January 2024

In January 2024, the Maine Supreme Judicial Court overruled in part its decision in Pushard and, in doing so, stopped the practice of “court-as-casino” that awarded free houses to defendant mortgagors.  In Finch v. U.S. Bank, NA, appellee mortgagor asked the Maine SJC to uphold a lower court verdict – based upon Pushard – that awarded him a free house after the trial court found that the foreclosing mortgagee had served a defective foreclosure notice on the mortgagor.  The trial court, citing Pushard, held that the foreclosure action led to a decision on the merits of the plaintiff mortgagee’s claims; because the trial court found the foreclosure notice defective, the court found for the defendant mortgagor and – applying the principle of res judicata – determined that the court had adjudicated the plaintiff mortgagee’s rights to foreclose the note and mortgage – i.e., the plaintiff mortgagee could not foreclose again.

The Maine SJC took the opportunity in Finch to revisit its decision in Pushard, acknowledging that “no other jurisdiction has adopted the view that a failed first foreclosure attempt necessarily bars a second attempt based on a new breach.”  Overruling in part its decision in Pushard, the Court held that a mortgagee who serves a defective foreclosure notice necessarily does not accelerate the loan for purposes of foreclosure, therefore prohibiting the trial court from ruling on the merits of the mortgagee’s claim – i.e., the mortgagee can foreclose again.

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