Opinion
Civil Action RE-18-119
08-20-2021
KEYBANK NATIONAL ASSOCIATION, Plaintiff, v. CYNTHIA ANN WATSON, Personal Representative of the Estate of John C. Watson, Jr., a/k/a John C. Watson, Defendant, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR TBW MORTGAGE BACKED TRUST SERIES 2007-2, TBW MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-2, and STATE OF MAINE-MAINE REVENUE SERVICES, PARTIES IN INTEREST
Plaintiffs Counsel: Ryan Dumais, Esq. Defendant: Cynthia Watson(Pro Se) as PR of the Estate of John Watson PII U.S. Bank, NA's Counsel: David Goldman, Esq-Paul Driscoll, Esq Elizabeth Lacombe, Esq. PII State of Maine-Maine Revenue Services Counsel: Kevin Crosman, AAG
Plaintiffs Counsel: Ryan Dumais, Esq.
Defendant: Cynthia Watson(Pro Se) as PR of the Estate of John Watson PII U.S. Bank, NA's Counsel: David Goldman, Esq-Paul Driscoll, Esq
Elizabeth Lacombe, Esq. PII State of Maine-Maine Revenue Services Counsel: Kevin Crosman, AAG
ORDER
MaryGay Kennedy, Justices
Before the Court is Plaintiffs Motion for Summary Judgment. After due consideration, the court declines to rule on the pending Motion and orders that the parties submit supplemental briefs regarding the matters discussed herein.
I. Factual Background
Plaintiff, Key Bank National Association, is the current owner and holder of both a Promissory Note and Mortgage in the property located at 110 Mayberry Rd., in Gray Maine. (PSOMF ¶ 1-6). Both the Note and Mortgage were executed and delivered by John C. Watson Jr., ("Borrower") on November 14, 2000. (PSOMF ¶ 1-5.) The Note provided the Borrower with a Home Equity Line of Credit ("HELOC") in the amount of $80,000. (PSOMF ¶ 1.) The Note granted the Borrower a fifteen-year "draw period" in which Key Bank agreed to advance funds to the Borrower up to the $80,000 line of credit, upon request. (PSOMF ¶ 1.) The Note is secured by the November 14, Mortgage. (PSOMF ¶ 3.) The line of credit on the Note was increased to $140,000 on December 9, 2004. (PSOMF 5.)
On February 20, 2007, the borrower owed $139,910.18 to Key Bank under the terms of the original Note. (Pl's. Mot. Sum. Judg., Exhibit G.) On March 16, 2007, the Borrower executed and delivered to Taylor, Bean, and Whitaker Mortgage Corporation ("TBWMC") a promissory note in the amount of $174,000. (PIISOMF ¶ 1.) The Note to TBWMC was secured by a mortgage on the same property subject to the HELOC Note and Mortgage. (PIISOMF ¶ 2). The Borrower used funds from the TBWMC loan to pay off his balance owed to Key Bank. (PIISOMF ¶ 6.) TBWMC indicated in a U.S. Department of Housing and Urban Development "Settlement Statement" that it specifically distributed $141,965.65 to the borrower for "First Mortgage Payoff to Key Bank." (PIIR. to Pl's. Mot. Sum. Judg., Exhibit K.) There is no evidence that the borrower made any attempt to terminate his HELOC account with Key Bank. (PSOMF ¶ 10.) The Borrower subsequently and periodically received funds on the HELOC account and has a current outstanding balance of $182,309.36 on the original Note. (PSOMF ¶ 17.)
The Borrower died on December 14, 2015. (PSOMF ¶ 12.) Both the HELOC Note and Note issued to TBWMC are now in default. (PSOMF ¶ 14.) The Party-in~Interest, U.S. Bank National Association, is the current owner and holder of the 2007 Mortgage. (PIISOMF ¶ 9.) Key Bank instituted this foreclosure action on the subject property and has filed for summary judgment, alleging that it's 2000 Mortgage holds priority. U.S. Bank argues that the 2007 Mortgage holds priority over Key Bank's HELOC Mortgage by virtue of "equitable subrogation."
II. Summary Judgment Standard
Summary judgment is granted to a moving party where "there is no genuine issue as to any material fact" and the moving party "is entitled to judgment as a matter of law." M.R. Civ. P. 56(c). "A material fact is one that can affect the outcome of the caseƒ and there is a genuine issue when there is sufficient evidence for a fact-finder to choose between competing versions of the fact." Lougee Conservancy v. CityMortgage, Inc., 2012 ME 103, ¶ 11, 48 A.3d 774 (quotation omitted). On summary judgment, the court considers reasonable inferences that may be drawn from the facts. Curtis v. Porter, 2001 ME 158, ¶ 9, 784 A.2d 18. Additionally, the nonmoving party benefits from all "favorable inferences that may be drawn from the facts presented." Id. (quotation marks omitted). "When facts or reasonable inferences are in dispute on a material point, summary judgment may not be entered." Id. "Summary judgment, when appropriate, may be rendered against the moving party." M.R. Civ. P. 56(c).
III. Discussion
To be entitled to Summary Judgment on a foreclosure claim, a mortgagee must establish that there are no disputed material facts for each of the following elements: (1) the existence of the mortgage, including the book and page number of the mortgage and an adequate description of the mortgaged premises, including the street address; (2) ownership of the mortgage note and mortgage, including all assignments and endorsements of the note and mortgage; (3) a beach of condition of the mortgage; (4) the amount due on the mortgage note, including any reasonable attorney fees and court costs; (5) the order of priority and any amounts that may be due to other parties in interest, including any public utility easements; (6) evidence of properly served notice of default and mortgagor's right to cure in compliance with statutory requirements; (7) proof of mediation, when required; and (8) if the homeowner has not appeared in the proceeding, a statement, with a supporting affidavit, of whether or not the defendant is in military services in accordance with the Servicemembers Civil Relief Act. Chase v. Home Fin. LLC v. Higgins, 2009 ME 136, ¶ 11, 985 A.2d 508. U.S. Bank argues that Key Bank is not entitled to summary judgment because U.S. Bank's 2007 Mortgage should be equitably subrogated in place of Key Bank's prior recorded mortgage because it provided the funds to satisfy the Borrower's debt owed to Key Bank.
A. Open Ended Mortgage
The mortgage held by KeyBank appears to have been open-ended because it was designed to secure a line of credit upon which Watson could draw from, rather than secure a set loan amount. Under Maine law, "debts or obligations secured by a mortgage that arise subsequent to the execution and recording of the mortgage, . . . have priority over the rights of all persons who, subsequent to the recording of such a mortgage, acquire any rights in or liens upon the mortgaged real estate[.]" 33 M.R.S. §§ 505(1)(B), 5. Neither party addressed this statutory provision in the summary judgement record. Accordingly, the court finds that it would be inappropriate to rule on the present Motion for Summary Judgment.
The court orders that the parties provide supplemental briefs addressing 33 M.R.S. § 505 and its effect on the present dispute. The parties shall have sixty days from the entry of this order to submit their briefs to the court.
The entry is:
The parties are ORDERED to submit supplemental briefs to the court discussing the matters addressed herein.
The parties hall have SIXTY (60) days from the entry of this Order to submit their briefs.
The Clerk is directed to incorporate this Order into the docket by reference pursuant to Maine Rule of Civil Procedure 79(a).