Housman v. Golden

• Court: Superior Court of Maine
• Decided: February 7, 2007
• Docket: YORre-06-044
• Status: Unpublished

Opinion

I

STATE OF MAINE SUPERIOR COURT C M L ACTION YORK, ss. DOCKET NO. RE-06-044 6/33 4 o R - 2Pw7 /

CHARLES J. HOUSMAN, as Trustee of the Pine Banks Nominee Trust,

and

WALLACE CAPITAL, LLC,

Plaintiffs

v. ROBERTA A. GOLDEN, ORDER

Third Party Plaintiff / Defendant

DONALD L. GARBRECHT LAW LIBRARY ROCKMERE LODGE, ANDREW F. ANTONIUK, ROBERT BROWN and MAY 1 6 2007 DOUGLAS FLINT,

Third Party Defendants

This matter comes before the Court on Plaintiffs' motion to strike second

affidavit; Plaintiffs' motion for summary judgment; and third party Defendants' motion

to dismiss.

FACTUAL BACKGROUND

Plaintiff Charles Housman ("the Trustee") is the Trustee of Pine Banks Nominee

Trust ("the Trust"), which was organized under Massachusetts law in February 1990.

Defendant Roberta A. Golden ("Golden") is a Massachusetts resident who owns

property at 38 Stearns Road in Ogunquit, Maine. Plaintiff Wallace Capital, LLC

("Wallace") is a Massachusetts corporation, which is a party in interest as holder of a January 2006 mortgage on the Ogunquit property in the amount of $600,000. On November 24,2004, Golden signed a promissory note in favor of the Trust for

a construction loan in the amount of $1,050,000. Under the note, interest only payments

would begin in June 2005, with the entire balance due before November 29, 2005.

Golden states that she intended to build a home on the property after demolishing a

cottage on her lot, noting that, through several different entities, she has owned the

Ogunquit property since 1987. Also, she claims that the parties' understanding and

accepted practice was that interest would be paid out of the loan balance as construction progressed, but there were some difficulties with the construction because

neighboring landowners contested her building permit. Golden contends that the

owners of the neighboring Rockmere Lodge, Andrew Antoniuk, Robert Brown, and

Douglas Flint (collectively "third-party Defendants") challenged her building permit

before the Town and then appealed that decision to this Court, impeding development.'

The Trustee alleges that Golden is in default, having failed to make payments as

required by the note. As of April 2006, the alleged amount of default under the 2004

note is $816, 227 (principal), $19,045.30 (interest), $4,151.13 (late fees), and $6,801.90

(default fees), to include an unspecified amount of legal fees and costs. The Trust

notified Golden of the default in a March 15, 2006 letter. Additionally, Wallace alleges

that Golden also defaulted on its note, which had called for interest payments

beginning in March 2006, with the full balance and interest due before September 17,

2006. The alleged amount of default under the Wallace mortgage is $178,875

(principal),$5,366.25 (interest), $115.52 (late fees), and $1,490.63 (default fees), plus legal

fees and costs.

1 Separate litigation between Golden and the Third-Party Defendants regarding an easement continues today, as an appeal from the decision in Docket NQ,CV-05-047, The Trust and Wallace filed a foreclosure complaint against Golden on March 23,

2006. The complaint seeks foreclosure of the Trust's mortgage, as well as Wallace's

mortgage, per 14 M.R.S. § 6321 et seq. (2005), and also asks this Court to determine the

amount of default and order that Golden be held liable for any deficiency after a

foreclosure sale. Golden denies that she is in breach and raises numerous affirmative

defenses, including waiver, lack of standing, laches, the statute of limitations, failure to

state a claim upon which relief can be granted, and fraud and misrepresentation on the

part of the Plaintiffs, among other defenses. She also brings a third-party complaint

against third-party Defendants for tortious interference with contractual relations,

defamation, intentional infliction of emotional distress, trespass, slander of title, and

violation of 5 M.R.S. 5 207. Third-party Defendants argue that they were not parties to

the mortgage and therefore may not be held liable for any judgment that might issue

against Golden.

DISCUSSION

1. Motion to Strike Affidavit.

Plaintiffs have moved to strike a second affidavit filed by Golden. Golden

initially filed an affidavit to accompany her opposition to summary judgment.

Plaintiffs challenged the affidavit because it allegedly did not contain the proper

language and jurat required by Rule 56. M.R. Civ. P. 56(e) requires that affidavits in the

context of summary judgment be based on personal knowledge, contain admissible

fads, and demonstrate the affianYs competency. To ensure that her affidavit would not

be stricken, Golden filed a second, notarized affidavit. The addition of the notary's

signature was the only alteration. Plaintiffs now move to strike the notarized affidavit

because they contend that Golden is not entitled to re-file her affidavit. Their motion to

strike is denied because Rule 56(e) gives the Court discretion to allow further affidavits to be filed, and no prejudice to Plaintiffs would result if the second affidavit is

considered.

2. Summary Tudment Motion.

Summary judgment is proper where there exist no genuine issues of material fact

and the moving party is entitled to judgment as a matter of law. M.R. Civ. P. 56(c); see

also Levine v. R.B.K. Caly Coy., 2001 ME 77, ¶ 4, 770 A.2d 653, 655. A genuine issue is

raised "when sufficient evidence requires a fact-finder to choose between competing

versions of the h t h at trial." Parrish v. Wright, 2003 ME 90, q[ 8, 828 A.2d 778, 781. A

material fad is a fact that has "the potential to affect the outcome of the suit." Burdzel v.

Sobus, 2000 ME 84, ¶ 6, 750 A.2d 573, 575. When assessing a summary judgment

motion, this Court compares the parties' statements of material fact and record

references to decide whether a genuine issue of material fact has been generated. Corey

v. Norman, Hanson & DeTroy, 1999 ME 196, ¶ 8,742 A.2d 933,938. When deciding whether to order judgment on a foreclosure complaint, this Court

addresses whether the mortgage has been breached, the amount due as a result, and the

order of priority of lienholders. Abbott v. Lacourse, 2005 ME 103,¶ 9, 882 A.2d 253,255.

In Abbott, the Law Court reversed the trial courrs grant of summary judgment in the

foreclosure action because the parties' contradictory affidavits revealed a material

factual dispute about whether the note had been repaid. Id. 'I[ 10,882 A.2d at 255.

The admissibility of extrinsic evidence regarding the parties' agreements about

construction draws is also an issue in this case. The par01 evidence rule prevents the

court from considering "extrinsic evidence offered to alter or vary unambiguous

contractual language." Rogers v. Jackson, 2002 ME 140, ¶ 9, 804 A.2d 379, 381. This rule,

however, is based on the assumption that the contract between the parties is integrated.

Id. In Rogers, the Law Court determined that summary judgment was improper because, viewing the non-moving party's allegations most favorably, the contract was

not integrated. Id. The Court explained that when contracting parties also have an oral

agreement that performance will be conditioned upon the occurrence of some other

event, "the agreement is not integrated with respect to the oral condition." Id. (citations

omitted).

Here, Plaintiffs argue that the note securing the mortgage represents the parties'

complete agreement regarding Golden's payment obligations. Because she did not

make payments as required, they contend, she is in default and they are entitled to

foreclosure as a matter of law. Plaintiffs argue that there are no disputed material facts

because the documents speak for themselves.

This is not a simple residential mortgage, however; it is a commercial loan

accompanied by a construction holdback agreement that by its terms depends on the

happening of certain conditions. Golden has raised several disputed issues of material

fact, most notably the parties' understanding as to the timing and method of making

interest payments, which is germane to whether she defaulted on the loan. She

contends that the parties agreed that interest could be deducted from the unused

portion of the loan, and when that was exhausted, it could come from the second

mortgage with Wallace. At oral argument, Plaintiffs admitted that there was an escrow

with the first loan from which payments could be drawn, but they contend that once

that money was exhausted, Golden would still be responsible for making payments in

another way. This is a factual dispute that is relevant to the issue of default. Golden further argues that the Trust waived portions of the holdback agreement

by actually deducting those interest payments from the unused balance, which she

contends became an "established pattern and practice," as it had been in prior

transactions with the same lenders. Golden claims that payments on the first loan were current as of March 1, 2006, and that after that time, interest should have been

withdrawn from the balance of the Wallace loan. Instead, she received a notice of

default fifteen days later.

There is no dispute that payments were not made; the dispute revolves around

whether Golden was obligated to make the payments based on the parties'

understanding, and based on Plaintiffs' refusal to make a disbursement. They claim

that they could not disburse construction funds because the loan was in default, but

Golden contends that their refusal to allow the construction draw entitled her not to pay

until disbursement occurred. She also disputes the amount that Plaintiffs claim was

due, which is also a material fact. Lastly, Golden cites insurance issues and a five-

month construction delay due to litigation with her neighbors as factors that affected

payment, because the agreement called for installment disbursements based on

construction progress. She contends that the other litigation disrupted construction

progress.

Underlying all of these arguments is the central issue of integration. Viewing the

matter in the light most favorable to Golden, she has alleged facts that, if true, tend to

show some oral agreement about construction draws outside of the otherwise clear

terms of the note and mortgage, like the alleged oral agreement in Rogers. Because these

inherently factual issues are contested, preventing this Court from determining whether

a breach occurred and if so, the amount due Plaintiffs, summary judgment on the

foreclosure complaint is denied.

3. Third-Party Defendants' Motion to Dismiss.

The Third-Party Defendants' Motion to Dismiss is Granted, without prejudice to

these claims being brought in a separate action. Bedard v. Green, 409 A.2d 676 (Me.

1979). The entry will be as follows:

Plaintiffs' Motion to Strike Affidavit and for Summary Judgment is Denied. Third-Party Defendants' Motion to Dismiss is Granted, without prejudice.

Dated: February 7,2007

Justice, Superior Court Alan E. Shepard, Esq. - PLS Roberta A. Golden (PRO SE) - DEF Susan Driscoll, Esq. - TIP DEFENDANTS