Justia Bankruptcy Opinion Summaries

Leonard and Pauline Cortellino executed a promissory note and mortgage in 2006 for the purchase of property in Maine. The mortgage, originally granted to Mortgage Electronic Registration Systems (MERS) as nominee for Mortgage Lenders Network USA, Inc. (MLN), was later assigned multiple times, ultimately to Wilmington Savings Fund Society, FSB, as Trustee for Brougham Fund I Trust in 2016. However, MLN filed for bankruptcy in 2007 and ceased operations after the bankruptcy concluded in 2012. Due to deficiencies in prior assignments following the Maine Supreme Judicial Court’s decision in Bank of America, N.A. v. Greenleaf, parties sought to cure the assignment defects. In 2021, a receiver for MLN, appointed by the Delaware Court of Chancery, assigned the Cortellino mortgage to Wilmington Savings, which was recorded in 2022.After the Cortellinos defaulted on their mortgage payments in 2014, Wilmington Savings sent them a notice of default and right to cure in August 2022. Wilmington Savings filed a foreclosure action in the Maine Superior Court (Androscoggin County) in October 2022. Following a trial in October 2024 and post-trial submissions, the Superior Court entered a judgment of foreclosure and sale in April 2025. The court found Wilmington Savings owned the mortgage and denied the Cortellinos’ motion for additional findings. The Cortellinos appealed.The Maine Supreme Judicial Court reviewed the Superior Court’s factual findings for clear error and its legal conclusions de novo. The Court held that Wilmington Savings was the rightful owner of the mortgage due to the valid receiver’s assignment, but found that the right-to-cure notice was legally defective. The notice overstated the amount required to cure the default and contained numerical inconsistencies, failing to strictly comply with Maine’s statutory requirements. The Court vacated the judgment and remanded for entry of dismissal. View "Wilmington Savings Fund Society v. Cortellino" on Justia Law

In 2008, Richard and Suzan Collins were divorced. In 2009, the court issued an amended judgment that contained an order of enforcement. In 2014, the court held Richard in contempt for failing to comply with the payment obligations created by the 2009 order. Two months after the court issued the contempt order, Richard filed a petition for Chapter 7 bankruptcy. Later that year, the Bankruptcy Court issued a discharge in bankruptcy. Suzan then filed a request for a show cause hearing, asserting that Richard had not made the payments required by the 2014 contempt order. Richard moved to dismiss Suzan’s request for the show cause hearing on the grounds that, aside from his child support debt, all of his financial obligations had been discharged in the bankruptcy action. After a show cause hearing, the district court denied Richard’s motion to dismiss and confirmed his payment obligations as ordered in the contempt order. The Supreme Judicial Court affirmed, holding that Richard’s obligations under the divorce judgment were statutorily insulated from a post-judgment bankruptcy discharge, and Richard remained liable to Suzan and for payments to a third-party creditor. Therefore, the district court did not err by enforcing the contempt order that pre-dated the bankruptcy discharge. View "Collins v. Collins" on Justia Law

In 2008, Richard and Suzan Collins were divorced. In 2009, the court issued an amended judgment that contained an order of enforcement. In 2014, the court held Richard in contempt for failing to comply with the payment obligations created by the 2009 order. Two months after the court issued the contempt order, Richard filed a petition for Chapter 7 bankruptcy. Later that year, the Bankruptcy Court issued a discharge in bankruptcy. Suzan then filed a request for a show cause hearing, asserting that Richard had not made the payments required by the 2014 contempt order. Richard moved to dismiss Suzan’s request for the show cause hearing on the grounds that, aside from his child support debt, all of his financial obligations had been discharged in the bankruptcy action. After a show cause hearing, the district court denied Richard’s motion to dismiss and confirmed his payment obligations as ordered in the contempt order. The Supreme Judicial Court affirmed, holding that Richard’s obligations under the divorce judgment were statutorily insulated from a post-judgment bankruptcy discharge, and Richard remained liable to Suzan and for payments to a third-party creditor. Therefore, the district court did not err by enforcing the contempt order that pre-dated the bankruptcy discharge. View "Collins v. Collins" on Justia Law

In 2012, Plaintiff, a church located in Portland, filed a complaint seeking a state court judgment based on a bankruptcy court judgment that it obtained in 1985, under a former name, against Defendant. During the pendency of the state court action, Plaintiff also moved for a writ of execution on the original bankruptcy judgment. Defendant counterclaimed against Plaintiff and its pastor. The district court issued an order directing the issuance of a writ and then granted judgment on the pleadings in favor of Plaintiff on both its complaint and Defendant’s counterclaim. The Supreme Judicial Court vacated the execution order and the judgment, holding (1) the district court correctly denied Defendant’s motion to dismiss Plaintiff’s complaint seeking a judgment on the bankruptcy court judgment; but (2) the district court erred by ordering that an execution issue, granting judgment on the pleadings, and dismissing Defendant’s claims against Plaintiff’s pastor. View "Faith Temple v. DiPietro" on Justia Law