## Facts

- Four Chapter 7 bankruptcy trustees filed adversary proceedings in separate bankruptcy cases involving Maryland real property encumbered by recorded deeds of trust securing lender loans.
- The trustees asserted that the deeds of trust were invalid because the required affidavit of consideration (and/or the acknowledgment within it) was missing or defective.
- The secured creditors contended that any such formal defects were cured by Maryland’s curative statute, Md. Code, Real Prop. § 4-109, because no judicial proceeding challenging the instruments was filed within six months after recordation.
- The United States Bankruptcy Court for the District of Maryland consolidated matters presenting the same legal issue and certified questions of Maryland law to the Court of Appeals of Maryland.

## Issues

1. Whether the absence of an affidavit of consideration on a recorded deed of trust is a curable “defect” under Md. Real Prop. § 4-109.
2. Whether an incomplete or improper affidavit of consideration (including a defective acknowledgment) on a recorded deed of trust is curable under § 4-109.
3. Whether § 4-109 cures these defects when no judicial challenge is commenced within six months of recordation.
4. Whether, once cured under § 4-109, the deed of trust is valid and enforceable against a bankruptcy trustee seeking to treat the property as unencumbered.

## Decision

- The Court of Appeals of Maryland answered each certified question “yes.”
- Section 4-109 unambiguously applies to defects involving missing or improper affidavits of consideration (and related acknowledgment defects) in recorded deeds of trust.
- If no judicial proceeding challenging the instrument is filed within six months after recordation, the defect is cured by operation of law.
- As a result, the deeds of trust remain effective and enforceable, and the trustees may not invalidate them based solely on the identified affidavit defects.

## Legal Principles

- Maryland’s curative statute, Md. Real Prop. § 4-109, cures specified formal defects in recorded instruments after a six-month period, unless a judicial challenge is timely filed.
- “Defects” curable under § 4-109 include both (a) missing affidavits of consideration and (b) improper or incomplete affidavits or acknowledgments associated with those affidavits, when the instrument has been recorded.
- After the six-month period expires without a judicial challenge, the defect is treated as legally ineffective, and the recorded instrument is enforceable as recorded.
- In bankruptcy litigation involving Maryland real property, a trustee cannot defeat a recorded deed of trust on the basis of affidavit-of-consideration defects that § 4-109 has cured.

## Conclusion

The court construed Md. Real Prop. § 4-109 to cure missing or defective affidavits of consideration (and related acknowledgment flaws) in recorded deeds of trust after six months absent a timely judicial challenge, leaving the deeds enforceable against Chapter 7 trustees.


Guttman v. Wells Fargo Bank, N.A., 421 Md. 227, 26 A.3d 856 (Md. 2011)