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Northup v. Poling
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MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2000 ME 199
Docket: Han-00-259
Argued: October 5, 2000
Decided: November 13, 2000
Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, SAUFLEY, ALEXANDER, and CALKINS,
JJ.
CHRISTINA NORTHUP et al.
v.
VIRGIL POLING
SAUFLEY, J.
[¶1] Christina Northup and Susan Norberg, trustees of the Poling
Family Realty Trust, appeal from a judgment entered in the Superior Court
(Hancock County, Hjelm, J.) granting a summary judgment to their father,
Virgil Poling, on their challenge to Poling's foreclosure of a mortgage on
real property in Deer Isle. The trustees argue that Poling's mortgage
foreclosure by publication, pursuant to 14 M.R.S.A. § 6203(1) (Supp. 1999),
violated their due process rights under the Maine and U.S. Constitutions.
We disagree and affirm the judgment.
I. BACKGROUND
[¶2] In 1976, Virgil Poling transferred certain property in Deer Isle,
Maine, to his daughters, Susan Norberg and Christina Northup, as trustees
of the Poling Family Realty Trust. In exchange, Norberg and Northup gave
Poling a promissory note secured by a mortgage on the Deer Isle property.
The promissory note promised to pay "the principal sum of One Hundred
Seventy Five Thousand Dollars ($175,000.00) plus interest at the rate of
six (6) percent per annum." An annual payment of $6000 was payable to
the order of Poling, starting on January 1, 1977, and continuing each year
until the principal and the interest were paid in full.
[¶3] In an accompanying mortgage deed, the trustees (1) covenanted
to perform "all the agreements and conditions as provided in note of even
date," (2) allowed Poling to foreclose in the event of a breach of the note
conditions, and (3) agreed that any notice of foreclosure should be given
by publication "in some newspaper published in said county." No other
form of notice was required by the mortgage deed.
[¶4] Initially, Northup and Norberg convinced Poling to forgive
several annual payments, but Poling eventually required that the payments
be made on time. When a dispute regarding the validity of the original
transfer to the trust occurred, the trustees stopped making payments
again.{1} In 1995, Poling initiated foreclosure proceedings pursuant to 14
M.R.S.A. § 6203(1). During three consecutive weeks, on July 1, 8, and 15,
1995, Poling published a notice of foreclosure on the Deer Isle property in
the Bangor Daily News. On July 20, 1995, Poling filed a record of the
publications at the Hancock County Registry of Deeds. The trustees assert
that they did not find out about the foreclosure until after the one year
statutory redemption period had run. See 14 M.R.S.A. § 6204 (1980 & Supp.
1999).
[¶5] In 1998, the trustees filed a complaint against Poling in the
Hancock County Superior Court challenging the validity of the foreclosure
and seeking to set it aside.{2} When the trustees moved for a summary
judgment on their claims related to the constitutionality of the
foreclosure, Poling objected and moved for summary judgment in his own
favor. The Superior Court denied the trustees' motion and granted Poling's
motion for summary judgment, concluding that no "state action" was
involved, and thus, that no constitutional violation had occurred. This
appeal followed.{3}
II. DISCUSSION
[¶6] We review the evidence in the light most favorable to the
nonprevailing party to determine whether the record supports the
conclusion that there is no genuine issue of material fact and that the
prevailing party was entitled to judgment as a matter of law. Kandlis v.
Huotari, 678 A.2d 41, 42 (Me. 1996). When the facts are not disputed, we
review the Superior Court's grant of summary judgment for errors of law.
Royal Ins. Co. v. Pinette, 2000 ME 155, ¶ 4, 756 A.2d 520, 523. There is no
dispute regarding the facts before us.
[¶7] The procedure used by Poling to foreclose on the Deer Isle
property is set forth in 14 M.R.S.A. § 6203(1).{4} A foreclosure pursuant to
subsection 6203(1) involves three elements: (1) breach of a condition; (2)
publication notice in a newspaper of general circulation for three
consecutive weeks, describing the mortgage, the real estate sought to be
foreclosed, the reason for the foreclosure, and a statement that the
mortgagor breached a condition; and (3) a timely recording in the registry
of deeds within thirty days after the last date of such publication. Id.
Unless the property is redeemed by the mortgagor within one year of the
first publication, the foreclosure is complete. 14 M.R.S.A. § 6204.
[¶8] The trustees argue that Poling's use of the statute deprived
them of the trust's property without "reasonable notice" in violation of
their due process rights under the Maine and U.S. Constitutions. See
Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306 (1950).
Specifically, the trustees contend that the statute, by allowing service by
publication, and involving the Register of Deeds in the recording of the
notice, embodies sufficient "state action" to implicate their due process
rights.
[¶9] The Fourteenth Amendment protects against state actions that
result in deprivation of property without due process of law. Estate of
Kruzynski, 2000 ME 17, ¶¶ 8-10, 744 A.2d 1054, 1056-57.{5} The state
action requirement excludes from the Fourteenth Amendment's reach
"merely private conduct, no matter how discriminatory or wrongful." Am.
Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 50 (1999) (citations omitted).
Thus, our threshold inquiry is whether a state action occurred in this
matter. See Onat v. Penobscot Bay Med. Ctr., 574 A.2d 872, 875 (Me. 1990).
[¶10] The mere fact that the parties, in their private arrangements,
agreed to make use of state-sanctioned remedies or procedures does not
create state action. Tulsa Prof'l Collection Servs., Inc. v. Pope, 485 U.S.
478, 486 (1988). Nor does the fact that the State enacted the procedure
and made the remedy available make the State a responsible party for the
use of the process. Am. Mfrs. Mut. Ins. Co., 526 U.S. at 53. In the context
of private foreclosures, absent exceptional circumstances, "state action
is not present when a private party forecloses a mortgage pursuant to a
non-judicial foreclosure statute." Fitzgerald v. Cleland, 498 F. Supp. 341,
346 (D. Me. 1980) (citations omitted), aff'd in part and vacated on other
grounds, 650 F.2d 360 (1st Cir. 1981).
[¶11] The foreclosure complained of here was a nonjudicial
foreclosure. Poling is an individual whose actions in this matter were not
related to the government in any way. The contract of the parties was
entered into privately, and the method of notice and foreclosure was
agreed to in the private contract and did not involve the court or the State
in any manner. With the exception of the recording of notice by the
Register of Deeds, no state actor had any involvement whatsoever with
the foreclosure.
[¶12] Accordingly, because the parties entered into a private
agreement, with consensual reliance upon a statutorily articulated
process, there can be no deprivation of constitutional rights unless the
process directly involved the "overt, significant assistance of state
officials" necessary for the establishment of state action. Am. Mfrs. Mut.
Ins. Co., 526 U.S. at 54 (citing Tulsa Prof'l Collection Servs., Inc., 485 U.S.
at 486). "[W]hen private parties make use of state procedures with the
overt, significant assistance of state officials, state action may be
found." Tulsa Prof'l Collection Servs., Inc., 485 U.S. at 486 (citations
omitted).{6}
[¶13] We look then to the specific process at issue to determine
whether it incorporated the "overt, significant assistance" of a state
actor. See id. Northup contends that the action of the Register of Deeds in
recording the notice constituted overt, significant assistance of a state
actor. It did not. The Register did not order or cause the foreclosure; she
merely recorded the notice. Neither the exercise of judgment nor decision
making was present in the Register's actions. The Register was a passive
recipient of the documents and performed only a ministerial function in
recording the notice. Such ministerial actions do not constitute
"significant" or "overt" actions of the State. See Am. Mfrs. Mut. Ins. Co.,
526 U.S. at 54;{7} Northrip v. Fed. Nat'l Mortg. Ass'n, 527 F.2d 23, 29 (6th
Cir. 1975).
[¶14] Because the parties privately agreed to use the process, and
the State had no more than a ministerial role in that process, no "state
action" was involved. The Superior Court correctly concluded that the
trustees failed to present material facts in support of a claim that they
were deprived of rights guaranteed by the Maine or U.S. Constitutions.
The entry is:
Judgment affirmed.
Attorney for plaintiffs:
Barry K. Mills, Esq., (orally)
Hale & Hamlin, LLC
P O Box 729
Ellsworth, ME 04605-0729
Attroney for defendant:
Robert S. Frank, Esq., (orally)
Harvey & Frank
P O Box 126
Portland, ME 04112-0126
Attorneys for intervenor State of Maine:
Andrew Ketterer, Attorney General
Christopher C. Taub, Asst. Attorney General (orally)
Robert C. Perkins, Asst. Attorney General
6 State House Station
Augusta, ME 04333-0006
FOOTNOTES******************************** {1} . In 1995, we upheld the validity
of the Deer Isle property transfer and the Poling Family Realty Trust. Poling
v. Northup, 652 A.2d 1114 (Me. 1995). {2} . Counts I and II of the complaint
alleged that section 6203 deprived trustees of their property in violation
of due process rights of the Maine and U.S. Constitutions. Count III argued
that section 6203 and the due process clauses created an implied obligation
of notice beyond mere publication. Counts IV and V were dismissed by stipulation
of the parties. {3} . Because the trustees' suit challenged the constitutionality
of a statute, the Attorney General, on behalf of the State of Maine, moved
to intervene as a defendant pursuant to M.R. Civ. P. 24(d). The Superior
Court granted the State's motion, and the State remains an appellee on appeal.
{4} . 14 M.R.S.A. § 6203(1), "Foreclosure without possession,"
provides: If, after breach of the condition, the mortgagee or any person
claiming under him is not desirous of taking and holding possession of the
premises, he may proceed for the purpose of foreclosure in either of the
following modes. 1. Public notice. He may give public notice in a newspaper
of general circulation in the county where the premises are situated, if
any, or if not, in a newspaper of general circulation in an adjoining county,
3 weeks successively, of his claim by mortgage on such real estate, describing
the premises intelligibly and naming the date of the mortgage and that the
condition in it is broken, by reason whereof he claims a foreclosure; and
cause a copy of such printed notice, and the name and date of the newspaper
in which it was last published, to be recorded in each registry in which
the mortgage deed is or by law ought to be recorded, within 30 days after
such last publication. All foreclosures of real estate mortgages between
September 3, 1965 and February 8, 1966 and otherwise valid, except that
public notice was given in a newspaper published and printed in whole or
in part in the county where the premises are located rather than in a newspaper
having its principal place of business in the county where the premises
are located, are validated. For the purpose of this section a newspaper
shall be defined as one printed in the English language and entered as second-
class postal matter in the United States mails. 14 M.R.S.A. § 6203(1)
(Supp. 1999). {5} . The due process rights guaranteed by the Maine Constitution,
Me. Const. art. I, § 6-A, are coextensive with those guaranteed by
the Fourteenth Amendment of the U.S. Constitution. In re Heather C., 2000
ME 99, ¶ 21, 751 A.2d 448, 454 (citations omitted). {6} . No sheriff
sale occurred in the instant action. Cf. Lugar v. Edmondson Oil Co., 457
U.S. 922, 941-42 (1982) (finding state action where there was an ex parte
court order and subsequent sheriff's attachment). {7} . The Supreme Court
has distinguished those cases where the State's involvement, if any, was
simply the enactment of a statute or the undertaking of a ministerial action,
from those cases where the state officials actually played a significant
role in the process. Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 157 (1978)
(citing N. Georgia Finishing, Inc. v. Di-Chem, Inc, 419 U.S. 601 (1975);
Fuentes v. Shevin, 407 U.S. 67 (1972)). See also Connecticut v. Doehr, 501
U.S. 1 (1991) (finding state action where the judge ordered a prejudgment
attachment); Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80 (1988) (finding
state action where the court ordered a writ of attachment); Sniadach v.
Family Finance Corp., 395 U.S. 337 (1969) (finding state action where state
statute provided for the right to garnish or to obtain a prejudgment attachment
as well as the procedure by which the rights could be exercised).
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