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Mudge v. Bank of America, N.A.

United States District Court, First Circuit

November 20, 2013

John J. Mudge, Jr. and Lisa Mudge
v.
Bank of America, N.A. and TD Bank, N.A. Opinion No. 2013 DNH 159

Edmond J. Ford, Esquire Peter G. McGrath, Esquire Richard K. McPartlin, Esquire William Philpot, Jr., Esquire.

ORDER

Joseph A. DiClerico, Jr. United States District Judge

John and Lisa Mudge brought suit in state court against Bank of America, N.A. (“Bank of America”) and TD Bank, N.A. (“TD Bank”) alleging claims that arose from the defendants’ conduct in handling the Mudges’ mortgages and in attempting to foreclose on their home. TD Bank removed the case to this court and moves to dismiss the claims against it. The Mudges object.

Background

Sometime prior to 2009, John and Lisa Mudge entered into a loan with Bank of America which was secured by a mortgage on the Mudges’ home at 57 Sterling Avenue in Hooksett, New Hampshire. Also sometime prior to 2009, the Mudges entered into a loan with TD Bank which was secured by a second mortgage on the Mudges’ home.[1]

The Mudges eventually had difficulty making their mortgage payments and wanted to proceed with a short sale of their home.[2]The Mudges allege that TD Bank, as holder of the second mortgage, “initially agreed to permit a short sale and led Plaintiffs to believe that they would cooperate in scheduling same.” Compl. ¶ 40. The Mudges allege that despite TD Bank’s initial indication that it would permit a short sale, TD Bank did not respond to their short sale request package, and the Mudges were unable to proceed with a short sale.

Standard of Review

Federal Rule of Civil Procedure 12(b)(6) allows a defendant to move to dismiss on the ground that the plaintiff’s complaint fails to state a claim on which relief can be granted. In assessing a complaint for purposes of a motion to dismiss, the court “separate[s] the factual allegations from the conclusory statements in order to analyze whether the former, if taken as true, set forth a plausible, not merely conceivable, case for relief.” Juarez v. Select Portfolio Servicing, Inc., 708 F.3d 269, 276 (1st Cir. 2013) (internal quotation marks omitted). “If the facts alleged in [the complaint] allow the court to draw the reasonable inference that the defendants are liable for the misconduct alleged, the claim has facial plausibility.” Id. (internal quotation marks omitted).

Discussion

The Mudges bring claims against TD Bank for breach of the covenant of good faith and fair dealing (Count V), breach of contract (Count VI), and negligent misrepresentation (Count VII).[3] TD Bank moves to dismiss all of the Mudges’ claims against it.

A. Breach of Contract

The Mudges allege that TD Bank breached the second mortgage agreement by failing to follow New Hampshire underwriting and closing requirements, failing to “perform properly and in good faith, ” “fail[ing] to honor verbal promises, ” “fail[ing] to recognize or credit certain payments, refus[ing] reasonable short sale offers, and fail[ing] to respond in good faith.” Compl. ¶¶ 47-49. TD Bank moves to dismiss on the grounds that the Mudges’ allegations are too vague and conclusory to state a claim. In response, the Mudges simply assert that they adequately pleaded their claims in Counts V, VI, and VII.[4]

Under New Hampshire law, “a breach of contract occurs when there is a failure without legal excuse to perform any promise which forms the whole or part of a contract.” Axenics, Inc. v. Turner Constr. Co., 164 N.H. 659, 668 (2013) (internal quotation marks and citation omitted). Although the Mudges allege that TD Bank was required to and failed to follow the New Hampshire underwriting and closing requirements associated with their agreement, [5] they do not explain what the underwriting and closing requirements were or in what ways TD Bank failed to follow them. They also contend that TD Bank failed to perform properly and failed to honor promises but provide no facts to support those charges. Further, it is far from clear how such actions would constitute breach of a written agreement. The Mudges also allege that TD Bank “failed to recognize or credit certain payments, ” but they do not explain what payments they made to TD Bank, when they made them, or provide any details about TD Bank’s alleged failure to credit those payments. Such allegations are insufficient to survive a motion to dismiss.

The Mudges’ breach of contract claim fails to provide enough facts “‘to raise a right to relief above the speculative level . . . .’” Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1, 12 (1st Cir. 2011) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Instead, the Mudges’ allegations in support of their breach of contract claim are mere “naked assertions devoid of further factual enhancement [which] need not be accepted.” Plumbers’ Union Local No. 12 Pension Fund v. Nomura Asset Acceptance Corp., 632 F.3d 762, 771 (1st Cir. 2011) (internal quotation marks and citation omitted); see also Katz v. Pershing, LLC, 672 F.3d 64, 73 (1st Cir. 2012) (“If the factual allegations in a complaint are too meager, vague, or conclusory to remove the possibility ...


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