United States District Court, D. New Hampshire
Brian Goodman, Sr.
Wells Fargo Bank, N.A. and Golden West Financial Corp.
J. Goodman, Sr., pro se
Patrick Kennedy, Esq.
OPINION AND ORDER
N. LaPlante United States District Judge
mortgage-fraud case involves two properties in Concord, New
Hampshire that have been sold at foreclosure. Pro se
plaintiff Brian Goodman, Sr. alleges that two mortgage
refinancing transactions in 2007 were the product of fraud
committed by defendants or their predecessors in interest.
His Amended Complaint contains seven counts against two
defendants: 1) fraudulent misrepresentation; 2) fraudulent
concealment; 3) fraudulent inducement; 4) conversion; 5)
common law fraud; 6) unjust enrichment; and 7) a request for
injunctive relief. The court's jurisdiction is based on
diversity of citizenship. 28 U.S.C. § 1332(a).
the court are defendants' motions to
dismiss.Defendant Golden West argues that it merged
out of legal existence prior to the transactions at issue in
this case and thus can not be sued. Defendant Wells Fargo
Bank, N.A. advances several grounds for dismissal. After
reviewing the parties' submissions and state court
litigation involving the same parties and properties, and
conducting oral argument, the court grants both
defendants' motions. First, Golden West lacks the
capacity to be sued. See Fed.R.Civ.P. 17(b). Next,
plaintiff's claims against Wells Fargo are barred, in
whole or part, by: 1) the doctrines of res judicata and
collateral estoppel; and 2) the applicable statutes of
limitations. Defendants' motions are therefore granted.
See Fed. R. Civ. P. 12(b)(6) .
Applicable legal standard
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. 2010).
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). In addition to relating the
allegations in the Amended Complaint, the court also culls
background facts from the judicial findings during the
parties' prior proceedings. See Kowalski v.
Gagne, 914 F.2d 299, 305 (1st Cir. 1990) (“It is
well-accepted that federal courts may take judicial notice of
proceedings in other courts if those proceedings have
relevance to the matters at hand.”). Finally, a motion
to dismiss is an appropriate vehicle for raising and deciding
a statute of limitations defense. See, e.g., Abdallah v.
Bain Capital LLC, 752 F.3d 114, 119 (1st Cir. 2014).
Guided by these standards, the court turns first to
plaintiff's allegations and the prior proceedings.
November 2007, plaintiff refinanced two income properties he
owned in Concord, New Hampshire. First, he executed a note
and mortgage in connection with his property at 26-28 Palm
Street. The note had a face value of $185, 000,
payable to “World Savings Bank, FSB, a Federal Savings
Bank, its successors and/or assigns, or anyone to whom this
Note is transferred.” It was secured by a mortgage
granted to “World Savings Bank, FSB, its successors and
assigns.” The mortgage was recorded at the Merrimack
County Registry of Deeds.
days later, plaintiff executed a note and mortgage in
connection with his property at 14-16 Pinecrest Circle. This
note had a face value of $217, 000, also payable to
“World Savings Bank . . . its successors and/or
assignees, or anyone to whom this note is
transferred.” Plaintiff granted a mortgage to secure the
note to “World Savings Bank, its successors and/or
assigns.” This mortgage was also recorded in the
Rockingham County Registry of Deeds.
“disclaims both the authenticity and legitimacy”
of the notes and mortgages “derived through deceitful
means and filed in deceit with a state agency for purposes of
World Savings Bank merger
December 31, 2007, World Savings Bank changed its name to
Wachovia Mortgage, FSB. In 2009, Wachovia Mortgage, FSB
changed its name to Wells Fargo Southwest, N.A. and
subsequently merged with Wells Fargo Bank, N.A. Both parties
acknowledge that defendant Wells Fargo Bank, N.A. is
therefore the successor in interest to World Savings
Bank. See Park v. Wells Fargo Bank,
No., C 12-2065-PJH, 2012 WL 3309694, at *2 (N.D. Cal.
Aug. 13, 2012) (“Numerous courts have . . . concluded
that Wells Fargo is the successor to Wachovia and World
Savings.”); Nguyen v. Wells Fargo Bank, N.A.,
749 F.Supp.2d 1022, 1035 (N.D. Cal. 2010) (“[T]he
original lender, World Savings Bank, FSB, simply changed its
name to Wachovia Mortgage, FSB, and is now a division of
Wells Fargo Bank, N.A. . . .”); DeLeon v. Wells
Fargo Bank, N.A., 729 F.Supp.2d 1119, 1121 (N.D. Cal.
2010) (“World Savings had changed its name to Wachovia
Mortgage, FSB and then merged into Wells Fargo Bank,
State court litigation
or 2011, Wells Fargo began the process of foreclosure of the
two properties after plaintiff fell behind on his mortgage
payments. After several years of litigation which will be
discussed in more detail below, the properties were sold at
foreclosure in 2017.
February 2011, plaintiff, represented by counsel, sued Wells
Fargo in state court to permanently enjoin the impending
foreclosure sale of the Pinecrest Circle
property. The Court granted plaintiff temporary
injunctive relief and plaintiff began making mortgage
payments pursuant to an agreement with Wells
Fargo. Eventually, the payments stopped and
foreclosure proceedings resumed.
state court Amended Complaint, filed in January 2015,
plaintiff accused Wells Fargo of, inter alia,
fraud. He specifically alleged that Wells Fargo
used false statements to support its foreclosure efforts and
that it was not the true holder of the
mortgage. The Superior Court found that
plaintiff's defenses to foreclosure were factually
unsupported and granted summary judgment in Wells Fargo's
three-paragraph order, the New Hampshire Supreme Court
affirmed the trial court's summary judgment
ruling. It rejected, among others, the arguments
that the Superior Court erroneously concluded that “he
defaulted on his mortgage loan to the bank” and
“that there were no genuine issues of material fact
regarding whether he had defaulted, the bank had a loan in
his name, the bank held the original note, and the note had
passed to it by operation of law.” The Supreme
Court later denied plaintiff's motion for
March 2011, plaintiff, again represented by counsel, sued
Wells Fargo to enjoin the scheduled foreclosure on the Palm
Street property. The Court temporarily enjoined the
foreclosure. In addition to seeking the injunction,
plaintiff alleged in his five-count Amended
Complaint that, inter alia, Wells Fargo failed to
create a valid mortgage because it failed to pay off
plaintiff's previous mortgage and because it
“securitized” plaintiff's mortgage and
note. The latter actions, according to
plaintiff, “destroyed” the mortgage and
note. Plaintiff also alleged that Wells Fargo
violated New Hampshire's Consumer Protection Act, N.H.
Rev. Stat. Ann. § 358-A, by fraudulently misrepresenting
various terms of the mortgage agreement.
same day that it granted summary judgment in the Pinecrest
suit, the Superior Court granted Wells Fargo's motion to
dismiss the Palm Street suit. As particularly relevant to
this lawsuit, the Court held that “even if the note and
mortgage were securitized, their validity would not be
destroyed as the plaintiff suggests . . . . [S]ecuritization
of the mortgage and note does not relieve the plaintiff of
his obligation to pay under their terms and
conditions.” The Court further found that
plaintiffs' fraud allegations were barred by New
Hampshire's three-year statute of limitations, N.H. Rev.
Stat. Ann. § 508:4. And even if timely, the Court ruled
that plaintiff's Amended Complaint failed to plead facts
that amounted to fraud.
Hampshire Supreme Court affirmed the dismissal of the Palm
Street suit in a brief order. As particularly relevant here,
the Court rejected plaintiff's arguments that the trial
court erred in dismissing his fraud claim, his
securitization-related claim and his claim that Wells Fargo
did not hold the original note and mortgage.
Amended Complaint in this action, plaintiff added Golden West
Financial Corp. as a defendant. Golden West seeks
dismissal on the basis that it lacks the capacity to be sued,
having merged out of existence in 2006.
precise contours of plaintiff's claims against Golden
West are difficult to discern, beyond his noting that it was
a participant in securitizing mortgages, an act which, he
claims, forms the basis of his fraud allegations. Golden West
seeks dismissal because it merged with Wachovia Corp. (and
out of existence) in October 2006, long before plaintiff
filed this lawsuit, and more than one year before the parties
executed the mortgages at issue in this case. Thus, Golden
West argues, it lacks the capacity to be sued. See
to Fed.R.Civ.P. 17(b)(2), a corporation's capacity to be
sued is determined pursuant to the “law under which it
was organized.” Similarly, “[t]he federal courts
have held that the capacity of a dissolved corporation to sue
and be sued is determined by the law of the state in which it
was organized.” 6A Charles Allen Wright, Arthur R.
Miller & Mary Kay Kane, Federal Practice and
Procedure § 1563 (2010) (and cases cited therein).
Golden West asserts, without objection, that it was organized
under the laws of California. Under California law,
following a merger, “the separate existence of the
disappearing corporation ceases and the surviving corporation
shall . . . be subject to all the debts and liabilities of
each in the same manner as if the surviving corporation had
itself incurred them.” Cal. Corp. Code § 1107
does not dispute that Golden West merged out of existence
before he filed this lawsuit. Indeed, he acknowledges that
the mergers of Golden West with Wachovia and Wachovia with
Wells Fargo means that “all allegations and claims made
against World Savings Bank . . . Golden West and Wachovia are
hereby consolidated and directly lodged against Wells Fargo
Bank, N.A., as successor in interest.” Rather than
disputing the fact that Golden West merged out of existence
prior to the relevant events in this case, plaintiff asserts
that counsel's act of filing the instant motion somehow
resurrects the putative defendant. But plaintiff cites no
authority for this position, nor can the court locate
any. Accordingly, the entity formerly known
as Golden West lacks the capacity to be sued and its motion
to dismiss must be granted.
Fargo asserts several grounds for dismissal. The court
addresses them in turn.
Fargo first argues that all of plaintiff's claims in this
lawsuit are barred by the doctrine of res judicata, based on
the two prior state court judgments. As discussed in more
detail below, the state court rulings conclusively
established the non-fraudulent validity of both the Pinecrest
and Palm Street transactions. Plaintiff's claims are
federal law, a state court judgment receives the same
preclusive effect as it would receive under the law of the
state in which it was rendered.” Dillon v. Select