UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Deutsche Bank National Trust Co., as Trustee
v. Civil No. 15-cv-304-JD Opinion No. 2017 DNH 146 Jennifer Pike
O R D E R
Deutsche Bank brought suit against Jennifer Pike seeking a
declaratory judgment that its mortgage on her property is not
subject to her homestead interest or, alternatively, that
Deutsche Bank is entitled to equitable subrogation for the
amount it paid to satisfy a prior mortgage. Pike brought
counterclaims, seeking to quiet title in the property in her
favor and a declaratory judgment that she retains a homestead
right in the property.1
The case was scheduled for a bench trial. Prior to trial
and based on the parties’ pretrial filings and briefs, the court
dismissed Deutsche Bank’s equitable subrogation claim. At the
final pretrial conference, counsel for Deutsche Bank asked for
an opportunity to move for reconsideration of the decision to
deny Deutsche Bank’s equitable subrogation claim. Counsel and
1 Pike previously voluntarily dismissed two other counterclaims. the court agreed that the only other issue in the case was the
effect of the divorce decree on Pike’s homestead right and
agreed that this is a legal issue which does not require a
trial. The court granted Deutsche Bank the opportunity to move
for reconsideration of the decision to dismiss its equitable
subrogation claim. Deutsche Bank filed its motion, and Pike
filed a response. The court denied the motion for
reconsideration.
As agreed during the final pretrial conference, the court
directed Pike to file an additional brief on the issue of the
effect of the divorce decree on her homestead right and provided
time for Deutsche Bank to respond. Both the additional brief
and the response have been filed. Therefore, the question of
whether the divorce extinguished Pike’s homestead interest in
the property, the only remaining issue in the case, has been
briefed and is ready for ruling.
Background
In June of 2000, William T. Pike, Jr. married Jennifer who
became Jennifer L. Pike. On August 15, 2001, William bought the
property at issue in this case, 34 Dogwood Lane, New London, New
Hampshire. The purchase was financed in part with a mortgage
from Mascoma Savings Bank.
2 Thereafter, the property was conveyed between William and
Jennifer and to and from a revocable trust and was mortgaged
twice after the initial purchase.2 The last mortgage was granted
by William in 2004 to secure a loan from First Franklin
Financial Corporation. Jennifer did not sign the First Franklin
loan or mortgage. The First Franklin mortgage was assigned to
Deutsche Bank in 2009.
Jennifer and William were divorced on July 3, 2013. At
that time, William owned the property. Jennifer was living at
the property with their son, Charlie.
The Final Decree of Divorce provided, with respect to the
property, that it was awarded to Jennifer “free and clear of any
interest of William Pike.” Despite the “free and clear”
language, the decree continued on to state that “Jennifer may
remain in the home until it goes into foreclosure, or Charlie
graduates high school. The Parties will share equally any
equity in the home.” William was required to share equally in
the costs of repairs to the home.
William transferred the property to Jennifer by deed on
July 26, 2013. The deed was recorded on August 8, 2013.
Deutsche Bank’s remaining claim seeks a declaratory
judgment that its mortgage on the property is not subject to
2 To avoid confusion, Jennifer Pike will be referred to hereafter as Jennifer.
3 Jennifer’s homestead interest in the property. In her remaining
counterclaims, Jennifer seeks to quiet title in the property in
her favor under RSA 498:5-a and seeks a declaratory judgment
that she retains her homestead right in the property. William
is not and has never been a party in this case.
Discussion
Deutsche Bank contends that the divorce decree extinguished
Jennifer’s homestead interest in the property as of July 3,
2013, and that when Jennifer acquired a new homestead interest
on July 26, 2013, the new homestead interest was subject to the
preexisting First Franklin mortgage. Jennifer contends that the
divorce decree did not extinguish her homestead interest in the
property because she was living at the property and was granted
an interest in the property by the divorce decree. As a result,
Jennifer argues, her homestead interest survived the divorce and
is superior to the First Franklin mortgage. Deutsche Bank
argues that the law of the case doctrine precludes the court
from considering Jennifer’s theory that her homestead right was
not extinguished by the divorce.
A. Law of the Case Doctrine
The law of the case doctrine “posits that when a court
decides upon a rule of law, that decision should continue to
govern the same issues in subsequent stages in the same case.”
4 Harlow v. Children’s Hosp., 432 F.3d 50, 55 (1st Cir. 2005). A
district court, nevertheless, retains the power to reconsider
its interlocutory orders. Perez-Ruiz v. Crespo-Guillen, 25 F.3d
40, 42 (1st Cir. 1994). For that reason, the law of the case
doctrine “‘merely expresses the practice of courts generally to
refuse to reopen what has been decided, not a limit to their
power.’” Harlow, 432 F.3d at 55 (quoting Messenger v. Anderson,
225 U.S. 436, 444 (1912)); see also Arizona v. California, 460
U.S. 605, 618–19 (1983).
Deutsche Bank cites a statement in the court’s order
denying Deutsche Bank’s motion for summary judgment. There, the
court paraphrased Deutsche Bank’s argument in support of its
claim that the divorce caused Jennifer’s homestead interest to
be secondary to its mortgage because it began foreclosure
proceedings before the property was conveyed by William to
Jennifer following the divorce. The court denied summary
judgment because Deutsche Bank did not show that beginning
foreclosure proceedings, without a foreclosure sale, had any
effect on Jennifer’s homestead interest.
As such, the cited statement in the court’s order was not a
legal ruling in the case. Further, even if the court had made a
considered decision on the effect of the divorce on Jennifer’s
homestead interest, it retains the power to reconsider such a
ruling. Therefore, the law of the case doctrine does not affect
5 the court’s power to consider the effect of the divorce on
Jennifer’s homestead interest in order to decide Jennifer’s
counterclaim.
B. Effect of Divorce on Jennifer’s Homestead Interest
Under New Hampshire law, “[e]very person is entitled to
$120,000 worth of his or her homestead, or of his or her
interest therein, as a homestead.” RSA 480:1 (as amended in
2015). The homestead right exists in “[t]he owner and the
husband and wife of the owner . . . during the owner’s
lifetime.” RSA 480:3-a. “The homestead right is exempt from
attachment during its continuance from levy or sale on execution
and from liability to be encumbered or taken for the payment,
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Deutsche Bank National Trust Co., as Trustee
v. Civil No. 15-cv-304-JD Opinion No. 2017 DNH 146 Jennifer Pike
O R D E R
Deutsche Bank brought suit against Jennifer Pike seeking a
declaratory judgment that its mortgage on her property is not
subject to her homestead interest or, alternatively, that
Deutsche Bank is entitled to equitable subrogation for the
amount it paid to satisfy a prior mortgage. Pike brought
counterclaims, seeking to quiet title in the property in her
favor and a declaratory judgment that she retains a homestead
right in the property.1
The case was scheduled for a bench trial. Prior to trial
and based on the parties’ pretrial filings and briefs, the court
dismissed Deutsche Bank’s equitable subrogation claim. At the
final pretrial conference, counsel for Deutsche Bank asked for
an opportunity to move for reconsideration of the decision to
deny Deutsche Bank’s equitable subrogation claim. Counsel and
1 Pike previously voluntarily dismissed two other counterclaims. the court agreed that the only other issue in the case was the
effect of the divorce decree on Pike’s homestead right and
agreed that this is a legal issue which does not require a
trial. The court granted Deutsche Bank the opportunity to move
for reconsideration of the decision to dismiss its equitable
subrogation claim. Deutsche Bank filed its motion, and Pike
filed a response. The court denied the motion for
reconsideration.
As agreed during the final pretrial conference, the court
directed Pike to file an additional brief on the issue of the
effect of the divorce decree on her homestead right and provided
time for Deutsche Bank to respond. Both the additional brief
and the response have been filed. Therefore, the question of
whether the divorce extinguished Pike’s homestead interest in
the property, the only remaining issue in the case, has been
briefed and is ready for ruling.
Background
In June of 2000, William T. Pike, Jr. married Jennifer who
became Jennifer L. Pike. On August 15, 2001, William bought the
property at issue in this case, 34 Dogwood Lane, New London, New
Hampshire. The purchase was financed in part with a mortgage
from Mascoma Savings Bank.
2 Thereafter, the property was conveyed between William and
Jennifer and to and from a revocable trust and was mortgaged
twice after the initial purchase.2 The last mortgage was granted
by William in 2004 to secure a loan from First Franklin
Financial Corporation. Jennifer did not sign the First Franklin
loan or mortgage. The First Franklin mortgage was assigned to
Deutsche Bank in 2009.
Jennifer and William were divorced on July 3, 2013. At
that time, William owned the property. Jennifer was living at
the property with their son, Charlie.
The Final Decree of Divorce provided, with respect to the
property, that it was awarded to Jennifer “free and clear of any
interest of William Pike.” Despite the “free and clear”
language, the decree continued on to state that “Jennifer may
remain in the home until it goes into foreclosure, or Charlie
graduates high school. The Parties will share equally any
equity in the home.” William was required to share equally in
the costs of repairs to the home.
William transferred the property to Jennifer by deed on
July 26, 2013. The deed was recorded on August 8, 2013.
Deutsche Bank’s remaining claim seeks a declaratory
judgment that its mortgage on the property is not subject to
2 To avoid confusion, Jennifer Pike will be referred to hereafter as Jennifer.
3 Jennifer’s homestead interest in the property. In her remaining
counterclaims, Jennifer seeks to quiet title in the property in
her favor under RSA 498:5-a and seeks a declaratory judgment
that she retains her homestead right in the property. William
is not and has never been a party in this case.
Discussion
Deutsche Bank contends that the divorce decree extinguished
Jennifer’s homestead interest in the property as of July 3,
2013, and that when Jennifer acquired a new homestead interest
on July 26, 2013, the new homestead interest was subject to the
preexisting First Franklin mortgage. Jennifer contends that the
divorce decree did not extinguish her homestead interest in the
property because she was living at the property and was granted
an interest in the property by the divorce decree. As a result,
Jennifer argues, her homestead interest survived the divorce and
is superior to the First Franklin mortgage. Deutsche Bank
argues that the law of the case doctrine precludes the court
from considering Jennifer’s theory that her homestead right was
not extinguished by the divorce.
A. Law of the Case Doctrine
The law of the case doctrine “posits that when a court
decides upon a rule of law, that decision should continue to
govern the same issues in subsequent stages in the same case.”
4 Harlow v. Children’s Hosp., 432 F.3d 50, 55 (1st Cir. 2005). A
district court, nevertheless, retains the power to reconsider
its interlocutory orders. Perez-Ruiz v. Crespo-Guillen, 25 F.3d
40, 42 (1st Cir. 1994). For that reason, the law of the case
doctrine “‘merely expresses the practice of courts generally to
refuse to reopen what has been decided, not a limit to their
power.’” Harlow, 432 F.3d at 55 (quoting Messenger v. Anderson,
225 U.S. 436, 444 (1912)); see also Arizona v. California, 460
U.S. 605, 618–19 (1983).
Deutsche Bank cites a statement in the court’s order
denying Deutsche Bank’s motion for summary judgment. There, the
court paraphrased Deutsche Bank’s argument in support of its
claim that the divorce caused Jennifer’s homestead interest to
be secondary to its mortgage because it began foreclosure
proceedings before the property was conveyed by William to
Jennifer following the divorce. The court denied summary
judgment because Deutsche Bank did not show that beginning
foreclosure proceedings, without a foreclosure sale, had any
effect on Jennifer’s homestead interest.
As such, the cited statement in the court’s order was not a
legal ruling in the case. Further, even if the court had made a
considered decision on the effect of the divorce on Jennifer’s
homestead interest, it retains the power to reconsider such a
ruling. Therefore, the law of the case doctrine does not affect
5 the court’s power to consider the effect of the divorce on
Jennifer’s homestead interest in order to decide Jennifer’s
counterclaim.
B. Effect of Divorce on Jennifer’s Homestead Interest
Under New Hampshire law, “[e]very person is entitled to
$120,000 worth of his or her homestead, or of his or her
interest therein, as a homestead.” RSA 480:1 (as amended in
2015). The homestead right exists in “[t]he owner and the
husband and wife of the owner . . . during the owner’s
lifetime.” RSA 480:3-a. “The homestead right is exempt from
attachment during its continuance from levy or sale on execution
and from liability to be encumbered or taken for the payment,
except in [five specific] cases” which are not asserted in this
case. RSA 480:4.
The statute does not address the effect of divorce on a
spouse’s homestead right, and the New Hampshire Supreme Court
has not addressed the issue. Therefore, the court must consider
New Hampshire law and persuasive decisions from other juris-
dictions to determine whether it can predict the course the New
Hampshire Supreme Court would take if the issue were presented.
See Steinmetz v. Coyle & Caron, Inc., --- F.3d ---, 2017 WL
2855787, at *10 (1st Cir. June 29, 2017); Manchester Sch. Dist.
v. Crisman, 306 F.3d 1, 14 (1st Cir. 2002).
6 1. New Hampshire Law Related to the Homestead Right
The New Hampshire Supreme Court has made it abundantly
clear that the homestead right is a legislative expression of
important public policy. The purpose of the homestead right is
“to secure to debtors and their families the shelter of the
homestead roof, . . . to protect and preserve inviolate a family
home, . . . to protect[] the family from destitution, and
protect[] society from the danger of its citizens becoming
paupers.” Maroun v. Deutsche Bank Nat’l Tr. Co., 167 N.H. 220,
225-26 (2014) (internal quotation marks omitted). Because of
the “protective purpose of the homestead right,” there is a
presumption against waiver of the right. Maroun, 167 N.H. at
228. Absent fraud or other illegality, the homestead law
protects the security of families in their homes over “the
claims of otherwise deserving creditors.” Deyeso v. Cavadi, 165
N.H. 76, 82 (2013).
2. Law in Other Jurisdictions
Other courts that have considered the effect of divorce on
a preexisting homestead right have concluded that it depends on
the terms of the divorce decree. The Vermont Supreme Court has
held that a divorce terminates the homestead right of a party
who either does not own the property or does not reside at the
7 property “unless the [divorce] order makes some other specific
provision.” Condosta v. Condosta, 453 A.2d 1128, 1131 (1982);
In re Kadoch, 526 B.R. 626, 635-36 (Bankr. Vt. 2015)
(interpreting Condosta). Other courts have held that when the
divorce decree does not address the homestead interest but does
grant the spouse an interest in the property, such as by
requiring the other spouse to deed the property, that interest
is sufficient to maintain the spouse’s homestead interest as
long as she resides in the property. See PNC Bank, N.A. v.
Patterman, 64 N.E.3d 725, 729 (Ill. App. 2016); Almanza v.
Salas, 2014 WL 554807, at *4-*5 (Tex. App. Feb. 11, 2014). In
Arkansas, “divorce will not terminate the homestead right in the
head of a household who continues to occupy the homestead.”
Fitton v. Bank of Little Rock, 365 S.W.3d 888, 892 (Ark. 2010).
In Texas, homestead rights are presumed to continue unless shown
to have been extinguished, and divorce does not automatically
destroy homestead rights. Marincasiu v. Drilling, 441 S.W. 3d
551, 561 (Tex. App. 2014).
3. New Hampshire Law Interpreting Divorce Decrees
The interpretation of the language of a divorce decree is a
question of law for the court to decide. Matter of Oligny¸ 169
N.H. 533, 153 A.3d 194, 196 (2016). “[I]n New Hampshire, ‘the
undivided interest in the real estate [apportioned by a divorce
8 judgment] vest[s] in the [grantee spouse], by the mere force of
the decree as effectually as the same could be done by any
conveyance of the [grantor spouse] himself.’” United States v.
Baker, 2014 WL 4199120, at *3 (D.N.H. Aug. 22, 2014) (quoting
Swett v. Swett, 49 N.H. 264, 264 (1870)) (additional internal
quotation marks omitted); see also Sommers v. Sommers, 143 N.H.
686, 692 (1999) (statement in divorce decree that one party was
awarded the car and that title would be transferred after other
events created an immediate property interest); Bonneville v.
Bonneville, 142 N.H. 435, 438-39 (1997).
In this case, the divorce decree awarded Jennifer the
property “free and clear of any interest of William Pike.” The
language “exclusive use and possession of the” property was
crossed out, reinforcing the court’s intent to grant Jennifer
ownership, not just use, of the property. The decree required
William to deed the property within thirty days of July 3, 2013.
William deeded the property to Jennifer on July 26, 2013.
Jennifer’s right to the property became effective
immediately when the divorce decree issued on July 3, 2013.
4. Holding
The protective purpose of the New Hampshire homestead
interest and the weight of authority from other jurisdictions
supports a conclusion that the New Hampshire Supreme Court would
9 hold in this case that the divorce did not extinguish Jennifer’s
homestead interest. Instead, because the divorce decree awarded
the property to Jennifer, who had an existing homestead interest
in the property, the homestead interest continued through the
divorce as long as Jennifer occupied the property. That result
is also supported by the analysis used by the bankruptcy court
in this district to determine whether a debtor could claim an
exemption based on the homestead right under RSA 480:1 after
divorce. See In re Visconti, 426 B.R. 422, 426-27 (Bankr.
D.N.H. 2001).
The divorce decree in Visconti, which became final before
the bankruptcy proceeding began, granted the debtor “a one-half
interest in the proceeds of the homestead after its sale.” Id.
at 426. The debtor asserted that he had a homestead interest in
the property based on that award. The bankruptcy court held
that the divorce decree determined what interest in the property
it conveyed to the debtor and decided “that the final divorce
decree only gave the Debtor a monetary interest in the proceeds
of the sale of the home, not an equitable property interest in
the actual real estate.” Id. at 427. For that reason, the
debtor was not entitled to an exemption based on a homestead
right. In contrast, Jennifer was awarded the property, which
supports her continued homestead interest.
10 Therefore, the divorce decree at issue here did not
extinguish Jennifer’s homestead interest, and she continues to
have a homestead interest in the property.
B. Deutsche Bank’s Claim and Jennifer’s Counterclaims
Deutsche Bank’s remaining claim in the case seeks a
declaratory judgment that its mortgage on the property is not
subject to Jennifer’s homestead interest. Jennifer’s remaining
counterclaims are to quiet title in the property in her favor
pursuant to RSA 498:5-a and for a declaratory judgment that she
retains a homestead interest in the property.
As is explained above, the divorce did not extinguish
Jennifer’s preexisting homestead interest in the property, which
continues as long as she occupies the property. Jennifer’s
homestead interest is prior and not subject to Deutsche Bank’s
mortgage. Therefore, Jennifer may assert her homestead interest
in the property under RSA 480:1, if and when Deutsche Bank
forecloses on the property.
The parties have disputed which version of RSA 480:1
applies to Jennifer’s homestead right, arguing that different
amounts are protected. Because Deutsche Bank has not yet
foreclosed, Jennifer has not yet asserted the right under RSA
480:1. If a foreclosure occurs, Jennifer will be entitled to
11 the amount protected under the version of RSA 480:1 that is in
effect at that time.
In Count I, Jennifer brings a quiet title action pursuant
to RSA 498:5-a. In support, she asserts that Deutsche Bank
holds no enforceable right to the property because of her
homestead interest. Jennifer addressed the quiet title
counterclaim in her trial brief, arguing that when deeds violate
a homestead right, the transfer is void. She asserts in support
of her claim that “[t]he deeds are not ambiguous. None of the
transfers contained a provision waiving Jennifer’s homestead
rights.”
As the court has held, Jennifer retains a homestead
interest in the property, which entitles her to the amount set
by statute as an exemption from attachment, levy, sale, and
encumbrance for payment of debts, with certain exceptions. RSA
480:1; RSA 480:4; Maroun, 167 N.H. at 225. Deutsche Bank holds
a mortgage on the property, which allows it to invoke the
statutory power of sale in the event of default. Mortgage, doc.
no. 20-4, at ¶ 22. Jennifer has not provided evidence or any
viable argument to show that title to the property can be
settled in her exclusive of Deutsche Bank’s mortgage interest.
12 C. Attorney’s Fees
In her trial brief, Jennifer asserted a right to an award
of attorney’s fees under RSA 361-C:2. Deutsche Bank objected
that any request for fees was premature and that RSA 361-C:2
does not apply to Jennifer. If Jennifer intends to pursue an
award of attorneys’ fees, she may make an appropriate motion
after judgment is entered.
Conclusion
For the foregoing reasons, the court finds and rules as
follows:
Jennifer Pike has a homestead interest pursuant to RSA
480:1 in the property located at 34 Dogwood Lane, New London,
New Hampshire. Deutsche Bank’s mortgage on the property located
at 34 Dogwood Lane, New London, New Hampshire, is subject to
Jennifer’s prior homestead interest.
As to Deutsche Bank’s claim in Count I, the court finds and
rules that Deutsche Bank did not prove the claim, which is
dismissed.
As to Jennifer Pike’s counterclaim in Count I, the court
finds and rules that she did not prove the claim, which is
As to Jennifer Pike’s counterclaim in Count II, the court
finds and rules in favor of Jennifer Pike.
13 This order resolves all remaining claims and counterclaims.
Therefore, the clerk of court shall enter judgment accordingly.
SO ORDERED.
__________________________ Joseph DiClerico, Jr. United States District Judge
August 1, 2017
cc: Stephen T. Martin, Esq. Kevin P. Polansky, Esq.