UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE
Joseph C. Davey, III as Conservator for Jay C. Davey a/k/a Joseph C. Davey, IV.
v. Civil No. 17-cv-244-JL Opinion No. 2018 DNH 200 Federal National Mortgage Association, Wells Fargo, and their counsel Harmon Law Offices
MEMORANDUM ORDER
In this mortgage-related action, the mortgagor challenges
the bank’s foreclosure on two parcels of property merged into a
single parcel after one of the original parcels was mortgaged.
Joseph C. Davey III, proceeding pro se, brought this action in
Rockingham County Superior Court on behalf of and as conservator
for the mortgagor, his permanently-disabled son, Joseph C. Davey
IV.1 He concedes that defendants Wells Fargo Bank, N.A., and the
Federal National Mortgage Association (FNMA) may properly
foreclose on the mortgaged property (71 Plaistow Road) but
contests--and seeks injunctive relief against--their foreclosure
on adjacent property (69 Plaistow Road) that was merged with the
mortgaged property after the mortgage was recorded. Defendants
FNMA and Wells Fargo removed the action to this court, see 28
1 To avoid confusion, the court refers to the plaintiff as “Davey” and to his father and conservator as “Joseph Davey.” U.S.C. § 1441, which has subject-matter jurisdiction under 28
U.S.C. § 1332 (diversity).
The defendants now move for summary judgment on Davey’s
petition, arguing that, under Mahmoud v. Town of Thornton, 169
N.H. 387, 391 (2016), and on a factual record undisputed by the
plaintiff, Wells Fargo’s mortgage interest encumbers the
entirety of the merged property. The court agrees and grants
the defendants’ motion.
Applicable legal standard
“The court shall grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). “A dispute is genuine if the evidence about the
fact is such that a reasonable jury could resolve the point in
the favor of the non-moving party. A fact is material if it
carries with it the potential to affect the outcome of the suit
under the applicable law.” DeAndrade v. Trans Union LLC, 523
F.3d 61, 65 (1st Cir. 2008) (internal quotations omitted).
“A party moving for summary judgment must identify for the
district court the portions of the record that show the absence
of any genuine issue of material fact.” Flovac, Inc. v. Airvac,
Inc., 817 F.3d 849, 853 (1st Cir. 2016) (citing Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986)). “Once the moving party has
2 accomplished this feat, the burden shifts to the nonmoving
party, who must, with respect to each issue on which [he] would
bear the burden of proof at trial, demonstrate that a trier of
fact could reasonably resolve that issue in [his] favor.”
Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st
Cir. 2010) (citing Celotex, 477 U.S. at 324). “[T]he non-moving
party ‘may not rest upon mere allegation . . . but must set
forth specific facts showing that there is a genuine issue for
trial.’” Braga v. Hodgson, 605 F.3d 58, 60 (1st Cir. 2010)
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250
(1986)).
In analyzing a summary judgment motion, the court draws
“all reasonable inferences that may be extrapolated from the
record . . . in favor of the non-movant,” but may disregard
“allegations of a merely speculative or conclusory nature.”
Serra v. Quantum Servicing, Corp., 747 F.3d 37, 39–40 (1st Cir.
2014). “As to issues on which the [nonmovant] bears the
ultimate burden on proof,” as Davey does here, he “cannot rely
on an absence of competent evidence, but must affirmatively
point to specific facts that demonstrate the existence of an
authentic dispute.” Kenney v. Floyd, 700 F.3d 604, 608 (1st
Cir. 2012). The following recitation takes this approach,
describing facts that are undisputed except where noted.
3 Background
This suit concerns two adjacent parcels of land in
Plaistow, New Hampshire--71 Plaistow Road and 69 Plaistow Road.
Davey took title to the 71 Plaistow Road parcel in 1998.2 He
obtained the 69 Plaistow Road parcel in 2002.3
Davey took out a mortgage loan on September 20, 2004 in the
original amount of $280,000.00 (the “Wells Fargo mortgage”).4 In
exchange for the loan, he conveyed a security interest in the
71 Plaistow Road parcel, and only the 71 Plaistow Road parcel,
to Mortgage Electronic Systems, Inc. and to its successors and
assigns.5 The mortgage was subsequently assigned several times.
FNMA currently holds the mortgage by assignment from Wells
Fargo.
Around the same time, Davey began proceedings to merge the
69 Plaistow Road parcel with the 71 Plaistow Road parcel.6 R.J.
Pica Engineering filed an Application for Planning Board Action
2 Defendants’ Mot. Ex. B (doc. no. 23-4). Davey has not challenged the authenticity of this or any of the defendants’ other submitted evidence. 3 Defendants’ Mot. Ex. C (doc. no. 23-5). 4 Defendants’ Mot. Ex. D (doc. no. 23-6). 5 Id.; Defendants’ Mot. Ex. E (doc. no. 23-7) at 3. 6 It is unclear from the record whether Davey began these proceedings before or after taking out the Wells Fargo mortgage loan. Neither party suggests, however, that this lack of clarity impacts summary judgment on the issues discussed below.
4 with the Town of Plaistow Planning Board, on Davey’s behalf.7
Pica Engineering identified both the 69 and 71 Plaistow Road
parcels as the site of the proposed action, which was to
“convert two residential sites to a[n] office complex[,] remove
two structures and build an addition on the remaining building[,
and] removal of lot line to combine two lots.”8 Davey both
signed the application and asked the Planning Board to allow
Pica Engineering to represent him at meetings regarding the
application.9
The Planning Board met on September 15, 2004, to address
this proposed “voluntary lot merger and commercial site plan for
properties located at 69 and 71 Plaistow Road.”10 It
conditionally approved the application two months later11 and, on
October 19, 2005, gave its final approval.12 The lot merger site
plan was recorded with the Rockingham Registry of Deeds.13
7 Defendants’ Mot. Ex. G (doc. no. 23-9). 8 Id. at 3. 9 Id. at 4, 9. 10 Id. at 10. 11 Id. at 11. 12 Id. at 12. 13 Defendants’ Mot. Ex. H (doc. no. 23-9).
5 In 2006, Davey obtained a commercial mortgage loan in the
original amount of $44,000, secured by both of the now-merged
69 and 71 Plaistow Road parcels.14 In 2012, People’s United Bank
assigned that note and mortgage to an individual.15
Sometime thereafter, the State of New Hampshire took a
0.19 acre portion of the merged parcels and two easements--one
permanent and one temporary--on the merged property through
eminent domain, entitling Davey to compensation. In light of
their liens on some or all of the merged parcels, both People’s
United and Wells Fargo claimed the $85,000 deposit allotted by
the State as compensation. The New Hampshire Board of Tax and
Land Appeals (the “Land Board”) held a hearing on January 12,
2012 to apportion the State’s deposit.16 It concluded that
almost the entire taking impacted only the 69 Plaistow Road
parcel, and that only 5% of the temporary easement--an amount
“de minimis under any reasonable calculation”--impacted the 71
Plaistow Road parcel.17 As Wells Fargo admitted at the time, its
mortgage encumbered only the 71 Plaistow Road parcel, despite
14 Defendants’ Mot. Ex. I (doc. no. 23-11) at 1, 8. 15 Defendants’ Mot. Ex. J (doc. no. 23-12). 16 Defendants’ Mot. Ex. K (doc. no. 23-13) at 1. 17 Id. at 6-7.
6 the subsequent merger.18 Because the commercial mortgage
encumbered both of the merged parcels, and thus was the only
encumbrance on the 69 Plaistow Road parcel, the Land Board
awarded the entirety of the deposit to People’s United.19
Davey ceased making payments on the Wells Fargo mortgage in
November 2007. A foreclosure sale of the merged property was
scheduled for March 5, 2008. He then engaged in a series of
bankruptcy filings, staying any other proceedings relating to
the property in question. After the United States Bankruptcy
Court for the District of New Hampshire (Deasy, J.) granted
relief from the stay, the defendants scheduled another
foreclosure sale for June 7, 2017. Davey filed this action in
Rockingham County Superior Court on June 6, 2017, seeking and
obtaining a temporary restraining order to enjoin the
foreclosure sale. The defendants then removed the action to
this court.
Analysis
Davey effectively seeks, through his complaint, to quiet
title to the merged parcels. Specifically, he seeks to
establish that the defendants lack any mortgage interest in the
69 Plaistow Road parcel and thus may not foreclose on both of
18 Id. at 6. 19 Id. at 5-7.
7 the merged parcels. The defendants move for summary judgment
arguing that, under New Hampshire law, their mortgage on the
71 Plaistow Road parcel encumbers both parcels after the merger,
permitting them to foreclose on both. In light of the New
Hampshire Supreme Court’s recent decision in Mahmoud, 169 N.H.
at 391, on the undisputed facts presented here, the court agrees
with the defendants.
A. Foreclosure on combined properties
In Mahmoud, like Davey in this case, Mahmoud mortgaged one
lot (Lot 1) of his subdivided property. Id. at 388. The
mortgage deed described the mortgaged property consistent with
the depiction of that lot on the subdivision plan and included
the following language:
TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the “Property.”
Id. Mahmoud subsequently re-divided his property and, in the
process, relocated the southerly border of Lot 1, adding 1.5
acres to the lot. Id. When he defaulted, the mortgagee
foreclosed on the expanded lot. Id. at 389. Mahmoud petitioned
to quiet title to the lot, arguing that “the foreclosure sale
and mortgage deed were invalid, and that therefore he own[ed]
record title to Lot 1, including the additional disputed land.”
8 Id. The trial court granted summary judgment to the mortgagee,
concluding that, though the mortgage occurred before the lot’s
expansion, the mortgage deed included any additions to the lot.
Id.
The New Hampshire Supreme Court affirmed, agreeing that
“the language in the mortgage deed granted to [the mortgagee] .
. . clearly and automatically included any additions to the
mortgaged property” because it “plainly stated that it included,
together with the legal description of the property, . . .
‘[a]ll replacements and additions.’” Id. at 391. Thus, the
mortgagee obtained, through foreclosure, the entire expanded
lot. Id.
The parties do not dispute that Wells Fargo’s mortgage deed
in this action contains identical language. It describes the
mortgaged property as:
71 Plaistow Road, Plaistow, New Hampshire, . . . TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the “Property.”20
In light of the New Hampshire Supreme Court’s interpretation of
this language in Mahmoud, the defendants’ mortgage interest
20 Defendants’ Mot. Ex. E (doc. no. 27-3) at 3 (emphasis added).
9 encumbers not only the 71 Plaistow Road parcel, but also
“clearly and automatically include[s] any additions to the
mortgaged property,” 169 N.H. at 391, including the merging of
another lot--here, 69 Plaistow Road--into the mortgaged
property.
B. Davey’s arguments
Davey raises three arguments as to why the holding in
Mahmoud does not warrant summary judgment in the defendants’
favor. Neither presents a dispute of material fact that
precludes summary judgment in this action.
First, Davey attempts to distinguish Mahmoud from this
case, arguing summarily that, unlike Mahmoud’s lot-line
adjustment, the mortgage language does not cover a voluntary
merger of two preexisting lots.21 The court observes no
probative differences between Davey’s voluntary merger and
Mahmoud’s lot-line adjustment.
21Plaintiff’s Mem. (doc. no. 27-1) at 3. As the defendants point out, Davey focuses his brief argument on language that does not govern the outcome of this case. Specifically, he contends that “the resulting parcel of land created by the merger was not, arguably, ‘improvements, easements, appurtenances, and fixtures now or hereafter a part of the property.’” Id. He does not address the “replacements and additions” language, on which Mahmoud turns. See id. In consideration of Davey’s pro se status, however, the court construes his argument as invoking the operative language and addresses it accordingly.
10 Like Mahmoud, Davey sought and received approval from a
municipal planning board to alter the division of his property.22
Davey’s alteration, like Mahmoud’s, was voluntary and initiated
by the owner of both parcels.23 In both instances, the
alteration resulted in a significant increase in the property’s
land area--Mahmoud’s lot-line change increased the area of the
mortgaged property from 1.06 to 2.40 acres. And both Mahmoud
and Davey completed their alteration by recording a site plan in
the registry of deeds showing the post-approval parcels with new
lot lines.24 Mahmoud, 169 N.H. at 388.
The mortgage provides that “[a]ll replacements and
additions” to the 71 Plaistow Road parcel “shall also be covered
by this Security Instrument.”25 The New Hampshire Supreme Court
considers that language “unambiguous,” and reads it to include
additions to the property effected voluntarily through approval
by the municipal planning board. Mahmoud, 169 N.H. at 391.
Accordingly, any difference that may exist between a re-divison,
22 See Defendants’ Mot. Ex. G (doc. no. 23-9). 23Davey effected his merger pursuant to N.H. Rev. Stat. Ann. § 674:39-a, I which allows that “[a]ny owner of 2 or more contiguous preexisting approved or subdivided lots or parcels who wishes to merge them for municipal regulation and taxation purposes may do so by applying to the planning board or its designee.” 24 Defendants’ Mot. Ex. H (doc. no. 23-10). 25 Defendants’ Mot. Ex. E (doc. no. 23-7) at 3.
11 as in Mahmoud, and a merger, as in Davey’s case, does not amount
to a dispute of material fact that would defeat summary
judgment.
At oral argument, Davey asserted a second difference
between his case and Mahmoud.26 He argued that Mahmoud does not
apply to this case because, in Mahmoud, no separate mortgage
encumbered the post-merger property as the commercial mortgage
does here. While true that there is no indication that a
separate mortgage encumbered the merged property in Mahmoud,
that factual difference is not material to the holding in that
case or this court’s application of it. Mahmoud turns on the
language in the mortgage deed encumbering the original lot and
addresses whether, in light of that language, acreage added to
the originally-mortgaged property becomes part of the property
secured by that mortgage. 169 N.H. at 390-91. Whether another
mortgage also encumbers the merged property, as here, may lead
to a dispute between mortgagees over which mortgage takes
priority; it does not affect the Davey’s claims here.
26This court “generally will not consider theories raised for the first time at oral argument, out of fairness to adverse parties and the court.” Exeter Hosp. v. New England Homes, Inc., 2011 WL 3862146, at *4 (D.N.H. Sept. 1, 2011). It addresses Davey’s argument, however, out of consideration for his pro se status, and because defense counsel reasonably could have anticipated it and was afforded an opportunity to respond to it at the hearing.
12 Finally, Davey challenges “whether the Defendants even hold
the subject Commercial Mortgage that the Defendants seek to
foreclose.”27 Wells Fargo has produced evidence that People’s
United assigned the commercial mortgage to an individual, Karen
Varney.28 Davey contends, and has maintained since this action’s
inception, that a differnt individual investor, Jeremy
Provencher, holds that mortgage.29 At oral argument, he
explained that Varney transferred her interest in the mortgage
to Provencher. Though he has produced no evidence to that
effect at any stage in this litigation, Davey suggests that the
ownership of the commercial mortgage constitutes a dispute of
material fact.30
This may constitute a dispute of fact, but it is not one
material to this action. The defendants here do not contend
that they hold the commercial mortgage. Nor do they seek to
foreclose under it. Rather, they seek to foreclose under the
Wells Fargo mortgage, arguing, as discussed supra, that the
mortgage pre-dating the merger encumbers the entirety of the
post-merger property. Thus, even if Provencher currently holds
27 Plaintiff’s Mem. (doc. no. 27-1) at 2. 28 Defendants’ Mot. Ex. J (doc. no. 23-2). 29 Compl. (doc. no. 1-1) ¶ 10. 30 Plaintiff’s Mem. (doc. no. 27-1) at 4-5.
13 the commercial mortgage, that fact would not preclude summary
judgment as to Wells Fargo’s rights to foreclose under the Wells
Fargo mortgage.
Davey has argued, in a related vein, that only the assignee
of the commercial mortgage has a right to foreclose on the
merged property. Under New Hampshire law, however, as a general
proposition, the claim of the mortgagee who first recorded its
interest has priority over that of a subsequent mortgagee. See
Amoskeag Bank v. Chagnon, 133 N.H. 11, 14 (1990). Wells Fargo
recorded its interest in 71 Plaistow Road on September 23,
2004,31 well before Davey mortgaged the merged property on
August 11, 2006. Wells Fargo’s claim therefore has priority
over the commercial mortgage.
Furthermore, to the extent that Davey seeks to assert the
rights of the individual who holds the commercial mortgage as
against Wells Fargo, he lacks standing to do so in any
representative capacity. A litigant asserting the rights of a
third party must show that
the litigant personally has suffered an injury in fact that gives rise to a sufficiently concrete interest in the adjudication of the third party's rights; second, that the litigant has a close relationship to the third party; and third, that some hindrance exists that prevents the third party from protecting its own interests.
31 Defendants’ Mot. Ex. E (doc. no. 23-7).
14 Council Of Ins. Agents & Brokers v. Juarbe-Jimenez, 443 F.3d
103, 108 (1st Cir. 2006). Davey has made no such showing here.
And, though Davey represented at oral argument that Provencher
has had notice of this action since its inception, Provencher
has not asserted his own interests in this action.
C. Estoppel
Finally, Wells Fargo’s prior concession before the Land
Board that its mortgage encumbered only the 71 Plaistow Road
parcel does not preclude it from arguing, now, that its mortgage
encumbers the entirety of the merged property.
“The doctrine of judicial estoppel . . . operates to
prevent a litigant from taking a litigation position that is
inconsistent with a litigation position successfully asserted by
him in an earlier phase of the same case or in an earlier court
proceeding.” Perry v. Blum, 629 F.3d 1, 8 (1st Cir. 2010).
Even assuming that the Land Board hearing constituted “an
earlier court proceeding,”32 Wells Fargo did not “successfully
assert” that its mortgage encompassed only the 71 Plaistow Road
parcel. Though Wells Fargo admitted as much in its answer in
32Though defendants argue otherwise, there is some authority allowing for an adjudicatory proceeding before an administrative body to constitute a “court proceeding” for judicial estoppel purposes. E.g., King v. Herbert J. Thomas Mem'l Hosp., 159 F.3d 192, 196 (4th Cir. 1998) (analyzing effect of positions taken before the Social Security Administration in judicial estoppel context). The court need not resolve that issue here, however.
15 that proceeding, it further argued that the subsequent merger
and commercial mortgage created a “cloud on the title” to the
merged properties, which the Superior Court should resolve
before the Land Board determined who was entitled to the deposit
in the eminent domain proceedings.33 The Land Board rejected
that position.34
Furthermore, as the defendants observe, Wells Fargo took
its positions before the Land Board in January 2012. The
Mahmoud decision issued over four years later, in September
2016. While Wells Fargo’s present argument may have been
available to it in 2012, in theory, its current position lacked
definitive authority in settled law at the time of the Land
Board hearing. Cf. Boston Gas Co. v. Century Indem. Co., 708
F.3d 254, 263 (1st Cir. 2013) (shift in applicable law “relevant
to” the judicial-estoppel analysis where party’s legal theory
changes).
Conclusion
The defendants have demonstrated that, on the undisputed
facts present in this case and under settled New Hampshire law,
they are entitled to judgment as a matter of law on the
plaintiff’s claim. Accordingly, the court GRANTS the
33 Defendants’ Mot. Ex. K (doc. no. 23-13) at 3. 34 Id. at 3-5.
16 defendants’ motion for summary judgment.35 The clerk shall enter
judgment accordingly and close the case.
SO ORDERED.
Joseph N. Laplante United States District Judge
Dated: October 5, 2018
cc: Joseph C. Davey, III, pro se Jay C. Davey, pro se Joseph Patrick Kennedy, Esq.
35 Document no. 23.