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Fleet National Bank v. Gardiner Hillside Estates
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MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2002 ME 120
Docket: Ken-01-384
Submitted
on Briefs: March 26, 2002
Decided: July 30, 2002
Panel: CLIFFORD, RUDMAN, DANA, ALEXANDER, CALKINS, and LEVY, JJ.
FLEET NATIONAL BANK
v.
GARDINER HILLSIDE ESTATES, INC. et al.
CLIFFORD, J.
[¶1] Gardiner Hillside Estates, Inc.{1} appeals from a judgment entered in
the Superior Court (Kennebec County, Studstrup, J.), that certified as final
pursuant to M.R. Civ. P. 54(b) a summary judgment in favor of Fleet National
Bank{2} in Fleet's foreclosure action against the property of Gardiner Hillside.
Gardiner Hillside contends that the Superior Court erred in certifying the
judgment as final before resolving its counterclaims, and in entering the summary
judgment. We affirm the judgment.
[¶2] Fleet lent $337,500 to Hamilton Trowbridge Realty Trust
Corporation, evidenced by a promissory note dated March 6, 1996. The note
provided that the borrower would make sixty monthly payments, the first
fifty-nine of which would be $3176.86. Fleet also loaned $50,000 to HTH
Corporation, which executed a promissory note, also dated March 6, 1996, that
had substantially the same terms as the note from Hamilton Trowbridge except
that the monthly payments were proportionally lower. On that same day,
Gardiner Hillside guaranteed each of the above loans and granted Fleet mortgages
on two properties owned by Gardiner Hillside to secure the loans.
[¶3] The debtors on the notes fell behind in their payments, and Fleet
instituted this foreclosure action against Gardiner Hillside. Gardiner Hillside
raised the affirmative defenses of fraud in the inducement, contributory
negligence, fraud, illegality, injury by a fellow servant, estoppel, failure to
comply with 14 M.R.S.A. § 6111 (Supp. 2001),{3} violation of state and federal
confidentiality statutes, violation of the Maine Fair Debt Collection Practices Act,
failure to include a necessary party, and failure to mitigate damages. Gardiner
Hillside also asserted five counterclaims, seeking damages for (I) fraud in the
inducement, (II) release of confidential information, (III) violation of the duty of
good faith and fair dealing, (IV) violation of the Maine Fair Debt Collection
Practices Act, and (V) abuse of process and malicious prosecution. The remedy
sought by the counterclaims was limited to monetary damages.
[¶4] Fleet moved, unsuccessfully, to strike the affirmative defenses and
counterclaims pursuant to M.R. Civ. P. 12(f) and to dismiss pursuant to
M.R. Civ. P. 12(b)(6). Fleet later moved for a summary judgment in its
foreclosure action, but not on Gardiner Hillside's counterclaims. Gardiner
Hillside's response to the motion for a summary judgment on the complaint for
foreclosure did not specifically dispute the facts set out in the M.R. Civ. P. 56(h)
statement of material facts filed by Fleet, nor did Gardiner Hillside submit a
statement of material facts to support its affirmative defenses. Rather, Gardiner
Hillside asserted facts to support its counterclaims and argued that summary
judgment on the foreclosure action was improper because the damages that would
be recovered pursuant to the counterclaims would offset the liability on the note.
[¶5] The court entered a summary judgment in favor of Fleet on its
foreclosure claim. It concluded that the statement of material facts submitted by
Fleet established its right to a judgment of foreclosure, and that Gardiner
Hillside's response failed to controvert Fleet's statement of material facts in the
manner required by M.R. Civ. P. 56(h)(2). Gardiner Hillside appealed the
summary judgment.
[¶6] On June 22, 2001, this Court (Wathen, C.J.) ordered that Gardiner
Hillside's appeal from the summary judgment be remanded to the Superior Court
for either (1) disposition of the pending counterclaims, or (2) a determination of
the appropriateness of the entry on the docket pursuant to M.R. Civ. P. 54(b).
[¶7] On remand, the Superior Court certified the foreclosure judgment as
final and ordered its immediate entry on the docket. The court determined that
the requirements of Rule 54(b) were satisfied because (1) the claims for
foreclosure were legally and factually distinguishable from the counterclaims,
(2) the amounts due on the loans were determinable and determined, (3) Gardiner
Hillside had failed to show that it would be irreparably harmed by the entry of the
judgment and initiation of the ninety-day redemption period, and (4) Gardiner
Hillside's counterclaims sought monetary relief only, and its ability to recover
those damages from Fleet, should it prevail on the counterclaims, would not be
affected by the foreclosure. This appeal by Gardiner Hillside from the order of
certification followed.
I.
[¶8] Gardiner Hillside challenges the propriety of the certification of the
summary judgment. It also contends that the summary judgment should be
vacated on its merits because the damages it will receive for its counterclaims will
offset the amount due on the notes.{4}
[¶9] Maine Rule of Civil Procedure 54(b)(1) provides, in its entirety:
Except as otherwise provided in paragraph (2) of this subdivision
[concerning entry of a judgment on the underlying claim before
entering judgment on a request for attorney's fees] and in Rule 80(d)
[concerning certain orders prior to judgment], when more than one
claim for relief is presented in an action, whether as a claim,
counterclaim, cross-claim, or third-party claim, or when multiple
parties are involved, the court may direct the entry of a final
judgment as to one or more but fewer than all of the claims or parties
only upon an express determination that there is no just reason for
delay and upon an express direction for the entry of judgment. In the
absence of such determination and direction, any order or other form
of decision, however designated, except those enumerated in
paragraph (2) of this subdivision and in the last sentence of Rule
80(d), which adjudicates less than all the claims or the rights and
liabilities of less than all the parties shall not terminate the action as
to any of the claims or parties, and the order or other form of
decision is subject to revision at any time before the entry of
judgment adjudicating all the claims and the rights and liabilities of
all the parties.
M.R. Civ. P. 54(b)(1).
[¶10] We review certifications under Rule 54(b) for abuse of discretion.
Dravo Corp. v. Regional Waste Sys., Inc., 632 A.2d 141, 142 (Me. 1993). There
is a strong policy against piecemeal review of litigation, however, and we require
that there be a good reason for immediate certification of a partial judgment. See
Bates v. Eckhardt Telecomm. Inc., 2002 ME 69, ¶ 6, 794 A.2d 648, 650. The
trial court must explain with particularity why it finds that "no just reason for
delay" exists. Id. It is not sufficient that the court merely recites that it finds no
reason for delay as "a matter of rote." Cole v. Peterson Realty, Inc., 432 A.2d
752, 757 (Me. 1981).
[¶11] When deciding whether there is no just reason for a delay, the trial
court should consider several factors:{5}
They include the relationship between adjudicated and unadjudicated
claims, the likelihood that the reviewing court will face the same
issues more than once, the possibility that future action by the trial
court will render moot the need for review, whether immediate
appeal will expedite the trial process, and miscellaneous factors such
as the res judicata effect of a final judgment and economic and
solvency considerations.
Key Bank of Maine v. Park Entrance Motel, 640 A.2d 211, 212 (Me. 1994).
[¶12] Although we have found certification pursuant to Rule 54(b) to be an
abuse of discretion when "the adjudicated and unadjudicated claims [in the
complaint and the counterclaim] are so factually and legally intertwined that it
would serve no purpose to enter final judgment on the complaint at this time,"
Dravo Corp., 632 A.2d at 142 (improper to certify a judgment for plaintiff in
breach of contract claim as final when unresolved counterclaim sought rescission
of the contract), the existence of a related claim that does not affect the rights of
the plaintiff should not generally prevent entry of a judgment on the plaintiff's
claim. See Fleet Bank of Maine v. Hoff, 580 A.2d 690, 691 (Me. 1990) (Bank
entitled to final judgment in its claim against guarantor of loan, notwithstanding
fact that one defendant guarantor had filed cross-claim for indemnification against
the other. "This is precisely the situation in which a Rule 54(b) certification is
appropriate.").
[¶13] In this case, the Superior Court identified four factors that favored
certification of the judgment as final pursuant to Rule 54(b): (1) the mortgage
claims are legally and factually distinguishable from the counterclaims, because
the counterclaims, even if meritorious, would not eliminate liability under the
mortgage; they would merely provide damages from which the defendants could
pay the amount owed; (2) the damages due on the loans secured by the mortgages
are determinable and determined notwithstanding the fact that the counterclaims
remain unresolved; (3) the defendants do not live on the property and have not
shown that they would be irreparably harmed by immediate foreclosure and
initiation of the ninety-day redemption period; and (4) any claims that the
defendants may have against Fleet will not be prejudiced by the foreclosure
because the defendants will be able to recover a judgment from Fleet in the event
that they prevail on the counterclaims. There was a sufficient factual basis for
each of these findings and the court could have reasonably concluded that, on
balance, the purposes of Rule 54(b) would be served by certification of the
judgment of foreclosure. For these reasons, the trial court did not abuse its
discretion, and we affirm the certification of the summary judgment.
II.
[¶14] Gardiner Hillside also contends that the summary judgment should
not have been granted in the foreclosure action because the damages on its
counterclaims will setoff the amount due on the loan. Although Gardiner Hillside
presents this argument as a separate challenge to the merits of the summary
judgment, its contentions here are indistinguishable from its argument that the
judgment should not have been certified as final. Gardiner Hillside has not
effectively asserted any affirmative defenses to the foreclosure action.{6}
Accordingly, the summary judgment need not be denied merely because Gardiner
Hillside has asserted separate claims against Fleet.
The entry is:
Judgment affirmed.
___________________________________
Attorney for the plaintiff:
Colleen P. Tucker, Esq.
P.O. Box 15003
Portland, Maine 04112
Attorney for the defendants:
Mark A. Kearns, Esq.
Abenaki Professional Park
P.O. Box 1528
Wells, Maine 04090
FOOTNOTES********************************
{1} . The defendants in the proceedings below include Jean and Richard Hamilton
and several corporations that they own: Hamilton Trowbridge Realty Trust Corp.,
HTH Corp., and Gardiner Hillside Estates, Inc. Throughout this decision we refer
to Gardiner Hillside Estates because, as the owner of the property subject to
foreclosure, it is the defendant relevant to this appeal. {2} . The original lender
was Fleet Bank of Maine. Fleet National Bank is Fleet Bank of Maine's successor-in-interest
by merger. {3} . Title 14 M.R.S.A. § 6111 sets out procedures in foreclosure
actions against residential property. {4} . Fleet moved to dismiss Gardiner Hillside's
appeal, contending that Gardiner Hillside did not fully comply with the order
on remand. We find no defects in the manner in which Gardiner Hillside complied
with the order and deny Fleet's motion. {5} . Although not explicitly mentioned
in Key Bank, the trial court may also appropriately consider whether the
other claims are frivolous or are being brought for the purpose of harassment
or delaying entry of a judgment. See Allis-Chalmers Corp. v. Philadelphia Elec.
Co., 521 F.2d 360, 364 (1975) (summarizing consensus among federal courts
about what factors may be considered). {6} . As explained above, Gardiner Hillside's
statement of material facts submitted in support of its assertion of affirmative
defenses in response to Fleet's motion for summary judgment failed to comply with
Rule 56(h) |