United States District Court, D. Maine
ORDER ON MOTION FOR SUMMARY JUDGMENT
Z. SINGAL UNITED STATES DISTRICT JUDGE.
the Court is the Motion for Summary Judgment (ECF No. 44)
filed by Defendants and Counterclaim Plaintiffs Wasi Habibzai
and Manija Habibzai (together, “Defendants” or
“Habibzais”). For reasons explained herein, the
Court GRANTS IN PART and DENIES IN PART the Motion.
a party is entitled to summary judgment if, on the record
before the Court, it appears “that there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a).
“[T]he mere existence of some alleged factual dispute
between the parties will not defeat an otherwise properly
supported motion for summary judgment; the requirement is
that there be no genuine issue of material fact.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247-48 (1986). An issue is “genuine” if
“the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Id.
at 248. A “material fact” is one that has
“the potential to affect the outcome of the suit under
the applicable law.” Nereida-Gonzalez v.
Tirado-Delgado, 990 F.2d 701, 703 (1st Cir. 1993).
party moving for summary judgment must demonstrate an absence
of evidence to support the nonmoving party's case.
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
In determining whether this burden is met, the Court must
view the record in the light most favorable to the nonmoving
party and give that party the benefit of all reasonable
inferences in its favor. Santoni v. Potter, 369 F.3d
594, 598 (1st Cir. 2004). Once the moving party has made this
preliminary showing, the nonmoving party must “produce
specific facts, in suitable evidentiary form, to establish
the presence of a trialworthy issue.” Triangle
Trading Co., Inc. v. Robroy Indus., Inc., 200 F.3d 1, 2
(1st Cir. 1999) (quotation marks and punctuation omitted);
see also Fed.R.Civ.P. 56(e). “Mere
allegations, or conjecture unsupported in the record, are
insufficient.” Barros-Villahermosa v. United
States, 642 F.3d 56, 58 (1st Cir. 2011) (quoting
Rivera-Marcano v. Normeat Royal Dane Quality A/S,
998 F.2d 34, 37 (1st Cir. 1993)); see also Wilson v.
Moulison N. Corp., 639 F.3d 1, 6 (1st Cir. 2011)
(“A properly supported summary judgment motion cannot
be defeated by conclusory allegations, improbable inferences,
periphrastic circumlocutions, or rank speculation.”).
“As to any essential factual element of its claim on
which the nonmovant would bear the burden of proof at trial,
its failure to come forward with sufficient evidence to
generate a trialworthy issue warrants summary judgment for
the moving party.” In re Ralar Distribs.,
Inc., 4 F.3d 62, 67 (1st Cir. 1993). Ultimately, summary
judgment does not require “an all-or-nothing
approach” and the Court may grant partial summary
judgment on only certain claims or even part of a claim.
Wright & Miller, 10B Federal Practice & Procedure
§ 2737 (4th ed. 2016); see also Fed.R.Civ.P.
of Maine Local Rule 56 prescribes a detailed process by which
the parties are to place before the Court the “material
facts . . . as to which the moving party contends there is no
genuine issue.” D. Me. Loc. R. 56(b). The Local Rule
further requires each statement of material fact to be
followed by a “record citation[ ] . . . to the specific
page or paragraph of identified record material supporting
the assertion.” D. Me. Loc. R. 56(f). Ultimately, in
constructing the narrative of undisputed facts for purposes
of summary judgment, the Court deems any statement with a
supporting record citation admitted but “may disregard
any statement of fact not supported by a specific citation to
record material properly considered on summary
judgment.” D. Me. Loc. R. 56(f); see also
Fed.R.Civ.P. 56(e)(2) (“If a party fails to properly
support an assertion of fact or fails to properly address
another party's assertion of fact as required by Rule
56(c), the court may . . . consider the fact undisputed for
purposes of the motion[.]”).
23, 2015, a house located at 17 Garett Avenue in Gray, Maine
(the “Gray Property”) burned to the ground.
Initial construction of this house began with the issuance of
a building permit for construction of a new home in May 2002.
The initial construction ran into some problems and the
property thereafter became a bank-owned property. Michael
Beaulieur a/k/a Beaulieu (“Beaulieu”),
general contractor and real estate investor, heard about the
property from a realtor and decided to purchase the property
as an investment in 2003. On October 10, 2003, Beaulieu paid York
Federal Credit Union $150, 000 to purchase the partially
constructed Gray Property.
time of Beaulieu's purchase, the Gray Property was
framed, enclosed in plywood, but missing windows, doors, and
waterproofing. Between 2003 and 2004, Beaulieu installed
windows, doors, a deck, and exterior “Tyvek”
waterproofing. In a letter dated February 5, 2004, the Town
Code Enforcement Officer informed Beaulieu the original
building permit had lapsed and that he was issuing a Stop
Work Order on the Gray Property. (ECF No. 52-3 at PageID #
822.) The Stop Work Order noted “structural
problems” with the house and indicated an engineer
review would be necessary before another building permit
could issue. (Id.) Thereafter, the property sat
untouched for approximately eight years.
Mortgage on the Gray Property
financed his purchase of the Gray Property as well as the
planned additional construction with a $295, 000 loan from
Downeast Mortgage Corporation (“Downeast
Mortgage”). Downeast Mortgage was co-owned by Jim
Lindvall (“Jim” or “Lindvall”), a
mortgage lender and a real estate investor. In 2007 or 2008,
Jim Lindvall incorporated Market Trading Company, LLC
(“Market Trading”), a sole-member limited
liability company, to purchase three mortgages from Downeast
Mortgage; one of those mortgages was for the Gray Property.
As a result, Market Trading then became the mortgage holder
for the Gray Property. While there is no documentation that
Beaulieu ever paid off the mortgage on the Gray Property,
Beaulieu maintains that by July 2012, he owed Lindvall
nothing on the Gray Property.
Habibzais & Their Efforts to Buy a Home
Wasi Habibzai (“Wasi”) and his wife, Manija
Habibzai (“Manija”) have lived in Maine since
immigrating to the United States from Afghanistan in 1990.
They have been married for approximately seventeen years and
have three sons. Manija speaks English as a second language;
for Wasi, English is a third language. Together, they
have operated a used car business known as Silver Motors for
more than ten years. The Habibzais are Muslim. In accordance
with their religious practice, the Habibzais do not charge
interest or incur interest charges. As a result, they
generally do not use credit cards and conduct much of their
business in cash. However, they also use debit cards and
maintain bank accounts.
in the early 2000s, Wasi was introduced to Beaulieu by
Beaulieu's brother. Beaulieu, in turn, introduced Wasi to
Lindvall in 2008. This introduction was made in connection
with Wasi negotiating to buy a property in Buxton, Maine,
that was then an investment jointly held by Beaulieu and
Lindvall. Wasi made a $5, 000 cash deposit towards the
purchase of this Buxton property. He then discovered some
issues with the property and sought the return of his
deposit. According to Wasi, Lindvall and Beaulieu
“screw[ed]” him by refusing to give him back his
deposit for about four years. (W. Habibzai 9/2/15 Dep. (ECF
No. 53) at PageID # 851.)
of returning the deposit, Lindvall eventually offered to sell
Wasi the Gray Property by sometime in 2012 or 2013.
Contemporaneous documentation of this agreement is
lacking.However, the deposition testimony of the
Habizais and Michael Beaulieu, both establish an agreement
between Wasi, Beaulieu, and Lindvall to sell the Gray
Property to the Habibzais.
Habibzais recommenced construction on the Gray Property
shortly after reaching an agreement to buy it. Working
alongside family and friends,  the Habibzais completed
additional construction. (R. 281-86; 337;
384-401.) Wasi also obtained an electrical permit
in October 2013 and established electrical service for the
Gray Property in his own name. (R. 337 & 340-42.)
However, prior to the fire on June 23, 2015, the Habibzais
did not obtain any building permit or certificate of
occupancy for the Gray Property.
to the terms of their agreement, Wasi made monthly cash
payments to Lindvall toward the purchase of the Gray
Property. These payments varied in amount.
According to Wasi, the payments ranged from at least $800 to
approximately $9, 000 each and all of the necessary payments
to Lindvall (totaling over $80, 000) were made before
September 19, 2014.Ultimately, the earliest documentation of
the transfer of the Gray Property from Beaulieu to Wasi is a
quitclaim deed dated March 17, 2015. (R. 403-04.) This
quitclaim deed was recorded on April 13, 2015.
Coverage on the Gray Property
making the necessary payments to purchase the Gray Property,
the Habibzais acquired a homeowner's insurance policy on
the Gray Property from State Farm Fire and Casualty Company
(“Plaintiff” or “State Farm”) through
John Couture Insurance Agency on September 19, 2014
(hereinafter, “the Policy”). The Policy provided
a dwelling coverage limit of $397, 200 and an additional
personal property coverage limit of $297, 900. The Habibzais
made their first premium payment to State Farm on the day
they acquired the Policy. They continued to make timely
payments during all relevant times thereafter. The
Habibzais' premium payments were made in cash.
Passing of Jim Lindvall
passed away suddenly on October 25, 2014. Shortly before his
death, Lindvall had a one-car accident with his personal
vehicle on his own property. He called Wasi for assistance.
According to Wasi, he had Lindvall's Cadillac towed to
Silver Motors for repair and gave Lindvall his Volvo as a
loaner. The Volvo contained some of Wasi's personal
papers, including papers related to the Gray Property.
According to Wasi, those papers were no longer with the
vehicle once it was returned following Jim's death. Wasi
also had a monetary dispute with Lindvall's heirs
immediately following his death about other vehicles,
including two Cadillacs that were located at Silver Motors.
left behind three grown children, including his daughter,
Abigail Lindvall (“Abigail”). Abigail graduated
from law school in 2013, and practiced law for a brief period
of time in Massachusetts. She was appointed Personal
Representative for her father's estate on December 15,
2014. Abigail left her in-house counsel position in order to
work on the Lindvall's Estate, including winding-up
Jim's various business enterprises, which consisted of at
least eight businesses he had operated or co-operated in
between 2010 and 2014.
has acknowledged that her father “was not a wonderful
record keeper.” (R. 29.) Nonetheless, as the Personal
Representative of Lindvall's Estate and the acting
principal of Market Trading, she searched all of her
father's available personal and business records and
found no documents to suggest that there was ever an
agreement to sell the Gray Property to the Habibzais.
Likewise, she found no indications in her father's
personal and business records that Lindvall had any deal or
agreement with Beaulieu with regard to the Gray Property or a
swap of that property. She similarly found no evidence in her
father's personal or business records of any payments
made by the Habibzais toward the purchase of the Gray
Property. Rather, the documentation she found suggested that
Market Trading still held a mortgage on the Property as
security for the $295, 000 loan to Beaulieu.
Trading's Foreclosure on the Gray Property
11, 2015, Abigail Lindvall, as acting principal of Market
Trading, filed a foreclosure complaint in Cumberland County
Superior Court to foreclose on the mortgage on the Gray
Property (hereinafter, “the Initial Foreclosure
Complaint”). (R. 307-316.) Prior to filing the Initial
Foreclosure Complaint, Abigail Lindvall had reviewed all of
the records she could find with regard to her father's
personal business and the business of Market Trading. She
found no evidence that any payments had been made to satisfy
Mr. Beaulieu's $295, 000 obligation secured by the
mortgage. As a result, the Initial Foreclosure Complaint
named Beaulieu as the defendant and eight persons or entities
as parties-in-interest based upon liens of record. Beaulieu
was “very surprised” to be named as the defendant
in the Gray Property foreclosure because he believed at that
point that Wasi “own[ed] the house.” (R. 16.) The
Habibzais were not included as defendants or
parties-in-interest in the Initial Foreclosure Complaint. At
the time Abigail filed the initial complaint, she did not
believe the Habibzais had any interest in the Gray Property.
about May 29, 2015, Market Trading filed an amended
foreclosure complaint in Cumberland County Superior Court
regarding the Gray Property (hereinafter “the Amended
Foreclosure Complaint”). (R. 317-327.) Among the
changes in the Amended Foreclosure Complaint was the addition
of Wasi as a party-in-interest. The change to add Wasi as a
party-in-interest to the Amended Foreclosure Complaint was
prompted by a registry search performed by Abigail after an
incident on the Property. However, Abigail still had
seen no records that suggested that her father had made any
commitment to the Habibzais concerning the Gray Property. (R.
40.) According to the Amended Foreclosure Complaint, the
total due on the note secured by the Market Trading mortgage
on the Gray Property as of March 31, 2015, was $500, 490.19,
with further amounts accruing at a per diem rate of $65.12.
Wasi was served with the Amended Foreclosure Complaint about
twenty days before the fire occurred at the Gray Property.
Ultimately, this foreclosure action was resolved via a
settlement agreement between Market Trading and the Habibzais
on December 1, 2015. (R. 114-18.)
Real Estate Tax Lien ...