MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2016 ME 10
Docket: Han-14-534
Submitted
On Briefs: September 28, 2015
Decided: January 14, 2016
Panel: ALEXANDER, MEAD, GORMAN, JABAR, and HUMPHREY, JJ.
THE BANK OF NEW YORK, AS TRUSTEE FOR THE
CERTIFICATEHOLDERS OF CWALT, INC. ASSET-BACKED
CERTIFICATES, SERIES 2003-15T2
v.
JOHN B. DYER et al.
PER CURIAM
[¶1] John B. Dyer appeals from an order entered by the District Court
(Ellsworth, Mallonee, J.) dismissing The Bank of New York’s complaint, in which
the Bank sought to foreclose on Dyer’s real property in Bar Harbor, after the Bank
acknowledged that it could not prove that it had the requisite standing to pursue its
claim. Dyer contends that the court erred in dismissing the complaint without
prejudice, and in declining to award him his full attorney fees and costs.
We affirm the order.
I. BACKGROUND
[¶2] On May 29, 2003, Dyer gave a $997,000 promissory note and a
mortgage on property in Bar Harbor securing the note to Countrywide Home
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Loans, Inc. The mortgage contained language naming Mortgage Electronic
Registration Systems, Inc. (MERS) as lender’s nominee—language that we found
to be problematic in Bank of America, N.A. v. Greenleaf (Greenleaf I),
2014 ME 89, ¶ 13-15, 96 A.3d 700.
[¶3] In July 2008, the Bank filed a complaint for foreclosure in the
District Court, asserting that Dyer had stopped making payments on the note as of
June 2007, and that he then owed the Bank $1,014,869.91. The Bank’s motion for
summary judgment and Dyer’s cross-motion for summary judgment were denied,
as was the Bank’s second motion for summary judgment.
[¶4] The case proceeded to trial on three separate days:
• January 4, 2013 (Mallonee, J.): The Bank was unable to produce the
original note, and, given the limited knowledge of the Bank’s witness, the
court sustained Dyer’s objection to the admission of a copy. The court took
the Bank’s motion for a continuance under advisement. Dyer objected and
asked for a dismissal with prejudice. On January 11, the court granted the
continuance, but as a sanction it ordered the Bank to pay Dyer’s costs and
attorney fees for the first day of the trial in the amount of $4,090.61.
• October 11, 2013 (D. Mitchell, J.): Because of judicial scheduling issues, a
different judge presided at the second day of the trial. After the Bank’s
witness was sworn but before testimony began, the Bank moved to amend its
complaint to add Countrywide Home Loans as a party-in-interest; Dyer
objected. The court then continued the trial on its own motion. The motion
to amend was later granted.
• November 20, 2014 (Mallonee, J.): On September 22, 2014, two months
before the third day of the trial, the Bank filed a motion to dismiss its
complaint without prejudice on the ground that
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the subject mortgage appears to fall under the scope of
the Supreme Judicial Court’s recent decision in
[Greenleaf I]. . . . [U]nder the present time constraints of
proceeding forward to trial in this case, and
notwithstanding Plaintiff’s counsel[’s] efforts, Plaintiff
maintains that it will not be able to gather the additional
witness testimony and evidence needed prior to trial to
establish standing to foreclose.
Dyer filed a lengthy written objection requesting that (1) any
dismissal be with prejudice, and (2) he be awarded his attorney fees
and costs.
At the outset of the third day of trial, the parties argued the motion to
dismiss. The Bank acknowledged that “at this point in time we are
unable to establish that we have [] standing.” The court took the
motion to dismiss under advisement.
[¶5] Subsequently, by written order, the court granted the Bank’s motion to
dismiss without prejudice and declined to award additional attorney fees or costs.1
Dyer appealed.
II. DISCUSSION
[¶6] Dyer asserts that after three attempts at a trial “the District Court . . .
has granted [the Bank] a million dollar mulligan when its inability to perfect a
foreclosure is the result of its own substantive and evidentiary shortcomings.” We
review the dismissal without prejudice for an abuse of discretion. See U.S. Bank
Nat’l Ass’n v. Manning, 2014 ME 96, ¶ 12, 97 A.3d 605.
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We review the court’s determination that awarding Dyer his first-day costs and attorney fees was
sufficient for an abuse of discretion. Jandreau v. LaChance, 2015 ME 66, ¶ 29, 116 A.3d 1273. Finding
none, we do not discuss further Dyer’s contention that he should have been awarded additional sums.
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[¶7] The briefs in this appeal were filed before we issued our opinions in
three recent foreclosure cases: Homeward Residential, Inc. v. Gregor,
2015 ME 108, 122 A.3d 947; Wells Fargo Bank, N.A. v. Girouard, 2015 ME 116,
123 A.3d 216; and Bank of America, N.A. v. Greenleaf (Greenleaf II),
2015 ME 127, 124 A.3d 1122. Each of those decisions addressed the distinction
between standing and jurisdiction, and, in Gregor and Greenleaf II, the proper
result when a party seeking to foreclose cannot establish standing.
[¶8] In Girouard, we took note of
the predicate requirement that a putative mortgagee establish standing,
which is a demonstration that that party holds the rights necessary to
get through the courthouse door and pursue the claim in the first
place. . . . [A] party’s lack of standing is not a jurisdictional problem,
but rather it is an issue of justiciability that precludes a party from
invoking the court’s jurisdiction.
2015 ME 116, ¶ 8 n.3, 123 A.3d 216.
[¶9] Gregor indicated the consequence of a foreclosure plaintiff’s lack of
standing:
[T]he record wholly supports the court’s determination that [the
plaintiff] failed to demonstrate that [it] had standing to maintain the
foreclosure action. Although the court maintained jurisdiction over
the parties and subject matter, it could not decide the merits of the
case when the plaintiff lacked standing pursuant to [14 M.R.S.]
section 6321. Instead, the court could only dismiss the action.
Because the court addressed the merits of the complaint for
foreclosure in its judgment, we vacate the judgment in its entirety and
remand for an entry of a dismissal without prejudice.
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2015 ME 108, ¶¶ 23-24, 122 A.3d 947 (citation omitted).
[¶10] Finally, Greenleaf II confirmed that when a plaintiff lacks standing,
although the court retains jurisdiction, dismissal of the complaint without prejudice
is the proper result:
Because standing is a threshold concept dealing with the
necessity for the invocation of the court’s power to decide true
disputes, it is an issue cognizable at any stage of a legal proceeding,
even after a completed trial. When discovered, a standing defect does
not affect, let alone destroy, the court’s authority to decide disputes
that fall within its subject matter jurisdiction. A plaintiff’s lack of
standing renders that plaintiff’s complaint nonjusticiable—i.e.,
incapable of judicial resolution.
Here, the court could not have entered a judgment . . .
addressing the merits of the Bank’s foreclosure claim because the
Bank failed to show the minimum interest that is a predicate to
bringing that claim in the first place. Under these circumstances, the
court properly disposed of the case by entering a dismissal without
prejudice.
2015 ME 127, ¶¶ 8-9, 124 A.3d 1122 (alteration, citations, and quotation marks
omitted).
[¶11] The logic of the Greenleaf II holding is evident when applied in this
case. A dismissal with prejudice “operate[s] as an adjudication on the merits.”
Johnson v. Samson Constr. Corp., 1997 ME 220, ¶ 8, 704 A.2d 866 (quotation
marks omitted). Because there is no dispute that the Bank lacked standing and
therefore never had “the rights necessary to get through the courthouse door and
pursue [its] claim in the first place,” Girouard, 2015 ME 116, ¶ 8 n.3,
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123 A.3d 216, the trial court’s power to make any adjudication on the merits of
that claim, including a dismissal with prejudice, was not invoked. Accordingly, a
dismissal without prejudice, which disposed of the case without exploring its
merits, was the required result.
The entry is:
Order of dismissal without prejudice affirmed.
On the briefs:
George J. Marcus, Esq., Jennie L. Clegg, Esq., and Andrew C.
Helman, Esq., Marcus, Clegg & Mistretta, P.A., Portland, for
appellants John B. Dyer and William Purcell
David W. Merritt, Esq., Houser & Allison, APC, Boston,
Massachusetts, for appellee The Bank of New York
Ellsworth District Court docket number RE-2008-120
FOR CLERK REFERENCE ONLY