United States District Court, D. Maine
U.S. BANK, NATIONAL ASSOCIATION, AS SUCCESSOR TRUSTEE TO BANK OF AMERICA, N.A., AS SUCCESSOR BY MERGER TO LASALLE BANK, N.A., AS TRUSTEE FOR THE CERTIFICATEHOLDERS OF MLMI TRUST, MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2006-MNLI Plaintiff,
MICHAEL S. TUTTLE, Defendant, JPMORGAN CHASE BANK, N.A., BANK OF AMERICA, N.A., KAMCO SUPPLY CORP. OF BOSTON, and MAINE DEPARTMENT OF HEALTH AND HUMAN SERVICES, DIVISION OF SUPPORT AND ENFORCEMENT AND RECOVERY, Parties-in-Interest.
ORDER ON MOTION TO DISMISS
A. WOODCOCK, JR. UNITED STATES DISTRICT JUDGE
lender loaned a residential property owner $760, 000 and
obtained a promissory note from the borrower but failed to
obtain title to the legally-enforceable mortgage to secure
payment of the promissory note. When the borrower failed to
pay in accordance with the terms of the promissory note, the
lender's successor attempted to foreclose on the
residential property asserting that the circumstances created
an equitable mortgage on the borrower's property. The
Court grants the borrower's motion to dismiss the
equitable mortgage count because the Maine Supreme Judicial
Court does not recognize the concept of equitable mortgage in
19, 2019, U.S. Bank, National Association, as Successor
Trustee to Bank of America, N.A., as Successor by Merger to
LaSalle Bank, N.A., as Trustee for the Certificateholders of
MLMI Trust, Mortgage Loan Asset-Backed Certificates, Series
2006-MNLI (U.S. Bank) filed a complaint against Michael S.
Tuttle and Tamara Lea Tuttle, naming as parties-in-interest
JPMorgan Chase Bank, N.A.; Bank of America, N.A.; KAMCO
Supply Corp. of Boston; and the Maine Department of Health
and Human Services, Division of Support and Enforcement and
Recovery. Compl. (ECF No. 1). The Complaint asserted
five counts against each defendant: breach of note; breach of
contract, money had and received; quantum meruit; unjust
enrichment; and equitable mortgage. Compl.
September 5, 2019, Mr. Tuttle answered the Complaint,
Def.'s Answer to Pl.'s Compl. (ECF No. 16),
and filed a motion to dismiss for failure to state a claim.
Def.'s Mot. to Dismiss Counts II, III, IV & V of
Pl.'s Compl. (ECF No. 17) (Def.'s
Mot.). On September 26, 2019, U.S. Bank filed a
consent motion to extend its time to respond to Mr.
Tuttle's Motion to Dismiss, stating that “[t]he
Parties have engaged in extensive negotiating to limit the
issue[s] before the Court which will be reflected in an
Amended Complaint and Partial Opposition to Motion to Dismiss
which will be filed on September 30, 2019.”
Consented Mot. to Extend (ECF No. 21).
September 30, 2019, U.S. Bank filed a response to Mr.
Tuttle's motion. Opp'n to Def.'s Mot. to
Dismiss Count V of Pl.'s Compl. (ECF No. 23)
(Pl.'s Opp'n). On October 10, 2019, Mr.
Tuttle filed a reply. Def.'s Reply to Pl.'s Obj.
to Def.'s Mot. to Dismiss (ECF No. 24)
(Def.'s Reply). On October 18, 2019, U.S. Bank
filed a consent motion to amend its complaint, Consented
to Mot. to Amend Compl. (ECF No. 25), and on the same
day the Magistrate Judge granted U.S. Bank's consent
motion to amend the complaint. Order Granting Mot. to Am.
Compl. (ECF No. 27). On October 21, 2019, U.S. Bank
filed an amended complaint asserting only two counts against
Mr. Tuttle: breach of note and equitable mortgage. Am.
Compl. ¶¶ 24-43 (ECF No. 28). On the same day,
Mr. Tuttle answered the Amended Complaint. Def.'s
Answer to Pl.'s Am. Compl. (ECF No. 29).
Factual Background 
Tuttle conveyed the property at 15 Ocean Avenue, town of Cape
Elizabeth, Cumberland County, state of Maine, to Mr. Tuttle
by a warranty deed on March 28, 2018. Am. Compl.
¶ 10. On May 25, 2006, Mr. Tuttle “executed and
delivered to Mortgage Lenders Network USA, Inc. [MLNUS] a
certain Note in the amount of $760, 000.” Id.
¶ 11. This amount was “significantly below the
property's value at that time . . ..” Id.
¶ 36. The Amended Complaint is imprecise about how
exactly U.S. Bank came to be the holder of the promissory
note, but U.S. Bank alleges that it is “the proper
holder of the Note and is entitled to enforce the terms and
conditions of the Note due to its breach by the Defendant,
Michael S. Tuttle.” Id. ¶ 27.
Tuttle also “executed a Mortgage on May 25, 2006, which
particularly referenced exactly the same property address of
15 Ocean Avenue, Cape Elizabeth, ME 04107, which was
referenced on the aforesaid Promissory Note.”
Id. ¶ 38. U.S. Bank acknowledges in the Amended
Complaint that the “aforesaid Mortgage is arguably
unenforceable under current Maine Law pursuant to the
Greenlea[f] decision.” Id.
¶ 39 (citing Bank of Am., N.A. v. Greenleaf,
2014 ME 89');">2014 ME 89, 96 A.3d 700; Fed. Nat'l Mortg. Ass'n
v. Deschaine, 2017 ME 190, 170 A.3d 230; Pushard v.
Bank of Am., N.A., 2017 ME 230, 175 A.3d
March 19, 2019, the law firm of Doonan, Graves &
Longoria, LLC on behalf of U.S. Bank sent Mr. Tuttle a notice
of mortgagor's right to cure, or demand letter.
Id. ¶ 12; Compl., Attach. 3
(Demand Letter). This demand letter informed Mr.
Tuttle of “the payment due date, the total amount
necessary to cure the default, and the deadline by which the
default must be cured . . ..” Am. Compl.
¶ 13; see also Demand Letter at 1-2. Mr. Tuttle
failed to cure the default prior to the expiration of the
deadline for cure specified in the demand letter. Am.
Compl. ¶ 14. U.S. Bank is the present holder and
lawful owner of the note, id. ¶¶ 15-16,
which is indorsed in blank by Mortgage Lenders Network
See Compl., Attach. 2 at 4 (Note). The
total debt owed under the note as of May 17, 2019, was $1,
023, 328.20. Am. Compl. ¶ 21. Mr. Tuttle was,
at the time of the filing of the Amended Complaint, in
possession of the property secured by the note, and was not
in the military. Id. ¶¶ 22-23.
POSITIONS OF THE PARTIES
Michael S. Tuttle's Motion to Dismiss
Tuttle asserts that “[a]n equitable mortgage arises
when a property owner borrows money from another party and
gives a deed (or possibly some sort of assignment in the case
of personal property) to that lender.” Def.'s
Mot. at 4. “It is not, ” in Mr. Tuttle's
view, “a concept which has any meaning in this case,
” because “[u]nder an equitable mortgage theory
involving the giving of a deed, if the parties have agreed
that upon payment of the debt the ...