UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE

Farion N. Brown and Donna Brown

v. Civil No. 16-cv-530-JL Opinion No.

Wells Fargo Home Mortgage, et. al.

ORDER

Defendants Wells Fargo and Federal National Mortgage

Association (“FNMA”) move to dismiss this action, which is

duplicative of an earlier case filed by the same plaintiffs

against the same defendants upon the same basis of fact and

asserting all but one of the same claims.1 Plaintiffs Fairon and

Donna Brown moved to stay this action pending the outcome of

plaintiffs’ interlocutory appeal in the earlier-filed action.

For the reasons explained below, the court denies plaintiffs’

motion to stay as moot and grants defendants’ motion to dismiss,

substantially for the reasons set forth in defendants’

supporting memorandum.

Background

On November 5, 2015, after receiving an eviction notice at

their foreclosed-upon home, the Browns filed a lawsuit in

1 See Brown v. Wells Fargo Home Mortg., No. 15-cv-467-JL (D.N.H. filed Nov. 7, 2015) (“Brown I”). Hillsborough County Superior Court. They brought claims against

FNMA, who owned the Browns’ mortgage, and Wells Fargo, who

serviced it, for violations of the Real Estate Settlement

Procedures Act (“RESPA”),

et seq., the Equal

Credit Opportunity Act (“ECOA”),

et seq.,

Unfair, Deceptive, or Unreasonable Collection Practices Act

(“UDUCPA”),

-C:3, and the duty of good

faith and fair dealing. They sought both damages and injunctive

relief -- specifically, rescission of the foreclosure sale.

The defendants removed that case to this court and moved to

dismiss. After a full round of briefing, several late-filed

addenda from the plaintiffs, and a motion hearing, this court

granted defendants’ motion to dismiss the Browns’ claims

(1) challenging the validity of the foreclosure proceedings and

seeking as relief rescission of the foreclosure sale,2 (2) under

the UDUCPA and the duty of good faith and fair dealing, and

(3) for injunctive relief under RESPA and the ECOA. Brown v.

Wells Fargo,

. The Browns’ claims for damages

2 This court dismissed these claims on the grounds that the plaintiffs did not seek to enjoin the foreclosure sale before it occurred, despite admitting to notice thereof. Brown,

. New Hampshire law “bar[s] any action or right of action of the mortgagor based on the validity of the foreclosure” if the mortgagor fails “to petition the superior court . . . to enjoin the scheduled foreclosure sale.”

, II.

2 under RESPA and the ECOA remained in play.

That order

issued on June 20, 2016. The Browns filed an interlocutory

appeal challenging this court’s dismissal of the Browns’ claims

for injunctive relief. On April 28, 2017, the Court of Appeals

dismissed that appeal for lack or jurisdiction.3

While the appeal was pending, the defendants initiated the

eviction proceedings of which they had notified the plaintiffs

in November 2015 -- the very same notice that precipitated the

Browns’ first action. The Browns countered by disputing the

defendants’ title to his property. New Hampshire law dictates

that such a challenge -- a plea of title -- be filed in the

superior court.

; Bank of N.Y.

Mellon v. Dowgiert,

(N.H. 2016) (a plea of

title is “an action or right of action, not a defense” and must

be prosecuted in the superior court). Filing a plea of title

operates to stay the circuit court’s eviction proceedings.

.

Presumably as their plea of title, on November 28, 2016,

the Browns filed this action in the Hillsborough County Superior

Court. This complaint, through factual allegations that are

almost word-for-word identical to those in the Browns’ first

complaint, challenges the validity of the foreclosure sale and

3 See Brown I document no. 42.

3 asserts claims against the same two defendants for violations of

the same statutes -- RESPA, the ECOA, and New Hampshire’s

UDUCPA. The only substantive difference between this complaint

and that in Brown I is replacement of the Browns’ dismissed

claim for violation of the duty of good faith and fair dealing

with a claim for breach of fiduciary duty based on the

foreclosure sale, which had already occurred when plaintiffs

filed their Brown I complaint. In short, the basis for the

Browns’ challenge to defendants’ title is precisely the same

claims that this court dismissed as barred by

, II4 -- their claims challenging the validity of

the foreclosure.

Defendants’ motion to dismiss

The plaintiffs’ complaint in this new action raises three

categories of claims: (1) claims challenging FNMA’s foreclosure

and seeking injunctive relief, which the court dismissed in its

order in the earlier action; (2) claims for damages under RESPA

and the ECOA, which the court allowed to proceed in the earlier

action; and (3) a new claim against both defendants for breach

4 Defendants assert -- and the plaintiffs do not dispute -- that in making that filing, the plaintiffs failed to timely inform the Superior Court that its claims had already been dismissed as barred by New Hampshire law.

4 of fiduciary duty based on the foreclosure sale. None of these

categories survives defendants’ motion to dismiss.

A. Issue preclusion

As the defendants cogently explain, issue preclusion bars

the plaintiffs’ claims challenging FNMA’s foreclosure (counts 1

and 2). Under federal common law, which applies here, see Glob.

NAPs, Inc. v. Verizon New England Inc.,

, 95 (1st

Cir. 2010), a previous adjudication estops the litigation of an

issue if the following criteria are established:

(1) an identity of issues (that is, that the issue sought to be precluded is the same as that which was involved in the prior proceeding), (2) actuality of litigation (that is, that the point was actually litigated in the earlier proceeding), (3) finality of the earlier resolution (that is, that the issue was determined by a valid and binding final judgment or order), and (4) the centrality of the adjudication (that is, that the determination of the issue in the prior proceeding was essential to the final judgment or order).

Faigin v. Kelly,

(1st Cir. 1999). These

elements are easily satisfied here.

First, the issues are identical. As discussed supra, the

plaintiffs’ claims challenging the foreclosure and the facts

underlying them are substantially identical -- indeed, in

significant part, word-for-word identical -- in both complaints.5

5 See Compl. (doc. no. 1-2) ¶¶ 48-78; Brown I Compl. (doc. no. 1- 1) ¶¶ 48-79.

5 Second, those issues were actually litigated in the

previous proceeding. The defendants moved to dismiss all

claims. The Browns opposed the motion through a series of often

late-filed and amended opposition briefs. The court considered

all of defendants’ arguments, heard oral argument, and dismissed

plaintiffs’ claims challenging the validity of FNMA’s

foreclosure because the Browns failed to raise those issues

before the foreclosure sale as required by

, II. See Brown,

.

Third, that litigation resulted in an order that was

“final” for purposes of issue preclusion.6 That is, the “parties

had a full and fair opportunity to litigate [the] matter,” and

the court’s order dismissing those claims was unequivocal, not

tentative, and issued after full briefing and a hearing.

O'Reilly v. Malon,

, 822–23 (1st Cir. 1984). The

court’s order was, therefore, “sufficiently firm to be accorded

preclusive effect.” Pure Distributors, Inc. v. Baker,

, 157 n.5 (1st Cir. 2002) (citing Restatement (Second) of

Judgments § 13 (1982)).

Finally, the adjudication of the issues was central to

court’s order. The court addressed the plaintiffs’ post-

6 Albeit not necessarily “final” in the sense of

.

6 foreclosure sale attempt to challenge the foreclosure’s validity

and concluded that New Hampshire law barred the plaintiffs from

doing so. Brown,

. That determination was

essential to the court’s order dismissing plaintiffs’ claims and

request for injunctive relief.

B. Duplicative claims

Plaintiffs’ claims for damages under RESPA and ECOA, which

are proceeding in the earlier action, fare no better.

Plaintiffs reiterate exactly those same claims here, against the

same defendants, and invoke identical facts in support thereof.

What remains for the plaintiffs to prosecute in this action is,

accordingly, “materially on all fours” with their claims in

Brown I. Cong. Credit Corp. v. AJC Intern., Inc.,

(1st Cir. 1994). Insofar as these claims and the facts

giving rise to them are indistinguishable, a determination in

that action leaves little or nothing to be determined in this

one. Therefore, the court dismisses plaintiffs’ claims for

damages under RESPA and ECOA as duplicative of their earlier-

filed action.

C. Breach of fiduciary duty

Finally, plaintiffs’ claim for breach of fiduciary duty

must be dismissed for failure to state a claim. See Fed. R.

Civ. P. 12(b)(6). The court may dismiss a complaint if the

7 plaintiff fails to state a claim by pleading “factual content

that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Martinez v.

Petrenko,

(1st Cir. 2015) (quoting Ashcroft v.

Iqbal,

(2009)).

New Hampshire recognizes that a foreclosing mortgagee, in

“executing a power of sale is bound both by the statutory

procedural requirements and by a duty to protect the interests

of the mortgagor through the exercise of good faith and due

diligence.” Murphy v. Fin. Dev. Corp.,

(1985). This is the duty that the plaintiffs appear to invoke.

They allege that the defendants violated it through “the bank’s

refusal to continue the foreclosure so that Plaintiff [sic]

could be evaluated with such short notice to the public, without

adequate advertising, and the failure to set an upset price of

more than 70% of fair market value.”7

It is unclear from the pleading whether plaintiffs intend

to assert this claim against Wells Fargo. Even if they did,

that claim must be dismissed because the obligation to conduct a

foreclosure in good faith and with due diligence “do[es] not

extend to parties other than the foreclosing mortgagee,” such as

the loan servicer. Faiella v. Green Tree Servicing LLC, 2016

7 Compl. (doc. no. 1-2) ¶ 87.

, 12-13 (DiClerico, J.); Gikas v. JPMorgan Chase Bank,

N.A.,

(Laplante, J.).

The plaintiffs’ claim against FNMA fares no better. To the

extent that the plaintiffs challenge FNMA’s conduct of the

foreclosure action -- its scheduling or advertising of the sale

and the price it set -- the plaintiffs’ claims are time-barred

by the relevant statute of repose: “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.”

, II-a. See also Dowgiert,

.

FNMA submits, and plaintiffs do not dispute, that it recorded

the foreclosure deed in question on October 21, 2015,8 over one

year and one day before plaintiff filed the instant action on

November 28, 2016.

Even were they not otherwise barred, plaintiffs’ claim for

violation of this duty must be dismissed as unsupported by facts

alleged in the complaint. See Martinez,

. As

for notice of the foreclosure sale, the plaintiffs’ complaint

8 Mot. to Dismiss Ex. F (doc. no. 6-7). The court may consider this document in resolving a motion to dismiss under Fed. R. Civ. P. 12(b)(6) as a document integral to the complaint. Rederford v. U.S. Airways, Inc.,

(1st Cir. 2009).

9 supports the conclusion, and plaintiffs do not dispute, that

they received statutorily-sufficient notice before the sale

occurred.9 Similarly, New Hampshire law required such notice to

be “published once a week for 3 successive weeks in some

newspaper of general circulation within the town or county in

which the property is situated.”

,

I. Plaintiffs’ complaint offers only the conclusory allegation

that “the bank” refused to continue the foreclosure “without

adequate advertising”; it adduces no facts supporting that

allegation. Finally, plaintiffs’ complaint invokes no facts

concerning the insufficiency of the sale price -- such as, for

example, the upset price offered by FNMA, the actual sale price,

or the alleged fair market value. See Murphy,

(“What constitutes a fair price, or whether the mortgagee

must establish an upset price, adjourn the sale, or make other

reasonable efforts to assure a fair price, depends on the

circumstances of each case.”).

9 Specifically, the plaintiffs allege that Wells Fargo commenced foreclosure proceedings on July 27, 2015, Compl. (doc. no. 1-2) ¶ 41, some 30 days before the August 26, 2015 sale. The foreclosure deed indicates that FNMA provided notice to the plaintiffs that same day. See Mot. to Dismiss Ex. E (doc. no. 6-6). Though it has since been amended, at the time the sale took place, New Hampshire Rev. Stat. Ann. § 479:25, II required that the mortgagee serve notice of the sale “upon the mortgagor . . . at least 25 days before the sale.” The 30 days’ notice provided by FNMA exceeds this requirement.

10 Furthermore, to the extent that plaintiffs allege that FNMA

violated the duty in question by refusing to consider the

plaintiffs’ mitigation request, this court “has time and again

held that lenders have no duty . . . to modify a loan or forbear

from foreclosure.’” Towle v. Ocwen Loan Serv., LLC,

(McCafferty, J.). It sees no reason to deviate from

that position here.

Accordingly, the court grants defendants’ motion to dismiss

plaintiffs’ claim for “breach of fiduciary duty.”

Plaintiffs’ motion to stay

The plaintiffs do not counter the defendants’ arguments.

Specifically, the plaintiffs do not contest that this action is

duplicative of their prior action in this court. They do not

argue that the requirements for a showing of issue preclusion

have not been met, or that their RESPA and ECOA claims are not

identical to and duplicative of those claims pending in the

earlier-filed action, or that their complaint supports a claim

for “breach of fiduciary duty.”

Instead, the plaintiffs cross-moved for a stay of this

action pending the outcome of their interlocutory appeal.10

Because the Court of Appeals has dismissed that appeal as not

ripe and because the court concludes that all of plaintiffs’

10 Mot. to Stay (doc. no. 8).

11 claims are ripe for dismissal, as discussed supra Part II, the

court denies that motion as moot.

Conclusion

The plaintiff's claims in this action are barred under the

doctrine of issue preclusion, are duplicative of claims

proceeding in the earlier-filed action, or lack the requisite

factual allegations to satisfy Rule 12(b)(6). The court

accordingly GRANTS the defendants’ motion to dismiss.11 The

court further DENIES, as moot, the plaintiffs’ motion to stay

these proceedings.12

The clerk shall enter judgment accordingly and close the

case.

SO ORDERED.

Joseph N. Laplante United States District Judge

Dated: May 17, 2017

cc: William C. Sheridan, Esq. Michael R. Stanley, Esq.

11 Document no. 6. 12 Document no. 8.

12