JOHN H. RICH, Magistrate Judge.
Plaintiff, U.S. Bank Trust, N.A., as Trustee for LSF9 Master Participation Trust ("U.S. Bank"), moves pursuant to Federal Rule of Civil Procedure 55(b)(2) for a default judgment on its complaint against defendant Karen J. Akey for foreclosure and sale of property owned by Akey at 10 South Ridge Drive in Standish, Maine ("Standish Property"). See Plaintiff's Motion for Default Judgment and Memorandum in Support of Motion for Default Judgment ("Default Judgment Motion") (ECF No. 13); Trial Memo, marked for identification at hearing as Exhibit 9; [Proposed] Judgment of Foreclosure and Sale ("Proposed Judgment"), marked for identification at hearing as Exhibit 10; Complaint (ECF No. 1).
U.S. Bank filed the Complaint on August 15, 2016. See Complaint. On August 26, 2016, it filed proof of service of a Summons on Akey, indicating that the Summons had been left at Akey's residence with Ted Tocci, an individual of suitable age and discretion who resided there. See ECF No. 8. On October 3, 2016, U.S. Bank filed a motion for the entry of default, see ECF No. 9, which the Clerk's Office granted the same day, no answer or responsive pleading having been filed, see ECF No. 11. U.S. Bank also filed a motion for a default judgment hearing, see ECF No. 10, which I denied without prejudice because U.S. Bank had not accompanied that request with a motion and memorandum for default judgment or supporting evidence, see ECF No. 12.
On November 1, 2016, U.S. Bank filed the instant motion for default judgment and request for a hearing to establish damages. See Default Judgment Motion. I granted its request for an evidentiary hearing, see ECF Nos. 14-15, which was scheduled for December 12, 2016, at 9:00 a.m., see Notice and Order dated November 14, 2016 (ECF No. 16). I directed that counsel for U.S. Bank provide a copy of my Notice and Order, together with another copy of the Summons and Complaint, by both certified mail, return receipt requested, and first-class mail to Akey, and by first-class mail to Tocci. See id. I further directed that counsel file with the court, no later than December 5, 2016, a certification that those steps had been taken, attaching the return receipt for the Akey correspondence. See id.
On December 5, 2016, counsel filed an affidavit of Lisa M. Higgins, a paralegal at counsel's law firm, averring that, on November 30, 2016, she mailed copies of the Notice and Order, as well as the Summons and Complaint, by regular and certified mail to Akey and by regular mail to Tocci. See ECF No. 18. She stated that she had not received the return receipt for the certified mailing, but she appended a copy of a USPS tracking verification page indicating that USPS had been unable to deliver the certified mail and had left a notice for the recipient. See ECF Nos. 18 & 18-1.
"While a default . . . constitutes an admission of liability, the quantum of damages remains to be established by proof unless the amount is susceptible of mathematical computation." KPS & Assocs., Inc. v. Designs by FMC, Inc., 318 F.3d 1, 19 (1st Cir. 2003) (citation and internal punctuation omitted). "A hearing may be required . . . to set damages when the amount is in dispute or is not ascertainable from the pleadings." In re Home Rests., Inc., 285 F.3d 111, 114 (1st Cir. 2002).
The hearing, as noticed, was duly convened on December 12, 2016. Counsel for U.S. Bank appeared, presented one witness, Maria Curtis of Caliber Home Loans, Inc. ("Caliber"), and offered eight exhibits, all of which were admitted. Akey did not appear. Counsel for U.S. Bank represented that the letters sent to Akey and Tocci by regular mail had not been returned and that, per an inquiry he made of USPS on the morning of December 10, 2016, Akey had made no arrangements as of that time to retrieve the letter sent by certified mail.
1. On August 5, 2008, Akey executed a Fixed Rate Note ("Note") in favor of Wells Fargo Bank, N.A. ("Wells Fargo"), promising to pay the sum of $252,000.00 to Wells Fargo on a 15-year repayment schedule. See Exh. 1. On the same date, she executed a Mortgage in favor of Wells Fargo, mortgaging the Standish Property as security for repayment of the Note. See Exh. 2.
2. The Note states: "I understand that the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the "Note Holder." Exh. 1 at 1. Stamped at the bottom of the Note is the following:
Id. at 3.
3. U.S. Bank is in possession of the original Note, which its counsel presented to me for inspection during the hearing, and which I returned to him. The Note appeared identical to the copy marked as Exhibit 1 and bore an original signature.
4. Wells Fargo initially serviced the Akey loan, but later arranged for Caliber, a home loan servicing company, to do so. See Testimony of Maria Curtis ("Curtis Test."). On October 20, 2015, Wells Fargo granted a limited power of attorney to Caliber to undertake certain actions, including executing any documents as might be necessary or appropriate to enable Caliber to carry out loan servicing and administrative duties. See Exh. 7. Curtis manages the Akey account for Caliber. See Curtis Test. When Caliber began servicing the Akey account, it obtained Wells Fargo's records concerning the loan and integrated them with its own records. See id. Curtis also researched the Wells Fargo records to ensure their accuracy. See id.
5. By Assignment of Mortgage dated April 5, 2016, Wells Fargo assigned all of its right, title, and interest in and to the Mortgage to U.S. Bank, as Trustee for LSF9 Master Participation Trust. See Exh. 3. Approximately a month earlier, on March 2, 2016, U.S. Bank had granted a limited power of attorney to Caliber to facilitate servicing of certain home loans, including those of LSF9 Master Participation Trust. See Exh. 8.
6. By letter dated June 21, 2016, Caliber formally notified Akey on behalf of LSF9 Master Participation Trust that Akey had defaulted on the Note and Mortgage by having failed to make any payment since August 2012 and had the right to cure the default by July 29, 2016, by paying all sums owed as a result of the default (then totaling $119,035.86). See Exh. 4. Akey made no payment by July 29, 2016, and has made no payment since. See Curtis Test.
7. At hearing, counsel for U.S. Bank represented that his client seeks the following, based upon an accounting prepared by Caliber of all monies due and owing on the Note through January 2, 2017, see Exh. 5; Curtis Test.: (i) $205,065.50 in unpaid principal, (ii) $8,488.01 in unpaid escrow,
1. "In Maine, foreclosure is a creature of statute[.]" Bank of Am., N.A. v. Greenleaf, 2014 ME 89, ¶ 8, 96 A.3d 700, 704 (citing 14 M.R.S.A. §§ 6101-6325).
2. "After breach of condition in a mortgage of first priority, the mortgagee or any person claiming under the mortgagee may proceed for the purpose of foreclosure by a civil action against all parties in interest in either the Superior Court or the District Court in the division in which the mortgaged premises . . . is located[.]" 14 M.R.S.A. § 6321.
3. "After hearing, the court shall determine whether there has been a breach of condition in the plaintiff's mortgage, the amount due thereon, including reasonable attorney's fees and court costs, the order of priority and those amounts, if any, that may be due to other parties that may appear and whether any public utility easements held by a party in interest survive the proceedings." 14 M.R.S.A. § 6322.
4. A mortgagee must (i) commence its foreclosure action in accordance with the Maine Rules of Civil Procedure, see id. § 6321, (ii) establish its standing to sue with respect to both the note and mortgage at issue, see Greenleaf, 2014 ME 89, ¶¶ 8-9, 96 A.3d at 704-05, and, (iii) on the merits, establish "eight elements of proof to support a judgment of foreclosure[,]" id., 2014 ME 89, ¶ 18, 96 A.3d at 708.
5. U.S. Bank commenced the instant foreclosure action in accordance with the Maine Rules of Civil Procedure by filing the instant Complaint and, within 90 days thereafter, filing a return of service indicating that the Summons and Complaint were served by a civil deputy sheriff at Akey's "dwelling house or usual place of abode with some person of suitable age and discretion then residing therein[.]" Me. R. Civ. P. 3 & 4(c)(2), (d)(1). In an abundance of caution, I also directed U.S. Bank to mail a copy of the Summons and Complaint, along with a copy of the court's November 14, 2016, Notice and Order, to Akey and Tocci, the individual served on her behalf, by regular first-class mail and to Akey by certified mail, return receipt requested. U.S. Bank complied with that directive.
6. U.S. Bank, as trustee for LSF9 Master Participation Trust, has standing to enforce the Note by virtue of its possession of the original Note, which contains a blank indorsement. See Greenleaf, 2014 ME 89, ¶ 11, 96 A.3d at 706 ("[A]s the possessor of a note indorsed in blank, the Bank provided its status as the holder of the note and therefore enjoys the right to enforce the debt.") (citing 11 M.R.S.A. §§ 1-1201(5), (21)(a) & 3-1301(1)).
7. U.S. Bank, as trustee for LSF9 Master Participation Trust, has standing to enforce the Note by virtue of Wells Fargo's Assignment of Mortgage dated April 5, 2016.
8. U.S. Bank meets the eight elements of proof to support a judgment of foreclosure:
9. Accordingly, "a judgment of foreclosure and sale must issue providing that if the mortgagor or the mortgagor's successors, heirs and assigns do not pay the sum that the court adjudges to be due and payable, with interest within the period of redemption, the mortgagee shall proceed with a sale[.]" 14 M.R.S.A. § 6322.
10. Maine law provides that, following a public foreclosure sale, "[a]ny deficiency must be assessed against the mortgagor and an execution must be issued by the court therefor." Id. § 6324. However, as discussed above, the Proposed Judgment states that it "only seeks an In Rem Judgment against the property." Proposed Judgment at [2]. I construe this as a waiver of the right to seek any deficiency judgment against Akey following any public foreclosure sale.
For the foregoing reasons, I recommend that the court
I further recommend that the court
1. U.S. Bank is responsible for recording an attested copy of this Judgment and for paying the appropriate recording fees.
2. If Akey, or her heirs or assigns, pay U.S. Bank the amount adjudged due and owing ($269,643.21) within 90 days of the date of the Judgment, as that time period is calculated in accordance with 14 M.R.S.A. § 6322, U.S. Bank shall forthwith discharge the Mortgage and file a dismissal of this action on the ECF Docket.
3. If Akey, or her heirs or assigns, do not pay U.S. Bank the amount adjudged due and owing ($269,643.21) within 90 days of the date of the Judgment, as that time period is calculated in accordance with 14 M.R.S.A. § 6322, her remaining rights to possession of the Standish Property shall terminate, and U.S. Bank shall conduct a public sale of the Standish Property in accordance with 14 M.R.S.A. § 6323, disbursing the proceeds first to itself in the amount of $269,643.21 after deducting the expenses of the sale, with any surplus to Akey, or her heirs or assigns, in accordance with 14 M.R.S.A. § 6324. U.S. Bank has waived the right to seek any deficiency judgment against Akey personally.
4. Pursuant to 14 M.R.S.A. § 2401(3)(F), the Clerk shall sign a certification after the appeal period has expired, certifying that the applicable period has expired without action or that final judgment has been entered following appeal.
Finally, I recommend that the Judgment include the following provisions required by 14 M.R.S.A. § 2401(3):
1. The names and addresses, if known, of all parties to this action, including counsel of record, as set forth on the ECF Docket.
2. The docket number of this case, No. 2:16-cv-00414-JDL.
3. The finding that Akey, the only party to these proceedings besides U.S. Bank, received notice of the proceedings in accordance with the applicable provisions of the Maine Rules of Civil Procedure.
4. A description of the real estate involved (the Standish Property), as set forth in Exhibit A to the Complaint herein.
5. The title "Judgment of Foreclosure and Sale," the street address of the real estate involved, 10 South Ridge Drive, Standish ME, 04084, and the book and page number of the Mortgage, Cumberland County Registry of Deeds Book 26280, Page 320.
