MAINE SUPREME JUDICIAL COURT                                        Reporter of Decisions
Decision:    2015 ME 17
Docket:      And-14-142
Submitted
  On Briefs: December 1, 2014
Decided:     February 26, 2015

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



                               CITIMORTGAGE, INC.

                                          v.

                             RONALD CHARTIER et al.

HJELM, J.

         [¶1] Ronald and Amy T. Chartier appeal from a judgment of foreclosure

entered by the District Court (Lewiston, Beliveau, J.) in favor of CitiMortgage, Inc.

after a non-jury trial.    The Chartiers contend that the court erred in entering

judgment against them because the notice of default provided by CitiMortgage did

not satisfy the requirements of the mortgage. We agree and vacate the judgment.

                                 I. BACKGROUND

         [¶2] Viewing the record in the light most favorable to the prevailing party,

CitiMortgage, the following facts were established at trial. See Batchelder v.

Realty Res. Hospitality, LLC, 2007 ME 17, ¶ 3, 914 A.2d 1116. On May 11, 2007,

Amy executed a promissory note in favor of Cornerstone Home Loans. In order to

secure performance under the note, Amy and her husband, Ronald, executed a
2

mortgage in favor of Cornerstone encumbering their residential property in

Lewiston. On May 14, 2007, Cornerstone assigned the mortgage to Mortgage

Electronic Registration Systems, Inc. (MERS).                       At around the same time,

Cornerstone indorsed the note to Merrimack Mortgage Company, Inc., which also

serviced the mortgage. In June 2007 the servicing of the mortgage was transferred

from Merrimack to CitiMortgage, Inc., and Merrimack eventually indorsed the

note to CitiMortgage.1 On December 2, 2008, CitiMortgage sent Amy a letter

notifying her that the loan was in default and that she needed to pay the past due

amount within thirty days in order to cure the default. On December 14, 2009—

more than a year after CitiMortgage sent the notice of default to Amy—MERS

assigned the mortgage to CitiMortgage.2

        [¶3] In February 2010, CitiMortgage filed a complaint in District Court,

alleging that Amy was in default on the secured loan because she had not made any

payments since October 1, 2008, and seeking foreclosure of the mortgage. In their




    1
        No evidence was presented to show when the note was indorsed to CitiMortgage or when
CitiMortgage first obtained possession of the note. However, CitiMortgage did own the note at the time it
filed its complaint.
    2
      The 2007 assignment of the mortgage from Cornerstone to MERS transferred all of Cornerstone’s
rights under the instrument. MERS’s subsequent assignment of its rights to CitiMortgage therefore does
not implicate the standing issues addressed in Bank of America, N.A. v. Greenleaf, 2014 ME 89, ¶¶ 6-17,
96 A.3d 700, where MERS purported to assign greater rights than it held as the nominee of the original
mortgagee.
                                                                                                      3

answer, the Chartiers alleged, among other things, that CitiMortgage failed to

provide a notice of default and right to cure as required by the mortgage.

        [¶4] The case proceeded to trial in January 2014, and on March 11, 2014,

the court entered a judgment of foreclosure for CitiMortgage in the principal

amount of $176,882.46, plus attorney fees and costs.                            The judgment was

accompanied by written findings of fact and conclusions of law, including the

court’s conclusion that the notice of default complied with the terms of the

mortgage. The Chartiers appealed.

                                         II. DISCUSSION

        [¶5] The dispositive inquiry in this case is whether the notice of default sent

by CitiMortgage complied with the conditions in the mortgage instrument. At the

time CitiMortgage sent the notice of default, the statute governing sufficiency of

such notices was 14 M.R.S. § 6111 (2008).3                       The parties stipulated at trial,

however, that, pursuant to 14 M.R.S. § 6111(5)(B), CitiMortgage was exempt from

the requirements of the statute.4 Furthermore, on appeal, CitiMortgage argues that


   3
     Title 14 M.R.S § 6111 was amended in 2009 to change some of the notice requirements. P.L. 2009,
ch. 402, §§ 10-14 (effective June 15, 2009); P.L. 2009, ch. 476, §§ A-2, B-2 (effective Feb. 24, 2010)
(codified at 14 M.R.S. § 6111 (2014)).
   4
      Title 14 M.R.S. § 6111(5)(B) (2008), which has since been repealed, see P.L. 2009, ch. 476, § A-2,
(effective Feb. 24, 2010), provided:

        This section does not apply to . . . [a] mortgage that contains a requirement that a
        reinstatement notice, a notice of right to cure or an equivalent notice be given to the
        mortgagor at least 30 days prior to accelerating the maturity of the unpaid balance of the
4

the notice of default needed to comply only with the terms of the mortgage.

Therefore, neither party has preserved the argument that the notice of default must

meet the requirements of section 6111, see Bangor Sav. Bank v. Richard, 2014 ME

20, ¶ 3, 86 A.3d 1167, and we examine the sufficiency of the notice of default

based only on the requirements of the mortgage, see Bank of Me. v. Hatch, 2012

ME 35, ¶ 10, 38 A.3d 1260.

       [¶6] CitiMortgage contends that the notice of default in this case “fully

complie[d]” with the terms of the mortgage. The Chartiers argue, however, that

CitiMortgage did not satisfy the terms of the mortgage because the mortgage

requires the “lender” to send the notice of default, and CitiMortgage was not the

“lender” as defined in the mortgage. We agree.

       [¶7] Whether, pursuant to the mortgage, CitiMortgage was the “lender,” and

thus the proper party to send the notice of default, is a matter of contract

interpretation. See Kondaur Capital Corp. v. Hankins, 2011 ME 82, ¶¶ 18-19,

25 A.3d 960. “We review the meaning of a contract de novo and interpret an

unambiguous provision according to the plain meaning of its terms.” Id. ¶ 19.




       obligation or otherwise enforcing the mortgage against the mortgagor, if the mortgagee
       gives such a notice to the mortgagor and to any cosigner against whom the mortgagee
       seeks to enforce the obligation secured by the mortgage.

The mortgage in this case contains a provision requiring that notice of default and the right to cure be
given at least 30 days before accelerating payment.
                                                                                                     5

       [¶8] Pursuant to the mortgage, “Lender may require immediate payment in

full,” and subsequently foreclose on the mortgaged property, only if “Lender sends

to [the borrower] . . . a notice” that the borrower is in default. “Lender” is defined

in the mortgage as Cornerstone Home Loans or “any Person who takes ownership

of the Note and this Security Instrument.” (Emphasis added.) That definition is

unambiguous: in order to send a notice of default that complies with the mortgage,

CitiMortgage needed to own both the note and the mortgage. The undisputed

evidence, however, establishes that when CitiMortgage sent the notice of default,

the note and mortgage were owned by separate entities.5 Thus, pursuant to the

terms of the mortgage, CitiMortgage was not a “lender” with authority to send the

notice.

       [¶9] CitiMortgage argues that, when it issued the notice of default, it had

implied authority to act on behalf of MERS, the mortgagee at the time, because it

was the servicer of the mortgage. Even if CitiMortgage was acting as MERS’s

agent, however, the fact remains that when CitiMortgage sent the notice of default,

the note and mortgage were not in common ownership, and no one, including

MERS, was the “lender” as defined in the mortgage.

   5
      When CitiMortgage issued the notice of default in December 2008, MERS owned the mortgage, but
there is no evidence that it owned the note. The indorsements on the note reflect that it was owned by
either by Merrimack or CitiMortgage. The determination of which entity owned the note is not material
to this case, however, because as long as the note was owned by an entity other than MERS, there was no
“lender” as defined in the mortgage.
6

                                         III. CONCLUSION

         [¶10]      The mortgage allowed CitiMortgage to foreclose only if the

conditions regarding the notice of default were met. Because the notice of default

sent to the Chartiers failed to satisfy those conditions, CitiMortgage is not entitled

to a judgment of foreclosure.6

        The entry is:

                           Judgment vacated. Remanded to the District Court
                           for entry of judgment for the Chartiers.



On the briefs:

        Joshua Klein-Golden, Esq., Clifford & Golden, PA, Lisbon
        Falls, for appellants Ronald Chartier and Amy Chartier

        Donald E. Frechette, Esq., Edwards Wildman Palmer LLP,
        Hartford, Connecticut, for appellee CitiMortgage, Inc.



Lewiston District Court docket number RE-2010-29
FOR CLERK REFERENCE ONLY




    6
       Because we vacate the judgment on the ground that CitiMortgage’s notice of default did not comply
with the terms of the mortgage, we need not reach the Chartiers’ alternative argument that the court erred
at trial by admitting, in violation of M.R. Civ. P. 56(d), affidavits that were part of the record associated
with the parties’ cross-motions for summary judgment. We note, however, that the purpose of that Rule
is “to make it unnecessary to controvert facts for purposes of summary judgment solely because of
concern about the possible preclusive effect of any admission of fact at trial or in other subsequent
proceedings.” M.R. Civ. P. 56 Advisory Note to 2011 amend. That purpose is not implicated where, as
here, a trial court considers, but does not give preclusive effect to, sworn affidavits submitted in
connection with a motion for summary judgment.
