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Denutte v. U.S. Bank, N.A.

Supreme Judicial Court of Maine

July 30, 2019


         Argued: February 5, 2019

Page 620

          Meredith C. Eilers, Esq. (orally), Michael R. Bosse, Esq., and Daniel J. Mitchell, Esq., Bernstien Shur, Portland, for appellant Pamela A. Denutte

         Robert M. Brochin, Esq. (orally), Morgan, Lewis & Bockius LLP, Miami, Florida, and Jeff Goldman, Esq., Morgan, Lewis & Bockius LLP, Boston, Massachusetts, for appellee U.S. Bank, N.A.



         HJELM, J.

         [¶1] After borrowing money from a financial institution and executing a mortgage to secure the loan, Pamela A. Denutte fully performed her obligations arising from the transaction. She alleges that despite her performance, U.S. Bank, N.A.— the servicer of the mortgage— did not fulfill its statutory duty when it came time for the mortgage to be discharged. See 33 M.R.S. § 551 (2018). She filed a complaint against U.S. Bank based on that alleged statutory violation, but, on motion filed by U.S. Bank, the Business and Consumer Docket (Murphy, J. ) dismissed the complaint as time-barred. Denutte appeals from that judgment, which we now affirm.

          I. BACKGROUND

         [¶2] In her complaint, Denutte alleged the following facts, which we treat as admitted for the purpose of determining whether the allegations state a viable claim for relief. See Sabina v. JPMorgan Chase Bank, N.A., 2016 ME 141, ¶ 2, 148 A.3d 284.

         [¶3] In December of 2008, Denutte obtained a loan from Merrimack Mortgage Company, Inc. Denutte’s promise to satisfy

Page 621

her loan obligations was secured by a mortgage encumbering real property she owned in South Portland. After Denutte fully performed her obligations, Merrimack discharged the mortgage by executing a written release dated May 17, 2013. U.S. Bank, acting as the servicer of Merrimack’s mortgage-secured loans, recorded the release in the Cumberland County Registry of Deeds. The recording was timely as measured by 33 M.R.S. § 551, which requires a mortgagee to record a written release of a mortgage "[w]ithin 60 days after full performance of the conditions of the mortgage." On June 6, 2013, the registry mailed the original recorded mortgage release to U.S. Bank, and U.S. Bank received the recorded instrument no later than three business days later. In early September of 2013— approximately three months after it received the original recorded mortgage release back from the registry— U.S. Bank mailed the release to Denutte.

         [¶4] Four years later, on September 27, 2017, Denutte filed a complaint in the Superior Court (Cumberland County) alleging that U.S. Bank had violated another portion of 33 M.R.S. § 551— the mailing obligation, which requires a mortgagee[1] to mail the original recorded mortgage release to the mortgagor within thirty days after the mortgagee receives the recorded release back from the registry of deeds.[2] See Sabina, 2016 ME 141, ¶ 9, 148 A.3d 284. In her complaint, Denutte asserted that, because of the statutory violation, U.S. Bank is liable to her as the statute provides— for "exemplary damages" of $500 and her reasonable attorney fees and costs.

         [¶5] The case was transferred to the Business and Consumer Docket, and soon after, in December of 2017, U.S. Bank moved to dismiss Denutte’s complaint as time-barred and therefore failing to state a claim upon which relief may be granted, see M.R. Civ. P. 12(b)(6). In its motion, U.S. Bank contended that Denutte’s claim for a violation of section 551’s mailing obligation was subject to and barred by the one-year statute of limitations provided in 14 M.R.S. § 858 (2018) for "[a]ctions for any penalty or forfeiture on a penal statute." Denutte responded that the statutory mailing obligation is remedial rather than penal and is therefore controlled, not by the one-year limitation period of section 858, but by the six-year period of limitations that applies more generally to civil claims, see 14 M.R.S. § 752 (2018) ("All civil claims shall be commenced within 6 years after the cause of action accrues ... except as otherwise specially provided.").[3]

         [¶6] In March of 2018, the court issued a judgment determining that the portion of section 551 creating the mailing requirement is a penal statute, that an award of damages for its violation is a penalty, and that a claim for violating the mailing requirement is therefore subject to the one-year statute of limitations prescribed in section 858. The court concluded that the complaint was time-barred because Denutte filed her complaint more than one

Page 622

year after the alleged violation. Denutte’s motion for reconsideration was denied by the court, see M.R. Civ. P. 7(b)(5), 59(e), and she then filed this timely ...

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