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Hynes v. Bank of New York Mellon

United States District Court, D. New Hampshire

November 4, 2019

Samuel Hynes and Lisa Hynes
v.
Bank of New York Mellon et al.

          ORDER

          LANDYA MCCAFFERTY UNITED STATES DISTRICT JUDGE

         In a case that was removed from the New Hampshire Superior Court, Rockingham County, Samuel and Lisa Hynes bring suit against New Penn Financial, LLC d/b/a Shellpoint Mortgage Servicing (“Shellpoint”) and the Bank of New York Mellon f/k/a The Bank of New York, as Trustee for the Certificate Holders of CWABS, Inc. Asset Backed Certificate Series 2007-13 (“Bank of New York”), alleging claims arising out of defendants' alleged misrepresentations in connection with their mortgage agreement and a loan modification agreement. Plaintiffs also allege that defendants acted in bad faith and without due diligence in connection with the foreclosure sale of plaintiffs' home, which resulted in the home being sold at below fair market value. Defendants move for summary judgment on all of plaintiffs' claims. Plaintiffs object in part.

         STANDARD OF REVIEW

         A movant is entitled to summary judgment if it “shows that there is no genuine dispute as to any material fact and [that it] is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In reviewing the record, the court construes all facts and reasonable inferences in the light most favorable to the nonmovant. Kelley v. Corr. Med. Servs., Inc., 707 F.3d 108, 115 (1st Cir. 2013).

         BACKGROUND [1]

         In July 2007, plaintiffs executed a promissory note in favor of Countrywide Home Loans, Inc. (“Countrywide”) in the amount of $115, 000 in connection with refinancing a loan. That same day, plaintiffs granted a mortgage on their home in Londonderry, New Hampshire (the “property”) to Countrywide to secure the loan, with Mortgage Electronic Registration Systems, Inc. as the mortgagee in its capacity as nominee for Countrywide. The mortgage was eventually assigned to Bank of New York, with Shellpoint acting as the loan servicer. Plaintiffs defaulted on their obligations under the mortgage and last made a mortgage payment in March 2017. On November 6, 2017, plaintiffs received a Notice of Foreclosure for the property, which listed a sale date of December 27, 2017.

         On December 7, 2017, plaintiffs retained the services of a “loss mitigation specialist” named Douglas Mesquita to help apply for mortgage assistance. Mesquita assisted plaintiffs in their efforts to obtain a loan modification agreement, contacting Shellpoint several times and submitting paperwork on plaintiffs' behalf.

         Shortly before the date of the scheduled foreclosure sale, and after submitting a completed application for a loan modification agreement on plaintiffs' behalf to Shellpoint, Mesquita spoke with a Shellpoint representative and requested that the sale be postponed. The representative explained several times that she had submitted a request for the foreclosure sale to be postponed but could not guarantee that it would be postponed.

         The foreclosure sale took place as scheduled on December 27, 2017. There was “snow on the ground and a forecast high well below freezing at 18 degrees.”[2] Doc. no. 13 at ¶ 32. Bank of New York purchased the property for $127, 639. This action followed.

         DISCUSSION

         Plaintiffs assert six claims: two counts of breach of the duty of good faith and due diligence arising out of the foreclosure sale (Counts I and II); breach of the covenant of good faith and fair dealing in the mortgage agreement (Count III); negligent misrepresentation (Count IV); promissory or equitable estoppel (Count V); and “standing” (Count VI). Defendants move for summary judgment on all of plaintiffs' claims.

         I. Counts III-VI

         Counts III-VI arise out of plaintiffs' allegations in their amended complaint that Shellpoint represented to Mesquita that the foreclosure sale would not take place as scheduled. In their summary judgment motion, defendants pointed to evidence in the record, including plaintiffs' and Mesquita's deposition testimony, as well as audio recordings of a phone call between Mesquita and a Shellpoint representative, which shows that Shellpoint never made such a representation.

         In their objection, plaintiffs acknowledge this evidence and agree that defendants are entitled to judgment on Counts III-VI. Therefore, ...


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