UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Rolling Green at Whip-Poor-Will Condominium Townhouse Unit Owners Association, et al
v. Civil No. 15-cv-391-PB Opinion No. 2016 DNH 044 Bank of America, et al
MEMORANDUM AND ORDER
This case involves an attempt by a condominium association
to recover for damages it suffered after frozen pipes burst in a
vacant condominium unit. The condominium association has sued
Bank of America (“BOA”), the mortgagee for the vacant unit, and
Safeguard Properties, a company BOA hired to oversee the
property. BOA has responded with a motion to dismiss for
failure to state a claim. For the reasons that follow, I deny
BOA’s motion.
I. BACKGROUND1
In 2010, Maria Caporicci purchased a unit (“the Unit”) in
1 The facts here are drawn primarily from Rolling Green’s complaint (Doc. No. 1-1) and are construed in the light most favorable to Rolling Green. See Rivera v. Centro Medico de Turabo, Inc., 575 F.3d 10, 15 (1st Cir. 2009). the Rolling Green at Whip-Poor-Will Condominium in Hudson, NH.2
Doc. No. 1-1 at 5. Caporicci granted a mortgage secured by the
Unit to the Mortgage Electronic Registration System, Inc., which
later assigned it to BOA. Id. at 6.
In February 2013, Caporicci died, leaving the Unit vacant.
Id. The mortgage loan soon went into default and in September
2013, Rolling Green formally terminated the Unit’s “common area
privileges,” which included access to running water. Id.
Several months later, by May 2014, BOA retained Safeguard
Properties (“Safeguard”) to “monitor” and “exercise . . .
authority and control over” the vacant Unit “on [the bank’s]
behalf,” although BOA had not yet initiated foreclosure
proceedings. Id. at 7, 11. Safeguard posted a notice on the
Unit stating that it was monitoring the Unit at the request of
the “mortgagee.” Id. at 7.
Later in 2014, Rolling Green became concerned that the Unit
would be left unheated over the winter, creating a risk that the
pipes would burst and cause damage to nearby units. Id. at 4.
On November 24, 2014, it sent a letter to BOA’s attorney
expressing its concerns and asking BOA to turn on the heat and
2 The condominium has two governing associations, one for townhouses, and one for condominium units. Both entities are plaintiffs here. Doc. No. 1-1 at 4-5. For the sake of brevity, I refer to both associations as “Rolling Green” in this Memorandum and Order.
2 winterize the Unit immediately. Id. The letter also stated
that BOA would be held responsible for any damage caused by its
negligence, and reminded BOA that its common area privileges had
been terminated. Id.
On the same day, November 24, 2014, Rolling Green also
wrote to Caporicci’s estate, requesting permission to take
“custody and control” of the Unit until BOA foreclosed. Id.
The administrator of Caporicci’s estate agreed, and a copy of
the estate’s authorization of custody and control was sent to
BOA and Safeguard. Id. at 8. About a week later, on December
3, 2014, Rolling Green members entered the Unit and found that
the heat was turned off but the water remained on. Id. Rolling
Green drained the water lines and attempted to turn the heat on,
but discovered an issue that prevented them from doing so. Id.
It then notified BOA’s attorney that a plumber needed to be
called to turn on the heat. Id. Later that month, on December
12, 2014, Safeguard employees entered the Unit, changed the
locks, and turned the water on – but failed to fix or turn on
the heat. Id. Safeguard did not notify Rolling Green of its
actions. Id.
A month later, on January 9, 2015, the pipes burst in the
Unit. Id. at 9. Rolling Green’s property management company
received a call from the owner of a neighboring unit complaining
3 that water was flooding into his condo. Id. The company went
to the Unit, but had to cut the locks to gain entry. Id. Upon
arrival, they discovered that the water had been turned on and
the water lines had frozen and ruptured, causing the flooding.
Id. The boiler in the building had also cracked and exploded,
and the floor in the Unit was sagging. Id. Making matters
worse, the pipes serving the building’s shared sprinkler system
failed soon after, and the system was rendered inoperable. Id.
The Hudson Fire Department later examined the damage and
concluded that the building might collapse. Id. As a result,
the other unit owners in the building had to be temporarily
relocated. Id.
Rolling Green bore the cost of the repairs to the sprinkler
system and the common areas, receiving an estimate of $83,800
for the sprinkler alone. Id. Rolling Green informed Safeguard
of the damage, and although Safeguard initially indicated that
it would send a crew to estimate the damages, it never got back
to Rolling Green. Id. at 10. BOA, meanwhile, refused to accept
a deed in lieu of foreclosure from Caporicci’s estate. Id.
Instead, it scheduled a foreclosure sale for September 1, 2015,
but left the repair costs to Rolling Green. Id. at 10-11.
On September 23, 2015, Rolling Green brought suit for
negligence, trespass, and conversion against BOA and Safeguard
4 in a New Hampshire state court. BOA removed the case to this
court, and responded with the present motion to dismiss for
failure to state a claim under Rule 12(b)(6). Safeguard filed
an answer and has not joined in BOA’s motion to dismiss.
II. STANDARD OF REVIEW
To survive a Rule 12(b)(6) motion, a plaintiff must allege
sufficient facts to “state a claim to relief that is plausible
on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
A claim is facially plausible if it provides “factual content
that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id. This
plausibility standard “asks for more than a sheer possibility
that a defendant has acted unlawfully,” id., but “simply calls
for enough fact to raise a reasonable expectation that discovery
will reveal evidence” of wrongdoing. Twombly, 550 U.S. at 556.
I employ a two-step approach in deciding a Rule 12(b)(6)
motion. See Ocasio-Hernandez v. Fortuno-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 punctuation, and alterations omitted). I
5 then accept as true all non-conclusory factual allegations and
the reasonable inferences drawn from them, and determine whether
the claim is plausible. Id.
III. ANALYSIS
BOA does not challenge the sufficiency of Rolling Green’s
claims that Safeguard trespassed on common areas in the
condominium, converted water that belonged to the condominium
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Rolling Green at Whip-Poor-Will Condominium Townhouse Unit Owners Association, et al
v. Civil No. 15-cv-391-PB Opinion No. 2016 DNH 044 Bank of America, et al
MEMORANDUM AND ORDER
This case involves an attempt by a condominium association
to recover for damages it suffered after frozen pipes burst in a
vacant condominium unit. The condominium association has sued
Bank of America (“BOA”), the mortgagee for the vacant unit, and
Safeguard Properties, a company BOA hired to oversee the
property. BOA has responded with a motion to dismiss for
failure to state a claim. For the reasons that follow, I deny
BOA’s motion.
I. BACKGROUND1
In 2010, Maria Caporicci purchased a unit (“the Unit”) in
1 The facts here are drawn primarily from Rolling Green’s complaint (Doc. No. 1-1) and are construed in the light most favorable to Rolling Green. See Rivera v. Centro Medico de Turabo, Inc., 575 F.3d 10, 15 (1st Cir. 2009). the Rolling Green at Whip-Poor-Will Condominium in Hudson, NH.2
Doc. No. 1-1 at 5. Caporicci granted a mortgage secured by the
Unit to the Mortgage Electronic Registration System, Inc., which
later assigned it to BOA. Id. at 6.
In February 2013, Caporicci died, leaving the Unit vacant.
Id. The mortgage loan soon went into default and in September
2013, Rolling Green formally terminated the Unit’s “common area
privileges,” which included access to running water. Id.
Several months later, by May 2014, BOA retained Safeguard
Properties (“Safeguard”) to “monitor” and “exercise . . .
authority and control over” the vacant Unit “on [the bank’s]
behalf,” although BOA had not yet initiated foreclosure
proceedings. Id. at 7, 11. Safeguard posted a notice on the
Unit stating that it was monitoring the Unit at the request of
the “mortgagee.” Id. at 7.
Later in 2014, Rolling Green became concerned that the Unit
would be left unheated over the winter, creating a risk that the
pipes would burst and cause damage to nearby units. Id. at 4.
On November 24, 2014, it sent a letter to BOA’s attorney
expressing its concerns and asking BOA to turn on the heat and
2 The condominium has two governing associations, one for townhouses, and one for condominium units. Both entities are plaintiffs here. Doc. No. 1-1 at 4-5. For the sake of brevity, I refer to both associations as “Rolling Green” in this Memorandum and Order.
2 winterize the Unit immediately. Id. The letter also stated
that BOA would be held responsible for any damage caused by its
negligence, and reminded BOA that its common area privileges had
been terminated. Id.
On the same day, November 24, 2014, Rolling Green also
wrote to Caporicci’s estate, requesting permission to take
“custody and control” of the Unit until BOA foreclosed. Id.
The administrator of Caporicci’s estate agreed, and a copy of
the estate’s authorization of custody and control was sent to
BOA and Safeguard. Id. at 8. About a week later, on December
3, 2014, Rolling Green members entered the Unit and found that
the heat was turned off but the water remained on. Id. Rolling
Green drained the water lines and attempted to turn the heat on,
but discovered an issue that prevented them from doing so. Id.
It then notified BOA’s attorney that a plumber needed to be
called to turn on the heat. Id. Later that month, on December
12, 2014, Safeguard employees entered the Unit, changed the
locks, and turned the water on – but failed to fix or turn on
the heat. Id. Safeguard did not notify Rolling Green of its
actions. Id.
A month later, on January 9, 2015, the pipes burst in the
Unit. Id. at 9. Rolling Green’s property management company
received a call from the owner of a neighboring unit complaining
3 that water was flooding into his condo. Id. The company went
to the Unit, but had to cut the locks to gain entry. Id. Upon
arrival, they discovered that the water had been turned on and
the water lines had frozen and ruptured, causing the flooding.
Id. The boiler in the building had also cracked and exploded,
and the floor in the Unit was sagging. Id. Making matters
worse, the pipes serving the building’s shared sprinkler system
failed soon after, and the system was rendered inoperable. Id.
The Hudson Fire Department later examined the damage and
concluded that the building might collapse. Id. As a result,
the other unit owners in the building had to be temporarily
relocated. Id.
Rolling Green bore the cost of the repairs to the sprinkler
system and the common areas, receiving an estimate of $83,800
for the sprinkler alone. Id. Rolling Green informed Safeguard
of the damage, and although Safeguard initially indicated that
it would send a crew to estimate the damages, it never got back
to Rolling Green. Id. at 10. BOA, meanwhile, refused to accept
a deed in lieu of foreclosure from Caporicci’s estate. Id.
Instead, it scheduled a foreclosure sale for September 1, 2015,
but left the repair costs to Rolling Green. Id. at 10-11.
On September 23, 2015, Rolling Green brought suit for
negligence, trespass, and conversion against BOA and Safeguard
4 in a New Hampshire state court. BOA removed the case to this
court, and responded with the present motion to dismiss for
failure to state a claim under Rule 12(b)(6). Safeguard filed
an answer and has not joined in BOA’s motion to dismiss.
II. STANDARD OF REVIEW
To survive a Rule 12(b)(6) motion, a plaintiff must allege
sufficient facts to “state a claim to relief that is plausible
on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
A claim is facially plausible if it provides “factual content
that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id. This
plausibility standard “asks for more than a sheer possibility
that a defendant has acted unlawfully,” id., but “simply calls
for enough fact to raise a reasonable expectation that discovery
will reveal evidence” of wrongdoing. Twombly, 550 U.S. at 556.
I employ a two-step approach in deciding a Rule 12(b)(6)
motion. See Ocasio-Hernandez v. Fortuno-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 punctuation, and alterations omitted). I
5 then accept as true all non-conclusory factual allegations and
the reasonable inferences drawn from them, and determine whether
the claim is plausible. Id.
III. ANALYSIS
BOA does not challenge the sufficiency of Rolling Green’s
claims that Safeguard trespassed on common areas in the
condominium, converted water that belonged to the condominium
association, and negligently caused the pipes in the Unit to
burst. Instead, it argues that dismissal is required because
Rolling Green has failed to allege sufficient facts to support
its claim that BOA can be held liable for Safeguard’s tortious
acts. I am unpersuaded by BOA’s argument.
Rolling Green alleges that BOA had a right under the
mortgage to “take reasonable measures to preserve and protect”
the Unit “in the event that it became vacant or abandoned.”
Doc. No. 1-1 at 3. It claims that BOA actually exercised
control over the Unit and retained Safeguard to act as its agent
in exercising that control. Id. at 7, 11. Further, it asserts
that Safeguard was acting as BOA’s agent when it accessed common
areas in the condominium without permission, converted water
belonging to Rolling Green without permission, and caused the
pipes to burst in the Unit by turning on the water to the Unit
6 during the winter even though it was unheated. Id. at 8, 11-
12. Finally, it alleges that BOA knew or should have known
that: (1) neither Safeguard nor BOA was authorized to access
common areas in the condominium; (2) neither defendant was
authorized to use the condominium’s water; and (3) turning the
water to the Unit on while it was unheated and changing the
locks on the Unit presented an unreasonable risk that the pipes
in the Unit would freeze and burst. Id. at 4, 5 and 8.
When these facts are viewed in the light most favorable to
Rolling Green, they are sufficient to state a plausible claim
that BOA can be held liable for Safeguard’s tortious acts under
basic principles of tort and agency law. See, e.g., Restatement
(Third) of Agency § 7.04; Restatement (Second) of Torts §
877(d). Accordingly, I deny BOA’s motion to dismiss without
prejudice to its right to renew its argument in a motion for
summary judgment after discovery has been completed.3
IV. CONCLUSION
For the reasons stated, BOA’s motion to dismiss (Doc. No.
3 Because I deny the motion to dismiss on basic tort and agency principles, I need not determine whether BOA can be held liable on any of Rolling Green’s claims as a mortgagee in possession of the Unit. See Case v. St. Mary’s Bank, 164 N.H. 649, 655-56 (2013) (describing mortgagee in possession doctrine).
7 10) is denied.
SO ORDERED.
/s/Paul Barbadoro Paul Barbadoro United States District Judge
March 4, 2016
cc: Daniel D. Muller, Jr. Thomas J. Pappas Christopher P. Flanagan Marissa Tripolsky