MTGLQ INVESTORS, L.P.
Submitted On Briefs: June 14, 2017
L. Guillory, Esq., Saco, for appellant Shelley Alley.
L. Audiffred, Esq., Saco, for appellee MTGLQ Investors, L.P.
ALEXANDER, MEAD, GORMAN, HJELM, and HUMPHREY, JJ.
On September 12, 2013, Wells Fargo Bank, N.A.,  filed a
foreclosure complaint in the District Court (Springvale)
naming John F. Shelley as the defendant and Shelley Alley as
a party in interest. In the complaint, Wells Fargo alleged
that on April 5, 2007, Linda M. Shelley executed a note in
favor of First Magnus Financial Corporation for $211, 500.
The complaint alleged that on the same day, Linda M. Shelley
and John F. Shelley executed a mortgage on property in
Waterboro as security for the loan, naming First Magnus as
the lender and Mortgage Electronic Registration Systems,
Inc., as the nominee. Wells Fargo further alleged that John
and Linda deeded the property to Alley on April 26, 2007;
Linda died on June 26, 2011; and the note had been in default
since August 1, 2011. Alley answered the
After a nonjury testimonial hearing, by decision dated March
23, 2016, the court [Dhscoll, J.) entered a judgment
of foreclosure in favor of MTGLQ in the amount of $268,
897.21 plus interest and fees. The court denied Alley's
request for further findings of fact. See M.R. Civ.
P. 52(b). Alley appeals.
We do not reach Alley's challenge to the merits of the
foreclosure determination, however, because we conclude that
there is a dispositive threshold issue regarding the absence
of the debtor as a necessary party. Although not raised
before the trial court or to us, we may, sua sponte, raise
the issue of the absence of a necessary party at any point in
the proceedings.Ocwen Fed. Bank, FSB v. Gile, 2001
ME 120, ¶ 16, 777 A.2d 275.
The court found-and there is no dispute-that only Linda
executed the note in 2007 in favor of First Magnus (as noted
above, both Linda and John executed the mortgage and then
purported to deed the property to Alley). The note was
indorsed in blank and is currently held by MTGLQ.
See 11M.R.S. §§l-1201(21)(a), 3-1301
(2016); Bank of Am., N.A. v. Greenleaf, 2014 ME 89,
¶ 10 & n.7, 96 A.3d 700. A few weeks after Linda
died in 2011, the note went into default. The record contains
no intimation or evidence that the obligations of the note
were ever taken over by any other party. In short, this
litigation is missing a debtor (presumably, the Estate of
Maine Rule of Civil Procedure 19(a) "requires joinder of
all available persons who have an interest in the litigation
so that any judgment will effectively and completely
adjudicate the dispute." Gile, 2001 ME 120,
¶ 14, 777 A.2d 275 (quotation marks omitted). Thus, a
necessary party is one whose absence prevents the court from
finally determining the matter before it, see id.
¶ 12: "Joinder is required in circumstances where
the absence of unnamed parties would prevent a judgment from
fully adjudicating the underlying dispute, expose those who
are already parties to multiple or inconsistent obligations,
or prejudice the interests of absent parties, "
Mutherv. Broad Cove Shore Ass'n, 2009 ME 37,
¶ 9, 968 A.2d 539. See Gile, 2001 ME 120,
¶ 21, 777 A.2d 275 ("If joinder of a directly
interested party is possible, then joinder is
mandatory."). Whether a party is necessary to the
litigation therefore depends on what elements of proof must
be established, based on the cause of action alleged in that
particular litigation. See Housing Sec, Inc. v. Me. Natl
Bank, 391 A.2d 311, 315 (Me. 1978).
Among the necessary elements for foreclosure in Maine are the
plaintiff's proof, by a preponderance of the evidence, of
both "a breach of condition in the mortgage" and
"the amount due on the mortgage note, including any
reasonable attorney fees and court costs."
Greenleaf, 2014ME 89, ¶ 18, 96 A.3d 700;
see U.S. Bank, N.A. v. Tannenbaum, 2015ME 141,
¶ 9, 126 A.3d 734. Here, as in most foreclosure cases,
MTGLQ alleged-and the court found-that the mortgage was
breached by the default on the payment obligations of the
note. The crux of the dispute is therefore whether and to
what extent the debtor met her contractual obligations to the
bank (i.e., those set out in the note). Although a person
with an interest in the property subject to the mortgage has
standing to defend the matter by virtue of her interest in
the property, see 14 M.R.S. § 6321 (2012),
person with an interest in the property is unable to do so
effectively as to the nonpayment on the note because the
person is not-and, as here, may never have been-a party to
the note. The inability of a court to properly adjudicate the
issues embedded in a foreclosure action without the debtor is
made even more clear in this case because the judgment
purports to render John Shelley-who is not the obligor on the
note-liable for any deficiency, but then states that no
deficiency shall issue "against anyone who did not
actually execute a promissory note or other document creating
an obligation to pay."
Thus, without the debtor-and more particularly, in the
absence of notice to the debtor and an opportunity for the
debtor to be heard, see infra n.5-the court cannot
fully and fairly decide the contractual dispute on which the
creditor's entitlement to reach and sell the property
depends. See Gile, 2001 ME 120, ¶ 11, 777 A.2d
275 ("We are hesitant to act upon requests to decide
issues when the interests of the parties to the appeal are
not apparent and an important party is not before the
Court"). This is analogous to the approach we took in
Gile, in which a bank filed a complaint to foreclose
on property that was also subject to a municipal tax lien.
Id. ¶¶ 3-4. While the litigation was
pending, a successor bank attempted to pay the town the past
due taxes and associated interest and fees. Id.
¶ 6. We held that the town was a necessary party to the
litigation because both "the nature of the
[mortgagor's] remaining interest in the property"
and "the sums that may be due and owing to [the
successor bank] cannot be finally determined until the status
of the Town's interest in the property is resolved."
Id. ¶ 12. As in Gile, "the sums
that may be due and owing" to MTGLQ by virtue of the
alleged default on the note "cannot be finally
determined" until the debtor or her successor has an
opportunity to defend the allegation of her nonpayment.
We therefore conclude that the debtor is a necessary party to
this foreclosure action. Because the debtor was not named as
a party in this matter, we vacate the judgment and remand