Title: Thurston v. Galvin

State: maine

Issuer: Maine Supreme Court

Document:

MAINE SUPREME JUDICIAL COURT 
Reporter of Decisions 
Decision: 
2014 ME 76 
Docket: 
Oxf-13-332 
Argued: 
April 9, 2014 
Decided: 
June 10, 2014 
 
Panel: 
ALEXANDER, SILVER, MEAD, GORMAN, and JABAR, JJ. 
Majority: 
SILVER, MEAD, GORMAN, and JABAR, JJ. 
Dissent: 
ALEXANDER, J. 
 
 
JOHN A. THURSTON et al. 
 
v. 
 
JENNY G. GALVIN 
 
 
GORMAN, J. 
[¶1]  Jenny G. Galvin appeals from a judgment entered in the District Court 
(Rumford, Oram, J.) in favor of John A. Thurston and Patricia S. Thurston finding 
Galvin in default on a land installment contract, foreclosing her rights in the 
contract, and ordering a writ of possession in favor of the Thurstons.  Galvin 
contends that the Thurstons are barred from pursuing the foreclosure action 
because the contract did contain all of the contents required for land installment 
contracts by 33 M.R.S. § 482(1) (2013).  She also contends that the court erred 
when, after finding her in default and foreclosing her rights in the contract pursuant 
to 14 M.R.S. § 6203-F (2013), it did not order a public sale pursuant to 14 M.R.S. 
§§ 6321-6325 (2013).  Because we conclude that the contract complies with 
 
2 
33 M.R.S. § 482(1) and that 14 M.R.S. § 6203-F does not mandate a judicial sale 
of property subject to a land installment contract, we affirm the judgment. 
I.  BACKGROUND 
[¶2]  Galvin, a resident of New Hampshire, entered into a land installment 
contract with the Thurstons on October 10, 2008.  The contract established the 
terms of a transfer from the Thurstons to Galvin of an approximately nine-acre 
parcel of land with a dwelling in the Town of Bethel.  This parcel comprised a 
portion of a property jointly owned by the Thurstons that was encumbered by a 
mortgage held by Norway Savings Bank.  The contract fixed the purchase price at 
$550,000 with an initial payment of $115,000; monthly installments of $2749.50 
for two years; and a final balloon payment due in October of 2010.  The parties 
subsequently amended the contract, extending the monthly payment obligation and 
delaying the balloon deadline by one year.  The contract also obligated Galvin to 
pay real estate taxes on the property.  In return, she acquired the right to possess 
the premises immediately and the right to receive “a good and sufficient Warranty 
Deed of said real estate, clear of incumbrances” after she paid the full purchase 
price.    
[¶3]  The contract provided that Galvin’s failure to pay the monthly 
installments, balloon payment, or real estate taxes would place her in default, at 
which time the Thurstons could foreclose her rights to the property “by any of the 
 
3 
means provided by law for the foreclosure of land installment contracts or 
mortgages.”  The contract contained no language indicating that, if she breached 
her obligations, Galvin would be entitled to recoup any portion of the monies she 
had paid the Thurstons.   
[¶4]  Galvin made the initial payment and made full monthly payments 
through September of 2011.  She made no payments in October and November of 
2011, made only partial monthly payments through March of 2012, and thereafter 
stopped making payments entirely.  She also failed to pay the property taxes owed 
in 2011 and 2012.  
[¶5]  The Thurstons provided Galvin with a notice of default and right to 
cure in May of 2012.  After Galvin failed to pay the sum owed to the Thurstons 
within the restoration period, they commenced this action.  In their complaint, 
dated August 22, 2012, the Thurstons asked the court to find Galvin in default on 
the contract and enter a judgment of foreclosure pursuant to 14 M.R.S. § 6203-F; 
order the issuance of a writ of possession in their favor; and award damages 
reflecting interest and late charges, real estate taxes paid by the Thurstons on 
Galvin’s behalf, costs of repair for waste to the premises, and attorney fees.  In an 
amended answer filed on February 15, 2013, Galvin asserted, inter alia, that the 
 
4 
Thurstons were barred from the relief they sought because the contract did not 
comply with 33 M.R.S. § 482(1).1 
[¶6]  At a bench trial on April 9, 2013, witnesses testified about the terms of 
the land installment contract, the Norway Savings Bank mortgage on the property, 
a line of credit opened by the Thurstons against that mortgage, and the nature of 
the claimed damage to the premises.   
[¶7]  On May 1, 2013, the court entered a judgment of foreclosure against 
Galvin on the grounds that she was in default for having failed to make the 
requisite property tax and purchase price payments.  In that order, the court 
determined that the Thurstons were not barred from bringing this action, even if 
the land installment contract failed to comply with 33 M.R.S. § 482(1), because 
they nonetheless would have had “access to the summary Forcible Entry and 
Detainer process in order to obtain possession of the real estate.”  Although the 
court declined to award damages for waste or real estate taxes, it determined, in an 
incorporated judgment of the same date, that the Thurstons were entitled to 
exclusive possession of the premises and ordered that a writ of possession issue 
upon the expiration of a sixty-day redemption period.  The court further ordered 
                                         
1  Galvin also asserted that the Thurstons had breached the contract by causing Norway Savings Bank 
to foreclose or threaten to foreclose its mortgage on the property.  She does not raise this issue on appeal, 
however, and we therefore deem it waived.  See Mehlhorn v. Derby, 2006 ME 110, ¶ 11, 905 A.2d 290.  
 
5 
that, if Galvin failed to redeem the property, the Thurstons would be entitled to 
$6667.13 in attorney fees.  
[¶8]  Galvin moved to alter or amend the judgment pursuant to 
M.R. Civ. P. 59(e) on the grounds that the court failed to order a public sale, as 
required by 14 M.R.S. §§ 6323-6324.  On June 21, 2013, the court denied the 
motion after concluding that the plain language of section 6203-F did not mandate 
a foreclosure sale and disbursement of the sale proceeds.  Galvin timely appealed.  
II.  DISCUSSION 
A. 
Contract Enforceability 
[¶9]  Galvin first contends that the Thurstons are barred from pursuing a 
foreclosure action against her on the ground that the land installment contract is 
unenforceable because it does not include a conspicuous statement of 
encumbrances against the property, a statement of buyer’s rights, or a provision 
that the vendor provide evidence of title, as required by 33 M.R.S. § 482(1).2  
                                         
2  Title 33 M.R.S. § 482(1) (2008) provides, in pertinent part: 
1.  Contents.  A land installment contract . . . shall contain at least the following 
provisions: 
. . .  
J.  A conspicuous statement of any encumbrances against the property, including a 
statement of any pending order of any public agency or other matters of public record 
affecting the property; 
. . .  
 
6 
The court made no specific findings concerning the contract’s compliance with 
these statutory provisions, and neither party moved for additional findings of fact 
and conclusions of law pursuant to M.R. Civ. P. 52(b).  Rather, the court 
determined that, even if the contract failed to satisfy the statute, the Thurstons had 
“access to the summary Forcible Entry and Detainer process” to regain possession 
of the premises and, therefore, were not barred from pursuing this action. 
[¶10]  The Thurstons never raised by their pleadings a cause of action for 
forcible entry and detainer, and the elements of such an action were never tried.  
See 14 M.R.S. § 6001(1) (2013); Frost Vacationland Props., Inc. v. Palmer, 
1999 ME 15, ¶¶ 9-13, 723 A.2d 418 (discussing the elements of a forcible entry 
and detainer action); see also M.R. Civ. P. 15(b) (providing that issues not raised 
by the pleadings may be tried by express or implied consent of the parties).  The 
court’s rejection of Galvin’s defense because the Thurstons might have an 
alternative remedy was thus error.  Nonetheless, its ultimate conclusion that Galvin 
was in default on the contract was necessarily based on a finding that an 
                                                                                                                                   
L.  A statement of the rights of the buyer established by Title 14, section 6111 to cure 
a default by the buyer;  
M.  A provision that the vendor provide evidence of title by copy of deed, or 
otherwise, at the time of the execution of the agreement and, if the vendor is not prepared 
to deliver a full warranty deed on completion of the contract, a description of the deed 
which the vendor will deliver on completion. . . . 
These same statutory requirements for land installment contracts were in effect in 2008 when the 
parties executed the contract, and have not been amended since then.  See 33 M.R.S. § 482(1) (2008).  
 
7 
enforceable contract exists.  See Pelletier v. Pelletier, 2012 ME 15, ¶ 20, 
36 A.3d 903 (stating that, in the absence of a motion pursuant to 
M.R. Civ. P. 52(b), “we will infer that the trial court made any factual inferences 
needed to support its ultimate conclusion”).   
[¶11]  Our independent review of the record supports the trial court’s 
determination.  See Coastal Ventures v. Alsham Plaza LLC, 2010 ME 63, ¶ 19, 
1 A.3d 416 (the existence of an enforceable contract is reviewed for clear error); 
Ackerman v. Yates, 2004 ME 56, ¶ 10, 847 A.2d 481 (the interpretation of an 
unambiguous contract is a question of law that is reviewed de novo).  The contract 
contains a section entitled “Encumbrances” that lists the outstanding mortgage on 
the property, thus satisfying the requirement of section 482(1)(J).  Sub-paragraph 
(e) under the paragraph entitled “Default” provides information about Galvin’s 
right to cure her default, and about her right to a delay in any foreclosure 
proceedings if the property were being used by her as her primary residence, 
generally complying with section 482(1)(L).3  And, finally, the language found in 
the paragraph entitled “Description of Property,” the attached deed description and 
plan, and the language found in the paragraph entitled “Closing,” stating that, upon 
full payment of the agreed-upon price the Thurstons would provide Galvin with “a 
                                         
3  The trial court found that the Thurstons provided Galvin with a proper notice to cure pursuant to 
14 M.R.S. § 6111 (2008) (requiring a thirty day redemption period), amended by P.L. 2009, ch. 402, § 10 
(effective June 15, 2009) (requiring, inter alia, a thirty-five day redemption period).  That finding has not 
been challenged on appeal. 
 
8 
good and sufficient Warranty Deed of said real estate, clear of encumbrances,” 
demonstrates compliance with section 482(1)(M).  Because the land installment 
contract is sufficiently definite to ascertain its exact meaning and fix exactly the 
legal liabilities of each party and because it is in substantial compliance with 
section 482(1), it is enforceable.  See Sullivan v. Porter, 2004 ME 134, ¶ 13, 
861 A.2d 625 (holding that a contract to sell a farm was sufficiently definite 
because it “embodied the essential material terms for a contract”); see also 
Gollihue v. Russo, 789 N.E.2d 1151, 1154 (Ohio Ct. App. 2003) (“[I]t is well 
established that a land contract may be held to be enforceable … even though it 
does not strictly comply with [the statutory minimum contents of land installment 
contracts].”) 
B. 
Foreclosure Process 
[¶12]  Galvin next contends that the court erred when it entered a judgment 
of foreclosure pursuant to 14 M.R.S. § 6203-F and ordered a writ of possession in 
favor of the Thurstons, rather than foreclosing her rights in accordance with the 
mortgage foreclosure process set forth in 14 M.R.S. §§ 6321-6325.  That process 
mandates a public sale of real property after the expiration of a redemption period 
if the court determines that there has been a default.  See 14 M.R.S. §§ 6322, 6323.  
The question here is whether section 6203-F requires a court to order a public sale 
 
9 
of the property at issue when ordering a foreclosure on a land installment contract.  
We conclude that it does not. 
[¶13]  The interpretation of a statute is a legal issue that we review de novo.  
Carrier v. Sec’y of State, 2012 ME 142, ¶ 12, 60 A.3d 1241.  When interpreting a 
statute, 
[w]e first look to the plain meaning of the statute, interpreting its 
language to avoid absurd, illogical or inconsistent results and 
attempting to give all of its words meaning.  When a statute is 
unambiguous, we interpret the statute directly . . . without examining 
legislative history . . . .  We look to legislative history and other 
extraneous aids in interpretation of a statute only when we have 
determined that the statute is ambiguous.  A statute is ambiguous if it 
is reasonably susceptible to different interpretations. 
 
Id.  (internal citations and quotation marks omitted).   
[¶14]  Section 6203-F provides, in pertinent part: 
If the purchaser of real estate under a contract for the sale of real 
estate, including a bond for a deed, is in default of any of the terms of 
that contract, the seller or the seller’s heirs or assigns may foreclose 
the rights of the purchaser in the contract . . . by any of the means 
provided by law for the foreclosure of mortgages, except that the 
redemption period is 60 days.  
 
14 M.R.S. § 6203-F(1).  As Galvin correctly points out, under current law, “the 
means provided by law for the foreclosure of mortgages” are those set forth in 
14 M.R.S. §§ 6321-6325.4  Section 6203-F also states clearly, however, that the 
                                         
4  At the time of the enactment of section 6203-F, a defaulting mortgagor could simply be evicted from 
the premises by the mortgagee, and any payments made to that point were forfeited.  See 14 M.R.S.A. 
§ 6201 (1967) (foreclosure by possession, allowing a mortgagee to enter on the property with consent, by 
 
10 
mortgage foreclosure process applies only to the “rights of the purchaser in the 
contract.”  14 M.R.S. § 6203-F(1) (emphasis added). 
[¶15]  In land installment contracts generally, and certainly in this one, the 
purchaser’s contractual rights are limited to possession of the premises until she 
has made the final payment.5  The vendor retains legal title to the property.  
See Thompson v. Skowhegan Sav. Bank, 433 A.2d 434, 436 (Me. 1981) (stating 
that “the vendor of land under an installment sale contract retains legal title to the 
land”).  Accordingly, because Galvin’s sole rights are possessory rights, those are 
the only rights affected by the section 6203-F foreclosure process.  Ending 
Galvin’s right to possess the property, but then compelling the Thurstons to submit 
the property to a public sale would implicate the vendors’ rights in the property, 
rather than the purchaser’s rights.  The plain meaning of section 6203-F precludes 
                                                                                                                                   
peaceable entry, or by writ of entry on conditional judgment, with such possession sufficient to foreclose 
the mortgagor’s interest) (repealed 2007); 14 M.R.S.A. § 6203 (1967) (foreclosure without possession, 
permitting a mortgagee to foreclose the mortgagor’s interest simply by public advertisement or service of 
notice) (repealed 2007).  In 1975, in response to several U.S. Supreme Court decisions that mandated 
notice and hearing before the deprivation of significant property interests, the Maine Legislature enacted 
the precursor to 14 M.R.S. §§ 6321-6325 (2013), thereby giving mortgagees the choice of strict 
foreclosure (with its risk of associated due process litigation) or an alternative method requiring notice, 
hearing, and an accounting.  See P.L. 1975, ch. 552 (effective Oct. 1, 1975); see also Comment, 
The Constitutionality of Maine’s Real Estate Mortgage Foreclosure Statutes, 32 Me. L. Rev. 147, 147-48 
(1980).  In 2007, however, the Legislature repealed all forms of strict foreclosure, leaving only the 
process set forth in 14 M.R.S. §§ 6321-6325.  See P.L. 2007, ch. 391, §§ 1, 3 (effective Sept. 20, 2007).   
5  This does not mean that the purchaser in a land installment contract has no equitable rights.  
See, e.g., Thompson v. Skowhegan Sav. Bank, 433 A.2d 434, 436 (Me. 1981) (holding that, although the 
vendor to a land installment contract retains legal title, the purchaser is the equitable owner for purposes 
of bringing a tort claim against an abutting landowner).  The equitable rights of a purchaser, however, are 
not material in this case. 
 
11 
such an interpretation.  Here, the only applicable provisions of 14 M.R.S. 
§§ 6321-6325 are those that apply to Galvin’s right to possess to the property, i.e., 
those provisions that concern Galvin’s rights of redemption.  As to those, there is 
no dispute.   
[¶16]  We recognize that a growing number of courts have held that a land 
installment contract should be treated as a mortgage, at least in those cases where 
the purchaser’s payments have been more than nominal, so as to afford a purchaser 
rights beyond redemption.  See Restatement (Third) of Property: Mortgages § 3.4 
cmt. b(3) & reporters’ note (1997) (compiling cases); Grant S. Nelson, 
The Contract for Deed As A Mortgage: The Case for the Restatement Approach, 
1998 BYU L. Rev. 1111, 1115-16 & n.58.  We note, however, that the contract 
between Galvin and the Thurstons contains no language suggesting that Galvin 
should be permitted to recoup any of the payments made before breaching the 
contract.  In addition, our treatment of a land installment contract as a mortgage 
would render meaningless the words “the rights of the purchaser in the contract” in 
section 6203-F.  This we cannot do.  See Blue Yonder, LLC v. State Tax Assessor, 
2011 ME 49, ¶ 13, 17 A.3d 667 (“[W]e must not interpret the statutes in a manner 
that would render some of the language superfluous and meaningless.”).  To alter 
the statutory protections enjoyed by a purchaser of land through a land installment 
 
12 
contract “is the province of the Legislature, not of this Court.”  Mason v. Town of 
Readfield, 1998 ME 201, ¶ 8, 715 A.2d 179. 
The entry is: 
Judgment affirmed. 
 
 
 
 
 
 
 
 
ALEXANDER, J., dissenting. 
 
[¶17]  I respectfully dissent. 
 
[¶18]  The Thurstons elected to pursue the statutory foreclosure remedy 
pursuant to 14 M.R.S. § 6203-F (2013).  The foreclosure remedy to collect on a 
mortgage debt is a statutory remedy, with available relief necessarily limited to that 
provided by the foreclosure statute. 
 
[¶19]  Section 6203-F(1) governing foreclosure procedure, states, in pertinent 
part: 
1.  Foreclosure procedure.  If the purchaser of real estate under a 
contract for the sale of real estate, including a bond for a deed, is in 
default of any of the terms of that contract, the seller or the seller’s 
heirs or assigns may foreclose the rights of the purchaser in the 
contract not less than 30 days after giving the notice required by 
subsection 2 by any of the means provided by law for the foreclosure 
of mortgages, except that the redemption period is 60 days. . . .  The 
remedy afforded by this section supplements other legal remedies that 
may be available to the seller. 
 
 
13 
 
[¶20]  Thus, foreclosure may only be enforced “by any means provided by 
law for the foreclosure of mortgages.”  Id.  Pursuant to the foreclosure law today, 
the only means provided by law for foreclosure is established in 14 M.R.S. 
§§ 6321-6325 (2013) implemented by the procedures specified in M.R. Civ. P. 
55(a)(1), 56(j), and 93.  That process envisions, ultimately, a public sale of the 
premises, 14 M.R.S. § 6323, with any net proceeds of the sale going to the 
defaulting purchaser after payment of the outstanding loan balance and costs of the 
foreclosure proceeding, 14 M.R.S. § 6324. 
 
[¶21]  Oftentimes there may be no net proceeds left after the sale, and the 
defaulting purchaser may be assessed a deficiency judgment.  But a deficiency 
judgment is unlikely here where, given Galvin’s $115,000 down payment and 
payments totaling almost $100,000 over three years, Galvin has paid 
approximately $215,000 of the original $550,000 purchase price.  On these facts, 
the Court’s approved remedy, depriving Galvin of any opportunity to recover some 
value from the sums she has paid, will likely result in a considerable windfall to 
the Thurstons. 
 
[¶22]  The Court reaches this result by holding that the purchasers of the 
property subject to the foreclosure action have not acquired title to the property and 
are therefore not the owners of the property and not subject to the protections 
afforded by 14 M.R.S. §§ 6321-6325.  However, this holding does not explain why 
 
14 
the only remedy provided by the foreclosure statute should be rendered a nullity, 
with the sellers then free to invoke some other remedy, outside the foreclosure 
statute, to pocket any net value left from the purchaser’s payments for the property, 
rather than return any net proceeds from a public sale to the defaulting purchaser. 
 
[¶23]  I would hold that in electing to invoke the statutory foreclosure 
process, the Thurstons limited their remedies to those provided in the foreclosure 
statute.  Because the trial court did not apply those remedies to protect any net 
equity in the purchaser’s investment, I would vacate the judgment of the trial court.    
 
 
 
 
 
 
On the briefs and at oral argument: 
 
Donald A. Fowler, Jr., Esq., Kingfield, for appellant Jenny G. Galvin  
John S. Jenness, Jr., Esq., South Paris, for appellees John S. Thurston  and 
Patricia S. Thurston 
 
 
Rumford District Court docket number RE-2012-30 
FOR CLERK REFERENCE ONLY