Bangor Sav. Bank v. Gabianelli

Maine Superior

Bangor Sav. Bank v. Gabianelli

DecidedOctober 30, 2012

DocketPENre-11-19

StatusUnpublished

This text of Bangor Sav. Bank v. Gabianelli (Bangor Sav. Bank v. Gabianelli) is published on Counsel Stack Legal Research, covering Superior Court of Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Bangor Sav. Bank v. Gabianelli, (Me. Super. Ct. 2012).

Pincite

Opinion

STATE OF MAINE SUPERIOR COURT PENOBSCOT, ss CIVL ACTION Docket No. RE-11-19 II l BANGOR SAVINGS BANK, J__AA\tA.- Pc: ,\1-! '/:J! JDtl-- Plaintiff

v. ORDER

FRANCIS P. GABIANELLI A!K/A FRANK P. GABBIANELLI AND JOANNE M. GABBIANELLI, Defendants

This matter came before the Court for hearing on August 16, 2012. Plaintiff

appeared with its attorney, Michael Haenn, Esq. Defendants appeared with their

attorneys, Gross, Minsky and Mogul, P .A. The property at issue in this foreclosure case

is located in Dixmont, Penobscot County, Maine.

Factual Background and Findings

On March 11, 2003, Francis P. Gabbianelli and Joanne M. Gabbianelli (the only

Defendants in this action) and Gabbianelli Enterprises, Inc. (GEl) executed and delivered

a commercial promissory note in the original principal amount of $330,000.00 (330K

note). Mr. and Mrs. Gabbianelli and GEl executed and delivered a mortgage deed to the

Plaintiff with respect to property located at 3 Veterans Highway in Brooks, Maine (the

Brooks Property) in favor of Bangor Savings Bank (the Plaintiff) to secure the 330K

Note. Mr. and Mrs. Gabbianelli also executed and delivered a mortgage deed to the

Plaintiff with respect to their personal residence located at 268 Hog Hill Rd. in Dixmont,

Maine (the Dixmont property) to secure the same 330K Note. In 2006, Mr. and Mrs.

Gabbianelli and GEl also executed and delivered a 20K Note to the Plaintiff. This Note

was secured only by the Brooks property. The Gabbianellis and GEl defaulted on the

1 330K Note by failing to make required payments and as a result breached conditions in

the mortgages on both the Brooks and Dixmont Properties. 1 The Plaintiff brought

separate foreclosure actions on the mortgages in Waldo and Penobscot Counties. 2 On

June 7, 2011, the Belfast District Court in Waldo County entered two Orders: 3

1) with respect to Counts I and II of the Complaint, the two counts of the

Complaint that involved allegations against Mr. and Mrs. Gabbianelli,

the Court issued an "Order and Judgment of Foreclosure." This Order

described the action as a "civil action to foreclose mortgage liens."

This "Order and Judgment of Foreclosure" in pertinent part provided as

follows: A) " ... the Court hereby ORDERS and ADWDGES a

foreclosure of both the 330K Mortgage and the 20K Mortgage ... ," and

B) "If the proceeds of the public sale are insufficient to satisfy the

amount adjudged to be due and owing to the Plaintiff as provided

hereinabove, the Plaintiff shall have the remedies for a deficiency ... ";

and

2) with respect to Counts III and IV of the Complaint, the two counts of

the Complaint that involved allegations against GEl, the Belfast Court

issued an "Order and Judgment." This Order describes the action as a

"civil action to enforce the contractual obligations of ... [GEl]." The

"Order and Judgment provided in pertinent part as follows: A) " ... it is

hereby ORDERD, that judgment be and is hereby entered on Count III

1 The Gabbianellis and GEl also defaulted on the 20K note, and such default was the subject of Counts II and IV of the Belfast District Court action. 2 The decision to pursue these foreclosure actions in separate counties was not a discretionary litigation tactic, but instead a requirement under 14 M.R.S. § 6321. 3 The Court takes judicial notice of the Belfast District Court case, RE-11-06.

2 of the Complaint [relating to the 330K Note] in favor of the Plaintiff

and against [GEl] ... ; and B) "It is further ORDERED, that judgment

be and is hereby entered on Count IV of the Complaint [relating to the

20K Note] in favor ofthe Plaintiff and against [GEl]. ... "

Plaintiff asserts that it did not request or receive a personal judgment against the

Gabbianellis in the Waldo County action, nor is it seeking a personal judgment against

them in this action. Defendants agree there is no personal judgment against them in the

Waldo County action, but argue that there is a judgment with respect to the 330K Note in

the Waldo County action, albeit the judgment on the Note is against GEL

Issues

Defendants have raised two issues4 for the .Court's consideration: 1) Do the

Belfast District Court's Judgments limit the amount Plaintiff may "recover" in the present

foreclosure; and 2) Is the Plaintiff improperly claiming in this Penobscot County action

foreclosure expenses and attorney fees unrelated to the Dixmont property and/or already

awarded in connection with the Belfast District Court Order and Judgment of

Foreclosure?

Analysis

The Court has considered the arguments and evidence presented by the parties at

trial and in their written submissions. This case is in a unique posture. Plaintiff seeks the

equitable remedy offoreclosure5 , yet there are two mortgages securing one 330K Note

4 To the extent Defendants raised the issue of lack ofproper notice by the Bank, the Court is satisfied that the Bank appropriately satisfied the notice requirements. 5 Kennebec Federal Savings and Loan Assoc. v. Kueter, 1997 ME 123,695 A. 2d 1201 (matters relating to a mortgage foreclosure action are equitable in nature).

3 and one of the mortgaged properties in a different county was sold a year ago. Open

questions remain about the amount currently due on the Note and the amount of

foreclosure expenses and attorney fees that should be considered in connection with the

foreclosure of the Dixmont property. Thus, the Court will not issue a Foreclosure

Judgment at this time.

A. Defendants' Merger Claim

The Defendants claim that since the Plaintiff received a judgment in the Belfast

case on the 330K Note (albeit against GEl), the underlying obligation has merged into the

final judgment. Defendants rely on the following for their merger argument:

The general rule of merger is that when a valid and final personal judgment is rendered in favor of the plaintiff, the original debt or cause of action, or underlying obligation upon which an adjudication is predicated, is said to be merged into the final judgment, and the plaintiff cannot maintain a subsequent action on any part of the original claim, because the doctrine of merger operates to extinguish a cause of action on which a judgment is based and bars a subsequent action for the same cause. A new cause of action on a judgment is substituted for the original claim.

The merger rule of claim preclusion does not require that there be an identity of all parties in both lawsuits. Rather, it requires that the plaintiff whose claim may be merged and the defendant whose defense may be barred in the first lawsuit also be the parties affected by the same claim in the second suit. 46 Am. Jur. 2d Judgments§ 451 (2012).

Additionally, as the Bankruptcy Court for the District of Maine stated in In re Bache-

Wiig v. Fournier, 299 B.R. 245, 249-250 (Bank. D. Me. 2003):

The general rule is that a mortgagee who has obtained a judgment on the mortgage note does not forgo his rights under the mortgage until the debt is satisfied. The cases are uniform in holding that until the mortgage debt is actually satisfied, the recovery of a judgment on the obligation secured by a mortgage, without the foreclosure of the mortgage, although merging the debt in the judgment, has no effect upon the mortgage or its lien, does not merge it, and does not preclude its foreclosure in a subsequent suit instituted for that purpose ...

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