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Estate of Frost

Supreme Court of Maine

August 16, 2016

ESTATE OF BARBARA M. FROST

         Reporter of Decisions

          Argued: May 3, 2016

         On the briefs:

          John F. Lambert, Jr., Esq., and Abigail C. Varga, Esq., Lambert Coffin, Portland, for appellant Nancy Gamash

          Bradley M. Lown, Esq., Coughlin, Rainboth, Murphy & Lown, P.A., Portsmouth, New Hampshire, for appellee Bank of America, N.A.

         At oral argument:

          Abigail C. Varga, Esq., for appellant Nancy Gamash

          Bradley M. Lown, Esq., for appellee Bank of America, N.A.

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

          JABAR, J.

         [¶1] Nancy Gamash appeals from a summary judgment entered in the Cumberland County Probate Court (Mazziotti, J.) in a matter derivative to a will contest that she initiated regarding the estate of Barbara M. Frost. She contends that the court erred in concluding that Bank of America, N.A., (BANA) holds a valid note and mortgage encumbering property of Frosts estate, and that the advances on BANAs mortgage are valid obligations of Frosts estate. In the absence of a genuine dispute of material fact on the issue, we affirm the judgment entered in BANAs favor as to the validity of the note and mortgage. With respect to the validity of certain mortgage advances, however, we vacate the judgment entered in favor of BANA and remand for the entry of a summary judgment in favor of Gamash.

         I. FACTUAL BACKGROUND

         [¶2] "Viewing the record in the light most favorable to the non-prevailing part[y], the summary judgment record contains the following facts, which are undisputed unless otherwise noted." Remmes v. Mark Travel Corp., 2015 ME 63, ¶ 3, 116 A.3d 466 (citation omitted).

         [¶3] Frost, who was born in 1933, executed a will in March 2000, naming her half-sister, Gamash, as her sole beneficiary. Frosts friend, Thomas Blair, began managing tenants, repairs, and renovations at Frosts multi-unit property and residence in Old Orchard Beach (the property) at some point in the early 2000s. On September 9, 2005, Frost executed a durable financial power of attorney (the POA) appointing Blair as her agent.

         [¶4] In February 2007, Blair contacted an assisted living facility and paid a deposit to reserve the next available apartment for Frost. Frost moved to the assisted living facility in August 2007. On September 10, 2007, Frost executed another will, eliminating Gamash as legatee and naming Blair as her primary beneficiary. Frost was admitted to the hospital for spinal surgery on September 19, 2007, and discharged to a rehabilitation center on September 27, where she remained until October 10.

         [¶5] In September 2007, Blair contacted Countrywide Bank and applied for a reverse mortgage on the property, using the POA to sign or initial numerous documents, including a "Certificate of Home Equity Conversion Mortgage Counseling" and a disclosure explaining that the loan could be accelerated if the property ceased to be the borrowers primary residence. Blair also completed a residential reverse mortgage application in which he represented that he was Frosts son and that the borrower, Frost, intended to occupy the property as her primary residence. Frost later signed the application that Blair had completed, personally acknowledging that "the property will be occupied as certified herein."

         [¶6] In October 2007, Countrywide issued a letter to Frost stating that it had approved her application for a reverse mortgage subject to the satisfaction of several preconditions, including completion of another counseling certificate without the POA information and review and approval of the POA by the closing agent if the borrower planned to use the POA at closing. Frost then executed a "Certificate of Home Equity Conversion Mortgage Counseling, " and Countrywides closing agent, Absolute Title, reviewed and approved the POA for use at closing. In November 2007, Countrywide issued closing instructions to Absolute Title, directing Absolute Title to postpone the closing if it "has knowledge or a belief that Borrower owns and occupies another residence not subject to this transaction and does not intend to occupy the Property." Absolute Title thereafter faxed a message to Countrywide, stating that "[Frost] is currently in Rehab. Not certain if will be able to make closing. Son - Tom Blair is contact.... Attached are copies of Tom[]s POA."

         [¶7] On November 7, 2007, a loan closing agent met with Frost at her assisted living facility, and Frost signed and initialed each page of a promissory note and a deed of trust in connection with a Countrywide reverse mortgage loan in the original principal amount of $950, 000. The note provided, inter alia, that "[a]ll outstanding principal, accrued interest, and other charges" would be immediately due and payable if the property ceased to be the borrowers principal residence. During the closing, Frost signed or initialed numerous other documents, including another residential reverse mortgage application, wherein she affirmed that she intended to occupy the property as her primary residence; and a reverse mortgage loan agreement with an ...


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