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McGrenaghan v. Federal National Mortgage Association

United States District Court, D. New Hampshire

December 10, 2015

Bonnie McGrenaghan, Plaintiff
Federal National Mortgage Association, Defendant Opinion No. 2015 DNH 227


Steven J. McAuliffe United States District Judge

Bonnie McGrenaghan initially filed this action in state court, seeking to temporarily and permanently enjoin the Federal National Mortgage Association (“FNMA”) from foreclosing its mortgage deed to her home. She also sought an order compelling FNMA to reform the underlying promissory note (which was executed by only her former husband) to allow her to assume it. The state court temporarily enjoined FNMA from foreclosing upon McGrenaghan’s property - a foreclosure that had been scheduled for June 29, 2015.

FNMA removed the case to this court, invoking the court’s diversity subject matter jurisdiction. See 28 U.S.C. § 1441(b). See also 28 U.S.C. § 1332. It now moves to dismiss all claims advanced in McGrenaghan’s petition, asserting that none states a viable cause of action. See Fed.R.Civ.P. 12(b)(6). McGrenaghan objects. For the reasons discussed, FNMA’s motion is granted in part, and denied in part.

Standard of Review

When ruling on a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the court must “accept as true all well-pleaded facts set out in the complaint and indulge all reasonable inferences in favor of the pleader.” SEC v. Tambone, 597 F.3d 436, 441 (1st Cir. 2010). Although the complaint need only contain “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), it must allege each of the essential elements of a viable cause of action and “contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face, ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation and internal punctuation omitted).

In other words, “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Instead, the facts alleged in the complaint must, if credited as true, be sufficient to “nudge[] [plaintiff’s] claims across the line from conceivable to plausible.” Id. at 570. If, however, the “factual allegations in the complaint are too meager, vague, or conclusory to remove the possibility of relief from the realm of mere conjecture, the complaint is open to dismissal.” Tambone, 597 F.3d at 442.

A final point bears making, given the fact that the parties rely upon several documents in support of their respective positions (e.g., the promissory note, the mortgage deed, various assignments of those documents, etc.). Typically, a court must decide a motion to dismiss exclusively upon the allegations set forth in the complaint (and any documents attached to that complaint) or convert the motion into one for summary judgment. See Fed.R.Civ.P. 12(d). There is, however, an exception to that general rule:

[C]ourts have made narrow exceptions for documents the authenticity of which are not disputed by the parties; for official public records; for documents central to plaintiffs’ claim; or for documents sufficiently referred to in the complaint.

Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993) (citations omitted). See also Trans-Spec Truck Service v. Caterpillar Inc., 524 F.3d 315, 321 (1st Cir. 2008); Beddall v. State St. Bank & Trust Co., 137 F.3d 12, 17 (1st Cir. 1998). Since neither party disputes the authenticity of the various documents referenced in the petition and attached to defendant’s motion to dismiss, the court may properly consider those documents without converting FNMA’s motion into one for summary judgment.


Accepting the petition’s factual allegations as true - as the court must at this juncture - the relevant background is as follows. In September of 2001, John McGrenaghan (plaintiff’s former husband) secured a loan from Wilmington National Finance, Inc. in the amount of $277, 000. That loan was evidenced by a promissory note (the “Note”), which Mr. McGrenaghan executed. The obligation to repay that loan was secured by a mortgage deed to the McGrenaghans’ residence in Stratham, New Hampshire (the “Mortgage”). Both Mr. McGrenaghan and plaintiff, who were married at the time, executed the Mortgage.[1]

In October of 2011, plaintiff and Mr. McGrenaghan were divorced. Pursuant to the terms of their divorce decree, plaintiff was awarded the couple’s Stratham residence. Accordingly, in January of 2012, Mr. McGrenaghan conveyed all of his interest in that property to plaintiff. The property did, however, remain subject to the Mortgage and, of course, Mr. McGrenaghan remained obligated under the terms of the Note. But, says plaintiff, it was then that she first learned that Mr. McGrenaghan had not been making timely monthly payments of principal and interest as required by the Note: she received a notice of foreclosure from FNMA and a statement of the amount necessary to reinstate the loan ($22, 790.79). Plaintiff says she immediately placed that sum into her counsel’s trust account and petitioned the Superior Court to enjoin the foreclosure.[2]

The state court enjoined the foreclosure and the matter remained pending for approximately two years, until FNMA assigned the Mortgage to Bank of America, thereby destroying its own legal standing to pursue the foreclosure. Following FNMA’s assignment of the Mortgage, the state court dismissed the action.

Meanwhile, in November of 2013, Mr. McGrenaghan filed for bankruptcy protection pursuant to Chapter 7 of the Bankruptcy Code. His obligation to repay the loan evidenced by the Note was among those that were discharged in bankruptcy. Approximately eighteen months later, Bank of America assigned the Mortgage ...

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