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March 2013 Archives

Hidden Defects May Invalidate Deeds

Recording real estate deeds in a county registry is intended, among other things, to prevent fraud and ensure that a prospective buyer can verify that the seller actually owns the property for sale.  In the rare case where a seller sells a property twice, if the first buyer promptly records her deed, the second buyer is considered to be "on notice" that the seller no longer owns the property, and thus the second deed is treated as void in light of the first, recorded, deed.  This rule protects "first buyers" who record promptly from claims of ownership brought by others, and it protects potential "second buyers" from unwittingly accepting an invalid deed.

Employee or Independent Contractor Under Massachusetts Law? The Importance of Classifying Workers Correctly

Although the Massachusetts Independent Contractor Statute, M.G.L. c. 149, § 148B, is intended to protect workers by ensuring that they receive "the many benefits, both public and private, that employees enjoy," the fact that a worker may not want to be classified as an employee often does not matter when determining the worker's proper classification.

Bankruptcy Court Rules Remainder Interests Not Subject to Homestead Exemption

In a "Chapter 7" bankruptcy proceeding, a debtor's assets are liquidated, and the proceeds are divided among the debtor's creditors.  Some of the debtor's assets, however, may be exempt from liquidation under various provisions of federal or state law.  One such exemption is created by the Massachusetts Homestead Statute, M.G.L. c. 188, §§ 1, et seq.  The Homestead Statute protects a debtor's home from most creditors, subject to certain restrictions. To qualify for this "homestead exemption," the debtor must be an owner of a home who occupies the home or intends to occupy it as a principal residence.

Property Owned in Family Trusts - A Recipe for Conflict

When parents or grandparents are able to pass down residential property to their children and grandchildren, it should be a piece of the American Dream come true.  And, with foresight, good planning, and a little bit of luck, it can be.  Too often, however, these "gifts" can devolve into situations that tear extended families apart.  It often doesn't take long before family members start to treat each other unfairly and eventually become openly hostile towards each other.

The Public Records Law: A Powerful Pre-Discovery Tool

The Massachusetts Public Records Law (or PRL) provides an often overlooked, simple, cost effective and powerful tool for litigants to investigate claims and gather pertinent documents even before the commencement of a lawsuit.  Like its federal analogue the Freedom of Information Act (or FOIA), the Massachusetts PRL allows anyone to request any records generated, received or maintained by a Massachusetts governmental agency, department, or subdivision, whether in electronic or paper form, including computer records, electronic mail, video and audiotapes.  I have found that in many business disputes, using the PRL, I can quickly and inexpensively uncover valuable information that can inform strategy and save my client the need to chase the same material via the formal litigation discovery process.

Abuse Prevention Orders: Abuse and Substantive Dating Relationships

In a recent case, E.C.O. vs. Gregory James Compton (SJC-11259, March 13, 2013), the Massachusetts Supreme Judicial Court overturned a District Court Judge's extension of a G.L. c. 209A Abuse Prevention Order in favor of a 16-year-old girl whose father obtained a restraining order against a 24-year-old man, with whom the daughter was involved while she was traveling abroad.  In doing so, the court shed some more light on legal standards in obtaining abuse prevention orders in general.

First Circuit Upholds MERS Mortgage System Under Massachusetts Law

The First Circuit has affirmed a holding finding that the system under which mortgages are held in the name of Mortgage Electronic Registration Systems, Inc., commonly known as MERS, comports with Massachusetts law relating to mortgage transactions.  In the underlying matter, Culhane v. Aurora Loan Services of Nebraska, 826 F.Supp.2d 352 (D.Mass. 2011), Judge Young of the United States District Court had held that a mortgagor possesses standing to challenge the chain of assignment of his or her mortgage in defense to a foreclosure action, but further held that the MERS system of registration and transfer of mortgages is lawful.

Proposed Amendments To Supplemental Probate Court Rule 412

Amendments to Supplemental Probate Court Rule 412, which currently provides the method by which a child support judgment may be modified by agreement, may soon be expanded to include a method by which parties to an action may seek to modify, by agreement, any judgment or temporary order of the Probate and Family Court.  (That said, actions under M.G.L. 209A, which govern abuse prevention orders, are specifically excluded from the modification procedures outlined in Supplemental Probate Court Rule 412.)  

No Implied Covenant Before Mortgage Note Executed

Massachusetts' implied covenant of good faith and fair dealing does not apply to negotiations and contract preparations for a mortgage and accompanying promissory note, the First Circuit has held.  In Latson v. Plaza Home Mortgage, Inc., the plaintiffs filed suit against their lender alleging, among other claims, violation of the implied covenant based on the lender's alleged failure to provide a proper commitment letter, good faith estimate, or other documents required by law, and gave them insufficient opportunity to review the terms in the loan documents.   The United States District Court for the District of Massachusetts dismissed the case for failure to state a claim, and the borrowers appealed.

Property Owned in Family Trusts - A Recipe for Conflict

When parents or grandparents are able to pass down residential property or a family business to their children and grandchildren, it should be a piece of the American Dream come true.  And, with foresight, good planning and a little bit of luck, it can be.  Too often, however, these "gifts" can devolve into situations that tear extended families apart.  It often doesn't take long before family members start to treat each other unfairly and eventually become openly hostile towards each other.

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