UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

John Riggieri

v. Civil No. 16-cv-20-LM Opinion No.

Caliber Home Loans, Inc. et al.

O R D E R

In a case that was removed from the New Hampshire Superior

Court, Cheshire County, John Riggieri brings suit against

Caliber Home Loans, Inc. (“Caliber”), Ocwen Loan Servicing, LLC

(“Ocwen”), and U.S. Bank Trust, N.A. (“U.S. Bank”), alleging

that defendants made misrepresentations in connection with a

proposed loan modification offer. Riggieri also alleges that

defendants generally acted in bad faith, and that their conduct

resulted in a foreclosure auction at which his home was sold

below market value.

Defendants move to dismiss under Federal Rule of Civil

Procedure 12(b)(6), contending that the complaint fails to state

a claim. Riggieri objects. For the reasons that follow,

defendants’ motions to dismiss are 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.,

(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,

(2009).

Background1

In 2002, John Riggieri purchased a plot of land in

Marlborough, New Hampshire (the “property”). On November 30,

2006, Riggieri and his then-wife, Nancy Gaunya, executed a

promissory note in favor of Countrywide Home Loans, Inc.

(“Countrywide”) in the amount of $604,000 to finance the

construction of a home on the property (the “note”). See doc.

no. 21-2. That same day, Riggieri and Gaunya granted a mortgage

on the property to Countrywide to secure the loan, with Mortgage

1 The facts are summarized from the Riggieri’s amended complaint (doc. no. 17) and a copy of Riggieri’s promissory notes, mortgage, and foreclosure deed, which were attached as exhibits to various filings in this case. See Rivera v. Centro Medico de Turabo, Inc.,

(1st Cir. 2009) (noting that a court may consider documents sufficiently referred to in the complaint on a motion to dismiss without converting the motion to one for summary judgment).

2 Electronic Registration Systems, Inc. (“MERS”) as the mortgagee

in its capacity as nominee for Countrywide. See doc. no. 21-3.

Both the note and the mortgage list the address of the property

as “38 Shaker Farm Road, Marlborough, New Hampshire 03455.” At

some point prior to November 23, 2015, the mortgage was assigned

to U.S. Bank.2

On June 9, 2009, Riggieri, Gaunya, and Countrywide entered

into a “Modification of Note and Security Instrument,” which

amended certain of the note’s terms (the “modified note”). See

doc. no. 21-4. The modified note also lists the property’s

address as “38 Shaker Farm Road, Marlborough, New Hampshire

03455.”

Riggieri alleges that in September 2009 “there was a

discrepancy in [his] escrow account.” Doc. no. 17 at ¶ 18. As

a result of the discrepancy, Harmon Law Offices began

foreclosure proceedings on the property in November 2011.

Riggieri alleges that he entered into a loan modification

agreement and the foreclosure did not occur.

2 The foreclosure deed states that U.S. Bank held the mortgage as of the date of the foreclosure. Caliber and U.S. Bank represent in their motion to dismiss that MERS assigned the mortgage to BAC Home Loans Servicing, LP, which assigned the mortgage to U.S. Bank in August 2015. Because Riggieri does not dispute that U.S. Bank validly held the mortgage at the time of the foreclosure, the exact record of assignment of the mortgage is immaterial to the court’s analysis.

3 In August 2012, Bank of America, which had been the loan

servicer, transferred servicing responsibilities to Ocwen. On

September 14, 2012, Ocwen mailed Gaunya a letter, noting that

she was approved to enter a new modification program which would

reduce her principal balance and monthly mortgage payment (the

“Ocwen letter”).3 The letter informed Gaunya that if she

completed a trial period, she would reduce her monthly payment

from $4,400.26 per month to $1,510.16 per month, reduce her

total loan balance from $722,277.17 to $173,047.68, and reduce

her interest rate from 5.375% to 2%. The letter also informed

Gaunya that she could accept the offer by making her first trial

period plan payment by October 1, 2012. The letter was

addressed to Gaunya at “38 Shaker Farm Road S, Marlborough, NH

03455.”4

Riggieri alleges that he did not become aware of the Ocwen

letter until early 2013, well after the deadline for acceptance.5

Riggieri alleges that the letter was “unbelievable” and that,

once he became aware of it, he “assumed that it was junk mail or

3 Riggieri alleges that “Ocwen was forced in a settlement with the Department of Justice to write down [the] loan” significantly. Doc. no. 17 at ¶ 22.

4 It is unclear why the letter was addressed to Gaunya only.

5 Riggieri does not allege when Gaunya received the letter or why he did not become aware of the letter until early 2013.

4 not a legitimate offer, and did not act upon it.” Doc. no. 17

at ¶¶ 29-30.

In February 2014, Ocwen began foreclosure proceedings on

the property. Riggieri alleges that the foreclosure proceedings

ended after he requested that Ocwen produce the original

promissory note, and it could not.

In June 2015, Ocwen transferred servicing responsibilities

on the loan to Caliber. Upon receiving notice of the transfer,

Riggieri requested that Caliber honor the offer made in the

Ocwen letter. Caliber refused to adjust the loan amount or

Riggieri’s interest rate. Shortly thereafter, Caliber mailed a

notice of foreclosure to Riggieri and published a notice of

foreclosure in the Manchester Union Leader. Riggieri alleges

that at the time the foreclosure notice was mailed, he was

traveling on a 27-day trip. Riggieri alleges that he had the

post office put his mail on hold while he was traveling, from

October 29 through November 23, 2015 and, therefore, did not

receive notice of the foreclosure sale, which took place on the

day he returned from the trip.6

6 In accordance with RSA 479:26, U.S. Bank’s attorney included with the foreclosure deed an affidavit setting forth the circumstances to show that the power of sale was duly executed. See doc. no. 32-3 at 3-4. In the affidavit, U.S. Bank’s counsel provides that a copy of the notice of foreclosure was sent to Gaunya and Riggieri by certified mail on October 23, 2015. Therefore, Riggieri should have received the foreclosure notice prior to his 27-day trip. For purposes of this order,

5 Both the mailed notice and the notice published in the

Manchester Union Leader listed the property’s address as “38

Shaker Farm Road, Marlborough, NH 03455,” the same address that

is listed in the mortgage, the note, and the modified note.

Riggieri alleges that the property’s actual address is “38

Shaker Farm Road South, Marlborough, NH 03455,” which was the

address listed in the Ocwen letter. Riggieri also alleges that

the auctioneer at the foreclosure sale “admitted that all

parties were unable to find the property initially,” which

Riggieri believes was caused by the incorrect address being

listed in the notice. Doc. no. 17 at ¶ 48.

U.S. Bank, which held the mortgage at the time of the

foreclosure, purchased the property at the foreclosure sale.

According to the foreclosure deed, U.S. Bank purchased the

property for $379,677.01. See doc. no. 32-3 at 1. The

foreclosure deed lists the property’s address as “38 Shaker Farm

Road, Marlborough, NH 03455.”

Riggieri alleges that at the

time he filed this lawsuit, shortly after the foreclosure sale,

he was 2300 days, more than six years, late on his mortgage

payments.

Riggieri filed this lawsuit in state court on December 21,

2015. Defendants removed the case to this court on January 20,

the court assumes that the foreclosure notice arrived sometime after October 29, and was held by the post office.

6 2016, and moved to dismiss the complaint. Riggieri subsequently

amended the complaint, and defendants move to dismiss the

amended complaint. Riggieri objects.

Discussion

Riggieri asserts five claims: (i) negligent misrepresenta-

tion; (ii) breach of the covenant of good faith and fair

dealing; (iii) unjust enrichment; (iv) negligent infliction of

emotional distress; and (v) “standing.” Riggieri does not

specify against which defendant he brings each claim, although

he appears to allege that Caliber and U.S. Bank should be held

liable for any of Ocwen’s unlawful activity because they are

“successors in interest” to Ocwen. Defendants move to dismiss

all claims.7

I. Negligent Misrepresentation

Riggieri alleges that Ocwen is liable for negligent

misrepresentation because the Ocwen letter was “unbelievable”

and offered “an extremely short timeline for acceptance.” Doc.

no. 17 at ¶ 60. Riggieri alleges that Caliber is liable for

negligent misrepresentation because it “negligently failed to

properly describe the property in the notice of foreclosure.”

Id. at ¶ 67. Riggieri also alleges that “Defendants have added

7 Caliber and U.S. Bank filed a motion to dismiss (doc. no. 20). Ocwen filed a separate motion to dismiss (doc. no. 21).

7 erroneous costs and fees to the Plaintiff’s loan . . . leading

him down the path to foreclosure.” Id. at ¶¶ 74-75. Defendants

contend that Riggieri does not allege any misrepresentation and,

to the extent he does, his claim is barred by the economic loss

doctrine.

Under New Hampshire common law, the elements of a claim for

negligent misrepresentation “are a negligent misrepresentation

of a material fact by the defendant and justifiable reliance by

the plaintiff.” Wyle v. Lees,

(2011) (citing

Snierson v. Scruton,

(2000)). Moreover, “[i]t

is the duty of one who volunteers information to another not

having equal knowledge, with the intention that he will act upon

it, to exercise reasonable care to verify the truth of his

statements before making them.”8

A. Ocwen Letter

Riggieri’s complaint does not allege facts sufficient to

support a claim for negligent misrepresentation based on the

Ocwen letter. Other than vague and conclusory allegations that

8 Riggieri devotes one section in each of his objections to defendants’ motions to dismiss to arguing that his claim for negligence was sufficiently alleged. Although Riggieri alleged a claim for negligence in his original complaint, he does not allege a claim for negligence in his amended complaint, and defendants did not address a claim for negligence in their motions to dismiss. Therefore, there is no negligence claim in the case.

8 the letter was “misleading” or “worded . . . to avoid responses

from consumers,” doc. no. 17 at ¶¶ 62-63, Riggieri does not

allege any facts to show a misrepresentation in the letter. To

the contrary, Riggieri appears to allege that the offer

contained in the letter was legitimate, because Ocwen was forced

to offer a reduction on the loan as a result of its settlement

with the Department of Justice.

Even if Riggieri had alleged a misrepresentation based on

wording in the letter, the complaint fails to allege any

justifiable reliance on such a representation. Indeed, Riggieri

alleges that he did not discover the letter until several months

after the deadline for responding had passed.9 He has not

alleged any facts to support a plausible theory that he relied

to his detriment on an alleged misrepresentation in that letter.

9 Riggieri’s original complaint alleged that he received the letter shortly after it was mailed. Ocwen asserts that Riggieri’s contradictory allegation in his amended complaint that he did not receive the letter until 2013 is an attempt to avoid dismissal based on the statute of limitations, an argument Ocwen pressed in its motion to dismiss the original complaint. Ocwen urges the court to disregard the allegation in the amended complaint that Riggieri did not become aware of the letter until 2013 on that basis. The court declines to do so. See, e.g., Bernadotte v. N.Y. Hosp. Med. Ctr. of Queens, No. 13-cv- 965(MKB),

, at *5 (E.D.N.Y. Feb. 28, 2014) (“While there may be a rare occasion to disregard the contradictory and manipulated allegations of an amended pleading . . . the more usual and benevolent option is to accept the superseded pleadings . . . .” (internal quotation marks and citation omitted)).

9 In addition, even if Riggieri’s allegations were sufficient

to support a negligent misrepresentation claim, the claim would

nonetheless be barred by the economic loss doctrine. Under New

Hampshire law, the contractual relationship between a lender and

borrower typically precludes recovery in tort. Moore v. Mortg.

Elec. Registration Sys., Inc.,

(D.N.H.

2012) (citing Wyle, 162 N.H. at 409–10). This principle, known

as the “economic loss doctrine,” operates on the theory that

“[i]f a contracting party is permitted to sue in tort when a

transaction does not work out as expected, that party is in

effect rewriting the agreement to obtain a benefit that was not

part of the bargain.” Plourde Sand & Gravel Co. v. JGI E.,

Inc.,

(2007). Thus, where a borrower claims

the existence of a duty outside the contractual relationship, he

has the burden of proving that the lender voluntarily engaged in

“activities beyond those traditionally associated with the

normal role of a money lender.” Moore,

(quoting Seymour v. N.H. Sav. Bank,

(1989)).

“This burden extends to claims against mortgagees as well as

loan servicers.” Bowser v. MTGLQ Inv’rs, LP, No. 15-cv-154-LM,

, at *2 (D.N.H. Aug. 11, 2015) (citing cases).

“There is no question that New Hampshire recognizes an

exception to the economic loss doctrine for certain negligent

10 misrepresentation claims.” Schaefer v. IndyMac Mortg. Servs.,

(1st Cir. 2013). A narrow exception exists for

professionals “who are in the business of supplying

information,” such as accountants, appraisers, and investment

brokers.

(discussing Plourde,

).10

The facts alleged in the complaint show that the economic

loss doctrine applies to Riggieri’s negligent misrepresentation

claim based on the Ocwen letter. Riggieri does not allege that

Ocwen voluntarily engaged in activities beyond those

traditionally associated with the normal role of a money lender.

See Moore,

. The Ocwen letter contains an

offer from a loan servicer on behalf of a lender to modify the

terms of the loan. Tort claims based on misrepresentations made

in connection with a loan modification offer are barred by the

economic loss doctrine because they “are related to defendants’

attempts to collect the [borrower’s] mortgage debt.” Dionne v.

10 The New Hampshire Supreme Court has also recognized an exception in a case where a homeowner made misrepresentations in an effort to sell his home. See Schaefer,

(discussing Wyle, 162 N.H. at 409–10). In the latter instance, the New Hampshire Supreme Court was careful to limit the exception only to those misrepresentations made prior to the formation of the contract and in an effort to induce a person to enter into the contract. See

Riggieri does not assert that this exception applies to his claim.

11 Fed. Nat’l Mortg. Assoc., No. 15-cv-56-LM,

, at

*13 (D.N.H. June 14, 2016); see also Schaefer,

.11

Although Riggieri asserts that Ocwen is in “the business of

supplying information”12 and, therefore, an exception to the

economic loss doctrine exists, he alleges no facts to support

such a claim. The First Circuit has made clear that negligent

misrepresentation claims such as Riggieri’s which are asserted

against loan services are plainly barred by the economic loss

doctrine, and do not fall within that exception. See Schaefer,

(holding that the district court correctly

held that plaintiff’s negligent misrepresentation claim against

a loan servicer arising out of an alleged misrepresentation in a

loan modification offer letter was barred by the economic loss

doctrine); see also Bowser,

, at *2 (applying

11Riggieri argues briefly that the case law regarding the applicability of the economic loss doctrine to claims arising out of misrepresentations in a loan modification offer does not apply because Ocwen was forced to offer the loan modification due to a settlement with the Department of Justice. Riggieri does not explain why that fact, even if true, changes the application of the economic loss doctrine to his claim.

12Although Riggieri filed separate objections to the two motions to dismiss, he generally refers to “the defendants” throughout both objections. While Riggieri more specifically addressed his argument concerning the exception for defendants who are in the business of supplying information in his objection to Caliber and U.S. Bank’s objection, the court interprets Riggieri’s argument on that point to pertain to Ocwen as well.

12 economic loss doctrine to bar negligence claim against loan

servicer).

Therefore, even if Riggieri had plausibly alleged a claim

for negligent misrepresentation based on the Ocwen letter, which

he has not, the economic loss doctrine bars that claim.

B. Other Misrepresentations

Riggieri alleges that Caliber misrepresented the property’s

address in the notice of foreclosure, and that it improperly

added fees and costs to Riggieri’s loan. Neither allegation is

sufficient to plead a claim for negligent misrepresentation.

Even assuming the truth of the allegation that Caliber

misrepresented the property’s address on the notice of

foreclosure,13 that act does not give rise to a claim for

negligent misrepresentation on Riggieri’s behalf. An essential

element of a claim for negligent representation is justifiable

reliance by the plaintiff. Riggieri alleges that he did not

receive notice of the foreclosure until after the sale occurred.

He does not allege that he relied on the allegedly mistaken

address in the notice of foreclosure in any way. Therefore, he

cannot base a claim for negligent misrepresentation on the

13As mentioned above, the address listed in the notice of foreclosure matched the address listed in the mortgage, the note, the modified note, and the foreclosure deed.

13 allegedly inaccurate address contained in the notice of

foreclosure.

Riggieri’s allegation concerning added fees is also

insufficient to survive a motion to dismiss. Riggieri does not

explain how the late fees could be considered a

misrepresentation. Moreover, Riggieri alleges that he “was

behind on his mortgage payments for 2300 days.” Doc. no. 17 at

¶ 95. Pursuant to the terms of the mortgage, the lender was

entitled to charge Riggieri additional fees and costs. See doc.

no. 21-3 at ¶¶ 1, 14. Further, Riggieri never paid any of the

fees and costs and, therefore, he has not alleged that he

suffered any injury from the misrepresentation.

Accordingly, Riggieri’s claim for negligent

misrepresentation is dismissed.

II. Good Faith and Fair Dealing

Riggieri alleges that Ocwen violated the implied covenant

of good faith and fair dealing in the mortgage agreement by

sending him the allegedly misleading Ocwen letter. Riggieri

also alleges that “defendants” breached the implied covenant in

various ways, including by (i) keeping Riggieri “uninformed and

off track with his loan,” (ii) “moving to foreclose without

. . . proper notice,” (iii) “auctioning the . . . Property for

substantially less than the property is worth,” (iv) “failing to

14 properly describe the property” in the foreclosure notices

published in the Manchester Union Leader, (v) “add[ing]

interest, late payments, and other fees” to Riggieri’s loan, and

(vi) accelerating Riggieri’s loan and foreclosing on the

property arbitrarily and without proper explanation. Doc. no.

17 at ¶ 85; see id. at ¶ 97. None of Riggieri’s allegations is

sufficient to state a plausible claim for relief for violation

of the implied covenant of good faith and fair dealing.

Under New Hampshire law, the implied covenant of good faith

and fair dealing applies in three different contractual

contexts: contract formation, termination of at-will contracts,

and discretion in contract performance. Centronics Corp. v.

Genicom Corp.,

(1989). Riggieri invokes the

third category that limits discretion in contractual

performance. “[W]hether a plaintiff has sufficiently alleged a

breach of this duty turns in part on ‘whether [an] agreement

allows or confers discretion on the defendant to deprive the

plaintiff of a substantial portion of the benefit of the

agreement.’” Todd v. Aggregate Indus. - Ne. Region, Inc., No.

14-cv-393-JL,

, at *11 (D.N.H. Oct. 27, 2015)

(quoting Rouleau v. U.S. Bank, N.A., No. 14-cv-568-JL,

, at *3 (D.N.H. Apr. 17, 2015)). Such “contractual

discretion can be exercised in a way that violates the duty of

good faith and fair dealing only if a promise is subject to such

15 a degree of discretion that its practical benefit could

seemingly be withheld.” Milford–Bennington R.R. Co., Inc. v.

Pan Am Rys., Inc., No. 10-cv-264-PB,

, at *4

(D.N.H. Dec. 16, 2011) (internal quotation marks, alterations,

and citation omitted).

A. Ocwen Letter

Riggieri argues that the Ocwen letter was misleading and

that Ocwen failed to follow up with him after he did not respond

in a timely manner, to ensure that he took advantage of the loan

modification offer. Riggieri contends that these actions

constitute a breach of the implied covenant of good faith and

fair dealing in the mortgage agreement.

As discussed above, Riggieri has not adequately alleged

that the Ocwen letter was misleading in any way. Regardless,

“[c]ourts have generally concluded . . . that the covenant of

good faith and fair dealing in a loan agreement cannot be used

to require the lender to modify or restructure the loan.”

Moore,

; see also Gikas v. JPMorgan Chase

Bank, N.A., No. 11-cv-573-JL,

, at *3-4 (D.N.H.

Apr. 10, 2013); Ruivo v. Wells Fargo Bank, N.A., No. 11–cv–466–

PB,

, at *3 (D.N.H. Nov. 19, 2012). This is so

because “[p]arties are bound by the agreements they enter into

and the court will not use the implied covenant of good faith

16 and fair dealing to force a party to rewrite a contract so as to

avoid a harsh or inequitable result.” Ruivo,

at

*4 (citing, among other cases, Moore,

;

Olbres v. Hampton Co-op. Bank,

(1997)).

Therefore, to the extent Riggieri attempts to base his

breach of the implied covenant of good faith and fair dealing

claim on the Ocwen letter or Ocwen’s failure to offer him a loan

modification in general, that claim is dismissed.

B. Keeping Riggieri “Off Track” on His Loan

Riggieri alleges that defendants kept him “uninformed and

off track with his loan.” Doc. no. 17 at ¶ 85(a). Riggieri

does not explain how any defendant withheld information from him

or got him “off track” with his loan. These bare allegations

are insufficient to state a plausible breach of the implied

covenant of good faith and fair dealing by any defendant.

C. Lack of Notice to Riggieri

Riggieri alleges that defendants breached the implied

covenant of good faith and fair dealing because he did not

receive actual notice of the foreclosure prior to the sale.

Riggieri alleges, however, that he did not receive notice prior

to the foreclosure because he had taken a 27-day trip and asked

17 the post office to hold his mail during that time.14 In other

words, even if defendants’ failure to give Riggieri prior actual

notice of the foreclosure could be a breach of the covenant,

Riggieri’s failure to receive the written notice was his own

fault.

Further, Riggieri does not explain how his lack of receipt

of prior notice of the foreclosure sale could give rise to a

claim for breach of the implied covenant of good faith and fair

dealing. The mortgage states that the manner in which the

lender must provide the borrower with notice of a foreclosure is

“prescribed by Applicable Law.” Doc. no. 20-3 at ¶ 22. New

Hampshire law “requires that the foreclosing party send notice

to the mortgagor’s last known address by registered or certified

mail at least twenty-five days before the sale.” Bradley v.

Wells Fargo Bank, N.A., No. 12-cv-127-PB,

, at *3

(D.N.H. Mar. 3, 2014) on reconsideration in part, No. 12-cv-127-

PB,

(D.N.H. May 20, 2014) (citing RSA § 479:25).

“It does not, however, require that the mortgagor receive actual

notice.” Id.

14Although not specifically alleged, the complaint implies that Riggieri was away on his trip when Caliber mailed the notice of foreclosure. As mentioned above, the affidavit attached to the foreclosure deed states that the foreclosure notice was sent to Riggieri and Gaunya by certified mail on October 23, 2015, six days prior to Riggieri’s trip.

18 Therefore, Riggieri’s alleged lack of actual notice does

not give rise to a claim for breach of the implied covenant of

good faith and fair dealing.

D. Auctioning Off the Property for Less than it is Worth

Riggieri alleges that the property was auctioned off “for

substantially less than the property is worth.” Doc. no. 17 at ¶

85(c). Although not specifically alleged in the complaint, the

foreclosure deed, which was attached to another motion filed by

Caliber and U.S. Bank, shows that U.S. Bank purchased the

property for $379,677.01. See doc. no. 32-3 at 1.

Riggieri offers no support for his theory that the implied

covenant of good faith and fair dealing in a mortgage agreement

requires a certain sale price at a foreclosure auction. Outside

of the mortgage agreement, a mortgagee has a common law duty to

make a reasonable effort to obtain a fair price.15 Riggieri does

not allege a claim based on violation of that duty.

15New Hampshire law imposes a duty on a mortgagee to “exert every reasonable effort to obtain a fair and reasonable price under the circumstances.” Murphy v. Fin. Dev. Corp.,

(1985) (internal quotation marks and citation omitted). This duty, however, is based on New Hampshire common law, which demands that “in the context of a foreclosure sale, the mortgagee owes the mortgagor a fiduciary duty of good faith and due diligence.” Bascom Const., Inc. v. City Bank and Trust,

(1993) (citing Murphy,

); see also People’s United Bank v. Mountain Home Developers of Sunapee, LLC,

(D.N.H. 2012).

19 In addition, Riggieri fails to provide factual allegations

to support any claim that the sales price was too low. His

complaint, therefore, is insufficient to allege bad faith. See

People’s United Bank,

(noting that

conclusory allegations of a property being auctioned off in a

foreclosure sale at below value without alleging the proper

value of a property are insufficient to show bad faith).

Therefore, the complaint does not state a claim for breach

of the implied covenant of good faith and fair dealing based on

the purchase price at the foreclosure sale.

E. Inaccurate Address in Foreclosure Notice

Riggieri alleges that Caliber inaccurately listed the

property’s address in the notice of foreclosure published in the

Manchester Union Leader.16 He alleges that the published notice

listed the property’s address as “38 Shaker Farm Road,” when the

property’s actual address is “38 Shaker Farm Road South.”

Riggieri asserts that the address in the published notice of

foreclosure was inaccurate, which he alleges violates the

16Caliber asserts in its motion to dismiss that, as a loan servicer, it did not have a contract with Riggieri and, therefore, cannot be held liable for breach of the implied covenant of good faith and fair dealing in any agreement. However, it appears that Riggieri is attempting to impose liability upon U.S. Bank, which held the mortgage at the time of the foreclosure, through Caliber’s actions as U.S. Bank’s agent.

20 implied covenant of good faith and fair dealing in the

mortgage.17

Riggieri alleges that Caliber “negligently failed to

properly describe the property in the notice of foreclosure.”

Doc. no. 17 at ¶ 67. As discussed above, the duty of good faith

and fair dealing applies when a party unreasonably exercises

discretion granted to it in an agreement. Riggieri does not

identify the portion of the mortgage agreement that confers

discretion upon the mortgagor with respect to properly

advertising or providing accurate notice of the foreclosure

sale. See, e.g., Mudge v. Bank of America, N.A., No. 13-cv-421-

JD,

, at *3 (D.N.H. Nov. 20, 2013) (collecting

cases dismissing good faith and fair dealing claims for failing

to identify grants of discretion in mortgage agreements that

were exercised unreasonably). Therefore, Riggieri does not

allege a plausible claim for breach of the implied covenant of

good faith and fair dealing based on the address in the

foreclosure notice.18

17As discussed above, the published notice of foreclosure uses the same address (“30 Shaker Farm Road”) as that listed in the mortgage, the note, the modified note, and the foreclosure deed.

18Further, even if Riggieri had properly asserted a claim based on the allegedly incorrect address in the notice of foreclosure, he fails to allege any injury as a result of that conduct. Although Riggieri alleges that potential purchasers and the auctioneer himself “initially” had some “confusion”

21 F. Fees

Riggieri alleges that defendants have “continued to add

interest, late payments, and other fees to [his] loan,” doc. no.

17 at ¶ 85(e), in violation of the implied covenant of good

faith and fair dealing. The terms of the mortgage provide that

failure of the borrowers to make their required monthly mortgage

payments permits the lender to collect late fees and interest.

Riggieri alleges that he was more than six years late on his

mortgage payments, and does not allege that defendants added any

fees prior to his default. Therefore, based on the allegations

in the complaint and the express terms of the mortgage

agreement, defendants were entitled to charge Riggieri fees and

interest after he was in default.

Accordingly, Riggieri’s allegations based on fees and

interest are insufficient to state a claim for breach of the

implied covenant of good faith and fair dealing in the mortgage

agreement.

G. Foreclosing Without Proper Explanation

Riggieri alleges that defendants breached the implied

covenant of good faith and fair dealing “[b]y failing to

about the location of the property, he does not allege that potential purchasers failed to attend the auction based on the allegedly incorrect address.

22 accelerate or start foreclosure proceedings for such an extended

period . . . .” Doc. no. 17 at ¶ 97. Riggieri admits he was in

default for more than six years and lays blame on defendants for

waiting so long to foreclose. Nothing in the terms of the

mortgage requires the mortgagee to foreclose immediately upon

the mortgagor’s default. Moreover, it is difficult to see how

the mortgagee’s forbearance in exercise of its right to

foreclose in this case could constitute a breach of the duty of

good faith and fair dealing. See Brown v. Wells Fargo Home

Mortg., No. 15-cv-467-JL,

, at *6 (D.N.H. June

20, 2016); see also Rouleau,

, at *5 (“a party

does not breach the duty of good faith and fair dealing simply

by invoking a specific, limited right that is expressly granted

by an enforceable contract” (internal quotation marks and

citation omitted)); Moore,

(“the mere

fact that some or all of the defendants exercised their

contractual right to foreclose on the Moores after they

defaulted on their mortgage payments does not amount to a breach

of the implied covenant”) (citations omitted). And Riggieri has

not alleged any facts to support such a claim. Therefore,

Riggieri’s claim for breach of the implied covenant of good

faith and fair dealing based on defendants’ delay in foreclosing

is dismissed.

23 In sum, none of Riggieri’s allegations is sufficient to

state a plausible claim for relief against any defendant for

breach of the implied covenant of good faith and fair dealing in

the mortgage agreement. Accordingly, Riggieri’s claim based on

the implied covenant is dismissed.

III. Unjust Enrichment

Riggieri alleges that U.S. Bank “has been unjustly enriched

by [the] reduced purchase price as they purchased a home for way

less than the home is worth” after providing improper notice of

the foreclosure. Doc. no. 17 at ¶ 104.

“The doctrine of unjust enrichment is that one shall not be

allowed to profit or enrich himself at the expense of another

contrary to equity.” Cohen v. Frank Developers, Inc.,

(1978) (internal quotation marks and citation omitted);

see also Pella Windows & Doors, Inc. v. Faraci,

(1990). To be entitled to restitution for unjust

enrichment, a plaintiff must show that the defendant received “a

benefit which would be unconscionable for him to retain.” Clapp

v. Goffstown Sch. Dist.,

(2009) (internal

quotation marks omitted); see also R. Zoppo Co., Inc. v. City of

Manchester,

(1982). In addition, unjust

enrichment is an equitable remedy that is not available if the

24 parties’ relationship is controlled by a contract. Turner v.

Shared Towers VA, LLC,

(2014).

In the context of a foreclosure sale, a claim for unjust

enrichment may be viable, despite the mortgage agreement, if the

defendant obtained title to the property based on impropriety or

misconduct in the foreclosure proceeding. See, e.g., Coleman v.

Financial, No. 16-cv-11124,

, at *5 (E.D. Mich.

June 24, 2016). As is explained above, to the extent Riggieri

contends that the address on the foreclosure notice and his own

failure to pick up his mail would constitute misconduct that

invalidates U.S. Bank’s title to the property, he has not

alleged sufficient facts to support those theories. In the

absence of malfeasance, the mortgage agreement precludes an

unjust enrichment claim. See Smith v. Litton Loan Servicing,

(6th Cir. 2013) (a lender’s invocation of

its “foreclosure remedy when a borrower stops making payments on

a loan secured by a mortgage . . . can produce lamentable

situations, but these situations are anticipated by mortgage

agreements and are not the sort of inequity that unjust

enrichment is meant to address”).

In addition, even if the claim were not precluded by the

mortgage agreement, to the extent Riggieri relies on the value

of the property as a basis for unjust enrichment, he does not

allege facts to show that U.S. Bank received an unconscionable

25 benefit. Through the original loan, on November 30, 2006,

Riggieri and Gaunya received $604,000. By September 2012, the

amount due on the loan was $609,000. When the property was sold

at the foreclosure sale, Riggieri had not made mortgage payments

for more than six years. The property was sold to U.S. Bank for

$379,677.01.

Riggieri does not allege that the sale price is less than

the fair market value of the property, much less that the fair

market value exceeds the amount due on the mortgage. He also

does not allege that U.S. Bank is seeking to recover any

deficiency from him. See, e.g., Restatement (Third) of Property

(Mortgages), § 8.4 (1997). Further, he does not allege what, if

any, equity he held in the property. The amount of the sale

price does not show that U.S. Bank obtained a benefit that would

be unconscionable to retain.19

IV. Negligent Infliction of Emotional Distress

Riggieri alleges that “Defendants have made various

negligent misrepresentations to the Plaintiff,” doc. no. 17 at

“When opposing a Rule 12(b)(6) motion, a plaintiff cannot 19

expect a trial court to do his homework for him. Rather, the plaintiff has an affirmative responsibility to put his best foot forward in an effort to present some legal theory that will support his claim.” Carter’s of New Bedford, Inc. v. Nike, Inc.,

, 292 n.2 (1st Cir. 2015) (internal citation and quotation marks omitted).

26 ¶ 109, which led to physical injuries, such as loss of appetite,

upset stomach, sleeplessness, and severe mental anguish.

To make out a negligent infliction of emotional distress

claim, the plaintiff must show: “(1) causal negligence of the

defendant; (2) foreseeability; and (3) serious mental and

emotional harm accompanied by objective physical symptoms.”

Tessier v. Rockefeller,

(2011) (internal

quotation marks and citation omitted); see also Mottram v. Wells

Fargo Bank, N.A., No. 15-cv-470-PB,

, at *4

(D.N.H. Mar. 8, 2016). As discussed above, Riggieri has not

alleged that any defendant made any misrepresentations,

negligent or otherwise, to him. Therefore, he has not alleged a

claim for negligent infliction of emotional distress based on a

negligent misrepresentation.

V. Standing

Riggieri alleges that the “Defendant” did not have standing

to foreclose on the property because Ocwen could not produce the

original note when Riggieri requested it. Although New

Hampshire law does not recognize a cause of action of

“standing,” it appears that Riggieri is attempting to allege a

claim for wrongful foreclosure based on the fact that Ocwen did

27 not produce the original note when he requested it, in 2014,

long before the foreclosure sale in November 2015.20

U.S. Bank held the mortgage at the time of the foreclosure.

Under the terms of the mortgage agreement, U.S. Bank had “the

authority, as agent of the noteholder, to exercise the power of

sale.” Bergeron v. N.Y. Cmty. Bank,

(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 the note at the time of

the foreclosure). Therefore, U.S. Bank was authorized to

foreclose on the property regardless of whether it held the

note.

Accordingly, defendants are entitled to dismissal of

Riggieri’s complaint.

Conclusion

For the foregoing reasons, defendants’ motions to dismiss

(doc. nos. 20 and 21) are granted.

20Although Riggieri appears to base his claim on Ocwen’s alleged inability to produce the original note in 2014, he does not appear to seek to hold Ocwen liable for his “standing” claim. See Gikas,

, at *4-5 (plaintiff cannot hold previous loan servicer liable for any wrongful conduct by current servicer or note holder).

28 While the motions to dismiss were pending, Caliber and U.S.

Bank filed a motion seeking a declaration that the inadvertent

recording of the foreclosure deed is void, pending the outcome

of this litigation (doc. no. 32). In light of this order, which

disposes of this litigation, the motion (doc. no. 32) is

terminated as moot.

The clerk of court is directed to enter judgment

accordingly and close the case.

SO ORDERED.

__________________________ Landya McCafferty United States District Judge

August 3, 2016

cc: Joseph A. Farside, Jr., Esq. Nathan Reed Fennessy, Esq. Keith A. Mathews, Esq. Thomas J. O’Neill, Esq.

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