United States District Court, D. New Hampshire
F. Skinner, III, Esq. Michael Joseph Reed, Esq. Kevin P.
J. MCAULIFFE, UNITED STATES DISTRICT JUDGE
January of 2018, defendant, PennyMac Loan Services, LLC
(“PennyMac”) foreclosed the mortgage deed to
plaintiffs' home. Seven months later, plaintiffs, Robert
and Debra Carideo, brought this action seeking to recover for
various injuries and harms they say PennyMac inflicted upon
them. PennyMac moves the court to dismiss all claims advanced
against it, asserting that none states a viable cause of
action. For the reasons given, that motion is granted in part
and denied in part.
ruling on a motion to dismiss under Fed.R.Civ.P. 12(b)(6),
the court must “accept as true all well-pleaded facts
set out in the complaint and indulge all reasonable
inferences in favor of the pleader.” SEC v.
Tambone, 597 F.3d 436, 441 (1st Cir. 2010). Although the
complaint need only contain “a short and plain
statement of the claim showing that the pleader is entitled
to relief, ” Fed.R.Civ.P. 8(a)(2), it must allege each
of the essential elements of a viable cause of action and
“contain sufficient factual matter, accepted as true,
to state a claim to relief that is plausible on its face,
” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(citation and internal punctuation omitted).
other words, “a plaintiff's obligation to provide
the ‘grounds' of his ‘entitlement to
relief' requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action
will not do.” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007). Instead, the facts alleged in the
complaint must, if credited as true, be sufficient to
“nudge [plaintiff's] claims across the line from
conceivable to plausible.” Id. at 570. If,
however, the “factual allegations in the complaint are
too meager, vague, or conclusory to remove the possibility of
relief from the realm of mere conjecture, the complaint is
open to dismissal.” Tambone, 597 F.3d at 442.
pertinent facts, as stated in plaintiffs' amended
complaint and as they appear in recorded, publicly-available
documents, are largely undisputed. In April of 2012,
plaintiffs obtained a loan in the principal amount of $192,
632. As security for that loan, they conveyed a first
mortgage deed to Mortgage Electronic Registration Systems,
Inc., as nominee for the lender, Alpine Mortgage, LLC. That
mortgage deed was duly recorded in the Hillsborough County
Registry of Deeds. Three years later, in May of 2015, that
mortgage was assigned to PennyMac. The assignment was also
duly recorded in the registry of deeds.
plaintiffs defaulted on the promissory note, PennyMac
instituted foreclosure proceedings. Plaintiffs did not seek
to enjoin those proceedings. See generally N.H. Rev.
Stat. Ann. (“RSA”) 479:25, II(c). On January 11,
2018, PennyMac (through a licensed auctioneer) conducted a
foreclosure sale, at which PennyMac was the high bidder. It
purchased the property for $197, 019.70 and recorded the
foreclosure deed in the registry of deeds. At the time, the
town of Pelham, New Hampshire, assessed the value of the
property at $269, 000. Amended Complaint at para. 19. Thus,
the sale price at the foreclosure auction was approximately
73 percent of assessed value.
months after the foreclosure sale, plaintiffs instituted this
action in state court. Defendant removed the proceeding to
this forum, invoking the court's diversity jurisdiction.
See 28 U.S.C. §§ 1441 and 1446. See
also 28 U.S.C. § 1332.
parties engaged in informal settlement discussions, during
which former counsel to PennyMac agreed that his client would
review plaintiffs' application for a
“post-foreclosure loan modification.” Plaintiffs
completed and submitted such an application. Approximately
two weeks later, however, current counsel for PennyMac
informed plaintiffs that, “we have discussed your
proposal with our client, but they are not inclined to review
the Plaintiffs for a loan mod post-foreclosure.” After
it became clear that settlement was unlikely, plaintiffs
filed an Amended Complaint. In turn, PennyMac filed the
pending motion to dismiss.
preliminary matter, the court notes that Plaintiffs'
Amended Complaint contains a count captioned “Fraud,
Conversion, Theft by Deception, Civil RICO, ” in which
they advance claims against several individuals and one
limited liability company (the “California
Entities”). But, plaintiffs acknowledge that they never
attempted to serve any of those individuals or the
corporation. See Suggestion of Bankruptcy (document
no. 17) (“[I]t would not make economic sense for the
beleaguered plaintiffs in this case to spend additional money
attempting to serve [the California Entities].”).
Plaintiffs have also informed the court that the California
Entities have filed for bankruptcy protection, in a
proceeding currently pending in the Central District of
California. Those parties were never properly joined as
defendants in this proceeding and, should plaintiffs wish to
pursue any claims against them, plaintiffs must, of course,
first seek leave of the bankruptcy court and obtain relief
from the automatic stay in that case. Because the California
Entities were never properly served, all claims against them
are dismissed without prejudice.
PennyMac, plaintiffs' Amended Complaint (document no. 9),
advances six state common law causes of action. The court
will address each in turn.
Count 1 - “Plea of Title”
first claim is that PennyMac lacked the legal authority to
foreclose the mortgage. Plaintiffs' reasoning is,
however, somewhat confusing. They claim that more than three
months after the foreclosure sale occurred, they
“received paperwork [from one of the California
Entities] indicating that the Mortgage was Assigned and [the]
Note was and [sic] endorsed over to West H&A and no
longer held by the Defendant PennyMac.” Amended
Complaint at para. 29. See also Exhibit C to Amended
Complaint, “Assignment of Mortgage” (document no.
9-3) (purporting to have been executed on March 19, 2018 -
well after the foreclosure sale). Perhaps not surprisingly,
however, the Amended Complaint fails to describe how a
mortgage assignment, prepared (but never recorded)
after the foreclosure sale, could have affected
PennyMac's authority to foreclose the mortgage deed.
Moreover, plaintiffs appear to acknowledge that the untimely
mortgage assignment was prepared without lawful authority as
part of the fraud scheme to which they say they fell victim
(as discussed in their claims against the California
entities). See, e.g., Amended Complaint at para. 73
(“The [California Entities] lied to the Carideos, took
their money, took their mortgage payments, gave them false
hope, false promises, and also, although it remains to be
proved, it appears that they also provided fraudulent
mortgage and note documents and caused the Carideos'
home to be taken by PennyMac.”) (emphasis supplied).
PennyMac points out: (1) the documents of record make clear
that PennyMac was the lawful holder of the mortgage deed to
plaintiffs' home when it conducted the foreclosure sale;
and (2) a post-foreclosure, fraudulent effort to transfer
that mortgage deed (or the ...