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Campbell v. Specialized Loan Servicing, LLC

United States District Court, First Circuit

January 23, 2014

Timothy J. Campbell
Specialized Loan Servicing, LLC, et al. No. 2014 DNH 014


PAUL BARBADORO, District Judge.

Timothy Campbell has sued the Bank of America, N.A., the current holder of his mortgage note, and Specialized Loan Servicing, LLC ("SLS"), his loan servicer. Bank of America has filed a motion to dismiss for failure to state a claim. For the reasons set forth in this Memorandum and Order, I grant the motion to dismiss in part and deny it in part.


Campbell borrowed $50, 000 from Countrywide Home Loans, Inc. in 2006. The note evidencing the loan is secured by a mortgage on Campbell's primary residence that names Mortgage Electronic Registration Systems, Inc. ("MERS") as mortgagee and states that it is acting "as nominee for Lender." Countrywide failed in 2008 and the note was subsequently assigned to Bank of America. The loan is currently being serviced by SLS.

For reasons that are not specified in the complaint, defendants initiated foreclosure proceedings against Campbell in 2009 and 2010, but each sale was cancelled for unstated reasons. Campbell is current on his mortgage and no further actions have been taken with respect to the foreclosure. Nevertheless, defendants informed several credit reporting agencies that Campbell had a foreclosure in his credit history.

Campbell complains about alleged irregularities with respect to his loan agreement, including unexplained fluctuations in a principal balance that currently exceeds $47, 000, although he "has no idea why it is so high after paying it for seven years."[2] He claims that his monthly payments have tripled and that defendants improperly obtained hazard insurance on the property and passed the cost to him. Campbell has "repeatedly" requested an accounting, and he claims never to have received a "legible, understandable and clear explanation" of how much he owes.

Campbell also alleges in general terms that defendants mishandled his loan modification requests. He claims that Bank of America participated "half-heartedly" and without good faith in government loan modification programs aimed at providing debt relief to homeowners. He also claims to be eligible for these programs and to have submitted applications with supporting documentation on numerous occasions, only to be told by defendants that the paperwork was either never received or was "lost."

On May 13, 2013, Campbell filed suit in Cheshire County Superior Court against SLS and Bank of America for declaratory relief, an accounting, and an injunction barring the defendants from foreclosing on his home. He also seeks damages resulting from adverse credit reporting regarding the foreclosure proceedings. Bank of America later removed the case to this court and filed the present motion to dismiss.


To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must make factual allegations sufficient to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007)). A claim is facially plausible when it pleads "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id . (citations omitted).

In deciding a motion to dismiss, I employ a two-step approach. See Ocasio-Hernández v. Fortuño-Burset , 640 F.3d 1, 12 (1st Cir. 2011). First, I screen the complaint for statements that "merely offer legal conclusions couched as fact or threadbare recitals of the elements of a cause of action." Id . (citations, internal quotation marks, and alterations omitted). A claim consisting of little more than "allegations that merely parrot the elements of the cause of action" may be dismissed. Id . Second, I credit as true all non-conclusory factual allegations and the reasonable inferences drawn from those allegations and then determine if the claim is plausible. Id . The plausibility requirement "simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence" of illegal conduct. Twombly , 550 U.S. at 556. The "make-or-break standard" is that those allegations and inferences, taken as true, "must state a plausible, not a merely conceivable, case for relief." Sepúlveda-Villarini v. Dep't of Educ. , 628 F.3d 25, 29 (1st Cir. 2010); see Twombly , 550 U.S. at 555 ("Factual allegations must be enough to raise a right to relief above the speculative level.").


A. Entitlement to a Loan Modification

Campbell seeks a declaration that he has a right to a loan modification under "terms previously proposed" by Bank of America. This court has consistently held that lenders generally have no duty to modify loan terms absent express contractual language to the contrary. See, e.g., Moore v. Mortg. Elec. Reg. Sys., Inc. , 848 F.Supp.2d 107, 130 (D.N.H. 2012); Gikas v. JPMorgan Chase Bank, N.A., 2013 DNH 057, 8; Ruivo v. Wells Fargo Bank, N.A., No. 11-cv-466-PB, 2012 WL 5845452, at *3 (D.N.H. Nov. 19, 2012). This is so because "[p]arties are bound by the agreements they enter into and the court will not... force a party to rewrite a contract so as to avoid a harsh or inequitable result." Ruivo, 2012 WL 5845452 at *4 (citing Moore , 848 F.Supp.2d at 130; Olbres v. Hampton Co-op. Bank , 142 N.H. 227, 233 (1997)). Campbell does not argue that a contractual provision entitles ...

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