Wells Fargo Bank, N.A. v. Jeffrey White

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2015 ME 145
Docket: And-14-547
Submitted
On Briefs: September 28, 2015
Decided: November 12, 2015
Panel: ALEXANDER, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
WELLS FARGO BANK, N.A.
v.
JEFFREY WHITE
JABAR, J.
[¶1] After consenting in January 2014 to the entry of a foreclosure judgment
in favor of Wells Fargo Bank, N.A., Jeffrey White moved in September 2014 for
relief from that judgment. Jeffrey now appeals from an order of the District Court
(Lewiston, Oram, J.) denying his motion for relief. Jeffrey argues that the court
abused its discretion by denying relief pursuant to M.R. Civ. P. 60(b)(1) because,
at the time that he consented to the judgment, he mistakenly believed that Wells
Fargo possessed standing to foreclose. Jeffrey also contends that the court erred by
denying relief pursuant to M.R. Civ. P. 60(b)(4) because the judgment is void due
to Wells Fargo’s failure to prove the elements of standing. We reject these
contentions and affirm.
2
I. BACKGROUND
[¶2] On July 13, 2011, Wells Fargo filed a foreclosure complaint against
Jeffrey that alleged the following facts: On April 11, 2007, Jeffrey executed and
delivered to Cornerstone Home Loans, LLC, (Cornerstone) a promissory note for
$262,500. To secure the note, Jeffrey executed and delivered to Mortgage
Electronic Registration Systems, Inc. (MERS), as nominee for Cornerstone, a
mortgage on real property located in Mechanic Falls. MERS thereafter assigned its
interest in the mortgage to Wells Fargo. Wells Fargo’s complaint did not allege,
and its foreclosure mediation information did not include, evidence that Wells
Fargo acquired any interest in Jeffrey’s mortgage other than the interest that it
obtained from MERS.
[¶3] Jeffrey filed a pro se answer to the complaint, asserting, inter alia, that
Wells Fargo was not a holder of the note and therefore lacked standing to
foreclose. In June 2013, an attorney entered an appearance for Jeffrey and
represented Jeffrey throughout the remainder of the case. On January 29, 2014,
based on an agreed-to judgment that was signed by the parties, the court entered a
final judgment of foreclosure and sale that provided Jeffrey with an extended
3
180-day period of redemption.1 Jeffrey did not appeal, and his redemption period
expired in July 2014.
[¶4] On September 9, 2014, Jeffrey moved for relief from judgment
pursuant to M.R. Civ. P. 60(b)(1) and (4). As grounds for relief, Jeffrey alleged
that Cornerstone had not assigned the mortgage to Wells Fargo and that Wells
Fargo had not acquired ownership of the mortgage through its assignment from
MERS. He argued that relief was warranted pursuant to Rule 60(b)(1) because the
parties had mistakenly believed that MERS’s assignment gave Wells Fargo
standing to foreclose, and asserted that the parties could not have realized their
mistake until July 2014, when we issued our decision in Bank of America, N.A. v.
Greenleaf (Greenleaf I), 2014 ME 89, 96 A.3d 700. Jeffrey also argued that Wells
Fargo’s failure to establish standing deprived the court of jurisdiction, rendering
the judgment void and justifying relief pursuant to Rule 60(b)(4).
[¶5] In its objection to Jeffrey’s motion, Wells Fargo asserted that neither
party had been mistaken, and that Jeffrey had simply failed to anticipate the future
course of the law. Wells Fargo further contended that Greenleaf I had “imposed a
new principle of law” and that retroactive application of that law would jeopardize
the finality of an untold number of foreclosure judgments. In reply, Jeffrey argued
1
See 14 M.R.S. § 6322 (2014) (providing a ninety-day period of redemption for mortgages executed
on or after October 1, 1975).
4
that the parties could not have litigated Wells Fargo’s standing before we issued
Greenleaf I, and that res judicata was therefore inapplicable. He also argued that
Greenleaf I should retroactively apply and render the judgment void because such
application would ensure that Maine citizens were vulnerable to a foreclosure
action brought only by a party with standing.
[¶6] After a hearing, the court entered an order denying Jeffrey’s motion.
The court determined that Jeffrey was not entitled to relief pursuant to
Rule 60(b)(1) because the parties had not been mistaken about the facts or the law
regarding standing when they agreed to the entry of judgment. The court found
that Jeffrey had deliberately, and with the advice of counsel, decided not to contest
Wells Fargo’s standing, and concluded that Jeffrey was not entitled to relief from
this deliberate decision. The court also determined that Jeffrey was not entitled to
relief pursuant to Rule 60(b)(4), finding that Jeffrey had both a fair opportunity and
a significant incentive to challenge Wells Fargo’s standing, but failed to do so, and
concluding that the need for finality outweighed the interest in recognizing a
post-judgment attack on Wells Fargo’s standing.
[¶7] Jeffrey timely appealed to us.
5
II. DISCUSSION
A. Rule 60(b)(1) — Mistake
[¶8] “On motion and upon such terms as are just, the court may relieve a
party . . . from a final judgment . . . for the following reasons: . . . mistake,
inadvertence, surprise, or excusable neglect.” M.R. Civ. P. 60(b)(1). When
supported by competent evidence, the court’s decision on a Rule 60(b)(1) motion is
reviewable only for an abuse of discretion. Warren v. Waterville Urban Renewal
Auth., 290 A.2d 362, 365 (Me. 1972).
[¶9] Wells Fargo commenced foreclosure in July 2011, nearly a year after
we determined that a mortgage’s reference to MERS as a “nominee” for the lender
provided no interest in the mortgage other than the right to record it, see
Mortg. Elec. Registration Sys., Inc. v. Saunders, 2010 ME 79, ¶¶ 9-10, 2 A.3d 289,
and more than six months after we advised that a foreclosure defendant could
challenge the plaintiff’s standing if the plaintiff lacked ownership of the mortgage,
see JPMorgan Chase Bank v. Harp, 2011 ME 5, ¶ 9, 10 A.3d 718. When Wells
Fargo filed its complaint, it claimed an interest in Jeffrey’s mortgage solely
through its assignment from MERS. Jeffrey was not mistaken as to this fact and
was represented by counsel who presumably was aware of Saunders and Harp.
Nevertheless, he did not challenge the adequacy of Wells Fargo’s interest in his
mortgage, but consented to the entry of judgment, and did not thereafter appeal.
6
On these facts, we discern no abuse of discretion in the court’s decision to deny
Jeffrey’s Rule 60(b)(1) request.
B. Rule 60(b)(4) — Void
[¶10] On motion brought pursuant to M.R. Civ. P. 60(b)(4), “a court at any
time may relieve a party from a judgment when that judgment is void.” Hamill v.
Bay Bridge Assocs., 1998 ME 181, ¶ 4, 714 A.2d 829. A motion brought pursuant
to Rule 60(b)(4) is not subject to the discretion of the trial court. Id. “The
challenged judgment is either valid or void. If valid, the judgment stands; if void,
it must be set aside.” Id. (quotation marks omitted).
[¶11] “There is a strong policy in favor of ending litigation and giving
finality to court judgments.” Standish Tel. Co. v. Saco River Tel. & Tel. Co.,
555 A.2d 478, 481 (Me. 1989). “Balanced against that policy favoring finality is a
requirement that a judgment, in order to become final, must be valid,”2 id., i.e.,
2
“The more recent trend in the law is to favor finality over an absolute requirement of validity.”
Standish Tel. Co. v. Saco River Tel. & Tel. Co., 555 A.2d 478, 481 (Me. 1989).
The tension between finality and validity of judgments . . . may be resolved by addressing
the following factors as justification for relitigating issues [related to] subject matter
jurisdiction: (1) whether the action of the court was a manifest abuse of authority
(2) whether the action of the court substantially infringes upon the authority of another
tribunal . . . (3) whether the original court lacked capability of making an informed
determination of its jurisdiction and (4) whether procedural fairness dictates a belated
raising of [an issue related to] subject matter jurisdiction.
Northeast Bank N.A. v. Crochere, 438 A.2d 266, 268 n.7 (Me. 1981).
7
entered by a court with jurisdiction over the parties and the subject matter, and the
authority to utilize the process in question, Warren, 290 A.2d at 365.
[¶12] The Vermont Supreme Court has long barred disappointed litigants
from raising the issue of standing post-judgment, ruling that “[a] judgment is not
void on standing or jurisdictional grounds when a party had a prior opportunity to
contest on those grounds but failed to do so.” Donley v. Donley, 686 A.2d 943,
945 (Vt. 1996); see also Citibank, N.A. v. Mumley, No. S1087-09 CnC,
2011 Vt. Super. LEXIS 79, at **5-9 (Vt. Super. Ct. Sept. 1, 2011) (denying
foreclosure defendants’ Rule 60(b)(4) motion raising the issue of standing, and
ruling that the issue was barred from post-judgment attack).
[¶13] Here, Jeffrey alleges that the court lacked jurisdiction over the case
because Wells Fargo lacked standing to bring the action. As we have recently
reiterated, the issue of standing is an issue of justiciability, not jurisdiction. Bank
of Am., N.A. v. Greenleaf (Greenleaf II), 2015 ME 127, ¶¶ 7-8, --- A.3d ---. The
District Court has jurisdiction over foreclosure actions, including Wells Fargo’s
action against Jeffrey. See 14 M.R.S. § 6321 (2014). By waiving the issue of
standing and submitting a consented-to judgment to the court, Jeffrey asked the
court to adjudicate the foreclosure action. The court did not lack jurisdiction over
the parties or the subject matter, did not adjudicate issues beyond the scope of
those submitted for decision, and did not act in a manner inconsistent with due
8
process. Jeffrey’s assertion that the judgment is void is unpersuasive. We discern
no error in the court’s decision to deny Jeffrey’s request for relief pursuant to
Rule 60(b)(4).
The entry is:
Judgment affirmed.
On the briefs:
Jeffrey White, appellant pro se
Daniella Massimilla, Esq., Litchfield Cavo, LLP, Lynnfield,
Massachusetts, for appellee Wells Fargo Bank, N.A.
Lewiston District Court docket number RE-2011-159
FOR CLERK REFERENCE ONLY