Martin v. Wells Fargo

2016 DNH 084

• Court: District Court, D. New Hampshire
• Decided: April 21, 2016
• Docket: 15-cv-447-LM
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Michael Martin and Julie Martin

v. Civil No. 15-cv-447-LM Opinion No. 2016 DNH 084 Wells Fargo Bank, N.A. and North American Savings Bank, FSB

O R D E R

Michael and Julie Martin, proceeding pro se, brought suit

in state court against Wells Fargo Bank, N.A. (“Wells Fargo”)

and North American Savings Bank, FSB (“NASB”), alleging claims

that arose from defendants’ conduct in handling the Martins’

promissory note and mortgage and in attempting to foreclose on

their home. The case was removed to this court on October 30,

2015. The court granted Wells Fargo’s motion to dismiss the

complaint without prejudice to the Martins’ opportunity to file

an amended complaint setting forth facts sufficient to state

plausible claims against Wells Fargo.1 See doc. no. 11. The

Martins filed an amended complaint (doc. no. 12), and Wells

Fargo moves to dismiss (doc. no. 16). The Martins object. For

1 NASB has not filed a response to the complaint or otherwise appeared in this action. the reasons that follow, Wells Fargo’s motion to dismiss is

granted.

Standard of Review

Under Rule 12(b)(6), the court must accept the factual

allegations in the complaint as true, construe reasonable

inferences in the plaintiff’s favor, and “determine whether the

factual allegations in the plaintiff’s complaint set forth a

plausible claim upon which relief may be granted.” Foley v.

Wells Fargo Bank, N.A., 772 F.3d 63, 71 (1st Cir. 2014)

(citation omitted). A claim is facially plausible “when the

plaintiff pleads factual content that allows the court to draw

the reasonable inference that the defendant is liable for the

misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009). Analyzing plausibility is “a context-specific task” in

which the court relies on its “judicial experience and common

sense.” Id. at 679.

Because the Martins are proceeding pro se, the court is

obliged to construe their complaint liberally. See Erikson v.

Pardus, 551 U.S. 89, 94 (2007) (per curiam) (internal citations

omitted) (“[A] pro se complaint, however inartfully pleaded,

must be held to less stringent standards than formal pleadings

drafted by lawyers.”). However, “pro se status does not

insulate a party from complying with procedural and substantive

2 law. Even under a liberal construction, the complaint must

adequately allege the elements of a claim with the requisite

supporting facts.” Chiras v. Associated Credit Servs., Inc.,

12-10871-TSH, 2012 WL 3025093, at *1 n.1 (D. Mass. July 23,

2012) (quoting Ahmed v. Rosenblatt, 118 F.3d 886, 890 (1st Cir.

1997) (internal citation and quotation marks omitted)).

Where, as here, written instruments are provided as

exhibits to a pleading, the exhibits are “part of the pleading

for all purposes.”2 Fed. R. Civ. P. 10(c); see also Trans-Spec

Truck Serv. v. Caterpillar, Inc., 524 F.3d 315, 321 (1st Cir.

2008). When “a written instrument contradicts allegations in

the complaint to which it is attached, the exhibit trumps the

allegations.” Clorox Co. P.R. v. Proctor & Gamble Commercial

Co., 228 F.3d 24, 32 (1st Cir. 2000) (internal quotation marks

and citation omitted).

Background

On November 25, 2009, Michael Martin executed a promissory

note in favor of NASB, in exchange for a loan of $217,979. That

same date, Michael and Julie Martin granted a mortgage to NASB

to secure the loan. The mortgage encumbered the Martins’ home

at 79 Ford Farm Road in Milton, New Hampshire.

The Martins attached as exhibits to their complaint the 2

promissory note, the mortgage, and the assignment of the mortgage, as well as various other documents.

3 The mortgage states that Mortgage Electronic Registration

Systems, Inc. (“MERS”) is the mortgagee as nominee for the

lender, NASB. On November 2, 2012, MERS, acting as nominee for

NASB, assigned the mortgage to Wells Fargo.

On September 10, 2015, the law firm of Bendett & McHugh,

acting on Wells Fargo’s behalf, sent the Martins a notice of

foreclosure, informing them that a foreclosure auction would

occur on November 4, 2015. Before the scheduled date of the

foreclosure auction, the Martins brought this action.

Discussion

The Martins assert three claims against Wells Fargo in

their amended complaint: Wrongful Foreclosure (Count I);

Intentional Infliction of Emotional Distress (Count II); and

Declaratory Relief (Count III). Wells Fargo moves to dismiss

all claims.3

As with the Martins’ claims alleged against Wells Fargo in

the original complaint, the claims in the amended complaint are

based on the allegation that Wells Fargo does not have the legal

authority to foreclose on the Martins’ home. As the court laid

3 The Martins brought this case against NASB and Wells Fargo, and their original complaint asserted six claims against both defendants. The amended complaint lists NASB and Wells Fargo as defendants, but the “parties” section of the amended complaint lists only Wells Fargo as a defendant, and the allegations are all directed at Wells Fargo.

4 out in detail in its previous order, however, the mortgage

expressly grants MERS (solely as nominee for Lender and Lender’s

successors and assigns) the power of sale and “the right to

foreclose and sell the Property; and to take any action required

of Lender.” The mortgage assignment, which was recorded on

November 2, 2012, states that MERS, as nominee for NASB, its

successors and assigns, conveys the mortgage to Wells Fargo.

Thus, the mortgage authorizes MERS to act on behalf of the

noteholder, and MERS assigned the mortgage to Wells Fargo.

The Martins argue that, despite the assignment of the

mortgage, Wells Fargo does not have the authority to foreclose

for two reasons. First, they contend that Wells Fargo does not

hold the note, and cannot foreclose without holding both the

note and the mortgage. As the court explained in its previous

order, however, regardless of whether Wells Fargo holds the

note, the plain language of the mortgage gives the holder of the

mortgage “the authority, as agent of the noteholder, to exercise

the power of sale.” Bergeron v. N.Y. Cmty. Bank, 168 N.H. 63,

71 (N.H. 2015) (noting that if the language of the mortgage

establishes an agency relationship between the assignee of MERS

and the holder of the note, the assignee of MERS has the

authority to foreclose regardless of whether that entity holds

5 the note at the time of the foreclosure). Therefore, Wells

Fargo does not need to hold the note in order to foreclose.4

Second, the Martins contend that the assignment of the

mortgage was invalid because NASB did not hold the mortgage at

the time of the assignment. They base that argument on the

allegation in their amended complaint that prior to the

assignment of the mortgage, NASB “sold its personal property

interest in the Plaintiffs Accommodation Note as a transferable

record to Guaranteed REMIC Pass-Through Securities and MX

Securities, Ginnie Mae REMIC Trust 2009-117.” Doc. no. 12 at ¶

8.

Assuming the truth of that allegation, the assignment of

the mortgage was valid. The mortgage assignment plainly states

that MERS is acting as nominee for NASB and its successors and

assigns. Therefore, even if NASB sold the note in 2009 as

alleged in the complaint, MERS had the authority to assign the

mortgage on behalf of the successor noteholder. Accordingly,

4 In addition, as the court noted in its previous order, the underlying documents show that Wells Fargo does hold the note. Because the Martins dispute that fact, and because Wells Fargo may foreclose even if it does not hold the note, the court need not address in this order whether Wells Fargo properly holds the note.

6 the amended complaint does not plausibly allege that the

assignment of the mortgage to Wells Fargo was invalid.5

All of the Martins’ claims against Wells Fargo are based on

the allegation that Wells Fargo does not have the legal

authority to foreclose on their home. See doc. no. 12 at ¶ 20

(basing claim for wrongful foreclosure on allegation that “Wells

Fargo Bank, N.A., did not have the legal authority to foreclose

on the Subject Property”); id. at ¶ 26 (basing claim for

intentional infliction of emotional distress on allegation that

Wells Fargo “misrepresented to the Plaintiffs that [it] was

entitled to exercise the power of sale provision contained in

the Mortgage . . . [despite having] no legal, equitable, or

actual beneficial interest whatsoever in the Property”); id. at

¶ 37 (seeking to quiet title in the property and that Wells

Fargo “be declared to have no interest estate, right, title or

interest in the subject property”). Because that allegation is

contradicted by exhibits attached to the Martins’ amended

5 The Martins also reference a “Report of Condition” for 2015, which they assert shows that Wells Fargo is holding certain securities “Guaranteed by Ginnie Mae (GNMA).” Doc. no. 17 at 5; doc. no. 12 at ¶ 19. They assert that the Report of Condition shows that Wells Fargo has sold more of those same securities than it held. According to the Martins, this “overage” demonstrates that Wells Fargo “could not own [their] Mortgage/Note, because all securities Guaranteed by GNMA, to date, have been sold . . . .” Doc. no. 17 at 5. That allegation is insufficient to contradict the plain language of the mortgage and the mortgage assignment.

7 complaint, the Martins fail to state any plausible claims for

relief against Wells Fargo. Therefore, the court grants Wells

Fargo’s motion to dismiss.

The court notes that the only claims brought in the amended

complaint are asserted against Wells Fargo. To the extent the

Martins intend to bring claims against NASB, they must file a

second amended complaint asserting claims against NASB, and

serve NASB in accordance with Federal Rule of Civil Procedure

4(m).

Conclusion

For the foregoing reasons, Wells Fargo’s motion to dismiss

(doc. no. 16) is granted. To the extent the Martins intend to

pursue claims against NASB, they shall file a second amended

complaint on or before May 23, 2016, and serve NASB in

accordance with Rule 4(m). Failure to file a second amended

complaint within this time frame and serve NASB in accordance

with Rule 4(m) will result in the dismissal of this action in

its entirety with prejudice.

SO ORDERED.

__________________________ Landya McCafferty United States District Judge April 21, 2016 cc: Michael C. Martin, pro se Julie A. Martin, prose David D. Christensen, Esq.