Weeks v . Five Bros. Mtg. 13-CV-426-JD 4/9/14 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Melissa Weeks and Daniel Rouille

v. Civil N o . 13-cv-426-JD Opinion N o .

Five Brothers Mortgage Services & Securing, Inc. and U.S. Bank National Association

O R D E R

Melissa Weeks and Daniel Rouille brought suit in state court

against Five Brothers Mortgage Services & Securing, Inc. (“Five

Brothers”) and U.S. Bank National Association (“U.S. Bank”),

alleging claims that arose from U.S. Bank’s involvement in the

foreclosure of the plaintiffs’ house and the defendants’ taking

and disposal of the plaintiffs’ personal property. The

defendants removed the case to this court and move to dismiss

Count I of the complaint, which alleges various “statutory

violations.” The plaintiffs object.

Background

On or about September 1 7 , 2008, Melissa Weeks and Daniel

Rouille (“plaintiffs”) entered into a loan with U.S. Bank, which

was secured by a mortgage on their house at 244 West Rosemont

Avenue in Manchester, New Hampshire (“Manchester House”). After

obtaining the loan, the plaintiffs made their monthly mortgage

payments as scheduled for a period of time. At some point, U.S. Bank informed the plaintiffs that their most recent payment was seventy dollars short of the required amount. U.S. Bank explained that the property taxes on the Manchester House had increased and there were insufficient funds in the plaintiffs’ escrow account to cover the additional taxes. U.S. Bank told the plaintiffs that it would not accept any payment unless it included the additional seventy dollars.

The plaintiffs and U.S. Bank began discussing a “partial payment plan,” where the plaintiffs would agree to make “half- payments” and U.S. Bank would assist them in obtaining a mortgage modification agreement. At some point, the plaintiffs encountered “health issues” and “were forced to temporarily stay in an apartment in Pittsfield, New Hampshire” (“Pittsfield Apartment”). Despite staying at the Pittsfield Apartment, the plaintiffs left all of their possessions in the Manchester House, and continued to pay for the utilities at the house.

While staying at the Pittsfield Apartment, the plaintiffs corresponded with U.S. Bank regarding resolution of the additional charges and a possible modification agreement. Eventually, U.S. Bank refused to enter into a modification agreement with the plaintiffs, and instead increased the amount due for the monthly mortgage payments in order to recoup the money that the plaintiffs had not paid while making “half- payments.”1

1 The complaint does not allege when U.S. Bank charged the additional seventy dollars, how long the plaintiffs were negotiating with U.S. Bank to resolve the issue, or when the plaintiffs began staying at the Pittsfield Apartment.

2 On August 1 0 , 2010, U.S. Bank purchased the Manchester House

at a foreclosure auction.2 U.S. Bank recorded the foreclosure

deed, which was dated November 2 9 , 2010, with the Hillsborough

County Registry of Deeds on December 7 , 2010. The plaintiffs

allege that they did not know at the time that the house had been

auctioned off or that U.S. Bank was the purchaser, and that U.S.

Bank led them to believe that they still owned the house after

the date of the auction.

On May 1 , 2011, the Hillsborough County Sheriff, on behalf

of U.S. Bank, “completed abode service” of an eviction notice at

the Manchester House. The eviction notice required the

plaintiffs to vacate the house on or before June 1 0 , 2011. On

June 2 2 , 2011, the Hillsborough County Sheriff “completed abode

service” of a landlord/tenant writ at the house. The writ

required the plaintiffs to file an appearance in a

landlord/tenant action initiated by U.S. Bank on or before June

3 0 , 2011. The plaintiffs allege that they never received the

eviction notice or the writ because they were staying at the

Pittsfield Apartment during this time. On or about July 2-4, 2011, Five Brothers, which was hired

by U.S. Bank, entered the Manchester House without the

plaintiffs’ permission. On July 6, 2011, the plaintiffs spoke

with U.S. Bank about why Five Brothers had entered the house

without their consent. The plaintiffs allege that U.S. Bank told

them that the plaintiffs held the deed to the house, that Five

2 The defendants assert that U.S. Bank purchased the Manchester House on November 1 , 2010.

3 Brothers was “securing the property,” and that “no one would

enter” the house. Despite U.S. Bank’s representations, that same

day, Five Brothers entered the house and began removing the

plaintiffs’ possessions.

During the July 6 conversation, U.S. Bank also told the

plaintiffs that they had until the following day, July 7 , 2011,

to sign the modification paperwork. The plaintiffs faxed the

signed paperwork to U.S. Bank on July 7 .

On July 8 , 2011, the plaintiffs received a notice that they

had defaulted in the landlord/tenant action for failure to file

an appearance. The notice indicated that a writ of possession

would issue on July 1 1 , 2011. The plaintiffs filed a motion on

July 11 asking the court to strike the default, arguing that they

had not received any documents concerning the eviction and that

they were working with U.S. Bank on a loan modification.

On July 1 0 , 2011, the plaintiffs learned that Five Brothers

had removed almost all of their possessions from the Manchester

House. The plaintiffs contacted U.S. Bank the following day

about the removal of their possessions, and U.S. Bank told the

plaintiffs to speak with Five Brothers. The plaintiffs filed a

complaint with the Manchester Police Department that day because

of the “wrongful removal of their possessions” from the house.

The following day, July 1 2 , the plaintiffs spoke with Five

Brothers. Five Brothers “apologized for the miscommunication

between it and [U.S. Bank] which caused them to remove

Plaintiffs’ possessions from [the Manchester House] in error.”

4 On July 1 4 , 2011, U.S. Bank filed a motion for voluntary

non-suit with prejudice in the landlord/tenant action. The

following day, the plaintiffs received a letter from U.S. Bank

stating “your loan is currently being reviewed for default

resolution workout options.” On July 2 1 , 2011, U.S. Bank asked

the plaintiffs to provide them with additional information in

connection with the loan workout within thirty days.

On August 18 and August 2 0 , 2011, Five Brothers entered the

Manchester House and removed the plaintiffs’ remaining

possessions. The plaintiffs did not give Five Brothers or U.S.

Bank permission to remove anything from the house. The

plaintiffs allege that Five Brothers subsequently disposed of

their possessions.

The plaintiffs brought suit in state court against U.S. Bank

and Five Brothers, alleging claims for “Statutory Violations,

e.g., RSA 5 4 0 , RSA 540-A and RSA 358-A” (Count I ) ; Conversion

(Count I I ) ; Trespass to Chattels (Count I I I ) ; “Attorney’s Fees

and Costs” (Count I V ) ; and Negligence (Count V ) . The defendants

removed the case to this court and move to dismiss Count I .

Standard of Review

Because the defendants filed their answer before filing the

motion to dismiss, the motion to dismiss is construed as a motion

for judgment on the pleadings under Federal Rule of Civil

Procedure 12(c). A motion for judgment on the pleadings is

subject to the same standard as a motion to dismiss under Federal

5 Rule of Civil Procedure 12(b)(6). Shay v . Walters,

6 ,

82 (1st Cir. 2012).

Federal Rule of Civil Procedure 12(b)(6) allows a defendant

to move to dismiss on the ground that the plaintiff’s complaint

fails to state a claim on which relief can be granted. In

assessing a complaint for purposes of a motion to dismiss, the

court “separate[s] the factual allegations from the conclusory

statements in order to analyze whether the former, if taken as

true, set forth a plausible, not merely conceivable, case for

relief.” Juarez v . Select Portfolio Servicing, Inc.,

(1st Cir. 2013) (internal quotation marks omitted). “If

the facts alleged in [the complaint] allow the court to draw the

reasonable inference that the defendants are liable for the

misconduct alleged, the claim has facial plausibility.”

(internal quotation marks omitted).

Discussion

The defendants move for judgment on Count I , arguing that

the plaintiffs fail to state a claim that the defendants violated

RSA 5 4 0 , RSA 540-A, or RSA 358-A. The plaintiffs object, arguing

that viewing the facts in the light most favorable to them, they

have alleged certain statutory violations.

A. RSA 540-A The defendants argue that RSA 540-A is inapplicable to them because the statute applies only to landlords who rent or lease residential premises, which they are not. The plaintiffs did not

6 address the defendants’ arguments regarding RSA 540-A in their

objection. Accordingly, because the defendants are not

“landlords” under RSA 540-A, the defendants are entitled to

judgment on the portion of Count I based on that statute. See,

e.g., Evans v . J Four Realty, LLC,

7 0 , 578 (2013) (“RSA

540-A:1, I , specifically defines a ‘landlord’ as one ‘who rents

or leases residential premises.’ Had the legislature intended

damages actions under RSA chapter 540-A to be brought against

those who do not ‘rent or lease residential premises,’ it could

have so stated.”) (internal citations omitted).

B. RSA 540

The defendants argue that the only subsection of RSA 540 that could apply to them is RSA 540:12, which provides that the purchaser of a home in a foreclosure sale may recover possession of the home if it gives the occupant proper notice. The defendants contend that the factual allegations in the complaint show that U.S. Bank provided the plaintiffs with proper notice.3 In response, the plaintiffs contend that they have adequately alleged a claim under RSA 540:12.

3 The defendants suggest in a footnote that RSA 540 may not apply to them because U.S. Bank did not rent the Manchester House. To the extent the defendants intended to argue that the portion of Count I based on RSA 540 should be dismissed because the statute does not apply to them, that argument was not sufficiently developed to be addressed. See Higgins v . New Balance Athletic Shoes, Inc.,

5 2 , 260 (1st Cir. 1999); United States v . Zannino,

, 17 (1st Cir. 1990).

7 RSA 540:12, titled “Possessory Action,” provides: “The

owner, lessor, or purchaser at a mortgage foreclosure sale of any

tenement or real estate may recover possession thereof from a

lessee, occupant, mortgagor, or other person in possession,

holding it without right, after notice in writing to quit the

same as herein prescribed.” Thus, purchasers of a property at a

foreclosure sale may be liable for an eviction if “they fail[] to

comply with the notice to quit process required by” RSA 540:12.

Bradley v . Wells Fargo Bank, N.A.,

, at *4 (D.N.H.

Mar. 3 , 2014); see also Greelish v . Wood,

2 1 , 528

(2006) (recognizing a cause of action for damages for a failure

to comply with the notice to quit process).

The requirements of a notice to quit premises is governed by

RSA 540:2, which provides that a notice to quit must be given in

accordance with RSA 540:3 and 540:5. RSA 540:3 requires a notice

to quit be given to an occupant at least thirty days prior to

terminating a tenancy. RSA 540:5 requires that the notice “be

served upon the tenant personally or left at his or her last and

usual place of abode.”

The defendants argue that the complaint alleges that they

served an eviction notice on May 1 , 2011, that the eviction

notice required the plaintiffs to vacate the house on or before

June 1 0 , 2011, and that Five Brothers did not remove any

possessions until July 6, 2011. The defendants argue that,

therefore, they complied with the thirty days’ notice provision

of RSA 540:3. They also contend that they complied with RSA

8 540:5 because the eviction notice was left at the Manchester

House, which was the plaintiffs’ last and usual place of abode.

In response, the plaintiffs argue that their last and usual

place of abode was the Pittsfield Apartment and, therefore, they

were not properly served under RSA 540:5. In addition, they

argue that the defendants would not have been entitled to recover

possession of the house until after a writ of possession was

issued and served upon them. They contend that because the writ

of possession was never issued and, thus, never served, the

defendants failed to comply with RSA 540.

The plaintiffs allege that at some point prior to the

foreclosure auction, they began staying at the Pittsfield

Apartment. They also allege that they “corresponded” with U.S.

Bank while staying at the Pittsfield Apartment in order to

resolve the issues with their mortgage payments. None of the

parties has provided, and the court is not aware o f , New

Hampshire case law defining an occupant’s “last and usual place

of abode” as the phrase is used in RSA 540:5.

It is unclear from the complaint how long the plaintiffs

were staying at the Pittsfield Apartment and whether U.S. Bank

knew that the plaintiffs were staying at the Pittsfield Apartment

at the time of service of the eviction notice.4 In light of the

standard on a motion for judgment on the pleadings, the court

cannot determine whether service of the eviction notice was

proper and, therefore, cannot determine whether U.S. Bank

4 Under RSA 540:3, V , an eviction notice is equivalent to a notice to quit for purposes of the statute.

9 complied with RSA 540. Accordingly, the defendants’ motion to dismiss Count I , to the extent it seeks to dismiss the portion of the claim under RSA 5 4 0 , is denied.5

C. RSA 358-A

The defendants argue that they are exempt from RSA 358-A

because banks and other similar institutions are subject to the

jurisdiction of the bank commissioner. See RSA 358-A:3; Monzione

v . U.S. Bank, N.A.,

, at *3 (D.N.H. Jan. 2 5 , 2013).

The plaintiffs do not dispute U.S. Bank’s immunity and do not

pursue their claim under RSA 358-A against U.S. Bank in their

objection. They argue, however, that Five Brothers is not

subject to the jurisdiction of the bank commissioner and,

therefore, can be liable under RSA 358-A. In their reply, the

defendants argue that Five Brothers is subject to the

jurisdiction of the bank commissioner because it acted on

direction from U.S. Bank, and that the complaint does not allege

a claim under RSA 358-A against Five Brothers in any event.

5 The plaintiffs also argue that regardless of whether U.S. Bank complied with the requirements of a notice to quit in RSA 540, U.S. Bank “would only be able to recover possession of the Manchester [House] after a writ of possession issued and after the sheriff served the writ of possession.” The plaintiffs cite to RSA 540:14 in support of that assertion. RSA 540:14 does not appear to create a private right of action, and to the extent the defendants illegally seized the plaintiffs’ possessions, that conduct could be actionable under the plaintiffs’ claims for conversion or trespass to chattels. Because the court cannot determine in the context of a motion for judgment on the pleadings whether the plaintiffs were properly served with the notice to quit, however, the court does not address whether Count I could survive based on RSA 540:14.

10 The New Hampshire Consumer Protection Act, RSA 358-A:2,

provides: “It shall be unlawful for any person to use any unfair

method of competition or any unfair or deceptive act or practice

in the conduct of any trade or commerce within the state.” The

complaint does not allege any unfair method of competition or

unfair or deceptive act or practice undertaken by Five Brothers.

Nor do the plaintiffs attempt to point to any such allegations in

their objection. Therefore, the defendants are entitled to

judgment on the pleadings on Count I to the extent it is based on

a claim for violation of RSA 358-A.

Conclusion

For the foregoing reasons, the defendants’ motion to dismiss

Count I of the complaint (document n o . 15) is granted as to the

parts of the claim based on RSA 540-A and RSA 358-A, and is

otherwise denied.

SO ORDERED.

Joseph A. DiClerico, Jr. United States District Judge

April 9, 2014

cc: Donna-Marie Cote, Esq. Michael J. Lambert, Esq.

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