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Aho v. Bank of America, N.A.

United States District Court, D. New Hampshire

December 18, 2015

Adam Aho
Bank of America, N.A. Deutsche Bank Nat'l Trust Co. Opinion No. 2015 DNH 232

Stephen T. Martin, Esq., William P. Breen, Esq., Peter F. Carr, II, Esq.


Joseph N. Laplante United States District Judge

In this mortgage-related case, plaintiff Adam Aho brings a seven-count complaint for damages and declaratory and injunctive relief against two banks whom Aho claims have no right to foreclose on his home. The defendants, Bank of America (“BOA”) and Deutsche Bank National Trust Co. (“Deutsche”), moved to dismiss, asserting that Aho’s complaint fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). After consideration of the complaint, the parties’ written submissions, and oral argument, the court grants defendants’ motion.

I. Legal standard

To survive a motion to dismiss under Rule 12(b)(6), the plaintiff’s complaint must allege facts sufficient to “state a claim to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In ruling on such a motion, the court must accept as true all well-pleaded facts set forth in the complaint and must draw all reasonable inferences in the plaintiff’s favor. See, e.g., Martino v. Forward Air, Inc., 609 F.3d 1, 2 (1st Cir. 2010). The court “may consider not only the complaint but also facts extractable from documentation annexed to or incorporated by reference in the complaint and matters susceptible to judicial notice.” Rederford v. U.S. Airways, Inc., 589 F.3d 30, 35 (1st Cir. 2009). With the facts so construed, “questions of law [are] ripe for resolution at the pleadings stage.” Simmons v. Galvin, 575 F.3d 24, 30 (1st Cir. 2009). The following factual summary adopts that approach.

II. Background facts

In January 2007, Aho and his wife executed a mortgage naming as mortgagee Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee for New Century Mortgage Corporation, its successors and assigns. The mortgage secured a promissory note for $195, 000 that Aho executed in favor of New Century and granted a security interest in property in Rindge, New Hampshire. New Century endorsed the note in blank and undated. New Century filed for Chapter 11 bankruptcy in August 2008.

The mortgage was assigned from MERS to BAC Home Loans Servicing, LP, f/k/a Countrywide Home Loan Servicing ("BAC"). That assignment was recorded in the Cheshire County (N.H.) Registry of Deeds on August 29, 2011. BOA is the successor by merger to BAC.

In July 2012, Select Portfolio Servicing, Inc. (“SPS”) began servicing Aho's loan. Deutsche, as trustee for a trust into which the note and mortgage were pooled with other mortgages and sold to investors - known as securitizing -- holds the note. An assignment of the mortgage from BOA to Deutsche, as Trustee, was recorded in the Cheshire County Registry on November 19, 2014.

By letter dated August 24, 2011, BOA notified Aho of its intent to foreclose on the property. Shortly thereafter, Aho filed suit in state court to enjoin the foreclosure. He claimed that he was deceptively “put into this mortgage” and asked that the bank provide the signed contract and original promissory Note. Roughly one month later, the Superior Court continued the foreclosure sale for 60 days. By February 2012, the state court noted that the note had been produced but that Aho continued to challenge the identity of the note holder. After a lengthy interregnum during which the record reflects the parties’ attempts to reach an amicable resolution, Aho was informed in March 2015 that BOA was no longer the servicer of the note or mortgage and that Deutsche, as trustee, held the note. Soon after, Aho filed a second amended complaint, adding Deutsche as a defendant. Deutsche subsequently removed the case to this court.

The operative complaint consists of seven counts. Counts 1-4 allege wrongful foreclosure against BOA based on several different rationales: that BOA wasn’t the note-holder when it sent the foreclosure notice; that the mortgage was held by a different entity than the note, rendering it invalid; that the 2011 MERS assignment to BAC (predecessor to BOA) was invalid because it came three years after New Century's bankruptcy; and that BOA must demonstrate precisely when it came into possession of the original note to validate its right to foreclose. The three counts against Deutsche follow a similar theme. Aho alleges that Deutsche lacks the authority to foreclose because MERS did not have the right to assign the original mortgage, that Deutsche was never assigned the mortgage and that it does not legally own the note and mortgage due to an alleged violation of the rules of the trust into which they were purportedly transferred. Aho seeks declaratory and injunctive relief, as well as attorneys’ fees from both defendants; he also seeks compensatory damages against BOA for wrongful foreclosure.

IV. Legal Analysis

A. Counts 1-4 (wrongful foreclosure against BOA)

BOA argues that Aho’s complaint fails to state a claim for wrongful foreclosure because, as Aho concedes, BOA did not foreclose on Aho’s property and no foreclosure by BOA is scheduled. Aho argues that merely by initiating the foreclosure process, BOA is liable. Moreover, Aho claims entitlement to an injunction against BOA ...

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