Hersey v. WPB Partners, LLC

Filing 64

///ORDER granting 52 defendant's Motion for Summary Judgment; and granting 53 defendant's Motion for Summary Judgment. So Ordered by Judge Steven J. McAuliffe.(lat)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Mary Hersey,
Plaintiff
v.

Case No. 11-cv-207-SM
Opinion No. 2014 DNH 029

WPB Partners, LLC,
Defendant
O R D E R
Plaintiff, Mary Hersey (“Hersey”), brings this action
against WPB Partners, LLC (“WPB Partners”), which holds a
promissory note and mortgage on Hersey’s undeveloped real estate.
Plaintiff’s remaining claim alleges that WPB Partners violated
Massachusetts’ usury law,1 entitling her to relief.

WPB Partners

filed a counterclaim against Hersey for breach of contract, based
upon Hersey’s failure to pay on the promissory note.

At the

close of discovery, defendant filed motions seeking entry of
summary judgment in its favor on both claims.

Those motions,

doc. nos. 52 and 53, are granted.

I.

Standard of Review
When ruling on a motion for summary judgment, the court must

“view the entire record in the light most hospitable to the party

1

For simplicity’s sake, the court will refer to WPB
Partners and its predecessor, Investment Realty Funding, LLC, as
“defendant” or “WPB Partners.”

opposing summary judgment, indulging all reasonable inferences in
that party’s favor.”
(1st Cir. 1990).

Griggs-Ryan v. Smith, 904 F.2d 112, 115

Summary judgment is appropriate when the record

reveals “no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”

Fed. R. Civ.

P. 56(a).

II.

Plaintiff’s Claim
With respect to Hersey’s claim that WPB Partners charged an

effective interest rate exceeding the maximum allowed under
Massachusetts’ usury statute, see Mass. Gen. Laws ch. 271, § 49,
there is no genuine factual dispute that, as allowed under the
statute, WPB Partners filed a timely notice with the
Massachusetts Attorney General’s office of its intention to make
loans at interest rates that exceeded the statutory cap.

Because

“notification to the Attorney General is an absolute defense to
the enforceability of” an otherwise usurious note, Cannarozzi v.
Fiumara, 371 F.3d 1, 6 (1st Cir. 2004), Hersey’s claim fails.
See also In re Loucheschi LLC, 471 B.R. 777, 782 (Bankr. D. Mass.
2012).

Contrary to Hersey’s position, WPB Partners’ notice was not
deficient.

WPB Partners was not, as plaintiff asserts, required

to file a separate notice for plaintiff’s specific loan.

2

See

Cannarozzi, 371 F.3d at 5 (holding that transaction-specific
notice is not required, noting that “notification is valid for
two years for loan transactions during that period.”).

Nor was

the notice defective because it specified that defendant intended
to make commercial loans, but plaintiff’s loan was residential,
not commercial.

There is no serious dispute on this record,

however, that Hersey’s loan was a business loan made for the
purpose of funding real estate development.

Summary judgment in favor of defendant on plaintiff’s sole
remaining claim, Count II, is necessarily granted.

III.

Defendant’s Counterclaim
A.

Liability

Hersey’s only defense to defendant’s breach of contract
counterclaim is that WPB Partners may not recover damages for
breach of contract because it has unclean hands.

The argument is

rejected for two reasons.

First, WPB Partners seeks a legal remedy in the form of
liquidated damages.

“[T]he unclean hands doctrine,” however,

only “bar[s] equitable relief.”

Moulton-Garland v. Cabletron

Sys., Inc., 143 N.H. 540, 544 (1999) (emphasis is original).
also Kearney v. Elias, 2008 WL 3502116, at *7 (D.N.H. Aug. 11,

See

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2008) (“[A]t common law, . . . [the] ‘unclean hands’ defense is
available only against equitable relief, not claims for
damages.”)

Second, even if the unclean hands doctrine was

generally available as a defense to WPB Partners’ breach of
contract claim, plaintiff has not demonstrated, on this record,
that WPB Partners’ conduct was sufficiently egregious to warrant
the doctrine’s application.

See generally Precision Instrument

Mfg., Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806,
814 (1945) (the doctrine of unclean hands bars relief to a party
“tainted with inequitableness or bad faith”).

See also Congress

Park Office Condos II, LLC v. First-Citizens Bank & Trust Co.,
105 So. 3d 602, 610 (Fla. Dist. Ct. App. 4th Dist. 2013) (“A
failure to comply with the material terms of a loan document may
be a breach of contract, and it may not be nice, but it does not
amount to unclean hands.”).

B.

Liquidated Damages

During the pretrial conference held on February 7, 2014, the
court disclosed its intention to grant defendant’s motions for
summary judgment.

Following a discussion with respect to the

existence of any material dispute related to calculating the
liquidated damages amount, the parties agreed that the amount of
$443,443.03, as of September 6, 2011 (a date contemporaneous with
the filing of the bankruptcy petition) would be appropriate.

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That amount represents a calculation decidedly in plaintiff’s
favor, and an amount based in substantial part on plaintiff’s own
expert’s opinion.

By agreeing to entry of judgment in that

amount, less than it reasonably could expect, defendant
pragmatically recognized that the property’s value is
substantially less than the judgment amount, and no useful
purpose would be served by the expenditure of additional time and
resources to arrive at a higher, more accurate, but unimportant
figure.

Conclusion
Defendant’s motions for summary judgment, doc. nos. 52 and
53, are granted.

Judgment is entered in favor of the defendant

on plaintiff’s usury claim, Count II.

Judgment is entered in

favor of defendant on its counterclaim for breach of contract,
and liquidated damages in the amount of $433,433.03, is awarded.

SO ORDERED.
____________________________
Steven J. McAuliffe
United States District Judge
February 11, 2014
cc:

Raymond J. DiLucci, Esq.
Richard K. McPartlin, Esq.
Edmond J. Ford, Esq.

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