United States District Court, D. New Hampshire
Douglas T. Sharp,
Deutsche Bank National Trust Company, As Trustee For Morgan Stanley ABS Capital Inc. Trust 2006-HE3
ORDER Opinion No. 2015 DNH 155
LANDYA McCAFFERTY, District Judge.
In a case that has been removed from the Hillsborough County Superior Court, Douglas Sharp seeks to enjoin Deutsche Bank National Trust Company ("Deutsche Bank") from foreclosing on his mortgage. He claims that Deutsche Bank cannot foreclose because it: (1) lacks the authority to do so (Count I); and (2) breached the implied covenant of good faith and fair dealing (Count II). In addition, he seeks to amend his complaint to add Wells Fargo Bank, N.A. ("Wells Fargo") as a defendant, and to assert a claim that Wells Fargo and Deutsche Bank violated the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C §§ 2601-2617. Deutsche Bank objects to Sharp's motion to amend as futile and moves to dismiss his complaint for failure to state a claim upon which relief can be granted. The court heard oral argument on Deutsche Bank's motion to dismiss on November 18, 2014. For the reasons that follow, Sharp's motion to amend is denied, and Deutsche Bank's motion to dismiss is granted.
The facts in this section are drawn from Sharp's Amended Verified Complaint, document no. 1-1, his proposed Second Amended Complaint, document no. 13-2, and certain documents that are attached to those complaints or that are appropriately considered in conjunction therewith. See Foley v. Wells Fargo Bank, N.A., 772 F.3d 63, 71-72 (1st Cir. 2014); Watterson v. Page, 987 F.2d 1, 3-4 (1st Cir. 1993) (describing documents courts may consider when ruling on a motion to dismiss).
On December 21, 2005, plaintiff's father, Martin Sharp,  executed a promissory note in favor of New Century Mortgage Corporation ("New Century"), in exchange for a loan of $60, 000. On the same day that Martin executed the promissory note, Martin and Douglas granted a mortgage to New Century to secure the loan. The mortgage, in turn, encumbered a property in Goffstown, New Hampshire, that Martin and Douglas owned as joint tenants with the right of survivorship.
Notwithstanding the fact that the promissory note identifies Martin as the sole borrower, see State Ct. R. (doc. no. 3-1) 44 of 106, the mortgage defines the term "Borrower" to mean "Martin F[.] Sharp, a single person and Douglas T. Sharp[, ] a married person, " id. at 2 of 106. In a section titled "Joint and Several Liability; Co-signers; Successors and Assigns Bound, " the mortgage provides, in pertinent part:
Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several. However, any Borrower who co-signs this Security Instrument but does not execute the Note (a "co-signer"): (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer's interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer's consent.
Id. at 11 of 106. Additionally, in a section titled "Acceleration; Remedies, " the mortgage provides that if the borrower defaults, and the default is not cured in a timely manner, "Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the STATUTORY POWER OF SALE and any other remedies permitted by Applicable Law." Id. at 14 of 106.
New Century has executed two documents purporting to assign the Sharps' mortgage. On December 28, 2005, New Century executed a document titled "Assignment of Mortgage, " which appeared to assign the Sharps' mortgage to Deutsche Bank ("the 2005 assignment"). Id. at 24 of 106. That document was recorded in the Hillsborough County Registry of Deeds almost two years later, on October 3, 2007. On February 27, 2012, Wells Fargo, acting as attorney-in-fact for New Century, executed a second document purporting to assign the Sharps' mortgage to Deutsche Bank ("the 2012 assignment"). See id. at 29 of 106. That document was recorded in the Hillsborough County Registry of Deeds on March 13, 2012.
In April of 2007, after the 2005 assignment was executed, but before it was recorded, New Century filed for bankruptcy protection. In 2008, the bankruptcy court ordered New Century to convey all of its assets into a liquidating trust.
Martin Sharp died in 2009. Sometime after Martin's death, the complaint does not say when, Douglas stopped making mortgage payments. In June of 2014, Deutsche Bank sent him notice of a foreclosure sale. He responded by sending a letter, titled "Request for Postponement, " to Deutsche Bank's mortgage servicer, America's Servicing Company ("ASC"). The letter states:
I, Douglas T. Sharp, request to postpone the trustees sale of the property located at 28 Joffre St. Goffstown, N.H. 03102, to take place on July 24, 2014, in order to organize legal documentation as well as loan modification or sale of the property.
Second Am. Compl., Attach. 8 (doc. no. 13-10), at 6 of 12. In a letter dated eight days later and addressed to Martin, ASC stated:
We're writing to let you know that we've received an inquiry from Douglas Sharp on your behalf. Since we don't have authorization to respond directly to Douglas Sharp we will be responding to you.
We are currently reviewing the inquiry, and expect to complete our research and provide you with the results on or before August 04, 2012.
Id. at 7 of 12. Four days after that, ASC wrote directly to Douglas, explaining that he "was able to receive certain information for the loan but not the specific information he requested." As the "Request for Postponement" does not include any request for information, it is not clear what information Sharp requested from ASC.
Shortly thereafter, Sharp filed an action in the Hillsborough County Superior Court seeking to enjoin the foreclosure sale. Subsequently, Sharp filed an amended complaint claiming that Deutsche Bank had no authority to foreclose on his mortgage and had violated the implied covenant of good faith and fair dealing. On August 7, 2014, New Hampshire Superior Court Judge Gillian Abramson issued a temporary injunction, enjoining Deutsche Bank from foreclosing on Sharp's mortgage. Deutsche Bank removed the suit to this court thereafter, and moved to dismiss Sharp's amended complaint for failure to state a claim upon which relief can be granted.
In September of 2014, Mari DeBlois of The Way Home, a housing advocacy group, reported to Douglas's counsel that she had attempted to obtain information about Martin's loan from ASC on Douglas's behalf, but had been repeatedly rebuffed on grounds that she was not properly authorized to receive such information. In February of 2015, after Deutsche Bank moved to dismiss Sharp's amended complaint, but before the court ruled on Deutsche Bank's motion, Sharp sent two letters to Wells Fargo, one styled as a "request for information" pursuant to 12 C.F.R. § 1024.36, the other styled as a "notice of error" pursuant to 12 C.F.R. § 1024.35.
In his request, Sharp identified six different kinds of information he was seeking, all related generally to the topic of assuming Martin's status as the borrower of the loan that Martin had received from New Century. Presumably as a result of a typographical error in Sharp's request for information, Wells Fargo construed it as a request ...