May 27, 2014
MECHANICS SAVINGS BANK, Plaintiff
TOWN OF RICHMOND and MALAMUTE INVESTMENT MANAGEMENT, INC., Defendants and HOWARD HOFFMAN, Party-in-Interest
For Plaintiff: Mechanics Savings Bank, Auburn, ME; Sonia Buck, Esq., Linnell, Choate & Webber, Auburn, ME.
For Defendants: Malamute Investment Management, Inc., Scarborough, ME; Town of Richmond, Town of Richmond; Elliott R. Teel, Esq., Portland, ME.
For Party-in-Interest: Howard Hoffman, Scarborough, ME.
DECISION AND JUDGMENT
Andrew M. Horton, Justice, Superior Court.
Before the court is plaintiff Mechanics Savings Bank's [Mechanics] motion for summary judgment. Mechanics' properly supported facts are deemed admitted because defendants have been precluded from filing opposing facts. ( See 3/27/14 Order.) The court elects to decide the Motion without oral argument See M.R Civ. P. 7(b)(7).
This case is about who owns the property at 19 Frog Lane in Richmond, Maine. Defendant Malamute Investment Management, Inc. (" Malamute") conveyed the property to Celia Winslow in 2006. (Supp. S.M.F. ¶ 2.) Party-in-Interest Howard Hoffman is the sole shareholder and owner of Malamute and is also married to Celia Winslow. (Supp. S.M.F. ¶ 3.) On December 27, 2006, Winslow granted a mortgage to plaintiff Mechanics. (Supp. S.M.F. ¶ 5.) The mortgage accurately described the property but failed to include the Frog Lane street number assigned to the property. (Supp. S.M.F. ¶ 6.) This omission created future taxing errors that gave rise to this case.
Celia Winslow defaulted on her mortgage and Mechanics commenced foreclosure proceedings on April 8, 2008. (Supp. S.M.F. ¶ 7.) Mechanics received a judgment of foreclosure, but the judgment incorrectly identified the address of the property as 3 Frog Lane instead of 19 Frog Lane. (Supp. S.M.F. ¶ ¶ 11-12.) Mechanics then obtained title to the property as high bidder at the foreclosure auction. (Supp. S.M.F. ¶ 13.) Although the foreclosure deed is correct, the accompanying Maine Real Estate Transfer Tax Form failed to properly identify the property. (Supp. S.M.F. ¶ 14.) As a result, the Town of Richmond incorrectly named Mechanics as the owner of Lot 4.1 instead of Lot 4.2 on its tax map. (Supp. S.M.F. ¶ ¶ 15-16.)
The Town of Richmond received notice of the foreclosure, but continued to assess Malamute for the property at 19 Frog Lane. (Supp. S.M.F. ¶ ¶ 8-9.) When the taxes went unpaid from 2008-2011, the Town of Richmond sent the statutorily required tax lien notices to Malamute instead of Mechanics. (Supp. S.M.F. ¶ ¶ 17, 29.) Meanwhile, the Town sent tax lien notices for Lots 4.1 and 4.11 to Mechanics, which Mechanics believed was the property that it owned. (Supp. S.M.F. ¶ ¶ 22-23.) Mechanics paid the tax bill for those properties in January 2012. (Supp. S.M.F. ¶ 23.) Eventually, Hoffman paid the outstanding taxes for 19 Frog Lane, despite knowing that neither Malamute nor Winslow owned the property. (Supp. S.M.F. ¶ 27.) The Town of Richmond executed a quitclaim deed to Malamute for the property after Hoffman paid the arrears. (Supp. S.M.F. ¶ 30.) Only after Hoffman paid the taxes did Mechanics discover the error. (Supp. S.M.F. ¶ 28.) The Town of Richmond now recognizes Mechanics as the owner of the property at 19 Frog Lane. (Supp. S.M.F. ¶ 36.)
Mechanics filed its complaint on October 26, 2012. It seeks declaratory judgment pursuant to 14 M.R.S. § 5953 that it owns the property located at 19 Frog Lane in Richmond, Maine. Following a discovery dispute between the parties, the court sanctioned defendants for failing to appear for properly noticed depositions and violating a court order. The court ordered that defendants could not file opposing statements of material fact but allowed them to file opposing legal memoranda.
1. Standard of Review
" Summary judgment is appropriate when there is no genuine issue of material fact that is in dispute and, at trial, the parties would be entitled to judgment as a matter of law." Fitzgerald v. Hutchins, 2009 ME 115, ¶ 9, 983 A.2d 382. " An issue is genuine if there is sufficient evidence supporting the claimed factual dispute to require a choice between the differing versions; an issue is material if it could potentially affect the outcome of the matter." Brown Dev. Corp. v. Hemond , 2008 ME 146, ¶ 10, 956 A.2d 104.
2. Tax Lien Foreclosure
Mechanics argues that the Town of Richmond's tax lien foreclosure was invalid because the Town did not send notice of the liens and impending foreclosure to the record owner as required by statute. Malamute argues that because Mechanics did not record its foreclosure deed until March 22, 2011, it was not the record owner and therefore not entitled to receive notice of the tax liens and impending foreclosure.
Under Maine's tax lien statute,
At the time of the recording of the tax lien certificate in the registry of deeds, in all cases the tax collector shall file with the municipal treasurer a true copy of the tax lien certificate and shall hand deliver or send by certified mail, return receipt requested, to each record holder of a mortgage on that real estate, to the holder's last known address, a true copy of the tax lien certificate. If the real estate has not been assessed to its record owner, the tax collector shall send by certified mail, return receipt requested, a true copy of the tax lien certificate to the record owner.
36 M.R.S. § 942 (2013). Similarly, the foreclosure section provides:
The municipal treasurer shall notify the party named on the tax lien mortgage and each record holder of a mortgage on the real estate not more than 45 days nor less than 30 days before the foreclosing date of the tax lien mortgage, in a writing signed by the treasurer or bearing the treasurer's facsimile signature and left at the holder's last and usual place of abode or sent by certified mail, return receipt requested, to the holder's last known address of the impending automatic foreclosure and indicating the exact date of foreclosure.
36 M.R.S. § 943.
" [S]tatutes governing the procedures whereby an owner may lose his property for the nonpayment of taxes are to be strictly construed against the taxing authority." Johnson v. Town of Dedham , 490 A.2d 1187, 1190 (Me. 1985) (quoting City of Augusta v. Allen , 438 A.2d 472, 474 (Me. 1981)). If a-town fails to comply strictly with statutory requirements, its tax lien is void. Cary v. Town of Harrington , 534 A.2d 355, 358 (Me. 1987).
The Town of Richmond mistakenly sent the lien and foreclosure notices to Malamute, even though Malamute was no longer the record owner of the property as of 2006. Malamute argues that Mechanics was not the record owner at the time due to its failure to record, but Malamute was also not the record owner because it had conveyed the property to Winslow. Because only Malamute received the notices, they were sent to the wrong party, regardless of whether Winslow or Mechanics was the record owner. The Town of Richmond, therefore, failed to comply with the statutory requirements. Accordingly, its tax liens and subsequent foreclosure of the property are void.
Malamute received a quitclaim deed from the Town of Richmond. " [A] quit claim deed is only effective to convey whatever interest the grantor may have had in the land." Ricker v. United States , 417 F.Supp. 133, 140 (D. Me. 1976). Because the Town had no interest to convey, Malamute received no interest in 19 Frog Lane.
The entry is
Mechanics' motion for summary judgment is GRANTED.
The court declares that Plaintiff Mechanics Savings Bank owns the property at 19 Frog Lane in Richmond, Maine, which property is shown on the Town of Richmond Tax Map U13, Lot 4.2, and is more particularly described at Sagadahoc County Registry of Deeds Book 3277, Page 334.
Pursuant to M.R. Civ. P. 79(a), the clerk is hereby directed to incorporate this Decision and Judgment by reference in the docket.