Doody et al v. Bank of America, N.A. et al
ORDER granting 61 Motion to Dismiss. See attached ruling and order for details. Signed by Judge Robert N. Chatigny on 10/5/2021. (Salah, M.)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
JAMES J. DOODY, III et al.,
BANK OF AMERICA, N.A., FEDERAL
NATIONAL MORTGAGE ASSOCIATION,
and SETERUS, INC.,
Case No. 3:19-cv-1191 (RNC)
RULING AND ORDER
Plaintiff James Doody brings this action for alleged
unlawful conduct relating to enforcement of a mortgage on his
home, including in connection with foreclosure proceedings in
Connecticut Superior Court.
Four counts remain pending against
defendant Bank of America, N.A. (“BANA”).
dismiss all counts.
BANA has moved to
For reasons that follow, the motion is
Plaintiff James J. Doody, III refinanced the mortgage on
his home in Branford in July 2013.
ECF No. 1 ¶ 5.
assigned the mortgage to the Federal National Mortgage
Association (“FNMA”), but continued to service the mortgage
until around September 2015, at which time defendant Seterus
took over servicing from BANA.
Id. ¶ 9.
From December 2013 through June 2014, plaintiff failed to
make the $969.30 monthly payments on the mortgage.
Id. ¶ 5-6.
In July 2014, plaintiff resumed making monthly payments of
In September 2014, BANA initiated a foreclosure action
in the Superior Court for the Judicial District of New Haven
claiming that plaintiff was in default because his renewed
monthly payments failed to cover the seven-month arrearage.
Fed. Nat’l Mortg. v. Doody, No. CV146049727, 2018 WL 3511216, at
*1 (Conn. Super. Ct. June 29, 2018).
Beginning in January 2015, plaintiff paid an increased
monthly amount of $1,542.77 to cure the arrearage.
2015, before the arrearage was cured, plaintiff resumed paying
the original amount of $969.30.
Seterus (which took over
servicing of the mortgage from BANA in 2015) apparently
accepted, or at least did not return, any of these payments
until January 2016, at which time it began rejecting them.
The foreclosure action subsequently went to trial.
2018, the Superior Court entered judgment in favor of Mr. Doody,
finding that FNMA (which at that point owned the mortgage)
failed to prove by a preponderance of the evidence that the
mortgage was in default.
Id. at *2.
Plaintiff alleges that the defendants intentionally failed
to apply any of the mortgage payments he made from July 2014
through December 2016, ECF No. 1 ¶¶ 10-11; and that this led
them to repeatedly mischaracterize the outstanding balance.
He also alleges that the defendants have inaccurately
notified credit reporting agencies that no payments have been
made since July 2014, resulting in a “serious delinquency.”
Plaintiff further alleges that, despite the judgment in
the foreclosure action, defendants continue to send him
inaccurate mortgage statements and continue to report to credit
agencies that he is in default.
Id. ¶¶ 17-20.
Under Rule 12(b)(6), a complaint is properly dismissed when
it fails to state a claim upon which relief may be granted.
withstand a properly supported motion to dismiss, a complaint
must present a claim that is “plausible on its face.”
v. Iqbal, 556 U.S. 662, 678 (2009).
The plausibility standard
requires a plaintiff to provide factual allegations permitting a
reasonable inference that the defendant is liable for the
In his brief in opposition, plaintiff has winnowed his
claims against BANA to the following four: breach of contract,
promissory estoppel, breach of the duty of good faith and fair
dealing, and vexatious litigation. 1
BANA argues that the first
BANA requests that the Court enter an order formally dismissing the
claims that plaintiff has abandoned. ECF No. 77 at 1. Because Rule
41(a)(1)(A)(i) allows a plaintiff to voluntarily dismiss an action, or part
of an action, before a defendant serves either an answer or a motion for
summary judgment, and because only motions to dismiss have been filed here,
three claims are barred by res judicata because plaintiff could
have, but did not, plead these claims as counterclaims in the
BANA argues that the vexatious litigation
claim, which is predicated on the foreclosure action, must be
dismissed because plaintiff has not shown that the action lacked
Both arguments are well-founded.
Under the doctrine of res judicata, a litigant cannot
reassert in a later action a claim that has or could have been
decided on the merits in an earlier action against the same
party or its privies.
See Corey v. Avco-Lycoming Div., Avco
Corp., 163 Conn. 309, 317, 307 A.2d 155 (1972).
courts . . . accord state judgments the same preclusive effect
those judgments would have in the courts of the rendering state.
. . .”
Hoblock v. Albany Cty. Bd. of Elections, 422 F.3d 77, 93
(2d Cir. 2005).
Connecticut has adopted a transactional test to
determine whether a later action involves a claim that could
have been raised in an earlier action.
A claim is barred if it
implicates the “rights of the plaintiff to remedies against the
plaintiff’s voluntary withdrawal is sufficient and does not require a court
order. See Lindquist v. Murphy, No. 3:15-CV-0870 (CSH), 2015 WL 6692244, at
*2 (D. Conn. Nov. 3, 2015) (collecting cases and noting that motions to
dismiss do not preclude voluntary withdrawal under Rule 41); Blaize-Sampeur
v. McDowell, No. 05CV4275(JFB)(ARL), 2007 WL 1958909, at *2 (E.D.N.Y. June
29, 2007) (“[D]istrict courts within the Second Circuit have since adopted
the approach of the majority of courts in other circuits — that is, that Rule
41(a) does not require dismissal of the action in its entirety. . . .”).
defendant with respect to all or any part of the transaction, or
series of connected transactions, out of which the [earlier]
Orselet v. DeMatteo, 206 Conn. 542, 546, 539
A.2d 95, 97 (1988).
Connecticut courts define a transaction
“pragmatically, giving weight to such considerations as whether
the facts are related in time, space, origin, or motivation,
whether they form a convenient trial unit, and whether their
treatment as a unit conforms to the parties’ expectations or
business understanding or usage. . . .”
res judicata is predicated on a prior foreclosure action, the
transactional test operates to bar claims that “have a
sufficient connection to the making, validity or enforcement of
the note and mortgage.”
App. 595, 605 (2014).
CitiMortgage, Inc. v. Rey, 150 Conn.
See Tanasi v. Citimortgage, Inc., 257 F.
Supp. 3d 232, 255 (D. Conn. 2017).
The transactional test is
met here because plaintiff’s claims against BANA for breach of
contract, promissory estoppel and breach of the duty of good
faith and fair dealing all relate to whether BANA was entitled
to foreclose on the mortgage loan.
Plaintiff argues that res judicata does not apply because
he did not have an opportunity to raise his claims in the
However, at the time the proceeding was
commenced, and until the trial concluded, state courts in
foreclosure cases often adjudicated counterclaims based on
allegations of misconduct subsequent to the execution of the
See, e.g., Bank of Am., N.A. v. Criscitelli, No.
CV136038369S, 2015 WL 5806294, at *3 (Conn. Super. Ct. Aug. 31,
2015); Ali, Inc. v. Veronneau, No. 126431, 1996 WL 600772, at *3
(Conn. Super. Ct. Oct. 11, 1996); Shawmut Bank v. Wolfley, No.
CV93 0130109 S, 1994 WL 34207, at *4 (Conn. Super. Ct. Jan. 24,
Permitting such counterclaims had received the blessing
of the Connecticut Appellate Court.
TD Bank, N.A. v. M.J.
Holdings, LLC, 143 Conn. App. 322, 331, 71 A.3d 541, 547 (2013).
Plaintiff relies on a decision of the Connecticut Appellate
Court issued after the foreclosure trial was completed, U.S.
Bank Nat’l Ass’n v. Blowers, 177 Conn. App. 622, 632, 172 A.3d
837, 843 (2017), rev’d, 332 Conn. 656, 212 A.3d 226 (2019).
Blowers announced that “improper conduct occurring during
mediation and modification negotiations” could not be raised as
a defense in a foreclosure proceeding.
622 at 629-30.
Blowers, 177 Conn. App.
Blowers also held, however, that if
“modification negotiations ultimately result in a final,
binding, loan modification, and the mortgagee subsequently
breaches the terms of that new modification, then any special
defenses asserted by the mortgagor in regard to that breach”
would be valid.
Plaintiffs’ claims for breach of contract,
promissory estoppel and breach of the duty of good faith and
fair dealing are predicated on his allegation that BANA breached
the modified agreement.
Therefore, Bowers does not save his
claims from the preclusive effect of res judicata under state
Turning to the remaining claim, BANA argues that plaintiff
fails to allege a plausible claim for vexatious litigation under
Conn. Gen. Stat. § 52–568.
Under Connecticut law, “a
claim for vexatious litigation requires a plaintiff to allege
that the previous lawsuit was initiated maliciously, without
probable cause, and terminated in the plaintiff's favor.”
v. Levy, 191 Conn. 257, 263, 464 A.2d 52, 56 (1983).
statutory vexatious litigation action differs from an action at
common law “only in that a finding of malice is not an essential
element, but will serve as a basis for higher damages.”
Church Grp., Ltd. v. Tyler, Cooper & Alcorn, LLP, 281 Conn. 84,
94, 912 A.2d 1019, 1027 (2007).
With both common law and
statutory vexatious litigation claims, “[t]he existence of
probable cause is an absolute protection.”
Id. (quoting Brodrib
v. Doberstein, 107 Conn. 294, 296, 140 A. 483 (1928)).
Connecticut courts have adopted a standard of probable cause
that allows litigants to pursue claims even when they are
unlikely to succeed.
Id. at 103.
The Connecticut Supreme Court
has reaffirmed that a suit might have probable cause even it
turns out ultimately to be meritless.
Id. at 104.
standard, a litigant is not subject to liability for vexatious
litigation if it had “a reasonable, good faith belief in the
facts alleged and the validity of the claim asserted.”
DeLaurentis v. City of New Haven, 220 Conn. 225, 256, 597 A.2d
807, 823 (1991).
Here, plaintiff’s factual allegations do not support a
reasonable inference that probable cause for the foreclosure
action was objectively lacking.
Plaintiff does not contest that
he failed to make his mortgage payments from December 2013 to
See ECF No. 1 ¶ 6; Doody, 2018 WL 3511216, at *1.
And it does not appear that the arrearage was paid before the
foreclosure action was commenced.
In similar circumstances,
state courts have found probable cause.
See, e.g., Vaccaro v.
U.S. Bank, N.A., No. CV146050373S, 2016 WL 8488123, at *3 (Conn.
Super. Ct. Nov. 8, 2016) (finding probable cause to initiate
foreclosure proceedings where plaintiffs “do not dispute”
defaulting on their mortgage).
That judgment was ultimately
rendered in plaintiff’s favor does not detract from this
Id. (“[A] lack of probable cause cannot be inferred
from the fact that the foreclosure action was dismissed.”).
Accordingly, BANA’s motion to dismiss is hereby granted.
So ordered this 5th day of October 2021.
Robert N. Chatigny
United States District Judge
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