MAINE	SUPREME	JUDICIAL	COURT	                                                        Reporter	of	Decisions	
Decision:	    2017	ME	145	
Docket:	      Yor-16-198	
Submitted	
  On	Briefs:	 June	14,	2017	
Decided:	     July	6,	2017	
	
Panel:	       ALEXANDER,	MEAD,	GORMAN,	HJELM,	and	HUMPHREY,	JJ.	
	
	
                                     MTGLQ	INVESTORS,	L.P.	
                                               	
                                              v.	
                                               	
                                       SHELLEY	ALLEY	
	
	
GORMAN,	J.	

         [¶1]		On	September	12,	2013,	Wells	Fargo	Bank,	N.A.,1	filed	a	foreclosure	

complaint	 in	 the	 District	 Court	 (Springvale)	 naming	 John	 F.	 Shelley	 as	 the	

defendant	 and	 Shelley	 Alley	 as	 a	 party	 in	 interest.	 	 In	 the	 complaint,	 Wells	

Fargo	alleged	that	on	April	5,	2007,	Linda	M.	Shelley	executed	a	note	in	favor	

of	 First	 Magnus	 Financial	 Corporation	 for	 $211,500.	 	 The	 complaint	 alleged	

that	 on	 the	 same	 day,	 Linda	 M.	 Shelley	 and	 John	F.	 Shelley	 executed	 a	

mortgage	 on	 property	 in	 Waterboro	 as	 security	 for	 the	 loan,	 naming	 First	

Magnus	 as	 the	 lender	 and	 Mortgage	 Electronic	 Registration	 Systems,	 Inc.,	 as	

the	 nominee.	 	 Wells	 Fargo	 further	 alleged	 that	 John	 and	 Linda	 deeded	 the	


    1	
    	 The	 court	 (Janelle,	 J.)	 substituted	 MTGLQ	 Investors,	 L.P.,	 as	 the	 plaintiff	 by	 order	 dated	
May	11,	2015.	
2	

property	to	Alley	on	April	26,	2007;	Linda	died	on	June	26,	2011;	and	the	note	

had	been	in	default	since	August	1,	2011.		Alley	answered	the	complaint.2	

          [¶2]	 	 After	 a	 nonjury	 testimonial	 hearing,	 by	 decision	 dated	

March	23,	2016,	 the	 court	 (Driscoll,	 J.)	 entered	 a	 judgment	 of	 foreclosure	 in	

favor	 of	 MTGLQ	 in	 the	 amount	 of	 $268,897.21	 plus	 interest	 and	 fees.	 	 The	

court	denied	Alley’s	request	for	further	findings	of	fact.		See	M.R.	Civ.	P.	52(b).		

Alley	appeals.	

          [¶3]		We	do	not	reach	Alley’s	challenge	to	the	merits	of	the	foreclosure	

determination,	 however,	 because	 we	 conclude	 that	 there	 is	 a	 dispositive	

threshold	 issue	 regarding	 the	 absence	 of	 the	 debtor	 as	 a	 necessary	 party.		

Although	not	raised	before	the	trial	court	or	to	us,	we	may,	sua	sponte,	raise	

the	issue	of	the	absence	of	a	necessary	party	at	any	point	in	the	proceedings.3		

Ocwen	Fed.	Bank,	FSB	v.	Gile,	2001	ME	120,	¶	16,	777	A.2d	275.	

          [¶4]	 	 The	 court	 found—and	 there	 is	 no	 dispute—that	 only	 Linda	

executed	the	note	in	2007	in	favor	of	First	Magnus	(as	noted	above,	both	Linda	


     2	
      	 John	 Shelley	 filed	 a	 response	 to	 the	 complaint	 stating	 that	 he	 claimed	 no	 interest	 in	 the	
property	and	was	not	a	party	to	the	note.		He	did	not	appear	at	the	trial	and	is	not	a	party	to	the	
appeal.		Alley	has	defended	the	action	as	a	party	in	interest.		See	14	M.R.S.	§	6321	(2012)	(providing	
for	the	joinder	of	any	party	in	interest,	including	“mortgagors,	holders	of	fee	interest,	mortgagees,	
lessees	.	.	.	,	lienors	and	attaching	creditors”);	see	also	infra	n.6.	
	
   3	 	 We	 requested	 additional	 briefing	 from	 the	 parties	 regarding	 the	 effect	 of	 the	 absence	 of	 the	

debtor	as	a	party	to	this	foreclosure	action.		Both	parties	submitted	supplemental	briefs	addressing	
this	issue.	
                                                                                                                  3	

and	John	executed	the	mortgage	and	then	purported	to	deed	the	property	to	

Alley).		The	note	was	indorsed	in	blank	and	is	currently	held	by	MTGLQ.		See	

11	M.R.S.	 §§	1-1201(21)(a),	 3-1301	 (2016);	 Bank	of	Am.,	N.A.	 v.	 Greenleaf,	

2014	ME	89,	¶	10	&	n.7,	96	A.3d	700.		A	few	weeks	after	Linda	died	in	2011,	

the	note	went	into	default.		The	record	contains	no	intimation	or	evidence	that	

the	obligations	of	the	note	were	ever	taken	over	by	any	other	party.4		In	short,	

this	litigation	is	missing	a	debtor	(presumably,	the	Estate	of	Linda	Shelley).5	

        [¶5]	 	 Maine	 Rule	 of	 Civil	 Procedure	 19(a)	 “requires	 joinder	 of	 all	

available	persons	who	have	an	interest	in	the	litigation	so	that	any	judgment	

will	 effectively	 and	 completely	 adjudicate	 the	 dispute.”	 	 Gile,	 2001	 ME	 120,	

¶	14,	777	A.2d	275	(quotation	marks	omitted).		Thus,	a	necessary	party	is	one	

whose	absence	prevents	the	court	from	finally	determining	the	matter	before	

it,	 see	 id.	 ¶	 12:	 “Joinder	 is	 required	 in	 circumstances	 where	 the	 absence	 of	


   4		We	are	not	persuaded	by	MTGLQ’s	argument	that	Alley	should	be	deemed	to	have	assumed	the	

obligations	 of	 the	 note	 by	 accepting	 the	 deed	 to	 the	 property	 in	 violation	 of	 the	 provisions	 in	 the	
mortgage	 and	 note	 allowing	 the	 lender	 to	 accelerate	 the	 note	 if	 the	 property	 was	 transferred	
without	the	lender’s	prior	written	consent.		Alley	was	not	a	party	to	either	the	note	or	the	mortgage	
and	 is	 therefore	 not	 bound	 by	 their	 terms.	 	 See	 Sullivan	 v.	 Porter,	 2004	ME	134,	 ¶¶	 11,	 13,	
861	A.2d	625	 (stating	 that	 “the	 party	 seeking	 to	 enforce	 the	 contract	 must	 establish	 .	.	 .	 that	 the	
parties	 did	 enter	 into	 a	 contract,”	 including	 the	 parties’	 “mutual[]	 assent	 to	 be	 bound	 by	 all	 its	
material	terms”).		MTGLQ	also	offers	no	authority	for	any	mechanism	by	which	a	party	can	be	held	
to	be	a	de	facto	debtor	in	these	circumstances.	
	
   5		This	is	unlike	a	party’s	failure	to	defend	an	action,	which	could	give	rise	to	a	default	judgment.		

See	 M.R.	 Civ.	 P.	 55.	 	 Neither	 Linda’s	 Estate	 nor	 any	 other	 debtor	 was	 ever	 named	 as	 a	 party	 or	
provided	notice	of	the	action.		 See	Stoops	v.	Nelson,	2013	ME	27,	¶	19,	61	A.3d	705	(applying	due	
process	requirements	to	foreclosure	proceedings).	
4	

unnamed	 parties	 would	 prevent	 a	 judgment	 from	 fully	 adjudicating	 the	

underlying	 dispute,	 expose	 those	 who	 are	 already	 parties	 to	 multiple	 or	

inconsistent	 obligations,	 or	 prejudice	 the	 interests	 of	 absent	 parties,”	

Muther	v.	 Broad	 Cove	 Shore	 Ass’n,	 2009	 ME	 37,	 ¶	 9,	 968	 A.2d	 539.	 	 See	 Gile,	

2001	ME	120,	¶	21,	777	A.2d	275	(“If	joinder	of	a	directly	interested	party	is	

possible,	 then	 joinder	 is	 mandatory.”).	 	 Whether	 a	 party	 is	 necessary	 to	 the	

litigation	 therefore	 depends	 on	 what	 elements	 of	 proof	 must	 be	 established,	

based	 on	 the	 cause	 of	 action	 alleged	 in	 that	 particular	 litigation.	 	 See	

Housing	Sec.,	Inc.	v.	Me.	Nat’l	Bank,	391	A.2d	311,	315	(Me.	1978).	

      [¶6]	 	 Among	 the	 necessary	 elements	 for	 foreclosure	 in	 Maine	 are	 the	

plaintiff’s	 proof,	 by	 a	 preponderance	 of	 the	 evidence,	 of	 both	 “a	 breach	 of	

condition	 in	 the	 mortgage”	 and	 “the	 amount	 due	 on	 the	 mortgage	 note,	

including	 any	 reasonable	 attorney	 fees	 and	 court	 costs.”	 	 Greenleaf,	

2014	ME	89,	 ¶	 18,	 96	 A.3d	 700;	 see	 U.S.	 Bank,	 N.A.	 v.	 Tannenbaum,	

2015	ME	141,	¶	9,	126	A.3d	734.		Here,	as	in	most	foreclosure	cases,	MTGLQ	

alleged—and	the	court	found—that	the	mortgage	was	breached	by	the	default	

on	 the	 payment	 obligations	 of	the	 note.	 	 The	 crux	 of	 the	 dispute	 is	 therefore	

whether	and	to	what	extent	the	debtor	met	her	contractual	obligations	to	the	

bank	(i.e.,	those	set	out	in	the	note).		Although	a	person	with	an	interest	in	the	
                                                                                                                   5	

property	subject	to	the	mortgage	has	standing	to	defend	the	matter	by	virtue	

of	her	interest	in	the	property,	see	14	M.R.S.	§	6321	(2012),6	the	person	with	

an	interest	in	the	property	is	unable	to	do	so	effectively	as	to	the	nonpayment	

on	the	note	because	the	person	is	not—and,	as	here,	may	never	have	been—a	

party	 to	 the	 note.	 	 The	 inability	 of	 a	 court	 to	 properly	 adjudicate	 the	 issues	

embedded	in	a	foreclosure	action	without	the	debtor	is	made	even	more	clear	

in	this	case	because	the	judgment	purports	to	render	John	Shelley—who	is	not	

the	 obligor	 on	 the	 note—liable	 for	 any	 deficiency,	 but	 then	 states	 that	 no	

deficiency	 shall	 issue	 “against	 anyone	 who	 did	 not	 actually	 execute	 a	

promissory	note	or	other	document	creating	an	obligation	to	pay.”	

        [¶7]		Thus,	without	the	debtor—and	more	particularly,	in	the	absence	of	

notice	 to	 the	 debtor	 and	 an	 opportunity	 for	 the	 debtor	 to	 be	 heard,	 see	

infra	n.5—the	 court	 cannot	 fully	 and	 fairly	 decide	 the	 contractual	 dispute	 on	

which	the	creditor’s	entitlement	to	reach	and	sell	the	property	depends.		See	

Gile,	2001	ME	120,	¶	11,	777	A.2d	275	(“We	are	hesitant	to	act	upon	requests	

to	 decide	 issues	 when	 the	 interests	 of	 the	 parties	 to	 the	 appeal	 are	 not	

apparent	and	an	important	party	is	not	before	the	Court.”).		This	is	analogous	

to	the	approach	we	took	in	Gile,	in	which	a	bank	filed	a	complaint	to	foreclose	

   6	 	 Title	 14	 M.R.S.	 §	 6321	 has	 since	 been	 amended,	 but	 not	 in	 any	 way	 that	 affects	 this	 appeal.		

See	P.L.	2015,	ch.	229,	§	1	(effective	Oct.	15,	2015);	P.L.	2013,	ch.	555,	§	2	(effective	Aug.	1,	2014).	
6	

on	property	that	was	also	subject	to	a	municipal	tax	lien.		Id.	¶¶	3-4.		While	the	

litigation	was	pending,	a	successor	bank	 attempted	 to	 pay	 the	 town	 the	 past	

due	taxes	and	associated	interest	and	fees.		Id.	¶	6.		We	held	that	the	town	was	

a	 necessary	 party	 to	 the	 litigation	 because	 both	 “the	 nature	 of	 the	

[mortgagor’s]	remaining	interest	in	the	property”	and	“the	sums	that	may	be	

due	and	owing	to	[the	successor	bank]	cannot	be	finally	determined	until	the	

status	of	the	Town’s	interest	in	the	property	is	resolved.”		Id.	¶	12.		As	in	Gile,	

“the	 sums	 that	 may	 be	 due	 and	 owing”	 to	 MTGLQ	 by	 virtue	 of	 the	 alleged	

default	 on	 the	 note	 “cannot	 be	 finally	 determined”	 until	 the	 debtor	 or	 her	

successor	has	an	opportunity	to	defend	the	allegation	of	her	nonpayment.		Id.	

      [¶8]		We	therefore	conclude	that	the	debtor	is	a	necessary	party	to	this	

foreclosure	 action.	 	 Because	 the	 debtor	 was	 not	 named	 as	 a	 party	 in	 this	

matter,	we	vacate	the	judgment	and	remand	with	instructions	to	dismiss	the	

matter	without	prejudice.	

      The	entry	is:	

                   Judgment	vacated.		Remanded	with	instructions	
                   to	dismiss	the	matter	without	prejudice.		
	
	     	      	     	      	      	
	                         	
                                                                      7	

Robert	L.	Guillory,	Esq.,	Saco,	for	appellant	Shelley	Alley	
	
James	L.	Audiffred,	Esq.,	Saco,	for	appellee	MTGLQ	Investors,	L.P.	
	
	
Springvale	District	Court	docket	number	RE-2013-221	
FOR	CLERK	REFERENCE	ONLY	
