133 A.3d 1021
Me.2016Background
- Oceanic Inn, Inc. and Armand Vachon sued Sloan’s Cove, LLC after Sloan’s Cove (owned by Vachon’s sister Pauline Beale) foreclosed Vachon’s mortgage by statutory power of sale and sold the Oceanic Inn property at auction.
- Procedurally: Sloan’s Cove moved to dismiss most claims under M.R. Civ. P. 12(b)(6); the court granted dismissal of nine claims (including breach of fiduciary duty and negligent infliction of emotional distress) and left breach of contract and an accounting issue.
- Sloan’s Cove then moved for summary judgment on Oceanic’s breach of contract claim and on Sloan’s Cove’s counterclaim seeking a declaratory judgment validating the foreclosure sale; the court granted summary judgment to Sloan’s Cove and later awarded attorney fees and interest consistent with the allonge.
- Factual core: Vachon became sole obligor under a note after Sloan’s Cove paid the loan; Vachon defaulted on a balloon payment; Sloan’s Cove complied with statutory foreclosure notice and published sale notices; an attorney (not a licensed auctioneer) conducted the auction on Sept. 13, 2013, and the property sold for $455,000 (a surplus over the $284,500 debt).
- Oceanic argued fiduciary and negligence-based claims (relying on family/estate relationships and conduct around the sale), asserted the sale was commercially unreasonable (insufficient advertising, unlicensed auctioneer, confusing statements about bankruptcy), and disputed interest and fee calculations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a fiduciary duty arose from the mortgagee’s power-of-sale foreclosure | Oceanic: foreclosure by power of sale or family/estate ties gave rise to fiduciary duty to disclose and protect mortgagor | Sloan’s Cove: no fiduciary duty; mortgagee-mortgagor relationship and family ties alone insufficient | Court: no per se fiduciary duty for power-of-sale foreclosures; pleadings lacked facts establishing fiduciary relationship; dismissal affirmed |
| Whether negligent infliction of emotional distress claim survives dismissal | Oceanic: conduct foreseeably caused severe emotional distress and special relationship existed | Sloan’s Cove: no duty to avoid emotional harm absent special relationship or bystander context | Court: no special relationship shown; dismissal affirmed |
| Whether the foreclosure sale breached contract because it was not "commercially reasonable" | Oceanic: sale was commercially unreasonable (limited advertising, unlicensed auctioneer, auctioneer’s statements chilled bidding) | Sloan’s Cove: complied with statutory power-of-sale requirements and contractual terms; sale produced surplus so not unreasonable | Court: even assuming commercial-reasonableness standard applies, no genuine issue of material fact showing unreasonableness; summary judgment for Sloan’s Cove affirmed |
| Whether Sloan’s Cove’s declaratory-judgment counterclaim validating the sale was properly granted | Oceanic: sale invalid for reasons above | Sloan’s Cove: established statutory compliance and entitlement to judgment | Court: Sloan’s Cove met its burden; summary judgment on counterclaim affirmed |
Key Cases Cited
- Remmes v. Mark Travel Corp., 116 A.3d 466 (Me. 2015) (summary judgment standards; view record in light most favorable to nonmovant)
- Ramsey v. Baxter Title Co., 54 A.3d 710 (Me. 2012) (12(b)(6) standard; view complaint in light most favorable to plaintiff)
- Bryan R. v. Watchtower Bible & Tract Soc’y, 738 A.2d 839 (Me. 1999) (kinship or business ties alone do not create fiduciary duty)
- Camden Nat’l Bank v. Crest Constr., Inc., 952 A.2d 213 (Me. 2008) (mortgagee–mortgagor relationship alone is not a fiduciary duty)
- Bar Harbor Bank & Trust v. The Woods at Moody, LLC, 974 A.2d 934 (Me. 2009) (discussing commercial-reasonableness challenge to power-of-sale foreclosure and inadequacy of price alone absent fraud or irregularity)
- Hebert v. Hebert, 475 A.2d 422 (Me. 1984) (standards for assessing attorney fee records and time documentation)