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Bank of America v. Mortgage Lenders Network USA

Superior Court of Maine, Cumberland

February 3, 2017




         Before the court is plaintiff Bank of America's unopposed motion for summary judgment on its amended complaint for declaratory judgment, quiet title, and equitable relief. For the following reasons, the motion is denied.


         On January 26, 2004, Robert and Ann-Charlott Deutsch executed and delivered a note to The Mortgage Office. (Supp.'g S.M.F. ¶¶ 9, 11.) The note was secured by a mortgage on real property located at 27 Bartol Island Road in Freeport. (Id. ¶¶ 9-11.) On January 26, 2004, The Mortgage Office assigned the mortgage to defendant. (Id. ¶¶ 14-15.) Plaintiff has provided an undated allonge purporting to endorse the note from The Mortgage Office to defendant. (Id. ¶ 12.) The note itself reflects a series of endorsements, including an endorsement from defendant to Countrywide Home Loans, Inc. and an endorsement in blank from Countrywide. (Id.)

         Plaintiff filed a complaint on April 25, 2016. In the complaint, plaintiff sought one count of equitable assignment and discharge of mortgage. Defendant did not answer the complaint and, on May 26, 2016, plaintiff requested an entry of default and moved for a default judgment. On June 22, 2016, the court denied plaintiff's request for a default on the ground that plaintiff had not properly effected service on defendant. The court denied plaintiff's motion for a default judgment on the grounds that plaintiff had not joined the Deutsches as parties and the record did not include the note, any evidence that plaintiff is the holder of the note and owner of the mortgage, or any evidence that the Deutsches had paid the note and mortgage in full. (6/22/16 Order 2-4.)

         Plaintiff filed an amended complaint on September 27, 2016. In the amended complaint, plaintiff sought: count I, declaratory relief; count II, quiet title; and count III, equitable relief. Defendant's registered agent was served with the amended complaint on October 13, 2016. Defendant has not filed an answer. Plaintiff filed a motion for summary judgment on November 14, 2016. Defendant has not opposed the motion.


         1. Standard of Review

         Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any . . . show that there is no genuine issue as to any material fact." M.R. Civ. P. 56(c). "A material fact is one that can affect the outcome of the case, and there is a genuine issue when there is sufficient evidence for a fact-finder to choose between competing versions of the fact." McIlroy v. Gibson's Apple Orchard, 2012 ME 59, ¶7, 43 A.3d 948 (citation omitted). Summary judgment rules are enforced strictly in matters involving mortgage foreclosure. JPMorgan Chase Bank v. Harp, 2011 ME 5, ¶15, 10A.3d 718.

         2. Motion for Summary Judgment

         a. Count I, Declaratory Judgment

         Plaintiff seeks a declaration that defendant holds the mortgage in trust for the benefit of plaintiff. (Pl's Mot. Summ. J. 8-25.)[1] 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 (2016). First, it is unclear whether there is a controversy "between the litigants." Berry v. Daigle, 322 A.2d 320, 325 (Me. 1974).

         Second, "[w]hen declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration and no declaration shall prejudice the rights of persons not parties to the proceeding." 14 M.R.S. § 5963 (2016). As the court explained in its order denying plaintiff's motion for a default judgment, the Deutsches are necessary parties because a ruling on the merits could prejudice their rights. (6/22/16 Order 3-4.) Plaintiff has not added the Deutsches as parties and instead maintains the Deutsches are not necessary parties because the Deutsches' payments are due to the note holder, and the declaration plaintiff seeks would affect only ownership of the mortgage. (Pl's Mot. Summ. J. 2.) As the mortgagors, the Deutsches have an interest in whether plaintiff owns the mortgage. See Bank of Am., N.A. v. Greenleaf, 2014 ME 89, ¶ 9, 96 A.3d 700 (mortgage ownership and status as note holder give mortgagee standing to foreclose). If the Deutsches have sold the property, the current owners also are necessary parties and must be joined. (Supp.'g S.M.F. ¶ 9 n.2); Bank of Am., N.A. v. Metro Mortg. Co., 2015 Me. Super. LEXIS 14, at *3 (Jan. 29, 2015).

         Finally, a declaratory judgment as to whether plaintiff owns the mortgage would not necessarily remove any uncertainty as to ownership. If the court were to determine that plaintiff does not own the mortgage, The Mortgage Office and defendant, if it is still in business, would remain free to litigate ownership of the mortgage. See 14 M.R.S. § 5958 ...

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