U.S. Bank National Association v. Christopher J. Curit
131 A.3d 903
| Me. | 2016Background
- In 2005 the Curits executed a mortgage recorded with MERS as nominee; MERS purported to assign the mortgage to U.S. Bank in 2007. The Curits defaulted in 2012.
- U.S. Bank filed a foreclosure complaint in March 2013 but later moved to voluntarily dismiss the action, citing lack of standing because it lacked an assignment from the original lender.
- At a hearing on October 14, 2014 the District Court granted the bank’s motion but entered judgment dismissing the action with prejudice; the court orally indicated it intended to permit refiling if standing were later established.
- U.S. Bank timely appealed the dismissal. While the appeal was pending, the bank moved under M.R. App. P. 5(e) to “correct” the record to reflect the court’s oral intent; the court issued an order changing the judgment to dismissal without prejudice.
- The Curits cross-appealed the Rule 5(e) correction. The Law Court concluded the initial dismissal with prejudice was legally incorrect because the bank lacked standing, but the trial court erred in using Rule 5(e) (during a pending appeal) to effectuate the substantive change.
- The Law Court vacated both trial-court judgments and remanded with instructions to enter dismissal without prejudice.
Issues
| Issue | Plaintiff's Argument (U.S. Bank) | Defendant's Argument (Curit) | Held |
|---|---|---|---|
| Whether the trial court could dismiss with prejudice when plaintiff lacked standing | Dismissal with prejudice was improper because Bank lacked standing; court should allow dismissal without prejudice so Bank can refile if standing later established | A dismissal with prejudice should bar refiling and, if entered, could result in attorney-fee entitlement as prevailing party | Court: Trial court erred in dismissing with prejudice; lack of standing makes merits nonjusticiable and only dismissal without prejudice is proper |
| Whether the trial court could use M.R. App. P. 5(e) while an appeal was pending to convert the judgment from with-prejudice to without-prejudice | The court’s written judgment omitted its oral intent; Rule 5(e) may correct the record to reflect what occurred | Rule 5(e) cannot be used to effect substantive changes while an appeal is pending; such a change harms Curits’ rights | Court: Using Rule 5(e) to change the substantive effect of the judgment during an appeal was improper; Rule 5(e) is limited to correcting omissions/misstated record, not substantive alterations |
| Whether the Rule 5(e) correction here was a harmless procedural fix | Bank argued the correction merely reflected the court’s intent and remedied an omission, not a substantive change | Curits argued the correction substantively altered the judgment and was beyond the court’s authority pending appeal | Court: The change was substantive, not harmless; Rule 5(e) was the wrong vehicle and the action should have been dismissed without prejudice via proper post-judgment procedures if timely sought |
Key Cases Cited
- Bank of America, N.A. v. Greenleaf, 96 A.3d 700 (Me. 2014) (standing/ownership issues in foreclosure cases)
- Bank of Am., N.A. v. Greenleaf, 124 A.3d 1122 (Me. 2015) (lack of standing renders foreclosure complaint nonjusticiable)
- Johnson v. Sampson Constr. Corp., 704 A.2d 866 (Me. 1997) (dismissal with prejudice is an adjudication on the merits)
- Mortg. Elec. Registration Sys., Inc. v. Saunders, 2 A.3d 289 (Me. 2010) (MERS as nominee lacks enforceable debt interest)
- Estate of Everett, 460 A.2d 1026 (Me. 1983) (appellate-rule corrections intended to settle the record, not alter substance)