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Mader v. Wells Fargo Bank N.A.

United States District Court, D. New Hampshire

January 17, 2017

Brian Mader and Nancy Mader
v.
Wells Fargo Bank, N.A. Opinion No. 2017 DNH 011

          Keith A. Mathews, Esq.

          Michael R. Stanley, Esq.

          ORDER

          Landya McCafferty United States District Judge.

         Plaintiffs Brian and Nancy Mader, initially proceeding pro se, filed a complaint to enjoin foreclosure of their property in New Hampshire Superior Court, Rockingham County. The superior court enjoined the foreclosure sale and scheduled a hearing. Before the date of the hearing, defendant Wells Fargo Bank, N.A. (“Wells Fargo”) removed the action to this court and now moves to dismiss the Maders' amended complaint. The Maders, now represented by counsel, object.

         Legal Standard

         Under Federal Rule of Civil Procedure 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) (citations and internal quotation marks 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).

         Background[1]

         Brian and Nancy Mader are residents and mortgagors of a property located at 47 Blossom Road in Windham, New Hampshire (the “property”). On March 9, 2006, the Maders executed a promissory note in favor of World Savings Bank, FSB (“WSB”), in exchange for a $543, 750.00 loan. The Maders granted a first priority mortgage on the property to WSB to secure the loan (the “mortgage”). Doc. no. 5-3.[2] Wells Fargo is the successor-by-merger to WSB. See Foley, 772 F.3d at 68 n.2.

         In 2007, the Maders began experiencing financial difficulties. Their financial situation improved somewhat in 2010, and the Maders were approved for a loan modification. Unfortunately, Mr. Mader was laid off shortly thereafter, and the Maders began having difficulties making their mortgage payments under the modification agreement.

         On May 14, 2013, the Maders submitted a voluntary petition for Chapter 13 bankruptcy. Doc. no. 13-2 at 2. On June 20, 2014, the Maders voluntarily converted their bankruptcy to a Chapter 7 case. Id. at 7. On February 13, 2015, the Maders received a discharge of their personal liability on the debt under 11 U.S.C. § 727, but the mortgage remained a valid lien on the property. See Id. at 11.[3]

         In 2016, the Maders sought a loan modification from Wells Fargo, sending a letter of hardship and a set of complete financial records. Wells Fargo requested and re-requested documents from the Maders related to their modification application. The Maders allege that Wells Fargo “misled the [Maders] about the status of their modification request.” Doc. no. 11 at ¶ 15.[4] Wells Fargo “discouraged the [Maders] from seeking legal counsel to address this issue.” Id. at ¶ 16. Wells Fargo also “falsely informed the [Maders] that the modification would not affect their credit.” Id. at ¶ 18. “The [Maders] only agreed to this modification with the knowledge that it would not affect their credit.” Id. at ¶ 33. Eventually, Wells Fargo denied the Maders' request for a modification.

         At some point, Wells Fargo informed the Maders that it intended to foreclose on the property and that it had scheduled a foreclosure sale for July 7, 2016. On June 22, 2016, the Maders, initially proceeding pro se, filed a complaint against Wells Fargo in state court to enjoin foreclosure of the property. The superior court issued a preliminary ex parte order to enjoin Wells Fargo from foreclosing on the property and scheduled a hearing for July 11, 2016.

         Days before the scheduled hearing, Wells Fargo removed the case to this court and subsequently moved to dismiss the Maders' complaint for failure to state a claim. Doc. no. 5. The Maders, now represented by counsel, did not object to Wells Fargo's motion to dismiss, but instead moved for leave to amend their original complaint. Doc. no. 8. The court granted the Maders' motion to amend and denied, without prejudice, Wells Fargo's motion to dismiss as moot. Doc. no. 10.

         Discussion

         The Maders filed their amended complaint (doc. no. 11), alleging seven separate claims: (I) negligence; (II) negligent misrepresentation; (III) breach of the covenant of good faith and fair dealing; (IV) violation of the New Hampshire Consumer Protection Act (“CPA”), N.H. Rev. Stat. Ann. § 358-A; (V) negligent infliction of emotional distress (“NIED”); (VI) violation of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605(k); and (VII) lack of standing to foreclose. Wells Fargo now ...


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