Opinion
CV-16-13
07-13-2017
WELLS FARGO BANK, N.A., as Trustee for Aegis Asset Backed Securities Trust Mortgage Pass-Through Certificates, Series 2004-4, Plaintiff, v. AEGIS LENDING CORPORATION, Defendant, and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. as nominee for AEGIS LENDING, CORPORATION, NANCY J. BELL, STILLWATER HEALTH CARE INC., EMERA MAINE f/k/a BANGOR HYDRO-ELECTRIC COMPANY, and MAINE DEPARTMENT OF TRANSPORTATION, Parties-In-Interest.
DECISION
ANN M. MURRAY, JUSTICE
Presently before the Court is Plaintiff Wells Fargo Bank, N.A., as trustee for Aegis ' Asset Backed Securities Trust Mortgage Pass-Through Certificates Series 2004-4's Complaint for quiet title and for declaratory judgment. A trial was scheduled to be held on June 29, 2017. On June 26, 2017, the parties filed a Stipulation of Facts. On June 29, 2017, the parties who appeared, Plaintiff and Party-In-Interest Bell, relied on the Stipulation of Facts and presented closing arguments to the Court. For the following reasons, the Court grants Judgment to the Defendant and Parties-in-Interest on Plaintiffs Complaint.
I. BACKGROUND
The relevant background underlying the present dispute is derived from the Stipulation of Facts and Documents submitted by both parties, which can be briefly summarized as follows. Party-in-interest, Nancy Bell, and Helen Fonsell received a loan for $ 77, 300.00, and signed a Note dated July 10, 2004. The note listed Aegis Lending Corporation as the lender. Ms. Bell and Ms. Fonsell also executed a mortgage on July 10, 2004, in favor of Mortgage Electronic Registration Systems, Inc. ("MERS"), as nominee of Aegis, securing the property located at 499 Wilson Street in Brewer, Maine ["Property"]. Also on July 10, 2004, Ms. Bell and Ms. Fonsell signed an adjustable rate rider, which provided for a fluctuating interest rate on the note.
Unfortunately, Ms. Fonsell passed away in 2006. On April 11, 2012, Ms. Bell signed a "Home Affordable Modification Agreement" which, inter alia, recognized that Ms. Bell was experiencing financial difficulties, modified the maturity date of the loan, and changed the total amount due to $ 137, 094.41. It was again recited that MERS was "acting solely as a nominee of the lender." On January 31, 2013, MERS purported to assign the mortgage in question to Wells Fargo Bank NA., the plaintiff in this case.
Plaintiff filed its Complaint on January 20, 2016, seeking quiet title and declaratory judgment. The original mortgagee, Aegis Lending Corporation, as well as MERS, Nancy Bell, Stillwater Health Care, Inc., Emera Maine f/k/a Bangor Hydro-Electric Company, and the Maine Department of Transportation have all been served. Only Party-In-Interest, Nancy Bell, has filed an answer or otherwise appeared in this matter.
II. DISCUSSION
As a threshold matter, Plaintiffs demand for quiet title is inappropriate in the present proceedings. Maine law makes a quiet title action available to "a person in possession of property... or a person who has conveyed such property... [and has been] in uninterrupted possession of such property for 4 years or more. . . ." 14 M.R.S. § 6651. As stated by the Court in United States Bank, quiet title actions are "vehicles to confirm legal title to real estate, not to adjudicate ownership interests in a mortgage, which secures the right to payment under the note instrument" United States Bank v. Decision One Mortg. Co., CV-15-65, 2016 Me. Super. LEXIS 173, at * 6 (July 26, 2016), (citing to 14 M.R.S. §§ 6651-6658).
Moving on to Plaintiffs request for declaratory judgment, declaratory judgment actions are also governed by statute. 14 M.R.S. §§ 5951-5963. The Declaratory Judgment Act permits courts to "declare rights, status and other legal relations" if declaration will "terminate the controversy or remove an uncertainty." 14 M.R.S. §§ 5953, 5957 (2015). To "satisfy the controversy requirement, the case must be ripe for judicial consideration and action." Wagner v. Secretary of State, 663 A.2d 564, 567 (Me. 1995) ("Ripeness concerns the fitness of the issue for judicial decision and the hardship to the parties of withholding court consideration, ").
This case is unlike a typical declaratory judgment action, such as where a court is called upon to declare the location of a boundary line and the court's decision terminates the controversy. In this case, if Plaintiff fails to establish its ownership of the mortgage, the controversy will continue. Therefore, it is doubtful that this action for a declaratory judgment is proper. See, e.g., United States Bank Nat'l Ass'n v. Decision One Mortg. Co., No. RE-2016-115, 2016 Me. Super. LEXIS 227, at *4 (Nov. 21, 2016) ("In the current case, it is not apparent that a determination by the Court as to whether Plaintiff owns the mortgage will remove uncertainty. If the Court determines that Plaintiff does not own the mortgage, the remaining parties would still be free to litigate the ownership of the mortgage, "); Fannie Mae v. America's Wholesale Lender, No. RE-15-068, 2016 Me. Super. LEXIS 37, at *3 (Mar. 1, 2016); United States Bank Trust, NA. v. Accredited Home Lenders, No. CV-15-228, 2017 Me. Super. LEXIS 60, at *4 (May 2, 2017).
However, even if a declaratory judgment action were appropriate, Plaintiffs still cannot prevail on its complaint. Addressing the substance of Plaintiff's arguments, Plaintiff argues that under 33 M.R.S. § 508, the assignment from MERS to Plaintiff is presumed to be valid, However, 33 M.R.S. § 508 only applies to final foreclosure judgments. See also United States Bank v. Decision One Mortg. Co., CV-15-65, 2016 Me. Super. LEXIS 173, * 4 n.4 (July 26, 2016] (stating that the plaintiff relied upon 33 M.R.S. § 508 "for the proposition that the Maine legislature recognizes MERS's presumption of authority to assign all interests in a mortgage to a successor in interest. That section, however, applies to assignments subject to a final foreclosure judgment. . . Section 508 is inapplicable to the present case."] (citations omitted); Bank of N.Y. Mellon v. First Magnus Fin, Corp., CV-15-172, 2016 Me. Super. LEXIS 132, at * 2 n.l (July 5, 2016] (The "Bank cites 33 M.R.S. § 508 for the proposition that the Maine legislature recognizes MERS's presumption of authority to assign all interests in a mortgage to a successor in interest. That section, however, applies to assignments subject to a final foreclosure judgment, . .The statute does not apply here.") (citations omitted); Tamir v. United States, 566 B.R. 278, 281 (D. Me. 2016) ("After Greenleaf. the Maine Legislature enacted new legislation clarifying the authority of nominee mortgagees like MERS to execute assignments, discharges, and partial releases. . . (codified at 33 M.R.S. § 508 (Pamph, 2015) (applying only to assignments that are the subject of a final foreclosure judgment).").
33 M.R.S. §500 provides:
Plaintiff next argues that Ms. Bell does not have standing to challenge the assignment from MERS to Plaintiff. The Court finds that the mortgagor has a legally enforceable interest in the mortgage entitling her to enforce its terms. In this case, this interest is sufficient to provide Ms. Bell with standing to challenge the mortgage assignment. Furthermore, this argument was presented to the Law Court in the plaintiffs brief in Greenleaf (Bell ex, 1 at 13), and was not successful. In Greenleaf, the mortgagor challenged the assignment from MERS. The Law Court considered the mortgagor's challenge, and did not hold that the mortgagor lacked standing to challenge the mortgage assignment. (See Bell ex. 1 at 13.); Greenleaf, 2014 ME 89, 96 A.3d 700.
This argument was also considered and rejected by the Maine District Court (Cumberland, Woodman, ].). Deutsche Bank Nat'l Trust Co. v. Home Funds Direct, No. RE-15-10 (Me. Dist. Ct., Cumberland, July 5, 2017] ("[A mortgagor] has a legally enforceable interest in the mortgage, entitling him to enforce its terms. [The mortgagor's] interest remains whether Plaintiff attempts to assert an ownership interest in the mortgage through a complaint for foreclosure or, as here, through a complaint for declaratory judgment.").
Moving to the final issue in this case, Plaintiff states that it has met the requirements in Greenleaf and has established its ownership in the mortgage. In Greenleaf the Law Court held that an assignment by MERS, acting as nominee, was insufficient to convey ownership rights in the mortgage (as necessary to foreclose on the property), and that a MERS assignment transferred the right to record the mortgage and nothing more. Greenleaf 2014 ME 89, ¶¶ 14-17, 96 A.3d 700. In Greenleaf the plaintiff provided evidence of a note endorsed in blank. Id. ¶ 11. Plaintiff also offered into evidence "the original mortgage, a mortgage assignment, and a certification of a merger." Id., ¶ 13. Despite this evidence, the Law Court found that the plaintiff had not met its burden to prove ownership of the mortgage, Id. ¶¶ 13-17. Specifically, the Court noted that proof of the original mortgage only established the fact that the borrowers had executed a mortgage on the property; that the MERS assignment only transferred the right to record the mortgage; and that notwithstanding evidence of the plaintiffs ownership of the note, the plaintiff did not establish ownership of the mortgage. Id.
To the extent that Plaintiff argues that its possession of the original mortgage is sufficient to establish ownership of the mortgage, the Court does not agree. In Greenleaf the Law Court stated that possession of the note was sufficient to establish ownership of the note, because the note is a negotiable instrument and governed under Maine's Uniform Commercial Code, See Greenleaf, 2014 ME 89, ¶¶ 10-11, 96 A.3d 700 [stating that "Section 3-1301 permits a party to enforce a note if it is the 'holder' of the note, that is, if it is in possession of the original note that is indorsed in blank, ") The mortgage, however, is not a negotiable instrument Id. ¶ 12 ("Thus, whereas a plaintiff who merely holds or possesses-but does not necessarily own-the note satisfies the note portion of the standing analysis, the mortgage portion of the standing analysis requires the plaintiff to establish ownership of the mortgage."}. Thus, the Law Court in Greenleaf made clear that possession of mortgage is not sufficient to establish ownership of the mortgage.
As the Law Court has addressed and rejected the proof provided by Plaintiff in this case, the Court does not find that Plaintiff is the owner of the mortgage. See also United States Bark Trust, N.A. v. Accredited Home Lenders, CV-15-228, 2017 Me. Super. LEXIS 60, at *5 (May 2, 2017) ("The court cannot decide here that the holder of the mortgage note, as a transferee of MERS as nominee for defendant mortgagee, is the owner of the mortgage as beneficiary of an equitable trust held by defendant without contradicting the Law Court's determination in Greenleaf, "].
The Entry is:
1) The Court declines to declare that Plaintiff owns the mortgage in question and therefore Judgment is entered for the Defendant and Parties-In-Interest on Plaintiffs Complaint for quiet title and declaratory judgment.
2) This Order shall be incorporated into the docket by reference pursuant to M.R. Civ. P. 79.
1. Authority presumed. A person or entity that is named as nominee to hold a mortgage for another person or entity, in an instrument creating or assigning the mortgage, is presumed to have the authority to execute an assignment, partial release, discharge or other instrument that affects the title to the mortgaged property unless the person or entity on whose behalf the nominee is named:
A. Explicitly negates such authority within the instrument in which the nominee is named; or
B. Executes a separate instrument that explicitly negates such authority and that is recorded in the registry of deeds within the county or district in which the mortgaged property is located,
2. Instrument valid. An assignment, partial release, discharge or other instrument affecting the title to mortgaged property or any interest in the property that is otherwise valid and that is executed by a nominee mortgagee with authority as provided in subsection 1 is valid even if the assignment, partial release, discharge or other instrument does not state the authority of the nominee mortgagee to take the action,
3. Statement not a limitation of authority. A statement in an instrument described in this section to the effect that, for purposes of recording, the nominee mortgagee is the mortgagee of record, or any statement of similar meaning, may not be considered to be a limitation upon the authority of the nominee mortgagee.
4. Application. This section applies exclusively to any discharge or partial release issued prior to the effective date of this section, whether made by a nominee mortgagee or by a subsequent assignee; to discharges or partial releases issued on or subsequent to the effective date of this section, whether made by a nominee mortgagee or by a subsequent assignee; and to any assignment or other instrument affecting title to a mortgaged property that is the subject of a foreclosure judgment or other legal judgment affecting title to a mortgaged property for which, as of the effective date of this section, either the period for appeal has run with no appeal having been filed or ail rights of appeal have been exhausted, (emphasis added].