UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Michelle Willette

v. Civil No. 14-cv-238-PB Opinion No.

Federal Home Loan Mortgage Corporation

MEMORANDUM AND ORDER

Michelle Willette has filed a petition to declare the

foreclosure deed to her home in Pembroke, New Hampshire invalid

and to enjoin the Federal Home Loan Mortgage Corporation

(“Freddie Mac”) from evicting her. Freddie Mac has filed a

motion to dismiss for failure to state a claim.

I. FACTS

Willette’s property in Pembroke, New Hampshire was subject

to a mortgage held by the original lender, Washington Mutual

Bank, FA. On September 28, 2008, the United States Office of

Thrift Supervision seized Washington Mutual Bank and facilitated

the sale of its assets — including Willette’s mortgage — to

JPMorgan Chase.

On July 11, 2012, Chase’s attorney sent a letter to

Willette telling her that “foreclosure has commenced.” On July

24, 2012, Chase sent Willette a letter regarding mortgage modification and requested an “updated profit and loss

statement” from Willette. Two days later, however, it sent

Willette a second letter stating that she was not eligible for a

mortgage modification. Nevertheless, in October 2012, Willette

wrote Chase and its attorney requesting a halt to foreclosure

proceedings and seeking unspecified information regarding a

possible mortgage modification. She did not receive a response.

Freddie Mac alleges that it acquired Willette’s mortgage at

some point after she requested a mortgage modification from

Chase.1 On January 4, 2013, Freddie Mac’s attorney sent a notice

to Willette informing her that a foreclosure sale would take

place on February 4, 2013. The letter also informed Willette

that she had the right to petition the superior court to enjoin

the scheduled foreclosure sale. Freddie Mac’s attorney caused

the same notice to be published in the Concord Monitor, a

newspaper of general circulation in the town of Pembroke, New

Hampshire.

At the foreclosure sale on February 4, 2013, Freddie Mac

purchased the property for $270,000. It recorded the

1 In her complaint, Willette states that “Freddie Mac alleges to have acquired the subject mortgage on January 25, 2007.” Doc. No. 1-1. In its memorandum in support of its motion to dismiss, Freddie Mac states that it acquired Willette’s mortgage on November 28, 2012. Doc. No. 3-1. Freddie Mac also attached a copy of the assignment from Chase to Freddie Mac, dated November 28, 2012. Doc. No. 3-4. 2 foreclosure deed on March 19, 2013. On June 26, 2013, Freddie

Mac filed a Landlord and Tenant Writ in circuit court to evict

Willette.

In April 2014, Willette filed a plea of title in Merrimack

County Superior Court seeking to declare the foreclosure deed

invalid and to enjoin “any further possessory action” against

her. Freddie Mac removed the action to this Court and filed a

motion to dismiss for failure to state a claim.

II. STANDARD OF REVIEW

To survive a Rule 12(b)(6) motion, a plaintiff must make

factual allegations sufficient to “state a claim to relief that

is plausible on its face.” Ashcroft v. Iqbal,

(2009) (quoting Bell Atl. Corp. v. Twombly,

(2007)). A claim is facially plausible when it pleads “factual

content that allows the court to draw the reasonable inference

that the defendant is liable for the misconduct alleged. The

plausibility standard is not akin to a ‘probability

requirement,’ but it asks for more than a sheer possibility that

a defendant has acted unlawfully.”

(citations omitted).

In deciding a motion to dismiss, I must “accept as true the

well-pleaded factual allegations of the complaint, draw all

reasonable inferences therefrom in the plaintiff’s favor and 3 determine whether the complaint, so read, sets forth facts

sufficient to justify recovery on any cognizable theory.”

Martin v. Applied Cellular Tech., Inc.,

(1st Cir.

2002). In addition to the facts set forth in the complaint, I

consider “documents incorporated by reference into the

complaint, matters of public record, and facts susceptible to

judicial notice.” Haley v. City of Boston,

(1st

Cir. 2011) (citing In re Colonial Mortg. Bankers Corp.,

(1st Cir. 2003)).

III. ANALYSIS

Willette challenges the validity of Freddie Mac’s

foreclosure deed by claiming that it lacked the power to

foreclose the mortgage it allegedly acquired from Chase. She

argues that Freddie Mac “alleges to have acquired the subject

mortgage on January 25, 2007,” but public information about the

chain of title indicates that other entities held the mortgage

after that date. Doc. No. 1-1, at 2. Therefore, Willette

argues that Freddie Mac’s “standing to foreclose derived from a

broken chain of title.” Doc. No. 5, at 2.

Freddie Mac argues in response that Section 479:25, II of

the New Hampshire Revised Statutes bars Willette’s claim.

Section 479:25, II places demands on both the foreclosing and 4 foreclosed parties. Before foreclosing, the mortgagee (or his

or her assignee) must notify the mortgagor that he or she has “a

right to petition the superior court in the county in which the

premises are situated . . . to enjoin the foreclosure sale.”

, II. Section 479:25, II also

places restrictions on the mortgagor’s ability to challenge the

foreclosure: “Failure to institute such petition and complete

service upon the foreclosing party, or his agent, conducting the

sale prior to sale shall thereafter bar any action or right of

action of the mortgagor based on the validity of the

foreclosure.”

The New Hampshire Supreme Court construes § 479:25, II to

bar a mortgagor from challenging the validity of a foreclosure

sale after it has occurred based on facts that the mortgagor

knew or should have known prior to the foreclosure sale. See

Murphy v. Fin. Dev. Corp.,

(N.H. 1985) (“The

only reasonable construction of the language in RSA 479:25, II

. . . is that it bars any action based on facts which the

mortgagor knew or should have known soon enough to reasonably

permit the filing of a petition prior to the sale.”). This

Court has also applied § 479:25, II to bar post-foreclosure

claims based on facts that a mortgagor knew or should have known

before the foreclosure sale. See Magoon v. Fed. Nat’l Mortg. 5 Ass’n, No. 13-cv-250,

, at *1-2 (D.N.H. Aug. 6,

2013); Calef v. Citibank, N.A., No. 11-cv-526,

,

at *4 (D.N.H. Feb. 21, 2013) (holding that a mortgagor was

barred from raising claims relating to the validity of an

assignment because he “‘knew or should have known’ the facts

related to that assignment ‘soon enough to reasonably permit the

filing of a petition prior to the sale.’”).

Willette’s complaint is based primarily on facts that “are

a matter of public record,” and therefore she either knew or

should have known them prior to the foreclosure sale. See Doc.

No. 1-1, at 2. Willette has not argued otherwise. Furthermore,

Freddie Mac’s attorney sent Willette notice of the foreclosure

sale a month before it occurred, which allowed her sufficient

time to petition to enjoin the sale. As a result, § 479:25, II

bars Willette’s claim.

In an effort to overcome the § 479:25, II time bar,

Willette argues that her claim should be governed by § 479, II-a

instead. Section 479:25, II-a provides: “No claim challenging

the form of notice, manner of giving notice, or the conduct of

the foreclosure sale shall be brought by the mortgagor or any

record lienholder after one year and one day from the date of

the recording of the foreclosure deed for such sale.” N.H. Rev.

Stat. § 479:25, II-a. Thus, unlike claims that a mortgagor knew 6 or should have known prior to the foreclosure sale, claims

challenging “the conduct of the foreclosure sale” may be brought

up to one year and one day after the foreclosure sale. See id.

Such claims could not be brought before the foreclosure sale

because they necessarily arise during the foreclosure sale

itself. See Murphy,

.

Willette argues that her claims arise under § 479:25, II-a

and therefore may be brought up to a year and a day after the

recording of the foreclosure deed. Specifically, she asserts

that Freddie Mac recorded a fraudulent foreclosure deed which

should be considered part of the “conduct of the foreclosure

sale.”2 See Doc. No. 5. She argues that the foreclosure deed is

invalid because Freddie Mac’s authority to foreclose “derived

from a broken chain of title.” See id. at 2. This is

essentially an argument about the validity of Freddie Mac’s

title to Willette’s mortgage framed in terms relating to the

foreclosure deed.

Even assuming that the recording of a fraudulent

foreclosure deed is part of the “conduct of the foreclosure

sale,” Willette’s argument fails because it is based on the

2 Willette claims in conclusory terms that Freddie Mac acted fraudulently, but she does not allege facts sufficient to support a claim of fraud. See Fed. R. Civ. P. 9(b) (allegations of fraud must be pled with particularity).

7 mistaken premise that a claim based on foreclosure sale conduct

can be brought up to a year and a day after the foreclosure deed

is recorded regardless of § 479:25, II. That is not the case.

Paragraph II establishes a bar to challenges knowable before the

foreclosure sale; Paragraph II-a sets a deadline for claims that

are not barred by Paragraph II. Paragraph II-a does not save a

claim that is otherwise barred by Paragraph II. If it did,

Paragraph II would effectively be eviscerated.

IV. CONCLUSION

Willette knew or should have known of the facts underlying

her challenges to the foreclosure sale before the sale occurred.

Because she did not present those claims in a petition to enjoin

the foreclosure sale, her claims are barred by § 479:25, II.

Defendant’s motion to dismiss (Doc. No. 3) is granted. The

clerk shall enter judgment accordingly and close the case.

SO ORDERED.

/s/Paul Barbadoro_______ Paul Barbadoro United States District Judge

September 18, 2014

cc: Stephen W. Wight, Esq. Nathan Reed Fennessy, Esq.

8