UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE

Joseph C. Davey, III as Conservator for Jay C. Davey a/k/a Joseph C. Davey, IV.

v. Civil No. 17-cv-244-JL Opinion No.

Federal National Mortgage Association, Wells Fargo, and their counsel Harmon Law Offices

MEMORANDUM ORDER

In this mortgage-related action, the mortgagor challenges

the bank’s foreclosure on two parcels of property merged into a

single parcel after one of the original parcels was mortgaged.

Joseph C. Davey III, proceeding pro se, brought this action in

Rockingham County Superior Court on behalf of and as conservator

for the mortgagor, his permanently-disabled son, Joseph C. Davey

IV.1 He concedes that defendants Wells Fargo Bank, N.A., and the

Federal National Mortgage Association (FNMA) may properly

foreclose on the mortgaged property (71 Plaistow Road) but

contests--and seeks injunctive relief against--their foreclosure

on adjacent property (69 Plaistow Road) that was merged with the

mortgaged property after the mortgage was recorded. Defendants

FNMA and Wells Fargo removed the action to this court, see 28

1 To avoid confusion, the court refers to the plaintiff as “Davey” and to his father and conservator as “Joseph Davey.” U.S.C. § 1441, which has subject-matter jurisdiction under

(diversity).

The defendants now move for summary judgment on Davey’s

petition, arguing that, under Mahmoud v. Town of Thornton,

(2016), and on a factual record undisputed by the

plaintiff, Wells Fargo’s mortgage interest encumbers the

entirety of the merged property. The court agrees and grants

the defendants’ motion.

Applicable legal standard

“The court shall grant summary judgment if the movant shows

that there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law.” Fed. R.

Civ. P. 56(a). “A dispute is genuine if the evidence about the

fact is such that a reasonable jury could resolve the point in

the favor of the non-moving party. A fact is material if it

carries with it the potential to affect the outcome of the suit

under the applicable law.” DeAndrade v. Trans Union LLC,

(1st Cir. 2008) (internal quotations omitted).

“A party moving for summary judgment must identify for the

district court the portions of the record that show the absence

of any genuine issue of material fact.” Flovac, Inc. v. Airvac,

Inc.,

(1st Cir. 2016) (citing Celotex Corp. v.

Catrett,

(1986)). “Once the moving party has

2 accomplished this feat, the burden shifts to the nonmoving

party, who must, with respect to each issue on which [he] would

bear the burden of proof at trial, demonstrate that a trier of

fact could reasonably resolve that issue in [his] favor.”

Borges ex rel. S.M.B.W. v. Serrano-Isern,

(1st

Cir. 2010) (citing Celotex,

). “[T]he non-moving

party ‘may not rest upon mere allegation . . . but must set

forth specific facts showing that there is a genuine issue for

trial.’” Braga v. Hodgson,

(1st Cir. 2010)

(quoting Anderson v. Liberty Lobby, Inc.,

(1986)).

In analyzing a summary judgment motion, the court draws

“all reasonable inferences that may be extrapolated from the

record . . . in favor of the non-movant,” but may disregard

“allegations of a merely speculative or conclusory nature.”

Serra v. Quantum Servicing, Corp.,

, 39–40 (1st Cir.

2014). “As to issues on which the [nonmovant] bears the

ultimate burden on proof,” as Davey does here, he “cannot rely

on an absence of competent evidence, but must affirmatively

point to specific facts that demonstrate the existence of an

authentic dispute.” Kenney v. Floyd,

(1st

Cir. 2012). The following recitation takes this approach,

describing facts that are undisputed except where noted.

3 Background

This suit concerns two adjacent parcels of land in

Plaistow, New Hampshire--71 Plaistow Road and 69 Plaistow Road.

Davey took title to the 71 Plaistow Road parcel in 1998.2 He

obtained the 69 Plaistow Road parcel in 2002.3

Davey took out a mortgage loan on September 20, 2004 in the

original amount of $280,000.00 (the “Wells Fargo mortgage”).4 In

exchange for the loan, he conveyed a security interest in the

71 Plaistow Road parcel, and only the 71 Plaistow Road parcel,

to Mortgage Electronic Systems, Inc. and to its successors and

assigns.5 The mortgage was subsequently assigned several times.

FNMA currently holds the mortgage by assignment from Wells

Fargo.

Around the same time, Davey began proceedings to merge the

69 Plaistow Road parcel with the 71 Plaistow Road parcel.6 R.J.

Pica Engineering filed an Application for Planning Board Action

2 Defendants’ Mot. Ex. B (doc. no. 23-4). Davey has not challenged the authenticity of this or any of the defendants’ other submitted evidence. 3 Defendants’ Mot. Ex. C (doc. no. 23-5). 4 Defendants’ Mot. Ex. D (doc. no. 23-6). 5 Id.; Defendants’ Mot. Ex. E (doc. no. 23-7) at 3. 6 It is unclear from the record whether Davey began these proceedings before or after taking out the Wells Fargo mortgage loan. Neither party suggests, however, that this lack of clarity impacts summary judgment on the issues discussed below.

4 with the Town of Plaistow Planning Board, on Davey’s behalf.7

Pica Engineering identified both the 69 and 71 Plaistow Road

parcels as the site of the proposed action, which was to

“convert two residential sites to a[n] office complex[,] remove

two structures and build an addition on the remaining building[,

and] removal of lot line to combine two lots.”8 Davey both

signed the application and asked the Planning Board to allow

Pica Engineering to represent him at meetings regarding the

application.9

The Planning Board met on September 15, 2004, to address

this proposed “voluntary lot merger and commercial site plan for

properties located at 69 and 71 Plaistow Road.”10 It

conditionally approved the application two months later11 and, on

October 19, 2005, gave its final approval.12 The lot merger site

plan was recorded with the Rockingham Registry of Deeds.13

7 Defendants’ Mot. Ex. G (doc. no. 23-9). 8 Id. at 3. 9 Id. at 4, 9. 10 Id. at 10. 11 Id. at 11. 12 Id. at 12. 13 Defendants’ Mot. Ex. H (doc. no. 23-9).

5 In 2006, Davey obtained a commercial mortgage loan in the

original amount of $44,000, secured by both of the now-merged

69 and 71 Plaistow Road parcels.14 In 2012, People’s United Bank

assigned that note and mortgage to an individual.15

Sometime thereafter, the State of New Hampshire took a

0.19 acre portion of the merged parcels and two easements--one

permanent and one temporary--on the merged property through

eminent domain, entitling Davey to compensation. In light of

their liens on some or all of the merged parcels, both People’s

United and Wells Fargo claimed the $85,000 deposit allotted by

the State as compensation. The New Hampshire Board of Tax and

Land Appeals (the “Land Board”) held a hearing on January 12,

2012 to apportion the State’s deposit.16 It concluded that

almost the entire taking impacted only the 69 Plaistow Road

parcel, and that only 5% of the temporary easement--an amount

“de minimis under any reasonable calculation”--impacted the 71

Plaistow Road parcel.17 As Wells Fargo admitted at the time, its

mortgage encumbered only the 71 Plaistow Road parcel, despite

14 Defendants’ Mot. Ex. I (doc. no. 23-11) at 1, 8. 15 Defendants’ Mot. Ex. J (doc. no. 23-12). 16 Defendants’ Mot. Ex. K (doc. no. 23-13) at 1. 17 Id. at 6-7.

6 the subsequent merger.18 Because the commercial mortgage

encumbered both of the merged parcels, and thus was the only

encumbrance on the 69 Plaistow Road parcel, the Land Board

awarded the entirety of the deposit to People’s United.19

Davey ceased making payments on the Wells Fargo mortgage in

November 2007. A foreclosure sale of the merged property was

scheduled for March 5, 2008. He then engaged in a series of

bankruptcy filings, staying any other proceedings relating to

the property in question. After the United States Bankruptcy

Court for the District of New Hampshire (Deasy, J.) granted

relief from the stay, the defendants scheduled another

foreclosure sale for June 7, 2017. Davey filed this action in

Rockingham County Superior Court on June 6, 2017, seeking and

obtaining a temporary restraining order to enjoin the

foreclosure sale. The defendants then removed the action to

this court.

Analysis

Davey effectively seeks, through his complaint, to quiet

title to the merged parcels. Specifically, he seeks to

establish that the defendants lack any mortgage interest in the

69 Plaistow Road parcel and thus may not foreclose on both of

18 Id. at 6. 19 Id. at 5-7.

7 the merged parcels. The defendants move for summary judgment

arguing that, under New Hampshire law, their mortgage on the

71 Plaistow Road parcel encumbers both parcels after the merger,

permitting them to foreclose on both. In light of the New

Hampshire Supreme Court’s recent decision in Mahmoud,

, on the undisputed facts presented here, the court agrees

with the defendants.

A. Foreclosure on combined properties

In Mahmoud, like Davey in this case, Mahmoud mortgaged one

lot (Lot 1) of his subdivided property.

. The

mortgage deed described the mortgaged property consistent with

the depiction of that lot on the subdivision plan and included

the following language:

TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the “Property.”

Mahmoud subsequently re-divided his property and, in the

process, relocated the southerly border of Lot 1, adding 1.5

acres to the lot.

When he defaulted, the mortgagee

foreclosed on the expanded lot.

. Mahmoud petitioned

to quiet title to the lot, arguing that “the foreclosure sale

and mortgage deed were invalid, and that therefore he own[ed]

record title to Lot 1, including the additional disputed land.”

8

The trial court granted summary judgment to the mortgagee,

concluding that, though the mortgage occurred before the lot’s

expansion, the mortgage deed included any additions to the lot.

The New Hampshire Supreme Court affirmed, agreeing that

“the language in the mortgage deed granted to [the mortgagee] .

. . clearly and automatically included any additions to the

mortgaged property” because it “plainly stated that it included,

together with the legal description of the property, . . .

‘[a]ll replacements and additions.’”

. Thus, the

mortgagee obtained, through foreclosure, the entire expanded

lot.

The parties do not dispute that Wells Fargo’s mortgage deed

in this action contains identical language. It describes the

mortgaged property as:

71 Plaistow Road, Plaistow, New Hampshire, . . . TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the “Property.”20

In light of the New Hampshire Supreme Court’s interpretation of

this language in Mahmoud, the defendants’ mortgage interest

20 Defendants’ Mot. Ex. E (doc. no. 27-3) at 3 (emphasis added).

9 encumbers not only the 71 Plaistow Road parcel, but also

“clearly and automatically include[s] any additions to the

mortgaged property,”

, including the merging of

another lot--here, 69 Plaistow Road--into the mortgaged

property.

B. Davey’s arguments

Davey raises three arguments as to why the holding in

Mahmoud does not warrant summary judgment in the defendants’

favor. Neither presents a dispute of material fact that

precludes summary judgment in this action.

First, Davey attempts to distinguish Mahmoud from this

case, arguing summarily that, unlike Mahmoud’s lot-line

adjustment, the mortgage language does not cover a voluntary

merger of two preexisting lots.21 The court observes no

probative differences between Davey’s voluntary merger and

Mahmoud’s lot-line adjustment.

21Plaintiff’s Mem. (doc. no. 27-1) at 3. As the defendants point out, Davey focuses his brief argument on language that does not govern the outcome of this case. Specifically, he contends that “the resulting parcel of land created by the merger was not, arguably, ‘improvements, easements, appurtenances, and fixtures now or hereafter a part of the property.’”

He does not address the “replacements and additions” language, on which Mahmoud turns. See

In consideration of Davey’s pro se status, however, the court construes his argument as invoking the operative language and addresses it accordingly.

10 Like Mahmoud, Davey sought and received approval from a

municipal planning board to alter the division of his property.22

Davey’s alteration, like Mahmoud’s, was voluntary and initiated

by the owner of both parcels.23 In both instances, the

alteration resulted in a significant increase in the property’s

land area--Mahmoud’s lot-line change increased the area of the

mortgaged property from 1.06 to 2.40 acres. And both Mahmoud

and Davey completed their alteration by recording a site plan in

the registry of deeds showing the post-approval parcels with new

lot lines.24 Mahmoud,

.

The mortgage provides that “[a]ll replacements and

additions” to the 71 Plaistow Road parcel “shall also be covered

by this Security Instrument.”25 The New Hampshire Supreme Court

considers that language “unambiguous,” and reads it to include

additions to the property effected voluntarily through approval

by the municipal planning board. Mahmoud,

.

Accordingly, any difference that may exist between a re-divison,

22 See Defendants’ Mot. Ex. G (doc. no. 23-9). 23Davey effected his merger pursuant to

-a, I which allows that “[a]ny owner of 2 or more contiguous preexisting approved or subdivided lots or parcels who wishes to merge them for municipal regulation and taxation purposes may do so by applying to the planning board or its designee.” 24 Defendants’ Mot. Ex. H (doc. no. 23-10). 25 Defendants’ Mot. Ex. E (doc. no. 23-7) at 3.

11 as in Mahmoud, and a merger, as in Davey’s case, does not amount

to a dispute of material fact that would defeat summary

judgment.

At oral argument, Davey asserted a second difference

between his case and Mahmoud.26 He argued that Mahmoud does not

apply to this case because, in Mahmoud, no separate mortgage

encumbered the post-merger property as the commercial mortgage

does here. While true that there is no indication that a

separate mortgage encumbered the merged property in Mahmoud,

that factual difference is not material to the holding in that

case or this court’s application of it. Mahmoud turns on the

language in the mortgage deed encumbering the original lot and

addresses whether, in light of that language, acreage added to

the originally-mortgaged property becomes part of the property

secured by that mortgage.

. Whether another

mortgage also encumbers the merged property, as here, may lead

to a dispute between mortgagees over which mortgage takes

priority; it does not affect the Davey’s claims here.

26This court “generally will not consider theories raised for the first time at oral argument, out of fairness to adverse parties and the court.” Exeter Hosp. v. New England Homes, Inc.,

, at *4 (D.N.H. Sept. 1, 2011). It addresses Davey’s argument, however, out of consideration for his pro se status, and because defense counsel reasonably could have anticipated it and was afforded an opportunity to respond to it at the hearing.

12 Finally, Davey challenges “whether the Defendants even hold

the subject Commercial Mortgage that the Defendants seek to

foreclose.”27 Wells Fargo has produced evidence that People’s

United assigned the commercial mortgage to an individual, Karen

Varney.28 Davey contends, and has maintained since this action’s

inception, that a differnt individual investor, Jeremy

Provencher, holds that mortgage.29 At oral argument, he

explained that Varney transferred her interest in the mortgage

to Provencher. Though he has produced no evidence to that

effect at any stage in this litigation, Davey suggests that the

ownership of the commercial mortgage constitutes a dispute of

material fact.30

This may constitute a dispute of fact, but it is not one

material to this action. The defendants here do not contend

that they hold the commercial mortgage. Nor do they seek to

foreclose under it. Rather, they seek to foreclose under the

Wells Fargo mortgage, arguing, as discussed supra, that the

mortgage pre-dating the merger encumbers the entirety of the

post-merger property. Thus, even if Provencher currently holds

27 Plaintiff’s Mem. (doc. no. 27-1) at 2. 28 Defendants’ Mot. Ex. J (doc. no. 23-2). 29 Compl. (doc. no. 1-1) ¶ 10. 30 Plaintiff’s Mem. (doc. no. 27-1) at 4-5.

13 the commercial mortgage, that fact would not preclude summary

judgment as to Wells Fargo’s rights to foreclose under the Wells

Fargo mortgage.

Davey has argued, in a related vein, that only the assignee

of the commercial mortgage has a right to foreclose on the

merged property. Under New Hampshire law, however, as a general

proposition, the claim of the mortgagee who first recorded its

interest has priority over that of a subsequent mortgagee. See

Amoskeag Bank v. Chagnon,

(1990). Wells Fargo

recorded its interest in 71 Plaistow Road on September 23,

2004,31 well before Davey mortgaged the merged property on

August 11, 2006. Wells Fargo’s claim therefore has priority

over the commercial mortgage.

Furthermore, to the extent that Davey seeks to assert the

rights of the individual who holds the commercial mortgage as

against Wells Fargo, he lacks standing to do so in any

representative capacity. A litigant asserting the rights of a

third party must show that

the litigant personally has suffered an injury in fact that gives rise to a sufficiently concrete interest in the adjudication of the third party's rights; second, that the litigant has a close relationship to the third party; and third, that some hindrance exists that prevents the third party from protecting its own interests.

31 Defendants’ Mot. Ex. E (doc. no. 23-7).

14 Council Of Ins. Agents & Brokers v. Juarbe-Jimenez,

(1st Cir. 2006). Davey has made no such showing here.

And, though Davey represented at oral argument that Provencher

has had notice of this action since its inception, Provencher

has not asserted his own interests in this action.

C. Estoppel

Finally, Wells Fargo’s prior concession before the Land

Board that its mortgage encumbered only the 71 Plaistow Road

parcel does not preclude it from arguing, now, that its mortgage

encumbers the entirety of the merged property.

“The doctrine of judicial estoppel . . . operates to

prevent a litigant from taking a litigation position that is

inconsistent with a litigation position successfully asserted by

him in an earlier phase of the same case or in an earlier court

proceeding.” Perry v. Blum,

(1st Cir. 2010).

Even assuming that the Land Board hearing constituted “an

earlier court proceeding,”32 Wells Fargo did not “successfully

assert” that its mortgage encompassed only the 71 Plaistow Road

parcel. Though Wells Fargo admitted as much in its answer in

32Though defendants argue otherwise, there is some authority allowing for an adjudicatory proceeding before an administrative body to constitute a “court proceeding” for judicial estoppel purposes. E.g., King v. Herbert J. Thomas Mem'l Hosp.,

, 196 (4th Cir. 1998) (analyzing effect of positions taken before the Social Security Administration in judicial estoppel context). The court need not resolve that issue here, however.

15 that proceeding, it further argued that the subsequent merger

and commercial mortgage created a “cloud on the title” to the

merged properties, which the Superior Court should resolve

before the Land Board determined who was entitled to the deposit

in the eminent domain proceedings.33 The Land Board rejected

that position.34

Furthermore, as the defendants observe, Wells Fargo took

its positions before the Land Board in January 2012. The

Mahmoud decision issued over four years later, in September

2016. While Wells Fargo’s present argument may have been

available to it in 2012, in theory, its current position lacked

definitive authority in settled law at the time of the Land

Board hearing. Cf. Boston Gas Co. v. Century Indem. Co.,

(1st Cir. 2013) (shift in applicable law “relevant

to” the judicial-estoppel analysis where party’s legal theory

changes).

Conclusion

The defendants have demonstrated that, on the undisputed

facts present in this case and under settled New Hampshire law,

they are entitled to judgment as a matter of law on the

plaintiff’s claim. Accordingly, the court GRANTS the

33 Defendants’ Mot. Ex. K (doc. no. 23-13) at 3. 34 Id. at 3-5.

16 defendants’ motion for summary judgment.35 The clerk shall enter

judgment accordingly and close the case.

SO ORDERED.

Joseph N. Laplante United States District Judge

Dated: October 5, 2018

cc: Joseph C. Davey, III, pro se Jay C. Davey, pro se Joseph Patrick Kennedy, Esq.

35 Document no. 23.

17