Moosehead Mountain Resort, Inc. v. Carmen Rebozo Foundation, Inc.

• Court: Superior Court of Maine
• Decided: April 8, 2022
• Docket: PIScv-21-05
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT PISCATAQUIS, ss Civil Action Docket No, CV-21-000 5

MOOSEHEAD MOUNTAIN RESORT, INC.,

and ORDER DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMEN1" OFLC, Inc.,

Plaintiffs

v.

CARMEN REBOZO FOUNDATION, INC.,

Defendant.

On June 25, 2021, Plaintiffs commenced this suit by filing a complaint raising six counts

against Defendant including claims for breach of contract, unjust entichment, breach of a duty of

good faith and fair dealing, intentional tnisrepresentation, and negligent misrepresentation. Their

dispute centers upon a $6,350,000 promissory note which plaintiff Moosehead Mountain Resort

("Moosehead") executed in 2007 along with a mortgage securing the note, both of which were

subsequently assigned to Defendant. The matter before the Court now is Plaintiffs' motion for

surnmaty judgment concerning that note and mortgage. The m.otion seeks a partial judgment from

the Court ordering: (1) "that Defendant may not collect default interest or attorney's fees under the

note and mortgage;" (2) "that the correct payoff [amount] as of November 30, 2021 is $4,079,856.75;"

(3) that Plaintiff be awarded "$20,400 in fees and costs and such additional amounts as may be

supported by affidavit;" and (4) that the Plaintiffs be granted so1ne unspecified "further relief'' if doing so is just and proper. (Pl.'s hfot. Summ. J. 13.)1 As explained in the following sections of this Order,

the Court denies the motion because it is apparent from the summary judgment record that genuine

disputes of material fact exist pertaining to these matters.

I. STANDARD OF REVIEW

Summary judgment is appropriate only when the moving party has shown that no genuine dispute

exists concerning the material facts and that it is entitled to judgment as a matter oflaw. M.R. Civ. P.

56(c), A fact is "material" when it has the potential to affect the outcome of the case. Lougee Comen){mry

v. City Mortgage, lJJc., 2012 ME 103, ii 11, 48 A.3d 774. A "genuine issue of material fact exists when a

fact-finder must choose between competing versions of the truth." Holmes, 2019 ME 84, ,i 15, 208

A3d 792. TI1e facts in the sununaiy judgment record are limited to those facts which are ptopetl}' set

forth in the parties' respective statements of fact, See e.g., Pushard tJ. lliven1kw P.ychiatlic Ctr., 2020 ME

23, ~ 4 n.2, 224 A.3d 1239; Beny v. M.aineStreal)J Fin., 2019 ME 27, ,i 7, 202 A.3d 1195; Ho!1J1es v. E. i\1e.

Med. Ch:, 20-19 ME 84, ~ 14, 208 A.3d 792; JVLR. Civ. P. 56(c), (h). The Court considers those facts

in the light most favorable to the notHnoving party. Cor))Jier v. Genesis Healthcare LLC, 2015 ME 161,

,i 7, 129 A.3d 944; ]6111/CJS v. Nickerso11, 637 A.2d 1152, 1154 (Me. 1994) ("[I]he party seeking the

summary judgment has the burden of demonstrating dearly that there is no genuine issue of fact. Any

doubt on this score will be resolved againsl him and the opposing party will be given the benefit of

any inferences which might reasonably be drawn from the evidence.") (quoting 2 Field, McKusick &

Wroth, Mt1i11e Civil Pn:u:tice § 56.4 at 39 (2d ed. 1970)).

Where it is the plaintiff (i.e., the party who bears the ultimate burden of persuasion on the

claim or defense at issue) who has moved for sununa1y judgment, the plaintiff bears the burden of II demonstrating "that each element of its claim is established without dispute as to material fact within

l The page number has been added by the Court, Plaintiffs' motion does not contain page numbers.

2 the summary judgment record.>' N. Star Capital Acq11isitio11, ILC v. Victo,~ 2009 1v1E 129, ~ 8, 984 A.2d

1278; see cdso Cacb, LLC v. K1rk,s, 2011 lvill 70, ifiJ 8-9> 21 A.3d 1015. If the plaintiff satisfies this

burden, the defendant, in order to avoid summary judgment, must coi-ne forward with specific facts

demonstrating that a genuine, material, factual dispute exists for trial. M.R. Civ. P. 56(e); K11/as, 2011

ME 70, if1 8-9, 21 A.3d 1015.

II. THE PARTIES~ STATEMENTS OF FACT

A. The Parties~ Nonco1npHa_11ce with the Pl'Ocedure Specified i11 M.R. Civ. P. 56(h)

M.R. Civ. P. 56(h) sets forth a specific procedure governing how parties must present the facts

of the case to the Cotut when a party moves for summary judgtnenr, which the Court will briefly

explain here. Under Rule 56(h), the tnoving party must support its motion for summary judgment by

submitting a statement of material facts (S.Ivf.F.) which in separate, numbered paragraphs, sets forth

the moving party's factual assertions. M.R. Civ. P. 56(h)(1). To be considered, each factual assertion

must be supported by a specific citation to competent evidentiaiy lllilterial. M.R. Civ. P. S6Q1)(1),

5601)(4). The non-moving party must then respond by submitting an opposing statement of facts

(O.S.M.F.), which responds to each of the moving party's factual assertions with 11n admission,

gualification, or denial. M.R. Civ. P. 5601)(2). Each responding paragraph of the O.S.IvLF. must starl

with the designation "Admitted," "Denied," or "Qualified." Id. If the responding paragrnph begins

with the designation "Admitted'' the paragraph "shall end with such designation." Id. If the non­

moving party wishes to qualify or deny a factual assertion, the party must do so by providing a specific

record citation to competent evidentiary material supporting the qualification or denial. 1(/. In each

responding paragraph the party may always note any objections to the tnoving party's factual assertion

accotding to the procedure prnvided in Rule 56(i). M.R. Chr. P. 56Q1)(2), 56(i). As part ofits response,

3 the non-moving party may also submit a separate statement of additional facts (S.A.F.), setting forth,

with proper supporting record citations, the non-moving party's factual assertions regarding any

additional matters that it believes are material to the matters at issue in the motion. M.R, Civ. P.

56(h)(2) If the moving party wishes to respond to the non-moving party's S.A.F. it must do so by

filing a reply statement that follows lhe same procedure applicable to the non-moving party's O.S.J'vl.F.

M.R. Civ. P. 56~1)(3). The Law Court has made it known that "[i]n the unique setting of sumtna1y

judgment, strict adherence to the Rule's requirements is necessa1y to ensure that the process is both

predictable and just." De11tsche Ba11k Nat'!T1: Co. v. Raggiani, 2009 lvIE 120, ii 7, 985 A.2d 1. Failure to

comply with the procedure set forth in Rule 56 may result in serious consec1uences to a party's efforts

in moving for ot opposing summary judgment. See e.g., First Tracks ln/Js., LLC /J. l\1mrqy, P!111JJb &

1\1111n1y, Zo-15 ME 104, ,i,r 1-3, 121 A.3d 1279; Stmdf!Y 11. Ha11cock C!J. Comlil'l:r, 2004 ME 157, ,r,r 17-23, 864 A.2d 169; Dqy/e v. Dcp't ef Hm;w1 Sms., 2003 ME 61, il,111-13, 824 A.2d 48; J_,(/vi111: 11. R.B.I( Cab1

Co,p., 2001 ME 77, ,r,i 8~10, 770 A.2d 653.

The Rule S6Q1) statements submitted by the parties on th.is motion for partial summary

judgment display a number of instances where the patties failed to adhere to the re9uired procedure.

Most notably, in their reply statement to Defendant's S.A.F., Plaintiffs failed to support any of their

denials or qualifications with specific citations to evidentia1y material. As an example, in many

instances, Plaintiffs responded to Defendant's factual assertions with the text: "Qualified: Admitted

to !11e extent supported by the record. See Plaintiffs [sic] Affidavit." (See e.g., Pl.'s Reply to Def.'s S.A.F

,i,r 1-8.) This is not an effective qualification because, amongst other issues, the response does not contain a specific supporting citation, such as a reference to a page or paragraph number of a specific

record document, and instead seems to invite the Court to examine the whole of Plaintiffs' principal

rnulci-page supporting affidavit (i.e.> Mr. Confalone's affidavit) to, on its own, find some facts with

which to qualify the Defendant's assertion in some way. It is not the Court's role to assist Plaintiffs

4 in the task of responding lo Defendant's assertions. The Law Court's jurisprudence indicates that the

Superior Court is not "permitted to independently search a record to find support for facts offered by

a party," Levim, 2001 ME 77, il 9, 770 A.2d 653. Even tnorc importantly, the Law Court has further

indicated that "[i]n the absence of specific record references, a proffered fact is not properly before

the court" and that assertions in a Rule 5601) statement of fact should be disregarded if not supported

by a "specific citation" to competent evidentiaty material. See id ("A statement of material facts must

directly refer the court to the specific portions of the record from which each fact is drawn.") Because

of Plaintiffs' failure to support their denials and qualifications with specific citations to evidentiaty

material, all of the factual assertions in Defendant's S.A.F. are deemed admitted to the extent the

defendant's factual assertion was properly set forth and supported as required under Rule 56. See e.g.,

Dqyle v. Dep't efHm11a11 Sen;s., 2003 ME 61, ,iii 11-13, 824 A.2d 48 ("Because Doyle failed to follow tlie

p_totocol set forth in Rule 56, many of DHS's material facts are not controverted and thus are properly

deemed admitted."); Sta11/'!} v. Hancock C(y. CoJll!}J 1rs, 2004 }VIE 157, ,i 18,864 A.2d 169; M.R. Civ. P.

56(h)(4) ("Facts contained in a supporting or opposing statement of material facts, if supported by

record citations as required by this rule, shall be deemed admitted unless properly controverted."). In

tum, in the several instances where Defendant's O.S.M.F. designates a response to a factual assertion

in Plaintiffs' S.M.F. with "Denied" or "Qualified" but fails to provide a specific record citation to

support the response, tl1e Court will deem the Plaintiffs' factual assertion as admitted to the extent the

Plaintiffs' assertion was properly set forth and supported.

B. Summary ofthe Patties' Statements

The following paragraphs briefly summarize the matters presented in the parties' respective

statements of fact.

5 On June 20, 2007, Moosehead entered into a transaction with Machias Savings Bank for a

$6,350,000 loan, with Mooschcad delivering a pronusso1y note in that amount to the Bank. (Pl.'s

Supp.'g S.M.F. ~] L) The note was secured by a mortgage using certain real estate owned by Plaintiffs

as collateral. (Id.) This mortgage is recorded in the Piscataquis County Regist1y of Deeds 2 in Book

1849 at page 4. (Id) As part of this transaction, plaintiff OFLC provided the Bank with a guaranty

covering the $6,350,000 note and with a mortgage securing that guaranty. (Id. ii 2.) The mortgage

securing OFLC's guarnnty agreement is recorded in the Registq of Deeds in Book 1848 at page 37.

(Id.) On April 10; 2013, the bank assigned the note and mortgage to Dcfendant, 3 (Id.)

The note and mortgage, now between Defendant and Plaintiffs, provided the following terms

at the time it was assigned: (some of these terms were later modified, see following paragrnph).

• A regular interest rate of 10.95% per annum • A default interest rate of "si" percent (6%) greater than the note rate in existence at the time of default'' to be "imposed from the date of notice to Borrower of a default until the default has been cured to the Lender's satisfaction," o Default occurs when the "Borrower" or "Guarantor" fails to pay the atnounts due and the nonpayment "is not cured within fifteen (15) days written notice from the Lender." o Default occurs when the "Borrower" or "Guarantor" breaches any of the "covenants, agreements ot obligations" set forth in the parties' agreement and the breach "is not cured within fifteen (15) days written notice from the Lender." o Default occurs when "Lender" co1nes to believe that the collateral used to secure the loan is in danger of loss, misuse, or confiscation, or the «Borrower" and "Guarantor" have endangered the safety or integrity of the collateral> or the "Lender" othenvise perceives its interest in the collateral to be at risk. o Default occurs when a judicial or administrative action is conu11cnccd against the "Borrower" or "Guarantor" which might impact the "Lender's" interest; however, no default occurs if the legal action is dismissed within sixty days. • The "Borrower" may not strip or co11u111t waste upon tJ1c property identified as the collateral or suffer others doing so. • The "Borrower" must provide the ''Lender" with certain financial information and maintain clear and accurate records of income and expenses concerning the property identified as the colhtetal. • A late fee equal to 10% of the overdue payment to be applied if the "Borrowd' is ten days late in making a payment.

2 All following references to the "Registry of Deeds" :ire to the Piscataquis County Regist:1:y unless othenvise specified. 'This assignment is recorded in the Regist1y of Deeds in Book 2229 at page 6L

6 • The "Borrower" agrees to pay all of the "Lender's" expenses incurred in collecting on or enforcing the "Boi'i'ower's" obligations under the note. • The mortgage secures all of the costs incurred by the "Lender" to "obtain, preserve, and enforce the Mortgage, collect the obligation, and maintain and preserve the collatcrnl, including, but not limited to, taxes, assessments, insurance premiums, repairs, attorneys' fees and legal expenses, rent, storage costs, and expenses of sale," • The "Lender" may take any action it believes reasonably necessaty to protect the value of the property identified as collateral or the "Lender's" interest in it, including defending any claim or legal action affecting those interests. o If any arc incurred, those costs are added to the "Borrowet's" debt and accrne interest at the default rate identified in the note. • The "Lender" has the discretion to provide a partial release. • Paytnents made by the "Borrower" nrnst be applied first to accrued interest, then to the principal balance, and then to other expenses such as accrued late fees or collection fees. However, notwithstanding the foregoing, the "Lender" maintains the discretion to apply any and all payments in whatever order and manner the "Lender" deems advisable.

(Def:s S.A.F. il13-18.)

After the note and mortgage were assigned from Machias Savings Bank to Defendant,

Plaintiffs and Defendant executed a number of documents aimed at tnodifying the terms of the parties'

loan agreement. These docmnents include what the parties refer to, as an 'allongc,' 'profit participation

agreement,' and 'modification agreement.' (Def.'s S.A.F. ,, 21-23.) The allonge, which is signed by

1foosehead and OFLC's principal, Mr. James Confalone, indicates that it amended the original note's

interest rate terms to state that the regular interest rate would be six percent per (6.00%) per annum

and to state that a default intetest rate of "eight percent (8.00%) greater than the note rate in existence

at the time of default" would be "imposed from the date of default by Borrower until the default has

been cured to the lender's satisfaction." (Def.'s S.A.J<. iJ 21.) These amended terms are different from

the note's original tenns which had provided for a default interest rate of six percent (6.00%) to "be

imposed from the date of notlce to Borrower of a default until the default has been cured to the

Lender's satisfaction.'' (Def.'s S.A.F. ,i,i 3, 21.) Plaintiffs do not address the allonge in their statement I! of facts. The terms found in the other loan modification doc1.11nents, i.e., the 'profit participation r

agreement' and 'modification agreement; did not make any further alterations to those interest rate

7 terms not any other alterations to the parties' agreement that ate material to the matters at issue on

this motion. (Def.'s S.A.F. 1 22).

Sometime in 2014, Defendant loaned Plaintiffs an additional $700,000 and this additional loan

was incorporated into the parties' financing agreement. (Def.'s S.A.F. ,i 24.) In order to obtain this

additional loan, Plaintiffs had agreed to pay Defendant $200,000 in prepaid interest. (Def.'s S.A.F. ,i

25.) Plaintiffs and Defendant dispute whether this $200,000 was paid when it became due on

September 14, 2014. 4

According to Defendant, beginning in June of 2014, JJlaintiffs began to miss payments due on

the note, a breach of the parties' financing agreement, and that Plaintiffs have not cured the breach

by paying off the arrears. (Def.'s S.A.F. ~ 23.) In August of 2016, a legal action was commenced in

Maine by Maine's Attorney General in which the Rebozo Foundation and Plaintiffs were all named as

defendant parties. (Id. 1~ 29-31.) In th.is action, the State of Maine alleges that Plaintiffs failed to

properly invest in a ski area property, which was identified as collateral in Plaintiffs and Defendant's

loan agreement. (Id ~ 61.) Additionally, according to Defendant, as of September 28, 2017, Plaintiffs

have allowed some property identified as collateral in the financing agreement to "significantly

deteriorate in condition." (Def.'s S.A.F. 162 (referencing three photos of Moosehead's ski lodge taken

on that date which show the lodge in an apparently deteriorated state)).

Plaintiffs asserts that in an email dated July 28, 2016, Defendants agreed to accept as a payment

on the note and mortgage, title to some real estate that the parties agi:eed was worth $300,000, (Pl.'s

Supp.'g SJvLF. ii 38.) Plaintiffs assert that they relied on this purported "written agreement" and

4 Plaintiffs assert that Defendant foiled to credit a $200,000 payment fo1· the prepaid interest on that date and support the assecrtion with a citation to an affidavit submitted by James Confalone and a citation to certain ttansaction records (J-ee Pl.'s Supp.'g S.1Vf.F. ,i 16; Confalone A.ff. ,i 18; Confalone Aff., Ex. H at 84-86.) The cited portion of the Hffidavit supports Plaintiffs' assertion, but the cited transaction records contradict the asse1tion and indicate that the $200,000 payment was in fact credited towards the outstanding interest on Plaintiffs' debt. (Co11falone Aff., Ex. H at 85.) Even though Defendants failed to properly deny or qualify the Plaintiffs' assei:tion (see Def,'s Opp. S.M.F. ,i 18), because one ofPlaintiffs' supporting citations directly contradicts their factual assertion, the Court does not treat Plaintiffs' assertion regarding the $200,000 pa}rment as undisputed.

8 stopped making monthly payments on the loan aftet August 1, 2016. (Id. ~ 40.) Plaintiffs assert that

Defendant breached this "written agreement" by failing to take title to the property and assert that

Defendant is now wi:ongfully charging default fees on Ph.intiffs' loan based on Plaintiffs' purpotted

failure to make monthly payments. (Id. ii 41.) Defendant denies having ever entered into such an

agteement with Plaintiffs. (Def.'s Opp. S.M.F. iii[ 38-41; Dcf.'s S.A.F. ~,126-28).

In May of 2019, Plaintiffs executed a purchase and sale agreement with a real estate developer

wherein Plaintiffs contemplated selling some of the property identified as collateral in the parties' loan

agreement, including a "ski mountain property" held by Moosehead. (Def.'s S.A.F. il~ 31-33.) This

purchase and sale agreement was contingent on Plaintiffs settllng the Attorney General's suit against

them. (Id. ii 34.)

Beginning in May of 2020, Plaintiffs communicated to Defendant that they wanted to sell

some of the property identified as collateral in the loan agree1nent and requested that Defendant

provide then1 with a "payoff' amount to facilitate the sale. (PL's Supp.'g S.M.F. i! 7.) The parties'

statements set forth a number of conflicting assertions about their dysfunctional communications

relating to Plaintiffs' request for this «payoff' amount. The details of those communications are not

immediately relevant to the matters at issue on this motion and therefore will not be surrunarized here.

However, the Court will note that eventually in June of 2020, Defendant provided Plaintiffs with a

letter indicating that Defendant believes that Plaintiffs have been in default under the terms of thefr

agreement for some time and that Plaintiffs owed default interest totaling $944,748.58. (It/. ~ 12.)

Plaintiffs communicated their disagreement with this payoff number and tl1eir belief that the}' were

not in default in various letters, emails, and telephone calls to Defendant. (It!. ~'ii 10-14.) Plaintiffs

then sent a letter in October of 2020 requesting that Defendants revise the payoff amount and provide

a partial release to facilitate the sale of soine of the property identified as the collateral. (Id. ii 28.) The

parties continued discussions into 2021 regarding the amount due under their agreement and a

9 potential sale of the collateral without corning to an agreement regarding those matters. (Id. ,i 29~34,

43; Def.'s S.A.F. ,i,i 46-59.) In May of 2021, Defendant provided Plaintiffs with a revised calculation

stating that the total amount due as of May 1, 2021 was $6,494,16L94 (with unpaid principal of

$3,605,450.00, "default interest" totaling $2,795,155.04, and attorneys' fees of $93,556.90); however,

Plaintiffs disagree with this calculation. (Def.'s S.A.F. ii 57-58; Pl.'s Supp.'g S.M.F. ,r,i 41, 43.) Throughout the duration of the financing agreement between Plaintiffs and Defendant,

Defendant has not pro,,ided monthly invoices or annual balance statements. O)l.'s Supp.'g S.M.F. ,i

36.) Defendant has not issued demand letters concerning the loan agreement. (Id i[ 37.)

Plaintiffs commenced their suit against Defendant on June 25, 2021, by filing their complaint

in the Superior Court. Plaintiffs filed this motion for partial summary judg1nent on November 19,

2021. In their motion, Plaintiffs assert that the "amount actually owed" on the note and mortgage as

of October 1, 2021, is $4>079,856.75 (with unpaid principal totaling $3,367,772.40 and interest totaling

$712,084.35). Defendant disagrees with this calculation and asserts that the amount due on the note

has increased from the $6,494,161.94 stated in its JVIay 2021 letter.

III. ANALYSIS

A. Defendant's Motion to Deny 01· Dela Summaty Judgme11t Pursuant to .A1.R. Cfr. P. 56(1).

Defendant has moved under M.R. Civ. P. 56(£) that the Court defer ruling on Plaintiffs' motion

for summary judgment for a period of time to allow Defendant to have a fair opportunity to engage

in discovery to obtain information that Defendant believes is nccessa1y to oppose Plaintiffs' motion.

The Maine Rules of Civil Procedure permit parties to move for sutnmary judgment at any time

after an action is commenced as long as the motion is made "within such time as not to delay the

trial[.]" S. Portla11d Police Patro/As/n v. City ofS. P01tland, 2006 ME 55, ii 11, 896 A.2d 960. Rule 56(f)

tempe.i:s that general rule by protecting parties who oppose summary judgment but "who for valid

10 reasons" cannot present the facts essential to justifying their opposition to the motion. S. P01tlcmdPolice

Patro!As,'11, 2006 ME 55, ii 11, 896 A.2d 960; see also A11gdl v, I-Ia/lee, 2012 ME 10, il 13, 36 A.3d 922

(Stating that Rule 56(f) requites "that a party opposing summary judgment must be allowed adequate

opportunity to conduct discovery or otherwise develop evidence in opposition to the su1n111a1y

judgment motion"). The Rule states the following:

\'{/hen Affidavits are Unavailable, Should it appear from the affidavits of a patty opposing the motion that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance ta permit affidavits to be obtained or depositions to be taken or discove1y to be had or may make such other order as just.

The Law Court has indicated that to obtain relief under Rule 56(£), the party opposing su1n1nary

judgment "must, inter alia, set forth a plausible basis for believing that specified facts, susceptible of

collection within a reasonable ti.me frame, probably exist, and must further indicate how the emergent

facts, if adduced, will influence the outcome of the pending summm·y judgment motion." J, Port!a11d

Police Patrol Ass111, 2006 1vIE 55, ii 12, 896 A.2d 960 (quoting Bqy VicJIJ Ba11k, N.A. JJ. High/mu/ Go!f

Mmtgagees Rcal(y Tmst, 2002 ME 178, i122, 814 A.2d 449). The Law Court has further indicated that

the affidavits submitted by a party seeking relief under Rule 56(£) should "demonstrate that the party

has been diligent in conducting discove1y and show 'good cause' why the additional discovery ,vas not

previously practicable with reasonable diligence" and that the affidavits should "attest that the movant

has personal knowledge of the recited grounds for the requested continuance." Bqy VieJtJ Ballk, N.A.,

2002 ME 178, 1122-25, 814 A.2d 449 (holding that a trial court did not err in denying a Rule 56(£)

motion for continuance where the party's supporting affidavits did not fully explain what essential

facts the party sought to justify its opposition to the motion for sun11nary judgment and why additional

discovery to obtain those facts had not been possible earlier).

Defendant argues in its Rule 56(£) motion here, that Plaintiffs moved for summary judgment

so soon after the commencement of these proceedings that, at least at the time the motion was filed,

11 Defendant had not yet had a meaningful opportunity to conduct its own discovety efforts. In

particular, Defendant notes that Plaintiffs' motion for summary judgment hinges upon the question

of whether and when Plaintiffs defaulted under the terms of their agreement and notes that the

resolution of those questions will influence the determination of whether Plaintiffs are cor:rect

regarding the amount due on the note as well as other issues. Defendant argues it has not had adequate

time to conduct discovery on those topics and therefore lacks all the facts necessary to justify its

opposition to Plaintiffs' motion.

The Court views Defendant's arguments on these points to be generally reasonable;

nonetheless, Defendant has failed to demonstrate that it is entitled to Rule 56(.f) relief here because

Defendant has failed to properly support the motion by affidavit as required undet the Law Court's

interpretation of the Rule, None of the affidavits Defendant has submitted in its opposition to

summary judgment contain information describing what efforts Defendant has made tlrns far to

obtain the information it argues it needs to properly respond to Plaintiffs' motion. Nor do

Defendant's affidavits set fol'th the other necessary information concerning whether Defendant has

been "diligent in conducting discove1y" not whether "good cause" exists as to "why the additional

discovery [sought by Defendant] was not previously practicable with reasonable diligence." Due to

the lack of an affidavit supplying this information, the Court denies Defendant's request for relief

under Rule 56(f). Seego11eml/y Brg View Ba11k, NA., 2002 ME 178, iJi] 22-25, 8t4 A.2d 449.

B. Plaintiffs' Motio11 Co11ce1'11ing Default lnte1·est and Related Fees

Plaintiffs' leg-al argument in favor of partial summaty judgment is premised on Plaintiffs'

contention that, under the terms of the parties' loan agreement, Plaintiffs (the "Borrower" and

"Guarantor") are only deemed to be "in default" if Defendant (the "Lender") provides written notice

tllilt a default event has occurred, and Plaintiffs fail to cure the breach within the allotted titne.

Plaintiffs argue that, because it is undisputed that Defendant has never sent any written notice of

12 default to Plaintiffs, Plaintiffs' account with Defendant has never been "in default" and therefore it is

improper for Defendants to demand interest at the default rate and other fees that only may be

assessed in the event of a default.

As support for this argument, Plaintiffs point to the provisions found in the note on page two

and in the mortgage at section III, paragraphs A and B. (fhe relevant sections of the two documents

appear to inchide the exact same provisions). Plaintiffs' motion does not identify any other portion

of the patties' loan agreement as support for their argument. The portion of the note that Plaintiffs

refer to is reproduced below along with two othet: subpat:agraphs that are found in the same section

of the agreement and are of particular relevance to the issues.

Default. Borrower shall be in default 1..indei: the terms of this Note if any of the following events (each an "Event of Default") shall occur:

a) The failure of Borrower and/or Guarantor to pay when due any principal of, interest, costs or charges on this Note in accordance with the terms hereof, or any fees, charges or other atnounts payable to Lender hereunder or under any other Loan Documents [sic], or of any other indeb_tedness or obligations of Borrower and/or Guarantor to Lender, and such failure is not cured within ten (10) days written notice from the Lender.

(b) The failure, refusal or neglect of Borrower and/ot Guarantor to properly obsetve, perfotm or comply with its covennnts, agreements or obligations contained herein or any of the other Loan Documents, and such failure is not cured within fifteen CJ 5) days written notice from tl1e Lendet.

(g) The Lender believes, in its sole discretion, that any of the collateral given as security for the Loan to be in danget of loss, misuse or confiscation, or that the Borrower and/or Guarantor has endangered the safety or integrity of the collateral ot any liens of Lender; or the Lender, in its sole discretion, perceives its interest in the collateral to be at risk

(i) The commencement of any judicial or administrative proceeding against the Borrower and/or Guarantor, or any company of which the Borrower or Guarantor is or was a principal owner, or against any collateral of Borrower and/or Guarantor, or any company of which the Borrower or Guarantor is or was a principal owner, which might affect Lender's interest in the property, and such proceeding is not dismissed within sixty (60) days or Borrower and/or Guarantor does not bond or provide othet indemnification satisfacto1y

13 lo Lender against an adverse result; or the entty of any court order wWch enjoins, restrains or in any way prevents Borrower and/ or Guarantor, or any company of which the Borrower or Guarantor is or was a principal owner, from conducting all or any material part of Bmrowet's and/or Guarantor's business affairs in the ordinary course of busincs unless such order is set aside within thirty (30) days.

(PL's Mot. Summ. J. 10; Pl.'s Supp.'g S.M.F. ,11; Confalone Aff, Ex. A at 2-4.)

In response to Plaintiffs' argument, Defendant contends that the governing loan document

on whether and when the Defendant can demand default interest is the allonge to the note that Mr.

Confalone signed after the note was assigned to Defendant in 2013. The relevant section of the

allonge states:

NOW, THEREFORE, for good and valuable consideration, the receipt whereof is hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

(3) The section regarding interest in the Note is amended to read as follows:

Interest. Except in the event of default, intetest will accrue on the principal of this Note, computed from the date hereof, at a fixed rate equal to six and zero hundredths of one percent (6.00%) per annum. Interest shall be calculated monthly on the outstanding principal balance of the Loan...

During any period in which the Borrower is in default under the terms of this Note or under the terms of any of the loan documents secuting this loan, at Lender's option the Lender may impose a default interest rate which is eight percent (8.00%) greater than the note rate in existence at the time of default. The default interest rate will be imposed from the date of default by BorroweJ: until the default has been cured to the Lender's satisfaction.

(Def.'s S.A.F. 121; Bertran Aff., at V1vIB000071-72). Defendant argues based on the allonge, that it

can charge default interest from the date of any default, until the breach is cured to Defendant's

satisfaction, regardless of whether any notice of default was previously sent. In the alternative,

Defendant argues that, given the language in the allonge and the terms in the note and mortgage, the

14 parties' lending agreement is ambiguous as to whether Plaintiffs are considered to be "in default" from

the date of default or only after notice is given and Plaintiffs fail to cure. In support of that argument,

Defendant points in particular to the fact that none of the paragraphs in the 'default sections' of the

note and mortgage listing the occurrences that are recognized as an "Event of Default," aside from

paragraphs (a) and (b), specify that prior w1'itten notice of default must be given by the Lender before

the occurrence is recognized as an "Event of Default." Defendant further argues that it has presented

competent evidence st1pporting its position that Phlintiffs defaulted in ways other than those listed in

paragraphs (a) and (b), such as the commencement of litigation against Plaintiffs by the state Attorney

General in 2016 (see paragraph(i)) and by conun.itting waste (see paragraph (g)). Defendant thus

contends that summary judgment is inappropriate, as material factual disputes exist pe1:taining to

whether Plaintiffs are "in default" under the loan agreement and pertaining to the meaning of the

purportedly ambiguous default interest rate terms.

The question of how terms in a contract should be interpl'eted is a question of law for the

Court, as is the question of whether the contract's terms are ambiguous. fnjoB,idgc, LLC JJ. Chi111a11i,

Im:, 2020 ME 41, 1 13, 228 A.3d 721. In the event the Coul:t determines that contract terms are

ambiguous, the meaning of those contract terms is deemed a question for the trier-of-fact "and

summary judgment is inappropriate unless the record completely eliminates the possibility of an issue

of material fact concerning the intent of the parties." Id. Contract language is ambiguous if "it is

reasonably possible" to give the language ''at least two different meanings." Re!it111cc Nat'/ ]JJClem. 11.

[(11owles btd11s. SerJJ.f., COip., 2005 ME 29, 1124, 868 A.2d 220, When interpreting a contract's terms and

determining whether contract terms are ambiguous, the Court considers the entirety of the contract.

Rc/iaHce Not'! I11deJJJ., 2005 ME 29, 1124, 868 A.2d 220. Additionally, the Court Htnay look to extrinsic

evidence to reveal a latent ambiguity." Villas try the Sea Ow11ers Ass'JI v. Gani!J, 2000 ME 48, 1J 10, 748

A.2d 457. If an apparent ambiguity in a particular contract clause can be sufficiently clarified by

15 reference to other provisions in the contract, the clause is not ambiguous. Rdim1cc Nat'/ I11dem., 2005

ME 29, ~ 24, 868 A.2d 220. Unambiguous contract terms are interpreted according to their "plain,

ordinary, and generally accepted meaning" and so as to "avoid interpretations that would render any

particular contractual provision meaningless." Id.

The fast issue the Court must rule on is whether the default provisions of the note and

mortgage, identified by Plaintiffs and Defendant, are ambiguous. Specifically, the Court must

determine whether these provisions are ambiguous as to whether Defendant must first prov.itle

Plaintiffs with written notice and some opportunity to cure before any of the events listed as "Events

of Default" in the note and mortgage. Prior to the enactment of the allonge, the interest section of

the note explicitly required notice before default interest could be imposed. That explicit notjce

provision was omitted in the allonge, the terms of which specified that default intetest could be

imposed upon default. Concluding that notice was no longer needed, however, would not be accurate

because the default provisions of the note still tequired notice fol' a nonpayment default and the

default would be a prerequisite to imposing interest at the default rate. Those events listed in

pamgrnphs (a) and {b) still 1'equited notice before a default could take place and in the absence of

notice, default interest could not be imposed. This does not necessarily mean that the plaintiff prevails,

however.

Plaintiffs argue that the default provisions require written notice and a failure to cute befote

any listed event is considered an "Event of Default'\ citing the very broad language contained in

paragraph (b). Again, the text of paragraph (b) states that, "[t]he failure> refusal or neglect of Borrower

and/or Guarnntor to properly observe, perform or comply with its covenants, agreements or

obligations contained herein or any of the other Loan Documents, and such failure is not cured within

fifteen (15) days written notice from the Lender" qualifies as an "Event of Default."

16 Paragraph (b/s wide reference to "covenants, agreements or obligations contained herein or any of

the other Loan Documents" appears to signal that the parties intended paragraph (b) to apply to all

of Plaintiffs' obligations set forth in any of the documents that comprise the parties' financing

agreement.

This may not 111ake sense, however, because when (b) is read in conjunction with the remainder

of the default section, it is not dear at all that its notice provision applies to all of ways a borrower

could default. Fii:st, the 15-day notice ptovision in (b) obviously doesn't apply to a failure to make a

loan payment which is governed by the 10-day notice provision found in (a). These provisions are

mutually exclusive. Additionally, at the beginning of the default provisions, the note and mortgage

both state that "Bortower shall be in default under the terms of this Note if any of the following

events (each an "Event of Default") shall occur[.]" (emphasis added). The1neaning of this language

would appear to be that if any of the events specified in the following lettered paragraphs comes to

pass then the event is considered an "Event of Default." Although paragraph (b) is so broadly worded

that it could be read to apply to each and every breach of contract obligations by the borrower should

a breach occur, the list of events does not stop or begin with paragraph (b). Instead, this section of

the contract provides nine other specific events, each of which, according to the beginning sentence,

are to be considered an "Event of Default." None of the other paragraphs listing the "Event[s] of

Default" specify that the event is only considered a default if the lender provides written notice of the

breach and the borrower fails to cure. In this context, the fact that paragraph (a) and (b) specificall)'

list written notice and the borrower's failure to cure within a specific time after notice as preconditions

for the event to qualify as a default, when the other paragraphs of the section do not, indicates that

the events listed in those other paragraphs do not include such preconditions.

Further, it would be somewhat strange and redundant to require the Lender to ptovide prior

written notice before considering the occutrence of some of the listed events as a default. For

17 example, paragraph (i) provides that if a "judicial or administrative proceeding'' is com1ncnced "against

the Borrower and/or Guarantor, or any coh1pany of which the Borrower or Guarantor is or was a

ptincipal owner, or against any collateral ..., which might affect Lender's intei:est in the property" and

the proceeding is not dismissed within sixty days the event is considered a default. In that

circumstance, the Borrower or Guarantor would already have dear notice of a potential default event

because they would more than likely have been setved with the complaint (or at least provided other

11otice of the proceedings) by the party commencing the proceedings against them and would be

presumed to have knowledge of the provisions in the note. The reasonableness of Defendant's

interpretation is further bolstered by theic evidence concerning the allonge that Nit. Confalone signed

in 2013, which purpotts to remove an original provision in the note requiring that default interest be

"be imposed from the date of notice to Borrower of a default until the default has been cured to the

Lender's satisfaction" with a provision stating that default "be imposed from the date of default by

Borrower until the default has been cured to the Lender's satisfaction." (Def.'s S.A.F. ~ 21.)

Accordingly, Defendant's preferred interpretation of the default provision may prevail according to

the plain meaning of the document. 5 Under these circumstances the note and mortgage provisions

pertaining to the question of whether notice is a prerequisite to the imposition of default interest are

ambiguous at best.

In turn, the facts presented in Defendant's S.A.F. generate genuine factual issues pertaining to

whether and when any of the "Events of Default" listed in paragraphs (c), (g), and (i) occurred. If any

of those events did occut, then Defendants would arguably have the right under the loan agreement

to charge default interest and related fees after the date of the default. These matters also generate

additional questions of fact regarding the proper calculation of the default interest, fees, and,

s The Plaintiff has not addressed explicitly in any detail why the general notice provision in (b) applies to the other default provisions.

18 consequently, the proper cnlculation of the amount due on Plaintiffs' account with Defendant. Por

all of the above reasons, the Court denies Plaintiffs' motion for a partial summary judgment declaring

"that Defendant may not collect default interest" and "that the correct payoff [amount] as of

November 30, 2021 is $4,079,856.75[.)"

C, Atto1'11eys' Fees

Plaintiffs have moved th.Ht the Court declare in a summary judgment that Defendants are not

entitled to recover any attorneys' fees incun:ed in enforcing Plaintiffs' obligntions under the note. To

support this request, Plaintiffs first point to the provision in the note stating, "Borrower agrees to pay

all of the Lender's expenses incurred in collecting or enforcing this Note, including, but not limited

to attorneys' fees and costs of suit." (PL's :tviot. Smnm. J. 12.) They then argue that there are provisions

found on page 2 of the note and page 7 of the mortgage that prohibit Defendant from recovering

these fees and costs without providing a "prior written 10 or 15 day demand" for those fees and costs.

The Court has studied page 2 of the note and page 7 of the mortgage and not found any contract

language establishing that purported requirement-the referenced language on those pages pertain to

when certain events qualify as a default under the agreement not to conditions that must be satisfied

for Defendant to seek attorneys' fees incurred in enforcing the note. The Court thus rejects Plaintiffs'

argument.

In the alternative, Plaintiffs argue that Defendant cannot recover attorneys' fees because

Defendant has no evidence of any attorneys' fees incurred in collecting on or enforcing the note.

Plaintiffs base this argument on their assertion that they have asked Defendant to provide information

on such attorneys' fees and Defendant has not responded. (See Pl.'s Supp.'g S.M.F. iJ 14.) However,

this is not a prevailing argument either. Defendant has presented facts indicating that beginning in

August of 2016, Plaintiffs and Defendant were all parties in a suit brought by the Attorney General

alleging, inter alia, that Plaintiffs failed to properly invest in a ski area that se1ves as a portion of the

19 collateral being used as security in their loan agreement with Defendant. (Dcf.'s S.A.F. ,i,i 29-30, 36,

61.) Defendant asserts that the work of its attorncy(s) representing Defendant's interests in the

Attorney General's suit falls under the scope of "Lender's expenses incurred in collecting or enforcing

this Note." To bolster that position, Defendants cite to the provision in the mortgage stating that the

obligations secured by the mortgage include "[a]ll costs incurred by the Lender to obtain, preserve,

and enforce this mortgage, collect the obligation, and maintain and preserve the collateral, including,

but not linutcd to, taxes, assessments, ..., attomeys' fees and legal expenses, ..., and expenses of

sale." (Ir/. iJ ·12.) Defendant's attorney, Vanessa Berttan has also provided an affidavit where she avers

that she and another attorney were employed by Defendant to represent Defendant's .interests in the

ski area and loan agreement generally in the case brought by the Attorney General. (Id ,I 60.) Attorney

Bertran also avers that Defendant has employed her to represent them in negotiations concerning the

sale of the aforementioned ski area in 2020. (Jr/.) Her affidavit also includes an attachment where she

lists the dates Defendants incuued attorneys' fees for Attorney Bertran and others and the amount of

those fees. Id. (referencing attachment V1vIB 0000205)).

The Court is unable to grant sun11na11r judgment on the issue of attorney fees. Attorney fees

incurred by defendant in the lawsuit brought by the State would not qualify as having being incurred

"in collecting or enforcing this Note," or "all costs ... to obtain, preserve, and enforce this mortgage,

collect the obligation, and maintain and prese1ve the collateral, including, but not limited to, taxes,

assessments, . , ., attorneys' fees and legal expenses. There is no indication that defending that lawsuit

was done to enforce or collect this note, and although in the tnost general sense, defending the suit

could have been done to preseive colhtteral, in part, to preserve this mortgage or collateral, the

remaining tettns in this clause make it clear that it addresses costs related to prese1vation of collateral

during the collection or foreclosure process, which was not taking place at the time. On the other

hand, it is a much better argument that the defendant could be entitled to attorney fees incurred in

20 defending the present suit, which prevents the Court from granting the motion concerning attorney

fees.

PIBinciffs also move that the Court grant a summaiy judgment awardlng them $20,400 in

attorneys' fees and casts which they claim to have incurred in prosecuting this suit against Defendants.

As stated by the Law Court, "it is well settled that Maine coutts have no authority to award such fees

in the absence of express statuto1y authorization or agreement by the parties." Goodwin tJ. School

AdtJJi11iJtrative Disftict No. 35, 1998 N1E 263, ii 13, 721 A.2d 642. However, trial courts do possess a

"limited, sparingly used, inherent authority to sanction parties or attorneys who clearly abuse the

litigation process in the extraordinarr circumstances where significant bad faith has been

demonstrated." Estate ef [IYcatherbee, 2014 IVIE 73, , 17, 93 A.3d 248. In that vein, M.R. Civ. P. 11

provides that the trial court may impose attorneys' fees if the Court determines that a party or their

attorney signed a pleading or motion with the intent to defeat the purpose of Rule 11 's requirements.

As for the cout:t's authority to award fees here, Plaintiffs point to Fmser E111plo)'ec.r Fed. Credit U11io11 v.

Labbe, 708 A.2d 1027 (Me. 1998), a case where the Law Court affirmed the imposition of sanctions

against a defendant pursuant to M.R. Civ. P. 11 after a trial court determined that the defendant had

filed affirmative defenses and counterclaims solely for the purpose of delaying foreclosure

p.t:aceedlngs.

Plaintiffs' argument is not persuasive. After reviewing the record and applicable law, the Court

has found no basis upon which to award Plaintiffs' attorneys fees at this stage of the litigation. The

Hzisercase is inapplicable here because Plaintiffs have not shown that Defendant has violated Rule 11

or otherwise engaged in sanctionable behavior during this litigation. PIBintiffs' request for a summary

judgment awarding thetn attorneys' fees and costs is denied,

IV. CONCLUSION

21 The CouJ:t has determined based on the record presented and the applicable law that Plaintiffs'

have not met their burden to receive the partial summ.ary judgment they have requested. Genuine

issues concerning material facts exist as to the meaning of certain ambiguous default provisions in the

p11.rties' lo&n agreement pertaining; in part, to whether certain written notice requirements must be met

for Plaintiffs to be considered "in default" under the agreement. Genuine issues also exist pertaining

to the matter of whether and when Plaintiffs may have defaulted on their obligations under the

agreement and also, consequently, what amount is due on the note and mortgage (i.e., the "payoff'

amount). In addition, Plaintiffs' motion failed to demonstrate that Defendant lacks the right to be

awarded attorneys' fees under the agreement and failed to demonstrate that Plaintiffs are entitled to

attorneys' fees and legal costs at this time. Accordingly, Plaintiffs' motion for summary judgment is

denied.

Because it has been expressed by at least one party tl1at there is an u1'gent need for the

resolution of this case, It is being referred for a judicial settlement conference conducted by a justice

other than the undersigned. The parties will be contacted by the Court for it to be schedule ct 1

Entry:

1. Defendant's J:vfotion for Rule 56(f) Relief is DENIED.

2. Plaintiffs' Motion for Summary Judgment is DENIED.

3. The Parties shall engage in a settlement conference.

The clerk may incorporate this Order on the docket by reference pursuant to M.R. Civ. P.

79(a).

t. \X,'illiam Anderson, Justice Maine Superior Court