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Derry & Webster, LLC v. Bayview Loan Servicing, LLC

United States District Court, D. New Hampshire

December 29, 2014

Derry & Webster, LLC
v.
Bayview Loan Servicing, LLC No. 2014 DNH 264.

MEMORANDUM AND ORDER

PAUL BARBADORO, District Judge.

Derry & Webster, LLC has sued Bayview Loan Servicing, LLC to recover damages it suffered as a result of a foreclosure sale. Bayview has responded with a motion to dismiss for failure to state a claim. For the reasons that follow, I grant Bayview's motion in part and deny it in part.

I. BACKGROUND[1]

In September 2007, Derry & Webster granted two mortgages on property it owned in Hudson, New Hampshire to Silver Hill Financial, LLC as security for loans totaling $1, 062, 000. Silver Hill Financial later assigned the loans and mortgages to Bayview. Derry & Webster defaulted on the loans, and Bayview scheduled a foreclosure sale for October 3, 2013. Derry & Webster responded by filing for bankruptcy protection, causing the scheduled foreclosure sale to be cancelled.

In late 2013, Derry & Webster began to discuss a possible short sale with Bayview. At an unspecified point prior to November 6, 2013, Bayview informed Derry & Webster that it would accept a short sale for $600, 000. On November 6, 2013, Derry & Webster entered into an agreement with Artivan Sookisian, a third-party buyer, to sell the property to Sookisian for $600, 000. Doc. No. 1-1 at 7-11. On December 27, 2013, Bayview sent a "discount payoff letter" to Derry & Webster approving a short sale that would yield $600, 000 to Bayview and, in turn, release Derry & Webster and its principals from further obligations under the original loans. The parties scheduled a closing to take place on February 26, 2014, but the closing did not ultimately take place.

On March 3, 2014, Bayview, through its attorney, William Amann, petitioned the bankruptcy court for relief from the automatic stay as a secured creditor of Derry & Webster. See Br. Doc. No. 52.[2] In its motion, Bayview stated that "[Derry & Webster] has no means to reinstate the loan. Instead, [Derry & Webster] has proposed a short-sale outside of bankruptcy, which [Bayview] is willing to accept, however, relief from the automatic stay must be obtained first." Id. at 2.

At around this time, Bayview informed Derry & Webster that it would accept a short sale of $568, 000 if Derry & Webster assented to its motion to lift the automatic stay. On March 11, 2014, in response to Bayview's representations, Derry & Webster assented to Bayview's motion. See Br. Doc. No. 54. The bankruptcy court entered an order granting the motion on March 19 and stayed the order until April 2. See Br. Doc. No. 55.

Also on March 19, Amann sent an email to Allen and Morgan Hollis, an attorney representing Sookisian's lender. In that email, Amann wrote that "as long as [Bayview] nets $568, 000 they're good." Doc. No. 4-2 at 29. He also requested further documents from Hollis that were needed to complete the short sale. See id. By April 2, 2014, both Derry & Webster and Sookisian had done everything required to complete the short sale. They awaited only a letter from Bayview confirming its approval, which Amann had previously indicated they could expect to receive no later than April 1.

The bankruptcy court's order lifting the automatic stay became effective on April 2, 2014. Br. Doc. No. 55. On April 3, Amann informed Derry & Webster that Bayview would not accept a short sale unless it yielded $600, 000. Although Derry & Webster's representatives believed that Bayview was obligated to accept a $568, 000 short sale, they continued to negotiate with Bayview in an effort to conclude the transaction.

On April 14, 2014, Bayview served notice on Derry & Webster that it had scheduled a foreclosure sale of the Hudson property for May 13, 2014. On May 7, 2014, Derry & Webster petitioned the Hillsborough County Superior Court to enjoin the foreclosure. Doc. No. 4-1 at 4. The court granted a temporary injunction that day and scheduled a hearing on the merits to take place ten days later, on May 17, 2014. Id. at 52. On May 13, 2014, however, Bayview removed the case to this Court. Doc. No. 1. Because Bayview did not seek additional interim relief, the state court temporary injunction expired on May 17, 2014. Bayview ultimately conducted a foreclosure sale of the Hudson property on June 12, 2014.

On July 11, 2014, Derry & Webster filed an amended complaint seeking damages and an order declaring that it has satisfied its legal obligations to Bayview. See Doc. No. 12.

II. STANDARD OF REVIEW

To survive a motion to dismiss for failure to state a claim, 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 if it pleads "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id . 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 ...


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