Campbell v Specialized Loan Serv et al.

• Court: District Court, D. New Hampshire
• Decided: January 23, 2014
• Docket: 13-cv-278-PB
• Status: Published

Opinion

Campbell v Specialized Loan Serv et a l . 13-cv-278-PB 1/23/14 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Timothy J. Campbell

v. Case No. 13-cv-278-PB Opinion No. 2 014 DNH 014 Specialized Loan Servicing, L L C , et al.

MEMORANDUM AND ORDER

Timothy Campbell has sued the Bank of America, N.A., the

current holder of his mortgage note, and Specialized Loan

Servicing, LLC ("SLS"), his loan servicer. Bank of America has

filed a motion to dismiss for failure to state a claim. For the

reasons set forth in this Memorandum and Order, I grantthe

motion to dismiss in part and deny it in part.

I. BACKGROUND1

Campbell borrowed $50,000 from Countrywide Home Loans, Inc.

in 2006. The note evidencing the loan is secured by a mortgage

1 Unless otherwise specified, the background is taken from Campbell's complaint or from the note and mortgage attached to Bank of America's motion to dismiss. See Doc. Nos. 1-1, 10-2, 10-3. I consider the latter documents at this stage of litigation because they are "documents central to the plaintiff's claim." Worrall v. Fed. Nat. Mortg. Ass'n, 2013 DNH 158, 3 (quoting Rivera v. Centro Medico de Turabo, Inc., 575 F .3d 10, 15 (1st Cir. 2009)). on Campbell's primary residence that names Mortgage Electronic

Registration Systems, Inc. ("MERS") as mortgagee and states that

it is acting "as nominee for Lender." Countrywide failed in

2008 and the note was subsequently assigned to Bank of America.

The loan is currently being serviced by SLS.

For reasons that are not specified in the complaint,

defendants initiated foreclosure proceedings against Campbell in

2009 and 2010, but each sale was cancelled for unstated reasons.

Campbell is current on his mortgage and no further actions have

been taken with respect to the foreclosure. Nevertheless,

defendants informed several credit reporting agencies that

Campbell had a foreclosure in his credit history.

Campbell complains about alleged irregularities with

respect to his loan agreement, including unexplained

fluctuations in a principal balance that currently exceeds

$47,000, although he "has no idea why it is so high after paying

it for seven y e a r s . H e claims that his monthly payments have

tripled and that defendants improperly obtained hazard insurance

on the property and passed the cost to him. Campbell has

"repeatedly" requested an accounting, and he claims never to

~ Campbell's loan agreement provides for adjustable rate loan of 10.125% and the possibility that the rate would increase to as high as 17.125%. It has a term of thirty years with initial monthly payments of $443.41. Doc. No. 10-2.

2 have received a "legible, understandable and clear explanation"

of how much he owes.

Campbell also alleges in general terms that defendants

mishandled his loan modification requests. He claims that Bank

of America participated "half-heartedly" and without good faith

in government loan modification programs aimed at providing debt

relief to homeowners. He also claims to be eligible for these

programs and to have submitted applications with supporting

documentation on numerous occasions, only to be told by

defendants that the paperwork was either never received or was

"lost."

On May 13, 2013, Campbell filed suit in Cheshire County

Superior Court against SLS and Bank of America for declaratory

relief, an accounting, and an injunction barring the defendants

from foreclosing on his home. He also seeks damages resulting

from adverse credit reporting regarding the foreclosure

proceedings. Bank of America later removed the case to this

court and filed the present motion to dismiss.

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 3 U.S. 662, 678 (2009) (quoting Bell A t l . Corp. v. Twombly, 550

U.S. 544, 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

'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 Ocaslo-Hernandez v. Fortuho-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. Twomb1y, 550 U.S. at 556. The

"make-or-break standard" is that those allegations and 4 inferences, taken as true, "must state a plausible, not a merely

conceivable, case for relief." Sepulveda-Villarini v. Pep't of

Educ., 628 F.3d 25, 29 (1st Cir. 2010); see Twombly, 550 U.S. at

555 ("Factual allegations must be enough to raise a right to

relief above the speculative level.").

Il l . ANALYSIS

A. Entitlement to a Loan Modification

Campbell seeks a declaration that he has a right to a loan

modification under "terms previously proposed" by Bank of

America. This court has consistently held that lenders

generally have no duty to modify loan terms absent express

contractual language to the contrary. See, e.g., Moore v.

Mortg. Flee. Reg. Sys., Inc., 84 8 F. Supp. 2d 107, 130 (D.N.H.

2 012); Gikas v. JPMorgan Chase Bank, N.A., 2013 DNH 057, 8;

Ruivo v. Wells Fargo Bank, N.A., No. ll-cv-4 66-PB, 2 012 WL

5845452, at *3 (D.N.H. Nov. 19, 2012). This is so because

"[plarties are bound by the agreements they enter into and the

court will not . .. force a party to rewrite acontract so as

to avoid a harsh or inequitable result." Ruivo, 2012 WL 5845452

at *4 (citing Moore, 848 F. Supp. 2d at 130; Olbres v. Hampton

Co-op. Bank, 142 N.H. 227, 233 (1997)) . Campbell does not argue

that a contractual provision entitles him to a loan 5 modification. Nor has he sufficiently pleaded a claim that any

state or federal law gives him a statutory right to seek a

modification. Accordingly, I dismiss his loan modification

claims against Bank of America.

B. UDUCPA

Campbell next argues that defendants violated New

Hampshire's Unfair, Deceptive or Unreasonable Collection

Practices Act ("UDUCPA") by falsely reporting that he had

suffered a foreclosure. UDUCPA states that "[n]o debt collector

shall collect or attempt to collect a debt in an unfair,

deceptive or unreasonable manner." N.H. Rev. Stat. Ann. § 358-

C:2. Campbell asserts that Bank of America violated UDUCPA

section 358-C:3(III) by taking actions "which the debt collector

in the regular course of business does not take." Although

Campbell acknowledges that Bank of America twice initiated

foreclosure proceedings, he argues that his home was never

actually foreclosed upon. By reporting a foreclosure to credit

agencies and refusing Campbell's request to remove the

misinformation, Campbell's argument goes. Bank of America

engaged in deceptive conduct in violation of UDUCPA.

The only argument Bank of America presents in support of

its motion to dismiss the UDUCPA claim is that the claim is

defective because it fails to sufficiently allege that Bank of 6 America falsely reported that Campbell had suffered a

foreclosure. According to Bank of America, Campbell's complaint

alleges only that defendants reported that a foreclosure

proceeding had been commenced against Campbell. Since Campbell

acknowledges in his complaint that defendants initiated a

foreclosure proceeding against him. Bank of America reasons,

his UDUCPA claim necessarily fails because its report was not

false. I reject this argument because it is based on a

misreading of Campbell's complaint. Read generously, the

complaint alleges that Bank of America falsely reported that

Campbell had suffered a foreclosure - not merely that a

foreclosure proceeding had been commenced against him. Since

Bank of America does not challenge the UDUCPA claim on any other

ground, I deny its motion to dismiss this count.

C. CPA

Campbell also argues that Bank of America violated the New

Hampshire Consumer Protection Act ("CPA") by (1) refusing his

loan modification requests with the "express intent and purpose"

to initiate foreclosure; and (2) entering into a contract with

Campbell while knowing that he would not be able to afford his

monthly payments.

Bank of America responds by invoking section 358-A:3(I) of

the New Hampshire P.evised Statutes, which exempts from the CPA 7 "[t]rade or commerce that is subject to the jurisdiction of the

bank commissioner . . . or federal banking or securities

regulators who possess the authority to regulate unfair or

deceptive trade practices." As a national bank. Bank of America

argues that it is subject to the comprehensive regulations of

the Office of the Comptroller of the Currency ("OCC") and is

therefore exempt from the CPA's requirements.

Business activities of national banks and their operating

subsidiaries are controlled by the National Bank Act ("NBA") and

OCC regulations. Atkins v. U.S. Bank Nat'1 Ass'n, 2014 DNH 001,

7-8. (citing Watters v. Wachovia Bank, N.A., 550 U.S. 1, 6, 21

(2007)). These business activities include real estate lending.

12 U.S.C. § 371. National banks can make real estate loans

"without regard to state law limitations concerning, " among

other things, the terms of a loan, including "the circumstances

under which a loan may be called due and payable" and the

"processing, origination, servicing, sale or purchase of, or

investment or participation in, mortgages." 12 C.F.R. §

34.4(a)(4, 10). Bank of America is registered with the OCC as a

national bank.3 The OCC's power to regulate national banks is

U.S. Dep't of the Treasury, Office of the Comptroller of the Currency, National Banks Active as of 11/30/2013, http://www.occ.gov/topics/licensing/national-bank- lists/national-by-name-pdf .pdf (listing Bank of America as a comprehensive, and the OCC "plainly has the authority to protect

consumers from the same kinds of fraudulent, deceptive, and

unfair practices that are targeted by the Consumer Protection

Act." Aubertin v. Fairbanks Capital Corp., 2 005 DNH 021, 6

(citing OCC Advisory Letter, Guidance on Unfair or Deceptive

Acts or Practices, AL 2002-3, 2002 WL 521380 at * 2-3 (March 22,

2002)). Bank of America invoked the OCC's power in its motion

to dismiss, and cited relevant law to support its exemption

argument. It need do no more. See Atkins, 2014 DNH 001, 8.

D. Misrepresentation

Campbell also asserts claims for intentional and negligent

misrepresentation, arguing that "neither [defendant] ever

seriously entertained" his loan modification applications.

Rather, they "intentionally misled" him into believing they

would consider his applications, then repeatedly "lost" the

applications with the goal of foreclosing on his home.

Claims asserting intentional or negligent representation

are subject to Federal Rule of Civil Procedure 9 (b)'s heightened

pleading standard. Moore, 848 F. Supp. 2d at 132. As such, any

allegation "must specify the who, what, where, and when of the

allegedly false or fraudulent representations." Id. Under New

national bank).

9 Hampshire law, a plaintiff must show "that the representation

was made with knowledge of its falsity or with conscious

indifference to its truth." LeDoux v. JP Morgan Chase, N.A.,

No. 12-CV-260- JL, 2012 WL 5874314, at *11 (D.N.H. Nov. 20, 2012)

(citing Tessier v. Rockefeller, 162 N.H. 324, 332 (2011)).

Here, Campbell fails to plead his misrepresentation claims

with anything resembling the required specificity. Aside from

generalities, he submits no evidence of any specific

representations by Bank of America. He does not allege who made

particular statements or when they were made, and he makes only

general allegations as to content. Campbell's misrepresentation

claims thus fail due to lack of specificity.

E. Interference with a Valid Business Relationship

Using the same general allegations as above, Campbell

alleges that each defendant "intentionally, recklessly and

negligently interfered with a valid business relationship

existing between" himself and the other defendant. In essence,

he argues that Bank of America intentionally interfered with his

business relationship with SLS, and vice versa.

To assert such a claim against Bank of America, Campbell

must allege that (1) he had an economic relationship with SLS;

(2) Bank of America knew of this relationship; (3) Bank of

America intentionally and improperly interfered with the 10 relationship; and (4) Campbell was damaged by the interference.

See Johnson v. Capital Offset Co., Inc., No. 1l-cv-459-JD, 2013

WL 3930694, at *3 (D.N.H. Jul. 30, 2013) (citing Singer Asset

Fin. Co., LLC v. Wyner, 156 N.H. 468, 478 (2007) ) . Any such

interference must be motivated by an improper purpose. Id.

(citing Nat'1 Emp't Serv. Corp. v. Olsten Staffing Serv., Inc.,

145 N.H. 158, 162 (2000)).

Campbell alleges no facts that would permit a plausible

inference that Bank of America intentionally and improperly

interfered with his business relationship with SLS. This is a

threadbare recital that fails to state a viable claim for

relief. See Ocasio-Hernandez, 640 F.3d at 12.

F. Request for Accounting

Campbell requests that SLS and Bank of America "provide an

accurate, complete and current accounting of his entire payment

history on the mortgage," including disbursements from escrow

for tax, insurance, and other payments made on his behalf. He

also requests that I issue a declaratory judgment of the amount

he owes on the mortgage. Campbell alleges that he "repeatedly

requested an accounting of his payment history on the mortgage

and an accounting of his disbursements made from escrow, yet he

has not received legible, understandable and clear explanation

11 as to applications of the payments he has made and the

disbursements from his account that have been made on his

behalf." Bank of America allots a mere footnote to this

allegation, arguing, without providing supporting authority,

that only the current servicer, SLS, is able to provide a full

accounting.

Any accounting obligations that SLS conceivably owes to

Campbell are derivative of Bank of America's contractual

obligations as note holder, I thus reject Bank of America's

challenge to Campbell's request for an accounting. For similar

reasons, I deny Bank of America's motion to dismiss Campbell's

request for declaratory relief stating the amount he owes on the

mortgage.

IV. CONCLUSION

For the reasons discussed above, I grant Bank of America's

motion to dismiss (Doc. No. 10) with respect to all of

Campbell's claims against Bank of America except his claim for a

declaratory judgment stating the amount he owes on his loan

(Count I), an accounting (Count II), and his UDUCPA claim (Count

III) .

12 SO ORDERED.

/s/Paul Barbadoro Paul Barbadoro United States District Judge

February 23, 2014

cc: Timothy J. Campbell, pro se Michael P. Robinson, Esq. John Harold McCann, Esq. Thomas J. Pappas, Esq.