United States District Court, D. New Hampshire
N. Laplander United States District Judge
plaintiff in this mortgage-related action challenges the
defendant's foreclosure on the mortgage on her home in
Derry, New Hampshire. Plaintiff Karen Julius brought a
complaint against Wells Fargo Bank, N.A., the lender and
mortgagee, in Rockingham County Superior Court, after Wells
Fargo initiated foreclosure proceedings a mere two days after
the death of her husband, the only obligor under the mortgage
note. Wells Fargo removed the action to this court, see 28
U.S.C. § 1441, which has subject-matter jurisdiction
under 28 U.S.C. §§ 1331 (federal question) and 1332
First Amended Complaint, Julius raises several state-law
claims, asserts violations of the Real Estate Settlement
Procedures Act (RESPA), 12 U.S.C. § 2601 et seq., and
challenges the defendant's standing to
foreclose. Wells Fargo moves to dismiss the First
Amended Complaint, arguing that it fails to state a claim
upon which relief can be granted, see Fed. R. Civ. P.
12(b)(6), and citing -- in that process -- a plethora of
cases in which nearly identical claims brought by plaintiffâs
counsel have been repeatedly dismissed by courts in this
District. 2 See, e.g., Mader v. Wells Fargo Bank,
N.A., 2017 DNH 011 (McCafferty, J.); Gasparik v.
Fed. Natâl Mortg. Assân, 2016 DNH 215 (Johnstone, M.J.);
Riggieri v. Caliber Home Loans, Inc., 2016 DNH 128
(McCafferty, J.); Bowser v. MTGLQ Invârs, LP, 2015
DNH 149 (McCafferty, J.); LaCourse v. Ocwen Loan
Servicing, LLC, 2015 DNH 077 (McCafferty, J.). After
hearing oral argument and concluding that Juliusâs claims are
foreclosed on much the same grounds, the court grants Wells
Applicable legal standard
plaintiff must state a claim to relief by pleading
"factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged." Martinez v. Petrenko, 792
F.3d 173, 179 (1st Cir.2015) (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)). In ruling on such a
motion, the court accepts as true all well-pleaded facts set
forth in the complaint and draws 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) (internal
quotations omitted). The court "need not, however,
credit bald assertions, subjective characterizations,
optimistic predictions, or problematic suppositions, "
and "[e]mpirically unverifiable conclusions, not
logically compelled, or at least supported, by the stated
facts, deserve no deference." Sea Shore Corp. v.
Sullivan, 158 F.3d 51, 54 (1st Cir. 1998) (internal
following factual summary adopts the approach described
above. Karen Julius and her late husband, Tabert Julius,
purchased their home in Derry in 2005. Both Mr. and Mrs.
Julius signed the mortgage agreement,  but only Mr.
Julius signed the note. The Juliuses remained current on their
mortgage payments for approximately ten years, until Mr.
Julius, who suffered from cancer, became unable to work in
that time, the Juliuses sought relief from Wells Fargo, which
provided them with some forbearance by admitting them into
its home preservation program. Wells Fargo did not, at that
time, inform the Juliuses that they would be removed from the
program should Mr. Julius pass away. The Juliuses continued
to make reduced payments, even after the plaintiff left her
job to care for her husband full-time. She informed Wells
Fargo of these hardships in March 2016 through a letter to
their home preservation program specialist.
Julius passed away in 2016. Two days later, Wells Fargo
informed the plaintiff that she would be removed from the
home preservation program, and that her home would be placed
in foreclosure proceedings. Though she requested additional
time to find employment and set her affairs in order, she was
removed from the home preservation program. Wells Fargo also
"removed her from receiving statements and loan details
online, " preventing her from keeping track of her loan
or payments. At oral argument, the parties confirmed
that the defendant never initiated foreclosure proceedings or
issued a foreclosure notice.
plaintiff has brought five claims against Wells Fargo arising
from this series of events: (1) breach of the covenant of
good faith and fair dealing; (2) negligent misrepresentation,
(3) intentional infliction of emotional distress; (4)
violations of the Real Estate Settlement Procedures Act
(RESPA), 12 U.S.C. § 2601 et seq.; and (5) a challenge
to the defendant's standing to foreclose on the mortgage.
court is not unsympathetic to the plaintiff's position.
It may have behooved Wells Fargo to offer her an opportunity
to set her affairs in order after her recent loss and to make
arrangements allowing her to pay off the mortgage loan, even
though she was not originally a party to the note. While that
may have been a considerate practice on Wells Fargo's
part, it is not a course Wells Fargo was legally
obligated to take.
court discusses with respect to each of the plaintiff's
claims, courts in this District have repeatedly dismissed the
same claims brought by the plaintiff's counsel,
explaining in detail the reasons why those claims do not lie.
Because this ground has been so thoroughly trodden, and is by
now so undoubtedly familiar to plaintiff's counsel, the
court does not retread it in detail here. For the reasons
discussed below, all of the plaintiff's claims must be
The covenant of good faith and fair dealing (Count
plaintiff first contends that Wells Fargo violated the
implied covenant of good faith and fair dealing. "In
every agreement, there is an implied covenant that the
parties will act in good faith and fairly with each
other." Birch Broad, Inc. v. Capitol Broad.
Corp., Inc., 161 N.H. 192 (2010). Julius invokes the
third category of the breach of that covenant recognized in
New Hampshire: limitation of discretion in contractual
performance. See Id. at 198. Whether a plaintiff has
sufficiently alleged a breach of that particular duty
turns on three key questions: (1) whether the agreement
allows or confers discretion on the defendant to deprive the
plaintiff of a substantial portion of the benefit of the
agreement; (2) whether the defendant exercised its discretion
reasonably; and (3) whether the defendant's abuse of
discretion caused the damage complained of.
Moore v. Mortg. Elec. Reg. Sys., Inc., 848 F.Supp.
2D 107, 129 (D.N.H. 2012). As with many such claims brought
before this court, the plaintiff's fails at the first
duty of good faith and fair dealing ordinarily does not come
into play in disputes" where "the underlying
contract plainly spells out both the rights and duties of the
parties and the consequences that will follow from a breach
of a specified right." Milford-Bennington R. Co.,
Inc. v. Pan Am Rys., Inc., 2011 DNH 2 0 6, 11
(Barbadoro, J.) (internal quotations and citations omitted).
"[P]arties generally are bound by the terms of an
agreement freely and openly entered into, ' and the
implied covenant does not preclude a contracting party from
insisting on enforcement of the contract by its terms, even
when enforcement 'might operate harshly or
inequitably.'" Moore, 848 F.Supp. 2d at 129
(quoting Olbres v. Hampton Co-op. Bank, 142 N.H.
227, 233 (1997)). That is the case here.
plaintiff does not dispute that the note obligated her
husband to pay back the amount of the loan secured by the
mortgage. Nor does she dispute that the account was
in default. The mortgage contract -- which both Mr. and Mrs.
Julius signed -- spells out the lender's remedy in the
event that Mr. Julius defaulted. The plaintiff argues, in
essence, that by allowing the Juliuses to enter the home
protection program and by communicating with the plaintiff
while her husband was ill, Wells Fargo created an expectation
that it would continue to forebear and to communicate with
her, despite the fact that she was a third-party to the note,
after his passing. The clear terms of the agreement preclude
such a claim.
mortgage agreement, to which the plaintiff was a
party, provides that forbearance by Wells Fargo "shall
not be a waiver of or preclude the exercise of any right or
remedy, " including acceleration or statutory power of
sale. While the defendant may, under these
provisions, possess some discretion in deciding whether or
not to proceed with the foreclosure, the provisions in
question are "not so lacking in clarity as to provide
the fodder for a successful claim for breach of the implied
duty of good faith and fair dealing." Dove v. Bank
of New York Mellon, 2016 DNH 041, 13-14 (where note and
mortgage provide lender with discretion to accelerate loan
and pursue remedies including statutory power of sale upon
default, borrower could not ...