Homeward Residential, Inc. v. Marianne A. Gregor
122 A.3d 947
| Me. | 2015Background
- In 2002 Gregor executed an $80,000 promissory note and mortgage; the mortgage was recorded in Waldo County.
- The mortgage was assigned multiple times (some assignments recorded, some unrecorded); an unrecorded assignment to Fannie Mae appeared in the defendant’s file and Homeward admitted in discovery that Fannie Mae owned the loan.
- Gregor defaulted in 2009; Bank of America filed for foreclosure in 2011; Homeward Residential was later substituted as plaintiff and then its interest was apparently assumed by Ocwen before trial.
- At a bench trial Ocwen’s loan analyst was the sole witness; exhibits included the original note (endorsed in blank), recorded assignments, the unrecorded Fannie Mae assignment, and an Ocwen computer printout of the payoff amount.
- The trial court found Homeward/Ocwen lacked standing to foreclose because of the prior assignment to Fannie Mae, but it made factual findings (including an amount due) and entered judgment for the defendant, adding that the parties may relitigate the issues in a future action.
- The Supreme Judicial Court vacated that judgment and remanded for dismissal without prejudice because the plaintiff lacked standing and the court should not have decided the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court’s reservation that the parties may relitigate issues was erroneous | Homeward: not directly argued as principal issue on appeal | Gregor: statement could allow re-litigation but court should have simply dismissed | Court vacated entire judgment and dismissed without prejudice; rejected concern about reservation as moot once judgment vacated |
| Admissibility of Ocwen computer printout to prove amount due | Homeward/Ocwen: printout was a business record foundationally supported by witness | Gregor: witness lacked firsthand knowledge and was not a qualified custodian | Court found the witness was not qualified to lay foundation; evidence was inadequate (discussed as a problem though decision rested on standing) |
| Whether possession/endorsement of promissory note gave standing to foreclose absent mortgage ownership | Homeward/Ocwen: possession and blank endorsement of the note entitled plaintiff to enforce the note and foreclose | Gregor: Homeward admitted it did not own the mortgage and Fannie Mae’s assignment undermines standing to foreclose | Court: plaintiff must show both holder of note and owner of mortgage (or claim under the owner); Homeward admitted it did not own the mortgage, so lacked standing under 14 M.R.S. § 6321 |
| Proper remedy when plaintiff lacks standing but court addressed merits | Homeward/Ocwen: judgment on merits was acceptable given evidence | Gregor: lack of standing required dismissal, not a merits determination | Court: where plaintiff lacks standing, court cannot decide merits; vacated judgment and remanded for dismissal without prejudice |
Key Cases Cited
- Bank of Am., N.A. v. Greenleaf, 96 A.3d 700 (Me. 2014) (plaintiff must demonstrate standing to enforce note and owner of mortgage when seeking foreclosure)
- Mortg. Elec. Registration Sys., Inc. v. Saunders, 2 A.3d 289 (Me. 2010) (standing and possession of note principles in foreclosure context)
- Witham Family Ltd. P’ship v. Town of Bar Harbor, 110 A.3d 642 (Me. 2015) (justiciability requires a real and substantial controversy)
- Bank of Me. v. Hatch, 38 A.3d 1260 (Me. 2012) (foundation/witness qualifications for business-records hearsay exception)