United States District Court, D. Maine
U.S. BANK TRUST, N.A., AS TRUSTEE FOR LSF11 MASTER PARTICIPATION TRUST, Plaintiff,
AARON CUNNINGHAM and LISA CUNNINGHAM, Defendants, MAINE REVENUE SERVICES and MAINE DEPARTMENT OF HEALTH AND HUMAN SERVICES DIVISION OF SUPPORT ENFORCEMENT AND RECOVERY, Parties-in-Interest.
ORDER ON PLAINTIFF'S MOTION FOR APPROVAL OF
A. WOODCOCK, JR. UNITED STATES DISTRICT JUDGE
concluded that mortgagee in this foreclosure case has
complied with Maine law in demonstrating that it holds the
promissory note and is the owner of the mortgage, the Court
still defers final approval of the consent judgment of
foreclosure to allow the mortgagee to correct a typographical
error, clarify whether attorney's fees are included in
the judgment, explain the order of priority and amounts due
to the parties-in-interest or other parties, provide an
interest rate for the post-judgment interest, and
differentiate between that interest and the pre-judgment
1, 2019, U.S. Bank Trust, N.A., as Trustee for LSF11 Master
Participation Trust (U.S. Bank), filed a foreclosure
complaint against Defendants Mr. Aaron Cunningham and Ms.
Lisa Cunningham and Parties-in-Interest Maine Revenue
Services (MRS) and Maine Department of Health and Human
Services Division of Support Enforcement and Recovery (Maine
DHHS). Compl. (ECF No. 1). U.S. Bank served Mr.
Cunningham on July 6, 2019, Ms. Cunningham on July 8, 2019,
and Jeanne Lambrew, a commissioner designated by law to
accept service of process on behalf of Maine DHHS, on July 9,
2019, and filed proof of service for the three parties on
August 1, 2019. Proof of Service as to Aaron
Cunningham at 2 (ECF No. 8); Proof of Service as to
Lisa Cunningham at 2 (ECF No. 9); Proof of Service
as to Maine Department of Health and Human Services Division
of Support Enforcement and Recovery at 2 (ECF No. 11).
U.S. Bank served Lisa Marchese, a deputy attorney general
designated by law to accept service of process on behalf of
MRS, on July 9, 2019, and filed proof of service on September
3, 2019. Proof of Service as to Maine Revenue
Services at 2 (ECF No. 13).
12, 2019, Ms. Cunningham filed an answer to U.S. Bank's
Complaint. Answer of Lisa Cunningham (ECF No. 5). On
July 28, 2019, Maine DHHS filed an answer to the Complaint.
Answer of Party-in-Interest State of Maine Department of
Health and Human Services (ECF No. 6). Maine DHHS filed
an amended answer to the Complaint on September 5, 2019.
Am. Answer of Party-in-Interest, State of Maine
Department of Health and Human Services (ECF No. 17).
September 3, 2019, U.S. Bank filed a motion for entry of
default as to Aaron Cunningham, which the Deputy Clerk of
Court granted the same day. Pl.'s Mot. for Entry of
Default as to Aaron Cunningham (ECF No. 14); Order
Granting Motion for Entry of Default as to Aaron
Cunningham (ECF No. 15). On October 3, 2019, U.S. Bank
filed a motion for entry of default as to MRS, which the
Deputy Clerk of Court granted the same day. Pl.'s
Mot. for Entry of Default as to Party-in-Interest, Maine
Revenue Services (ECF No. 18); Order Granting Motion
for Entry of Default as to Maine Revenue Services (ECF
October 31, 2019, U.S. Bank moved for the Court's
approval of a “Consent Judgment of Foreclosure and
Sale” between U.S. Bank, Ms. Cunningham, Mr.
Cunningham, and Maine DHHS. Mot. to Approve Consent J. of
Foreclosure and Sale ¶¶ 3-5 (ECF No. 21). U.S.
Bank attached the proposed consent judgment to the motion.
Id., Attach. 1, Consent J. of Foreclosure and
Sale (Consent J.).
Court examined the documents in this case to determine
whether U.S. Bank has standing to foreclose against Mr. and
Ms. Cunningham. The Maine Supreme Judicial Court explained
that “standing to foreclose involves the
plaintiff's interest in both the note and the
mortgage.” Bank of Am., N.A. v. Greenleaf,
2014 ME 89, ¶ 9, 96 A.3d 700. The Court first turns to
the promissory note.
September 14, 2017, Mr. and Ms. Cunningham indorsed the
original note in the amount of $98, 000.00 payable to
Domestic Bank, a federal savings bank, which is named as the
lender. Compl., Attach. 2, Note at 1.
Domestic Bank made the note payable without recourse to
Credit Northeast, Inc. Id. at 3. Credit Northeast,
Inc. made the note payable without recourse to Countrywide
Bank, FSB. Id. Countrywide Bank, FSB made the note
payable without recourse in blank. Id.
Complaint, U.S. Bank asserts that “the object of this
litigation is a Note executed under seal currently owned and
held by U.S. Bank Trust, N.A., as Trustee for LSF11 Master
Participation Trust, in which the Defendants, Aaron
Cunningham and Lisa Cunningham, are the obligor . . .
.” Compl. ¶ 2. In Count I of the
Complaint, U.S. Bank claims that it is “the holder of
the Note . . . pursuant to indorsement by the previous holder
(if applicable) and physical possession of the aforesaid Note
in conformity with Title 11, section 3-1201, et seq. of the
Maine Revised Statutes and Simansky v. Clark, 147 A.
205, 128 Me. 280 (1929), ” and that “[a]s such,
[U.S. Bank] has the right to foreclosure upon the subject
property.” Id. ¶ 29. U.S. Bank adds that
it is “the current owner and investor of the aforesaid
Mortgage and Note.” Id. ¶ 30.
Maine law, section 3-1301 of title 11 “permits a party
to enforce a note if it is the ‘holder' of the
note, that is, if it is in possession of the original note
that is indorsed in blank.” Greenleaf, 2014 ME
89, ¶ 10. The Court accepts U.S. Bank's evidence
that it has “possession of the original note that is
indorsed in blank, ” and is the
“‘holder' of the note, ” and therefore
U.S. Bank “enjoys the right to enforce the debt.”
Id. ¶¶ 10-11. That Domestic Bank and
Credit Northeast indorsed the note without recourse is of no
moment, because Countrywide subsequently indorsed the note in
blank and U.S. Bank has possession of the note. Fed.
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