James B. Nutter & Co. v. Black

KEHOE, J. This opinion is about the scope of legal protections afforded to individuals who are unable to handle their financial affairs in a responsible manner because of a physical or mental condition. We will use the terms “disabled,” “under a disability,” and “subject to guardianship proceedings” to refer to persons who have been adjudicated by a court to be unable to manage their property and for whom a guardian of the property has been appointed. 1 We will employ the descriptors ⁵ “incompetent” and “non compos mentis” for individuals who may be unable to manage their property, but who are not subject to guardianship proceedings. As we will explain, the distinction between an incompetent person and a disabled person is critical to the outcome of this appeal. James B. Nutter & Co. (“Nutter”) appeals from a judgment of the Circuit Court for Baltimore County in favor of Edwina E. Black and David L. Moore, Esquire.

Nutter describes itself as “one of the leading reverse mortgage lenders[ 2 ] in the [United States].” Ms. Black is a disabled person. Moore has been the court-appointed guardian of her property since 1994. In 2009, Nutter entered into a reverse mortgage loan with Ms. Black. This took place without Moore’s knowledge or consent.

When Moore learned of the transaction, he refused to ratify it. Nutter filed suit seeking a judgment requiring Moore to ratify the transaction or, alternatively, granting various forms of restitutionary relief. The circuit court concluded that there was no legal or factual basis for any of Nutter’s claims and entered judgment accordingly. Nutter presents five issues, which we have consolidated and reworded: ⁶ I. Did the circuit court err when it held that the loan transaction was void, as opposed to voidable?

II

Is Nutter entitled to the restitution of any part of the money it paid to Ms. Black?

III

Is Nutter entitled to subrogate its interest to that of the previous lender? We will affirm the circuit court’s judgment. Background This case came to the circuit court on cross-motions for summary judgment. Both parties relied upon a joint stipulation of relevant facts, which we summarize and supplement as necessary.

A. Ms. Black’s Disability More than 25 years ago, Ms. Black sustained permanent and significant neurological injuries after she was deprived of oxygen during a surgical procedure. In 1989, the Circuit Court for Baltimore City determined that Ms. Black was disabled, and appointed guardians of her person and her property. 3 In 1994, the Circuit Court for Baltimore City ⁷ appointed Moore as the substitute guardian of Ms. Black’s property. In 1995, Moore, acting in his capacity as guardian of the property, purchased a home (the “Stuart Mills property”) located in Baltimore County for Ms. Black’s use. To pay for the purchase, Moore, again in his capacity as guardian, borrowed $119,200 and signed a deed of trust note and a purchase money deed of trust.

The note was eventually acquired by Bank of America. The deed of conveyance and the deed of trust were recorded in the land records of Baltimore County. The deed of conveyance identified the grantee as “Edwina E. Black” and stated in pertinent part: See Order in the Matter of Edwina Black for the appointment of a Guardian as filed in the Circuit Court for Baltimore City, Case No. 89200059/CE100323. Said Order having appointed David L. Moore, Attorney at Law, as Substitute Guardian.

The deed of trust was executed as follows: “Edwina E. Black by David L. Moore, Guardian of the Property of Edwina E. Black.” In 2007, Ms. Black’s guardianship action was transferred from the Circuit Court for Baltimore City to the Circuit Court for Baltimore County. B. The Reverse Mortgage Transaction In April 2009, Ms. Black, acting on her own and without the knowledge or consent of Moore, entered into a reverse mortgage transaction with Nutter regarding the Stuart Mills property. Before closing, Nutter engaged a title agent to examine the title to the residence, and to perform the typical closing services. The joint stipulation states that “[Nutter] and the title agent that handled the closing failed to properly identify the guardianship action in the Court record.” The stipulation does not address whether Nutter or the title agent realized ⁸ that Ms. Black was a disabled person based upon the information contained in the deed and deed of trust.

Most of the documents that Ms. Black signed as part of the reverse mortgage transaction are not in the record. What is clear is that Ms. Black executed two deeds of trust 4 encumbering the Stuart Mills property to secure repayment of the loan. At closing, Nutter paid $154,317.13 as follows: $80,651.96 to Bank of America to satisfy the existing loan and to extinguish the existing deed of trust; $57,132.01 directly to Ms. Black; and $16,533.16 for settlement expenses. Moore knew nothing about any of this.

Ms. Black deposited the proceeds into her personal account. 5 Moore first became aware that something was amiss when he received a notice from Bank of America stating that its loan had been satisfied and its deed of trust released. He made inquiries and learned of the reverse mortgage transaction. Moore then withdrew from Ms. Black’s account $34,106, that is, what was left of the money that had been paid to Ms. Black at closing. Moore deposited this money into a separate guardianship account.

On July 17, 2009, Moore notified Nutter of Ms. Black’s disability and requested that Nutter provide him with the documents relating to the transaction. Nutter complied with this request. Thereafter, Nutter, and its agents, attempted to contact Moore over a period of several months, but received no response. Finally, in November 2009, Nutter sent Moore a letter asking him (1) to ratify the reverse mortgage transaction or (2) to disaffirm it and reimburse Nutter in the amount of $137,738.97, that is, the sum of the Bank of America pay-off ⁹ and the money paid to Ms. Black at closing.

Approximately eight months later, Moore, through counsel, took the position that the reverse mortgage transaction was void as a matter of law and that he was under no duty to return any portion of the loan proceeds. 6 C. The Circuit Court Litigation Nutter initiated this action on June 17, 2011, when it filed a complaint for a declaratory judgment and related relief against Ms. Black and Moore. Nutter asserted that it had entered into the reverse mortgage transaction with Ms. Black “without actual knowledge that [she had been] declared disabled and that [Moore] had been appointed Guardian of the Property of Ms. Black.” Nutter presented three theories of relief relevant to this appeal. First, Nutter sought a judgment ratifying the reverse mortgage agreement between Ms. Black and Nutter. Second, Nutter asserted that Ms. Black and Moore had been unjustly enriched in the amount of $137,783.97, that is, its disbursements at closing less settlement expenses, and requested a judgment against Ms. Black and Moore in that amount.

Third, Nutter sought to subrogate its interests to those enjoyed by Bank of America under the prior lien. 7 Moore and Ms. Black filed an answer which sought, as additional relief, a judgment that, the reverse mortgage was void, a declaration of title to the property in favor of Moore, as guardian of Ms. Black’s property, attorney’s fees, and any other relief necessary. After the completion of discovery, the parties filed cross-motions for summary judgment. After oral argument on the ¹⁰ motions, the circuit court, in a thorough and well-considered memorandum opinion and order, denied Nutter’s motion for summary judgment and granted Ms. Black and Moore’s cross-motion. In summary, the court concluded that the reverse mortgage transaction was void, rather than voidable, and that Nutter was on constructive notice of Ms. Black’s disability.

The court denied Nutter’s claim for restitution because it was premised solely upon its contention that the reverse mortgage transaction was voidable. As to Nutter’s claim for subrogation, the court noted that subrogation in this context is available “when there is a debt or obligation owed by one person which another person, who is neither a volunteer nor an intermeddler, pays or discharges under such circumstances as in equity entitle him to reimbursement to prevent unjust enrichment^]” The court explained that “[a] volunteer is a party who has paid the debt of another without any assignment or agreement and is not under legal obligation, or compulsion to do so for the preservation of his own rights[.]” The court reasoned that, because the reverse mortgage transaction was void, Nutter had no rights in the Stuart Mills property and “thus was not compelled to pay the mortgage in order to preserve any rights.” After the court’s memorandum order and opinion was issued, both parties filed motions to alter or amend the judgment on essentially the same grounds, i.e., that both parties had requested declaratory relief but that the court had failed to issue a declaratory judgment. The court denied Nutter’s motion but entered a supplemental order declaring null and void “the Second Deed of Trust (to Secure a Reverse Mortgage Loan) ... in favor of the Secretary of Housing and Urban Development,” as well as “the Deed of Trust in favor of [Nutter].” Analysis We review the circuit court’s grant of summary judgment de novo, Harford, County v. Saks Fifth Ave. Distrib.

Co., 399 Md. ¹¹ 73, 82, 923 A.2d 1 (2007), determining, first, whether there exists a dispute as to any material fact and, second, whether the circuit court was legally correct in granting judgment in favor of the prevailing party. Lombardi v. Montgomery County, 108 Md.App. 695, 710 , 673 A.2d 762 (1996). I. Void or Voidable? The parties agree that Ms. Black did not have the legal capacity to enter into the reverse mortgage transaction, but they disagree as to the implications of her condition.

Moore asserts that Ms. Black’s lack of capacity rendered the reverse mortgage transaction void. If the contract is void, Nutter has no right to enforce the terms of the reverse mortgage transaction and Nutter’s remedies, to the extent that it has any, lie in subrogation and restitution. For its part, Nutter contends that the reverse mortgage transaction was voidable. Nutter argues that, when Moore learned of the reverse mortgage transaction, he could have rescinded the transaction but was required to do so within a reasonable time period.

Moreover, Nutter asserts that if Moore had opted to rescind, he would have been required to pay Nutter $137,783.97, representing the pay-off amount of the Bank of America loan plus the money paid to Ms. Black at closing. Because none of this occurred, Nutter contends that Moore, through his inaction, constructively affirmed the reverse mortgage transaction and that the circuit court erred in failing to enter a declaratory judgment to that effect. In considering the parties’ contentions, we will first examine the concepts of void and voidable contracts, focusing on two recent and representative decisions of the Court of Appeals that approach the question from somewhat different perspectives. These decisions instruct that, in considering whether a contract should be treated as void or voidable, the Court plays particular heed to the degree to which a judicial conclusion that a conveyance is void might affect the interests of good faith third parties.

We will review Maryland’s statutory provisions for the protection of disabled persons as well as a series of earlier decisions of the Court of Appeals on which ¹² Nutter relies. Finally, we will consider the rights of third parties and how those rights might be affected by a judgment that the deeds of trust in question are void. 8 A. The Distinction Between Void and Voidable Contracts “A void contract is ‘not a contract at all’ ... and all parties, present and future, would be equally allowed to avoid the contract.” Julian v. Buonassissi, 414 Md. 641, 666 , 997 A.2d 104 (2010) (quoting Restatement (Second) of Contracts § 7 cmt. a (1981)). In contrast, a voidable contract is one in which one or both of the parties have the right to “avoid the relations created by the contract, or by ratification of the contract to extinguish the power of avoidance.” Id. at 666-67, 997 A.2d 104 (quoting Restatement (Second) of Contracts § 7 (1981)). The distinction between a void and a voidable transaction is particularly important with regard to deeds and other instruments conveying interests in real property.

As the Julian court noted: once a deed is considered void ab initio or of no legal effect, there are lasting consequences to everyone in the subsequent chain of title. As a result, we have been circumspect at common law in finding a deed void ab initio and have limited our rulings regarding voidness to circumstances that go to the face of the deed, e.g., forgery.[ 9 ] ¹³ Id. at 668 , 997 A.2d 104 (footnote omitted). In this context, the Court cited two of its earlier decisions that dealt with “grantors suffering from mental infirmities,” Riley v. Carter, 76 Md. 581, 595-96 , 25 A. 667 (1893), and Evans v. Horan, 52 Md. 602, 610-11 (1879). In both of those cases, the Court concluded that such deeds were voidable, but not void.

(We will discuss Riley and Carter, as well as some related decisions, later in this opinion.) Maryland’s appellate courts have not definitively addressed whether a conveyance by a disabled person is voidable or void. B. Maryland’s Guardianship Statute Maryland’s first comprehensive statute for the protection of disabled persons was first enacted at Chapter 72 of the Laws of 1785. That statute replaced a patchwork quilt of common law remedies and granted Maryland’s Chancellor the “full power and authority in all cases to superintend, direct, and govern [incompetent persons’] affairs and concerns, both as to the care of their persons, and management of their estates[.]” In re Estate of Rachel Colvin, 3 Md.Ch. 278, 282 (1851). Maryland’s guardianship statute has been modified on numerous occasions, and is now codified at Title 13 of the Estates and Trusts Article. 10 We are primarily concerned with Subtitle 2, which pertains to the protection of the property of disabled persons.

A circuit court may appoint a guardian of the property upon a finding that: (1) The person is unable to manage his property and affairs effectively because of physical or mental disability, disease, habitual drunkenness, addiction to drugs, imprisonment, compulsory hospitalization, confinement, detention by a foreign power, or disappearance; and ¹⁴ (2) The person has or may be entitled to property or benefits which require proper management. ET § 13—201(c). Appointment and qualification of a guardian of the property “vests in him title to all property ... of the protected person that is held at the time of appointment or acquired later.” ET § 13—206(c)(1) 11 ; Buxton v. Buxton, 363 Md. 634 , 647 n. 2, 770 A.2d 152 (2001) (“Under current law, a guardian for the property of an incompetent person does hold title to the protected person’s property.” (emphasis in original)). The guardian is required to use those resources “as needed for the clothing, support, care, protection, welfare, and rehabilitation of the disabled person.” ET § 13-214(b)(2).

In so doing, the guardian must “give consideration to the support and care of the disabled person during the probable period of the estate and the needs of persons dependent upon the disabled person.” Id. Consistent with these statutory provisions, a disabled person lacks the capacity to enter into a contract. Gillet v. Shaw, 117 Md. 508, 512 , 83 A. 394 (1912) (“According to the established law in this state ... the contract of a person adjudged to be insane cannot be enforced against him.”). Similarly, a disabled person is unable to convey an interest in real property.

Supreme Council of Royal Arcanum v. Nicholson, 104 Md. 472, 479 , 65 A. 320 (1906) (When adjudicated to be non compos mentis, an individual “is divested of his property!)]”); Law v. John Hanson Sav. & Loan, 42 Md.App. 505, 512-13 , 400 A.2d 1154 (1979) (After appointment, the guardian “was vested with title to [the disabled person’s] property and was the only person who validly could execute ... a deed of trust[.]” Moreover, the disabled person “had no power” to do so.). Additionally, an order appointing a guardian of the property is constructive notice of the limitations upon the ¹⁵ disabled person’s ability to enter into legally-binding contracts. Flach v. Gottschalk, 88 Md. 368, 376 , 41 A. 908 (1898) (A guardianship proceeding “furnish[es] notice—actual in some instances, constructive in others, but in both a sufficient notice—of the lunacy, and this would preclude an averment that the party dealing with the lunatic was ignorant of the latter’s mental incapacity.”); Seaboard Surety Co. v. Boney, 135 Md.App. 99 , 117 n. 3, 761 A.2d 985 (2000) (“ ‘[Guardianship proceedings are treated as giving public notice of the ward’s incapacity and establish his status with respect to transactions during guardianship even though the other party to a particular transaction may have no knowledge or reason to know of the guardianship[.]’ ” (quoting Restatement (Second) of Contracts § 13 cmt. a.)). 12 ¹⁶ Finally, we recognize that guardianship proceedings implicate one of the most fundamental values of our society. As the Court of Appeals explained: a court ... assumes jurisdiction in guardianship matters to protect those who, because of illness or other disability, are unable to care for themselves.

In reality the court is the guardian; an individual who is given that title is merely an agent or arm of that tribunal in carrying out its sacred responsibility. Kicherer v. Kicherer, 285 Md. 114, 118 , 400 A.2d 1097 (1979). C. Atkinson v. McCulloh and Related Decisions Nutter’s contention that the deeds of trust are voidable, instead of void, is largely based upon its interpretation of the Court’s analysis in Atkinson v. McCulloh, 149 Md. 662 , 132 A. 148 (1926). Nutter views this case as standing for the proposition that a deed by a disabled person is voidable.

Nutter misreads the opinion. Atkinson is the capstone of a relative handful of Maryland cases that dealt with conveyances, 13 or in some cases contracts, 14 by incompetent individuals who had not been adjudicated to be disabled at the time of execution of the document ¹⁷ in question. In these decisions, the Court, either by holding or in dicta, established that such transactions were (1) voidable but not void; and (2) could not be attacked by, or on behalf of, the incompetent person, unless the contractual terms were objectively unfair or the counterparty knew of the incompetent party’s mental state when the contract was executed. Flach, 88 Md. at 372-74 , 41 A. 908 . 15 In Atkinson, the Court was confronted with a case in which the counterparty (McCulloh) was aware, or should have been aware, of the incompetent’s (Atkinson’s) mental status. 149 Md. at 673 , 132 A. 148 .

Three years after the deed in question was recorded, and after McCulloh entered into a contract to convey the property to a third party, Atkinson’s heirs filed an action to set the deed aside. Id. at 665-66, 132 A. 148 . After considering the Maryland cases which we discussed in the previous paragraph, as well as out-of-state decisions and scholarly authorities, the Court concluded as follows: it seems to us the sounder view, and one more nearly in accord with the decisions of this court, is that the contract of a lunatic, made with a sane person who had, or could by the exercise of reasonable prudence have had, knowledge of his disability, may be avoided at the option of the lunatic when of sound mind, or by his guardian, heirs, or devisees ... provided they exercise that option within a reasonable time, and surrender whatever benefit they have received from the transaction. Id. at 674 , 132 A. 148 .

In its brief, Nutter asserts that the Atkinson analysis “does not distinguish between contracts made by individuals already ¹⁸ declared incompetent by a court versus contracts made with individuals not declared incompetent by a court. It simply refers to ‘lunatics.’ ” The problem with Nutter’s argument is that it takes the above-quoted passage from Atkinson out of context. Earlier in its analysis, the Court noted that “[i]n this state the contract of a person who has not been adjudicated non corwpos mentis is not void but voidable.” Id. at 672, 132 A. 148 . Moreover, there is nothing in the Court’s opinion that suggests that Atkinson had been adjudicated as an incompetent either before, or after, the relevant conveyance.

The same is true for the other decisions holding that deeds by incompetent persons were voidable but not void. See Riley, 76 Md. at 591-92 , 25 A. 667 (the court’s summary of the pertinent facts); Evans, 52 Md. at 605-06, 609 (same); Key’s Lessee, 1 Md. at 37-38 (same); see also Safe Deposit & Trust Co. v. Tait, 54 F.2d 383, 385 (D.Md.1931) (“[T he Maryland cases very clearly hold that contracts and conveyances by persons non compos mentis, before adjudication and not under guardianship, are merely voidable, and not void.” (citing Atkinson, Flach, Riley, and Evans)). In this line of cases, only Flach v. Gottschalk addressed the significance of an adjudication of disability. Flach entered into a contract for the purchase of whiskey and, after having taken delivery, refused payment based on his assertion that he was incompetent at the time the contract was made.

The issue before the Court of Appeals was whether Flach could repudiate the contract. Id. at 370, 41 A. 908 . The Court began its analysis by noting that: Speaking generally, the contracts of a lunatic, who has not been found by an inquisition to be insane, do not belong to the class that are absolutely void, but fall within the group that is described as voidable. This is certainly the law in Maryland.

Id. (citations omitted). After reviewing relevant Maryland and out-of-state authority, the Court commented: ¹⁹ As the lunatic’s contract at best is only voidable it would be unjust and inequitable to allow him to repudiate it if it had been made fairly and in good faith when the other party was ignorant of the disability, unless both parties upon a rescission of it can be restored to the situation they originally occupied. The inconvenience which it is supposed may result from this doctrine can easily be averted by a formal inquisition of lunacy.

Such an inquisition would furnish notice—actual in some instances, constructive in others, but in both a sufficient notice—of the lunacy; and this would preclude an averment that the party dealing with the lunatic was ignorant of the latter’s mental incapacity. 88 Md. at 375-76 , 41 A. 908 (citations omitted; emphasis added). In short, the Atkinson line of cases provides no support for Nutter’s contention that the reverse mortgage transaction is voidable, as opposed to void. D. The Rights of Good Faith Third Parties We fully recognize that Maryland courts “have been circumspect at common law in finding a deed void ab initio and have limited ... rulings regarding voidness to circumstances that go to the face of the deed, e.g., forgery.” Julian, 414 Md. at 668 , 997 A.2d 104 (footnote omitted). This circumspection arises out of a concern for the rights of innocent third parties because “once a deed is considered void ab initio or of no legal effect, there are lasting consequences to everyone in the subsequent chain of title.” Id.

In considering whether the deed executed by Ms. Black should be treated as the effective equivalent of a forged deed, two recent decisions of the Court of Appeals are instructive. The first is Julian itself; the second is Scotch Bonnett Realty Corp. v. Matthews, 417 Md. 570 , 11 A.3d 801 (2011). In Julian , the Court considered when a violation of a statute could render a deed void; in Scotch Bonnett, the issue was ²⁰ whether a forged signature that was part of a larger scheme of misrepresentation rendered a deed void. Julian did not involve an allegation of forgery.

Instead, Julian asserted that the deed in question was void because she had signed it without having been given a notice of a right of rescission that was required by the Protection of Homeowners in Foreclosure Act (“PHIFA”), Real Property §§ 7-301-7-321. 414 Md. at 666 , 997 A.2d 104 . The Court noted that various provisions of PHIFA explicitly provided that certain activities undertaken in violation of the statute were void. Id. at 675, 997 A.2d 104 . However, the Court found no indication in the language of the statute that the legislature intended that a failure to provide the right of rescission notice rendered a subsequent deed void.

Id. at 674 , 997 A.2d 104 . The Court concluded: In the present situation, the Legislature has spoken clearly when a provision was to be voided for violation of PHIFA. With respect to the notice of rescission language, the Legislature failed to include a reference to “void[.]” ... To declare a deed void because of lack of notice could and would radically alter the protection of all bona fide purchasers in a subsequent chain of title.

Id. at 677 , 997 A.2d 104 . Scotch Bonnett involved a deed that was obtained by a forgery but was not itself forged. Johnson, a mere acquaintance of the sole director of Scotch Bonnett Realty Corporation (“SBRC”), submitted corporate articles of amendment to the Maryland Department of Assessments and Taxation that designated him as an “officer” of SBRC. 417 Md. at 573 , 11 A.3d 801 . The articles of amendment were purportedly signed by the corporation’s resident agent and attorney but the signature was forged.

Id. at 572-73 , 11 A.3d 801 . Johnson then sold a property owned by SBRC to an innocent third party. Id. at 574 , 11 A.3d 801 . Johnson signed his own name to the deed purportedly as an officer of SBRC.

Id. Litigation ensued and, eventually, the following question was certified to ²¹ the Court of Appeals by the United States Bankruptcy Court for the District of Maryland: Does the use of a deed that is neither a forged document, nor signed with a forged signature, but which derives its transactional vitality from forged corporate articles of amendment, render a conveyance of land void ab initio, or, is good title transferred to bona fide purchasers for value without notice? Id. at 572 , 11 A.3d 801 . The Court concluded that such a deed was not void ab initio because, among other reasons, an affirmative answer: would inject uncertainty into the law of conveyancing, beyond that already existing under the present rule under which a forged deed is void ab initio.

Such a rule would turn into a jury question whether fraud in the inducement voided a deed ab initio and destabilize the predictability of result for bona fide purchasers for value. Stability of the law is particularly desirable in the field of real property law. A property owner’s title should not be at risk that a grantor in the chain of title decides that the act of granting has been induced by a written misrepresentation, even if the misrepresentation includes a forged signature. Id. at 587-88 , 11 A.3d 801 .

Both Julian and Scotch Bonnett cited with approval this Court’s opinion in Harding v. Ja Laur Corp., 20 Md.App. 209 , 315 A.2d 132 (1974). In Harding , we noted that a “forger, having no title can pass none to his vendee.” Id. at 214-15 , 315 A.2d 132 . From this premise, we concluded that: Consequently, there can be no bona fide holder of title under a forged deed. A forged deed, unlike one procured by fraud, deceit or trickery is void from its inception.

The distinction between a deed obtained by fraud and one that has been forged is readily apparent. In a fraudulent deed an innocent purchaser is protected because the fraud practiced upon the signatory to such a deed is brought into play, at least in part, by some act or omission on the part of the person upon whom the fraud is perpetrated.... A forged ²² deed, on the other hand, does not necessarily involve any action on the part of the person against whom the forgery is committed. Id. at 215 , 315 A.2d 132 .

Returning to the case before us, no provision in Maryland’s guardianship statute explicitly provides that a deed by a disabled person is void. However, ET § 13—206(c)(1) provides that upon appointment and qualification, a guardian is vested with “title to all property of ... the protected person that is held at the time of appointment or acquired later[.]” Thus, a disabled person, like a forger, holds no legal title to property. Owning nothing, she can convey nothing. Harding, 20 Md. App. at 214-15 , 315 A.2d 132 .

Additionally—and to address the policy concern raised in Julian and Scotch Bonnett—concluding that a deed by an adjudicated disabled person is void poses no threat whatsoever to subsequent good faith purchasers. A good faith purchaser is one who “acquires property for valuable consideration, in good faith, and without notice of another’s prior claim to the property.” Fishman v. Murphy, 433 Md. 534, 546 , 72 A.3d 185 (2013). All potential purchasers of real property are on constructive notice of properly indexed information in the land and court records of the county in which the property is located. See Greenpoint Mortgage Funding v. Schlossberg, 390 Md. 211, 228-30 , 888 A.2d 297 (2005).

Thus, a court order appointing a guardian of the property is constructive notice to the world that the disabled person is without authority to convey his or her property. Flach, 88 Md. at 374 , 41 A. 908 ; Boney, 135 Md.App. at 117 n. 3, 761 A.2d 985 . To be sure, a would-be purchaser or lender may choose to forego a title examination, or to hire a negligent examiner, or to decline to take the trouble to look at the information generated by the title search, but imprudence of this sort bears its own risks. There is no reason for us to treat a deed by an adjudicated disabled person any differently from any other readily-recognizable title flaw.

For us to do so, “would invite a ‘head in the sand’ approach, or create an exception that would ‘swallow the ²³ rule’ and undermine the protective purpose of guardianships.” Boney, 135 Md.App. at 117 n. 3, 761 A.2d 985 . Even from the scanty facts in the record, it is easy to conclude that treating the reverse mortgage transaction as void furthers the purposes of Maryland’s guardianship law. Before the transaction occurred, the guardianship estate had more than $200,000 in equity in the Stuart Mills property—an asset that could be used to meet Ms. Black’s future needs. After the transaction, the guardianship estate’s equity in the property was significantly reduced and, over time, would have been eliminated altogether.

Moreover, any future increase in value of the Stuart Mills property would inure to Nutter’s, and not to Ms. Black’s, benefit. Were we to conclude that the transaction was voidable, Moore would be required either to (1) ratify the transaction, a decision which, over time, would deprive Ms. Black of all equity in the property; or (2) rescind the transaction and make Nutter whole, a process which would require the effort and expense of obtaining substitute financing, as well as scraping money together to reimburse Nutter for the money that Ms. Black had herself spent. In our view, neither of these outcomes furthers the purposes of Maryland’s guardianship law. The court assumed jurisdiction over Ms. Black’s property in the first place to protect her because she is unable to care for herself.

Kicherer, 285 Md. at 118 , 400 A.2d 1097 . As the court’s agent, Moore is obligated to “discharge his duties for the best interest of