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JPMorgan Chase Bank, N.A. v. Lowell

Supreme Court of Maine

February 28, 2017


          Submitted On Briefs: November 29, 2016

         Judgment vacated. Remanded to the District Court for entry of judgment for Lowell.

         Reporter of Decisions

          Joshua Klein-Golden, Esq., Clifford & Golden, PA, Lisbon Falls, for appellant Terrance B. Lowell

          Adam J. Shub, Esq., Preti Flaherty Beliveau & Pachios, LLP, Portland, for appellee JPMorgan Chase Bank, N.A.


          HJELM, J.

         [¶1] Terrance B. Lowell appeals from a judgment of foreclosure in favor of JPMorgan Chase Bank, N.A., entered in the District Court (Lewiston, Dow, J.) after a bench trial. Lowell argues that the court erred or abused its discretion by admitting certain documents pursuant to the business records exception to the hearsay rule, see M.R. Evid. 803(6), and by finding that the notice of default issued by JPMorgan complied with statutory requirements. Although the court properly admitted the challenged documents in evidence, we agree that the notice of default was defective. We therefore vacate the judgment and remand for entry of judgment for Lowell.

          I. BACKGROUND

         [¶2] In March 2015, JPMorgan filed a complaint against Lowell seeking foreclosure on residential property located in Auburn.[1] JPMorgan alleged that Lowell had defaulted by failing to make payments due on a promissory note executed in favor of Wachovia Mortgage Corporation; that the note was secured by a mortgage in favor of Mortgage Electronic Registration Systems, Inc., (MERS), as nominee for Wachovia; and that, after several transactions, all rights created by the instruments had been assigned to JPMorgan.[2] Lowell filed an answer, which, as later amended, disputed many of the allegations in the complaint and asserted several affirmative defenses.

         [¶3] The matter proceeded to trial in March 2016. To lay the foundation necessary for the admission of various documents as business records, see M.R. Evid. 803(6), JPMorgan presented the testimony of employee Frank Dean, who had worked for JPMorgan for five years and, at the time of trial, was a "mortgage banking research officer." Dean testified that his responsibilities in that position included reviewing "business records pertaining to residential mortgage loans, " and that in preparation for trial he had "reviewed the electronic business records pertaining to [Lowells] mortgage file, " including the note, mortgage, assignments of the mortgage, and payment history. He further testified that he previously worked as a "bank branch loan officer" for JPMorgan and had been "responsible for meeting with bank customers, . . . developing residential mortgage applications, ... processing mortgage loans, closing mortgage loans, and . . . handling customer service issues . . . such as payment applications." He stated that while assisting customers with loan payments he observed "how the system was accessed" by bank tellers at the time of payment, "where the information was entered, and how it was saved, and became a record." He explained that, based on this cumulative experience, he was familiar with how JPMorgans business records were created, checked for accuracy, and accessed, and he confirmed that JPMorgan followed all procedures for maintaining the accuracy of the documents at issue in this case.

         [¶4] Based on Deans foundational testimony, JPMorgan introduced a number of documents in evidence, including the note and mortgage; the notice of default and right to cure issued to Lowell by JPMorgan in January 2015; and Exhibit E, which consists of "screen prints" from JPMorgans computer databases that show the charges and payments made on Lowells loan between June 2006-which, Dean testified, is when JPMorgan acquired the note-and late February 2016. Dean stated that according to the computer printouts, Lowell had not made any payments on his loan since September 1, 2012.

         [¶5] During Deans testimony, Lowell made a general objection to the admission of JPMorgans records pursuant to Rule 803(6). The court overruled the objection, rejecting Lowells argument that JPMorgan was required to establish that Dean had knowledge about the creation of the records particular to this case. Lowell later objected specifically to the admission of some portions of Exhibit E that cover activity while JPMorgan owned the note, based on his assertion that Dean lacked personal knowledge about how various charges in the printouts were calculated and entered, and the court also overruled that objection.[3]

         [¶6] Following the trial, on March 16, 2016, the court entered a judgment of foreclosure in favor of JPMorgan, finding that Lowell owed $125, 000.33 on the note and mortgage, plus attorney fees and disbursements. Lowell timely appealed. See 14 M.R.S. § 1901 (2016); M.R. App. P. 2.


         [¶7] To be entitled to a judgment of foreclosure, JPMorgan was required to prove, among other things, "the amount due on the mortgage note, including any reasonable attorney fees and court costs, " and service on Lowell of a notice of default and right to cure that complied with statutory requirements. Bank of Am., N.A. v. Greenleaf, 2014 ME 89, ¶ 18, 96 A.3d 700; see also 14 M.R.S. §§ 6111(1-A), 6322 (2014).[4] Lowell argues that the court erred by admitting JPMorgans business records showing the amount ...

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