Butterfield v. Deutsche Bank Ntl Trust

2017 DNH 054

• Court: District Court, D. New Hampshire
• Decided: March 20, 2017
• Docket: 16-cv-348-PB
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Richard Butterfield

v. Civil No. 16-cv-348-PB Opinion No. 2017 DNH 054 Deutsche Bank National Trust

MEMORANDUM AND ORDER

Richard Butterfield filed this action in an attempt to undo

a foreclosure sale on a property he once owned in Rochester, New

Hampshire. He has sued Deutsche Bank National Trust Company in

its capacity as trustee for the trust that currently owns the

property. He seeks both damages and injunctive relief and

asserts claims for wrongful foreclosure, breach of contract, and

lack of power and authority to foreclose.

Deutsche Bank has filed a motion to dismiss for failure to

state a claim.

I. BACKGROUND1

Butterfield took title to a residential property located at

1 I draw the facts from the amended complaint (doc. no. 11) and documents referenced in the pleadings that a court may consider when ruling on a motion to dismiss. See Plumbers' Union Local No. 12 Pension Fund v. Nomura Asset Acceptance Corp., 632 F.3d 762, 771 (1st Cir. 2011). The facts are construed in the light most favorable to Butterfield. Id. 9 Norman Street in Rochester, New Hampshire on February 23, 2001.

On February 13, 2007, he refinanced his mortgage with a loan

from Chase Bank, USA. On or about March 6, 2013, Chase assigned

the mortgage to Deutsche Bank as trustee for the J.P. Morgan

Trust 2007-CH5, Asset Backed Pass-Through Certificates, Series

2007-CH5 trust.

Deutsche Bank foreclosed on the property on December 1,

2015. It filed a foreclosure deed on February 26, 2016. An

affidavit was filed with the foreclosure deed as is required by

N.H. Rev. Stat. Ann. § 479:26. Among other things, the

affidavit asserts that: (1) Butterfield failed to make payments

required under the mortgage; (2) timely notice of the

foreclosure sale was sent by certified mail to Butterfield's

home address; (3) the original foreclosure sale was continued by

public proclamation until December 1, 2015; and (4) the property

was sold to Deutsche Bank at auction as the highest bidder on

December 1, 2015. Although notice of the foreclosure sale was

sent to Butterfield by certified mail, he did not receive it.

Butterfield asserts three claims for relief. Count I,

which is styled as a claim for wrongful foreclosure, contends

that the foreclosure sale is void because Butterfield did not

receive the advance notice of the impending foreclosure that is

required by N.H. Rev. Stat. Ann. § 479:25 ("RSA 479:25). Count

2 II alleges that Deutsche Bank is liable for breach of contract

because it failed to comply with the notice of default

requirements described in paragraph 22 of the mortgage. Count

III asserts that Deutsche Bank lacked the power to foreclose

because Chase's assignments of the note and mortgage were

improper. Deutsche Bank argues in its motion to dismiss that

Count I fails to state a claim for relief and that the remaining

claims are barred by RSA 479:25 because they were not brought

prior to the foreclosure sale.

When a lender seeks to foreclose a mortgage pursuant to a

power of sale in New Hampshire, it must satisfy the publication

and notice requirements of RSA 479:25. If the lender satisfies

these requirements, the borrower ordinarily loses the right to

challenge the validity of the foreclosure sale unless he files a

petition to enjoin the foreclosure sale before it occurs. Id.

Butterfield claims in Count I that the foreclosure sale is

void because he did not receive "personal notice" of the

foreclosure. This argument is based on a misreading of RSA

479:25, which permits a lender to notify a borrower of a

foreclosure sale either by serving the foreclosure notice on the

borrower or by sending the notice to the borrower's last known

address. As the New Hampshire Supreme Court has recognized, the

statute does not entitle a borrower to actual notice of the

3 foreclosure sale. See Dugan v. Manchester Fed. Sav. & Loan

Ass'n, 92 N.H. 44 (1942) (construing P.L. Ch. 215 § 23).2

Butterfield does not claim that Deutsche Bank failed to send him

the notice required by the statute and he does not challenge

Deutsche Bank's contention in the affidavit it filed with the

foreclosure deed pursuant to N.H. Rev. State. Ann. § 479:26 that

proper notice was sent. Accordingly, Count I of the amended

complaint fails to state a viable claim for relief.

Counts II and III of the Amended Complaint challenge the

validity of the foreclosure process. Because these claims were

not brought prior to the foreclosure sale, they are barred by

RSA 479:25.3 See The Bank of New York Mellon as Trustee v.

Dowgiert, 145 A.2d 138, 142 (N.H. 2016).

2 Butterfield's reliance on Snyder v. New Hampshire Sav. Bank, 134 N.H. 32, 37 (1991) is misplaced. Snyder merely recognizes that an owner of a mortgaged premises is entitled to the notice required by the statute. The term "personal notice" is used in the opinion merely to distinguish notice by service or mail, which an owner is entitled to, from the general notice of a foreclosure that is provided through publication. The opinion does not hold that a foreclosure notice is invalid unless it is received.

3 A borrower's breach of fiduciary duty claim for damages need not be brought prior to the foreclosure sale. Dugan, 92 N.H. at 44. Butterfield, however, does not present a breach of fiduciary duty claim.

4 Deutsche Bank's motion to dismiss (doc. no. 14) is granted.

SO ORDERED.

/s/Paul Barbadoro Paul Barbadoro United States District Judge

March 21, 2017

cc: Stephen T. Martin, Esq. William P. Breen, Esq.