FOR PLAINTIFF: JOHN MCVEIGH, ADAM J SHUB, PRETI FLAHERTY BELIVEAU PACHIOS LLP, PORTLAND ME.
FOR DEFENDANT: MARK E PORADA, GAVIN MCCARTHY, PIERCE ATWOOD, MERRILLS WHARF, PORTLAND ME.
ORDER ON PLAINTIFF'S MOTION TO DISMISS
John O'Neil, Jr.,
Defendant Howard Patten was an owner of two development companies: Sanders Point, LLC, and P & S Associates, LLC. On July 25, 2007, P & S executed and delivered to BNE a Demand Note. Defendant Howard Patten also executed a separate individual guaranty of the P & S Note which he secured by granting Plaintiff a mortgage on his residence at 6 Spencer Way Property. Defendant Howard Patten further personally guaranteed the obligations of a separate loan from Plaintiff to Sanders Point, LLC, again securing the guarantee with a mortgage to Plaintiff on his residence at 6 Spencer Way.
Plaintiff asserts that both Sanders Point, LLC and P & S Associates, LLC have defaulted on the terms of their notes. Plaintiff has foreclosed on both companies, and applied the proceeds to their debts. Plaintiff contends that a deficiency remains. Plaintiff is now seeking a judgment of foreclosure on the 6 Spencer Way Property. Defendant contests the defaults and brings counterclaims for accounting, breach of fiduciary duty, intentional misrepresentation, negligent misrepresentation, and claims under the Maine Unfair Trade Practices Act. Plaintiff moves the court from an exemption from the foreclosure mediation process.
A. Foreclosure Mediation
Plaintiff moves the court for an exemption from the foreclosure mediation process on the basis that the mortgage was issued as collateral to secure a commercial loan. Defendants object, arguing that they are owner-occupiers of the property, and therefore entitled to mediation pursuant to 14 M.R.S § 6321-A(3) and M.R. Civ. P. 93.
According to 14 M.R.S § 6321-A(3), " the court shall adopt rules to establish a foreclosure mediation program to provide mediation in actions for foreclosure of mortgages on owner-occupied residential property with no more than 4 units that is the primary residence of the owner-occupant." 14 M.R.S § 6321-A(3) (2013). Rule 93 defines " owner-occupied" as: " an individual who is the mortgagor of a residential property that is that individual's primary residence. The term may include two or more individuals who are joint mortgagors of that residential property." M.R. Civ. P. 93(a)(3). There is an exemption to the mediation program and any delays associated with required mediation of foreclosure matters for commercial loans. M.R. Civ. P. 93(d)(2). " Commercial Loan" is defined as: " a loan made to a borrower in which the proceeds of the loan are not used, in whole or in part, for personal, family or household purposes, and/or are not used to refinance a loan made in whole or in part for personal, family or household purposes." M.R. Civ. P. 93(a)(1). Moreover, M.R. Civ. P. 93(d))(2) states: " In any actions where the mortgage acts as collateral given solely to secure a commercial loan, counsel for the plaintiff, ... may file and serve with the complaint a motion requesting exemption from the deferral." M.R. Civ. P. 93(d)(2). However, the court may still require mediation and the associated delays in court proceedings where the court finds that " its application is in the best interests of justice."
In the case before the court, Plaintiff is correct that the loan in question fits the definition of a commercial loan. Therefore, it is likely that M.R. Civ. P. 93(d)(2) applies. However, regardless of the commercial nature of the loan at its origination, in this case in which Defendant meets the definition of an " owner-occupier" and has requested mediation, it is in the best interest of justice to require mediation.
B. Motion to Dismiss Counterclaims
a. Statute of Limitations
Plaintiff claims that any counterclaim that Defendant could bring would have accrued at the time of the closing of the commercial loan in July 2007, and therefore Defendant's counterclaims are barred by the statute of limitations. Where a plaintiff asserts that the cause of action was fraudulently concealed from the plaintiff or where a plaintiff asserts a cause of action of fraud, the statute of limitations is tolled until the plaintiff discovers the fraud or would have discovered the fraud had the plaintiff exercised due diligence and ordinary prudence. 14 M.R.S 859 (2014) (" If a person, liable to any action mentioned, fraudulently conceals the cause thereof from the person entitled thereto, or if a fraud is committed which entitles any person to an action, the action may be commenced at any time within 6 years after the person entitled thereto discovers that he has just cause of action, except as provided in section 3580 .); Westman v. Armitage, 215 A.2d 919, 921-22 (Me. 1966). In this case, Defendant (or Counterclaim-Plaintiff) alleges that Plaintiff fraudulently concealed information about ...