STATE OF MAINE SUPERIOR CO~J. YORK, SS. V/ CIVIL ACTION DOCKET NO. ~-13-~
ELIZABE1H M. HUTZ and ) VoN~ Yo~ --5/Jq).:Joti LLEWELLYN P.R. ALDREN, ) ) Plaintiffs, ) ) v. ) ORDER ) JAMES G. MOVCHAN, MARVIN A. ) Sl\1I1H and SHELLEY J. Sl\1I1H, ) ) Defendants. )
I. Background
On August 12, 2011, Plaintiffs Elizabeth M. Hutz and Llewellyn P.R. Alden and
· Defendants Marvin A. Smith and Shelley J. Smith entered into a Purchase and Sales Agreement
pursuant to which Marvin A. Smith and Shelley J. Smith were to purchase property located at 48
Parsons Beach Road, Kennebunk, York County, Maine. (Supp. S.M.F. ~ 1). The agreed upon
purchase price was $3.4 million in cash. (Supp. S.M.F. ~ 2.) On February 10, 2012, Plaintiffs and
Defendants Marvin A. Smith and Shelley J. Smith agreed to amend the Purchase and Sales
Agreement such that Plaintiffs would finance $2.4 million of the purchase price in the form of a
note and mortgage secured to the property. (Supp. S.M.F. ~~ 3, 4.) On March 29, 2012
Defendants Marvin A. Smith and Shelley J. Smith assigned "all right, title and interest in and·1o"
the Purchase and Sale Agreement to Shelley J. Smith's father, Defendant James G. Movchan.
The next day, March 30, 2012, Defendant Mochvan executed and delivered to Plaintiffs a
Mortgage and a Promissary Note in the amount of Two Million Four Hundred Thousand and
00/100 Dollars ($2,400,00.00). (Supp. S.M.F. ~~ 6, 7). Also on March 30, 2012, Defendants
1 executed and delivered to Plaintiffs a Guaranty reinforcing the obligations of Defendant
Mochvan pursuant to the Note. (Supp. S.M.F. ~~ 9, 10).
Under the terms of the Note, Defendant Mochvan was required to make a principal
payment of $700,000 on or before August 31, 2012. (Supp. S.M.F. ~ 15). Defendant did not
make the August 31, 2012 payment, nor did either of the other Defendants. (Supp. S.M.F. ~~ 16,
17). Defendant Mochvan wasrequired to make a second principal payment on or before
December 31, 2012 of $1,700,000. (Supp. S.M.F. ~ 18). Neither Defendant Mochvan nor either
of the other Defendants made the December 31, 2012 payment. (Supp. S.M.F. ~~ 19, 20). On
September 21, 2012, Plaintiffs sent to Defendants, by certified mail, a notice of default. (Supp.
S.M.F. ~ 23).
The principal amount due under the Note is $2,400,000 and interest is accruing at the rate
of 6% or $394.52 per day. (Supp. S.M.F. ~~ 21, 22). Plaintiffs claim attorney's fees in the
amount of$18,637.72. (Supp. S.M.F. ~ 26). The Property is not Defendant Mochvan's primary
residence. (Supp. S.M.F. ~ 13).
II. Standard ofReview
When reviewing a motion for summary judgment, the Court reviews the parties'
statements of material facts and the cited record evidence in the light most favorable to the non-
moving party. Id. Summary Judgment is granted where "there is no genuine issue of material fact
and []the prevailing party is entitled to judgment as a matter oflaw." Hutz v. Alden, 2011 ME
27, ~ 12, 12 A.3d 1174. A genuine issue of material fact exists where the fact finder must make a
determination between differing versions of the truth. Reliance National Indemnity v. Knowles .
Industrial Services Corp., 2005 ME 29, ~7, 868 A.2d 220; citing Univ. of Me. Found. V. Fleet
2 Bank of Me., 2003 1viE 20, ~20, 817 A2d 871. Furthermore, "a fact is material if it could
potentially affect the outcome of the case." Id.
ill. Discussion
Plaintiffs have brought this action for foreclosure and breach of guaranty. In order to
prove a foreclosure action, Plaintiffs must be able to show the existence of a mortgage, proof of
ownership of the mortgage and the note, breach of the mortgage note, amount due on the note
(including attorney fees and court costs), order of priority, properly served notice of default and
right to cure, and where applicable proof of completed mediation and compliance with the Civil
Servicemembers Relief Act Chase Home Finance LLC v Higgins, 20091v!E 136, ~ 11, 985 A2d
508, (citations omitted); see M.R Civ. P. 56G). The elements at issue are (1) whether Plaintiffs
complied with all statutory and contractual procedural requirements of foreclosure, (2) whether
Plaintiffs can show ownership of the Note and Mortgage, (3) whether there was a default, and (4)
the amount of attorneys fees claimed.
Defendants have presented a number of arguments and counterclaims in opposition to
those presented by Plaintiffs. Defendants argue that they are entitled to the protections of 14
M.RS. § 6111 due to the Mortgage Agreement Defendants argue that Plainti-ffs have not shown
that they are .the owners of the Mortgage and Note. Defendants argue that the Note and Mortgage
were modified to allow for payment once Defendants had sold other property holdings, and
therefore there has been no breach. Finally, Defendants argue that Plaintiffs have not proven the
amount of attorney's fees claimed.
Defendants argue that Plaintiffs should be held to the procedural requirements of 14
M.RS. § 6111 in seeking to foreclose on Defendants' property. The protections of 14 M.RS. §
6111 are solely for residential property occupied by the mortgagor. 14 M.RS. § 6111 (2013).
3 Defendants admit that the property in question is not their primary residence. Nonetheless,
Defendant's argue that since the Mortgage agreement states:
At any time after a default has occurred (subject to Grantor's rights under 14 M.R.S.A. § 6111), the Grantee shall have all rights and remedies of a mortgagee under Maine law
This clause of the Mortgage incorporates only those rights intended by 14 M.R.S. § 6111 et. seq.
The mortgagors have only those rights under section 6111 that they had in the absence of the
mortgage clause. The Mortgage Agreement does not grant rights or protections that would not
otherwise be afforded to the mortgagors under the statute. Therefore, because the property in
question is not a residential property occupied by the mortgagor, the protections of 14 M.R.S. §
6111 do not apply.
Defendants argue that Plaintiffs have not provided sufficient evidence of ownership of
the Mortgage and the Note. "The mortgagee shall certify proof of ownership of the mortgage
note and produce evidence of the mortgage note, mortgage and all assignments and
endorsements ofthe mortgage note and mortgage." 14 M.R.S. § 6321 (2014). Defendant argues
that the Ryder Affidavit is insufficient to show ownership because as Plaintiffs' lawyer, Attorney
Ryder cannot speak from personal knowledge as to Plaintiffs' ownership of the documents in
question. Defendants further argue that there is no credible evidence offered by Plaintiffs that
ownership has not been transferred. Defendants raise a genuine issue of material fact concerning
the ownership of the Mortgage and Note.
Finally, Defendants contend that the Note and Mortgage were modified to allow payment
once Defendants had sold other property holdings. Because Defendants had yet to sell their other
property, and because they had continued to make interest payments• to Plaintiffs, Defendants
argue that there had been no breach_ In order to determine whether there has been a breach of
4 contract the Court first looks to the plain meaning of the contract itself Langevin v. Allstate Ins.
Co., 2013 11E 55,~ 9, 66 A.3d 585, 590. Defendants argue that they were led to believe that
there was a modification. (Add.
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STATE OF MAINE SUPERIOR CO~J. YORK, SS. V/ CIVIL ACTION DOCKET NO. ~-13-~
ELIZABE1H M. HUTZ and ) VoN~ Yo~ --5/Jq).:Joti LLEWELLYN P.R. ALDREN, ) ) Plaintiffs, ) ) v. ) ORDER ) JAMES G. MOVCHAN, MARVIN A. ) Sl\1I1H and SHELLEY J. Sl\1I1H, ) ) Defendants. )
I. Background
On August 12, 2011, Plaintiffs Elizabeth M. Hutz and Llewellyn P.R. Alden and
· Defendants Marvin A. Smith and Shelley J. Smith entered into a Purchase and Sales Agreement
pursuant to which Marvin A. Smith and Shelley J. Smith were to purchase property located at 48
Parsons Beach Road, Kennebunk, York County, Maine. (Supp. S.M.F. ~ 1). The agreed upon
purchase price was $3.4 million in cash. (Supp. S.M.F. ~ 2.) On February 10, 2012, Plaintiffs and
Defendants Marvin A. Smith and Shelley J. Smith agreed to amend the Purchase and Sales
Agreement such that Plaintiffs would finance $2.4 million of the purchase price in the form of a
note and mortgage secured to the property. (Supp. S.M.F. ~~ 3, 4.) On March 29, 2012
Defendants Marvin A. Smith and Shelley J. Smith assigned "all right, title and interest in and·1o"
the Purchase and Sale Agreement to Shelley J. Smith's father, Defendant James G. Movchan.
The next day, March 30, 2012, Defendant Mochvan executed and delivered to Plaintiffs a
Mortgage and a Promissary Note in the amount of Two Million Four Hundred Thousand and
00/100 Dollars ($2,400,00.00). (Supp. S.M.F. ~~ 6, 7). Also on March 30, 2012, Defendants
1 executed and delivered to Plaintiffs a Guaranty reinforcing the obligations of Defendant
Mochvan pursuant to the Note. (Supp. S.M.F. ~~ 9, 10).
Under the terms of the Note, Defendant Mochvan was required to make a principal
payment of $700,000 on or before August 31, 2012. (Supp. S.M.F. ~ 15). Defendant did not
make the August 31, 2012 payment, nor did either of the other Defendants. (Supp. S.M.F. ~~ 16,
17). Defendant Mochvan wasrequired to make a second principal payment on or before
December 31, 2012 of $1,700,000. (Supp. S.M.F. ~ 18). Neither Defendant Mochvan nor either
of the other Defendants made the December 31, 2012 payment. (Supp. S.M.F. ~~ 19, 20). On
September 21, 2012, Plaintiffs sent to Defendants, by certified mail, a notice of default. (Supp.
S.M.F. ~ 23).
The principal amount due under the Note is $2,400,000 and interest is accruing at the rate
of 6% or $394.52 per day. (Supp. S.M.F. ~~ 21, 22). Plaintiffs claim attorney's fees in the
amount of$18,637.72. (Supp. S.M.F. ~ 26). The Property is not Defendant Mochvan's primary
residence. (Supp. S.M.F. ~ 13).
II. Standard ofReview
When reviewing a motion for summary judgment, the Court reviews the parties'
statements of material facts and the cited record evidence in the light most favorable to the non-
moving party. Id. Summary Judgment is granted where "there is no genuine issue of material fact
and []the prevailing party is entitled to judgment as a matter oflaw." Hutz v. Alden, 2011 ME
27, ~ 12, 12 A.3d 1174. A genuine issue of material fact exists where the fact finder must make a
determination between differing versions of the truth. Reliance National Indemnity v. Knowles .
Industrial Services Corp., 2005 ME 29, ~7, 868 A.2d 220; citing Univ. of Me. Found. V. Fleet
2 Bank of Me., 2003 1viE 20, ~20, 817 A2d 871. Furthermore, "a fact is material if it could
potentially affect the outcome of the case." Id.
ill. Discussion
Plaintiffs have brought this action for foreclosure and breach of guaranty. In order to
prove a foreclosure action, Plaintiffs must be able to show the existence of a mortgage, proof of
ownership of the mortgage and the note, breach of the mortgage note, amount due on the note
(including attorney fees and court costs), order of priority, properly served notice of default and
right to cure, and where applicable proof of completed mediation and compliance with the Civil
Servicemembers Relief Act Chase Home Finance LLC v Higgins, 20091v!E 136, ~ 11, 985 A2d
508, (citations omitted); see M.R Civ. P. 56G). The elements at issue are (1) whether Plaintiffs
complied with all statutory and contractual procedural requirements of foreclosure, (2) whether
Plaintiffs can show ownership of the Note and Mortgage, (3) whether there was a default, and (4)
the amount of attorneys fees claimed.
Defendants have presented a number of arguments and counterclaims in opposition to
those presented by Plaintiffs. Defendants argue that they are entitled to the protections of 14
M.RS. § 6111 due to the Mortgage Agreement Defendants argue that Plainti-ffs have not shown
that they are .the owners of the Mortgage and Note. Defendants argue that the Note and Mortgage
were modified to allow for payment once Defendants had sold other property holdings, and
therefore there has been no breach. Finally, Defendants argue that Plaintiffs have not proven the
amount of attorney's fees claimed.
Defendants argue that Plaintiffs should be held to the procedural requirements of 14
M.RS. § 6111 in seeking to foreclose on Defendants' property. The protections of 14 M.RS. §
6111 are solely for residential property occupied by the mortgagor. 14 M.RS. § 6111 (2013).
3 Defendants admit that the property in question is not their primary residence. Nonetheless,
Defendant's argue that since the Mortgage agreement states:
At any time after a default has occurred (subject to Grantor's rights under 14 M.R.S.A. § 6111), the Grantee shall have all rights and remedies of a mortgagee under Maine law
This clause of the Mortgage incorporates only those rights intended by 14 M.R.S. § 6111 et. seq.
The mortgagors have only those rights under section 6111 that they had in the absence of the
mortgage clause. The Mortgage Agreement does not grant rights or protections that would not
otherwise be afforded to the mortgagors under the statute. Therefore, because the property in
question is not a residential property occupied by the mortgagor, the protections of 14 M.R.S. §
6111 do not apply.
Defendants argue that Plaintiffs have not provided sufficient evidence of ownership of
the Mortgage and the Note. "The mortgagee shall certify proof of ownership of the mortgage
note and produce evidence of the mortgage note, mortgage and all assignments and
endorsements ofthe mortgage note and mortgage." 14 M.R.S. § 6321 (2014). Defendant argues
that the Ryder Affidavit is insufficient to show ownership because as Plaintiffs' lawyer, Attorney
Ryder cannot speak from personal knowledge as to Plaintiffs' ownership of the documents in
question. Defendants further argue that there is no credible evidence offered by Plaintiffs that
ownership has not been transferred. Defendants raise a genuine issue of material fact concerning
the ownership of the Mortgage and Note.
Finally, Defendants contend that the Note and Mortgage were modified to allow payment
once Defendants had sold other property holdings. Because Defendants had yet to sell their other
property, and because they had continued to make interest payments• to Plaintiffs, Defendants
argue that there had been no breach_ In order to determine whether there has been a breach of
4 contract the Court first looks to the plain meaning of the contract itself Langevin v. Allstate Ins.
Co., 2013 11E 55,~ 9, 66 A.3d 585, 590. Defendants argue that they were led to believe that
there was a modification. (Add. S.M.F. ~ 4). Defendants cite Plaintiff's acceptance of interest
payments as proof of the alleged modification. Defendants argue that they understood the
contract to be modified and that Plaintiffs' acceptance of interest payments was evidence that
Plaintiffs had agreed to wait until Defendants sold their other property holdings. (Smith Aff. ~~
9-14). The Court finds that a question of fact remains as to whether there was a modification of
the loan agreement and whether a default occurred.
Defendants challenge the Plaintiff's requested attorney's fees. Plaintiff must provide
sufficient detail of the accrual of atorney' s fees in order for the Court to determine the
reasonability of the fees. See Bordetsky v. Charron, 2012 WL 1521493, at *7 (Me.B.C.D.);
Hensley v. Eckerhart, 461 U.S. 424, 437 (1983) (the fee applicant bears the burden of
establishing entitlement to an award and documenting the appropriate hours expended and hourly
rates). Plaintiffs have filed affidavits from both attorneys working on the case summarily stating
the total amount and offering their opinion on reasonableness of the fee. A question of fact
remains as to how the Plaintiffs reached the final attorneys' fee and whether it is reasonable.
IV. Conclusion
The Court DENIES Plaintiff's Motion for Summary Judgment.
DATE: Joa* ~ rt · Jr. Justice, Superior Court
5 ATTORNEY FOR PLAINTIFF ELIZABETH M HUTZ; JOHN P GIFFUNE VERRIL DANA LLP POBOX586 PORTLAND ME 04112
ATTORNEY FOR PLAINTIFF LLEWELLYN PH ALDEN: WENDY JPARADIS BERNSTEIN SHUR SAWYER & NELSON POBOX8729 PORTLAND ME 04101
ATTORNEY FOR DEFENDANTS : THOMAS DANYLIK ESQ WOODMAN EDMANDS DANYLIK AUSTIN ET AL POBOX468 BIDDEFORD ME 04005