United States District Court, D. New Hampshire
Deutsche Bank National Trust Co., as Trustee for FFMLT Trust 2005-FF2, Mortgage Pass-Through Certificates, Series 2005-FF2
Jennifer L. Pike. Opinion No. 2015 DNH 196
JOSEPH DiCLERICO, Jr., District Judge.
Deutsche Bank is seeking a declaratory judgment that Jennifer L. Pike is not entitled to a homestead exemption for certain property on which Deutsche Bank holds the mortgage or, alternatively, that she is subject to equitable subrogation of her waiver of the homestead exemption in the first mortgage on the property. Pike moves to dismiss the case, arguing that jurisdiction is lacking and that Deutsche Bank has not stated an actionable claim for possession of the property because it failed to plead its compliance with RSA chapter 540. Deutsche Bank objects to the motion.
Pike moves to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). When considering a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the court considers the facts alleged in the complaint but may also consider "whatever evidence has been submitted, such as depositions and exhibits." Carroll v. United States, 661 F.3d 87, 94 (1st Cir. 2011) (internal quotation marks omitted). The scope of a motion under Rule 12(b)(6) is narrower. Generally, the court is limited to the facts alleged in the complaint, except that the court may consider documents referred to or incorporated into the complaint and certain other documents when their authenticity is not disputed. Watterson v. Page, 987 F.2d 1, 3-4 (1st Cir. 1993).
Pike states that for purposes of her motion to dismiss she accepts as true all of the facts stated in Deutsche Bank's complaint. Pike does not challenge any of the fifteen exhibits Deutsche Bank filed with the complaint. Therefore, the background information is summarized from the complaint, and to the extent necessary, from the exhibits submitted with the complaint.
The property in question in this case is located at 34 Dogwood Lane, New London, New Hampshire. Jennifer Pike was married to William Pike when Margaret H. Jenkins deeded the property to William in 2001. In December of 2003, Jennifer and William granted a mortgage on the property to New Century Mortgage Corporation as security for a loan of $225, 000, which is referred to as the First Mortgage. Jennifer and William released all rights of homestead as part of the First Mortgage.
In November of 2004, William obtained a loan in the amount of $269, 000, secured by a mortgage on the property, from First Franklin Financial Corporation. That transaction is referred to as the Second Mortgage. The loan for the Second Mortgage was used in part to pay off the First Mortgage, which was discharged on January 25, 2005.
William deeded the property to the Pike Family Trust in April of 2005. William and Jennifer, as trustees of the Pike Family Trust, deeded the property to Jennifer in November of 2006. Jennifer then deeded the property to William on February 6, 2007.
William filed a voluntary petition in bankruptcy under Chapter 13 on February 6, 2007. A year later, the bankruptcy proceeding was converted to Chapter 7.
The Second Mortgage was assigned to Deutsche Bank in May of 2009. Additional filings were made at the Merrimack County Registry of Deeds to clarify the name of the holder of the Second Mortgage.
William and Jennifer were divorced on July 3, 2013. Deutsche Bank began foreclosure proceedings on the property on July 11, 2013. As required by the divorce decree, William transferred the property to Jennifer on July 26, 2013. The foreclosure sale was postponed from August 12, 2013, to October 11, 2013, to December 13, 2013.
Jennifer filed a petition in state court to enjoin the December 13, 2013, foreclosure sale, and the Superior Court issued an injunction. Deutsche Bank moved for summary judgment to remove the injunction, which was granted on August 14, 2014. Jennifer appealed, and the New Hampshire Supreme Court affirmed. Pike v. Deutsche Bank Nat'l Tr. Co., as Trustee, ___ A.3d ___, 2015 WL 4266759 (N.H. Sup.Ct. May 13, 2015).
In that decision, the New Hampshire Supreme Court ruled that Pike's assertion of a homestead exemption did not support an injunction against foreclosure. The court agreed with the Superior Court that Pike could assert a homestead exemption, pursuant to RSA 480:8-a, even if a foreclosure occurred, with the result that she could not show that she would be in immediate danger of irreparable harm if the foreclosure were to proceed. The court also noted that a foreclosure would not automatically cause her removal from the property.
Although the injunction was lifted, Deutsche Bank did not begin foreclosure proceedings. Instead, Deutsche Bank filed suit here. In the complaint, Deutsche Bank is seeking a declaratory judgment that its security interest in the property is not subject to a homestead exemption claimed by Pike, or alternatively, that it is entitled to equitable subrogation so that any homestead exemption does not apply to the amount paid to discharge ...