Ingress v. Merrimack Mortgage Company, Inc. et al

Filing 61

///ORDER granting 23 Motion to Dismiss; granting 25 Motion to Dismiss; granting 14 Motion to Dismiss; granting 17 Motion to Dismiss. So Ordered by Judge Paul J. Barbadoro.(jna)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE

Jeanne L. Ingress
Civil No. 11-cv-373-PB
Opinion No. 2012 DNH 40

v.
Merrimack Mortgage Co., Inc.,
et al.

MEMORANDUM AND ORDER
After Jeanne Ingress stopped making her monthly mortgage
payments, a mortgage company instituted foreclosure proceedings
on her home.

Ingress brought suit in state court, seeking to

enjoin the foreclosure.

After she was ultimately unsuccessful

in that action, she filed a quiet title suit in state court
concurrently with this suit in federal court.

Prior to my

consideration of her federal action, she was denied relief in
her second state action.

In this suit, Ingress seeks money

damages against five mortgage companies and a law firm, alleging
the existence of defects in the chain of title to her mortgage
as well as fraudulent conduct and disclosure violations that
taint the mortgage and foreclosure.

Defendants have filed

motions to dismiss all claims, and for the reasons below, I
grant those motions.

I.

BACKGROUND

On September 15, 2005, Ingress borrowed approximately
$205,000 from Merrimack Mortgage Company, Inc. (“Merrimack”) and
mortgaged property in Wilton, New Hampshire as security for the
loan.

Merrimack subsequently sold Ingress’s mortgage and

transferred the servicing rights.

In late 2008 or early 2009,

Ingress stopped making her monthly mortgage payments.

In March

2009, Wells Fargo Bank, N.A., as Trustee for Option One Mortgage
Trust 2006-1 Asset-Backed Securities, Series 2006-1 (“Wells
Fargo”) commenced foreclosure proceedings.
Seeking to stop the imminent foreclosure sale of her
property, Ingress brought suit (the first state action) in
Merrimack County Superior Court in November 2010 against
Merrimack; Wells Fargo; American Home Mortgage Servicing, Inc.
(“American”), an intermediate assignee of the mortgage; and
Shechtman Halperin Savage, LLP (“Shechtman”), counsel to Wells
Fargo.

Ingress argued that she was unable to discern the

identity of the current holder of her mortgage and that the
rising interest rates and monthly payments on her mortgage were
evidence that she had been the victim of unfair practices.
Ingress v. Wells Fargo Bank, No. 10-E-571 at 1-2 (N.H. Super.
2

Nov. 29, 2010), Doc. No. 14-3.

Chief Justice Robert J. Lynn

stated in his November 29 order that although he “agrees with
[Ingress] to a point, . . . the property in question clearly is
encumbered by a mortgage owed to some financial institution and
[Ingress] has, in effect, been living rent free in the property
for nearly two years.”

Id. at 2.

He enjoined the foreclosure

sale scheduled for that day, but ordered that the injunction
would expire after ten days unless Ingress deposited with the
court the $41,400 she owed in unpaid mortgage payments and
continued to deposit $1,800 per month until the litigation was
concluded.

Id.

On December 7, two days prior to the date Ingress would
have been required to deposit the outstanding balance due on the
mortgage, a hearing was held before a different judge.

Ingress

disputed the chain of title to the mortgage, contending that the
mortgage and accompanying notes had been improperly assigned.
Ingress v. Wells Fargo Bank, No. 2010-EQ-0571 at 1 (N.H. Super.
Dec. 8, 2010), Doc. No. 14-10.

The following day, Presiding

Justice Diane M. Nicolosi enjoined the foreclosure sale for
ninety days, explaining that the record was unclear as to who
could properly foreclose on the mortgage.
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Id.

She vacated the

requirement that Ingress deposit $41,400 with the court, and
replaced it with a requirement that Ingress deposit $3,600 with
the court by January 1, and an additional $1,800 each month
thereafter.

Id. at 2.

On February 15, 2011, Justice Nicolosi granted the
respondents’ motions to dismiss Ingress’s claims.

Ingress v.

Wells Fargo Bank, No. 226-2010-CV-571 (N.H. Super. Feb. 15,
2011), Doc. No. 14-15.

She noted that Ingress had failed to

deposit any money with the court and that Ingress had conveyed
the property to John Ingress and so was no longer the real party
in interest in the case.1

Id. at 1-2.

On April 6, 2011, Justice

Nicolosi denied Ingress’s motion for reconsideration, explaining
that Ingress “has not provided any additional factual support
for her claims that Wells Fargo is not the mortgagee by valid
assignment.”

Ingress v. Wells Fargo Bank, No. 226-2010-CV-571

(N.H. Super. Apr. 6, 2011), Doc. No. 24-7.

On April 29, the

case was closed.
In July 2011, Ingress brought this suit pro se in federal
court against the same four parties named in her original state
court action and one additional party, Sand Canyon Corp. (“Sand
1

The property has since been conveyed back to Ingress.
4

Canyon”).2

Her complaint contains thirteen counts and alleges

that defendants engaged in a civil conspiracy, committed fraud,
and violated a number federal regulations and statutes,
including the Truth in Lending Act, 15 U.S.C. §§ 1601 et seq.,
the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq., and
the Uniform Commercial Code.
On the same day she filed this case, Ingress also filed a
quiet title action in state court (the second state action),
naming the same defendants as in her federal complaint.

On

December 7, 2011, Presiding Justice Jacalyn A. Colburn ruled
against Ingress on all claims.

Ingress v. Merrimack Mortgage

Co., No. 2011-CV-0542 (N.H. Super. Dec. 7, 2011), Doc. No. 39.
She first determined that Ingress had not asserted any viable
claims against Option One or Sand Canyon because Ingress
acknowledged that neither party had an interest in her property,
and because Ingress failed to include any factual allegations
about their actions.

Id. at 4-5.

2

She next determined that “the

In her complaint, Ingress names Sand Canyon and Option One
Mortgage Corporation (“Option One”) as separate parties, but she
acknowledges that Option One and Sand Canyon are actually the
same entity, the former having become the latter by way of a
corporate name change. Compl. ¶ 4, Doc. No. 1. For clarity, I
shall treat the corporation as a single entity, and shall refer
to it, regardless of its name at the time, as Sand Canyon.
5

doctrine of res judicata bars this suit or any further action
against Merrimack, Wells Fargo, A[merican], and S[hechtman].”
Id. at 6.
Justice Colburn’s comprehensive res judicata analysis
detailed how all three prongs required for its application had
been met: (1) the four defendants were identical to the
defendants in Ingress’s prior state court action; (2) despite
new theories of relief, Ingress’s action was based on “the same
factual transaction –- the mortgage, the foreclosure and
ownership and servicing of the note”; and (3) the prior action
was a final judgment on the merits.

Id. at 7-8.

She dismissed

Ingress’s claims with prejudice.

II.

STANDARD OF REVIEW

In considering a motion to dismiss under Federal Rule of
Civil Procedure 12(b)(6), I “accept as true the well-pleaded
factual allegations of the complaint, draw all reasonable
inferences therefrom in the plaintiff's favor and determine
whether the complaint, so read, sets forth facts sufficient to
justify recovery on any cognizable theory.”

Martin v. Applied

Cellular Tech., 284 F.3d 1, 6 (1st Cir. 2002).
6

To survive a

motion to dismiss for failure to state a claim, the general
standard under Rule 8 of the Federal Rules of Civil Procedure is
that the complaint must “state a claim to relief that is
plausible on its face.”

Ashcroft v. Iqbal, 129 S. Ct. 1937,

1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)).

A claim is facially plausible when it pleads

“factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.

The plausibility standard is not akin to a

‘probability requirement,’ but it asks for more than a sheer
possibility that a defendant has acted unlawfully.”

Id.

(citations omitted).
When a plaintiff acts pro se, this court is obliged to
construe the pleadings liberally in favor of the pro se party.
See Ayala Serrano v. Lebron Gonzales, 909 F.2d 8, 15 (1st Cir.
1990) (citing Estelle v. Gamble, 429 U.S. 97, 106 (1976)).

That

review ensures that pro se pleadings are given fair and
meaningful consideration.

See Eveland v. Dir. of C.I.A., 843

F.2d 46, 49 (1st Cir. 1988).
The court may take into account the record in the original
action when a motion to dismiss is based upon a claim of res
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judicata.

Andrew Robinson Int’l, Inc. v. Hartford Fire Ins.

Co., 547 F.3d 48, 51 (1st Cir. 2008).

III.
A.

ANALYSIS

Res Judicata
The four defendants who were parties to the first state

action argue that the doctrine of res judicata bars all claims
against them.

For the same reasons advanced by Justice Colburn

in her recent decision, I agree.
In New Hampshire, res judicata bars a plaintiff from
relitigating matters that were actually decided, or that could
have been decided, in an earlier action between the same parties
for the same cause of action.

Brooks v. Trustees of Dartmouth

Coll., 161 N.H. 685, 690 (2011).

The purpose of the doctrine is

“to avoid repetitive litigation so that at some point litigation
over a particular controversy must come to an end.”

E. Marine

Constr. Corp. v. First S. Leasing, 129 N.H. 270, 273 (1987)
(quoting Bricker v. Crane, 118 N.H. 249, 252 (1978)).

Three

elements must be met for res judicata to apply: (1) the parties
must be the same or in privity with one another; (2) the cause
of action must be the same; and (3) the prior action must have
8

been a final judgment on the merits.

Brooks, 161 N.H. at 690.

Ingress does not contest the first or third elements, and thus
the dispositive question is whether this suit is based on the
same cause of action as the first state action.
A cause of action is broadly defined to encompass “all
theories on which relief could be claimed on the basis of the
factual transaction in question.”
Marine, 129 N.H. at 274-75).

Id. at 694 (quoting E.

So long as the factual transaction

is the same, a subsequent suit against the same party will be
barred even if the plaintiff is prepared to present new evidence
or offer new theories of relief, and even if the plaintiff seeks
different forms of relief than in the prior action.

E. Marine,

129 N.H. at 275-76.
I determine that this suit is based on the same cause of
action as Ingress’s first state action.

In that prior suit, the

factual transaction was the chain of events from mortgage
through foreclosure pertaining to the ownership and encumbrance
of the Wilton property.

Because all of Ingress’s claims in this

case are based on that same factual transaction, they are
barred.

It is of no moment that Ingress wishes to present new

evidence in this suit, nor that Ingress seeks monetary damages
9

now whereas she sought injunctive relief in the prior action.
See E. Marine, 129 N.H. at 275-76.

I dismiss all claims against

Merrimack, Wells Fargo, American, and Schechtman on the basis of
res judicata.3
B.

Claims against New Defendant
The sole defendant in this suit who was not a party to the

first action, and who therefore cannot avail itself of a res
judicata bar based on that action, is Sand Canyon.

Nonetheless,

Ingress’s claims against Sand Canyon are barred by the res
judicata effect of her second state action.
The resolution of the second state action satisfies all the
requirements necessary to apply res judicata in this subsequent
suit.

See Brooks, 161 N.H. at 690.

First, the party in this

case, Sand Canyon, is the same as in the second state action.
Second, the claims in this case are based on the same cause of
action as in the prior suit.

Both cases concern the same

3

Ingress also contends that res judicata should not apply
because her new complaint “makes allegations not known to [her]
at the time the previous complaint was brought forth.” Pl.’s
Opp’n to Mot. to Dismiss at 5, Doc. No. 42. Ingress has not
provided any detail, however, about which facts have recently
come to light or why she was unaware of those facts previously.
In light of Ingress’s failure to offer more than conclusory
assertions, I need not entertain her argument.
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factual transaction –- the ownership and encumbrance of the
Wilton property and the chain of events from mortgage through
foreclosure –- in which Sand Canyon is alleged to have been an
intermediary assignee of the mortgage.

Third, the second state

action was a final decision on the merits.

Justice Colburn

dismissed the claims against Sand Canyon with prejudice, and “a
dismissal with prejudice is deemed an adjudication on the merits
for purposes of res judicata.”

Oriental Bank & Trust v. Pardo

Gonzalez, 509 F. Supp. 2d 127, 135 (D.P.R. 2007); see MoultonGarland v. Cabletron Sys., Inc., 143 N.H. 540, 542 (1999) (“A
judgment entered ‘with prejudice’ constitutes a judgment on the
merits of a matter[.]”).
Even if Ingress’s claims against Sand Canyon were not
barred by res judicata, however, I would dismiss them for
failure to state a claim.

Although Ingress’s allegations about

Sand Canyon paint a less than clear picture of Sand Canyon’
exact role as an intermediate assignee, two important facts
emerge.

First, Sand Canyon had no connection with Ingress prior

to or during the time Ingress entered into the mortgage
agreement.

Second, Sand Canyon does not currently possess any

interest in Ingress’s property and has not been involved in the
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foreclosure proceedings.

In light of these facts, Counts I

through IX of the complaint all fail to state a claim against
Sand Canyon because they allege fraud and disclosure failures by
the original lender.4

The allegations in Count XI (titled

“Breach of Trust”) must also be dismissed because they set out
defenses pursuant to UCC § 3-305 against a party seeking payment
on an instrument, and Sand Canyon does not hold an instrument
and is not seeking to enforce payment.
Counts X and XII are allegations of fraud, which must be
alleged with particularity according to Federal Rule of Civil
Procedure 9(b).

Mendez Internet Mgmt. Servs., Inc. v. Banco

Santander de P.R., 621 F.3d 10, 14 (1st Cir. 2010).

Count XII

fails to state a claim for mail fraud because Ingress has not
alleged that Sand Canyon mailed any documents.5

Count X alleges

fraud generally, and contains a brief explanation that a person

4

In responding documents addressed to the arguments of other
defendants, Ingress also admits that Counts I through IX are
barred by the statute of limitations. Opp’n to Mot. to Dismiss
at 2-3, Doc. No. 41.
5

In documents responsive to other defendants’ motions to
dismiss, Ingress concedes that her mail fraud claim “either
fail[s] to state a claim upon which relief can be granted or
[is] not a recognizable cause of action.” Opp’n to Mot. to
Dismiss at 3, Doc. No. 42.
12

who enforces a note must be in possession of the note.

To the

extent Ingress is raising a defense against enforcement of the
note, as seems to be the case based on her citation to UCC § 3305, her argument cannot be directed at Sand Canyon who does not
hold the note.

To the extent Ingress is making a common-law

fraud accusation based on problems in the chain of title, her
vague allegation is insufficient to support the claim.

She has

not alleged any facts that would establish her reliance on a
false representation by Sand Canyon.

See Snierson v. Scruton,

145 N.H. 73, 77 (2000) (describing elements necessary to plead a
claim of fraud).

Moreover, under Ingress’s own account of

events, Sand Canyon did not interact with her at the two times
where one might expect a possibility of fraudulent conduct by a
mortgage company: at the signing stage or in the foreclosure
process.
Lastly, Count XIII, which alleges conspiracy, also fails to
state a claim upon which relief can be granted.6

As best I can

discern, Ingress asserts that the defendants conspired to

6

As with the mail fraud claim, Ingress concedes in responses to
other defendants’ motions to dismiss that her conspiracy claim
“either fail[s] to state a claim upon which relief can be
granted or [is] not a recognizable cause of action.” Opp’n to
Mot. to Dismiss at 3, Doc. No. 42.
13

deceive various mortgagors by leading them to believe that the
named Trustee (Wells Fargo) had been assigned the security
instruments well before the date the Trustee had actually been
assigned those instruments.

Even assuming the veracity of that

allegation, Ingress has not asserted the facts necessary to
state a claim for conspiracy.

See Jay Edwards, Inc. v. Baker,

130 N.H. 41, 47 (1987) (listing elements of civil conspiracy).
Ingress’s allegations do not show how, even if defendants had
conspired to deceive her about the date Wells Fargo became
Trustee, such a deception has proximately caused her to suffer
damages.

See id. (damages as proximate result of conspiracy is

element of claim).

The foreclosure of the Wilton property was

not caused by any conspiracy to post-date assignment documents,
but by Ingress’s failure to repay her mortgage.

Therefore, her

conspiracy claim fails as a matter of law.

IV.

CONCLUSION

For the foregoing reasons, Ingress’s claims are barred by
res judicata, and her allegations against Sand Canyon also fail
to state a claim upon which relief can be granted.

Defendants’

motions to dismiss (Doc. Nos. 14, 17, 23, 25) are granted.
14

The

clerk is directed to enter judgment accordingly and close the
case.
SO ORDERED.

/s/Paul Barbadoro
Paul Barbadoro
United States District Judge

February 8, 2012

cc:

Jeanne L. Ingress
Joshua M. Wyatt, Esq.
Alexander J. Walker, Esq.
Daniel E. Will, Esq.
Victor Manougian, Esq.
Paula-Lee Chambers, Esq.
Geoffrey M. Coan, Esq.
Dean J. Wagner, Esq.

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