Court Opinion

ID: 3169673
Source: CourtListenerOpinion
Date Created: 2016-01-14 17:05:41.420322+00
Date Added: 2024-06-11T12:03:04.728089
License: Public Domain

MAINE SUPREME JUDICIAL COURT                                        Reporter of Decisions
Decision:   2016 ME 10
Docket:     Han-14-534
Submitted
 On Briefs: September 28, 2015
Decided:    January 14, 2016

Panel:          ALEXANDER, MEAD, GORMAN, JABAR, and HUMPHREY, JJ.

              THE BANK OF NEW YORK, AS TRUSTEE FOR THE
           CERTIFICATEHOLDERS OF CWALT, INC. ASSET-BACKED
                     CERTIFICATES, SERIES 2003-15T2

                                          v.

                                 JOHN B. DYER et al.

PER CURIAM

         [¶1] John B. Dyer appeals from an order entered by the District Court

(Ellsworth, Mallonee, J.) dismissing The Bank of New York’s complaint, in which

the Bank sought to foreclose on Dyer’s real property in Bar Harbor, after the Bank

acknowledged that it could not prove that it had the requisite standing to pursue its

claim. Dyer contends that the court erred in dismissing the complaint without

prejudice, and in declining to award him his full attorney fees and costs.

We affirm the order.

                                  I. BACKGROUND

         [¶2]    On May 29, 2003, Dyer gave a $997,000 promissory note and a

mortgage on property in Bar Harbor securing the note to Countrywide Home
2

Loans, Inc.    The mortgage contained language naming Mortgage Electronic

Registration Systems, Inc. (MERS) as lender’s nominee—language that we found

to be problematic in Bank of America, N.A. v. Greenleaf (Greenleaf I),

2014 ME 89, ¶ 13-15, 96 A.3d 700.

       [¶3]   In July 2008, the Bank filed a complaint for foreclosure in the

District Court, asserting that Dyer had stopped making payments on the note as of

June 2007, and that he then owed the Bank $1,014,869.91. The Bank’s motion for

summary judgment and Dyer’s cross-motion for summary judgment were denied,

as was the Bank’s second motion for summary judgment.

       [¶4] The case proceeded to trial on three separate days:

    • January 4, 2013 (Mallonee, J.): The Bank was unable to produce the
      original note, and, given the limited knowledge of the Bank’s witness, the
      court sustained Dyer’s objection to the admission of a copy. The court took
      the Bank’s motion for a continuance under advisement. Dyer objected and
      asked for a dismissal with prejudice. On January 11, the court granted the
      continuance, but as a sanction it ordered the Bank to pay Dyer’s costs and
      attorney fees for the first day of the trial in the amount of $4,090.61.

    • October 11, 2013 (D. Mitchell, J.): Because of judicial scheduling issues, a
      different judge presided at the second day of the trial. After the Bank’s
      witness was sworn but before testimony began, the Bank moved to amend its
      complaint to add Countrywide Home Loans as a party-in-interest; Dyer
      objected. The court then continued the trial on its own motion. The motion
      to amend was later granted.

    • November 20, 2014 (Mallonee, J.): On September 22, 2014, two months
      before the third day of the trial, the Bank filed a motion to dismiss its
      complaint without prejudice on the ground that
                                                                                                    3

               the subject mortgage appears to fall under the scope of
               the Supreme Judicial Court’s recent decision in
               [Greenleaf I]. . . . [U]nder the present time constraints of
               proceeding forward to trial in this case, and
               notwithstanding Plaintiff’s counsel[’s] efforts, Plaintiff
               maintains that it will not be able to gather the additional
               witness testimony and evidence needed prior to trial to
               establish standing to foreclose.

       Dyer filed a lengthy written objection requesting that (1) any
       dismissal be with prejudice, and (2) he be awarded his attorney fees
       and costs.

       At the outset of the third day of trial, the parties argued the motion to
       dismiss. The Bank acknowledged that “at this point in time we are
       unable to establish that we have [] standing.” The court took the
       motion to dismiss under advisement.

       [¶5] Subsequently, by written order, the court granted the Bank’s motion to

dismiss without prejudice and declined to award additional attorney fees or costs.1

Dyer appealed.

                                       II. DISCUSSION

       [¶6] Dyer asserts that after three attempts at a trial “the District Court . . .

has granted [the Bank] a million dollar mulligan when its inability to perfect a

foreclosure is the result of its own substantive and evidentiary shortcomings.” We

review the dismissal without prejudice for an abuse of discretion. See U.S. Bank

Nat’l Ass’n v. Manning, 2014 ME 96, ¶ 12, 97 A.3d 605.

   1
      We review the court’s determination that awarding Dyer his first-day costs and attorney fees was
sufficient for an abuse of discretion. Jandreau v. LaChance, 2015 ME 66, ¶ 29, 116 A.3d 1273. Finding
none, we do not discuss further Dyer’s contention that he should have been awarded additional sums.
4

      [¶7] The briefs in this appeal were filed before we issued our opinions in

three recent foreclosure cases: Homeward Residential, Inc. v. Gregor,

2015 ME 108, 122 A.3d 947; Wells Fargo Bank, N.A. v. Girouard, 2015 ME 116,

123 A.3d 216; and Bank of America, N.A. v. Greenleaf (Greenleaf II),

2015 ME 127, 124 A.3d 1122. Each of those decisions addressed the distinction

between standing and jurisdiction, and, in Gregor and Greenleaf II, the proper

result when a party seeking to foreclose cannot establish standing.

      [¶8] In Girouard, we took note of

      the predicate requirement that a putative mortgagee establish standing,
      which is a demonstration that that party holds the rights necessary to
      get through the courthouse door and pursue the claim in the first
      place. . . . [A] party’s lack of standing is not a jurisdictional problem,
      but rather it is an issue of justiciability that precludes a party from
      invoking the court’s jurisdiction.

2015 ME 116, ¶ 8 n.3, 123 A.3d 216.

      [¶9] Gregor indicated the consequence of a foreclosure plaintiff’s lack of

standing:

      [T]he record wholly supports the court’s determination that [the
      plaintiff] failed to demonstrate that [it] had standing to maintain the
      foreclosure action. Although the court maintained jurisdiction over
      the parties and subject matter, it could not decide the merits of the
      case when the plaintiff lacked standing pursuant to [14 M.R.S.]
      section 6321. Instead, the court could only dismiss the action.
      Because the court addressed the merits of the complaint for
      foreclosure in its judgment, we vacate the judgment in its entirety and
      remand for an entry of a dismissal without prejudice.
                                                                                   5

2015 ME 108, ¶¶ 23-24, 122 A.3d 947 (citation omitted).

      [¶10] Finally, Greenleaf II confirmed that when a plaintiff lacks standing,

although the court retains jurisdiction, dismissal of the complaint without prejudice

is the proper result:

             Because standing is a threshold concept dealing with the
      necessity for the invocation of the court’s power to decide true
      disputes, it is an issue cognizable at any stage of a legal proceeding,
      even after a completed trial. When discovered, a standing defect does
      not affect, let alone destroy, the court’s authority to decide disputes
      that fall within its subject matter jurisdiction. A plaintiff’s lack of
      standing renders that plaintiff’s complaint nonjusticiable—i.e.,
      incapable of judicial resolution.

            Here, the court could not have entered a judgment . . .
      addressing the merits of the Bank’s foreclosure claim because the
      Bank failed to show the minimum interest that is a predicate to
      bringing that claim in the first place. Under these circumstances, the
      court properly disposed of the case by entering a dismissal without
      prejudice.

2015 ME 127, ¶¶ 8-9, 124 A.3d 1122 (alteration, citations, and quotation marks

omitted).

      [¶11] The logic of the Greenleaf II holding is evident when applied in this

case. A dismissal with prejudice “operate[s] as an adjudication on the merits.”

Johnson v. Samson Constr. Corp., 1997 ME 220, ¶ 8, 704 A.2d 866 (quotation

marks omitted). Because there is no dispute that the Bank lacked standing and

therefore never had “the rights necessary to get through the courthouse door and

pursue [its] claim in the first place,” Girouard, 2015 ME 116, ¶ 8 n.3,
6

123 A.3d 216, the trial court’s power to make any adjudication on the merits of

that claim, including a dismissal with prejudice, was not invoked. Accordingly, a

dismissal without prejudice, which disposed of the case without exploring its

merits, was the required result.

        The entry is:

                           Order of dismissal without prejudice affirmed.

On the briefs:

        George J. Marcus, Esq., Jennie L. Clegg, Esq., and Andrew C.
        Helman, Esq., Marcus, Clegg & Mistretta, P.A., Portland, for
        appellants John B. Dyer and William Purcell

        David W. Merritt, Esq., Houser & Allison, APC, Boston,
        Massachusetts, for appellee The Bank of New York

Ellsworth District Court docket number RE-2008-120
FOR CLERK REFERENCE ONLY