Title: U.S. Bank National Ass'n v. Manning

State: maine

Issuer: Maine Supreme Court

Document:

MAINE SUPREME JUDICIAL COURT 
Reporter of Decisions 
Decision: 
2020 ME 42 
Docket: 
Cum-19-192 
Argued: 
December 6, 2019 
Decided: 
April 2, 2020 
Revised: 
August 11, 2020 
 
Panel: 
MEAD, GORMAN, JABAR, HUMPHREY, and HJELM, JJ.* 
 
 
U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE FOR RASC 2005KS9 
 
v. 
 
THOMAS MANNING 
 
 
HUMPHREY, J. 
[¶1]  U.S. Bank National Association as Trustee for RASC 2005KS9 (the 
Bank), appeals from a judgment of the Superior Court (Cumberland County, 
Wheeler, J.) granting Thomas Manning’s motion for reconsideration and 
dismissing with prejudice the Bank’s foreclosure complaint.  The Bank also 
appeals from an order of sanctions imposed by the court (L. Walker, J.) 
following a judicial settlement conference.   
                                         
*  Although Justice Alexander participated in the appeal, he retired before this opinion was 
certified.   
         Justice Hjelm sat at oral argument and participated in the initial conference while he was an 
Associate Justice, and, on order of the Senior Associate Justice, was authorized to continue his 
participation in his capacity as an Active Retired Justice. 
 
 
2 
[¶2]  The procedural record of this case stretches back to 2010 and 
includes one prior appeal in which we vacated the trial court’s judgment 
dismissing the Bank’s foreclosure complaint with prejudice.  See U.S. Bank Nat’l 
Ass’n v. Manning (Manning I), 2014 ME 96, ¶¶ 1, 20, 97 A.3d 605.  In this appeal, 
we are asked again to determine whether the court abused its discretion by 
dismissing with prejudice the Bank’s foreclosure complaint.  After review, we 
affirm the sanctions imposed by the court (L. Walker, J.) following the 
settlement conference and vacate the court’s (Wheeler, J.) judgment dismissing 
the Bank’s complaint with prejudice.  We remand the matter with instructions 
to dismiss the Bank’s foreclosure complaint without prejudice. 
I.  BACKGROUND 
A. 
Foreclosure Complaint and Prior Appeal 
[¶3]  On August 2, 2005, Manning signed a promissory note in the amount 
of $520,000 listing Mortgage Lenders Network USA, Inc., as the lender, and, in 
order to secure the note, executed and delivered a mortgage to Mortgage 
Electronic Registration Systems, Inc., as the nominee of the lender.  On May 24, 
2010, the Bank filed a complaint for foreclosure against Manning, and it 
amended the complaint on July 15, 2010.   
 
 
3 
[¶4]  More than three years after the complaint was filed, the court 
(Wheeler, J.) dismissed the Bank’s complaint with prejudice because the Bank 
had failed to timely pay a $150 sanction.  See Manning I, 2014 ME 96, ¶ 3, 
97 A.3d 605 (chronicling the previous pre-trial history of this case).  Following 
the Bank’s timely appeal, we held that the court abused its discretion in 
dismissing the complaint, vacated the judgment, and remanded the case for 
further proceedings.  See id. ¶¶ 14-20. 
B. 
Proceedings After Remand 
1. 
Initial Proceedings Following Remand 
[¶5]  Upon remand, the court held a status conference on October 14, 
2014, set a discovery deadline of March 6, 2015, and scheduled a judicial 
settlement conference to be held “in March including [a] Bank official with 
authority to settle.”  On February 3, 2015, the Bank—to address the issue of its 
standing in light of our decision in Bank of America, N.A. v. Greenleaf, 2014 ME 
89, 96 A.3d 700—filed a motion to amend its complaint and to stay the 
foreclosure proceeding.  Manning opposed the Bank’s motion and, instead, 
moved for summary judgment because the Bank lacked standing to foreclose.  
See M.R. Civ. P. 56.  The Bank opposed the motion for summary judgment and 
 
 
4 
moved to voluntarily dismiss its complaint without prejudice.1  See M.R. Civ. P. 
41(a)(2).  Manning opposed the requested dismissal.   
[¶6]  On June 1, 2015, the court entered an order addressing the parties’ 
pending motions.  First, the court denied Manning’s motion for summary 
judgment, reasoning that, because it “lack[ed] subject matter jurisdiction,” it 
could not enter a final judgment on the merits of the Bank’s complaint.  Second, 
the court granted the Bank’s motion to voluntarily dismiss its complaint 
without prejudice.2   
[¶7]  Two weeks later, on June 15, Manning filed a motion for 
reconsideration of the court’s order, which the Bank opposed.  See M.R. Civ. P. 
7(b)(5).  Manning argued that the court’s June 1 order incorrectly implied that 
the court had heard oral argument from the parties, and he asserted that the 
court had subject matter jurisdiction over all residential foreclosures.   
[¶8]  On July 1, 2015, Manning filed a letter alerting the court to the 
then-pending appeal in Bank of America v. Greenleaf, 2015 ME 127, 124 A.3d 
1122 (Greenleaf II), and suggested that, because the anticipated decision in 
                                         
1  In its motion, the Bank acknowledged that the originating lender, Mortgage Lenders Network 
USA, Inc., was no longer in business and requested that, in light of our decisions in Bank of America, 
N.A. v. Greenleaf, 2014 ME 89, 96 A.3d 700 and CitiMortgage, Inc. v. Chartier, 2015 ME 17, 111 A.3d 
39, the complaint be dismissed without prejudice.   
2  In its order, the court also declined to award costs or fees to Manning.   
 
 
5 
Greenleaf II “may address or inform the question posed here: whether a lack of 
standing removes subject matter jurisdiction,” the court stay all briefing on his 
motion to reconsider until a decision in Greenleaf II was issued.  On July 16, 
2015, the court granted the parties’ joint motion to stay further proceedings on 
the motion for reconsideration until thirty days after the decision in Greenleaf II 
was issued.   
[¶9]  We issued our decision in Greenleaf II on September 22, 2015.   
[¶10]  On October 15, 2015, the court granted Manning’s “consented-to” 
motion to continue the stay until November 6, 2015.  A week later, the court 
ordered that a judicial settlement conference be set for “early December” and 
that the case remain stayed until after the settlement conference.   
[¶11]  On December 4, 2015, Manning requested a conference with the 
court and counsel for the parties.  On February 26, 2016, the Bank objected to 
Manning’s request and moved to lift the July 16, 2015, stay on Manning’s 
motion for reconsideration.  The Bank pointed out that it had been eight months 
since Manning filed his motion and five months since the decision in Greenleaf 
II was issued.  Manning opposed the Bank’s motion to lift the stay.   
 
[¶12]  Four months later, on July 13, 2016, the Bank filed a letter with the 
court, inquiring about the status of the pending motions regarding Manning’s 
 
 
6 
request for a conference and the Bank’s motion to lift the July 16, 2015, stay.  
On July 25, 2016, the court ordered that a settlement conference be scheduled 
“within the next sixty days.”   
2. 
Judicial Settlement Conferences 
[¶13]  On September 23, 2016, the court (L. Walker, J.) conducted a 
settlement conference with the parties, but the case was not settled.3  On 
October 12, 2016, the same judge who had served as the mediator held a 
follow-up telephone conference with counsel, after which the court ordered the 
parties to brief the issues addressed during the telephone conference, including 
whether the Bank had “complied with the court’s order to have present all 
persons with full settlement authority who [were] prepared to make 
reasonable concessions.”   
[¶14]  On November 18, 2016, Manning filed a motion for contempt 
against the Bank for its conduct at the settlement conference, arguing that the 
Bank had “fail[ed] to produce a representative with authority to settle,” made 
misrepresentations to the court, and failed to negotiate in good faith.  On 
                                         
3  In an order entered on July 20, 2018, the court stated that, at the settlement conference, “the 
Bank represented to the court that better terms could not be offered unless the [pooling and servicing 
agreement] was reformed.  [The] court relied on the Bank’s representations and terminated the 
[settlement conference] without reaching [a] settlement.”   
 
 
7 
April 11, 2017, the court ordered the parties to “negotiate fastidiously in good 
faith” in order to resolve all claims and, if no agreement was reached by 
April 28, the court would hold a one-day testimonial hearing on Manning’s 
motion for contempt.4   
[¶15]  On October 6, 2017, Manning filed a renewed motion for contempt, 
arguing that the court should dismiss the Bank’s foreclosure complaint with 
prejudice “or, in the alternative, hold the Bank in contempt and impose 
sanctions.”  The court held a hearing on the motion on February 9, 2018, and 
conducted a second judicial settlement conference on May 18, 2018.   
[¶16]  On July 20, 2018, the court granted Manning’s motion for contempt 
and imposed sanctions on the Bank, ordering it to pay Manning’s attorney fees 
and costs “associated with preparation for and attendance [at] both Judicial 
Settlement Conferences.”  The court found that the Bank had “failed to comply 
with the court’s order regarding the judicial settlement conference, despite 
having the ability to do so.”  The court “stop[ped] short” of dismissing the case 
with prejudice, and left it to the trial court to “consider the [Bank’s] conduct . . . 
                                         
4  On May 12, 2017, the Bank filed a motion to vacate the court’s April 11, 2017, order, arguing 
that “the foreclosure action is non-justiciable [because] the court relinquished its subject matter 
jurisdiction over the parties and the claims by the entry of the June 1, 2015, order dismissing the 
case.”  On September 8, 2017, the court denied the Bank’s motion.   
 
 
 
8 
during the course of the litigation generally as to whether dismissal with 
prejudice is justified as a final disposition” of the case.5   
[¶17]  By this time, it had been more than three years since the court’s 
June 1, 2015, order dismissing the Bank’s foreclosure complaint without 
prejudice and Manning’s subsequent June 15, 2015, motion for reconsideration.   
3. 
Motion to Reconsider the June 1, 2015, Order 
[¶18]  On September 11, 2018, Manning filed a motion to set a final 
briefing schedule on his pending motion for reconsideration and motion to 
extend the existing stay, which had been in effect since July 16, 2015.  The court 
(Wheeler, J.) granted the motion to continue the stay and set a final briefing 
schedule.  On January 17, 2019, Manning filed a brief in support of his pending 
motion for reconsideration, requesting that the court dismiss the foreclosure 
complaint with prejudice and award Manning attorney fees.  In response, the 
Bank argued that the court should not rely on the events that occurred after the 
June 1, 2015, dismissal without prejudice when evaluating the motion for 
reconsideration.   
                                         
5  On July 31, 2018, the Bank filed a motion to reconsider the court’s July 20 order, arguing that 
the court erred in imposing sanctions on the Bank for a period of time in which Manning refused to 
compromise.  The court denied the motion on August 30.   
 
 
 
9 
[¶19]  On April 24, 2019, the court granted Manning’s June 15, 2015, 
motion to reconsider the court’s June 1, 2015, order.  The court dismissed with 
prejudice the Bank’s foreclosure complaint as a sanction for the Bank’s failure 
to cooperate with discovery requests, disregard of court orders, and conduct at 
the judicial settlement conference, and also awarded Manning his attorney fees 
from July 19, 2018—the date the Bank was sanctioned for its conduct at the 
judicial settlement conferences—to the conclusion of the case.   
 
[¶20]  The Bank then filed a timely notice of appeal.  See M.R. App. P. 
2B(c)(2). 
II.  DISCUSSION 
[¶21]  The Bank contends that the court abused its discretion when it 
(1) required the parties to participate in a settlement conference after staying 
Manning’s motion for reconsideration, (2) imposed sanctions on the Bank 
following the settlement conference, and (3) granted the motion for 
reconsideration and dismissed the foreclosure complaint with prejudice.  We 
address each in turn. 
 
 
10 
A. 
Judicial Settlement Conference 
1. 
Orders to Hold a Settlement Conference 
[¶22]  The Bank argues that the court abused its discretion by extending 
the July 16, 2015, stay on Manning’s motion for reconsideration and “forcing” 
the Bank to participate in the judicial settlement conference.  We review court 
orders supervising and managing proceedings for an abuse of discretion.  
See Geary v. Stanley, 2007 ME 133, ¶ 12, 931 A.2d 1064; see also M.R. Civ. P. 
16(a)-(b).  “The touchstone of determining whether the court has properly 
exercised its discretion is whether in a given case that discretion is exercised in 
furtherance of justice.”  Unifund CCR Partners v. Demers, 2009 ME 19, ¶ 8, 966 
A.2d 400 (alterations omitted) (quotation marks omitted).  
[¶23]  Here, upon remand in 2014, the court ordered the parties to attend 
a settlement conference.  See M.R. Civ. P. 16(b).  A settlement conference was 
not held because, in part, the Bank filed a motion to voluntarily dismiss its 
complaint without prejudice, which was granted by the court.  Manning then 
filed a motion for reconsideration of the dismissal and, at the parties’ request, 
 
 
11 
the court stayed Manning’s motion in anticipation of our decision in 
Greenleaf II.6   
[¶24]  During this stay, the court again ordered the parties to attend a 
settlement conference and extended the stay until after that conference was 
held.  A settlement conference eventually took place on September 23, 2016; 
however, it was unsuccessful and, on November 18, 2016, Manning filed a 
motion for contempt based on the Bank’s alleged conduct at the settlement 
conference.  This was followed by a hearing on Manning’s motion for contempt 
and a second unsuccessful settlement conference.   
[¶25]  In the circumstances of this case, where Manning filed a motion for 
reconsideration and the parties then both agreed to stay further proceedings 
on that motion, the court’s decision to require the parties to attend a settlement 
conference was “exercised in furtherance of justice,” Unifund CCR Partners, 
2009 ME 19, ¶ 8, 966 A.2d 400, and, thus, was not an abuse of discretion.7 
                                         
6  Manning’s motion for reconsideration, which we treat as a motion to alter or amend a judgment, 
see Arsenault v. Arsenault, 2008 ME 75, ¶ 5, 946 A.2d 412; M.R. Civ. P. 59(e), “suspend[ed] the finality 
of the initial judgment and defer[red] the running of the appeal period,” Most v. Most, 477 A.2d 250, 
258 n.12 (Me. 1984). 
7  Although we do not take issue with the court’s decision to require a settlement conference 
during the stay, the court’s management of this case, in general, did not comport with “the overall 
purpose of the [Maine] Rules of Civil Procedure, which is to ensure the speedy and inexpensive 
resolution of a case.”  Merrifield v. Hadlock, 2009 ME 1, ¶ 6, 961 A.2d 1107 (discussing a pretrial 
scheduling order); see M.R. Civ. P. 1. 
 
 
12 
2. 
Sanctions Imposed at Settlement Conference 
[¶26]  The Bank also challenges the sanctions imposed by the court 
(L. Walker, J.) following the settlement conference, arguing that the court 
abused its discretion when it attempted “to force [the Bank] to settle and accept 
Manning’s settlement demands.”  We review a court’s imposition of sanctions 
for an abuse of discretion.  See Bayview Loan Servicing, LLC v. Bartlett, 2014 ME 
37, ¶ 10, 87 A.3d 741.   
[¶27]  A court may conduct a settlement conference and direct the parties 
to appear and “participate in good faith.”  M.R. Civ. P. 16(b).  If a party fails to 
comply with a pretrial rule or order, a court may impose “such sanctions as the 
circumstances warrant,” including a dismissal of the action or an award of 
attorney fees.  M.R. Civ. P. 16(d).  “Although the court cannot force a settlement 
on the parties, the failure to negotiate in good faith may lead to an abuse of the 
litigation process and be sanctionable.”  Chiappetta v. LeBlond, 544 A.2d 759, 
761 (Me. 1988) (citation omitted).  A court also has “the inherent authority to 
sanction a party’s failure to comply with the rules.”  Baker’s Table, Inc. v. City of 
Portland, 2000 ME 7, ¶ 16, 743 A.2d 237; see Green Tree Servicing, LLC v. Cope, 
2017 ME 68, ¶ 18, 158 A.3d 931 (stating that even when a plaintiff lacks 
 
 
13 
standing, a “court is not divested of its inherent authority to dismiss the 
complaint with prejudice as a sanction for misconduct”). 
[¶28]  When imposing sanctions, a court must consider certain factors, 
including “(1) the purpose of the specific rule at issue; (2) the party’s conduct 
throughout the proceedings; (3) the party’s basis for its failure to comply; 
(4) prejudice to other parties; and (5) the need for the orderly administration 
of justice.”  Bayview Loan Servicing, LLC, 2014 ME 37, ¶ 12, 87 A.3d 741. 
[¶29]  In this case, the court possessed the authority to impose sanctions 
on the Bank for its conduct at the settlement conference.  See Green Tree 
Servicing, LLC, 2017 ME 68, ¶ 18, 158 A.3d 931; Baker’s Table, Inc., 2000 ME 7, 
¶ 16, 743 A.2d 237.  At the February 9, 2018, hearing on Manning’s motion for 
sanctions, the court found, and the Bank acknowledged, that the Bank had failed 
to ensure that a person with “full authority” to settle attended the settlement 
conference.  Therefore, the court did not abuse its discretion in imposing 
sanctions for the Bank’s conduct during the settlement conference.  See Bayview 
Loan Servicing, LLC, 2014 ME 37, ¶ 23, 87 A.3d 741. 
B. 
Motion for Reconsideration 
[¶30]  The Bank contends that the court abused its discretion when it 
granted Manning’s motion for reconsideration and dismissed the foreclosure 
 
 
14 
complaint with prejudice, arguing that the court improperly relied on events 
that occurred after it entered the original dismissal order on June 1, 2015.   
[¶31]  Manning’s motion for reconsideration was filed pursuant to 
Rule 7(b)(5) of the Maine Rules of Civil Procedure and was directed at the 
court’s original June 1, 2015, order, which both denied Manning’s motion for 
summary judgment and granted the Bank’s motion to voluntarily dismiss the 
foreclosure action without prejudice.  To the extent that Manning’s motion for 
reconsideration challenged the court’s order denying his motion for summary 
judgment, we treat it as a motion to reconsider the court’s order in accordance 
with Rule 7(b)(5); however, to the extent that Manning’s motion sought a 
reconsideration of the court’s judgment dismissing the complaint without 
prejudice, we treat his motion for reconsideration as a motion to alter or amend 
the judgment.8  See Arsenault v. Arsenault, 2008 ME 75, ¶ 5, 946 A.2d 412; M.R. 
Civ. P. 59(e); see also Geary v. Stanley Med. Research Inst., 2008 ME 9, ¶ 10, 939 
                                         
8  See M.R. Civ. P. 7, Advisory Committee’s Notes May 1, 2000 (“A new subdivision (b)(5) is added 
to address the continuing confusion about motions for reconsideration.  A corresponding 
amendment has been made to Rule 59 to provide explicitly that a motion to reconsider a judgment is 
a Rule 59 motion to alter or amend the judgment.”); M.R. Civ. P. 59, Advisory Committee’s Notes 
May 1, 2000 (“Rule 59(e) is amended to add a new last sentence making clear that a motion to 
reconsider the judgment is a motion to alter or amend the judgment, thereby removing confusion as 
to whether the appeal period is suspended until the court can dispose of the motion.”). 
 
 
15 
A.2d 86 (stating that a denial of a motion for summary judgment is not a final 
judgment). 
[¶32]  We review for an abuse of discretion a court’s ruling on both a 
motion for reconsideration of an order and a motion to alter or amend a 
judgment.  See Green Tree Servicing, LLC, 2017 ME 68, ¶ 12, 158 A.3d 931; Shaw 
v. Shaw, 2003 ME 153, ¶ 7, 839 A.2d 714.  In each instance, our review for an 
abuse of discretion “involves three questions: (1) whether the court’s factual 
findings are supported by the record according to the clear error standard, 
(2) whether the court understood the law applicable to the exercise of its 
discretion, and (3) whether the court’s weighing of the applicable facts and 
choices was within the bounds of reasonableness.”  Green Tree Servicing, LLC, 
2017 ME 68, ¶ 12, 158 A.3d 931.  
[¶33]  We also “closely review” for an abuse of discretion a court’s 
dismissal with prejudice of a foreclosure complaint.  Manning I, 2014 ME 96, 
¶ 12, 97 A.3d 605. “Due to the severity of dismissal . . . and the constitutional 
implications of such an action . . . the trial court’s discretion in imposing [this] 
ultimate sanction is narrow indeed and will be given close scrutiny on appeal.”  
Id. (quotation marks omitted). 
 
 
16 
[¶34]  A motion for reconsideration of an order “shall not be filed unless 
required to bring to the court’s attention an error, omission or new material 
that could not previously have been presented.”  M.R. Civ. P. 7(b)(5).  
“Rule 7(b)(5) is intended to deter disappointed litigants from seeking ‘to 
reargue points that were or could have been presented to the court on the 
underlying motion.’”  Shaw, 2003 ME 153, ¶ 8, 839 A.2d 714 (quoting M.R. 
Civ. P. 7, Advisory Committee’s Notes (May 1, 2000)); see Roalsvik v. Comack, 
2019 ME 71, ¶ 3, 208 A.3d 367 (affirming the denial of a motion for 
reconsideration when the motion presented “allegations of events that 
occurred only after the hearing was held and the record was closed”). 
[¶35]  Similarly, when ruling on a motion to alter or amend a judgment, a 
court is “free within a very limited time period to alter or amend its judgment 
when convinced it was erroneous, and substitute the proper judgment in its 
place.”  Most v. Most, 477 A.2d 250, 258 (Me. 1984).  When doing so, a court “is 
not free to litigate anew . . . [and] may only re-examine those facts already 
presented to determine whether an error of law or fact has taken place and 
whether substantial justice has been rendered.”  Id. at 260; see Perez v. Lorraine 
Enters., 769 F.3d 23, 32 (1st Cir. 2014) (stating that Fed. R. Civ. P. 59(e) “does 
 
 
17 
not permit a party to turn back the clock, erase the record, and try to reinvent 
its case after an adverse judgment has entered”). 
[¶36]  Here, in granting the motion for reconsideration, the court 
reasoned that its dismissal of the Bank’s foreclosure complaint with prejudice 
was warranted by the Bank’s failure to cooperate in discovery, its unwillingness 
to follow court orders, and its failure to negotiate in good faith during the 
judicial settlement conference process, which occurred after the order that was 
being reconsidered.  Much of this conduct was already addressed following the 
settlement conference when the court (L. Walker, J.) sanctioned the Bank for its 
failure to follow court orders or negotiate in good faith.  In effect, two different 
judges sanctioned the same party for the same alleged misconduct. 
[¶37]  The trial court (Wheeler, J.) abused its discretion in both granting 
Manning’s motion for reconsideration and imposing sanctions on the Bank, 
which included a dismissal with prejudice of the Bank’s foreclosure complaint.  
As such, we remand the matter to the trial court with instruction to dismiss the 
Bank’s complaint without prejudice, in accordance with the court’s original 
June 1, 2015, order.   
The entry is: 
Order imposing sanctions for conduct at 
settlement conference affirmed.  Judgment 
 
 
18 
imposing sanctions and dismissing complaint 
with prejudice vacated.  Remanded for trial court 
to dismiss the Bank’s foreclosure complaint 
without prejudice.  
 
 
 
 
 
 
 
 
Brett L. Messinger, Esq. (orally), and Elizabeth M. Lacombe, Esq., Portland, for 
appellant US Bank NA 
 
Kelly W. McDonald, Esq. (orally), Murray, Plumb & Murray, Portland, for 
appellee Thomas Manning 
 
 
Cumberland County Superior Court docket number RE-2011-20 
FOR CLERK REFERENCE ONLY