Bearing witness: Maine demands direct testimony
Editor’s Note: This story originally appeared in the January edition of DS News.
October 22, 2020, at The Bank of New York Mellon v. Danielle Shone, et al., 2020 ME 122, the Supreme Court of Justice of Maine serving as a tribunal, the highest court in Maine, has significantly clarified its previous rulings regarding the testimony required for an incorporated business record to be admitted into evidence in a Maine foreclosure action. Previously, the court had issued a series of decisions dating back to 2011 that gradually increased the standard of proof for admitting a current agent’s case that incorporated the files of a previous agent. Specifically, the court ruled that admitting records from a previous server required more than integrating into the records of the current server and relying on the current server on the built-in records. In addition, to establish an appropriate basis for the admission of integrated cases, the current administrator’s witness had to have sufficient knowledge
the business practices of the former provider to demonstrate the reliability and reliability of the information. Beneficial Maine, Inc. v. Carter, 2011 ME 77.
In December 2017, the court raised the bar again, ruling that in order to authenticate the loan records of a former agent, direct testimony on
the “usual business practices” of the former manager were required. National KeyBank Association v. Estate of Eula W. Quint, 2017 ME 237.
Following the Quint decision, in recent years, foreclosure claimants in Maine have had to call multiple witnesses at trial to ensure that at least one witness with significant personal knowledge of each former agent’s practices was present. This enhanced standard of proof not only posed a logistical problem
charge on the foreclosure of the parties, but it also presented evidentiary problems in cases where a witness with sufficient knowledge of the practices of a former agent was not available.
In fact, a large and growing number of properties abandoned by non-performing borrowers have remained vacant,
investors are unwilling or unable to foreclose lest the trial court find their testimony insufficient. Under Maine law, such a decision will not only cause the foreclosure action to fail, but will also render
the unenforceable mortgage and note, which effectively means the loss of the asset.
After Quint, Supreme Court of Justice changed Maine rules of evidence
regarding the admission of business records to align with the Federal Rules of Evidence. This change came into effect on August 1, 2018.
Subsequently, on May 30, 2019, the Court of Appeal of the 1st circuit rendered its decision in US Bank Trust, NA v Jones, 925 F.3rd 534 (1st Cir. 2019) who upheld a decision of a federal district court registering a judgment for the plaintiff seized in a Maine case, finding that the witness need not have personal knowledge of a former’s record-keeping practices server whose folders had been integrated into the folders of the current server.
Fortunately for the foreclosure parties, in Shone the court has now set aside
of course and has set a lower standard of proof that is more consistent with the approach taken in other jurisdictions as well as by federal courts.
Specifically, the court clarified that in the future, it is not necessary for the current agent’s witness to have personal knowledge of business practices.
an old server whose files have been integrated into the files of the current server so that the integrated files can be admitted into evidence. Additionally, the court has publicly distanced itself from its own rulings in Carter, Quint, and other recent foreclosure cases, noting that those more recent rulings had
departed from, but did not expressly set aside, the precedent in several other decisions of the Court of Justice dating from 1984. See Northeast Bank & Trust Co. v. Soley, 481 A.2d 1123 (Me. 1984).
According to the court’s decision in the Shone case, the witness must always have
knowledge of the current administrator’s record-keeping practices, as well as how the current administrator has incorporated the records of all previous administrators into their records, including how these built-in records have been verified and used by the current administrator to show that they are trustworthy. The court also noted that a
the case can always be rejected if the opponent can demonstrate “that the source of the information or the method or the circumstances of preparation indicate unreliability”.
This is an important victory for the parties to the foreclosure, who will normally no longer be required to present a series of witnesses in order to have a chain of business records from former servers admitted into evidence in foreclosure actions of the Maine. While Maine remains a “one and done” state, this ruling has removed a very big barrier to excluding plaintiffs in Maine.