266 A.3d 288
Me.2022Background
- In Sept. 2017 Rockwell Homes borrowed $1,300,000 from Jackson Lumber, secured by a mortgage on Lebanon, ME property; Wiswell and the Bissons executed personal guaranties. Rockwell defaulted in Sept. 2018.
- Jackson Lumber notified the debt and proceeded with a statutory power-of-sale foreclosure; at the May 23, 2019 public sale Jackson Lumber was the highest bidder at $550,000 and executed a purchase-and-sale agreement naming itself as purchaser.
- Jackson Lumber later assigned its rights under that agreement (to DiBerto, then Agamenticus Holdings) and conveyed the deed on Aug. 15, 2019 to Agamenticus; Jackson Lumber therefore did not hold the deed at closing.
- An independent appraisal contemporaneous with foreclosure valued the Lebanon property at $1,100,000; Jackson Lumber’s claimed balance due at sale time was $1,070,918.37 and it sought a deficiency and moved for approval of attachment and trustee process for about $620,942.63.
- The Superior Court denied the motion, concluding that when the mortgagee is the “purchaser at the public sale” the statutory deficiency is measured by the difference between the independent-appraised fair market value at the time of sale and the amount owed; because the appraisal exceeded the debt there was no recoverable deficiency.
- Jackson Lumber appealed the denial, arguing it was not the “purchaser at the public sale” because it assigned the purchase agreement and never received the deed; the Supreme Judicial Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a mortgagee that was the highest bidder but later assigned the purchase-and-sale agreement is the “purchaser at the public sale” under 14 M.R.S. § 6203-E | Jackson: Not the purchaser because it assigned the agreement and did not receive the deed | Defendants: The statutory term means the successful bidder at the public sale; assignment and later conveyance do not change that status | Court: "Purchaser at the public sale" refers to the successful bidder at the sale (the mortgagee here); assignment/transfer after sale does not alter that designation |
| Whether the deficiency should be calculated by comparing the sale price or by using an independent appraisal when the mortgagee is the purchaser at the sale | Jackson: The deficiency should be based on sale outcomes and its asserted monetary shortfall | Defendants: § 6203‑E limits deficiency to difference between independent-appraised fair market value at time of sale and the sum due, when mortgagee is purchaser | Court: § 6203‑E applies; deficiency is measured by appraisal-based fair market value at time of sale; here appraisal > amount owed, so no recoverable deficiency |
| Whether denial of attachment and trustee process was an abuse of discretion | Jackson: Trial court erred in applying § 6203‑E to bar attachment on the claimed deficiency | Defendants: Trial court correctly interpreted statute and reasonably found no likelihood of success on a deficiency claim | Court: No abuse of discretion or reversible error; findings supported by affidavits and statutory construction |
Key Cases Cited
- Key Bank of Me. v. Holman, 657 A.2d 775 (Me. 1995) (construing deficiency calculation when mortgagee is purchaser at public sale)
- Peoples Sav. Bank v. Spencer, 482 A.2d 832 (Me. 1984) (noting statutes protect against self-dealing mortgagees)
- Libby O’Brien Kingsley & Champion, LLC v. Blanchard, 121 A.3d 109 (Me. 2015) (standard for reviewing affidavit-based findings on attachment)
- Fleet Nat’l Bank v. Liberty, 845 A.2d 1183 (Me. 2004) (statutory interpretation reviewed de novo)
- Sweeney v. Hope House, Inc., 656 A.2d 1215 (Me. 1995) (immediate appealability of orders denying attachment and trustee process)