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Nationstar Mortgage, LLC v. Halfacre

Supreme Court of Maine

July 5, 2016

NATIONSTAR MORTGAGE, LLC
v.
TIMOTHY E. HALFACRE

          Argued: June 9, 2016

         On the briefs:

          Paula-Lee Chambers, Esq., and Maura K. McKelvey, Esq., Hinshaw & Culbertson LLP, Boston, Massachusetts, for appellant Nationstar Mortgage, LLC

          Frank D'Alessandro, Esq., Pine Tree Legal Assistance, Portland, for appellee Timothy E. Halfacre

         At oral argument:

          Maura K. McKelvey, Esq., for appellant Nationstar Mortgage, LLC

          Frank D'Alessandro, Esq, for appellee Timothy E. Halfacre Cumberland County Superior Court docket number RE-2014-47 For Clerk Reference Only

          Panel: ALEXANDER, MEAD, GORMAN, JABAR, and HJELM, JJ.

          PER CURIAM

         [¶1] Nationstar Mortgage, LLC, appeals from a summary judgment entered by the Superior Court (Cumberland County, Wheeler, J.), determining that Nationstar's foreclosure action against Timothy E. Halfacre was barred by the doctrine of res judicata. The appeal comes to us in an uncommon posture, with Nationstar now asserting, after several shifts of position, that it lacked standing to bring the action, and that therefore the action should be dismissed without prejudice so that Nationstar, or perhaps another entity, can initiate a third foreclosure action against Halfacre.

         [¶2] Because Nationstar lacks standing to maintain this action, the summary judgment must be vacated and Nationstar's complaint must be dismissed. We leave to the trial court the determination of whether a sanction should be imposed in this matter, pursuant to M.R. Civ. P. 11(a), for Nationstar's conduct in this case. Likewise, we leave to the trial court the determination of any appropriate remedies or sanctions should Nationstar initiate another foreclosure or other action to collect on the unpaid debt.

         [¶3] The instant foreclosure action was Nationstar's second foreclosure action against Halfacre. Nationstar's first foreclosure action, filed in 2012, went to trial in 2013. Following the trial, the court (Mills, J.) found that Nationstar had failed to prove the elements of its foreclosure claim and entered judgment for Halfacre. Nationstar did not appeal that judgment, electing instead to file a new foreclosure action against Halfacre, asserting the same foreclosure claims as had been decided after trial in 2013.

         [¶4] As a result of Nationstar's documentation errors and litigation choices, we again face a plaintiff in a foreclosure action that lacks standing to bring the action pursuant to 14 M.R.S. § 6321 (2014).[1] See generally Homeward Residential, Inc. v. Gregor, 2015 ME 108, ¶¶ 13-20, 122 A.3d 947.[2] In this case, Nationstar represented to the trial court that it had cured its lack of standing, and supported that representation with a quitclaim assignment that Nationstar had obtained from the original lender, Residential Mortgage Services, Inc. (RMS), in the course of the litigation. The appeal record, however, also includes a different quitclaim assignment that demonstrates that RMS had assigned all of its interest in the mortgage to the Federal National Mortgage Association (Fannie Mae) one day before RMS purported to assign the same interest to Nationstar.

         [¶5] At oral argument, Nationstar conceded that it had actual knowledge of the Fannie Mae assignment and that the RMS assignment to Nationstar was not effective.[3] See 33 M.R.S. § 201 (2015); Spickler v. Ginn, 2012 ME 46, ¶ 12, 40 A.3d 999 ("[A] subsequent grantee obtains title to the property notwithstanding a prior conveyance if the subsequent grantee both (1) has no actual notice of the first conveyance, and . . . (2) recorded his deed before the first grantee recorded hers." (emphasis added)). Thus, Nationstar does not, in fact, have standing to foreclose on the mortgage. See Bank of Am., N.A. v. Greenleaf, 2014 ME 89, ¶¶ 9, 12-17, 96 A.3d 700.

         [¶6] Because Nationstar lacked standing in the trial court, we must vacate the trial court's judgment. See Gregor, 2015 ME 108, ¶ 24, 122 A.3d 947 ("[The court cannot] decide the merits of the case when the plaintiff lack[s] standing pursuant to section 6321."). We recognize that the trial court apparently was not presented with the Fannie Mae quitclaim assignment, and therefore that the trial court had no reason to question the quitclaim assignment to Nationstar and the representations of counsel that Nationstar's assignment was effective. We remand the matter for ...


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