Wilmington Savings Fund Society v. York

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STATE OF MAINE SUPERIOR COURT
CUMBERLAND, ss. CIVIL ACTION
DOCKET NO. RE-18-203
WILMINGTON SAVINGS FUND )
SOCIETY, FSB, as trustee of )
STANWlCH MORTGAGE LOAN )
TRUST A, )
)
Plaintiff/ Cross-Claim )
Defendant )
)
v. )
)
DORTHY M. YORK and BARRY )
LAMB, personal representative of the )
estate of WILLIAM F. YORK, ) ORDER ON PARTIES-IN­
) INTEREST CLARE AND
Defendants/ Cross­ ) SCOTT LABRECQUE'S
Claim ) MOTION FOR SUMMARY
Defendant/ Cross­ ) JUDGMENT
Claim Plaintiff )
)
and )
)
CLARE LABRECQUE and SCOTT )
LABRECQUE, )
)
Parties-in­ )
Interest/ Cross­ )
Claim Plaintiff/ Cross­ ) REC'D CIJMB CLERKS OFC
Claim Defendant ) AUG 1 '19 AM8:47
)
and )
)
DEPARTMENT OF THE TREASURY )
- INTERNAL REVENUE SERVICE, )
)
Party-in-Interest. )

Pending before the Court is parties-in-interest/ cross-claim plaintiffs/ cross-claim

defendants Clare and Scott LaBrecque's motion for summary judgment on

plaintiff/ cross-claim defendant Wilmington Savings Fund Society, FSB as Trustee for

Stanwich Mortgage Loan Trust A's (the "Bank") complaint. For the following reasons,

the motion is denied.
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I. Background

On April 20, 2006, William York executed a promissory note to pay Bank of

America, N.A. $690,596.00 and secured it with a mortgage on 26 Castle View Drive,

Yarmouth, Maine (the "Property").' (Pl.'s A.S.M.F. 'l[ 1.) In 2014, Bank of America

endorsed the note in blank and assigned the mortgage on the Property to the Christiana

Trust, A Division of Wilmington Savings Fund Society, FSB, not in its individual capacity

but as Trustee of ARLP Trust 3. (Pl.'s A.S.M.F. 'l[ 3.) On February 1, 2016, this assignment

was rescinded by Bank of America. (Pl.'s A.S.M.F. 'l[ 4.) On July 14, 2017, the mortgage

was assigned to Plaintiff Bank. (Pl.'s A.S.M.F. 'l[ 5.) Defendant Dorothy York and William

York owned the Property as joint tenants by virtue of their deed dated May 25, 2005. (PIIs'

S.M.F. 'l[ 10.)

In late 2010, William York obtained a loan for $204,446 from the LaBrecques and

secured it with a mortgage on the Property. (Pl.'s A.S.M.F. 'l[ 2.) On April 15, 2015, the

LaBrecques obtained a judgment for foreclosure and sale against William York. (Pl.'s

A.S.M.F. 'l[ 6.) The LaBrecques thereafter purchased William York's interest in the

Property. (Pl.'s A.S.M.F. 'l[ 9.) Their deed provides that they own a 50% undivided interest

in the Property which is "subject to a first mortgage of record recorded in said

Cumberland County Registry of Deeds Book 23876 Page 72." (Pl.'s A.S.M.F. 'l[ 10.) The

first mortgage of record referenced in the LaBrecques' deed is the mortgage on which the

Bank is attempting to foreclose in this action. (Pl.'s A.S.M.F. 'l[ 11.)

On November 29, 2016, William York died. (PIIs' S.M.F. 'l[ 12.) Currently, Dorothy

York and the LaBrecques are the owners of the Property. (PIIs' S.M.F. 'l[ 14.) The Bank has

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William York was the sole borrower under the promissory note and was listed as the sole borrower on
the mortgage as well as being listed as an owner. (P!Is' S.M.F. 'l['l[ 4-9.) Defendant Dorothy York was not
listed on the promissory note and was not listed as a borrower on the mortgage but was listed as an owner
of the Property on the mortgage. (Plls' S.M.F. 'l['l[ 4-9.)

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commenced a foreclosure action on the mortgage and promissory note that were secured

by the Property. (PIIs' S.M.F. 'l['l[ 1-9.)

The Bank filed its complaint for foreclosure on August 13, 2018 and an amended

complaint on January 28, 2019. The LaBrecques filed an answer to the Bank's complaint

and a counterclaim for unjust enrichment against the Bank on September 6, 2018, and

they filed an answer to the Bank's amended complaint on March 6, 2019. The Bank filed

an answer to the LaBrecques' counterclaim on September 26, 2018.

The LaBrecques filed the instant motion for summary judgment against the Bank

on March 11, 2019. The Bank filed an opposition on March 28, 2019, and the LaBrecques

filed a reply on April 5, 2019.

II. Standard of Review

Summary judgment is granted to a moving party where "there is no genuine issue

as to any material fact" and the moving party "is entitled to judgment as a matter of law."

M.R. Civ. P. 56(c). "A material fact is one that can affect the outcome of the case, and there

is a genuine issue when there is sufficient evidence for a fact-finder to choose between

competing versions of the fact." Lougee Conservancy v. CityMortgage, Inc., 2012 ME 103, 'l[

11, 48 A.3d 774 (quotation omitted). To survive a defendant's motion for summary

judgment, the plaintiff must establish a prima fade case for every element of the

plaintiff's cause of action. See Savell v. Duddy, 2016 ME 139, 'l[ 18, 147 A.3d 1179.

On summary judgment, the court considers reasonable inferences that may be

drawn from the facts. Curtis v. Porter, 2001 ME 158, 'l[ 9, 784 A.2d 18. Additionally, the

nonmoving party benefits from all "favorable inferences that may be drawn from the

facts presented." Id. (quotation marks omitted). "When facts or reasonable inferences are

in dispute on a material point, summary judgment may not be entered." Id.

III. Discussion
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The LaBrecques bring this motion for summary judgment to preclude the Bank

from foreclosing on their undivided 50% interest in the Property as a matter of law. The

LaBrecques argue that the note and mortgage on which the Bank is attempting to

foreclose were executed solely by William York and because that debt belonged solely to

William York, who is no longer an owner of the Property due to his death, the Bank's

proper course to satisfy the debt owed to them is through a claim on William York's estate

in probate court. To support their position, the LaBrecques point to Virginia case law

which they believe to be the controlling law in this proceeding. The Bank argues that

Maine law applies in this case and that because the LaBrecques' mortgage was junior to

the Bank's mortgage, the Bank may foreclose on the entire property, not just on Dorothy

York's 50% interest.

A. Choice of Law

"When a contract contains a choice of law provision, [Maine] generally will

interpret the contract under the chosen state's laws." Stenzel v. Dell, Inc., 2005 ME 37, 'I[ 7,

870 A.2d 133. Based on a choice of law provision' in the Bank's mortgage, the LaBrecques

contend that Virginia law controls the substantive issues in this case, while the Bank

argues that Maine law should apply. To support its argument, the Bank notes that the

choice of law provision states, in part:

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The choice of law provision reads as follows:

With respect to procedural matters related to the perfection and enforcement of Lender's
rights against the Property, this Security Instrument will be governed by federal law
applicable to Lender and to the extent not preempted by federal law, the laws of the State
of Maine. In all other respects, the Security Instrument will be governed by federal law
applicable to Lender and, to the extent not preempted by federal law, the laws of the
Commonwealth of Virginia without regard to its conflicts of law provisions. However, if
there ever is a question about whether any provision of this Security Instrument is valid or
enforceable, the provision that is questioned will be governed by whichever state or federal
law would find the provision to be valid and enforceable.

(Flis' S.M.F., Ex. B, p. 4.)

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[I]f there ever is a question about whether any provision of
this Security Instrument is valid or enforceable, the provision
that is questioned will be governed by whichever state or
federal law would find the provision to be valid and
enforceable.

(Pl.'s Opp. S.M.F. 'l['l[ 17-18.) Based on this language, the Bank contends that because the

LaBrecques are challenging the Bank's right to foreclose under the mortgage, even if

Virginia law prohibited foreclosure under the facts of this case, the Court would be

required to look to the laws of another state, such as Maine, for authority of the Bank to

foreclose.

The Court finds the quoted language is invalid. Maine "will enforce a contractual

choice of law provision unless either (a) the chosen state has no substantial relationship

to the parties or the transaction and there is no other reasonable basis for the parties'

choice, or (b) the application of the law of the chosen state would be contrary to a

fundamental policy of a state which has a materially greater interest than the chosen state

in the determination of the particular issue." Schroeder v. Rynel, Ltd., 1998 ME 259, 'l[ 8, 720

A.2d 1164. This provision asks the Court not to look to the relationship that a state has to

the parties or the litigation, but rather to the effect a state's law has on the outcome of the

proceeding. This violates Maine's law regarding conflicts of law.

The valid portion of the choice of law provision states that Virginia law will apply

except when preempted by federal law or with respect to procedural matters. (PIIs' S.M.F.

'l['l[ 17-18.) Thus, assuming no federal preemption, whether Maine or Virginia law applies

depends on whether the issue presented is substantive or procedural. The Bank is seeking

to enforce the mortgage signed by William York, which is a substantive right. The

LaBrecques are seeking to preclude the Bank from pursuing the foreclosure because they

believe the Bank must seek recovery through William York's probate estate, which is a

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procedural issue. The Court finds that the issue at the heart of this case is the enforcement

of the Bank's right to foreclose on the Property. Therefore, Virginia law applies.

B. Foreclosure

The LaBrecques cite the case Dolby v. Dolby, 694 S.E.2d 635 (Va. 2010), for the

proposition that the Bank cannot foreclose on the LaBrecques' 50% undivided interest in

the Property. However, Dolby does not address the foreclosure rights of a mortgage

holder, but rather it is a probate case that addresses whether a mortgagor's estate is

responsible for mortgage payments when the mortgagor dies or whether the

responsibility runs with the property. See Dolby, 694 S.E.2d at 636-37. While William

York's estate may be liable for payments on the mortgage, this does not affect the Bank's

right to foreclose on the Property as long as the Bank has complied with Maine's

foreclosure requirements. See 14 M.R.S. §§ 6321-6325 (2018).

Virginia is a race-notice state. See Va. Code§ 55-96 (2018). "As such, it adheres to

a first in time, first in right priority scheme. The first to properly record a lien against real

property with the Clerk's Office of the applicable jurisdiction has priority over

subsequently recorded liens." Cruickshanks v. Pemberton Oaks Townhouse Ass'n, 512 B.R.

814, 818-19 (Bankr. E.D. Va. 2014). Furthermore, "[w]hen a foreclosure occurs, the sale

proceeds are used to pay off lien holders in the downstream order of their priority, with

the upstream lienholder remaining unaffected." Atl. Tr. Servs., LLC v. Cortez, 2018 Va. Cir.

LEXIS 4, at *14 (Cir. Ct. Jan. 10, 2018).

The LaBrecques owned a mortgage that was junior to that of the Bank's mortgage

on the Property. (PL's A.S.M.F. '![ 7.) The LaBrecques foreclosed on their mortgage and

obtained a judgment of foreclosure and sale. (Pl.'s A.S.M.F. '![ 6.) That judgment states

that the "LABRECQUES are junior mortgage holders" and "Christina [sic] Trust is a

priority mortgage holder." (Pl.'s A.S.M.F. '![ 7.) The judgment of foreclosure and sale
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further states that the "LABRECQUES (through its agents or attorneys) shall proceed

with a sale of YORK'S interest in the real estate ... free and clear of all liens, except senior

to LABRECQUES." (PL' s A.S.M.F. 'l[ 8.) The LaBrecques purchased the interest in William

York's estate that they foreclosed on through a quitclaim deed without covenant. (PL's

A.S.M.F. 'l[ 9.) The LaBrecques' deed states that they received a "fifty (50%) percent

undivided interest in the property" that was "subject to a first mortgage of record." (PL' s

A.S.M.F. 'l[ 10.) The first mortgage of record referred to in the LaBrecques's deed was the

Bank's mortgage. (PL's A.S.M.F. 'l[ 11.)

The Bank is not precluded from foreclosing on the entire estate, as the LaBrecques'

deed was subject to the Bank's mortgage. See Fox v. Templeton, 329 S.E.2d 6, 9 (Va. 1985).

IV. Conclusion

For the foregoing reasons, Parties-in-Interest Clare and Scott LaBrecques' Motion

for Summary Judgment is DENIED.

The Clerk is directed to incorporate this Order into the docket by reference

pursuant to Maine Rule of Civil Procedure 79(a).

Dated: -----'-(LL.'-/;_,__/1--'/;___,,cz_ _
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Plaintiff-Ian Brown,_ E~q. dy Esq.
York-Wilham Kenne '
~!
~ p~~~:ques-Maura Horodyski, Esq.
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Plls IRS-Andrew Lizotte, Esq.
PR Lamb-Pro Se Entered on the Docket:_% /
'f{vc

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