MAINE SUPREME JUDICIAL COURT Reporter of Decisions

Decision: 2013 ME 60

Docket: Cum-12-431

Argued: May 16, 2013

Decided: June 20, 2013

Panel: ALEXANDER, LEVY, SILVER, MEAD, GORMAN, and JABAR, JJ.

U.S. BANK, NATIONAL ASSOCIATION AS TRUSTEE FOR

THE MLMI SURF TRUST SERIES 2006-BC2

v.

THEODORE W. THOMES et al.

MEAD, J.

[¶1] U.S. Bank, N.A., appeals from a judgment entered after trial by the 

District Court (Portland, Moskowitz, J.) in favor of Theodore and Renee Thomes 

on the bank’s complaint seeking (1) a judgment of foreclosure and sale concerning 

real property in Windham owned by the Thomeses; and (2) a judgment against 

Theodore on a theory of unjust enrichment for the amount of the note secured by 

the property, which the bank deemed necessary because only Renee was a party to

the note and the mortgage securing the note. We agree with the bank’s contention 

that it was entitled to a judgment of foreclosure against Renee in light of our recent 

decision in Bank of America, N.A. v. Cloutier, 2013 ME 17, 61 A.3d 1242, and so 

we vacate the judgment in that regard. In all other respects, the judgment is 

affirmed.
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I. BACKGROUND

[¶2] Viewing the record in the light most favorable to its judgment, the trial 

court did or could have found the following facts from the evidence admitted at 

trial. See Pelletier v. Pelletier, 2012 ME 15, ¶ 13, 36 A.3d 903. Theodore (Ted) 

and Renee Thomes jointly own a home in Windham. In May 2004, they

mortgaged the property to secure a $195,225 loan. The mortgage loan broker was 

David McGovern, a social acquaintance and friend of the Thomeses. McGovern 

offered his services to the Thomeses and was aware that they owned the property 

jointly.

[¶3] In 2005, Renee decided to refinance the property in order to make 

home improvements. At that time Ted was out of work and confined to bed 

recovering from a serious shoulder injury. Renee testified at trial that he was in 

“severe pain” and was taking “heavy narcotics” for pain; Ted described himself as 

“all doped up” and “overmedicat[ed]” by his doctor. Renee testified that she might 

have talked to Ted about refinancing the house, but she alone made the decision to 

do it.

[¶4] Renee again went to McGovern to obtain the refinancing. She filled 

out a loan application listing only herself as the borrower, while stating on the 

application that title to the property would be held in both her name and Ted’s as 

joint tenants. She told McGovern that she and Ted owned the property, a fact that 
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she assumed he already knew from their previous loan transaction. She and 

McGovern signed the loan application; Ted did not. Ted had no discussions with 

McGovern concerning the 2005 refinancing and was not told by anyone that he 

needed to be involved. He did not review the closing documents, nor did Renee 

discuss with him why the transaction was a refinancing rather than a second 

mortgage. He never considered himself to be a co-borrower on the loan.

[¶5] At the closing conducted by McGovern, Renee signed a note for a 

$223,000 loan in her name alone and gave a mortgage in her name alone, both in 

favor of MortgageIT, Inc. The 2004 mortgage was paid in full, and Renee received 

$14,411 in cash. MortgageIT endorsed the new note to the bank, which by allonge 

endorsed the note in blank. At trial, a mortgage resolution associate for Bank of 

America, which currently services the loan, testified that U.S. Bank is the holder 

with physical custody of the note; the original note was admitted in evidence. The 

mortgage was assigned by MortgageIT’s nominee to the bank, and a copy of the 

assignment was also admitted in evidence.

[¶6] At trial, Renee agreed that she had made no payments on the loan since

2007. The Bank of America associate testified that the amount owed was 

$340,290. Notice of the default was served on Renee. In August 2007, the bank

filed a complaint against the Thomeses. As amended, the complaint alleged four 

counts, including Foreclosure and Sale (Count I); and Unjust Enrichment 
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(Count IV), seeking damages from Ted as a result of the benefit that he gained 

from the loan to Renee.1

[¶7] At the conclusion of the trial, the court ruled from the bench in favor of 

the Thomeses on all counts of the bank’s complaint. It denied the bank’s motion to 

amend its findings pursuant to M.R. Civ. P. 52, and this appeal followed.

II. DISCUSSION

A. Foreclosure

[¶8] The court entered judgment against the bank on Count I after finding 

that it did not present sufficient evidence to establish that it owned the note or the 

mortgage. The parties agree, correctly, that the resolution of this issue is 

controlled by our recent decision in Cloutier, which was handed down after this 

case was appealed. 2013 ME 17, 61 A.3d 1242.

[¶9] The statute governing civil foreclosures requires, inter alia, that “[t]he 

mortgagee . . . certify proof of ownership of the mortgage note and produce 

evidence of the mortgage note, mortgage and all assignments and endorsements of 

the mortgage note and mortgage.” 14 M.R.S. § 6321 (2012). In Cloutier, we 

addressed the question of “the proof that is required for a party to prove 

‘ownership’ of the mortgage note and mortgage for purposes of foreclosure,” and 

 1

 The bank does not appeal from the court’s judgment in favor of the Thomeses on the remaining 

counts of the complaint.
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held that the foreclosure plaintiff must “identify the owner or economic beneficiary 

of the note and, if the plaintiff is not the owner, . . . indicate the basis for the 

plaintiff’s authority to enforce the note pursuant to Article 3-A of the UCC.” 

Cloutier, 2013 ME 17, ¶¶ 1, 16, 61 A.3d 1242. In other words, “the phrase ‘certify 

proof of ownership of the mortgage note’ requires only that a foreclosure plaintiff 

identify the owner or economic beneficiary and, if it is not itself the owner, prove 

that it has power to enforce the note.” Id. ¶ 21.

[¶10] The trial court, acting without the guidance of Cloutier, required the 

bank to prove more than was necessary to satisfy the statute. The bank’s initial

burden was not to prove that it owned the note, but rather to identify the owner or 

economic beneficiary of the note, which it did both in the complaint and in the 

evidence it presented. First, the caption of the amended complaint states that the 

bank acted “as Trustee for the MLMI SURF Trust Series 2006-BC2.” Second, that 

same relationship is specified on (1) the first endorsement of the note from 

MortgageIT to the bank, (2) the allonge executed by the bank endorsing the note in 

blank, and (3) the assignment of the mortgage from MortgageIT’s nominee to the 

bank, all of which were admitted in evidence. Accordingly, the requirement that 

the bank identify the owner or economic beneficiary of the note was satisfied.

[¶11] Because it was not itself the owner of the note, the bank was also 

required to prove that it was empowered to enforce the note, see id., a requirement 
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the bank met when it admitted in evidence the original note endorsed in blank and 

elicited testimony that it had physical possession of the note. In Cloutier we

observed that the party seeking to enforce the note “currently has possession of the 

note, which is endorsed in blank. The definition of ‘holder’ includes ‘[t]he person 

in possession of a negotiable instrument that is payable . . . to bearer.’ A holder of 

an instrument is entitled to enforce it.” Id. ¶ 18 (quoting 11 M.R.S. 

§ 1-1201(21)(a) (2012)) (citation omitted). That is precisely the situation 

presented here.

[¶12] Because the bank identified the owner or economic beneficiary of the 

note and proved that it had the power to enforce the note, the requirements of 

14 M.R.S. § 6321 as construed by Cloutier were satisfied, and the bank was 

entitled to a judgment of foreclosure against Renee on Count I.

B. Unjust Enrichment

[¶13] Count IV of the amended complaint alleges that Ted was unjustly 

enriched when Renee used the proceeds of the mortgage loan taken solely in her 

name to pay off the couple’s existing joint mortgage debt, which the bank asserts 

constituted a benefit conferred on Ted that he accepted or retained without paying 

for it.

[¶14] “An unjust enrichment claim is brought to recover the value of the 

benefit retained when there is no contractual relationship, but when, on the grounds 
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of fairness and justice, the law compels performance of a legal and moral duty to 

pay.” Estate of Miller, 2008 ME 176, ¶ 29, 960 A.2d 1140 (quotation marks 

omitted). The claim is established by proving that “(1) the claimant conferred a 

benefit on the receiving party, (2) the receiving party had appreciation or 

knowledge of the benefit, and (3) acceptance or retention of the benefit was under 

circumstances that make it inequitable for [the receiving party] to retain the benefit 

without payment of its value.” Estate of Anderson, 2010 ME 10, ¶ 10, 

988 A.2d 977 (quotation marks omitted). We review the trial court’s findings 

concerning the bank’s unjust enrichment claim for clear error. Id.

[¶15] Here, the court found that “[t]he evidence establishes that Mr. Thomes 

didn’t know the nature of the transaction. He was at home and sick. He assumed 

that the transaction was going to be a transaction that had to do with a home equity 

loan to add insulation in the home.” Those findings are not clearly erroneous 

because they are supported by competent evidence in the record in the form of the 

Thomeses’ testimony. See Pelletier, 2012 ME 15, ¶ 13, 36 A.3d 903. The bank

asserts that the evidence dictates a different conclusion, but because 

“[d]eterminations of witness credibility are uniquely within the fact-finder’s 

authority,” we “examine the record, and the reasonable inferences that may be 

drawn from the record, in the light most favorable to the trial court’s judgment.” 

Id. (quotation marks omitted).
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[¶16] Once the court’s factual findings are accepted, the bank’s unjust 

enrichment claim fails because it cannot establish that Ted “had appreciation or 

knowledge of the benefit.” Estate of Anderson, 2010 ME 10, ¶ 10, 988 A.2d 977 

(quotation marks omitted). Furthermore, the court was justified in finding that the 

third element of the bank’s unjust enrichment claim, that “acceptance or retention 

of the benefit was under circumstances that make it inequitable for [Ted] to retain 

the benefit without payment of its value,” id. (quotation marks omitted), was not 

satisfied. “The most significant element of the doctrine of unjust enrichment is 

whether the enrichment of the defendant is unjust.” Howard & Bowie, P.A. v. 

Collins, 2000 ME 148, ¶ 14, 759 A.2d 707 (alterations omitted).

[¶17] The court determined that MortgageIT made the loan solely to Renee

with its eyes open, finding that “[t]he evidence . . . establishes that MortgageIT 

knew that Mr. Thomes owned the real estate and the deal was consummated with 

only Ms. Thomes listed as the mortgagor.” That finding is supported by competent 

evidence in the record: (1) Renee completed the loan application as the sole 

borrower, listing Ted on the application as a joint titleholder and joint tenant; 

(2) the mortgage broker used by MortgageIT also brokered the Thomeses’ earlier 

mortgage where Ted was a co-mortgagor; (3) the commitment to issue title 

insurance and the title insurance policy itself recite that title to the insured property 

is “vested in: Renee Thomes and Theodore W. Thomes, by virtue of a Warranty 
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Deed from Theodore W. Thomes”; and (4) the commitment to issue title insurance 

identifies the mortgage to be retired, an outstanding property tax lien, and an 

outstanding materialman’s lien as debts owed by both Renee and Ted.

[¶18] The court did not clearly err in finding that Ted did not know about or 

appreciate the benefit that the bank asserts was conferred on him, or in finding that 

MortgageIT made the loan to Renee knowing that Ted held an ownership interest 

in the property securing the loan. Accordingly, the court did not err in entering 

judgment against the bank on its unjust enrichment claim.

The entry is:

Judgment as to Count I vacated; remanded for 

further proceedings consistent with this opinion. 

In all other respects, judgment affirmed.

On the briefs:

Elizabeth Papez, Esq., Winston & Strawn, LLP, Washington, District of 

Columbia, Patrick D. Thornton, Esq., Monaghan Leahy, LLP, Portland, and 

Corin R. Swift, Esq., and Jeff Goldman, Esq., Bingham McCutchen LLP, 

Portland, for appellant U.S. Bank, N.A.

S. James Levis, Jr., Esq., Law Office of S. James Levis, Jr., Kennebunk, for 

appellees Theodore W. and Renee Thomes
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At oral argument:

Elizabeth Papez, Esq., for appellant U.S. Bank, N.A.

S. James Levis, Jr., Esq., for appellees Theodore W. and Renee Thomes

Portland District Court docket number RE-2007-241

FOR CLERK REFERENCE ONLY