The Bank of New York Mellon FKA v. Decision One Mortgage Co., LLC

• Court: Superior Court of Maine
• Decided: March 27, 2017
• Docket: SAGre-16-10
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT SAGADAHOC, ss. CIVIL ACTION DOCKET NO. RE-16-10

) THE BANK OF NEW YORK MELLON FKA ) THE BANK OF NEW YORK, AS TRUSTEE ) FOR THE CERTIFICATE HOLDERS OF THE ) CWABS, INC., ASSET-BACKED ) CERTIFICATES, SERIES 2005-BCS, ) ) Plaintiff ) ) v. ) ORDER ON PLAINTIFF'S MOTION ) FOR QUIET TITLE AND DECISION ONE MORTGAGE ) DECLARATORY PARTIAL C01,IT'ANY, LLC, ) DEFAULT JUDGMENT AND ) JUDGMENT ON THE PLEADINGS Defendant ) ) MORTGAGE ELECTRONIC REGISTRATION ) SYSTEMS, INC., AS NOMINEE FOR ) DECISION ONE MORTGAGE COMPANY, ) llC ) ) RICK EASTMAN, ) ) DOWNEAST ENERGY, ) ) and ) ) ADAM BAKER WELL DRILLING, ) ) Parties-in-Interest ) )

Pending before the court is Plaintiff The Bank of New York Mellon f/k/ a The

Bank of New York, as Trustee for the Certificateholders of the CWABS, Inc., Asset­

Backed Certificates, Series 2005-BCS's motion for quiet title, declaratory partial default

judgment, and judgment on the pleadings against Defendant Decision One Mortgage

Company, LLC.

For the reasons set forth below, Plaintiff's motion is denied. I. BACKGROUND

According to Plaintiff's complaint, on August 22, 2005, Party-in-Interest Rick

Eastman executed and delivered to Defendant an adjustable rate note in the amount of

$202,350.00. 1 (Pl.'s Compl. <_[ 10.) To secure the note, Eastman executed a mortgage deed

in favor of Party-in-Interest Mortgage Electronic Registration Systems, Inc. ("MERS") as

nominee for the Defendant. (Pl.'s Compl. <_[ 12.) The secured property is located at 7

Heron Lane in Richmond, Maine. (Pl.'s Compl. <_[ 12.) The mortgage deed was recorded

in the Sagadahoc County Registry of Deeds. (Pl.'s Compl. <_[ 12.)

Plaintiff asserts that on September 29, 2006, MERS assigned the mortgage to "The

Bank of New York, a New York Corporation, as Trustee," but that on March 22, 2013,

MERS expunged that assignment by virtue of an "Affidavit of Expungement of

Assignment of Mortgage." (Pl.'s Compl. <_[ 14.) Plaintiff further asserts that "by virtue of

an Assignment of Mortgage dated April 28, 2010," 2 MERS assigned the mortgage to

Plaintiff. (Pl.'s Compl. <_[ 15, Ex. F.)

In 2014, the Law Court held that MERS, as nominee for a lender, had no right to

assign a mortgage on behalf of that lender. Bank of Am., N.A. v. Greenleaf (Greenleaf I),

2014 ME 89, <_[<[ 14-17, 96 A.3d 700. This left MERS' purported assignees, such as

Plaintiff here, unable to prove sufficient ownership interest in the mortgage to have

standing to foreclose. See id. <[ 22 n. 13 ("Standing requires that the plaintiff have a

minimal legal interest in both the note and mortgage to seek a foreclosure, including

1 The note was apparently thereafter endorsed by Defendant to Plaintiff. (PL' s Compl. Ex. B 3.) The endorsement is undated. (Id.) Plaintiff alleges that it is the current holder of the note. (Pl.'s Compl.

2 ownership of the mortgage."). See also U.S. Bank N.A. v. Curit, 2016 ME 17,

A.3d 903 (citing Mortg. Elec. Registration Sys., Inc. v. Saunders, 2010 ME 79, 9191 15, 26, 2

A.3d 289; Greenleaf I, 2014 ME 89, 9191 15-17, 96 A.3d 700) (internal citations omitted)

("Since 2010, we have made clear that :MERS, as 'nominee' for the lender £or the

purpose of recording the mortgage, does not have any enforceable right in the debt that

secures the mortgage and thus cannot foreclose upon the mortgage; MERS can only

assign the right to record the mortgage and cannot assign ownership of the mortgage.").

Presumably hoping to resolve a similar standing problem in advance of an action

to foreclose, Plaintiff filed this action for declaratory judgment against Defendant on

March 28, 2016. Specifically, Plaintiff asks this court to do the following:

(a) Confirm that [Defendant] intended that [MERS] as nominee for [Defendant] has the right to assign, enforce and discharge [Defendant's] ownership interest in tl1e mortgage, and ratify all actions taken in accordance with said assignn1ent by said assignee or any subsequent assignee; (b) Order the Confirmatory Transfer of [the mortgage] ... to [Plaintiff]; [ensure] that the aforesaid order is a confirmatory Nunc Pro Tune order and an effective reaffirmation of the assignment from [MERS] dated April 28, 2010 ... ; (c) Specifically find the Plaintiff is the owner of both the Note and Mortgage Deed and its ownership rights in the subject property; nunc pro tune as of April 28, 2010 ... ; (d) Render an in rem permanent injunction concerning the ownership of the subject property mortgage, subject to any rights of redemption held by the mortgagees, rests with the Plaintiff [sic]; and (e) Grant such other and further relief as the Court may determine proper.

(Pl.'s Compl. 4-5.)

3 MERS and Adam Baker Well Drilling, Inc. 3 have each filed an answer to

Plaintiff's complaint. The Defendant has not answered the complaint or appeared in

this action, nor have Rick Eastman or Downeast Energy. 4

An evidentiary hearing in this matter was held on Iviarch 7, 2017. See M.R. Civ. P.

SS(b)(2) ("If, in order to enable the court to enter judgment or to carry it into effect, it is

necessary . . . to establish the truth of any averment by evidence or to make an

investigation of any other matter, the court may conduct such hearings ... as it deems

necessary and proper . . . .") Plaintiff appeared by counsel. Party-in-interest Adam

Baker Well Drilling, Inc. appeared pro se by representative Adam Baker but did not

offer any argument or evidence. Plaintiff's counsel produced the orig,inal note for the

Court's inspection and the Court is satisfied that Plaintiff's Exhibit 1 is a true copy of the

original note.

Plaintiff's sole witness was Jennifer Ogle, a foreclosure litigation specialist for

Shellpoint Mortgage Servicing ("SMS"). Ms. Ogle affirmed th~t she is "personally

familiar with the loan concerning Rick Eastman" and that Plaintiff's Exhibit 1 is "a copy

of what is [SMS's] business record as well as the original note." However, no

testimonial or other evidence was offered to explain the relationship, if any, betw~en

SMS and Plaintiff.

3 Adam Baker Well Drilling, Inc. is a party in interest pursuant to a Writ of Execution in the amount of $9,680.81 dated April 2, 2009, and recorded in the Sagadahoc County Registry of Deeds. (Pl. 's CompL ,r 6; Ans. of Adam Baker Well Drilling Inc. ,r 6.) 4 According to Plaintiffs complaint, Downeast Energy is a party in interest pursuant to a Notice of Judgment (Small Claims) in the amount of $1,091.88 dated November 9, 2006, and recorded in the Sagadahoc County Registry of Deeds. (Pl.'s Compl. ,r 5.)

4 II. DISCUSSION

a. Quiet title.

Plaintiff's motion is captioned, in part, "motion for quiet title." (Pl.'s Mot. 1.)

However, Plaintiff neither claims to be in possession of the subject property nor claims

that Plaintiff has conveyed any interest in the property. 14 M.R.S. § 6651 (2016) (actions

to quiet title may be brought by "[a] person in possession of real property, claiming an

estate of freehold therein or an unexpired term of not less than 10 years, or a person

who has conveyed such property or any interest therein with covenants of title or

warranty, upon which he may be liable.") Quiet title actions are vehicles to confirm

legal title to real estate, not to adjudicate ownership interests in a mortgage, which

secures the right to payment under the note instrument. See 14 M.R.S. §§ 6651-6658. To

the extent that Plaintiff moves to quiet title at this time, the Court does not see fit to

grant Plaintiff's motion.

b. Declaratory judgment.

Plaintiff moves for "declaratory default judgment" against Defendant and all

parties in interest. (Pls.' Mot. 1.) The court questions whether declaratory judgment is

appropriate in this case. Maine's Declaratory Judgments Act empowers the court to

"declare ... rights, status and other legal relations" when doing so will "terminate the

controversy or remove an uncertainty." 14 M.R.S. §§ 5593, 5597 (2015). The Declaratory

Judgment Act "does not relax the requirements of justiciability necessary to present the

Court with a judicable controversy." Berry v. Daigle, 322 A.2d 320, 325 (Me. 1974).

Declaratory judgment is not proper unless the case presents "an active dispute of real

interests between the litigants." Id. It is unclear whether there is any such dispute in this

matter.

In addition, it is not apparent that a determination by the court as to whether

5 Plaintiff owns the mortgage will remove uncertainty; if the court determines that

Plaintiff does not own the mortgage, the remaining parties would still be free to litigate

the ownership of the mortgage. See 14 M.R.S. § 5958; United States Bank Nat'l Ass'n v.

Decision One Mortg. Co., RE-16-115, 2016 Me. Super. LEXIS 227, at *4 (Nov. 21, 2016).

Finally, in light of the Law Court's decision in Greenleaf and based on the facts of

this case, it is unclear whether it is within the purview of this Court to grant Plaintiff the

remedy that it truly seeks: standing to foreclose on the mortgage. See Greenleaf I, 2014

ME 89, <[<[ 14-17, 96 A.3d 700. The Court is not persuaded by Plaintiff's argument that a

declaratory judgment is proper because the mortgage is held in equitable trust for the

holder of the mortgage note. (Pl.'s Memo. of Law 2-3) (citing, inter alia, Jordan v. Cheney,

74 ME 359 (Me. 1883)).) The Law Court in Greenleaf I held that a bank, as transferee of

MERS as nominee for the mortgagee, had no standing to foreclose on the transferred

mortgage despite having proven its status as holder of the mortgage note and its right

to enforce the debt created thereby. Greenleaf I, 2014 ME 89, <]I 11, 96 A.3d 700. To find

here, for the sole reason that Plaintiff is the holder of the mortgage note, that Plaintiff, as

transferee of MERS as nominee for Defendant mortgagee, is the owner of the mortgage

as beneficiary of an equitable trust held by Defendant would either fly in the face of the

Law Court's decision or would fail to satisfy the standing requirements set out therein,

and possibly both. See generally John J. Aromando, Standing to Foreclose in Maine: Bank of

America; N.A. v. Greenleaf, 29 Maine Bar J. 186 (2014) (noting that Greenleaf I marks a

distinct departure from Maine precedent on the equitable trust doctrine as it applies to

mortgages).

c. Default judgment.

The court has discretion in entering default judgment. "[T]he granting of a

default judgment is discretionary, premised on the theory that justice is better served by

6 adjudicating cases on their merits than by the use of default judgments." Millett v.

Dumais, 365 A.2d 1038, 1040 (Me. 1976). Although at hearing Plaintiff's counsel

apparently intended to establish Plaintiff's status as holder of the note, Plaintiff's

witness had no discernable connection to Plaintiff or Plaintiff's business affairs. The

Court therefore has no evidentiary basis to determine that Plaintiff is the holder of the

note and therefore default judgment is not proper at this time.

d. Judgment on the pleadings.

Pursuant the caption of Plaintiff's motion, Plaintiff seeks judgment on the

pleadings in addition to default judgment. (Pl.'s Mot. 1.) "A motion for judgment on the

pleadings filed by the plaintiff tests the legal sufficiency of the affirmative defenses set

forth in the defendant's answer." Cunningham v. Haza, 538 A.2d 265, 267 n.2 (Me. 1988)

(citing 1 Field, McKusick & Wroth, Maine Civil Practice § 12.14 (2d ed. 1970). See also

Temple v. DiPietro, 2015 ME 166,

inappropriate in this matter because the Defendant has neither appeared nor filed any

responsive pleading. See United States Bank v. Decision One Mortg. Co., No. CV-15-65,

2016 Me. Super. LEXIS 173, *7 (July 26, 2016). See also Perez v. Wells Fargo N.A., 774 F.3d

1329, 1336-37 (11th Cir. 2014).

III. CONCLUSION

In light of the foregoing, Plaintiff's motion is DENIED.

Given the court's analysis above regarding the legal issues at issue in this matter,

it appears that entry of dismissal without prejudice would be the appropriate action

making this a final judgment subject to appeal. However, it would be inappropriate for

the court to dismiss this matter without allowing time for input from the Plaintiff. The

Plaintiff is allowed until May 1, 2017 to make additional filings in this matter. If no

7 additional filings are made, this matter will be dismissed without prejudice by the

court.

Date: March 27, 2017 0 GJ .; d/c~ Daniell. Billings Justice, Maine Superior Court

8 THE BANK OF NEW YORK MELLON - PLAINTIFF SUPERIOR COURT 20 BROAD STREET LL2 SAGADAHOC, ss. NEW YORK NY 10005 Docket No BATSC-RE-2016-00010 Attorney for: THE BANK OF NEW YORK MELLON JOHN A DOONAN - RETAINED 03/28/2016 DOONAN GRAVES LONGORIA LLC 100 CUMMINGS CENTER, STE 225D DOCKET RECORD BEVERLY MA 01915

v. DECISION ONE MORTGAGE COMPANY LLC - DEFENDANT 6060 JA JONES DRIVE SUITE 1000 CHARLOTTE NC 28287

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC - PARTIES IN INTEREST 1818 LIBRARY STREET SUITE 300 RESTON VA 20190 Attorney for: MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC PAUL D WEINSTEIN - RETAINED 04/14/2016 BENDETT & MCHUGH PC 30 DANFORTH ST SUITE 104 PORTLAND ME 04101

RICK EASTMAN - PARTIES IN INTEREST

DOWNEAST ENERGY - PARTIES IN INTEREST 18 SPRING STREET BRUNSWICK ME 04011

ADAM BAKER WELL DRILLING - PARTIES IN INTEREST 32 KIMBERLEY CIRCLE BRUNSWICK ME 04011

Filing Document: COMPLAINT Minor Case Type: OTHER REAL ESTATE Filing Date: 03/28/2016

Docket Events: 03/28/2016 FILING DOCUMENT - COMPLAINT FILED ON 03/28/2016

03/28/2016 Party(s): THE BANK OF NEW YORK MELLON ATTORNEY - RETAINED ENTERED ON 03/28/2016 RE-200 Page 1 of 4 Printed on: 04/11/2017