Opinion
RE-18-55
03-17-2020
CLAYTON B. REYNOLDS, Plaintiff, v. BANK OF AMERICA, N.A., Defendant.
ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
JOHN O'NEIL, JR. JUSTICE
Plaintiff Clayton Reynolds ("Reynolds") complains for declaratory judgment against defendant Bank of America, N.A. ("BANA") with respect to a mortgage it holds on property located at 6 Winter Street Extension, Saco, Maine ("the premises"), seeking an order that declares the mortgage and note are unenforceable and that Reynolds holds the premises free and clear of the mortgage. BANA counterclaims for unjust enrichment in the amount owed on the note, or, in the alternative, for the sum cost of the taxes and insurance premiums BANA has covered since Reynolds stopped making payments on the loan. Reynolds and BANA have filed cross-motions for summary judgment on Reynolds's declaratory judgment action and BANA's unjust enrichment counterclaims. This court entertained oral arguments on the motions on February 26, 2020. For the reasons set forth below, Reynolds's motion for summary judgment on its declaratory judgment action and on BANA's counterclaims for unjust enrichment is granted and BANA's motion for summary judgment is denied.
The complaint before the court is Reynold's third amended complaint, which was filed on February 19, 2019.
I. Summary Judgment Factual Record
On November 14, 2009, BANA extended a mortgage loan for the principal amount of $195,260 to Reynolds, which is evidenced by a promissory note and secured by a mortgage on the premises. (Defendant's Statement of Material Facts, hereinafter "DSMF," ¶ 1; Plaintiffs Statement of Material Facts, hereinafter 'TSMF," ¶ 1; Defendant's Statement of Additional Material Facts, hereafter "DSAMF, "¶ 1.) BANA is the current owner of the loan and holder of the mortgage and note. (DSMF ¶¶ 1, 6, 14.)
The second paragraph of the mortgage provides that the borrower "shall include" with each monthly payment on the principal, interest and any late charges a sum equal to, inter alia, taxes on the mortgaged property; premiums for insurance required under the terms of the mortgage, including hazard insurance; and mortgage insurance premiums for any year in which the lender was required to pay such a premium to the Secretary of Housing and Urban Development (collectively "escrow items"). (DMSF ¶ 2; DSAMF ¶ 2.) Under mortgage's seventh paragraph, the lender had the option-but was not required-to "pay whatever is necessary to protect the value of the [premises]," including on the escrow items, if the borrower failed to make any payments for these expenses. (DSMF ¶ 4; DSAMF ¶ 4.) By executing the mortgage, Reynolds acknowledged that the document provided for the payment of the escrow items directly by the borrower under the second paragraph or by the lender under paragraph seven if the borrower failed to do so. (DSMF ¶¶ 3, 5; DSAMF ¶¶ 3, 5.) Other than the note and mortgage, no other agreements) exist between BANA and Reynolds regarding payment of the escrow items. (PSMF ¶ 9.)
Reynolds last made a payment on the loan in February 2010, resulting in an unpaid principal balance of $194,811.08. (DSMF¶¶ 10-11; DSAMF ¶¶ 10-11.)
On August 27, 2015, BANA filed a complaint to foreclose on the mortgage ("Foreclosure Action"). (DSMF ¶ 15; PSMF ¶¶ 3, 5; DSAMF ¶ 15.) The Superior Court (York County, Douglas, J.) entered judgment ("Judgment") in Reynolds's favor on BANA's Foreclosure Action on December 28, 2016-a decision BANA did not appeal. (DSMF ¶ 16; PSMF ¶¶ 6, 7; DSAMF ¶ 16.)
Between Reynolds's last loan payment in February 2010 and entry of the Judgment in December 2016, BANA made payments towards the premises's property taxes ($13,933.36), homeowner insurance premiums ($3,984.44) and FHA mortgage insurance premiums ($6,214.44) in the aggregate amount of $24,132.24. (DSMF ¶¶ 20, 22, 24, 25; DSAMF ¶¶ 20, 22, 24, 25.) Between the entry of the Judgment on December 28, 2016 and October 16, 2019, BANA paid an additional $8,675.24-$5,492.52 in property taxes, $1,657 in homeowner's insurance premiums, and $1,525.72 in mortgage insurance premiums. (DSMF ¶¶ 26-28; DSAMF ¶¶ 26-28.) BANA continued to make these payments even after it entered its appearance in the present action on July 18, 2018. (Plaintiffs Statement of Additional Material Facts, hereinafter 'TSAMF," ¶ L.) Reynolds has not compensated BANA for its payment of any of these expenses. (DSMF ¶¶ 30, 32; DSAMF ¶¶ 30, 32.) The parties dispute whether, as a matter of fact, the terms of the mortgage constitute an agreement concerning the payment of these expenses since entry of the Judgment on December 28, 2016. (PSMF ¶ 10, as qualified by Defendant's Opposing Statement of Material Facts, hereinafter "DOSMF," ¶ 10.)
BANA misstates this total as $8,678.24. (see DMSF ¶ 29.)
BANA includes an additional statement of fact that Reynolds did not contact BANA to ask it to stop making these payments, citing to his answer to BANA's counterclaim. (See DSMF ¶ 31.) Because his answer to BANA's counterclaim is not evidence of the quality that would be admissible at trial, this fact will not be treated as part of the summary judgment record. See MSBA Practice Series Maine Rules of Civil Procedure 386 (Hon. Donald G. Alexander et al. eds., 2008) (listing the types of evidence upon which a statement of material facts may properly rely).
Reynolds includes as a statement of material fact that "Reynolds made no agreement with [BANA] or Carrington Mortgages Services for either of diem to pay real estate taxes and hazard insurance premiums on his home after December 28, 2016." (PSMF ¶ 10.) BANA qualifies, denying that no agreement exists (given that the parties are bound by the terms of the mortgage) while acknowledging that the parties have not entered into any additional agreements) since entry of the Judgment. (DOSMF ¶ 10.) It is unclear to die court if Reynolds's statement is meant to demonstrate that, as a matter of fact, the mortgage ceased to govern his contractual relationship with and obligations to BANA since December 28, 2016 or if he is trying to establish that he and BANA have not entered into any other agreement since that date. Because the degree to which the terms of the mortgage contractually bind the parties either before or after the entry of the Judgment is a legal question at the core of the dispute between the parties, Reynolds's statement is treated as properly qualified by BANA.
II. Standard of Review
"Cross motions for summary judgment neither alter the basic Rule 56 standard, nor warrant the grant of summary judgment per se." Estate of Mason v. Amica Mut. Ins. Co., 2017 ME 58, ¶ 8, 158 A.3d 495. Thus, summary judgment is proper, just as it is when only one party motions for it, when a review of the parties' statements of material facts and the record evidence to which they refer, considered in the light most favorable to a nonprevailing party, establishes that mere is no genuine issue of material fact in dispute and that the prevailing party is entitled to judgment as a matter of law. Estate of Frost, 2016 ME 132, ¶ 15, 146 A.3d 118 (cross-motions for summary judgment); see Estate of Kay v. Estate of Wiggins, 2016 ME 108, ¶ 9, 143 A.3d 1290 (motion for summary judgment). A contested fact is "material" if has the potential to influence the outcome of the case, and a "genuine" issue of material fact exists if the factfinder must decide between competing versions of the truth, hems v. Concord General Mut. Ins. Co., 2014 ME 34, ¶ 10, 87 A.3d 732. Judgment as a matter of kw is not warranted if "any reasonable view of the evidence could sustain a verdict for the opposing party pursuant to the substantive law that is an essential element of the claim." Merriam v. Wanger, 2000 ME 159, ¶ 7, 757 A.2d 778. When material facts are contested, the dispute must be resolved through fact-finding at trial-even if the likelihood of success at trial by one party or the other is small. Rose v. Parsons, 2015 ME 73, ¶ 4, 118 A.3d 220; Curtis v. Porter, 2001 ME 158, ¶ 7, 784 A.2d 18. This holds true because summary judgment is neither a substitute for trial when a material fact is in dispute, Cookson v. Brewer Sch. Dep't, 2009 ME 57, ¶ 12, 974 A.2d 276, nor an arena for trial by affidavit, Hut% v. Alden, 2011 ME 27, ¶ 16, 12 A.3d 1174.
If a properly supported motion is filed, then the burden shifts to the nonmoving party to demonstrate that a factual dispute exists sufficient to establish a prima facie case for each element of the claim or defense in order to avoid summary judgment. Watt v. Unifirst Corp., 2009 ME 47, ¶ 21, 969 A.2d 897. The evidence proffered by the nonmoving party is assessed for sufficiency-not persuasiveness-such that a court can make a factual determination without speculating. Estate of Smith v. Cumberland County, 2013 ME 13, ¶ 19, 60 A.3d 759.
III. Discussion
A. Declaratory Judgment
Reynolds contends that the Law Court's recent decisions in Pushard v. BANA and Fannie Mae v. Deschaine are directly applicable precedent that binds this court to find that the mortgage and note are unenforceable and that the mortgage should be discharged. Pushard v. Bank of America, NA.., 2017 ME 230, 175 A.3d 103; Fed. Nat'l Mortg. Assoc, v. Deschaine, 2017 ME 190, 170 A.3d 230. This court finds Reynolds's argument compelling-even in light of BANA's suggestion that these decisions should be reconsidered as detached from prior case law and/or internally muddled.
BANA recognizes that Pushard and Deschaine stand for the proposition that "plaintiffs [are] entitled to a declaration rendering their respective notes and mortgages unenforceable" in the event that die mortgagee loses its foreclosure action. (BANA's Mem. J. 4.)
1. Stare Decisis
As an initial matter, it is important to acknowledge that stare decisis dictates that this court follow precedent that is directly applicable to facts before it, regardless of whether or not this court agrees with BANA's position, "unless the passage of time and changes in conditions justify reexamining the law stated in [a] prior opinion and reaching a different result." Estate of Galipeau v. State Farm Mut. Auto. Ins. Co., 2016 ME 28, ¶ 15, 132 A.3d 1190. Only roughly three years have elapsed since the Law Court rendered its decision in cases that raised identical issues to those before this court now- i.e., the enforceability of a mortgage and note and the dischargeability of the mortgage after the mortgagee loses its foreclosure action. Assuming, for the sake of argument and with great reluctance, that this court is even in a position to question the Law Court's decision-making process in Pushard and Deschaine, this court finds that there has been no fundamental change in conditions that might warrant taking a second look at what has become settled law in this state. While stare decisis might, in theory, "become a self-defeating principle" if "it operates so inflexibly as to deny to judges the power to move ahead amidst the onrushing currents of change," it provides in this case an essential lodestar to guide this court's analysis because the precedent relied upon remains undimmed by the passage of time. See Moulton v. Moulton, 309 A.2d 224, 228 (Me. 1973).
Putting aside the potential effect of stare decisis for a moment, this court does not find persuasive either of BANA's arguments for why Pushard and Deschaine should not apply to the case at bar-i.e., that the Law Court misapplied res judicata in these cases because it has only been recognized as an affirmative defense in prior decisions and that Pushard is defective for lack of internal consistency. Res judicata can be used as a shield by a litigant to protect itself from attacks waged by a novel opponent on the same grounds as those raised against it in prior proceedings-but also as a sword by a litigant against a party to a prior proceeding if (1) it had a full and fair opportunity to ligate the issue in a prior action and (2) the issue was decided by a prior final judgment. See, e.g., Beal v. Allstate Ins. Co., 2010 ME 20, ¶ 17, 989 A.3d 733 (recognizing nonmutual offensive issue preclusion); Reed p. Tracy, 435 A.2d 745, 746 (Me. 1981) (discussing res judicata in the context of an affirmative defense). The fact that res judicata is an affirmative defense that can be waived does not per se prevent a party from relying on the doctrine offensively as these differing applications of the doctrine are not mutually exclusive. Nor did the Law Court, in deciding Pushard and Deschaine, "summarily create[ ] an apparent new avenue for borrowers to use res judicata" because its application of this principle is deeply rooted in prior case law. (See BANA's Mem. 6.) Although the Law Court adduced to only Johnson v. Samson Const. Corp. in Deschaine and to Johnson and Deschaine in Pushard m. explaining it decision to apply res judicata rules in the same manner in a foreclosure action as any other type of case, its decision flows directly and logically from a series of decisions that both recognize the offensive use of res judicata in the issue preclusion context but also give form and definition to criteria a court applies in determining whether a matter has been fully and fairly litigated. Johnson v. Samson Const Corp., 1997 ME 220, ¶ 8, 704 A.2d 866; see, e.g., Beal, 2010 ME 20, ¶ 17, 989 A.3d 733; Van Houten v. Harco Const., Inc., 655 A.2d 331, 333 (Me. 1995); Bossier v. Barry, 403 A.2d 762, 770 & n.6 (Me. 1979). Pushard, Deschaine 2nd Johnson are woven with common thread, reinforcing each other and providing solid support on which this court can rely to reach the claims now before it. Consequently, this court finds BANA's argument that Pushard and Deschaine represent a clear break from precedent to be without merit.
Nor does this court find BANA's position tenable that the Law Court's holding in `Pushard as to the enforceability of the mortgage and note should be viewed with suspicion or interpreted narrowly because its rejection of the plaintiffs claims under 33 M.R.S. § 551 and for slander of title demonstrates that it "[i]ntrinsically . . . recognizes the defensive (as opposed to offensive) nature of res judicata" (See BANA's Mem. 6.) This court perceives no inconsistency between the Law Court's decision on these claims and its ultimate determination that the mortgage and not was unenforceable on res judicata grounds. See Pushard, 2017 ME 230, ¶¶ 15-17, 175 A.3d 103 (upholding summary judgment in the mortgagee's favor on the § 551 claim on the grounds that the mortgagors had not fully performed under the mortgage's terms and the slander of title claim because the record lacked evidence that the mortgagee discharged the mortgage with malice). Simply stated, BANA reads a subtext into the Pushard decision that does not exist. As a result, stare decisis leads this court to find that the Law Court's holdings in Pushard and Deschaine apply to the case at bar.
2. Issue Preclusion
Turning to the merits of Reynolds's motion for summary judgment on his claims against BANA, this court finds that the bank, as the defendant in Pushard, is collaterally estopped from relitigating whether a mortgagor has a right to a declaratory judgment that the mortgage and note held by it are unenforceable and that the mortgage has been discharged. Res judicata prevents relitigation of matters already decided. Portland Water Dist. v. Town of Standish, 2008 ME 23, ¶ 7, 940 A.2d 1097; Harriman v. Border Trust Co., 2004 ME 28, ¶ 5, 842 A.2d 1266 ("The law is plain that [litigants] cannot again come forward in the same legal mission against the same parties to secure a remedy ... previously denied."). This doctrine expresses itself in two ways-claim preclusion, which prevents the relitigation of claims by parties to previous action or their privities when the prior proceeding resulted in a valid final judgment and the matter was or could have been litigated in the first action, Norton v. Town of Long Island, 2005 ME 109, ¶ 18, 883 A.2d 889, and issue preclusion, which is not dependent on the mutuality of parties but requires that the party collaterally estopped from contesting an issue before the court in a later proceeding had a "full and fair opportunity and incentive" to litigate it in the prior proceeding and that the judgment resulting from the prior action determined an identical issue, Beal, 2010 ME 20, ¶ 17, 989 A.2d 733. Issue preclusion can be used offensively against a party to a prior proceeding when its serves the interest of justice, which a court must assess on a case-by-case basis. Id.; Van Houten, 655 A.2d at 333; Hossler, 403 A.2d at 769. The party resisting collateral estoppel shoulders the burden of demonstrating that it would be prejudiced by its application. Beal, 2010 ME 20, ¶ 18, 989 A.3d 733. In deciding if the party subject to collateral estoppel had a full and fair opportunity to litigate the issue in the prior proceeding, the court considers several criteria:
The size of the claim, the forum of the prior litigation, whether the issue was a factual or a legal one, the foreseeability of future suits, the extent of the previous litigation, the availability of new evidence, the experience of counsel, indications of a compromise verdict, and procedural opportunities available in the second suit that were unavailable in the first.Id. ¶ 18 (quoting Hossler, 403 A.2d at 769 (citations omitted)). The court should also "carefully evaluate the reasons why a . . . plaintiff did not join in and have his claim adjudicated in the first action" because a plaintiff should not be able to rely on res judicata as a sword if the reason for his lack of involvement in the prior proceeding "was merely to lie in ambush and wait for a favorable judgment." Hossler, 403 A.2d at 769-770.
As to the case at bar, it is clear as crystal that BANA had a full and fair opportunity in Pushard to litigate the enforceability of a mortgage and note against a mortgagor who prevailed in an underlying foreclosure action and the dischargeability of the mortgage on the property and that the Law Court decided this issue in rendering its decision. First, even a conservative reading of the Law Court's decision in Pushard demonstrates that it decided the issues at hand in the final judgment it entered in favor of the plaintiff/mortgagor. Therefore, the first of two requirement for issue preclusion to apply has been satisfied. Turning to the factors indicative of a full and fair opportunity to litigate, this court finds that the factual circumstances and procedural posture of Reynolds's claim against BANA and Pushard's litigation against the bank are almost identical. Both cases involved foreclosure actions for an amount due between $100,000 and $200,000 and resulted in judgments entered in favor of the mortgagors. See Pushard, 2017 ME 230, ¶¶ 2-4, 175 A.3d 103. The forums in which BANA defends the current action and in which it litigated Pushard are analogous; Reynolds filed his claim in the Superior Court while the Pushards' declaratory judgment action was first heard by the Business and Consumer Court before its appeal to the Law Court. As in Pushard, the questions before this court concerning the enforceability of the mortgage and note and the dischargeability of the mortgage in light of a prior foreclosure judgment are legal in nature. See Id. ¶ 35 ("[W]e identify no legal reason to adopt different res judicata rules for foreclosure cases than those that apply in every other type of case." (emphasis in original)). It was certainly foreseeable to BANA that future litigation against it hinged on the Law Court's decision in Pushard. The litigation between the Pushards and BANA was sufficiently extensive given that BANA had the opportunity to argue its position in the BCD and before the Law Court. BANA has not claimed that new or different evidence is at play in this case that would change the outcome in Pushard. The bank availed itself of competent, experienced counsel in this case and its predecessor. There are no indications of a compromise verdict, nor does BANA have available to it procedural opportunities that it lacked in the prior proceeding. Lastly, the Pushards' action against BANA was not of the kind that Reynolds could have readily joined. Collectively, each and every of these factors favor the application of issue preclusion to the case at hand. The application of this principle prevents BANA from relitigating its contention that the mortgage and note do not become unenforceable and the mortgage is not discharged when a mortgagee loses the underlying foreclosure action. Consequently, summary judgment is entered for Reynolds for his declaratory judgment action; his mortgage and note are declared unenforceable and the mortgage on the premises is discharged.
B. Unjust Enrichment
In apparent anticipation of this court siding with Reynolds in his declaratory judgment action, BANA argues that it can recover for unjust enrichment if a ruling in his favor came to past-either for the balance remaining on the loan to Reynolds or, in the alternative, for the escrow items that BANA paid on Reynolds's behalf since he stopped making payments on the loan in 2010. BANA's unjust enrichment claims to each of these sums are discussed in turn.
This court does not find merit in BANA's contention in its motion for summary judgment that unjust enrichment prevents a declaration that the mortgage and note are unenforceable as the reasoning behind this line of attack is indistinguishable from the rationale it relies upon to argue against the application of res judicata as an offensive measure. (See BANA's Mem. 7-9.) Therefore, it will only consider BANA's second argument regarding unjust enrichment-i.e., that a decision by this court in Reynolds's favor on his declaratory judgment claim triggers an unjust enrichment counterclaim by the bank.
1. Balance on the Loan
BANA cannot recover on its counterclaim for unjust enrichment as to the unpaid balance on the underlying loan because the parties entered into a contract by assenting to the terms of the mortgage, even though this contract is rendered unenforceable by this order. See, e.g., York County v. PropertyInfo Corp., 2019 ME 12, ¶ 26, 200 A.3d 803 (holding that a contractual relationship between the parties "precludes the availability of any recovery in equity for unjust enrichment"). "The rationale behind this rule is that courts should not intervene to redefine rights and obligations that parties have already defined for themselves through a voluntary contract." Knope v. Green Tree Servicing, 2017 ME 95, ¶ 13, 161 A.3d 696.
Because it resolves BANA's counterclaims on other grounds, this court will not reach Reynolds's argument that the bank's attempt to recover for unjust enrichment for the balance remaining on the loan is barred by claim preclusion.
BANA does not challenge this rule of law, instead arguing that if this court finds the mortgage unenforceable in accordance with Pushard and Deschaine, then the contract is void and the bank can recover for unjust enrichment. BANA has not adduced to any authority that a contract is void if it becomes unenforceable. The cases to which BANA cites establish that it can plead unjust enrichment as an alternate theory of relief, see Fitzpatrick v. Teleflex, Inc., 630 F.Supp.2d 91, 106-107 (D. Me. 2009), and equitable remedies may still be available if a contract is rendered, amongst other potential outcomes, unenforceable or invalid, see Ingram v. Rencor Controls, Inc., 256 F.Supp.2d 12, 22 (D. Me. 2003) (emphasis added). Neither of these cases establish that a declaration that a contract is unenforceable is tantamount to voiding it or that a party can recover for unjust enrichment solely as a result of the contract becoming unenforceable.
Ingram, in applying state law, cites to Horton & McGehee, Maine Civil Remedies § 7-5(a) (1996); it, in turn, adduces to 66 Am. Jur. 2d Restitution and Implied Contracts § 7 (1973), which concerns contracts that arise by fact or law and makes no mention of whether a party can seek equitable remedies once a contract has been found to be unenforceable, and Harmony Homes Corp v. Cragg, 390 A.2d 1033, 1036-37 (Me. 1978), a case that turned on a party's disaffirmation of a contract-not whether litigant has an equitable remedy available to him for contract rendered unenforceable. Ingram, like many other courts, appears to have "used the words 'void,' voidable,' 'invalid' and 'unenforceable' imprecisely" and interchangeably, which tends to minimize the distinction that does exist between these classifications. See Daugherty v. Kessler, 286 A.2d 95, 97 (Md. 1972). Because none of these authorities support the proposition that an unjust enrichment claim can be brought if a contract is found to be unenforceable, this court will not interpret Ingram as support for BANA's counterclaim.
Importantly, the law differentiates between a contract that is void, which is without legal effect, and one that is unenforceable, according to which a new directly enforceable duty may be created by the promisor, such as when it becomes unenforceable on statute of limitations grounds. Compare 1 Corbin on Contracts § 1.7 ("The meaning that is most commonly intended to be conveyed by the word 'void' is a total absence of legal effect."); 17A Am. Jur. 2d Contracts § 9 ("A void contract is not a contract at all, and is without legal effect; it binds no one and is a mere nullity") to 1 Corbin on Contracts § 1.8 ("A perfectly valid contract may become unenforceable by virtue of the statute of limitations ... The expiration of the period fixed by statute, however, does not make such a contract void."); 17A Am. Jur. 2d Contracts § 6 ("Some agreements give rise to contractual duties although they are unenforceable, such as an agreement that does not comply with the statute of frauds, which in some jurisdictions renders the agreement merely unenforceable but not wholly void."). Since the two classifications are conceptually distinct, this court will not treat a contract that the parries cannot enforce as void in the absence of binding precedent that instructs it to do so.
2. Escrow Items
Just as the existence of the contract bars BANA's counterclaim for unjust enrichment on the loan balance, the terms agreed to in the mortgage also preclude BANA from recovering under a theory of unjust enrichment for its payments on the escrow items. Although granting Reynolds a declaratory judgment renders the mortgage and note unenforceable, it does not void the contract that exists between him and BANA regarding the payment of these expenses.
While the same rules of law apply to preclude BANA's counterclaim for these sums as for the loan balance, the court discusses this second part of the bank's counterclaim separately to express its skepticism with its motives for continuing to pay for the escrow items in light of the Judgment entered against it in its foreclosure action and the clarification provide by the Law Court regarding the enforceability of a note and mortgage in Pushard and Deschaine. The fact that a party benefited is insufficient to trigger an unjust enrichment claim; the benefit conferred must be unjust U.S. Bank Nat'l Ass'n v. Thomes, 2013 ME 60, ¶ 16, 69 A.3d 411 ("The most significant element of the doctrine of unjust enrichment is whether the enrichment of the defendant is unjust" (emphasis in original)). Here, BANA covered these expenses voluntarily even after it lost its foreclosure action on December 16, 2016; the Law Court issued its decisions in Deschaine and Pushard on December 7 and December 12, 2017, respectively; and Reynolds filed his declaratory judgment action against the bank on July 2, 2018. BANA is charged with knowledge of this development in the law-a particularly reasonable presumption given its direct involvement in litigating Pushard. See Woodman v. Woodman, 3 Me. 350, 352 (1825) ("All persons are presumed to know the law; and they must govern themselves by legal principles in their contracts and transactions with each other . .. ."; see also Bisbee v. Mt. Battie Mfg. Co., 107 Me. 185, 77 A. 778, 781 (1910) ("It is true that every person is presumed to know the law, and to act in the light of such a knowledge . . . .").
It is, therefore, difficult to see how Reynolds was unjustly enriched by BANA's voluntary payments after it became clear to the bank that it could not recover on the mortgage. As pointed out by Reynolds, BANA's payment of these expenses resembles that of the "volunteer" imagined by the Law Court in Knope who "thrust [its] benefits upon others" and for whom unjust enrichment is not an available remedy. Knope, 2017 ME 95, ¶ 18 n.3, 161 A.3d 696. The causes of fairness and justice are not furthered by permitting BANA to manufacture an unjust enrichment claim as to the escrow items by taking steps that it could have decided not to take. See Forrest Assoc, v. `Passamaquoddy Tribe, 2000 ME 195, ¶ 14, 760 A.2d 1041 (recognizing that unjust enrichment claims are asserted "on the grounds of fairness and justice"). Because the existence of a contract governing payment of the escrow items and the fact that at least a portion of the benefit conferred to Reynolds was not unjust, summary judgment is properly granted for Reynolds as to BANA's unjust enrichment counterclaim for these expenses.
IV. Order
For the reasons set forth above, it is hereby ordered and the entry shall be: 'Plaintiff Clayton B. Reynolds's motion for summary judgment on his declaratory judgment action and defendant Bank of America, NA.'s counterclaims for unjust enrichment is GRANTED. The note and the mortgage for real property located at 6 Winter Street Extension, Saco, Maine held by Bank of America, N.A. are declared unenforceable, and Reynolds holds the property unencumbered by the mortgage. Defendant Bank of America, N.A.'s motion for summary judgment on plaintiff Reynolds's declaratory judgment action and on its counterclaims for unjust enrichment is DENIED."
The clerk may enter this Order on the docket by reference pursuant to M.R. Civ. P. 79(a).
SO ORDERED