Wells Fargo Bank v. Aegis Lending Corporation

• Court: Superior Court of Maine
• Decided: August 8, 2017
• Docket: PENcv-16-13
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT PENOBSCOT, SS. CIVIL ACTION DOCKET NO. CV-16-13

WELLS FARGO BANK, N.A., as Trustee for Aegis Asset Backed Securities Trust Mortgage Pass-Through Certificates, Series 2004-4,

Plaintiff,

v.

AEGIS LENDING CORPORATION, DECISION

Defendant,

and

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. as nominee for AEGIS LENDING, CORPORATION, NANCY J. BELL, STILLWATER IIEALTH CARE INC., EMERA MAINE f/k/a BANGOR HYDRO-ELECTRIC COMPANY, and MAINE DEPARTMENT OF TRANSPORTATION,

Parties-In-Interest.

Presently before the Court is Plaintiff Wells Fargo Bank, N.A., as Trustee for Aegis

Asset (Jacked Securities Trust Mortgage Pass-Through Certificates Series 2004-4's Motion

for Additional Findings of Fact pursuant to M.R. Civ. P 52(b) and for an Amendment of

Judgment pursuant to M.R. Civ. P. 59(e), filed on July 28, 2017. Plaintiffs Motion seeks

redress from the Court's Order dated July 13, ;rnt7. For the reasons stated below, the Court

denies the Motion. II. BACKGROUND

The pertinent facts for the instant Motion can be briefly summarized as follows.

Plaintiff filed its Complaint on January 20, 2017, seeking the Court to Order that Plaintiff is

the owner of a mortgage executed by Nancy Bell and Helen Fonsell on July 10, 2004, and

purportedly assigned by Mortgage Electronic Registration Systems, Inc. ("MERS") to

Plaintiff on January 31, 2013.

Plaintiff filed its Complaint on January 20, 2016, seeking quiet title and declaratory

judgment. On July 29, 2017, the Court held a hearing and Plaintiff argued that it was the

owner of the mortgage at issue, because Plaintiff possesses the original note and mortgage;

33 M.R.S. § 508 validates the otherwise ineffective assignment from MF.RS; and that Ms.

Bell did not have standing to challenge Plaintiffs ownership of the mortgage through the

assignment from MERS.l The Comt issued an Order dated July 13, 2017, rejecting

Plaintiffs arguments and entering judgment in favor of Defendant and Parties-in-Interest.

Plaintiff timely filed this Motion, and states that the Court failed to address Plaintiff's

equitable trust argument.

II. STANDARD OF REVIEW

Pursuant to M.R. Civ. P. 52(b), the "court may ... amend its findings or make

additional findings and may amend the judgment if appropriate." However, the court need

not grant every request. In re Jacob B., 2008 ME 168, ,r 15, 959 A.2d 731 ("A trial court is

not required to make further findings in response to every post-judgment request for

findings pursuant to M.R. Civ. P. 52(a)."). Any motion made under M.R. Civ. P. S2(b) "must

include the proposed findings of fact and conclusions of law requested." Id.

1 Plaintiffs Counsel brietly stated that "There's certainly a trust ... but it's more than that ..." Other than that brief statement, Plaintiff did not otherwise develop or address its equitable tn1sl argument.

2 Motions brought under M.R. Civ. P. 52 do not provide a forum for the unsuccessful

party to reargue their case. Wandishin v. Wandishin, 2009 ME 73, ,r 19, 976 A.2d 949.

("Requests for additional fact-findings pursuant to M.R Civ. P. 52(b) should not be used to

attempt to require the court to explain its reasoning in reaching a particular result or to

reargue points that were contested at trial and have been resolved by the court's

decision.").

Motions made pursuant to M.R. Civ. P. 59(e) need not be granted unless "it is

reasonably clear that prejudicial error has been committed or that substantial justice has

not been done." Cates v. Farrington, 423 A.2d 539, 54-1 (Me. 1980) ("when the trial is

before a judge without a jury, such motions must be based on a manifest error of law or

mistake of fact."). The burden of proving harmful error rests with the moving party.

Clifford v. Klein, 463 A.2d 709, 714 (Me. 1983).

Ill. DISCUSSION

As a threshold matter, Plaintiff has not filed or offered proposed findings of fact

required by M.R. Civ. P. 52(b). Plaintiffs neglect provides grounds for the Court to dismiss

Plaintiffs Motion. See Eremita v. Marchiori, 2016 ME 160, ,r 3, 150 A.3d 336 ("Erernita's

motion did not include any proposed findings and therefore did not comply with the

requirements of Rule 52(b). With no proper motion for further findings and conclusions

before it, the court did not en by denying Eremita's request for relief.").

Even reaching the substance of Plaintiffs Motion, the Court is not persuaded that

Plaintiff is entitled to relief. Plaintiff states that the Court "did 11ot consider the equitable

trust argument made by Plaintiff on June 29, 2017, in open court." Plaintiff fleetingly

3 mentioned a "trust," at the Ilea ring, but did not in any way develop its equitable trust

argument at the Hearing.

Furthermore, at the end of its July 13, 2017 Order, the Court stated:

As the Law Court has addressed and rejected the proof provided by Plaintiff in this case, the Court does not find that Plaintiff is the owner of the mortgage. See also United States Bank Trust, N.A. v. Accredited Home Lenders, CV-15-228, 2017 Me. Super. LEXIS 60, at *5 (May 2, 2017) ("The court cannot decide here that the holder of the mortgage note, as a tram.jeree of MERS as nominee for defendant mortgagee, is the owner of the mort.qage as benejkiary of an equitable trust held by defendant without contradicting the /,aw Court's determination in Greenleaf'].

Wells Fargo Bani< v. Aegis Lending Corporation, PENSC-CV-2016-013 (Pen. Super. Ct., Pen.

Cty., July 13, 2017) (emphasis added). The plaintiff in Greenleaf also raised the equitable

trust argument, and it was rejected . (see Def.'s Ex. 1 at 11 ("lB]oth Maine and

Massachusetts have long followed the basic tenet that if the note and mortgage are held by

different entities, the mortgage holder holds the mortgage in trust for the holder of the

note.").) Moreover, the plaintiff in Greenleaf cited to the same cases that Plaintiff relies

upon in its present Motion. For all of these reasons, the Court declines to amend or alter its .

Order dated July 13, 2017, and denies Plaintiffs Motion.

The Entry is:

1) The Court DENIES Plaintiffs Motion for Additional rindings of Fact and for an Amendment of Judgment.

2) This Order shall be incorporated into the docket by reference pursuant to M.R. Civ. P. 79.

;J ,'

Dated : Aqgust _:_. 2017 , ' Ann M. Murray, Justice Superior Court

4 STATE OF MAINE SUPERIOR COURT PENOBSCOT, SS. CIVIL ACTION DOCKET NO. CV-16-13

WELLS FARGO BANK, N.A., as Trustee for Aegis Asset Racked Securities Trust Mortgage Pass-Through Certificates, Series 2004-4,

v. AEGIS LENDING CORPORATION, DECISION

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. as nominee for AEGIS LENDING, CORPORATION, NANCY J. BELL, STILLWATER IIEALTH CARE INC., EMERA MAINE f/k/a BANGOR HYDRO-ELECTRIC COMPANY, and MAINE DEPARTMENT OF TRANSPORTATION,

Presently before the Court is Plaintiff Wells Fargo Bank, N.A., as trustee for Aegis

Asset Backed Securities Trust Mortgage Pass-Through Certificates Series 2004-4's

Complaint for quiet title and for declaratory judgment. A trial was scheduled to be held on

June 29, 2017. On June 26, 2017, the parties filed a Stipulation of Facts. On June 29, 2017,

the parties who appeared, Plaintiff and Party-In-Interest Bell, relied on the Stipulation of

Facts and presented closing arguments to the Court. For the following reasons, the Court

grants Judgment to the Defendant and Parties-in-Interest on Plaintiffs Complaint. I. BACKGROUND

The relevant background underlying the present dispute is derived from the

Stipulation of Facts and Documents submitted by both parties, which can be briefly

summarized as follows. Party-in-interest, Nancy Bell, and Helen Fonsell received a loan for

$ 77,300.00, and signed a Note dated July 10, 2004. The note listed Aegis Lending

Corporation as the lender. Ms. Bell and Ms. Fonsell also executed a mortgage on July 10,

2004, in favor of Mortgage Electronic Registration Systems, Inc. ("MERS"), as nominee of

Aegis, securing the property located at 499 Wilson Street in Brewer, Maine

("Property"). Also on July 10, 2004, Ms. Bell and Ms. Fonsell signed an adjustable rate rider,

which provided for a fluctuating interest rate on the note.

Unfortunately, Ms. Fonsell passed away in 2006. On April 11, 2012, Ms. Bell signed a

"Home Affordable Modification Agreement" which, inter alia, recognized that Ms. Bell was

experiencing financial difficulties, modified the maturity date of the loan, and changed the

total amount due to $ 137,094.41. It was again recited that MERS was "acting solely as a

nominee of the lender." On January 31, 2013, MERS purported to assign the mortgage in

question to Wells Fargo Bank NA., the plaintiff in this case.

Plaintiff filed its Complaint on January 20, 2016, seeking quiet title and declaratory

judgment. The original mortgagee, Aegis Lending Corporation, as well as MERS, Nancy Bell,

Stillwater Health Care, Inc., Emera Maine f/k/a Bangor Hydro-Electric Company, and the

Maine Department of Transportation have all been served. Only Party-In-Interest, Nancy

Bell, has filed an answer or otherwise appeared in this matter.

2 II. DISCUSSION

As a threshold matter, Plaintiffs demand for quiet title is inappropriate in the

present proceedings. Maine law makes a quiet title action available to "a person in

possession of property.. , or a person who has conveyed such property.. , [and has been] in

uninterrupted possession of such property for 4 years or more.. . ." 14 M.R.S. § 6651. As

stated by the Court in United States Bank, 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." United States Bani< v. Decision One Mortg. Co.,

CV-15-65, 2016 Me. Super. LEXIS 173, at* 6 (July 26, 2016), (citing to 14 M.R.S. §§ 6651­

6658).

Moving on to Plaintiff's request for declaratory judgment, declaratory judgment

actions are also governed by statute. 14 M.R.S. §§ 5951-5963. The Declaratory Judgment

Act permits courts to "declare rights, status and other legal relations" if declaration will

"terminate the controversy or remove an uncertainty." 14 M.R.S. §§ 5953, 5957 (2015). To

"satisfy the controversy requirement, the case must be ripe for judicial consideration and

action." Wagner v. Secretary of Stute, 663 A.2d 564, 567 (Mc. 1995) ("Ripeness concerns

the fitness of the issue for judicial decision and the hardship to the parties of withholding

court consideration.").

This case is unlike a typical declaratory judgment action, such as where a court is

called upon to declare the location of a boundary line and the court's decision terminates

the controversy. In this case, if Plaintiff fails to establish its ownership of the mortgage, the

controversy will continue. Therefore, it is doubtful that this action for a declaratory

judgment is proper. See, e.g., United States Bank Nat'/ Ass'n v. Decision One Mortg. Co., No.

3 RE-2016-115, 2016 Me. Super. LEXIS 227, at *4 (Nov. 21, 2016) ("In the current case, it is

not apparent that a determination by the Court as to whether 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.");

Fannie Mae v. America's Wholesale Lender, No. RE-15-068, 2016 Me. Super. LEXIS 37, at *3

(Mar. 1, 2016); United States Bank Trust, N.A. v. Accredited Home Lenders, No. CV-15-228,

2017 Me. Super. LEXIS 60, at *4 (May 2, 2017).

However, even if a declaratory judgment action were appropriate, Plaintiff's still

cannot prevail on its complaint. Addressing the substance of Plaintiff's arguments, Plaintiff

argues that under 33 M.R.S. § 508, the assignment from MERS to Plaintiff is presumed to be

valid. 1 However, 33 M.R.S. § 508 only applies to final foreclosure judgments. See also

1 33 M.R.S. § 508 provides:

1. Authority presumed. A person or entity that is named as nominee to hold a mortgage for another person or entity, in an instrument creating or assignlng the mortgage, is presumed to have the authority to execute an assignment, partial release, discharge or other instrument that affects the title to the mortgaged properly unless the person or entity on whose behalf the nominee is named: A. Explicitly negates such authority within the instrument in which the nominee is named; or B. Executes a separate Instrument that explicitly negates such authority and that is recorded in the registry of deeds within the county or district in which the mortgaged property is located.

2. Instrument valid. An assignment, partial release, discharge 01· other instrument affecting the title to mortgaged property or any interest in the property that is otherwise valid and that is executed by a nominee mortgagee with authority as provided in subsection 1 is valid even if the assignment, partial release, discharge or other instrument docs not state the authority of the nominee mortgagee to take the action.

3. Statement not a limitation of authority. A statement in an instrument described in this section to the effect that, for purposes of recording, the nominee mortgagee is the mortgagee of record, or any statement of similar meaning, may not be considered to be a limitation upon the authority of the nominee mortgagee.

4. Application. This section applies exdusivcly to any discharge or partial release issued prior to the effective date of this section, whether made hy a nominee mortgagee or by a subsequent assignee; to discharges or partial releases issued on or subsequent lo the effective date of this section, whether made by a nominee mortgagee or by a subsequent assignee; and to any assignment or other instrument affecting title to a mortgaged property that is the subject of a foreclosure j11d,gme11t or other legal jud,qment affecting title to a mortgaged property for which, as of the effective date of this

4 United States Bonk v. Decision One Mortg. Co., CV-15-65, 2016 Me. Super. LEXIS 173, * 4 n.4

(July 26, 2016) (stating that the plaintiff relied upon 33 M.R.S. § 508 "for the proposition

that the Maine legislature recognizes MERS's presumption of authority to assign all

interests in a mortgage to a successor in interest. That section, however, applies to

assignments subject to a final foreclosure judgment. .. Section 508 is inapplicable to the

present case.") (citations omitted); Bank of N. Y. Mellon v. First Magnus Fin. Corp., CV-15­

172, 2016 Me. Super. LEXlS 132, at * 2 n.1 (July 5, 2016) (The "Bank cites 33 M.R.S. §

508 for the proposition that the Maine legislature recognizes MERS's presumption of

authority to assign ,111 interests in a mortgage to a successor in interest. That section,

however, applies to assignments subject to a final foreclosure judgment. ..The statute does

not apply here.") (citations omitted); Tamir v. United States, 566 B.R. 278, 281 (D. Me.

2016) ("After {iree_I!lec1f, the Maine Legislature enacted new legislation clarifying the

authority of nominee mortgagees like MERS to execute assignments, discharges, and partial

releases...(codified at 33 M.R.S. § 508 (Pamph. 2015) (applying only to assignments that

are the subject of a final foreclosure judgment).").

Plaintiff next argues that Ms. Bell does not have standing to challenge the

assignment from MERS to Plaintiff. The Court finds that the mortgagor has a legally

enforceable interest in the mortgage entitling her to enforce its terms. In this case, this

interest is sufficient to provide Ms. Bell with standing to challenge the mortgage

assignment. 2 Furthermore, this argument was presented to the Law Court in the plaintiff's

section, either the period for appeal has run with no appeal having been filed or all rights of appeal have been exhc1usted. (emphasis added). i This argument was also considered and rejected by the Maine District Courl (Cumberland, Woodman, J.). Deutsche Bani( Nat'/ '/'rnst Co. v. Home Funds Direct, No. RE-15-10 (Me. Dist. Ct., Cumberland, July 5. 20'17) ("[A mortgagor! has a legally enforceable interest in the mortgage, entitling him to enforce its terms. f'l'he

5 hrief in Greenleaf (Bell ex. 1 at 13), and was not successful. In Greenleaf, the mortgagor

challenged the assignment from MERS. The Law Court considered the mortgagor's

challenge, and did not hold that the mortgagor lacked standing to challenge the mortgage

assignment. (See Bell ex. 1 at 13.); Greenleaf, 2014 ME 89, 96 A.3d 700.

Moving to the final issue in this case, Plaintiff states that it has met the requirements

in Greenleaf and has established its ownership in the mortgage. In Greenleaf, the Law Court

held that an assignment by MERS, acting as nominee, was insufficient to convey ownership

rights in the mortgage (as necessary to foreclose on the properly), and that a MERS

assignment transferred the right to record the mortgage and nothing more. Greenleaf,

2014 ME 89, ,r,r 14-17, 96 A.3d 700. In Green/ea}; the plaintiff provided evidence of a note

endorsed in blank. Id. ,r 11. Plaintiff also offered into evidence "the original mortgage, a

mortgage assignment, and a certification of a merger." Id. ,r 13. Despite this evidence, the

Law Court found that the plaintiff had not met its burden to prove ownership of the

mortgage. Id. ,r,r 13-17. Specifically, the Court noted that proof of the original mortgage

only established the fact that the borrowers had executed a mortgage on the property; that

the MERS assignment only transferred the right to record the mortgage; and that

notwithstanding evidence of the plaintiff's ownership of the note, the plaintiff did not

establish ownership of the mortgage. Id.

To the extent that Plaintiff argues that its possession of the original mortgage is

sufficient to establish ownership of the mortgage, the Court docs not agree. In Greenleaf,

the Law Court stated that possession of the note was sufficient to establish ownership of

mortgagOl''s J interest remains whether Plaintiff attempts to assert an ownership interest in Llir. mortgage through a complaint for foreclosure or, as here, through a mm plaint for declaratory Judgment."),

6 the note, because the note is a negotiable instrument and governed under Maine's

Uniform Commercial Code. See Greenleaf, 2014 ME 89, ,r,r 10-11, 96 A.3d 700 (stating that

"Section 3-1301 permits a party to enforce a note if it is the 'holder' of the note, that is, if it

is in possession of the original note that is indorsed in blank.") The mortgage, however, is

not a negotiable instrument. Id. ,r 12 ("Thus, whereas a plaintiff who merely holds or

possesses-but does not necessarily own-the note satisfies the note portion of the

standing analysis, the mortgage portion of the standing analysis requires the plaintiff to

establish ownership of the mortgage."). Thus, the Law Court in Greenleaf made clear that

possession of mortgage is not sufficient to establish ownership of the mortgage.

As the Law Court has addressed and rejected the proof provided by Plaintiff in this

case, the Court does not find that Plaintiff is the owner of the mortgage. See also United

States Bank Trust, N.A. v. Accredited Home !,enders, CV-15-228, 2017 Me. Super. LEXIS 60, at

*5 (May 2, 2017) ("The court cannot decide here that the holder of the mortgage note, as a

transferee of Mims as nominee for defendant mortgagee, is the owner of the mortgage as

beneficiary of an equitable trust held by defendant without contradicting the Law Court's

determination in Greenleaf").

1) The Court declines to declare that Plaintiff owns the mortgage in question and therefore Judgment is entered for the Defendant and Parties-In-Interest on Plaintiffs Complaint for quiet title and declaratory judgment.

2) This Order shall be incorporated into the docket by reference pursuant to M.R. Civ. P. 79.

Dated: July 13, 2017 Ahn M. Murray, Justice Superior Court