled that the executor would have to do equity by
satisfying any claims made by Ford against the estate.

Id. at

456.
Deutsche Bank asserts that Adel misrepresented the warranty
covenants in the deed because the Vacant Lot was not free of
encumbrances when he signed the deed that purported to convey
greater title than he held.2

At that time, the Vacant Lot was

subject to a tax lien by the town and a mortgage of $110,000 to
Apogee Trust along with a conditional assignment of rents and
leases.

Therefore, Adel signed a deed that purported to convey

greater title than he held.

However, after Adel signed the

warranty deed to Amir, he redeemed the Vacant Lot by paying the
taxes and receiving the quitclaim deed from the town.
2

The court notes that there is no record evidence of any
intentional misrepresentation. Instead, all of the parties to
each transaction were mistaken as to which property was being
conveyed, leading to the confusion about what encumbrances
existed.
9

Adel argues that estoppel by deed does not apply here
because he did have title to the Vacant Lot when he conveyed it
to Amir and he is not attempting to deny his covenant of title
that existed in January of 2002.

Whether estoppel by deed might

apply when a grantor asserts title to a property that he has
conveyed by deed to another, without the problem of incomplete
title at the time of the conveyance, need not be decided here.
As Deutsche Bank has demonstrated, Adel did not disclose the tax
lien or the mortgage on the Vacant Lot when it was conveyed to
Amir, and therefore, at the time of the conveyance Adel did not
hold title to the Vacant Lot free and clear of all encumbrances.
Adel contends that despite the valid conveyance of the
Vacant Lot to Amir in January of 2002, he regained title to the
property in August of 2005 when the town issued a quitclaim deed
of the property to him after the back taxes were paid.

Adel does

not explain, however, how the town’s quitclaim deed could convey
title to the Vacant Lot to Adel in light of Adel’s prior warranty
deed of the Vacant Lot to Amir.3

See MacNeill v. Brownell, 133

N.H. 184, 189 (1990).
Adel also contends that, pursuant to RSA 80:89, the town
intended, by issuing the quitclaim deed to him, to reinstate
title to the Vacant Lot in Adel and to reinstate Apogee Trust’s
mortgage and conditional assignment of rents and leases.
3

Adel’s

Adel’s reference to White as support for a theory that the
town’s intent to convey the Vacant Lot to him by quitclaim deed
provided him with good title is not persuasive.
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reasoning on the application of RSA 80:89 in this situation is
opaque at best.

RSA 80:89 establishes the requirements for

notice and opportunity for repurchase to a former owner of
property acquired by a town through a tax deed.

Those

requirements, apparently, were met in this case, and the property
was redeemed.

Because Adel had sold the Vacant Lot to Amir years

before he received the quitclaim deed from the town, however, RSA
80:89 has no apparent effect on the title to the Vacant Lot.

2.

Bona Fide Purchaser

Adel also contends that Deutsche Bank cannot claim an
interest in the Vacant Lot because Deutsche Bank’s interest is
dependent on Alia’s title to the property.

Adel argues that Alia

cannot claim valid title because she was not a bona fide
purchaser who could defeat Adel’s interest conveyed by the town’s
quitclaim deed.

Adel argues that because the town’s tax lien and

quitclaim deed to him were recorded, Alia and Deutsche Bank
should have discovered them and were on notice of his competing
interest in the Vacant Lot.
When competing interests in real estate exist, any
unrecorded interests will be extinguished by a bona fide
purchaser for value.

RSA 477:3-a; Hawthorne Trust v. Maine Sav.

Bank, 136 N.H. 533, 537 (1992).

“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

11

property.”

Thomas v. Finger, 144 N.H. 500, 502 (1999) (internal

quotation marks omitted).
The primary and fatal problem with applying the bona fide
purchaser theory here is that Adel has not shown that he held a
competing interest in the Vacant Lot when Alia bought the
property from Amir.

Even if Adel held an interest in the Vacant

Lot through the town’s quitclaim deed, he was not a bona fide
purchaser because he was on notice that he had previously
conveyed the property to Amir.

In addition, to the extent Adel’s

theory challenges the rights of Amir and Alia to the property,
that cannot be resolved here when neither Amir nor Alia is a
party in this case.
Therefore, Adel has not shown, for purposes of his motion
for summary judgment, that he owns the Vacant Lot and that he is
entitled to summary judgment on his quiet title claim, Count I,
and declaratory judgment claim, Counts II.

B.

Mortgage

In Count III, Adel seeks to invalidate Deutsche Bank’s
mortgage on the Vacant Lot.

Adel alleged in the amended

complaint that the mortgage was invalid because Alia did not
intend to grant a mortgage on the Vacant Lot and Deutsche Bank
did not intend to receive a mortgage on that property.

He also

alleged that Alia could not grant a mortgage because she did not
hold title to the Vacant Lot.

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For purposes of summary judgment, however, Adel makes a
different argument.

He now contends that because a mortgage

serves as security for a loan, Deutsche Bank cannot foreclose on
the mortgaged property when he does not owe the debt for the
loan.

Deutsche Bank asserts that Adel’s mortgage theory is a non

sequitur because the undisputed facts, admitted by Adel,
establish that the loan to Alia to buy the Vacant Lot was secured
by the mortgage on the Vacant Lot.
Adel’s mortgage and debt theory again depend on proof that
he holds title to the Vacant Lot.
the case.

He has not shown that to be

In the absence of an interest in the mortgaged

property, Adel does not appear to have standing to contest the
mortgage that was granted on Alia’s loan.

II.

Deutsche Bank’s Motion for Summary Judgment
Deutsche Bank seeks summary judgment in its favor on Adel’s

claims.4

As the party moving for summary judgment, Deutsche Bank

must show that based on the undisputed material facts, it is
entitled to judgment as a matter of law.

Fed. R. Civ. P. 56(a).

As the party with the burden of proof, Adel “must present

4

In its memorandum in support of its motion for summary
judgment, Deutsche Bank asks for “summary judgment quieting title
to the vacant lot in Alia Fadili. Subject to the Note and
Mortgage.” Mem. doc. no. 17 at 6. Deutsche Bank did not bring a
counterclaim seeking to quiet title in Alia Fadili. Therefore,
to the extent Deutsche Bank seeks a quiet title judgment on a
claim that has not been raised, that relief is not available
here.
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definite, competent evidence sufficient to establish the elements
of [his] claim in order to survive a motion for summary
judgment.”

Pina v. Children’s Place, 740 F.3d 785, 795 (1st Cir.

2014) (internal quotation marks omitted).

A.

Quiet Title and Declaratory Judgment - Counts I and II

In support of summary judgment, Deutsche Bank asserts that
Adel cannot deny that he conveyed valid title to the Vacant Lot
to Amir through the warranty deed in January of 2002.5

As in its

opposition to Adel’s motion for summary judgment, Deutsche Bank
relies on the doctrine of estoppel by deed, as applied in White
v. Ford, 124 N.H. 452 (1984).

Adel contends that the mutual

mistake between Adel and Amir as to what property was conveyed
makes that transaction voidable as between Adel and Amir and that
estoppel by deed does not apply.

1.

Effect of Mistake as to Identity of Property Conveyed

Deutsche Bank contends that under Bell v. Morse, 6 N.H. 205,
209-10, 1833 WL 1279, (1833), a grantor of land cannot change the
terms of a deed by asserting that the description of the property

5

Although Deutsche Bank states in the introduction to its
memorandum that Adel is seeking to invalidate a mortgage “on a
vacant parcel of land he owns on Lake Winnipesauke in Alton, New
Hampshire,” that statement appears to be a typographical error as
Deutsche Bank strongly challenges Adel’s claim that he owns the
Vacant Lot.
14

in the deed was a mistake.

In response, Adel argues that the

transaction is voidable as a mutual mistake.
“‘Where a mistake of both parties at the time a contract was
made as to a basic assumption on which the contract was made has
a material effect on the agreed exchange of performances, the
contract is voidable by the adversely affected party.’”

Gray v.

First NH Banks, 138 N.H. 279, 284 (1994) (quoting Restatement
(Second) of Contracts § 152(1) (1979)).

Further, “[a] party

seeking to avoid an agreement on the basis of mutual mistake must
ordinarily avoid the entire contract, including any part that has
already been performed.”

Derouin v. Granite St. Realty, Inc.,

123 N.H. 145, 147 (1983).
To the extent the mutual mistake theory would apply to the
transaction between Amir and Adel, Amir would appear to be the
adversely affected party because he intended to buy and paid for
the House Lot but received property of lesser value, the Vacant
Lot.

It is undisputed that Amir did not avoid the conveyance of

the Vacant Lot, and Amir is not a party to this suit.

Even if

Adel were able to avoid the deed to Amir under the doctrine of
mutual mistake, he has not given up the consideration Amir paid
in the transaction.

Therefore, Adel’s argument based on mutual

mistake is inapposite to the circumstances of this case.

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2.

Estoppel by Deed

As is discussed above in the context of Adel’s motion for
summary judgment, a grantor is estopped from denying the warranty
covenants he gave to the grantee by signing a deed.

Adel does

not dispute that he signed the warranty deed to Amir, conveying
the Vacant Lot.

Adel argues, however, that despite the deed to

Amir, the town’s quitclaim deed to Adel “had the effect of
vesting [Adel] with fee simple ownership interest in the
property,” and that estoppel by deed does not apply in this case.
Mem., doc. no. 37 at 4.
Contrary to Adel’s arguments, estoppel by deed does apply in
the circumstances of this case as is explained above in Part I.
Therefore, based on the facts and covenants in the warranty deed
to Amir, Adel is estopped from denying that he conveyed good
title to the Vacant Lot.

Further, Adel provides no persuasive

argument to show that the town’s quitclaim deed invalidated the
warranty deed to Amir.

Therefore, Adel cannot show that he holds

title to the Vacant Lot free and clear of Deutsche Bank’s
mortgage.

B.

Mortgage

Deutsche Bank asserts that its mortgage on the Vacant Lot is
enforceable.

Adel argues, without citation to authority, that

Deutsche Bank cannot profit from Stewart Title Company’s
negligence in conducting the title search in 2006 and that

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Deutsche Bank’s recourse is against Stewart Title.

Because Adel

cannot show that he holds the title to the Vacant Lot, he has not
persuasively contested Deutsche Bank’s mortgage on that property.
Therefore, Adel cannot succeed on his claim in Count III to
invalidate Deutsche Bank’s mortgage.

Conclusion
For the foregoing reasons, the plaintiff’s motion for
summary judgment (document no. 23) is denied.

The defendant’s

motion for summary judgment (document no. 17) is granted.

The

plaintiff’s claims in Counts I, II, and III are dismissed by
summary judgment.
The clerk of court shall enter judgment accordingly and
close the case.
SO ORDERED.

____________________________
Joseph A. DiClerico, Jr.
United States District Judge
March 6, 2014
cc:

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

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