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U.S. Bank Trust, N.A. v. Mackenzie

Supreme Court of Maine

October 11, 2016

U.S. BANK TRUST, N.A., AS TRUSTEE FOR LSF8 MASTER PARTICIPATION TRUST
v.
BEVIN L. (HOOPER) MACKENZIE

         Reporter of Decisions

          Submitted On Briefs: May 26, 2016

         On the briefs:

          L. Clinton Boothby, Esq., Boothby Perry, LLC, Turner, for appellant Bevin L. (Hooper) Mackenzie.

          Leonard F. Morley, Jr., Esq., William B. Jordon, Esq., and Corey S. Hadley, Esq., Shapiro & Morley, LLC, South Portland, for appellee U.S. Bank Trust, N.A., as Trustee for LSF8 Master Participation Trust.

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

          HJELM, J.

         [¶1] In this foreclosure action brought by U.S. Bank Trust, N.A., as Trustee for LSF8 Master Participation Trust (the Bank), Bevin L. (Hooper) Mackenzie-the mortgagor-moved for summary judgment on the ground that, inter alia, the requisite notices of default and right to cure were deficient. Although the District Court (Lewiston, Dow, J.) agreed with Mackenzies contention, it entered an order dismissing the complaint without prejudice, expressly reserving to the Bank the right to commence a new action if it were to issue a statutorily compliant notice of default and right to cure. On this appeal by Mackenzie, she argues that she is entitled to a summary judgment rather than merely a dismissal of the matter without prejudice because the defective notices of right to cure constitute a substantive defect in the Banks cause of action.[1] In the absence of a cross-appeal by the Bank, we affirm the dismissal of the complaint but remand with instructions for the court to revise its order so that it is with prejudice but does not establish the parties rights in any future litigation.

         I. BACKGROUND

         [¶2] In its complaint, the Bank alleges the following facts, which we recite to provide some context for our discussion of the procedural issues in this case.

         [¶3] In 2001, Mackenzie and Jim B. Hooper acquired two parcels of real property located in Leeds. In September 2004, Hooper executed a loan repayment and security agreement with Beneficial Maine, Inc. To secure Beneficials right to receive payments under the loan agreement, Mackenzie and Hooper executed a mortgage deed in favor of Beneficial.

         [¶4] Having received no payments since 2011 toward the loan obligation, in December 2013 Beneficial sent separate but substantively identical notices of default and right to cure to Hooper and Mackenzie. See 14 M.R.S. § 6111 (2014).[2] After sending the notices, Beneficial still did not receive any payments, and in March 2014, it filed a complaint in the District Court against Mackenzie and Hooper, alleging a default for failure to make payments required under the loan agreement and seeking to foreclose on the mortgaged properties. See 14 M.R.S. §§6321-6326 (2015). Beneficial attached copies of the notices of right to cure as exhibits to the complaint.

         [¶5] While the action was pending, Beneficial assigned the loan agreement and mortgage to the Bank, and the court (Schneider, J.) granted Beneficials motion to substitute the Bank as the plaintiff. Following two unsuccessful mediation sessions, Mackenzie filed a motion for summary judgment supported by a statement of material facts. See M.R. Civ. P. 56. In her motion, Mackenzie argued, among other things, that the notices of right to cure were deficient because they did not satisfy the requirements of section 6111(1-A).[3] The Bank opposed the motion and argued in part that the motion for summary judgment should be denied because Mackenzies statement of material facts failed to establish that her factual assertions would be admissible in evidence and therefore did not comply with the requirements of M.R. Civ. P. 56(e). The Bank also argued that the notices of right to cure were sufficient. In her reply, Mackenzie filed an amended statement of material facts in an apparent attempt to rectify the formal deficiencies in her original statement.

         [¶6] After holding a hearing on the motion, in July 2015 the court (Dow, J.) issued an order concluding that "the notice of right to cure did not comply with statutory requirements." On that basis, the court dismissed the complaint without prejudice "so that [the Bank] may send notice in compliance [with] 14 M.R.S. ยง 6111 at least ...


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