MAINE SUPREME JUDICIAL COURT Reporter of Decisions Decision: 2020 ME 42 Docket: Cum-19-192 Argued: December 6, 2019 Decided: April 2, 2020 Panel: MEAD, GORMAN, JABAR, HUMPHREY, and HJELM, JJ.*

U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE FOR RASC 2005KS9 v. THOMAS MANNING

HUMPHREY, J.

[¶1] U.S. Bank National Association as Trustee for RASC 2005KS9 (the Bank), appeals from a judgment of the Superior Court (Cumberland County, Wheeler, J.) granting Thomas Manning’s motion for reconsideration and dismissing with prejudice the Bank’s foreclosure complaint. The Bank also appeals from an order of sanctions imposed by the court (L. Walker, J.) following a judicial settlement conference.

[¶2] The procedural record of this case stretches back to 2010 and includes one prior appeal in which we vacated the trial court’s judgment

* Although Justice Alexander participated in the appeal, he retired before this opinion was certified.

Justice Hjelm sat at oral argument and participated in the initial conference while he was an Associate Justice, and, on order of the Senior Associate Justice, was authorized to continue his participation in his capacity as an Active Retired Justice.

dismissing the Bank’s foreclosure complaint with prejudice. See U.S. Bank Nat’l Ass’n v. Manning (Manning I), 2014 ME 96, ¶¶ 1, 20, 97 A.3d 605. In this appeal, we are asked again to determine whether the court abused its discretion by dismissing with prejudice the Bank’s foreclosure complaint. After review, we affirm the sanctions imposed by the court (L. Walker, J.) following the settlement conference and vacate the court’s (Wheeler, J.) judgment dismissing the Bank’s complaint with prejudice. We remand the matter with instructions to dismiss the Bank’s foreclosure complaint without prejudice.

I. BACKGROUND

A. Foreclosure Complaint and Prior Appeal

[¶3] On August 2, 2005, Manning signed a promissory note in the amount of $520,000 listing Mortgage Lenders Network USA, Inc., as the lender, and, in order to secure the note, executed and delivered a mortgage to Mortgage Electronic Registration Systems, Inc., as the nominee of the lender. On May 24, 2010, the Bank filed a complaint for foreclosure against Manning, and it amended the complaint on July 15, 2010.

[¶4] More than three years after the complaint was filed, the court (Wheeler, J.) dismissed the Bank’s complaint with prejudice because the Bank had failed to timely pay a $150 sanction. See Manning I, 2014 ME 96, ¶ 3,[*~726–732] 97 A.3d 605 (chronicling the previous pre-trial history of this case). Following the Bank’s timely appeal, we held that the court abused its discretion in dismissing the complaint, vacated the judgment, and remanded the case for further proceedings. See id. ¶¶ 14-20.

B. Proceedings After Remand motion to reconsider until a decision in Greenleaf II was issued. On July 16, 2015, the court granted the parties’ joint motion to stay further proceedings on the motion for reconsideration until thirty days after the decision in Greenleaf II was issued.

[¶9] We issued our decision in Greenleaf II on September 22, 2015.

[¶10] On October 15, 2015, the court granted Manning’s “consented-to” motion to continue the stay until November 6, 2015. A week later, the court ordered that a judicial settlement conference be set for “early December” and that the case remain stayed until after the settlement conference.

[¶11] On December 4, 2015, Manning requested a conference with the court and counsel for the parties. On February 26, 2016, the Bank objected to Manning’s request and moved to lift the July 16, 2015, stay on Manning’s motion for reconsideration. The Bank pointed out that it had been eight months since Manning filed his motion and five months since the decision in Greenleaf II was issued. Manning opposed the Bank’s motion to lift the stay.

[¶12] Four months later, on July 13, 2016, the Bank filed a letter with the court, inquiring about the status of the pending motions regarding Manning’s request for a conference and the Bank’s motion to lift the July 16, 2015, stay.

On July 25, 2016, the court ordered that a settlement conference be scheduled “within the next sixty days.”

faith” in order to resolve all claims and, if no agreement was reached by April 28, the court would hold a one-day testimonial hearing on Manning’s motion for contempt.4

[¶15] On October 6, 2017, Manning filed a renewed motion for contempt, arguing that the court should dismiss the Bank’s foreclosure complaint with prejudice “or, in the alternative, hold the Bank in contempt and impose sanctions.” The court held a hearing on the motion on February 9, 2018, and conducted a second judicial settlement conference on May 18, 2018.

[¶16] On July 20, 2018, the court granted Manning’s motion for contempt and imposed sanctions on the Bank, ordering it to pay Manning’s attorney fees and costs “associated with preparation for and attendance [at] both Judicial Settlement Conferences.” The court found that the Bank had “failed to comply with the court’s order regarding the judicial settlement conference, despite having the ability to do so.” The court “stop[ped] short” of dismissing the case with prejudice, and left it to the trial court to “consider the [Bank’s] conduct . . .

[¶19] On April 24, 2019, the court granted Manning’s June 15, 2015, motion to reconsider the court’s June 1, 2015, order. The court dismissed with prejudice the Bank’s foreclosure complaint as a sanction for the Bank’s failure to cooperate with discovery requests, disregard of court orders, and conduct at the judicial settlement conference, and also awarded Manning his attorney fees from July 19, 2018—the date the Bank was sanctioned for its conduct at the judicial settlement conferences—to the conclusion of the case.

[¶20] The Bank then filed a timely notice of appeal. See M.R. App. P. 2B(c)(2).

II. DISCUSSION

[¶21] The Bank contends that the court abused its discretion when it (1) required the parties to participate in a settlement conference after staying Manning’s motion for reconsideration, (2) imposed sanctions on the Bank following the settlement conference, and (3) granted the motion for reconsideration and dismissed the foreclosure complaint with prejudice. We address each in turn.

A. Judicial Settlement Conference

1. Orders to Hold a Settlement Conference

[¶22] The Bank argues that the court abused its discretion by extending the July 16, 2015, stay on Manning’s motion for reconsideration and “forcing” the Bank to participate in the judicial settlement conference. We review court orders supervising and managing proceedings for an abuse of discretion. See Geary v. Stanley, 2007 ME 133, ¶ 12, 931 A.2d 1064; see also M.R. Civ. P. 16(a)-(b). “The touchstone of determining whether the court has properly exercised its discretion is whether in a given case that discretion is exercised in furtherance of justice.” Unifund CCR Partners v. Demers, 2009 ME 19, ¶ 8, 966 A.2d 400 (alterations omitted) (quotation marks omitted).

[¶23] Here, upon remand in 2014, the court ordered the parties to attend a settlement conference. See M.R. Civ. P. 16(b). A settlement conference was not held because, in part, the Bank filed a motion to voluntarily dismiss its complaint without prejudice, which was granted by the court. Manning then filed a motion for reconsideration of the dismissal and, at the parties’ request, the court stayed Manning’s motion in anticipation of our decision in Greenleaf II.^[6]

[¶24] During this stay, the court again ordered the parties to attend a settlement conference and extended the stay until after that conference was held. A settlement conference eventually took place on September 23, 2016; however, it was unsuccessful and, on November 18, 2016, Manning filed a motion for contempt based on the Bank’s alleged conduct at the settlement conference. This was followed by a hearing on Manning’s motion for contempt and a second unsuccessful settlement conference.

[¶25] In the circumstances of this case, where Manning filed a motion for reconsideration and the parties then both agreed to stay further proceedings on that motion, the court’s decision to require the parties to attend a settlement conference was “exercised in furtherance of justice,” Unifund CCR Partners, 2009 ME 19, ¶ 8, 966 A.2d 400, and, thus, was not an abuse of discretion.^[7]

standing, a “court is not divested of its inherent authority to dismiss the complaint with prejudice as a sanction for misconduct”).

[¶28] When imposing sanctions, a court must consider certain factors, including “(1) the purpose of the specific rule at issue; (2) the party’s conduct throughout the proceedings; (3) the party’s basis for its failure to comply; (4) prejudice to other parties; and (5) the need for the orderly administration of justice.” Bayview Loan Servicing, LLC, 2014 ME 37, ¶ 12, 87 A.3d 741.

[¶29] In this case, the court possessed the authority to impose sanctions on the Bank for its conduct at the settlement conference. See Green Tree Servicing, LLC, 2017 ME 68, ¶ 18, 158 A.3d 931; Baker’s Table, Inc., 2000 ME 7,

¶ 16, 743 A.2d 237. At the February 9, 2018, hearing on Manning’s motion for sanctions, the court found, and the Bank acknowledged, that the Bank had failed to ensure that a person with “full authority” to settle attended the settlement conference. Therefore, the court did not abuse its discretion in imposing sanctions for the Bank’s conduct during the settlement conference. See Bayview Loan Servicing, LLC, 2014 ME 37, ¶ 23, 87 A.3d 741.

B. Motion for Reconsideration

[¶30] The Bank contends that the court abused its discretion when it granted Manning’s motion for reconsideration and dismissed the foreclosure[*~730–735] complaint with prejudice, arguing that the court improperly relied on events that occurred after it entered the original dismissal order on June 1, 2015.

[¶31] Manning’s motion for reconsideration was filed pursuant to Rule 7(b)(5) of the Maine Rules of Civil Procedure and was directed at the court’s original June 1, 2015, order, which both denied Manning’s motion for summary judgment and granted the Bank’s motion to voluntarily dismiss the foreclosure action without prejudice. To the extent that Manning’s motion for reconsideration challenged the court’s order denying his motion for summary judgment, we treat it as a motion to reconsider the court’s order in accordance with Rule 7(b)(5); however, to the extent that Manning’s motion sought a reconsideration of the court’s judgment dismissing the complaint without prejudice, we treat his motion for reconsideration as a motion to alter or amend the judgment.8 See Arsenault v. Arsenault, 2008 ME 75, ¶ 5, 946 A.2d 412; M.R. Civ. P. 59(e); see also Geary v. Stanley Med. Research Inst., 2008 ME 9, ¶ 10, 939 A.2d 86 (stating that a denial of a motion for summary judgment is not a final judgment).

[¶32] We review for an abuse of discretion a court’s ruling on both a motion for reconsideration of an order and a motion to alter or amend a judgment. See Green Tree Servicing, LLC, 2017 ME 68, ¶ 12, 158 A.3d 931; Shaw v. Shaw, 2003 ME 153, ¶ 7, 839 A.2d 714. In each instance, our review for an abuse of discretion “involves three questions: (1) whether the court’s factual findings are supported by the record according to the clear error standard, (2) whether the court understood the law applicable to the exercise of its discretion, and (3) whether the court’s weighing of the applicable facts and choices was within the bounds of reasonableness.” Green Tree Servicing, LLC, 2017 ME 68, ¶ 12, 158 A.3d 931.

[¶33] We also “closely review” for an abuse of discretion a court’s dismissal with prejudice of a foreclosure complaint. Manning I, 2014 ME 96,

¶ 12, 97 A.3d 605. “Due to the severity of dismissal . . . and the constitutional implications of such an action . . . the trial court’s discretion in imposing [this] ultimate sanction is narrow indeed and will be given close scrutiny on appeal.” Id. (quotation marks omitted).

[¶34] A motion for reconsideration of an order “shall not be filed unless required to bring to the court’s attention an error, omission or new material that could not previously have been presented.” M.R. Civ. P. 7(b)(5). “Rule 7(b)(5) is intended to deter disappointed litigants from seeking ‘to reargue points that were or could have been presented to the court on the underlying motion.’” Shaw, 2003 ME 153, ¶ 8, 839 A.2d 714 (quoting M.R. Civ. P. 7, Advisory Committee’s Notes (May 1, 2000)); see Roalsvik v. Comack, 2019 ME 71, ¶ 3, 208 A.3d 367 (affirming the denial of a motion for reconsideration when the motion presented “allegations of events that occurred only after the hearing was held and the record was closed”).

[¶35] Similarly, when ruling on a motion to alter or amend a judgment, a court is “free within a very limited time period to alter or amend its judgment when convinced it was erroneous, and substitute the proper judgment in its place.” Most v. Most, 477 A.2d 250, 258 (Me. 1984). When doing so, a court “is not free to litigate anew . . . [and] may only re-examine those facts already presented to determine whether an error of law or fact has taken place and whether substantial justice has been rendered.” Id. at 260; see Perez v. Lorraine Enters., 769 F.3d 23, 32 (1st Cir. 2014) (stating that Fed. R. Civ. P. 59(e) “does[*~732–735] not permit a party to turn back the clock, erase the record, and try to reinvent its case after an adverse judgment has entered”).

[¶36] Here, in granting the motion for reconsideration, the court reasoned that its dismissal of the Bank’s foreclosure complaint with prejudice was warranted by the Bank’s failure to cooperate in discovery, its unwillingness to follow court orders, and its failure to negotiate in good faith during the judicial settlement conference process, which occurred after the order that was being reconsidered. Much of this conduct was already addressed following the settlement conference when the court (L. Walker, J.) sanctioned the Bank for its failure to follow court orders or negotiate in good faith. In effect, two different judges sanctioned the same party for the same alleged misconduct.

[¶37] The trial court (Wheeler, J.) abused its discretion in both granting Manning’s motion for reconsideration and imposing sanctions on the Bank, which included a dismissal with prejudice of the Bank’s foreclosure complaint. As such, we remand the matter to the trial court with instruction to dismiss the Bank’s complaint without prejudice, in accordance with the court’s original June 1, 2015, order.

The entry is:

Order imposing sanctions for conduct at settlement conference affirmed. Judgment imposing sanctions and dismissing complaint with prejudice vacated. Remanded for trial court to dismiss the Bank’s foreclosure complaint without prejudice.