Mechanics Savings Bank v. Belisle

• Court: Superior Court of Maine
• Decided: April 6, 2016
• Docket: ANDre-15-055
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT ANDROSCOGGIN , SS. CIVIL ACTION DOCKET NO. AUBSC-RE-15-055

MECHANICS SAVINGS BANK,

Plaintiff,

v. ORDER ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT STEPHEN P. BELISLE , RE CEIVED & FILED Defendant, APR O6 2016 and ANDROSCOGGIN SUPERIOR CO URT MECHANICS SAVINGS BANK,

Party-in-Interest.

Presently before the court is Plaintiff Mechanics Savings Bank's Motion for

Summary Judgment in this foreclosure action brought pursuant to 14 M.R.S . §§ 6321­

6325 . Defendant Stephen P. Belisle has appeared in this action , but did not file an

opposition to Plaintiff's motion .

After independent review, Plaintiff's Motion for Summary Judgment is denied and

judgment is entered for the Defendant.

I. BACKGROUND On or about September 25, 2001 , Defendant executed and delivered a

promissory note to Plaintiff with original principal amount of $89,000.00 (Pl. Supp.

S.M.F. ,I 1.) The promissory note was secured by a mortgage on property located at 38

Taylor Hill Road in Lewiston , Androscoggin County , Maine. (Id. ,I,I 1-2.) Plaintiff

asserts that Defendant has defaulted on his obligations under the note and the

Page 1 of 2 mortgage by failing to make monthly payments when due since February 1, 2015. (Id.

,I,I 7-8 .)

Plaintiff mailed Defendant a notice of default and right to cure on April 2, 2015

(the "Notice of Default") . (Id. ,I 9.) Plaintiff filed a complaint for foreclosure on June 18,

2015. (Compl. 1.) Foreclosure mediation pursuant to Maine Rule of Civil Procedure 93

was held on August 20, 2015. (Med. Report 1.) Plaintiff moved for summary judgment

on October 1, 2015.

II. STANDARD OF REVIEW

In residential mortgage fo reclosure actions, the court strictly applies the rules

regard ing summary judgment. HSBC Mortg. Servs., Inc. v. Murphy, 2011 ME 59, ,I 9,

19 A.3d 815. When a party moves for summary judgment in a residential mortgage

foreclosure action , Maine Rule of Civil Procedure 56U) requires the court to

independently determine whether the mortgage holder has properly set forth in its

statement of material facts all of the elements necessary for a foreclosure judgment.

M.R. Civ. P. 56U) ; Chase Home Fin. LLC v. Higgins, 2009 ME 136, ,I 11 , 985 A.2d 508.

Each statement of material fact must be "supported by evidence of a quality that could

be admissible at trial. " HSBC Bank USA, N.A. v. Gabay, 2011 ME 101 , ,I 10, 28 A.3d

1158; M.R. Civ. P. 56(h)(4) . The court must not consider a statement of material fact

unsupported by citation to record evidence nor is the court allowed to search the record

to find evidence in support of such unsupported statements. M.R. Civ. P. 56(h)(4);

Gabay, 2011 ME 101 , ,I 17, 28A.3d 1158.

Rule 56 also requires that "(s]worn or certified copies of all papers or parts

thereof referred to in an affidavit shall be attached thereto or served therewith ." M.R.

Page 2 of 2 Civ. P. 56(e). When an affiant's statements are based upon his or her review of

business records , these records must be attached and must be referenced in order for

the affidavit to provide adequate evidence in support of a moti on for summary j udgment.

Cach, LLC v. Kulas , 2011 ME 70 , ,I 10, 21 A.3d 1015; M.R. Civ. P. 56(h)(4) . In order for

such business records to be deemed "of a quality admissible at trial ," a qualified witness

must attest, with regard to each record , that:

(1) the record was made at or near the time of the events reflected in the record by, or from information transmitted by, a person with personal knowledge of the events recorded therein ; (2) the record was kept in the course of a regularly conducted business; (3) it was the regular practice of the business to make records of the type involved; and (4) no lack of trustworthiness is indicated from the source of information from which the record was made or the method or circumstances under which the record was prepared .

Bank of Am. , N.A. v. Greenleaf, 2014 ME 89, ,I 25, 96 A.3d 700; M.R. Evid . 803(6) .

In order to obtain summary judgment in a residential mortgage foreclosure

action , the mortgage holder "must comply strictly with all steps required by statute," and

the mortgage holder's statement of material facts must contain facts proving eight

essential elements, including :

• evidence of a properly served notice of default and right to cure in

compliance with 14 M.R.S. § 6111 ; and

• the amount due on the mortgage note, including any reasonable attorney

fees and court costs ;

Greenleaf, 2014 ME 89, ,I 18, 96 A.3d 700 (citation omitted) .

If the court determines on a motion for summary judgment that a foreclosure

plaintiff would be unable to prove a necessary element of its substantive claim , then the

Page 3 of 2 court must enter judgment for the defendant. Wells Fargo Bank, N.A. v. Girouard, 2015

ME 116, ,r 9, 123 A.3d 216. The court may order summary judgment aga inst the

moving party without the need for a cross-motion by the non-moving party when the

facts are thoroughly explored and no genuine issue found . M.R. Civ. P. 56(c) ; 3

Harvey, Maine Civil Practice§ 56 .10 at 251 (3d ed . 2012) .

Ill. ANALYSIS

A Notice of Default

Plaintiffs Notice of Default did not strictly comply with 14 M.R.S § 6111 . Under

14 M.R.S . § 6111 , a mortgagee may not accelerate or enforce a mortgage on a

mortgagor's primary residence until at least 35 days after giving written notice of the

mortgagor's right to cure the default. 14 M.R.S . § 6111(1) . If the mortgagor tenders

payment of the amounts necessary to cure the default within the 35 days, the mortgage

is restored as though the default had not occurred . Id. Section 6111 mandates that the

notice of default include , among other requirements : "An itemization of all past due

amounts causing the loan to be in default and the total amount due to cure the default;"

and "An itemization of any other charges that must be paid in order to the default[.]" Id.

§ 6111(1-A)(B-C).

The Law Court has explained : "Section 6111 affords a mortgagor a period of time

within which [the mortgagor] has a right to cure any default on the mortgage before the

mortgagee may accelerate maturity of the unpaid balance of the obligation or otherwise

enforce the mortgage because of a default." Greenleaf, 2014 ME 89, ,r 30, 96 A.3d 700

(emphasis supplied) (internal quotation marks and citation omitted). "[S]ection 6111

effectively freezes such additions to the payoff amount during the cure period. Because

Page 4 of 2 the amount due as stated in the notice of default is the precise amount that the

mortgagor has thirty-five days to pay in order to cure the default, the amount due is

not. .. open to any further accrual during that period ." Id. i131 (emphasis suppl ied ).

In the present case , Plaintiffs Notice of Default, mailed to Defendant on April 2,

2015, fails to strictly comply with 14 M.R .S. § 6111 for two reasons.

First, the Notice of Default is defective because it appears to require Defendant

to pay other amounts in addition to the precise amount necessary to cure the default.

Plaintiff's Notice of Default initially stated that the "AMOUNT NOW DUE" on the

mortgage was $1 ,683.26. (Therrien Aff. Ex. C.) The Notice of Defa ult further stated :

You have the right to cure such defaults by (a) full payment of all amounts that are due without acceleration , ... In order to avoid the consequences described here-in-below, you must tender to the Mechanics Savings Bank the AMOUNT NOW DUE not later than thirty five (35) days after the receipt of this notice.

(Id.) This language sufficiently complies with 14 M.R.S. § 6111 and Greenleaf.

However, it is the Notice of Default's subsequent language that fails to strictly

comply with § 6111 and Green leaf. The next paragraph of the Notice of Default stated :

You have the right to reinstate the your loan after acceleration until a judgment is entered if you meet the following conditions : (1) You pay to Lender the full amount that then would be due under this Security Instrument and the Note as if immediate payment in full had never been required ;

(3) You pay all of Lender's reasonable expenses in enforcing this Security Instrument including , for example , reasonable attorneys' fees , property inspection and valuation fees , and other fees incurred for the purpose of protecting Lender's interest in the property and rights under this Security Instrument; ...

(Id.) The Notice of Default further stated , emphasized with italics:

Complete satisfaction of the terms set forth in the preceding paragraph is required to avoid acceleration and foreclosure.

Page 5 of 2 (Id.) (emphasis original) .

As discussed above, § 6111 effectively freezes the pay-off amount that a

mortgagor must pay in order to avoid acceleration of the mortgage and foreclosure.

Greenleaf, 2014 ME 89 , 1m 30-31 , 96 A.3d 700. The emphasized statement that

"Complete satisfaction of the terms set forth in the preceding paragraph is required to

avoid acceleration" suggests that Defendant must do more than simply pay the

amount now due in order to avoid acce leration . (Therrien Aff. Ex. C) (italics original,

bold supplied) . The italicized statement suggests that the Defendant must also pay "the

fu ll amount that then would be due under this Security Instrument and the Note" and "all

of Lender's reasonable expenses in enforcing this Security Instrument" in order to cure

the default avoid accele ration . (Id.) Thus , the Notice of Default appears to require

Defendant to pay other amounts in addition to the "AMOUNT NOW DUE" in order to

cure the default and avoid acceleration . Therefore, in light of the Law Court's directive

that foreclosure plaintiffs must strictly comply with all statutory requirements, the Notice

of Default does not state the "precise amount" that Defendant must pay in order cure

the default and avoid acceleration of the mortgage .1

Second , the Notice of Default does not properly itemize the other charges that

must be paid in order to cure the default. As previously discussed , § 6111 requires that

I The court recognizes that the likely intent of the subsequent paragraphs in Plaintiff's Notice was to inform Defendant that, even after the cure period had expired , Defendant could have the loan reinstated as if acceleration had not occurred by paying "the full amount that then would be due under this Security Instrument and the Note" and "all of Lender's reasonable expenses in enforcing this Security Instrument" in addition to other requirements. However, the italicized sentence cited above does not state, Comple te satisfaction of the terms set forth in the preceding paragraph is required to reinstate the mortgage as if acceleration had not occurred. It is the use of the phrase "to avoid acceleration" that suggests that the mortgagor must comply with the additional terms to prevent acceleration , i.e., during the 35-day cure period .

Page 6 of 2 the notice of default contain an "itemization of any other charges that must be paid in

order to cure the default[.]" 14 M.R.S. § 6111 (1-A)(C).

The Notice of Default stated that the "AMOUNT NOW DUE" on the mortgage

was $1 ,683.26 . (Therrien Aff. Ex. C.) According to a footnote in the Notice, the basis

for calculating the "AMOUNT NOW DUE" was shown in a separate attachment. (Id.)

The attached document contained an itemized list of all past due monthly mortgage

payments from February 1, 2015, through April 1, 2015. (Id.) The attached document

also listed late fees of $53 .24, postage expenses of $2.49, and a "Fee Balance" of

$30.00. (Id. )

Neither the Notice of Default nor the document attached thereto stated what

charges or amounts are included in the $30.00 "Fee Balance" that Defendant must pay

in order to cure the default. It is unclear whether the "Fee Balance" represents a single

charge or multiple charges . It is unclear whether this "Fee Balance" includes

reasonable attorneys fees, property inspection fees, property valuation fees , or other

fees incurred by Plaintiff in protecting its security interest in the property.

Therefore , in light of the Law Court's directive that plaintiffs must strictly comply

with all statutory requirements , the court concludes that Plaintiff's Notice of Default fa il s

to properly itemize the additional charges that must be paid in order to cure the default

in accordance with § 6111 .

Because strict compliance with 14 M.R.S. § 6111 is an essential element of

foreclosure , there is no genuine issue that Plaintiff will be unable to prove its substantive

claim at trial. Therefore , the court must enter summary judgment for Defendant. See

Girouard, 2015 ME 116, ,I9, 123A.3d 216 .

Page 7 of 2 B. Reasonable Attorney Fees and Costs

Furthermore, the court also notes that Plaintiff's statement of fact regarding the

amount of attorney fees and costs was not properly supported . In a mortgage

foreclosure action , the court must determine the amount due on the note , including

reasonable attorney fees and costs. 14 M.R.S . § 6322; Greenleaf, 2014 ME 89, ,-r 18,

96 A.3d 700 (emphasis supplied). Without citation to an affidavit from counsel or a

breakdown of the attorney fees and costs , the court cannot determine whether the legal

fees claimed in a plaintiff's statement of material facts are reasonable . Bath Sav. Inst.

v. Elichaa , 2014 Me . Super. LEXIS 165, at *5 (Sept. 19, 2014).

In its statement of material facts , Plaintiff avers that the total amount due on the

mortgage as of September 21 , 2015, was $66,783.97, including $1 ,507 .59 in "collection

costs." (Pl. Supp. S.M.F. ,r 11 .) Plaintiff further avers that those collection costs

included $1,415.10 in legal fees and costs (Id.) Plaintiff cites only Therrien's affidavit

and Exhibit D attached thereto in support of its assertions. (Id.) Therrien's affidavit

reiterated the same assertions and cites Exhibit D attached thereto as evidentiary

support. (Therrien Aff. ,r,r 17-18.) The expense report included in Exhibit D provides an

itemized list of expenses incurred by Plaintiff, including various "legal" fees totaling

$1,415.10. (Id. Ex. D.) The expense report does not explain the purpose for which

these "legal" fees were incurred. (Id.) Plaintiff does not cite to the affidavit of its

counsel or the invoices attached thereto as evidence of the fees and expenses incurred

in this foreclosure action. (Pl. Supp . S.M.F . ,r 11 ; Therrien Aff. ,r 17); see (Buck Aff.

Attachments .)

Page 8 of 2 The expense report attached to Therrien 's affidavit as part of Exhibit D provides

no explanation or context for how or why these "legal" fees were incurred . Therefore ,

the court is unable to evaluate the reasonableness of those fees . Additionally , the court

is not permitted to search the record to find evidence in support of statements of

material fact. M.R. Civ. P. 56(h)(4); Gabay, 2011 ME 101 , ,r 17, 28 A.3d 1158. Thus ,

the court may not search the record for counsel 's affidavit in order to evaluate whether

the $1,415.10 in legal fees and costs is reasonable .

IV. CONCLUSION

Plaintiff's Motion for Summary Judgment is denied . Summary Judgment is

entered for Defendant.

The Clerk is directed to incorporate this Order into the

pursuant to Maine Rule Civil Procedure 79(a) .

Date JJjr(//~ MtyG Kennedy JuBee, Superior Court

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