TD Bank, N. A. v. Tucson Inc., More Properties, Inc., and Morency

• Court: Superior Court of Maine
• Decided: January 13, 2015
• Docket: CUMcv-14-33
• Status: Unpublished

Opinion

STATE OF MAINE BUSINESS AND CONSUMER COURT

Cumberland, ss. ClltAH-CUIYJ- OI-13 ..

Plaintiff

v. Docket No. BCD-CV-14<-83 ~

TUCSON, INC., MORE PROPERTIES, INC., CRAIG D. MORENCY and SCOTT P. MORENCY

Defendants

ORDER ON PLAJNTIFF'S MOTION FOR SUMMARY JUDGMENT

PlaintiffTD Bank, N.A.'s Motion for Summary Judgment cmne before the court for oral

argument January 7, 2015.

The corporation defendants have not defended in this case, and the Motion is directed to

the individual defendants, Craig Morency and Scott Morency, guarantors of the obligations of

the corporate defendants. The Morencys raise· several defenses and objections to the Bank's

Motion.

First, they assert that their guarantees were not supported by consideration because,

although they were nominal principals in the corporations, the corporations were functionally

controlled by their father, Paul Morency, and the sons del'ived no financial benefit from the

loans that they guaranteed. The record does indicate that the sons signed the guaranties

mainly or entirely because the Bank did not consider the father credit-worthy and required

gwu·anties fi·om others. For two reasons, the court does not accept the Morencys' argument.

First, there is no requirement that a loan guarantor benefit personally or directly from a loan,

student loans guaranteed by parents or grandparents or non-relatives being a common example

of such a situation. The sons presumably would not have signed the guaranties unless they wished to facilitate the loan to the father-and the grant of that wish is consideration enough.

Further, as the Bank points out, the guarantees unambiguously recite that they are supported

by valid and sufficient consideration, so the sons' contention is inadmissible under the parol

evidence rule. See Clarke v. DiPietro, 525 A.2d 623, 625 (Me. 1987).

The sons' second argument is that they felt rushed and pressured into signing the

guarantees and did not understand what they were signing. Here again, the unambiguous

terms of the guarantees prevail. See Peterman v. Clegg, 641 A.2d 867, 868 (Me.l991·) ("signed

contract is sufficient evidence to overcome the defendants' testimony to the contrary.").

Third, the Morencys claim to have been promised by their father that they would never

be liable on the guarantees. They do not claim the Bank itself made such an explicit promise,

but they do assert that the Bank had a fiduciary duty to correct the m.isimpression. Again, the

unambiguous languag·e of the guarantees negates any such argument. Moreover, the Morencys

have not demonstrated that the Bani< was under any fiduciary duty to them. In Ste·wart v.

JV!achias Savi11gs Bank, the Law Court said:

Standing· alone, a creditor-debtor relationship does not establish the existence of a confidential relationship. To demonstrate the necessary disparity of position and influence in such a bank-bonower relationship, a party must demonstrate diminished emotional or physical capacity or the letting down of all guru·ds and bars.

2000 ME 207, ~ 11, 762 A.2d 'M•, 4•6, quoting and citing Rezd v. Key Bauk qf Southernlvlaine, Inc., 821 F.2d 9, 18 (1st Cir.l987); See First NI-l Banks Granite State v. Scarborough, 615 A.2d 248, 250 (Me.l992); Diversified Foods, Inc. v. First NationalBauk q[Boston, 605 A.2d 609, 615 (Me.l992).

Lastly, the Morencys assert that the Bank is not entitled to summary judgment because

it tailed to noti(y them of the sales on foreclosure of the Banl<'s security for the loans. For two

reasons, that argument fails as well. First, the record indicates that the Banl< did send notice to

the address that they had provided. Second, the applicable forecloslu·e statute contains no

requirement that a foreclosing lender send notice of foreclosure to secondary obligors, such as

guarantors, in addition to the required notice to the mortgagor. See H M.R.S. § 6203-E ("No

2 action for a deficiency shall be brought by the holder of the mortgage note or other obligation

secured by mortgage of real estate after foreclosure by exercise of the power of sale, unless a

notice in writing of the mortg·agee's intention to foreclose the mortgag·e shall have been served

on the mortgagor or its representative . . ."). To impose the requirement of notice to

guarantors as well would be to add a provision to the statute.

For all of the foregoing reasons, it is ORDERED:

1. PlaintiffT.D. Bank, N.A.'s Motion for Summary Judgment is granted.

2. The Plaintiff's claims against the corporations remain pending. If the Plaintiff

intends to pursue those claims, it shall do so through a filing within 20 days. If the Plaintiff

does not intend to pursue those claims, it shall so advise the court within 20 days.

Pursuant to M.R. Civ. P. 79(a), the clerl{ is hereby directed to incorporate tllis order by

7~ reference in the docket.

Dated January 13, 2015

Justice, Business and Consumer ColU't

3 TD Bank, N.A. v. Tuscon, Inc., More Properties, Inc., Craig D. Morency and Scott P. Morency BCD-CV-14-33

TD Bank, N.A.

Counsel: Aaron Burns, Esq. Two Monument Square, 9th Floor PO Box 108 Portland, ME 04112

Tuscon, Inc., More Properties, Inc., Craig D. Morency and Scott P. Morency

Counsel: Andre Duchette, Esq. 30 Milk Street, 5th Floor Portland, ME 04101