United States District Court, D. New Hampshire
McCafferty United States District Judge.
Thomas Frangos brought suit in state court against Defendants
The Bank of New York Mellon, as trustee for the
Certificateholders of CWABS, Inc., Asset Back Certificates,
Series 2005-AB2 (“BNY”), and New Penn Financial,
LLC d/b/a Shellpoint Mortgage Servicing
(“Shellpoint”), seeking to enjoin the foreclosure
sale of his home. BNY and Shellpoint removed the case to this
court. Plaintiff subsequently amended his complaint to
include additional allegations and claims, and to add Bank of
America, N.A. (“BOA”) as a defendant. Plaintiff
has filed a motion to stay proceedings and a motion to join
the Frances Ann Frangos 2002 Revocable Trust u/t/d March 12,
2002 (“Trust”) as an indispensable party.
Defendants object. For the reasons that follow, the court
denies both of plaintiff's motions.
April 2005, plaintiff executed a promissory note in favor of
Optima Mortgage Corporation (“Optima”) in
exchange for a loan of $599, 000. The note was secured by a
mortgage, which plaintiff and Frances Frangos, his wife,
executed in favor of Mortgage Electronic Registration
Systems, Inc. (“MERS”), as nominee for Optima.
The mortgaged property is located in Portsmouth, New
parties disagree over the chain of title to the property. In
his complaint, plaintiff alleges that, by virtue of an April
2003 deed, the Trust holds title to the property. Disputing
this allegation, BNY and Shellpoint point to a quitclaim deed
dated May 2, 2005, in which plaintiff, as trustee of the
Trust, conveys the property to plaintiff, “a married
man.” Doc. no. 27-6 at 2 of 5. Based on this
quitclaim deed, it appears that plaintiff obtained title to
the property shortly after the mortgage was executed. In
response, however, plaintiff claims that (1) he was never
trustee of the Trust, so the May 2, 2005 deed is invalid; and
(2) regardless, there is a third deed, dated May 15, 2005,
“return[ing] the real estate from [plaintiff]
individually to himself as trustee of the Trust.” Doc.
no. 46 at 2.
case, in November 2007, plaintiff filed for Chapter 7
bankruptcy. During that proceeding, plaintiff and Countrywide
Home Loans, Inc. (“Countrywide”), then the
servicer of plaintiff's loan, executed a reaffirmation
agreement. In the agreement, plaintiff reaffirmed the
outstanding debt on his mortgage loan. The bankruptcy
proceeding closed in January 2009. At some point in 2009,
plaintiff stopped making mortgage payments. See Frangos
v. Bank of America, N.A., 826 F.3d 594, 595 (1st Cir.
2011, BNY came to hold both the note and mortgage. Meanwhile,
the servicer of plaintiff's loan changed from Countrywide
to BOA, and then, finally, to Shellpoint. In 2013, after
negotiations over loan restructuring failed, BNY attempted to
foreclose on the property. Id. In response,
plaintiff and Frances Frangos filed suit against defendants
in state court and obtained a preliminary injunction barring
the sale. Id. Defendants removed the case to this
court, and Judge Barbadoro granted summary judgment in favor
of defendants. See Id. at 595-96. In June 2016, the
First Circuit affirmed the grant of summary judgment.
Id. at 594, 597-98. The court refers to this first
action as “Frangos I.”
August 2016, BNY and Shellpoint notified plaintiff that a
foreclosure sale was scheduled for September 23. Plaintiff
again filed suit in state court and obtained an ex parte
injunction barring the sale. Defendants removed the case to
this court and then filed motions to dismiss. Plaintiff
thereafter filed the instant motions to stay and to join the
Trust as an indispensable party.
plaintiff's motions are founded on his argument that the
mortgage is void because the Trust held title to the property
at the time the mortgage was executed. He moves to stay
proceedings so that, in the bankruptcy court, he can seek to
invalidate the mortgage and reaffirmation agreement. He notes
that the bankruptcy court has already granted his motion to
reopen his 2007 case on this ground. Plaintiff further moves
to join the Trust as an indispensable party under Rule 19 of
the Federal Rules of Civil Procedure. The court considers
each motion in turn.
Motion to Stay Proceedings
courts “possess the inherent power to stay [a case] for
prudential reasons.” Microfinancial, Inc. v.
Premier Holidays Int'l, Inc., 385 F.3d 72, 77 (1st
Cir. 2004). The pendency of related proceedings “can
constitute such a reason.” Id. A district
court's discretionary power to stay “should be
invoked when the interests of justice counsel in favor of
such a course.” Id. at 78. Relevant factors
include “(1) potential prejudice to the non-moving
party; (2) hardship and inequity to the moving party without
a stay; and, (3) judicial economy.” Good v. Altria
Grp., Inc., 624 F.Supp.2d 132, 134 (D. Me. 2009); see
also Microfinancial, Inc., 385 F.3d at 78. The
movant bears the burden of demonstrating that “a stay
is appropriate.” Emseal Joint Sys., Ltd. V. Schul
Int'l Co., LLC, No. 14-cv-358-SM, 2015 WL 1457630,
at *1 (D.N.H. Mar. 27, 2015); see also Microfinancial,
Inc., 385 F.3d at 77.
has failed to establish that a stay is appropriate under
these circumstances. He has not argued that he will suffer
either hardship or inequity in the absence of a stay. His
sole argument is one of judicial economy. He asserts that if
the bankruptcy court determines that “the reaffirmation
agreement and the mortgage are invalid, many of [his] claims
in this litigation will be or could be affected.” Doc.
no. 34 at ¶ 3. However, plaintiff does not
explain how the bankruptcy court's determination on the
invalidity of the reaffirmation agreement will resolve any of
his claims before this court. Nor does plaintiff provide any
reason why the bankruptcy court is the more appropriate or
convenient forum in which to litigate the validity of the
mortgage, especially given that BNY and Shellpoint are
actively litigating that very issue as part of their pending
motion to dismiss, see doc. no. 27-1 at 13-19.
Plaintiff's argument regarding judicial economy is
conclusory and therefore unpersuasive.
there is a potential for a stay to cause prejudice to
defendants, each of whom asserts an interest in the
expeditious resolution of the action. Plaintiff has
apparently not made a mortgage payment since 2009. See
Frangos, 826 F.3d at 595. When BNY attempted to
foreclose in 2013, plaintiff instituted Frangos I. See
Id. Defendants waited until June 2016 to receive a
favorable decision from the First Circuit. Because defendants
have already proceeded through a full round of litigation