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Mudge v. Bank of America, N.A.

United States District Court, D. New Hampshire

October 24, 2014

John J. Mudge, Jr. and Lisa Mudge
v.
Bank of America, N.A. and TD Bank, N.A.

ORDER OPINION NO. 2014 DNH 223.

JOSEPH A. DICLERICO, Jr., District Judge.

John J. Mudge, Jr. and Lisa Mudge move, pursuant to Federal Rule of Civil Procedure 59(e), to alter or amend the judgment entered in favor of the defendants. In support, they point to newly discovered evidence and argue that the court made errors in granting summary judgment in favor of Bank of America. Bank of America objects.

Standard of Review

Rule 59(e) allows a motion to alter or amend a judgment within twenty-eight days of the date the judgment was entered. To succeed on a motion under Rule 59(e), a party must show that the judgment is wrong because of a manifest error of law or fact, an intervening change in controlling law, or newly discovered evidence. In re Genzyme Corp. Securities Litig. , 754 F.3d 31, 46 (1st Cir. 2014); Markel Am. Ins. Co. v. Diaz-Santiago , 674 F.3d 21, 32 (1st Cir. 2012). A party cannot "introduce new evidence or advance arguments that could and should have been presented to the district court prior to judgment." Alicea v. Machete Music , 744 F.3d 773, 781 (1st Cir. 2014).

Discussion

The Mudges recently discovered that Bank of America recorded a "Discharge of Mortgage" for their mortgage on August 21, 2014. They argue that Bank of America's failure to disclose the recording of the discharge is a discovery violation and that the discharge shows that Bank of America was the holder of the note and was not merely the servicer.[1] The Mudges also argue that the court's summary judgment order was based on factual and legal errors.

A. Discharge of Mortgage

The Mudges primarily argue that Bank of America failed to comply with their discovery obligations by not disclosing the discharge and that the failure to provide discovery requires overturning the summary judgment order. The Mudges cite no authority to support that theory, and the court has found none that might apply in this context. In its objection to the Mudges' motion to alter or amend judgment, Bank of America acknowledges that the recently recorded discharge is newly discovered evidence within the meaning of Rule 59(e).

To succeed on their Rule 59(e) motion based on newly discovered evidence, the Mudges must show that the discharge is material in the context of summary judgment. See Aybar v. Crispin-Reyes , 118 F.3d 10, 16 (1st Cir. 1997); In re Neurontin Marketing & Sales Practices Litig. , 799 F.Supp.2d 110, 113 (D. Mass. 2011). For that purpose, the Mudges state that "the discharge reveals who the holder of the note here is. The discharge contradicts BOA's position as to who the holder is (by definition the holder of the note is stated on the discharge)."

Bank of America moved for summary judgment on the Mudges' claims of breach of contract and breach of the duty of good faith and fair dealing solely on the ground that during the time Bank of America held the mortgage, between September 21, 2011, and October 19, 2011, no breach of contract or breach of the duty of good faith and fair dealing occurred. In granting summary judgment on those claims, the court stated that "[t]he record evidence demonstrates, and the Mudges do not dispute, that MERS assigned the mortgage to Bank of America on September 21, 2011, and that Bank of America assigned the mortgage to Federal National Mortgage Association on October 19, 2011." Doc. no. 72 at 11. The court further held that Bank of America could be liable for a breach of the mortgage agreement only while it was a party to the mortgage agreement, that is, when it was the holder of the mortgage between September 21 and October 19, 2011. The court concluded that Bank of America did not breach the terms of the mortgage or the duty of good faith and fair dealing during that period, and granted Bank of America's motion for summary judgment on those claims (Counts I and IV).

In its objection to the Mudges' motion to alter or amend judgment, Bank of America states that the Mudges' argument that the discharge tends to show that it was the holder of the Mudges' mortgage "is pure conjecture and contradicted by the evidence submitted on summary judgment and the recordings in the Merrimack Country Registry of Deeds." In support, Bank of America invites the court to compare its entire memorandum of law in support of summary judgment with the Mudges' memorandum objecting to summary judgment. By way of further support, Bank of America states in a footnote: "The validity of the recently recorded discharge is, at best, doubtful, because it was not executed by the holder of the mortgage, Federal National Mortgage Association, and was erroneously executed by Defendant." Bank of America does not deny that it recorded the discharge or provide specific evidence to show that the discharge is invalid.

The recently recorded discharge undermines the factual basis for summary judgment on the breach of contract and breach of the duty of good faith and fair dealing claims. Contrary to the evidence Bank of America provided for purposes of summary judgment, the discharge states:

For value received, Bank of America, N.A., successor by merger to BAC Home Loans Servicing, LP, fka Countrywide Home Loans Servicing, LP, holder of a mortgage from JOHN H MUDGE JR, LISA S MUDGE to Mortgage Electronic Registration Systems, Inc., dated 01/27/2003 and recorded in MERRIMACK County Registry of Deeds, for the state of New Hampshire in Book 2458, Page 1795, hereby discharges said mortgage.

Motion (doc. no. 76), Exhibit 1 (emphasis added). The discharge is signed by Jesse Lester, Assistant Vice President at Bank of America and is notarized. On its face, the discharge creates a factual dispute as to when Bank of America was the holder of the mortgage for purposes of the Mudges' breach of contract and breach of the duty of good faith and fair dealing claims.[2] Because the court granted summary judgment in favor of Bank of ...


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