2006-236, JOY A. CHASE v. AMERIQUEST MORTGAGE CO.

amount of $90,000. The parties stipulated, for purposes of the hearing before as collateral, Mr. Chase entered into a mortgage with Ameriquest in the

Bankers Trust Company of California. In April 2002, again utilizing the home

affirm.

Court (

their home as collateral, they later executed a mortgage note and deed with Chase, purchased a home at 55 Main Street in Rumney in August 1996. Using The facts are undisputed. The plaintiff and her ex-husband, George

I. Background

held by the defendant, Ameriquest Mortgage Company (Ameriquest). We Burling, J.) requiring her to pay a portion of an outstanding mortgage DUGGAN, J. The plaintiff, Joy A. Chase, appeals an order of the Trial

brief and orally), for the defendant. McNicholas Law Offices, P.A., of Concord (Patrick J. McNicholas on the

to press. Errors may be reported by E-mail at the following address: Gregory M. Sorg, of Franconia, on the brief and orally, for the plaintiff.

page is: http://www.courts.state.nh.us/supreme. v.

editorial errors in order that corrections may be made before the opinion goes No. 2006-236 Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Grafton Readers are requested to notify the Reporter, Supreme Court of New ___________________________

a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as p. 2 RSA 480:4, III (2001), which provides:

payment of debts, except in the following cases:

case because the Ameriquest mortgage fell within the exception contained in court held that the homestead right in RSA 480:1 did not apply in the plaintiff’s for purposes of our analysis the correctness of that position. However, the trial

and from liability to be encumbered or taken for the

Ameriquest under the terms of the mortgage.

$74,439.78 from the plaintiff, the amount it paid to Bankers Trust.

during its continuance from levy or sale on execution,

the statutory homestead exemption relieves her from any obligation to pay

the mortgage with Ameriquest. Neither side disputes that the plaintiff’s house 480:1 generally protects her, up to $100,000, from having to make payment on his or her interest therein, as a homestead.” The plaintiff argues that RSA foreclosure. The proceedings at issue here followed, with Ameriquest seeking

The homestead right is exempt from attachment

evidence in the record. court’s findings of historical fact, where those findings are supported by applying the doctrines of equitable subrogation and unjust enrichment because $74,439.78. The plaintiff appealed, arguing that the trial court erred in subrogation and unjust enrichment required the plaintiff to pay the review interpretation and application of statutes present questions of law, which we homestead exemption as set forth in RSA 480:1, :4 and :5-a. The

that “[e]very person is entitled to $100,000 worth of his or her homestead, or of foreclosure proceedings began. The plaintiff then sought to enjoin the RSA 480:1 (Supp. 2006) establishes the homestead right by providing the plaintiff did not meet the obligations of the mortgage with Ameriquest and residence subject to any indebtedness legally secured thereby.” At some point, Elwood v. Bolte, 119 N.H. 508, 510 (1979).

70, 72 (2005). In conducting our review, we accord deference to the trial de novo. See, e.g., Town of Hinsdale v. Town of Chesterfield, 153 N.H. constituted a charge on the homestead and the doctrines of equitable

We begin with the interpretation and application of the statutory

II. Statutory Homestead Exemption

her husband, the plaintiff became the “sole owner of the parties’ marital

Ameriquest paid off the Bankers Trust mortgage. After a hearing, the trial court ruled that Ameriquest’s mortgage

Pursuant to a divorce agreement later executed between the plaintiff and

mortgage instrument with Ameriquest. As part of the mortgage agreement, the trial court, that Mr. Chase forged the plaintiff’s name when he executed the estate, p. 3 grantee.” Although the Ameriquest mortgage constitutes a conveyance of real notary public or commissioner and shall show the mailing address of the

However, for purposes of this case, both parties stipulated that the plaintiff’s

owned the home; they were thus the parties who could grant the conveyance.

acknowledge it before a justice, notary public or commissioner.

results and effectuate the legislative purpose of the statutes.

477:3 that “[e]very deed or other conveyance of real estate shall be signed by

satisfy the requirements of at least two applicable statutes. 477:3. That is, the trial court found that both the petitioner and her husband homestead; (3) according to law. Even if we assume See RSA party (or parties) granting the conveyance at issue here did not sign and see Black’s Law Dictionary 1031 (8th ed. 1999) (defining mortgage), the

they do not contradict each other, and so that they will lead to reasonable

either RSA 477:3 (2001) or RSA 480:5-a (2001). We agree with the plaintiff. “according to law” since it was not created with the formalities required by First, the Ameriquest mortgage does not satisfy the requirement of RSA not apply because the Ameriquest mortgage is not a charge on the homestead

requirements are satisfied, the third is not. The Ameriquest mortgage does not

RSA 480:4, III requires: (1) a mortgage; (2) which is made a charge on a

more statutes that deal with a similar subject matter, we construe them so that Cranmore Ski Resort, 152 N.H. 399, 405 (2005). When interpreting two or do so in harmony with the overall statutory scheme. Soraghan v. Mt. to include. Id. We do not construe statutes in isolation; instead, we attempt to been assigned to Ameriquest. The plaintiff contends that RSA 480:4, III does legislature might have said or add language that the legislature did not see fit legislative intent from the statute as written and will not consider what the of Town of Bethlehem, 154 N.H. ___, ___, 911 A.2d 1, 5 (2006). We interpret statute, we ascribe the plain and ordinary meaning to the words used. Appeal whole. Town of Hinsdale, 153 N.H. at 72. When examining the language of the legislature’s intent as expressed in the words of the statute considered as a made a charge thereon according to law . . . . In matters of statutory interpretation, we are the final arbiters of the

the Bankers Trust mortgage as if it were a charge on the homestead that had discharged the Bankers Trust mortgage, and thereby became entitled to treat The trial court ruled that RSA 480:4, III applied because Ameriquest

III. In the enforcement of mortgages which are

. . . homestead exemption is intended to be a shield, not a sword.”

p. 4 the Florida Supreme Court noted in a case quite similar to this one, “The inequitable for Ms. Chase to retain the property free and clear of all liens.” As

because she took out the original mortgage and lives on the property. It is

any, with the formalities required for the conveyance of land.” Ameriquest mortgage was not “executed by the owner and wife or husband, if given our discussion of RSA 477:3, can there be any dispute that the

when Ameriquest paid her valid mortgage. Ms. Chase is aware of the benefit mortgage foreclosure and she stipulated to the existence of forgery. and mortgage foreclosure. The plaintiff initiated this case in equity to enjoin a

made at the time of purchase to secure payment of the purchase money.” Nor, by ruling to the contrary. observation that, despite the forgery, “[a] benefit was conferred on Ms. Chase exigencies of this particular case. We are mindful of the trial court’s the superior court in several types of cases, including those dealing with fraud court erred in exercising those same powers to balance the equities and

fraud has long been recognized.”). Although it was not the plaintiff herself who power of the superior court to exercise its equitable jurisdiction in the case of v. Stewart, 111 N.H. 350, 352 (1971) (“Plaintiff’s petition alleged fraud and the There can be no dispute that the Ameriquest mortgage was not “a mortgage See Owen husband, if any, with the formalities required for the conveyance of land.” Thus, we conclude that RSA 480:4, III does not apply, and the trial court erred payment of the purchase money, unless it is executed by the owner and wife or RSA 498:1 (1997) (amended 2006) confers equitable jurisdiction upon court’s equitable powers to enjoin the foreclosure, but then arguing that the consider whether to uphold the trial court’s exercise of its equitable powers. Sav. & Loan v. Fishbein, 619 So. 2d 267, 271 (Fla. 1993). Accordingly, we now

to law because at least two crucial provisions of the law were not followed. homestead right, except a mortgage made at the time of purchase to secure

plaintiff is in the somewhat unenviable position of having invoked the superior the plaintiff’s position, we decline her invitation to end our analysis here. The Although the language of the statutory homestead exemption supports

III. Equitable Subrogation

Ameriquest mortgage cannot constitute a charge on the homestead according RSA 480:5-a. It dictates that “[n]o deed shall convey or encumber the execute mortgage deed with formalities required by law). Accordingly, the that homestead exemption can be waived where husband and wife both a; see also In re St. Onge, 317 B.R. 39, 42 (Bankr. D.N.H. 2004) (explaining

Second, the Ameriquest mortgage does not satisfy the requirements of

statutory formalities of execution were not satisfied. husband forged her name on the mortgage instrument. Accordingly, the it was free and clear of liens.

p. 5 the case and facts demand. jurisdiction, to administer all relief which the nature of 5

quitclaim deed, granting Mrs. Fishbein title to the house and representing that

done. It is the practice of courts of equity, having

bank could not foreclose on the mortgage, but that it could have an equitable As a result of Mrs. Fishbein’s challenge, the trial court ruled that the and then lived in the house for several years. Mrs. Fishbein challenged. Id. at 269. went into default and the bank commenced foreclosure proceedings, which existing mortgage on the house, and executed a purchase money mortgage. Id. The mortgage (obtained via the forgery) then

As part of a subsequent divorce proceeding, Mr. Fishbein executed a

name on the mortgage instrument. Id. mortgage was for $1,200,000 and he obtained it by forging Mrs. Fishbein’s and good conscience ought to be or should have been mortgage, again using the Palm Beach house as collateral. of equity will order to be done that which in fairness Id. This time the after the second mortgage was executed, Mr. Fishbein took out yet another the requirements of the particular situation. A court exercised according to the circumstances and exigencies of the case. Id. Approximately three years awarding equitable relief rests in the sound discretion of the trial court to be the Palm Beach house, acknowledged the existence of the previous mortgages, at 268. Later, both Mr. Fishbein and his wife executed a second mortgage on

Mr. Fishbein took title to a house in Palm Beach in his own name, assumed an Beach Savings and Loan v. Fishbein. See Fishbein, 619 So. 2d at 267. There, The Florida Supreme Court dealt with similar facts and issues in Palm

Id. at 541-42. equitable order unless it constitutes an unsustainable exercise of discretion. Hannaford Bros. Co., 150 N.H. 540, 541 (2004). We will uphold a trial court’s

which allow it to shape and adjust the precise relief to Gutbier v.

594 (1999) (quotations, citations and brackets omitted). The propriety of Claremont School Dist. v. Governor (Costs and Attorney’s Fees), 144 N.H. 590,

wronged seeks other than damages . . . .”

The court has broad and flexible equitable powers

N.H. Donuts, Inc. v. Skipitaris, 129 N.H. 774, 783 (1987) (quotation omitted). “[I]t is the historic purpose of equity to secure complete justice . . . .”

(1985).

granting relief from the effects of another person’s fraud when the party perpetrated the forgery, “the superior court’s equitable jurisdiction extends to sword.

p. 6 homestead exemption is intended to be a shield, not a Fishbein is not entitled to a . . . windfall. The benefit the homestead. On the other hand, Mrs.

against the property for the [money] not used to

genuine. This is why the bank can make no claim ensuring that her signature on the mortgage was suffer because the bank was not more careful in

them. Of course, Mrs. Fishbein should not be made to by a natural person: (1) a homestead . . . .

testified that she had no funds with which to pay performed on the realty, the following property owned pay off the preexisting liens, and Mrs. Fishbein time he had no other assets which could be used to

obligations contracted for house, field or other labor the purchase, improvement or repair thereof, or already overdue. Mr. Fishbein testified that by that and assessments thereon, obligations contracted for

bank made its loan, one of the prior mortgages was shall be a lien thereon, except for the payment of taxes

exemption to receive a “windfall.”

stood before the execution of the mortgage. When the of any court, and no judgment, decree or execution Mrs. Fishbein [stood] in no worse position than she

lien, Id. at 269. The court reasoned, however, that under imposition of an equitable

despite the forgery, equity would not allow Mrs. Fishbein to use the homestead

homestead protection is guilty of fraudulent or otherwise egregious conduct.” imposed against homestead real property where the beneficiary of the the imposition of the equitable lien, reasoning that such a lien could “only be

There shall be exempt from forced sale under process

section of the Florida Constitution that creates a homestead exemption:

The Florida Supreme Court reversed the intermediate court, holding that

Id.

homestead, and as such not subject to foreclosure by the bank, but reversed court affirmed the trial court’s conclusion that the house was Mrs. Fishbein’s opportunity to try to sell the home privately. Id. An intermediate appellate foreclosure sale on the equitable lien so that Mrs. Fishbein could have an preexisting mortgages and taxes. Id. The trial court also stayed any lien on the house to the extent that its funds were used to satisfy the principal debtor). The purpose behind subrogation is

p. 7 all the rights which the creditor had against him (the

purpose of making this right effective is invested with reimbursed by the principal debtor and for the therefor, who thereby acquires an equitable right to be

the payment of a debt by a party secondarily liable

applied the doctrine of equitable subrogation.

principles. The doctrine of subrogation presupposes contract, statute, or common law or equitable party’s right to subrogation can arise either by

in the homestead. be applied here; therefore, we must decide whether the trial court properly

the case.

the doctrine of subrogation has its origins in equity. A

the Generally, of them. We do not share the plaintiff’s reading of

Ameriquest to pay off the existing Bankers Trust mortgage and thereby invest (quotation omitted)). Accordingly, we conclude that equitable principles should between the parties, if it is necessary to make the injured party whole.” devise a remedy which extends or exceeds the terms of a prior agreement

Cf. Skipitaris, 129 N.H. at 783 (“[A] court sitting in equity may even

purpose of the homestead exemption and the circumstances or exigencies of decision to apply principles of equity struck the proper balance between the superior court in this state, we are persuaded that the Florida Supreme Court’s Fishbein case, and in light of the broad equitable powers that rest with the Thus, given the close factual similarities between the present appeal and apparently fraud or forgery in the procurement of a mortgage, alone, is not one

stipulated that the plaintiff’s husband used forgery to obtain funds from such fraud and egregious conduct are at issue here, where it has been in, purchase, or improve the homestead.” Id. at 1028 (emphasis added). Just where funds obtained through fraud or egregious conduct were used to invest equitable principles to reach beyond the literal language of the exceptions only ultimately reaffirmed the holding in Fishbein that the court will “invoke[ ] discussed Fishbein and related cases in great detail, see id. at 1024-28, and

three stated exceptions to the Florida [C]onstitution’s homestead right” – and homestead right, the case must involve situations that fall within one of the cases stand for the proposition that in order “to impose an equitable lien on the of the Florida Supreme Court. According to the plaintiff, Havoco and related essentially been narrowed to an “anomalous” holding by subsequent decisions 2001), the plaintiff argues that Fishbein is not persuasive because it has Relying upon Havoco of America, Ltd. v. Hill, 790 So. 2d 1018 (Fla.

Id. at 270-71. p. 8 Accordingly, the first factor is satisfied.

event Mr. and Ms. Chase did not meet the terms in the Security Instrument.”

sole right of foreclosure on the property, which operated as collateral in the primary note holder on the property at 55 Main Street. Ameriquest secured the paying off the mortgage note to Bankers Trust, “Ameriquest became the

unnecessary. the homestead as collateral to secure the debt. As the trial court held, by Therefore, inclusion of this fifth element in the test for equitable subrogation is

Ameriquest paid the Bankers Trust mortgage in order to protect its interest in “volunteer,” set forth below, adequately takes this consideration into account. considered a volunteer for purposes of equitable subrogation.”). Here,

others. to pay or when no interest of his is protected by payment.” equitable subrogation, “one is a volunteer if he pays while under no obligation

reimbursement. contractual provisions as to subrogation and existence and applicability of equitable principles or

have been made to protect its own interest, we conclude that the definition of pays the debt of another in order to protect his own property or interest is not 73 Am. Jur. 2d Rawson v. City of Omaha, 322 N.W.2d 381, 384-85 (Neb. 1982) (“[O]ne who Fire Ins. Co. v. Aetna Cas. & Sur. Co., 318 A.2d 659, 661 (Vt. 1974); accord the entire debt; and (4) subrogation may not work any injustice to the rights of Norfolk & Dedham

acted as a volunteer in paying off the Bankers Trust mortgage. For purposes of With respect to the first element, the question is whether Ameriquest position of the satisfied creditor.”

liberal application. on the subrogee, which generally includes proof of: the

required satisfaction of a fifth element, namely, that payment by the subrogee against a wrongdoer, but need not necessarily be limited to such an individual. See id. Although the trial court held that equitable subrogation

debt upon which it was not primarily liable; (3) the subrogee must have paid subrogee cannot have acted as a volunteer; (2) the subrogee must have paid a apply, we hold that all of the following conditions must be met: (1) the

of another may, under certain circumstances, succeed to the rights and

Equitable subrogation, in particular, is a broad doctrine, which is given subrogation case, the burden of proving entitlement is

[individuals] from recouping a windfall . . . . In any conscience ought to pay it. It also prevents Subrogation § 2 (2001).

citations and brackets omitted). Claims for subrogation are generally made Wolters v. Am. Republic Ins. Co., 149 N.H. 599, 601 (2003) (quotations,

rest by compelling payment by the one who in good to place the responsibility where it ultimately should enrichment.

p. 9 purpose.” 73 Am. Jur. 2d not reach arguments concerning its application of the doctrine of unjust Having upheld the trial court’s application of equitable subrogation, we need

by him to discharge the obligation, or the value of the property applied for that 9 subrogee is entitled to indemnity to the extent only of the money actually paid application of the doctrine of equitable subrogation under the facts of this case. operation of equitable subrogation is limited by the “general rule . . . that a

conclusion concerning the applicability of RSA 480:4, III, but uphold its requirements of RSA 477:3 and RSA 480:5-a. The amount recoverable by

BRODERICK, C.J.