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Bank of America, N.A. v. Kelly

Superior Court of Maine, Cumberland

November 24, 2014

BANK OF AMERICA, N.A., Plaintiff
v.
GEORGE J. KELLY, JR., Defendant.

ORDER ON MOTION FOR SANCTIONS

Jayce A Wheeler, J.

This matter is before the court on defendant's motion tor sanctions. Defendant argues that plaintiff must be sanctioned for failing to mediate in good faith as required by the Foreclosure Diversion Program under M.R. Civ. P. 93(j). For the following reasons, defendant's motion for sanctions is granted.

BACKGROUND

Plaintiff filed its complaint for foreclosure in this case more than two years ago, on April 13, 2012. Since then, the parties have engaged in multiple mediation sessions, the most recent of which was held on February 7, 2014. On that day, after 8 months of mediation, the plaintiff requested an entirely new financial packet from the defendant, claiming it never received the documents necessary to process a loan modification. (2/7/14 Mediator's Report of Noncompliance.) The mediator found that this conflicted with the plaintiff's prior representations and issued a report of noncompliance. Defendant requested sanctions, which the court granted on May 6, 2014. (5/6/14 Order.)

While defendant's first motion for sanctions was pending, defendant began resubmitting the requested documents. (1st McKelway Aff, ¶¶ 16-20.) On June 25, 2014, defendant's housing counselor contacted the servicer for a status update and the servicer informed defendant that it could not process the modification request because the profit and loss statement submitted by defendant did not have a business name on it. (1st McKelway Aff. ¶ 27.) Defendant's housing counselor explained that defendant does not have a business name-he simply uses his own name, but the servicer requested a letter explaining that he does business under his own name. (1st McKelway Aff. ¶ 27.) Up to that point, defendant had already submitted multiple profit and loss statements, and plaintiff never objected to their form. (1st McKelway Aff. ¶ 28.) Defendant's housing counselor mailed the letter on June 30 along with an updated profit and loss statement for the month of May. (1st McKelway Aff. ¶ 30.) Defendant filed the motion for sanctions on July 7, 2014.

On August 8, 2014, the loan servicer told defendant's housing counselor that the only document it needed was a bank statement for July 2014, showing defendant's monthly social security benefit. (2nd McKelway Aff. ¶ 8.) Defendant had already submitted multiple documents showing his social security income benefit. (2nd McKelway Aff. ¶ 9.) Since August 8, 2014, plaintiff has not notified defendant that he needed to submit any other documents. At argument on October 30, 2014, plaintiff's counsel stated that the loan modification request could not be processed because defendant has failed to submit an up-to-date profit and loss statement.

DISCUSSION

Under Rule 93(j) and 14 M.R.S. § 6321-A(12) (2013), the court may impose sanctions on a party for failure to mediate in good faith. Bayview Loan Servicing, LLC v. Bartlett, 2014 ME 37, ¶ 12, 87 A.3d 741. In Bayview, the Law Court identified several factors for the court to consider in imposing sanctions, including:

(1) the purpose of the specific rule at issue;
(2) the party's conduct throughout the proceedings;
(3) the party's basis for its failure to comply;
(4) prejudice to other parties; and
(5) the need for the orderly administration of justice.

Id. "The court should also consider the purpose to be served by imposing sanctions, including penalizing the noncompliant party and deterring similar conduct." Id. The court may also consider the effect violations have on the adverse party. Id. ΒΆ 13. A showing of bad ...


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