United States District Court, D. Maine
U.S. BANK TRUST, N.A., AS TRUSTEE FOR LSF9 MASTER PARTICIPATION TRUST Plaintiff,
JULIA L. JONES Defendant.
A. WOODCOCK, JR. UNITED STATES DISTRICT JUDGE.
lender seeks to foreclose after a borrower defaulted on her
loan payments. Because the right to cure letter overstated
the amount that the borrower had to pay in order to cure her
default and Maine law requires strict adherence to all
statutory foreclosure requirements, including an accurate
itemization of all past due amounts that caused the loan to
be in default and the total amount due to cure the default,
the lender is not entitled to foreclose on the property.
However, the same fatal error does not apply with the
lender's lawsuit on its promissory note and breach of
contract counts and the Court grants the lender judgment on
those counts. The Court also grants the lender's request
to correct the legal description of the subject property in
the mortgage deed.
December 14, 2016, U.S. Bank Trust, N.A., as Trustee for LSF9
Master Participation Trust (U.S. Bank), filed a civil action
against Julia L. Jones, asserting that Ms. Jones had failed
to pay U.S. Bank in accordance with the terms of a promissory
note and demanding that the property that secured the note be
foreclosed. Compl. (ECF No. 1). More specifically,
U.S. Bank's Complaint contains six counts: (1) Count
One-foreclosure; (2) Count Two-breach of note; (3) Count
Three-breach of contract; (4) Count Four-quantum meruit; (5)
Count Five-unjust enrichment; and (6) Count Six-reformation
of mortgage. Id. On February 10, 2017, Ms. Jones
answered the Complaint. Def.'s Answer to Pl.'s
Compl. (ECF No. 5) (Answer).
same day, Ms. Jones moved to dismiss counts IV and V of the
Complaint. Def.'s Mot. to Dismiss Counts IV & V
of Pl.'s Compl. (ECF No. 6). The Court held oral
argument on June 29, 2017. Minute Entry for Motion
Hearing (ECF No. 15). After oral argument and upon
agreement of the parties, the Court dismissed without
prejudice Counts IV and V. Order (ECF No. 16). At a
pretrial conference on September 7, 2017, the parties also
agreed that U.S. Bank is entitled to the reformation it
sought in Count VI. Rep. of Final Pretrial Conference and
Order at 1 (ECF No. 23).
November 6, 2017, a bench trial was held on Counts I, II, and
III. Minute Entry for Bench Trial (ECF No. 29). On
December 6, 2017, Ms. Jones filed a post-trial brief.
Def.'s Post Trial Mem. (ECF No. 34)
(Def.'s Br.). U.S. Bank filed a reply on January
12, 2018. Pl.'s Reply to the Def.'s Post Trial
Mem. (ECF No. 36) (Pl.'s Reply).
Contemporaneously, on December 7, 2017, U.S. Bank filed its
post-trial brief. Pl.'s Post Trial Mem. (ECF No.
35) (Pl.'s Br.). Ms. Jones filed her reply on
January 16, 2018. Def.'s Post Trial Reply Mem.
(ECF No. 37) (Def.'s Reply).
Bank is a corporation organized under the laws of the state
of Minnesota, with its principal place of business located at
425 Walnut Street, Cincinnati, Ohio. Compl. ¶
4; Answer ¶ 4. Ms. Jones is a resident of the
town of Raymond, County of Cumberland, and state of Maine.
Compl. ¶ 5; Answer ¶ 5.
21, 2004, James L. Jones and Linda P. Jones conveyed property
situated at 139 Conesca Road, Raymond, Maine, 04071, by
Warranty Deed recorded in the Cumberland County Registry of
Deeds in Book 21580, Page 18, as corrected by Corrective
Warranty Deed recorded in Book 22049, Page 213.
Compl. ¶ 6, 8; Answer ¶ 6, 8.
April 17, 2007, Ms. Jones, in return for a loan, executed and
delivered to Downeast Mortgage Corporation a note in the
amount of $160, 000.00 (the Note). Compl. ¶ 7;
Answer ¶ 7; Pl.'s Ex. 1. On April
18, 2007, to secure the Note, Ms. Jones executed a Mortgage
Deed in favor of Mortgage Electronic Registration Systems,
Inc. (MERS) as nominee for Downeast Mortgage Corporation,
securing the property located at 139 Conesca Road.
Compl. ¶ 8; Answer ¶ 8;
Pl.'s Ex. 2. The mortgage deed is recorded in
the Cumberland County Registry of Deeds in Book 25033, Page
312. Id. On September 1, 2011, Ms. Jones executed a
Home Affordable Modification Agreement which decreased the
principal balance of the Note to $159, 019.35.
Compl. ¶ 9; Answer ¶ 9;
Pl.'s Ex. 3.
7, 2013, MERS, as nominee for Downeast Mortgage, assigned the
mortgage to Bank of America, N.A. and recorded the assignment
in the Cumberland County Registry of Deeds in Book 30753,
Page 215. Pl.'s Ex. 4. On April 1, 2015, the
mortgage was further assigned to U.S. Bank, as recorded in
Book 32188, Page 91. Pl.'s Ex. 5. The transfers
were confirmed and title clarified by an order of the Maine
Superior Court on July 19, 2016. Pl.'s Ex. 6.
August 3, 2016, Caliber Home Loans, Inc., as servicer on
behalf of U.S. Bank, sent Ms. Jones a Notice of Right to Cure
(Demand Letter). Compl. ¶ 13; Answer
¶ 13; Pl.'s Ex. 7. Ms. Jones failed to make
the monthly payments beginning with the one due on November
1, 2012, and Ms. Jones did not make further payments after
receiving the Demand Letter. Compl. ¶ 15, 24;
Answer ¶ 15, 24.
trial, U.S. Bank sought to establish the amount due on the
loan, including interest and fees, by introducing an account
summary and a spreadsheet of transactions. Pl.'s
Ex. 8. According to those records, as of November 1,
2017, Ms. Jones owed $155, 409.02 in unpaid principal, $21,
888.86 for an escrow account for tax and insurance payments,
$43, 566.78 in uncollected interest, and $5, 593.62 in other
fees and costs, for a total amount due of $226, 458.28.
Id. The spreadsheet was admitted after testimony
from a records custodian from Caliber Home Loans, Inc.,
Jones is still in possession of the subject property.
Compl. ¶ 19; Answer ¶ 19.
THE PARTIES' POSITIONS
Julia L. Jones' Position
Jones argues that judgment must be entered against U.S. Bank
because the Notice of Default and Right to Cure Letter was
defective for several reasons. Def.'s Br. at 1;
Def.'s Reply at 1-2. First, Ms. Jones claims
that Maine law and the terms of the mortgage require the
mortgagee-not the servicer-send the notice. Def.'s
Br. at 2. Second, she contends that the figures in the
demand letter were incorrect because the total included
$2638.32 in a “Corporate Advance Balance” line
item, which she maintains was for attorney's fees and
costs that U.S. Bank had no right to recoup from her.
Id. at 2-3.
Jones also asserts that U.S. Bank's Exhibit 8, the
spreadsheet of transactions for her loan, was not properly
admitted into evidence or should be accorded no weight for
several reasons. Id. at 3. First, Ms. Jones argues
that Ms. Lopez's testimony about the
“boarding”-or records transfer-of Ms. Jones'
loan from a previous servicer must be disregarded and
stricken as hearsay because the boarding occurred on November
11, 2014, more than a year before Caliber hired her. Id.;
Def.'s Reply at 2. Second, she contends that U.S.
Bank has not adequately authenticated the document because
there was no testimony about the fidelity of the printout to
the electronic database and the blacked out account number on
the printout indicates it does not “accurately reflect
the electronic information it purported to
demonstrate.” Def.'s Br. at 4.
Jones sees a number of discrepancies in the loan records
which undermine their reliability. Ms. Jones says that
Caliber's late charges total $432.81 in its demand letter
but total $1442.70 in its September 13, 2017 spreadsheet,
Def.'s Ex. 1, even though the charges should
cover the same period. Def.'s Br. at 4-5. Ms.
Jones suggests there is also a discrepancy between the per
diem interest rates on Caliber's spreadsheets,
Pl.'s Ex. 8, Def.'s Ex. 1, and a
letter from the previous servicer, Seterus, Def.'s
Ex. 2, and says the interest totals for the period are
mathematically incorrect because they are not even multiples
of the per diem interest amount. Def.'s Br. at
5-6; Def.'s Reply at 3.
Ms. Jones urges the Court to avoid a cursory analysis of the
business records exception, particularly because “the
party offering the records did not actually create those
records, ” but merely received them from a separate
entity without “knowledge of the transmitting
entity's recordkeeping practices . . . .”
Def.'s Br. at 6-9; Def.'s Reply at
3. She is skeptical of so-called “integration” of
business records, whereby some courts admit business records
of a previous entity because a subsequent entity incorporated
those records and relied upon them. Def.'s Br.
at 6-9; Def.'s Reply at 3 (citing Keybank
N.A. v. Quint, 2017 ME 237, 176 A.3d 717).
U.S. Bank's Position
Bank maintains that its demand letter gave proper notice
under Maine law. Pl.'s Br. at 6-7; Pl.'s
Reply at 1-2. It suggests, “Maine courts have
neither discussed nor adopted” a requirement that the
lender specifically, as opposed to the lender's servicer
as its agent, mail the letter to the borrower. Pl.'s
Br. at 6-7; Pl.'s Reply at 1-2. U.S. Bank
asserts that it has met all of the elements for foreclosure,
but that even if the court determines otherwise, it is still
entitled to relief on its underlying contract claims
contained in Counts II and III. Pl.'s Br. at
the per diem interest calculation, U.S. Bank explains that it
“can be calculated by multiplying the principal amount
of the loan . . . by [the] (annual percentage rate of
interest), and dividing by 365.” Id. at 9
(quoting Frazier v. HSBC, 401 Fed.Appx. 436, 468 n.
2 (11th Cir. 2010). U.S. Bank maintains that the $23.42
figure in its spreadsheets is correct. Id.
the redaction of the financial account number, U.S. Bank
insists that it was only complying with Federal Rule of Civil
Procedure 5.2 to protect the plaintiff's privacy, and
that U.S. Bank should not be penalized because that would
lead to an absurd result. Pl.'s Reply at 3. It
argues that there is no genuine question that the duplicate
document accurately reflects Caliber's original
electronic records. Id. at 3-4.
Bank contends that its spreadsheet was properly admitted into
evidence pursuant to Federal Rule of Evidence 803(6), the
business records exception to the hearsay prohibition.
Pl.'s Br. at 5-6. It explains that Ms. Lopez can
testify about the reliability of the records even though she
was not yet employed at Caliber when the documents were
created, because the witness need not be the person who
actually prepared the record, so long as the witness can
explain and be cross examined concerning the manner in which
the records are made and kept. Pl.'s Reply at
Maine's Foreclosure Requirements
are eight elements of proof that a plaintiff must meet in
order to support a judgment of foreclosure under 14 M.R.S.
 the existence of the mortgage, including the book and
page number of the mortgage, and an adequate description of
the mortgaged premises, including the street address, if any;
 properly presented proof of ownership of the mortgage
note and evidence of the mortgage note and the mortgage,
including all assignments and endorsements of the note and
 a breach of condition in the mortgage;
 the amount due on the mortgage note, including any
reasonable attorney fees and court costs;
 the order of priority and any amounts that may be due to
other parties in interest, including any public utility
 evidence of properly served notice of default and
mortgagor's right to cure in compliance with statutory
 after January 1, 2010, proof of completed mediation (or
waiver or default of mediation), when required, pursuant to
the statewide foreclosure mediation program rules; and
 if the homeowner has not appeared in the proceeding, a
statement, with a supporting affidavit, of whether or not the
defendant is in military service in accordance with the
Servicemembers Civil Relief Act.
Bank of Am., N.A. v. Greenleaf, 2014 ME 89, ¶
18, 96 A.3d 700 (internal modifications and footnotes
omitted) (numbering supplied) (quoting Chase Home Finance
LLC v. Higgins, 2009 ME 136, ¶ 11, 985 A.2d 508.
The Maine Supreme Judicial Court has also repeatedly
emphasized that “[a] plaintiff seeking a foreclosure