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Ocean Communities Federal Credit Union v. Roberge

Supreme Court of Maine

July 26, 2016

OCEAN COMMUNITIES FEDERAL CREDIT UNION
v.
GUY R. ROBERGE et al.

          Submitted On Briefs: June 22, 2016

          Elizabeth LaPierre, Esq., and Bridget McMahon, Esq., Legal Services for the Elderly, Scarborough, for appellant Guy R. Roberge

          William J. Gallitto, III, Esq., Bergen & Parkinson, LLC, Saco, for appellee Ocean Communities Federal Credit Union

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

          GORMAN, J.

         [¶1] Guy R. Roberge appeals from a summary judgment entered in the District Court (Biddeford, Mulhern, J.) in favor of Ocean Communities Federal Credit Union (the Credit Union) on the Credit Unions complaint for residential foreclosure. Roberge contends that the court erred by concluding that the Credit Union established its entitlement to a summary judgment as to each element of foreclosure in accordance with M.R. Civ. P. 56. We agree, and vacate the judgment and remand for a trial.

         I. BACKGROUND

         [¶2] On February 17, 2015, the Credit Union filed a foreclosure complaint in the District Court against Roberge and Lisa H. Pombriant concerning residential property in Biddeford. The Credit Union alleged that Roberge executed a note for a home equity line of credit on September 17, 2008, and that Roberge and Pombriant mortgaged the Biddeford property to secure Roberges loan. The Credit Union further alleged that the City of Biddeford had placed tax liens on the property, and that the Credit Union had paid the amounts owed for the taxes, resulting in the Citys release of the liens. The Credit Union asserted that Roberge was in default on the note and that Roberge and Pombriant had breached the mortgage by failing to reimburse the Credit Union for the tax lien advances. Roberge disputed the complaint.[1]

         [¶3] The Credit Union moved for a summary judgment on June 15, 2015. For each of its accompanying statements of material facts, the Credit Union cited to either (1) the affidavit of Claude Morgan, the Credit Unions collections manager, in which Morgan referred to three attached exhibits- the note, the mortgage, and the notice of default, or (2) the affidavit of William J. Gallitto III, the Credit Unions attorney. By judgment dated August 18, 2015, the court granted a summary judgment for foreclosure and sale in favor of the Credit Union in the amount of $144, 998.97. Roberge appeals.

         II. DISCUSSION

         [¶4] Roberge challenges the courts entry of a summary judgment on the ground that the Credit Union did not establish each of the elements necessary to foreclose according to the requirements of Rule 56. We consider the evidence in the summary judgment record in the light most favorable to Roberge, as the nonmoving party, to determine, de novo, whether the parties summary judgment filings reveal any genuine dispute of material fact and whether the Credit Union is entitled to a judgment as a matter of law based on the undisputed facts. See M.R. Civ. P. 56(c); HSBC Bank USA, N.A. v. Gabay, 2011 ME 101, ¶ 8, 28 A.3d 1158; Beneficial Me. Inc. v. Carter, 2011 ME 77, ¶ 6, 25A.3d96.

         [¶5] Although summary judgment practice has long used consistent standards, we have, in the past decade, detailed the application of those requirements to residential foreclosure matters in particular. In doing so, "[w]e have repeatedly emphasized the importance of applying summary judgment rules strictly in the context of residential mortgage foreclosures." HSBC Mortg. Servs., Inc. v. Murphy, 2011ME59, ¶9, 19A.3d815 (quotation marks omitted); see Gabay, 2011 ME 101, ¶ 9, 28 A.3d 1158.

         [¶6] A party moving for a summary judgment in a foreclosure case must comply with several layers of requirements. First, the motion must be accompanied by a "separate, short, and concise statement of material facts, set forth in numbered paragraphs" with only one fact per paragraph. M.R. Civ. P. 56(h)(1). Each fact must be supported by a citation to "the specific portions of the record from which each fact is drawn." Gabay, 2011 ME 101, ¶ 9, 28 A.3d 1158 (quotation marks omitted); see M.R. Civ. P. 56(h)(1), (4).

         [¶7] In the context of mortgage foreclosures, this supporting evidence primarily consists of affidavits signed by bank employees or representatives. Murphy, 2011 ME 59, ¶ 9, 19 A.3d 815. "Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." M.R. Civ. P. 56(e); see Carter, 2011 ME 77, ¶ 6, 25 A.3d 96. Thus, the record references in both the statements of material facts and the affidavits themselves "must refer to evidence of a quality that could be admissible at trial." Gabay, 2011 ME 101, ¶ 2 n.2, 28 A.3d 1158 (quotation marks omitted); see Carter, 2011 ME 77, ¶ 6, 25 A.3d 96; Murphy, 2011 ME 59, ¶ 9 & n.6, 19 A.3d 815.

         [¶8] When an affidavit refers to records as the basis for the affiants knowledge, those records must be attached: "Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith."[2] M.R. Civ. P. 56(e) (emphasis added); see Cach, LLC v. Kulas, 2011 ME 70, 10, 21 A.3d 1015; see also Arrow Fin. Servs., LLC v. Guiliani, 2011 ME 135, ¶¶ 12-14, 32A.3d 1055. For example, in Kulas, the plaintiff submitted with its motion for summary judgment a bank officers affidavit stating that the plaintiff obtained the defendants account pursuant to an assignment from the bank, and referring to "computerized and hard copy books and records" of the bank to support the fact of the assignment; none of those records was attached to the affidavit. 2011 ME 70, ¶¶ 3, 10, 21 A.3d 1015 (quotation marks omitted). We concluded that "[w]ithout a sworn or certified copy of the assignment, the summary judgment record does not support [the plaintiffs] assertion that it was the assignee of [the defendants] account, " and we vacated the summary judgment in favor of the plaintiff Id. ¶¶ 10, 12.

         [¶9] Indeed, in foreclosure cases, "the information supplied by the affidavits is largely derivative because it is drawn from a businesss records, and not from the affiants personal observation of events." Murphy, 2011 ME 59, ¶ 9, 19 A.3d 815. Business records are hearsay and therefore inadmissible pursuant to M.R. Evid. 802 unless they meet the requirements of the business records exception in M.R. Evid. 803(6). Murphy, 2011 ME 59, ¶ 10, 19 A.3d 815. We review the trial courts foundational findings as to the admissibility of evidence for clear error and, if the admissibility of the evidence is established by undisputed foundational facts, we review the courts consideration of that evidence for an abuse of discretion. Carter, 2011 ME 77, ¶ 9, 25A.3d96.

         [¶10] To qualify documents for the business records exception, the moving party first must establish that the affiant is the custodian of the records "or another qualified witness." M.R. Evid. 803(6); see Homeward Residential Inc. v. Gregor,2015 ME 108, ¶ 14 n.11, 122 A.3d 947; Murphy,2011 ME 59, ΒΆ 10, 19 A.3d 815. "A qualified witness is one who was intimately involved in the daily operation of the business and whose testimony showed the firsthand nature ...


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