Katahdin Trust Company v. Magnus

• Court: Superior Court of Maine
• Decided: January 31, 2017
• Docket: AROcv-16-024
• Status: Unpublished

Opinion

STATE OF MAJNE SUPERIOR COURT AROOSTOOK, ss DOCKET NO. CV-16-H 024

KATA! !DIN TRUST COMPANY ) Plaintiff ) ) v. ) ) ) BERTRAM MAGNUS ) DECISION ON MOTTON ) and ) } DAN £ELLE L'HEUREUX ) Defendants )

Pending before the court is Defendant Bertram Magnus' Motion To Set Aside Default and

Default Judgment brought pursuant to M.R.Civ. P. SS(c). For the reasons set forth herein, the

court denies this motion.

BACKGROUND

The court conducted a hearing of this matter on January 31, 2017. The Plaintiff appeared

through counsel, Richard L. Currier Esq. The Defendant Bertram Magnus appeared representing

himself. The Defendant Danielle L'Heureux did not appear. Although both parties presented

argument, neither presented any evidence. The court has taken judicial notice of the contents of

the file. The file reflects that on or about Febrnary 22, 2014 the Defendants entered into a retail

installment sales cor.1tract pmsuant to which they pmchased a used 2011 Chevrnlet Aveo motor

vehide from Griffeth Ford Lincoln, a motor vehicle dealership located in Caribou, Maine. The

Plaintiff loaned the purchase price to the Defendants, each of whom contracted lo repay the

amount of the loan in its entirety . There is no dispute that the Plaintiff is the holder in clue course of the Consumer Credit Contract upon which this action is based. There is also no dispute that

the Defendanls foiled to make the required payments and were in default of their agreement at

the time lhe Plaintiff commenced this action. There is no dispute that the Plaintiff provided to the

Defendants a Notice of Default and a Notice of Right to Cure. Finally, there is no dispute that the

Defendants did not cure their default. The Plaintiff then repossessed the veruclc and sold it at a

public sale for$ I00. The resulting deficiency on the contract was $70 I2.57.

On September 14, 2016, the Plaintiff served the Defendant Bertram Magnus with a copy

of the complaint and summons underlying this action. On September 22, 20 l6, the Plaintiff

served the Defendant Danielle I.'Heureux with a copy of the complaint and summons. The

complaint demanded judgment against the Defendants, jointly and severally in the amount of the

deficiency plus interest and costs.

The sununons clearly directed each defendant lo file their answer with the Superior Court

located at 144 Sweden Street in Caribou, Maine within 20 clays of service upon them. The

summons also clearly warned that a failure to file the required answer could result in the entry of

a default judgment against them .

Neither defendant filed an answer with the Superior Court. As appears from the

"affidavit'' or Richard L. Rhoda, Esq., the Defendant Magnus went to his law office atlcr being

served with the summons and complaint. Although Attorney Rhoda has not appeared as counsel

for the Defendant, his office secretary apparently assisted the Defendant with the preparation of

an answer and provided a transmittal letter and envelope addressed to the Houlton District Court

' Although the affidavit fails to comply with the requirements of M.R.Civ .I'. 4A( i) because it contains only illl ack11owledgme111 and nol a ;11ra1 (See Pineland Lun.\b!!r Co~ Robinson, 382 A.2d 3J (Mc. 1978) and Br~ Richard Acheson 554 A.2d 798 (Me. 1989) in which lhe Lnw Courl recognized the difference between a "jurat" and a ·•certificale of acknowledgement." The Law Court indicated that a "certificate of acknowledgment". such as .lccompanics the afjiclm•ils in this case, wiis not 1111 acceptable substitute for a requirement of a sworn statement, even though as in Pinelmlll, the statement purported lo be under oath .) lhe Plaintiff lrns agrcccl lo wuive this technical detect.

2 and not the Aroostook County Superior Court as required by the summons. Additionally, it

appears that a copy of that responsive pleading was mistakenly addressed to Attorney Richard L.

Rhoda rather than Plaintiff's attorney Richard L. Cunier. Consequently. neither the Superior

Court nor Attorney Currier received the Detenclant's response. On October 27, 2016, the Plaintiff

requested that the Defendants be defaulted and that a default judgment be entered against each.

The clerk entered the defaults and the defoult judgments against the defendants.The amount of

the default judgment was $7012.57 plus interest and costs. 2

DISCUSSION

The pending motion is governed by the provisions ofM.R.Civ.P. 55 (c) and applicable

case law. The mlc provides that "For good cause shown the comi may set aside an entry of

default and, if a judgment by default has been entered may likewise set it aside in accordance

with Rule 60(b)." The LAw Court has il\dicated that

"To establish good cause, a pa1iy must show a good excuse for his or her untimeliness and a meritorious defense. The good excuse and the meritorious defense requirements are "two distinct components", both of which must be satisfied in order to prevail on a Rule 55(c) motion. Levine v. Ke l1a11k Nat'l Ass'n, 2004 ME 131, ~20, 861 A.2d 678,684 1

(internal citations omitted).

As indicated above, neither party submitted any evidence and the courl has before it, only

the submissions found within the file. As Lhe moving party, the Defendant has the burden ol'

proof and must show both a good excuse for not properly filing his answer and in addition, must

demonstrate a meritorious defense. For argument's sake and without making any specific finding

that Detendant Magnus' i.11advcrtcnt filing of his response in the wrong court constitutes a "good

excuse'', the court will nonetheless consider this honest mistake Lo be a "good excuse" in the

'The l'laintifT lrns submiltcd a Bill of Costs totaling $250 .80. Neither Defendant has objected to these costs .

3 absence of any objection from the Plaintiff. This still leaves the question of whether the

Defendant has demonstrated a meritorious defense.

The Defendant has indicated that he became involved in the underlying tnmsaction as an

act of charily towards the Defendant L'Heureux and that it was she who actually enjoyed the use

of the vehicle until it was repossessed. While the court may be sympathetic to Defendant

Magnus' circumstances, the fact remains that the dealer sold the car and the Phiintiff financed the

sale upon the strength of two promises of repayment, one by Defendant L'Heureux and the other

by the Defendant Magnus. No one has made the payments to which the Plaintiff was clearly

entitled. Notwithstanding the Defendant's charitable inclinations towards Ms. L'Heureux, the

court's ruling cannot be governed by sympathy.

The Defendant also points to the fact that the purchase price of the car in February of

2014 was $1 I, 969.90 and it was sold on June 3. 2016 for $100. The Defendant argues that such a

large disparity in values indicates that the vehicle was not sold in a "commercially reasonable

manucr" us required. The Defendant also argues that "If this Court does not vucate the default it

will "work(s) a plain and unmistakable injustice against the Defendant. Cuti!lo v. Gcrstel, 477

A.2d 750, 752 (Me 1984).'",1

A court does have the authority to grant relief, including relief from a default judgment

(See Roussel v. Ashby, 2015 ME 43, ~12, 114 A.3d 670,674) in circumstances where a denial of

relief would work,, plain and 11nmis1akable injustice. A plain and umnistakable injustice is one

that is instantly visible wilhOLll argument. 'ullivan_y. Roc~w9ot!, 2015 ME l 19, i!t4, 124 A.3d

150, I54. The record does not support such a finding in this case.

'Tiu: courl has re~d Culilto v. Gers1cl, 477 A.2d 750 (Me 1984) and can find nu reference lo the queslion of"plnin and unmistaknble injustice". The case would itppcnr to support the proposi1io11s lhttl lo show good cc1use, the moving party hus the uurden of proving hoth a good excuse for the default and the existence of a meritorious defense to 1hc itcliun and that a 1>arty can be charged wilh the omissions of his Rttornc)' or record .

4 The Law Court has indicated that:

If the trial court is to determine the meritorious nature of the defaulted party's alleged defense, it must be presented facls from which it may conclude that such a meritorious defense exists. The mere assertion that such a meritorious defense does exist is insufficient to support a motion to set aside a default entry or default judgment. Whether the default entry resulted from factual circumstances justifying relief is a question of fact and must he proven by evidence, which as appears from this record was not forthcoming. SheepKo!J.and Corn. _v. Gregory, 383 A.2d 16, 20 (Me. 1978)

The Defendant Magnus has presented no evidence in support of his contention that the

Plaintiff's sale was not clone in a commercially reasonable manner. He has asserted this

proposition hut the record is devoid or evidence. There is nothing in the record to demonstrate

the circumstances of the sale . The difference between the original sales price and lhe amount of

the proceeds from the liquidation sale does not make any injustice associated with the

circumstances of that sale inslantly visible lo !his co111·1 wilho111 argumenl.

Moreover, although the Defendant's affidavit (technical deficiencies aside) of November

I, 2016 states that when the vehicle was sold in 2016, "it was in good condition, both as to

physical condition and operating condition and was certainly w011h more than $ I00, there is

nothing in the affidavit lo show that he was a competent witness with personal knowledge of

those represcntntions. Before this court will accept factual representations set forth in an

al'lidavit, the affidavit needs to be made upon personal knowledge. It should also set forth such

!acts as would be admissible in comt and it should show affirnrntively that the affiant is

competent lo testify to the mat1ers slated therein . (See, e.g. M.R.Civ. P. 56 (e))

The Defondanl , who resides in Houlton, has indicated lo the court that the motor vehicle

that is the underlying subject of' the complaint, was in the possession of the Dclcndanl

5 I :Hcureux. fl appears that she resides in Auburn." The Defendant asserts that he knew the

condition of the vehicle at the time of sale but his 41ffidavit does not reflect that he had personal

knowledge or this or if so, how he came by that knowledge. How the Defendant could know the

physical condition of the vehicle or its opernting condition without conducting some kind of

inspection himself or having a competent third party do so remains a mystery to this court. The

record is devoid of competent evidence pertaining to the condition or the vehicle at the time it

\Vas sold.

The affidavit also fails to indicate anything about the circumstances of the sale, e.g. ir it

was advertised, how it was adve11ised, how many times it was advertised, where it was

conducted, the lime that it was conducted, how many bids were received, etc. Based upon the

record evidence, or lack thereof', there is no injustice that is instantly visible to this court without

argument. Accordingly, this court is not prepared to find as c1 fact that the circumstances

surrounding the Plaintiff's sale of the motor vehicle were not commercially reasonable.

CONCLUSION

The Dcfonclant had the hurden of proof for his motion and he has failed to meet that

burden. 5 The entry shall be:

The Dcfondunt's Motion to Set Aside Default Judgment for Good Cause M.R.Civ.P. 55

(c) is denied.

January 3 I , 20 I 7 E. Allen Hunter Active Retired Justice of the Superior Court

' The summons rcnccls Iha! an Androscoggin County deputy served the Defendant L'l lcureux at :i6 Sixth SI, 2-1, in Auburn. Maine. 'The court recognizes thal lhc Defendant has been representing himselt' in these proceedings and the courl is aware !hilt he is nol a licensed allorney and may be ,mtamiliar with the requirements fo1 legal proceedings. 111 court however, thcrn is bul one set of rules thal applies irrespective of whether a party is represented by counsel or whether that person is representing himself. All parties are bound by the same controlling principles of law and the court may not engage in any bending ol'the rules or granting of special consideration because u liliganl nppec1rs without legal representation. rru11nu1 v. Browne, 200 I \4E ,r 11, 788 A.2d.