United States District Court, D. New Hampshire
OPINION AND ORDER
N. LAPLANTE UNITED STATES DISTRICT JUDGE.
Janet Saunders and Peter Saunders have sued numerous banks,
bank officials, attorneys and other individuals and
businesses challenging, inter alia, the legitimacy of the
promissory note and mortgage executed (or, as they allege,
purportedly executed) in 2005 in connection with their
purchase of a home in Kingston, NH, the previous year. Their
Amended Complaint asserts claims of conversion, unjust
enrichment, intentional infliction of emotional distress as
well as substantive RICO violations and a RICO conspiracy claim
against roughly 50 individual and corporate defendants and 39
the court are separate motions to dismiss filed by five
groups of defendants. After reviewing the parties'
submissions and conducting oral argument,  the court finds
that plaintiffs have failed to state a claim upon which
relief can be granted. See Fed.R.Civ.P. 12(b)(6).
Defendants' motions are therefore granted.
Applicable legal standard
state a claim for relief and withstand a motion to dismiss,
the plaintiff must plead “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). 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.
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
quotations omitted). Guided by these standards, the court
turns to the operative Amended Complaint.
court previously found that plaintiffs' 451-page, 881
paragraph Verified Complaint violated Fed.R.Civ.P. 8(a)(2)
and ordered plaintiffs to file a Complaint in conformance
with the federal rules. The plaintiffs did so in a timely
manner.While the latter document is the operative
Complaint, the court has carefully reviewed the
plaintiffs' original Complaint (doc. no. 1) and Verified
Complaint in an abundance of caution in recognition of their
pro se status. Moreover, as indicated in the opening
paragraph of the operative Amended Complaint, the plaintiffs
have incorporated by reference the “rejected”
Verified Complaint. The court relies on that document, which
it refers to as the “Verified Complaint, ” for
certain background facts.
plaintiffs purchased a home in Kingston, New Hampshire, in
2004. In 2005, plaintiffs executed a mortgage and note for
$392, 000. Plaintiff Peter Saunders executed the
mortgage but did not sign the note. The lender was defendant
First Magnus Financial Corp.,  while the mortgage was held by
Mortgage Electronic Registration Systems, Inc.
(MERS). In December 2009, MERS, on the
lender's behalf, assigned the mortgage to Wachovia Bank,
which subsequently merged with defendant Wells Fargo.
Saunders fell behind on her repayment obligations in late
2009, and her modification requests were
denied. Wells Fargo then set a foreclosure date
of December 27, 2010, in response to which plaintiffs moved
to enjoin the foreclosure (in addition to seeking damages for
other alleged Wells Fargo actions) in state Superior
Court. In separate orders in 2013 and 2014, the
Superior Court dismissed all of plaintiffs' claims
against Wells Fargo. Saunders v. Wells Fargo, N.A.,
No. 218-2010-CV-1457 (N.H. Super. June 12, 2013 and Feb.
6, 2014). The New Hampshire Supreme Court affirmed those
rulings. Saunders v. Wells Fargo, 2015 WL 11071265
(Feb 12, 2015). In so doing, the Court described the
Saunders's arguments as: 1) Wells Fargo lacked the right
to foreclose; 2) MERS's assignment was voidable due to
false and forged documentation; 3) the Saunders's were
defrauded “right from the beginning of the
contract”; and 4) extrinsic fraud voids the Superior
the New Hampshire Supreme Court's decision, Wells Fargo
again attempted to foreclose. Four days before the scheduled
sale, the Saunders' gifted the property to a friend,
Barbara Hagan. Nevertheless, Wells Fargo purchased the
property at foreclosure, and, on March 31, 2016, served an
eviction notice on plaintiffs. Approximately two months
later, the Saunders' filed suit in this court, which they
voluntarily dismissed within a few months, and again filed
suit in January 2017. The operative five-count amended
complaint (doc. no. 82) was filed in August 2017. The
Complaint, though presumably filed in good faith by the pro
se plaintiffs, is essentially a “[50-page and
originally a 451-page] hodge podge of conclusory allegations
about the process of securitizing . . . mortgages and
reselling them to investors.” See Lariviere v. Bank
of N.Y. as Tr., No. CIV.9-515-P-S, 2010 WL 2399583, at
*4 (D. Me. May 7, 2010), report and recommendation adopted,
No. CIV.09-515-P-S, 2010 WL 2399556 (D. Me. June 11, 2010).
the operative Amended Complaint, , the Verified Complaint,
and plaintiffs' specific allegations have been difficult
for the court to comprehend and accordingly, to evaluate for
sufficiency under Rule 12(b)(6). In an abundance of caution,
and in deference to plaintiffs' pro se status, the court
has taken these claims at face value, and evaluates them as
they are named and characterized by the plaintiffs: claims of
1) conversion; 2) unjust enrichment; 3) intentional
infliction of emotional distress; and 4) civil RICO.
Conversion (Count 1)
is an intentional exercise of dominion or control over a
chattel which so seriously interferes with the right of
another to control it that the actor may justly be required
to pay the other the full value of the chattel.”
Muzzy v. Rockingham Cty. Trust Co., 113 N.H. 520,
523 (1973). “The gist of the action of conversion is
the proof of wrongful deprivation of property to one entitled
to possession.” Pac. & Atl. Shippers, Inc. v.
Schier, 109 N.H. 551, 554 (1969).
claim that the defendants all played a role in converting the
note Janet Saunders signed in 2005. The basis of their claim
is that by “securitizing” the note, the
defendants converted Janet Saunders's
property. The Saunders's conversion claim
fails for two reasons: (1) because the mortgage -- signed by
both plaintiffs -- explicitly states that it and the note can
be sold; and (2) because the execution of a promissory note
does not confer a right of possession to personal property
during the pendency of the underlying debt, thus rendering a
conversion of the note legally impossible under the facts
the first point, the mortgage contains the following
provision: “The Note or a partial interest in the Note
(together with [the Mortgage]) can be sold one or more times
without prior notice to Borrower.” Thus, even if
the court were to accept the dubious proposition that the
sale of the note was a “deprivation of property,
” it was not “wrongful” according its own
and more fundamentally, a conversion claim does not lie under
these facts, as courts have repeatedly rejected the
Saunders's claim of right to possession of the note or
that securitization somehow invalidates the obligation
contained therein. See, e.g., Bukhari v. T.D. Serv.
Co., No. 2:10-cv-000578-GMN-PAL, 2010 WL 2762794, *5 (D.
Nev. July 13, 2010) (“Plaintiff's conversion claim
is without merit. . . . [H]e was the maker of the promissory
note.... As to [him], the promissory note therefore
represented an obligation, not property or a right, and it is
legally impossible for any action with respect to the
promissory note to constitute conversion of anything owned
by [him].”); Feller v. Indymac Mtg. Servs.,
No. 09-5720 RJB, 2010 WL 342187, *3 (W.D. Wash. Jan. 26,
2010) (holding that plaintiff failed to state a claim for
conversion of a promissory note by her lender because
“she has an obligation to pay the bearer of the note,
which was IndyMac . . . The note is not property of the
Plaintiff.”); Rieger v. Wells Fargo Bank,
N.A., No. 3:13-CV-00749 JSC, 2013 WL 3835815, *7 (N.D.
Cal. July 23, 2013) (quoting Bukhari and stating “[t]he
same is true here”); see also, Andersen v. LaSalle
Bank, N.A., No. 15-30107-MGM, 2016 WL 3093375 at *5 (D.
Mass. June 1, 2016) (Mastroianni, J.); (“While
securitization has many consequences, it did nothing to
affect Plaintiff's rights and obligations under the Note
and Mortgage.”); Orellana v. Deutsche Bank
Nat'l Trust Co., No. 12-11982-NMG, 2013 WL 5348596
at *4 (D. Mass. Aug. 30 2013) (Boal, Mag. J.)
(“[S]ecuritization by itself does not render a
foreclosure invalid. . . . Orellana does not allege that he
made unsuccessful attempts to pay down his loan, and fails to
cite to any authority in support of his legal theories . . .
Accordingly, the securitization of Orellana's note, by
itself, does not support a claim for wrongful
foreclosure.”) (Report and Recommendation adopted by
Gorton, J., Sept. 20, 2013). Plaintiffs provide no contrary
facts alleged, no conversion occurred as a matter of law.
Accordingly, Count 1 must be dismissed.
Unjust enrichment (Count 2)
Count 2, plaintiffs claim that “every iota of
compensation earned by any Party - be it direct fee, referral
fee, commission or override - who participated, directly or
indirectly, in Plaintiffs' transaction - constituted
enrichment is an equitable remedy, found where an individual
receives ‘a benefit which would be unconscionable for
him to retain.'” Clapp v. Goffstown Sch.
Dist., 159 N.H. 206, 210 (2009)(quoting Kowalski v.
Cedars of Portsmouth Condo Ass'n, 146 N.H. 130, 133
(2001)) (emphasis in original). Plaintiffs' claim suffers
from two legal defects and must be dismissed.
the Saunders's unjust enrichment claim is premised on
their conversion claim, which the court has already found to
be legally insufficient. See Amended Complaint, doc no. 82,
¶ 66 (“Unjust enrichment has occurred specifically
as a result of multiple acts of conversion . . . .”).
Again, on the facts alleged, no conversion occurred as a
matter of law.
under New Hampshire law, the court “cannot allow
recovery under a theory of unjust enrichment when there is a
valid, express contract covering the subject matter at
hand.” Axenics, Inc. v. Turner Constr. Co.,
164 N.H. 659, 669-70 (2013). Here, the parties'
relationship is based on, and is governed by, the terms of
the mortgage and note, pursuant to which, as previously
noted, “[t]he Note or a partial interest in the Note
(together with [the Mortgage]) can be sold one or more times
without prior notice to Borrower.” Thus, not
only is there a contract governing the parties' mortgage
loan-related relationship, the express language of that
contract undercuts any claim of unconscionability on the part
of any other defendant involved in the securitization of the
Saunders's mortgage. And while the plaintiffs argue that
any purported contract was void ab initio due to the
lender's fraudulent failure to disclose that their
mortgage would be unlawfully converted through
securitization, the court has already concluded that on the
facts alleged, there was no conversion as a matter of
law. Count 2 is therefore dismissed.
Intentional infliction of emotional distress (Count 3)
next claim that the defendants intentionally caused them
severe emotional distress by engaging in foreclosure-related
actions despite having no legal right to do so.
order to set forth a claim for intentional infliction of
emotional distress, a plaintiff must allege that a defendant
“by extreme and outrageous conduct, intentionally or
recklessly cause[d] severe emotional distress to
another.” Morancy v. Morancy,134 N.H. 493,
496 (1991) (quotation omitted). “In determining whether
conduct is extreme and outrageous, it is not enough that a
person has acted with an intent which is tortious or even
criminal, or that he has intended to inflict emotional
distress, or even that his conduct has been characterized by
malice.” Mikell v. Sch. Admin. Unit No. 33,
158 N.H. 723, 729 (2009) (citation and quotations omitted).
Rather, “[l]iability has been found only where the
conduct has been so outrageous in character, and so extreme