Opinion
RE-15-068
03-01-2016
FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiff v. AMERICA'S WHOLESALE LENDER, Defendant and MICHAEL R. AVERY, Party-in-Interest
ORDER ON PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AND JUDGMENT ON THE PLEADINGS
NANCY MILLS JUSTICE, SUPERIOR COURT
Before the court is plaintiff Federal National Mortgage Association's motion for default judgment and judgment on the pleadings in its declaratory judgment action against defendant America's Wholesale Lender, Michael Avery, the mortgagor, is a party-in-interest. For the following reasons, plaintiffs motion is denied.
FACTS
On December 20, 2005, Mr. Avery executed and delivered to defendant a promissory note in the amount of $153, 000.00, (Supp. S.M.F. ¶ 2; Pl's Ex. C.) To secure the note, Mr. Avery executed a mortgage deed on property located at 18 Ocean St in South Portland. (Supp. S.M.F. ¶ 3; Pl's Ex. B.) The mortgage was in favor of Mortgage Electronic Registration Systems, Inc., (MERS) as nominee for defendant. (Id.) MERS purported to assign the mortgage to Bank of America on May 1, 2012, and Bank of America purported to assign the mortgage to plaintiff on October 13, 2012. (Supp. S.M.F.¶¶4-5; P's Exs. D, E.)
Plaintiff filed this declaratory judgment action on May 8, 2015. Plaintiff seeks a confirmatory nunc pro tunc order, an "effective reaffirmation" of the assignments, and a finding that plaintiff is the owner of both the note and the mortgage. (Compl. 115(a)-(b); Mot. Default J. and J. Pleadings 1-2.) Mr. Avery was served on May 11, 2015. Defendant was served on May 14, 2015. Neither party has answered the complaint. Plaintiff filed its motion for a default judgment and judgment on the pleadings on November 2, 2015. Neither defendant nor party-in-interest responded to plaintiff's motion.
DISCUSSION
Maine's Declaratory Judgments Act empowers the court to "declare rights, status and other legal relations" when doing so will "terminate the controversy or remove an uncertainty." 14 M.R.S. §§ 5953, 5957 (2015). First, it is unclear whether there is a controversy "between the litigants." Berry v. Daigle, 322 A.2d 320, 325 (Me. 1974).
Second, "[w]hen declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration and no declaration shall prejudice the rights of persons not parties to the proceeding." 14 M.R.S. § 5963 (2015). A reaffirmation of these assignments would be a declaration of the rights of MERS and Bank of America to assign the mortgage at issue. MERS and Bank of America are not parties to this action. See id. Bank of Am., N.A. v. Metro Mortg. Co., 2015 Me. Super. LEXIS 14, at *3 (Jan. 29, 2015) (denying plaintiff's request for default judgment in declaratory judgment action in part because plaintiff had failed to join necessary parties); Horton & McGehee, Maine Civil Remedies § 3-3(d)(2) at 50 (4th ed. 2004) ("A declaration of rights may properly be refused when persons whose interests would be affected are not parties.").
Further, a declaratory judgment as to whether plaintiff owns the mortgage would not necessarily remove any uncertainty as to ownership of the mortgage. If the court were to declare that plaintiff does not own the mortgage, MERS and Bank of America would remain free to litigate whether they instead own the mortgage. See 14 M.R.S. § 5958 (2015); Bourgeois v. Sprague, 358 A.2d 521, 522 (Me. 1976) (M.R. Civ. P. 19 applies to declaratory judgment actions); 2 Harvey, Maine Civil Practice § 19:1 at 558 (3d ed. 2011) (M.R. Civ. P. 19 protects parties by ensuring issues will not be relitigated).
Finally, especially in matters involving mortgage foreclosure, procedural rules must be followed. See TPMorgan Chase Bank v. Harp, 2011 ME 5, ¶ 15, 10 A.3d 718. Rule 55(b)(2) authorizes the court to conduct a hearing if the court deems it necessary and proper "to establish the truth of any averment by evidence." M.R. Civ. P. 55(b)(2); (Pl's Compl. ¶¶11-13.)
CONCLUSION
Section 5963 of Maine's Declaratory Judgments Act prohibits the court from declaring the rights of persons who are not parties to the action. Section 5958 provides: "The court may refuse to render or enter a declaratory judgment or decree where such judgment or decree, if rendered or entered, would not terminate the uncertainty or controversy giving rise to the proceeding." The court cannot declare the rights of MERS and Bank of America, who are not parties. A declaration of plaintiff's rights may not remove any uncertainty regarding ownership of the mortgage. Finally, even if all necessary parties had been named in this suit, a hearing would be scheduled to establish the truth of plaintiff's averments.
The entry is
Plaintiff Federal National Mortgage Association's Motion for Default Judgment and Judgment on the Pleadings is DENIED.