330 F. Supp. 3d 530
D. Me.2018Background
- U.S. Bank sued Julia L. Jones seeking foreclosure and damages for breach of a promissory note after Jones defaulted on a 2007 loan secured by property in Raymond, Maine; U.S. Bank later obtained agreed reformation of the mortgage's legal description.
- Caliber Home Loans, servicer for U.S. Bank, mailed an August 3, 2016 Notice of Right to Cure listing a total amount to cure the default that included a $2,638.32 "Corporate Advance Balance."
- Jones stopped making payments beginning November 1, 2012, and did not cure after receiving the demand letter; U.S. Bank introduced an account summary and transaction spreadsheet showing a total due of $226,458.28 as of November 1, 2017.
- Jones challenged the demand letter as defective (arguing it must be sent by the mortgagee, and that the amounts were inaccurate) and attacked the admissibility and trustworthiness of the servicer's accounting records.
- The Court held a bench trial on foreclosure (Count I), breach of note (Count II), and breach of contract (Count III); Counts IV and V were dismissed without prejudice and Count VI (reformation) was agreed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether servicer's mailing of §6111 notice satisfies statute's requirement that notice be "given by the mortgagee" | U.S. Bank: servicer acts as mortgagee's agent; notice valid | Jones: statute requires mortgagee itself to send notice; servicer's mailing is defective | Court: servicer mailing did not render notice defective; agency principles permit servicer to give notice |
| Whether the demand letter accurately itemized the precise amount required to cure under 14 M.R.S. §6111 | U.S. Bank: demand letter complied with statute; totals presumed correct | Jones: demand letter overstated amount by including Corporate Advance Balance (attorney/title costs) that Bank could not recoup | Court: demand letter was defective because it included an unexplained, impermissible $2,638.32 charge; foreclosure denied |
| Admissibility/authentication of servicer's account summary and transaction spreadsheet under Fed. R. Evid. 901, 1001-1003 | U.S. Bank: custodian Lopez authenticated printout as original/computer printout; redaction per FRCP 5.2 not fatal | Jones: hearsay, not properly authenticated; boarding/records transfer and redaction raise authenticity/trustworthiness issues | Court: printout properly authenticated as an original; redaction does not defeat authenticity; admitted under rules |
| Whether integrated records (entries created by prior servicers and boarded into Caliber's system) are admissible under Fed. R. Evid. 803(6) (business records) | U.S. Bank: Caliber integrated and relied on prior records; custodian testified to boarding and review processes; entries trustworthy | Jones: Maine precedent requires proof of BOTH businesses' practices; integrated records inadmissible as double hearsay | Court: applied federal approach permitting admission where receiving entity integrates and relies on records and indicia of reliability exist; admitted spreadsheet under Rule 803(6) and Rule 807; bank awarded judgment on contract claims |
Key Cases Cited
- Bank of America, N.A. v. Greenleaf, 96 A.3d 700 (Me. 2014) (lists elements required for foreclosure and stresses strict compliance)
- JPMorgan Chase Bank, N.A. v. Lowell, 156 A.3d 727 (Me. 2017) (invalidated demand letter for overstating amount required to cure)
- Fed. Nat'l Mortg. Ass'n v. Deschaine, 170 A.3d 230 (Me. 2017) (emphasizes strict enforcement to deter lax foreclosure practices)
- Deutsche Bank Nat'l Tr. Co. v. Eddins, 182 A.3d 1241 (Me. 2018) (Maine rule requires witness knowledge of practices of both creating and receiving entities for integrated records)
- Quint v. [Name redacted], 176 A.3d 717 (Me. 2017) (rejected admission of prior-servicer records absent sufficient foundation)
- Wallace Motor Sales, Inc. v. Am. Motors Sales Corp., 780 F.2d 1049 (1st Cir. 1985) (custodian need not be the original creator of business records to authenticate them)