Maine State Housing Authority v. Sullivan

STATE OF MAINE SUPERIOR COURT
FRANKLIN, ss. CIVIL ACTION
DOCKET NO. RE-19-03

MAINE STATE HOUSING
AUTHORITY,
Plaintiff

V. FINDINGS OF FACT AND
CONCLUSIONS OF LAW

THOMAS P. SULLIVAN et.al.,
Defendants

This matter was brought to the attention of the undersigned on August 7,
2019 with respect to the Plaintiff's Motion for Summary Judgment filed the same
day. The Defendants have not responded to the motion. After reviewing the file
in its entirety, the Court makes the following Findings of Fact and Conclusions of
Law upon which the Judgment of Foreclosure-attached hereto and incorporated­
by reference herein is based:

I. Background:

1. This is a foreclosure action. In 2010, Defendants Thomas Sullivan and
Reana LeCours made and delivered to Regency Mortgage Corp. a fixed rate Note,
dated June 28, 2010, in consideration for a loan. The Note was in the principal
amount of $86,734.00. In order to execute the Note, Defendants put up their home,
located at 54 Swamp Road, Temple, ME, as collateral.

2. The Mortgage Deed was recorded on June 30, 2010. Shortly thereafter,
Regency assigned the Mortgage to the Maine State Housing Authority (MSHA),
and by extension, Mortgage Servicing Solutions (MSS), as MSHA and MSS
executed two Powers of Attorney to cover MSHA' s Mortgages.

3. Although the Defendants made payments on the note until the end of
2018 (missing a number of payments along the way), they stopped making
payments after December 18, 2018, thereby defaulting on their loan, and in breach
of the Mortgage.

4. As a result, the acceleration clause came into affect, and all amounts due
under the terms of the Note are now due. MSHA, by and through MSS, sent
Sullivan and LeCours notice of the their default, dated February 20, 2019.
5. As of July 16, 2019, Defend ants owe Plaintiff $78,699.49 ($73,673.45 being
the remaining principal and the rest interest and attorneys fees).

6. Sullivan was served in-hand by the Franklin County Sheriff's Office on
April 23, 2019, while LeCours was served through her mother, who resides with
LeCours, also by the Franklin County Sheriff's Office the same day.

7. Sullivan did not timely respond and was thus in default, while LeCours
did respond, seeking mediation.' This Court, however, granted the Plaintiff's
Motion to Terminate Mediation on June 10, 2019, meaning those parties never
ended up mediating.2 There are currently no other proceedings for possession of
the Real Property.

II. Standard of Review:

8. Because this is a foreclosure action, there is a particular standard for
summary judgment that the Plaintiff, MSHA, must satisfy in order to have their
motion granted. Thus, although there still must be a genuine issue of material fact
in order to preclude the Cour t granting the motion, see Curtis v. Porter, 2001 :ME
158, 9I9I 6,7, 784 A.2d 18, there is a much more specific list of elements to consider.

9. Specifically, the Maine Rules of Civil Procedure state

Foreclosure Actions. No summary judgment shall be entered in a
foreclosure action filed pursuant to Title 14, Chapter 713 of- the
Maine Revised Statutes except after review by the court and
determination that (i) the service and notice requirements of 14
M.R.S. § 6111 and these rules have been strictly performed; (ii) the
plaintiff has properly certified proof of ownership of the mortgage
note and produced evidence of the mortgage note, the mortgage, and
all assignments and endorsements of the mortgage note and the
mortgage; and (iii) mediation, when required, has been completed
or has been waived or the defendant, after proper service and notice,
has failed to appear or respond and has been defaulted or is subject
to default. In actions in which mediation is mandatory, has not been
waived, and the defendant has appeared, the defendant's opposition
pursuant to Rule 56(c) to a motion for summary judgment shall not
be due any sooner than ten (10) days following the filing of the
mediator's report.

M.R. Civ. P. 56(j).

1 Ms. Sullivan (Lecours) took the position that because her then-husband was awarded the property

in question along with the d ebt-pmsuant to their Divorce Judgment dated 12 / 3 / 13, she could not
be held responsjble for any debt associated with the property, including the Note. Sadly, she was
mistaken.
, The motion was granted because neither party was residing in the subject premises.

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10. The Law Court has recently heard a number of cases dealing with
motions for summary judgment in the foreclosure context, and has clarified and
expanded this list, so that there are now a number of elements that the foreclosing
plaintiff must satisfy in order to prevail on a 56(j) motion for summary judgment.
The Law Court set forth the following list of elements:

(1) The existence of the mortgage, including the book and page
number of th mortgage, and an adequate description of the
mortgaged premises, including the street address, if any;

(2) Properly presented proof of ownership of the mortgage note and
the mortgage, including all assignments and endorsements of the
note and the mortgage;

(3) A breach of condition in the mortgage;

(4) The amount due on the mortgage note, including any reasonable
attorney fees and court costs;

(5) The order of priority and any amounts that may be due to other
parties in interest, including any public utility easements;

(6) Evjdence of properly served notice of default and mortgagor's
right to cure in compliance with statutory requirements;

(7) After January 1, 2010, proof of completed mediation (or waiver
or default 0£ mediation), when reguired, pursuant to the statewide
foreclosure mediation program rules; and

(8) If the h meowner has n t appeared in the proce ding, a
statement, with a supporting affidavit, of whether or not the
defendant is in military service in accordance with the
Servicemembers Civil Relief Act.

HSBC Mortg. Servs., Inc. v. Gabay, 2011 ME 101, 'JI 10, 28 A.3d 1158; Chase
Home Fin. LLC v. Higgins, 2009 ME 136, 'Ir 11, 985 A.2d 508; see also Camden
Nat'l Bank v. Peterson, 2008 ME 85, 'JI 21, 948 A.2d 1251 (stating that a party
seeking foreclosure must comply strictly with all steps required by statute).

11. The Law Court has also emphasized that such facts must appear
in the Plaintiff's Statement of Material Facts on summary judgment, and
that Plain.ti.ff' s assertions must be supported by ecord references to
evidence that is of a sufficient quality that it would be admissibl at h"ial.
See HSBC Mortg. Servs., Inc. v. Murphy, 2011 ME 59, 19, 19 A.3d 815; see also
M.R. Gv. P. 56(h)(1), (4) ("The court may disregard any statement of fact
not supported by a specific citation to record material properly considered
on summary judgment. The court shall have no independent duty to search
or consider any part of the record not specifically referenced in the parties'

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separate statement of facts."); Gabay, 2011 ME 101, 'if 17 ("Our statement
th.at we will not, and trial courts should not, independently search a r cord
to find evidence to support a party's claim when that claim is insufficiently
referenced in that party's statement of material facts is no mere technicality
to make summary judgment practice more difficult.").

12. Finally, although the defendants have not filed responsive briefs to
MSHA' s motion, the foreclosure context means this does not change the
undersigned's standard of review. See Suntrust Mortg. v. Adler, CV No. RE-2009­
133, 2011 Me. Super. LEXIS 90, at *3,4 (May 13, 2011) ("Regardless of whether the
defendant has fil d an objection, however, tb.is motion is subject to Rule 56(j),
which imposes detailed requirements for granting summary judgment in
foreclosure actions. M.R. Civ. P. 56(j). The court has an independent obligation to
ensure compliance with this rule.").

13. Thus, the outcome is determined by whether MSHA and MSS have
properly laid out the necessary facts in the Statement of Material Facts, and
whether those assertions are properly supported by record citations. Because of
the emphasis on record citations, the undersigned will include citations to both th
numbered paragraph in the Statement of Material Fact and record citations.

II. Discussion:

14. In this case, MSHA and MSS have referenced all the necessary facts
outlined in M.R. Civ. P. 56(j) and Chase Home Fin., and propei-ly supported those
assertions with- record - citations that provide for those facts. Because-this
determination involves more going through a checklist than any analysis, th.is
section will do little more than simply go through the Chase Home Fin. elements
and provide citations. ·

15. The first element is the existence of the mortgage, including the book
and page number f the n1ortgage, and an adequate d escription of the mortgaged
premi es, including the str et address. This is provid d in the Statement of
Material Facts (S.M.F:), paragraphs 3, 8, and 10, and supported by Exhibits B and
C.
16. The second element is properly presented pro f of ownership of the
mortgage note and the mortgage, j.ncluding all assignments and endorsements of
the note and th mortgage. This is provided in S.M.F. <JI<J[ 9,10, and 11, and
supported by Exhibit D.

17. The third element is a breach of condition in the mortgage. This is
provided in S.M.F. 'i['i[ 17, 18, and 19, and supported by Exhibit E.

18. The fourth element is the amount due on the mortgage note, including
any reasonable attorney fees and court costs. This is provided in S.M.F. <['if 9 and
19, and supported by Exhibits E and G.

19. The filth element the order of priority and any am unts that may be
due to other parties in interest, inclu ding any public utility easements. This is

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provided for in S.M.F. <JI 15, and supported by the affidavit of Bruce Hochman, <JI<JI
7,8, and 9.

20. The sixth element is evidence of a properly served notice of default and
mortgagor's right to cur in compliance with statutory requirements. This is
provided in S.M.F. <J[ 17, 18, and 19, and supported by Exhibit F.

21. The seventh element is proof of completed mediation (or waiver or
default of mediation), when reguir d, pursuant to the statewide foreclosure
mediation program rules. This is provided for in S.M.F. <JI<[ 23, 24, and 25, and
upported by the affidavit 0£ Ryan DeRedin, <J[<JI 46, 47 and 48, and by this Court's
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Jun 10, 2019 Order Granting Plaintiff's Motion to Terminate Mediation (Dow, J.).

22. The eighth and final element is a statement, with a supporting afiidavit,
of whether or not the defendant is in military service in accordance with the
Servicemembers Civil Relief Act. This is provided for in S.M.F. <J[ 32, and
supported by th.e affidavit of Bruce Hochman, 'Il' 17, which in tum is supported by
thereto attached Exhibit A.

23. The one final point to make in this discussion is the role that the Rules
of Evidence play. As the Law Court noted less than a decade ago, "[i]n a
foreclosure case the relevant documents are often created by entities other than the
foreclosing party. The supporting affidavits attempting to demonstrate that these
records are admissibl under the business records exception to the hearsay rule
must comply with the requirements laid out by the Law Court in Beneficial Maine,
LLC v. -Carter; 2011 ME 77, 2-5 A.3d ·96." Bae Homes Loans Servicing vi Richard-s-,--GV­
No. RE-10-613, 2011 Me. Super. LEXIS 194, at *3, 4 (Dec. 7, 2011) (Wheeler, J.).

24. As is true of the other elements, MSHA and MSS have correctly
followed the Law Court's requirements, as the custodian of records who provides
this information, Mr. Ryan DeRedin and his affidavit, avoid many of the common
problems where other banks have failed in foreclosure actions.

25. As the Law Court noted in Beneficial Maine, the affiant need not be an
employee of the creator of the mortgage (in this case Regency). 2011 ME 77, <JI 13.
"In such instances, records will be admissible pursuant to the business records
exception to the hearsay rule, M.R. Evid. 803(6), if the £01.mdational evidence from
the r ceiving entity's employee is adequate to demonstrate that the employee had
sufficient kn.owl dge of both businesses' regular practices to demonstrate the
reliability and trustworthiness of the information." Id.

26. The Law Court also noted that such an affiant must demonstrate
knowledge about a num.b er of aspects of the business, listing specifically: (1) the
producer of the record at issue employed r gular bu ·iness practices £or creating
and maintaining the r cords that were sufficiently accepted by the receiving
business to allow reliance n the records by the receiving businessi (2) the
produc r of the record at issue employed regular business practices for
transmitting them to the receiving business; (3) by manual or electronic processes,
the r ceiving business integrated the J"ecords into its own records and maintained

5
them through regular business processes; (4) the record at issue was, in fact,
among the receiving business's own records; and (5) the receiving business relied
on these records in its day-to-day operations. Id. <JI 14. The Plaintiff has done so.

27. Finally, because the admissibility of such records dep nds on the
business records exception, "an affidavit of a custodian of business records must
demonstrate that the affiant meets the requirements ofM.R Evid. 803(6)
governing the admission of records of regularly conducted business. A business's
r cords kept in the course fits regu]axly conducted busin ss may b admissible
noti.v:ithstanding the hearsay rule if the necessary foundation is established 'by the
testimony of the custodian o other qualified witness."' HSBC Mortg. Servs., Inc. v.
Mu1phy 1 2011 ME 59, <JI 10, 19 A.3d 815 (quoting M.R. Evid. 803(6)).
28. "The foundation that the custodian or qualified witness must establish
is four-fold: (1) the record was made at or near the time of the events reflected in
the record by, or from information transmitted by, a person with personal
knowledge f the events recorded therein; (2) the record was kept in the cours of
a regularly conducted business; (3) it was the regular practice of the business to
make records of the type involved; and (4) no lack of trustworthiness is indicated
from the so1.uce of information from which the record was made or the method or
circumstances under which the record was prepared." Id. (quoting Bank of Am.,
N.A., v. Barr, 2010 ME 124, <JI 19, 9 A.3d 816).

29. On behalf of MSHA and MSS, Mr. DeRedin's affidavit seems to
establish all of these n. cessary elements. His affidavit notes the ·egular practices
of business keeping at MSS, n tes his knowledg and understanding f the-such
record keeping, and ind d, tak s care to note that the ab ve-noted requ.h ements
are satisfied (in particular, <][CJI 20 - 24 of his affidavit copy the language of M.R.
Evid. 803(6)).

30. Thus, because MSHA and MSS retained a custodian of records that
satisfies the reguirements laid out in BeneficialMain e and Murphy, the records upon
which the plainti.ff relies fall squarely within the business records exception to th
hearsay rule.

III. Conclusion:

31. Because MSHA established all of the 56(j) and Chase Home Fin.
elements, and because there is no hearsay issue for the admissibility of MSHA's
supporting records, the Court grants Plaintiff's motion for summary judgment.

The Clerk is directed to incorporate these Findings of Fact and Conclusions
of Law by reference into the docket for this case, pursuant to Rule 79(a), Maine
Rules of Civil Procedure.

Date: 9 /27 / 19

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MAINE STATE HOUSING AUTHORITY - PLAINTIFF SUPERIOR COURT
353 WATER STREET FRANKLIN, ss.
AUGUSTA ME 04330
Attorney for: MAINE STATE HOUSING AUTHORITY
Docket No Fl\RSC-RE-2019-000 0~ ' 1:1"/lt?J
BRUCE HOCHMAN - RETAINED 04/12/2019
EATON PEABODY
PO BOX 15235 DOCKET RECORD
100 MIDDLE STREET
PORTLAND ME 04112-5235

Attorney for: MAINE STATE HOUSING AUTHORITY
MICAH A SMART - RETAINED 04/12/2019
EATON PEABODY
PO BOX 15235
100 MIDDLE STREET
PORTLAND ME 04112-5235

v.
REANA M LECOURS - DEFENDANT
209 ROUTE 2 WEST
WILTON ME 04294
THOMAS SULLIVAN - DEFENDANT
54 SWAMP ROAD
TEMPLE ME 04984
Attorney for: THOMAS SULLIVAN
BRUCE HOCHMAN - REMOVAL 06/25/2019
EATON PEABODY
PO BOX 15235
100 MIDDLE STREET
PORTLAND ME 04112-5235

A ttorney for: THOMAS SULLIVAN
MICAH A SMART - REMOVAL 06/25/2019
EATON PEABODY
PO BOX 15235
100 MIDDLE STREET
PORTLAND ME 04112-5235

A lias: THOMAS SULLIVAN

Filing Document: COMPLAINT Minor Case Type: FORECLOSURE
F iling Date: 04/12/2019

D ocket Events:
0 4/12/2019 FILING DOCUMENT - COMPLAINT FILED ON 04/12/2019

0 4/12/2019 Party(s): THOMAS SULLIVAN
ATTORNEY - RETAINED ENTERED ON 04/12/2019

Defendant's Attorney: BRUCE HOCHMAN

0 4/12/2019 Party(s): MAINE STATE HOUSING AUTHORITY
ATTORNEY - APPOINTED ORDERED ON 04/12/2019

RE-200 Page 1 of 6 Printed on: 12/29/2020