Court Opinion

ID: 4159348
Source: CourtListenerOpinion
Date Created: 2017-04-11 15:07:54.779688+00
Date Added: 2024-06-11T13:19:05.699054
License: Public Domain

MAINE	SUPREME	JUDICIAL	COURT	                                       Reporter	of	Decisions	
Decision:	 2017	ME	68	
Docket:	   Cum-16-159	
Argued:	   December	14,	2016	
Decided:	  April	11,	2017	
	
Panel:	    ALEXANDER,	MEAD,	GORMAN,	JABAR,	and	HJELM,	JJ.	
	
	
                           GREEN	TREE	SERVICING,	LLC	
                                        	
                                      v.	
                                        	
                              THELMA	J.	COPE	et	al.	
	
	
HJELM,	J.	

      [¶1]		Green	Tree	Servicing,	LLC,	commenced	this	residential	foreclosure	

action	 against	 Thelma	 J.	 Cope	 even	 though	 it	 did	 not	 own	 the	 mortgage	 on	

Cope’s	property	and	therefore	did	not	have	standing.		Shortly	before	the	trial	

was	to	be	held,	Green	Tree	moved	to	dismiss	its	complaint	without	prejudice	

for	 lack	 of	 standing.	 	 See	 M.R.	 Civ.	 P.	 41(a)(2).	 	 The	 Superior	 Court	

(Cumberland	 County,	 Mills,	 J.)	 dismissed	 the	 complaint	 but	 ordered	 that	 the	

dismissal	was	 with	prejudice	as	 a	 sanction	 for	 Green	 Tree’s	pretrial	 conduct.		

Green	 Tree	 moved	 for	 reconsideration,	 see	 M.R.	 Civ.	 P.	 59(e),	 and	 the	 court	

entered	an	amended	order	that	dismissed	the	action	without	prejudice	based	

on	its	conclusion	that	it	did	not	have	the	authority	to	impose	a	dismissal	with	
2	

prejudice,	 even	 as	 a	 sanction,	 because	 Green	 Tree	 did	 not	 have	 standing	 to	

bring	the	foreclosure	complaint	in	the	first	place.			

         [¶2]	 	 On	 this	 resulting	 appeal	 by	 Cope,1	 we	 clarify	 that,	 when	 the	

circumstances	 warrant,	 a	 trial	 court	 retains	 the	 authority	 to	 dismiss	 a	

foreclosure	 complaint	 with	 prejudice	 as	 a	 sanction,	 even	 when	 the	 plaintiff	

lacks	 standing.	 	 We	 therefore	 vacate	 the	 judgment	 and	 remand	 for	 further	

proceedings.	

                                       I.		BACKGROUND	

         [¶3]		In	May	2014,	Green	Tree	Servicing,	LLC,	filed	a	complaint	against	

Cope	to	foreclose	on	her	residential	property	located	in	Portland.2		Green	Tree	

alleged	 that	 Cope	 had	 executed	 a	 promissory	 note	 in	 favor	 of	 First	 Magnus	

Financial	Corporation	in	July	2005;	that	the	note	was	secured	by	a	mortgage	

in	 favor	 of	 Mortgage	 Electronic	 Registration	 Systems,	 Inc.	 (MERS),	 as	

“nominee”	 for	 First	 Magnus	 Financial	 Corporation;	 that	 Green	 Tree	 had	

acquired	 an	 interest	 in	 the	 mortgage	 through	 a	 series	 of	 assignments	

beginning	 with	 an	 initial	 assignment	 from	 MERS;	 that	 Green	 Tree	 possessed	

   1		Although	Cope’s	appeal	is	from	a	judgment	in	her	favor,	she	has	standing	to	“appeal	because	

sufficient	adverse	collateral	consequences	could	arise	from	the	portion	of	the	judgment	that	[s]he	
challenges.”		U.S.	Bank,	N.A.	v.	Tannenbaum,	2015	ME	141,	¶	3	n.2,	126	A.3d	734.	

     2		The	complaint	named,	as	a	party-in-interest,	the	Bank	of	New	York	Mellon,	which	Green	Tree	

alleged	held	a	junior	interest	in	the	mortgaged	property.		See	14	M.R.S.	§	6321	(2014),	amended	by	
P.L.	2015,	ch.	229,	§	1	(effective	October	15,	2015).		The	Bank	has	not	participated	in	this	appeal.		
                                                                                         3	

the	 original	 note	 endorsed	 in	 blank;	 and	 that	 Cope	 had	 not	 made	 any	

payments	on	the	note	since	June	2009.		

	     [¶4]		After	an	unsuccessful	mediation	session	held	in	September	2014,	

the	 court	 issued	 a	 scheduling	 order	 that	 established	 a	 discovery	 deadline	 of	

March	 16,	 2015,	 and	 a	 deadline	 for	 motions	 fourteen	 days	 after	 the	 close	 of	

discovery.		In	late	May,	the	parties	were	notified	that	a	trial	would	be	held	on	

July	 21.	 	 On	 July	 1—three	 months	 after	 the	 court-ordered	 deadline	 to	 file	

motions—Green	 Tree	 moved	 to	 amend	 its	 complaint	 to	 join	 First	 Magnus	

Financial	Corporation	Liquidating	Trust,	the	successor	to	the	original	lender,	

as	 a	 defendant,	 and	 to	 add	 a	 claim	 for	 a	 declaratory	 judgment	 that	 would	

determine	the	parties’	respective	interests	in	the	note	and	mortgage.		See	M.R.	

Civ.	 P.	 15(a).	 	 These	 proposed	 amendments	 related	 to	 Green	 Tree’s	 deficient	

interest	 in	 the	 mortgage—a	 problem	 that	 can	 be	 traced	 to	 an	 initial	

assignment	by	MERS	as	“nominee”	for	the	original	lender,	ultimately	resulting	

in	 Green	 Tree	 not	 having	 standing	 to	 foreclose	 on	 the	 property.	 	 See	 Bank	 of	

Am.,	N.A.,	v.	Greenleaf,	2014	ME	89,	¶¶	12-17,	96	A.3d	700	(holding	that	a	bank	

did	 not	 have	 the	 requisite	 standing	 to	 foreclose	 on	 the	 defendant’s	 property	

because	the	bank	had	acquired	the	mortgage	from	MERS,	as	“nominee”	for	the	

original	lender,	and	therefore	had	only	the	right	to	record	the	mortgage,	but	
4	

no	 other	 rights—including	 the	 right	 to	 seek	 foreclosure).3	 	 The	 court	 denied	

the	motion	because	it	was	untimely.		

          [¶5]	 	 On	 July	 13,	 Green	 Tree	 filed	 a	 motion	 to	 dismiss	 its	 foreclosure	

complaint	without	prejudice	pursuant	to	M.R.	Civ.	P.	41(a)(2),	acknowledging	

that	it	lacked	standing	to	proceed	with	the	action.		Cope	opposed	the	motion,	

arguing	 that	 the	 action	 should	 be	 dismissed	 with	 prejudice	 or	 alternatively	

that	 the	 court	 should	 enter	 a	 judgment	 in	 her	 favor.	 	 At	 a	 hearing	 on	 Green	

Tree’s	motion,4	the	court	ordered	Green	Tree	to	submit	an	affidavit	describing	

its	efforts	to	locate	the	original	lender	and	remedy	the	standing	defect.		Green	

Tree	filed	the	requested	affidavit	in	August	2015.		

          [¶6]	 	 In	 January	 2016,	 the	 court	 issued	 an	 order	 denying	 Green	 Tree’s	

motion	 to	 dismiss	 its	 complaint	 without	 prejudice,	 instead	 dismissing	 the	

complaint	with	prejudice.		In	its	order,	the	court	identified	two	bases	for	that	

decision.		First,	the	court	found	that	this	was	the	third	foreclosure	complaint	

filed	against	Cope	based	on	the	same	note	and	mortgage.5		The	first	complaint	

     3	 	 We	 issued	 our	 decision	 in	 Bank	 of	 America,	 N.A.	 v.	 Greenleaf,	 2014	 ME	 89,	 96	 A.3d	 700,	 on	

July	3,	 2014—one	 year	 before	 Green	 Tree	 filed	 its	 motion	 to	 amend	 its	 complaint,	 which	 was	 the	
process	by	which	Green	Tree	first	brought	its	lack	of	standing	to	the	court’s	attention.	
     4		Cope	has	not	included	a	copy	of	the	hearing	transcript	as	part	of	the	record	on	appeal.	

     5		In	her	filings	with	the	court,	Cope	acknowledged	that	Green	Tree	was	not	the	plaintiff	in	those	

prior	foreclosure	actions.	
                                                                                                                 5	

had	been	voluntarily	dismissed	without	prejudice	based	on	a	stipulation	of	the	

parties	to	that	action	pursuant	to	Rule	41(a)(1),	and	the	second	complaint	had	

been	 dismissed	 without	 prejudice	 by	 court	 order	 on	 the	 plaintiff’s	 motion	

pursuant	to	Rule	41(a)(2).6		The	court	reasoned	that	because	two	foreclosure	

actions	against	Cope	had	been	dismissed	previously,	“[f]airness	dictates”	that	

Green	 Tree	 should	 not	 receive	 more	 favorable	 treatment	 than	 it	 would	 have	

been	 allowed	 pursuant	 to	 Rule	 41(a)(1),	 which	 provides	 that	 “a	 notice	 of	

dismissal	operates	as	an	adjudication	upon	the	merits	when	filed	by	a	plaintiff	

who	 has	 once	 dismissed	 in	 any	 court	 .	.	.	 an	 action	 based	 on	 or	 including	 the	

same	claim.”7		(Emphasis	added.)		

        [¶7]		Second—and	more	significant	to	this	appeal—the	court	found	that	

Green	Tree	had	known	since	at	least	July	2014,	when	we	issued	our	decision	

in	 Greenleaf,	 that	 it	 would	 not	 be	 able	 to	 establish	 standing	 to	 foreclose	 on	

   6		Although	the	record	does	not	contain	the	stipulation	of	dismissal	in	the	first	case	or	the	order	

of	 dismissal	 in	 the	 second	 case,	 the	 parties	 do	 not	 dispute	 the	 history	 of	 those	 prior	 foreclosure	
actions	as	stated	by	the	court.		

    7		Pursuant	to	M.R.	Civ.	P.	41(a),	a	complaint	may	be	voluntarily	dismissed	in	two	ways.		First,	“an	

action	may	be	dismissed	by	the	plaintiff	without	order	of	court	(i)	by	filing	a	notice	of	dismissal	at	
any	time	before	service	by	the	adverse	party	of	an	answer	or	of	a	motion	for	summary	judgment,	
whichever	 first	 occurs,	 or	 (ii)	 by	 filing	 a	 stipulation	 of	 dismissal	 signed	 by	 all	 parties	 who	 have	
appeared	in	the	action	.	.	.	.”		M.R.	Civ.	P.	41(a)(1).		Second,	an	action	may	be	dismissed	“upon	order	
of	the	court	and	upon	such	terms	and	conditions	as	the	court	deems	proper.”		M.R.	Civ.	P.	41(a)(2).		
Unless	 otherwise	 stated	 in	 the	 notice	 or	 order	 of	 dismissal,	 a	 voluntary	 dismissal	 is	 without	
prejudice,	except	that,	as	noted	in	the	text,	a	notice	of	dismissal	pursuant	to	Rule	41(a)(1)	“operates	
as	 an	 adjudication	 upon	 the	 merits	 when	 filed	 by	 a	 plaintiff	 who	 has	 once	 dismissed	 in	 any	
court	.	.	.	an	action	based	on	or	including	the	same	claim.”	
6	

Cope’s	 mortgage;	 that	 Green	 Tree’s	 efforts	 to	 contact	 the	 original	 lender	 and	

remedy	the	standing	defect	had	not	been	productive	and	that	the	“prospects	

for	 future	 success	 [to	 cure	 the	 standing	 problem]	 appear[ed]	 minimal”;	 and	

that	 Green	 Tree	 had	 nevertheless	 proceeded	 with	 the	 litigation,	 which	

included	deposing	Cope,	who	was	ninety	years	old,	in	March	2015.8			

         [¶8]	 	 Green	 Tree	 filed	 a	 timely	 motion	 for	 reconsideration,	 see	 M.R.	

Civ.	P.	59(e),	arguing	that	because	it	lacked	standing	to	pursue	this	foreclosure	

action,	 the	 court	 was	 only	 authorized	 to	 dismiss	 the	 complaint	 without	

prejudice,	based	on	our	recent	decisions	in	U.S.	Bank	N.A.	v.	Curit,	2016	ME	17,	

¶	10,	131	A.3d	903,	and	Bank	of	New	York	v.	Dyer,	2016	ME	10,	¶	11,	130	A.3d	

966.		Cope	opposed	the	motion,	arguing	that	the	court	was	not	compelled	to	

enter	a	dismissal	without	prejudice.		Cope	argued	alternatively	that	the	court	

should	 dismiss	 the	 complaint	 with	 prejudice	 as	 to	 Green	 Tree’s	 action	 for	

relief	on	the	note,	which	Green	Tree	indisputably	owned	and	had	standing	to	

enforce,	but	should	dismiss	the	foreclosure	complaint	without	prejudice	“in	all	

other	respects.”			

         [¶9]	 	 The	 court	 granted	 Green	 Tree’s	 motion	 for	 reconsideration	 in	

March	2016.		The	court	explained	that	although	it	had	“intended	the	dismissal	

     8		Although	the	record	does	not	contain	information	referring	to	Green	Tree’s	deposition	of	Cope,	

the	parties	do	not	dispute	that	the	deposition	took	place.			
                                                                                            7	

with	 prejudice	 to	 serve	 as	 a	 sanction,”	 our	 decisions	 in	 Curit	 and	 Dyer	 left	 it	

with	“little	discretion	to	dismiss	[a]	foreclosure	action[]	with	prejudice	when	

the	 plaintiff	 lacks	 standing,	 even	 when	 the	 plaintiff	 has	 engaged	 in	 dilatory	

conduct	 that	 warrants	 a	 sanction.”	 	 The	 court	 further	 stated	 that	 contrary	 to	

Cope’s	 argument,	 it	 could	 not	 “bifurcate	 the	 standing	 analysis	 by	 dismissing	

the	action	with	prejudice	as	to	only	the	note.”		Accordingly,	the	court	entered	

an	amended	judgment	dismissing	Green	Tree’s	complaint	without	prejudice.			

       [¶10]	 	 Cope	 timely	 appealed.	 	 See	 14	 M.R.S.	 §	 1851	 (2016);	 M.R.	

App.	P.	2.			

                                     II.		DISCUSSION	

	      [¶11]		Cope	argues	that	the	court	erred	by	granting	Green	Tree’s	motion	

for	 reconsideration	 and	 entering	 an	 amended	 judgment	 dismissing	 Green	

Tree’s	 foreclosure	 complaint	 without	 prejudice.	 	 Specifically,	 Cope	 contends	

that	the	amended	judgment	was	the	product	of	the	court’s	misapprehension	of	

the	 extent	 of	 its	 discretionary	 authority	 to	 dismiss	 Green	 Tree’s	 foreclosure	

complaint	with	prejudice	as	a	sanction,	regardless	of	whether	Green	Tree	had	

standing	to	bring	the	action.			

       [¶12]	 	 A	 court’s	 decisions	 to	 grant	 a	 Rule	 59	 motion	 and	 to	 dismiss	 a	

complaint	 without	 prejudice	 are	 generally	 each	 reviewed	 for	 an	 abuse	 of	
8	

discretion.	 	 See	 Dyer,	 2016	 ME	 10,	 ¶	 6,	 130	 A.3d	 966	 (dismissal	 without	

prejudice);	 Wells	 Fargo	 Bank,	 N.A.	 v.	 Burek,	 2013	 ME	 87,	 ¶	 14,	 81	 A.3d	 330	

(Rule	 59	 motion).	 	 “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.”		Bayview	Loan	Servicing,	LLC	v.	Bartlett,	

2014	ME	37,	¶	10,	87	A.3d	741	(alteration	and	quotation	marks	omitted).		The	

inquiry	 here	 implicates	 the	 second	 of	 these	 questions,	 which	 calls	 for	 a	

determination	 of	 the	 parameters	 of	 the	 court’s	 authority—a	 matter	 that	 we	

review	 de	 novo.	 	 See	 U.S.	 Bank,	 N.A.	 v.	 Tannenbaum,	 2015	 ME	 141,	 ¶	 4,	

126	A.3d	734	(“The	trial	court's	authority	to	undertake	particular	action	is	an	

issue	 of	 law	 that	 we	 examine	 de	 novo.”	 (alteration	 and	 quotation	 marks	

omitted)).			

      [¶13]	 	 In	 several	 recent	 decisions,	 we	 have	 stated	 that	 when	 a	 court	

dismisses	 a	 foreclosure	 complaint	 because	 the	 putative	 mortgagee	 lacks	

standing,	 the	 dismissal	 must	 be	 without	 prejudice.	 	 See	 Curit,	 2016	 ME	 17,	

¶	10,	131	A.3d	903;	Dyer,	2016	ME	10,	¶	11,	130	A.3d	966;	see	also	U.S.	Bank	
                                                                                         9	

Trust,	 N.A.	 v.	 Mackenzie,	 2016	 ME	 149,	 ¶	 11	 n.6,	 149	 A.3d	 267;	 Bank	 of	 Am.,	

N.A.	 v.	 Greenleaf	 (Greenleaf	 II),	 2015	 ME	 127,	 ¶¶	 8-9,	 124	 A.3d	 1122;	

Homeward	 Residential,	 Inc.	 v.	 Gregor,	 2015	 ME	 108,	 ¶	 24,	 122	 A.3d	 947.	 	 A	

dismissal	 with	 prejudice,	 which	 “operates	 as	 an	 adjudication	 on	 the	 merits,”	

Dyer,	 2016	 ME	 10,	 ¶	 11,	 130	 A.3d	 966	 (alteration	 and	 quotation	 marks	

omitted),	is	improper	when	the	dismissal	is	entered	because	the	plaintiff	lacks	

standing,	 because	 without	 standing,	 the	 plaintiff	 cannot	 invoke	 the	 court’s	

jurisdiction	to	“make	any	adjudication	on	the	merits,”	id.	

      [¶14]		Here,	in	its	initial	order	of	dismissal,	the	court	found	that	Green	

Tree	 had	 pursued	 its	 foreclosure	 claim	 for	 one	 year	 after	 we	 issued	 our	

opinion	in	Greenleaf,	knowing	that	it	did	not	own	the	mortgage	and	therefore	

did	 not	 have	 standing,	 and	 then	 waited	 until	 one	 week	 before	 trial	 to	 seek	

dismissal	 of	 its	 complaint.	 	 In	 its	 amended	 order,	 the	 court	 made	 even	 more	

clear	that	it	had	“intended	the	dismissal	with	prejudice	to	serve	as	a	sanction.”		

The	 question	 here	 is	 whether,	 once	 the	 court	 determined	 that	 Green	 Tree	

lacked	standing,	it	still	had	authority	to	dismiss	Green	Tree’s	complaint	with	

prejudice	 based	 on	 its	 finding	 that	 Green	 Tree	 had	 engaged	 in	 sanctionable	

conduct.	
10	

        [¶15]	 	 As	 provided	 in	 certain	 provisions	 of	 the	 Maine	 Rules	 of	 Civil	

Procedure	 and	 our	 case	 law,	 courts	 are	 vested	 with	 discretion	 to	 dismiss	 an	

action	 with	 prejudice	 as	 a	 sanction	 for	 various	 types	 of	 pretrial	 misconduct.		

For	 example,	 in	 the	 foreclosure	 context,	 we	 have	 recognized	 a	 court’s	

discretionary	 authority	 to	 dismiss	 a	 complaint	 with	 prejudice	 based	 on	 the	

mortgagee’s	 failure	 to	 make	 a	 good	 faith	 effort	 to	 mediate,	 see	 M.R.	

Civ.	P.	93(j);	U.S.	Bank,	N.A.	v.	Sawyer,	2014	ME	81,	¶¶	12-13,	17,	95	A.3d	608;	

Bayview	Loan	Servicing,	LLC,	2014	ME	37,	¶	23,	87	A.3d	741;	or	comply	with	a	

discovery	 order,	 see	 M.R.	 Civ.	 P.	 37(b);	 U.S.	 Bank	 Nat’l	 Ass’n	 v.	 Manning,	

2014	ME	 96,	 ¶¶	 12-20,	 97	 A.3d	 6059—provided	 that	 the	 mortgagee’s	

noncompliance	 is	 sufficiently	 egregious	 to	 warrant	 such	 a	 sanction.	 	 See	 also	

M.R.	 Civ.	 P.	 16(d)	 (providing	 that	 when	 a	 party	 fails	 to	 comply	 with	 a	

scheduling	order,	a	“court	may	impose	.	.	.	such	sanctions	as	the	circumstances	

warrant,	 which	 may	 include	 the	 dismissal	 of	 the	 action	 or	 any	 part	 thereof	

with	or	without	prejudice”	(emphasis	added)).	

   9		In	U.S.	Bank	National	Association	v.	Manning,	2014	ME	96,	¶¶	12-20,	97	A.3d	605,	we	vacated	

the	 court’s	 order	 dismissing	 the	 bank’s	 foreclosure	 complaint	 with	 prejudice	 based	 on	 our	
conclusion	 that	 the	 bank’s	 failure	 to	 timely	 pay	 a	 $150	 fine	 did	 not	 constitute	 such	 serious	
noncompliance	to	justify	the	ultimate	sanction	of	a	dismissal	with	prejudice.		The	case	nevertheless	
supports	the	general	proposition	that	in	the	appropriate	circumstances,	a	court	has	the	discretion	
to	 dismiss	 a	 foreclosure	 complaint	 with	 prejudice	 if	 a	 mortgagee	 fails	 to	 comply	 with	 a	 discovery	
order.	
                                                                                        11	

       [¶16]	 	 Further,	 Rule	 41(a)(2),	 which	 was	 the	 basis	 for	 the	 court’s	

dismissal	in	this	case,	expressly	states	that	“[u]nless	otherwise	specified	in	the	

order,	 a	 [voluntary]	 dismissal	 .	 .	 .	 is	 without	 prejudice,”	 but	 that	 Rule	 also	

authorizes	 a	 dismissal	 “upon	 order	 of	 the	 court	 and	 upon	 such	 terms	 and	

conditions	 as	 the	 court	 deems	 proper.”	 	 (Emphasis	 added.)	 	 The	 language	

permitting	a	court	to	specify	the	“terms	and	conditions”	of	dismissal	provides	

a	 court	 with	 the	 discretion	 to	 dismiss	 a	 case	 with	 or	 without	 prejudice.	 	 Cf.	

Thornton	 v.	 Adams,	 2003	 ME	 104,	 ¶	 6,	 829	 A.2d	 517	 (construing	 similar	

language	in	Rule	41(b)(3),	which	governs	involuntary	dismissals,	to	allow	for	

dismissals	with	or	without	prejudice).	

       [¶17]		The	broad	discretion	granted	to	courts	to	sanction	a	party	for	its	

noncompliance	with	various	procedural	rules	demonstrates	that	a	court	is	not	

barred	from	imposing	sanctions—including	a	dismissal	with	prejudice—even	

when	the	plaintiff	lacks	standing	to	pursue	a	foreclosure	claim.		Cases	such	as	

Curit	and	Dyer,	which	hold	that	absent	standing	a	dismissal	must	be	without	

prejudice,	are	based	on	the	materially	different	circumstance	where	a	putative	

mortgagee’s	lack	of	standing	is	the	sole	basis	to	dismiss	its	complaint.		Here,	in	

contrast,	 the	 court	 made	 clear	 that	 it	 had	 “intended	 the	 dismissal	 with	

prejudice	to	serve	as	a	sanction,”	noting	that	Green	Tree	had	pursued	its	claim	
12	

as	 if	 it	 would	 be	 tried,	 and	 had	 waited	 until	 one	 week	 before	 trial	 to	 seek	

dismissal	 of	 its	 complaint,	 even	 though	 it	 had	 “kn[own]	 for	 months”	 that	 it	

would	be	unable	to	obtain	an	assignment	of	the	mortgage	sufficient	to	confer	

standing.		The	court	therefore	determined	that	the	nature	of	the	dismissal	of	

Green	 Tree’s	 complaint	 should	 reflect	 considerations	 going	 beyond	 its	 mere	

lack	of	standing,	thus	making	this	case	distinguishable	from	Curit	and	Dyer.		

       [¶18]	 	 A	 dismissal	 with	 prejudice	 imposed	 as	 a	 sanction	 is	 not	 an	

adjudication	 of	 the	 merits	 of	 a	 plaintiff’s	 claim.	 	 Rather,	 the	 imposition	 of	 a	

sanction	 represents	 the	 court’s	 “determination	 of	 a	 collateral	 issue:	 whether	

the	[party	or]	attorney	has	abused	the	judicial	process.”		Willy	v.	Coastal	Corp.,	

503	 U.S.	 131,	 138-39	 (1992)	 (quotation	 marks	 omitted)	 (concluding	 that	 a	

court	 had	 the	 authority	 to	 sanction	 a	 plaintiff	 pursuant	 to	 Fed.	 R.	 Civ.	 P.	 11	

even	 though	 it	 was	 later	 determined	 that	 the	 court	 lacked	 subject	 matter	

jurisdiction	over	the	action).		Accordingly,	even	when	a	court	is	without	power	

to	 reach	 the	 merits	 of	 a	 complaint	 because	 the	 plaintiff	 lacks	 standing,	 see	

Greenleaf	II,	2015	ME	127,	¶¶	8-9,	124	A.3d	1122;	Gregor,	2015	ME	108,	¶	24,	

122	A.3d	947,	the	court	is	not	divested	of	its	inherent	authority	to	dismiss	the	
                                                                                                    13	

complaint	 with	 prejudice	 as	 a	 sanction	 for	 misconduct,	 cf.	 Willy,	 503	 U.S.	 at	

138.10	

       [¶19]	 	 Having	 concluded	 that	 a	 court	 has	 the	 discretion	 to	 impose	 the	

ultimate	 sanction	 of	 a	 dismissal	 with	 prejudice	 against	 a	 plaintiff	 in	 a	

foreclosure	 action	 even	 when	 the	 plaintiff	 lacks	 standing,	 we	 take	 this	

opportunity	 to	 outline	 the	 procedural	 steps	 that	 a	 court	 should	 follow	 when	

determining	 whether	 such	 a	 sanction	 is	 proper,	 consistent	 with	 basic	

principles	 of	 due	 process.	 	 The	 process	 outlined	 here	 closely	 tracks	 the	

thoughtful	procedures	employed	by	the	court	in	this	case.			

       [¶20]		First,	before	imposing	a	dismissal	with	prejudice	as	a	sanction,	a	

court	should	ordinarily	ensure	that	reasonable	steps	are	taken	to	provide	the	

plaintiff	 with	 adequate	 notice	 that	 such	 a	 result	 will	 be	 considered.	 	 See	

Sawyer,	 2014	ME	81,	 ¶	 12,	 95	 A.3d	 608	 (noting,	 in	 a	 decision	 where	 we	

affirmed	a	dismissal	with	prejudice,	that	the	court	had	“placed	the	parties	on	

notice	that	dismissal	with	prejudice	was	a	very	real	possibility”);	cf.	Bartlett,	

2014	 ME	 37,	 ¶	 14,	 87	 A.3d	 741	 (stating	 that	 “[p]arties	 are	 not	 entitled	 to	 a	

warning	that	the	trial	court	may	dismiss	a	case	based	on	noncompliance	with	
   10		To	the	extent	that	our	decisions	in	U.S.	Bank	N.A.	v.	Curit,	2016	ME	17,	¶	10,	131	A.3d	903,	and	

Bank	of	New	York	v.	Dyer,	2016	ME	10,	¶	11,	130	A.3d	966,	suggest	that	a	dismissal	with	prejudice	is	
an	actual	adjudication	of	the	merits	of	a	claim	and	is	therefore	never	appropriate	when	a	plaintiff	
lacks	standing,	we	clarify	that	a	dismissal	with	prejudice	merely	operates—i.e.,	has	the	same	effect	
as—an	adjudication	on	the	merits.	
14	

pretrial	procedures,”	but	that	we	will	consider	“the	presence	of	a	warning	as	a	

factor	supporting	dismissal	with	prejudice”).		That	notice	should	be	provided	

through	a	motion	for	sanctions	filed	by	the	mortgagor,	or,	as	in	Sawyer,	in	an	

order	 or	 motion	 issued	 by	 the	 court.	 	 A	 mortgagor’s	 mere	 request	 for	 a	

dismissal	 with	 prejudice	 or	 some	 other	 affirmative	 sanction	 embedded	 in	 an	

opposition	 to	 a	 plaintiff’s	 motion	 for	 dismissal	 without	 prejudice	 will	 not	

usually	be	adequate	to	provide	sufficient	notice.	

      [¶21]		Second,	the	court	must	provide	the	plaintiff	with	an	opportunity	

to	 be	 heard	 on	 the	 issue	 of	 whether	 the	 case	 should	 be	 dismissed	 with	

prejudice.	 	 Compare	 Manning,	 2014	 ME	 96,	 ¶	 16,	 97	 A.3d	 605	 (vacating	 a	

judgment	dismissing	a	mortgagee’s	complaint	with	prejudice	in	part	because	

“the	 court	 imposed	 the	 ultimate	 sanction	 without	 ever	 holding	 a	 hearing	 or	

conference	 of	 counsel”),	 with	 Sawyer,	 2014	 ME	 81,	 ¶	 12,	 95	 A.3d	 608	

(concluding	 that	 a	 court	 did	 not	 abuse	 its	 discretion	 by	 dismissing	 a	

foreclosure	complaint	with	prejudice	when	the	mortgagee	had	“a	meaningful	

opportunity	 to	 be	 heard	 on	 the	 potential	 dismissal”).	 	 The	 opportunity	 to	 be	

heard	may,	but	need	not	be,	a	full	evidentiary	hearing.		For	example,	a	court	

may	simply	invite	the	plaintiff	to	submit	an	affidavit	describing	why	the	action	

should	not	be	dismissed	with	prejudice.	
                                                                                         15	

       [¶22]	 	 Third	 and	 finally,	 if,	 after	 notice	 to	 the	 plaintiff	 and	 an	

opportunity	 for	 it	 to	 be	 heard,	 the	 court	 determines	 that	 a	 dismissal	 with	

prejudice	is	proper,	its	judgment	should	clearly	define	what	the	dismissal	with	

prejudice	 means—its	 impact	 on	 particular	 parties	 and	 particular	 claims,	 for	

example—so	 that	 the	 effect	 of	 the	 order	 is	 clear	 to	 the	 parties,	 to	 us	 in	 the	

event	of	an	appeal,	and	to	a	trial	court	in	the	event	of	future	litigation.		As	we	

have	 previously	 stated,	 when	 the	 court	 enters	 a	 judgment	 on	 the	 merits	 of	 a	

foreclosure	 complaint,	 the	 court	 should	 not	 speculate	 about	 the	 potential	

effect	of	the	judgment	on	future	litigation,	because	any	such	comment	would	

constitute	an	improper	advisory	opinion.		See	Mackenzie,	2016	ME	149,	¶	12,	

149	 A.3d	 267;	 Tannenbaum,	 2015	 ME	 141,	 ¶¶	6	 n.3,	 10,	 126	 A.3d	 734;	

Wells	Fargo	 Bank,	 N.A.	 v.	 Girouard,	 2015	 ME	 116,	 ¶	 10,	 123	 A.3d	 216.	 	 In	

contrast,	 when	 a	 court	 dismisses	 an	 action	 as	 a	 sanction	 for	 a	 plaintiff’s	

misconduct,	the	future	effect	of	the	order	needs	to	be	made	clear—otherwise	

the	court	is	imposing	a	sanction	without	explaining	its	content.	

       [¶23]		In	sum,	because	Green	Tree’s	lack	of	standing	did	not	deprive	the	

court	 of	 its	 discretion	 to	 dismiss	 Green	 Tree’s	 complaint	 along	 with	 “terms	

and	conditions	[that]	the	court	deems	proper,”	M.R.	Civ.	P.	41(a)(2),	we	vacate	

the	 order	 dismissing	 the	 complaint	 without	 prejudice	 and	 remand	 for	 the	
16	

court	 to	 determine	 whether	 a	 dismissal	 with	 prejudice—or	 any	 other	

sanction—remains	appropriate	in	the	circumstances	in	this	case.11		

         The	entry	is:	

                            Judgment	 of	 dismissal	 without	 prejudice	
                            vacated.	 	 Remanded	 for	 further	 proceedings	
                            consistent	with	this	opinion.				
	
	      	     	      	       	       	
	
Joshua	 Klein-Golden,	 Esq.	 (orally),	 Clifford	 &	 Golden,	 PA,	 Lisbon	
Falls,	for	appellant	Thelma	J.	Cope	
	
Leonard	 F.	 Morley,	 Jr.,	 Esq.,	 William	 B.	 Jordan,	 Esq.,	 and	 Corey	 S.	
Hadley,	 Esq.	 (orally),	 Shapiro	 &	 Morley,	 LLC,	 South	 Portland,	 for	
appellee	Green	Tree	Servicing,	LLC	
	
Thomas	 A.	 Cox,	 Esq.,	 Portland,	 for	 amicus	 curiae	 National	
Consumer	Law	Center	
	
	
Cumberland	County	Superior	Court	docket	number	RE-2014-244	
FOR	CLERK	REFERENCE	ONLY	

   11		Although	the	court’s	initial	order	of	dismissal	was	with	prejudice,	it	would	be	inappropriate	

for	 us,	 in	 the	 context	 of	 an	 appeal,	 to	 simply	 reinstate	 the	 terms	 of	 that	 dismissal.	 	 Rather,	 the	
determination	 of	 the	 terms	 and	 conditions	 of	 a	 dismissal	 are	 particularly	 within	 a	 trial	 court’s	
discretion.		Accordingly,	we	do	not	reach	the	merits	of	Cope’s	arguments	that	it	would	be	proper	for	
the	trial	court	to	issue	a	dismissal	with	prejudice,	or	alternatively	a	dismissal	with	prejudice	as	to	
the	note	and	without	prejudice	in	all	other	respects.