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EIGHTH DISTRICT COURT

Located at Lewiston
Docket No. LEW-RE-14-041

STATE OF MAINE
ANDROSCOGGIN, ss.

FRT 2011-1 TRUST,


Plaintiff,
v.
RODNEY POULIN,
Defendant.

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ORDER

This foreclosure action was before the court on March 16, 2016, for final hearing on
PlaintiffFRT 2011-1 Trust's Complaint for Foreclosure by Civil Action dated February 12,
2014, and served on Defendant Rodney Poulin on April 14, 2014. 1 At the final hearing, Plaintiff
was represented by John A. Doonan, Esq., and Defendant was represented by Thomas A. Cox,
Esq. The parties stipulated to the admission of a portion of Plaintiffs exhibits; stipulated to
submit written objections/argument and written responses/argument regarding Plaintiffs
remaining exhibits; and stipulated that the court could decide the issues in this action "on the
papers" after ruling on the admission of the disputed exhibits. Pursuant to the parties'
stipulations, the court admitted Plaintiffs Exhibit nos. 1, 2, 10 - 13, 15 - 17, and 19 into
evidence. After review of the parties' written objections and responses, the court admitted
Plaintiffs Exhibit nos. 3-9 and 14 into evidence.
In its submission, Plaintiff conceded that the subject note and mortgage are held by
separate entities. Nevertheless, citing the Uniform Commercial Code, 11 M.R.S. 9-1203 (7),
and Culhane v. Aurora Loan Servs. of Nebraska, 708 F.3d 282, 292 (1st Cir. 2013), Plaintiff
asserted that the subject note in this matter was transferred to Plaintiff by both endorsement and
delivery, therefore the mortgage also transferred to Plaintiff. Plaintiff further contends that in a
title theory state, an equitable trust is implied by law, pursuant to which the title to the subject
mortgage is held in trust by the holder of the note.
Because a mortgage note is a negotiable instrument, 11 M.R.S. 3-1104(1), the
enforceability of the plaintiffs interest in the note is governed by Maine's Uniform Commercial
Code (U.C.C.), 11 M.R.S. 3-1301. Wells Fargo Bank, NA. v. Burek, 2013 ME 87, ~ 18, 81
A.3d 330; see 11 M.R.S. 1-1101(1). Section 3-1301 permits a party to enforce a note if it is the
"holder" ofthe note. 11 M.R.S. 1-1201(5), (2l)(a); 11 M.R.S. 3-1301(1). However, the
interest in the note is only part of the standing analysis, to be able to foreclose, a plaintiff must
also show the requisite interest in the mortgage. Bank ofAmerica, NA . v. Greenleaf, 2014 ME

At the time of the final hearing, Plaintiffs Motion for Substitution of Plaintiff filed on
March 7, 2016, was pending. The motion sought to substitute WestVue NPL Trust II as the
plaintiff in this foreclosure action based on an assignment of mortgage dated April 28, 2015, and
recorded in the Androscoggin County Registry of Deeds on October 13,2015, in Book 9230,
Page 290.

89, ~ 12. This means that to have standing to foreclose, after demonstrating an interest in the
mortgage note, a plaintiff also must "establish ownership of the mortgage." Id.
Under Maine's foreclosure statute, "a mortgagee is a party that is entitled to enforce the
debt obligation that is secured by a mortgage." Mortgage Electronic Registration Systems, Inc.
v. Saunders, 2010 ME 79, ~ 11,2 A.3d 289. In Saunders, Mortgage Electronic Registration
Systems, Inc. ("MERS") was not mentioned in the mortgage note; was described in the mortgage
"solely as the 'nominee' to the lender;" was given only bare legal title for the purpose of
recording the mortgage; had no beneficial rights in the mortgage; and had no covenants made in
its favor. Id. at~ 10. Consequently, the Law Court determined that MERS as a nominee could
not be considered a mortgagee under Maine's foreclosure statute. Id. at~ 11; see also Greenleaf,
2014 ME 89, ~ 14, 96 A.3d 700. MERS could not assign a greater right than that which it
possessed; therefore if MERS was not a mortgagee and, if it did not own the mortgage, it could
not assign ownership of that mortgage to another party. Greenleaf, 2014 ME 89, ~ 16,96 A.3d
700. MERS could assign only the right to record the mortgage as nominee for the original
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lender. Id.
Standing may be assessed, determined and acted upon by the court at anytime, as it
relates to the court's subject matter jurisdiction. JPMorgan Chase Bank v. Harp, 2011 ME 5, ~
7, 10 A.3d 718, 719; Saunders, 2010 ME 79, ~~ 15, 26,2 A.3d 289; see also M. R. Civ. P.
12(h)(3) ("[w]henever it appears by suggestion of the parties or otherwise that the court lacks
jurisdiction of the subject matter, the court shall dismiss the action"). Moreover, a judgment
entered by a court without subject matter jurisdiction is void. Boyer v. Boyer, 1999 ME 128, ~ 6,
736 A.2d 273 (citing Coombs v. Government Employees Ins. Co., 534 A.2d 676, 678 (Me.
1987)). However, if a plaintiffs lack of standing is cured before the defendant or the court
questions it, then the foreclosure action may be maintained and prosecuted by that plaintiff.
JPMorgan Chase Bank v. Harp, 2011 ME 5.
Defendant originally granted a mortgage to MERS as nominee for EquiFirst Corporation
(Compl. ~ 6, Pl. Ex. 2.) MERS's role is defined in the instant mortgage as it was in the
mortgages considered in Saunders and Greenleaf Id. The mortgage then purportedly was
assigned through various assignments commencing with an assignment from MERS to FCDB
SNPWL Trust dated June 3, 2011, and recorded in the Androscoggin County Registry of Deeds
on June 13,2011 , in Book 8175, page 143 . (Compl. ~ 7, Pl. Ex. 3.) However, this assignment of
mortgage served only to assign to FCDB SNPWL Trust, its successors and assigns, the right to
record the mortgage on behalf of the original lender. Greenleaf, 2014 ME 89, ~ 16. The MERS
interest in the mortgage was transferred to Plaintiff by assignment dated September 20, 2013,
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Plaintiffs reliance on Culhane, 708 F.3d 282, to support its argument that MERS was
empowered to assign the mortgage seems to be misplaced. The Law Court found Culhane not to
suggest that under Maine foreclosure law a document containing language akin to the Greenleaf
mortgage allowed MERS to assign a greater interest in the mortgage than the right to record it as
the lender's nominee. Greenleaf, 2014 ME 89, ~ 18, n. 11. The Law Court further observed that
in Culhane Massachusetts substantive law controlled the First Circuit' s determination. I d.

and recorded in the Androscoggin County Registry of Deeds on September 26, 2013, in Book
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8782, page 269. (Compl. ,-r 7, Pl. Ex. 4.) Based on the foregoing analysis, the court concludes
that Plaintiff did not own the mortgage and therefore lacked standing to foreclose when it
commenced this action on February 14, 2014.
Plaintiff contends the Ratification of Assignment dated February 27, 2015, and executed
by EquiFirst cures its lack of standing. (Pl. Ex. 5.) Plaintiff believes the Ratification of
Assignment resolves its standing problem by way of EquiFirst confirming retroactively that
MERS had the authority to transfer of all of its rights as the original lender to a successor entity,
notwithstanding the express language of the June 3, 2011 assignment. Plaintiff relies heavily on
the fact that this type of instrument had not been considered by the Law Court and was
distinguishable from the [assignments] under consideration in Saunders and Greenleaf Plaintiff,
however, fails to cite any specific legal authority regarding the efficacy of retrospectively trying
to recast the original transaction by employing self-serving language.
For the reasons cited above, the court believes the putative transfer of ownership of the
subject mortgage to FCDB SNPWL Trust through fthe June 3, 2011 assignment was a nullity,
without legal effect, a void transaction. A void transaction is not susceptible to validation or
ratification, Yvanova v. New Century Mortgage Corp., 62 Cal. 4th 919; 365 P.3d 845; 199 Cal.
Rptr. 3d 66 (Cal. 2016). See also Culhane, 708 F.3d at 291 (a challenge to an assignment from
MERS [as nominee] is premised on the notion that MERS never properly held the mortgage,
and, thus, had no interest to assign, in which case the assignment would be void (not merely
voidable)). Absent legal support for Plaintiffs claims about operation ofthe Ratification of
Assignment, the court concludes that the transfer of ownership of the mortgage from MERS to
FCDB SNPWL Trust remains a nullity.
The Ratification of Assignment also contained language whereby EquiFirst expressly
granted and conveyed its rights as lender under the subject mortgage to MERS. Curiously,
Plaintiff insisted that this portion of the instrument was not a transfer of ownership, but
nonetheless somehow transmuted the legal effect of the loan documents retroactive to the
original date of the mortgage. (Pl. Ex. 5.) Again, Plaintiff failed to cite any specific legal
authority supporting this contention. Absent legal support for Plaintiffs claims about the
operation of the Ratification of Assignment, the court believes that this instrument reasonably
can be construed to effectuate a transfer ofEquiFirst's rights under the mortgage as lender to
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MERS as of February 27,2015. Cf Wells Fargo Bank, NA., Burek, 2013 ME 87, ,-r21 & n. 7.

During the pendency of this matter, three more assignments ensued. A motion to
substitute parties in this foreclosure action addressed only the last of these subsequent transfers.
That motion was filed just a few days before the final hearing and could not be acted on as of the
time of the hearing.
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Which begs the question of why Plaintiff resorted to this convoluted legal legerdemain,
rather than simply obtain a direct assignment of all EquiFirst's remaining right, title and interest
as lender in the subject mortgage. See Harp, 2011 ME 5, ,-r 3; Burek, 2013 ME 87, ,-r 21.
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Based on the court's finding in the preceding paragraph, the doctrine of estoppel by afteracquired property potentially could resolve Plaintiff's standing issue. The doctrine provides that
if a grantor purports to convey to a grantee real property that he does not own at that time, if the
grantor subsequently acquires title to that property, this after-acquired title to the property inures
to the benefit of the grantee, provided the conveyance was made with warranty covenants.
Deutsche Bank Nat'! Trust Co. v. Wilk, 2013 ME 79 ~ 19, 76 A.3d 363. When a grantor conveys
real property without warranty covenants, however, an after-acquired title will not inure or be
transferred to the grantee. In the instant matter, the doctrine does not pertain. The June 3, 2011
assignment from MERS to FCDB SNPWL did not contain warranty covenants by MERS . (Pl.
Ex. 3.) Therefore, any after-acquired title that might be asserted based on EquiFirst's
conveyance to MERS by means of the Ratification of Assignment would not inure to FCDB
SNPWL and, thus, ownership of the mortgage was not transferred to FCDB SNPWL or any
subsequent assignee. See Wilk, 2013 ME 79 at~ 19. Consequently, as of the time ofhearing,
the court finds that MERS continued to own the mortgage and neither Plaintiff nor any
subsequent assignee had standing to bring and maintain this foreclosure action. See id. at~~ 19,
20. 5
In light of the foregoing discussion, the court concludes that Plaintiff currently does not
have standing to prosecute this foreclosure action. 6 Accordingly, it is hereby ORDERED that
this action for foreclosure is dismissed without prejudice. 7 Homeward Residential, Inc., v.
Gregor, 2015 ME 108, ~ 24.

The Clerk is directed to enter this Order on the civil docket by reference pursuant
to Rule 79(a) of the Maine Rules of Civil Procedure.
Dated:

5 ):3 };W

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In light of the determination that MERS owned the mortgage by virtue of the Ratification
of Assignment, the court concludes that the Quitclaim Assignment dated March 11, 2016, which
purportedly assigned ownership of the mortgage to WestVue NPL Trust II, is void.
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After making this decision, the court does not need to address the parties' dispute
regarding whether the notice to cure complied with 14 M.R.S. 6011.
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Based on the court's order in this matter, Plaintiffs Motion for Substitution of Plaintiff
dated March 4, 2 0 16, is moot.
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