Calef v. Citibank, N.A., Trustee, et al

Filing 48

///ORDER granting 22 Motion for Summary Judgment. The clerk shall enter judgment accordingly and close the case. So Ordered by Chief Judge Joseph N. Laplante.(jb)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
John M. Calef
v.

Civil No. 11-cv-526-JL
Opinion No. 2013 DNH 023

Citibank, N.A. et al.
MEMORANDUM ORDER
This action is one in a series of foreclosure-related
actions pending in this court in the aftermath of what has come
to be called the “mortgage crisis.”
uncommon:

The fact pattern here is not

plaintiff John M. Calef defaulted on his mortgage

payment obligations, prompting an entity claiming to be the
mortgagee to pursue foreclosure.

What is uncommon about this

case, though, is that the foreclosure sale went forward, and the
foreclosure deed was recorded, before Calef filed this action
seeking to invalidate the sale and enjoin his eviction from the
property.

As pleaded in the complaint, Calef’s claims are

premised on several theories as to why the foreclosure was void.
While disparate, those theories can be grouped into two
categories:

theories that an assignment of the mortgage to the

foreclosing entity was invalid and theories that the foreclosure
deed and accompanying affidavit were invalid.
This court has jurisdiction over this matter under 28 U.S.C.
§ 1332(a)(1) (diversity), because Calef is a New Hampshire

citizen, the defendants are citizens of other states, and the
amount in controversy exceeds $75,000.

The defendants have moved

for summary judgment, see Fed. R. Civ. P. 56, arguing that none
of Calef’s various theories entitles him to relief based upon the
undisputed facts.

After hearing oral argument, the court agrees.

Insofar as Calef’s claims arise from alleged infirmities in the
assignment of his mortgage to the foreclosing entity, New
Hampshire law precludes him from pursuing those claims because he
failed to file a petition to enjoin the foreclosure prior to the
sale.

Insofar as Calef’s claims arise from alleged infirmities

in the foreclosure deed and affidavit, the undisputed material
facts establish as a matter of law that no such infirmities
exist–-or none that would entitle Calef to relief, in any event.
Summary judgment will accordingly be entered for the defendants.
I.

Applicable legal standard
Summary judgment is appropriate where “the movant shows that

there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
P. 56(a).

Fed. R. Civ.

A dispute is “genuine” if it could reasonably be

resolved in either party’s favor at trial.

See Estrada v. Rhode

Island, 594 F.3d 56, 62 (1st Cir. 2010) (citing Meuser v. Fed.
Express Corp., 564 F.3d 507, 515 (1st Cir. 2009)).

A fact is

“material” if it could sway the outcome under applicable law.
2

Id. (citing Vineberg v. Bissonnette, 548 F.3d 50, 56 (1st Cir.
2008)).

In analyzing a summary judgment motion, the court “views

all facts and draws all reasonable inferences in the light most
favorable to the non-moving party.”

Id.

The following facts are

set forth accordingly.
II.

Background1
Plaintiff John M. Calef is the eponymous trustee of the John

M. Calef February 1996 Revocable Trust, and in that capacity
previously owned property in Meredith, New Hampshire.

In April

2007, Calef, acting both individually and as trustee, borrowed
$650,000 from Aegis Wholesale Corporation.

The promissory note

for the loan was secured by a mortgage on the Meredith property;
the named mortgagee was Mortgage Electronic Registration Systems,
Inc., or “MERS,” acting “as a nominee for [Aegis] and [its]
successors and assigns.”
In September 2007, Aegis sold both the note and mortgage to
Citibank, N.A., in its capacity as trustee for a securitized

1

This section briefly recounts the key facts. Of the 34
paragraphs of “undisputed material facts” set forth in
defendants’ memorandum of law, Calef has “admitted” 32. See
Memo. in Supp. of Obj. to Mot. for Summ. J. (document no. 24-1)
at 2. Plaintiff’s memorandum is silent as to his position
regarding the remaining two paragraphs, which are supported by
citations to admissible record evidence. The facts set forth in
those two paragraphs are therefore deemed admitted as well, see
L.R. 7.2(b)(2), and the court incorporates defendants’ statement
of undisputed material facts, in its entirety, by reference.
3

mortgage trust (though MERS, as nominee, remained the mortgagee
of record).

EMC Mortgage Corporation became the servicer for all

loans owned by the securitized trust, including Calef’s.
Citibank, as trustee, also gave EMC a Limited Power of Attorney
that granted it the power to act for the securitized trust by,
among other things, “execut[ing] and acknowledg[ing] . . . all
documents customarily and reasonably necessary and appropriate”
to conduct foreclosures.
In March 2009, Calef breached his payment obligations under
the note and mortgage, and subsequently fell into default.

When

he failed to cure that default, EMC retained Harmon Law Offices
as foreclosure counsel.

In May 2010, Harmon wrote to Calef

informing him of its representation of EMC and of his right to
reinstate the loan.

Not long thereafter, in anticipation of

foreclosure, Mary Cook, an assistant secretary and vice president
of MERS, executed an assignment of mortgage assigning Calef’s
mortgage from MERS to CitiBank, N.A., in its capacity as trustee
for the securitized trust.

The assignment was then recorded in

the Belknap County Registry of Deeds.
A week after the assignment, Harmon sent Calef a copy of the
unrecorded version of the assignment, along with other documents.
Another week after that, Harmon sent Calef a Notice of Mortgage

4

Foreclosure Sale.2

That notice included the following language,

as mandated by N.H. Rev. Stat. Ann. § 479:25:

“[y]ou are hereby

notified that you have a right to petition the superior court for
the county in which the mortgaged premises are situated, with
service upon the mortgagee, and upon such bond as the court may
require, to enjoin the scheduled foreclosure sale.”

(The

original was entirely capitalized; the court has employed lowercase text here for readability’s sake.)

Calef did not file such

a petition.
Although the sale was briefly postponed, it ultimately went
forward on September 7, 2010.

Citibank, N.A., as trustee, was

the high bidder, purchasing the property for $800,900.44.

On

October 18, 2010, the Foreclosure Deed, accompanied by an
affidavit signed by “Tamara S. Reitz, Vice President of EMC
Mortgage Corporation as Attorney-in-fact for Citibank, N.A. as
Trustee,” was recorded with the Belknap County Registry of Deeds.
Calef filed the present action in Belknap County Superior Court

2

At oral argument, Calef–-speaking on his own behalf, not
through counsel--claimed that he had never received this notice,
and also related a number of other facts that were neither
included in the complaint nor supported by the record evidence.
While the court does not wish to seem insensitive to Mr. Calef’s
concerns about the foreclosure and the events leading up to it,
those facts were not properly presented to this court in response
to the defendants’ motion for summary judgment, see supra n.1,
and this court cannot take them into account when considering
that motion.
5

on October 14, 2011.
court.

Defendants removed the action to this

See 28 U.S.C. § 1441.

III. Analysis
Calef’s complaint, filed by counsel, alleges six “specific
counts” that, with one exception, request certain forms of relief
rather than identifying the legal theories upon which his claims
to relief are premised.3

Defendants, to their credit, have

gamely attempted to divine those theories from the various
factual allegations of the complaint.

Their assessment, which

Calef has not disputed and in which the court concurs, is that
Calef’s theories fall into two general categories:

(1) claims

related to pre-sale conduct (specifically, claims that the
assignment of the mortgage from MERS to Citibank was invalid) and
3

Specifically, the counts are for (1) injunctive relief to
enjoin eviction; (2) petition to quiet title; (3) declaratory
judgment; (4) petition to invalidate foreclosure sale and nullify
effect of recording foreclosure deed; (5) consequential damages
and attorneys fees; and (6) violation of the Consumer Protection
Act (“CPA”), N.H. Rev. Stat. Ann. 358-A. As best the court can
tell, the final count–-the only one to identify a specific cause
of action--is based upon the same alleged conduct as the other
counts, and would fail for the reasons discussed infra. And, in
any event, Calef withdrew his CPA claim at oral argument on the
defendants’ motion.
At oral argument, Calef also disclaimed many of the theories
advanced in his complaint. Indeed, it seemed the only theories
Calef did not disclaim were the theories first advanced in his
opposition to the defendants’ motion and referenced in n.5 infra.
Because, however, it is unclear to the court exactly which
theories Calef now intends to press, this order addresses all of
the theories pleaded in Calef’s complaint.
6

(2) claims related to post-sale conduct (specifically, claims
that the foreclosure deed and accompanying affidavit were
invalid).

Defendants argue that the first category of claims is

barred by N.H. Rev. Stat. Ann. § 479:25, II, because Calef failed
to petition the superior court to enjoin the foreclosure prior to
the sale, and that the second set of claims each fail as a matter
of law.

As discussed below, defendants are correct, and are

entitled to summary judgment in their favor.
A.

Plaintiff’s claims related to the assignment

Calef’s assertion that the foreclosure was void due to the
invalidity of the assignment from MERS to Citibank appears to
rest on four distinct theories:
•

Aegis, the lender for
nominee, ceased doing
MERS could not assign
Compl. ¶ 15; see also

which MERS originally served as
business in 2007, and for that reason
the mortgage to Citibank in 2010,
id. Count IV, ¶ 4;

•

Mary Cook, who executed the assignment, is “a known
Robo-Signer,” id. ¶ 12, and had a “clear conflict of
interest” because she allegedly “represented both the
assignor and the assignee in the transaction, as well as the
servicer,” id. ¶ 16;

•

the notarization of the assignment was on a separate page
from the assignment itself and therefore “could potentially
be attached to quite literally any document in need of
notarization,” id. ¶ 17; and

•

MERS did not hold the promissory note at the time of the
assignment, and thus could not validly assign the mortgage
to Citibank, id. ¶ 34.

7

While the legal significance of these allegations to the validity
of the foreclosure is dubious, the court need not examine them in
detail given the scope and effect of N.H. Rev. Stat. Ann. §
479:25, II.

In relevant part, that provision reads:

Notice of the [foreclosure] sale as served on or mailed
to the mortgagor shall include the following language:
“You are hereby notified that you have a right to
petition the superior court for the county in which the
mortgaged premises are situated, with service upon the
mortgagee, and upon such bond as the court may require,
to enjoin the scheduled foreclosure sale.” Failure to
institute such petition and complete service upon the
foreclosing party, or his agent, conducting the sale
prior to sale shall thereafter bar any action or right
of action of the mortgagor based on the validity of the
foreclosure.
N.H. Rev. Stat. Ann. § 479:25, II (emphasis added).

Under this

section, a mortgagor, “to preserve a challenge to the validity of
the foreclosure sale,” must file an action to enjoin the
foreclosure prior to the sale.

Gordonville Corp. N.V. v. LR1-A

Ltd. P’ship, 151 N.H. 371, 377 (2004).

If the mortgagor fails to

do so, he or she may not challenge the foreclosure’s validity
“based on facts which the mortgagor knew or should have known
soon enough to reasonably permit the filing of a petition prior
to the sale.”

Murphy v. Fin. Dev. Corp., 126 N.H. 536, 540

(1985); see also People’s Utd. Bank v. Mtn. Home Developers of
Sunapee, LLC, 858 F. Supp. 2d 162, 167-68 (D.N.H. 2012).

8

The defendants argue, persuasively, that this section
precludes Calef from pressing his assignment-related claims in
this case.

It is undisputed that:

•

EMC, through counsel, sent Calef a copy of the unrecorded
assignment, and the assignment itself was recorded, more
than a month prior to the sale;

•

The notice of sale that counsel sent to Calef contained the
language required by § 479:25, II; and

•

Calef did not “petition the superior court for the county in
which the mortgaged premises are situated . . . to enjoin
the scheduled foreclosure sale” prior to the sale.

Insofar as Calef’s claims are premised upon the asserted
invalidity of the assignment, then, it would appear that Calef
“knew or should have known” the facts related to that assignment
“soon enough to reasonably permit the filing of a petition prior
to the sale” (he has not, at any rate, argued otherwise).

He did

not do that, despite being apprised of his right to do so, and
ample New Hampshire case law supports the conclusion that he is
now barred from raising his assignment-related claims.

See,

e.g., Fuller v. Fed. Nat’l Mortg. Ass’n, No. 218-2011-CV-00668,
slip op. at 4-6 (N.H. Super. Ct. Oct. 2, 2012) (§ 479:25, II
barred challenge to foreclosure based on alleged invalidity of
assignment where plaintiffs had notice of assignment well before
sale); Baril v. JP Morgan Chase Bank, N.A., No. 218-2010-CV-501,
slip. op. at 4-6 (N.H. Super. Ct. July 20, 2011) (similar); Fed.

9

Nat’l Mortg. Ass’n v. Goyal, No. 09-C-0543, 2011 WL 4403839 (N.H.
Super. Ct. Feb. 25, 2011) (similar).
Calef does not advance any compelling argument to the
contrary.

Citing Magistrate Judge McCafferty’s opinion in

People’s United Bank, Calef asserts that “a breach of fiduciary
duty claim against the mortgagee may legitimately be based on the
mortgagee’s pre-sale conduct.”

Memo. in Supp. of Obj. to Mot.

for Summ. J. (document no. 24-1) at 2.

Setting aside the fact

that Calef’s complaint does not aver that any of the defendants
breached any fiduciary duties owed to him, Calef misconstrues the
significance of People’s United Bank.

Judge McCafferty did not

hold, as Calef suggests, that a mortgagor who fails to file a
pre-sale petition may nonetheless recover based entirely on presale conduct.

Rather, she held where a mortgagor challenges the

mortgagee’s conduct during the foreclosure sale–-which Calef is
not doing here–-he or she may use pre-sale conduct as evidence in
support of that claim (e.g., to show the mortgagee’s bad faith).
People’s Utd. Bank, 858 F. Supp. 2d at 167-68.

Indeed, Judge

McCafferty dismissed both claims in that case that were premised
solely upon pre-sale conduct, holding that they were barred by
§ 479:25, II.

Id. at 170-71.

The same result obtains here.

To the extent that Calef’s

claims are premised upon the alleged invalidity of the

10

assignment, N.H. Rev. Stat. Ann. § 479:25, II entitles defendants
to summary judgment.4
B.

Plaintiff’s claims related to the foreclosure deed

Calef also advances a number of theories as to why the
foreclosure deed and affidavit were invalid:
•

EMC, which executed the deed on behalf of Citibank, was not
authorized to act as Citibank’s attorney-in-fact because no
power of attorney was recorded in the registry of deeds,
Compl. ¶¶ 19-21;

•

Tamara Reitz, who signed the deed, did not have personal
knowledge regarding his loan and made “false statements in
[the] foreclosure deed affidavit,” id. Count V, ¶ 3; see
also id. ¶ 29;

•

the notarization of the foreclosure deed is on a separate
page from Ms. Reitz’s signature, id. ¶ 28; and

4

Calef also suggests that he can recover for other pre-sale
conduct, arguing in his memorandum that Aegis’s transfer of the
note to Citibank in 2007 did not comply with the pooling and
servicing agreement (“PSA”) that created the securitized trust
for which Citibank served as trustee. Memo. in Supp. of Obj. to
Mot. for Summ. J. (document no. 24-1) at 7-8. Assuming,
dubitante, that this theory of recovery is not barred by
§ 479:25, II (and that it is adequately presented in Calef’s
complaint), it still does not entitle Calef to relief. As this
court has previously explained, a borrower lacks standing to
challenge the transfer of a note on grounds that would merely
render the transfer voidable (as opposed to void). LeDoux v. JP
Morgan Chase, N.A., 2012 DNH 194, 13-15. And, as multiple courts
have held, alleged noncompliance with a PSA is precisely such a
matter. See, e.g., Butler v. Deutsche Bank Trust Co. Americas,
No. 12-cv-10337, 2012 WL 3518560, *7 (D. Mass. Aug. 14, 2012)
(citing cases); cf. also In re Correia, 452 B.R. 319, 324-25 (1st
Cir. B.A.P. 2011) (borrower lacked standing to object to breaches
of PSA).
11

•

the foreclosure deed identifies Citibank as a national
association even though “Securitized Trusts are never formed
as National Associations . . . , but as corporate entities
under specific state laws,” id. ¶ 23.5

None of these theories withstands scrutiny.
As an initial matter, the court cannot accept the premise on
which Calef’s deed-related claims rest:

that a defaulted

mortgagor whose property has been sold at foreclosure has an
enforceable interest in the recording of the foreclosure deed.
It is true that “[t]itle to the foreclosed premises [does] not
pass to the purchaser until the time of the recording of the deed
and affidavit.”

N.H. Rev. Stat. Ann. § 479:26, III.

The New

Hampshire Supreme Court has held, though, that “this rule does
not change the fact that the debtor possessed neither a legal nor
an equitable interest in the property once the auctioneer’s
hammer fell and the memorandum of sale was signed.”

Barrows v.

Boles, 141 N.H. 382, 393 (1996) (internal alterations and

5

In opposing defendants’ motion, Calef also attempts to
raise other supposed deficiencies with the foreclosure deed and
affidavit. See, e.g., Memo. in Supp. of Obj. to Mot. for Summ.
J. (document no. 24-1) at 12-13 (noting that “[t]he signature
line of the Foreclosure Affidavit does not clearly delineate that
Ms. Reitz is Vice President of EMC Mortgage Corporation and is
signing for the Attorney-in-Fact” and that the foreclosure deed
states that the property was conveyed to Citibank, N.A. rather
than Citibank as trustee). A party is, however, “not entitled to
raise new and unadvertised theories of liability for the first
time in opposition to a motion for summary judgment.” Calvi v.
Knox Cnty., 470 F.3d 422, 431 (1st Cir. 2006). And, were the
court to consider these supposed deficiencies anyway, they would
not entitle Calef to relief for the reasons stated infra.
12

quotation marks omitted); see also McAdam v. Lorden, 2005 DNH
134, 7-12 (foreclosure sale extinguished mortgagor’s interest in
property, even where she refused to surrender possession).
Indeed, the New Hampshire statute governing the recording of
foreclosure deeds provides that failure to record the foreclosure
deed and affidavit as set forth in the statute has but a single
consequence:

it “shall render the sale void and of no effect

only as to liens and other encumbrances of record with the
register of deeds for [the county where the property is situated]
intervening between the day of the sale and the time of recording
of said deed and affidavit.”
(emphasis added).

N.H. Rev. Stat. Ann. § 479:26, II

In other words, even where a foreclosure deed

and affidavit are not recorded at all, that does not affect the
validity of the foreclosure sale as to the mortgagor.

It follows

that where the recorded deed and affidavit are deficient in some
respect–-as alleged here--that, too, is a matter of no concern to
the mortgagor.
While that is reason enough to grant summary judgment in
defendants’ favor, each of Calef’s theories also fails on its own
merit.
•

They do not require extended analysis:

As noted above, Citibank granted EMC a limited power of
attorney authorizing EMC to act on Citibank’s behalf. That
it was not recorded in the registry of deeds is of no legal
consequence. New Hampshire law provides that a power of
attorney “may be recorded as required for a deed,” N.H. Rev.
Stat. Ann. § 477:9 (emphasis added), but does not require
13

recording. Similarly, § 5-41 of the New Hampshire Title
Examination Standards, upon which Calef relies, provides
only that a power of attorney “ordinarily should be
recorded,” not that this is necessary.6
•

Calef has presented no evidence in support of his assertion
that Ms. Reitz had no personal knowledge regarding his loan
or that she made false statements in the affidavit (nor has
he identified what those supposedly false statements are).
The undisputed evidence shows instead that Ms. Reitz, as an
employee of EMC–-the loan servicer–-had access to all
records regarding Calef’s loan at the time she executed the
affidavit. In his interrogatory responses, Calef asserted
that Ms. Reitz could not have had knowledge of his loan
because no power of attorney authorizing EMC to act on the
mortgagee’s behalf had been recorded. But, as just
discussed, New Hampshire law did not require recording of
the power of attorney--and even if recording were required,
the court is at a loss to see how a failure to record the
power of attorney could conceivably demonstrate that EMC
employees had no knowledge of Calef’s loan.

•

Calef has identified, and the court has found, no provision
or principle of New Hampshire law that requires notarization
of a document on the same page as the signatories’
signatures. No such requirement appears in the Uniform Law
on Notarial Acts, N.H. Rev. Stat. Ann. § 456-B:1 et seq.,
which includes comprehensive requirements for notarial acts
in this state. Where no statute or case law includes such a
requirement, this court will not fashion one from whole
cloth. Cf. Douglas v. York Cnty., 433 F.3d 143, 153 (1st
Cir. 2005) (“[A] federal court sitting in diversity
jurisdiction [has] no license to expand [state] law beyond
its present limits.”).

•

Nor has the court found any statute or case law assigning
any legal significance to the foreclosure deed’s supposedly
incorrect reference to Citibank as a national association
rather than a “corporate entity,” which appears to be at
most a scrivener’s error (if it is truly an error at all).

6

It bears noting, moreover, that the Title Examination
Standards merely “express the practice considered reasonable by
the New Hampshire Bar Association,” N.H. Bar Ass’n Title Exam.
Standards § 1-1, and are not an authoritative statement of law.
14

Calef himself has not even mentioned this theory in his
opposition memorandum, let alone sought to defend it, which
the court takes as a tacit acknowledgment of its lack of
merit.
Defendants are, therefore, also entitled to summary judgment
on Calef’s claims based upon the alleged invalidity of the
foreclosure deed and affidavit.
IV.

Conclusion
For the reasons set forth above, the defendants’ motion for

summary judgment7 is GRANTED.

The clerk shall enter judgment

accordingly and close the case.
SO ORDERED.

____________________________
Joseph N. Laplante
United States District Judge
Dated:
cc:

February 21, 2013

Philip A. Brouillard, Esq.
Andrew Scott Winters, Esq.
Mary Ellen Manganelli, Esq.

7

Document no. 22.
15