Lead Opinion
Majority: ALEXANDER, SILVER, MEAD, GORMAN, and JABAR, JJ.
Dissent: LEVY, J.
[¶ 1] Nicolle M. Bradbury appeals from a judgment of the District Court (Bridg-ton, Powers, J.) dismissing without prejudice the complaint for foreclosure initiated against her by the Federal National Mortgage Association (Fannie Mae). Bradbury challenges the court’s failure to find loan servicer GMAC Mortgage, LLC in contempt pursuant to M.R. Civ. P. 56(g) after sanctioning Fannie Mae for submitting a bad faith affidavit for purposes of summary judgment. She also contends that the court erred in failing to award her attorney fees and costs associated with opposing Fannie Mae’s motion for a protective order. We affirm the judgment.
I. BACKGROUND
[¶2] In 2009, Fannie Mae instituted foreclosure proceedings against Bradbury for residential property she owns in Denmark, Maine. Fannie Mae named GMAC Mortgage, LLC, d/b/a Ditech, LLC.com, the loan servicer, as a party-in-interest.
[¶ 3] A few months later, the court granted Bradbury’s request for a letter rogatory to depose Stephan pursuant to M.R. Civ. P. 28(b). During that deposition, Stephan testified that he does not read the affidavits he signs, reviews only the computations of amounts owed, does not review the exhibits to the affidavits, and does not execute the affidavits before a notary. Based on this testimony, the parties filed several motions, among them Fannie Mae’s motion for a protective order to prevent the public disclosure of Stephan’s deposition, see M.R. Civ. P. 26(c); Bradbury’s request for an award of expenses incurred in opposing the protective motion, see M.R. Civ. P. 26(c), 37(a)(4); and Bradbury’s motion seeking a finding that the Stephan affidavit was presented in bad faith, a finding that both Fannie Mae and counsel for Fannie Mae were in contempt for submitting the bad faith affidavit, and an award of attorney fees and costs, see M.R. Civ. P. 56(g).
[¶ 4] The court denied Fannie Mae’s motion for a protective order after determining that Fannie Mae failed to establish the requisite “good cause.”
[¶ 5] On Fannie Mae’s motion, the court then dismissed the complaint without prejudice. Bradbury appeals.
II. DISCUSSION
[¶ 6] Maine Rule of Civil Procedure 56(g) authorizes the court to find that a summary judgment affidavit was submitted in bad faith, and sets forth the applicable sanctions:
(g) Affidavits Made in Bad Faith. Should it appear to the satisfaction of the court at any time that any of the affidavits presented pursuant to this rule are presented in bad faith or solely for the purpose of delay, the court shall forthwith order the party employing them to pay to the other party the amount of the reasonable expenses which the filing of the affidavits caused the other party to incur, including reasonable attorney fees, and any offending party or attorney may be adjudged guilty of contempt.
Although the court ordered Fannie Mae to pay her attorney fees and costs associated with its submission of the bad faith affidavit consistent with Rule 56(g), Bradbury argues that because the affidavit was executed by a GMAC employee, the court erred in declining to also find GMAC in contempt. In the context of the national “robo-signing” scandal, for which GMAC has already been sanctioned in other jurisdictions, and based on the “extreme and outrageous misconduct” GMAC perpetrated, Bradbury contends that the District Court erred in refusing to exercise its contempt power.
[¶ 7] The affidavit in this case is a disturbing example of a reprehensible practice. That such fraudulent evidentiary filings are being submitted to courts is both violative of the rules of court and ethically indefensible. The conduct through which this affidavit was created and submitted displays a serious and alarming lack of respect for the nation’s judiciaries.
[¶ 8] In the circumstances of this case, however, we do not disturb the sanctions fashioned by the court for the bad faith affidavit. Courts have rule-based, as well as inherent, power to hold parties in contempt, see M.R. Civ. P. 66; Edwards v. Campbell,
[¶ 10] Our decision is supported by substantial authority — or rather, the lack thereof — from other jurisdictions. To date, no published opinion shows that a court in Maine or any other state has imposed a contempt finding pursuant to Rule 56(g) for submitting a bad faith affidavit. Further, although M.R. Civ. P. 56(g) — in effect without amendment since 1959 — largely duplicates the language of Fed.R.Civ.P. 56(h)
[¶ 11] We also discern no error or abuse of discretion in the court’s failure to award Bradbury attorney fees and costs in defending against the motion for a protective order pursuant to M.R. Civ. P. 37(a)(4). See M.R. Civ. P. 26(c) (applying the fees and costs provision of Rule 37(a)(4) to unsuccessful motions for protective orders). Contrary to Bradbury’s contention, the court’s determination that Fannie Mae did not establish the “good cause” necessary to obtain a protective order pursuant to Rule 26(c) does not preclude its authority to also find that the motion was “substantially justified or that other circumstances make an award of expenses unjust” pursuant to Rule 37(a)(4). See M.R. Civ. P. 52(b); Brown v. Habrle,
The entry is:
Judgment affirmed.
Notes
. Bank of America, another of Bradbury's creditors, was also named as a party-in-interest. Bank of America is not a party to this appeal.
. We note that the motion presented to the trial court did not specifically request that the court find GMAC in contempt. Nonetheless, a generous reading of its multiple paragraphs indicates that Bradbury wished to have GMAC sanctioned in some way.
. “Upon motion by a party ... and for good cause shown, any justice or judge of the court in which the action is pending may make any order which justice requires to protect a party
. In the same order, the court also considered and denied Fannie Mae’s "Renewed Motion for Summary Judgment,” and vacated its pri- or grant of a partial summary judgment.
. The bad faith affidavit provision was initially promulgated as Fed.R.Civ.P. 56(g). Fed.R.Civ.P. 56 advisory committee’s note to 2010 amend.
Dissenting Opinion
dissenting.
[¶ 12] I respectfully dissent.
[¶ 13] The District Court did not simply conclude that Fannie Mae and GMAC
[¶ 14] The bad faith extant in this case was, as the court found, “serious and troubling” misconduct. GMAC’s loan servicer, Jeffrey Stephan, testified at his deposition that he signed about 8,000 documents each month. He testified that he did not read affidavits before he signed them; he did not have custody or personal knowledge of loan files or documents, even though his affidavit said he did; and he did not know whether the documents attached to his affidavit were true and correct copies, even though his affidavit said that they were. Stephan did not know whether the documents referred to in his affidavit in this case were attached to the affidavit when he signed it. He further testified that after he signed affidavits, they were taken to another location by another employee to be notarized by a notary who certified that Stephan personally appeared and swore to the truth of the affidavits, even though Stephan did not.
[¶ 15] Maine Rule of Civil Procedure 56(g) directs that if a court determines that a party’s summary judgment affidavit was “presented in bad faith,” it “shall forthwith” award reasonable expenses, including attorney fees, to the other party. This is what occurred here. The rule further provides that “any offending party or attorney may be adjudged guilty of contempt.” M.R. Civ. P. 56(g). The precise question presented is whether the court may exercise this discretion regarding contempt without conducting a hearing. The answer should account for the seriousness of the bad faith committed before the court and the extent to which it undermines the administration of justice.
[¶ 16] In this case, the dishonesty associated with the preparation and notarization of Stephan’s affidavit was severe. Not only did the affidavit fail to present admissible evidence, as the rule requires, but it deceived a judge into believing that it did. Furthermore, we can take judicial notice that GMAC is one of the largest mortgage loan servicers in the United States.
[¶ 17] The medium of the mortgage foreclosure summary judgment process is the paper submissions authorized by Rule 56 — affidavits, statements of material facts, motions, and memoranda of law. Unlike live testimony, which is subject to the fact-finder’s scrutiny of its credibility, the veracity of a paper submission is not easily determined. An affiant who is careless or is willing to fabricate facts encounters few barriers to the production of an affidavit that, within its four corners, appears to be well-conceived and trustworthy. Consequently, the integrity of the process depends largely on the good faith of the financial institutions and attorneys who invoke the rule. As we recognized in HSBC v. Murphy, the obligation of good faith is made real by the signature requirements of M.R. Civ. P. 11, which is the primary sentry guarding against the corruption of the summary judgment process, and the other requirements of the civil rules. See HSBC Mortg. Servs., Inc. v. Murphy,
[¶ 18] Faced with extreme misconduct which misled the court and thereby undermined the integrity of the judicial process, the court should have granted Bradbury’s request that it undertake a more searching inquiry before it determined whether a finding of contempt was warranted.
. Contrary to GMAC's arguments in response to the motion in District Court, the defects with Stephan’s affidavit were not merely "procedural.” Although the affidavit stated that true and accurate copies of the note and mortgage were attached to it, the affidavit failed to attach a loan modification agreement that amended both the note and mortgage. The affidavit also asserted that a true and correct copy of the mortgage assignment from GMAC to Fannie Mae, dated September 17, 2007, was attached. If this is true, the October 16, 2007 loan modification agreement entered into by GMAC as the mortgagee was ineffective because Fannie Mae, and not GMAC, would have been the mortgagee as of that date.
. See Robo-Signing, Chain of Title, Loss Mitigation, and Other Issues in Mortgage Servicing: Hearing Before the Subcomm. on Hous. & Cmty. Opportunity of the H. Comm, on Fin. Sens., 111th Cong. 307 (2011) (statement of Thomas Maraño, Chief Executive Officer, Mortgage Operations, Ally Financial Inc.) available at http://financialservices.house.gov/ Media/file/hearings/111/Marano 111810.pdf.
. Indeed, several other jurisdictions have grappled with similar misconduct on the part of Jeffrey Stephan and GMAC. See Sheenan v. Mortg. Elec. Registration Sys., Inc.,