Jackson Lumber & Millwork Co., Inc. v. Rockwell Homes, LLC , 2022 ME 4 ( 2022 )

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2022 ME 4Docket: Yor-21-144
Argued: December 9, 2021
Decided: January 13, 2022
Panel: STANFILL, C.J., and MEAD, GORMAN, JABAR, HUMPHREY, HORTON, and CONNORS, JJ.
JACKSON LUMBER & MILLWORK CO., INC.
v.
ROCKWELL HOMES, LLC, et al.
HUMPHREY, J.
[¶1] In ruling on a motion for approval of attachment and trustee process
filed by Jackson Lumber & Millwork Co., Inc., the Superior Court (York County,
Douglas, J.) concluded that because Jackson Lumber was both the mortgagee
and the “purchaser at the public sale” of foreclosed property in Lebanon, Maine,
the fair market value of that property as established by an independent
appraisal—not the value established by the highest bid at the public sale—was
used in determining the amount of any deficiency. 14 M.R.S. § 6203-E (2021).
Jackson Lumber appeals from the court’s denial of its motion for approval of
attachment and trustee process in the amount of $620,942.63 against the real
and personal property of mortgagor Rockwell Homes, LLC, and individual
guarantors Rock Bisson, Rock Bisson II, and Aaron Wiswell, arguing that the
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court erred in treating Jackson Lumber as the “purchaser at the public sale” of
the property when it had assigned its rights under the purchase and sale
agreement to another entity and was not the party that received the deed.1 We
affirm the court’s order denying Jackson Lumber’s motion.
I. BACKGROUND
[¶2] The facts found by the court in reaching its decision are, except as
noted, supported by the affidavits and attached exhibits submitted in
conjunction with the motion for approval of attachment and trustee process.
See Libby O’Brien Kingsley & Champion, LLC v. Blanchard, 2015 ME 101, ¶ 5,
121 A.3d 109. In September 2017, Rockwell Homes borrowed $1,300,000 from
Jackson Lumber to acquire real property in Lebanon. The loan was secured by
a mortgage on the property, and Wiswell executed a promissory note on behalf
of Rockwell Homes. The note also included personal guaranties executed by
the Bissons and Wiswell. Rockwell Homes defaulted on the note in September
2018.
1Separately, the court approved attachment and trustee process against the real and personal
property of Rock Bisson in the amount of $300,000 based on a separate line of credit that Bisson
opened with Jackson Lumber on behalf of “Bisson Const” and personally guaranteed. That ruling is
not challenged on appeal and will not be discussed further. The court also reached findings about a
November 2018 promissory note and mortgage on property in Sanford, but the complaint did not
allege a deficiency on that note or seek any recovery on it, and that note is not pertinent to our
discussion here.
3
[¶3] In January 2019, the CEO and treasurer of Jackson Lumber sent
emails to Wiswell informing him that the balance due on the loan was
$1,041,026.95 and that an appraisal showed the Lebanon property against
which that debt was secured had an “as is” value of $1,100,000. In March 2019,
Jackson Lumber provided notice of default and demanded payment in full of all
amounts due on the note secured by the Lebanon property—the sum of
$1,070,918.37.2
[¶4] On April 22, 2019, acting pursuant to 14 M.R.S. § 6203-A (2021),
Jackson Lumber provided notice to Rockwell Homes, the Bissons, and Wiswell
of its intention to foreclose on the mortgage by public sale of the Lebanon
property on May 23, 2019. The public sale was conducted as scheduled, and
Jackson Lumber was the highest bidder at $550,000. Jackson Lumber executed
a purchase and sale agreement naming itself as both the seller and “Purchaser”
of the Lebanon property.
[¶5] On July 15, 2019, Jackson Lumber assigned its rights under the
purchase and sale agreement to Robert DiBerto in exchange for $600,000.
2 Although the court characterized the March 2019 communication as providing to the relevant
mortgagors and guarantors a “Notice[] of Intention to Foreclose and Liability for Deficiency” as to the
secured debt, that finding is erroneous. The March 2019 communication was a notice of default and
demand for payment of the note secured by the mortgage on the Lebanon property; the notice of
intention to foreclose and liability for deficiency as to the property followed in April. This erroneous
but unchallenged factual finding does not affect the issue of statutory construction raised on appeal.
4
DiBerto then assigned his rights to Agamenticus Holdings, LLC, and on
August 15, 2019, Jackson Lumber conveyed the property to Agamenticus.
[¶6] Jackson Lumber filed a complaint in the Superior Court on
November 25, 2019, seeking monetary damages, attorney fees, and costs based
on claims for a deficiency judgment against Rockwell Homes and for
enforcement of the individual guaranties of the Bissons and Wiswell. Jackson
Lumber simultaneously moved for approval of attachment and trustee process
against all defendants. It filed a draft order and the affidavit of its chief
executive officer and treasurer, who authenticated and attached documentary
exhibits. All defendants opposed the motion for approval of attachment and
trustee process. Rock Bisson and Wiswell attached their own affidavits with
exhibits. Jackson Lumber filed a reply memorandum and a supplemental
affidavit from its CEO and treasurer.
[¶7] The court held a nontestimonial hearing in April 2021 and entered
an order denying the motion for approval of attachment and trustee process as
to the claims for deficiency against Rockwell Homes and for enforcement of the
guaranties of the Bissons and Wiswell on the mortgage note for the Lebanon
property. The court reasoned that Jackson Lumber had not established a
likelihood of success on the merits because when the mortgagee is the
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“purchaser at the public sale” of the mortgaged premises, the amount of the
deficiency must be determined by comparing the amount owed with the fair
market value of the property at the time of the sale, as established by an
independent appraisal. 14 M.R.S. § 6203-E. The court regarded mortgagee
Jackson Lumber as the “purchaser at the public sale” and concluded that there
was no recoverable deficiency given that the appraised value of the Lebanon
property ($1,100,000) exceeded the amount owed by Rockwell Homes at the
time of the foreclosure ($1,070,918.37). Id.
[¶8] Jackson Lumber timely appealed from the denial of its motion for
approval of attachment and trustee process as to the claims for a deficiency
owed on the Lebanon property and for the enforcement of the individual
guaranties of the Bissons and Wiswell. See 14 M.R.S. § 1851 (2021); M.R.
App. P. 2B(c)(1); Sweeney v. Hope House, Inc., 656 A.2d 1215, 1216 (Me. 1995)
(“An order denying a motion for approval of attachment and trustee process is
immediately appealable as an exception to the final judgment rule.”).
II. DISCUSSION
[¶9] We review a decision to deny approval of attachment and trustee
process for an abuse of discretion or clear error. See Sweeney, 656 A.2d at 1216.
We will disturb the trial court’s findings based on the affidavits only if “the
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affidavits contain no competent evidence to support the finding as to the
plaintiffs’ likelihood of success.” Blanchard, 2015 ME 101, ¶ 5, 121 A.3d 109(quotation marks omitted).
[¶10] Issues of statutory interpretation are, however, reviewed de novo,
and the fundamental issue on appeal here is the interpretation of the term
“purchaser at the public sale” in 14 M.R.S. § 6203-E. See Fleet Nat’l Bank v.
Liberty, 2004 ME 36, ¶ 5, 845 A.2d 1183. In interpreting a statute, we “look to
the plain meaning of the statute, interpreting its language to avoid absurd,
illogical or inconsistent results and attempting to give all of its words meaning.”
Thurston v. Galvin, 2014 ME 76, ¶ 13, 94 A.3d 16 (quotation marks omitted). In
doing so, we view “the relevant provisions in the context of the entire statutory
scheme to generate a harmonious result.” Corinth Pellets, LLC v. Arch Specialty
Ins. Co., 2021 ME 10, ¶ 19, 246 A.3d 586 (quotation marks omitted). If a statute
is unambiguous, we interpret the statute directly without examining legislative
history; we “look to legislative history and other extraneous aids in
interpretation of a statute only when we have determined that the statute is
ambiguous,” meaning that it “is reasonably susceptible to different
interpretations.” Thurston, 2014 ME 76, ¶ 13, 94 A.3d 16 (quotation marks
omitted).
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[¶11] The relevant paragraph of section 6203-E provides, “In the event
that the mortgagee is the purchaser at the public sale, any deficiency is limited
to the difference between the fair market value of the premises at the time of
the sale, as established by an independent appraisal, and the sum due the
mortgagee with interest plus the expenses incurred in making the sale.”
(Emphasis added.) This stands in contrast to the ordinary determination of a
deficiency by comparing the sale price with the sum owed to the mortgagee and
adding interest and expenses. See 14 M.R.S. § 6203-E; cf. 14 M.R.S. § 6323
(2021) (providing, in the statute governing public sales in foreclosures by civil
action,3 that “[a]ny rights of the mortgagee to a deficiency claim against the
mortgagors are limited to the amount established as of the date of the public
sale. The date of the public sale is the date on which bids are received to
establish the sales price, no matter when the sale is completed by the delivery
of the deed to the highest bidder.”).
3 Although we do not consider the pertinent language of 14 M.R.S. § 6203-E (2021) to be
ambiguous, we reference its legislative history in this footnote for the limited purpose of supporting
our comparison of that provision with the law governing public sales in foreclosures by civil action.
The language in 6203-E was proposed to establish a method for determining the deficiency that
parallels the method employed for sales in foreclosures by civil action, 14 M.R.S. §§ 6323-6324
(2021). See An Act Regarding Maine’s Power of Sale Foreclosure Law: Hearing on L.D. 276 Before the
J. Standing Comm. on Judiciary, 127th Legis. (2015) (testimony of Ben Marcus on behalf of the Maine
Credit Union League). The language of section 6203-E, which tracks the language of section 6324,
thus similarly serves as “a protection against a self-dealing mortgagee.” Peoples Sav. Bank v. Spencer,
482 A.2d 832, 834 (Me. 1984).
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[¶12] Thus, when “(1) the mortgagee is the purchaser at the public sale
and (2) the mortgagee seeks a deficiency judgment,” the deficiency is
determined based on a comparison of the fair market value at the time of the
public sale, as established by an independent appraisal, with the amount owed
to the mortgagee. Key Bank of Me. v. Holman, 657 A.2d 775, 776 (Me. 1995)
(construing the comparable provision in the statute governing a public sale
ordered in a foreclosure by civil action). At issue here is whether Jackson
Lumber was the “purchaser at the public sale” even though it did not ultimately
acquire the property because it later assigned away its rights under the
purchase and sale agreement and never received the deed. 14 M.R.S. § 6203-E.
[¶13] The term “purchaser,” viewed in isolation, means “[s]omeone who
obtains property for money or other valuable consideration; a buyer.”
Purchaser, Black’s Law Dictionary (11th ed. 2019). The statutory term
“purchaser at the public sale” has its own meaning, however, based on its usage
in the statutory scheme. For instance, 14 M.R.S. § 6203-A(5) requires that a
purchase and sale agreement be executed “[a]t the completion of a public sale,”
after which the agreement “may be assigned by the purchaser.”4 (Emphasis
4Although a purchase and sale agreement need not be executed if the mortgagee is the successful
bidder, Jackson Lumber did execute a purchase and sale agreement and then assigned its rights as
the “Purchaser” of the property. See 14 M.R.S. § 6203-A(5) (2021).
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added.) That the “purchaser” is authorized to assign the agreement suggests
that the successful bidder5 at the public sale is the “purchaser at the public sale.”
Id. § 6203-E; see also id. § 6203-A(5) (“A mortgagee may bid and may purchase
any real estate sold at such sale, as long as the mortgagee is the highest
bidder.”); cf. id. § 6323 (providing, in the statute governing public sales in
foreclosures by civil action, that “[t]he date of the public sale is the date on
which bids are received to establish the sales price, no matter when the sale is
completed by the delivery of the deed to the highest bidder”). Thus, the
assignee of the purchase and sale agreement may receive the deed even if it is
not “the purchaser at the public sale” and might not have even participated in
the public sale. Id. § 6203-E; see also 14 M.R.S. § 6324 (2021) (referring, in the
statute governing sales in foreclosures by civil action, to the real estate
“purchased by the highest bidder at the public sale” and a mortgagee that is “the
purchaser at the public sale”).
[¶14] Interpreting “purchaser at the public sale” to mean the successful
bidder at the public sale is supported by section 6203-E itself, which provides
for calculation of the deficiency based on the fair market value “at the time of
5 We use the term “successful bidder” because “[i]f the highest bidder fails to perform on the
agreement, the foreclosing mortgagee may execute a purchase and sale agreement with the next
highest bidder.” 14 M.R.S. § 6203-A(5).
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the sale,” not the fair market value at the time that money or the deed changes
hands. This provision connects a mortgagee that is a “purchaser at the public
sale” with the value of the property at the time of that sale. See id. § 6203-E.
[¶15] Other statutes use the term “purchaser” rather than “purchaser at
the public sale” to describe the entity that ultimately receives the deed. For
instance, 14 M.R.S. § 6203-B (2021) requires the recording of an affidavit
memorializing the sale “within 30 days after the date of delivery of the deed to
the purchaser or the purchaser’s agent.” This statute notably does not describe
the purchaser as the “purchaser at the public sale.”6 Id. § 6203-E (emphasis
added). Similarly, 33 M.R.S. § 501-A (2021), which establishes the statutory
power of sale, uses the term “purchaser or purchasers” to describe the entity or
entities that receive the deed; again, the reference is not to a “purchaser at the
public sale,” 14 M.R.S. § 6203-E.
[¶16] The statutory scheme at issue therefore supports the trial court’s
determination: Jackson Lumber, which was the successful bidder at the public
sale and the buyer listed on the purchase and sale agreement of the Lebanon
6See also J. E. Keefe, Jr., Annotation, What constitutes a “public sale,” 4 A.L.R.2d 575, 575 (1949)
(“Generally speaking, the term ‘public sale,’ as used in statutes . . . means a sale in which the public,
upon proper notice, is invited to participate and give full opportunity to bid upon a competitive basis
for the property placed on sale, which is sold to the highest bidder.”); Offredi v. Huhla, 60 A.2d 779,
781 (Conn. 1948) (“A ‘public sale’ is one made at auction to the highest bidder and at which all
persons have a right to come in and bid.”).
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property, was the “purchaser at the public sale” of that property. 14 M.R.S.
§ 6203-E. The Superior Court did not misinterpret the law and did not
otherwise err or abuse its discretion in denying the motion for approval of
attachment and trustee process as to the Lebanon property.
The entry is:
Order denying the motion for approval of
attachment and trustee process related to the
$1,300,000 promissory note affirmed.
Anthony J. Manhart, Esq. (orally), and Bodie B. Colwell, Esq., Preti Flaherty LLP,
Portland, for appellant Jackson Lumber & Millwork, Co., Inc.
James F. Molleur, Esq., and Christopher J. Keach, Esq. (orally), Molleur Law
Office, Saco, for appellees Rockwell Homes, LLC, Rock Bisson, and Rock Bisson
II
Shea H. Watson, Esq. (orally), and Timothy H. Norton, Esq., Kelly Remmel &
Zimmerman, Portland, for appellee Aaron Wiswell
York County Superior Court docket number CV-2019-261
FOR CLERK REFERENCE ONLY