Court Opinion

ID: 4171706
Source: CourtListenerOpinion
Date Created: 2017-05-25 15:13:16.585048+00
Date Added: 2024-06-11T14:13:05.518114
License: Public Domain

MAINE	SUPREME	JUDICIAL	COURT	                                           Reporter	of	Decisions	
Decision:	     2017	ME	105	
Docket:	       Oxf-15-401	
Submitted	
			On	Briefs:	 May	26,	2016	
Argued:	       September	14,	2016	
Decided:	      May	25,	2017	
	
Panel:	        ALEXANDER,	GORMAN,	JABAR,	HJELM,	and	HUMPHREY,	JJ.	
	
	
                              WELLS	FARGO	BANK,	N.A.	
                                        	
                                       v.	
                                        	
                              CLARA	WELCH-GALLANT	
	
	
GORMAN,	J.	

       [¶1]	 	 Wells	 Fargo	 Bank,	 N.A.,	 appeals	 from	 a	 judgment	 of	 the	 District	

Court	 (Rumford,	 Beliveau,	 J.)	 dismissing	 its	 foreclosure	 complaint	 against	

Clara	Welch-Gallant	as	a	sanction,	pursuant	to	M.R.	Civ.	P.	16A(d),	for	pretrial	

misconduct.	 	 Wells	 Fargo	 argues	 that	 the	 court	 erred	 by	 dismissing	 the	

complaint	 with	 prejudice	 rather	 than	 without	 prejudice.	 	 We	 vacate	 the	

judgment	 and	 remand	 to	 allow	 the	 court	 to	 follow	 the	 process	 we	 recently	

outlined	 in	 Green	 Tree	 Servicing,	 LLC	 v.	 Cope,	 2017	ME	 68,	 ---	 A.3d	 ---,	 issued	

on	April	11,	2017.	
2	

                                               I.		BACKGROUND	

          [¶2]	 	 Wells	 Fargo	 instituted	 foreclosure	 proceedings	 against	

Welch-Gallant	 in	 the	 District	 Court	 on	 February	 24,	 2014,	 alleging	 that,	 in	

2012,	Welch-Gallant	executed	a	promissory	note	in	the	amount	of	$70,700	in	

favor	 of	 Embrace	 Home	 Loans,	 Inc.	 (EHL),	 as	 well	 as	 a	 mortgage	 on	 her	 real	

property	 in	 Mexico,	 Maine,	 in	 favor	 of	 Mortgage	 Electronic	 Registration	

Systems,	Inc.	(MERS),	“as	nominee	for	[EHL]”	to	secure	the	note.		Wells	Fargo	

alleged	 that	 it	 was	 the	 holder	 of	 the	 note	 and	 that	 MERS	 had	 assigned	 the	

mortgage	 to	 it	 in	 2013.	 	 Welch-Gallant	 timely	 answered	 the	 complaint.	 	 See	

M.R.	Civ.	P.	12(a).	

	         [¶3]		The	court	(Carlson,	J.)	issued	a	scheduling	order	dated	March	18,	

2014,	setting	June	18,	2014,	as	the	discovery	deadline.		By	July	1,	2014,	both	

parties	had	filed	their	witness	and	exhibit	lists;	Welch-Gallant	named	herself	

as	 her	 sole	 witness	 and	 indicated	 that	 she	 intended	 to	 offer	 no	 exhibits.	 	 On	

September	26,	2014,1	the	court	conducted	a	pretrial	conference	and	issued	an	

order	 that	 day	 noting	 that	 “[d]iscovery	 [was]	 complete”	 and	 setting	 the	 trial	

for	February	5,	2015,	giving	“30	days[’]	prior	notice	for	out	of	state	witness.”		

     1	 	 On	 July	 3,	 2014,	 we	 issued	 our	 opinion	 in	 the	 matter	 of	 Bank	 of	 America,	 N.A.	 v.	 Greenleaf,	

2014	ME	89,	96	A.3d	700.		Neither	party	brought	that	decision	to	the	attention	of	the	court.	
                                                                                         3	

	     [¶4]	 	 On	 the	 day	 of	 trial,	 Wells	 Fargo	 moved	 to	 dismiss	 without	

prejudice	its	complaint	against	Welch-Gallant	on	the	ground	that,	because	its	

mortgage	assignment	was	from	MERS	as	“nominee,”	it	lacked	standing	to	seek	

foreclosure	 pursuant	 to	 our	 decisions	 in	 Bank	 of	 America,	 N.A.	 v.	 Greenleaf,	

2014	ME	89,	96	A.3d	700	and	Mortgage	Electronic	Registration	Systems,	Inc.	v.	

Saunders,	 2010	 ME	 79,	 2	 A.3d	 289.	 	 After	 a	 nontestimonial	 hearing	 at	 which	

Welch-Gallant	 asked	 that	 Wells	 Fargo	 be	 sanctioned,	 the	 court	 (Beliveau,	 J.)	

ordered	the	action	dismissed	with	prejudice.		

      [¶5]		Wells	Fargo	moved	to	alter	or	amend	the	judgment	to	provide	for	a	

dismissal	 without	 prejudice,	 arguing	 that	 its	 lack	 of	 standing	 deprived	 the	

court	 of	 subject	 matter	 jurisdiction	 and	 that	 the	 absence	 of	 subject	 matter	

jurisdiction	 allowed	 the	 court	 to	 dismiss	 only	 without	 prejudice.		

Welch-Gallant	 opposed	 the	 motion,	 arguing	 that	 a	 dismissal	 with	 prejudice	

was	 within	 the	 court’s	 discretion	 pursuant	 to	 M.R.	 Civ.	 P.	 41(a)(2)	 for	 Wells	

Fargo’s	 failure	 to	 be	 prepared	 for	 trial	 and	 filing	 of	 a	 “surprise”	 motion	 to	

dismiss	instead.		

      [¶6]	 	 By	 decision	 dated	 July	 21,	 2015,	 the	 court	 denied	 Wells	 Fargo’s	

motion	 to	 alter	 or	 amend	 the	 judgment,	 maintaining	 the	 dismissal	 with	
4	

prejudice,	and	also	ordered	Wells	Fargo	to	pay	Welch-Gallant’s	attorney	fees	

in	defending	the	action.		Wells	Fargo	appeals.		

                                       II.		DISCUSSION	

       [¶7]	 	 As	 we	 recently	 reiterated	 in	 Green	 Tree	 Servicing,	 LLC	 v.	 Cope,	

Maine’s	 trial	 courts	 may	 sanction	 parties	 “for	 various	 types	 of	 pretrial	

misconduct,”	 and	 among	 the	 sanctions	 that	 courts	 are	 authorized	 to	 impose	

are	 dismissals	 with	 prejudice.	 	 2017	ME	 68,	 ¶	 15,	 ---	 A.3d	 ---.	 	 In	 this	 case,	

Wells	 Fargo	 argues	 that,	 based	 upon	 its	 representations	 to	 the	 court	 that	 it	

lacked	 standing	 to	 pursue	 the	 matter,	 the	 trial	 court	 was	 authorized	 only	 to	

dismiss	the	case	without	prejudice.		For	the	reasons	we	explained	in	Cope,	id.	

¶	18,	 we	 disagree,	 but	 we	 do	 agree	 that	 the	 process	 used	 by	 the	 trial	 court	

here	did	not	entirely	follow	the	procedural	steps	that	we	have	since	stated	a	

court	 should	 take	 before	 imposing	 the	 sanction	 of	 dismissal	 with	 prejudice,	

see	id.	¶¶	19-22.		We	therefore	remand	the	case	to	the	District	Court	to	allow	it	

to	conduct	a	proceeding	that	comports	with	the	process	articulated	in	Cope.		

       The	entry	is:	

                     Judgment	 vacated.	 	 Remanded	 for	 further	
                     proceedings	consistent	with	this	opinion.		
	
	      	      	      	      	      	
                                                                          5	

	
Daniella	 Massimilla,	 Esq.	 (orally),	 Litchfield	 Cavo,	 LLP,	 Lynnfield,	
Massachusetts,	for	appellant	Wells	Fargo	Bank,	N.A.	
	
David	W.	Austin,	Esq.	(orally),	Rumford,	for	appellee	Clara	Welch-Gallant	
	
	
Rumford	District	Court	docket	number	RE-2014-8	
FOR	CLERK	REFERENCE	ONLY