The Maine Supreme Judicial Court affirmed a district court's dismissal without prejudice of a foreclosure action brought by U.S. Bank National Association against Richard S. Jewett and Shirley A. Jewett, rejecting an appeal by third-party creditor Unifund CCR Partners.
The case stems from a 1999 loan the Jewetts obtained from Green Tree Servicing LLC, later known as Ditech Financial LLC, for $90,403.50. The loan was secured by a mortgage on their home in Dixmont, Maine. In 2018, Ditech assigned the promissory note to U.S. Bank National Association as Trustee for Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate Trust 2000-4.
The foreclosure dispute began when the Jewetts stopped making monthly payments on their loan before March 15, 2016. U.S. Bank sent the couple a "Notice of Right to Cure" on July 27, 2018, followed by filing a foreclosure complaint on Sept. 24, 2018. The complaint stated that the entire principal amount and all other sums were presently due and payable because of the default, listing the amount due as $85,876.23.
Complicating the matter was Unifund CCR Partners, which had recorded a judgment execution lien in the amount of $6,179.72 against Richard Jewett's interest in the mortgaged premises in August 2012. Under Maine law, U.S. Bank was required to name Unifund as a party in interest because of its judgment execution lien. Maine Revised Statutes section 6321 defines parties in interest as "mortgagors, holders of fee interest, mortgagees, lessees pursuant to recorded leases or memoranda thereof, lienors and attaching creditors."
After a bench trial held on June 16 and Oct. 11, 2023, the District Court in Newport, presided over by Judge Larson, entered a judgment of dismissal without prejudice against U.S. Bank on July 25, 2024. The dismissal without prejudice means that U.S. Bank could potentially refile the foreclosure action in the future.
Unifund appealed the dismissal to the Maine Supreme Judicial Court, arguing that the district court erred in dismissing the foreclosure action without prejudice. Specifically, Unifund contended that the dismissal would not have a preclusive effect on unaccelerated amounts in future foreclosure actions. This distinction is important because it relates to whether U.S. Bank could pursue foreclosure on portions of the debt that had not yet been accelerated or declared immediately due.
The Maine Supreme Judicial Court, in a decision written by Justice Mead and joined by Chief Justice Stanfill and Justices Lawrence, Douglas, and Lipez, unanimously affirmed the district court's judgment. The high court's decision was announced on Nov. 25, 2025, following oral arguments heard on Sept. 9, 2025.
The case illustrates the complex interplay between mortgage foreclosure proceedings and third-party creditor interests. When multiple parties hold liens or other interests in real property, foreclosure actions must carefully balance the rights of all stakeholders. Unifund's position as a judgment creditor gave it standing to participate in the foreclosure proceeding and to appeal decisions that could affect its ability to collect on its judgment.
Foreclosure dismissals without prejudice are significant because they allow the foreclosing party to refile their action while preserving their claims. However, such dismissals can also affect the rights of other creditors who may be concerned about the timing and scope of future foreclosure attempts.
The distinction between accelerated and unaccelerated amounts in mortgage foreclosures relates to whether the lender has declared the entire loan balance immediately due (acceleration) or is only pursuing past-due payments. This technical aspect of mortgage law can significantly impact both the scope of foreclosure proceedings and the rights of junior creditors.
The Maine Supreme Judicial Court's affirmation of the dismissal suggests that the district court properly exercised its discretion in determining that dismissal without prejudice was appropriate under the circumstances. The decision provides guidance for similar cases involving multiple creditors and complex mortgage assignments.
This case also highlights the ongoing challenges in the mortgage servicing industry, where loans are frequently transferred between different servicers and trustees. The assignment of the mortgage from Ditech to U.S. Bank as trustee reflects the common practice of securitizing mortgage loans through trust structures.
The decision in *U.S. Bank v. Jewett* may influence how courts in Maine handle similar foreclosure cases involving multiple creditors and questions about the appropriate form of dismissal when foreclosure actions encounter procedural or substantive difficulties.