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Federal National Mortgage Association v. Sturgis

Superior Court of Maine, Cumberland

July 19, 2018

BRIAN S. STURGIS, Defendant.



         Before the Court is Defendant Brian Sturgis`s ("Sturgis") motion for summary judgment, [1] This motion was filed pursuant to the Court's May 7, 2018 trial management conference Order directing Sturgis to file a motion regarding the applicability of M.R. Civ. P. 41 to this case. Having considered the filings of the parties, for the following reasons, the Court now denies Sturgis's motion.

         I. Background

         The following facts are not in dispute. On August 31, 2005, Defendant Brian Sturgis executed a promissory note in favor of GMAC Mortgage Corporation ("GMAC") and executed a mortgage to GMAC on the same day. On August 20, 2008, Plaintiff Federal National Mortgage Association ("Fannie Mae"), as GMAC's purported successor-in-interest, [2] filed a foreclosure action against Sturgis alleging Sturgis defaulted on the loan on March 1, 2008 and the principal balance due was $217, 351.70. Fannie Mae voluntarily dismissed that lawsuit pursuant to M.R. Civ. P. 4l(a)(1)(i) on October 27, 2008, On June 1, 2009, Fannie Mae filed a second foreclosure action against Sturgis alleging Sturgis defaulted on January 1, 2009 and the principal balance due was $214, 479-62. Sturgis signed a modification agreement offered by GMAC on September 25, 2009. On October 20, 2009, the second lawsuit was also voluntarily dismissed pursuant to Rule 4l(a)(1)(i). On April 6, 2011, Fannie Mae filed a third foreclosure action against Sturgis. That action was dismissed by stipulation of the parties pursuant to M.R. Civ. P. 4l(a)(1)(ii) on June 6, 2012. The current foreclosure action was filed on May 10, 2016.

         II. Standard of Review

         Summary judgment is appropriate if, based on the parties' statements of material facts and the cited record, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. M.R. Civ. P. 56(c); Dyer v. Dep't of Tramp., 2008 ME 106, ¶ 14, 951 A.2d 821. "A material fact is one that can affect the outcome of the case. A genuine issue of material fact exists when the factfinder must choose between competing versions of the truth." Dyer, 2008 ME 106, ¶ 14, 951 A.2d 821 (internal citation and quotation marks omitted). When deciding a motion for summary judgment, the court reviews the evidence in the light most favorable to the non-moving party. Id.

         If the movant's motion for summary judgment is properly supported, the burden then shifts to the non-movant to respond with specific facts indicating a genuine issue for trial in order to avoid summary judgment. M.R. Civ. P. 56(e). When a defendant moves for summary judgment, the plaintiff must respond with evidence establishing a prima facie case. Watt v. UniFirst Corp., 2009 ME 47, ¶ 21, 969 A.2d 897. The evidence proffered by the plaintiff "need not be persuasive at that stage, but the evidence must be sufficient to allow a factfinder to make a factual determination without speculating." Estate of Smith v. Cumberland Cnty., 2013 ME 13, ¶ 19, 60 A.3d 759. If a plaintiff fails to present sufficient evidence, then the defendant is entitled to a summary judgment. Watt, 2009 ME 47, ¶ 21, 969 A.2d 897.

         III. Discussion

         A. The Two-Dismissal Rule

         Sturgis's motion is premised on the assertion that the filing and dismissal of the first two foreclosure lawsuits operates as a judgment on the merits, thereby barring the current claim as res judicata. [3] Rule 41(a)(1) states, in relevant part:

[A]n action may be dismissed by the plaintiff without order of court (i) by filing a notice of dismissal at any time before service by the adverse party of an answer or of a motion for summary judgment, whichever first occurs.... [A] notice of dismissal operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in any court of this state ... an action based on or including the same claim.

         Sturgis argues the dismissal of the second lawsuit operates as an adjudication on the merits and therefore bars Plaintiff from bringing a subsequent foreclosure action against him, citing Johnson and its progeny. See Johnson v. Samson Constr. Corp., 1997 ME 220, ¶ 8, 704 A.2d 866 ("The court's dismissal with prejudice of the first action operated 'as an adjudication on the merits.' ... That judgment bars the complaint in this action which alleges precisely what the complaint in the first action alleged: that [Defendant] defaulted on the note and that [Plaintiff] is entitled to a judgment for the amount due under the note.").

         Had there been no subsequent payments made on the loan or any modification of the loan, Fannie Mae v. Deschaine, which holds that the filing of a foreclosure lawsuit accelerates the mortgage debt and therefore bars subsequent foreclosure suits pursuant to the rule in Johnson, would likely compel a finding that the two-dismissals rule bars any future foreclosure action. See Fannie Mae v. Deschaine, 2017 ME 190, ¶¶ 26, 35-36, 170 A.3d 230. Indeed, the Law Court in Pushard v. Bank of America cites with approval an opinion of the Supreme Court of Ohio wherein, when presented with a Rule 41 question in the foreclosure context, the Court held a second voluntary dismissal bars all future foreclosure actions. U.S. Bank Nat'l Ass'n v. Gullotta, 899 N.E.2d 987, 402 (Ohio 2008) ("[W]e hold that each missed payment under the promissory note and mortgage did not give rise to a new claim and that [the] two-dismissal rule does apply. Thus, res judicata barred [Plaintiffs] third complaint."); see Pushard v. Bank of Am., N.A., 2017 ME 230, ¶ 22 n. 10, 175 A.3d 103. Yet, this passage of the Ohio Court's opinion is particularly relevant to the case under consideration:

The significant facts here are that the underlying note and mortgage never changed, that upon the initial default, the bank accelerated the payments owed and demanded the same principal payment that it demanded in every complaint, that [Defendant] never made another payment after ...

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