U.S. Bank, N.A. v. Sawyer
2014 ME 81
| Me. | 2014Background
- Sawyers defaulted on their mortgage in 2009 and entered a trial modification; payments were later increased above predelinquency levels, causing renewed distress.
- Foreclosure filed in 2012 while Chase served as loan servicer; after filing, Sawyers sought modification and pursued mediations with multiple servicers.
- First mediation (Oct 2012): Chase requested duplicate documents and promised a decision within 30 days but did not decide.
- Second mediation (Feb 2013): Chase again requested documents and promised response by Apr 22, but no timely decision or response.
- Third mediation (May 2013): Chase promised a June 28 decision; after missed deadline, the loan was transferred to SPS and no modification was offered.
- Show cause hearing (Sept 24, 2013): SPS appeared late with a speculative proprietary modification and no evidentiary support; court dismissed the complaint with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether dismissal with prejudice was proper sanction under Rule 93(j). | Bank argues the sanction is excessive and lacks evidence of bad faith or prejudice. | Sawyers assert sanctions were appropriate given mediation failures and delays. | Yes; sanctions upheld as proper discretionary response to failure to negotiate in good faith. |
| Whether there was evidence of bad faith or prejudice to the Sawyers. | Bank contends no bad faith or prejudice evidenced. | Sawyers argue Bank’s delays caused prejudice and distress. | Bank’s lack of good faith could be inferred; Sawyers were prejudiced by delays and added costs. |
Key Cases Cited
- Bartlett v. Bartlett, 87 A.3d 741 (2014 ME 37) (sanction of dismissal with prejudice upheld for failure to negotiate in good faith)
- Murphy v. Bartlett, 86 A.3d 610 (2014 ME 13) (sanctions may be imposed based on lack of good faith even without willful fault)
- Pelletier v. Pelletier, 597 A.2d 60 (Me.1991) (warning and opportunity to be heard support sanctions for lack of preparedness)
- First Franklin Fin. Corp. v. Gardner, 60 A.3d 1262 (2013 ME 3) (emphasizes need for good faith participation in mediation)
- Bayview Loan Servicing, LLC v. Bartlett, 87 A.3d 741 (2014 ME 37) (confirms discretionary sanctions for lender’s mediation failures)