Institution v. Elichaa
| Decision Date | 19 September 2014 |
| Docket Number | SUPERIOR COURT Docket No. RE-13-0445 |
| Parties | BATH SAVINGS INSTITUTION, Plaintiff v. SUZAN M. ELICHAA, Defendants BATH SAVINGS INSTITUTION, F.W. WEBB COMPANY, MAINE REVENUE SERVICE, and UNITIL d/b/a NORTHERN UTILITIES ME GAS, Parties-in-interest |
| Court | Maine Superior Court |
CUMBERLAND, ss.
Before the Court is a motion by the Plaintiff, Bath Savings Institute, for summary judgment in a residential foreclosure action brought pursuant to 14 M.R.S. §§ 6321-6325 (2013).1 Neither the Defendant nor any of the parties-in-interest submitted an opposition the Plaintiff's motion. However, because the Plaintiff failed to provide evidence of a properly served notice of default and mortgagor's right to cure in compliance with statutory requirements and failed to establish the amount due on the note, the motion for summary judgment is DENIED. See Bank of Am., N.A. v. Greenleaf, 2014 ME 89, ¶ 18, --- A.3d --- (citing to Chase Home Fin. LLC v. Higgins, 2009 ME 136, ¶ 11, 985 A.2d 508). Furthermore, the evidence submitted in support of the Plaintiff's motion for summary judgment demonstrates that it lacks standing to seek foreclosure of the Defendant's mortgage, and thus, the Plaintiff has sixty (60) days to join the real party-in-interest pursuant to M.R. Civ. P. 17(a) and to provide documentary evidence of its role as servicer of the mortgage.
The Plaintiff's motion for summary judgment is subject to Rule 56(j), which imposes detailed requirements for granting summary judgment in foreclosure actions. M.R. Civ. P. 56(j).2 The court is independently required to determine if those requirements have been met and is also required to determine whether the mortgage holder has set forth in its statement of material facts the evidence necessary for a judgement in a residential mortgage foreclosure. See Greenleaf, 2014 ME 89, ¶ 18, --- A.3d ---; Higgins, 2009 ME 136, ¶ 11, 985 A.2d 508.
After reviewing the Plaintiff's motion and the documents and affidavits cited to, the Court concludes that the requirements for a judgment of foreclosure have not been met, in part because the Plaintiff failed to produce evidence of a properly served notice in compliance with 14 M.R.S. § 6111 (2013). See Greenleaf, 2014 ME 89, ¶ 18, --- A.3d --- (citing to Higgins, 2009 ME 136, ¶ 11, 985 A.2d 508) (listing the elements of proof necessary to support a judgment of foreclosure).
The notice referred to and appended to the Plaintiff's motion for summary judgment does not strictly comply with the requirements of 14 M.R.S. § 6111. The notice, which is dated September 30, 2013, informs the Defendant that "[a]dditional interest continues to accrue on the Note at the current rate . . . for each day subsequent to September 30, 2013 until you cure your default." The notice also provides that "you will. . . be obligated to pay all additional accrued interest, fees, including attorney's fees, costs and other expenses incurred by BSI subsequent to September 30, 2013." These statements do not strictly comply with the statutory requirements of 14 M.R.S. § 6111, which "effectively freezes" additions to the amount necessary to cure the default. Greenleaf, 2014 ME 89, ¶ 31, --- A.3d ---. By stating that the Defendant "will also be obligated to pay" additional amounts that accrue on the note subsequent to September 30, 2013, the notice indicates an amount in excess of the amount listed in the notice will be necessary in order to cure the default. This runs afoul of 14 M.R.S. § 6111.
Additionally, the amount the Plaintiff asserts is due on the note in its statement of material facts is not supported by the documents cited to. The Plaintiff claims that $253,727.20 is due and owing on the note. (Pl. SMF ¶ 14.) The Plaintiff cites to a "Loan Payoff Statement" which states the amount due and owing is $253,721.20. (Pl. Ex. I.) A review of the figures reveals that the "Mortgage Discharge Fee" is only sixteen dollars in the loan payoff statement but the Plaintiff is claiming it is twenty-two dollars in its statement of material facts. (Pl. SMF ¶ 14; Pl. Ex. I.) Although this is a seemingly small discrepancy, it alone would be sufficient to deny the Plainttiff's motion for summary judgment. See Bangor Sav. Bank v. Richard, 2014 ME 20, ¶ 9, 86 A.3d 1167; HSBC Bank USA, N.A. v. Gabay, 2011 ME 101, ¶ 9, 28 A.3d 1158 ().
Additionally, the Plaintiff's statement of material fact establishing the amount of attorney fees incurred thus far is not properly supported. The Plaintiff claims to have incurred $6,252.87 in legal fees. (Pl. SMF ¶ 22.) However, instead of citing to counsel's affidavit and the billing records attached to counsel's affidavit, the Plaintiff cites only to the affidavit of its employeewho does not reference any supporting documentation. (Hennessey Af. ¶ 29.) See M.R. Civ. P. 56(h)(4); Gabay, 2011 ME 101, ¶ 8, 28 A.3d 1158 (). Without a reference to a breakdown of the legal fees and charges incurred it impossible for the Court to evaluate whether the legal fees are reasonable, which is especially important in this case given the unusually high fees incurred in a relatively short period of time. See 14 M.R.S. § 6322 ().
For these reasons, the Plaintiff's motion for summary judgment is DENIED.
In order to have standing to foreclose a residential mortgage, the Plaintiff must establish: (1) that it is the holder of the note; and (2) that it is the owner of the mortgage. Greenleaf, 2014 ME 89, ¶¶ 10-17, --- A.3d ---. The Plaintiff failed to satisfy both prongs of the standing analysis in this case.
Although the Plaintiff need not be the owner, or economic beneficiary, of the note in order to having standing to foreclose, the Plaintiff must establish that it is the current holder of the note and is entitled to enforce the note under Maine's Uniform Commercial Code. Id. ¶¶ 10-11, 21; U.S. Bank Nat'l Ass'n v. Thomes, 2013 ME 60, ¶¶ 9, 11, 69 A.3d 411; see also 11 M.R.S. § 1-1201(5),(21 )(a) (2013); 11 M.R.S. § 3-1301(1) (2013). In its statement of material facts the Plaintiff dose not claim to be the current holder of the note. It merely claims "to be the holder of all rights set forth" in the note and mortgage. (Pl. SMF ¶ 8.) The Plaintiff further states that the "Note and Mortgage were assigned by BSI to Federal Home Loan Mortgage Corporation ('Freddie Mac')." (Pl. SMF ¶ 8.) This is not the same as claiming to have physical possessionof the original note indorsed in blank, which is required in order to establish the right to enforce the note as the holder.3 See 11 M.R.S. § 1-1201(5), (21)(a); 11 M.R.S. § 3-1301(1). Assuming that the Plaintiff actually has possession of the original note and the failure to state so in the statement of material facts was a drafting oversight, this defect can be cured by providing the affidavit of a qualified witness that states that the Plaintiff is currently in possession of the note.4
With regard to the second prong of the standing analysis, the Plaintiff affirmatively asserts that it is not the owner of the mortgage. (See Pl. SMF ¶ 8.) Ownership of the mortgage is required in order to establish standing to seek foreclosure. Greenleaf, 2014 ME 89, ¶ 12, --- A.3d --- () The Plaintiff states that the Defendant originally executed the mortgage in its favor but that it assigned the mortgage to Freddie Mac.5 (Pl. SMF ¶ 8.) There is no assertion that Freddie Mac ever assigned the mortgage back to the Plaintiff, thus, the Plaintiff lacks standing to pursue the foreclosure action. See Greenleaf 2014 ME 89, ¶¶ 12-17, --- A.3d --- ()
The Plaintiff asserts that it is Freddie Mac's servicer and "according to federal rules and regulations, as well as Freddie Mac guidelines, BSI must bring this collection and foreclosure action in its own name." (Pl. SMF ¶ 8.) The federal rules and regulations referred to are notspecifically cited. Also, the Plaintiff did not attach any documentary evidence regarding Freddie Mac's guidelines, any documentary evidence supporting the Plaintiff's claim that it is acting as Freddie Mac's agent, nor a copy of the assignment referred to, and thus this statement is not properly supported. See M.R. Civ. P. 56(e) (). However, even if the Plaintiff had properly supported its assertion that it services the loan on Freddie Mac's behalf, it would still not have standing to seek foreclosure in its own name pursuant to Greenleaf.6 Only the mortgage owner, in this case Freddie Mac, has standing to do so.
As the analysis above demonstrates, the Plaintiff lacks standing to seek foreclosure of the Defendant's mortgage because the Plaintiff has not established it is the holder of the note or the owner of the mortgage. See id. ¶¶ 10-17. As such, the Plaintiff is not the real party-in-interest pursuant to M.R. Civ. P. 17(a). See Mortg. Elec. Registration Sys. Inc. v. Saunders, 2010 ME 79, ¶ 17, 2 A.3d 289 (); see also J.P. Morgan Chase Bank v. Harp, 2011 ME 5, ¶ 12, 10 A.3d 718. And, as standing...
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