United States District Court, D. New Hampshire
McCafferty United States District Judge
case that was removed from the New Hampshire Superior Court,
Cheshire County, John Riggieri brings suit against Caliber
Home Loans, Inc. (“Caliber”), Ocwen Loan
Servicing, LLC (“Ocwen”), and U.S. Bank Trust,
N.A. (“U.S. Bank”), alleging that defendants made
misrepresentations in connection with a proposed loan
modification offer. Riggieri also alleges that defendants
generally acted in bad faith, and that their conduct resulted
in a foreclosure auction at which his home was sold below
move to dismiss under Federal Rule of Civil Procedure
12(b)(6), contending that the complaint fails to state a
claim. Riggieri objects. For the reasons that follow,
defendants’ motions to dismiss are granted.
Rule 12(b)(6), the court must accept the factual
allegations in the complaint as true, construe reasonable
inferences in the plaintiff’s favor, and
“determine whether the factual allegations in the
plaintiff’s complaint set forth a plausible claim upon
which relief may be granted.” Foley v. Wells Fargo
Bank, N.A., 772 F.3d 63, 71 (1st Cir. 2014) (citation
omitted). A claim is facially plausible “when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
2002, John Riggieri purchased a plot of land in Marlborough,
New Hampshire (the “property”). On November 30,
2006, Riggieri and his then-wife, Nancy Gaunya, executed a
promissory note in favor of Countrywide Home Loans, Inc.
(“Countrywide”) in the amount of $604, 000 to
finance the construction of a home on the property (the
“note”). See doc. no. 21-2. That same
day, Riggieri and Gaunya granted a mortgage on the property
to Countrywide to secure the loan, with Mortgage Electronic
Registration Systems, Inc. (“MERS”) as the
mortgagee in its capacity as nominee for Countrywide. See
doc. no. 21-3. Both the note and the mortgage list
the address of the property as “38 Shaker Farm Road,
Marlborough, New Hampshire 03455.” At some point prior
to November 23, 2015, the mortgage was assigned to U.S.
9, 2009, Riggieri, Gaunya, and Countrywide entered into a
“Modification of Note and Security Instrument, ”
which amended certain of the note’s terms (the
“modified note”). See doc. no. 21-4. The
modified note also lists the property’s address as
“38 Shaker Farm Road, Marlborough, New Hampshire
alleges that in September 2009 “there was a discrepancy
in [his] escrow account.” Doc. no. 17 at
¶ 18. As a result of the discrepancy, Harmon Law Offices
began foreclosure proceedings on the property in November
2011. Riggieri alleges that he entered into a loan
modification agreement and the foreclosure did not occur.
August 2012, Bank of America, which had been the loan
servicer, transferred servicing responsibilities to Ocwen. On
September 14, 2012, Ocwen mailed Gaunya a letter, noting that
she was approved to enter a new modification program which
would reduce her principal balance and monthly mortgage
payment (the “Ocwen letter”). The letter
informed Gaunya that if she completed a trial period, she
would reduce her monthly payment from $4, 400.26 per month to
$1, 510.16 per month, reduce her total loan balance from
$722, 277.17 to $173, 047.68, and reduce her interest rate
from 5.375% to 2%. The letter also informed Gaunya that she
could accept the offer by making her first trial period plan
payment by October 1, 2012. The letter was addressed to
Gaunya at “38 Shaker Farm Road S, Marlborough, NH
alleges that he did not become aware of the Ocwen letter
until early 2013, well after the deadline for
acceptance.Riggieri alleges that the letter was
“unbelievable” and that, once he became aware of
it, he “assumed that it was junk mail or not a
legitimate offer, and did not act upon it.” Doc. no.
17 at ¶¶ 29-30.
February 2014, Ocwen began foreclosure proceedings on the
property. Riggieri alleges that the foreclosure proceedings
ended after he requested that Ocwen produce the original
promissory note, and it could not.
2015, Ocwen transferred servicing responsibilities on the
loan to Caliber. Upon receiving notice of the transfer,
Riggieri requested that Caliber honor the offer made in the
Ocwen letter. Caliber refused to adjust the loan amount or
Riggieri’s interest rate. Shortly thereafter, Caliber
mailed a notice of foreclosure to Riggieri and published a
notice of foreclosure in the Manchester Union
Leader. Riggieri alleges that at the time the
foreclosure notice was mailed, he was traveling on a 27-day
trip. Riggieri alleges that he had the post office put his
mail on hold while he was traveling, from October 29 through
November 23, 2015 and, therefore, did not receive notice of
the foreclosure sale, which took place on the day he returned
from the trip.
the mailed notice and the notice published in the
Manchester Union Leader listed the property’s
address as “38 Shaker Farm Road, Marlborough, NH 03455,
” the same address that is listed in the mortgage, the
note, and the modified note. Riggieri alleges that the
property’s actual address is “38 Shaker Farm Road
South, Marlborough, NH 03455, ” which was the address
listed in the Ocwen letter. Riggieri also alleges that the
auctioneer at the foreclosure sale “admitted that all
parties were unable to find the property initially, ”
which Riggieri believes was caused by the incorrect address
being listed in the notice. Doc. no. 17 at ¶
Bank, which held the mortgage at the time of the foreclosure,
purchased the property at the foreclosure sale. According to
the foreclosure deed, U.S. Bank purchased the property for
$379, 677.01. See doc. no. 32-3 at 1. The
foreclosure deed lists the property’s address as
“38 Shaker Farm Road, Marlborough, NH 03455.”
Id. Riggieri alleges that at the time he filed this
lawsuit, shortly after the foreclosure sale, he was 2300
days, more than six years, late on his mortgage payments.
filed this lawsuit in state court on December 21, 2015.
Defendants removed the case to this court on January 20,
2016, and moved to dismiss the complaint. Riggieri
subsequently amended the complaint, and defendants move to
dismiss the amended complaint. Riggieri objects.
asserts five claims: (i) negligent misrepresentation; (ii)
breach of the covenant of good faith and fair dealing; (iii)
unjust enrichment; (iv) negligent infliction of emotional
distress; and (v) “standing.” Riggieri does not
specify against which defendant he brings each claim,
although he appears to allege that Caliber and U.S. Bank
should be held liable for any of Ocwen’s unlawful
activity because they are “successors in
interest” to Ocwen. Defendants move to dismiss all
alleges that Ocwen is liable for negligent misrepresentation
because the Ocwen letter was “unbelievable” and
offered “an extremely short timeline for
acceptance.” Doc. no. 17 at ¶ 60.
Riggieri alleges that Caliber is liable for negligent
misrepresentation because it “negligently failed to
properly describe the property in the notice of
foreclosure.” Id. at ¶ 67. Riggieri also
alleges that “Defendants have added erroneous costs and
fees to the Plaintiff’s loan . . . leading him down the
path to foreclosure.” Id. at ¶¶
74-75. Defendants contend that Riggieri does not allege any
misrepresentation and, to the extent he does, his claim is
barred by the economic loss doctrine.
New Hampshire common law, the elements of a claim for
negligent misrepresentation “are a negligent
misrepresentation of a material fact by the defendant and
justifiable reliance by the plaintiff.” Wyle v.
Lees, 162 N.H. 406, 413 (2011) (citing Snierson v.
Scruton, 145 N.H. 73, 78 (2000)). Moreover, “[i]t
is the duty of one who volunteers information to another not
having equal knowledge, with the intention that he will act
upon it, to exercise reasonable care to verify the truth of
his statements before making them.” Id.
complaint does not allege facts sufficient to support a claim
for negligent misrepresentation based on the Ocwen letter.
Other than vague and conclusory allegations that the letter
was “misleading” or “worded . . . to avoid
responses from consumers, ” doc. no. 17 at
¶¶ 62-63, Riggieri does not allege any facts to
show a misrepresentation in the letter. To the contrary,
Riggieri appears to allege that the offer contained in the
letter was legitimate, because Ocwen was forced to offer a
reduction on the loan as a result of its settlement with the
Department of Justice.
Riggieri had alleged a misrepresentation based on wording in
the letter, the complaint fails to allege any justifiable
reliance on such a representation. Indeed, Riggieri alleges
that he did not discover the letter until several months
after the deadline for responding had passed. He has not
alleged any facts to support a plausible theory that he
relied to his detriment on an alleged misrepresentation in
addition, even if Riggieri’s allegations were
sufficient to support a negligent misrepresentation claim,
the claim would nonetheless be barred by the economic loss
doctrine. Under New Hampshire law, the contractual
relationship between a lender and borrower typically
precludes recovery in tort. Moore v. Mortg. Elec.
Registration Sys., Inc., 848 F.Supp.2d 107, 133 (D.N.H.
2012) (citing Wyle, 162 N.H. at 409-10). This
principle, known as the “economic loss doctrine,
” operates on the theory that “[i]f a contracting
party is permitted to sue in tort when a transaction does not
work out as expected, that party is in effect rewriting the
agreement to obtain a benefit that was not part of the
bargain.” Plourde Sand & Gravel Co. v. JGI E.,
Inc., 154 N.H. 791, 794 (2007). Thus, where a borrower
claims the existence of a duty outside the contractual
relationship, he has the burden of proving that the lender
voluntarily engaged in “activities beyond those
traditionally associated with the normal role of a money
lender.” Moore, 848 F.Supp.2d at 133 (quoting
Seymour v. N.H. Sav. Bank, 131 N.H. 753, 759
(1989)). “This burden extends to claims against
mortgagees as well as loan servicers.” Bowser v.
MTGLQ Inv’rs, LP, No. 15-cv-154-LM, 2015 WL
4771337, at *2 (D.N.H. Aug. 11, 2015) (citing cases).
is no question that New Hampshire recognizes an exception to
the economic loss doctrine for certain negligent
misrepresentation claims.” Schaefer v. IndyMac
Mortg. Servs., 731 F.3d 98, 108 (1st Cir. 2013). A
narrow exception exists for professionals “who are in
the business of supplying information, ” such as
accountants, appraisers, and investment brokers. Id.
(discussing Plourde, 154 N.H. at 759).
facts alleged in the complaint show that the economic loss
doctrine applies to Riggieri’s negligent
misrepresentation claim based on the Ocwen letter. Riggieri
does not allege that Ocwen voluntarily engaged in activities
beyond those traditionally associated with the normal role of
a money lender. See Moore, 848 F.Supp.2d at 133. The
Ocwen letter contains an offer from a loan servicer on behalf
of a lender to modify the terms of the loan. Tort claims
based on misrepresentations made in connection with a loan
modification offer are barred by the economic loss doctrine
because they “are related to defendants’ attempts
to collect the [borrower’s] mortgage debt.”
Dionne v. Fed. Nat’l Mortg. Assoc., No.
15-cv-56-LM, 2016 WL 3264344, at *13 (D.N.H. June 14, 2016);
see also Schaefer, 731 F.3d at 107.
Riggieri asserts that Ocwen is in “the business of
supplying information” and, therefore, an exception
to the economic loss doctrine exists, he alleges no facts to
support such a claim. The First Circuit has made clear that
negligent misrepresentation claims such as Riggieri’s
which are asserted against loan services are plainly barred
by the economic loss doctrine, and do not fall within that
exception. See Schaefer, 731 F.3d at 108-09 (holding
that the district court correctly held that plaintiff’s
negligent misrepresentation claim against a loan servicer
arising out of an alleged misrepresentation in a loan
modification offer letter was barred by the economic loss
doctrine); see also Bowser, 2015 WL 4771337, at *2
(applying economic loss doctrine to bar negligence claim
against loan servicer).
even if Riggieri had plausibly alleged a claim for negligent
misrepresentation based on the Ocwen letter, which he has