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Mark E. Schaefer v. Indymac Mortgage Services

December 10, 2012

MARK E. SCHAEFER
v.
INDYMAC MORTGAGE SERVICES, ET AL.



The opinion of the court was delivered by: Joseph A. DiClerico, Jr. United States District Judge

ORDER

Mark Schaefer brought state law claims against IndyMac Mortgage Services; One West Bank, FSB; Federal National Mortgage Association; and Harmon Law Offices, P.C., which arose from his attempts to obtain a mortgage loan modification and the subsequent foreclosure proceedings on his home. The court granted the defendants' motions to dismiss. Schaefer filed a motion for reconsideration, a motion to amend the motion for reconsideration, and a motion for a stay pending the decision on his motion for reconsideration.*fn1 The defendants did not file a response to any of Schaefer's motions.

Discussion

In support of his motion for reconsideration, Schaefer contends that the court erred in concluding that his tort claims are barred by the economic loss doctrine and that the decision denies him a remedy in violation of the policies of the State of New Hampshire. He moves to amend his motion for reconsideration to clarify that he intended to seek reconsideration pursuant to Federal Rule of Civil Procedure 59. Schaefer also moves to stay the effect of the order granting the motions to dismiss until the decision on the motion for reconsideration is issued.

A. Motion to Amend

Schaefer asks to amend his motion for reconsideration by including a reference to Rule 59. In the motion to amend, Schaefer represents that he sought the assent of the defendants' counsel who did not assent. The defendants, however, did not file a response to the motion.

Schaefer's amended motion for reconsideration, citing Rule 59, is allowed.

B. Motion for Reconsideration

A motion for reconsideration faces a high hurdle to succeed.

Latin Am. Music Co. v. ASCAP, 642 F.3d 87, 91 (1st Cir. 2011). Under Rule 59(e), the moving party must show "an intervening change in the controlling law, a clear legal error, or newly-discovered evidence." Soto-Padro v. Pub. Bldgs. Auth., 675 F.3d 1, 9 (1st Cir. 2012). New arguments that could and should have been made before judgment issued do not provide a basis for reconsideration. Feliciano-Hernandez v. Pereira-Castillo, 663 F.3d 527, 537 (1st Cir. 2011).

Schaefer argues in support of his motion that the court made a clear legal error in holding that his claims were barred by the economic loss doctrine. He contends that the court erred in failing to hold that Harmon Law Offices and IndyMac Mortgage Services each assumed a duty to provide information to Schaefer that was necessary for his loan modification and reinstatement. In addition, Schaefer contends that the court should reconsider the decision because that result denies him a remedy, which he asserts is contrary to the policies of the State of New Hampshire, and "runs the risk of inviting any nationally organized lender sued in the Courts of this state to invoke removal jurisdiction, secure in the knowledge that the Federal District Court recognizes no theory of recovery for mortgagees against abusive mortgagors, thus essentially licensing mortgagors to engage in abuse of New Hampshire borrowers without fear of legal ramifications."*fn2

1. Economic loss doctrine

Schaefer argues that the court failed to properly consider the exception to the economic loss doctrine for negligent misrepresentations made to those who might reasonably be expected to rely on the representation, as stated in Plourde Sand & Gravel Co. v. JGI Eastern, Inc., 154 N.H. 791, 799-800 (2007). He contends that qualifying misrepresentations were made because Harmon made a promise to Schaefer to provide a reinstatement or payoff amount and IndyMac sent false instructions to Schaefer in the Milian letter. Schaefer argues that Harmon and IndyMac would have expected him to rely on those representations.

Schaefer did not allege a claim of negligent misrepresentation against Harmon. In his opposition to Harmon's motion to dismiss, Schaefer stated: "It is important to note at the outset that the Petitioner asserts only one set of allegations which are directed at the conduct of Harmon in this matter, that is, the allegations set forth at pars. [sic] 16, 39, 59, 61 and 62, and illustrated by Exhibit B to the Petition." Count II, Negligent Misrepresentation, is set forth in paragraphs 44 through 48 and alleges that ...


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