Bank of American, N.A. v. Scott A. Greenleaf
2014 ME 89
| Me. | 2014Background
- In 2006 Scott A. Greenleaf executed a $385,000 promissory note and mortgage naming Residential Mortgage Services, Inc. (RMS) as lender and MERS as RMS’s nominee.
- BAC Home Loans Servicing, LP (Countrywide successor) later commenced foreclosure; Bank of America (the Bank) was substituted as plaintiff after a merger with BAC.
- The District Court denied the Bank’s untimely summary judgment motion, sanctioned the Bank’s attorney for defective Rule 56 filings, and later tried the foreclosure claim with limited testimony (Bank litigation liaison Heather Pollock) and documentary exhibits (note, mortgage, MERS→BAC assignment, merger certificate, payment printout, notice of default).
- The District Court entered judgment of foreclosure for the Bank; Greenleaf appealed challenging standing, sufficiency of proof on foreclosure elements, and admission of records.
- The Supreme Judicial Court vacated the foreclosure judgment because the Bank failed to prove ownership of the mortgage (standing) and also erred in admitting the Bank’s account printout and in giving a defective notice of default, any of which independently require vacatur.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to foreclose (ownership of note and mortgage) | Bank: possession of the original note endorsed in blank makes it a holder entitled to enforce the note; MERS assignment and merger certificate show transfer of mortgage interest to Bank | Greenleaf: MERS held only nominee/recording rights under the mortgage and could not assign ownership of the mortgage; Bank did not show an assignment from RMS or other proof of mortgage ownership | Court: Bank was holder of the note but did not establish ownership of the mortgage; MERS only had nominee/recording rights and could not grant greater rights by assignment; Bank lacked standing — judgment vacated |
| Evidentiary foundation for account/payment printout (business record) | Bank: Exhibit was a business record admissible under M.R. Evid. 803(6) with Bank witness testimony | Greenleaf: Bank’s litigation liaison lacked personal, transactional knowledge and did not establish the requisite custodian/qualified-witness foundation | Court: Pollock did not establish custodian status or how records were created/maintained; admission of the printout was erroneous and without it amount due was not proven |
| Sufficiency of notice of default under 14 M.R.S. § 6111 | Bank: provided notice with itemization and invited borrower to contact servicer for up-to-date payoff | Greenleaf: itemization was inadequate because notice instructed him to contact servicer for final payoff, failing the statutory ‘‘itemization of any other charges’’ requirement | Court: §6111 requires a cure amount fixed during the 35-day cure period; notice was deficient for directing borrower to contact servicer for final payoff — noncompliant |
| Sanctions for defective Rule 56 filings | Bank: sanction was excessive | Greenleaf: court’s sanction insufficient? (Greenleaf sought greater fees) | Court: affirmed District Court’s sanction of $625 against attorney Doonan and did not disturb the exercise of discretion |
Key Cases Cited
- Mortg. Elec. Registration Sys., Inc. v. Saunders, 2 A.3d 289 (Me. 2010) (MERS as nominee holds only limited recording rights and is not a mortgagee under Maine foreclosure statute)
- Bank of Am., N.A. v. Cloutier, 61 A.3d 1242 (Me. 2013) (distinguishing standing from evidentiary proof; requirements for foreclosure plaintiffs)
- Deutsche Bank Nat’l Trust Co. v. Wilk, 76 A.3d 363 (Me. 2013) (possession of note endorsed in blank makes holder entitled to enforce note; mortgage ownership still required)
- JPMorgan Chase Bank v. Harp, 10 A.3d 718 (Me. 2011) (failure to establish ownership of mortgage undermines ability to foreclose)
- Chase Home Finance LLC v. Higgins, 985 A.2d 508 (Me. 2009) (enumerating eight elements of proof required for judgment of foreclosure)
- Wells Fargo Bank, N.A. v. Burek, 81 A.3d 330 (Me. 2013) (analysis of §6321 proof requirements and distinction from Saunders)
- Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282 (1st Cir. 2013) (discussed but not applied as Maine law controls nominee/assignment issue)
- Beneficial Me., Inc. v. Carter, 25 A.3d 96 (Me. 2011) (business-record foundation requires qualified witness with firsthand knowledge)