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Key Trust Co. v. Nasson College et al.
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MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 1997 ME 145
Docket: Yor-96-802
Submitted
on briefs: May 23, 1997
Decided: July 3, 1997
Panel: WATHEN, C.J., ROBERTS, GLASSMAN, CLIFFORD, and LIPEZ, JJ.
KEY TRUST COMPANY OF MAINE
v.
NASSON COLLEGE et al.
CLIFFORD, J.
[¶1] Nasson College appeals from the summary judgment entered in
favor of Key Trust Company of Maine in the Superior Court (York County,
Fritzsche, J.) on Key Trust's complaint seeking a foreclosure and sale.
Nasson contends that the court improperly granted Key Trust's motions for
a protective order and for a summary judgment. We disagree and affirm the
judgment.
[¶2] In November of 1962, Nasson executed and delivered to Canal
National Bank,{1} as trustee, a certain indenture of mortgage and deed of trust
that was secured by the Allen Hall Dormitory and the Marland Hall
Dormitory. In November of 1969, Nasson executed and delivered to Canal
National Bank, as trustee, a second indenture of mortgage and deed of trust
that was secured by the Science Building.
[¶3] On March 20, 1985, Nasson executed and delivered to Key Bank
of Southern Maine, as successor trustee to Canal National Bank, two first
supplemental indenture and bondholder consents amending the prior
indenture of mortgage and deed of trust documents. Key Trust notified
Nasson on November 23, 1994, that the supplemental indentures were in
default, accelerated the debt, and demanded that the debt be cured. Key
Trust filed a complaint for foreclosure by civil action on January 20, 1995,
alleging that Nasson had defaulted on its obligations as provided by the
supplemental indentures. After Key Trust was unsuccessful in serving
Nasson and two parties-in-interest, it received, on March 14, 1995, an ex
parte order allowing service by publication. Service by publication was
effected on Nasson. The trial court (York County, Fritzsche, J.) granted Key
Trust's motion for a summary judgment and a default judgment on August
15, 1995.
[¶4] On March 14, 1996, Nasson filed a motion for relief from
judgment pursuant to M.R. Civ. P. 60(b). Because of Key Trust's failure to
serve the Secretary of State pursuant to M.R. Civ. P. 4(d)(8), the court voided
the previously entered judgment of foreclosure and the previously held
public sale. The court subsequently entered an order, dated May 10, 1996,
setting forth a pre-trial schedule and ordering that discovery be completed
by June 30, 1996.
[¶5] Nasson filed an answer on May 30, 1996. Nasson admitted that
it had failed to make payments but claimed that those "incidents [do not]
constitute a default." Nasson also claimed that Key Trust had failed to state
a claim on which relief could be granted and had waived its right to collect
sums due pursuant to the supplemental indentures.
[¶6] On June 21, 1996, nine days prior to the date set by the court
for the completion of discovery, Nasson served on Key Trust a set of
interrogatories and a request for the production of documents. Key Trust
responded by filing a motion for a protective order.
[¶7] On August 1, 1996, Key Trust filed a motion for a summary
judgment and a default judgment and to dismiss parties-in-interest, along
with a statement of material facts and an accompanying affidavit.{2} Nasson
opposed the motion and filed its own statement of material facts and an
accompanying affidavit signed by Edward Mattar, Chairman of the Board of
Nasson College. After a hearing on November 5, 1996, the court granted
Key Trust's motion for a summary judgment and motion for a protective
order and entered a summary judgment for Key Trust. This appeal followed.
[¶8] Nasson contends that the court improperly granted a summary
judgment because genuine issues of material fact exist. In addition, Nasson
argues that it was precluded from pursuing legitimate discovery by the
court's improper granting of Key Trust's motion for a protective order. We
disagree.
[¶9] In an appeal from a grant of summary judgment, we review the
court's conclusions for errors of law. In making that determination, we view
the evidence in the light most favorable to the party against whom the
judgment was entered to determine whether the record supports the trial
court's conclusion that there is no genuine issue of material fact and the
movant is entitled to a judgment as a matter of law. Simpson v. Central
Maine Motors, Inc., 669 A.2d 1324, 1325-26 (Me. 1996).
[¶10] In order to withstand a motion for a summary judgment, a party
must respond by "setting forth specific facts showing that there is a genuine
issue for trial." M.R. Civ. P. 56(e). Nasson's answer formally asserts the
affirmative defense of waiver. Based on the affidavit of Mattar, however, it is
clear that Nasson is relying on the defense of estoppel or forbearance,
claiming that Key Trust is precluded from enforcing the provisions of the
loan documents because of certain alleged promises and representations
made to Nasson at the time the supplemental indentures were executed,
and, although not in any way explicitly stated, on which Mattar alleges,
Nasson somehow relied.
[¶11] "Promissory estoppel is an accepted doctrine in Maine." June
Roberts Agency, Inc. v. Venture Properties, Inc., 676 A.2d 46, 49 (Me.
1996) (citing Chapman v. Bomann, 381 A.2d 1123, 1127 (Me. 1978)). The
Restatement provides: "A promise which the promisor should reasonably
expect to induce action or forbearance on the part of the promisee . . . and
which does induce such action or forbearance is binding if injustice can be
avoided only by enforcement of the promise." Restatement (Second) of
Contracts § 90(1) (1979).
[¶12] Although Nasson has adequately raised a material fact as to the
existence of a promise that may have been made with regard to the federal
government's intention not to foreclose in the event of a default, Nasson has
utterly failed to demonstrate any evidence of its reliance on the alleged
promise. That failure precludes Nasson's claim as a matter of law. Mattar's
affidavit, on which Nasson relies for its alleged defense, states that Mattar
relied on the alleged assurances as a benefactor and not as a principal or
officer of Nasson.{3} The affidavit does not assert any reliance by Nasson. To
avoid a summary judgment, Nasson was obligated to do more than state its
affirmative defense. It was required to offer admissible evidence in support
of that defense. See Bangor & Aroostook R.R. v. Daigle, 607 A.2d 533, 535-
36 (Me. 1992). Key Trust is entitled to a summary judgment because
Nasson has failed to offer evidence in support of its defense.
[¶13] In its contention that the court abused its discretion in
protecting Key Trust from discovery, Nasson has not indicated any
information that it can expect to uncover in the requested discovery that
could constitute reliance or forbearance to support its affirmative defense.
It seeks information concerning promises that may have been made by the
lender. Only Nasson, however, can provide the necessary evidence about its
reliance on the promises, and it has not done so; nor can Nasson reasonably
contend that such information is in the possession of Key Trust.
Accordingly, the court acted within its discretion by granting to Key Trust
protection from responding to the requested discovery that was filed shortly
before the court ordered deadline, that would require an extensive, time
consuming search of Key Trust's records, and that in any event could not
establish its only alleged defense. M.R. Civ. P. 26(c).
The entry is:
Judgment affirmed.
Attorneys for plaintiff:
Laura M. O'Hanlon, Esq.
Mark Haley, Esq.
Conley & Haley
P O Box 651
Bath, ME 04530-0651
Attorney for defendant:
Bruce M. Read, Esq.
Hodsdon, Read & Shepard
56 Portland Road
Kennebunk, ME 04043
FOOTNOTES******************************** {1} The record reflects that Key
Trust acquired the trust assets of Key Bank of Southern Maine, the successor
to Canal National Bank. {2} The parties-in-interest have not appealed. {3}
Mattar's affidavit provides in part: 11. I relied on those promises, and
assurances, which can easily be validated by discovery and the subsequent
depositions of many of the individuals who were present at the seminal meeting
which included a large group of attorneys who can be relied upon to provide
their respective notes. 12. Without such assurances I would have been unwilling
to advance hundreds of thousands of dollars, and the Creditor's Committee
would have been unwilling to release the college from bankruptcy. All of
this can be substantiated via discovery.
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