Bradley v Wells Fargo Bank

2013 DNH 173

• Court: District Court, D. New Hampshire
• Decided: December 18, 2013
• Docket: 12-CV-127-PB
• Status: Published

Opinion

Bradley v Wells Fargo Bank 12-CV-127-PB 12/18/13 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Jeffrey Bradley

v. Civil N o . 12-cv-127-PB Opinion N o . 2013 DNH 173 Wells Fargo Bank, N.A. et a l .

MEMORANDUM AND ORDER

Jeffrey Bradley lost his home to foreclosure. He has sued

his mortgage lender, two assignees of his mortgage, and two

entities involved in servicing his loan. He challenges the

legality of the foreclosure on several grounds and seeks damages

from all of the defendants.

Bradley asserts his claims in both an amended complaint and

a proposed second amended complaint that he filed with a motion

to join additional defendants. Two defendants named in the

amended complaint have filed answers, and the rest have filed

motions to dismiss. All defendants oppose the motion for

joinder. For the reasons set forth in this Memorandum and

Order, I grant the motions to dismiss and deny the motion for

joinder. I. BACKGROUND

A. Factual Background1

Bradley obtained a $143,500 mortgage loan from Ameriquest

Mortgage Company in November 2004. Shortly thereafter,

Ameriquest assigned the mortgage to Wells Fargo Bank, N.A. as

trustee for an unnamed trust (“Wells Fargo Trustee”). 2 Although

the first payment on the note was not due until January 1 , 2005,

Bradley made payments on the loan in November and December 2004,

as well as the first required payment in January 2005.

Defendants, however, failed to give Bradley credit for any of

his payments.

Without Bradley’s knowledge, HomEq Servicing was assigned

responsibility for servicing Bradley’s loan. On March 1 , 2005,

HomEq sent Bradley a notice stating that his loan was three

months overdue. Although Bradley’s loan called for the lender

to make homeowner’s insurance payments on his behalf from an

1 I draw the background facts from the proposed second amended complaint (Doc. N o . 6 6 - 1 ) , which provides a somewhat more detailed description of the relevant facts than is provided in the amended complaint. Doc. N o . 3 8 . 2 The proposed second amended complaint alleges that the assignment originally failed to name the assignee and that the actual assignment was made at a later time. The complaint does not identify the trust that benefitted from the assignment.

2 escrow account, HomEq failed to make the required payments. In

August 2005, Bradley received a notice from his insurer stating

that his homeowner’s insurance was about to be cancelled.

Following instructions Bradley received from HomEq, Bradley paid

his insurer and deducted the payment from his September mortgage

payment. HomEq, however, refused to credit Bradley for his

September mortgage payment. It also failed to give him a credit

for his October payment and a double payment he attempted to

make in November.

One or more defendants instituted foreclosure proceedings

against Bradley in March 2006. 3 In response, Bradley brought

suit in state court to enjoin the foreclosure. A state court

judge dismissed the foreclosure proceedings in an order dated

January 3 1 , 2007 “due to the cancellation of the foreclosure and

the attempt of the plaintiffs to refinance their loan.” After

the foreclosure case was dismissed, a representative of the

defendants assured Bradley that an agreement could be reached to

resolve their dispute.4 Bradley, however, was unable to contact

3 The complaint does not identify the defendants who instituted foreclosure proceedings. 4 Again, the complaint does not identify the defendants whose representative allegedly made these representations.

3 the defendants to negotiate a settlement agreement. In 2009,

Bradley spoke with a representative of HomEq and was informed

that his loan “was lost in the computer database.” Between 2007

and 2010, defendants also sent multiple notices concerning the

loan to the wrong address. On at least one occasion, Bradley

was unable to obtain a payoff number from Wells Fargo or any of

the other defendants. As a result, he lost an opportunity to

refinance his loan.

On September 1 , 2010, Wells Fargo Trustee assigned

Bradley’s mortgage to Wells Fargo Bank, N.A. as Trustee for a

trust created pursuant to a Pooling and Servicing Agreement

dated October 1 , 2004 (“Wells Fargo PSA Trustee”). 5 At around

the same time, Ocwen Loan Servicing, LLC assumed responsibility

for servicing Bradley’s loan.

A few months later, on February 8 , 2011, Wells Fargo PSA

Trustee scheduled a foreclosure sale for March 9, 2011. It

later postponed the foreclosure sale: first until April 6, 2011,

and ultimately until April 2 7 , 2011. A law office acting on

behalf of Wells Fargo PSA Trustee sent Bradley’s former attorney

5 Bradley alleges that the second assignment was not signed but instead only bears the initials “CC” for Christine Carter, an account manager for Ocwen Loan Servicing, LLC.

4 a notice that the original foreclosure sale had been postponed.

It continued to send foreclosure notices to the attorney even

after she notified defendants that she no longer represented

Bradley. Bradley never received notice of the foreclosure,

which was completed as scheduled on April 2 7 , 2011. Wells Fargo

PSA Trustee purchased the property at the foreclosure sale.

On or about May 1 , 2011, one of the defendants put a

padlock on the door of Bradley’s home without a writ of

possession and without giving him either notice to quit or a

notice of eviction. On May 1 4 , defendants or their agents threw

Bradley’s household goods into a dumpster and destroyed many of

Bradley’s personal effects, sentimental items, furniture, and

other household goods.

B. Procedural Background

On January 2 7 , 2012, Bradley filed a complaint in the

Rockingham County Superior Court against Wells Fargo. Doc. N o .

3. On March 3 0 , 2012, Wells Fargo removed the case to this

court. On March 1 8 , 2013, Bradley filed an amended complaint

naming Ameriquest and Ocwen as additional defendants. Bradley

also listed Wells Fargo separately as a defendant in its

individual capacity, in its capacity as trustee of the unnamed

trust and in its capacity as trustee of the trust created by the 5 Pooling and Servicing Agreement. Doc. N o . 3 8 . Wells Fargo PSA

Trustee and Ocwen answered the amended complaint, but Wells

Fargo, Wells Fargo Trustee, and Ameriquest all filed motions to

dismiss for failure to state a claim. Bradley objected to each

motion.

On September 2 4 , 2013, Bradley filed a motion for joinder

and attached a proposed second amended complaint that named

HomEq Servicing as an additional defendant. The proposed second

amended complaint also added additional factual allegations and

new claims for relief against the original defendants. Doc.

Nos. 6 6 , 66-1. On October 8 , 2013, all defendants filed

objections to the motion for joinder.

II. STANDARD OF REVIEW

To survive a Rule 12(b)(6) motion to dismiss, a plaintiff

must make factual allegations sufficient to “state a claim to

relief that is plausible on its face.” Ashcroft v . Iqbal, 556

U.S. 6 6 2 , 678 (2009)(quoting Bell Atl. Corp. v . Twombly, 550

U.S. 5 4 4 , 570 (2007)). A claim is facially plausible when it

pleads “factual content that allows the court to draw the

reasonable inference that the defendant is liable for the

misconduct alleged. The plausibility standard is not akin to a 6 ‘probability requirement,’ but it asks for more than a sheer

possibility that a defendant has acted unlawfully.” Id.

(citations omitted).

In deciding a motion to dismiss, I employ a two-step

approach. See Ocasio–Hernández v . Fortuño–Burset, 640 F.3d 1 ,

12 (1st Cir. 2011). First, I screen the complaint for

statements that “merely offer legal conclusions couched as fact

or threadbare recitals of the elements of a cause of action.”

Id. (citations, internal quotation marks, and alterations

omitted). A claim consisting of little more than “allegations

that merely parrot the elements of the cause of action” may be

dismissed. Id. Second, I credit as true all non-conclusory

factual allegations and the reasonable inferences drawn from

those allegations, and then determine if the claim is plausible.

Id. The plausibility requirement “simply calls for enough fact

to raise a reasonable expectation that discovery will reveal

evidence” of illegal conduct. Twombly, 550 U.S. at 556. The

“make-or-break standard” is that those allegations and

inferences, taken as true, “must state a plausible, not a merely

conceivable, case for relief.” Sepúlveda–Villarini v . Dep't of

Educ., 628 F.3d 2 5 , 29 (1st Cir. 2010); see Twombly, 550 U.S. at

555 (“Factual allegations must be enough to raise a right to 7 relief above the speculative level.”).

Federal Rule of Civil Procedure 1 9 , governing the required

joinder of parties, “addresses situations where a lawsuit is

proceeding without a party whose interests are central to the

suit.” Bacardí Int’l Ltd. v . V . Suarez & Co., Inc., 719 F.3d 1 ,

9 (1st Cir. 2013)(citing Picciotto v . Cont’l Cas. Co., 512 F.3d

9, 15 (1st Cir. 2008)). The rule requires courts to “make

pragmatic, practical judgments that are heavily influenced by

the facts of each case.” Id. A party can be required to join

i f , among other things, “in that person’s absence, the court

cannot accord complete relief among existing parties.” Fed. R.

Civ. P. 19(a)(1)(A). Joinder is thus not required under

19(a)(1)(A) if “[c]omplete relief can be afforded among those

already parties.” Bacardí Int’l, 719 F.3d at 1 0 .

III. ANALYSIS

This case is procedurally complex because I must

simultaneously resolve both defendants’ motions to dismiss the

amended complaint and Bradley’s motion for joinder. Bradley has

also increased the complexity of the case by suing Wells Fargo

as distinct defendants in its corporate capacity, as trustee of

an unnamed trust, and as Wells Fargo PSA Trustee. I address 8 this complexity by first addressing the motions to dismiss the

amended complaint and then resolving the motion for joinder. In

resolving both motions, I will assume for purposes of analysis

that Wells Fargo can be treated as a distinct defendant for each

capacity in which it has been sued.

A. Motions to Dismiss

Bradley focuses his claims in the amended complaint on the

foreclosure of the mortgage and his eviction following the

foreclosure. The proper targets for these claims are Wells

Fargo PSA Trustee, the entity that allegedly oversaw the

foreclosure and eviction, and Ocwen, the loan servicer when the

foreclosure and eviction occurred. The amended complaint does

not allege that any of the other defendants had any involvement

in either the foreclosure or the eviction. Accordingly, the

amended complaint is defective to the extent that it seeks to

hold these defendants liable for harm resulting from either the

foreclosure or the eviction.6 See Gikas v . JPMorgan Chase Bank,

N.A., 2013 DNH 0 5 7 , 11 (finding that when defendants did not

participate in foreclosure, “it is difficult to see how 6 In dismissing these claims, I take no position on Wells Fargo’s contention that its liability as Wells Fargo PSA Trustee is limited to any recovery that Bradley is able to obtain from trust assets.

9 [plaintiff] could possibly recover” from them for any alleged

wrongs visited upon him during the foreclosure).

The only other claim that Bradley presents in the amended

complaint is a claim that one or more of the defendants are

liable because a lender who was willing to refinance Bradley’s

mortgage loan “was unable to get a payoff amount from Wells

Fargo or any of the named defendants and [as a result]

plaintiffs’ loan refinance opportunity was lost.” Doc. N o . 3 8 .

The amended complaint, however, alleges no additional facts

whatsoever about the request for a payoff - no date, no year, or

general time frame, and no party. This is a threadbare recital

with no facts to support i t . Therefore, it too fails to state a

viable claim for relief. See Ocasio-Hernandez, 640 F.3d at 1 2 .

B. Bradley’s Second Amended Complaint and Proposed Joinder of Parties

On September 2 4 , 2013, Bradley filed a motion to join HomEq

Servicing as a defendant pursuant to Rule 19(a)(1)(A), and

attached a proposed second amended complaint to his motion.7

7 Bradley also seeks permission to sue “Unknown agents” who, he explains, are “those individuals or entities employed by, contracted with, or otherwise utilized by one or more of the other named defendants.” Bradley does not identify any specific actions by these agents that would lead the court to believe that it cannot accord complete relief among the existing parties. Fed. R. Civ. P. 19(a)(1)(A). Accordingly, I decline 10 HomEq serviced the loan prior to 2010, at which point Ocwen took

over. By ceasing servicing the loan in 2010, HomEq was not

involved in any of the foreclosure proceedings, and all claims

from the original complaint would fail against it for the same

reasons that the claims cannot succeed against Wells Fargo

Trustee, Wells Fargo, and Ameriquest. I will consider the other

claims against HomEq below in my discussion of the applicability

of the new claims to all defendants.

1. Validity of the Assignment

Bradley has pleaded additional facts in the proposed second

amended complaint to support his claim that the foreclosure was

invalid because the assignments on which it was based are

defective. These new allegations do not lead to a viable claim

against HomEq because Bradley does not allege that it was

involved in the foreclosure. The new facts are also

insufficient to support claims against Ameriquest, Wells Fargo,

or Wells Fargo Trustee. Wells Fargo PSA Trustee and Ocwen have

not challenged the viability of the foreclosure claims in the

amended complaint. Therefore, no purpose would be served in

allowing Bradley to file a second amended complaint merely to

his request to join the unnamed agents as defendants.

11 assert new facts against defendants who have not challenged the

sufficiency of the amended complaint.

2. RESPA Claims

Count V of the second amended complaint includes a claim

under the Real Estate Settlement Procedures Act, (“RESPA”), for

failing to notify Bradley of a transfer of loan servicers,

impermissibly charging late fees during the transfer period, and

failing to pay Bradley’s insurance premiums, as required by

their contract. 12 U.S.C. §§ 2605(b-d),(g). These allegations

include actions taken by HomEq in 2005 when it treated his

payments as late payments, failed to make timely insurance

payments, and failed to properly credit his payments to his

account balance. Bradley also claims that in August 2010, HomEq

and Ocwen failed to provide notice of the transfer of servicing

of his loan. For the latter allegation, he claims that in

August 2010, HomEq sent notice to his prior lawyers that he

never received.

Claims under RESPA are subject to a three-year statute of

limitations for claims brought under 12 U.S.C. § 2605. 12

U.S.C. § 2614. As each of these claims began to run, at the

12 latest, in August 2010, they are each barred by the statute.8

See Da Silva v . U.S. Bank, N.A., 885 F. Supp.2d 5 0 0 , 504-05 (D.

Mass. Aug. 8 , 2012). The RESPA claims would thus be futile

against all defendants.

3. Fraud and Fraudulent Misrepresentation

Count VI alleges fraud and fraudulent misrepresentation

relating to the January 2007 Superior Court conference, in which

defendant’s counsel misrepresented to Bradley that he “would be

able to work things out” by calling a certain phone number.

Bradley further claims that in 2009, HomEq misrepresented that

8 Bradley does not argue in response to defendant’s statute of limitations arguments that his claims relate back to the filing of his original complaint. Fed. R. Civ. P. 15(c). One RESPA claim, the August 2010 claim for failure to provide notice of change of service, would not be barred by the statute of limitations if found to relate back. However, this claim does not arise “out of the conduct, transaction, or occurrence set out – or attempted to be set out – in the original pleading.” Id. at 15(c)(1)(B). The original complaint, as discussed above, surrounds the foreclosure, with additional pleaded facts concerning assignments and a failure to provide a pay-off amount. This conduct is vastly different than an alleged failure to provide notice of a transfer of servicers – one of whom was not even mentioned in the original complaint. Bradley’s fraud claim fails to relate back for similar reasons. Should it relate back, the only fraud claim that would not be barred involves the second amended complaint’s allegation that HomEq, in 2009, misrepresented that Bradley’s loan was not in the database – conduct that was never mentioned in the original complaint. Thus, Bradley’s claims do not relate back to the filing of his original complaint.

13 his loan was not in HomEq’s database, and more generally that

defendants fraudulently stated that he would be able to modify

the loan when they did not in good faith intend to consider him

for a modification.

Under New Hampshire law, a personal action must be brought

within three years of “the act or omission complained of,” or

within three years of when the act or omission was discovered or

“in the exercise of reasonable diligence should have [been]

discovered.” N.H. Rev. Stat. Ann. § 508:4, I (statute of

limitations for personal actions). The limitations period on

these claims expired, at the latest, in 2012. Because they were

only asserted in September 2013, the claims are barred by the

statute of limitations, and therefore futile. See Moore v .

Mortg. Elec. Registration Sys., Inc., 848 F. Supp. 2d 1 0 7 , 121-

22 (D.N.H. 2012).

4. Breach of the Duty of Good Faith and Fair Dealing

Count VII claims a breach of the duty of good faith and

fair dealing. Here Bradley argues that the mortgage contract

afforded defendants discretion, and that they abused that

discretion by transferring servicers without proper notice and

by failing to credit Bradley’s 2005 loan payments. The three

year New Hampshire statute of limitations applies to actions in 14 contract as well as tort, unless the claim is otherwise limited

by a particular statute. N.H. Rev. Stat. Ann. § 508:1; 4 , I .

As discussed above, each of these allegations would also be

futile by failing to fall within the state’s three year statute

of limitations.

Each of Bradley’s additional claims would be futile, and

the new parties that he seeks to join are unnecessary for this

court to afford complete relief for his claims surrounding the

foreclosure and defendants Ocwen’s and/or the Wells Fargo PSA

Trustee’s actions subsequent to foreclosing. For the reasons

discussed above, I deny Bradley’s motion to join additional

parties and counts to this litigation. Doc. N o . 6 6 .

IV. CONCLUSION

For the reasons set forth above, I grant Wells Fargo’s

motion to dismiss, Doc. N o . 4 3 , Ameriquest’s motion to dismiss,

Doc. N o . 5 1 , Wells Fargo Trustee’s motion to dismiss, Doc. N o .

5 9 , and I deny Bradley’s motion for joinder, Doc. N o . 66. 9

9 Because I deny Bradley’s motion to join, I need not decide the validity of the motion to strike brought by Ocwen, Wells Fargo, Wells Fargo Trustee, and Wells Fargo PSA Trustee. Doc. N o . 7 1 .

15 SO ORDERED.

/s/Paul Barbadoro Paul Barbadoro United States District Judge

December 1 8 , 2013

cc: Ruth A . Hall, Esq. Terrie L . Harman, Esq. Christopher J. Fischer, Esq. William Philpot, Jr., Esq. John S . McNicholas, Esq.