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Castleberry v. Wells Fargo Bank Home Mortgage

United States District Court, D. New Hampshire

November 20, 2017

Glenda Castleberry and Leah Boyd
Wells Fargo Home Mortgage

          Glenda Castleberry, pro se

          Leah Boyd, pro se

          David D. Christensen, Esq.

          Timothy Ryan Demarco, Esq.


          Joseph N. Laplante United States District Judge

         In this mortgage-based action, plaintiffs Glenda Castleberry and Leah Boyd, proceeding pro se, again[1] seek to enjoin the foreclosure on property in Somersworth, New Hampshire. They sued the mortgage-holder and servicer of the mortgage secured by that property, Wells Fargo Bank, N.A., [2] in Strafford County Superior Court. Wells Fargo removed the action to this court, See 28 U.S.C. § 1441, which has jurisdiction under 28 U.S.C. § 1332 (diversity).

         The court draws the following facts from the complaint and from documents sufficiently referenced therein, construing them in the plaintiffs' favor. See Martino v. Forward Air, Inc., 609 F.3d 1, 2 (1st Cir. 2010) (The court must “accept as true all well-pleaded facts in the complaint and make all reasonable inferences in plaintiff's favor.”); Rederford v. U.S. Airways, Inc., 589 F.3d 30, 35 (1st Cir. 2009) (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.”). It also draws on the facts set forth in its order dismissing an action filed by Boyd in 2016 to prevent foreclosure on the same property. Boyd, 2016 DNH 156, 1-3.

         Castleberry purchased a four-unit house in Somersworth in August, 2009. Boyd, 2. Castleberry took out the mortgage and signed the accompanying note. Id. After the mortgage and the warranty deed conveying the property to her were recorded with the Strafford County Registry of Deeds, Castleberry conveyed the property to herself and Boyd, her daughter, through a warranty deed. Id. Boyd resided in one of the property's units; Castleberry rented out the other three units. Id.

         At some point prior to Boyd's 2016 action, some of those tenants stopped paying rent and, lacking funds to make mortgage payments, Castleberry defaulted.[3] Wells Fargo initiated foreclosure proceedings. Boyd filed that action seeking to quiet title and to enjoin the foreclosure sale so that she could obtain rent withheld by the tenants, which she would use to make mortgage payments. Id. at 4. Concluding that Boyd may have lacked standing to challenge the foreclosure's validity as a non-party to the mortgage agreement, see Fed. R. Civ. P. 12(b)(1), and that, in any event, she failed to state a claim upon which it could grant relief, see id. 12(b)(6), the court granted Wells Fargo's motion to dismiss that action. Boyd, 2016 DNH 156, 4-7.

         Eight months later, Boyd and Castleberry together filed this action seeking to enjoin Wells Fargo's renewed foreclosure proceedings. Plaintiffs allege that, due to the tenants' nonpayment, Castleberry fell behind on the mortgage.[4] After the court dismissed Boyd's previous action, they contacted the defendant in an effort to obtain a loan modification.[5] They allege that they “have not been given enough time to do the loan modification, ” that Wells Fargo “keep[s] switching [them] around and saying [it is] doing something but [Castleberry and Boyd] just get the runaround when [they] ask for answers, ” and that “the only reason [the loan modification] has not gone through is because [Wells Fargo] keep[s] telling [them] they need more documents or something else.”[6] Much as Boyd did through her last action, they seek an injunction preventing Wells Fargo from foreclosing so that they have time to: (1) evict non-paying tenants and/or get their tenants to pay rent, (2) obtain Social Security Income benefits for Boyd, and (3) “have a judge decide who really even owns the home”[7] in light of the post-mortgage warranty deed conveying the property to both Castleberry and Boyd.

         Wells Fargo removed the case to this court and now moves to dismiss the complaint, arguing that the plaintiffs fail to state a cognizable claim for relief. See Fed. R. Civ. P. 12(b)(6). Boyd filed a brief objection, [8] to the effect that she could “prove property rights are that of Leah Boyd's, ” but that she “need[s] Wells Fargo to speak and cooperate with [her] to resolve this matter . . . .”[9] The court held oral argument on Wells Fargo's motion on October 26, 2017 and afforded the plaintiffs an opportunity to articulate any further objections at that time.

         The court may dismiss a complaint under Rule 12(b)(6) if the plaintiffs have not alleged facts sufficient to “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Even construing the plaintiffs' pro se complaint liberally, see Erickson v. Pardus, 551 U.S. 89, 94 (2007), the court concludes that they have not done so here.

         Reading their complaint generously, the plaintiffs attempt to bring a claim for breach of the covenant of good faith and fair dealing. That is, they allege that they have sought a loan modification and that Wells Fargo is failing to cooperate in the loan modification process. But the plaintiffs allege that Castleberry defaulted on the loan.[10] And “New Hampshire imposes no duty to forebear from foreclosure in the face of default.” Frangos v. Bank of Am., N.A., No. 13-CV-472-PB, 2014 WL 3699490, at *4 (D.N.H. July 24, 2014). As this court has explained faced with similar allegations, “the covenant of good faith and fair dealing in a loan agreement cannot be used to require the lender to modify or restructure the loan.” Moore v. Mortg. Elec. Registration Sys., Inc., 848 F.Supp.2d 107, 130 (D.N.H. 2012). Though the plaintiffs' frustration at their perceived inability to obtain a direct answer or consistent information from the defendant concerning its willingness to modify the loan is understandable, [11] the plaintiffs have not, therefore, stated a claim for relief through those allegations.

         As this court has previously noted, Boyd's attempt to establish her ownership of the property “may amount to a petition to quiet title to the property.” Boyd, 2016 DNH 156, 5. Through such an action, a plaintiff “essentially seeks a declaratory judgment from the court regarding the parties' land interests.” Porter v. Coco,154 N.H. 353, 357 (2006). The plaintiffs raise an identical issue in this action, alleging that “it's not clear if [Boyd] in fact has the right to take the house free of Wells Fargo because they put her on the deed not the mortgage, ” as a result of which they “need time to go to court to have a judge decide who really even owns the home.”[12]As the court previously explained, “[w]hile the deed conveying the property to Castleberry and Boyd may well give Boyd an interest in the property, any such interest was subject to the pre-existing mortgage and its conditions, which included the possibility of foreclosure in ...

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