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Another Maine Court Decision Addresses Notices of Default

Posted By USFN, Tuesday, September 1, 2015
Updated: Saturday, September 26, 2015

September 1, 2015


by Tristan Birkenmeier and Santo Longo
Bendett & McHugh, P.C. - USFN Member (Connecticut, Maine, Vermont)

On August 18, 2015 the Maine Supreme Judicial Court issued its decision in Wells Fargo Bank, N.A. v. Girouard, 2015 ME 116. Girouard provides clear direction to the trial courts that entry of judgment for the defendant is required if the trial court finds that the notice of default sent to the borrower failed to strictly comply with the requirements of Maine’s notice of default statute, 14 M.R.S. § 6111.

After the Supreme Judicial Court issued its seminal decision in Bank of America v. Greenleaf, 2014 ME 89 (2014), which clarified the state statutory requirements with respect to notices of default, the Girouards filed a motion for summary judgment, contending that the notice sent by Wells Fargo failed to comply with 14 M.R.S. § 6111. Wells Fargo did not dispute the deficiencies of the notice, but asserted that because sending an adequate notice of default is a statutory prerequisite to commencing a foreclosure action, the case should be dismissed without prejudice. [There was prior Maine case law in support of this proposition. See Dutil v. Burns, 1997 ME 1, 674 A. 2d 910 (1996).] The trial court agreed, granted the defendants’ motion for summary judgment, and entered an order of dismissal without prejudice. On appeal, Maine’s high court vacated the dismissal without prejudice and remanded the case for entry of judgment for the defendants.

Prior to Girouard, there was uncertainty in the trial courts as to the proper disposition of a case after a finding that the notice of default did not strictly comply with the statutory requirements. The results varied from court to court, with some courts dismissing without prejudice, as the trial court did in Girouard. Other courts dismissed with prejudice or entered judgment for the defendants. In a few rare cases, judgment was entered for the defendants; however, the court also expressly reserved to the parties the right to re-litigate the merits of the case in a future action. Girouard leaves the trial courts with only one option: entry of judgment for the defendants.

What remains unclear after Girouard is the effect such a judgment for the defendant will have on a mortgagee’s ability to institute a second foreclosure action on the same default. In fact, the Supreme Judicial Court expressly declined to address this issue. Depending on how relevant law develops in Maine, such judgments could potentially bar re-filing. Therefore, in the wake of Girouard, it is especially important that the adequacy of the notice of default is considered before a new foreclosure action is instituted, or a pending case is brought to trial.

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