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Linda L'esperance v. Manhattan Mortgage Corporation

September 5, 2012


The opinion of the court was delivered by: Landya McCafferty United States Magistrate Judge

Opinion No. 2012 DNH 155


Based on the court's order of June 12, 2012, document no. 32, this case now consists of Linda L'Esperance's claims against Manhattan Mortgage Corporation ("Manhattan") for: (1) negligent, fraudulent, or intentional misrepresentation (Count IX); (2) violation of New Hampshire's Consumer Protection Act ("CPA"), New Hampshire Revised Statutes Annotated ("RSA") chapter 358-A (Count X); (3) negligence, breach of contract, and breach of the obligation of good faith and fair dealing (Count XII); and (4) negligence (Count XIII). Before the court is L'Esperance's motion for default judgment. The court heard oral argument on August 17, 2012. For the reasons that follow, L'Esperance's motion for default judgment is denied.

The Legal Standard

Default has entered. See doc. no. 33. Thus, Manhattan is "taken to have conceded the truth of the factual allegations in the complaint as establishing the grounds for liability."

S.E.C. v. New Futures Trading Int'l Corp., No. 11--cv--532--JL, 2012 WL 1378558, at *1 (D.N.H. Apr. 20, 2012) (quoting Ortiz-- Gonzalez v. Fonovisa, 277 F.3d 59, 62--63 (1st Cir. 2002)). But, while "a defaulting party admits the factual basis of the claims asserted against it, the defaulting party does not admit the legal sufficiency of those claims." 10 James Wm. Moore, Moore's Federal Practice § 55.32[1][b] (3d ed. 2011) (citing Quirindongo Pacheco v. Rolon Morales, 953 F.2d 15, 16 (1st Cir. 1992)). Accordingly, "[t]he claimant must state a legally valid claim for relief," 10 Moore's, supra, and "[a] court may grant judgment by default only for relief that may lawfully be granted on the well-pleaded facts alleged by the claimant," id. (emphasis added). Therefore, "a district court may, after entry of default, still conclude that a complaint fails to state a claim." Feliciano--Hernandez v. Pereira--Castillo, 663 F.3d 527, 537 n.5 (1st Cir. 2011) (citing Ramos--Falcon v. Autoridad de Energia Electrica, 301 F.3d 1, 2 (1st Cir. 2002)).

As the court of appeals for this circuit has recently explained, the process for determining whether a complaint states a claim involves two steps:

Step one: isolate and ignore statements in the complaint that simply offer legal labels and conclusions or merely rehash cause-of-action elements.

[Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1,] 12 [(1st Cir. 2011)] (discussing, among other cases, Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009), and Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Step two: take the complaint's well-pled (i.e., non-conclusory, non-speculative) facts as true, drawing all reasonable inferences in the pleader's favor, and see if they plausibly narrate a claim for relief. Id. (again, discussing Iqbal and Twombly, among others); see also S.E.C. v. Tambone, 597 F.3d 436, 441--42 (1st Cir. 2010) (en banc). Plausible, of course, means something more than merely possible, and gauging a pleaded situation's plausibility is a "context-specific" job that compels [a court] "to draw on" [its] "judicial experience and common sense."

Iqbal, 129 S. Ct. at 1949, 1950. And in performing [its] review, [a court] consider[s] (a) "implications from documents" attached to or fairly "incorporated into the complaint," (b) "facts" susceptible to "judicial notice," and (c) "concessions" in plaintiff's "response to the motion to dismiss." Arturet--Velez v. R.J. Reynolds Tobacco Co., 429 F.3d 10, 13 n.2 (1st Cir. 2005); see also Haley v. City of Boston, 657 F.3d 39, 44, 46 (1st Cir. 2011).

Schatz v. Rep. State L'ship Comm., 669 F.3d 50, 55-56 (1st Cir. 2012) (footnote and parallel citation omitted).


Given the court's obligation to determine whether any of L'Esperance's claims would pass muster under Rule 12(b)(6) of the Federal Rules of Civil Procedure ("Federal Rules"), the following background is drawn from L'Esperance's amended complaint, document no. 20.

In the portion of her complaint that identifies the parties, L'Esperance alleges that "Manhattan Mortgage . . . transacted business with [her] . . . by sending her an application for their services to assist in acquiring a loan modification, . . . [making] misrepresentations regarding the quality and nature of the services they could and would deliver, and accepting [her] fee for said service, which as alleged below, was never delivered." Am. Compl. ¶ 20. The "General Allegations" section of her complaint includes the following:

Defendant Manhattan Mortgage Corporation held itself out as having the willingness and ability to assist the Plaintiff in acquiring a loan modification after her efforts with her lenders had failed. Defendant Manhattan Mortgage Corporation specifically represented that it, through its staff, employees, agents, and/or representatives had an intrinsic working knowledge of the mortgage industry, modifications, federal funding and criteria for modifications, the Plaintiff's lender in particular, and specifically that it could successfully effectuate a modification of the Plaintiff's loans. Based on these promises, and this agreement, the Plaintiff paid Manhattan Mortgage Corporation in the order of $2,195.00 for their represented services. However, Manhattan Mortgage ...

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