Federal Nat'l Mortgage Assoc. v. First Magnus Financial Corp.

Opinion

STATE OF MAINE SUPERIOR COURT CUMBERLAND, ss CIVIL ACTION DOCKET NO. RE-16-257 FEDERAL NATIONAL MORTGAGE ASSOCIATION,

Plaintiff

v. ORDER

FIRST MAGNUS FINANCIAL CORP., et al., REC'D CUMB CLERKS OF JAN 26 '22 AM8: 18 Defendants

The court has reviewed the memoranda filed by plaintiff FNMA and by defendant Alice

Cassidy in response to its September 7, 2021 order and rules as follows:

1. Plaintiff FNMA's complaint is dismissed with prejudice based on the decision of the

Law Court in Beal Bank USA v. New Century Mortgage Corp., 2019 ME 150,217 A.3d 731.

Cassidy argues that the court should also declare that FNMA has no interest in the property, but

this goes beyond the Beal Bank decision, which states that the holder of the note "may retain

some equitable interest in the accompanying mortgage" even though that does not equate to

actual ownership of the mortgage or a right to compel the assignment of the mortgage. 2019 ME

150 ,r 15 (emphasis in original).

2. Cassidy argues that she should then be entitled to pursue her claim for attorney's fees

under 14 M.R.S. § 6101. In pertinent part, section6101 provides:

For the foreclosure of a mortgage by any method authorized by this chapter [chapter 713 of Title 14 M.R.S.], if the mortgagee prevails, the mortgagee or a person claiming under the mortgage may charge a reasonable attorney's fee .... If the mortgagee does not prevail, or upon evidence that the action was not brought in good faith, the court may order the mortgagee to pay the mortgagor's reasonable court costs and attorney's fees incurred in (

defending against the foreclosure or any proceeding within the foreclosure action ....

FNMA's action did not, as Cassidy essentially acknowledges, expressly seek foreclosure

of a mortgage by any method authorized by chapter 713 of Title 14. Cassidy's Response to

September 21, 2021 Order, filed September 24, 2021, at 6. Rather the action was brought to

position FNMA to be able to bring a foreclosure action by seeking a declaratory judgment that it

was the owner of the note and had standing to foreclose. This is evident from the "Wherefore"

clause in FNMA's original complaint. In its amended complaint FNMA added a request for

relief compelling an assignment of the mortgage from First Magnus.

The court is mindful of the Law Comt' s ruling in Goodwin v. School Administrative

District No. 35, 1998 ME 263 1 13, 721 A.2d 642, that Maine courts have no authority to award

fees in the absence of express statutory authorization or agreement by the parties. In this case

there is an express statutory authorization. The court agrees with Cassidy that FNMA cannot

evade the attorney's fee provision in section 6101 by bringing a preliminary declaratory

judgment action seeking to establish standing to foreclose and waiting to seek foreclosure if its

claim to standing is upheld.

FNMA did not prevail in this action, and accordingly Cassidy may file an application for

attorney's fees and costs on her counterclaim within 30 days of the date of this order. FNMA

shall have 21 days from service of Cassidy' s application in which to respond.

The entry shall be:

1. The amended complaint is dismissed with prejudice.

2. Defendant Alice Cassidy shall file an application for attorney's fees within 30 days.

2 3. The Clerk is directed to incorporate this order in the docket by reference pursuant to Rule 79(a).

Dated: January 7- S' , 2022

~ Thomas D. Warren Justice, Superior Court

Entered on the Docket: OI /i~~ Plaintiff-Trevin Schmidt, Esq. Defendant Cassidy-John Cam~bell, Esq. Defendant MERS-Paul Weinstein, Esq.