Newburyport Five Cents Savings Bank v. MacDonald
Docket: No. 97-P-1083
Court: Massachusetts Appeals Court; October 27, 1999; Massachusetts; State Appellate Court
Material facts are undisputed: MacDonald, a Massachusetts resident, borrowed money from a Massachusetts bank to purchase commercial real estate in New Hampshire. He executed four promissory notes and mortgages between November 1987 and April 1990, defaulting on all by May 1992 when the bank conducted foreclosure sales. The bank filed suit for the deficiency in May 1995, which MacDonald removed to Essex County Superior Court. A key legal issue arose regarding which state's statute of limitations applies: Massachusetts or New Hampshire. Massachusetts law, under G.L. c. 244, § 17A, imposes a two-year limit post-foreclosure, which would bar the bank's claim, while New Hampshire allows a twenty-year limit. A Superior Court judge ruled that the New Hampshire statute applies, determining it does not conflict with Massachusetts public policy and that New Hampshire has a significant relationship to the transactions. The judge granted partial summary judgment in favor of the bank, establishing MacDonald's liability for $708,308.01. The conclusion aligns with Massachusetts' historical perspective on statutes of limitations as procedural matters, referencing the Gourdeau case, where the court emphasized the importance of the state's significant relationship to the parties and the occurrence concerning limitations. The Superior Court motion judge determined that New Hampshire has a stronger interest than Massachusetts in overseeing the foreclosure sales and the deficiency action related to property located in New Hampshire. The judge concluded that New Hampshire law should govern the statute of limitations for these transactions, as they involved New Hampshire property financed by New Hampshire trusts. The mortgages executed by MacDonald specified that New Hampshire law would apply, reinforcing the judge's finding that the parties had a reasonable agreement to this effect. Massachusetts law supports the right of parties to select the governing law, and applying New Hampshire’s statute of limitations does not conflict with Massachusetts public policy. The motion judge also indicated that MacDonald failed to timely raise any claims regarding irregularities in the foreclosure sale, as he did not file in New Hampshire within the required timeframe. The court rejected MacDonald’s argument that the application of the Gourdeau decision should be prospective only, noting that the Supreme Judicial Court had previously dismissed this notion. The judgment was affirmed, acknowledging that MacDonald had raised issues about the foreclosure process and sale, but these did not affect the outcome.