United States District Court, D. New Hampshire
Farion N. Brown and Donna Brown
Wells Fargo Home Mortgage, Opinion No. 2017 DNH 094
William C. Sheridan, Esq.
Michael R. Stanley, Esq.
N. Laplante United States District Judge
Wells Fargo and Federal National Mortgage Association
(“FNMA”) move to dismiss this action, which is
duplicative of an earlier case filed by the same plaintiffs
against the same defendants upon the same basis of fact and
asserting all but one of the same claims. Plaintiffs Fairon
and Donna Brown moved to stay this action pending the outcome
of plaintiffs' interlocutory appeal in the earlier-filed
action. For the reasons explained below, the court denies
plaintiffs' motion to stay as moot and grants
defendants' motion to dismiss, substantially for the
reasons set forth in defendants' supporting memorandum.
November 5, 2015, after receiving an eviction notice at their
foreclosed-upon home, the Browns filed a lawsuit in
Hillsborough County Superior Court. They brought claims
against FNMA, who owned the Browns' mortgage, and Wells
Fargo, who serviced it, for violations of the Real Estate
Settlement Procedures Act (“RESPA”), 12 U.S.C.
§ 2601 et seq., the Equal Credit Opportunity Act
(“ECOA”), 15 U.S.C. § 1691 et seq., Unfair,
Deceptive, or Unreasonable Collection Practices Act
(“UDUCPA”), N.H. Rev. Stat. Ann. §
358-C:3, and the duty of good faith and fair dealing.
They sought both damages and injunctive relief --
specifically, rescission of the foreclosure sale.
defendants removed that case to this court and moved to
dismiss. After a full round of briefing, several late-filed
addenda from the plaintiffs, and a motion hearing, this court
granted defendants' motion to dismiss the Browns'
claims (1) challenging the validity of the foreclosure
proceedings and seeking as relief rescission of the
foreclosure sale,  (2) under the UDUCPA and the duty of good
faith and fair dealing, and (3) for injunctive relief under
RESPA and the ECOA. Brown v. Wells Fargo, 2016 DNH
102, 3. The Browns' claims for damages under RESPA and
the ECOA remained in play. Id. That order issued on
June 20, 2016. The Browns filed an interlocutory appeal
challenging this court's dismissal of the Browns'
claims for injunctive relief. On April 28, 2017, the Court of
Appeals dismissed that appeal for lack or
the appeal was pending, the defendants initiated the eviction
proceedings of which they had notified the plaintiffs in
November 2015 -- the very same notice that precipitated the
Browns' first action. The Browns countered by disputing
the defendants' title to his property. New Hampshire law
dictates that such a challenge -- a plea of title -- be filed
in the superior court. N.H. Rev. Stat. Ann. §
540:17; Bank of N.Y. Mellon v. Dowgiert, 169
N.H. 200, 205 (N.H. 2016) (a plea of title is “an
action or right of action, not a defense” and must be
prosecuted in the superior court). Filing a plea of title
operates to stay the circuit court's eviction
proceedings. N.H. Rev. Stat. Ann. § 540:18.
as their plea of title, on November 28, 2016, the Browns
filed this action in the Hillsborough County Superior Court.
This complaint, through factual allegations that are almost
word-for-word identical to those in the Browns' first
complaint, challenges the validity of the foreclosure sale
and asserts claims against the same two defendants for
violations of the same statutes -- RESPA, the ECOA, and New
Hampshire's UDUCPA. The only substantive difference
between this complaint and that in Brown I is replacement of
the Browns' dismissed claim for violation of the duty of
good faith and fair dealing with a claim for breach of
fiduciary duty based on the foreclosure sale, which had
already occurred when plaintiffs filed their Brown I
complaint. In short, the basis for the Browns' challenge
to defendants' title is precisely the same claims that
this court dismissed as barred by N.H. Rev. Stat.
Ann. § 479:25, II -- their claims challenging the
validity of the foreclosure.
Defendants' motion to dismiss
plaintiffs' complaint in this new action raises three
categories of claims: (1) claims challenging FNMA's
foreclosure and seeking injunctive relief, which the court
dismissed in its order in the earlier action; (2) claims for
damages under RESPA and the ECOA, which the court allowed to
proceed in the earlier action; and (3) a new claim against
both defendants for breach of fiduciary duty based on the
foreclosure sale. None of these categories survives
defendants' motion to dismiss.
defendants cogently explain, issue preclusion bars the
plaintiffs' claims challenging FNMA's foreclosure
(counts 1 and 2). Under federal common law, which applies
here, see Glob. NAPs, Inc. v. Verizon New England
Inc., 603 F.3d 71, 95 (1st Cir. 2010), a previous
adjudication estops the litigation of an issue if the
following criteria are established:
(1) an identity of issues (that is, that the issue sought to
be precluded is the same as that which was involved in the
prior proceeding), (2) actuality of litigation (that is, that
the point was actually litigated in the earlier proceeding),
(3) finality of the earlier resolution (that is, that the
issue was determined by a valid and binding final judgment or
order), and (4) the centrality of the adjudication (that is,