HSBC MORTGAGE SERVICES, INC. Plaintiff,
CORINTHIAN MORTGAGE CORPORATION D/B/A SOUTHBANC MORTGAGE, DEAN L. BUNDY AND JESSICA W. BUNDY Defendants.
ORDER ON PLAINTIFF'S MOTION FOR DEFAULT
MaryGay Kennedy Justice.
HSBC Mortgage Services, Inc. ("HSBC"), moves for
default judgment against defendants Corinthian Mortgage
Corporation d/b/a SouthBanc Mortgage
("Corinthian"), Dean L. Bundy and Jessica W. Bundy
related to alleged transfers in interest, ownership, and
enforcement rights on a note and mortgage. The court has
reviewed the parties' filings, and based on the
following, Plaintiff HSBC's motion is denied.
Factual and Procedural Background
August 8, 2005, Dean L. Bundy executed a promissory note in
the amount of $165, 000 to Corinthian. (Pl'.s Compl.
¶ 6, Ex. A.) On the same date, Dean L. Bundy and Jessica
W. Bundy signed a mortgage on property in Lisbon, Maine to
secure the note. (Id. ¶ 7, Ex. B.) The mortgage
listed Corinthian as the lender of the $165, 000 and Mortgage
Electronic Registration Systems, Inc. (MERS) as the nominee
for the lender and the lender's successors and assigns.
(Id.) HSBC asserts that on July 1, 2015, MERS
assigned the August 8, 2005 mortgage from Corinthian to HSBC.
(Id. ¶ 8, Ex. C.)
August 3, 2015, HSBC filed a complaint for declaratory
judgment pursuant to 14 M.R.S.A. § 5951 et seq.
that it is the owner of all rights in the note and mortgage,
that HSBC is the mortgagee within the meaning of 14 M.R.S.A.
§ 6321, and that HSBC has standing to enforce the note
through foreclosure for any breach of the obligations under
the note. (Id. ¶ 18(A).) HSBC asserts that
those who have a claim or any interest that would be affected
by the declaration were made parties to the action.
(Id. ¶ 17.) Corinthian was served a summons and
complaint on August 17, 2015 care of Gerald McElmore as agent
for Corinthian, (Pl'.s Mot. Default J. ¶ 1), and
both Dean L. Bundy and Jessica W. Bundy were served on August
September 23, 2015, the court received a letter from Dean L.
Bundy, which purported to state his opposition to HSBC's
motion for declaratory judgment. Defendant Dean L.
Bundy's opposition letter was untimely, as it was
received 37 days after service of the summons and complaint
and not within the required 20-day time period. M.R. Civ. P.
January 19, 2016, HSBC filed a motion for default judgment.
Corinthian, Dean L. Bundy and Jessica W. Bundy failed to file
an opposition to the motion within the required 21-day time
period, M.R. Civ. P. 7(b)(1)(A). (Pl'.s Mot. Default J.
¶ 2.) HSBC asserts that the purpose of the relief sought
is to establish its ability to enforce the mortgage through
foreclosure. (Id. ¶ 4.)
Maine Supreme Court has set forth eight elements of proof
that are necessary to support a judgment of foreclosure.
See Bank of Am., N.A. v. Greenleaf, 2014 ME 89,
¶ 18, 96 A.3d 700. The default judgment sought here
addresses the second element, which is that a party must
properly present proof of ownership of the mortgage and note,
including all assignments and endorsements of the note and
the mortgage. Id.
as a threshold issue, courts can only decide cases where
there is a real and substantial, justiciable controversy.
Homeward Residential, Inc. v. Gregor, 2015 ME 108,
¶ 16, 122 A.3d 947. Maine's Declaratory Judgments
Act empowers the court to declare rights, status and other
legal relations when doing so will terminate the controversy
or remove an uncertainty. 14 M.R.S. §§ 5953, 5957.
Here, there is only tenuous evidence that any actual
controversy exists among the litigants. None of the
Defendants has answered or otherwise appeared in this action.
(Pl'.s Mot. Default J. ¶ 2). Plaintiff HSBC alleges
that Corinthian is unwilling or unable to execute a
recordable instrument confirming its intent that MERS had the
authority to transfer the full interest in the mortgage,
(Id. ¶ 5), and that Corinthian is now a
dissolved corporation that continues in existence for
purposes of winding up its affairs, (Pl'.s Compl. ¶
10). These assertions, however, are not supported by
reference to any documentation that has been submitted to the
court. Accordingly, the court may refuse to render or enter a
declaratory judgment. See Fannie Mae v. America's
Wholesale Lender, No. RE-15-068, 2016 Me. Super. LEXIS
37, at *4-5 (Mar. 1, 2016.)
HSBC satisfies its burden to show there is a justiciable
controversy, when declaratory relief is sought, all persons
who have or claim any interest that would be affected by the
declaration must be made parties to the action. Id.
at *2; See Bank of Am., N.A. v. Metro Mortg. Co.,
No. RE-14-355, 2015 Me. Super. LEXIS 14, at *3 (Jan. 29,
2015.) In this case, MERS, who HSBC alleges transferred their
interest in the mortgage, (Pl'.s Compl. ¶ 8), has
not been named as a party. Were the court to grant the
requested default judgment, uncertainty as to ownership of
the mortgage remains outstanding. Fannie Mae, 2016
Me. Super. LEXIS 37, at *3.
in matters involving mortgage foreclosure, procedural rules
must be followed, and the court is authorized to conduct a
hearing if it deems it necessary and proper to hear evidence
as to the truth of any averment. Id. Here, the court
has no evidence, other than the statement made by HSBC
itself, that Corinthian is unwilling or unable to confirm its
intent to give MERS the authority to transfer the
mortgage's interest. (Pl'.s Mot. Default J, ¶
5.) Therefore, at present the court has insufficient evidence
to say that this case contains a substantial, justiciable
controversy that would empower the court to declare
HSBC's motion for ...