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Mudge v. Bank of America, N.A.

United States District Court, D. New Hampshire

March 25, 2015

John J. Mudge, Jr. and Lisa S. Mudge
v.
Bank of America, N.A. and TD Bank, N.A. Opinion No. 2015 DNH 065.

ORDER

JOSEPH A. DiCLERICO, Jr., District Judge.

John and Lisa Mudge brought claims against Bank of America and TD Bank, N.A. that arose from the defendants' actions related to the Mudges' mortgage and the attempted foreclosure on their home. The only claims that remain in the case are breach of contract and breach of the implied covenant of good faith and fair dealing brought against Bank of America. Bank of America moves for summary judgment, and the Mudges object.

Background

In 2003, John and Lisa Mudge obtained a loan which was secured by a mortgage on the Mudges' home at 57 Sterling Avenue in Hooksett, New Hampshire. In June of 2009, when the Mudges encountered difficulty making their monthly mortgage payments, they attempted to obtain a mortgage modification agreement from Bank of America, the loan servicer. When Bank of America informed the Mudges that they could not discuss a mortgage modification unless they were in arrears, the Mudges stopped making their monthly mortgage payments.

MERS assigned the Mudges' mortgage to Bank of America on September 21, 2011, and Bank of America assigned the mortgage to Federal National Mortgage Association on October 19, 2011. Bank of America referred the home to foreclosure in September of 2011, but the foreclsoure was stayed until April of 2013. The Mudges sold their home in October of 2013, after this action was begun. The proceeds of the sale fully paid off the loan secured by the mortgage.[1]

Summary judgment was granted in favor of Bank of America on all claims on August 27, 2014. Summary judgment was granted on the breach of contract and breach of the implied covenant of good faith and fair dealing claims because Bank of America showed that it only held the mortgage for a limited period, between September 21 and October 19, 2011, and the Mudges failed to show that Bank of America caused any breach during that time.

On October 2, 2014, the Mudges moved for reconsideration of the summary judgment order on a variety of grounds. The court granted the motion and vacated summary judgment on the breach of contract and breach of the implied covenant of good faith and fair dealing claims because the Mudges offered newly discovered evidence that a discharge of their mortgage was filed on August 21, 2014, that named Bank of America as the holder of the mortgage. The court concluded that the mortgage discharge raised a factual dispute about when Bank of America held the mortgage, which undermined the factual basis for summary judgment on the breach of contract and breach of the implied covenant of good faith and fair dealing claims.

The court set a new deadline for summary judgment motions. Bank of America moved for summary judgment on the remaining claims, and the Mudges filed an objection. The Mudges then were granted additional time for discovery on the limited issue of the mortgage discharge and time to file an amended objection to summary judgment. The extended deadlines have now passed. The Mudges did not file an amended objection to Bank of America's motion for summary judgment.

Standard of Review

Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). "A genuine issue is one that can be resolved in favor of either party, and a material fact is one which has the potential of affecting the outcome of the case." Jakobiec v. Merrill Lynch Life Ins. Co., 711 F.3d 217, 223 (1st Cir. 2013) (internal quotation marks omitted). In deciding a motion for summary judgment, the court draws all reasonable factual inferences in favor of the nonmovant. Kenney v. Floyd, 700 F.3d 604, 608 (1st Cir. 2012).

Discussion

Bank of America moves for summary judgment on the remaining claims of breach of contract and breach of the implied covenant of good faith and fair dealing. In support, Bank of America contends that despite the mortgage discharge filed on August 21, 2014, it only held the mortgage from September 21, 2011, to October 19, 2011. The Mudges object to summary judgment on the remaining claims, arguing that the August 21 discharge causes a material factual dispute about when Bank of America held their mortgage and arguing for the first time that Bank of America was the holder of the mortgage based on new expert opinion. The Mudges now assert that other actions by Bank of America constitute breach of contract and breach of the implied covenant of good faith and fair dealing.

A. Breach of Contract

The Mudges do not dispute the legal standard applicable to breach of contract under New Hampshire law, as that standard was provided in the previous summary judgment order.[2] As stated there, to prove a breach of contract claim, a plaintiff must "show (1) that a valid, binding contract existed between the parties, and (2) that [the defendant] breached the terms of the contract." Wilcox Indus. Corp. v. Hansen, 870 F.Supp.2d 296, 311 (D.N.H. 2012). A breach of contract claim ordinarily cannot be maintained against a non-party to the contract. See Jaffe v. Catholic Med. Ctr., 2002 WL 31466416, at *2 (D.N.H. Nov. 4, 2002); Riesgo v. Heidelberg Harris, Inc., 36 F.Supp.2d 53, 59 (D.N.H. 1997). Thus, loan servicers, who are not parties to a mortgage agreement, cannot be held liable for breach of that agreement. See ...


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