Wilmington Savings Fund Society, FSB v. Matthew J. Needham

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2019 ME 42
Docket: And-18-313
Argued: March 4, 2019
Decided: March 14, 2019

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


WILMINGTON SAVINGS FUND SOCIETY, FSB

v.

MATTHEW J. NEEDHAM et al.


PER CURIAM

[¶1] Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, not

individually but as Trustee for Hilldale Trust, appeals from a judgment in favor

of Matthew J. Needham1 entered in the Superior Court (Androscoggin County,

MG Kennedy, J.) after a bench trial on Wilmington’s foreclosure complaint. For

the reasons discussed below, we vacate the judgment and remand the matter

for entry of judgment for Wilmington.

I. CASE HISTORY

[¶2] The following facts are undisputed. In August 2005, Needham

signed a promissory note in favor of EquiFirst Corporation that was secured by

1 In addition to Needham, Nicole L. Leighton is a named defendant in this matter. She has not

participated in this appeal. For the sake of clarity, Needham will be referred to individually
throughout this opinion.
2

a mortgage on his real property situated in Auburn. Needham defaulted on that

loan in August 2014 when he stopped making the required payments. In

September 2016, loan servicer BSI Financial Services sent Needham a notice of

the right to cure on behalf of Ventures Trust2—the then-holder of the note and

mortgage by virtue of assignment—as required by 14 M.R.S. § 6111(1) (2018).

Ventures Trust thereafter filed a foreclosure complaint in January 2017.

[¶3] In December 2017, Ventures Trust filed a motion seeking to

substitute Wilmington Savings Fund, FSB, as plaintiff because it had transferred

the mortgage and note by assignment to Wilmington, as trustee for Hilldale

Trust, in October 2017. The motion was granted in January 2018.

[¶4] A short bench trial was held in April 2018, after which Needham

stipulated that Wilmington’s complaint and filings were proper, its various

exhibits were admissible, and he had in fact defaulted under the terms of the

note and mortgage. The parties agreed that the only issue to be decided by the

court was whether 14 M.R.S. § 6111(1) requires a mortgagee itself—and not its

loan servicer acting as its agent—to send the notice of the right to cure.

Resolution of that question would be dispositive of the case. In lieu of

2 The complete designation of Ventures Trust is “Ventures Trust 2013-I-H-R by MCM Capital

Partners, LLC, its trustee.”
3

presenting their arguments at trial, the parties agreed to submit written

arguments.

[¶5] The court entered judgment for Needham on July 10, 2018. In its

judgment, the court explained:

The clearest guidance available to this [c]ourt in deciding this
issue is the oft-repeated mandate that a plaintiff seeking a
judgment of foreclosure must strictly comply with statutory
requirements. See, e.g., [Bank of Am., N.A. v.] Greenleaf, 2014 ME 89,
¶ 18, 96 A.3d 700; [Chase Home Fin. LLC v.] Higgins, 2009 ME 136,
¶ 11, 985 A.2d 508; Camden Nat’l Bank v. Peterson, 2008 ME 85,
¶ 21, 948 A.2d 1251. Section 6111 plainly requires notice to be
“given by the mortgagee.” 14 M.R.S.A. § 6111(1). The term
“mortgage servicer” appears elsewhere in section 6111, e.g., id.
§ 6111(1-A)(D), (E), indicating the Legislature recognizes that a
servicer is a distinct entity from a mortgagee. The Legislature has
not designated loan servicers as entities that can send notice to
mortgagors in satisfaction of section 6111.

Absent any indication from the Law Court or the Legislature
that an exception may be made when a loan servicer sends notice
on behalf of a mortgagee, this [c]ourt finds, under a strict
interpretation of the statute, that notice must be sent by the
mortgagee. In this case, because notice was not sent by the
mortgagee, but rather by the loan servicer, the notice was
insufficient to satisfy the requirements of section 6111. Thus,
Plaintiff has not satisfied its burden to provide evidence of each of
the elements of proof necessary to support a judgment for
foreclosure. Judgment will be entered for Defendants.

[¶6] Wilmington timely appealed. M.R. App. P. 2B(c)(1).
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II. LEGAL ANALYSIS

[¶7] Wilmington argues that the court’s judgment ignores the common

law principles of agency, as well as the plain language and legislative purpose

of section 6111.

A. Agency in Common Law

[¶8] “Agency is the fiduciary relationship which results from the

manifestation of consent by one person to another that the other shall act on

his [or her] behalf and subject to his [or her] control, and consent by the other

so to act.” Libby v. Concord Gen. Mut. Ins. Co., 452 A.2d 979, 981 (Me. 1982).

Generally, “[a] person . . . subject to a duty[] to perform an act . . . can properly

appoint an agent to perform the act . . . unless public policy or the agreement

with another requires personal performance.” Restatement (Second) of Agency

§ 17 (Am. Law Inst. 1958); see also Restatement (Third) of Agency § 3.04 cmt. c

(Am. Law Inst. 2006) (“A person may delegate performance of an act if its legal

consequences for that person are the same whether the act is performed

personally or by another.”); Stenzel v. Dell, Inc., 2005 ME 37, ¶ 37, 870 A.2d 133

(quoting Restatement (Second) of Contracts § 318(1) (Am. Law Inst. 1981))

(“An obligor can properly delegate the performance of his duty to another

unless the delegation is contrary to public policy or the terms of his promise.”).
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[¶9] With that background, this appeal presents three questions:

(1) whether the loan servicer, BSI, was acting as an agent of the mortgagee at

the time it sent the notice of the right to cure to Needham; (2) whether the

mortgage contract requires personal performance by the mortgagee when

sending such a notice; and (3) whether section 6111 abrogates the common law

so that, regardless of the existence of an agency relationship, the mortgagee

itself must send the notice.

[¶10] The answer to the first question is implicit in the narrow scope of

the issue presented to the trial court by agreement of the parties. The parties

asked the court to determine whether a loan servicer may give a notice of the

right to cure on behalf of a mortgagee pursuant to section 6111(1), but—as the

parties confirmed at oral argument—did not dispute that BSI was a loan

servicer acting on behalf of the mortgagee in this case. Therefore, by definition,

BSI was acting as the mortgagee’s agent. Thus, the dispositive issues presented

here are entirely questions of law. We address the other two questions in turn.

B. Agency and the Mortgage Contract

[¶11] The court made the following supported findings regarding the

mortgage contract:

While not dispositive here, the mortgage contract in this case
similarly requires notice of default and right to cure to be sent by
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the “Lender.” The mortgage’s definition of “Lender” includes “any
Person who takes ownership of the Note and this Security
Instrument.” “Loan Servicer” is separately defined as “[t]he entity
that collects . . . Periodic Payments due under the Note and this
Security Instrument and also performs other mortgage loan
servicing obligations under the Note, this Security Agreement and
Applicable Law.” Clearly, the mortgage contemplates that the
Lender and the Loan Servicer are not the same entity.

(alterations in original) (citations omitted).

[¶12] When “the language of a contract is unambiguous, we review that

contract de novo as a question of law.” Williams v. Williams, 2017 ME 94, ¶ 9,

161 A.3d 710. While the court was correct that the lender and the loan servicer

are defined as distinct entities in the mortgage contract, the language of the

mortgage contract does not require personal performance by the mortgagee

when giving notice, and it is not a contractual duty that is deemed nondelegable

by public policy. Cf. Pinkham v. Libbey, 93 Me. 575, 577, 45 A. 823 (1900) (“[A]

contract for personal services involving the exercise of individual skill and

judgment . . . can be performed only by the person named.”).

[¶13] Looking to the terms of the mortgage contract, Needham does not

suggest any difference in legal effect when an otherwise valid notice is sent by

a lender’s agent and not the lender itself. We therefore conclude that the

mortgage contract does not prohibit the mortgagee from delegating to its agent

loan servicer the mortgagee’s duty to send the notice of the right to cure.
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C. Agency and Section 6111

[¶14] Title 14 M.R.S. § 6111(1) prohibits enforcement of a residential

mortgage until thirty-five days after written notice of the right to cure “is given

by the mortgagee to the mortgagor.” The court determined that because other

subsections of the statute, see id. § 6111(1-A)(D)-(E), differentiate between

mortgagees and loan servicers, the Legislature did not intend to designate

servicers as entities that can send notice to mortgagors.

[¶15] “We interpret the meaning of a statute de novo by analyzing its

plain language . . . .” Bank of Am., N.A. v. Cloutier, 2013 ME 17, ¶ 12, 61 A.3d 1242.

“A plain language interpretation should not be confused with a literal

interpretation . . . . Rather, courts are guided by a host of principles intended to

assist in determining the meaning and intent of a provision even within the

confines of a plain language analysis.” Dickau v. Vt. Mut. Ins. Co., 2014 ME 158,

¶ 20, 107 A.3d 621.

[¶16] When analyzing the interplay between section 6111(1) and the

common law of agency we look to “the well-established rule of statutory

construction that the common law is not to be changed by doubtful implication

[or] be overturned except by clear and unambiguous language, and that a

statute in derogation of it will not effect a change thereof beyond that clearly
8

indicated either by express terms or by necessary implication.” Batchelder v.

Realty Res. Hosp., LLC, 2007 ME 17, ¶ 23, 914 A.2d 1116; see also Maietta

Constr., Inc. v. Wainwright, 2004 ME 53, ¶ 10, 847 A.2d 1169 (“Generally,

Legislatures are deemed to draft legislation against the backdrop of the

common law, and do not displace it without directly addressing the issue.”).

Also informing our interpretation of section 6111(1) is the directive from the

Legislature that, “unless such construction is inconsistent with the plain

meaning of the enactment . . . . [w]hen an act that may be lawfully done by an

agent is done by one authorized to do it, his principal may be regarded as having

done it.” 1 M.R.S. § 71(1) (2018).

[¶17] Although section 6111 distinguishes between mortgagees,

mortgage servicers, and agents of mortgagees in its various subsections, there

is no clear statement or necessary implication that the Legislature intended to

abrogate the long-established principles of agency by simply stating that notice

“is given by the mortgagee.” Accord U.S. Bank Trust, N.A. v. Jones, 330 F. Supp.

3d 530, 536 (D. Me. 2018), appeal filed No. 18-1719 (1st Cir. Aug. 1, 2018)

(“[S]uch a narrow interpretation [of section 6111(1)] ignores well established

agency principles without any indication that the Maine Legislature intended

this result.”). Nor does the plain meaning of the statute suggest that the
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Legislature intended to depart from its general rule of statutory construction

that a principal is legally regarded as having done an act that was done on its

behalf by its agent acting within the scope of its authority.

[¶18] This interpretation is consistent with the purpose of the statute,

which is to prevent the unnecessary loss of a mortgagor’s home, and does not

alter our mandate that lenders must strictly comply with its requirements.

Bank of Am., N.A. v. Greenleaf, 2014 ME 89, ¶ 31, 96 A.3d 700; Sinclair v. Sinclair,

654 A.2d 438, 440 (Me. 1995). Moreover, Needham does not—and seemingly

cannot—suggest any legal or practical difference between an agent loan

servicer giving the notice on behalf of the mortgagee and the mortgagee itself

giving the notice. On the other hand, his suggested interpretation—which the

trial court adopted—is so narrow that it would prohibit even an attorney from

giving a notice of the right to cure on behalf of a mortgagee client. We cannot

say that the Legislature intended such a constricted reading. Accordingly, we

conclude that a mortgagee may delegate to an agent—such as a loan servicer—

its duty to provide a notice of the right to cure pursuant to section 6111(1).

D. Conclusion

[¶19] Because neither the mortgage contract nor section 6111(1)

prohibited the mortgagee from delegating to an agent loan servicer its duty to
10

give a notice of the right to cure to Needham, we vacate the court’s decision and

remand the matter for entry of judgment for Wilmington.

The entry is:

Judgment vacated. Remanded for further
proceedings consistent with this opinion.



Catherine R. Connors, Esq., and John J. Aromando, Esq., Pierce Atwood LLP,
Portland, and Nicholas A. Danella, Esq. (orally), Bradley Arant Boult Cummings
LLP, Birmingham, Alabama, for appellant Wilmington Savings Fund Society,
FSB

John D. Clifford, IV, Esq. (orally), Clifford & Golden, P.A., Lisbon Falls, for
appellee Matthew J. Needham

Ryan P. Dumais, Esq., Eaton Peabody, Brunswick, for amicus curiae Maine
Bankers Association

Brett R. Leland, Esq., and Jonathan M. Dunitz, Esq., Verrill Dana, Portland, for
amicus curiae Maine Association of Mortgage Professionals


Androscoggin County Superior Court docket number RE-2017-3
FOR CLERK REFERENCE ONLY