PORTLAND – The “robo-signing” foreclosure case of a Denmark woman represents such a serious attack on the integrity of the state’s judicial system that an investigation of the mortgage servicer’s practices is warranted, the woman’s lawyer argued before the Maine Supreme Judicial Court on Wednesday.

Nicolle Bradbury’s attorney, Thomas Cox, also said a lower court erred when it failed to find GMAC Mortgage in contempt because one of its employees signed a sworn document in support of foreclosure on her home without reviewing the relevant records. Cox, who discovered the flawed process, argued that it was part of a pattern and that the trial court should have considered remedial or punitive action against GMAC.

Cox said such affidavits affect all of the 1,152 foreclosure actions brought in Maine by GMAC over the past six years. He said GMAC was sanctioned in Florida for the same problems in 2006, but failed to reform its practices.

The robo-signing revelation prompted a suspension of foreclosures by GMAC and other big lenders, congressional hearings and an investigation by state attorneys general. Bradbury is a plaintiff in a class-action case in federal court.

The Federal National Mortgage Association — known as Fannie Mae — brought the foreclosure action against Bradbury in 2009 after she lost her job and stopped making mortgage payments. GMAC, part of Ally Financial Inc., is involved as the mortgage servicer and as the holder of a junior mortgage on the house.

In September 2010, District Court Judge Keith Powers found that the affidavit was submitted in bad faith and ordered Fannie Mae to pay Bradbury’s legal fees and costs — about $24,000 — but did not sanction GMAC. Although the affidavit was created by GMAC, it was presented in the case by Fannie Mae.

Cox, representing Bradbury for free through Pine Tree Legal Assistance, told the Supreme Court on Wednesday that the lower court should have analyzed the facts of the case in a full trial before deciding whether to punish GMAC for its improperly reviewed affidavit submitted in support of summary judgment.

Much of Cox’s appeal argument centered on a rule in Maine’s civil procedure that allows contempt proceedings when a court receives an affidavit in bad faith. The rule took effect in 1959 but apparently has never been used.

“You are asking us to determine that a judge who was unwilling to sail out into uncharted territory abused discretion by doing so,” said Justice Ellen Gorman.

Cox replied, “I wouldn’t put it in those terms, your honor,” before Justice Donald Alexander spoke out.

“Of course you wouldn’t put it in those terms, because that means you lose,” Alexander said.

John Aromando, the lawyer for Fannie Mae and GMAC, said his position was simply that the sanctions were within the discretion of the trial court, which chose not to order them against GMAC.

“You’ve got to find abuse of that discretion to disturb that finding,” he told the justices.

Aromando said aspects of the affidavit were not defensible.

“We have what is a very egregious violation, and a violation that really subverts our justice system by a party-in-interest in this litigation who leaves the case with no sanction,” said Justice Jon Levy. “How can that be right?”

Aromando said GMAC is accountable to Fannie Mae “in the real world of practical consequences.” He also said there was “regrettable sloppiness” in some cases, but the problem may not be as widespread as some suggest.

“The vast majority of these cases do not have this problem,” Aromando said. “I understand seeing even one of them is too much and you’ve seen a lot more than one, but we’re not at a percentage where it’s significant.”

The court will consider the arguments and make its ruling at a future date.

Staff Writer Ann S. Kim can be contacted at 791-6383 or at:

akim@pressherald.com