WILMINGTON SAVINGS FUND SOCIETY, FSB, D/B/A CHRISTIANA TRUST, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS TRUSTEE FOR BROUGHAM FUND I TRUST, Plaintiff
MORTGAGE LENDERS NETWORK USA, INC., Defendant and LEONARD M. CORTELLINO, PAULINE A. CORTELLINO, FIRST NATIONAL BANK OF OMAHA, NESS OIL COMPANY, and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR MORTGAGE LENDERS NETWORK USA, INC., Parties-In-Interest.
ORDER ON PLAINTIFF'S MOTION FOR DECLARATORY
MaryGay Kennedy, Justice
the Court is Plaintiff's motion for declaratory judgment
in which Plaintiff requests a declaration that it is the
owner of the subject mortgage. Defendant Mortgage Lenders
Network USA, Inc. ("Mortgage Lenders") has not
appeared in this action. Parties-in-interest Leonard and
Pauline Cortellino ("the Cortellinos") have
intervened to oppose this motion. A full evidentiary hearing
was held on this matter.
20, 2006, the Cortellinos executed and delivered to Mortgage
Lenders a note in the amount of $293, 250.00. Following a
series of endorsements, Plaintiff is the current holder of
the note. The note was secured by a mortgage on real property
located at 1 Buttonwood Lane, Lewiston, ME 04240. The
mortgage names Mortgage Lenders as the Lender and designates
Mortgage Electronic Registration Systems, Inc.
("MERS") as the nominee of the Lender for purposes
of recording the mortgage. On August 6, 2012, MERS purported
to assign the mortgage to CitiMortgage, Inc.
("CitiMortgage"). On May 6, 2013, CitiMortgage
assigned the mortgage to U.S. Bank National Association, as
Trustee for Prof-2012-SI Holding Trust I ("U.S.
Bank"). On December 23, 2014, U.S. Bank assigned the
mortgage to Wilmington Savings Fund Society, FSB, not in its
individual capacity but solely as Trustee for the PrimeStar-H
Fund I Trust ("Wilmington Savings"). Finally, on
October 25, 2016, Wilmington Savings assigned the mortgage to
2014, the Law Court held that MERS, as nominee for a lender,
had no right to assign a mortgage on behalf of that lender.
Bank of Am., N.A. v. Greenleaf 2014 ME 89,
¶¶ 14-17, 96 A.3d 700. This left MERS'
purported assignees unable to prove sufficient ownership
interest in the mortgage to have standing to foreclose.
See id. ¶ 22 n. 13 ("Standing requires
that the plaintiff have a minimal legal interest in both the
note and mortgage to seek a foreclosure, including ownership
of the mortgage."). Presumably hoping to resolve a
similar standing problem in advance of an action to
foreclose, Plaintiff filed this action for declaratory
judgment against Defendant. Conceding that the assignment
from MERS was invalid under Greenleaf, Plaintiff
seeks a declaration from this Court that it is nonetheless
the owner of the mortgage.
declaratory judgment requested in the case cannot be granted
for a number of reasons. Initially, the Court questions
whether a motion for declaratory judgment is appropriate
without an underlying cause of action. The Declaratory
Judgment Act "does not create a new cause of action; its
purpose is to provide a more adequate and flexible remedy in
cases where jurisdiction already exists." Hodgdon v.
Campbell, 411 A.2d 667, 669 (Me. 1980) (citations
omitted); see also Thompson v. Glidden, 445 A.2d
676, 679 (Me. 1982). Thus, as a declaratory judgment is
merely a remedy, and not a cause of action in and of itself,
there is no cause of action in this case on which the Court
can grant relief.
even if a declaratory judgment is the proper vehicle to
resolve Plaintiff's dilemma, courts can only decide cases
where there is a real and substantial, justiciable
controversy. Homeward Residential, Inc. v. Gregor,
2015 ME 108, ¶ 16, 122 A.3d 947. The 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. Here, there is only tenuous evidence that any
actual controversy exists. Although the Cortellinos have
intervened and opposed this motion, Mortgage Lenders, the
only named defendant, has not answered or otherwise appeared.
Plaintiff alleges that Mortgage Lenders is unwilling or
unable to execute a recordable instrument confirming its
intent that MERS had the authority to transfer the full
interest in the mortgage. However, the Court has no evidence,
other than statements made by Plaintiff itself, to support
this assertion. Accordingly, in the absence of an actual
controversy, at least as to the named Defendant, the Court
may refuse to enter a declaratory judgment. See Fannie
Mae v. America's Wholesale Lender, No. RE-15-068,
2016 Me. Super. LEXIS 37, at *4 (Mar. 1, 2016).
Court has further concerns as to whether all necessary
parties have been properly joined and given notice of the
action. "When 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. A declaratory
judgment in this case might also be a declaration as to the
rights of CitiMortgage and U.S. Bank, yet these entities are
not parties to this action. See id.; Fannie Mae,
2016 Me. Super. LEXIS 141, at *2-3 (denying plaintiff's
request for default judgment in declaratory judgment action
in part because plaintiff had failed to join necessary
parties); Horton & McGehee, Maine Civil Remedies
§ 3-3(d)(2) at 50 (4th ed. 2004) ("A declaration of
rights may properly be refused when persons whose interests
would be affected are not parties.").
the Maine Business Corporations Act provides a limitation on
liability for a dissolved corporation after a certain period
of time. See 13-C M.R.S. § 1408. If the
dissolved corporation has liquidated or distributed its
assets, a plaintiff may collect from shareholders of the
corporation only to the extent of the assets distributed to
the shareholders. 13-C M.R.S. § 1408(4). To the extent
Plaintiff's action seeks a declaration that affects an
asset disposed of in Mortgage Lender's dissolution,
Plaintiff must join any shareholders who might ultimately be
divested of that asset. See 13-C M.R.S. § 1408;
14 M.R.S. § 5963; M.R. Civ. P. 19(a); Bank of Am.,
NA. v. Metro Mortg. Co., 2015 Me. Super. LEXIS 14, at
*3-4 Can. 29, 2015).
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, CitiMortgage, U.S. Bank, and Mortgage
Lenders, if it is still in business, would remain free to
litigate ownership of the mortgage. See Fannie Mae,
2016 Me. Super. LEXIS 141, at *3-4.
Plaintiff contends it can overcome a MERS defect on the basis
that a note holder has an equitable interest in the mortgage,
citing Jordan v. Cheney, 74 ME 359, 361 (Me. 1883).
Courts in Maine have been hesitant to accept this argument,
as the Law Court has not yet determined the propriety of the
Jordan approach to resolve a Greenleaf
problem. See U.S. Bank, N.A. v. First Magnus Fin.
Corp., 2017 Me. Super. LEXIS 131, at *2 (May 24, 2017);
Bank of N.Y. Mellon v. First Magnus Fin. Corp., 2016
Me. Super. LEXIS 132, at *3-5 (July 5, 2016). The Court
agrees this is an issue to be resolved by the Law Court, and
this Court will not now grant a declaratory judgment in
Plaintiff's favor on this basis.
foregoing reasons, Plaintiffs motion for declaratory ...